Quarterly report pursuant to Section 13 or 15(d)

Financial Instruments (Tables)

v2.4.0.8
Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 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 September 30, 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
 
September 30, 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
$
—

 
$
186

 
$
—

 
$
186

 
$
—

 
$
237

 
$
—

 
$
237

Fuel Derivatives (liability)
—

 
(283
)
 
—

 
(283
)
 
—

 
(98
)
 
—

 
(98
)
Interest Rate Derivatives asset (liability)
—

 
56,039

 
—

 
56,039

 
—

 
(26,424
)
 
—

 
(26,424
)
Fair Value, by Balance Sheet Grouping
:
 
 
 
 
Fair Value Measurements as of
 
Balance Sheet Location
 
September 30, 2013
 
December 31, 2012
LNG Inventory Derivatives asset
Prepaid expenses and other
 
$
186

 
$
237

Fuel Derivatives (liability)
Prepaid expenses and other
 
(283
)
 
(98
)
Other Financial Instruments (in thousands):
 
 
September 30, 2013
 
December 31, 2012
 
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
2016 Notes, net of discount (1)
 
$
1,650,634

 
$
1,811,570

 
$
1,647,113

 
$
1,824,177

2020 Notes (1)
 
420,000

 
425,250

 
420,000

 
437,850

2021 Sabine Pass Liquefaction Senior Notes (1)
 
2,011,897

 
1,951,540

 
—

 
—

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

 
952,500

 
—

 
—

2012 Liquefaction Credit Facility (2)
 
—

 
—

 
100,000

 
100,000

2013 Liquefaction Credit Facilities (2)
 
100,000

 
100,000

 
—

 
—

CTPL Credit Facility (3)
 
391,665

 
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 September 30, 2013 and December 31, 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.
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location
three and nine months ended September 30, 2013 and 2012:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2013
 
2012
 
2013
 
2012
Interest Rate Derivatives - Not Designated gain (loss)
$
(22,481
)
 
$
—

 
$
60,707

 
$
—

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 three and nine months ended September 30, 2013 and 2012:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2013
 
2012
 
2013
 
2012
LNG Inventory Derivatives gain (loss)
$
14

 
$
(265
)
 
$
(394
)
 
$
599

Fuel Derivatives loss
(57
)
 
—

 
(57
)
 
—

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 three and nine months ended September 30, 2013 and 2012:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2013
 
2012
 
2013
 
2012
LNG Inventory Derivatives gain
$
201

 
$
—

 
$
976

 
$
—

Fuel Derivatives gain (loss)
(55
)
 
287

 
(3
)
 
(288
)
Schedule of Derivative Instruments [Table Text Block]
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 September 30, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
Fuel Derivatives
 
$
(283
)
 
$
(283
)
 
$
—

 
$
—

 
$
—

 
$
—

LNG Inventory Derivatives
 
186

 


 
186

 
—

 
—

 
186

Interest Rate Derivatives - Not Designated
 
64,309

 
—

 
64,309

 
—

 
—

 
64,309

Interest Rate Derivatives - Not Designated
 
(8,270
)
 
—

 
(8,270
)
 
—

 
—

 
(8,270
)
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
)
Schedule of Notional Amounts of Outstanding Derivative Positions
 
 
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
:
 
 
 
 
Fair Value Measurements as of
 
 
Balance Sheet Location
 
September 30, 2013
 
December 31, 2012
Interest Rate Derivatives - Not Designated
 
Non-current derivative assets
 
$
64,309

 
$
—

Interest Rate Derivatives - Designated
 
Non-current derivative liabilities
 
—

 
21,290

Interest Rate Derivatives - Not Designated
 
Other current liabilities
 
8,270

 
—

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 OCI and AOCI for the nine months ended September 30, 2013 and 2012:
 
Gain (Loss) in Other Comprehensive Income
 
Gain (Loss) Reclassified from AOCI 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

 
$
(29,676
)
 
$
—

 
$
—

 
$
(5,806
)
 
$
—

Interest Rate Derivatives - Settlements
(30
)
 
—

 
—

 
—

 
(167
)
 
—


The following table (in thousands) details the effect of our Interest Rate Derivatives included in OCI and AOCI for the three months ended September 30, 2013 and 2012:
 
Gain (Loss) in Other Comprehensive Income
 
Gain (Loss) Reclassified from AOCI 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
$
—

 
$
(29,676
)
 
$
—

 
$
—

 
$
—

 
$
—

Schedule of Financial Instruments
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 September 30, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
Fuel Derivatives
 
$
(283
)
 
$
(283
)
 
$
—

 
$
—

 
$
—

 
$
—

LNG Inventory Derivatives
 
186

 


 
186

 
—

 
—

 
186

Interest Rate Derivatives - Not Designated
 
64,309

 
—

 
64,309

 
—

 
—

 
64,309

Interest Rate Derivatives - Not Designated
 
(8,270
)
 
—

 
(8,270
)
 
—

 
—

 
(8,270
)
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
)