Quarterly report pursuant to Section 13 or 15(d)

Business Segment Information

v2.4.0.6
Business Segment Information
 9 Months Ended
Sep. 30, 2012
Segment Reporting [Abstract]  
Business Segment Information
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 and the Liquefaction Project, approximately 66.4% owned (at September 30, 2012) in western Cameron Parish, Louisiana on the Sabine Pass Channel and the following two other LNG terminals that are in various stages of development: Corpus Christi LNG, 100% owned, located near Corpus Christi, Texas; and Creole Trail LNG, 100% owned, located 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 develop a portfolio of long-term, short-term and spot LNG purchase and sale agreements, assist Cheniere Investments in negotiating with potential customers to monetize 2.0 Bcf/d of regasification capacity at 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 three months ended September 30, 2012
 
 
 
 
 
 
 
 
 
 
Revenues
 
69,818

 
50

 
2,661

 
(6,531
)
 
65,998

Intersegment revenues (losses) (2) (3)
 
3,879

 
50

 
2,953

 
(6,882
)
 
—

Depreciation, depletion and amortization
 
10,728

 
3,838

 
256

 
411

 
15,233

Non-cash compensation
 
5,206

 
1,299

 
9,256

 
36,104

 
51,865

Income (loss) from operations
 
(7,503
)
 
(8,943
)
 
(16,462
)
 
(21,609
)
 
(54,517
)
Interest expense, net
 
(43,638
)
 
(11,695
)
 
12

 
9,817

 
(45,504
)
Goodwill
 
76,819

 
—

 
—

 
—

 
76,819

Total assets
 
3,608,018

 
528,556

 
42,308

 
204,843

 
4,383,725

Expenditures for additions to long-lived assets
 
883,798

 
—

 
(6
)
 
696

 
884,488

 
 
 
 
 
 
 
 
 
 
 
As of or for the three months ended September 30, 2011
 
 
 
 
 
 
 
 
 
 
Revenues
 
68,375

 
11

 
(2,999
)
 
426

 
65,813

Intersegment revenues (losses) (2) (3)
 
1,238

 
9

 
(1,154
)
 
(93
)
 
—

Depreciation, depletion and amortization
 
10,869

 
3,717

 
328

 
357

 
15,271

Non-cash compensation
 
403

 
104

 
(430
)
 
2,201

 
2,278

Income (loss) from operations
 
38,383

 
(7,194
)
 
(12,482
)
 
(8,352
)
 
10,355

Interest expense, net
 
(43,318
)
 
(11,543
)
 
—

 
(10,264
)
 
(65,125
)
Goodwill
 
76,819

 
—

 
—

 
—

 
76,819

Total assets
 
1,937,126

 
541,559

 
63,108

 
109,650

 
2,651,443

Expenditures for additions to long-lived assets
 
1,450

 
30

 
—

 
112

 
1,592

 
 
 
 
 
 
 
 
 
 
 
For the nine months ended September 30, 2012
 
 
 
 
 
 
 
 
 


Revenues
 
206,142

 
107

 
977

 
(8,427
)
 
198,799

Intersegment revenues (losses) (2) (3)
 
6,872

 
101

 
2,618

 
(9,591
)
 
—

Depreciation, depletion and amortization
 
32,128

 
11,682

 
1,815

 
1,376

 
47,001

Non-cash compensation
 
5,591

 
1,373

 
10,657

 
38,492

 
56,113

Income (loss) from operations
 
27,873

 
(20,636
)
 
(31,788
)
 
(35,366
)
 
(59,917
)
Interest expense, net
 
(130,554
)
 
(34,697
)
 
12

 
5,520

 
(159,719
)
Expenditures for additions to long-lived assets
 
931,535

 
7

 
1,659

 
1,192

 
934,393

 
 
 
 
 
 
 
 
 
 
 
For the nine months ended September 30, 2011
 
 
 
 
 
 
 
 
 
 
Revenues
 
205,678

 
42

 
10,055

 
2,079

 
217,854

Intersegment revenues (losses) (2) (3)
 
12,452

 
34

 
(12,010
)
 
(476
)
 
—

Depreciation, depletion and amortization
 
32,554

 
11,214

 
847

 
1,667

 
46,282

Non-cash compensation
 
1,609

 
445

 
5,232

 
9,343

 
16,629

Income (loss) from operations
 
108,095

 
(18,542
)
 
(19,512
)
 
(19,661
)
 
50,380

Interest expense, net
 
(129,952
)
 
(34,161
)
 
—

 
(29,754
)
 
(193,867
)
Expenditures for additions to long-lived assets
 
7,619

 
114

 
12

 
547

 
8,292

 
(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"), a wholly owned subsidiary of Cheniere Partners, at the Sabine Pass LNG terminal in the three and nine months ended September 30, 2012 and 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 three and nine months ended September 30, 2012 and 2011. These LNG terminal segment intersegment costs are eliminated with intersegment revenues in our Consolidated Statements of Operations.