Press Releases

Cheniere Energy, Inc. NYSE American: LNG

Cheniere Energy, Inc. Reports Fourth Quarter and Full Year 2014 Results

HOUSTON, Feb. 20, 2015 /PRNewswire/ -- Cheniere Energy, Inc. ("Cheniere") (NYSE MKT: LNG) reported a net loss attributable to common stockholders of $158.6 million, or $0.70 per share (basic and diluted), for the three months ended December 31, 2014, compared to a net loss attributable to common stockholders of $135.2 million, or $0.61 per share (basic and diluted), for the corresponding 2013 period. For the year ended December 31, 2014, Cheniere reported a net loss attributable to common stockholders of $547.9 million, or $2.44 per share (basic and diluted), compared to a net loss attributable to common stockholders of $507.9 million, or $2.32 per share (basic and diluted), during the corresponding period of 2013.

Results include significant items for the three months and year ended December 31, 2014 of $44.2 million and $286.7 million, compared to $34.0 million and $109.1 million for the comparable 2013 periods, respectively. The significant items for the three months and year ended December 31, 2014 related to development expenses primarily for the liquefaction facilities being developed by us near Corpus Christi, Texas (the "Corpus Christi Liquefaction Project"), losses on early extinguishment of debt related to the write-off of debt issuance costs by Sabine Pass Liquefaction, LLC ("Sabine Pass Liquefaction") in connection with the refinancing of a portion of its credit facilities in May 2014 and April 2013, and derivative gains (losses) due primarily to changes in long-term LIBOR during the respective periods.

Included in general and administrative expense were non-cash compensation expenses of $16.3 million and $96.7 million for the three months and year ended December 31, 2014, respectively, compared to $64.9 million and $252.1 million for the comparable 2013 periods, respectively.

Results are reported on a consolidated basis and include our ownership interest in Cheniere Energy Partners, L.P. ("Cheniere Partners"), which is based on our 100% ownership of the general partner of Cheniere Partners and 80.1% ownership interest in Cheniere Energy Partners LP Holdings, LLC which owns a 55.9% limited partner interest in Cheniere Partners.

Overview of Recent Significant Events

  • In November 2014, we issued an aggregate principal amount of $1.0 billion in convertible unsecured payment in kind notes to RRJ Capital II, Ltd., Baytree Investments (Mauritius) Pte Ltd., and Seatown Lionfish Pte Ltd. Proceeds from the notes will be used for general corporate purposes and to fund a portion of the costs of developing, constructing, and placing into service the Corpus Christi Liquefaction Project;
  • In December 2014, we engaged 19 financial institutions to act as Joint Lead Arrangers to assist in the structuring and arranging of up to $11.5 billion of debt facilities for the Corpus Christi Liquefaction Project;
  • In December 2014, Corpus Christi Liquefaction, LLC ("Corpus Christi Liquefaction") entered into a liquefied natural gas ("LNG") Sale and Purchase Agreement ("SPA") with EDP Energias de Portugal S.A. ("EDP") under which EDP has agreed to purchase 40.0 million MMBtu of LNG per year (approximately 0.8 million tonnes per annum ("mtpa")) upon the date of first commercial delivery of the third natural gas liquefaction train ("Train") at the Corpus Christi Liquefaction Project;
  • In December 2014, the Federal Energy Regulatory Commission ("FERC") granted Corpus Christi Liquefaction the authorization to site, construct, and operate the Corpus Christi Liquefaction Project; and
  • In January 2015, we signed a note purchase agreement with EIG Management Company, LLC ("EIG") whereby funds managed by EIG have agreed to purchase approximately $1.5 billion of convertible notes that would be issued by Cheniere CCH HoldCo II, LLC, a wholly owned direct subsidiary of ours, which is scheduled to fund once we reach a positive final investment decision on the Corpus Christi Liquefaction Project. The net proceeds will be used to fund a portion of the costs of developing, constructing, and placing into service the Corpus Christi Liquefaction Project.

Liquefaction Projects Update

Sabine Pass Liquefaction Project

Through Cheniere Partners we are developing up to six Trains, each with a nominal production capacity of approximately 4.5 mtpa, at the Sabine Pass LNG terminal adjacent to the existing regasification facilities. We have received FERC and U.S. Department of Energy ("DOE") approvals for Trains 1 through 4, and we have filed all required regulatory applications with the FERC and DOE to develop Trains 5 and 6.

The Trains are in various stages of development.

  • Construction on Trains 1 and 2 began in August 2012, and as of December 31, 2014, the overall project for Trains 1 and 2 was approximately 81% complete, which is ahead of the contractual schedule. Based on our current construction schedule, we anticipate that Train 1 will produce LNG as early as late 2015.
  • Construction on Trains 3 and 4 began in May 2013, and as of December 31, 2014, the overall project for Trains 3 and 4 was approximately 54% complete, which is ahead of the contractual schedule. We expect Trains 3 and 4 to become operational in late 2016 and 2017, respectively.
  • Trains 5 and 6 are under development. We have entered into SPAs for approximately 3.75 mtpa in aggregate that commence with the date of first commercial delivery for Train 5. We have received authorizations from the DOE to export 503 Bcf per year of LNG volumes from Trains 5 and 6 to free trade agreement ("FTA") countries. Authorization to export LNG to non-FTA countries is pending. In December 2014, the FERC published the final Environmental Assessment, and final FERC authorization is subject to commissioner approvals.

We will contemplate making a final investment decision to commence construction of Train 5 and Train 6 based on, among other things, entering into engineering, procurement and construction ("EPC") contracts, entering into acceptable commercial arrangements, receiving all regulatory approvals and obtaining financing.

Corpus Christi Liquefaction Project

We continue to make progress on the commercialization and development of the Corpus Christi Liquefaction Project, which is being designed for up to three Trains with expected aggregate nominal production capacity of approximately 13.5 mtpa of LNG.

  • To date, we have entered into SPAs aggregating approximately 6.9 mtpa of LNG volumes commencing with Trains 1 and 2, and approximately 1.5 mtpa of LNG volumes commencing with Train 3.
  • In December 2014, we received authorization from the FERC to site, construct, and operate the Corpus Christi Liquefaction Project. We have received authorization from the DOE to export up to approximately 767 Bcf per year of domestically produced LNG to FTA countries. Authorization to export LNG to non-FTA countries is pending. We expect to receive the remaining regulatory approvals during the first half of 2015.

We will contemplate making a final investment decision to commence construction of the Corpus Christi Liquefaction Project based upon, among other things, entering into acceptable commercial arrangements, receiving all regulatory approvals and completing financing.

Timelines for Liquefaction Projects










Target Date



Sabine Pass Liquefaction


Corpus Christi Liquefaction

Milestone


Trains
1 - 4


Trains
5 & 6


Trains
1 - 3

DOE export authorization


Received


Received FTA

Pending Non-FTA


Received FTA
Pending Non-FTA

Definitive commercial agreements


Completed

 16.0 mtpa


T5: Completed

T6: 2015


T1-T2: Completed

T3: 2015

- BG Gulf Coast LNG, LLC


5.5 mtpa





- Gas Natural Fenosa


3.5 mtpa





- KOGAS


 3.5 mtpa





- GAIL (India) Ltd.


 3.5 mtpa





- Total Gas & Power N.A.




2.0 mtpa



- Centrica plc




1.75 mtpa



- PT Pertamina (Persero)






1.52 mtpa

- Endesa, S.A.






2.25 mtpa

- Iberdrola, S.A.






0.76 mtpa

- Gas Natural Fenosa LNG SL






1.50 mtpa

- Woodside Energy Trading Singapore






0.85 mtpa

- Electricite de France, S.A.






0.77 mtpa

- EDP Energias de Portugal S.A.






0.77 mtpa

EPC contracts


Completed


2015


Completed

Financing


Completed


2015


2015

- Equity commitments






Received

- Debt commitments






Received

FERC authorization


Completed





- FERC Order




2015


Received

- Certificate to commence construction




2015


2015

Issue Notice to Proceed


Completed


2015


2015

Commence operations


2015 - 2017


2018/2019


2018/2019

 

Cheniere Energy, Inc. is a Houston-based energy company primarily engaged in LNG-related businesses, and owns and operates the Sabine Pass LNG terminal and Creole Trail Pipeline in Louisiana. Cheniere is pursuing related business opportunities both upstream and downstream of the Sabine Pass LNG terminal. Through its subsidiary, Cheniere Energy Partners, L.P., Cheniere is developing a liquefaction project at the Sabine Pass LNG terminal adjacent to the existing regasification facilities for up to six Trains, each of which is expected to have a nominal production capacity of approximately 4.5 mtpa. Construction has begun on Trains 1 through 4 at the Sabine Pass Liquefaction Project. Cheniere has also initiated a project to develop liquefaction facilities near Corpus Christi, Texas. The Corpus Christi Liquefaction Project is being designed for up to three Trains, with expected aggregate nominal production capacity of approximately 13.5 mtpa of LNG, three LNG storage tanks with capacity of approximately 10.1 Bcfe and two LNG carrier docks. Commencement of construction for the Corpus Christi Liquefaction Project is subject, but not limited, to obtaining regulatory approvals, entering into long-term customer contracts sufficient to underpin financing of the project, obtaining financing, and Cheniere making a final investment decision. Cheniere believes that LNG exports from the Corpus Christi Liquefaction Project could commence as early as 2018.

For additional information, please refer to the Cheniere website at www.cheniere.com and Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the Securities and Exchange Commission.

This press release contains certain statements that may include "forward-looking statements" within the meanings of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Included among "forward-looking statements" are, among other things, (i) statements regarding Cheniere's business strategy, plans and objectives, including the construction and operation of liquefaction facilities, (ii) statements regarding expectations regarding regulatory authorizations and approvals, (iii) statements expressing beliefs and expectations regarding the development of Cheniere's LNG terminal and pipeline businesses, including liquefaction facilities, (iv) statements regarding the business operations and prospects of third parties, (v) statements regarding potential financing arrangements and (vi) statements regarding future discussions and entry into contracts. Although Cheniere believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere's periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere does not assume a duty to update these forward-looking statements.

 (Financial Tables Follow)

 

Cheniere Energy, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)(1)






Three Months Ended


Year Ended


December 31,


December 31,


2014



2013



2014



2013


Revenues












LNG terminal revenues

$

67,363



$

66,185



$

267,606



$

265,406


Marketing and trading revenues (losses)

(1,768)



(199)



(1,286)



242


Other

357



435



1,634



1,565


Total revenues

65,952



66,421



267,954



267,213














Operating costs and expenses












General and administrative expense

107,926



106,541



323,709



384,512


Operating and maintenance expense

16,594



12,744



85,792



89,169


Depreciation expense

15,296



15,676



64,258



61,209


Development expense

15,457



10,720



54,376



60,934


Other

13,142



117



13,387



375


Total operating costs and expenses

168,415



145,798



541,522



596,199














Loss from operations

(102,463)



(79,377)



(273,568)



(328,986)














Other income (expense)












Interest expense, net

(50,293)



(43,594)



(181,236)



(178,400)


Loss on early extinguishment of debt



(51,066)



(114,335)



(131,576)


Derivative gain (loss), net

(28,726)



27,742



(118,012)



83,448


Other income (expense)

(544)



137



(583)



1,091


Total other expense

(79,563)



(66,781)



(414,166)



(225,437)














Loss before income taxes and non-controlling interest

(182,026)



(146,158)



(687,734)



(554,423)


Income tax provision

(1,996)



(1,589)



(4,143)



(4,340)


Net loss

(184,022)



(147,747)



(691,877)



(558,763)


Less: net loss attributable to non-controlling interest

(25,409)



(12,518)



(143,945)



(50,841)


Net loss attributable to common stockholders

$

(158,613)



$

(135,229)



$

(547,932)



$

(507,922)














Net loss per share attributable to common stockholders—basic and diluted

$

(0.70)



$

(0.61)



$

(2.44)



$

(2.32)














Weighted average number of common shares outstanding—basic and diluted

226,201



221,624



224,338



218,869


 

 


Cheniere Energy, Inc.

Consolidated Balance Sheets

(in thousands, except share data)(1)




December 31,


2014



2013


ASSETS






Current assets






Cash and cash equivalents

$

1,747,583



$

960,842


Restricted cash and cash equivalents

481,737



598,064


Accounts and interest receivable

4,419



4,486


LNG inventory

4,294



10,563


Prepaid expenses and other

20,844



17,225


Total current assets

2,258,877



1,591,180








Non-current restricted cash and cash equivalents

550,811



1,031,399


Property, plant and equipment, net

9,246,753



6,454,399


Debt issuance costs, net

242,323



313,944


Non-current derivative assets

11,744



98,123


Goodwill

76,819



76,819


Other non-current assets

186,356



107,373


Total assets

$

12,573,683



$

9,673,237








LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities






Accounts payable

$

13,426



$

10,367


Accrued liabilities

169,129



186,552


Deferred revenue

26,655



26,593


Derivative liabilities

23,247



13,484


Other

18



15


Total current liabilities

232,475



237,011








Long-term debt, net

9,806,084



6,576,273


Non-current deferred revenue

13,500



17,500


Other non-current liabilities

20,107



2,396








Commitments and contingencies












Stockholders' equity (deficit)






Preferred stock, $0.0001 par value, 5.0 million shares authorized, none issued




Common stock, $0.003 par value






Authorized: 480.0 million shares at December 31, 2014 and 2013






Issued and outstanding: 236.7 million and 238.1 million shares at December 31, 2014 and 2013, respectively

712



716


Treasury stock: 10.6 million shares and 9.0 million shares at December 31, 2014 and 2013, respectively, at cost

(292,752)



(179,826)


Additional paid-in-capital

2,776,702



2,459,699


Accumulated deficit

(2,648,839)



(2,100,907)


Total stockholders' equity (deficit)

(164,177)



179,682


Non-controlling interest

2,665,694



2,660,375


Total equity

2,501,517



2,840,057


Total liabilities and equity

$

12,573,683



$

9,673,237











(1)

Please refer to the Cheniere Energy, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the Securities and Exchange Commission.

As of December 31, 2014, we had unrestricted cash and cash equivalents of $1,747.6 million available to Cheniere. In addition, we had current and non-current restricted cash and cash equivalents of $1,032.5 million (which included current and non-current restricted cash and cash equivalents available to Cheniere Partners, Sabine Pass Liquefaction and Sabine Pass LNG, L.P.) designated for the following purposes: $0.6 billion for the Sabine Pass Liquefaction Project, $36.2 million for Cheniere Creole Trail Pipeline, L.P., $91.1 million for interest payments related to the Sabine Pass LNG senior secured notes, and $292.3 million for other restricted purposes.

 

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SOURCE Cheniere Energy, Inc.