Quarterly report pursuant to Section 13 or 15(d)

Financial Instruments (Tables)

v2.4.0.6
Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2013
Financial Instruments [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table (in thousands) shows the fair value of our derivative assets and liabilities that are required to be measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012, which are classified as other current assets, other current liabilities and other non-current liabilities in our Consolidated Balance Sheets.
 
Fair Value Measurements as of
 
March 31, 2013
 
December 31, 2012
 
Quoted Prices in Active Markets
(Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
 
Total
 
Quoted Prices in Active Markets
(Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
 
Total
LNG Inventory Derivatives asset (liability)
$
—

 
$
(420
)
 
$
—

 
$
(420
)
 
$
—

 
$
237

 
$
—

 
$
237

Fuel Derivatives asset (liability)
—

 
420

 
—

 
420

 
—

 
(98
)
 
—

 
(98
)
Interest Rate Derivatives (liability)
—

 
(23,055
)
 
—

 
(23,055
)
 
—

 
(26,424
)
 
—

 
(26,424
)
Fair Value, by Balance Sheet Grouping
The following table (in thousands) shows the fair value and location of our LNG Inventory Derivatives and Fuel Derivatives on our Consolidated Balance Sheets:
 
 
 
 
Fair Value Measurements as of
 
Balance Sheet Location
 
March 31, 2013
 
December 31, 2012
LNG Inventory Derivatives asset (liability)
Prepaid expenses and other/ (Other current liabilities)
 
$
(420
)
 
$
237

Fuel Derivatives asset (liability)
Prepaid expenses and other/ (Other current liabilities)
 
420

 
(98
)
Other Financial Instruments (in thousands):
 
 
March 31, 2013
 
December 31, 2012
 
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
2016 Notes, net of discount (1)
 
$
1,648,286

 
$
1,825,477

 
$
1,647,113

 
$
1,824,177

2020 Notes (1)
 
420,000

 
444,150

 
420,000

 
437,850

2021 Sabine Pass Liquefaction Notes (1)
 
1,500,000

 
1,552,500

 
—

 
—

Liquefaction Credit Facility (2)
 
100,000

 
100,000

 
100,000

 
100,000

 
(1)
The Level 2 estimated fair value was based on quotations obtained from broker-dealers who make markets in these and similar instruments based on the closing trading prices on March 31, 2013 and December 31, 2012, as applicable.
(2)
The Level 3 estimated fair value was determined to be the carrying amount due to our ability to call this debt at anytime without penalty.
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The following table (in thousands) shows the changes in the fair value of our De-designated Interest Rate Derivatives recorded in derivative loss on our Consolidated Statements of Operations during the three months ended March 31, 2013 and 2012:
 
Three Month Ended March 31,
 
2013
 
2012
Interest Rate Derivatives - De-designated loss
$
17,983

 
$
—

The following table (in thousands) shows the changes in the fair value and settlements of our LNG Inventory Derivatives recorded in marketing and trading revenues (losses) on our Consolidated Statements of Operations during the three months ended March 31, 2013 and 2012:
 
Three Month Ended March 31,
 
2013
 
2012
LNG Inventory Derivatives gain (loss)
$
(524
)
 
$
1,859

The following table (in thousands) shows the changes in the fair value and settlements of our Fuel Derivatives recorded in derivative gain (loss) on our Consolidated Statements of Operations during the three months ended March 31, 2013 and 2012:
 
Three Month Ended March 31,
 
2013
 
2012
Fuel Derivatives gain (loss)
$
515

 
$
(836
)
Schedule of Derivative Instruments [Table Text Block]
The Company's commodity and interest rate derivatives are presented on a net basis on our Consolidated Balance Sheets as described above. The following table (in thousands) shows the fair value of our derivatives outstanding on a gross and net basis:
 
 
Gross Amounts Recognized
 
Gross Amounts Offset in the Consolidated Balance Sheet
 
Net Amounts Presented in the Consolidated Balance Sheet
 
Gross Amounts Not Offset in the Consolidated Balance Sheet
 
 
Offsetting Derivative Assets (Liabilities)
 
 
 
 
Derivative Instrument
 
Cash Collateral Received (Paid)
 
Net Amount
As of March 31, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
Fuel Derivatives
 
$
420

 
$
—

 
$
420

 
$
—

 
$
—

 
$
420

LNG Inventory Derivatives
 
(420
)
 
(420
)
 
—

 
—

 
—

 
—

Interest Rate Derivatives - de-designated
 
(23,055
)
 
—

 
(23,055
)
 
—

 
—

 
(23,055
)
As of December 31, 2012:
 
 
 
 
 
 
 
 
 
 
 
 
Fuel Derivatives
 
(98
)
 
(98
)
 
—

 
—

 
—

 
—

LNG Inventory Derivatives
 
237

 
—

 
237

 
—

 
—

 
237

Interest Rate Derivatives - designated
 
(21,290
)
 
—

 
(21,290
)
 
—

 
—

 
(21,290
)
Interest Rate Derivatives - de-designated
 
(5,134
)
 
—

 
(5,134
)
 
—

 
—

 
(5,134
)
Schedule of Notional Amounts of Outstanding Derivative Positions
At March 31, 2013, Sabine Pass Liquefaction had the following Interest Rate Derivatives outstanding that converted $20.0 million of the Liquefaction Credit Facility from a variable to a fixed interest rate. Sabine Pass Liquefaction pays a fixed interest rate on the swap and in exchange receives a variable interest rate based on the one-month LIBOR.
 
 
Initial Notional Amount
 
Maximum Notional Amount
 
Effective Date
 
Maturity Date
 
Weighted Average Fixed Interest Rate Paid
 
Variable Interest Rate Received
Interest Rate Derivatives - De-designated
 
$20.0 million
 
$2.9 billion
 
August 14, 2012
 
July 31, 2019
 
1.98%
 
One-month LIBOR
Schedule of Interest Rate Derivatives
s:
 
 
 
 
Fair Value Measurements as of
 
 
Balance Sheet Location
 
March 31, 2013
 
December 31, 2012
Interest Rate Derivatives - Designated
 
Non-current derivative liabilities
 
$
—

 
$
21,290

Interest Rate Derivatives - De-designated
 
Other current liabilities
 
1,077

 
—

Interest Rate Derivatives - De-designated
 
Non-current derivative liabilities
 
21,978

 
5,134

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)
The following table (in thousands) shows our Interest Rate Derivatives market adjustments recorded during the three months ended March 31, 2013 and 2012:
 
Gain (Loss) in Other Comprehensive Income
 
Gain (Loss) Reclassified from Accumulated OCI into Interest Expense (Effective Portion)
 
Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
Interest Rate Derivatives - Designated
$
21,297

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Interest Rate Derivatives - De-designated
—

 
—

 
—

 
—

 
—

 
—

Interest Rate Derivatives - Settlements
(30
)
 
—

 
—

 
—

 
—

 
—

Schedule of Financial Instruments
The Company's commodity and interest rate derivatives are presented on a net basis on our Consolidated Balance Sheets as described above. The following table (in thousands) shows the fair value of our derivatives outstanding on a gross and net basis:
 
 
Gross Amounts Recognized
 
Gross Amounts Offset in the Consolidated Balance Sheet
 
Net Amounts Presented in the Consolidated Balance Sheet
 
Gross Amounts Not Offset in the Consolidated Balance Sheet
 
 
Offsetting Derivative Assets (Liabilities)
 
 
 
 
Derivative Instrument
 
Cash Collateral Received (Paid)
 
Net Amount
As of March 31, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
Fuel Derivatives
 
$
420

 
$
—

 
$
420

 
$
—

 
$
—

 
$
420

LNG Inventory Derivatives
 
(420
)
 
(420
)
 
—

 
—

 
—

 
—

Interest Rate Derivatives - de-designated
 
(23,055
)
 
—

 
(23,055
)
 
—

 
—

 
(23,055
)
As of December 31, 2012:
 
 
 
 
 
 
 
 
 
 
 
 
Fuel Derivatives
 
(98
)
 
(98
)
 
—

 
—

 
—

 
—

LNG Inventory Derivatives
 
237

 
—

 
237

 
—

 
—

 
237

Interest Rate Derivatives - designated
 
(21,290
)
 
—

 
(21,290
)
 
—

 
—

 
(21,290
)
Interest Rate Derivatives - de-designated
 
(5,134
)
 
—

 
(5,134
)
 
—

 
—

 
(5,134
)