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Delaware
|
001-16383
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95-4352386
|
(State or other jurisdiction of incorporation or organization)
|
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
|
|
|
700 Milam Street, Suite 1900
|
|
|
Houston, Texas
|
|
77002
|
(Address of principal executive offices)
|
|
(Zip code)
|
|
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Large accelerated filer
x
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Accelerated filer
¨
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|||||
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
|||||
(Do not check if a smaller reporting company)
|
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Bcf
|
|
billion cubic feet
|
Bcf/d
|
|
billion cubic feet per day
|
Bcf/yr
|
|
billion cubic feet per year
|
Bcfe
|
|
billion cubic feet equivalent
|
DOE
|
|
U.S. Department of Energy
|
EPC
|
|
engineering, procurement and construction
|
FERC
|
|
Federal Energy Regulatory Commission
|
FTA countries
|
|
countries with which the United States has a free trade agreement providing for national treatment for trade in natural gas
|
GAAP
|
|
generally accepted accounting principles in the United States
|
Henry Hub
|
|
the final settlement price (in USD per MMBtu) for the New York Mercantile Exchange’s Henry Hub natural gas futures contract for the month in which a relevant cargo’s delivery window is scheduled to begin
|
LIBOR
|
|
London Interbank Offered Rate
|
LNG
|
|
liquefied natural gas, a product of natural gas consisting primarily of methane (CH
4
) that is in liquid form at near atmospheric pressure
|
MMBtu
|
|
million British thermal units, an energy unit
|
mtpa
|
|
million tonnes per annum
|
non-FTA countries
|
|
countries with which the United States does not have a free trade agreement providing for national treatment for trade in natural gas and with which trade is permitted
|
SEC
|
|
Securities and Exchange Commission
|
SPA
|
|
LNG sale and purchase agreement
|
Train
|
|
an industrial facility comprised of a series of refrigerant compressor loops used to cool natural gas into LNG
|
TUA
|
|
terminal use agreement
|
PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
CONSOLIDATED FINANCIAL STATEMENTS
|
|
June 30,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
ASSETS
|
(unaudited)
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,049,478
|
|
|
$
|
1,201,112
|
|
Restricted cash
|
724,458
|
|
|
503,397
|
|
||
Accounts and other receivables
|
74,283
|
|
|
5,749
|
|
||
Inventory
|
66,322
|
|
|
18,125
|
|
||
Other current assets
|
75,941
|
|
|
54,203
|
|
||
Total current assets
|
1,990,482
|
|
|
1,782,586
|
|
||
|
|
|
|
||||
Non-current restricted cash
|
31,726
|
|
|
31,722
|
|
||
Property, plant and equipment, net
|
18,729,177
|
|
|
16,193,907
|
|
||
Debt issuance costs, net
|
336,474
|
|
|
378,677
|
|
||
Non-current derivative assets
|
20,715
|
|
|
30,887
|
|
||
Goodwill
|
76,819
|
|
|
76,819
|
|
||
Other non-current assets
|
251,458
|
|
|
314,455
|
|
||
Total assets
|
$
|
21,436,851
|
|
|
$
|
18,809,053
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
48,676
|
|
|
$
|
22,820
|
|
Accrued liabilities
|
589,604
|
|
|
427,199
|
|
||
Current debt, net
|
1,677,476
|
|
|
1,673,379
|
|
||
Deferred revenue
|
26,709
|
|
|
26,669
|
|
||
Derivative liabilities
|
72,002
|
|
|
35,201
|
|
||
Other current liabilities
|
54
|
|
|
—
|
|
||
Total current liabilities
|
2,414,521
|
|
|
2,185,268
|
|
||
|
|
|
|
||||
Long-term debt, net
|
17,789,074
|
|
|
14,920,427
|
|
||
Non-current deferred revenue
|
7,500
|
|
|
9,500
|
|
||
Non-current derivative liabilities
|
311,207
|
|
|
79,387
|
|
||
Other non-current liabilities
|
50,382
|
|
|
53,068
|
|
||
|
|
|
|
||||
Commitments and contingencies (see Note 15)
|
|
|
|
|
|
||
|
|
|
|
||||
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 June 30, 2016 and December 31, 2015
|
|
|
|
||||
Issued and outstanding: 235.7 million shares and 235.6 million shares at June 30, 2016 and December 31, 2015, respectively
|
707
|
|
|
708
|
|
||
Treasury stock: 11.8 million shares and 11.6 million shares at June 30, 2016 and December 31, 2015, respectively, at cost
|
(357,491
|
)
|
|
(353,927
|
)
|
||
Additional paid-in-capital
|
3,105,728
|
|
|
3,075,317
|
|
||
Accumulated deficit
|
(4,243,204
|
)
|
|
(3,623,948
|
)
|
||
Total stockholders’ deficit
|
(1,494,260
|
)
|
|
(901,850
|
)
|
||
Non-controlling interest
|
2,358,427
|
|
|
2,463,253
|
|
||
Total equity
|
864,167
|
|
|
1,561,403
|
|
||
Total liabilities and equity
|
$
|
21,436,851
|
|
|
$
|
18,809,053
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Regasification revenues
|
$
|
65,622
|
|
|
$
|
66,489
|
|
|
$
|
131,173
|
|
|
$
|
133,291
|
|
LNG revenues (losses)
|
110,735
|
|
|
(706
|
)
|
|
113,439
|
|
|
(44
|
)
|
||||
Other revenues
|
470
|
|
|
2,242
|
|
|
1,296
|
|
|
3,147
|
|
||||
Total revenues
|
176,827
|
|
|
68,025
|
|
|
245,908
|
|
|
136,394
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating costs and expenses
|
|
|
|
|
|
|
|
||||||||
Cost of sales (excluding depreciation and amortization expense shown separately below)
|
85,709
|
|
|
1,444
|
|
|
100,216
|
|
|
2,137
|
|
||||
Operating and maintenance expense
|
45,562
|
|
|
17,727
|
|
|
81,879
|
|
|
53,433
|
|
||||
Development expense
|
1,616
|
|
|
16,609
|
|
|
3,163
|
|
|
32,705
|
|
||||
Marketing expense
|
26,225
|
|
|
20,379
|
|
|
51,203
|
|
|
33,425
|
|
||||
General and administrative expense
|
61,409
|
|
|
87,477
|
|
|
109,333
|
|
|
132,448
|
|
||||
Depreciation and amortization expense
|
32,781
|
|
|
20,154
|
|
|
56,870
|
|
|
37,923
|
|
||||
Impairment expense (recovery)
|
(71
|
)
|
|
—
|
|
|
10,095
|
|
|
176
|
|
||||
Other
|
50
|
|
|
109
|
|
|
162
|
|
|
265
|
|
||||
Total operating costs and expenses
|
253,281
|
|
|
163,899
|
|
|
412,921
|
|
|
292,512
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from operations
|
(76,454
|
)
|
|
(95,874
|
)
|
|
(167,013
|
)
|
|
(156,118
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense, net of capitalized interest
|
(105,967
|
)
|
|
(85,486
|
)
|
|
(182,304
|
)
|
|
(145,098
|
)
|
||||
Loss on early extinguishment of debt
|
(55,315
|
)
|
|
(7,281
|
)
|
|
(56,772
|
)
|
|
(96,273
|
)
|
||||
Derivative gain (loss), net
|
(90,621
|
)
|
|
46,049
|
|
|
(271,555
|
)
|
|
(80,641
|
)
|
||||
Other income (expense)
|
(6,930
|
)
|
|
283
|
|
|
(6,001
|
)
|
|
655
|
|
||||
Total other expense
|
(258,833
|
)
|
|
(46,435
|
)
|
|
(516,632
|
)
|
|
(321,357
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss before income taxes and non-controlling interest
|
(335,287
|
)
|
|
(142,309
|
)
|
|
(683,645
|
)
|
|
(477,475
|
)
|
||||
Income tax benefit (provision)
|
343
|
|
|
507
|
|
|
(273
|
)
|
|
(171
|
)
|
||||
Net loss
|
(334,944
|
)
|
|
(141,802
|
)
|
|
(683,918
|
)
|
|
(477,646
|
)
|
||||
Less: net loss attributable to non-controlling interest
|
(36,526
|
)
|
|
(23,307
|
)
|
|
(64,662
|
)
|
|
(91,442
|
)
|
||||
Net loss attributable to common stockholders
|
$
|
(298,418
|
)
|
|
$
|
(118,495
|
)
|
|
$
|
(619,256
|
)
|
|
$
|
(386,204
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share attributable to common stockholders—basic and diluted
|
$
|
(1.31
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(2.71
|
)
|
|
$
|
(1.71
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding—basic and diluted
|
228,323
|
|
|
226,481
|
|
|
228,231
|
|
|
226,405
|
|
|
Total Stockholders’ Equity
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Non-controlling Interest
|
|
Total
Equity
|
||||||||||||||||||
|
Shares
|
|
Par Value Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2015
|
235,639
|
|
|
$
|
708
|
|
|
11,649
|
|
|
$
|
(353,927
|
)
|
|
$
|
3,075,317
|
|
|
$
|
(3,623,948
|
)
|
|
$
|
2,463,253
|
|
|
$
|
1,561,403
|
|
Issuances of restricted stock
|
273
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Forfeitures of restricted stock
|
(96
|
)
|
|
(1
|
)
|
|
3
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,568
|
|
|
—
|
|
|
—
|
|
|
29,568
|
|
||||||
Shares repurchased related to share-based compensation
|
(105
|
)
|
|
(1
|
)
|
|
105
|
|
|
(3,564
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(3,564
|
)
|
||||||
Excess tax benefit (shortfall) from share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||||
Loss attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64,662
|
)
|
|
(64,662
|
)
|
||||||
Equity portion of convertible notes, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
857
|
|
|
—
|
|
|
—
|
|
|
857
|
|
||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,164
|
)
|
|
(40,164
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(619,256
|
)
|
|
—
|
|
|
(619,256
|
)
|
||||||
Balance at June 30, 2016
|
235,711
|
|
|
$
|
707
|
|
|
11,757
|
|
|
$
|
(357,491
|
)
|
|
$
|
3,105,728
|
|
|
$
|
(4,243,204
|
)
|
|
$
|
2,358,427
|
|
|
$
|
864,167
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(683,918
|
)
|
|
$
|
(477,646
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Non-cash LNG inventory write-downs
|
—
|
|
|
17,366
|
|
||
Depreciation and amortization expense
|
56,870
|
|
|
37,923
|
|
||
Share-based compensation
|
51,724
|
|
|
66,378
|
|
||
Amortization of debt issuance costs and discount
|
26,906
|
|
|
24,900
|
|
||
Loss on early extinguishment of debt
|
56,772
|
|
|
96,273
|
|
||
Total losses on derivatives, net
|
295,917
|
|
|
80,198
|
|
||
Net cash used for settlement of derivative instruments
|
(16,798
|
)
|
|
(88,934
|
)
|
||
Impairment expense
|
10,095
|
|
|
176
|
|
||
Other
|
8,811
|
|
|
28,957
|
|
||
Changes in restricted cash for certain operating activities
|
151,676
|
|
|
(55,410
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts and other receivables
|
(67,760
|
)
|
|
(2,396
|
)
|
||
Inventory
|
(34,003
|
)
|
|
(28,919
|
)
|
||
Accounts payable and accrued liabilities
|
(14,226
|
)
|
|
42,101
|
|
||
Deferred revenue
|
(1,960
|
)
|
|
(1,985
|
)
|
||
Other, net
|
15,860
|
|
|
(33,937
|
)
|
||
Net cash used in operating activities
|
(144,034
|
)
|
|
(294,955
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Property, plant and equipment, net
|
(2,277,469
|
)
|
|
(4,294,814
|
)
|
||
Use of restricted cash for the acquisition of property, plant and equipment
|
2,279,835
|
|
|
4,183,620
|
|
||
Other
|
(21,623
|
)
|
|
(101,836
|
)
|
||
Net cash used in investing activities
|
(19,257
|
)
|
|
(213,030
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuances of debt
|
5,698,219
|
|
|
5,205,000
|
|
||
Repayments of debt
|
(2,892,965
|
)
|
|
—
|
|
||
Debt issuance and deferred financing costs
|
(97,215
|
)
|
|
(411,149
|
)
|
||
Investment in restricted cash
|
(2,652,576
|
)
|
|
(4,518,880
|
)
|
||
Distributions and dividends to non-controlling interest
|
(40,164
|
)
|
|
(40,121
|
)
|
||
Proceeds from exercise of stock options
|
—
|
|
|
1,914
|
|
||
Payments related to tax withholdings for share-based compensation
|
(3,564
|
)
|
|
(6,174
|
)
|
||
Other
|
(78
|
)
|
|
19
|
|
||
Net cash provided by financing activities
|
11,657
|
|
|
230,609
|
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(151,634
|
)
|
|
(277,376
|
)
|
||
Cash and cash equivalents—beginning of period
|
1,201,112
|
|
|
1,747,583
|
|
||
Cash and cash equivalents—end of period
|
$
|
1,049,478
|
|
|
$
|
1,470,207
|
|
•
|
Cost of sales includes costs incurred directly for the production and delivery of LNG from the
SPL Project
such as natural gas feedstock, variable transportation and storage costs, derivative gains and losses associated with economic hedges to secure natural gas feedstock for the
SPL Project
, vessel chartering costs and other costs related to converting natural gas into LNG, all to the extent not utilized for the commissioning process. These costs were reclassified from operating and maintenance expense. Also included in cost of sales are purchase and delivery costs of our LNG and natural gas marketing business incurred by Cheniere Marketing.
|
•
|
Operating and maintenance expense now primarily includes costs associated with operating and maintaining the
SPL Project
such as third-party service and maintenance contract costs, payroll and benefit costs of operations personnel, natural gas transportation and storage capacity demand charges, derivative gains and losses related to the sale and purchase of LNG associated with the regasification terminal, insurance and regulatory costs.
|
•
|
Marketing expense includes costs directly associated with our LNG and natural gas marketing activities by Cheniere Marketing such as payroll and benefit costs of LNG marketing and origination personnel, professional services and other support costs to contract LNG customers throughout the global marketplace for the
SPL Project
and our second natural gas liquefaction and export facility at the Corpus Christi LNG terminal
(the “CCL Project”)
and to place volumes in the market for our portfolio. These costs were reclassified from general and administrative expense.
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
Current restricted cash
|
|
|
|
|
||||
SPLNG debt service and interest payment
|
|
$
|
77,415
|
|
|
$
|
77,415
|
|
SPL Project
|
|
263,114
|
|
|
189,260
|
|
||
CTPL construction and interest payment
|
|
—
|
|
|
7,882
|
|
||
CQP and cash held by guarantor subsidiaries
|
|
109,977
|
|
|
—
|
|
||
CCL Project
|
|
223,117
|
|
|
46,770
|
|
||
Cash held by our subsidiaries restricted to Cheniere
|
|
12,821
|
|
|
147,138
|
|
||
Other
|
|
38,014
|
|
|
34,932
|
|
||
Total current restricted cash
|
|
$
|
724,458
|
|
|
$
|
503,397
|
|
|
|
|
|
|
||||
Non-current restricted cash
|
|
|
|
|
||||
SPLNG debt service
|
|
$
|
13,650
|
|
|
$
|
13,650
|
|
Other
|
|
18,076
|
|
|
18,072
|
|
||
Total non-current restricted cash
|
|
$
|
31,726
|
|
|
$
|
31,722
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
SPL trade receivable
|
|
$
|
67,266
|
|
|
$
|
—
|
|
Interest receivable
|
|
259
|
|
|
95
|
|
||
Other accounts receivable
|
|
6,758
|
|
|
5,654
|
|
||
Total accounts and other receivables
|
|
$
|
74,283
|
|
|
$
|
5,749
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
Natural gas
|
|
$
|
5,338
|
|
|
$
|
5,724
|
|
LNG
|
|
35,526
|
|
|
5,148
|
|
||
Materials and other
|
|
25,458
|
|
|
7,253
|
|
||
Total inventory
|
|
$
|
66,322
|
|
|
$
|
18,125
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
LNG terminal costs
|
|
|
|
|
||||
LNG terminal
|
|
$
|
5,459,151
|
|
|
$
|
2,487,759
|
|
LNG terminal construction-in-process
|
|
13,487,338
|
|
|
13,875,204
|
|
||
LNG site and related costs, net
|
|
38,753
|
|
|
33,512
|
|
||
Accumulated depreciation
|
|
(456,716
|
)
|
|
(413,545
|
)
|
||
Total LNG terminal costs, net
|
|
18,528,526
|
|
|
15,982,930
|
|
||
Fixed assets and other
|
|
|
|
|
|
|
||
Computer and office equipment
|
|
12,491
|
|
|
12,153
|
|
||
Furniture and fixtures
|
|
17,393
|
|
|
17,101
|
|
||
Computer software
|
|
76,471
|
|
|
69,340
|
|
||
Leasehold improvements
|
|
44,064
|
|
|
40,136
|
|
||
Land
|
|
60,582
|
|
|
60,612
|
|
||
Other
|
|
37,476
|
|
|
49,376
|
|
||
Accumulated depreciation
|
|
(47,826
|
)
|
|
(37,741
|
)
|
||
Total fixed assets and other, net
|
|
200,651
|
|
|
210,977
|
|
||
Property, plant and equipment, net
|
|
$
|
18,729,177
|
|
|
$
|
16,193,907
|
|
•
|
interest rate swaps to hedge the exposure to volatility in a portion of the floating-rate interest payments under certain of our credit facilities
(“Interest Rate Derivatives”)
;
|
•
|
commodity derivatives to hedge the exposure to price risk attributable to future: (1) sales of our LNG inventory and (2) purchases of natural gas to operate the Sabine Pass LNG terminal
(“Natural Gas Derivatives”)
;
|
•
|
commodity derivatives consisting of natural gas purchase agreements for the commissioning and operation of the
SPL Project
(“Physical Liquefaction Supply Derivatives”)
and associated economic hedges
(“Financial Liquefaction Supply Derivatives”, and collectively with the Physical Liquefaction Supply Derivatives, the “Liquefaction Supply Derivatives”)
;
|
•
|
financial derivatives to hedge the exposure to the commodity markets in which we have contractual arrangements to purchase or sell physical LNG
(“LNG Trading Derivatives”)
; and
|
•
|
foreign currency exchange (“FX”) contracts to hedge exposure to currency risk associated with operations in countries outside of the United States
(“FX Derivatives”)
.
|
|
Fair Value Measurements as of
|
||||||||||||||||||||||||||||||
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
Quoted Prices in Active Markets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
|
|
Quoted Prices in Active Markets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total
|
||||||||||||||||
SPL Interest Rate Derivatives liability
|
$
|
—
|
|
|
$
|
(20,666
|
)
|
|
$
|
—
|
|
|
$
|
(20,666
|
)
|
|
$
|
—
|
|
|
$
|
(8,740
|
)
|
|
$
|
—
|
|
|
$
|
(8,740
|
)
|
CQP Interest Rate Derivatives liability
|
—
|
|
|
(19,148
|
)
|
|
—
|
|
|
(19,148
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
CCH Interest Rate Derivatives liability
|
—
|
|
|
(327,342
|
)
|
|
—
|
|
|
(327,342
|
)
|
|
—
|
|
|
(104,999
|
)
|
|
—
|
|
|
(104,999
|
)
|
||||||||
Liquefaction Supply Derivatives asset (liability)
|
(2,850
|
)
|
|
381
|
|
|
22,434
|
|
|
19,965
|
|
|
—
|
|
|
(25
|
)
|
|
32,492
|
|
|
32,467
|
|
||||||||
LNG Trading Derivatives asset (liability)
|
(1,443
|
)
|
|
(10,907
|
)
|
|
—
|
|
|
(12,350
|
)
|
|
—
|
|
|
1,053
|
|
|
—
|
|
|
1,053
|
|
||||||||
Natural Gas Derivatives liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66
|
)
|
|
—
|
|
|
(66
|
)
|
||||||||
FX Derivatives asset
|
—
|
|
|
160
|
|
|
—
|
|
|
160
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Net Fair Value Asset
(in thousands)
|
|
Valuation Technique
|
|
Significant Unobservable Input
|
|
Significant Unobservable Inputs Range
|
Physical Liquefaction Supply Derivatives
|
|
$22,434
|
|
Income Approach
|
|
Basis Spread
|
|
$(0.35) - $(0.02)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Balance, beginning of period
|
|
$
|
30,054
|
|
|
$
|
342
|
|
|
$
|
32,492
|
|
|
$
|
342
|
|
Realized and mark-to-market losses:
|
|
|
|
|
|
|
|
|
||||||||
Included in cost of sales (1)
|
|
(7,855
|
)
|
|
27
|
|
|
(10,204
|
)
|
|
27
|
|
||||
Purchases and settlements:
|
|
|
|
|
|
|
|
|
||||||||
Purchases
|
|
(16
|
)
|
|
71
|
|
|
31
|
|
|
71
|
|
||||
Settlements (1)
|
|
(71
|
)
|
|
—
|
|
|
(128
|
)
|
|
—
|
|
||||
Transfers out of Level 3 (2)
|
|
322
|
|
|
—
|
|
|
243
|
|
|
—
|
|
||||
Balance, end of period
|
|
$
|
22,434
|
|
|
$
|
440
|
|
|
$
|
22,434
|
|
|
$
|
440
|
|
Change in unrealized gains relating to instruments still held at end of period
|
|
$
|
(7,795
|
)
|
|
$
|
27
|
|
|
$
|
(9,484
|
)
|
|
$
|
27
|
|
|
(1)
|
Does not include the decrease in fair value of
$0.1 million
and
$0.7 million
related to the realized gains capitalized during the
three and six months ended June 30, 2016
, respectively.
|
(2)
|
Transferred to Level 2 as a result of observable market for the underlying natural gas purchase agreements.
|
|
|
Initial Notional Amount
|
|
Maximum Notional Amount
|
|
Effective Date
|
|
Maturity Date
|
|
Weighted Average Fixed Interest Rate Paid
|
|
Variable Interest Rate Received
|
SPL Interest Rate Derivatives
|
|
$20.0 million
|
|
$628.8 million
|
|
August 14, 2012
|
|
July 31, 2019
|
|
1.98%
|
|
One-month LIBOR
|
CQP Interest Rate Derivatives
|
|
$225.0 million
|
|
$1.3 billion
|
|
March 22, 2016
|
|
February 29, 2020
|
|
1.19%
|
|
One-month LIBOR
|
CCH Interest Rate Derivatives
|
|
$28.8 million
|
|
$5.5 billion
|
|
May 20, 2015
|
|
May 31, 2022
|
|
2.29%
|
|
One-month LIBOR
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
|
SPL Interest Rate Derivatives
|
|
CQP Interest Rate Derivatives
|
|
CCH Interest Rate Derivatives
|
|
Total
|
|
SPL Interest Rate Derivatives
|
|
CQP Interest Rate Derivatives
|
|
CCH Interest Rate Derivatives
|
|
Total
|
||||||||||||||||
Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
$
|
(7,340
|
)
|
|
$
|
(5,570
|
)
|
|
$
|
(45,149
|
)
|
|
$
|
(58,059
|
)
|
|
$
|
(5,940
|
)
|
|
$
|
—
|
|
|
$
|
(28,559
|
)
|
|
$
|
(34,499
|
)
|
Non-current derivative liabilities
|
|
(13,326
|
)
|
|
(13,578
|
)
|
|
(282,193
|
)
|
|
(309,097
|
)
|
|
(2,800
|
)
|
|
—
|
|
|
(76,440
|
)
|
|
(79,240
|
)
|
||||||||
Total derivative liabilities
|
|
$
|
(20,666
|
)
|
|
$
|
(19,148
|
)
|
|
$
|
(327,342
|
)
|
|
$
|
(367,156
|
)
|
|
$
|
(8,740
|
)
|
|
$
|
—
|
|
|
$
|
(104,999
|
)
|
|
$
|
(113,739
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
SPL Interest Rate Derivatives gain (loss)
|
|
$
|
(4,752
|
)
|
|
$
|
1,469
|
|
|
$
|
(16,030
|
)
|
|
$
|
(35,669
|
)
|
CQP Interest Rate Derivatives loss
|
|
(10,040
|
)
|
|
—
|
|
|
(19,570
|
)
|
|
—
|
|
||||
CCH Interest Rate Derivatives gain (loss)
|
|
(75,877
|
)
|
|
44,580
|
|
|
(236,053
|
)
|
|
(44,972
|
)
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
Liquefaction Supply Derivatives (1)
|
|
LNG Trading Derivatives (2)
|
|
Natural Gas Derivatives
|
|
Total
|
|
Liquefaction Supply Derivatives
|
|
LNG Trading Derivatives (2)
|
|
Natural Gas Derivatives (3)
|
|
Total
|
||||||||||||||||
Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other current assets
|
$
|
2,526
|
|
|
$
|
232
|
|
|
$
|
—
|
|
|
$
|
2,758
|
|
|
$
|
2,737
|
|
|
$
|
640
|
|
|
$
|
—
|
|
|
$
|
3,377
|
|
Non-current derivative assets
|
20,472
|
|
|
243
|
|
|
—
|
|
|
20,715
|
|
|
30,304
|
|
|
583
|
|
|
—
|
|
|
30,887
|
|
||||||||
Total derivative assets
|
22,998
|
|
|
475
|
|
|
—
|
|
|
23,473
|
|
|
33,041
|
|
|
1,223
|
|
|
—
|
|
|
34,264
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
(3,033
|
)
|
|
(10,778
|
)
|
|
—
|
|
|
(13,811
|
)
|
|
(490
|
)
|
|
(107
|
)
|
|
(66
|
)
|
|
(663
|
)
|
||||||||
Non-current derivative liabilities
|
—
|
|
|
(2,047
|
)
|
|
—
|
|
|
(2,047
|
)
|
|
(84
|
)
|
|
(63
|
)
|
|
—
|
|
|
(147
|
)
|
||||||||
Total derivative liabilities
|
(3,033
|
)
|
|
(12,825
|
)
|
|
—
|
|
|
(15,858
|
)
|
|
(574
|
)
|
|
(170
|
)
|
|
(66
|
)
|
|
(810
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative asset (liabilities), net
|
$
|
19,965
|
|
|
$
|
(12,350
|
)
|
|
$
|
—
|
|
|
$
|
7,615
|
|
|
$
|
32,467
|
|
|
$
|
1,053
|
|
|
$
|
(66
|
)
|
|
$
|
33,454
|
|
|
(1)
|
Does not include collateral of
$0.5 million
deposited for such contracts, which is included in
other current assets
in our Consolidated Balance Sheet as of June 30, 2016.
|
(2)
|
Does not include collateral of
$15.6 million
and
$11.0 million
deposited for such contracts, which are included in
other current assets
in our Consolidated Balance Sheets as of June 30, 2016 and
December 31, 2015
, respectively.
|
(3)
|
Does not include collateral of
$5.5 million
deposited for such contracts, which is included in
other current assets
in our Consolidated Balance Sheet as of
December 31, 2015
.
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
Statement of Operations Location
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Liquefaction Supply Derivatives loss
|
LNG revenues (losses)
|
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
Liquefaction Supply Derivatives gain (loss) (1)
|
Cost of sales
|
|
(8,670
|
)
|
|
81
|
|
|
(12,264
|
)
|
|
81
|
|
||||
LNG Trading Derivatives loss
|
LNG revenues (losses)
|
|
(16,976
|
)
|
|
—
|
|
|
(12,214
|
)
|
|
—
|
|
||||
Natural Gas Derivatives gain (loss)
|
LNG revenues (losses)
|
|
—
|
|
|
67
|
|
|
(5
|
)
|
|
(98
|
)
|
||||
Natural Gas Derivatives gain (loss)
|
Operating and maintenance expense
|
|
—
|
|
|
(294
|
)
|
|
174
|
|
|
460
|
|
|
|
|
|
|
Fair Value Measurements as of
|
||||||
|
Balance Sheet Location
|
|
June 30, 2016
|
|
December 31, 2015
|
|||||
FX Derivatives
|
Other current assets
|
|
$
|
355
|
|
|
$
|
—
|
|
|
FX Derivatives
|
Derivative liabilities
|
|
(132
|
)
|
|
—
|
|
|||
FX Derivatives
|
Non-current derivative liabilities
|
|
(63
|
)
|
|
—
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
Statement of Operations Location
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
FX Derivatives gain
|
|
LNG revenues (losses)
|
|
$
|
2,641
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
FX Derivatives gain
|
|
Derivative gain (loss), net
|
|
48
|
|
|
—
|
|
|
98
|
|
|
—
|
|
||||
FX Derivatives loss
|
|
Other income (expense)
|
|
(87
|
)
|
|
—
|
|
|
(87
|
)
|
|
—
|
|
|
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Net Amounts Presented in the Consolidated Balance Sheets
|
||||||
Offsetting Derivative Assets (Liabilities)
|
|
|
|
|||||||||
As of June 30, 2016
|
|
|
|
|
|
|
||||||
SPL Interest Rate Derivatives
|
|
$
|
(20,666
|
)
|
|
$
|
—
|
|
|
$
|
(20,666
|
)
|
CQP Interest Rate Derivatives
|
|
(19,148
|
)
|
|
—
|
|
|
(19,148
|
)
|
|||
CCH Interest Rate Derivatives
|
|
(327,342
|
)
|
|
—
|
|
|
(327,342
|
)
|
|||
Liquefaction Supply Derivatives
|
|
23,165
|
|
|
(167
|
)
|
|
22,998
|
|
|||
Liquefaction Supply Derivatives
|
|
(4,505
|
)
|
|
1,472
|
|
|
(3,033
|
)
|
|||
LNG Trading Derivatives
|
|
475
|
|
|
—
|
|
|
475
|
|
|||
LNG Trading Derivatives
|
|
(22,455
|
)
|
|
9,630
|
|
|
(12,825
|
)
|
|||
FX Derivatives
|
|
860
|
|
|
(505
|
)
|
|
355
|
|
|||
FX Derivatives
|
|
(376
|
)
|
|
181
|
|
|
(195
|
)
|
|||
As of December 31, 2015
|
|
|
|
|
|
|
|
|||||
SPL Interest Rate Derivatives
|
|
$
|
(8,740
|
)
|
|
$
|
—
|
|
|
$
|
(8,740
|
)
|
CCH Interest Rate Derivatives
|
|
(104,999
|
)
|
|
—
|
|
|
(104,999
|
)
|
|||
Liquefaction Supply Derivatives
|
|
33,636
|
|
|
(595
|
)
|
|
33,041
|
|
|||
Liquefaction Supply Derivatives
|
|
(574
|
)
|
|
—
|
|
|
(574
|
)
|
|||
LNG Trading Derivatives
|
|
1,922
|
|
|
(699
|
)
|
|
1,223
|
|
|||
LNG Trading Derivatives
|
|
(2,826
|
)
|
|
2,656
|
|
|
(170
|
)
|
|||
Natural Gas Derivatives
|
|
188
|
|
|
(254
|
)
|
|
(66
|
)
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
Advances made under EPC and non-EPC contracts
|
|
$
|
14,000
|
|
|
$
|
83,579
|
|
Advances made to municipalities for water system enhancements
|
|
95,584
|
|
|
89,953
|
|
||
Tax-related payments and receivables
|
|
29,351
|
|
|
31,712
|
|
||
Equity method investments
|
|
11,983
|
|
|
20,295
|
|
||
Other
|
|
100,540
|
|
|
88,916
|
|
||
Total other non-current assets
|
|
$
|
251,458
|
|
|
$
|
314,455
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
Interest costs and related debt fees
|
|
$
|
173,907
|
|
|
$
|
159,968
|
|
Compensation and benefits
|
|
69,975
|
|
|
99,511
|
|
||
SPL Project and CCL Project costs
|
|
326,788
|
|
|
145,759
|
|
||
LNG terminal costs
|
|
4,795
|
|
|
3,918
|
|
||
Other accrued liabilities
|
|
14,139
|
|
|
18,043
|
|
||
Total accrued liabilities
|
|
$
|
589,604
|
|
|
$
|
427,199
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
Long-term debt:
|
|
|
|
|
||||
SPLNG
|
|
|
|
|
||||
6.50% Senior Secured Notes due 2020 (“2020 SPLNG Senior Notes”) (1)
|
|
$
|
420,000
|
|
|
$
|
420,000
|
|
SPL
|
|
|
|
|
|
|||
5.625% Senior Secured Notes due 2021 (“2021 SPL Senior Notes”), net of unamortized premium of $7,959 and $8,718
|
|
2,007,959
|
|
|
2,008,718
|
|
||
6.25% Senior Secured Notes due 2022 (“2022 SPL Senior Notes”)
|
|
1,000,000
|
|
|
1,000,000
|
|
||
5.625% Senior Secured Notes due 2023 (“2023 SPL Senior Notes”), net of unamortized premium of $6,029 and $6,392
|
|
1,506,029
|
|
|
1,506,392
|
|
||
5.75% Senior Secured Notes due 2024 (“2024 SPL Senior Notes”)
|
|
2,000,000
|
|
|
2,000,000
|
|
||
5.625% Senior Secured Notes due 2025 (“2025 SPL Senior Notes”)
|
|
2,000,000
|
|
|
2,000,000
|
|
||
5.875% Senior Secured Notes due 2026 (“2026 SPL Senior Notes”)
|
|
1,500,000
|
|
|
—
|
|
||
2015 SPL Credit Facilities
|
|
832,695
|
|
|
845,000
|
|
||
CTPL
|
|
|
|
|
||||
$400.0 million Term Loan Facility (“CTPL Term Loan”), net of unamortized discount of zero and $1,429
|
|
—
|
|
|
398,571
|
|
||
Cheniere Partners
|
|
|
|
|
||||
2016 CQP Credit Facilities
|
|
450,000
|
|
|
—
|
|
||
CCH
|
|
|
|
|
||||
7.000% Senior Secured Notes due 2024 (“2024 CCH Senior Notes”)
|
|
1,250,000
|
|
|
—
|
|
||
2015 CCH Credit Facility
|
|
2,730,340
|
|
|
2,713,000
|
|
||
CCH HoldCo II
|
|
|
|
|
||||
11.0% Convertible Senior Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”)
|
|
1,109,165
|
|
|
1,050,588
|
|
||
Cheniere
|
|
|
|
|
||||
4.875% Convertible Unsecured Notes due 2021 (“2021 Cheniere Convertible Unsecured Notes”), net of unamortized discount of $158,036 and $174,095
|
|
921,690
|
|
|
879,938
|
|
||
4.25% Convertible Senior Notes due 2045 (“2045 Cheniere Convertible Senior Notes”), net of unamortized discount of $317,994 and $319,062
|
|
307,006
|
|
|
305,938
|
|
||
Unamortized debt issuance costs (2)
|
|
(245,810
|
)
|
|
(207,718
|
)
|
||
Total long-term debt, net
|
|
17,789,074
|
|
|
14,920,427
|
|
||
|
|
|
|
|
||||
Current debt:
|
|
|
|
|
||||
7.50% Senior Secured Notes due 2016 (“2016 SPLNG Senior Notes”), net of unamortized discount of $1,956 and $4,303 (3)
|
|
1,663,544
|
|
|
1,661,197
|
|
||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
|
—
|
|
|
15,000
|
|
||
Cheniere Marketing trade finance facilities
|
|
15,219
|
|
|
—
|
|
||
Unamortized debt issuance costs (2)
|
|
(1,287
|
)
|
|
(2,818
|
)
|
||
Total current debt, net
|
|
1,677,476
|
|
|
1,673,379
|
|
||
|
|
|
|
|
||||
Total debt, net
|
|
$
|
19,466,550
|
|
|
$
|
16,593,806
|
|
|
(1)
|
Must be redeemed or repaid concurrently with the
2016 SPLNG Senior Notes
under the terms of the
2016 CQP Credit Facilities
if the obligations under the
2016 SPLNG Senior Notes
are satisfied with borrowings under the
2016 CQP Credit Facilities
.
|
(2)
|
Effective January 1, 2016, we adopted ASU 2015-03 and ASU 2015-15, which require debt issuance costs related to term notes to be presented in the balance sheet as a direct deduction from the debt liability, rather than as an asset, retrospectively for each reporting period presented. As a result, we reclassified
$207.8 million
and
$2.8 million
from debt issuance costs, net to long-term debt, net and current debt, net, respectively, as of
December 31, 2015
.
|
(3)
|
Matures on November 30, 2016. We currently anticipate satisfying this obligation with borrowings under the
2016 CQP Credit Facilities
.
|
|
|
2015 SPL Credit Facilities
|
|
SPL Working Capital Facility
|
|
2016 CQP Credit Facilities
|
|
2015 CCH Term Loan Facilities
|
||||||||
Original facility size
|
|
$
|
4,600,000
|
|
|
$
|
1,200,000
|
|
|
$
|
2,800,000
|
|
|
$
|
8,403,714
|
|
Outstanding balance
|
|
832,695
|
|
|
—
|
|
|
450,000
|
|
|
2,730,340
|
|
||||
Commitments terminated
|
|
1,287,305
|
|
|
—
|
|
|
—
|
|
|
1,050,660
|
|
||||
Letters of credit issued
|
|
—
|
|
|
237,270
|
|
|
7,500
|
|
|
—
|
|
||||
Available commitment
|
|
$
|
2,480,000
|
|
|
$
|
962,730
|
|
|
$
|
2,342,500
|
|
|
$
|
4,622,714
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
LIBOR plus 1.30% - 1.75% or base rate plus 1.75%
|
|
LIBOR plus 1.75% or base rate plus 0.75%
|
|
LIBOR plus 2.25% or base rate plus 1.25% (1)
|
|
LIBOR plus 2.25% or base rate plus 1.25% (2)
|
||||||||
Maturity date
|
|
Earlier of December 31, 2020 or second anniversary of SPL Trains 1 through 5 completion date
|
|
December 31, 2020, with various terms for underlying loans
|
|
February 25, 2020, with principals due quarterly commencing on February 19, 2019
|
|
Earlier of May 13, 2022 or second anniversary of CCL Trains 1 and 2 completion date
|
|
(1)
|
There is a
0.50%
step-up for both LIBOR and base rate loans beginning on February 25, 2019.
|
(2)
|
There is a
0.25%
step-up for both LIBOR and base rate loans following completion of the first two Trains of the
CCL Project
.
|
|
|
2021 Cheniere Convertible Unsecured Notes
|
|
2025 CCH HoldCo II Convertible Senior Notes
|
|
2045 Cheniere Convertible Senior Notes
|
||||||
Aggregate original principal
|
|
$
|
1,000,000
|
|
|
$
|
1,000,000
|
|
|
$
|
625,000
|
|
Debt component, net of discount
|
|
$
|
921,690
|
|
|
$
|
1,109,165
|
|
|
$
|
307,006
|
|
Equity component
|
|
$
|
203,892
|
|
|
$
|
—
|
|
|
$
|
194,082
|
|
Interest payment method
|
|
Paid-in-kind
|
|
|
Paid-in-kind (1)
|
|
|
Cash
|
|
|||
Conversion by us (2)
|
|
—
|
|
|
(3)
|
|
|
(4)
|
|
|||
Conversion by holders (2)
|
|
(5)
|
|
|
(6)
|
|
|
(7)
|
|
|||
Conversion basis
|
|
Cash and/or stock
|
|
|
Stock
|
|
|
Cash and/or stock
|
|
|||
Conversion value in excess of principal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Maturity date
|
|
May 28, 2021
|
|
|
March 1, 2025
|
|
|
March 15, 2045
|
|
|||
Contractual interest rate
|
|
4.875
|
%
|
|
11.0
|
%
|
|
4.25
|
%
|
|||
Effective interest rate
|
|
9.1
|
%
|
|
11.9
|
%
|
|
9.4
|
%
|
|||
Remaining debt discount and debt issuance costs amortization period (8)
|
|
4.9 years
|
|
|
4.3 years
|
|
|
28.7 years
|
|
|
(1)
|
Prior to the substantial completion of Train 2 of the
CCL Project
, interest will be paid entirely in kind. Following this date, the interest generally must be paid in cash; however, a portion of the interest may be paid in kind under certain specified circumstances.
|
(2)
|
Conversion is subject to various limitations and conditions.
|
(3)
|
Convertible on or after the later of March 1, 2020 and the substantial completion of Train 2 of the
CCL Project
, provided that our market capitalization is not less than
$10.0 billion
(“Eligible Conversion Date”). The conversion price is the lower of (1) a
10%
discount to the average of the daily volume-weighted average price
(“VWAP”)
of our common stock for the
90
trading day period prior to the date notice is provided, and (2) a
10%
discount to the closing price of our common stock on the trading day preceding the date notice is provided.
|
(4)
|
Redeemable at any time after March 15, 2020 at a redemption price payable in cash equal to the accreted amount of the
2045 Cheniere Convertible Senior Notes
to be redeemed, plus accrued and unpaid interest, if any, to such redemption date.
|
(5)
|
Initially convertible at
$93.64
(subject to adjustment upon the occurrence of certain specified events), provided that the closing price of our common stock is greater than or equal to the conversion price on the conversion date.
|
(6)
|
Convertible on or after the
six
-month anniversary of the Eligible Conversion Date, provided that our total market capitalization is not less than
$10.0 billion
, at a price equal to the average of the daily
VWAP
of our common stock for the
90
trading day period prior to the date on which notice of conversion is provided.
|
(7)
|
Prior to December 15, 2044, convertible only under certain circumstances as specified in the indenture; thereafter, holders may convert their notes regardless of these circumstances. The conversion rate will initially equal
7.2265
shares of our common stock per $1,000 principal amount of the
2045 Cheniere Convertible Senior Notes
, which corresponds to an initial conversion price of approximately
$138.38
per share of our common stock (subject to adjustment upon the occurrence of certain specified events).
|
(8)
|
We amortize any debt discount and debt issuance costs using the effective interest over the period through contractual maturity except for the 2025 CCH HoldCo II Convertible Senior Notes, which are amortized through the date they are first convertible into our common stock.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Interest cost on convertible notes:
|
|
|
|
|
|
|
|
|
||||||||
Interest per contractual rate
|
|
$
|
49,853
|
|
|
$
|
33,603
|
|
|
$
|
98,893
|
|
|
$
|
47,542
|
|
Amortization of debt discount
|
|
9,100
|
|
|
7,116
|
|
|
17,985
|
|
|
13,714
|
|
||||
Amortization of debt issuance costs
|
|
1,254
|
|
|
601
|
|
|
2,405
|
|
|
615
|
|
||||
Total interest cost related to convertible notes
|
|
60,207
|
|
|
41,320
|
|
|
119,283
|
|
|
61,871
|
|
||||
Interest cost on other debt
|
|
255,853
|
|
|
199,911
|
|
|
490,069
|
|
|
359,998
|
|
||||
Total interest cost
|
|
316,060
|
|
|
241,231
|
|
|
609,352
|
|
|
421,869
|
|
||||
Capitalized interest
|
|
(210,093
|
)
|
|
(155,745
|
)
|
|
(427,048
|
)
|
|
(276,771
|
)
|
||||
Total interest expense, net
|
|
$
|
105,967
|
|
|
$
|
85,486
|
|
|
$
|
182,304
|
|
|
$
|
145,098
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Carrying
Amount |
|
Estimated
Fair Value |
|
Carrying
Amount |
|
Estimated
Fair Value |
||||||||
Senior Notes, net of premium or discount (1)
|
|
$
|
13,347,532
|
|
|
$
|
13,447,629
|
|
|
$
|
10,596,307
|
|
|
$
|
9,525,809
|
|
CTPL Term Loan, net of discount (2)
|
|
—
|
|
|
—
|
|
|
398,571
|
|
|
400,000
|
|
||||
Credit facilities (2) (3)
|
|
4,028,254
|
|
|
4,028,254
|
|
|
3,573,000
|
|
|
3,573,000
|
|
||||
2021 Cheniere Convertible Unsecured Notes, net of discount (4)
|
|
921,690
|
|
|
918,414
|
|
|
879,938
|
|
|
825,413
|
|
||||
2025 CCH HoldCo II Convertible Senior Notes (4)
|
|
1,109,165
|
|
|
1,153,534
|
|
|
1,050,588
|
|
|
914,363
|
|
||||
2045 Cheniere Convertible Senior Notes, net of discount (5)
|
|
307,006
|
|
|
356,250
|
|
|
305,938
|
|
|
331,919
|
|
|
(1)
|
Includes
2016 SPLNG Senior Notes
, net of discount;
2020 SPLNG Senior Notes
;
2021 SPL Senior Notes
, net of premium;
2022 SPL Senior Notes
;
2023 SPL Senior Notes
, net of premium;
2024 SPL Senior Notes
;
2025 SPL Senior Notes
;
2026 SPL Senior Notes
; and
2024 CCH Senior Notes
(collectively, the “Senior Notes”)
. The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of the
Senior Notes
and other similar instruments.
|
(2)
|
The Level 3 estimated fair value approximates the principal amount because the interest rates are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty.
|
(3)
|
Includes
2015 SPL Credit Facilities
,
SPL Working Capital Facility
,
2016 CQP Credit Facilities
,
2015 CCH Credit Facility
and
Cheniere Marketing trade finance facilities
.
|
(4)
|
The Level 3 estimated fair value was calculated based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including our stock price and interest rates based on debt issued by parties with comparable credit ratings to us and inputs that are not observable in the market.
|
(5)
|
The Level 1 estimated fair value was based on unadjusted quoted prices in active markets for identical liabilities that we had the ability to access at the measurement date.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Total share-based compensation
|
|
$
|
40,535
|
|
|
$
|
68,665
|
|
|
$
|
58,060
|
|
|
$
|
86,655
|
|
Capitalized share-based compensation
|
|
(4,982
|
)
|
|
(18,427
|
)
|
|
(6,336
|
)
|
|
(20,277
|
)
|
||||
Total share-based compensation expense
|
|
$
|
35,553
|
|
|
$
|
50,238
|
|
|
$
|
51,724
|
|
|
$
|
66,378
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
228,323
|
|
|
226,481
|
|
|
228,231
|
|
|
226,405
|
|
||||
Dilutive common stock options and unvested stock (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted
|
|
228,323
|
|
|
226,481
|
|
|
228,231
|
|
|
226,405
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share attributable to common stockholders
|
|
$
|
(1.31
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(2.71
|
)
|
|
$
|
(1.71
|
)
|
|
(1)
|
Stock options and unvested stock of
7.1 million
shares for each of the
three and six months ended June 30, 2016
and
10.1 million
shares for each of the
three and six months ended June 30, 2015
, representing securities that could potentially dilute basic
EPS
in the future, were not included in the diluted net loss per share computations because their effect would have been anti-dilutive. In addition,
16.0 million
shares in aggregate for the
three and six months ended June 30, 2016
and
15.5 million
shares in aggregate for the
three and six months ended June 30, 2015
, issuable upon conversion of the
2021 Cheniere Convertible Unsecured Notes
and the
2045 Cheniere Convertible Senior Notes
, were not included in the computation of diluted net loss per share because the computation of diluted net loss per share utilizing the “if-converted” method would be anti-dilutive. There were no shares included in the computation of diluted net loss per share for the
2025 CCH HoldCo II Convertible Senior Notes
because non-market-based contingencies underlying the eligible conversion date have not been met as of
June 30, 2016
.
|
|
Segments
|
||||||||||||||
|
LNG Terminal
|
|
LNG & Natural Gas Marketing
|
|
Corporate and Other (1)
|
|
Total
Consolidation
|
||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
|
||||||||
Revenues (losses) from external customers
|
$
|
150,977
|
|
|
$
|
43,969
|
|
|
$
|
(18,119
|
)
|
|
$
|
176,827
|
|
Intersegment revenues (losses) (2)
|
6
|
|
|
7,029
|
|
|
(7,035
|
)
|
|
—
|
|
||||
Depreciation and amortization expense
|
26,711
|
|
|
306
|
|
|
5,764
|
|
|
32,781
|
|
||||
Income (loss) from operations
|
10,115
|
|
|
(31,917
|
)
|
|
(54,652
|
)
|
|
(76,454
|
)
|
||||
Interest expense, net of capitalized interest
|
(80,127
|
)
|
|
—
|
|
|
(25,840
|
)
|
|
(105,967
|
)
|
||||
Loss before income taxes and non-controlling interest (3)
|
(210,561
|
)
|
|
(31,870
|
)
|
|
(92,856
|
)
|
|
(335,287
|
)
|
||||
Share-based compensation
|
7,045
|
|
|
10,257
|
|
|
23,233
|
|
|
40,535
|
|
||||
Expenditures for additions to long-lived assets
|
1,089,190
|
|
|
1,296
|
|
|
3,206
|
|
|
1,093,692
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
||||||||
Revenues (losses) from external customers
|
$
|
68,532
|
|
|
$
|
(706
|
)
|
|
$
|
199
|
|
|
$
|
68,025
|
|
Intersegment revenues (losses) (2)
|
491
|
|
|
6,354
|
|
|
(6,845
|
)
|
|
—
|
|
||||
Depreciation and amortization expense
|
16,071
|
|
|
244
|
|
|
3,839
|
|
|
20,154
|
|
||||
Loss from operations
|
(18,061
|
)
|
|
(26,367
|
)
|
|
(51,446
|
)
|
|
(95,874
|
)
|
||||
Interest expense, net of capitalized interest
|
(59,465
|
)
|
|
—
|
|
|
(26,021
|
)
|
|
(85,486
|
)
|
||||
Loss before income taxes and non-controlling interest (3)
|
(33,403
|
)
|
|
(26,816
|
)
|
|
(82,090
|
)
|
|
(142,309
|
)
|
||||
Share-based compensation
|
25,778
|
|
|
6,052
|
|
|
36,835
|
|
|
68,665
|
|
||||
Expenditures for additions to long-lived assets
|
3,944,191
|
|
|
1,400
|
|
|
20,874
|
|
|
3,966,465
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
|
||||||||
Revenues (losses) from external customers
|
$
|
216,528
|
|
|
$
|
46,673
|
|
|
$
|
(17,293
|
)
|
|
$
|
245,908
|
|
Intersegment revenues (losses) (2)
|
924
|
|
|
14,623
|
|
|
(15,547
|
)
|
|
—
|
|
||||
Depreciation and amortization expense
|
44,684
|
|
|
621
|
|
|
11,565
|
|
|
56,870
|
|
||||
Loss from operations
|
(2,434
|
)
|
|
(62,464
|
)
|
|
(102,115
|
)
|
|
(167,013
|
)
|
||||
Interest expense, net of capitalized interest
|
(131,493
|
)
|
|
—
|
|
|
(50,811
|
)
|
|
(182,304
|
)
|
||||
Loss before income taxes and non-controlling interest (3)
|
(451,532
|
)
|
|
(62,550
|
)
|
|
(169,563
|
)
|
|
(683,645
|
)
|
||||
Share-based compensation
|
9,822
|
|
|
15,146
|
|
|
33,092
|
|
|
58,060
|
|
||||
Expenditures for additions to long-lived assets
|
2,590,568
|
|
|
1,531
|
|
|
9,652
|
|
|
2,601,751
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
||||||||
Revenues (losses) from external customers
|
$
|
136,112
|
|
|
$
|
(44
|
)
|
|
$
|
326
|
|
|
$
|
136,394
|
|
Intersegment revenues (losses) (2)
|
594
|
|
|
13,371
|
|
|
(13,965
|
)
|
|
—
|
|
||||
Depreciation and amortization expense
|
31,012
|
|
|
444
|
|
|
6,467
|
|
|
37,923
|
|
||||
Loss from operations
|
(42,396
|
)
|
|
(31,550
|
)
|
|
(82,172
|
)
|
|
(156,118
|
)
|
||||
Interest expense, net of capitalized interest
|
(102,310
|
)
|
|
—
|
|
|
(42,788
|
)
|
|
(145,098
|
)
|
||||
Loss before income taxes and non-controlling interest (3)
|
(311,058
|
)
|
|
(32,206
|
)
|
|
(134,211
|
)
|
|
(477,475
|
)
|
||||
Share-based compensation
|
28,917
|
|
|
10,087
|
|
|
47,651
|
|
|
86,655
|
|
||||
Expenditures for additions to long-lived assets
|
4,534,436
|
|
|
2,114
|
|
|
49,655
|
|
|
4,586,205
|
|
|
(1)
|
Includes corporate activities, business development, strategic activities and certain intercompany eliminations. These activities have been included in the corporate and other column.
|
(2)
|
Intersegment revenues (losses) related to our LNG and natural gas marketing segment are primarily a result of international revenue allocations using a cost plus transfer pricing methodology. These LNG and natural gas marketing segment intersegment revenues (losses) are eliminated with intersegment revenues (losses) in our Consolidated
Statements of Operations
.
|
(3)
|
Items to reconcile loss from operations and loss before income taxes and non-controlling interest include consolidated other income (expense) amounts as presented on our Consolidated
Statements of Operations
primarily related to our LNG terminal segment.
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||||
LNG Terminal
|
|
$
|
20,130,382
|
|
|
$
|
17,363,750
|
|
LNG & Natural Gas Marketing
|
|
540,454
|
|
|
550,896
|
|
||
Corporate and Other
|
|
766,015
|
|
|
894,407
|
|
||
Total Consolidation
|
|
$
|
21,436,851
|
|
|
$
|
18,809,053
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Cash paid during the period for interest, net of amounts capitalized
|
|
$
|
59,260
|
|
|
$
|
46,165
|
|
Standard
|
|
Description
|
|
Expected Date of Adoption
|
|
Effect on our Consolidated Financial Statements or Other Significant Matters
|
ASU 2014-09,
Revenue from Contracts with Customers (Topic 606)
, and subsequent amendments thereto
|
|
This standard amends existing revenue recognition guidance and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance may be early adopted beginning January 1, 2017, and may be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption.
|
|
January 1, 2018
|
|
We are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.
|
ASU 2014-15,
Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern
|
|
This standard requires an entity’s management to evaluate, for each reporting period, whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued. Additional disclosures are required if management concludes that conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. Early adoption is permitted.
|
|
December 31, 2016
|
|
The adoption of this guidance is not expected to have an impact on our Consolidated Financial Statements or related disclosures.
|
Standard
|
|
Description
|
|
Expected Date of Adoption
|
|
Effect on our Consolidated Financial Statements or Other Significant Matters
|
ASU 2015-11,
Inventory (Topic 330): Simplifying the Measurement of Inventory
|
|
This standard requires inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance may be early adopted and must be adopted prospectively.
|
|
January 1, 2017
|
|
We are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.
|
ASU 2016-02,
Leases (Topic 842)
|
|
This standard requires a lessee to recognize leases on its balance sheet by recording a liability representing the obligation to make future lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. A lessee is permitted to make an election not to recognize lease assets and liabilities for leases with a term of 12 months or less. The standard also modifies the definition of a lease and requires expanded disclosures. This guidance may be early adopted, and must be adopted using a modified retrospective approach with certain available practical expedients.
|
|
January 1, 2019
|
|
We are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.
|
ASU 2016-09,
Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
|
|
This standard primarily requires the recognition of excess tax benefits for share-based awards in the statement of operations and the classification of excess tax benefits as an operating activity within the statement of cash flows. The guidance also allows an entity to elect to account for forfeitures when they occur. This guidance may be early adopted, but all of the guidance must be adopted in the same period.
|
|
January 1, 2017
|
|
We are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.
|
Standard
|
|
Description
|
|
Date of Adoption
|
|
Effect on our Consolidated Financial Statements or Other Significant Matters
|
ASU 2015-02,
Consolidation (Topic 810): Amendments to the Consolidation Analysis
|
|
These amendments primarily affect asset managers and reporting entities involved with limited partnerships or similar entities, but the analysis is relevant in the evaluation of any reporting organization’s requirement to consolidate a legal entity. This guidance changes (1) the identification of variable interests, (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. This guidance may be early adopted, and may be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption.
|
|
January 1, 2016
|
|
The adoption of this guidance did not have a material impact on our Consolidated Financial Statements or related disclosures.
|
Standard
|
|
Description
|
|
Date of Adoption
|
|
Effect on our Consolidated Financial Statements or Other Significant Matters
|
ASU 2015-03,
Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs
and ASU 2015-15,
Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements
|
|
These standards require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. Debt issuance costs incurred in connection with line of credit arrangements may be presented as an asset and subsequently amortized ratably over the term of the line of credit arrangement. This guidance may be early adopted, and must be adopted retrospectively to each prior reporting period presented.
|
|
January 1, 2016
|
|
Upon adoption of these standards, the balance of debt, net was reduced by the balance of debt issuance costs, net, except for the balance related to line of credit arrangements, on our Consolidated Balance Sheets. See
Note 11—Debt
for additional disclosures.
|
ASU 2015-05,
Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement
|
|
This standard clarifies the circumstances under which a cloud computing customer would account for the arrangement as a license of internal-use software. This guidance may be early adopted, and may be adopted as either retrospectively or prospectively to arrangements entered into, or materially modified, after the effective date.
|
|
January 1, 2016
|
|
The adoption of this guidance did not have an impact on our Consolidated Financial Statements or related disclosures.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
statements that we expect to commence or complete construction of our proposed LNG terminals, liquefaction facilities, pipeline facilities or other projects, or any expansions thereof, by certain dates, or at all;
|
•
|
statements regarding future levels of domestic and international natural gas production, supply or consumption or future levels of LNG imports into or exports from North America and other countries worldwide or purchases of natural gas, regardless of the source of such information, or the transportation or other infrastructure or demand for and prices related to natural gas, LNG or other hydrocarbon products;
|
•
|
statements regarding any financing transactions or arrangements, or ability to enter into such transactions;
|
•
|
statements relating to the construction of our Trains and pipeline, including statements concerning the engagement of any
EPC
contractor or other contractor and the anticipated terms and provisions of any agreement with any
EPC
or other contractor, and anticipated costs related thereto;
|
•
|
statements regarding any
SPA
or any other agreement to be entered into or performed substantially in the future, including any revenues anticipated to be received and the anticipated timing thereof, and statements regarding the amounts of total LNG regasification, natural gas liquefaction or storage capacities that are, or may become, subject to contracts;
|
•
|
statements regarding counterparties to our commercial contracts, construction contracts and other contracts;
|
•
|
statements regarding our planned development and construction of additional Trains and pipelines, including the financing of such Trains;
|
•
|
statements that our Trains, when completed, will have certain characteristics, including amounts of liquefaction capacities;
|
•
|
statements regarding our business strategy, our strengths, our business and operation plans or any other plans, forecasts, projections, or objectives, including anticipated revenues and capital expenditures, any or all of which are subject to change;
|
•
|
statements regarding legislative, governmental, regulatory, administrative or other public body actions, approvals, requirements, permits, applications, filings, investigations, proceedings or decisions;
|
•
|
statements regarding our anticipated LNG and natural gas marketing activities; and
|
•
|
any other statements that relate to non-historica
l or future information.
|
•
|
Overview of Business
|
•
|
Overview of Significant Events
|
•
|
Liquidity and Capital Resources
|
•
|
Results of Operations
|
•
|
Off-Balance Sheet Arrangements
|
•
|
Summary of Critical Accounting Estimates
|
•
|
Recent Accounting Standards
|
•
|
In February 2016, Cheniere Partners entered into a Credit and Guaranty Agreement for the incurrence of debt of up to an aggregate amount of approximately $2.8 billion
(the “2016 CQP Credit Facilities”)
. The
2016 CQP Credit Facilities
consist of: (1) a
$450.0 million
CTPL tranche term loan that was used to prepay the
$400.0 million
term loan facility
(the “CTPL Term Loan”)
in February 2016, (2) an approximately
$2.1 billion
SPLNG tranche term loan that will be used to redeem or repay the approximately
$2.1 billion
of the 7.50% Senior Secured Notes due 2016 issued by SPLNG
(the “2016 SPLNG Senior Notes”)
and the 6.50% Senior Secured Notes due 2020 issued by SPLNG
(the “2020 SPLNG Senior Notes” and collectively with the 2016 SPLNG Senior Notes, the “SPLNG Senior Notes”)
(which must be redeemed or repaid concurrently under the terms of the
2016 CQP Credit Facilities
), (3) a
$125.0 million
debt service reserve credit facility
(the “DSR Facility”)
that may be used to satisfy a
six
-month debt service reserve requirement and (4) a
$115.0 million
revolving credit facility that may be used for general business purposes.
|
•
|
In February 2016, SPL commenced production and shipment of LNG commissioning cargoes from Train 1 of the
SPL Project
.
|
•
|
In May 2016, our Board of Directors appointed Jack Fusco as our President and Chief Executive Officer, effective as of May 12, 2016.
|
•
|
In May 2016, CCH issued an aggregate principal amount of $1.25 billion of 7.000% Senior Secured Notes due 2024
(the “2024 CCH Senior Notes”)
. Net proceeds of the offering of approximately $1.1 billion, after deducting commissions, fees and expenses and incremental interest required under the
2024 CCH Senior Notes
during construction, were used to prepay a portion of the outstanding borrowings under its credit facility
(the “2015 CCH Credit Facility”)
.
|
•
|
In May 2016, Train 1 of the
SPL Project
achieved substantial completion and initiated operating activities.
|
•
|
In June 2016, SPL issued an aggregate principal amount of $1.5 billion of 5.875% Senior Secured Notes due 2026
(the “2026 SPL Senior Notes”)
. Net proceeds of the offering of approximately $1.3 billion, after deducting commissions, fees and expenses and incremental interest required under the
2026 SPL Senior Notes
during construction, were used to prepay a portion of the outstanding borrowings under the credit facilities it entered into in June 2015
(the “2015 SPL Credit Facilities”)
.
|
•
|
Cheniere Partners through operating cash flows from SPLNG, SPL and CTPL, existing unrestricted cash and debt or equity offerings;
|
•
|
Cheniere through project financing, existing unrestricted cash, debt and equity offerings by us or our subsidiaries, operating cash flows, services fees from Cheniere Holdings, Cheniere Partners and its other subsidiaries and distributions from our investments in Cheniere Holdings and Cheniere Partners.
|
•
|
$1.7 billion
of
2016 SPLNG Senior Notes
;
|
•
|
$0.4 billion
of
2020 SPLNG Senior Notes
;
|
•
|
$2.0 billion
of 5.625% Senior Secured Notes due 2021 issued by SPL
(the “2021 SPL Senior Notes”)
;
|
•
|
$1.0 billion
of 6.25% Senior Secured Notes due 2022 issued by SPL
(the “2022 SPL Senior Notes”)
;
|
•
|
$1.5 billion
of 5.625% Senior Secured Notes due 2023 issued by SPL
(the “2023 SPL Senior Notes”)
;
|
•
|
$2.0 billion
of 5.75% Senior Secured Notes due 2024 issued by SPL
(the “2024 SPL Senior Notes”)
;
|
•
|
$2.0 billion
of 5.625% Senior Secured Notes due 2025
(the “2025 SPL Senior Notes” and collectively with the 2021 SPL Senior Notes, the 2022 SPL Senior Notes, the 2023 SPL Senior Notes, the 2024 SPL Senior Notes and the 2026 SPL Senior Notes, the “SPL Senior Notes”)
; and
|
•
|
$1.5 billion
of
2026 SPL Senior Notes
.
|
•
|
the excess of: (1) the present value at such redemption date of (a) the redemption price of the
2016 SPLNG Senior Notes
plus (b) all required interest payments due on the
2016 SPLNG Senior Notes
(excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the treasury rate as of such redemption date plus 50 basis points; over (2) the principal amount of the
2016 SPLNG Senior Notes
, if greater.
|
•
|
pursuant to an
SPA
with SPL, the right to purchase, at Cheniere Marketing’s option, any LNG produced by SPL in excess of that required for other customers;
|
•
|
pursuant to
SPA
s with CCL, the right to purchase, at Cheniere Marketing’s option, any LNG produced by CCL that is not required for other customers; and
|
•
|
a portfolio of LNG vessel time charters.
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Operating cash flows
|
|
|
|
||||
Net cash used in operating activities
|
$
|
(144,034
|
)
|
|
$
|
(294,955
|
)
|
Changes in restricted cash for certain operating activities
|
(151,676
|
)
|
|
55,410
|
|
||
Cash, cash equivalents and restricted cash used in operating activities
|
(295,710
|
)
|
|
(239,545
|
)
|
||
|
|
|
|
||||
Investing cash flows
|
|
|
|
||||
Net cash used in investing activities
|
(19,257
|
)
|
|
(213,030
|
)
|
||
Use of restricted cash for the acquisition of property, plant and equipment
|
(2,279,835
|
)
|
|
(4,183,620
|
)
|
||
Cash, cash equivalents and restricted cash used in investing activities
|
(2,299,092
|
)
|
|
(4,396,650
|
)
|
||
|
|
|
|
||||
Financing cash flows
|
|
|
|
|
|
||
Net cash provided by financing activities
|
11,657
|
|
|
230,609
|
|
||
Investment in restricted cash
|
2,652,576
|
|
|
4,518,880
|
|
||
Cash, cash equivalents and restricted cash provided by financing activities
|
2,664,233
|
|
|
4,749,489
|
|
||
|
|
|
|
||||
Net increase in cash, cash equivalents and restricted cash
|
69,431
|
|
|
113,294
|
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
1,736,231
|
|
|
2,780,131
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
1,805,662
|
|
|
$
|
2,893,425
|
|
•
|
$450.0 million of borrowings under the
2016 CQP Credit Facilities
, which was entered into in February 2016 to prepay the $400.0 million CTPL Term Loan;
|
•
|
$1.1 billion of borrowings under the
2015 CCH Credit Facility
;
|
•
|
issuance of an aggregate principal amount of $1.3 billion of the
2024 CCH Senior Notes
in May 2016, which were used to prepay $1.1 billion of the outstanding borrowings under the
2015 CCH Credit Facility
;
|
•
|
$1.3 billion of borrowings under the
2015 SPL Credit Facilities
;
|
•
|
issuance of an aggregate principal amount of $1.5 billion of the
2026 SPL Senior Notes
in June 2016, which was used to prepay $1.3 billion of the outstanding borrowings under the
2015 SPL Credit Facilities
;
|
•
|
$15.2 million borrowings under the Cheniere Marketing trade finance facilities;
|
•
|
$140.0 million borrowings, net of $155.0 million repayment, made under the
SPL Working Capital Facility
;
|
•
|
$97.2 million
of debt issuance and deferred financing costs related to up-front fees paid upon the closing of these transactions; and
|
•
|
$40.2 million
of distributions and dividends to non-controlling interest by Cheniere Partners and Cheniere Holdings.
|
•
|
issuance of an aggregate principal amount of $2.0 billion of the
2025 SPL Senior Notes
in March 2015;
|
•
|
issuance of an aggregate principal amount of $625.0 million of the
2045 Cheniere Convertible Senior Notes
in March 2015, with an original issue discount of 20% for net proceeds of $495.7 million;
|
•
|
issuance of an aggregate principal amount of $1.0 billion of the
2025 CCH HoldCo II Convertible Senior Notes
in May 2015;
|
•
|
entering into the
2015 CCH Credit Facility
in May 2015 and borrowed $1.7 billion under this facility during the second quarter of 2015;
|
•
|
entering into the
2015 SPL Credit Facilities
aggregating $4.6 billion in June 2015, which terminated and replaced the 2013 SPL Credit Facilities;
|
•
|
$411.1 million
of debt issuance and deferred financing costs related to up-front fees paid upon the closing of these transactions; and
|
•
|
$40.1 million
of distributions and dividends to non-controlling interest by Cheniere Partners and Cheniere Holdings.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||||
Regasification revenues
|
$
|
65,622
|
|
|
$
|
66,489
|
|
|
$
|
(867
|
)
|
|
$
|
131,173
|
|
|
$
|
133,291
|
|
|
$
|
(2,118
|
)
|
LNG revenues (losses)
|
110,735
|
|
|
(706
|
)
|
|
111,441
|
|
|
113,439
|
|
|
(44
|
)
|
|
113,483
|
|
||||||
Other revenues
|
470
|
|
|
2,242
|
|
|
(1,772
|
)
|
|
1,296
|
|
|
3,147
|
|
|
(1,851
|
)
|
||||||
Total revenues
|
$
|
176,827
|
|
|
$
|
68,025
|
|
|
$
|
108,802
|
|
|
$
|
245,908
|
|
|
$
|
136,394
|
|
|
$
|
109,514
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||||
Cost of sales
|
$
|
85,709
|
|
|
$
|
1,444
|
|
|
$
|
84,265
|
|
|
$
|
100,216
|
|
|
$
|
2,137
|
|
|
$
|
98,079
|
|
Operating and maintenance expense
|
45,562
|
|
|
17,727
|
|
|
27,835
|
|
|
81,879
|
|
|
53,433
|
|
|
28,446
|
|
||||||
Development expense
|
1,616
|
|
|
16,609
|
|
|
(14,993
|
)
|
|
3,163
|
|
|
32,705
|
|
|
(29,542
|
)
|
||||||
Marketing expense
|
26,225
|
|
|
20,379
|
|
|
5,846
|
|
|
51,203
|
|
|
33,425
|
|
|
17,778
|
|
||||||
General and administrative expense
|
61,409
|
|
|
87,477
|
|
|
(26,068
|
)
|
|
109,333
|
|
|
132,448
|
|
|
(23,115
|
)
|
||||||
Depreciation and amortization expense
|
32,781
|
|
|
20,154
|
|
|
12,627
|
|
|
56,870
|
|
|
37,923
|
|
|
18,947
|
|
||||||
Impairment expense (recovery)
|
(71
|
)
|
|
—
|
|
|
(71
|
)
|
|
10,095
|
|
|
176
|
|
|
9,919
|
|
||||||
Other
|
50
|
|
|
109
|
|
|
(59
|
)
|
|
162
|
|
|
265
|
|
|
(103
|
)
|
||||||
Total operating costs and expenses
|
$
|
253,281
|
|
|
$
|
163,899
|
|
|
$
|
89,382
|
|
|
$
|
412,921
|
|
|
$
|
292,512
|
|
|
$
|
120,409
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||||
Interest expense, net of capitalized interest
|
$
|
105,967
|
|
|
$
|
85,486
|
|
|
$
|
20,481
|
|
|
$
|
182,304
|
|
|
$
|
145,098
|
|
|
$
|
37,206
|
|
Loss on early extinguishment of debt
|
55,315
|
|
|
7,281
|
|
|
48,034
|
|
|
56,772
|
|
|
96,273
|
|
|
(39,501
|
)
|
||||||
Derivative loss (gain), net
|
90,621
|
|
|
(46,049
|
)
|
|
136,670
|
|
|
271,555
|
|
|
80,641
|
|
|
190,914
|
|
||||||
Other expense (income)
|
6,930
|
|
|
(283
|
)
|
|
7,213
|
|
|
6,001
|
|
|
(655
|
)
|
|
6,656
|
|
||||||
Total other expense
|
$
|
258,833
|
|
|
$
|
46,435
|
|
|
$
|
212,398
|
|
|
$
|
516,632
|
|
|
$
|
321,357
|
|
|
$
|
195,275
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(Dollars in thousands)
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
||||||||||||
Income tax provision (benefit)
|
$
|
(343
|
)
|
|
$
|
(507
|
)
|
|
$
|
164
|
|
|
$
|
273
|
|
|
$
|
171
|
|
|
$
|
102
|
|
Net loss attributable to non-controlling interest
|
(36,526
|
)
|
|
(23,307
|
)
|
|
(13,219
|
)
|
|
(64,662
|
)
|
|
(91,442
|
)
|
|
26,780
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid Per Share (2)
|
|
Total Number of Shares Purchased as a Part of Publicly Announced Plans
|
|
Maximum Number of Units That May Yet Be Purchased Under the Plans
|
|
April 1 - 30, 2016
|
|
15,345
|
|
|
$33.77
|
|
—
|
|
—
|
May 1 - 31, 2016
|
|
17,224
|
|
|
$38.84
|
|
—
|
|
—
|
June 1 - 30, 2016
|
|
41,950
|
|
|
$33.36
|
|
—
|
|
—
|
Total
|
|
74,519
|
|
|
|
|
—
|
|
—
|
|
(1)
|
Represents shares surrendered to us by participants in our share-based compensation plans to settle the participants’ personal tax liabilities that resulted from the lapsing of restrictions on shares awarded to the participants under these plans.
|
(2)
|
The price paid per share was based on the closing trading price of our common stock on the dates on which we repurchased shares from the participants under our share-based compensation plans.
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
4.1
|
|
Indenture, dated as of May 18, 2016, among Cheniere Corpus Christi Holdings, LLC, as issuer, Corpus Christi Liquefaction, LLC, Cheniere Corpus Christi Pipeline, L.P. and Corpus Christi Pipeline GP, LLC, as guarantors, and The Bank of New York Mellon, as trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (SEC File No. 001-16383), filed on May 18, 2016)
|
4.2
|
|
Seventh Supplemental Indenture, dated as of June 14, 2016, between Sabine Pass Liquefaction, LLC and The Bank of New York Mellon, as Trustee under the Indenture (Incorporated by reference to Exhibit 4.1 to Cheniere Partners’ Current Report on Form 8-K (SEC File No. 001-33366), filed on June 14, 2016)
|
10.1†
|
|
Employment Agreement between Cheniere Energy, Inc. and Jack Fusco, dated May 12, 2016 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (SEC File No. 001-16383), filed on May 12, 2016)
|
10.2†
|
|
Letter Agreement between Cheniere Energy, Inc. and Neal Shear, dated May 12, 2016 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (SEC File No. 001-16383), filed on May 12, 2016)
|
10.3
|
|
Registration Rights Agreement, dated as of May 18, 2016, among Cheniere Corpus Christi Holdings, LLC and Corpus Christi Liquefaction, LLC, Cheniere Corpus Christi Pipeline, L.P. and Corpus Christi Pipeline GP, LLC, as guarantors, and Morgan Stanley & Co. LLC, for itself and as representative of the purchasers (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (SEC File No. 001-16383), filed on May 18, 2016)
|
10.4
|
|
Registration Rights Agreement, dated as of June 14, 2016, between Sabine Pass Liquefaction, LLC and Credit Suisse Securities (USA) LLC (Incorporated by reference to Exhibit 10.1 to Cheniere Partners’ Current Report on Form 8-K (SEC File No. 001-33366), filed on June 14, 2016)
|
10.5
|
|
Change orders to the Lump Sum Turnkey Agreement for the Engineering, Procurement and Construction of the Sabine Pass LNG Liquefaction Facility, dated as of November 11, 2011, between Sabine Pass Liquefaction, LLC and Bechtel Oil, Gas and Chemicals, Inc.: (i) the Change Order CO-00045 April Site Closure for Cheniere Celebration, dated April 4, 2016, (ii) the Change Order CO-00046 Defer Completion of Ship Loading Time Commissioning Test, dated May 17, 2016, and (iii) the Change Order CO-00047 Re-Orientation of PSV Bypass Valves, dated May 25, 2016 (Incorporated by reference to Exhibit 10.2 to SPL’s Quarterly Report on Form 10-Q (SEC File No. 333-192373), filed on August 8, 2016)
|
10.6
|
|
Change orders to the Lump Sum Turnkey Agreement for the Engineering, Procurement and Construction of the Sabine Pass LNG Stage 2 Liquefaction Facility, dated as of December 20, 2012, between Sabine Pass Liquefaction, LLC and Bechtel Oil, Gas and Chemicals, Inc.: (i) the Change Order CO-00021 Smokeless Flare Modification Study, dated March 29, 2016, (ii) the Change Order CO-00022 Cable Tray Support and Arc Flash Study, dated May 4, 2016, and (iii) the Change Order CO-00023 Re-Orientation of PSV Bypass Valves, dated May 17, 2016 (Incorporated by reference to Exhibit 10.3 to SPL’s Quarterly Report on Form 10-Q (SEC File No. 333-192373), filed on August 8, 2016)
|
10.7
|
|
Change orders to the Lump Sum Turnkey Agreement for the Engineering, Procurement and Construction of the Sabine Pass LNG Stage 3 Liquefaction Facility, dated as of May 4, 2015, between Sabine Pass Liquefaction, LLC and Bechtel Oil, Gas and Chemicals, Inc.: (i) the Change Order CO-00005 Performance and Attendance Bonus (PAB) Incentive Program Provisional Sum, dated March 16, 2016, (ii) the Change Order CO-00006 Additional Bechtel Hours to Support RECON, Temporary Access Rd., Addition of Flash Liquid Expander, Removal of Vibration Monitor System, To-Date Reconciliation of Soils Preparation Provisional Sum, dated March 22, 2016, (iii) the Change Order CO-00007 Additional Support for FERC Document Requests, dated May 10, 2016, (iv) the Change Order CO-00008 Water System Scope Changes and Seal Design & Seal Gas Modification, dated May 4, 2016, (v) the Change Order CO-00009 Re-Orientation of PSV Bypass Valves, dated May 17, 2016, and (vi) the Change Order CO-00010 Deletion of Chlorine Analyzer, dated June 15, 2016 (Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.) (Incorporated by reference to Exhibit 10.4 to SPL’s Quarterly Report on Form 10-Q (SEC File No. 333-192373), filed on August 8, 2016)
|
10.8*
|
|
Change orders to the Fixed Price Separated Turnkey Agreement for the Engineering, Procurement and Construction of the Corpus Christi Stage 1 Liquefaction Facility, dated as of December 6, 2013, between Corpus Christi Liquefaction, LLC and Bechtel Oil, Gas and Chemicals, Inc.: (i) the Change Order CO-00017 Process and Utility Tie-Ins Studies and Associated Scopes (138 kV Pricing, Transfer Line, Connections for Future LNG Truck Loading Facility), dated May 24, 2016, (ii) the Change Order CO-00018 FERC Conditions 40, 63, 64, 80, dated May 4, 2016, (iii) the Change Order CO-00019 Trelleborg Marine Equipment, BOG Compressor Tie-In, Multiplexer Credit, Additional FERC Hours, dated May 4, 2016, and (iv) the Change Order CO-00020 Impact Due to Overhead Power Transmission Lines on La Quinta Road and Flare System Modification Evaluation, dated May 31, 2016 (Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.)
|
Exhibit No.
|
|
Description
|
31.1*
|
|
Certification by Chief Executive Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act
|
31.2*
|
|
Certification by Chief Financial Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act
|
32.1**
|
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2**
|
|
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
†
|
Management contract or compensatory plan or arrangement.
|
|
|
CHENIERE ENERGY, INC.
|
|
|
|
|
|
Date:
|
August 8, 2016
|
By:
|
/s/ Michael J. Wortley
|
|
|
|
Michael J. Wortley
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(on behalf of the registrant and
as principal financial officer) |
|
|
|
|
Date:
|
August 8, 2016
|
By:
|
/s/ Leonard Travis
|
|
|
|
Leonard Travis
|
|
|
|
Vice President and Chief Accounting Officer
|
|
|
|
(on behalf of the registrant and
as principal accounting officer) |
PROJECT NAME:
Corpus Christi Stage 1 Liquefaction Facility
OWNER:
Corpus Christi Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 6, 2013
|
CHANGE ORDER NUMBER:
CO-00017
DATE OF CHANGE ORDER:
May 24, 2016
|
1.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will engineer, procure and construct to facilitate future expansion for the following scopes of work:
|
a.
|
Condensate Storage Tank Connections — a 3” T-connection and associated valves and drain.
|
b.
|
Refrigerant Storage System updates are listed below:
|
i.
|
6” T-connection and associated valves and drains added to the suction of the Stage 1 Propane Make-up Pump and a 4” T-connection and associated valves and drains added to the liquid propane return line from Trains in Stage 1.
|
ii.
|
Three 4” T-connections and associated valves and drains added to the ethylene make-up/de-inventory line in Stage 1
|
iii.
|
Utility connections in Stage 1 for future Stage 3 pump (Propane Makeup and Ethylene Re-Inventory Pumps) are listed below:
|
▪
|
Two 2” blowdown connections with associated valves and drains
|
▪
|
Four 2" dry flare connections with associated valves and drains
|
▪
|
Two 2" nitrogen connections with associated valves and drains
|
c.
|
Amine Storage System — Three 6” T-connections and associated valves and drains.
|
d.
|
Firewater — 18” T-connection and isolation valve added to the Stage 1 firewater pumps header and modifications to three (3) pipe racks and foundations to accommodate the future 18” line.
|
e.
|
Plant Air — 8” T-connection and associated valve and drain added to the Stage 1 plant air header.
|
f.
|
Details of these studies are depicted in Exhibit A of this Change Order.
|
2.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will conduct all the following updates for the future expansion:
|
a.
|
The first pole outside Hecker substation will be changed to a branch pole. This pole will allow the incoming lines from Hecker substation to split and run in two directions. One set of lines from the branch pole will cross the La Quinta road and will be routed North to a dead-end structure for future expansion. The other set of lines from the branch pole will cross the La Quinta road and will be routed South to serve CCL Stage 1 and future CCL Stage 2. Height of poles will be designed to meet clearance requirements of the overhead lines in accordance with NESC C-2.
|
b.
|
A manually operated disconnect switch will be provided to allow the future expansion dead -end pole to be de-energized when CCL Stage 1 overhead lines are in service.
|
c.
|
Separate set of 2 x OPGW (Optical Ground Wire) will be provided from the Hecker substation to the future expansion dead-end pole.
|
d.
|
Contractor’s installation scope will begin from the branch pole outside Hecker substation and will include the overhead lines routed to the future expansion dead end pole and CCL Stage 1 overhead-to-underground termination pole. Contractor will free-issue the overhead line conductor and OPGW for installation between the branch pole and the Hecker substation termination poles by Owner. Contractor will coil the OPGW fibers in splice boxes provided on the branch pole. Fusion splicing of fibers in the splice boxes at branch pole and the future expansion dead-end pole will be by the Owner.
|
e.
|
This scope is depicted in Exhibit B.
|
3.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will design and construct foundation and structural steel changes required on a portion of the 102R01(Utility Piperack) necessary for volume and loads of a new 30” transfer line. This scope is depicted in Exhibit C.
|
4.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will engineer, procure, and construct two (2) tie-ins for future LNG truck loading facilities. One of the tie-ins will be an 8” tie-in to the LNG line and the other will be an 8” tie-in to the BOG line. This scope is depicted in Exhibit D.
|
5.
|
The cost breakdowns for the scopes of work noted above in this Change Order are detailed in Exhibit E.
|
6.
|
Schedule C-1 (Milestone Payment Schedule) of Attachment C of the Agreement will be amended by including the Milestone(s) listed in Exhibit F of this Change Order.
|
The original Contract Price was
|
$
|
7,080,830,000
|
|
Net change by previously authorized Change Orders (0001-00016)
|
$
|
543,457,362
|
|
The Contract Price prior to this Change Order was
|
$
|
7,624,287,362
|
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of
|
$
|
***
|
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of
|
$
|
***
|
|
The new Contract Price including this Change Order will be
|
$
|
7,627,893,684
|
|
The original Aggregate Equipment Price was
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00016)
|
$
|
***
|
The Aggregate Equipment Price prior to this Change Order was
|
$
|
***
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of
|
$
|
***
|
The new Aggregate Equipment Price including this Change Order will be
|
$
|
***
|
The original Aggregate Labor and Skills Price was
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00016)
|
$
|
***
|
The Aggregate Labor and Skills Price prior to this Change Order was
|
$
|
***
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of
|
$
|
***
|
The new Aggregate Labor and Skills Price including this Change Order will be
|
$
|
***
|
The original Aggregate Provisional Sum was
|
$
|
950,561,351
|
|
Net change by previously authorized Change Orders (0001-00016)
|
$
|
(745,966,926
|
)
|
The Aggregate Provisional Sum prior to this Change Order was
|
$
|
204,594,425
|
|
The Aggregate Provisional Sum will be changed by this Change Order in the amount of
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be
|
$
|
204,594,425
|
|
/s/ Ed Lehotsky
|
|
/s/ Walker Kimball
|
Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Walker Kimball
|
Name
|
|
Name
|
Sr. VP LNG E&C
|
|
Senior Project Manager, SVP
|
Title
|
|
Title
|
June 8, 2016
|
|
May 24, 2016
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME:
Corpus Christi Stage 1 Liquefaction Facility
OWNER:
Corpus Christi Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 6, 2013
|
CHANGE ORDER NUMBER:
CO-00018
DATE OF CHANGE ORDER:
May 4, 2016
|
1.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will comply with the conditions of FERC Order 40 which states the “final design shall provide an air gap or vent installed downstream of the process seals or isolations installed at the interface between a flammable fluid system and an electrical conduit or wiring system. Each air gap shall vent to a safe location and be equipped with a leak detection device that shall continuously monitor for the presence of flammable fluid; shall alarm the hazardous condition; and shall shutdown the appropriate systems.” To comply, Contractor will revise the design as follows:
|
a.
|
Provide interlock showdown capability on identified pumps;
|
b.
|
Mitigate nuisance alarms and trips by:
|
i.
|
Prescribing alarm set-point to be fluid service specific
|
ii.
|
Alarm to occur at (-5 degrees F) and trip alarm at (-58 degrees F)
|
iii.
|
Add an interlock to shutdown each pump at Time elapsed 10 seconds after receiving trip set point.
|
2.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will comply with the conditions of FERC Order 63 which states “final design shall specify the ethylene storage vessels be equipped with redundant full capacity relief valves.” To comply, Contractor will install redundant full capacity relief valves on ethylene storage vessels 00V-2001A, 00V-2001B, and 00V-2001C. The redundant valve shall be set at the design pressure of the equipment. All relief valves shall have their isolation valves car sealed open and upstream isolation valves on spare(s) car seal closed.
|
3.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will comply with the conditions of FERC Order 64 which states “final design shall specify that propane storage vessels be equipped with redundant full capacity relief valves.” To comply, Contractor will install redundant full capacity relief valves on propane storage vessels 00V-2002A and 00V-2002B. The redundant valve shall be set at the design pressure of the equipment. All relief valves shall have their isolation valves car sealed open and upstream isolation valves on spare(s) car seal closed.
|
4.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will comply with the conditions of FERC Order 80 which states “final design shall include clean agent systems in the electrical switchgear and instrumentation buildings.” To comply, Contractor will add 17 clean agent systems in all occupied or unoccupied electrical switchgear and instrumentation buildings. Clean agent systems will be based on FM-200 or equivalent.
|
5.
|
The cost breakdowns for the scopes of work noted above in this Change Order are detailed in Exhibit A.
|
6.
|
Schedule C-1 (Milestone Payment Schedule) of Attachment C of the Agreement will be amended by including the Milestone(s) listed in Exhibit B of this Change Order.
|
The original Contract Price was
|
$
|
7,080,830,000
|
|
Net change by previously authorized Change Orders (0001-00017)
|
$
|
547,063,684
|
|
The Contract Price prior to this Change Order was
|
$
|
7,627,893,684
|
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of
|
$
|
***
|
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of
|
$
|
***
|
|
The new Contract Price including this Change Order will be
|
$
|
7,634,601,089
|
|
The original Aggregate Equipment Price was
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00017)
|
$
|
***
|
The Aggregate Equipment Price prior to this Change Order was
|
$
|
***
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of
|
$
|
***
|
The new Aggregate Equipment Price including this Change Order will be
|
$
|
***
|
The original Aggregate Labor and Skills Price was
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00017)
|
$
|
***
|
The Aggregate Labor and Skills Price prior to this Change Order was
|
$
|
***
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of
|
$
|
***
|
The new Aggregate Labor and Skills Price including this Change Order will be
|
$
|
***
|
The original Aggregate Provisional Sum was
|
$
|
950,561,351
|
|
Net change by previously authorized Change Orders (0001-00017)
|
$
|
(745,966,926
|
)
|
The Aggregate Provisional Sum prior to this Change Order was
|
$
|
204,594,425
|
|
The Aggregate Provisional Sum will be changed by this Change Order in the amount of
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be
|
$
|
204,594,425
|
|
/s/ Ed Lehotsky
|
|
/s/ Walker Kimball
|
Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Walker Kimball
|
Name
|
|
Name
|
Sr. VP LNG E&C
|
|
Senior Project Manager, SVP
|
Title
|
|
Title
|
May 17, 2016
|
|
May 4, 2016
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME:
Corpus Christi Stage 1 Liquefaction Facility
OWNER:
Corpus Christi Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 6, 2013
|
CHANGE ORDER NUMBER:
CO-00019
DATE OF CHANGE ORDER:
May 4, 2016
|
1.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will ensure the Quick Release Hook (QRH) assemblies and spare fasteners will be stainless steel. The chains for the breasting dolphin fenders will remain hot dip galvanized with a 6mm corrosion allowance.
|
2.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will install an additional 20-inch line and an additional 2-inch line for the future BOG and thermal relief tie-ins for the BOG compressor. These additions require increased support associated with pipe racks 102R01 (Utility Piperack) and 102R02 (Storage Tank Piperack) as shown in Exhibit A.
|
3.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will remove the two (2) additional multiplexer (MUX) interfaces that interconnected the Owner and AEP 138kV switchgear to drive the fiber optic lines. This scope was added in Change Order CO-00007, executed August 11, 2015. Owner will be credited for this scope removal.
|
4.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will add 3,500 additional hours for FERC support in accordance with Attachment A, Section 9.2 of the Agreement.
|
5.
|
The cost breakdowns for the scopes of work noted above in this Change Order are detailed in Exhibit B.
|
6.
|
Schedule C-1 (Milestone Payment Schedule) of Attachment C of the Agreement will be amended by including the Milestone(s) listed in Exhibit C of this Change Order.
|
The original Contract Price was
|
$
|
7,080,830,000
|
|
Net change by previously authorized Change Orders (0001-00018)
|
$
|
553,771,089
|
|
The Contract Price prior to this Change Order was
|
$
|
7,634,601,089
|
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of
|
$
|
***
|
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of
|
$
|
***
|
|
The new Contract Price including this Change Order will be
|
$
|
7,635,880,974
|
|
The original Aggregate Equipment Price was
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00018)
|
$
|
***
|
The Aggregate Equipment Price prior to this Change Order was
|
$
|
***
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of
|
$
|
***
|
The new Aggregate Equipment Price including this Change Order will be
|
$
|
***
|
The original Aggregate Labor and Skills Price was
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00018)
|
$
|
***
|
The Aggregate Labor and Skills Price prior to this Change Order was
|
$
|
***
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of
|
$
|
***
|
The new Aggregate Labor and Skills Price including this Change Order will be
|
$
|
***
|
The original Aggregate Provisional Sum was
|
$
|
950,561,351
|
|
Net change by previously authorized Change Orders (0001-00016)
|
$
|
(745,966,926
|
)
|
The Aggregate Provisional Sum prior to this Change Order was
|
$
|
204,594,425
|
|
The Aggregate Provisional Sum will be changed by this Change Order in the amount of
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be
|
$
|
204,594,425
|
|
/s/ Ed Lehotsky
|
|
/s/ Walker Kimball
|
Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Walker Kimball
|
Name
|
|
Name
|
Sr. VP LNG E&C
|
|
Senior Project Manager, SVP
|
Title
|
|
Title
|
June 8, 2016
|
|
May 4, 2016
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME:
Corpus Christi Stage 1 Liquefaction Facility
OWNER:
Corpus Christi Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 6, 2013
|
CHANGE ORDER NUMBER:
CO-00020
DATE OF CHANGE ORDER:
May 31, 2016
|
1.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will be compensated for the costs associated with required mobilization of a larger crane than planned to complete box culvert installation impeded by overhead transmission lines obstructing the path of construction.
|
2.
|
Per Article 6.1.B of the Agreement, Parties agree Contractor will conduct a study to identify a short-term solution (based on nitrogen injection) and a long-term solution (based on either high or low pressure air injection) to mitigate smoke production in the flares. The study will form the basis of estimate for the implementation of short-term and long-term flare modifications.
|
3.
|
The cost breakdowns for the scopes of work noted above in this Change Order are detailed in Exhibit A.
|
4.
|
Schedule C-1 (Milestone Payment Schedule) of Attachment C of the Agreement will be amended by including the Milestone(s) listed in Exhibit B of this Change Order.
|
The original Contract Price was
|
$
|
7,080,830,000
|
|
Net change by previously authorized Change Orders (0001-00019)
|
$
|
555,050,974
|
|
The Contract Price prior to this Change Order was
|
$
|
7,635,880,974
|
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of
|
$
|
***
|
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of
|
$
|
***
|
|
The new Contract Price including this Change Order will be
|
$
|
7,636,461,457
|
|
The original Aggregate Equipment Price was
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00019)
|
$
|
***
|
The Aggregate Equipment Price prior to this Change Order was
|
$
|
***
|
The Aggregate Equipment Price will be changed by this Change Order in the amount of
|
$
|
***
|
The new Aggregate Equipment Price including this Change Order will be
|
$
|
***
|
The original Aggregate Labor and Skills Price was
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00019)
|
$
|
***
|
The Aggregate Labor and Skills Price prior to this Change Order was
|
$
|
***
|
The Aggregate Labor and Skills Price will be changed by this Change Order in the amount of
|
$
|
***
|
The new Aggregate Labor and Skills Price including this Change Order will be
|
$
|
***
|
The original Aggregate Provisional Sum was
|
$
|
950,561,351
|
|
Net change by previously authorized Change Orders (0001-00019)
|
$
|
(745,966,926
|
)
|
The Aggregate Provisional Sum prior to this Change Order was
|
$
|
204,594,425
|
|
The Aggregate Provisional Sum will be changed by this Change Order in the amount of
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be
|
$
|
204,594,425
|
|
/s/ Ed Lehotsky
|
|
/s/ Walker Kimball
|
Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Walker Kimball
|
Name
|
|
Name
|
Sr. VP LNG E&C
|
|
Senior Project Manager, SVP
|
Title
|
|
Title
|
June 15, 2016
|
|
May 31, 2016
|
Date of Signing
|
|
Date of Signing
|
1.
|
I have reviewed this
quarterly report on Form 10-Q
of Cheniere Energy, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Jack A. Fusco
|
Jack A. Fusco
Chief Executive Officer of |
Cheniere Energy, Inc.
|
1.
|
I have reviewed this
quarterly report on Form 10-Q
of Cheniere Energy, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Michael J. Wortley
|
Michael J. Wortley
Chief Financial Officer of |
Cheniere Energy, Inc.
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Jack A. Fusco
|
Jack A. Fusco
Chief Executive Officer of |
Cheniere Energy, Inc.
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Michael J. Wortley
|
Michael J. Wortley
Chief Financial Officer of |
Cheniere Energy, Inc.
|