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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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95-4352386
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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700 Milam Street
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,
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Suite 1900
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Houston
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,
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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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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $ 0.003 par value
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LNG
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NYSE American
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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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 that, through a refrigeration process, has been cooled to a liquid state, which occupies a volume that is approximately 1/600th of its gaseous state
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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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U.S. Securities and Exchange Commission
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SPA
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LNG sale and purchase agreement
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TBtu
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trillion British thermal units, an energy unit
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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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June 30,
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December 31,
|
||||
|
2019
|
|
2018
|
||||
ASSETS
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(unaudited)
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|
|
||||
Current assets
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|
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|
||||
Cash and cash equivalents
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$
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2,279
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$
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981
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Restricted cash
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1,161
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2,175
|
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Accounts and other receivables
|
433
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|
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585
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Inventory
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290
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|
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316
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|
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Derivative assets
|
127
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63
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|
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Other current assets
|
135
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|
114
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|
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Total current assets
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4,425
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4,234
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Property, plant and equipment, net
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29,073
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27,245
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|
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Operating lease assets, net
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502
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|
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—
|
|
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Debt issuance costs, net
|
55
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|
|
72
|
|
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Non-current derivative assets
|
103
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|
|
54
|
|
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Goodwill
|
77
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|
|
77
|
|
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Other non-current assets, net
|
337
|
|
|
305
|
|
||
Total assets
|
$
|
34,572
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$
|
31,987
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|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities
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Accounts payable
|
$
|
120
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|
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$
|
58
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Accrued liabilities
|
1,572
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|
|
1,169
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|
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Current debt
|
—
|
|
|
239
|
|
||
Deferred revenue
|
136
|
|
|
139
|
|
||
Current operating lease liabilities
|
292
|
|
|
—
|
|
||
Derivative liabilities
|
84
|
|
|
128
|
|
||
Other current liabilities
|
3
|
|
|
9
|
|
||
Total current liabilities
|
2,207
|
|
|
1,742
|
|
||
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|
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Long-term debt, net
|
29,944
|
|
|
28,179
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|
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Non-current operating lease liabilities
|
202
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|
|
—
|
|
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Non-current finance lease liabilities
|
58
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|
|
57
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|
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Non-current derivative liabilities
|
94
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|
|
22
|
|
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Other non-current liabilities
|
44
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|
|
58
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Commitments and contingencies (see Note 16)
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|
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Stockholders’ equity
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|
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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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Common stock, $0.003 par value
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|
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Authorized: 480.0 million shares at June 30, 2019 and December 31, 2018
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|
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Issued: 270.5 million shares at June 30, 2019 and 269.8 million shares at December 31, 2018
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Outstanding: 257.5 million shares at June 30, 2019 and 257.0 million shares at December 31, 2018
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1
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1
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Treasury stock: 13.0 million shares and 12.8 million shares at June 30, 2019 and December 31, 2018, respectively, at cost
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(423
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)
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(406
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)
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Additional paid-in-capital
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4,097
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4,035
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Accumulated deficit
|
(4,129
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)
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(4,156
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)
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Total stockholders’ deficit
|
(454
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)
|
|
(526
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)
|
||
Non-controlling interest
|
2,477
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2,455
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|
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Total equity
|
2,023
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|
|
1,929
|
|
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Total liabilities and equity
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$
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34,572
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$
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31,987
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|
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
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2019
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2018
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2019
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2018
|
||||||||
Revenues
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||||||||
LNG revenues
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$
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2,173
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$
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1,442
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$
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4,316
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$
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3,608
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Regasification revenues
|
67
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65
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|
133
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|
130
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|
||||
Other revenues
|
52
|
|
|
36
|
|
|
104
|
|
|
47
|
|
||||
Total revenues
|
2,292
|
|
|
1,543
|
|
|
4,553
|
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|
3,785
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||||||||
Operating costs and expenses
|
|
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|
||||||||
Cost of sales (excluding depreciation and amortization expense shown separately below)
|
1,277
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|
|
873
|
|
|
2,491
|
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|
2,051
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|
||||
Operating and maintenance expense
|
295
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|
|
147
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|
|
516
|
|
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287
|
|
||||
Development expense
|
3
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|
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3
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|
|
4
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|
|
4
|
|
||||
Selling, general and administrative expense
|
77
|
|
|
73
|
|
|
150
|
|
|
140
|
|
||||
Depreciation and amortization expense
|
204
|
|
|
111
|
|
|
348
|
|
|
220
|
|
||||
Impairment expense and loss on disposal of assets
|
4
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Total operating costs and expenses
|
1,860
|
|
|
1,207
|
|
|
3,515
|
|
|
2,702
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|
||||
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|
||||||||
Income from operations
|
432
|
|
|
336
|
|
|
1,038
|
|
|
1,083
|
|
||||
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|
|
|
|
|
|
||||||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense, net of capitalized interest
|
(372
|
)
|
|
(216
|
)
|
|
(619
|
)
|
|
(432
|
)
|
||||
Loss on modification or extinguishment of debt
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
||||
Derivative gain (loss), net
|
(74
|
)
|
|
32
|
|
|
(109
|
)
|
|
109
|
|
||||
Other income
|
16
|
|
|
10
|
|
|
32
|
|
|
17
|
|
||||
Total other expense
|
(430
|
)
|
|
(189
|
)
|
|
(696
|
)
|
|
(321
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes and non-controlling interest
|
2
|
|
|
147
|
|
|
342
|
|
|
762
|
|
||||
Income tax benefit (provision)
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(12
|
)
|
||||
Net income
|
2
|
|
|
150
|
|
|
339
|
|
|
750
|
|
||||
Less: net income attributable to non-controlling interest
|
116
|
|
|
168
|
|
|
312
|
|
|
411
|
|
||||
Net income (loss) attributable to common stockholders
|
$
|
(114
|
)
|
|
$
|
(18
|
)
|
|
$
|
27
|
|
|
$
|
339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per share attributable to common stockholders—basic (1)
|
$
|
(0.44
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
1.42
|
|
Net income (loss) per share attributable to common stockholders—diluted (1)
|
$
|
(0.44
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
1.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding—basic
|
257.4
|
|
|
242.8
|
|
|
257.3
|
|
|
239.2
|
|
||||
Weighted average number of common shares outstanding—diluted
|
257.4
|
|
|
242.8
|
|
|
258.6
|
|
|
241.7
|
|
|
Three and Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Total Stockholders’ Equity
|
|
|
|
|||||||||||||||||||||||||
|
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, 2018
|
257.0
|
|
|
$
|
1
|
|
|
12.8
|
|
|
$
|
(406
|
)
|
|
$
|
4,035
|
|
|
$
|
(4,156
|
)
|
|
$
|
2,455
|
|
|
$
|
1,929
|
|
Vesting of restricted stock units
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||||
Shares withheld from employees related to share-based compensation, at cost
|
(0.2
|
)
|
|
—
|
|
|
0.2
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||||
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196
|
|
|
196
|
|
||||||
Distributions and dividends to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(144
|
)
|
|
(144
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
|
—
|
|
|
141
|
|
||||||
Balance at March 31, 2019
|
257.4
|
|
|
1
|
|
|
13.0
|
|
|
(418
|
)
|
|
4,063
|
|
|
(4,015
|
)
|
|
2,507
|
|
|
2,138
|
|
||||||
Vesting of restricted stock units
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||||
Shares withheld from employees related to share-based compensation, at cost
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Shares repurchased, at cost
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
116
|
|
|
116
|
|
||||||
Equity portion of convertible notes, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Distributions and dividends to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(146
|
)
|
|
(146
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(114
|
)
|
|
—
|
|
|
(114
|
)
|
||||||
Balance at June 30, 2019
|
257.5
|
|
|
$
|
1
|
|
|
13.0
|
|
|
$
|
(423
|
)
|
|
$
|
4,097
|
|
|
$
|
(4,129
|
)
|
|
$
|
2,477
|
|
|
$
|
2,023
|
|
Three and Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Total Stockholders’ Equity
|
|
|
|
|||||||||||||||||||||||||
|
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, 2017
|
237.6
|
|
|
$
|
1
|
|
|
12.5
|
|
|
$
|
(386
|
)
|
|
$
|
3,248
|
|
|
$
|
(4,627
|
)
|
|
$
|
3,004
|
|
|
$
|
1,240
|
|
Vesting of restricted stock units
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||||
Shares withheld from employees related to share-based compensation, at cost
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
243
|
|
|
243
|
|
||||||
Distributions and dividends to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(143
|
)
|
|
(143
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
357
|
|
|
—
|
|
|
357
|
|
||||||
Balance at March 31, 2018
|
237.9
|
|
|
1
|
|
|
12.6
|
|
|
(392
|
)
|
|
3,264
|
|
|
(4,270
|
)
|
|
3,104
|
|
|
1,707
|
|
||||||
Issuance of stock to acquire additional interest in Cheniere Holdings
|
10.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
376
|
|
|
—
|
|
|
(376
|
)
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||||
Shares withheld from employees related to share-based compensation, at cost
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
168
|
|
|
168
|
|
||||||
Equity portion of convertible notes, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Distributions and dividends to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
(145
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
||||||
Balance at June 30, 2018
|
248.1
|
|
|
$
|
1
|
|
|
12.6
|
|
|
$
|
(394
|
)
|
|
$
|
3,664
|
|
|
$
|
(4,288
|
)
|
|
$
|
2,751
|
|
|
$
|
1,734
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
339
|
|
|
$
|
750
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
348
|
|
|
220
|
|
||
Share-based compensation expense
|
61
|
|
|
58
|
|
||
Non-cash interest expense
|
93
|
|
|
30
|
|
||
Amortization of debt issuance costs, deferred commitment fees, premium and discount
|
44
|
|
|
35
|
|
||
Amortization of operating lease assets
|
158
|
|
|
—
|
|
||
Loss on modification or extinguishment of debt
|
—
|
|
|
15
|
|
||
Total losses (gains) on derivatives, net
|
(147
|
)
|
|
4
|
|
||
Net cash provided by (used for) settlement of derivative instruments
|
62
|
|
|
(8
|
)
|
||
Impairment expense and loss on disposal of assets
|
6
|
|
|
—
|
|
||
Other
|
2
|
|
|
(5
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts and other receivables
|
59
|
|
|
80
|
|
||
Inventory
|
33
|
|
|
10
|
|
||
Other current assets
|
(46
|
)
|
|
(61
|
)
|
||
Accounts payable and accrued liabilities
|
(80
|
)
|
|
(132
|
)
|
||
Deferred revenue
|
(2
|
)
|
|
(13
|
)
|
||
Operating lease liabilities
|
(163
|
)
|
|
—
|
|
||
Other, net
|
(7
|
)
|
|
(1
|
)
|
||
Net cash provided by operating activities
|
760
|
|
|
982
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Property, plant and equipment, net
|
(1,508
|
)
|
|
(1,508
|
)
|
||
Investment in equity method investment
|
(34
|
)
|
|
—
|
|
||
Other
|
—
|
|
|
16
|
|
||
Net cash used in investing activities
|
(1,542
|
)
|
|
(1,492
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuances of debt
|
2,021
|
|
|
1,799
|
|
||
Repayments of debt
|
(630
|
)
|
|
(281
|
)
|
||
Debt issuance and deferred financing costs
|
(20
|
)
|
|
(46
|
)
|
||
Debt extinguishment costs
|
—
|
|
|
(8
|
)
|
||
Distributions and dividends to non-controlling interest
|
(290
|
)
|
|
(288
|
)
|
||
Payments related to tax withholdings for share-based compensation
|
(14
|
)
|
|
(8
|
)
|
||
Repurchase of common stock
|
(3
|
)
|
|
—
|
|
||
Other
|
2
|
|
|
—
|
|
||
Net cash provided by financing activities
|
1,066
|
|
|
1,168
|
|
||
|
|
|
|
||||
Net increase in cash, cash equivalents and restricted cash
|
284
|
|
|
658
|
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
3,156
|
|
|
2,613
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
3,440
|
|
|
$
|
3,271
|
|
|
June 30, 2019
|
||
Cash and cash equivalents
|
$
|
2,279
|
|
Restricted cash
|
1,161
|
|
|
Total cash, cash equivalents and restricted cash
|
$
|
3,440
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Current restricted cash
|
|
|
|
|
||||
SPL Project
|
|
$
|
596
|
|
|
$
|
756
|
|
Cheniere Partners and cash held by guarantor subsidiaries
|
|
—
|
|
|
785
|
|
||
CCL Project
|
|
279
|
|
|
289
|
|
||
Cash held by our subsidiaries restricted to Cheniere
|
|
286
|
|
|
345
|
|
||
Total current restricted cash
|
|
$
|
1,161
|
|
|
$
|
2,175
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Trade receivables
|
|
|
|
|
||||
SPL and CCL
|
|
$
|
257
|
|
|
$
|
330
|
|
Cheniere Marketing
|
|
145
|
|
|
205
|
|
||
Other accounts receivable
|
|
31
|
|
|
50
|
|
||
Total accounts and other receivables
|
|
$
|
433
|
|
|
$
|
585
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Natural gas
|
|
$
|
19
|
|
|
$
|
30
|
|
LNG
|
|
38
|
|
|
24
|
|
||
LNG in-transit
|
|
104
|
|
|
173
|
|
||
Materials and other
|
|
129
|
|
|
89
|
|
||
Total inventory
|
|
$
|
290
|
|
|
$
|
316
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
LNG terminal costs
|
|
|
|
|
||||
LNG terminal and interconnecting pipeline facilities
|
|
$
|
23,650
|
|
|
$
|
13,386
|
|
LNG site and related costs
|
|
319
|
|
|
86
|
|
||
LNG terminal construction-in-process
|
|
6,529
|
|
|
14,864
|
|
||
Accumulated depreciation
|
|
(1,625
|
)
|
|
(1,299
|
)
|
||
Total LNG terminal costs, net
|
|
28,873
|
|
|
27,037
|
|
||
Fixed assets and other
|
|
|
|
|
|
|
||
Computer and office equipment
|
|
22
|
|
|
17
|
|
||
Furniture and fixtures
|
|
22
|
|
|
22
|
|
||
Computer software
|
|
104
|
|
|
100
|
|
||
Leasehold improvements
|
|
42
|
|
|
41
|
|
||
Land
|
|
59
|
|
|
59
|
|
||
Other
|
|
20
|
|
|
21
|
|
||
Accumulated depreciation
|
|
(127
|
)
|
|
(111
|
)
|
||
Total fixed assets and other, net
|
|
142
|
|
|
149
|
|
||
Assets under finance lease
|
|
|
|
|
||||
Tug vessels
|
|
60
|
|
|
60
|
|
||
Accumulated depreciation
|
|
(2
|
)
|
|
(1
|
)
|
||
Total assets under finance lease, net
|
|
58
|
|
|
59
|
|
||
Property, plant and equipment, net
|
|
$
|
29,073
|
|
|
$
|
27,245
|
|
•
|
interest rate swaps to hedge the exposure to volatility in a portion of the floating-rate interest payments under CCH’s credit facilities
(“CCH Interest Rate Derivatives”)
and to hedge against changes in interest rates that could impact anticipated future issuance of debt by CCH
(“CCH Interest Rate Forward Start Derivatives”)
;
|
•
|
commodity derivatives consisting of natural gas supply contracts for the commissioning and operation of the
SPL Project
,
CCL Project
and potential future development of Corpus Christi Stage 3
(“Physical Liquefaction Supply Derivatives”)
and associated economic hedges
(collectively, 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 both LNG Trading Derivatives and operations in countries outside of the United States
(“FX Derivatives”)
.
|
|
Fair Value Measurements as of
|
||||||||||||||||||||||||||||||
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
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
|
||||||||||||||||
CCH Interest Rate Derivatives asset (liability)
|
$
|
—
|
|
|
$
|
(88
|
)
|
|
$
|
—
|
|
|
$
|
(88
|
)
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
CCH Interest Rate Forward Start Derivatives liability
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Liquefaction Supply Derivatives asset (liability)
|
—
|
|
|
1
|
|
|
89
|
|
|
90
|
|
|
6
|
|
|
(19
|
)
|
|
(29
|
)
|
|
(42
|
)
|
||||||||
LNG Trading Derivatives asset (liability)
|
(4
|
)
|
|
51
|
|
|
—
|
|
|
47
|
|
|
1
|
|
|
(25
|
)
|
|
—
|
|
|
(24
|
)
|
||||||||
FX Derivatives asset
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
|
Net Fair Value Asset (Liability)
(in millions)
|
|
Valuation Approach
|
|
Significant Unobservable Input
|
|
Significant Unobservable Inputs Range
|
Physical Liquefaction Supply Derivatives
|
|
$89
|
|
Market approach incorporating present value techniques
|
|
Henry Hub Basis Spread
|
|
$(0.700) - $0.056
|
|
|
|
|
Option pricing model
|
|
International pricing spread, relative to Henry Hub (1)
|
|
128% - 176%
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Balance, beginning of period
|
|
$
|
31
|
|
|
$
|
10
|
|
|
$
|
(29
|
)
|
|
$
|
43
|
|
Realized and mark-to-market gains (losses):
|
|
|
|
|
|
|
|
|
||||||||
Included in cost of sales
|
|
7
|
|
|
(1
|
)
|
|
23
|
|
|
(12
|
)
|
||||
Purchases and settlements:
|
|
|
|
|
|
|
|
|
||||||||
Purchases
|
|
50
|
|
|
6
|
|
|
50
|
|
|
6
|
|
||||
Settlements
|
|
1
|
|
|
(4
|
)
|
|
45
|
|
|
(25
|
)
|
||||
Transfers out of Level 3 (1)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of period
|
|
$
|
89
|
|
|
$
|
12
|
|
|
$
|
89
|
|
|
$
|
12
|
|
Change in unrealized gains (losses) relating to instruments still held at end of period
|
|
$
|
7
|
|
|
$
|
(1
|
)
|
|
$
|
23
|
|
|
$
|
(12
|
)
|
|
|
|
Initial Notional Amount
|
|
Maximum Notional Amount
|
|
Effective Date
|
|
Maturity Date
|
|
Weighted Average Fixed Interest Rate Paid
|
|
Variable Interest Rate Received
|
CCH Interest Rate Derivatives
|
|
$29 million
|
|
$4.7 billion
|
|
May 20, 2015
|
|
May 31, 2022
|
|
2.30%
|
|
One-month LIBOR
|
CCH Interest Rate Forward Start Derivatives
|
|
$1.0 billion
|
|
$1.0 billion
|
|
June 30, 2020
|
|
September 30, 2030
|
|
2.11%
|
|
Three-month LIBOR
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
CCH Interest Rate Derivatives
|
|
CCH Interest Rate Forward Start Derivatives
|
|
Total
|
|
CCH Interest Rate Derivatives
|
|
CCH Interest Rate Forward Start Derivatives
|
|
Total
|
||||||||||||
Consolidated Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Non-current derivative assets
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||
Total derivative assets
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative liabilities
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Non-current derivative liabilities
|
(67
|
)
|
|
(7
|
)
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total derivative liabilities
|
(88
|
)
|
|
(7
|
)
|
|
(95
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative asset (liability), net
|
$
|
(88
|
)
|
|
$
|
(7
|
)
|
|
$
|
(95
|
)
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
CCH Interest Rate Derivatives gain (loss)
|
|
$
|
(67
|
)
|
|
$
|
29
|
|
|
$
|
(102
|
)
|
|
$
|
98
|
|
CCH Interest Rate Forward Start Derivatives loss
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
||||
CQP Interest Rate Derivatives gain
|
|
—
|
|
|
3
|
|
|
—
|
|
|
11
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Liquefaction Supply Derivatives (1)
|
|
LNG Trading Derivatives (2)
|
|
Total
|
|
Liquefaction Supply Derivatives (1)
|
|
LNG Trading Derivatives (2)
|
|
Total
|
||||||||||||
Consolidated Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
$
|
24
|
|
|
$
|
92
|
|
|
$
|
116
|
|
|
$
|
13
|
|
|
$
|
24
|
|
|
$
|
37
|
|
Non-current derivative assets
|
94
|
|
|
9
|
|
|
103
|
|
|
46
|
|
|
—
|
|
|
46
|
|
||||||
Total derivative assets
|
118
|
|
|
101
|
|
|
219
|
|
|
59
|
|
|
24
|
|
|
83
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities
|
(13
|
)
|
|
(50
|
)
|
|
(63
|
)
|
|
(79
|
)
|
|
(48
|
)
|
|
(127
|
)
|
||||||
Non-current derivative liabilities
|
(15
|
)
|
|
(4
|
)
|
|
(19
|
)
|
|
(22
|
)
|
|
—
|
|
|
(22
|
)
|
||||||
Total derivative liabilities
|
(28
|
)
|
|
(54
|
)
|
|
(82
|
)
|
|
(101
|
)
|
|
(48
|
)
|
|
(149
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative asset (liability), net
|
$
|
90
|
|
|
$
|
47
|
|
|
$
|
137
|
|
|
$
|
(42
|
)
|
|
$
|
(24
|
)
|
|
$
|
(66
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Notional amount, net (in TBtu) (3)
|
6,781
|
|
|
50
|
|
|
|
|
5,832
|
|
|
12
|
|
|
|
|
(1)
|
Does not include collateral calls of
$6 million
and
$5 million
for such contracts, which are included in
other current assets
in our Consolidated Balance Sheets as of
June 30, 2019
and
December 31, 2018
, respectively. Includes derivative assets of
$2 million
and
$2 million
and non-current assets of
$1 million
and
$3 million
as of
June 30, 2019
and
December 31, 2018
, respectively, for a natural gas supply contract CCL has with a related party.
|
(2)
|
Does not include collateral of
$15 million
and
$9 million
deposited for such contracts, which are included in
other current assets
in our Consolidated Balance Sheets as of
June 30, 2019
and
December 31, 2018
, respectively.
|
(3)
|
SPL had secured up to approximately
3,437
TBtu and
3,464
TBtu as of
June 30, 2019
and
December 31, 2018
, respectively. CCL had secured up to approximately
2,787
TBtu and
2,801
TBtu of natural gas feedstock through natural gas supply contracts as of
June 30, 2019
and
December 31, 2018
, respectively, of which
57
TBtu and
55
TBtu, respectively, were for a natural gas supply contract CCL has with a related party. Corpus Christi Stage 3 had secured up to approximately
754
TBtu of natural gas feedstock through natural gas supply contracts as of
June 30, 2019
.
|
|
Consolidated Statements of Operations Location (1)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
LNG Trading Derivatives gain (loss)
|
LNG revenues
|
|
$
|
94
|
|
|
$
|
(76
|
)
|
|
$
|
158
|
|
|
$
|
(70
|
)
|
LNG Trading Derivatives loss
|
Cost of sales
|
|
(51
|
)
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
||||
Liquefaction Supply Derivatives gain (loss) (2)
|
LNG revenues
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Liquefaction Supply Derivatives gain (loss) (2)(3)
|
Cost of sales
|
|
57
|
|
|
(3
|
)
|
|
139
|
|
|
(53
|
)
|
|
(1)
|
Fair value fluctuations associated with commodity derivative activities are classified and presented consistently with the item economically hedged and the nature and intent of the derivative instrument.
|
(2)
|
Does not include the realized value associated with derivative instruments that settle through physical delivery.
|
(3)
|
Includes
$24 million
and
$36 million
that CCL recorded in cost of sales under a natural gas supply contract with a related party during the
three and six months ended June 30, 2019
, respectively. Of this amount,
$4 million
was included in accrued liabilities as of
June 30, 2019
. CCL did
no
t have any transactions during the
three and six months ended June 30, 2018
under this contract.
|
|
|
|
Fair Value Measurements as of
|
||||||
|
Consolidated Balance Sheet Location
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
FX Derivatives
|
Derivative assets
|
|
$
|
11
|
|
|
$
|
16
|
|
FX Derivatives
|
Derivative liabilities
|
|
—
|
|
|
(1
|
)
|
||
FX Derivatives
|
Non-current derivative liabilities
|
|
(1
|
)
|
|
—
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
Consolidated Statements of Operations Location
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
FX Derivatives gain
|
LNG revenues
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
9
|
|
|
$
|
10
|
|
|
|
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 June 30, 2019
|
|
|
|
|
|
|
||||||
CCH Interest Rate Derivatives
|
|
$
|
(88
|
)
|
|
$
|
—
|
|
|
$
|
(88
|
)
|
CCH Interest Rate Forward Start Derivatives
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||
Liquefaction Supply Derivatives
|
|
121
|
|
|
(3
|
)
|
|
118
|
|
|||
Liquefaction Supply Derivatives
|
|
(35
|
)
|
|
7
|
|
|
(28
|
)
|
|||
LNG Trading Derivatives
|
|
109
|
|
|
(8
|
)
|
|
101
|
|
|||
LNG Trading Derivatives
|
|
(62
|
)
|
|
8
|
|
|
(54
|
)
|
|||
FX Derivatives
|
|
21
|
|
|
(10
|
)
|
|
11
|
|
|||
FX Derivatives
|
|
(11
|
)
|
|
10
|
|
|
(1
|
)
|
|||
As of December 31, 2018
|
|
|
|
|
|
|
|
|||||
CCH Interest Rate Derivatives
|
|
$
|
19
|
|
|
$
|
(1
|
)
|
|
$
|
18
|
|
Liquefaction Supply Derivatives
|
|
95
|
|
|
(36
|
)
|
|
59
|
|
|||
Liquefaction Supply Derivatives
|
|
(121
|
)
|
|
20
|
|
|
(101
|
)
|
|||
LNG Trading Derivatives
|
|
112
|
|
|
(88
|
)
|
|
24
|
|
|||
LNG Trading Derivatives
|
|
(92
|
)
|
|
44
|
|
|
(48
|
)
|
|||
FX Derivatives
|
|
30
|
|
|
(14
|
)
|
|
16
|
|
|||
FX Derivatives
|
|
(2
|
)
|
|
1
|
|
|
(1
|
)
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Advances made to municipalities for water system enhancements
|
|
$
|
89
|
|
|
$
|
90
|
|
Advances and other asset conveyances to third parties to support LNG terminals
|
|
55
|
|
|
54
|
|
||
Tax-related payments and receivables
|
|
21
|
|
|
21
|
|
||
Equity method investments
|
|
124
|
|
|
94
|
|
||
Advances made under EPC and non-EPC contracts
|
|
11
|
|
|
14
|
|
||
Other
|
|
37
|
|
|
32
|
|
||
Total other non-current assets, net
|
|
$
|
337
|
|
|
$
|
305
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Interest costs and related debt fees
|
|
$
|
405
|
|
|
$
|
233
|
|
Accrued natural gas purchases
|
|
402
|
|
|
610
|
|
||
LNG terminals and related pipeline costs
|
|
630
|
|
|
125
|
|
||
Compensation and benefits
|
|
58
|
|
|
117
|
|
||
Accrued LNG inventory
|
|
3
|
|
|
14
|
|
||
Other accrued liabilities
|
|
74
|
|
|
70
|
|
||
Total accrued liabilities
|
|
$
|
1,572
|
|
|
$
|
1,169
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Long-term debt:
|
|
|
|
|
||||
SPL
|
|
|
|
|
|
|||
5.625% Senior Secured Notes due 2021 (“2021 SPL Senior Notes”)
|
|
$
|
2,000
|
|
|
$
|
2,000
|
|
6.25% Senior Secured Notes due 2022 (“2022 SPL Senior Notes”)
|
|
1,000
|
|
|
1,000
|
|
||
5.625% Senior Secured Notes due 2023 (“2023 SPL Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.75% Senior Secured Notes due 2024 (“2024 SPL Senior Notes”)
|
|
2,000
|
|
|
2,000
|
|
||
5.625% Senior Secured Notes due 2025 (“2025 SPL Senior Notes”)
|
|
2,000
|
|
|
2,000
|
|
||
5.875% Senior Secured Notes due 2026 (“2026 SPL Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.00% Senior Secured Notes due 2027 (“2027 SPL Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
4.200% Senior Secured Notes due 2028 (“2028 SPL Senior Notes”)
|
|
1,350
|
|
|
1,350
|
|
||
5.00% Senior Secured Notes due 2037 (“2037 SPL Senior Notes”)
|
|
800
|
|
|
800
|
|
||
Cheniere Partners
|
|
|
|
|
||||
5.250% Senior Notes due 2025 (“2025 CQP Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.625% Senior Notes due 2026 (“2026 CQP Senior Notes”)
|
|
1,100
|
|
|
1,100
|
|
||
2016 CQP Credit Facilities
|
|
—
|
|
|
—
|
|
||
2019 CQP Credit Facilities
|
|
649
|
|
|
—
|
|
||
CCH
|
|
|
|
|
||||
7.000% Senior Secured Notes due 2024 (“2024 CCH Senior Notes”)
|
|
1,250
|
|
|
1,250
|
|
||
5.875% Senior Secured Notes due 2025 (“2025 CCH Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.125% Senior Secured Notes due 2027 (“2027 CCH Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
CCH Credit Facility
|
|
6,138
|
|
|
5,156
|
|
||
CCH HoldCo II
|
|
|
|
|
||||
11.0% Convertible Senior Secured Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”)
|
|
1,536
|
|
|
1,455
|
|
||
Cheniere
|
|
|
|
|
||||
4.875% Convertible Unsecured Notes due 2021 (“2021 Cheniere Convertible Unsecured Notes”)
|
|
1,248
|
|
|
1,218
|
|
||
4.25% Convertible Senior Notes due 2045 (“2045 Cheniere Convertible Senior Notes”)
|
|
625
|
|
|
625
|
|
||
$1.25 billion Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”)
|
|
—
|
|
|
—
|
|
||
Unamortized premium, discount and debt issuance costs, net
|
|
(752
|
)
|
|
(775
|
)
|
||
Total long-term debt, net
|
|
29,944
|
|
|
28,179
|
|
||
|
|
|
|
|
||||
Current debt:
|
|
|
|
|
||||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
|
—
|
|
|
—
|
|
||
$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”)
|
|
—
|
|
|
168
|
|
||
Cheniere Marketing trade finance facilities
|
|
—
|
|
|
71
|
|
||
Total current debt
|
|
—
|
|
|
239
|
|
||
|
|
|
|
|
||||
Total debt, net
|
|
$
|
29,944
|
|
|
$
|
28,418
|
|
|
|
SPL Working Capital Facility (1)
|
|
2019 CQP Credit Facilities
|
|
CCH Credit Facility
|
|
CCH Working Capital Facility
|
|
Cheniere Revolving Credit Facility
|
||||||||||
Original facility size
|
|
$
|
1,200
|
|
|
$
|
1,500
|
|
|
$
|
8,404
|
|
|
$
|
350
|
|
|
$
|
750
|
|
Incremental commitments
|
|
—
|
|
|
—
|
|
|
1,566
|
|
|
850
|
|
|
500
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Outstanding balance
|
|
—
|
|
|
649
|
|
|
6,138
|
|
|
—
|
|
|
—
|
|
|||||
Commitments prepaid or terminated
|
|
—
|
|
|
—
|
|
|
3,832
|
|
|
—
|
|
|
—
|
|
|||||
Letters of credit issued
|
|
415
|
|
|
—
|
|
|
—
|
|
|
338
|
|
|
—
|
|
|||||
Available commitment
|
|
$
|
785
|
|
|
$
|
851
|
|
|
$
|
—
|
|
|
$
|
862
|
|
|
$
|
1,250
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate on outstanding balance
|
|
LIBOR plus 1.75% or base rate plus 0.75%
|
|
(2)
|
|
LIBOR plus 1.75% or base rate plus 0.75%
|
|
LIBOR plus 1.25% - 1.75% or base rate plus 0.25% - 0.75%
|
|
LIBOR plus 1.75% - 2.50% or base rate plus 0.75% - 1.50%
|
||||||||||
Weighted average interest rate of outstanding balance
|
|
n/a
|
|
3.92%
|
|
4.15%
|
|
n/a
|
|
n/a
|
||||||||||
Maturity date
|
|
December 31, 2020
|
|
May 29, 2024
|
|
June 30, 2024
|
|
June 29, 2023
|
|
December 23, 2022
|
|
(1)
|
The SPL Working Capital Facility was amended in May 2019 in connection with commercialization and financing of Train 6 of the SPL Project. All terms of the SPL Working Capital Facility substantially remained unchanged.
|
(2)
|
LIBOR plus
1.50%
or base rate plus
0.50%
, with a
0.25%
step-up beginning on May 29, 2022 for the CQP Term Facility. LIBOR plus
1.25%
to
2.125%
or base rate plus
0.25%
to
1.125%
, depending on the then-current rating of Cheniere Partners for the CQP Revolving Facility.
|
|
|
2021 Cheniere Convertible Unsecured Notes
|
|
2025 CCH HoldCo II Convertible Senior Notes
|
|
2045 Cheniere Convertible Senior Notes
|
||||||
Aggregate original principal
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
$
|
625
|
|
Debt component, net of discount and debt issuance costs
|
|
$
|
1,172
|
|
|
$
|
1,519
|
|
|
$
|
311
|
|
Equity component
|
|
$
|
210
|
|
|
$
|
—
|
|
|
$
|
194
|
|
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
|
|
|
May 13, 2025
|
|
|
March 15, 2045
|
|
|||
Contractual interest rate
|
|
4.875
|
%
|
|
11.0
|
%
|
|
4.25
|
%
|
|||
Effective interest rate (8)
|
|
8.4
|
%
|
|
11.9
|
%
|
|
9.4
|
%
|
|||
Remaining debt discount and debt issuance costs amortization period (9)
|
|
1.9 years
|
|
|
1.3 years
|
|
|
25.7 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 lower of (1) a
10%
discount to the average of the daily volume-weighted average price (“VWAP”) of our common stock for the
90
trading day period prior to the date notice is provided, and (2) a
10%
discount to the closing price of our common stock on the trading day preceding the date notice is provided.
|
(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)
|
Rate to accrete the discounted carrying value of the convertible notes to the face value over the remaining amortization period.
|
(9)
|
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 June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest cost on convertible notes:
|
|
|
|
|
|
|
|
|
||||||||
Interest per contractual rate
|
|
$
|
64
|
|
|
$
|
58
|
|
|
$
|
126
|
|
|
$
|
116
|
|
Amortization of debt discount
|
|
9
|
|
|
8
|
|
|
19
|
|
|
16
|
|
||||
Amortization of debt issuance costs
|
|
3
|
|
|
2
|
|
|
6
|
|
|
4
|
|
||||
Total interest cost related to convertible notes
|
|
76
|
|
|
68
|
|
|
151
|
|
|
136
|
|
||||
Interest cost on debt and finance leases excluding convertible notes
|
|
382
|
|
|
344
|
|
|
755
|
|
|
680
|
|
||||
Total interest cost
|
|
458
|
|
|
412
|
|
|
906
|
|
|
816
|
|
||||
Capitalized interest
|
|
(86
|
)
|
|
(196
|
)
|
|
(287
|
)
|
|
(384
|
)
|
||||
Total interest expense, net
|
|
$
|
372
|
|
|
$
|
216
|
|
|
$
|
619
|
|
|
$
|
432
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Carrying
Amount |
|
Estimated
Fair Value |
|
Carrying
Amount |
|
Estimated
Fair Value |
||||||||
Senior notes (1)
|
|
$
|
19,483
|
|
|
$
|
21,499
|
|
|
$
|
19,466
|
|
|
$
|
19,901
|
|
2037 SPL Senior Notes (2)
|
|
791
|
|
|
912
|
|
|
791
|
|
|
817
|
|
||||
Credit facilities (3)
|
|
6,668
|
|
|
6,668
|
|
|
5,294
|
|
|
5,294
|
|
||||
2021 Cheniere Convertible Unsecured Notes (2)
|
|
1,172
|
|
|
1,302
|
|
|
1,126
|
|
|
1,236
|
|
||||
2025 CCH HoldCo II Convertible Senior Notes (2)
|
|
1,519
|
|
|
1,771
|
|
|
1,432
|
|
|
1,612
|
|
||||
2045 Cheniere Convertible Senior Notes (4)
|
|
311
|
|
|
489
|
|
|
310
|
|
|
431
|
|
|
(1)
|
Includes
2021 SPL Senior Notes
,
2022 SPL Senior Notes
,
2023 SPL Senior Notes
,
2024 SPL Senior Notes
,
2025 SPL Senior Notes
,
2026 SPL Senior Notes
,
2027 SPL Senior Notes
,
2028 SPL Senior Notes
,
2025 CQP Senior Notes
,
2026 CQP Senior Notes
,
2024 CCH Senior Notes
,
2025 CCH Senior Notes
and
2027 CCH Senior Notes
. The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of these senior notes and other similar instruments.
|
(2)
|
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.
|
(3)
|
Includes
SPL Working Capital Facility
,
2016 CQP Credit Facilities
,
2019 CQP Credit Facilities
,
CCH Credit Facility
,
CCH Working Capital Facility
,
Cheniere Revolving Credit Facility
and
Cheniere Marketing trade finance facilities
. 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.
|
(4)
|
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.
|
|
Consolidated Balance Sheet Location
|
|
June 30, 2019
|
||
Right-of-use assets—Operating
|
Operating lease assets, net
|
|
$
|
502
|
|
Right-of-use assets—Financing
|
Property, plant and equipment, net
|
|
58
|
|
|
Total right-of-use assets
|
|
|
$
|
560
|
|
|
|
|
|
||
Current operating lease liabilities
|
Current operating lease liabilities
|
|
$
|
292
|
|
Current finance lease liabilities
|
Other current liabilities
|
|
1
|
|
|
Non-current operating lease liabilities
|
Non-current operating lease liabilities
|
|
202
|
|
|
Non-current finance lease liabilities
|
Non-current finance lease liabilities
|
|
58
|
|
|
Total lease liabilities
|
|
|
$
|
553
|
|
|
Consolidated Statement of Operations Location
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
Operating lease cost (1)
|
Operating costs and expenses (2)
|
|
$
|
140
|
|
|
$
|
277
|
|
Finance lease cost:
|
|
|
|
|
|
||||
Amortization of right-of-use assets
|
Depreciation and amortization expense
|
|
1
|
|
|
2
|
|
||
Interest on lease liabilities
|
Interest expense, net of capitalized interest
|
|
3
|
|
|
5
|
|
||
Total lease cost
|
|
|
$
|
144
|
|
|
$
|
284
|
|
|
(1)
|
Includes
$46 million
and
$93 million
of short-term lease costs and
$8 million
and
$13 million
of variable lease costs incurred during the
three and six months ended June 30, 2019
, respectively.
|
(2)
|
Presented in cost of sales, operating and maintenance expense or selling, general and administrative expense consistent with the nature of the asset under lease.
|
Years Ending December 31,
|
Operating Leases (1)
|
|
Finance Leases
|
||||
2019
|
$
|
192
|
|
|
$
|
5
|
|
2020
|
167
|
|
|
10
|
|
||
2021
|
39
|
|
|
10
|
|
||
2022
|
19
|
|
|
10
|
|
||
2023
|
19
|
|
|
10
|
|
||
Thereafter
|
166
|
|
|
146
|
|
||
Total lease payments
|
602
|
|
|
191
|
|
||
Less: Interest
|
(108
|
)
|
|
(132
|
)
|
||
Present value of lease liabilities
|
$
|
494
|
|
|
$
|
59
|
|
|
(1)
|
Does not include
$1.6 billion
of legally binding minimum lease payments for vessel charters which were executed as of
June 30, 2019
but will commence primarily between 2020 and 2021 and have lease terms of up to
seven years
.
|
Years Ending December 31,
|
Operating Leases (1)
|
|
Capital Leases (2)
|
||||
2019 (3)
|
$
|
380
|
|
|
$
|
5
|
|
2020
|
184
|
|
|
5
|
|
||
2021
|
238
|
|
|
5
|
|
||
2022
|
264
|
|
|
5
|
|
||
2023
|
264
|
|
|
5
|
|
||
Thereafter
|
999
|
|
|
73
|
|
||
Total lease payments
|
2,329
|
|
|
98
|
|
||
Less: Interest
|
—
|
|
|
(39
|
)
|
||
Present value of lease liabilities
|
$
|
2,329
|
|
|
$
|
59
|
|
|
(1)
|
Includes certain lease option renewals that are reasonably assured and payments for certain non-lease components
.
Also includes
$79 million
in payments for short-term leases and
$1.6 billion
in payments for LNG vessel charters which were previously executed but will commence primarily between 2020 and 2021.
|
(2)
|
Does not include payments for non-lease components of
$98 million
.
|
(3)
|
Does not include
$43 million
in aggregate payments we will receive from our LNG vessel subcharters.
|
|
June 30, 2019
|
||
|
Operating Leases
|
|
Finance Leases
|
Weighted-average remaining lease term (in years)
|
7.2
|
|
19.3
|
Weighted-average discount rate (1)
|
5.4%
|
|
16.2%
|
|
(1)
|
The finance leases commenced prior to the adoption of ASC 842. In accordance with previous accounting guidance, the implied rate is based on the fair value of the underlying assets.
|
|
Six Months Ended June 30, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
174
|
|
Operating cash flows from finance leases
|
5
|
|
|
Financing cash flows from finance leases
|
—
|
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
106
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
LNG revenues
|
|
$
|
2,080
|
|
|
$
|
1,516
|
|
|
$
|
4,147
|
|
|
$
|
3,668
|
|
Regasification revenues
|
|
67
|
|
|
65
|
|
|
133
|
|
|
130
|
|
||||
Other revenues
|
|
21
|
|
|
13
|
|
|
36
|
|
|
23
|
|
||||
Total revenues from customers
|
|
2,168
|
|
|
1,594
|
|
|
4,316
|
|
|
3,821
|
|
||||
Net derivative gains (losses) (1)
|
|
93
|
|
|
(64
|
)
|
|
169
|
|
|
(60
|
)
|
||||
Other revenues (2)
|
|
31
|
|
|
13
|
|
|
68
|
|
|
24
|
|
||||
Total revenues
|
|
$
|
2,292
|
|
|
$
|
1,543
|
|
|
$
|
4,553
|
|
|
$
|
3,785
|
|
|
(1)
|
(2)
|
Includes revenues from LNG vessel subcharters. See
Note 11—Leases
for additional information about our subleases.
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Contract assets
|
|
$
|
8
|
|
|
$
|
—
|
|
|
|
Six Months Ended June 30, 2019
|
||
Deferred revenues, beginning of period
|
|
$
|
139
|
|
Cash received but not yet recognized
|
|
136
|
|
|
Revenue recognized from prior period deferral
|
|
(139
|
)
|
|
Deferred revenues, end of period
|
|
$
|
136
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||
|
|
Unsatisfied Transaction Price (in billions)
|
|
Weighted Average Recognition Timing (years) (1)
|
|
Unsatisfied Transaction Price (in billions)
|
|
Weighted Average Recognition Timing (years) (1)
|
||||
LNG revenues
|
|
$
|
108.4
|
|
|
11
|
|
$
|
106.6
|
|
|
11
|
Regasification revenues
|
|
2.5
|
|
|
5
|
|
2.6
|
|
|
6
|
||
Total revenues
|
|
$
|
110.9
|
|
|
|
|
$
|
109.2
|
|
|
|
|
(1)
|
The weighted average recognition timing represents an estimate of the number of years during which we shall have recognized half of the unsatisfied transaction price.
|
(1)
|
We omit from the table above all performance obligations that are part of a contract that has an original expected duration of one year or less.
|
(2)
|
We omit from the table above all variable consideration that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation when that performance obligation qualifies as a series. The table above excludes substantially all variable consideration under our SPAs and TUAs. The amount of revenue from variable fees that is not included in the transaction price will vary based on the future prices of Henry Hub throughout the contract terms, to the extent customers elect to take delivery of their LNG, and adjustments to the consumer price index. Certain of our contracts contain additional variable consideration based on the outcome of contingent events and the movement of various indexes. We have not included such variable consideration in the transaction price to the extent the consideration is considered constrained due to the uncertainty of ultimate pricing and receipt. Approximately
52%
and
55%
of our LNG revenues from contracts with a duration of over one year during the
three months ended June 30, 2019 and 2018
, respectively, and approximately
55%
of our LNG revenues from contracts with a duration of over one year during
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Share-based compensation costs, pre-tax:
|
|
|
|
|
|
|
|
|
||||||||
Equity awards
|
|
$
|
32
|
|
|
$
|
22
|
|
|
$
|
61
|
|
|
$
|
39
|
|
Liability awards
|
|
2
|
|
|
15
|
|
|
5
|
|
|
32
|
|
||||
Total share-based compensation
|
|
34
|
|
|
37
|
|
|
66
|
|
|
71
|
|
||||
Capitalized share-based compensation
|
|
(1
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|
(13
|
)
|
||||
Total share-based compensation expense
|
|
$
|
33
|
|
|
$
|
30
|
|
|
$
|
61
|
|
|
$
|
58
|
|
Tax benefit associated with share-based compensation expense
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
257.4
|
|
|
242.8
|
|
|
257.3
|
|
|
239.2
|
|
||||
Dilutive unvested stock
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
2.5
|
|
||||
Diluted
|
|
257.4
|
|
|
242.8
|
|
|
258.6
|
|
|
241.7
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per share attributable to common stockholders
|
|
$
|
(0.44
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
1.42
|
|
Diluted net income (loss) per share attributable to common stockholders
|
|
$
|
(0.44
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
0.11
|
|
|
$
|
1.40
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Unvested stock (1)
|
|
3.8
|
|
|
5.2
|
|
|
3.8
|
|
|
2.6
|
|
Convertible notes (2)
|
|
17.8
|
|
|
17.2
|
|
|
17.8
|
|
|
17.2
|
|
Total potentially dilutive common shares
|
|
21.6
|
|
|
22.4
|
|
|
21.6
|
|
|
19.8
|
|
|
(1)
|
Does not include
0.6 million
shares for each of the
three and six months ended June 30, 2019
and
0.4 million
shares for each of the
three and six months ended June 30, 2018
of unvested stock because the performance conditions had not yet been satisfied as of
June 30, 2019
and
2018
, respectively.
|
(2)
|
Includes number of shares in aggregate issuable upon conversion of the
2021 Cheniere Convertible Unsecured Notes
and the
2045 Cheniere Convertible Senior Notes
. There were
no
shares included in the computation of diluted
net income (loss)
per share for the
2025 CCH HoldCo II Convertible Senior Notes
because substantive non-market-based contingencies underlying the eligible conversion date have not been met as of
June 30, 2019
.
|
|
|
Percentage of Total Revenues from External Customers
|
|
Percentage of Accounts Receivable from External Customers
|
||||||||
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Customer A
|
|
17%
|
|
21%
|
|
18%
|
|
19%
|
|
11%
|
|
21%
|
Customer B
|
|
11%
|
|
17%
|
|
11%
|
|
14%
|
|
15%
|
|
14%
|
Customer C
|
|
11%
|
|
18%
|
|
12%
|
|
22%
|
|
15%
|
|
18%
|
Customer D
|
|
12%
|
|
16%
|
|
13%
|
|
11%
|
|
14%
|
|
*
|
Customer E
|
|
*
|
|
*
|
|
*
|
|
*
|
|
13%
|
|
*
|
Customer F
|
|
*
|
|
*
|
|
*
|
|
*
|
|
*
|
|
10%
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Cash paid during the period for interest on debt and finance leases, net of amounts capitalized
|
|
$
|
271
|
|
|
$
|
282
|
|
Cash paid for income taxes
|
|
20
|
|
|
4
|
|
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 or portions 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 our ability to enter into such transactions;
|
•
|
statements relating to the construction of our Trains and pipelines, 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 or pipelines;
|
•
|
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 marketing of volumes expected to be made available to our integrated marketing function; 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
|
•
|
In June 2019, our board of directors (the “Board”) appointed Michele A. Evans to serve as a member of the Board. Ms. Evans was also appointed to the Audit Committee and the Governance and Nominating Committee of the Board.
|
•
|
In May 2019, our wholly owned subsidiary
CCL Stage III
entered into an integrated production marketing transaction with Apache Corporation to purchase 140,000
MMBtu
per day of natural gas, for a term of approximately 15 years, at a price based on international LNG indices, net of a fixed liquefaction fee and certain costs incurred by Cheniere.
|
•
|
In May 2019, the board of directors of the general partner of Cheniere Partners made a positive
FID
with respect to Train 6 of the
SPL Project
and issued a full notice to proceed with construction to
Bechtel Oil, Gas and Chemicals, Inc.
(“Bechtel”)
in June 2019.
|
•
|
In March 2019, we received a positive Environmental Assessment from the FERC relating to
Corpus Christi Stage 3
and anticipate receiving all remaining necessary regulatory approvals for the project by the end of 2019.
|
•
|
In February 2019, Midship Pipeline, in which we hold an indirect equity interest, issued full notice to proceed to construct the Midship natural gas pipeline and related compression and interconnect facilities following receipt of final Notice to Proceed from the FERC and obtaining financing to construct the Midship Project.
|
•
|
As of July 31, 2019, over
750
cumulative LNG cargoes have been produced, loaded and exported from the
Liquefaction Projects
.
|
•
|
In June 2019, first LNG production from Train 2 of the
CCL Project
occurred, and the first commissioning cargo from Train 2 was exported.
|
•
|
In February 2019 and March 2019, CCL and SPL achieved substantial completion of Train 1 of the
CCL Project
and Train 5 of the
SPL Project
, respectively, and commenced operating activities.
|
•
|
In June 2019, we announced a capital allocation framework which prioritizes investments in the growth of our liquefaction platform, improvement of consolidated leverage metrics, and a return of excess capital to shareholders under a three-year, $1.0 billion share repurchase program.
|
•
|
In June 2019, the date of first commercial delivery was reached under the 20-year SPAs with Endesa S.A. and PT Pertamina (Persero) relating to Train 1 of the
CCL Project
.
|
•
|
In June 2019, CCH and its subsidiaries, as guarantors, entered into a note purchase agreement
(“CCH Note Purchase Agreement”)
with Allianz Global Investors GmbH to issue an aggregate principal amount of $727 million of 4.80% Senior Secured Notes due 2039
(the “2039 CCH Senior Notes”)
, with closing and funding of the
2039 CCH Senior Notes
conditional in part on the
2039 CCH Senior Notes
receiving at least two investment grade ratings within 18 months of the date of the
CCH Note Purchase Agreement
.
|
•
|
In May 2019, Cheniere Partners entered into five-year, $1.5 billion credit facilities
(the “2019 CQP Credit Facilities”)
, which consist of a $750 million delayed draw term loan (“CQP Term Facility”) and a $750 million revolving credit facility (“CQP Revolving Facility”), to fund a portion of the development and construction of Train 6, a third LNG berth and supporting infrastructure at the
SPL Project
.
|
•
|
In March 2019, the date of first commercial delivery was reached under the 20-year SPA with BG Gulf Coast LNG, LLC relating to Train 4 of the
SPL Project
.
|
•
|
SPL through project debt and borrowings, operating cash flows and equity contributions from Cheniere Partners;
|
•
|
Cheniere Partners through operating cash flows from SPLNG, SPL and CTPL and debt or equity offerings;
|
•
|
CCH Group through operating cash flows from CCL and CCP, project debt and borrowings and equity contributions from Cheniere; and
|
•
|
Cheniere through project financing, existing unrestricted cash, debt and equity offerings by us or our subsidiaries, operating cash flows, services fees from our subsidiaries and distributions from our investment in Cheniere Partners.
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
$
|
2,279
|
|
|
$
|
981
|
|
Restricted cash designated for the following purposes:
|
|
|
|
||||
SPL Project
|
596
|
|
|
756
|
|
||
Cheniere Partners and cash held by guarantor subsidiaries
|
—
|
|
|
785
|
|
||
CCL Project
|
279
|
|
|
289
|
|
||
Other
|
286
|
|
|
345
|
|
||
Available commitments under the following credit facilities:
|
|
|
|
||||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
785
|
|
|
775
|
|
||
$1.5 billion 2019 CQP Credit Facilities
|
851
|
|
|
—
|
|
||
$2.8 billion Cheniere Partners’ Credit Facilities (“2016 CQP Credit Facilities”)
|
—
|
|
|
115
|
|
||
Amended and restated CCH Credit Facility (“CCH Credit Facility”)
|
—
|
|
|
982
|
|
||
$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”)
|
862
|
|
|
716
|
|
||
$1.25 billion Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”)
|
1,250
|
|
|
1,250
|
|
|
|
SPL Train 6
|
|
Overall project completion percentage
|
|
32.4%
|
|
Completion percentage of:
|
|
|
|
Engineering
|
|
74.1%
|
|
Procurement
|
|
48.2%
|
|
Subcontract work
|
|
30.7%
|
|
Construction
|
|
2.1%
|
|
Date of expected substantial completion
|
|
1H 2023
|
•
|
Trains 1 through 4—
FTA countries
for a 30-year term, which commenced on May 15, 2016, and
non-FTA countries
for a 20-year term, which commenced on June 3, 2016, in an amount up to a combined total of the equivalent of 16
mtpa
(approximately 803
Bcf/yr
of natural gas).
|
•
|
Trains 1 through 4—
FTA countries
for a 25-year term and non-FTA countries for a 20-year term in an amount up to a combined total of the equivalent of approximately 203
Bcf/yr
of natural gas (approximately 4 mtpa).
|
•
|
Trains 5 and 6—
FTA countries
and
non-FTA countries
for a 20-year term, in an amount up to a combined total of 503.3
Bcf/yr
of natural gas (approximately 10 mtpa).
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Senior notes (1)
|
|
$
|
16,250
|
|
|
$
|
16,250
|
|
Credit facilities outstanding balance (2)
|
|
649
|
|
|
—
|
|
||
Letters of credit issued (3)
|
|
415
|
|
|
425
|
|
||
Available commitments under credit facilities (3)
|
|
1,636
|
|
|
775
|
|
||
Total capital resources from borrowings and available commitments (4)
|
|
$
|
18,950
|
|
|
$
|
17,450
|
|
|
(1)
|
Includes SPL’s 5.625% Senior Secured Notes due 2021, 6.25% Senior Secured Notes due 2022, 5.625% Senior Secured Notes due 2023, 5.75% Senior Secured Notes due 2024, 5.625% Senior Secured Notes due 2025, 5.875% Senior Secured Notes due 2026
(the “2026 SPL Senior Notes”)
, 5.00% Senior Secured Notes due 2027
(the “2027 SPL Senior Notes”)
, 4.200% Senior Secured Notes due 2028
(the “2028 SPL Senior Notes”)
and 5.00% Senior Secured Notes due 2037
(the “2037 SPL Senior Notes”)
(collectively, the “SPL Senior Notes”)
and Cheniere Partners’
2025 CQP Senior Notes
and
2026 CQP Senior Notes
.
|
(2)
|
Includes outstanding balances under the
SPL Working Capital Facility
and
2019 CQP Credit Facilities
, inclusive of any portion of the
2019 CQP Credit Facilities
that may be used for general corporate purposes.
|
(3)
|
Consists of
SPL Working Capital Facility
and
2019 CQP Credit Facilities
. Balance at
December 31, 2018
did not include the letters of credit issued or available commitments under the terminated
2016 CQP Credit Facilities
, which were not specifically for the Sabine Pass LNG Terminal.
|
(4)
|
Does not include Cheniere’s additional borrowings from the
2021 Cheniere Convertible Unsecured Notes
and the
2045 Cheniere Convertible Senior Notes
, which may be used for the Sabine Pass LNG Terminal.
|
|
CCL Stage 1
|
|
CCL Stage 2
|
||
Overall project completion percentage
|
99.5%
|
|
62.4%
|
||
Completion percentage of:
|
|
|
|
|
|
Engineering
|
100%
|
|
94.3%
|
||
Procurement
|
100%
|
|
92.5%
|
||
Subcontract work
|
96.4%
|
|
12.2%
|
||
Construction
|
99.2%
|
|
29.2%
|
||
Expected date of substantial completion
|
Train 2
|
3Q 2019
|
|
Train 3
|
2H 2021
|
•
|
CCL Project—
FTA countries
for a 25-year term and to
non-FTA countries
for a 20-year term up to a combined total of the equivalent of 767
Bcf/yr
(approximately 15 mtpa) of natural gas.
|
•
|
Corpus Christi Stage 3
—FTA countries for a 20-year term in an amount equivalent to 514 Bcf/yr (approximately 10 mtpa) of natural gas (the “Stage 3 FTA”). The application for authorization to export that same 514 Bcf/yr of domestically produced LNG by vessel to non-FTA countries is currently pending before the DOE (the “Stage 3 Non-FTA”).
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2019
|
|
2018
|
||||
Senior notes (1)
|
|
$
|
4,250
|
|
|
$
|
4,250
|
|
11.0% Convertible Senior Secured Notes due 2025 (2)
|
|
1,000
|
|
|
1,000
|
|
||
Credit facilities outstanding balance (3)
|
|
6,138
|
|
|
5,324
|
|
||
Letters of credit issued (3)
|
|
338
|
|
|
316
|
|
||
Available commitments under credit facilities (3)
|
|
862
|
|
|
1,698
|
|
||
Total capital resources from borrowings and available commitments (4)
|
|
$
|
12,588
|
|
|
$
|
12,588
|
|
|
(1)
|
Includes CCH’s 7.000% Senior Secured Notes due 2024
(the “2024 CCH Senior Notes”)
, 5.875% Senior Secured Notes due 2025
(the “2025 CCH Senior Notes”)
and 5.125% Senior Secured Notes due 2027
(the “2027 CCH Senior Notes”)
(collectively, the “CCH Senior Notes”)
.
|
(2)
|
Aggregate original principal amount before debt discount and debt issuance costs.
|
(3)
|
Includes
CCH Credit Facility
and
CCH Working Capital Facility
.
|
(4)
|
Does not include Cheniere’s additional borrowings from
2021 Cheniere Convertible Unsecured Notes
,
2045 Cheniere Convertible Senior Notes
and
Cheniere Revolving Credit Facility
, which may be used for the
CCL Project
.
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Operating cash flows
|
$
|
760
|
|
|
$
|
982
|
|
Investing cash flows
|
(1,542
|
)
|
|
(1,492
|
)
|
||
Financing cash flows
|
1,066
|
|
|
1,168
|
|
||
|
|
|
|
||||
Net increase in cash, cash equivalents and restricted cash
|
284
|
|
|
658
|
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
3,156
|
|
|
2,613
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
3,440
|
|
|
$
|
3,271
|
|
•
|
$982 million
of borrowings under the
CCH Credit Facility
;
|
•
|
$649 million
of borrowings under the
2019 CQP Credit Facilities
;
|
•
|
$390 million
of borrowings and
$558 million
in repayments under the
CCH Working Capital Facility
;
|
•
|
$290 million
of distributions to non-controlling interest by Cheniere Partners;
|
•
|
$72 million
of net repayments related to our Cheniere Marketing trade financing facilities;
|
•
|
$20 million
of debt issuance costs primarily related to up-front fees paid upon the closing of the
2019 CQP Credit Facilities
; and
|
•
|
$14 million
paid for tax withholdings for share-based compensation.
|
•
|
$1.7 billion of borrowings and $281 million in repayments under the CCH Credit Facility;
|
•
|
$14 million of borrowings under the CCH Working Capital Facility;
|
•
|
$123 million of net borrowings related to our Cheniere Marketing trade financing facilities;
|
•
|
$46 million of debt issuance costs related to up-front fees paid for the amendment and restatement of the CCH Credit Facility and the CCH Working Capital Facility;
|
•
|
$8 million in debt extinguishment costs;
|
•
|
$288 million of distributions and dividends to non-controlling interest by Cheniere Partners and Cheniere Holdings; and
|
•
|
$8 million paid for tax withholdings for share-based compensation.
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||||||
(in TBtu)
|
Operational
|
|
Commissioning
|
|
Operational
|
|
Commissioning
|
||||
Volumes loaded during the current period
|
361
|
|
|
3
|
|
|
645
|
|
|
28
|
|
Volumes loaded during the prior period but recognized during the current period
|
27
|
|
|
—
|
|
|
25
|
|
|
3
|
|
Less: volumes loaded during the current period and in transit at the end of the period
|
(36
|
)
|
|
(3
|
)
|
|
(36
|
)
|
|
(3
|
)
|
Total volumes recognized in the current period
|
352
|
|
|
—
|
|
|
634
|
|
|
28
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
LNG revenues
|
$
|
2,173
|
|
|
$
|
1,442
|
|
|
$
|
731
|
|
|
$
|
4,316
|
|
|
$
|
3,608
|
|
|
$
|
708
|
|
Regasification revenues
|
67
|
|
|
65
|
|
|
2
|
|
|
133
|
|
|
130
|
|
|
3
|
|
||||||
Other revenues
|
52
|
|
|
36
|
|
|
16
|
|
|
104
|
|
|
47
|
|
|
57
|
|
||||||
Total revenues
|
$
|
2,292
|
|
|
$
|
1,543
|
|
|
$
|
749
|
|
|
$
|
4,553
|
|
|
$
|
3,785
|
|
|
$
|
768
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
LNG revenues
(in millions)
:
|
|
|
|
|
|
|
|
||||||||
LNG from the Liquefaction Projects sold under third party long-term agreements (1)
|
$
|
1,393
|
|
|
$
|
1,118
|
|
|
$
|
2,910
|
|
|
$
|
2,111
|
|
LNG from the Liquefaction Projects sold by our integrated marketing function under short-term agreements
|
566
|
|
|
282
|
|
|
905
|
|
|
1,303
|
|
||||
LNG procured from third parties
|
31
|
|
|
76
|
|
|
184
|
|
|
186
|
|
||||
Other revenues and derivative gains (losses)
|
183
|
|
|
(34
|
)
|
|
317
|
|
|
8
|
|
||||
Total LNG revenues
|
$
|
2,173
|
|
|
$
|
1,442
|
|
|
$
|
4,316
|
|
|
$
|
3,608
|
|
|
|
|
|
|
|
|
|
||||||||
Volumes sold as LNG revenues
(in TBtu)
:
|
|
|
|
|
|
|
|
||||||||
LNG from the Liquefaction Projects sold under third party long-term agreements (1)
|
241
|
|
|
189
|
|
|
477
|
|
|
354
|
|
||||
LNG from the Liquefaction Projects sold by our integrated marketing function under short-term agreements
|
111
|
|
|
41
|
|
|
157
|
|
|
149
|
|
||||
LNG procured from third parties
|
5
|
|
|
10
|
|
|
23
|
|
|
21
|
|
||||
Total volumes sold as LNG revenues
|
357
|
|
|
240
|
|
|
657
|
|
|
524
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
Cost of sales
|
$
|
1,277
|
|
|
$
|
873
|
|
|
$
|
404
|
|
|
$
|
2,491
|
|
|
$
|
2,051
|
|
|
$
|
440
|
|
Operating and maintenance expense
|
295
|
|
|
147
|
|
|
148
|
|
|
516
|
|
|
287
|
|
|
229
|
|
||||||
Development expense
|
3
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
||||||
Selling, general and administrative expense
|
77
|
|
|
73
|
|
|
4
|
|
|
150
|
|
|
140
|
|
|
10
|
|
||||||
Depreciation and amortization expense
|
204
|
|
|
111
|
|
|
93
|
|
|
348
|
|
|
220
|
|
|
128
|
|
||||||
Impairment expense and loss on disposal of assets
|
4
|
|
|
—
|
|
|
4
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||
Total operating costs and expenses
|
$
|
1,860
|
|
|
$
|
1,207
|
|
|
$
|
653
|
|
|
$
|
3,515
|
|
|
$
|
2,702
|
|
|
$
|
813
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
Interest expense, net of capitalized interest
|
$
|
372
|
|
|
$
|
216
|
|
|
$
|
156
|
|
|
$
|
619
|
|
|
$
|
432
|
|
|
$
|
187
|
|
Loss on modification or extinguishment of debt
|
—
|
|
|
15
|
|
|
(15
|
)
|
|
—
|
|
|
15
|
|
|
(15
|
)
|
||||||
Derivative loss (gain), net
|
74
|
|
|
(32
|
)
|
|
106
|
|
|
109
|
|
|
(109
|
)
|
|
218
|
|
||||||
Other income
|
(16
|
)
|
|
(10
|
)
|
|
(6
|
)
|
|
(32
|
)
|
|
(17
|
)
|
|
(15
|
)
|
||||||
Total other expense
|
$
|
430
|
|
|
$
|
189
|
|
|
$
|
241
|
|
|
$
|
696
|
|
|
$
|
321
|
|
|
$
|
375
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
|||||||||||
Income before income taxes and non-controlling interest
|
$
|
2
|
|
|
$
|
147
|
|
|
(145
|
)
|
|
$
|
342
|
|
|
$
|
762
|
|
|
$
|
(420
|
)
|
Income tax benefit (provision)
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(3
|
)
|
|
(12
|
)
|
|
9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Effective tax rate
|
—
|
%
|
|
2.0
|
%
|
|
|
|
0.9
|
%
|
|
1.6
|
%
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
Net income attributable to non-controlling interest
|
$
|
116
|
|
|
$
|
168
|
|
|
$
|
(52
|
)
|
|
$
|
312
|
|
|
$
|
411
|
|
|
$
|
(99
|
)
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
|
|
Change in Fair Value
|
|
Fair Value
|
|
Change in Fair Value
|
||||||||
Liquefaction Supply Derivatives
|
$
|
90
|
|
|
$
|
127
|
|
|
$
|
(42
|
)
|
|
$
|
6
|
|
LNG Trading Derivatives
|
47
|
|
|
39
|
|
|
(24
|
)
|
|
9
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
|
|
Change in Fair Value
|
|
Fair Value
|
|
Change in Fair Value
|
||||||||
CCH Interest Rate Derivatives
|
$
|
(88
|
)
|
|
$
|
25
|
|
|
$
|
18
|
|
|
$
|
37
|
|
CCH Interest Rate Forward Start Derivatives
|
(7
|
)
|
|
20
|
|
|
—
|
|
|
—
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
|
|
Change in Fair Value
|
|
Fair Value
|
|
Change in Fair Value
|
||||||||
FX Derivatives
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
15
|
|
|
$
|
1
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
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
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans (3)
|
April 1 - 30, 2019
|
|
425
|
|
$64.70
|
|
—
|
|
—
|
May 1 - 31, 2019
|
|
13,973
|
|
$67.87
|
|
—
|
|
—
|
June 1 - 30, 2019
|
|
45,266
|
|
$68.24
|
|
44,600
|
|
$996,954,020
|
|
(1)
|
Includes 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 the shares.
|
(3)
|
On June 3, 2019, we announced that our Board authorized a 3-year, $1 billion share repurchase program.
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
10.1
|
|
|
10.2*
|
|
|
10.3*
|
|
|
10.4*
|
|
|
10.5*
|
|
|
10.6*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1**
|
|
|
32.2**
|
|
|
101.INS*
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH*
|
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
Inline XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE*
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
|
CHENIERE ENERGY, INC.
|
|
|
|
|
|
Date:
|
August 7, 2019
|
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:
|
August 7, 2019
|
By:
|
/s/ Leonard E. Travis
|
|
|
|
Leonard E. Travis
|
|
|
|
Vice President and Chief Accounting Officer
|
|
|
|
(on behalf of the registrant and
as principal accounting officer) |
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