Cheniere Energy, Inc. Reports First Quarter 2014 Results

           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  
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