Cheniere Energy Partners, L.P. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Supplemental Guarantor Information

Supplemental Guarantor Information

9 Months Ended

Sep. 30, 2018

Supplemental Guarantor Information [Abstract]

SUPPLEMENTAL GUARANTOR INFORMATION

Our CQP Senior Notes are jointly and severally guaranteed by each of our subsidiaries other than SPL (the “Guarantors”) and, subject to certain conditions governing its guarantee, Sabine Pass LP (collectively with SPL, the “Non-Guarantors”). These guarantees are full and unconditional, subject to certain customary release provisions including (1) the sale, exchange, disposition or transfer (by merger, consolidation or otherwise) of the capital stock or all or substantially all of the assets of the Guarantors, (2) upon the liquidation or dissolution of a Guarantor, (3) following the release of a Guarantor from its guarantee obligations and (4) upon the legal defeasance or satisfaction and discharge of obligations under the CQP Indenture. See Note 10—Debt in this quarterly report and Note 11—Debt of our Notes to Consolidated Financial Statements in our annual report on Form 10-K for the year ended December 31, 2017 for additional information regarding the CQP Senior Notes.

The following is condensed consolidating financial information for CQP (“Parent Issuer”), the Guarantors on a combined basis and the Non-Guarantors on a combined basis. We have accounted for investments in subsidiaries using the equity method.



Condensed Consolidating Balance Sheet
September 30, 2018
(in millions)

	Parent Issuer		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	—	$	—	$	—	$	—		$	—
Restricted cash	799		9		649		—			1,457
Accounts and other receivables	1		1		222		—			224
Accounts receivable—affiliate	1		46		21		(46		)	22
Advances to affiliate	—		100		174		(85		)	189
Inventory	—		12		76		—			88
Other current assets	19		1		35		—			55
Other current assets—affiliate	—		—		21		(21		)	—
Total current assets	820		169		1,198		(152		)	2,035

Property, plant and equipment, net	79		2,136		13,091		(24		)	15,282
Debt issuance costs, net	1		—		14		—			15
Non-current derivative assets	9		—		16		—			25
Investments in subsidiaries	2,449		347		—		(2,796		)	—
Other non-current assets, net	—		27		152		—			179
Total assets	$	3,358	$	2,679	$	14,471	$	(2,972	)	$	17,536

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities
Accounts payable	$	1	$	5	$	7	$	—		$	13
Accrued liabilities	44		20		439		—			503
Due to affiliates	—		132		52		(131		)	53
Deferred revenue	—		24		95		—			119
Deferred revenue—affiliate	—		21		—		(21		)	—
Derivative liabilities	—		—		6		—			6
Total current liabilities	45		202		599		(152		)	694

Long-term debt, net	2,565		—		13,494		—			16,059
Non-current derivative liabilities	—		—		2		—			2
Other non-current liabilities	—		5		5		—			10
Other non-current liabilities—affiliate	—		23		—		—			23

Partners’ equity	748		2,449		371		(2,820		)	748
Total liabilities and partners’ equity	$	3,358	$	2,679	$	14,471	$	(2,972	)	$	17,536



Condensed Consolidating Balance Sheet
December 31, 2017
(in millions)

	Parent Issuer		Guarantors			Non-Guarantors			Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	—	$	—		$	—		$	—		$	—
Restricted cash	1,033		12			544			—			1,589
Accounts and other receivables	—		2			189			—			191
Accounts receivable—affiliate	—		36			163			(36		)	163
Advances to affiliate	—		20			26			(10		)	36
Inventory	—		10			85			—			95
Other current assets	8		3			54			—			65
Other current assets—affiliate	—		—			21			(21		)	—
Total current assets	1,041		83			1,082			(67		)	2,139

Property, plant and equipment, net	80		2,164			12,920			(25		)	15,139
Debt issuance costs, net	20		—			18			—			38
Non-current derivative assets	14		—			17			—			31
Investments in subsidiaries	2,076		(63		)	—			(2,013		)	—
Other non-current assets, net	—		37			169			—			206
Total assets	$	3,231	$	2,221		$	14,206		$	(2,105	)	$	17,553

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities
Accounts payable	$	—	$	4		$	8		$	—		$	12
Accrued liabilities	23		8			606			—			637
Due to affiliates	—		47			66			(45		)	68
Deferred revenue	—		27			84			—			111
Deferred revenue—affiliate	—		22			—			(21		)	1
Other current liabilities—affiliate	—		1			—			(1		)	—
Total current liabilities	23		109			764			(67		)	829

Long-term debt, net	2,569		—			13,477			—			16,046
Non-current derivative liabilities	—		—			3			—			3
Other non-current liabilities	—		11			—			—			11
Other non-current liabilities—affiliate	—		25			—			—			25

Partners’ equity (deficit)	639		2,076			(38		)	(2,038		)	639
Total liabilities and partners’ equity (deficit)	$	3,231	$	2,221		$	14,206		$	(2,105	)	$	17,553



Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2018
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated

Revenues
LNG revenues	$	—		$	—		$	1,249		$	—		$	1,249
LNG revenues—affiliate	—			—			205			—			205
Regasification revenues	—			66			—			—			66
Regasification revenues—affiliate	—			64			—			(64		)	—
Other revenues	—			9			—			—			9
Other revenues—affiliate	—			48			—			(48		)	—
Total revenues	—			187			1,454			(112		)	1,529

Operating costs and expenses
Cost of sales (excluding depreciation and amortization expense shown separately below)	—			—			758			(2		)	756
Cost of sales—affiliate	—			—			8			(8		)	—
Operating and maintenance expense	—			17			96			—			113
Operating and maintenance expense—affiliate	—			39			107			(115		)	31
Development expense	—			1			—			—			1
General and administrative expense	1			1			1			—			3
General and administrative expense—affiliate	3			6			12			(3		)	18
Depreciation and amortization expense	1			19			88			(1		)	107
Impairment expense and loss on disposal of assets	—			8			—			—			8
Total operating costs and expenses	5			91			1,070			(129		)	1,037

Income (loss) from operations	(5		)	96			384			17			492

Other income (expense)
Interest expense, net of capitalized interest	(36		)	(1		)	(146		)	—			(183		)
Loss on modification or extinguishment of debt	(12		)	—			—			—			(12		)
Derivative gain, net	2			—			—			—			2
Equity earnings of subsidiaries	354			243			—			(597		)	—
Other income (expense)	4			(1		)	5			—			8
Total other income (expense)	312			241			(141		)	(597		)	(185		)

Net income	$	307		$	337		$	243		$	(580	)	$	307



Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2017
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated

Revenues
LNG revenues	$	—		$	—		$	723		$	—		$	723
LNG revenues—affiliate	—			—			111			—			111
Regasification revenues	—			65			—			—			65
Regasification revenues—affiliate	—			48			—			(48		)	—
Other revenues	—			3			—			—			3
Other revenues—affiliate	—			51			—			(50		)	1
Total revenues	—			167			834			(98		)	903

Operating costs and expenses
Cost (cost recovery) of sales (excluding depreciation and amortization expense shown separately below)	—			(1		)	488			3			490
Cost of sales—affiliate	—			—			5			(5		)	—
Operating and maintenance expense	1			7			65			—			73
Operating and maintenance expense—affiliate	6			33			82			(90		)	31
Development expense	—			—			1			—			1
General and administrative expense	1			1			3			—			5
General and administrative expense—affiliate	3			6			12			(3		)	18
Depreciation and amortization expense	1			17			69			—			87
Other	—			1			—			—			1
Total operating costs and expenses	12			64			725			(95		)	706

Income (loss) from operations	(12		)	103			109			(3		)	197

Other income (expense)
Interest expense, net of capitalized interest	(29		)	—			(124		)	—			(153		)
Loss on modification or extinguishment of debt	(25		)	—			—			—			(25		)
Derivative gain, net	1			—			—			—			1
Equity earnings (losses) of subsidiaries	88			(12		)	—			(76		)	—
Other income	—			—			3			—			3
Total other income (expense)	35			(12		)	(121		)	(76		)	(174		)

Net income (loss)	$	23		$	91		$	(12	)	$	(79	)	$	23



Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2018
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated

Revenues
LNG revenues	$	—		$	—		$	3,419		$	—		$	3,419
LNG revenues—affiliate	—			—			886			—			886
Regasification revenues	—			196			—			—			196
Regasification revenues—affiliate	—			194			—			(194		)	—
Other revenues	—			28			—			—			28
Other revenues—affiliate	—			183			—			(183		)	—
Total revenues	—			601			4,305			(377		)	4,529

Operating costs and expenses
Cost of sales (excluding depreciation and amortization expense shown separately below)	—			2			2,291			(2		)	2,291
Cost of sales—affiliate	—			—			23			(23		)	—
Operating and maintenance expense	—			48			258			—			306
Operating and maintenance expense—affiliate	—			113			317			(343		)	87
Development expense	—			1			1			—			2
General and administrative expense	3			2			4			—			9
General and administrative expense—affiliate	9			17			36			(9		)	53
Depreciation and amortization expense	2			56			261			(1		)	318
Impairment expense and loss on disposal of assets	—			8			—			—			8
Total operating costs and expenses	14			247			3,191			(378		)	3,074

Income (loss) from operations	(14		)	354			1,114			1			1,455

Other income (expense)
Interest expense, net of capitalized interest	(104		)	(3		)	(445		)	—			(552		)
Loss on modification or extinguishment of debt	(12		)	—			—			—			(12		)
Derivative gain, net	13			—			—			—			13
Equity earnings of subsidiaries	1,030			678			—			(1,708		)	—
Other income	10			—			9			—			19
Total other income (expense)	937			675			(436		)	(1,708		)	(532		)

Net income	$	923		$	1,029		$	678		$	(1,707	)	$	923



Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2017
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated

Revenues
LNG revenues	$	—		$	—		$	1,718		$	—		$	1,718
LNG revenues—affiliate	—			—			864			—			864
Regasification revenues	—			195			—			—			195
Regasification revenues—affiliate	—			128			—			(128		)	—
Other revenues	—			7			—			—			7
Other revenues—affiliate	—			162			—			(160		)	2
Total revenues	—			492			2,582			(288		)	2,786

Operating costs and expenses
Cost of sales (excluding depreciation and amortization expense shown separately below)	—			1			1,576			3			1,580
Cost of sales—affiliate	—			—			15			(15		)	—
Operating and maintenance expense	4			29			172			—			205
Operating and maintenance expense—affiliate	6			96			224			(256		)	70
Development expense	—			—			2			—			2
General and administrative expense	3			2			5			—			10
General and administrative expense—affiliate	9			19			46			(11		)	63
Depreciation and amortization expense	1			55			183			—			239
Other	—			1			—			—			1
Total operating costs and expenses	23			203			2,223			(279		)	2,170

Income (loss) from operations	(23		)	289			359			(9		)	616

Other income (expense)
Interest expense, net of capitalized interest	(81		)	—			(356		)	—			(437		)
Loss on modification or extinguishment of debt	(25		)	—			(42		)	—			(67		)
Derivative loss, net	—			—			(2		)	—			(2		)
Equity earnings (losses) of subsidiaries	244			(36		)	—			(208		)	—
Other income	1			—			5			—			6
Total other income (expense)	139			(36		)	(395		)	(208		)	(500		)

Net income (loss)	$	116		$	253		$	(36	)	$	(217	)	$	116



Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2018
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash flows provided by operating activities	$	339		$	408		$	928		$	(411	)	$	1,264

Cash flows from investing activities
Property, plant and equipment, net	—			(24		)	(554		)	—			(578		)
Investments in subsidiaries	(202		)	(81		)	—			283			—
Distributions received from affiliates, net	447			350			—			(797		)	—
Net cash provided by (used in) investing activities	245			245			(554		)	(514		)	(578		)

Cash flows from financing activities
Proceeds from issuances of debt	1,100			—			—			—			1,100
Repayments of debt	(1,090		)	—			—			—			(1,090		)
Debt issuance and deferred financing costs	(8		)	—			—			—			(8		)
Debt extinguishment costs	(6		)	—			—			—			(6		)
Distributions to parent	—			(858		)	(350		)	1,208			—
Contributions from parent	—			202			81			(283		)	—
Distributions to owners	(814		)	—			—			—			(814		)
Net cash used in financing activities	(818		)	(656		)	(269		)	925			(818		)

Net increase (decrease) in cash, cash equivalents and restricted cash	(234		)	(3		)	105			—			(132		)
Cash, cash equivalents and restricted cash—beginning of period	1,033			12			544			—			1,589
Cash, cash equivalents and restricted cash—end of period	$	799		$	9		$	649		$	—		$	1,457

Balances per Condensed Consolidating Balance Sheet:



	September 30, 2018
	Parent Issuer		Guarantors		Non-Guarantors		Eliminations		Consolidated
Cash and cash equivalents	$	—	$	—	$	—	$	—	$	—
Restricted cash	799		9		649		—		1,457
Total cash, cash equivalents and restricted cash	$	799	$	9	$	649	$	—	$	1,457



Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2017
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(89	)	$	293		$	317		$	(8	)	$	513

Cash flows from investing activities
Property, plant and equipment, net	—			(16		)	(1,187		)	8			(1,195		)
Investments in subsidiaries	(216		)	(7		)	—			223			—
Distributions received from affiliates, net	929			450			—			(1,379		)	—
Net cash provided by (used in) investing activities	713			427			(1,187		)	(1,148		)	(1,195		)

Cash flows from financing activities
Proceeds from issuances of debt	1,500			—			2,314			—			3,814
Repayments of debt	(1,470		)	—			(703		)	—			(2,173		)
Debt issuance and deferred financing costs	(18		)	—			(29		)	—			(47		)
Distributions to parent	—			(929		)	(450		)	1,379			—
Contributions from parent	—			216			7			(223		)	—
Distributions to owners	(74		)	—			—			—			(74		)
Net cash provided by (used in) financing activities	(62		)	(713		)	1,139			1,156			1,520

Net increase in cash, cash equivalents and restricted cash	562			7			269			—			838
Cash, cash equivalents and restricted cash—beginning of period	234			13			358			—			605
Cash, cash equivalents and restricted cash—end of period	$	796		$	20		$	627		$	—		$	1,443