Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Non-controlling Interest

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Note 8 - Non-controlling Interest
 9 Months Ended
Sep. 30, 2011
Noncontrolling Interest [Abstract]  
Noncontrolling Interest Disclosure [Text Block]
Non-controlling Interest

We have consolidated certain joint ventures and partnerships because we have a controlling interest in these ventures. Therefore, the entities’ financial statements are consolidated in our Consolidated Financial Statements and the entities’ other equity is recorded as a non-controlling interest. The following table sets forth the components of our non-controlling interest balance since inception attributable to third-party investors’ interests at September 30, 2011 (in thousands): 
Net proceeds from Cheniere Partners’ issuance of common units (1)
$
150,773

Net proceeds from Holdings’ sale of Cheniere Partners common units (2)
203,946

Distributions to Cheniere Partners’ non-controlling interest
(112,931
)
Non-controlling interest share of loss of Cheniere Partners
(24,018
)
Non-controlling interest at September 30, 2011
$
217,770

 
(1)
In March and April 2007, we and Cheniere Partners completed a public offering of 15,525,000 Cheniere Partners common units (the "Cheniere Partners Offering"). Cheniere Partners received $98.4 million in net proceeds from the issuance of its common units to the public. Prior to January 1, 2009, a company was able to elect an accounting policy of recording a gain or loss on the sale of common equity of a subsidiary equal to the amount of proceeds received in excess of the carrying value of the parent’s investment. Effective January 1, 2009, the sale of common equity of a subsidiary is accounted for as an equity transaction.
In January 2011, Cheniere Partners initiated an at-the-market program to sell up to 1.0 million common units, the proceeds from which would be used primarily to fund development costs associated with its liquefaction project. As of September 30, 2011, Cheniere Partners had sold 0.5 million common units with net proceeds of $9.0 million.
In September 2011, Cheniere Partners sold 3,000,000 common units in an underwritten public offering and 1,072,131 common units to Cheniere Common Units Holding, LLC ("Cheniere Common Units Holding") at a price of $15.25 per common unit. Cheniere Partners received net proceeds of approximately $60 million as of September 30, 2011.
(2)
In conjunction with the Cheniere Partners Offering, Cheniere LNG Holdings, LLC ("Holdings") sold a portion of the Cheniere Partners common units held by it to the public, realizing net proceeds of $203.9 million, which included $39.4 million of net proceeds realized once the underwriters exercised their option to purchase an additional 2,025,000 common units from Holdings. Due to the subordinated distribution rights on our subordinated units, we have recorded those proceeds as a non-controlling interest.