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

Annual report pursuant to Section 13 and 15(d)

Cash Distributions and Net Income (Loss) per Common Unit

Cash Distributions and Net Income (Loss) per Common Unit

12 Months Ended

Dec. 31, 2011

CASH DISTRIBUTIONS AND NET INCOME (LOSS) PER COMMON UNIT [Abstract]

Cash Distributions and Net Income (Loss) per Common Unit [Text Block]

Cash Distributions and Net Income (Loss) per Common Unit

Cash Distributions

Our partnership agreement requires that, within 45 days after the end of each quarter, we distribute all of our available cash (as defined in our partnership agreement). Generally, our available cash is our cash on hand at the end of a quarter less the amount of any reserves established by our general partner. All distributions paid to date have been made from operating surplus as defined in the partnership agreement. The following provides a summary of distributions paid by us during the years ended December 31, 2011, 2010 and 2009:



						Total Distribution (in thousands)
Date Paid	Period Covered by Distribution	Distribution Per Common Unit		Distribution Per Subordinated Unit		Common Units		Subordinated Units	General Partner Units
November 14, 2011	July 1 - September 30, 2011	$	0.425	$	—	$	13,176	—	$	269
August 12, 2011	April 1 - June 30, 2011	0.425		—		11,446		—	234
May 13, 2011	January 1 - March 31, 2011	0.425		—		11,335		—	231
February 11, 2011	October 1 - December 31, 2010	0.425		—		11,229		—	229
November 12, 2010	July 1 - September 30, 2010	0.425		—		11,227		—	229
August 13, 2010	April 1 - June 30, 2010	0.425		—		11,227		—	229
May 14, 2010	January 1 - March 31, 2010	0.425		0.425		11,227		57,538	1,403
February 12, 2010	October 1 - December 31, 2009	0.425		0.425		11,227		57,538	1,403
November 13, 2009	July 1 - September 30, 2009	0.425		0.425		11,227		57,538	1,403
August 14, 2009	April 1 - June 30, 2009	0.425		0.425		11,227		57,538	1,403
May 15, 2009	January 1 - March 31, 2009	0.425		0.425		11,227		57,538	1,403
February 13, 2009	October 1 - December 31, 2008	0.425		0.425		11,227		57,538	1,403

The subordinated units will receive distributions only to the extent we have available cash above the minimum quarterly distribution requirement for our common unitholders and general partner and certain reserves. As a result of the assignment of Cheniere Marketing's TUA to Cheniere Investments, effective July 1, 2010, our available cash for distributions was reduced. Therefore, we have not paid distributions on our subordinated units since the distribution made with respect to the quarter ended March 31, 2010.

Our partnership agreement provides that we maintain a tax capital account for each partner. In general, our partnership agreement provides that taxable income (loss) is allocated to our partners' for tax capital account maintenance purposes according to their ownership percentage interests. At December 31, 2011, our partners' tax capital account balances, maintained pursuant to the partnership agreement, were positive primarily as a result of being initially recorded at fair value at the time of the Cheniere Partners Offering. We also separately maintain capital accounts for financial reporting purposes. Capital accounts maintained for financial reporting purposes were not recorded at fair value at the time of the Cheniere Partners Offering and were in a deficit position as of December 31, 2011. For purposes of the Consolidated Financial Statements we allocate income (loss) to each partner's capital account according to the ownership percentage interests and record distributions against the partner's capital account that receive such distributions. If we were to liquidate, we would make liquidating distributions to our unit holders in accordance with the balances in their tax capital accounts maintained pursuant to the partnership agreement which may differ from the capital accounts maintained for purposes of the Consolidated Financial Statements.

Net Income (Loss) per Common Unit

Net income (loss) per common unit for a given period is based on the distributions that will be made to the unitholders with respect to the period plus an allocation of undistributed net income (loss) based on provisions of the partnership agreement, divided by the weighted average number of common units outstanding. The two class method dictates that net income (loss) for a period be reduced by the amount of available cash that will be distributed with respect to that period and that any residual amount representing undistributed net income be allocated to common unitholders and other participating unitholders to the extent that each unit may share in net income as if all of the net income for the period had been distributed in accordance with the partnership agreement. Undistributed income is allocated to participating securities based on the distribution waterfall for available cash specified in the partnership agreement. Undistributed losses (including those resulting from distributions in excess of net income) are allocated to common units and other participating securities on a pro rata basis based on provisions of the partnership agreement. Distributions are treated as distributed earnings in the computation of earnings per common unit even though cash distributions are not necessarily derived from current or prior period earnings.

Under our partnership agreement, the incentive distribution rights ("IDRs") participate in net income (loss) only to the extent of the amount of cash distributions actually declared, thereby excluding the IDRs from participating in undistributed net income (loss). We did not allocate earnings or losses to IDR holders for the purpose of the two class method earnings per unit calculation for any of the periods presented.

The following table provides a reconciliation of net income (loss) and the allocation of net income (loss) to the common units and the subordinated units for purposes of computing net income (loss) per unit (in thousands, except per unit data):



				Limited Partner Units
	Total			Common Units			Subordinated Units			General Partner
Year Ended December 31, 2011
Net income	(31,019		)
Declared distributions	50,136			49,134			—			1,002
Assumed allocation of undistributed net income	(81,155		)	(14,819		)	(64,713		)	(1,623		)
Assumed allocation of net income				34,315			(64,713		)	(621		)

Weighted average units outstanding				27,910			135,384
Net income per unit				$	1.23		$	(0.48	)

Year Ended December 31, 2010
Net income	$	107,568
Declared distributions	104,538			44,910			57,538			2,090
Assumed allocation of undistributed net income	3,030			—			2,969			61
Assumed allocation of net income				$	44,910		$	60,507		$	2,151

Weighted average units outstanding				26,416			135,384
Net income per unit				$	1.70		$	0.45

Year Ended December 31, 2009
Net income	186,912
Declared distributions	280,674			44,908			230,153			5,613
Assumed allocation of undistributed net loss	(93,762		)	(15,002		)	(76,885		)	(1,875		)
Assumed allocation of net income				29,906			153,268			3,738

Weighted average units outstanding				26,416			135,384
Net income per unit				$	1.13		$	1.13