Cheniere Partners Reports First Quarter 2020 Results and Reconfirms Full Year 2020 Distribution Guidance

 

HOUSTON--(BUSINESS WIRE)-- Cheniere Energy Partners, L.P. (NYSE American: CQP):

Summary of First Quarter 2020 Results (in millions, except LNG data)

 

Three Months Ended

 

March 31,

 

2020

 

2019

Revenues

$

1,718

 

 

$

1,749

 

Net income

$

435

 

 

$

385

 

Adjusted EBITDA1

$

792

 

 

$

607

 

LNG exported:

 

 

 

Number of cargoes

92

 

 

77

 

Volumes (TBtu)

325

 

 

275

 

LNG volumes loaded (TBtu)

327

 

 

273

 

 

Summary Full Year 2020 Distribution Guidance

 

 

2020

Distribution per Unit

$

2.55

-

$

2.65

 

Recent Highlights

Operational

  • As of April 27, 2020, more than 975 cumulative LNG cargoes totaling over 65 million tonnes of LNG have been produced, loaded, and exported from the SPL Project (defined below).

Financial

  • In March 2020, Sabine Pass Liquefaction, LLC entered into a $1.2 billion Working Capital Revolving Credit and Letter of Credit Reimbursement Agreement, which refinanced its previous working capital facility, reduced the interest rate, and extended the maturity date to March 2025.

Liquefaction Project Update

 

SPL Project

Liquefaction Train

Train 6

Project Status

Under Construction

Project Completion Percentage(1)

53.9%(2)

Expected Substantial Completion

1H 2023

Note: Project update excludes Trains in operation
(1) Project completion percentage as of March 31, 2020
(2) Engineering 93.8% complete, procurement 78.4% complete, and construction 15.0% complete

Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE American: CQP) reported net income of $435 million for the three months ended March 31, 2020 compared to $385 million for the comparable 2019 period. The increase in net income for the three months ended March 31, 2020 was primarily due to increased total margins2, partially offset by increased operating costs and expenses primarily as a result of Train 5 being in operation for the entire three month period in 2020 and increased interest expense. Total margins increased primarily due to increased volumes of LNG recognized in income primarily as a result of the timing of completion of Train 5, partially offset by decreased net gains from changes in fair value of commodity derivatives. Margins per MMBtu of LNG recognized in income were materially consistent for the three months ended March 31, 2020 as compared to the comparable 2019 period, due to decreased pricing of both LNG recognized in income and natural gas feedstock related to our LNG sales.

Adjusted EBITDA1 was $792 million for the three months ended March 31, 2020, compared to $607 million for the comparable 2019 period. The increase in Adjusted EBITDA during the three months ended March 31, 2020 as compared to the comparable 2019 period was primarily due to increased volumes of LNG recognized in income primarily as a result of Train 5 being in operation for the entire three month period in 2020, partially offset by increased total operating costs and expenses as a result of Train 5 completion timing.

Income from operations increased $101 million during the three months ended March 31, 2020 as compared to the comparable 2019 period, primarily due to increased volumes of LNG recognized in income, partially offset by increased operating costs and expenses and decreased net gains from changes in fair value of commodity derivatives.

During the three months ended March 31, 2020, 92 LNG cargoes were exported from the SPL Project, none of which were commissioning cargoes.

SPL Project

We operate five natural gas liquefaction Trains and are constructing one additional Train for a total production capacity of approximately 30 million tonnes per annum (“mtpa”) of LNG at the Sabine Pass LNG terminal (the “SPL Project”).

Distributions to Unitholders

We will pay a cash distribution per common and subordinated unit of $0.64 to unitholders of record as of May 7, 2020 and the related general partner distribution on May 15, 2020.

Investor Conference Call and Webcast

Cheniere Energy, Inc. will host a conference call to discuss its financial and operating results for the first quarter 2020 on Thursday, April 30, 2020, at 11 a.m. Eastern time / 10 a.m. Central time. A listen-only webcast of the call and an accompanying slide presentation may be accessed through our website at www.cheniere.com. Following the call, an archived recording will be made available on our website. The call and accompanying slide presentation may include financial and operating results or other information regarding Cheniere Partners.

About Cheniere Partners

Cheniere Partners is developing, constructing and operating natural gas liquefaction facilities at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana, on the Sabine-Neches Waterway less than four miles from the Gulf Coast. Cheniere Partners is currently operating five natural gas liquefaction Trains and is constructing one additional Train for a total production capacity of approximately 30 mtpa of LNG at the Sabine Pass terminal.

Cheniere Partners owns and operates regasification facilities at the Sabine Pass LNG terminal, which includes five LNG storage tanks with aggregate capacity of approximately 16.9 billion cubic feet (Bcf) equivalent, two marine berths that can each accommodate vessels with nominal capacity of up to 266,000 cubic meters, and vaporizers with regasification capacity of approximately 4.0 Bcf per day. Cheniere Partners also owns the Creole Trail Pipeline, a 94-mile pipeline that interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines.

For additional information, please refer to the Cheniere Partners website at www.cheniere.com and Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the Securities and Exchange Commission.

Forward-Looking Statements

This press release contains certain statements that may include “forward-looking statements.” All statements, other than statements of historical or present facts or conditions, included herein are “forward-looking statements.” Included among “forward-looking statements” are, among other things, (i) statements regarding Cheniere Partners’ financial and operational guidance, business strategy, plans and objectives, including the development, construction and operation of liquefaction facilities, (ii) statements regarding expectations regarding regulatory authorizations and approvals, (iii) statements expressing beliefs and expectations regarding the development of Cheniere Partners’ LNG terminal and liquefaction business, (iv) statements regarding the business operations and prospects of third parties, (v) statements regarding potential financing arrangements, and (vi) statements regarding future discussions and entry into contracts. Although Cheniere Partners believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere Partners’ actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere Partners’ periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere Partners does not assume a duty to update these forward-looking statements.

(Financial Tables Follow)

 

Cheniere Energy Partners, L.P.

Consolidated Statements of Income

(in millions, except per unit data)(1)

(unaudited)

 

 

 

 

 

Three Months Ended

 

March 31,

 

2020

 

2019

Revenues

 

 

 

LNG revenues

$

 

1,449

 

 

$

 

1,367

 

LNG revenues—affiliate

 

188

 

 

 

305

 

Regasification revenues

 

67

 

 

 

66

 

Other revenues

 

14

 

 

 

11

 

Total revenues

 

1,718

 

 

 

1,749

 

 

 

 

 

Operating costs and expenses

 

 

 

Cost of sales (excluding items shown separately below)

 

699

 

 

 

879

 

Operating and maintenance expense

 

152

 

 

 

138

 

Operating and maintenance expense—affiliate

 

33

 

 

 

29

 

General and administrative expense

 

2

 

 

 

3

 

General and administrative expense—affiliate

 

25

 

 

 

21

 

Depreciation and amortization expense

 

138

 

 

 

114

 

Impairment expense and loss on disposal of assets

 

5

 

 

 

2

 

Total operating costs and expenses

 

1,054

 

 

 

1,186

 

 

 

 

 

Income from operations

 

664

 

 

 

563

 

 

 

 

 

Other income (expense)

 

 

 

Interest expense, net of capitalized interest

 

(234

)

 

 

(187

)

Loss on modification or extinguishment of debt

 

(1

)

 

 

Other income, net

 

6

 

 

 

9

 

Total other expense

 

(229

)

 

 

(178

)

 

 

 

 

Net income

$

 

435

 

 

$

 

385

 

 

 

 

 

Basic and diluted net income per common unit

$

 

0.84

 

 

$

 

0.75

 

 

 

 

 

Weighted average number of common units outstanding used for basic and diluted net income per common unit calculation

 

348.6

 

 

 

348.6

 

----------------------

(1) Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the Securities and Exchange Commission.

Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

(in millions, except unit data) (1)

 

 

 

 

 

March 31,

 

December 31,

 

2020

 

2019

ASSETS

(unaudited)

 

 

Current assets

 

 

 

Cash and cash equivalents

$

 

1,734

 

 

$

 

1,781

 

Restricted cash

 

109

 

 

 

181

 

Accounts and other receivables

 

259

 

 

 

297

 

Accounts receivable—affiliate

 

38

 

 

 

105

 

Advances to affiliate

 

146

 

 

 

158

 

Inventory

 

98

 

 

 

116

 

Derivative assets

 

13

 

 

 

17

 

Other current assets

 

49

 

 

 

51

 

Other current assets—affiliate

 

2

 

 

 

1

 

Total current assets

 

2,448

 

 

 

2,707

 

 

 

 

 

Property, plant and equipment, net

 

16,476

 

 

 

16,368

 

Operating lease assets, net

 

92

 

 

 

94

 

Debt issuance costs, net

 

20

 

 

 

15

 

Non-current derivative assets

 

41

 

 

 

32

 

Other non-current assets, net

 

156

 

 

 

168

 

Total assets

$

 

19,233

 

 

$

 

19,384

 

 

 

 

 

LIABILITIES AND PARTNERS’ EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable

$

 

8

 

 

$

 

40

 

Accrued liabilities

 

569

 

 

 

709

 

Current debt

 

1,996

 

 

 

Due to affiliates

 

30

 

 

 

46

 

Deferred revenue

 

94

 

 

 

155

 

Deferred revenue—affiliate

 

 

 

1

 

Current operating lease liabilities

 

6

 

 

 

6

 

Derivative liabilities

 

12

 

 

 

9

 

Total current liabilities

 

2,715

 

 

 

966

 

 

 

 

 

Long-term debt, net

 

15,591

 

 

 

17,579

 

Non-current operating lease liabilities

 

85

 

 

 

87

 

Non-current derivative liabilities

 

2

 

 

 

16

 

Other non-current liabilities

 

1

 

 

 

1

 

Other non-current liabilities—affiliate

 

19

 

 

 

20

 

 

 

 

 

Partners’ equity

 

 

 

Common unitholders’ interest (348.6 million units issued and outstanding at March 31, 2020 and December 31, 2019)

 

1,879

 

 

 

1,792

 

Subordinated unitholders’ interest (135.4 million units issued and outstanding at March 31, 2020 and December 31, 2019)

 

(962

)

 

 

(996

)

General partner’s interest (2% interest with 9.9 million units issued and outstanding at March 31, 2020 and December 31, 2019)

 

(97

)

 

 

(81

)

Total partners’ equity

 

820

 

 

 

715

 

Total liabilities and partners’ equity

$

 

19,233

 

 

$

 

19,384

 

-----------------------

(1) Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the Securities and Exchange Commission.

Reconciliation of Non-GAAP Measures

Regulation G Reconciliation

In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying news release contains a non-GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure that is used to facilitate comparisons of operating performance across periods. This non-GAAP measure should be viewed as a supplement to and not a substitute for our U.S. GAAP measures of performance and the financial results calculated in accordance with U.S. GAAP, and the reconciliation from these results should be carefully evaluated.

Adjusted EBITDA is calculated by taking net income before interest expense, net of capitalized interest, changes in the fair value and settlement of our interest rate derivatives, taxes, depreciation and amortization, and adjusting for the effects of certain non-cash items, other non-operating income or expense items and other items not otherwise predictive or indicative of ongoing operating performance, including the effects of modification or extinguishment of debt, changes in the fair value of our commodity derivatives, impairment expense and loss on disposal of assets, and non-recurring costs related to our response to the COVID-19 outbreak. Adjusted EBITDA is not intended to represent cash flows from operations or net income as defined by U.S. GAAP and is not necessarily comparable to similarly titled measures reported by other companies.

We believe Adjusted EBITDA provides relevant and useful information to management, investors and other users of our financial information in evaluating the effectiveness of our operating performance in a manner that is consistent with management’s evaluation of business performance. Management believes Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization which vary substantially from company to company depending on capital structure, the method by which assets were acquired and depreciation policies. Further, the exclusion of certain non-cash items, other non-operating income or expense items and other items not otherwise predictive or indicative of ongoing operating performance enables comparability to prior period performance and trend analysis.

Adjusted EBITDA

The following table reconciles our Adjusted EBITDA to U.S. GAAP results for the three months ended March 31, 2020 and 2019 (in millions):

 

Three Months Ended

 

March 31,

 

2020

 

2019

Net income

$

 

435

 

 

$

 

385

 

Interest expense, net of capitalized interest

 

234

 

 

 

187

 

Loss on modification or extinguishment of debt

 

1

 

 

 

Other income, net

 

(6

)

 

 

(9

)

Income from operations

$

 

664

 

 

$

 

563

 

Adjustments to reconcile income from operations to Adjusted EBITDA:

 

 

 

Depreciation and amortization expense

 

138

 

 

 

114

 

Loss (gain) from changes in fair value of commodity derivatives, net

 

(17

)

 

 

(72

)

Impairment expense and loss on disposal of assets

 

5

 

 

 

2

 

Incremental costs associated with COVID-19 response

 

2

 

 

 

Adjusted EBITDA

$

 

792

 

 

$

 

607

 

 

Cheniere Energy Partners, L.P.
Investors
Randy Bhatia, 713-375-5479
Megan Light, 713-375-5492
or
Media Relations
Eben Burnham-Snyder, 713-375-5764
Jenna Palfrey, 713-375-5491

Source: Cheniere Energy Partners, L.P.