| Revenues from Contracts with Customers |
REVENUES FROM CONTRACTS WITH CUSTOMERS
The following table represents a disaggregation of revenue earned from contracts with customers during the three and six months ended June 30, 2020 and 2019 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
LNG revenues (1) |
|
$ |
2,340 |
|
|
$ |
2,080 |
|
|
$ |
4,744 |
|
|
$ |
4,147 |
|
Regasification revenues |
|
68 |
|
|
67 |
|
|
135 |
|
|
133 |
|
Other revenues |
|
16 |
|
|
21 |
|
|
38 |
|
|
36 |
|
Total revenues from customers |
|
2,424 |
|
|
2,168 |
|
|
4,917 |
|
|
4,316 |
|
Net derivative gains (losses) (2) |
|
(45 |
) |
|
93 |
|
|
119 |
|
|
169 |
|
Other (3) |
|
23 |
|
|
31 |
|
|
75 |
|
|
68 |
|
Total revenues |
|
$ |
2,402 |
|
|
$ |
2,292 |
|
|
$ |
5,111 |
|
|
$ |
4,553 |
|
|
|
(1) |
LNG revenues include revenues for LNG cargoes in which our customers exercised their contractual right to not take delivery but remained obligated to pay fixed fees irrespective of such election. LNG revenues during the three and six months ended June 30, 2020 included $708 million and $761 million, respectively, in revenues associated with LNG cargoes for which customers have notified us that they will not take delivery, of which $458 million would have otherwise been recognized subsequent to June 30, 2020, if the cargoes were lifted pursuant to the delivery schedules with the customers. LNG revenues during the three months ended June 30, 2020 excluded $53 million that would have otherwise been recognized during the quarter if the cargoes were lifted pursuant to the delivery schedules with the customers. Revenue is generally recognized upon receipt of irrevocable notice that a customer will not take delivery because our customers have no contractual right to take delivery of such LNG cargo in future periods and our performance obligations with respect to such LNG cargo have been satisfied.
|
|
|
(3) |
Includes revenues from LNG vessel subcharters. See Note 11—Leases for additional information about our subleases.
|
Contract Assets and Liabilities
The following table shows our contract assets, net, which are classified as other non-current assets, net on our Consolidated Balance Sheets (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2020 |
|
2019 |
Contract assets, net |
|
$ |
58 |
|
|
$ |
18 |
|
Contract assets represent our right to consideration for transferring goods or services to the customer under the terms of a sales contract when the associated consideration is not yet due. Changes in contract assets during the six months ended June 30, 2020 were primarily attributable to revenue recognized due to the delivery of LNG under certain SPAs for which the associated consideration was not yet due.
The following table reflects the changes in our contract liabilities, which we classify as deferred revenue on our Consolidated Balance Sheets (in millions):
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2020 |
Deferred revenues, beginning of period |
|
$ |
161 |
|
Cash received but not yet recognized |
|
23 |
|
Revenue recognized from prior period deferral |
|
(161 |
) |
Deferred revenues, end of period |
|
$ |
23 |
|
Transaction Price Allocated to Future Performance Obligations
Because many of our sales contracts have long-term durations, we are contractually entitled to significant future consideration which we have not yet recognized as revenue. The following table discloses the aggregate amount of the transaction price that is allocated to performance obligations that have not yet been satisfied as of June 30, 2020 and December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020 |
|
December 31, 2019 |
|
|
Unsatisfied Transaction Price (in billions) |
|
Weighted Average Recognition Timing (years) (1) |
|
Unsatisfied Transaction Price (in billions) |
|
Weighted Average Recognition Timing (years) (1) |
LNG revenues |
|
$ |
103.7 |
|
|
10 |
|
$ |
106.4 |
|
|
11 |
Regasification revenues |
|
2.3 |
|
|
5 |
|
2.4 |
|
|
5 |
Total revenues |
|
$ |
106.0 |
|
|
|
|
$ |
108.8 |
|
|
|
|
|
(1) |
The weighted average recognition timing represents an estimate of the number of years during which we shall have recognized half of the unsatisfied transaction price. |
We have elected the following exemptions which omit certain potential future sources of revenue from the table above:
|
|
(1) |
We omit from the table above all performance obligations that are part of a contract that has an original expected delivery duration of one year or less. |
|
|
(2) |
The table above excludes substantially all variable consideration under our SPAs and TUAs. We omit from the table above all variable consideration that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation when that performance obligation qualifies as a series. The amount of revenue from variable fees that is not included in the transaction price will vary based on the future prices of Henry Hub throughout the contract terms, to the extent customers elect to take delivery of their LNG, and adjustments to the consumer price index. Certain of our contracts contain additional variable consideration based on the outcome of contingent events and the movement of various indexes. We have not included such variable consideration in the transaction price to the extent the consideration is considered constrained due to the uncertainty of ultimate pricing and receipt. Approximately 26% and 52% of our LNG revenues from contracts included in the table above during the three months ended June 30, 2020 and 2019, respectively, and approximately 34% and 55% of our LNG revenues from contracts included in the table above during the six months ended June 30, 2020 and 2019, respectively, were related to variable consideration received from customers. During each of the three and six months ended June 30, 2020 and 2019, approximately 3% of our regasification revenues were related to variable consideration received from customers.
|
We may enter into contracts to sell LNG that are conditioned upon one or both of the parties achieving certain milestones such as reaching FID on a certain liquefaction Train, obtaining financing or achieving substantial completion of a Train and any related facilities. These contracts are considered completed contracts for revenue recognition purposes and are included in the transaction price above when the conditions are considered probable of being met.
|