Annual report pursuant to Section 13 and 15(d)

Schedule I

v2.4.0.8
Schedule I
 12 Months Ended
Dec. 31, 2013
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Financial Statements
CONDENSED BALANCE SHEET
(in thousands) 
 
December 31,
 
2013
 
2012
ASSETS
 

 
 
Debt receivable—affiliates
$
775,202

 
$
740,989

Other
5,844

 
—

Investments in affiliates
 
 
 
Cheniere's investment in affiliates
(475,957
)
 
(114,817
)
Non-controlling interest investments in affiliates
2,660,380

 
1,751,604

Investment in affiliates, net
2,184,423

 
1,636,787

Total assets
$
2,965,469

 
$
2,377,776

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current accrued liabilities
$
104

 
$
—

Current debt—affiliate
125,307

 
116,171

Commitments and contingencies
 
 
 
Stockholders' equity
179,678

 
510,001

Non-controlling interest
$
2,660,380

 
$
1,751,604

Total liabilities and stockholders' equity
$
2,965,469

 
$
2,377,776



CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands) 
 
Year Ended December 31,
 
2013
 
2012
 
2011
Operating costs and expenses
$
55

 
$
36

 
$
(133
)
 
 
 
 
 
 
Interest expense, net
—

 
(12,883
)
 
(20,709
)
Interest expense, net—affiliates
(9,137
)
 
(9,137
)
 
(38,192
)
Interest income—affiliates
34,213

 
34,213

 
34,213

Equity losses of affiliates
 
 
 
 
 
Equity losses of affiliates attributable to Cheniere
(532,942
)
 
(344,937
)
 
(174,201
)
Equity losses of affiliates attributable to non-controlling interest
(50,841
)
 
(12,861
)
 
(4,582
)
Net loss
$
(558,762
)
 
$
(345,641
)
 
$
(203,338
)
 
 
 
 
 
 
Other comprehensive income (loss)
27,351

 
(27,093
)
 
(85
)
Comprehensive loss attributable to non-controlling interest
48,809

 
12,861

 
4,582

Comprehensive loss, net
$
(482,602
)

$
(359,873
)
 
$
(198,841
)


CONDENSED STATEMENT OF CASH FLOWS
(in thousands) 
 
 
Year Ended December 31,
 
 
2013
 
2012
 
2011
Net cash used in operating activities
 
$
(5,796
)
 
$
(6,699
)
 
$
(4,479
)
 
 
 
 
 
 
 
Cash flows from investing activities
 
 

 
 

 
 

Investments in affiliates
 
139,494

 
(968,962
)
 
(449,756
)
Net cash used in investing activities
 
139,494

 
(968,962
)
 
(449,756
)
 
 
 
 
 
 
 
Cash flows from financing activities
 
 

 
 

 
 

Proceeds from sale of common stock, net
 
3,628

 
1,200,705

 
468,598

Purchase of treasury shares
 
(140,711
)
 
(20,414
)
 
(14,363
)
Repurchase of long-term debt
 
—

 
(204,630
)
 
—

Excess tax benefit from stock-based compensation
 
3,385

 
—

 
—

Net cash provided by (used in) financing activities
 
(133,698
)
 
975,661

 
454,235

 
 
 
 
 
 
 
Net decrease in cash and cash equivalents
 
—

 
—

 
—

Cash and cash equivalents—beginning of year
 
—

 
—

 
—

Cash and cash equivalents—end of year
 
$
—

 
$
—

 
$
—

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
The condensed financial statements represent the financial information required by Securities and Exchange Commission Regulation S-X 5-04 for Cheniere Energy, Inc. ("Cheniere").
 
In the condensed financial statements, Cheniere's investments in affiliates are presented under the equity method of accounting. Under this method, the assets and liabilities of affiliates are not consolidated. The investments in net assets of the affiliates are recorded in the balance sheets. The loss from operations of the affiliates is reported on a net basis as investment in affiliates (investment in and equity in net losses of affiliates).
 
A substantial amount of Cheniere's operating, investing, and financing activities are conducted by its affiliates. The condensed financial statements should be read in conjunction with Cheniere's consolidated financial statements.
  
DEBT
 
As of December 31, 2013 and 2012, our debt consisted of the following (in thousands):
 
 
December 31,
 
 
2013
 
2012
Current debt (including affiliate)
 
 
 
 
Note—Affiliate
 
$
125,307

 
$
116,171


Below is a schedule of future principal payments that we are obligated to make on our outstanding debt at December 31, 2013 (in thousands):
 
 
Payments Due for Years Ended December 31,
 
 
Total
 
2014
 
2015 to 2016
 
2017 to 2018
 
Thereafter
Note—Affiliate
 
$
125,307

 
125,307

 
$
—

 
$
—

 
$
—

 
(1)
Based on the total debt balance, scheduled maturities and interest rates in effect at December 31, 2013, our cash payments for interest would be zero because the only debt relates to a global intercompany note entered into by subsidiaries of Cheniere, as discussed below.
 
Note—Affiliate
 
In May 2007, we entered into a $391.7 million long-term note ("Note—Affiliate") with Cheniere Subsidiary Holdings, LLC ("Cheniere Subsidiary"), a wholly owned subsidiary of Cheniere. Cheniere Subsidiary received the $391.7 million net proceeds from a $400.0 million credit agreement entered into in May 2007. Borrowings under the Note—Affiliate bear interest equal to the terms of Cheniere Subsidiary's credit agreement at a fixed rate of 9¾% per annum. Interest is calculated on the unpaid principal amount of the Note—Affiliate outstanding and is payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. In August 2008, the Note—Affiliate was replaced with a global intercompany note entered into by all Cheniere subsidiaries that were parties to the $250.0 million credit agreement entered into in August 2008. Each subsidiary is both a maker and a payee under the global intercompany note, and balances between subsidiaries are as recorded on Cheniere's books and records. The $391.7 million of proceeds from the Note—Affiliate were used for general corporate purposes, including our repurchase, completed during 2007, of approximately 9 million shares of our outstanding common stock pursuant to the exercise of the call options acquired in the issuer call spread purchased by us in connection with the issuance of the $325.0 million convertible senior unsecured notes due August 2012. In January 2012, we decreased a portion of the Note—Affiliate principal balance with offsetting intercompany receivables that resulted in a new principal balance of $93.7 million.
GUARANTEES
 
Guarantees on Behalf of Cheniere Marketing, LLC
  
Many of Cheniere Marketing, LLC's natural gas purchase, sale, transportation and shipping agreements have been guaranteed by Cheniere. As of December 31, 2013, these guaranteed contracts have zero amount of exposure to the potential of future payments and there was zero carrying amount of liability related to these guaranteed contracts.
 
Guarantee on behalf of Sabine Pass Tug Services, LLC
 
Sabine Pass Tug Services, LLC ("Tug Services"), a wholly owned subsidiary of Cheniere Energy Partners, L.P., entered into a Marine Services Agreement ("Tug Agreement") for three tugs with Alpha Marine Services, LLC. The initial term of the Tug Agreement ends on the tenth anniversary of the service date, with Tug Services having the option for two additional extension terms of five years each. This contract has been guaranteed by Cheniere for up to $5.0 million.
SUPPLEMENTAL CASH FLOW INFORMATION AND DISCLOSURES OF NON-CASH TRANSACTIONS
 
 
Year Ended December 31,
 
 
2013
 
2012
 
2011
 
 
(in thousands)
Non-cash capital contributions (1)
 
$
(583,788
)
 
$
(344,937
)
 
$
(174,201
)
 
(1)
Amounts represent equity losses of affiliates not funded by Cheniere.