Cheniere Energy, Inc. Reports First Quarter 2014 Results PR Newswire HOUSTON, May 1, 2014 HOUSTON, May 1,2014 /PRNewswire/ --Cheniere Energy, Inc. ("Cheniere") (NYSE MKT: LNG) reported a net loss attributable to common stockholders of $97.8 million, or $0.44 per share (basic and diluted), for the three months ended March31, 2014, compared to a net loss attributable to common stockholders of $117.1 million, or $0.54 per share (basic and diluted), for the comparable 2013 period. Results include significant items for the three months ended March 31, 2014 of $46.8 million, or $0.21 per share (basic and diluted), compared to $34.6 million, or $0.16 per share (basic and diluted), for the comparable 2013 period. The significant items related to liquefied natural gas ("LNG") terminal development expenses and derivative losses. LNG terminal development expenses were primarily for the liquefaction facilities being developed by us near Corpus Christi, Texas (the "Corpus Christi Liquefaction Project"), and 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"). Derivative 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 Sabine Pass Liquefaction's four credit facilities. Results are reported on a consolidated basis and include our ownership interest in Cheniere Partners, which is based on our 100% ownership of the general partner and 84.5% ownership interest in Cheniere Holdings, which owns 55.9% of Cheniere Partners. Overview of Recent Significant Events oIn April 2014, our wholly owned subsidiary, Corpus Christi Liquefaction, LLC ("Corpus Christi Liquefaction") entered into two Sale and Purchase Agreements ("SPAs") with Endesa S.A. ("Endesa") under which Endesa has agreed to purchase a total of 117.3 million MMBtu of LNG per year (approximately 2.25 million tonnes per annum ("mtpa")) upon the commencement of operations of Train 1 of the Corpus Christi Liquefaction Project. oIn April 2014, Sabine Pass Liquefaction entered into a $325.0 million senior letter of credit and reimbursement agreement (the "Sabine Pass Liquefaction Senior LC Agreement") that it intends to use for the issuance of letters of credit on behalf of Sabine Pass Liquefaction for certain working capital requirements related to the Sabine Pass Liquefaction Project. Liquefaction Projects Update Sabine Pass Liquefaction Project Through Cheniere Partners we are developing up to six natural gas liquefaction trains ("Trains"), each with an expected nominal production capacity of approximately 4.5 mtpa at the Sabine Pass LNG terminal adjacent to the existing regasification facilities. Cheniere Partners has 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 March 31, 2014, the overall project for Trains 1 and 2 was approximately 63% complete, which is ahead of the contractual schedule. Based on our current construction schedule, we anticipate that Train 1 will produce LNG as early as late 2015. oConstruction on Trains 3 and 4 began in May 2013, and as of March 31, 2014, the overall project for Trains 3 and 4 was approximately 27% complete, which is ahead of the contractual schedule. To date, soil stabilization has been completed and pile driving, the 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 development of Trains 5 and 6. To date we have completed two LNG SPAs for approximately 3.75 mtpa in aggregate of LNG volumes that commence with the date of first commercial delivery for Train 5. In September 2013, we filed a complete application with the FERC. We have received authorizations from the DOE to export 503 Bcf of LNG volumes from Trains 5 and 6 to free trade agreement ("FTA") countries. Non-FTA authorization is pending. Corpus Christi Liquefaction Project We continue to make progress on the commercialization and development of the Corpus Christi Liquefaction Project, which is being designed for up to three Trains with expected aggregate nominal production capacity of approximately 13.5 mtpa of LNG. oIn February 2014, we received a scheduling notice from the FERC under which the FERC has scheduled the issuance of the FERC staff's final Environmental Impact Statement ("FEIS") for no later than October 8, 2014. In addition, this notice from the FERC alerted all other agencies issuing federal authorizations of the requirement to complete all necessary reviews and to reach a final decision on the request for a federal authorization within 90 days following issuance of the FEIS or no later than January 6, 2015. oIn April 2014, Corpus Christi Liquefaction entered into two SPAs with Endesa under which Endesa has agreed to purchase a total of approximately 2.25 mtpa of LNG upon the commencement of operations of Train 1 of the Corpus Christi Liquefaction Project. To date we have entered into SPAs aggregating 3.05 mtpa. oWe 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. Authorization to export LNG to non-FTA countries is pending. 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 1 & 2 3 & 4 5 & 6 Received FTA Received FTA; DOE export authorization Received Received Pending Pending Non-FTA Non-FTA Definitive commercial Completed Completed T5: Completed 2014 agreements 7.7 mtpa 8.3 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 - PT Pertamina (Persero) 0.8 mtpa - Endesa 2.25 mtpa EPC contract Completed Completed 2015 Completed Financing 2015 2014 - Equity Completed Completed - Debt commitments Received Received FERC authorization - FERC Order Received Received 2015 2014/2015 - Certificate to Received Received commence construction Issue Notice to Proceed Completed Completed 2015 2015 Commence operations 2015/2016 2016/2017 2018/2019 2018/2019 First Quarter 2014 Results For the quarter ended March 31, 2014, Cheniere reported loss from operations of $47.6 million, as compared to $67.5 million during the three months ended March 31, 2013. The $19.9 million decrease in net operating loss was primarily a result of decreased general and administrative expenses and decreased LNG terminal development expenses. General and administrative expense decreased $12.0 million in the three months ended March 31, 2014 as compared to the three months ended March 31, 2013 primarily as a result of the timing of awards under bonus plans relating to the Sabine Pass Liquefaction Project. LNG terminal development expense decreased $5.0 million in the three months ended March 31, 2014 as compared to the three months ended March 31, 2013, and were primarily related to the Corpus Christi Liquefaction Project being developed by us. Non-cash general and administrative expenses were $34.6 million and $59.2 million for the periods ending March 31, 2014 and March 31, 2013, respectively. 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 is expected to have a nominal 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 for up to three Trains, with expected aggregate nominal production capacity of approximately 13.5 mtpa of LNG, 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, obtaining financing, and Cheniere making a final investment decision. Cheniere believes that 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 quarter ended March 31, 2014, 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 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) (unaudited) Three Months Ended March 31, 2014 2013 Revenues LNG terminal revenues $ 66,419 $ 66,061 Marketing and trading revenues (losses) 657 (565) Other 474 410 Total revenues 67,550 65,906 Operating costs and expenses General and administrative expense 73,808 85,798 Depreciation, depletion and amortization 15,475 15,113 LNG terminal operating expense 13,687 15,259 LNG terminal development expense 12,112 17,088 Other 80 102 Total operating costs and expenses 115,162 133,360 Loss from operations (47,612) (67,454) Other income (expense) Interest expense, net (40,270) (40,262) Derivative loss, net (34,681) (17,468) Other income 310 475 Total other expense (74,641) (57,255) Loss before income taxes and non-controlling (122,253) (124,709) interest Income tax benefit (provision) (92) 80 Net loss (122,345) (124,629) Less: net loss attributable to non-controlling (24,535) (7,524) interest Net loss attributable to common stockholders $ (97,810) $ (117,105) Net loss per share attributable to common $ (0.44) $ (0.54) stockholders—basic and diluted Weighted average number of common shares 223,207 215,634 outstanding—basic and diluted March 31, December 31, 2014 2013 ASSETS (unaudited) Current assets Cash and cash equivalents $ 914,603 $ 960,842 Restricted cash and cash equivalents 520,119 598,064 Accounts and interest receivable 3,886 4,486 LNG inventory 4,106 10,563 Prepaid expenses and other 25,915 17,225 Total current assets 1,468,629 1,591,180 Non-current restricted cash and cash equivalents 330,072 1,031,399 Property, plant and equipment, net 7,132,041 6,454,399 Debt issuance costs, net 302,439 313,944 Non-current derivative assets 71,170 98,123 Goodwill 76,819 76,819 Intangible LNG assets 3,366 3,366 Other 140,080 104,007 Total assets $ 9,524,616 $ 9,673,237 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 6,269 $ 10,367 Accrued liabilities 142,275 186,552 Deferred revenue 26,764 26,593 Other 19,561 13,499 Total current liabilities 194,869 237,011 Long-term debt, net 6,578,350 6,576,273 Long-term deferred revenue 16,500 17,500 Other non-current liabilities 3,281 2,396 Commitments and contingencies Stockholders' equity Preferred stock, $0.0001 par value, 5.0 million — — shares authorized, none issued Common stock, $0.003 par value Authorized: 480.0 million shares at both March 31, 2014 and December 31, 2013 Issued and outstanding: 237.7 million shares and 238.1 million shares at March 714 716 31, 2014 and December 31, 2013, respectively Treasury stock: 9.2 million shares and 9.0 million shares at March 31, 2014 and (187,568) (179,826) December 31, 2013, respectively, at cost Additional paid-in-capital 2,501,133 2,459,699 Accumulated deficit (2,198,717) (2,100,907) Total stockholders' equity 115,562 179,682 Non-controlling interest 2,616,054 2,660,375 Total equity 2,731,616 2,840,057 Total liabilities and equity $ 9,524,616 $ 9,673,237 As of March31, 2014, we had cash and cash equivalents of $914.6 million available to Cheniere. In addition, we had current and non-current restricted cash and cash equivalents of $850.2 million (which included current and non-current restricted cash and cash equivalents available to Cheniere Partners, Sabine Pass Liquefaction and Sabine Pass LNG, L.P.) designated for the following purposes: $294.4 million for the Sabine Pass Liquefaction Project, $76.7 million for Cheniere Creole Trail Pipeline, L.P., $129.1 million for interest payments related to the Sabine Pass LNG senior secured Notes, and $350.0 million for other restricted purposes. Logo - http://photos.prnewswire.com/prnh/20090611/AQ31545LOGO SOURCE Cheniere Energy, Inc. Website: http://www.cheniere.com Contact: CONTACTS: Investors: Randy Bhatia: 713-375-5479; Christina Burke: 713-375-5104; Media: Diane Haggard: 713-375-5259
Cheniere Energy, Inc. Reports First Quarter 2014 Results
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