Annual report pursuant to Section 13 and 15(d)

Business Segment Information

v2.4.0.6
Business Segment Information
 12 Months Ended
Dec. 31, 2011
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
BUSINESS SEGMENT INFORMATION
 
We have three operating business segments: LNG terminal business, natural gas pipeline business and LNG and natural gas marketing business. These operating segments reflect lines of business for which separate financial information is produced internally and are subject to evaluation by our chief operating decision makers in deciding how to allocate resources.
 
Our LNG terminal business segment consists of the operational Sabine Pass LNG terminal, approximately 88.8% owned (at December 31, 2011) in western Cameron Parish, Louisiana on the Sabine Pass Channel and two other LNG terminals that are in various stages of development at the following locations: Corpus Christi LNG, 100% owned, near Corpus Christi, Texas; and Creole Trail LNG, 100% owned, at the mouth of the Calcasieu Channel in central Cameron Parish, Louisiana.
 
Our natural gas pipeline business segment consists of the Creole Trail Pipeline, consisting of 94 miles of natural gas pipeline connecting the Sabine Pass LNG terminal to numerous interconnections points with existing interstate natural gas pipelines in southwest Louisiana, and other natural gas pipelines in various stages of development to provide access to North American natural gas markets.
 
Our LNG and natural gas marketing business segment is seeking to enter into long-term commercial agreements for regasification capacity; develop a portfolio of long-term, short-term, and spot LNG purchase and sale agreements; assist Cheniere Partners in negotiations with potential customers for importing and exporting natural gas through the Sabine Pass LNG terminal; and enter into business relationships for the domestic marketing of natural gas imported by Cheniere Marketing as LNG to the Sabine Pass LNG terminal.

The following table summarizes revenues, net income (loss) from operations and total assets for each of our operating segments (in thousands): 
 
Segments
 
LNG Terminal
 
Natural
Gas Pipeline
 
LNG & Natural Gas Marketing
 
Corporate and Other (1)
 
Total
Consolidation
As of or for the Year Ended December 31, 2011
 

 
 

 
 

 
 
 
 

Revenues
$
274,272

 
$
50

 
$
13,554

 
$
2,568

 
$
290,444

Intersegment revenues (losses) (2) (3)
14,607

 
48

 
(13,731
)
 
(924
)
 
—

Depreciation, depletion and amortization
43,421

 
16,641

 
1,105

 
2,238

 
63,405

Non-cash compensation
2,096

 
550

 
9,258

 
14,460

 
26,364

Income (loss) from operations
143,615

 
(24,278
)
 
(28,380
)
 
(32,811
)
 
58,146

Interest expense, net
(173,590
)
 
(45,733
)
 
—

 
(40,070
)
 
(259,393
)
Goodwill
76,819

 
—

 
—

 
—

 
76,819

Total assets
1,875,613

 
537,671

 
67,792

 
434,249

 
2,915,325

Expenditures for additions to long-lived assets
9,617

 
258

 
16

 
732

 
$
10,623

 
Segments
 
LNG Terminal
 
Natural
Gas Pipeline
 
LNG & Natural Gas Marketing
 
Corporate and Other (1)
 
Total
Consolidation
As of or for the Year Ended December 31, 2010
 
 
 
 
 
 
 
 
 
Revenues
269,538

 
95

 
19,022

 
2,858

 
291,513

Intersegment revenues (losses) (4) (5) (6) (7)
130,954

 
255

 
(129,137
)
 
(2,072
)
 
—

Depreciation, depletion and amortization
42,683

 
15,063

 
1,087

 
4,418

 
63,251

Non-cash compensation
1,764

 
553

 
5,791

 
9,770

 
17,878

Income (loss) from operations
273,810

 
(22,014
)
 
(131,891
)
 
(15,282
)
 
104,623

Interest expense, net
(199,405
)
 
(45,228
)
 
—

 
(17,413
)
 
(262,046
)
Goodwill
76,819

 
—

 
—

 
—

 
76,819

Total assets
1,899,130

 
554,049

 
96,781

 
3,548

 
2,553,508

Expenditures for additions to long-lived assets
4,528

 
55

 
(349
)
 
1,543

 
5,777

 
 
 
 
 
 
 
 
 
 
As of or for the Year Ended December 31, 2009
 
 
 
 
 
 
 
 
 
Revenues
170,071

 
102

 
8,087

 
2,866

 
181,126

Intersegment revenues (losses) (4) (5) (6) (7)
252,928

 
932

 
(249,196
)
 
(4,664
)
 
—

Depreciation, depletion and amortization
33,203

 
14,731

 
1,505

 
4,790

 
54,229

Non-cash compensation
1,300

 
583

 
5,661

 
11,652

 
19,196

Loss from operations
333,710

 
(21,453
)
 
(260,514
)
 
(28,247
)
 
23,496

Interest expense, net
(157,057
)
 
(44,912
)
 
—

 
(41,326
)
 
(243,295
)
Goodwill
76,819

 
—

 
—

 
—

 
76,819

Total assets
2,013,618

 
569,626

 
147,164

 
2,214

 
2,732,622

Expenditures for additions to long-lived assets
106,628

 
(4,376
)
 
1,081

 
(539
)
 
102,794

 
(1)
Includes corporate activities, oil and gas exploration, development and exploitation activities and certain intercompany eliminations. Our oil and gas exploration, development and exploitation operating activities have been included in the corporate and other column due to the lack of a material impact that these activities have on our consolidated financial statements.
(2)
Intersegment revenues related to our LNG terminal segment are primarily from tug revenues from Cheniere Marketing and the receipt of 80% of gross margins earned by Cheniere Marketing in monetizing the TUA capacity of Cheniere Energy Investments, LLC ("Cheniere Investments") at the Sabine Pass LNG terminal in the year ended December 31, 2011. These LNG terminal segment intersegment revenues are eliminated with intersegment expenses in our Consolidated Statements of Operations.
(3)
Intersegment losses related to our LNG and natural gas marketing segment are primarily from Cheniere Marketing's tug costs and the payment of 80% of gross margins earned by Cheniere Marketing in monetizing the TUA capacity of Cheniere Investments at the Sabine Pass LNG terminal in the year ended December 31, 2011. These LNG terminal segment intersegment costs are eliminated with intersegment revenues in our Consolidated Statements of Operations.
(4)
Intersegment revenues related to our LNG terminal segment are primarily from TUA capacity reservation fee revenues and tug revenues of $125.5 million and $250.2 million that were received from our LNG and natural gas marketing segment for the years ended December 31, 2010 and 2009, respectively. These LNG terminal segment intersegment revenues are eliminated with intersegment expenses in our Consolidated Statements of Operations.
(5)
Intersegment revenues related to our natural gas pipeline segment are primarily from transportation fees charged by our natural gas pipeline segment to our LNG terminal and LNG and natural gas marketing segments to transport natural gas that was regasified at the Sabine Pass LNG terminal.  These natural gas pipeline segment intersegment revenues are eliminated with intersegment expenses in our Consolidated Statements of Operations.
(6)
Intersegment losses related to our LNG and natural gas marketing segment are primarily from TUA capacity reservation fee expenses and tug costs of $125.5 million and $250.2 million that were incurred from our LNG terminal segment for the years ended December 31, 2010 and 2009, respectively. These costs and expenses are classified as marketing trading gains (losses) as they are considered capacity contracts related to our energy trading and risk management activities. These LNG and natural gas marketing segment intersegment costs and expenses are eliminated with intersegment revenues in our Consolidated Statements of Operations.
(7)
Intersegment losses related to corporate and other are from various transactions between our LNG terminal, natural gas pipeline and LNG and natural gas marketing segments in which revenue recorded by one operating segment is eliminated with a non-revenue line item (i.e., operating expense or is capitalized) by the other operating segment.