Quarterly report pursuant to Section 13 or 15(d)

Financial Instruments (Tables)

v2.4.0.8
Financial Instruments (Tables)
3 Months Ended
Mar. 31, 2014
Derivative Instruments, Gain (Loss) [Line Items]  
Fair Value of Derivative Assets and Liabilities
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 March 31, 2014 and December 31, 2013, which are classified as prepaid expenses and other, non-current derivative assets and other current liabilities in our Consolidated Balance Sheets.
 
Fair Value Measurements as of
 
March 31, 2014
 
December 31, 2013
 
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 (liability)
$

 
$
35

 
$

 
$
35

 
$

 
$
(161
)
 
$

 
$
(161
)
Fuel Derivatives asset

 
19

 

 
19

 

 
27

 

 
27

Interest Rate Derivatives asset

 
51,626

 

 
51,626

 

 
84,639

 

 
84,639

Fair Value of Derivative Instruments by Balance Sheet Location
The following table (in thousands) shows the fair value and location of our LNG Inventory Derivatives and Fuel Derivatives on our Consolidated Balance Sheets:
 
 
 
 
Fair Value Measurements as of
 
Balance Sheet Location
 
March 31, 2014
 
December 31, 2013
LNG Inventory Derivatives asset (liability)
Prepaid expenses and other
 
$
35

 
$
(161
)
Fuel Derivatives asset
Prepaid expenses and other
 
19

 
27

Schedule of Notional Amounts of Outstanding Derivative Positions
At March 31, 2014, Sabine Pass Liquefaction had the following Interest Rate Derivatives outstanding:
 
 
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
The following table (in thousands) shows the fair value of our Interest Rate Derivatives:
 
 
 
 
Fair Value Measurements as of
 
 
Balance Sheet Location
 
March 31, 2014
 
December 31, 2013
Interest Rate Derivatives - Not Designated
 
Non-current derivative assets
 
$
71,170

 
$
98,123

Interest Rate Derivatives - Not Designated
 
Other current liabilities
 
(19,544
)
 
(13,484
)
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 Other Comprehensive Income ("OCI") and AOCI during the three months ended March 31, 2014 and 2013:
 
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
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Interest Rate Derivatives - Designated
$

 
$
21,297

 
$

 
$

 
$

 
$

Interest Rate Derivatives - Settlements

 
(30
)
 

 

 

 

Derivative Gross Presentation on Consolidated Balance Sheets
Our 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 Sheets
 
Net Amounts Presented in the Consolidated Balance Sheets
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
Offsetting Derivative Assets (Liabilities)
 
 
 
 
Derivative Instrument
 
Cash Collateral Received (Paid)
 
Net Amount
As of March 31, 2014:
 
 
 
 
 
 
 
 
 
 
 
 
Fuel Derivatives
 
$
19

 
$

 
$
19

 
$

 
$

 
$
19

LNG Inventory Derivatives
 
35

 
7

 
28

 

 

 
28

Interest Rate Derivatives - Not Designated
 
71,170

 

 
71,170

 

 

 
71,170

Interest Rate Derivatives - Not Designated
 
(19,544
)
 

 
(19,544
)
 

 

 
(19,544
)
As of December 31, 2013:
 
 

 
 
 
 
 
 
 
 
 
Fuel Derivatives
 
27

 

 
27

 

 

 
27

LNG Inventory Derivatives
 
(161
)
 
(161
)
 

 

 

 

Interest Rate Derivatives - Not Designated
 
98,123

 

 
98,123

 

 

 
98,123

Interest Rate Derivatives - Not Designated
 
(13,484
)
 

 
(13,484
)
 

 

 
(13,484
)
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments
 
 
March 31, 2014
 
December 31, 2013
 
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
2016 Notes, net of discount (1)
 
$
1,652,981

 
$
1,824,478

 
$
1,651,807

 
$
1,868,607

2020 Notes (1)
 
420,000

 
441,000

 
420,000

 
432,600

2021 Sabine Pass Liquefaction Senior Notes (1)
 
2,011,222

 
2,079,101

 
2,011,562

 
1,961,273

2022 Sabine Pass Liquefaction Senior Notes (1)
 
1,000,000

 
1,042,500

 
1,000,000

 
982,500

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

 
997,500

 
1,000,000

 
935,000

2013 Liquefaction Credit Facilities (2)
 
100,000

 
100,000

 
100,000

 
100,000

CTPL Credit Facility (3)
 
394,147

 
400,000

 
392,904

 
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 March 31, 2014 and December 31, 2013, 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 any time without penalty. 
(3)
The Level 3 estimated fair value approximates the principal amount because the interest rates are variable and reflective of market rates and CTPL has the ability to call this debt at any time without penalty.
Sales Revenue from Energy Commodities and Services [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]  
Derivative Instruments, Gain (Loss)
The following table (in thousands) shows the changes in the fair value and settlements of our LNG Inventory Derivatives recorded in revenues on our Consolidated Statements of Operations during the three months ended March 31, 2014 and 2013:
 
Three Months Ended March 31,
 
2014
 
2013
LNG Inventory Derivatives loss
$
(29
)
 
$
(550
)
Derivative gain (loss), net [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]  
Derivative Instruments, Gain (Loss)

The following table (in thousands) shows the changes in the fair value and settlements of our Fuel Derivatives and LNG Inventory Derivatives recorded in derivative loss, net on our Consolidated Statements of Operations during the three months ended March 31, 2014 and 2013:
 
Three Months Ended March 31,
 
2014
 
2013
LNG Inventory Derivatives loss
$
(435
)
 
$

Fuel Derivatives gain (1)
242

 
515


 
 
 
 
 
(1)Excludes settlements of hedges of the exposure to price risk attributable to future purchases of natural gas to be utilized
as fuel to operate the Sabine Pass LNG terminal for which Sabine Pass LNG has elected the normal purchase normal sale exemption from derivative accounting.
Interest Rate Contract [Member] | Derivative gain (loss), net [Member] | Not Designated as Hedging Instrument [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]  
Derivative Instruments, Gain (Loss)
The following table (in thousands) shows the changes in the fair value and settlements of our Interest Rate Derivatives—Not Designated recorded in derivative loss, net on our Consolidated Statements of Operations during the three months ended March 31, 2014 and 2013:
 
Three Months Ended March 31,
 
2014
 
2013
Interest Rate Derivatives - Not Designated
$
(34,479
)
 
$
(17,983
)