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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cheniere Energy Inc | AMEX:LNG | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 161.81 | 0 | 01:00:00 |
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Delaware
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001-16383
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95-4352386
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(State or other jurisdiction of incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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700 Milam Street, Suite 1900
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Houston, Texas
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77002
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(Address of principal executive offices)
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(Zip code)
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Large accelerated filer
x
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Bcf
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billion cubic feet
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Bcf/d
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billion cubic feet per day
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Bcf/yr
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billion cubic feet per year
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Bcfe
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billion cubic feet equivalent
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DOE
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U.S. Department of Energy
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EPC
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engineering, procurement and construction
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FERC
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Federal Energy Regulatory Commission
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FTA countries
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countries with which the United States has a free trade agreement providing for national treatment for trade in natural gas
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GAAP
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generally accepted accounting principles in the United States
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Henry Hub
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the final settlement price (in USD per MMBtu) for the New York Mercantile Exchange’s Henry Hub natural gas futures contract for the month in which a relevant cargo’s delivery window is scheduled to begin
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LIBOR
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London Interbank Offered Rate
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LNG
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liquefied natural gas, a product of natural gas consisting primarily of methane (CH
4
) that is in liquid form at near atmospheric pressure
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MMBtu
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million British thermal units, an energy unit
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mtpa
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million tonnes per annum
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non-FTA countries
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countries with which the United States does not have a free trade agreement providing for national treatment for trade in natural gas and with which trade is permitted
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SEC
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Securities and Exchange Commission
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SPA
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LNG sale and purchase agreement
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Train
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an industrial facility comprised of a series of refrigerant compressor loops used to cool natural gas into LNG
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TUA
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terminal use agreement
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PART I.
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FINANCIAL INFORMATION
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ITEM 1.
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CONSOLIDATED FINANCIAL STATEMENTS
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September 30,
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December 31,
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||||
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2016
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2015
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ASSETS
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(unaudited)
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Current assets
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Cash and cash equivalents
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$
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990,132
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$
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1,201,112
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Restricted cash
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827,545
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503,397
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Accounts and other receivables
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154,167
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5,749
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Inventory
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63,853
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18,125
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Other current assets
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69,030
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54,203
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Total current assets
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2,104,727
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1,782,586
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Non-current restricted cash
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31,128
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31,722
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Property, plant and equipment, net
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19,891,666
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16,193,907
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Debt issuance costs, net
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294,059
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378,677
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Non-current derivative assets
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11,247
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30,887
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Goodwill
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76,819
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76,819
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Other non-current assets
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279,434
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314,455
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Total assets
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$
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22,689,080
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$
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18,809,053
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities
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Accounts payable
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$
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38,569
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$
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22,820
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Accrued liabilities
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699,996
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427,199
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Current debt, net
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1,781,511
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1,673,379
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Deferred revenue
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26,709
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26,669
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Derivative liabilities
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61,829
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35,201
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Other current liabilities
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264
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—
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Total current liabilities
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2,608,878
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2,185,268
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Long-term debt, net
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19,033,513
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14,920,427
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Non-current deferred revenue
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6,500
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9,500
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Non-current derivative liabilities
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268,601
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79,387
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Other non-current liabilities
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65,849
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53,068
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Commitments and contingencies (see Note 16)
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Stockholders’ equity
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Preferred stock, $0.0001 par value, 5.0 million shares authorized, none issued
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—
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—
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Common stock, $0.003 par value
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Authorized: 480.0 million shares at September 30, 2016 and December 31, 2015
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Issued and outstanding: 235.1 million shares and 235.6 million shares at September 30, 2016 and December 31, 2015, respectively
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705
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708
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Treasury stock: 12.1 million shares and 11.6 million shares at September 30, 2016 and December 31, 2015, respectively, at cost
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(372,531
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)
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(353,927
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)
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Additional paid-in-capital
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3,112,753
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3,075,317
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Accumulated deficit
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(4,343,646
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)
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(3,623,948
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)
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Total stockholders’ deficit
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(1,602,719
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)
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(901,850
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)
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Non-controlling interest
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2,308,458
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2,463,253
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Total equity
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705,739
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1,561,403
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Total liabilities and equity
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$
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22,689,080
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$
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18,809,053
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
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September 30,
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||||||||||||
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2016
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2015
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2016
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2015
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||||||||
Revenues
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Regasification revenues
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$
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66,970
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$
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66,597
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$
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198,143
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$
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199,888
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LNG revenues (losses)
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398,554
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(1,557
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)
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511,993
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(1,601
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)
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||||
Other revenues
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149
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1,019
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1,445
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4,166
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Total revenues
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465,673
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66,059
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711,581
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202,453
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Operating costs and expenses
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Cost (cost recovery) of sales (excluding depreciation and amortization expense shown separately below)
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252,343
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(24,214
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)
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352,559
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(22,077
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)
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Operating and maintenance expense
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61,610
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17,963
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143,489
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71,396
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Development expense
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1,546
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4,935
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4,709
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37,640
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Selling, general and administrative expense
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59,418
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97,332
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196,999
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263,205
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Depreciation and amortization expense
|
49,212
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21,638
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106,082
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59,561
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|
||||
Restructuring expense
|
26,241
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—
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49,196
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—
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||||
Impairment expense
|
—
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396
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10,095
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572
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|
||||
Other
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27
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83
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|
189
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348
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|
||||
Total operating costs and expenses
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450,397
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|
118,133
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863,318
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410,645
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||||
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||||||||
Income (loss) from operations
|
15,276
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(52,074
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)
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(151,737
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)
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(208,192
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)
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||||
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||||||||
Other income (expense)
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||||||||
Interest expense, net of capitalized interest
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(148,053
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)
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(93,566
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)
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(330,357
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)
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(238,664
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)
|
||||
Loss on early extinguishment of debt
|
(25,765
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)
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—
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(82,537
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)
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(96,273
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)
|
||||
Derivative gain (loss), net
|
29,327
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(161,482
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)
|
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(242,228
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)
|
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(242,123
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)
|
||||
Other income (expense)
|
437
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|
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(39
|
)
|
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(5,564
|
)
|
|
616
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|
||||
Total other expense
|
(144,054
|
)
|
|
(255,087
|
)
|
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(660,686
|
)
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(576,444
|
)
|
||||
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|
||||||||
Loss before income taxes and non-controlling interest
|
(128,778
|
)
|
|
(307,161
|
)
|
|
(812,423
|
)
|
|
(784,636
|
)
|
||||
Income tax benefit (provision)
|
(1,638
|
)
|
|
69
|
|
|
(1,911
|
)
|
|
(102
|
)
|
||||
Net loss
|
(130,416
|
)
|
|
(307,092
|
)
|
|
(814,334
|
)
|
|
(784,738
|
)
|
||||
Less: net loss attributable to non-controlling interest
|
(29,974
|
)
|
|
(9,284
|
)
|
|
(94,636
|
)
|
|
(100,726
|
)
|
||||
Net loss attributable to common stockholders
|
$
|
(100,442
|
)
|
|
$
|
(297,808
|
)
|
|
$
|
(719,698
|
)
|
|
$
|
(684,012
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share attributable to common stockholders—basic and diluted
|
$
|
(0.44
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(3.15
|
)
|
|
$
|
(3.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding—basic and diluted
|
228,924
|
|
|
227,126
|
|
|
228,463
|
|
|
226,648
|
|
|
Total Stockholders’ Equity
|
|
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|
|||||||||||||||||||||||||
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Common Stock
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Non-controlling Interest
|
|
Total
Equity
|
||||||||||||||||||
|
Shares
|
|
Par Value Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2015
|
235,639
|
|
|
$
|
708
|
|
|
11,649
|
|
|
$
|
(353,927
|
)
|
|
$
|
3,075,317
|
|
|
$
|
(3,623,948
|
)
|
|
$
|
2,463,253
|
|
|
$
|
1,561,403
|
|
Exercise of stock options
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
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|
50
|
|
|
—
|
|
|
—
|
|
|
50
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|
||||||
Issuances of restricted stock
|
273
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
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|
||||||
Forfeitures of restricted stock
|
(377
|
)
|
|
(2
|
)
|
|
10
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,526
|
|
|
—
|
|
|
—
|
|
|
36,526
|
|
||||||
Shares repurchased related to share-based compensation
|
(464
|
)
|
|
(2
|
)
|
|
464
|
|
|
(18,604
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(18,604
|
)
|
||||||
Loss attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(94,636
|
)
|
|
(94,636
|
)
|
||||||
Equity portion of convertible notes, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
857
|
|
|
—
|
|
|
—
|
|
|
857
|
|
||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,159
|
)
|
|
(60,159
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(719,698
|
)
|
|
—
|
|
|
(719,698
|
)
|
||||||
Balance at September 30, 2016
|
235,073
|
|
|
$
|
705
|
|
|
12,123
|
|
|
$
|
(372,531
|
)
|
|
$
|
3,112,753
|
|
|
$
|
(4,343,646
|
)
|
|
$
|
2,308,458
|
|
|
$
|
705,739
|
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(814,334
|
)
|
|
$
|
(784,738
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Non-cash LNG inventory write-downs
|
—
|
|
|
17,826
|
|
||
Depreciation and amortization expense
|
106,082
|
|
|
59,561
|
|
||
Share-based compensation
|
85,128
|
|
|
92,627
|
|
||
Amortization of debt issuance costs and discount
|
38,826
|
|
|
28,552
|
|
||
Loss on early extinguishment of debt
|
82,537
|
|
|
96,273
|
|
||
Total losses on derivatives, net
|
269,399
|
|
|
208,769
|
|
||
Net cash used for settlement of derivative instruments
|
(34,567
|
)
|
|
(94,170
|
)
|
||
Impairment expense
|
10,095
|
|
|
572
|
|
||
Other
|
9,803
|
|
|
834
|
|
||
Changes in restricted cash for certain operating activities
|
119,831
|
|
|
92,589
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts and other receivables
|
(128,042
|
)
|
|
(2,226
|
)
|
||
Inventory
|
(28,051
|
)
|
|
(25,966
|
)
|
||
Accounts payable and accrued liabilities
|
39,599
|
|
|
16,671
|
|
||
Deferred revenue
|
(2,960
|
)
|
|
(3,003
|
)
|
||
Other, net
|
47,627
|
|
|
21,252
|
|
||
Net cash used in operating activities
|
(199,027
|
)
|
|
(274,577
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Property, plant and equipment, net
|
(3,449,161
|
)
|
|
(5,747,596
|
)
|
||
Use of restricted cash for the acquisition of property, plant and equipment
|
3,488,263
|
|
|
5,330,526
|
|
||
Other
|
(51,308
|
)
|
|
(111,518
|
)
|
||
Net cash used in investing activities
|
(12,206
|
)
|
|
(528,588
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuances of debt
|
8,308,306
|
|
|
6,178,000
|
|
||
Repayments of debt
|
(4,180,660
|
)
|
|
—
|
|
||
Debt issuance and deferred financing costs
|
(116,715
|
)
|
|
(519,699
|
)
|
||
Investment in restricted cash
|
(3,931,648
|
)
|
|
(5,161,701
|
)
|
||
Distributions and dividends to non-controlling interest
|
(60,159
|
)
|
|
(60,154
|
)
|
||
Proceeds from exercise of stock options
|
50
|
|
|
2,279
|
|
||
Payments related to tax withholdings for share-based compensation
|
(18,604
|
)
|
|
(44,305
|
)
|
||
Other
|
(317
|
)
|
|
1,424
|
|
||
Net cash provided by financing activities
|
253
|
|
|
395,844
|
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(210,980
|
)
|
|
(407,321
|
)
|
||
Cash and cash equivalents—beginning of period
|
1,201,112
|
|
|
1,747,583
|
|
||
Cash and cash equivalents—end of period
|
$
|
990,132
|
|
|
$
|
1,340,262
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
Current restricted cash
|
|
|
|
|
||||
SPLNG debt service and interest payment
|
|
$
|
115,490
|
|
|
$
|
77,415
|
|
SPL Project
|
|
325,630
|
|
|
189,260
|
|
||
CTPL construction and interest payment
|
|
—
|
|
|
7,882
|
|
||
CQP and cash held by guarantor subsidiaries
|
|
127,429
|
|
|
—
|
|
||
CCL Project
|
|
192,812
|
|
|
46,770
|
|
||
Cash held by our subsidiaries restricted to Cheniere
|
|
12,930
|
|
|
147,138
|
|
||
Other
|
|
53,254
|
|
|
34,932
|
|
||
Total current restricted cash
|
|
$
|
827,545
|
|
|
$
|
503,397
|
|
|
|
|
|
|
||||
Non-current restricted cash
|
|
|
|
|
||||
SPLNG debt service
|
|
$
|
13,650
|
|
|
$
|
13,650
|
|
Other
|
|
17,478
|
|
|
18,072
|
|
||
Total non-current restricted cash
|
|
$
|
31,128
|
|
|
$
|
31,722
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
SPL trade receivable
|
|
$
|
38,432
|
|
|
$
|
—
|
|
Cheniere Marketing trade receivable
|
|
100,555
|
|
|
—
|
|
||
Interest receivable
|
|
234
|
|
|
95
|
|
||
Other accounts receivable
|
|
14,946
|
|
|
5,654
|
|
||
Total accounts and other receivables
|
|
$
|
154,167
|
|
|
$
|
5,749
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
Natural gas
|
|
$
|
4,181
|
|
|
$
|
5,724
|
|
LNG
|
|
29,111
|
|
|
5,148
|
|
||
Materials and other
|
|
30,561
|
|
|
7,253
|
|
||
Total inventory
|
|
$
|
63,853
|
|
|
$
|
18,125
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
LNG terminal costs
|
|
|
|
|
||||
LNG terminal
|
|
$
|
7,976,737
|
|
|
$
|
2,487,759
|
|
LNG terminal construction-in-process
|
|
12,176,899
|
|
|
13,875,204
|
|
||
LNG site and related costs, net
|
|
38,752
|
|
|
33,512
|
|
||
Accumulated depreciation
|
|
(498,934
|
)
|
|
(413,545
|
)
|
||
Total LNG terminal costs, net
|
|
19,693,454
|
|
|
15,982,930
|
|
||
Fixed assets and other
|
|
|
|
|
|
|
||
Computer and office equipment
|
|
13,241
|
|
|
12,153
|
|
||
Furniture and fixtures
|
|
17,393
|
|
|
17,101
|
|
||
Computer software
|
|
78,942
|
|
|
69,340
|
|
||
Leasehold improvements
|
|
46,351
|
|
|
40,136
|
|
||
Land
|
|
60,582
|
|
|
60,612
|
|
||
Other
|
|
36,369
|
|
|
49,376
|
|
||
Accumulated depreciation
|
|
(54,666
|
)
|
|
(37,741
|
)
|
||
Total fixed assets and other, net
|
|
198,212
|
|
|
210,977
|
|
||
Property, plant and equipment, net
|
|
$
|
19,891,666
|
|
|
$
|
16,193,907
|
|
•
|
interest rate swaps to hedge the exposure to volatility in a portion of the floating-rate interest payments under certain of our credit facilities
(“Interest Rate Derivatives”)
;
|
•
|
commodity derivatives to hedge the exposure to price risk attributable to future: (1) sales of our LNG inventory and (2) purchases of natural gas to operate the Sabine Pass LNG terminal
(“Natural Gas Derivatives”)
;
|
•
|
commodity derivatives consisting of natural gas supply contracts for the commissioning and operation of the
SPL Project
(“Physical Liquefaction Supply Derivatives”)
and associated economic hedges
(“Financial Liquefaction Supply Derivatives”, and collectively with the Physical Liquefaction Supply Derivatives, the “Liquefaction Supply Derivatives”)
;
|
•
|
financial derivatives to hedge the exposure to the commodity markets in which we have contractual arrangements to purchase or sell physical LNG
(“LNG Trading Derivatives”)
; and
|
•
|
foreign currency exchange (“FX”) contracts to hedge exposure to currency risk associated with operations in countries outside of the United States
(“FX Derivatives”)
.
|
|
Fair Value Measurements as of
|
||||||||||||||||||||||||||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
Quoted Prices in Active Markets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
|
|
Quoted Prices in Active Markets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
|
||||||||||||||||
SPL Interest Rate Derivatives liability
|
$
|
—
|
|
|
$
|
(15,948
|
)
|
|
$
|
—
|
|
|
$
|
(15,948
|
)
|
|
$
|
—
|
|
|
$
|
(8,740
|
)
|
|
$
|
—
|
|
|
$
|
(8,740
|
)
|
CQP Interest Rate Derivatives liability
|
—
|
|
|
(12,166
|
)
|
|
—
|
|
|
(12,166
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
CCH Interest Rate Derivatives liability
|
—
|
|
|
(297,539
|
)
|
|
—
|
|
|
(297,539
|
)
|
|
—
|
|
|
(104,999
|
)
|
|
—
|
|
|
(104,999
|
)
|
||||||||
Liquefaction Supply Derivatives asset (liability)
|
(105
|
)
|
|
(275
|
)
|
|
12,480
|
|
|
12,100
|
|
|
—
|
|
|
(25
|
)
|
|
32,492
|
|
|
32,467
|
|
||||||||
LNG Trading Derivatives asset (liability)
|
284
|
|
|
(632
|
)
|
|
—
|
|
|
(348
|
)
|
|
—
|
|
|
1,053
|
|
|
—
|
|
|
1,053
|
|
||||||||
Natural Gas Derivatives liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66
|
)
|
|
—
|
|
|
(66
|
)
|
||||||||
FX Derivatives liability
|
—
|
|
|
(1,193
|
)
|
|
—
|
|
|
(1,193
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Net Fair Value Asset
(in thousands)
|
|
Valuation Technique
|
|
Significant Unobservable Input
|
|
Significant Unobservable Inputs Range
|
Physical Liquefaction Supply Derivatives
|
|
$12,480
|
|
Income Approach
|
|
Basis Spread
|
|
$(0.35) - $(0.03)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Balance, beginning of period
|
|
$
|
22,434
|
|
|
$
|
440
|
|
|
$
|
32,492
|
|
|
$
|
342
|
|
Realized and mark-to-market losses:
|
|
|
|
|
|
|
|
|
||||||||
Included in cost of sales (1)
|
|
(10,567
|
)
|
|
32,177
|
|
|
(20,482
|
)
|
|
32,204
|
|
||||
Purchases and settlements:
|
|
|
|
|
|
|
|
|
||||||||
Purchases
|
|
968
|
|
|
—
|
|
|
968
|
|
|
—
|
|
||||
Settlements (1)
|
|
(308
|
)
|
|
(71
|
)
|
|
(741
|
)
|
|
—
|
|
||||
Transfers out of Level 3 (2)
|
|
(47
|
)
|
|
—
|
|
|
243
|
|
|
—
|
|
||||
Balance, end of period
|
|
$
|
12,480
|
|
|
$
|
32,546
|
|
|
$
|
12,480
|
|
|
$
|
32,546
|
|
Change in unrealized gains relating to instruments still held at end of period
|
|
$
|
(10,567
|
)
|
|
$
|
—
|
|
|
$
|
(19,763
|
)
|
|
$
|
—
|
|
|
(1)
|
Does not include the decrease in fair value of
$0.7 million
related to the realized gains capitalized during the
nine months ended September 30, 2016
.
|
(2)
|
Transferred to Level 2 as a result of observable market for the underlying natural gas supply contracts.
|
|
|
Initial Notional Amount
|
|
Maximum Notional Amount
|
|
Effective Date
|
|
Maturity Date
|
|
Weighted Average Fixed Interest Rate Paid
|
|
Variable Interest Rate Received
|
SPL Interest Rate Derivatives
|
|
$20.0 million
|
|
$628.8 million
|
|
August 14, 2012
|
|
July 31, 2019
|
|
1.98%
|
|
One-month LIBOR
|
CQP Interest Rate Derivatives
|
|
$225.0 million
|
|
$1.3 billion
|
|
March 22, 2016
|
|
February 29, 2020
|
|
1.19%
|
|
One-month LIBOR
|
CCH Interest Rate Derivatives
|
|
$28.8 million
|
|
$5.5 billion
|
|
May 20, 2015
|
|
May 31, 2022
|
|
2.29%
|
|
One-month LIBOR
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
|
SPL Interest Rate Derivatives
|
|
CQP Interest Rate Derivatives
|
|
CCH Interest Rate Derivatives
|
|
Total
|
|
SPL Interest Rate Derivatives
|
|
CQP Interest Rate Derivatives
|
|
CCH Interest Rate Derivatives
|
|
Total
|
||||||||||||||||
Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
$
|
(6,376
|
)
|
|
$
|
(5,248
|
)
|
|
$
|
(45,481
|
)
|
|
$
|
(57,105
|
)
|
|
$
|
(5,940
|
)
|
|
$
|
—
|
|
|
$
|
(28,559
|
)
|
|
$
|
(34,499
|
)
|
Non-current derivative liabilities
|
|
(9,572
|
)
|
|
(6,918
|
)
|
|
(252,058
|
)
|
|
(268,548
|
)
|
|
(2,800
|
)
|
|
—
|
|
|
(76,440
|
)
|
|
(79,240
|
)
|
||||||||
Total derivative liabilities
|
|
$
|
(15,948
|
)
|
|
$
|
(12,166
|
)
|
|
$
|
(297,539
|
)
|
|
$
|
(325,653
|
)
|
|
$
|
(8,740
|
)
|
|
$
|
—
|
|
|
$
|
(104,999
|
)
|
|
$
|
(113,739
|
)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
SPL Interest Rate Derivatives gain (loss)
|
|
$
|
2,557
|
|
|
$
|
(10,872
|
)
|
|
$
|
(13,473
|
)
|
|
$
|
(46,541
|
)
|
CQP Interest Rate Derivatives gain (loss)
|
|
6,626
|
|
|
—
|
|
|
(12,944
|
)
|
|
—
|
|
||||
CCH Interest Rate Derivatives gain (loss)
|
|
20,113
|
|
|
(150,610
|
)
|
|
(215,940
|
)
|
|
(195,582
|
)
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
Liquefaction Supply Derivatives (1)
|
|
LNG Trading Derivatives (2)
|
|
Natural Gas Derivatives
|
|
Total
|
|
Liquefaction Supply Derivatives
|
|
LNG Trading Derivatives (2)
|
|
Natural Gas Derivatives (3)
|
|
Total
|
||||||||||||||||
Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other current assets
|
$
|
1,947
|
|
|
$
|
2,142
|
|
|
$
|
—
|
|
|
$
|
4,089
|
|
|
$
|
2,737
|
|
|
$
|
640
|
|
|
$
|
—
|
|
|
$
|
3,377
|
|
Non-current derivative assets
|
11,247
|
|
|
—
|
|
|
—
|
|
|
11,247
|
|
|
30,304
|
|
|
583
|
|
|
—
|
|
|
30,887
|
|
||||||||
Total derivative assets
|
13,194
|
|
|
2,142
|
|
|
—
|
|
|
15,336
|
|
|
33,041
|
|
|
1,223
|
|
|
—
|
|
|
34,264
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
(1,083
|
)
|
|
(2,490
|
)
|
|
—
|
|
|
(3,573
|
)
|
|
(490
|
)
|
|
(107
|
)
|
|
(66
|
)
|
|
(663
|
)
|
||||||||
Non-current derivative liabilities
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(84
|
)
|
|
(63
|
)
|
|
—
|
|
|
(147
|
)
|
||||||||
Total derivative liabilities
|
(1,094
|
)
|
|
(2,490
|
)
|
|
—
|
|
|
(3,584
|
)
|
|
(574
|
)
|
|
(170
|
)
|
|
(66
|
)
|
|
(810
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative asset (liabilities), net
|
$
|
12,100
|
|
|
$
|
(348
|
)
|
|
$
|
—
|
|
|
$
|
11,752
|
|
|
$
|
32,467
|
|
|
$
|
1,053
|
|
|
$
|
(66
|
)
|
|
$
|
33,454
|
|
|
(1)
|
Does not include collateral of
$1.5 million
deposited for such contracts, which is included in
other current assets
in our Consolidated Balance Sheet as of
September 30, 2016
.
|
(2)
|
Does not include collateral of
$13.4 million
and
$11.0 million
deposited for such contracts, which are included in
other current assets
in our Consolidated Balance Sheets as of
September 30, 2016
and
December 31, 2015
, respectively.
|
(3)
|
Does not include collateral of
$5.5 million
deposited for such contracts, which is included in
other current assets
in our Consolidated Balance Sheet as of
December 31, 2015
.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
Statement of Operations Location
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Liquefaction Supply Derivatives gain
|
LNG revenues (losses)
|
|
$
|
374
|
|
|
$
|
—
|
|
|
$
|
368
|
|
|
$
|
—
|
|
Liquefaction Supply Derivatives gain (loss) (1)
|
Cost (cost recovery) of sales
|
|
(10,416
|
)
|
|
32,103
|
|
|
(22,680
|
)
|
|
32,184
|
|
||||
LNG Trading Derivatives gain (loss)
|
LNG revenues (losses)
|
|
8,617
|
|
|
113
|
|
|
(3,597
|
)
|
|
113
|
|
||||
Natural Gas Derivatives loss
|
LNG revenues (losses)
|
|
—
|
|
|
(152
|
)
|
|
(5
|
)
|
|
(260
|
)
|
||||
Natural Gas Derivatives gain
|
Operating and maintenance expense
|
|
—
|
|
|
857
|
|
|
174
|
|
|
1,317
|
|
|
|
|
|
|
Fair Value Measurements as of
|
||||||
|
Balance Sheet Location
|
|
September 30, 2016
|
|
December 31, 2015
|
|||||
FX Derivatives
|
Derivative liabilities
|
|
$
|
(1,151
|
)
|
|
$
|
—
|
|
|
FX Derivatives
|
Non-current derivative liabilities
|
|
(42
|
)
|
|
—
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
Statement of Operations Location
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
FX Derivatives loss
|
|
LNG revenues (losses)
|
|
$
|
(1,385
|
)
|
|
$
|
—
|
|
|
$
|
(1,345
|
)
|
|
$
|
—
|
|
FX Derivatives gain
|
|
Derivative gain (loss), net
|
|
31
|
|
|
—
|
|
|
129
|
|
|
—
|
|
||||
FX Derivatives gain (loss)
|
|
Other income (expense)
|
|
2
|
|
|
—
|
|
|
(86
|
)
|
|
—
|
|
|
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts Presented in the Consolidated Balance Sheets
|
||||||
Offsetting Derivative Assets (Liabilities)
|
|
|
|
|||||||||
As of September 30, 2016
|
|
|
|
|
|
|
||||||
SPL Interest Rate Derivatives
|
|
$
|
(15,948
|
)
|
|
$
|
—
|
|
|
$
|
(15,948
|
)
|
CQP Interest Rate Derivatives
|
|
(12,166
|
)
|
|
—
|
|
|
(12,166
|
)
|
|||
CCH Interest Rate Derivatives
|
|
(297,539
|
)
|
|
—
|
|
|
(297,539
|
)
|
|||
Liquefaction Supply Derivatives
|
|
13,740
|
|
|
(546
|
)
|
|
13,194
|
|
|||
Liquefaction Supply Derivatives
|
|
(2,803
|
)
|
|
1,709
|
|
|
(1,094
|
)
|
|||
LNG Trading Derivatives
|
|
6,829
|
|
|
(4,687
|
)
|
|
2,142
|
|
|||
LNG Trading Derivatives
|
|
(5,712
|
)
|
|
3,222
|
|
|
(2,490
|
)
|
|||
FX Derivatives
|
|
(2,036
|
)
|
|
843
|
|
|
(1,193
|
)
|
|||
As of December 31, 2015
|
|
|
|
|
|
|
|
|||||
SPL Interest Rate Derivatives
|
|
$
|
(8,740
|
)
|
|
$
|
—
|
|
|
$
|
(8,740
|
)
|
CCH Interest Rate Derivatives
|
|
(104,999
|
)
|
|
—
|
|
|
(104,999
|
)
|
|||
Liquefaction Supply Derivatives
|
|
33,636
|
|
|
(595
|
)
|
|
33,041
|
|
|||
Liquefaction Supply Derivatives
|
|
(574
|
)
|
|
—
|
|
|
(574
|
)
|
|||
LNG Trading Derivatives
|
|
1,922
|
|
|
(699
|
)
|
|
1,223
|
|
|||
LNG Trading Derivatives
|
|
(2,826
|
)
|
|
2,656
|
|
|
(170
|
)
|
|||
Natural Gas Derivatives
|
|
188
|
|
|
(254
|
)
|
|
(66
|
)
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
Advances made under EPC and non-EPC contracts
|
|
$
|
13,678
|
|
|
$
|
83,579
|
|
Advances made to municipalities for water system enhancements
|
|
98,958
|
|
|
89,953
|
|
||
Collateral payments for the CCL Project
|
|
36,341
|
|
|
4,994
|
|
||
Tax-related payments and receivables
|
|
31,218
|
|
|
31,712
|
|
||
Equity method investments
|
|
11,058
|
|
|
20,295
|
|
||
Other
|
|
88,181
|
|
|
83,922
|
|
||
Total other non-current assets
|
|
$
|
279,434
|
|
|
$
|
314,455
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
Interest costs and related debt fees
|
|
$
|
228,434
|
|
|
$
|
159,968
|
|
Compensation and benefits
|
|
104,318
|
|
|
99,511
|
|
||
SPL Project and CCL Project costs
|
|
343,782
|
|
|
145,759
|
|
||
LNG terminal costs
|
|
4,430
|
|
|
3,918
|
|
||
Other accrued liabilities
|
|
19,032
|
|
|
18,043
|
|
||
Total accrued liabilities
|
|
$
|
699,996
|
|
|
$
|
427,199
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
Long-term debt:
|
|
|
|
|
||||
SPLNG
|
|
|
|
|
||||
6.50% Senior Secured Notes due 2020 (“2020 SPLNG Senior Notes”) (1)
|
|
$
|
420,000
|
|
|
$
|
420,000
|
|
SPL
|
|
|
|
|
|
|||
5.625% Senior Secured Notes due 2021 (“2021 SPL Senior Notes”), net of unamortized premium of $7,573 and $8,718
|
|
2,007,573
|
|
|
2,008,718
|
|
||
6.25% Senior Secured Notes due 2022 (“2022 SPL Senior Notes”)
|
|
1,000,000
|
|
|
1,000,000
|
|
||
5.625% Senior Secured Notes due 2023 (“2023 SPL Senior Notes”), net of unamortized premium of $5,844 and $6,392
|
|
1,505,844
|
|
|
1,506,392
|
|
||
5.75% Senior Secured Notes due 2024 (“2024 SPL Senior Notes”)
|
|
2,000,000
|
|
|
2,000,000
|
|
||
5.625% Senior Secured Notes due 2025 (“2025 SPL Senior Notes”)
|
|
2,000,000
|
|
|
2,000,000
|
|
||
5.875% Senior Secured Notes due 2026 (“2026 SPL Senior Notes”)
|
|
1,500,000
|
|
|
—
|
|
||
5.00% Senior Secured Notes due 2027 (“2027 SPL Senior Notes”)
|
|
1,500,000
|
|
|
—
|
|
||
2015 SPL Credit Facilities
|
|
—
|
|
|
845,000
|
|
||
CTPL
|
|
|
|
|
||||
$400.0 million Term Loan Facility (“CTPL Term Loan”), net of unamortized discount of zero and $1,429
|
|
—
|
|
|
398,571
|
|
||
Cheniere Partners
|
|
|
|
|
||||
2016 CQP Credit Facilities
|
|
450,000
|
|
|
—
|
|
||
CCH
|
|
|
|
|
||||
7.000% Senior Secured Notes due 2024 (“2024 CCH Senior Notes”)
|
|
1,250,000
|
|
|
—
|
|
||
2015 CCH Credit Facility
|
|
3,283,340
|
|
|
2,713,000
|
|
||
CCH HoldCo II
|
|
|
|
|
||||
11.0% Convertible Senior Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”)
|
|
1,139,667
|
|
|
1,050,588
|
|
||
Cheniere
|
|
|
|
|
||||
4.875% Convertible Unsecured Notes due 2021 (“2021 Cheniere Convertible Unsecured Notes”), net of unamortized discount of $151,996 and $174,095
|
|
927,729
|
|
|
879,938
|
|
||
4.25% Convertible Senior Notes due 2045 (“2045 Cheniere Convertible Senior Notes”), net of unamortized discount of $317,441 and $319,062
|
|
307,559
|
|
|
305,938
|
|
||
Unamortized debt issuance costs (2)
|
|
(258,199
|
)
|
|
(207,718
|
)
|
||
Total long-term debt, net
|
|
19,033,513
|
|
|
14,920,427
|
|
||
|
|
|
|
|
||||
Current debt:
|
|
|
|
|
||||
7.50% Senior Secured Notes due 2016 (“2016 SPLNG Senior Notes”), net of unamortized discount of $782 and $4,303 (3)
|
|
1,664,718
|
|
|
1,661,197
|
|
||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
|
98,500
|
|
|
15,000
|
|
||
Cheniere Marketing trade finance facilities
|
|
18,807
|
|
|
—
|
|
||
Unamortized debt issuance costs (2)
|
|
(514
|
)
|
|
(2,818
|
)
|
||
Total current debt, net
|
|
1,781,511
|
|
|
1,673,379
|
|
||
|
|
|
|
|
||||
Total debt, net
|
|
$
|
20,815,024
|
|
|
$
|
16,593,806
|
|
|
(1)
|
Must be redeemed or repaid concurrently with the
2016 SPLNG Senior Notes
under the terms of the
2016 CQP Credit Facilities
if the obligations under the
2016 SPLNG Senior Notes
are satisfied with borrowings under the
2016 CQP Credit Facilities
. See
Note 20—Subsequent Events
for additional details about the redemption of the
2020 SPLNG Senior Notes
.
|
(2)
|
Effective January 1, 2016, we adopted ASU 2015-03 and ASU 2015-15, which require debt issuance costs related to term notes to be presented in the balance sheet as a direct deduction from the debt liability, rather than as an asset, retrospectively
|
(3)
|
Matures on November 30, 2016. We currently anticipate satisfying this obligation with borrowings under the
2016 CQP Credit Facilities
. See
Note 20—Subsequent Events
for additional details about the intended repayment of the
2016 SPLNG Senior Notes
.
|
|
|
2015 SPL Credit Facilities
|
|
SPL Working Capital Facility
|
|
2016 CQP Credit Facilities
|
|
2015 CCH Credit Facility
|
||||||||
Original facility size
|
|
$
|
4,600,000
|
|
|
$
|
1,200,000
|
|
|
$
|
2,800,000
|
|
|
$
|
8,403,714
|
|
Outstanding balance
|
|
—
|
|
|
98,500
|
|
|
450,000
|
|
|
3,283,340
|
|
||||
Commitments prepaid or terminated
|
|
2,643,867
|
|
|
—
|
|
|
—
|
|
|
1,050,660
|
|
||||
Letters of credit issued
|
|
—
|
|
|
337,044
|
|
|
7,500
|
|
|
—
|
|
||||
Available commitment
|
|
$
|
1,956,133
|
|
|
$
|
764,456
|
|
|
$
|
2,342,500
|
|
|
$
|
4,069,714
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
LIBOR plus 1.30% - 1.75% or base rate plus 1.75%
|
|
LIBOR plus 1.75% or base rate plus 0.75%
|
|
LIBOR plus 2.25% or base rate plus 1.25% (1)
|
|
LIBOR plus 2.25% or base rate plus 1.25% (2)
|
||||||||
Maturity date
|
|
Earlier of December 31, 2020 or second anniversary of SPL Trains 1 through 5 completion date
|
|
December 31, 2020, with various terms for underlying loans
|
|
February 25, 2020, with principals due quarterly commencing on February 19, 2019
|
|
Earlier of May 13, 2022 or second anniversary of CCL Trains 1 and 2 completion date
|
|
(1)
|
There is a
0.50%
step-up for both LIBOR and base rate loans beginning on February 25, 2019.
|
(2)
|
There is a
0.25%
step-up for both LIBOR and base rate loans following completion of the first two Trains of the
CCL Project
.
|
|
|
2021 Cheniere Convertible Unsecured Notes
|
|
2025 CCH HoldCo II Convertible Senior Notes
|
|
2045 Cheniere Convertible Senior Notes
|
||||||
Aggregate original principal
|
|
$
|
1,000,000
|
|
|
$
|
1,000,000
|
|
|
$
|
625,000
|
|
Debt component, net of discount
|
|
$
|
927,729
|
|
|
$
|
1,139,667
|
|
|
$
|
307,559
|
|
Equity component
|
|
$
|
203,892
|
|
|
$
|
—
|
|
|
$
|
194,082
|
|
Interest payment method
|
|
Paid-in-kind
|
|
|
Paid-in-kind (1)
|
|
|
Cash
|
|
|||
Conversion by us (2)
|
|
—
|
|
|
(3)
|
|
|
(4)
|
|
|||
Conversion by holders (2)
|
|
(5)
|
|
|
(6)
|
|
|
(7)
|
|
|||
Conversion basis
|
|
Cash and/or stock
|
|
|
Stock
|
|
|
Cash and/or stock
|
|
|||
Conversion value in excess of principal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Maturity date
|
|
May 28, 2021
|
|
|
March 1, 2025
|
|
|
March 15, 2045
|
|
|||
Contractual interest rate
|
|
4.875
|
%
|
|
11.0
|
%
|
|
4.25
|
%
|
|||
Effective interest rate
|
|
8.3
|
%
|
|
11.9
|
%
|
|
9.4
|
%
|
|||
Remaining debt discount and debt issuance costs amortization period (8)
|
|
4.7 years
|
|
|
4.0 years
|
|
|
28.5 years
|
|
|
(1)
|
Prior to the substantial completion of Train 2 of the
CCL Project
, interest will be paid entirely in kind. Following this date, the interest generally must be paid in cash; however, a portion of the interest may be paid in kind under certain specified circumstances.
|
(2)
|
Conversion is subject to various limitations and conditions.
|
(3)
|
Convertible on or after the later of March 1, 2020 and the substantial completion of Train 2 of the
CCL Project
, provided that our market capitalization is not less than
$10.0 billion
(“Eligible Conversion Date”). The conversion price is the
|
(4)
|
Redeemable at any time after March 15, 2020 at a redemption price payable in cash equal to the accreted amount of the
2045 Cheniere Convertible Senior Notes
to be redeemed, plus accrued and unpaid interest, if any, to such redemption date.
|
(5)
|
Initially convertible at
$93.64
(subject to adjustment upon the occurrence of certain specified events), provided that the closing price of our common stock is greater than or equal to the conversion price on the conversion date.
|
(6)
|
Convertible on or after the
six
-month anniversary of the Eligible Conversion Date, provided that our total market capitalization is not less than
$10.0 billion
, at a price equal to the average of the daily
VWAP
of our common stock for the
90
trading day period prior to the date on which notice of conversion is provided.
|
(7)
|
Prior to December 15, 2044, convertible only under certain circumstances as specified in the indenture; thereafter, holders may convert their notes regardless of these circumstances. The conversion rate will initially equal
7.2265
shares of our common stock per $1,000 principal amount of the
2045 Cheniere Convertible Senior Notes
, which corresponds to an initial conversion price of approximately
$138.38
per share of our common stock (subject to adjustment upon the occurrence of certain specified events).
|
(8)
|
We amortize any debt discount and debt issuance costs using the effective interest over the period through contractual maturity except for the 2025 CCH HoldCo II Convertible Senior Notes, which are amortized through the date they are first convertible by holders into our common stock.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Interest cost on convertible notes:
|
|
|
|
|
|
|
|
|
||||||||
Interest per contractual rate
|
|
$
|
51,000
|
|
|
$
|
46,782
|
|
|
$
|
149,893
|
|
|
$
|
97,991
|
|
Amortization of debt discount
|
|
6,593
|
|
|
7,233
|
|
|
24,578
|
|
|
20,948
|
|
||||
Amortization of debt issuance costs
|
|
1,362
|
|
|
1,133
|
|
|
3,766
|
|
|
1,748
|
|
||||
Total interest cost related to convertible notes
|
|
58,955
|
|
|
55,148
|
|
|
178,237
|
|
|
120,687
|
|
||||
Interest cost on debt excluding convertible notes
|
|
281,814
|
|
|
230,807
|
|
|
773,032
|
|
|
587,137
|
|
||||
Total interest cost
|
|
340,769
|
|
|
285,955
|
|
|
951,269
|
|
|
707,824
|
|
||||
Capitalized interest
|
|
(192,716
|
)
|
|
(192,389
|
)
|
|
(620,912
|
)
|
|
(469,160
|
)
|
||||
Total interest expense, net
|
|
$
|
148,053
|
|
|
$
|
93,566
|
|
|
$
|
330,357
|
|
|
$
|
238,664
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Carrying
Amount |
|
Estimated
Fair Value |
|
Carrying
Amount |
|
Estimated
Fair Value |
||||||||
Senior Notes, net of premium or discount (1)
|
|
$
|
14,848,135
|
|
|
$
|
15,747,108
|
|
|
$
|
10,596,307
|
|
|
$
|
9,525,809
|
|
CTPL Term Loan, net of discount (2)
|
|
—
|
|
|
—
|
|
|
398,571
|
|
|
400,000
|
|
||||
Credit facilities (2) (3)
|
|
3,850,647
|
|
|
3,850,647
|
|
|
3,573,000
|
|
|
3,573,000
|
|
||||
2021 Cheniere Convertible Unsecured Notes, net of discount (4)
|
|
927,729
|
|
|
981,520
|
|
|
879,938
|
|
|
825,413
|
|
||||
2025 CCH HoldCo II Convertible Senior Notes (4)
|
|
1,139,667
|
|
|
1,296,440
|
|
|
1,050,588
|
|
|
914,363
|
|
||||
2045 Cheniere Convertible Senior Notes, net of discount (5)
|
|
307,559
|
|
|
414,063
|
|
|
305,938
|
|
|
331,919
|
|
|
(1)
|
Includes
2016 SPLNG Senior Notes
, net of discount;
2020 SPLNG Senior Notes
;
2021 SPL Senior Notes
, net of premium;
2022 SPL Senior Notes
;
2023 SPL Senior Notes
, net of premium;
2024 SPL Senior Notes
;
2025 SPL Senior Notes
;
2026
|
(2)
|
The Level 3 estimated fair value approximates the principal amount because the interest rates are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty.
|
(3)
|
Includes
2015 SPL Credit Facilities
,
SPL Working Capital Facility
,
2016 CQP Credit Facilities
,
2015 CCH Credit Facility
and
Cheniere Marketing trade finance facilities
.
|
(4)
|
The Level 3 estimated fair value was calculated based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including our stock price and interest rates based on debt issued by parties with comparable credit ratings to us and inputs that are not observable in the market.
|
(5)
|
The Level 1 estimated fair value was based on unadjusted quoted prices in active markets for identical liabilities that we had the ability to access at the measurement date.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Total share-based compensation
|
|
$
|
39,557
|
|
|
$
|
27,451
|
|
|
$
|
97,617
|
|
|
$
|
114,107
|
|
Capitalized share-based compensation
|
|
(6,153
|
)
|
|
(1,202
|
)
|
|
(12,489
|
)
|
|
(21,480
|
)
|
||||
Total share-based compensation expense
|
|
$
|
33,404
|
|
|
$
|
26,249
|
|
|
$
|
85,128
|
|
|
$
|
92,627
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
228,924
|
|
|
227,126
|
|
|
228,463
|
|
|
226,648
|
|
||||
Dilutive common stock options and unvested stock (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted
|
|
228,924
|
|
|
227,126
|
|
|
228,463
|
|
|
226,648
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share attributable to common stockholders
|
|
$
|
(0.44
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(3.15
|
)
|
|
$
|
(3.02
|
)
|
|
(1)
|
Stock options and unvested stock of
5.8 million
shares and
5.7 million
shares for the
three and nine months ended September 30, 2016
, respectively, and
8.6 million
shares for each of the
three and nine months ended September 30, 2015
, representing securities that could potentially dilute basic
EPS
in the future, were not included in the diluted net loss per share computations because their effect would have been anti-dilutive. Included in these numbers of shares are
5.1 million
shares for each of the
three and nine months ended September 30, 2016
and
5.4 million
shares for each of the
three and nine months ended September 30, 2015
of unvested stock that have performance conditions not yet satisfied as of September 30, 2016 and 2015, respectively. In addition,
16.2 million
shares in aggregate for the
three and nine months
|
|
Segments
|
||||||||||||||
|
LNG Terminal
|
|
LNG & Natural Gas Marketing
|
|
Corporate and Other (1)
|
|
Total
Consolidation
|
||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
||||||||
Revenues (losses) from external customers
|
$
|
314,917
|
|
|
$
|
179,188
|
|
|
$
|
(28,432
|
)
|
|
$
|
465,673
|
|
Intersegment revenues (losses) (2)
|
16,244
|
|
|
8,692
|
|
|
(24,936
|
)
|
|
—
|
|
||||
Depreciation and amortization expense
|
43,014
|
|
|
344
|
|
|
5,854
|
|
|
49,212
|
|
||||
Income (loss) from operations (3)
|
44,346
|
|
|
26,614
|
|
|
(55,684
|
)
|
|
15,276
|
|
||||
Interest expense, net of capitalized interest
|
(121,636
|
)
|
|
—
|
|
|
(26,417
|
)
|
|
(148,053
|
)
|
||||
Income (loss) before income taxes and non-controlling interest (4)
|
(68,345
|
)
|
|
26,736
|
|
|
(87,169
|
)
|
|
(128,778
|
)
|
||||
Share-based compensation
|
9,183
|
|
|
5,434
|
|
|
24,940
|
|
|
39,557
|
|
||||
Expenditures for additions to long-lived assets
|
1,213,662
|
|
|
1,103
|
|
|
170
|
|
|
1,214,935
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Three Months Ended September 30, 2015
|
|
|
|
|
|
|
|
||||||||
Revenues (losses) from external customers
|
$
|
67,212
|
|
|
$
|
(1,557
|
)
|
|
$
|
404
|
|
|
$
|
66,059
|
|
Intersegment revenues (losses) (2)
|
233
|
|
|
11,354
|
|
|
(11,587
|
)
|
|
—
|
|
||||
Depreciation and amortization expense
|
16,775
|
|
|
320
|
|
|
4,543
|
|
|
21,638
|
|
||||
Income (loss) from operations
|
27,072
|
|
|
(27,117
|
)
|
|
(52,029
|
)
|
|
(52,074
|
)
|
||||
Interest expense, net of capitalized interest
|
(67,589
|
)
|
|
(14
|
)
|
|
(25,963
|
)
|
|
(93,566
|
)
|
||||
Loss before income taxes and non-controlling interest (4)
|
(196,693
|
)
|
|
(27,665
|
)
|
|
(82,803
|
)
|
|
(307,161
|
)
|
||||
Share-based compensation
|
1,316
|
|
|
2,051
|
|
|
24,084
|
|
|
27,451
|
|
||||
Expenditures for additions to long-lived assets
|
1,429,808
|
|
|
403
|
|
|
21,258
|
|
|
1,451,469
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
||||||||
Revenues (losses) from external customers
|
$
|
530,526
|
|
|
$
|
222,418
|
|
|
$
|
(41,363
|
)
|
|
$
|
711,581
|
|
Intersegment revenues (losses) (2)
|
17,168
|
|
|
29,259
|
|
|
(46,427
|
)
|
|
—
|
|
||||
Depreciation and amortization expense
|
87,698
|
|
|
965
|
|
|
17,419
|
|
|
106,082
|
|
||||
Income (loss) from operations (3)
|
41,912
|
|
|
(35,850
|
)
|
|
(157,799
|
)
|
|
(151,737
|
)
|
||||
Interest expense, net of capitalized interest
|
(253,129
|
)
|
|
—
|
|
|
(77,228
|
)
|
|
(330,357
|
)
|
||||
Loss before income taxes and non-controlling interest (4)
|
(519,877
|
)
|
|
(35,814
|
)
|
|
(256,732
|
)
|
|
(812,423
|
)
|
||||
Share-based compensation
|
19,005
|
|
|
20,580
|
|
|
58,032
|
|
|
97,617
|
|
||||
Expenditures for additions to long-lived assets
|
3,800,814
|
|
|
2,634
|
|
|
13,238
|
|
|
3,816,686
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Nine Months Ended September 30, 2015
|
|
|
|
|
|
|
|
||||||||
Revenues (losses) from external customers
|
$
|
203,324
|
|
|
$
|
(1,601
|
)
|
|
$
|
730
|
|
|
$
|
202,453
|
|
Intersegment revenues (losses) (2)
|
827
|
|
|
24,725
|
|
|
(25,552
|
)
|
|
—
|
|
||||
Depreciation and amortization expense
|
47,787
|
|
|
764
|
|
|
11,010
|
|
|
59,561
|
|
||||
Loss from operations
|
(15,324
|
)
|
|
(58,667
|
)
|
|
(134,201
|
)
|
|
(208,192
|
)
|
||||
Interest expense, net of capitalized interest
|
(169,899
|
)
|
|
(14
|
)
|
|
(68,751
|
)
|
|
(238,664
|
)
|
||||
Loss before income taxes and non-controlling interest (4)
|
(507,751
|
)
|
|
(59,871
|
)
|
|
(217,014
|
)
|
|
(784,636
|
)
|
||||
Share-based compensation
|
30,233
|
|
|
12,138
|
|
|
71,736
|
|
|
114,107
|
|
||||
Expenditures for additions to long-lived assets
|
5,964,244
|
|
|
2,517
|
|
|
70,913
|
|
|
6,037,674
|
|
|
(1)
|
Includes corporate activities, business development, strategic activities and certain intercompany eliminations. These activities have been included in the corporate and other column. Also includes
$45.1 million
and
$60.5 million
for the
three and nine months ended September 30, 2016
, respectively, of Cheniere Marketing’s LNG revenues, which is eliminated in consolidation.
|
(2)
|
Intersegment revenues (losses) related to our LNG and natural gas marketing segment are primarily a result of international revenue allocations using a cost plus transfer pricing methodology. These LNG and natural gas marketing segment
|
(3)
|
Includes restructuring expense of
$23.1 million
and
$35.3 million
for the
three and nine months ended September 30, 2016
, respectively, in the corporate and other column and
$3.1 million
and
$13.9 million
for the
three and nine months ended September 30, 2016
, respectively, in the LNG and natural gas marketing segment.
|
(4)
|
Items to reconcile income (loss) from operations and income (loss) before income taxes and non-controlling interest include consolidated other income (expense) amounts as presented on our Consolidated
Statements of Operations
primarily related to our LNG terminal segment.
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
LNG Terminal
|
|
$
|
21,365,364
|
|
|
$
|
17,363,750
|
|
LNG & Natural Gas Marketing
|
|
631,378
|
|
|
550,896
|
|
||
Corporate and Other
|
|
692,338
|
|
|
894,407
|
|
||
Total Consolidation
|
|
$
|
22,689,080
|
|
|
$
|
18,809,053
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Cash paid during the period for interest, net of amounts capitalized
|
|
$
|
29,879
|
|
|
$
|
48,271
|
|
Non-cash conveyance of assets
|
|
—
|
|
|
13,169
|
|
Standard
|
|
Description
|
|
Expected Date of Adoption
|
|
Effect on our Consolidated Financial Statements or Other Significant Matters
|
ASU 2014-09,
Revenue from Contracts with Customers (Topic 606)
, and subsequent amendments thereto
|
|
This standard amends existing revenue recognition guidance and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance may be early adopted beginning January 1, 2017, and may be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption.
|
|
January 1, 2018
|
|
We are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.
|
Standard
|
|
Description
|
|
Expected Date of Adoption
|
|
Effect on our Consolidated Financial Statements or Other Significant Matters
|
ASU 2014-15,
Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern
|
|
This standard requires an entity’s management to evaluate, for each reporting period, whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued. Additional disclosures are required if management concludes that conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. Early adoption is permitted.
|
|
December 31, 2016
|
|
The adoption of this guidance is not expected to have an impact on our Consolidated Financial Statements or related disclosures.
|
ASU 2015-11,
Inventory (Topic 330): Simplifying the Measurement of Inventory
|
|
This standard requires inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance may be early adopted and must be adopted prospectively.
|
|
January 1, 2017
|
|
We are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.
|
ASU 2016-02,
Leases (Topic 842)
|
|
This standard requires a lessee to recognize leases on its balance sheet by recording a liability representing the obligation to make future lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. A lessee is permitted to make an election not to recognize lease assets and liabilities for leases with a term of 12 months or less. The standard also modifies the definition of a lease and requires expanded disclosures. This guidance may be early adopted, and must be adopted using a modified retrospective approach with certain available practical expedients.
|
|
January 1, 2019
|
|
We are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.
|
ASU 2016-09,
Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
|
|
This standard primarily requires the recognition of excess tax benefits for share-based awards in the statement of operations and the classification of excess tax benefits as an operating activity within the statement of cash flows. The guidance also allows an entity to elect to account for forfeitures when they occur. This guidance may be early adopted, but all of the guidance must be adopted in the same period.
|
|
January 1, 2017
|
|
We are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.
|
ASU 2016-16,
Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory
|
|
This standard requires the immediate recognition of the tax consequences of intercompany asset transfers other than inventory. This guidance may be early adopted, but only at the beginning of an annual period, and must be adopted using a modified retrospective approach.
|
|
January 1, 2018
|
|
We are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.
|
Standard
|
|
Description
|
|
Date of Adoption
|
|
Effect on our Consolidated Financial Statements or Other Significant Matters
|
ASU 2015-02,
Consolidation (Topic 810): Amendments to the Consolidation Analysis
|
|
These amendments primarily affect asset managers and reporting entities involved with limited partnerships or similar entities, but the analysis is relevant in the evaluation of any reporting organization’s requirement to consolidate a legal entity. This guidance changes (1) the identification of variable interests, (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. This guidance may be early adopted, and may be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption.
|
|
January 1, 2016
|
|
The adoption of this guidance did not have a material impact on our Consolidated Financial Statements or related disclosures.
|
ASU 2015-03,
Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs
and ASU 2015-15,
Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements
|
|
These standards require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. Debt issuance costs incurred in connection with line of credit arrangements may be presented as an asset and subsequently amortized ratably over the term of the line of credit arrangement. This guidance may be early adopted, and must be adopted retrospectively to each prior reporting period presented.
|
|
January 1, 2016
|
|
Upon adoption of these standards, the balance of debt, net was reduced by the balance of debt issuance costs, net, except for the balance related to line of credit arrangements, on our Consolidated Balance Sheets. See
Note 11—Debt
for additional disclosures.
|
ASU 2015-05,
Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement
|
|
This standard clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software. This guidance may be early adopted, and may be adopted as either retrospectively or prospectively to arrangements entered into, or materially modified, after the effective date.
|
|
January 1, 2016
|
|
The adoption of this guidance did not have an impact on our Consolidated Financial Statements or related disclosures.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
statements that we expect to commence or complete construction of our proposed LNG terminals, liquefaction facilities, pipeline facilities or other projects, or any expansions thereof, by certain dates, or at all;
|
•
|
statements regarding future levels of domestic and international natural gas production, supply or consumption or future levels of LNG imports into or exports from North America and other countries worldwide or purchases of natural gas, regardless of the source of such information, or the transportation or other infrastructure or demand for and prices related to natural gas, LNG or other hydrocarbon products;
|
•
|
statements regarding any financing transactions or arrangements, or ability to enter into such transactions;
|
•
|
statements relating to the construction of our Trains and pipeline, including statements concerning the engagement of any
EPC
contractor or other contractor and the anticipated terms and provisions of any agreement with any
EPC
or other contractor, and anticipated costs related thereto;
|
•
|
statements regarding any
SPA
or other agreement to be entered into or performed substantially in the future, including any revenues anticipated to be received and the anticipated timing thereof, and statements regarding the amounts of total LNG regasification, natural gas liquefaction or storage capacities that are, or may become, subject to contracts;
|
•
|
statements regarding counterparties to our commercial contracts, construction contracts and other contracts;
|
•
|
statements regarding our planned development and construction of additional Trains and pipelines, including the financing of such Trains;
|
•
|
statements that our Trains, when completed, will have certain characteristics, including amounts of liquefaction capacities;
|
•
|
statements regarding our business strategy, our strengths, our business and operation plans or any other plans, forecasts, projections, or objectives, including anticipated revenues, capital expenditures, maintenance and operating costs and cash flows, any or all of which are subject to change;
|
•
|
statements regarding legislative, governmental, regulatory, administrative or other public body actions, approvals, requirements, permits, applications, filings, investigations, proceedings or decisions;
|
•
|
statements regarding our anticipated LNG and natural gas marketing activities; and
|
•
|
any other statements that relate to non-historica
l or future information.
|
•
|
Overview of Business
|
•
|
Overview of Significant Events
|
•
|
Liquidity and Capital Resources
|
•
|
Results of Operations
|
•
|
Off-Balance Sheet Arrangements
|
•
|
Summary of Critical Accounting Estimates
|
•
|
Recent Accounting Standards
|
•
|
SPL commenced production and shipment of LNG commissioning cargoes from Trains 1 and 2 of the
SPL Project
in February and August 2016, respectively, and achieved substantial completion and commenced operating activities in May and September 2016, respectively.
|
•
|
In September 2016, SPL initiated the commissioning process for Train 3 of the
SPL Project
.
|
•
|
In October 2016, the previously announced planned outage to improve performance of the flare systems at the
SPL Project
, as well as to perform scheduled maintenance to Train 1 and other facilities, was completed on schedule and budget.
|
•
|
In May 2016, our Board of Directors appointed Jack Fusco as our President and Chief Executive Officer.
|
•
|
In February 2016, Cheniere Partners entered into a Credit and Guaranty Agreement for the incurrence of debt of up to an aggregate amount of approximately $2.8 billion
(the “2016 CQP Credit Facilities”)
. The
2016 CQP Credit Facilities
consist of: (1) a
$450.0 million
CTPL tranche term loan that was used to prepay the
$400.0 million
term loan facility
(the “CTPL Term Loan”)
in February 2016, (2) an approximately
$2.1 billion
SPLNG tranche term loan that will be used to redeem or repay the approximately
$2.1 billion
of the 7.50% Senior Secured Notes due 2016 issued by SPLNG
(the “2016 SPLNG Senior Notes”)
and the 6.50% Senior Secured Notes due 2020 issued by SPLNG
(the “2020 SPLNG Senior Notes” and collectively with the 2016 SPLNG Senior Notes, the “SPLNG Senior Notes”)
(which must be redeemed or repaid concurrently under the terms of the
2016 CQP Credit Facilities
), (3) a
$125.0 million
debt service reserve credit facility
(the “DSR Facility”)
that may be used to satisfy a
six
-month debt service reserve requirement and (4) a
$115.0 million
revolving credit facility that may be used for general business purposes.
|
•
|
In May 2016, CCH issued an aggregate principal amount of $1.25 billion of 7.000% Senior Secured Notes due 2024
(the “2024 CCH Senior Notes”)
. Net proceeds of the offering of approximately $1.1 billion, after deducting commissions, fees and expenses and incremental interest required under the
2024 CCH Senior Notes
during construction, were used to prepay a portion of the outstanding borrowings under its credit facility
(the “2015 CCH Credit Facility”)
.
|
•
|
In June and September 2016, SPL issued 5.875% Senior Secured Notes due 2026
(the “2026 SPL Senior Notes”)
and 5.00% Senior Secured Notes due 2027
(the “2027 SPL Senior Notes”)
, respectively, for aggregate principal amounts of
$1.5 billion
each. Net proceeds of the offerings of the
2026 SPL Senior Notes
and
2027 SPL Senior Notes
were approximately
$1.3 billion
and
$1.4 billion
, respectively, after deducting commissions, fees and expenses and incremental interest required under the respective senior notes during construction. The net proceeds were used to prepay a portion (for the
2026 SPL Senior Notes
) or all (for the
2027 SPL Senior Notes
) of the outstanding borrowings under the credit facilities we entered into in June 2015
(the “2015 SPL Credit Facilities”)
. The remaining proceeds from the
2027 SPL Senior Notes
are being used to pay a portion of the capital costs in connection with the construction of Trains 1 through 5 of the
SPL Project
in lieu of the terminated portion of the commitments under the
2015 SPL Credit Facilities
.
|
•
|
On September 30, 2016, we submitted a proposal to Cheniere Holdings’ board of directors to acquire the publicly held shares of Cheniere Holdings not already owned by us in a stock for stock exchange. There can be no assurance that any discussions that may occur between us and Cheniere Holdings in connection with our proposal will result in the entry
|
•
|
In October 2016, SPLNG issued a notice of redemption to redeem all of its outstanding
2020 SPLNG Senior Notes
. The redemption date will be November 30, 2016 (the “Redemption Date”) and the price will be equal to 103.250% of the principal amount of the
2020 SPLNG Senior Notes
, plus accrued and unpaid interest and additional interest, if any, on the
2020 SPLNG Senior Notes
to, but not including, the Redemption Date. Concurrently with the redemption of the
2020 SPLNG Senior Notes
, SPLNG intends to repay all of its outstanding
2016 SPLNG Senior Notes
, which mature on the Redemption Date, at a price equal to 100% of the principal amount of the
2016 SPLNG Senior Notes
, plus accrued and unpaid interest and additional interest, if any, on the
2016 SPLNG Senior Notes
to, but not including, the Redemption Date.
|
•
|
Cheniere Partners through operating cash flows from SPLNG, SPL and CTPL, existing unrestricted cash and debt or equity offerings;
|
•
|
Cheniere through project financing, existing unrestricted cash, debt and equity offerings by us or our subsidiaries, operating cash flows, services fees from Cheniere Holdings, Cheniere Partners and its other subsidiaries and distributions from our investments in Cheniere Holdings and Cheniere Partners.
|
•
|
$1.7 billion
of
2016 SPLNG Senior Notes
;
|
•
|
$0.4 billion
of
2020 SPLNG Senior Notes
;
|
•
|
$2.0 billion
of 5.625% Senior Secured Notes due 2021 issued by SPL
(the “2021 SPL Senior Notes”)
;
|
•
|
$1.0 billion
of 6.25% Senior Secured Notes due 2022 issued by SPL
(the “2022 SPL Senior Notes”)
;
|
•
|
$1.5 billion
of 5.625% Senior Secured Notes due 2023 issued by SPL
(the “2023 SPL Senior Notes”)
;
|
•
|
$2.0 billion
of 5.75% Senior Secured Notes due 2024 issued by SPL
(the “2024 SPL Senior Notes”)
;
|
•
|
$2.0 billion
of 5.625% Senior Secured Notes due 2025
(the “2025 SPL Senior Notes” and collectively with the 2021 SPL Senior Notes, the 2022 SPL Senior Notes, the 2023 SPL Senior Notes, the 2024 SPL Senior Notes, the 2026 SPL Senior Notes and the 2027 SPL Senior Notes, the “SPL Senior Notes”)
;
|
•
|
$1.5 billion
of
2026 SPL Senior Notes
; and
|
•
|
$1.5 billion
of
2027 SPL Senior Notes
.
|
•
|
the excess of: (1) the present value at such redemption date of (a) the redemption price of the
2016 SPLNG Senior Notes
plus (b) all required interest payments due on the
2016 SPLNG Senior Notes
(excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the treasury rate as of such redemption date plus 50 basis points; over (2) the principal amount of the
2016 SPLNG Senior Notes
, if greater.
|
•
|
pursuant to an
SPA
with SPL, the right to purchase, at Cheniere Marketing’s option, any LNG produced by SPL in excess of that required for other customers;
|
•
|
pursuant to
SPA
s with CCL, the right to purchase, at Cheniere Marketing’s option, any LNG produced by CCL that is not required for other customers; and
|
•
|
a portfolio of LNG vessel time charters.
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Operating cash flows
|
|
|
|
||||
Net cash used in operating activities
|
$
|
(199,027
|
)
|
|
$
|
(274,577
|
)
|
Changes in restricted cash for certain operating activities
|
(119,831
|
)
|
|
(92,589
|
)
|
||
Cash, cash equivalents and restricted cash used in operating activities
|
(318,858
|
)
|
|
(367,166
|
)
|
||
|
|
|
|
||||
Investing cash flows
|
|
|
|
||||
Net cash used in investing activities
|
(12,206
|
)
|
|
(528,588
|
)
|
||
Use of restricted cash for the acquisition of property, plant and equipment
|
(3,488,263
|
)
|
|
(5,330,526
|
)
|
||
Cash, cash equivalents and restricted cash used in investing activities
|
(3,500,469
|
)
|
|
(5,859,114
|
)
|
||
|
|
|
|
||||
Financing cash flows
|
|
|
|
|
|
||
Net cash provided by financing activities
|
253
|
|
|
395,844
|
|
||
Investment in restricted cash
|
3,931,648
|
|
|
5,161,701
|
|
||
Cash, cash equivalents and restricted cash provided by financing activities
|
3,931,901
|
|
|
5,557,545
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
112,574
|
|
|
(668,735
|
)
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
1,736,231
|
|
|
2,780,131
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
1,848,805
|
|
|
$
|
2,111,396
|
|
•
|
$450.0 million of borrowings under the
2016 CQP Credit Facilities
, which was entered into in February 2016 to prepay the $400.0 million CTPL Term Loan;
|
•
|
$1.6 billion of borrowings under the
2015 CCH Credit Facility
;
|
•
|
issuance of an aggregate principal amount of $1.3 billion of the
2024 CCH Senior Notes
in May 2016, which were used to prepay $1.1 billion of the outstanding borrowings under the
2015 CCH Credit Facility
;
|
•
|
$1.7 billion of borrowings under the
2015 SPL Credit Facilities
;
|
•
|
issuance of an aggregate principal amount of $1.5 billion of the
2026 SPL Senior Notes
in June 2016, which was used to prepay $1.3 billion of the outstanding borrowings under the
2015 SPL Credit Facilities
;
|
•
|
issuance of an aggregate principal amount of $1.5 billion of the
2027 SPL Senior Notes
in September 2016, which was used to prepay $1.2 billion of the outstanding borrowings under the
2015 SPL Credit Facilities
and pay a portion of the capital costs in connection with the construction of Trains 1 through 5 of the
SPL Project
;
|
•
|
$18.8 million of borrowings under the Cheniere Marketing trade finance facilities;
|
•
|
$313.5 million of borrowings and a $230.0 million repayment made under the
SPL Working Capital Facility
;
|
•
|
$116.7 million
of debt issuance and deferred financing costs related to up-front fees paid upon the closing of these transactions;
|
•
|
$60.2 million
of distributions and dividends to non-controlling interest by Cheniere Partners and Cheniere Holdings; and
|
•
|
$18.6 million
paid for tax withholdings for share-based compensation.
|
•
|
issuance of an aggregate principal amount of $2.0 billion of the
2025 SPL Senior Notes
in March 2015;
|
•
|
issuance of an aggregate principal amount of $625.0 million of the
2045 Cheniere Convertible Senior Notes
in March 2015, with an original issue discount of 20% for net proceeds of $495.7 million;
|
•
|
issuance of an aggregate principal amount of $1.0 billion of the
2025 CCH HoldCo II Convertible Senior Notes
in May 2015;
|
•
|
entering into the
2015 CCH Credit Facility
in May 2015 and borrowing $2.4 billion under this facility during the
nine months ended September 30, 2015
;
|
•
|
entering into the
2015 SPL Credit Facilities
in June 2015 and borrowing $250.0 million under this facility during the
nine months ended September 30, 2015
;
|
•
|
$519.7 million
of debt issuance and deferred financing costs related to up-front fees paid upon the closing of these transactions;
|
•
|
$60.2 million
of distributions and dividends to non-controlling interest by Cheniere Partners and Cheniere Holdings; and
|
•
|
$44.3 million
paid for tax withholdings for share-based compensation.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||||
Regasification revenues
|
$
|
66,970
|
|
|
$
|
66,597
|
|
|
$
|
373
|
|
|
$
|
198,143
|
|
|
$
|
199,888
|
|
|
$
|
(1,745
|
)
|
LNG revenues (losses)
|
398,554
|
|
|
(1,557
|
)
|
|
400,111
|
|
|
511,993
|
|
|
(1,601
|
)
|
|
513,594
|
|
||||||
Other revenues
|
149
|
|
|
1,019
|
|
|
(870
|
)
|
|
1,445
|
|
|
4,166
|
|
|
(2,721
|
)
|
||||||
Total revenues
|
$
|
465,673
|
|
|
$
|
66,059
|
|
|
$
|
399,614
|
|
|
$
|
711,581
|
|
|
$
|
202,453
|
|
|
$
|
509,128
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||||
Cost (cost recovery) of sales
|
$
|
252,343
|
|
|
$
|
(24,214
|
)
|
|
$
|
276,557
|
|
|
$
|
352,559
|
|
|
$
|
(22,077
|
)
|
|
$
|
374,636
|
|
Operating and maintenance expense
|
61,610
|
|
|
17,963
|
|
|
43,647
|
|
|
143,489
|
|
|
71,396
|
|
|
72,093
|
|
||||||
Development expense
|
1,546
|
|
|
4,935
|
|
|
(3,389
|
)
|
|
4,709
|
|
|
37,640
|
|
|
(32,931
|
)
|
||||||
Selling, general and administrative expense
|
59,418
|
|
|
97,332
|
|
|
(37,914
|
)
|
|
196,999
|
|
|
263,205
|
|
|
(66,206
|
)
|
||||||
Depreciation and amortization expense
|
49,212
|
|
|
21,638
|
|
|
27,574
|
|
|
106,082
|
|
|
59,561
|
|
|
46,521
|
|
||||||
Restructuring expense
|
26,241
|
|
|
—
|
|
|
26,241
|
|
|
49,196
|
|
|
—
|
|
|
49,196
|
|
||||||
Impairment expense
|
—
|
|
|
396
|
|
|
(396
|
)
|
|
10,095
|
|
|
572
|
|
|
9,523
|
|
||||||
Other
|
27
|
|
|
83
|
|
|
(56
|
)
|
|
189
|
|
|
348
|
|
|
(159
|
)
|
||||||
Total operating costs and expenses
|
$
|
450,397
|
|
|
$
|
118,133
|
|
|
$
|
332,264
|
|
|
$
|
863,318
|
|
|
$
|
410,645
|
|
|
$
|
452,673
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||||
Interest expense, net of capitalized interest
|
$
|
148,053
|
|
|
$
|
93,566
|
|
|
$
|
54,487
|
|
|
$
|
330,357
|
|
|
$
|
238,664
|
|
|
$
|
91,693
|
|
Loss on early extinguishment of debt
|
25,765
|
|
|
—
|
|
|
25,765
|
|
|
82,537
|
|
|
96,273
|
|
|
(13,736
|
)
|
||||||
Derivative loss (gain), net
|
(29,327
|
)
|
|
161,482
|
|
|
(190,809
|
)
|
|
242,228
|
|
|
242,123
|
|
|
105
|
|
||||||
Other expense (income)
|
(437
|
)
|
|
39
|
|
|
(476
|
)
|
|
5,564
|
|
|
(616
|
)
|
|
6,180
|
|
||||||
Total other expense
|
$
|
144,054
|
|
|
$
|
255,087
|
|
|
$
|
(111,033
|
)
|
|
$
|
660,686
|
|
|
$
|
576,444
|
|
|
$
|
84,242
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||||
Income tax provision (benefit)
|
$
|
1,638
|
|
|
$
|
(69
|
)
|
|
$
|
1,707
|
|
|
$
|
1,911
|
|
|
$
|
102
|
|
|
$
|
1,809
|
|
Net loss attributable to non-controlling interest
|
(29,974
|
)
|
|
(9,284
|
)
|
|
(20,690
|
)
|
|
(94,636
|
)
|
|
(100,726
|
)
|
|
6,090
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid Per Share (2)
|
|
Total Number of Shares Purchased as a Part of Publicly Announced Plans
|
|
Maximum Number of Units That May Yet Be Purchased Under the Plans
|
|
July 1 - 31, 2016
|
|
13,307
|
|
|
$38.71
|
|
—
|
|
—
|
August 1 - 31, 2016
|
|
345,200
|
|
|
$42.13
|
|
—
|
|
—
|
September 1 - 30, 2016
|
|
—
|
|
|
$—
|
|
—
|
|
—
|
Total
|
|
358,507
|
|
|
|
|
—
|
|
—
|
|
(1)
|
Represents shares surrendered to us by participants in our share-based compensation plans to settle the participants’ personal tax liabilities that resulted from the lapsing of restrictions on shares awarded to the participants under these plans.
|
(2)
|
The price paid per share was based on the closing trading price of our common stock on the dates on which we repurchased shares from the participants under our share-based compensation plans.
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
3.1
|
|
Amendment No. 1 to the Amended and Restated Bylaws of Cheniere Energy, Inc., dated September 15, 2016 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (SEC File No. 001-16383), filed on September 19, 2016)
|
4.1
|
|
Eighth Supplemental Indenture, dated as of September 19, 2016, between Sabine Pass Liquefaction, LLC and The Bank of New York Mellon, as Trustee under the Indenture (Incorporated by reference to Exhibit 4.1 to Cheniere Partners’ Current Report on Form 8-K (SEC File No. 001-33366), filed on September 23, 2016)
|
4.2
|
|
Ninth Supplemental Indenture, dated as of September 23 2016, between Sabine Pass Liquefaction, LLC and The Bank of New York Mellon, as Trustee under the Indenture (Incorporated by reference to Exhibit 4.2 to Cheniere Partners’ Current Report on Form 8-K (SEC File No. 001-33366), filed on September 23, 2016)
|
10.1†
|
|
Release Agreement between Cheniere Energy, Inc. and Meg A. Gentle, dated August 26, 2016 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (SEC File No. 001-16383), filed on August 26, 2016)
|
10.2
|
|
Change orders to the Lump Sum Turnkey Agreement for the Engineering, Procurement and Construction of the Sabine Pass LNG Liquefaction Facility, dated as of November 11, 2011, between Sabine Pass Liquefaction, LLC and Bechtel Oil, Gas and Chemicals, Inc.: (i) the Change Order CO-00048 N2 Supply for High Pressure Tightness Test During Commissioning and Startup, dated July 12, 2016, (ii) the Change Order CO-00050 Train 2 N2 Dryout, dated July 29, 2016, (iii) the Change Order CO-00051 Six-Day Work Week for Insulation Scope — Subproject 2, dated August 9, 2016, and (iv) the Change Order CO-00052 Process Flares Modification Provisional Sum, dated September 1, 2016 (Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.) (Incorporated by reference to Exhibit 10.1 to SPL’s Quarterly Report on Form 10-Q (SEC File No. 333-192373), filed on November 2, 2016)
|
10.3
|
|
Change orders to the Lump Sum Turnkey Agreement for the Engineering, Procurement and Construction of the Sabine Pass LNG Stage 2 Liquefaction Facility, dated as of December 20, 2012, between Sabine Pass Liquefaction, LLC and Bechtel Oil, Gas and Chemicals, Inc.: (i) the Change Order CO-00024 Additional Support for FERC Document Requests, dated June 20, 2016, (ii) the Change Order CO-00025 N2 Supply for High Pressure Tightness Test During Commissioning and Startup, dated July 12, 2016, (iii) the Change Order CO-00027 Addition of Check Valves to Condensate Lines, dated July 29, 2016, (iv) the Change Order CO-00028 Additional Professional Services Support Hours for the Flare System Evaluation, dated August 3, 2016, and (v) the Change Order CO-00029 Lump Sum Process Flares Modification, dated September 1, 2016 (Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.) (Incorporated by reference to Exhibit 10.2 to SPL’s Quarterly Report on Form 10-Q (SEC File No. 333-192373), filed on November 2, 2016)
|
10.4
|
|
Change order to the Lump Sum Turnkey Agreement for the Engineering, Procurement and Construction of the Sabine Pass LNG Stage 3 Liquefaction Facility, dated as of May 4, 2015, between Sabine Pass Liquefaction, LLC and Bechtel Oil, Gas and Chemicals, Inc.: the Change Order CO-00011 Site Drainage Design Change: Professional Service Hours, dated July 26, 2016 (Incorporated by reference to Exhibit 10.3 to SPL’s Quarterly Report on Form 10-Q (SEC File No. 333-192373), filed on November 2, 2016)
|
10.5*
|
|
Change orders to the Fixed Price Separated Turnkey Agreement for the Engineering, Procurement and Construction of the Corpus Christi Stage 1 Liquefaction Facility, dated as of December 6, 2013, between Corpus Christi Liquefaction, LLC and Bechtel Oil, Gas and Chemicals, Inc.: (i) the Change Order CO-00022 Permanent Plant Building Modifications, dated June 20, 2016 and (ii) the Change Order CO-00024 N2 Dewar Interface, Temporary Power to Air Cooler, Condensate Pipeline Maximum Allowable Operating Pressure, dated June 28, 2016 (Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.)
|
10.6
|
|
Registration Rights Agreement, dated as of September 23, 2016, between Sabine Pass Liquefaction, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated (Incorporated by reference to Exhibit 10.1 to Cheniere Partners’ Current Report on Form 8-K (SEC File No. 001-33366), filed on September 23, 2016)
|
31.1*
|
|
Certification by Chief Executive Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act
|
31.2*
|
|
Certification by Chief Financial Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act
|
32.1**
|
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2**
|
|
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
Exhibit No.
|
|
Description
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
†
|
Management contract or compensatory plan or arrangement.
|
|
|
CHENIERE ENERGY, INC.
|
|
|
|
|
|
Date:
|
November 2, 2016
|
By:
|
/s/ Michael J. Wortley
|
|
|
|
Michael J. Wortley
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(on behalf of the registrant and
as principal financial officer) |
|
|
|
|
Date:
|
November 2, 2016
|
By:
|
/s/ Leonard Travis
|
|
|
|
Leonard Travis
|
|
|
|
Vice President and Chief Accounting Officer
|
|
|
|
(on behalf of the registrant and
as principal accounting officer) |
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