Quarterly report pursuant to Section 13 or 15(d)

Business Segment Information

v3.5.0.2
Business Segment Information
 6 Months Ended
Jun. 30, 2016
Segment Reporting [Abstract]  
Business Segment Information
BUSINESS SEGMENT INFORMATION
  
We have two reportable segments: LNG terminal segment and LNG and natural gas marketing segment. We determine our reportable segments by identifying each segment that engaged in business activities from which it may earn revenues and incur expenses, had operating results regularly reviewed by the entities’ chief operating decision maker for purposes of resource allocation and performance assessment, and had discrete financial information. Revenues from external customers that were derived from customers outside of the United States were $28.7 million and $31.4 million for the three and six months ended June 30, 2016, respectively. We attribute revenues from external customers to the country in which the party to the applicable agreement has its principal place of business. Substantially all of our long-lived assets are located in the United States.

Our LNG terminal segment consists of the Sabine Pass and Corpus Christi LNG terminals. We own and operate the Sabine Pass LNG terminal located in Cameron Parish, Louisiana, on the Sabine-Neches Waterway less than four miles from the Gulf Coast through our ownership interest in and management agreements with Cheniere Partners. We own 100% of the general partner interest in Cheniere Partners and 80.1% of the common shares of Cheniere Holdings, which owns a 55.9% limited partner interest in Cheniere Partners. We are also developing and constructing a second natural gas liquefaction and export facility at the Corpus Christi LNG terminal near Corpus Christi, Texas.
 
Our LNG and natural gas marketing segment consists of LNG and natural gas marketing activities by Cheniere Marketing. Cheniere Marketing is developing a platform for LNG sales to international markets with professional staff based in the United States, United Kingdom, Singapore and Chile.

The following table (in thousands) summarizes revenues (losses) and income (loss) from operations for each of our reporting segments: 
 
Segments
 
LNG Terminal
 
LNG & Natural Gas Marketing
 
Corporate and Other (1)
 
Total
Consolidation
Three Months Ended June 30, 2016
 
 
 
 
 
 
 
Revenues (losses) from external customers
$
150,977

 
$
43,969

 
$
(18,119
)
 
$
176,827

Intersegment revenues (losses) (2)
6

 
7,029

 
(7,035
)
 
—

Depreciation and amortization expense
26,711

 
306

 
5,764

 
32,781

Income (loss) from operations
10,115

 
(31,917
)
 
(54,652
)
 
(76,454
)
Interest expense, net of capitalized interest
(80,127
)
 
—

 
(25,840
)
 
(105,967
)
Loss before income taxes and non-controlling interest (3)
(210,561
)
 
(31,870
)
 
(92,856
)
 
(335,287
)
Share-based compensation
7,045

 
10,257

 
23,233

 
40,535

Expenditures for additions to long-lived assets
1,089,190

 
1,296

 
3,206

 
1,093,692

 
 
 
 
 
 
 
 
Three Months Ended June 30, 2015
 
 
 
 
 
 
 
Revenues (losses) from external customers
$
68,532

 
$
(706
)

$
199

 
$
68,025

Intersegment revenues (losses) (2)
491

 
6,354

 
(6,845
)
 
—

Depreciation and amortization expense
16,071

 
244

 
3,839

 
20,154

Loss from operations
(18,061
)
 
(26,367
)
 
(51,446
)
 
(95,874
)
Interest expense, net of capitalized interest
(59,465
)
 
—

 
(26,021
)
 
(85,486
)
Loss before income taxes and non-controlling interest (3)
(33,403
)
 
(26,816
)
 
(82,090
)
 
(142,309
)
Share-based compensation
25,778

 
6,052

 
36,835

 
68,665

Expenditures for additions to long-lived assets
3,944,191

 
1,400

 
20,874

 
3,966,465

 
 
 
 
 
 
 
 
Six Months Ended June 30, 2016
 
 
 
 
 
 

Revenues (losses) from external customers
$
216,528

 
$
46,673

 
$
(17,293
)
 
$
245,908

Intersegment revenues (losses) (2)
924

 
14,623

 
(15,547
)
 
—

Depreciation and amortization expense
44,684

 
621

 
11,565

 
56,870

Loss from operations
(2,434
)
 
(62,464
)
 
(102,115
)
 
(167,013
)
Interest expense, net of capitalized interest
(131,493
)
 
—

 
(50,811
)
 
(182,304
)
Loss before income taxes and non-controlling interest (3)
(451,532
)
 
(62,550
)
 
(169,563
)
 
(683,645
)
Share-based compensation
9,822

 
15,146

 
33,092

 
58,060

Expenditures for additions to long-lived assets
2,590,568

 
1,531

 
9,652

 
2,601,751

 
 
 
 
 
 
 

Six Months Ended June 30, 2015
 
 
 
 
 
 
 
Revenues (losses) from external customers
$
136,112

 
$
(44
)
 
$
326

 
$
136,394

Intersegment revenues (losses) (2)
594

 
13,371

 
(13,965
)
 
—

Depreciation and amortization expense
31,012

 
444

 
6,467

 
37,923

Loss from operations
(42,396
)
 
(31,550
)
 
(82,172
)
 
(156,118
)
Interest expense, net of capitalized interest
(102,310
)
 
—

 
(42,788
)
 
(145,098
)
Loss before income taxes and non-controlling interest (3)
(311,058
)
 
(32,206
)
 
(134,211
)
 
(477,475
)
Share-based compensation
28,917

 
10,087

 
47,651

 
86,655

Expenditures for additions to long-lived assets
4,534,436

 
2,114

 
49,655

 
4,586,205

 
(1)
Includes corporate activities, business development, strategic activities and certain intercompany eliminations. These activities have been included in the corporate and other column.
(2)
Intersegment revenues (losses) related to our LNG and natural gas marketing segment are primarily a result of international revenue allocations using a cost plus transfer pricing methodology. These LNG and natural gas marketing segment intersegment revenues (losses) are eliminated with intersegment revenues (losses) in our Consolidated Statements of Operations.
(3)
Items to reconcile loss from operations and loss before income taxes and non-controlling interest include consolidated other income (expense) amounts as presented on our Consolidated Statements of Operations primarily related to our LNG terminal segment.

The following table (in thousands) shows total assets for each of our reporting segments: 
 
 
June 30,
 
December 31,
 
 
2016
 
2015
LNG Terminal
 
$
20,130,382

 
$
17,363,750

LNG & Natural Gas Marketing
 
540,454

 
550,896

Corporate and Other
 
766,015

 
894,407

Total Consolidation
 
$
21,436,851

 
$
18,809,053