Cheniere Energy Reports Third Quarter 2013 Results PR Newswire HOUSTON, Nov. 8, 2013 HOUSTON, Nov. 8,2013 /PRNewswire/ --Cheniere Energy, Inc. ("Cheniere") (NYSE MKT: LNG) reported a net loss attributable to common stockholders of $100.8 million, or $0.46 per share (basic and diluted), for the three months ended September30, 2013, compared to a net loss attributable to common stockholders of $109.0 million, or $0.52 per share (basic and diluted), for the comparable 2012 period. For the nine months ended September30, 2013, Cheniere reported a net loss attributable to common stockholders of $372.7 million, or $1.71 per share (basic and diluted), compared to a net loss attributable to common stockholders of $238.5 million, or $1.40 per share (basic and diluted), during the corresponding period of 2012. (Logo:http://photos.prnewswire.com/prnh/20090611/AQ31545LOGO) Significant items for the three months and nine months ended September 30, 2013 were $33.4 million, or $0.15 per share (basic and diluted), and $75.0 million, or $0.34 per share (basic and diluted), respectively, compared to $11.4 million, or $0.05 per share (basic and diluted), and $70.0 million, or $0.41 per share (basic and diluted), respectively, for the comparable 2012 periods. Significant items for the quarter related to liquefied natural gas ("LNG") terminal development expenses and derivative gains/losses, and for the nine months ended September 30, 2013, significant items also included loss on early extinguishment of debt. LNG terminal development expenses were primarily for the liquefaction facilities Cheniere Energy Partners, L.P. ("Cheniere Partners") is developing through Sabine Pass Liquefaction, LLC ("Sabine Pass Liquefaction") at the Sabine Pass LNG terminal adjacent to the existing regasification facilities (the "Sabine Pass Liquefaction Project") and the proposed liquefaction facilities being developed by us near Corpus Christi, Texas (the "Corpus Christi Liquefaction Project"). Derivative gains/losses were primarily the result of the change in fair value of Sabine Pass Liquefaction's interest rate derivatives to hedge the exposure to volatility in a portion of the floating-rate interest payments under the four credit facilities. Loss on early extinguishment of debt was related to Sabine Pass Liquefaction amending and replacing its $3.6 billion credit facility with four credit facilities aggregating $5.9 billion in May 2013. Results are reported on a consolidated basis and include our ownership interest in Cheniere Partners, which was 57.9% as of September 30, 2013. Liquefaction Projects Update Sabine Pass Liquefaction Project Cheniere Partners is developing up to six natural gas liquefaction trains ("Trains), each with a design production capacity of approximately 4.5 mtpa, at the Sabine Pass LNG terminal adjacent to the existing regasification facilities. We have received Federal Energy Regulatory Commission ("FERC") and Department of Energy ("DOE") approvals for Trains 1 through 4, and we have filed all required regulatory applications with the FERC and DOE to develop Trains 5 and 6. The Trains are in various stages of development. oConstruction on Trains 1 and 2 began in August 2012, and as of September 30, 2013, the overall project for Trains 1 and 2 was approximately 45% complete, which is ahead of the contracted schedule. Based on our current construction, we anticipate that Train 1 will produce LNG by late 2015. oConstruction on Trains 3 and 4 began in May 2013, and as of September 30, 2013, the overall project for Trains 3 and 4 was approximately 10% complete. To date, soil stabilization has been completed and pile driving, our next critical path item, is underway. We expect Trains 3 and 4 to become operational in late 2016 and 2017, respectively. oWe continue to make progress with the commercialization and development of Trains 5 and 6. To date, we have completed two LNG sale and purchase agreements ("SPAs") for approximately 3.75 mtpa, in aggregate, of LNG volumes that commence with the start of Train 5 operations. Annual fixed fee revenues associated with these SPAs are approximately $0.6 billion. Bechtel has begun the front-end engineering design ("FEED") on Trains 5 and 6, and we have commenced the regulatory approval process. In September 2013, we filed the complete application with the FERC. In February 2013 and in April 2013, we filed Free Trade Agreement ("FTA") and non-FTA export applications for LNG volumes under the SPAs with Total Gas & Power North America, Inc. ("Total") and Centrica plc ("Centrica"), respectively. In September 2013, we filed FTA and non-FTA export applications for LNG volumes for the un-contracted volumes from Train 5 and for all volumes from Train 6. To date, we have received authorization from the DOE to export LNG volumes to FTA countries under the Total SPA and Centrica SPA. FTA authorization for the remaining volumes from Train 5 and all volumes from Train 6 as well as non-FTA authorizations for both Trains 5 and 6 are pending. Corpus Christi Liquefaction Project We are also continuing to make progress on the commercialization and development of the Corpus Christi Liquefaction Project, which is being designed for up to three Trains with aggregate design production capacity of 13.5 mtpa of LNG. To date, the Corpus Christi Liquefaction Project is one of the top three projects under review at the FERC and is fifth on the DOE's Order of Precedence list, which lists the order in which the DOE will be processing non-FTA LNG export applications. In August 2012, we filed applications with the FERC for authorization to site, construct and operate the Corpus Christi Liquefaction Project and with the DOE requesting multi-contract authorization to export up to 767 Bcf per year of domestically produced LNG from the Corpus Christi Liquefaction Project to FTA and non-FTA countries. We have received authorization from the DOE to export up to 767 Bcf per year of domestically produced LNG to FTA countries from the Corpus Christi Liquefaction Project. In September 2013, we received the lump-sum turnkey contract price for the Corpus Christi Liquefaction Project from Bechtel, which has allowed us to commence commercialization of the Corpus Christi Liquefaction Project. We will contemplate making a final investment decision to commence construction of the Corpus Christi Liquefaction Project based upon, among other things, entering into acceptable commercial arrangements, receiving all regulatory approvals and obtaining financing. Timelines for Liquefaction Projects Target Date Sabine Pass Liquefaction Corpus Christi Liquefaction Trains Trains Trains Milestone Trains 1-3 1 & 2 3 & 4 5 & 6 T5: Received DOE export authorization Received Received FTA Received FTA; Pending Non-FTA Pending Non-FTA T5: Definitive commercial Completed Completed 8.3 Completed 2014 agreements 7.7 mtpa mtpa T6: 2014 - BG Gulf Coast LNG, LLC 4.2 mtpa 1.3 mtpa - Gas Natural Fenosa 3.5 mtpa - KOGAS 3.5 mtpa - GAIL (India) Ltd. 3.5 mtpa - Total Gas & Power N.A. 2.0 mtpa - Centrica plc 1.75 mtpa EPC contract Completed Completed 2015 2013/2014 Financing 2015 2014 - Equity Completed Completed - Debt commitments Received Received FERC authorization - FERC Order Received Received 2015 2014 - Certificate to Received Received commence construction Issue Notice to Proceed Completed Completed 2015 2014 Commence operations 2015/2016 2016/2017 2018/2019 2,018 Q3 2013 Results For the quarter and nine months ended September 30, 2013, Cheniere reported loss from operations of $45.9 million and $249.6 million, respectively, compared to $54.5 million and $59.9 million for the respective comparable periods in 2012. Net operating losses were primarily affected by general and administrative expenses due to non-cash compensation expenses from the granting of awards under the long-term incentive plan related to Trains 1 through 4 of the Sabine Pass Liquefaction Project and by LNG terminal operating expenses, which resulted primarily from costs incurred to purchase LNG to maintain the cryogenic readiness of the regasification facilities at the Sabine Pass LNG terminal. Non-cash compensation expenses were $24.7 million and $187.1 million for the three and nine months ended September 30, 2013, respectively, compared to $50.2 million and $54.1 million for the respective comparable 2012 periods. Changes in interest expense for the three and nine months ended September 30, 2013, respectively, compared to the comparable 2012 periods were primarily as a result of reduction of our indebtedness outstanding in 2012 and capitalization of interest on Sabine Pass Liquefaction's debt. Cheniere Energy, Inc. is a Houston-based energy company primarily engaged in LNG-related businesses, and owns and operates the Sabine Pass LNG terminal and Creole Trail Pipeline in Louisiana. Cheniere is pursuing related business opportunities both upstream and downstream of the Sabine Pass LNG terminal. Through its subsidiary, Cheniere Energy Partners, L.P., Cheniere is developing a liquefaction project at the Sabine Pass LNG terminal adjacent to the existing regasification facilities for up to six Trains, each of which will have a design production capacity of approximately 4.5 mtpa. Construction has begun on Trains 1 through 4 at the Sabine Pass Liquefaction Project. Cheniere has also initiated a project to develop liquefaction facilities near Corpus Christi, Texas. The Corpus Christi Liquefaction Project is being designed and permitted for up to three Trains, with aggregate design production capacity of up to 13.5 mtpa of LNG and which would include three LNG storage tanks with capacity of 10.1 Bcfe and two LNG carrier docks. Commencement of construction for the Corpus Christi Liquefaction Project is subject, but not limited, to obtaining regulatory approvals, entering into long-term customer contracts sufficient to underpin financing of the project, entering into an engineering, procurement and construction contract, obtaining financing, and Cheniere making a final investment decision. We believe LNG exports from the Corpus Christi Liquefaction Project could commence as early as 2018. For additional information, please refer to the Cheniere Energy, Inc. website at www.cheniere.com and Quarterly Report on Form 10-Q for the period ended September 30, 2013, filed with the Securities and Exchange Commission. This press release contains certain statements that may include "forward-looking statements" within the meanings of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Included among "forward-looking statements" are, among other things, (i) statements regarding Cheniere's business strategy, plans and objectives, including the construction and operation of liquefaction facilities, (ii) statements regarding our expectations regarding regulatory authorizations and approvals, (iii) statements expressing beliefs and expectations regarding the development of Cheniere's LNG terminal and pipeline businesses, including liquefaction facilities, (iv) statements regarding the business operations and prospects of third parties, (v) statements regarding potential financing arrangements and (vi) statements regarding future discussions and entry into contracts. Although Cheniere believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere's periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere does not assume a duty to update these forward-looking statements. (Financial Table Follows) Cheniere Energy, Inc. Selected Financial Information (in thousands, except per share data) ^(1) Three Months Ended Nine Months Ended September 30, September 30, 2013 2012 2013 2012 Revenues LNG terminal revenues $ 66,735 $ 65,939 $ 199,222 $ 199,269 Marketing and trading 590 (292) 441 (1,641) revenues Other 385 351 1,130 1,171 Total revenues 67,710 65,998 200,793 198,799 Operating costs and expenses LNG terminal operating 30,098 14,056 76,425 36,606 expense LNG terminal 11,046 11,721 50,214 54,629 development expense Depreciation, depletion 15,246 15,233 45,533 47,001 and amortization General and 57,096 79,427 277,971 120,236 administrative expense Other 100 78 258 244 Total operating costs 113,586 120,515 450,401 258,716 and expenses Loss from operations (45,876) (54,517) (249,608) (59,917) Other income (expense) Interest expense, net (52,528) (45,504) (134,806) (159,719) Loss on early — — (80,510) (15,098) extinguishment of debt Derivative gain (loss), (22,335) 287 55,706 (288) net Other income (expense) 65 (12,081) 954 (11,500) Total other expense (74,798) (57,298) (158,656) (186,605) Loss before income taxes and (120,674) (111,815) (408,264) (246,522) non-controlling interest Income tax provision (1,809) (61) (2,751) (211) Net loss (122,483) (111,876) (411,015) (246,733) Non-controlling 21,659 2,875 38,323 8,277 interest Net loss attributable $ (100,824) $ (109,001) $ (372,692) $ (238,456) to common stockholders Net loss per share attributable to common $ (0.46) $ (0.52) $ (1.71) $ (1.40) stockholders - basic and diluted Weighted average number of common shares 220,734 208,712 217,940 170,414 outstanding - basic and diluted September 30, December 31, 2013 2012 Cash and cash equivalents $ 374,164 $ 201,711 Restricted cash and cash equivalents 577,945 520,263 Accounts and interest receivable 26,079 3,486 LNG inventory 14,401 7,045 Prepaid expenses and other 16,471 16,058 Non-current restricted cash and cash equivalents 828,858 272,924 Property, plant and equipment, net 5,705,567 3,282,305 Debt issuance costs, net 340,856 220,949 Non-current derivative assets 64,309 — Goodwill 76,819 76,819 Other 100,384 37,525 Total assets $ 8,125,853 $ 4,639,085 Current liabilities $ 213,237 $ 159,763 Long-term debt, net of discount 5,574,195 2,167,113 Deferred revenue 18,500 21,500 Non-current derivative liabilities — 26,424 Other liabilities 3,572 2,680 Non-controlling interest 2,027,136 1,751,604 Stockholders' equity 289,213 510,001 Total liabilities and equity $ 8,125,853 $ 4,639,085 Sabine Cheniere Other Consolidated Partners Cheniere Cheniere Pass LNG Cash and cash $ — $ — $ 374,164 $ 374,164 equivalents Restricted cash and cash 139,591 ^(2) 1,238,740 ^(3) 28,472 1,406,803 equivalents Total $ 139,591 $ 1,238,740 $ 402,636 $ 1,780,967 As of September30, 2013, we had unrestricted cash and cash equivalents of $374.2 million available to Cheniere. In addition, we had consolidated restricted cash and cash equivalents of $1,406.8 million (which included cash and cash equivalents available to Cheniere Partners, in which we own a 57.9% interest, and Sabine Pass LNG) designated for the following purposes: $798.6 million for the Sabine Pass Liquefaction Project, $75.0 million for the Creole Trail Pipeline and $329.4 million for Cheniere Partners' working capital; $164.8 million for interest payments related to the Sabine Pass LNG senior secured notes and CTPL credit facility; $10.5 million for Sabine Pass LNG's working capital; and $28.5 million for other restricted purposes. Please refer to the Cheniere Energy, Inc. Quarterly Report on Form 10-Q (1) for the period ended September 30, 2013, filed with the Securities and Exchange Commission. All cash and cash equivalents presented above for Sabine Pass LNG are (2) considered restricted to us, but $10.5 million is considered unrestricted for Sabine Pass LNG. All cash and cash equivalents presented above for Cheniere Partners are (3) considered restricted to us, but $339.9 million is considered unrestricted for Cheniere Partners, including the $10.5 million considered unrestricted for Sabine Pass LNG. SOURCE Cheniere Energy, Inc. Website: http://www.cheniere.com Contact: Investors: Christina Burke: 713-375-5104, Nancy Bui: 713-375-5280; or Media: Diane Haggard: 713-375-5259
Cheniere Energy Reports Third Quarter 2013 Results
Press spacebar to pause and continue. Press esc to stop.