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

6 Months Ended

Jun. 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 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, 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
June 30, 2019
(in millions)

	Parent Issuer		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	1,009	$	7	$	—	$	—		$	1,016
Restricted cash	—		—		596		—			596
Accounts and other receivables	—		3		240		—			243
Accounts receivable—affiliate	1		31		166		(32		)	166
Advances to affiliate	—		134		206		(115		)	225
Inventory	—		13		91		—			104
Derivative assets	—		—		17		—			17
Other current assets	—		13		54		—			67
Other current assets—affiliate	—		1		21		(21		)	1
Total current assets	1,010		202		1,391		(168		)	2,435

Property, plant and equipment, net	79		2,457		13,722		(26		)	16,232
Operating lease assets, net	—		87		21		(16		)	92
Debt issuance costs, net	11		—		9		—			20
Non-current derivative assets	—		—		37		—			37
Investments in subsidiaries	2,947		508		—		(3,455		)	—
Other non-current assets, net	—		25		132		—			157
Total assets	$	4,047	$	3,279	$	15,312	$	(3,665	)	$	18,973

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities
Accounts payable	$	—	$	7	$	67	$	—		$	74
Accrued liabilities	37		28		1,011		—			1,076
Due to affiliates	1		145		44		(146		)	44
Deferred revenue	—		21		101		—			122
Deferred revenue—affiliate	—		21		—		(21		)	—
Current operating lease liabilities	—		6		—		—			6
Derivative liabilities	—		—		8		—			8
Other current liabilities—affiliate	—		1		—		(1		)	—
Total current liabilities	38		229		1,231		(168		)	1,330

Long-term debt, net	3,208		—		13,512		—			16,720
Non-current operating lease liabilities	—		81		5		—			86
Non-current derivative liabilities	—		—		12		—			12
Other non-current liabilities	—		1		2		—			3
Other non-current liabilities—affiliate	—		21		16		(16		)	21

Partners’ equity	801		2,947		534		(3,481		)	801
Total liabilities and partners’ equity	$	4,047	$	3,279	$	15,312	$	(3,665	)	$	18,973



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 June 30, 2019
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated

Revenues
LNG revenues	$	—		$	—		$	1,171		$	—		$	1,171
LNG revenues—affiliate	—			—			455			—			455
Regasification revenues	—			67			—			—			67
Regasification revenues—affiliate	—			65			—			(65		)	—
Other revenues	—			12			—			—			12
Other revenues—affiliate	—			65			—			(65		)	—
Total revenues	—			209			1,626			(130		)	1,705

Operating costs and expenses
Cost of sales (excluding depreciation and amortization expense shown separately below)	—			—			880			—			880
Cost of sales—affiliate	—			—			9			(9		)	—
Operating and maintenance expense	—			24			138			—			162
Operating and maintenance expense—affiliate	—			38			115			(116		)	37
General and administrative expense	1			—			2			—			3
General and administrative expense—affiliate	3			8			21			(5		)	27
Depreciation and amortization expense	—			20			118			—			138
Impairment expense and loss on disposal of assets	—			—			3			—			3
Total operating costs and expenses	4			90			1,286			(130		)	1,250

Income (loss) from operations	(4		)	119			340			—			455

Other income (expense)
Interest expense, net of capitalized interest	(37		)	(2		)	(191		)	—			(230		)
Equity earnings of subsidiaries	268			150			—			(418		)	—
Other income	5			1			1			—			7
Total other income (expense)	236			149			(190		)	(418		)	(223		)

Net income	$	232		$	268		$	150		$	(418	)	$	232



Condensed Consolidating Statement of Income
Three Months Ended June 30, 2018
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated

Revenues
LNG revenues	$	—		$	—		$	1,155		$	—		$	1,155
LNG revenues—affiliate	—			—			178			—			178
Regasification revenues	—			65			—			—			65
Regasification revenues—affiliate	—			66			—			(66		)	—
Other revenues	—			9			—			—			9
Other revenues—affiliate	—			80			—			(80		)	—
Total revenues	—			220			1,333			(146		)	1,407

Operating costs and expenses
Cost of sales (excluding depreciation and amortization expense shown separately below)	—			2			695			1			698
Cost of sales—affiliate	—			—			7			(7		)	—
Operating and maintenance expense	—			14			84			—			98
Operating and maintenance expense—affiliate	—			42			107			(119		)	30
Development expense	—			—			1			—			1
General and administrative expense	1			—			1			—			2
General and administrative expense—affiliate	3			7			12			(5		)	17
Depreciation and amortization expense	—			19			87			—			106
Total operating costs and expenses	4			84			994			(130		)	952

Income (loss) from operations	(4		)	136			339			(16		)	455

Other income (expense)
Interest expense, net of capitalized interest	(34		)	(2		)	(148		)	—			(184		)
Derivative gain, net	3			—			—			—			3
Equity earnings of subsidiaries	313			193			—			(506		)	—
Other income	3			2			2			—			7
Total other income (expense)	285			193			(146		)	(506		)	(174		)

Net income	$	281		$	329		$	193		$	(522	)	$	281



Condensed Consolidating Statement of Income
Six Months Ended June 30, 2019
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated

Revenues
LNG revenues	$	—		$	—		$	2,538		$	—		$	2,538
LNG revenues—affiliate	—			—			760			—			760
Regasification revenues	—			133			—			—			133
Regasification revenues—affiliate	—			131			—			(131		)	—
Other revenues	—			23			—			—			23
Other revenues—affiliate	—			124			—			(124		)	—
Total revenues	—			411			3,298			(255		)	3,454

Operating costs and expenses
Cost of sales (excluding depreciation and amortization expense shown separately below)	—			—			1,759			—			1,759
Cost of sales—affiliate	—			—			18			(18		)	—
Operating and maintenance expense	—			52			248			—			300
Operating and maintenance expense—affiliate	—			71			222			(227		)	66
General and administrative expense	2			1			3			—			6
General and administrative expense—affiliate	6			14			36			(8		)	48
Depreciation and amortization expense	1			37			214			—			252
Impairment expense and loss on disposal of assets	—			—			5			—			5
Total operating costs and expenses	9			175			2,505			(253		)	2,436

Income (loss) from operations	(9		)	236			793			(2		)	1,018

Other income (expense)
Interest expense, net of capitalized interest	(73		)	(3		)	(341		)	—			(417		)
Equity earnings of subsidiaries	690			458			—			(1,148		)	—
Other income	9			1			6			—			16
Total other income (expense)	626			456			(335		)	(1,148		)	(401		)

Net income	$	617		$	692		$	458		$	(1,150	)	$	617



Condensed Consolidating Statement of Income
Six Months Ended June 30, 2018
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated

Revenues
LNG revenues	$	—		$	—		$	2,170		$	—		$	2,170
LNG revenues—affiliate	—			—			681			—			681
Regasification revenues	—			130			—			—			130
Regasification revenues—affiliate	—			130			—			(130		)	—
Other revenues	—			19			—			—			19
Other revenues—affiliate	—			135			—			(135		)	—
Total revenues	—			414			2,851			(265		)	3,000

Operating costs and expenses
Cost of sales (excluding depreciation and amortization expense shown separately below)	—			2			1,533			—			1,535
Cost of sales—affiliate	—			—			15			(15		)	—
Operating and maintenance expense	—			31			162			—			193
Operating and maintenance expense—affiliate	—			74			210			(228		)	56
Development expense	—			—			1			—			1
General and administrative expense	2			1			3			—			6
General and administrative expense—affiliate	6			11			24			(6		)	35
Depreciation and amortization expense	1			37			173			—			211
Total operating costs and expenses	9			156			2,121			(249		)	2,037

Income (loss) from operations	(9		)	258			730			(16		)	963

Other income (expense)
Interest expense, net of capitalized interest	(68		)	(2		)	(299		)	—			(369		)
Derivative gain, net	11			—			—			—			11
Equity earnings of subsidiaries	676			435			—			(1,111		)	—
Other income	6			1			4			—			11
Total other income (expense)	625			434			(295		)	(1,111		)	(347		)

Net income	$	616		$	692		$	435		$	(1,127	)	$	616



Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 2019
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash flows provided by operating activities	$	621		$	723		$	450		$	(1,154	)	$	640

Cash flows from investing activities
Property, plant and equipment, net	—			(21		)	(567		)	3			(585		)
Investments in subsidiaries	(908		)	(806		)	—			1,714			—
Return of capital	503			390			—			(893		)	—
Other	—			—			(1		)	—			(1		)
Net cash used in investing activities	(405		)	(437		)	(568		)	824			(586		)

Cash flows from financing activities
Proceeds from issuances of debt	649			—			—			—			649
Debt issuance and deferred financing costs	(19		)	—			—						(19		)
Distributions to parent	—			(1,196		)	(848		)	2,044			—
Contributions from parent	—			908			806			(1,714		)	—
Distributions to owners	(616		)	—			—			—			(616		)
Other	—			3			—			—			3
Net cash provided by (used in) financing activities	14			(285		)	(42		)	330			17

Net increase (decrease) in cash, cash equivalents and restricted cash	230			1			(160		)	—			71
Cash, cash equivalents and restricted cash—beginning of period	779			6			756			—			1,541
Cash, cash equivalents and restricted cash—end of period	$	1,009		$	7		$	596		$	—		$	1,612

Balances per Condensed Consolidating Balance Sheet:



	June 30, 2019
	Parent Issuer		Guarantors		Non-Guarantors		Eliminations		Consolidated
Cash and cash equivalents	$	1,009	$	7	$	—	$	—	$	1,016
Restricted cash	—		—		596		—		596
Total cash, cash equivalents and restricted cash	$	1,009	$	7	$	596	$	—	$	1,612



Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 2018
(in millions)

	Parent Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(7	)	$	266		$	604		$	(58	)	$	805

Cash flows from investing activities
Property, plant and equipment, net	—			(18		)	(327		)	—			(345		)
Investments in subsidiaries	(112		)	(25		)	—			137			—
Return of capital	—			—			—			—			—
Distributions received from affiliates, net	277			—			—			(277		)	—
Net cash provided by (used in) investing activities	165			(43		)	(327		)	(140		)	(345		)

Cash flows from financing activities
Debt issuance and deferred financing costs	(1		)	—			—			—			(1		)
Distributions to parent	—			(335		)	—			335			—
Contributions from parent	—			112			25			(137		)	—
Distributions to owners	(527		)	—			—			—			(527		)
Net cash provided by (used in) financing activities	(528		)	(223		)	25			198			(528		)

Net increase (decrease) in cash, cash equivalents and restricted cash	(370		)	—			302			—			(68		)
Cash, cash equivalents and restricted cash—beginning of period	1,033			12			544			—			1,589
Cash, cash equivalents and restricted cash—end of period	$	663		$	12		$	846		$	—		$	1,521