Cheniere Energy, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Leases (Tables)

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of Leases, Balance Sheet Location

The following table shows the classification and location of our right-of-use assets and lease liabilities on our Consolidated Balance Sheets (in millions):



	Consolidated Balance Sheet Location	September 30, 2019
Right-of-use assets—Operating	Operating lease assets, net	$	493
Right-of-use assets—Financing	Property, plant and equipment, net	57
Total right-of-use assets		$	550

Current operating lease liabilities	Current operating lease liabilities	$	275
Current finance lease liabilities	Other current liabilities	2
Non-current operating lease liabilities	Non-current operating lease liabilities	203
Non-current finance lease liabilities	Non-current finance lease liabilities	58
Total lease liabilities		$	538

Schedule of Lease Cost, Income Statement Location

The following table shows the classification and location of our lease cost on our Consolidated Statements of Operations (in millions):



	Consolidated Statement of Operations Location	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost (1)	Operating costs and expenses (2)	$	163	$	440
Finance lease cost:
Amortization of right-of-use assets	Depreciation and amortization expense	1		3
Interest on lease liabilities	Interest expense, net of capitalized interest	2		7
Total lease cost		$	166	$	450


(1)	Includes $57 million and $150 million of short-term lease costs and $8 million and $21 million of variable lease costs incurred during the three and nine months ended September 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.

Schedule of Maturity of Lease Liabilities

Future annual minimum lease payments for operating and finance leases as of September 30, 2019 are as follows (in millions):



Years Ending December 31,	Operating Leases (1)			Finance Leases
2019	$	113		$	5
2020	218			10
2021	51			10
2022	19			10
2023	19			10
Thereafter	166			146
Total lease payments	586			191
Less: Interest	(106		)	(129		)
Present value of lease liabilities	$	480		$	62


(1)	Does not include $1.6 billion of legally binding minimum lease payments for vessel charters which were executed as of September 30, 2019 but will commence primarily between 2020 and 2021 and have fixed minimum lease terms of up to seven years.

Future annual minimum lease payments for operating and capital leases as of December 31, 2018, prepared in accordance with accounting standards prior to the adoption of ASC 842, were as follows (in millions):



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.

Lease, Other Quantitative Information

The following table shows the weighted-average remaining lease term (in years) and the weighted-average discount rate for our operating leases and finance leases:



	September 30, 2019
	Operating Leases	Finance Leases
Weighted-average remaining lease term (in years)	7.1	18.9
Weighted-average discount rate (1)	5.3%	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.

The following table includes other quantitative information for our operating and finance leases (in millions):



	Nine Months Ended September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	280
Operating cash flows from finance leases	6
Financing cash flows from finance leases	—
Right-of-use assets obtained in exchange for new operating lease liabilities	189