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Cheniere Partners Reports Fourth Quarter and Full Year 2019 Results and Reconfirms Full Year 2020 Distribution Guidance

February 25, 2020 GMT

HOUSTON--(BUSINESS WIRE)--Feb 25, 2020--

Cheniere Energy Partners, L.P. (NYSE American: CQP):

Summary of Fourth Quarter and Full Year 2019 Results (in millions, except LNG data)

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

Revenues

$

1,908

 

 

$

1,897

 

 

$

6,838

 

 

$

6,426

 

Net income

$

448

 

 

$

351

 

 

$

1,175

 

 

$

1,274

 

Adjusted EBITDA 1

$

766

 

 

$

692

 

 

$

2,507

 

 

$

2,517

 

LNG exported:

 

 

 

 

 

 

 

 

Number of cargoes

95

 

 

78

 

 

336

 

 

271

 

Volumes (TBtu)

336

 

 

278

 

 

1,192

 

 

969

 

LNG volumes loaded (TBtu)

335

 

 

277

 

 

1,190

 

 

968

 

 

 

 

 

Summary Full Year 2020 Distribution Guidance

 

 

 

 

2020

Distribution per Unit

$

2.55

 

-

$

2.65

 

Recent Highlights

Operational

  • As of February 21, 2020, over 900 cumulative LNG cargoes totaling over 60 million tonnes of LNG have been produced, loaded, and exported from the SPL Project (defined below).

Financial

  • We declared and paid distributions of $2.46 per unit to common unitholders for full year 2019, within the guidance range for the period.

Liquefaction Project Update

 

SPL Project

Liquefaction Train

Train 6

Project Status

Under Construction

Project Completion Percentage (1)

43.7% (2)

Expected Substantial Completion

1H 2023

Note: Project update excludes Trains in operation

1

Project completion percentage as of December 31, 2019

2

Engineering 91.5% complete, procurement 60.9% complete, and construction 9.7% complete

Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE American: CQP) reported net income of $448 million for the three months ended December 31, 2019 compared to $351 million for the comparable 2018 period. The increase in net income for the three months ended December 31, 2019 was primarily due to increased total margins 2, partially offset by increased operating costs and expenses as a result of an additional Train in operation and increased interest expense.

Cheniere Partners reported net income of $1.2 billion for the year ended December 31, 2019 compared to $1.3 billion for the comparable 2018 period. The decrease in net income for the year ended December 31, 2019 was primarily due to increased total operating costs and expenses primarily as a result of an additional Train in operation and certain maintenance and related activities at the SPL Project and increased interest expense, partially offset by increased total margins.

Total margins increased during the three and twelve months ended December 31, 2019 primarily due to increased volumes of LNG recognized in income primarily as a result of an additional Train in operation and increased net gains from changes in fair value of commodity derivatives, partially offset by decreased margins per MMBtu of LNG recognized in income. Margins per MMBtu of LNG recognized in income decreased during the three and twelve months ended December 31, 2019 as compared to the comparable 2018 periods due to decreased pricing of LNG recognized in income, partially offset by decreased pricing of natural gas feedstock related to our LNG sales.

Adjusted EBITDA 1 was $766 million and $2.5 billion, respectively, for the three and twelve months ended December 31, 2019, compared to $692 million and $2.5 billion for the comparable 2018 periods. The increase in Adjusted EBITDA during the three months ended December 31, 2019 as compared to the comparable 2018 period was primarily due to increased volumes of LNG recognized in income primarily as a result of an additional Train in operation, partially offset by decreased margins per MMBtu of LNG recognized in income and increased total operating costs and expenses as a result of an additional Train in operation.

Income from operations increased $152 million and $61 million, respectively, during the three and twelve months ended December 31, 2019 as compared to the comparable 2018 periods, primarily due to increased volumes of LNG recognized in income primarily as a result of an additional Train in operation and increased net gains from changes in fair value of commodity derivatives, partially offset by decreased margins per MMBtu of LNG recognized in income and increased total operating costs and expenses as a result of an additional Train in operation. During the twelve months ended December 31, 2019, total operating costs and expenses also increased due to certain maintenance and related activities at the SPL Project.

During the three months ended December 31, 2019, 95 LNG cargoes were exported from the SPL Project, none of which were commissioning cargoes. During the year ended December 31, 2019, 336 LNG cargoes were exported from the SPL Project, three of which were commissioning cargoes.

SPL Project

We are currently operating five natural gas liquefaction Trains and constructing one additional Train for a total production capacity of approximately 30 mtpa of LNG at the Sabine Pass LNG terminal (the “SPL Project”).

Distributions to Unitholders

We paid a cash distribution per common and subordinated unit of $0.63 to unitholders of record as of February 7, 2020 and the related general partner distribution on February 14, 2020.

Investor Conference Call and Webcast

Cheniere Energy, Inc. will host a conference call to discuss its financial and operating results for the fourth quarter and full year 2019 on Tuesday, February 25, 2020, at 10 a.m. Eastern time / 9 a.m. Central time. A listen-only webcast of the call and an accompanying slide presentation may be accessed through our website at www.cheniere.com. Following the call, an archived recording will be made available on our website. The call and accompanying slide presentation may include financial and operating results or other information regarding Cheniere Partners.

_______________

1

Non-GAAP financial measure. See “Reconciliation of Non-GAAP Measures” for further details.

2

Total margins as used herein refers to total revenues less cost of sales and cost of sales—affiliate.

About Cheniere Partners

Cheniere Partners is developing, constructing and operating natural gas liquefaction facilities at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana, on the Sabine-Neches Waterway less than four miles from the Gulf Coast. Cheniere Partners is currently operating five natural gas liquefaction Trains and is constructing one additional Train for a total production capacity of approximately 30 mtpa of LNG at the Sabine Pass terminal.

Cheniere Partners owns and operates regasification facilities at the Sabine Pass LNG terminal, which includes five LNG storage tanks with aggregate capacity of approximately 16.9 billion cubic feet (Bcf) equivalent, two marine berths that can each accommodate vessels with nominal capacity of up to 266,000 cubic meters, and vaporizers with regasification capacity of approximately 4.0 Bcf per day. Cheniere Partners also owns the Creole Trail Pipeline, a 94-mile pipeline that interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines.

For additional information, please refer to the Cheniere Partners website at www.cheniere.com and Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission.

Forward-Looking Statements

This press release contains certain statements that may include “forward-looking statements.” All statements, other than statements of historical or present facts or conditions, included herein are “forward-looking statements.” Included among “forward-looking statements” are, among other things, (i) statements regarding Cheniere Partners’ financial and operational guidance, business strategy, plans and objectives, including the development, 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 Partners’ LNG terminal and liquefaction business, (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 Partners 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 Partners’ 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 Partners’ 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 Partners does not assume a duty to update these forward-looking statements.

(Financial Tables Follow)

Cheniere Energy Partners, L.P.

Consolidated Statements of Income

(in millions, except per unit data) (1)

 

 

(Unaudited)

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

 

 

LNG revenues

$

1,533

 

 

$

1,408

 

 

$

5,211

 

 

$

4,827

 

LNG revenues—affiliate

295

 

 

413

 

 

1,312

 

 

1,299

 

Regasification revenues

67

 

 

65

 

 

266

 

 

261

 

Other revenues

13

 

 

11

 

 

49

 

 

39

 

Total revenues

1,908

 

 

1,897

 

 

6,838

 

 

6,426

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

 

 

 

 

 

Cost of sales (excluding depreciation and amortization expense shown separately below)

873

 

 

1,112

 

 

3,374

 

 

3,403

 

Cost of sales—affiliate

1

 

 

 

 

7

 

 

 

Operating and maintenance expense

160

 

 

103

 

 

632

 

 

409

 

Operating and maintenance expense—affiliate

38

 

 

30

 

 

138

 

 

117

 

Development expense

 

 

 

 

 

 

2

 

General and administrative expense

2

 

 

2

 

 

11

 

 

11

 

General and administrative expense—affiliate

20

 

 

20

 

 

102

 

 

73

 

Depreciation and amortization expense

137

 

 

106

 

 

527

 

 

424

 

Impairment expense and loss on disposal of assets

1

 

 

 

 

7

 

 

8

 

Total operating costs and expenses

1,232

 

 

1,373

 

 

4,798

 

 

4,447

 

 

 

 

 

 

 

 

 

Income from operations

676

 

 

524

 

 

2,040

 

 

1,979

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense, net of capitalized interest

(237

)

 

(181

)

 

(885

)

 

(733

)

Loss on modification or extinguishment of debt

 

 

 

 

(13

)

 

(12

)

Derivative gain, net

 

 

1

 

 

 

 

14

 

Other income

7

 

 

7

 

 

31

 

 

26

 

Other income—affiliate

2

 

 

 

 

2

 

 

 

Total other expense

(228

)

 

(173

)

 

(865

)

 

(705

)

 

 

 

 

 

 

 

 

Net income

$

448

 

 

$

351

 

 

$

1,175

 

 

$

1,274

 

 

 

 

 

 

 

 

 

Basic and diluted net income per common unit

$

0.87

 

 

$

0.69

 

 

$

2.25

 

 

$

2.51

 

 

 

 

 

 

 

 

 

Weighted average number of common units outstanding used for basic and diluted net income per common unit calculation

348.6

 

 

348.6

 

 

348.6

 

 

348.6

 

_______________

(1)

Please refer to the Cheniere Energy Partners, L.P. Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission.

Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

(in millions, except unit data) (1)

 

 

December 31,

 

2019

 

2018

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

1,781

 

 

$

 

Restricted cash

181

 

 

1,541

 

Accounts and other receivables

297

 

 

348

 

Accounts receivable—affiliate

105

 

 

114

 

Advances to affiliate

158

 

 

228

 

Inventory

116

 

 

99

 

Derivative assets

17

 

 

6

 

Other current assets

51

 

 

20

 

Other current assets—affiliate

1

 

 

 

Total current assets

2,707

 

 

2,356

 

 

 

 

 

Property, plant and equipment, net

16,368

 

 

15,390

 

Operating lease assets, net

94

 

 

 

Debt issuance costs, net

15

 

 

13

 

Non-current derivative assets

32

 

 

31

 

Other non-current assets, net

168

 

 

184

 

Total assets

$

19,384

 

 

$

17,974

 

 

 

 

 

LIABILITIES AND PARTNERS’ EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable

$

40

 

 

$

15

 

Accrued liabilities

709

 

 

821

 

Due to affiliates

46

 

 

49

 

Deferred revenue

155

 

 

116

 

Deferred revenue—affiliate

1

 

 

1

 

Current operating lease liabilities

6

 

 

 

Derivative liabilities

9

 

 

66

 

Total current liabilities

966

 

 

1,068

 

 

 

 

 

Long-term debt, net

17,579

 

 

16,066

 

Non-current operating lease liabilities

87

 

 

 

Non-current derivative liabilities

16

 

 

14

 

Other non-current liabilities

1

 

 

4

 

Other non-current liabilities—affiliate

20

 

 

22

 

 

 

 

 

Partners’ equity

 

 

 

Common unitholders’ interest (348.6 million units issued and outstanding at December 31, 2019 and 2018)

1,792

 

 

1,806

 

Subordinated unitholders’ interest (135.4 million units issued and outstanding at December 31, 2019 and 2018)

(996

)

 

(990

)

General partner’s interest (2% interest with 9.9 million units issued and outstanding at December 31, 2019 and 2018)

(81

)

 

(16

)

Total partners’ equity

715

 

 

800

 

Total liabilities and partners’ equity

$

19,384

 

 

$

17,974

 

_______________

(1)

 

Please refer to the Cheniere Energy Partners, L.P. Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission.

Reconciliation of Non-GAAP Measures

Regulation G Reconciliation

In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying news release contains a non-GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure that is used to facilitate comparisons of operating performance across periods. This non-GAAP measure should be viewed as a supplement to and not a substitute for our U.S. GAAP measures of performance and the financial results calculated in accordance with U.S. GAAP, and the reconciliation from these results should be carefully evaluated.

Adjusted EBITDA is calculated by taking net income before interest expense, net of capitalized interest, changes in the fair value and settlement of our interest rate derivatives, taxes, depreciation and amortization, and adjusting for the effects of certain non-cash items, other non-operating income or expense items and other items not otherwise predictive or indicative of ongoing operating performance, including the effects of modification or extinguishment of debt and changes in the fair value of our commodity derivatives. Adjusted EBITDA is not intended to represent cash flows from operations or net income as defined by U.S. GAAP and is not necessarily comparable to similarly titled measures reported by other companies.

We believe Adjusted EBITDA provides relevant and useful information to management, investors and other users of our financial information in evaluating the effectiveness of our operating performance in a manner that is consistent with management’s evaluation of business performance. Management believes Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization which vary substantially from company to company depending on capital structure, the method by which assets were acquired and depreciation policies. Further, the exclusion of certain non-cash items, other non-operating income or expense items and other items not otherwise predictive or indicative of ongoing operating performance enables comparability to prior period performance and trend analysis.

Adjusted EBITDA

The following table reconciles our Adjusted EBITDA to U.S. GAAP results for the three and twelve months ended December 31, 2019 and 2018 (in millions):

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

Net income

$

448

 

 

$

351

 

 

$

1,175

 

 

$

1,274

 

Interest expense, net of capitalized interest

237

 

 

181

 

 

885

 

 

733

 

Loss on modification or extinguishment of debt

 

 

 

 

13

 

 

12

 

Derivative gain, net

 

 

(1

)

 

 

 

(14

)

Other income

(7

)

 

(7

)

 

(31

)

 

(26

)

Other income—affiliate

(2

)

 

 

 

(2

)

 

 

Income from operations

$

676

 

 

$

524

 

 

$

2,040

 

 

$

1,979

 

Adjustments to reconcile income from operations to Adjusted EBITDA:

 

 

 

 

 

 

 

Depreciation and amortization expense

137

 

 

106

 

 

527

 

 

424

 

Loss (gain) from changes in fair value of commodity derivatives, net

(48

)

 

62

 

 

(67

)

 

99

 

Impairment expense and loss on disposal of assets

1

 

 

 

 

7

 

 

8

 

Legal settlement expense

 

 

 

 

 

 

7

 

Adjusted EBITDA

$

766

 

 

$

692

 

 

$

2,507

 

 

$

2,517

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20200225005284/en/

CONTACT: Cheniere Energy Partners, L.P.

Investors

Randy Bhatia, 713-375-5479

Megan Light, 713-375-5492

or

Media Relations

Eben Burnham-Snyder, 713-375-5764

Jenna Palfrey, 713-375-5491

KEYWORD: UNITED STATES NORTH AMERICA TEXAS

INDUSTRY KEYWORD: OIL/GAS ENERGY

SOURCE: Cheniere Energy Partners, L.P.

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PUB: 02/25/2020 08:00 AM/DISC: 02/25/2020 08:01 AM

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