Cheniere Energy, Inc. (“Cheniere”) (NYSE: LNG) today announced
its financial results for the second quarter 2024.
SECOND QUARTER 2024 SUMMARY FINANCIAL RESULTS
(in billions)
Three Months Ended June 30,
2024
Six Months Ended June 30,
2024
Revenues
$3.3
$7.5
Net Income1
$0.9
$1.4
Consolidated Adjusted EBITDA2
$1.3
$3.1
Distributable Cash Flow2
$0.7
$1.9
2024 FULL YEAR FINANCIAL GUIDANCE
(in billions)
2024 Previous
2024 Revised
Consolidated Adjusted EBITDA2
$5.5
-
$6.0
$5.7
-
$6.1
Distributable Cash Flow2
$2.9
-
$3.4
$3.1
-
$3.5
RECENT HIGHLIGHTS
- During the three and six months ended June 30, 2024, Cheniere
generated revenues of approximately $3.3 billion and $7.5 billion,
net income1 of approximately $0.9 billion and $1.4 billion,
Consolidated Adjusted EBITDA2 of approximately $1.3 billion and
$3.1 billion, and Distributable Cash Flow2 of approximately $0.7
billion and $1.9 billion, respectively.
- Raising full year 2024 Consolidated Adjusted EBITDA2 guidance
to $5.7 billion - $6.1 billion and full year 2024 Distributable
Cash Flow2 guidance to $3.1 billion - $3.5 billion.
- Pursuant to Cheniere’s comprehensive capital allocation plan,
during the three and six months ended June 30, 2024, Cheniere
repurchased an aggregate of over 3.1 million and approximately 10.7
million shares of common stock for approximately $496 million and
$1.7 billion, respectively, repaid $150 million and $300 million of
consolidated indebtedness, respectively, and paid quarterly
dividends of $0.435 and $0.870 per share of common stock,
respectively.
- In July 2024, Cheniere Marketing, LLC (“Cheniere Marketing”)
entered into a long-term liquefied natural gas (“LNG”) sale and
purchase agreement (“SPA”) with Galp Trading S.A. (“Galp”), a
subsidiary of Galp Energia, SGPS, S.A., under which Galp has agreed
to purchase approximately 0.5 million tonnes per annum (“mtpa”) of
LNG from Cheniere Marketing on a free-on-board basis. Deliveries
are expected to commence in the early 2030s and are subject to,
among other things, a positive Final Investment Decision with
respect to the second train of the SPL Expansion Project (defined
below).
- In June 2024, Cheniere announced updates to its ‘20/20 Vision’
long-term capital allocation plan, which included an increase to
its share repurchase authorization by an additional $4 billion
through 2027 and, subject to declaration by its Board of Directors,
an increase to its quarterly dividend by approximately 15% to $2.00
per common share annualized, commencing with the third quarter of
2024.
- In June 2024, Cheniere declared a dividend with respect to the
second quarter of 2024 of $0.435 per share of common stock, which
is payable on August 16, 2024.
- In June 2024, the Federal Energy Regulatory Commission (“FERC”)
issued a positive Environmental Assessment (“EA”) relating to the
CCL Midscale Trains 8 & 9 Project (defined below). Cheniere and
its subsidiaries expect to receive all remaining necessary
regulatory approvals for the project in 2025.
- In May 2024, Moody’s Corporation upgraded its issuer credit
ratings of Cheniere Energy Partners, L.P. (“Cheniere Partners”)
(NYSE: CQP) and Sabine Pass Liquefaction, LLC (“SPL”) from Ba1 and
Baa2, respectively, to Baa2 and Baa1, respectively, each with a
stable outlook. With these ratings upgrades, the entire Cheniere
complex is now investment grade rated by Moody’s Corporation,
S&P Global Ratings and Fitch Ratings.
- In July 2024, Fitch Ratings upgraded its issuer credit rating
of Cheniere Corpus Christi Holdings, LLC (“CCH”) from BBB to BBB+
with a stable outlook.
CEO COMMENT
“The second quarter of 2024 marked another outstanding quarter
for Cheniere, highlighting our team’s ability to execute safely,
reliably and strategically throughout our business,” said Jack
Fusco, Cheniere’s President and Chief Executive Officer. “Our
strong financial and operational results year-to-date, coupled with
our constructive outlook for the remainder of the year, have
enabled us to increase our full year 2024 Consolidated Adjusted
EBITDA and Distributable Cash Flow guidance ranges. For the
remainder of the year, we are focused on executing on our recently
updated capital allocation plan and upholding our track record for
operational excellence and safety while advancing future growth
across our leading infrastructure platform to reliably meet the
energy needs of our customers worldwide.”
SUMMARY AND REVIEW OF FINANCIAL RESULTS
(in millions, except LNG data)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
% Change
2024
2023
% Change
Revenues
$
3,251
$
4,102
(21
)%
$
7,504
$
11,412
(34
)%
Net income1
$
880
$
1,369
(36
)%
$
1,382
$
6,803
(80
)%
Consolidated Adjusted EBITDA2
$
1,322
$
1,858
(29
)%
$
3,095
$
5,457
(43
)%
LNG exported:
Number of cargoes
155
149
4
%
321
316
2
%
Volumes (TBtu)
553
536
3
%
1,155
1,139
1
%
LNG volumes loaded (TBtu)
552
534
3
%
1,153
1,136
1
%
Net income1 decreased approximately $489 million and $5.4
billion for the three and six months ended June 30, 2024,
respectively, as compared to the corresponding 2023 periods. The
decrease for the three months ended June 30, 2024 was primarily
attributable to lower total margins per MMBtu of LNG delivered
compared to the prior period (further described below), as well as
a $176 million unfavorable variance due to a gain of $606 million
for the three months ended June 30, 2024, as compared to a gain of
$782 million in the corresponding 2023 period, related to changes
in the fair value of our derivative instruments (before tax and
non-controlling interests) (further described below). The decrease
for the six months ended June 30, 2024 was primarily attributable
to an approximately $5.2 billion unfavorable variance due to a gain
of $321 million for the six months ended June 30, 2024, as compared
to a gain of $5.5 billion in the corresponding 2023 period, related
to changes in the fair value of our derivative instruments (before
tax and non-controlling interests). The unfavorable variances for
the three and six months ended June 30, 2024 were partially offset
by lower provisions for income tax, as well as lower net income
attributable to non-controlling interests for both periods.
Consolidated Adjusted EBITDA decreased approximately $536
million and $2.4 billion for the three and six months ended June
30, 2024, respectively, as compared to the corresponding 2023
periods. The decreases were primarily due to moderating
international gas prices and the higher proportion of our LNG being
sold under long-term contracts, resulting in lower total margins
per MMBtu of LNG delivered compared to the prior period.
A significant portion of the derivative gains (losses) relate to
the use of commodity derivative instruments indexed to
international gas and LNG prices, primarily related to our
long-term Integrated Production Marketing (“IPM”) agreements. Our
IPM agreements are designed to provide stable margins on purchases
of natural gas and sales of LNG over the life of the agreements 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. In addition, accounting requirements prescribe
recognition of these long-term gas supply agreements at fair value
each reporting period on a mark-to-market basis, but do not
currently permit mark-to-market recognition of the associated sale
of LNG, resulting in a mismatch of accounting recognition for the
purchase of natural gas and sale of LNG. As a result of continued
moderation of international gas price volatility and changes in
international forward commodity curves during the three and six
months ended June 30, 2024, we recognized $819 million and $494
million, respectively, of non-cash favorable changes in fair value
attributable to such positions (before tax and non-controlling
interests), compared to $593 million and $4.6 billion of non-cash
favorable changes in fair value in the corresponding 2023 periods,
respectively.
Share-based compensation expenses included in net income totaled
$52 million and $92 million for the three and six months ended June
30, 2024, respectively, compared to $36 million and $86 million for
the corresponding 2023 periods, respectively.
Our financial results are reported on a consolidated basis. Our
ownership interest in Cheniere Partners as of June 30, 2024
consisted of 100% ownership of the general partner and a 48.6%
limited partner interest.
BALANCE SHEET MANAGEMENT
Capital Resources
The table below provides a summary of our available liquidity
(in millions) as of June 30, 2024:
June 30, 2024
Cash and cash equivalents (1)
$
2,442
Restricted cash and cash equivalents
(2)
512
Available commitments under our credit
facilities:
SPL Revolving Credit Facility
762
Cheniere Partners Revolving Credit
Facility
1,000
CCH Credit Facility
3,260
CCH Working Capital Facility
1,390
Cheniere Revolving Credit Facility
1,250
Total available commitments under our
credit facilities
7,662
Total available liquidity
$
10,616
(1) $351 million of cash and cash
equivalents was held by our consolidated variable interest entities
(“VIEs”).
(2) $79 million of restricted cash and
cash equivalents was held by our consolidated VIEs.
Recent Key Financial Transactions and Updates
In May 2024, Cheniere Partners issued $1.2 billion aggregate
principal amount of 5.750% Senior Notes due 2034. In June 2024, the
net proceeds, together with cash on hand, were used to retire $1.2
billion outstanding aggregate principal amount of SPL’s 5.625%
Senior Secured Notes due 2025.
During the three and six months ended June 30, 2024
respectively, SPL repaid the remaining $150 million and $300
million in principal amount of its 5.750% Senior Secured Notes due
2024 with cash on hand.
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 in
Cameron Parish, Louisiana (the “SPL Project”).
SPL Expansion Project
Through Cheniere Partners, we are developing an expansion
adjacent to the SPL Project with an expected total production
capacity of up to approximately 20 mtpa of LNG (the “SPL Expansion
Project”), inclusive of estimated debottlenecking opportunities. In
February 2024, certain subsidiaries of Cheniere Partners submitted
an application to the FERC for authorization to site, construct and
operate the SPL Expansion Project, as well as an application to the
DOE requesting authorization to export LNG to Free-Trade Agreement
(“FTA”) and non-FTA countries, both of which applications exclude
debottlenecking.
CCL Project
We operate three natural gas liquefaction Trains for a total
production capacity of approximately 15 mtpa of LNG at the Corpus
Christi LNG terminal near Corpus Christi, Texas (the “CCL
Project”).
CCL Stage 3 Project
We are constructing an expansion adjacent to the CCL Project
consisting of seven midscale Trains with an expected total
production capacity of over 10 mtpa of LNG (the “CCL Stage 3
Project”). First LNG production from the first train of the CCL
Stage 3 Project is currently forecast to be achieved by the end of
2024.
CCL Stage 3 Project Progress as of June 30, 2024:
CCL Stage 3 Project
Project Status
Under Construction
Project Completion Percentage
62.4%(1)
Expected Substantial Completion
1H 2025 - 2H 2026
(1) Engineering 93.7% complete,
procurement 80.3% complete, subcontract work 83.9% complete and
construction 24.4% complete.
CCL Midscale Trains 8 & 9
Project
We are developing two additional midscale Trains with an
expected total production capacity of approximately 3 mtpa of LNG
(the “CCL Midscale Trains 8 & 9 Project”) adjacent to the CCL
Stage 3 Project. In March 2023, certain of our subsidiaries filed
an application with the FERC for authorization to site, construct
and operate the CCL Midscale Trains 8 & 9 Project, and in April
2023, filed an application with the DOE requesting authorization to
export LNG to FTA and non-FTA countries. In July 2023, we received
authorization from the DOE to export LNG to FTA countries. In June
2024, we received a positive EA from the FERC and anticipate
receiving all remaining necessary regulatory approvals for the
project in 2025.
INVESTOR CONFERENCE CALL AND WEBCAST
We will host a conference call to discuss our financial and
operating results for the second quarter 2024 on Thursday, August
8, 2024, 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 Net income as used herein refers to Net
income attributable to Cheniere Energy, Inc. on our Consolidated
Statements of Operations.
2 Non-GAAP financial measure. See
“Reconciliation of Non-GAAP Measures” for further details.
About Cheniere
Cheniere Energy, Inc. is the leading producer and exporter of
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 mtpa of LNG in
operation and an additional 10+ mtpa of expected production
capacity under construction. 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 June 30, 2024, 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, share repurchases and execution on the
capital allocation plan, and (viii) statements relating to our
goals, commitments and strategies in relation to environmental
matters. 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 August 2, 2024, approximately 3,570 cumulative LNG cargoes
totaling over 245 million tonnes of LNG have been produced, loaded
and exported from our liquefaction projects.
During the three and six months ended June 30, 2024, we exported
553 and 1,155 TBtu, respectively, of LNG from our liquefaction
projects. 30 TBtu of LNG exported from our liquefaction projects
and sold on a delivered basis was in transit as of June 30, 2024,
none of which was related to commissioning activities.
The following table summarizes the volumes of 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 six months ended June 30, 2024:
(in TBtu)
Three Months Ended June 30,
2024
Six Months Ended June 30,
2024
Volumes loaded during the current
period
552
1,153
Volumes loaded during the prior period but
recognized during the current period
30
37
Less: volumes loaded during the current
period and in transit at the end of the period
(30
)
(30
)
Total volumes recognized in the current
period
552
1,160
In addition, during the six months ended June 30, 2024, we
recognized 11 TBtu of LNG on our Consolidated Financial Statements
related to LNG cargoes sourced from third-parties.
Cheniere Energy, Inc.
Consolidated Statements of
Operations
(in millions, except per share
data)(1)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Revenues
LNG revenues
$
3,042
$
3,919
$
7,079
$
11,010
Regasification revenues
34
33
68
67
Other revenues
175
150
357
335
Total revenues
3,251
4,102
7,504
11,412
Operating costs and expenses
(recoveries)
Cost (recovery) of sales (excluding items
shown separately below) (2)
784
912
3,020
(627
)
Operating and maintenance expense
463
487
914
931
Selling, general and administrative
expense
99
87
200
194
Depreciation and amortization expense
304
297
606
594
Other operating costs and expenses
13
11
22
21
Total operating costs and expenses
1,663
1,794
4,762
1,113
Income from operations
1,588
2,308
2,742
10,299
Other income (expense)
Interest expense, net of capitalized
interest
(257
)
(291
)
(523
)
(588
)
Gain (loss) on modification or
extinguishment of debt
(9
)
(2
)
(9
)
18
Interest and dividend income
47
55
108
89
Other income, net
3
—
2
3
Total other expense
(216
)
(238
)
(422
)
(478
)
Income before income taxes and
non-controlling interest
1,372
2,070
2,320
9,821
Less: income tax provision
210
363
319
1,679
Net income
1,162
1,707
2,001
8,142
Less: net income attributable to
non-controlling interest
282
338
619
1,339
Net income attributable to Cheniere
$
880
$
1,369
$
1,382
$
6,803
Net income per share attributable to
common stockholders—basic (3)
$
3.85
$
5.65
$
5.97
$
27.99
Net income per share attributable to
common stockholders—diluted (3)
$
3.84
$
5.61
$
5.96
$
27.79
Weighted average number of common shares
outstanding—basic
228.4
242.3
231.3
243.1
Weighted average number of common shares
outstanding—diluted
228.9
243.8
231.9
244.8
__________________________
(1)
Please refer to the Cheniere Energy, Inc.
Quarterly Report on Form 10-Q for the quarter ended June 30, 2024,
filed with the Securities and Exchange Commission.
(2)
Cost of sales includes approximately $0.7
billion and $0.4 billion of gains from changes in the fair value of
commodity derivatives prior to contractual delivery or termination
during the three and six months ended June 30, 2024, as compared to
$0.8 billion and $5.5 billion of gains in the corresponding 2023
periods, respectively.
(3)
Earnings per share in the table may not
recalculate exactly due to rounding because it is calculated based
on whole numbers, not the rounded numbers presented.
Cheniere Energy, Inc.
Consolidated Balance
Sheets
(in millions, except share
data)(1)(2)
June 30,
December 31,
2024
2023
(unaudited)
ASSETS
Current assets
Cash and cash equivalents
$
2,442
$
4,066
Restricted cash and cash equivalents
512
459
Trade and other receivables, net of
current expected credit losses
719
1,106
Inventory
387
445
Current derivative assets
38
141
Margin deposits
105
18
Other current assets, net
133
96
Total current assets
4,336
6,331
Property, plant and equipment, net of
accumulated depreciation
33,079
32,456
Operating lease assets
2,845
2,641
Derivative assets
1,151
863
Deferred tax assets
26
26
Other non-current assets, net
841
759
Total assets
$
42,278
$
43,076
LIABILITIES, REDEEMABLE
NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
$
124
$
181
Accrued liabilities
1,706
1,780
Current debt, net of unamortized debt
issuance costs
798
300
Deferred revenue
125
179
Current operating lease liabilities
637
655
Current derivative liabilities
803
750
Other current liabilities
43
43
Total current liabilities
4,236
3,888
Long-term debt, net of unamortized
discount and debt issuance costs
22,590
23,397
Operating lease liabilities
2,200
1,971
Finance lease liabilities
506
467
Derivative liabilities
2,153
2,378
Deferred tax liabilities
1,576
1,545
Other non-current liabilities
419
410
Total liabilities
33,680
34,056
Redeemable non-controlling interest
6
—
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; 278.5 million shares and 277.9 million
shares issued at June 30, 2024 and December 31, 2023,
respectively
1
1
Treasury stock: 51.5 million shares and
40.9 million shares at June 30, 2024 and December 31, 2023,
respectively, at cost
(5,568
)
(3,864
)
Additional paid-in-capital
4,406
4,377
Retained earnings
5,625
4,546
Total Cheniere stockholders’ equity
4,464
5,060
Non-controlling interest
4,128
3,960
Total stockholders’ equity
8,592
9,020
Total liabilities, redeemable
non-controlling interest and stockholders’ equity
$
42,278
$
43,076
__________________________
(1)
Please refer to the Cheniere Energy, Inc.
Quarterly Report on Form 10-Q for the quarter ended June 30, 2024,
filed with the Securities and Exchange Commission.
(2)
Amounts presented include balances held by
our consolidated VIEs, substantially all of which are related to
Cheniere Partners. As of June 30, 2024, total assets and
liabilities of our VIEs, which are included in our Consolidated
Balance Sheets, were $17.4 billion and $18.2 billion, respectively,
including $351 million of cash and cash equivalents and $79 million
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 three and six months ended June 30,
2024 and 2023 (in millions):
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net income attributable to Cheniere
$
880
$
1,369
$
1,382
$
6,803
Net income attributable to non-controlling
interest
282
338
619
1,339
Income tax provision
210
363
319
1,679
Interest expense, net of capitalized
interest
257
291
523
588
Loss (gain) on modification or
extinguishment of debt
9
2
9
(18
)
Interest and dividend income
(47
)
(55
)
(108
)
(89
)
Other income, net
(3
)
—
(2
)
(3
)
Income from operations
$
1,588
$
2,308
$
2,742
$
10,299
Adjustments to reconcile income from
operations to Consolidated Adjusted EBITDA:
Depreciation and amortization expense
304
297
606
594
Gain from changes in fair value of
commodity and foreign exchange (“FX”) derivatives, net (1)
(606
)
(782
)
(321
)
(5,513
)
Total non-cash compensation expense
33
33
65
75
Other operating costs and expenses
3
2
3
2
Consolidated Adjusted EBITDA
$
1,322
$
1,858
$
3,095
$
5,457
__________________________
(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 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
attributable to Cheniere before net income attributable to
non-controlling interest, interest expense, net of capitalized
interest, 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, and non-cash compensation expense. 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 attributable to
Cheniere for the three and six months ended June 30, 2024 and
forecast amounts for full year 2024 (in billions):
Three Months Ended June
30,
Six Months Ended June
30,
Full Year
2024
2024
2024
Net income attributable to Cheniere
$
0.88
$
1.38
$
2.0
-
$
2.5
Net income attributable to non-controlling
interest
0.28
0.62
1.0
-
1.1
Income tax provision
0.21
0.32
0.4
-
0.6
Interest expense, net of capitalized
interest
0.26
0.52
1.1
-
1.1
Depreciation and amortization expense
0.30
0.61
1.2
-
1.2
Other expense (income), financing costs,
and certain non-cash operating expenses
(0.61
)
(0.35
)
0.0
-
(0.4
)
Consolidated Adjusted EBITDA
$
1.32
$
3.10
$
5.7
-
$
6.1
Interest expense (net of capitalized
interest and amortization)
(0.24
)
(0.49
)
(1.0
)
-
(1.0
)
Maintenance capital expenditures
(0.03
)
(0.05
)
(0.2
)
-
(0.2
)
Income tax (excludes deferred
taxes)(1)
(0.17
)
(0.28
)
(0.7
)
-
(0.4
)
Other income
0.04
0.09
0.1
-
0.1
Consolidated Distributable Cash
Flow
$
0.92
$
2.36
$
4.0
-
$
4.6
Distributable Cash Flow attributable to
non-controlling interest
(0.23
)
(0.50
)
(0.9
)
-
(1.1
)
Cheniere Distributable Cash
Flow
$
0.70
$
1.86
$
3.1
-
$
3.5
__________________________
Note: Totals may not sum due to
rounding.
(1) Our cash tax payments are subject to
commodity and market volatility, regulatory changes and other
factors which could significantly impact both the timing and amount
of our future cash tax payments. For more information, please refer
to the disclosure under Operating Cash Flows in Sources and Uses of
Cash within Liquidity and Capital Resources of the Cheniere Energy,
Inc. Quarterly Report on Form 10-Q for the quarter ended June 30,
2024, filed with the Securities and Exchange Commission.
Distributable Cash Flow 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, 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, 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 Consolidated Statements of Stockholders’ Equity
(Deficit) 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 considered for deployment by our Board of Directors
pursuant to our capital allocation plan, such as by way of common
stock dividends, stock repurchases, retirement of debt, or
expansion capital expenditures1. Distributable Cash Flow 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.
__________________________
1 Capital spending for our business
consists primarily of:
- Maintenance capital expenditures. These expenditures include
costs which qualify for capitalization that are required to sustain
property, plant and equipment reliability and safety and to address
environmental or other regulatory requirements rather than to
generate incremental distributable cash flow; and
- Expansion capital expenditures. These expenditures are
undertaken primarily to generate incremental distributable cash
flow and include investment in accretive organic growth,
acquisition or construction of additional complementary assets to
grow our business, along with expenditures to enhance the
productivity and efficiency of our existing facilities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240807719055/en/
Cheniere Energy, Inc. Investors
Randy Bhatia 713-375-5479 Frances Smith 713-375-5753 Media Relations Eben Burnham-Snyder 713-375-5764
Bernardo Fallas 713-375-5593
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