Annual report pursuant to Section 13 and 15(d)

Financial Instruments Financial Instruments (Tables)

v2.4.0.8
Financial Instruments Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [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 December 31, 2013 and 2012, which are classified as other current assets, other current liabilities, other non-current assets and other non-current liabilities in our Consolidated Balance Sheets.
 
Fair Value Measurements as of
 
December 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)
$
—

 
$
(171
)
 
$
—

 
$
(171
)
 
$
—

 
$
237

 
$
—

 
$
237

Fuel Derivatives asset (liability)
—

 
126

 
—

 
126

 
—

 
(98
)
 
—

 
(98
)
Interest Rate Derivatives asset (liability)
—

 
84,639

 
—

 
84,639

 
—

 
(26,424
)
 
—

 
(26,424
)
Fair Value, by Balance Sheet Grouping
Other Financial Instruments (in thousands):
 
 
December 31, 2013
 
December 31, 2012
 
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
2016 Notes, net of discount (1)
 
$
1,651,807

 
1,868,607

 
$
1,647,113

 
$
1,824,177

2020 Notes (1)
 
420,000

 
432,600

 
420,000

 
437,850

2021 Sabine Pass Liquefaction Senior Notes (1)
 
2,011,562

 
1,961,273

 
—

 
—

2022 Sabine Pass Liquefaction Senior Notes (1)
 
1,000,000

 
982,500

 
—

 
—

2023 Sabine Pass Liquefaction Senior Notes (1)
 
1,000,000

 
935,000

 
—

 
—

2012 Liquefaction Credit Facility (2)
 
—

 
—

 
100,000

 
100,000

2013 Liquefaction Credit Facilities (2)
 
100,000

 
100,000

 
—

 
—

CTPL Credit Facility (3)
 
392,904

 
400,000

 
—

 
—

 
(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 December 31, 2013 and 2012, as applicable.
(2)
The Level 3 estimated fair value approximates the carrying amount because the interest rates are variable and reflective of market rates and Sabine Pass Liquefaction has the ability to call this debt at anytime without penalty.
(3)
The Level 3 estimated fair value approximates the principal amount because the interest rates are variable and reflective of market rates and CTPL has the ability to call this debt at anytime without penalty. 

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
 
December 31, 2013
 
December 31, 2012
LNG Inventory Derivatives asset (liability)
Prepaid expenses and other
 
$
(171
)
 
$
237

Fuel Derivatives asset (liability)
Prepaid expenses and other
 
126

 
(98
)
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 and settlements of our LNG Inventory Derivatives and Fuel Derivatives recorded in marketing and trading revenues (losses) on our Consolidated Statements of Operations during the years ended December 31, 2013, 2012 and 2011:
 
Year Ended December 31,
 
2013
 
2012
 
2011
LNG Inventory Derivatives gain (loss)
$
(449
)
 
$
995

 
$
2,475

Fuel Derivatives gain
99

 
—

 
—

The following table (in thousands) shows the changes in the fair value and settlements of our LNG Inventory Derivatives and Fuel Derivatives recorded in derivative gain (loss), net on our Consolidated Statements of Operations during the years ended December 31, 2013, 2012 and 2011:
 
Year Ended December 31,
 
2013
 
2012
 
2011
LNG Inventory Derivatives gain
476

 
—

 
—

Fuel Derivatives gain (loss)
182

 
(622
)
 
(2,251
)
Schedule of Notional Amounts of Outstanding Derivative Positions
At December 31, 2013, Sabine Pass Liquefaction had the following Interest Rate Derivatives outstanding:  
 
 
Initial Notional Amount
 
Maximum Notional Amount
 
Effective Date
 
Maturity Date
 
Weighted Average Fixed Interest Rate Paid
 
Variable Interest Rate Received
Interest Rate Derivatives - Not Designated
 
$20.0 million
 
$2.9 billion
 
August 14, 2012
 
July 31, 2019
 
1.98%
 
One-month LIBOR
Interest Rate Derivatives - Not Designated
 
—
 
$671.0 million
 
June 5, 2013
 
May 28, 2020
 
2.05%
 
One-month LIBOR
Schedule of Interest Rate Derivatives
The following table (in thousands) shows the changes in the fair value and settlements of our Interest Rate Derivatives - Not Designated recorded in derivative gain (loss), net on our Consolidated Statements of Operations during the years ended December 31, 2013, 2012 and 2011:
 
Year Ended December 31,
 
2013
 
2012
 
2011
Interest Rate Derivatives - Not Designated gain
$
88,596

 
$
679

 
$
—

The following table (in thousands) shows the fair value of our Interest Rate Derivatives:
 
 
 
 
Fair Value Measurements as of
 
 
Balance Sheet Location
 
December 31, 2013
 
December 31, 2012
Interest Rate Derivatives - Not Designated
 
Non-current derivative assets
 
$
98,123

 
$
—

Interest Rate Derivatives - Not Designated
 
Other current liabilities
 
13,484

 
—

Interest Rate Derivatives - Designated
 
Non-current derivative liabilities
 
—

 
21,290

Interest Rate Derivatives - Not Designated
 
Non-current derivative liabilities
 
—

 
5,134

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)
The following table (in thousands) details the effect of our Interest Rate Derivatives included in Other Comprehensive Income ("OCI") and AOCI for the year ended December 31, 2013:
 
Gain (Loss) in Other Comprehensive Income
 
Gain (Loss) Reclassified from Accumulated OCI into Interest Expense (Effective Portion)
 
Losses Reclassified into Earnings as a Result of Discontinuance of Cash Flow Hedge Accounting
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
Interest Rate Derivatives - Designated
$
21,297

 
$
(21,290
)
 
$
—

 
$
—

 
$
—

 
$
—

Interest Rate Derivatives - De-designated
—

 
(5,814
)
 
—

 
—

 
5,807

 
—

Interest Rate Derivatives - Settlements
(30
)
 
(136
)
 
—

 
—

 
166

 
—

Schedule of Financial Instruments
Our 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 our Consolidated Balance Sheets
 
Net Amounts Presented in our Consolidated Balance Sheets
 
Gross Amounts not Offset in our Consolidated Balance Sheets
 
 
Offsetting Derivative Assets (Liabilities)
 
 
 
 
Derivative Instrument
 
Cash Collateral Received (Paid)
 
Net Amount
As of December 31, 2013:
 
 
 


 
 
 
 
 
 
 
 
Fuel Derivatives
 
$
126

 
$
—

 
$
126

 
$
—

 
$
—

 
$
126

LNG Inventory Derivatives
 
(171
)
 
(171
)
 
—

 
—

 
—

 
—

Interest Rate Derivatives - Not Designated
 
98,123

 
—

 
98,123

 
—

 
—

 
98,123

Interest Rate Derivatives - Not Designated
 
(13,484
)
 
—

 
(13,484
)
 
—

 
—

 
(13,484
)
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 - Not Designated
 
(5,134
)
 
—

 
(5,134
)
 
—

 
—

 
(5,134
)