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, 2019

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 indenture governing the CQP Senior Notes. 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, 2018 for additional information regarding the CQP Senior Notes.

The following is condensed consolidating financial information for Cheniere Partners (“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, 2019
(in millions)

	Parent Issuer		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	1,701	$	6	$	—	$	—		$	1,707
Restricted cash	—		—		185		—			185
Accounts and other receivables	—		3		274		—			277
Accounts receivable—affiliate	—		35		66		(34		)	67
Advances to affiliate	—		151		154		(128		)	177
Inventory	—		13		90		—			103
Derivative assets	—		—		8		—			8
Other current assets	1		12		52		—			65
Other current assets—affiliate	—		—		22		(22		)	—
Total current assets	1,702		220		851		(184		)	2,589

Property, plant and equipment, net	79		2,454		13,831		(26		)	16,338
Operating lease assets, net	—		86		21		(16		)	91
Debt issuance costs, net	10		—		7		—			17
Non-current derivative assets	—		—		29		—			29
Investments in subsidiaries	2,931		495		—		(3,426		)	—
Other non-current assets, net	—		25		132		—			157
Total assets	$	4,722	$	3,280	$	14,871	$	(3,652	)	$	19,221

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities
Accounts payable	$	—	$	5	$	12	$	—		$	17
Accrued liabilities	77		36		544		—			657
Due to affiliates	—		158		45		(163		)	40
Deferred revenue	—		21		148		—			169
Deferred revenue—affiliate	—		21		—		(21		)	—
Current operating lease liabilities	—		6		—		—			6
Derivative liabilities	—		—		29		—			29
Total current liabilities	77		247		778		(184		)	918

Long-term debt, net	4,053		—		13,518		—			17,571
Non-current operating lease liabilities	—		79		5		—			84
Non-current derivative liabilities	—		—		32		—			32
Other non-current liabilities	—		3		1		—			4
Other non-current liabilities—affiliate	—		20		16		(16		)	20

Partners’ equity	592		2,931		521		(3,452		)	592
Total liabilities and partners’ equity	$	4,722	$	3,280	$	14,871	$	(3,652	)	$	19,221



Condensed Consolidating Balance Sheet
December 31, 2018
(in millions)

	Parent Issuer		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	—	$	—	$	—	$	—		$	—
Restricted cash	779		6		756		—			1,541
Accounts and other receivables	1		1		346		—			348
Accounts receivable—affiliate	1		40		113		(40		)	114
Advances to affiliate	—		104		210		(86		)	228
Inventory	—		12		87		—			99
Derivative assets	—		—		6		—			6
Other current assets	—		2		18		—			20
Other current assets—affiliate	—		—		21		(21		)	—
Total current assets	781		165		1,557		(147		)	2,356

Property, plant and equipment, net	79		2,128		13,209		(26		)	15,390
Debt issuance costs, net	1		—		12		—			13
Non-current derivative assets	—		—		31		—			31
Investments in subsidiaries	2,544		440		—		(2,984		)	—
Other non-current assets, net	—		26		158		—			184
Total assets	$	3,405	$	2,759	$	14,967	$	(3,157	)	$	17,974

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities
Accounts payable	$	—	$	4	$	11	$	—		$	15
Accrued liabilities	39		14		768		—			821
Due to affiliates	—		127		48		(126		)	49
Deferred revenue	—		25		91		—			116
Deferred revenue—affiliate	—		22		—		(21		)	1
Derivative liabilities	—		—		66		—			66
Total current liabilities	39		192		984		(147		)	1,068

Long-term debt, net	2,566		—		13,500		—			16,066
Non-current derivative liabilities	—		—		14		—			14
Other non-current liabilities	—		1		3		—			4
Other non-current liabilities—affiliate	—		22		—		—			22

Partners’ equity	800		2,544		466		(3,010		)	800
Total liabilities and partners’ equity	$	3,405	$	2,759	$	14,967	$	(3,157	)	$	17,974



Condensed Consolidating Statement of Income
Three Months Ended September 30, 2019
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated

Revenues
LNG revenues	$	—		$	—		$	1,140		$	—		$	1,140
LNG revenues—affiliate	—			—			257			—			257
Regasification revenues	—			66			—			—			66
Regasification revenues—affiliate	—			65			—			(65		)	—
Other revenues	—			13			—			—			13
Other revenues—affiliate	—			36			—			(36		)	—
Total revenues	—			180			1,397			(101		)	1,476

Operating costs and expenses
Cost of sales (excluding depreciation and amortization expense shown separately below)	—			—			742			—			742
Cost of sales—affiliate	—			6			17			(17		)	6
Operating and maintenance expense	—			22			150			—			172
Operating and maintenance expense—affiliate	—			5			113			(84		)	34
General and administrative expense	1			1			1			—			3
General and administrative expense—affiliate	4			8			28			(6		)	34
Depreciation and amortization expense	1			21			117			(1		)	138
Impairment expense and loss on disposal of assets	—			—			1			—			1
Total operating costs and expenses	6			63			1,169			(108		)	1,130

Income (loss) from operations	(6		)	117			228			7			346

Other income (expense)
Interest expense, net of capitalized interest	(47		)	(1		)	(183		)	—			(231		)
Loss on modification or extinguishment of debt	(13		)	—			—			—			(13		)
Equity earnings of subsidiaries	170			48			—			(218		)	—
Other income (expense)	6			(1		)	3			—			8
Total other income (expense)	116			46			(180		)	(218		)	(236		)

Net income	$	110		$	163		$	48		$	(211	)	$	110



Condensed Consolidating Statement of Income
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
Other	—			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 early 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 Income
Nine Months Ended September 30, 2019
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated

Revenues
LNG revenues	$	—		$	—		$	3,678		$	—		$	3,678
LNG revenues—affiliate	—			—			1,017			—			1,017
Regasification revenues	—			199			—			—			199
Regasification revenues—affiliate	—			196			—			(196		)	—
Other revenues	—			36			—			—			36
Other revenues—affiliate	—			160			—			(160		)	—
Total revenues	—			591			4,695			(356		)	4,930

Operating costs and expenses
Cost of sales (excluding depreciation and amortization expense shown separately below)	—			—			2,501			—			2,501
Cost of sales—affiliate	—			6			35			(35		)	6
Operating and maintenance expense	—			74			398			—			472
Operating and maintenance expense—affiliate	—			76			335			(311		)	100
General and administrative expense	3			2			4			—			9
General and administrative expense—affiliate	10			22			64			(14		)	82
Depreciation and amortization expense	2			58			331			(1		)	390
Impairment expense and loss on disposal of assets	—			—			6			—			6
Total operating costs and expenses	15			238			3,674			(361		)	3,566

Income (loss) from operations	(15		)	353			1,021			5			1,364

Other income (expense)
Interest expense, net of capitalized interest	(120		)	(4		)	(524		)	—			(648		)
Loss on modification or extinguishment of debt	(13		)	—			—			—			(13		)
Equity earnings of subsidiaries	860			506			—			(1,366		)	—
Other income	15			—			9			—			24
Total other income (expense)	742			502			(515		)	(1,366		)	(637		)

Net income	$	727		$	855		$	506		$	(1,361	)	$	727



Condensed Consolidating Statement of Income
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 early 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 Cash Flows
Nine Months Ended September 30, 2019
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash flows provided by operating activities	$	782		$	907		$	656		$	(1,368	)	$	977

Cash flows from investing activities
Property, plant and equipment, net	—			(35		)	(1,123		)	2			(1,156		)
Investments in subsidiaries	(1,109		)	(949		)	—			2,058			—
Return of capital	721			546			—			(1,267		)	—
Other	—			—			(1		)	—			(1		)
Net cash used in investing activities	(388		)	(438		)	(1,124		)	793			(1,157		)

Cash flows from financing activities
Proceeds from issuances of debt	2,230			—			—			—			2,230
Repayments of debt	(730		)	—			—			—			(730		)
Debt issuance and deferred financing costs	(33		)	—			—			—			(33		)
Debt extinguishment costs	(4		)	—			—			—			(4		)
Distributions to parent	—			(1,581		)	(1,052		)	2,633			—
Contributions from parent	—			1,109			949			(2,058		)	—
Distributions to owners	(935		)	—			—			—			(935		)
Other	—			3			—			—			3
Net cash provided by (used in) financing activities	528			(469		)	(103		)	575			531

Net increase (decrease) in cash, cash equivalents and restricted cash	922			—			(571		)	—			351
Cash, cash equivalents and restricted cash—beginning of period	779			6			756			—			1,541
Cash, cash equivalents and restricted cash—end of period	$	1,701		$	6		$	185		$	—		$	1,892

Balances per Condensed Consolidating Balance Sheet:



	September 30, 2019
	Parent Issuer		Guarantors		Non-Guarantors		Eliminations		Consolidated
Cash and cash equivalents	$	1,701	$	6	$	—	$	—	$	1,707
Restricted cash	—		—		185		—		185
Total cash, cash equivalents and restricted cash	$	1,701	$	6	$	185	$	—	$	1,892



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