| Business Segment Information |
BUSINESS SEGMENT INFORMATION
We have two reportable segments: LNG terminal segment and LNG and natural gas marketing segment. We determine our reportable segments by identifying each segment that engaged in business activities from which it may earn revenues and incur expenses, had operating results regularly reviewed by the entities’ chief operating decision maker for purposes of resource allocation and performance assessment and had discrete financial information. Revenues from external customers that were derived from customers outside of the United States were $514.3 million for the year ended December 31, 2016, of which $161.7 million was derived from a customer in Japan. Substantially all of our revenues from external customers for each of the years ended December 31, 2015 and 2014 were attributed to the United States. We attribute revenues from external customers to the country in which the party to the applicable agreement has its principal place of business. Substantially all of our long-lived assets are located in the United States.
Our LNG terminal segment consists of the Sabine Pass and Corpus Christi LNG terminals. Our LNG and natural gas marketing segment consists of LNG and natural gas marketing activities by Cheniere Marketing. Cheniere Marketing is developing a portfolio of long- and medium-term SPAs with professional staff based in the United States, United Kingdom, Singapore and Chile.
During 2016, we initiated certain organizational changes to simplify our corporate structure, improve our operational efficiencies and implement a strategy for sustainable, long-term stockholder value creation through financially disciplined development, construction, operation and investment. We are currently evaluating the way we manage our business as a result of these changes. This evaluation is expected to be completed during the first quarter of 2017 and may result in a change to our reportable segments as organizational alignment is finalized.
The following table (in thousands) summarizes revenues (losses) and income (loss) from operations for each of our reporting segments:
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Segments |
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LNG Terminal |
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LNG & Natural Gas Marketing |
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Corporate and Other (1) |
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Total
Consolidation
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Year Ended December 31, 2016 |
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Revenues (losses) from external customers |
$ |
803,480 |
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$ |
520,645 |
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$ |
(40,958 |
) |
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$ |
1,283,167 |
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Intersegment revenues (losses) (2) |
294,889 |
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|
37,970 |
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|
(332,859 |
) |
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— |
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Depreciation and amortization expense |
149,690 |
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|
1,386 |
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|
22,966 |
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|
174,042 |
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Income (loss) from operations (3) |
237,432 |
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|
31,012 |
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(297,811 |
) |
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(29,367 |
) |
Interest expense, net of capitalized interest |
(384,605 |
) |
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— |
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(103,785 |
) |
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(488,390 |
) |
Income (loss) before income taxes and non-controlling interest (4) |
(268,955 |
) |
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35,406 |
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(429,336 |
) |
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(662,885 |
) |
Share-based compensation |
25,364 |
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24,772 |
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66,699 |
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116,835 |
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Expenditures for additions to long-lived assets |
4,623,438 |
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2,714 |
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(1,136 |
) |
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4,625,016 |
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Year Ended December 31, 2015 |
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Revenues from external customers |
$ |
269,281 |
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$ |
66 |
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$ |
1,538 |
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$ |
270,885 |
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Intersegment revenues (losses) (2) |
2,225 |
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|
29,373 |
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(31,598 |
) |
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— |
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Depreciation and amortization expense |
65,137 |
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|
1,071 |
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|
16,472 |
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|
82,680 |
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Loss from operations (3) |
(69,923 |
) |
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(85,577 |
) |
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(293,813 |
) |
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(449,313 |
) |
Interest expense, net of capitalized interest |
(219,831 |
) |
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— |
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(102,252 |
) |
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(322,083 |
) |
Loss before income taxes and non-controlling interest (4) |
(596,432 |
) |
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(87,133 |
) |
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(413,846 |
) |
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(1,097,411 |
) |
Share-based compensation |
32,948 |
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14,401 |
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147,959 |
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195,308 |
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Expenditures for additions to long-lived assets |
6,984,152 |
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2,731 |
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97,216 |
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7,084,099 |
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Year Ended December 31, 2014 |
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Revenues (losses) from external customers |
$ |
267,606 |
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$ |
(1,285 |
) |
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$ |
1,633 |
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$ |
267,954 |
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Intersegment revenues (losses) (2) |
(779 |
) |
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41,908 |
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(41,129 |
) |
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— |
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Depreciation and amortization expense |
58,883 |
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|
271 |
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|
5,104 |
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64,258 |
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Loss from operations |
(89,790 |
) |
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(12,993 |
) |
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(169,396 |
) |
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(272,179 |
) |
Interest expense, net of capitalized interest |
(177,400 |
) |
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— |
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(3,836 |
) |
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(181,236 |
) |
Loss before income taxes and non-controlling interest (4) |
(480,366 |
) |
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(14,874 |
) |
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(192,494 |
) |
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(687,734 |
) |
Share-based compensation |
14,129 |
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6,027 |
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90,073 |
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110,229 |
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Expenditures for additions to long-lived assets |
2,684,045 |
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|
1,888 |
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161,882 |
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2,847,815 |
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(1) |
Includes corporate activities, business development, strategic activities and certain intercompany eliminations. These activities have been included in the corporate and other column. Also includes $338.2 million for the year ended December 31, 2016 of Cheniere Marketing’s LNG revenues, which is eliminated in consolidation.
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(2) |
Intersegment revenues (losses) related to our LNG and natural gas marketing segment are primarily a result of international revenue allocations using a cost plus transfer pricing methodology. These LNG and natural gas marketing segment intersegment revenues (losses) are eliminated with intersegment revenues (losses) in our Consolidated Statements of Operations.
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(3) |
Includes restructuring expense of $44.4 million and $60.8 million for the years ended December 31, 2016 and 2015, respectively, in the corporate and other column and $17.0 million and zero for the years ended December 31, 2016 and 2015, respectively, in the LNG and natural gas marketing segment.
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(4) |
Items to reconcile income (loss) from operations and income (loss) before income taxes and non-controlling interest include consolidated other income (expense) amounts as presented on our Consolidated Statements of Operations primarily related to our LNG terminal segment.
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The following table (in thousands) shows total assets for each of our reporting segments:
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December 31, |
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2016 |
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2015 |
LNG Terminal |
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$ |
22,420,568 |
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$ |
17,363,750 |
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LNG & Natural Gas Marketing |
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731,023 |
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550,896 |
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Corporate and Other |
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551,146 |
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894,407 |
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Total Consolidation |
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$ |
23,702,737 |
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$ |
18,809,053 |
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