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CHENIERE ENERGY, INC.
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Delaware
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001-16383
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95-4352386
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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700 Milam Street
Suite 1900 Houston, Texas |
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77002
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
(713) 375-5000
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibit No.
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Description
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23.1*
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99.1*
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101.INS*
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XBRL Instance Document
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101.SCH*
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XBRL Taxonomy Extension Schema Document
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101.CAL*
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF*
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB*
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XBRL Taxonomy Extension Labels Linkbase Document
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101.PRE*
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XBRL Taxonomy Extension Presentation Linkbase Document
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*
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Filed herewith.
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CHENIERE ENERGY, INC.
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||
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Date:
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May 23, 2018
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By:
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/s/ Michael J. Wortley
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Name:
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Michael J. Wortley
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Title:
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Executive Vice President and
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Chief Financial Officer
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/s/ KPMG LLP
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KPMG LLP
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ITEM 8.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
/s/ KPMG LLP
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KPMG LLP
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
722
|
|
|
$
|
876
|
|
Restricted cash
|
1,880
|
|
|
860
|
|
||
Accounts and other receivables
|
369
|
|
|
218
|
|
||
Accounts receivable—related party
|
2
|
|
|
—
|
|
||
Inventory
|
243
|
|
|
160
|
|
||
Derivative assets
|
57
|
|
|
24
|
|
||
Other current assets
|
96
|
|
|
100
|
|
||
Total current assets
|
3,369
|
|
|
2,238
|
|
||
|
|
|
|
||||
Non-current restricted cash
|
11
|
|
|
91
|
|
||
Property, plant and equipment, net
|
23,978
|
|
|
20,635
|
|
||
Debt issuance costs, net
|
149
|
|
|
277
|
|
||
Non-current derivative assets
|
34
|
|
|
83
|
|
||
Goodwill
|
77
|
|
|
77
|
|
||
Other non-current assets, net
|
288
|
|
|
302
|
|
||
Total assets
|
$
|
27,906
|
|
|
$
|
23,703
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
25
|
|
|
$
|
49
|
|
Accrued liabilities
|
1,078
|
|
|
637
|
|
||
Current debt
|
—
|
|
|
247
|
|
||
Deferred revenue
|
111
|
|
|
73
|
|
||
Derivative liabilities
|
37
|
|
|
71
|
|
||
Total current liabilities
|
1,251
|
|
|
1,077
|
|
||
|
|
|
|
||||
Long-term debt, net
|
25,336
|
|
|
21,688
|
|
||
Non-current deferred revenue
|
1
|
|
|
5
|
|
||
Non-current derivative liabilities
|
19
|
|
|
45
|
|
||
Other non-current liabilities
|
59
|
|
|
49
|
|
||
|
|
|
|
||||
Commitments and contingencies (see Note 20)
|
|
|
|
|
|
||
|
|
|
|
||||
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 December 31, 2017 and 2016
|
|
|
|
||||
Issued: 250.1 million shares at December 31, 2017 and 2016
|
|
|
|
|
|
||
Outstanding: 237.6 million shares and 238.0 million shares at December 31, 2017 and 2016, respectively
|
1
|
|
|
1
|
|
||
Treasury stock: 12.5 million shares and 12.2 million shares at December 31, 2017 and 2016, respectively, at cost
|
(386
|
)
|
|
(374
|
)
|
||
Additional paid-in-capital
|
3,248
|
|
|
3,211
|
|
||
Accumulated deficit
|
(4,627
|
)
|
|
(4,234
|
)
|
||
Total stockholders’ deficit
|
(1,764
|
)
|
|
(1,396
|
)
|
||
Non-controlling interest
|
3,004
|
|
|
2,235
|
|
||
Total equity
|
1,240
|
|
|
839
|
|
||
Total liabilities and equity
|
$
|
27,906
|
|
|
$
|
23,703
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
|
|
|
|
|
||||||
LNG revenues
|
$
|
5,317
|
|
|
$
|
1,016
|
|
|
$
|
—
|
|
Regasification revenues
|
260
|
|
|
259
|
|
|
259
|
|
|||
Other revenues
|
21
|
|
|
8
|
|
|
12
|
|
|||
Other—related party
|
3
|
|
|
—
|
|
|
—
|
|
|||
Total revenues
|
5,601
|
|
|
1,283
|
|
|
271
|
|
|||
|
|
|
|
|
|
||||||
Operating costs and expenses
|
|
|
|
|
|
||||||
Cost (cost recovery) of sales (excluding depreciation and amortization expense shown separately below)
|
3,120
|
|
|
582
|
|
|
(15
|
)
|
|||
Operating and maintenance expense
|
446
|
|
|
216
|
|
|
95
|
|
|||
Development expense
|
10
|
|
|
7
|
|
|
42
|
|
|||
Selling, general and administrative expense
|
256
|
|
|
260
|
|
|
363
|
|
|||
Depreciation and amortization expense
|
356
|
|
|
174
|
|
|
83
|
|
|||
Restructuring expense
|
6
|
|
|
61
|
|
|
61
|
|
|||
Impairment expense and loss on disposal of assets
|
19
|
|
|
13
|
|
|
91
|
|
|||
Total operating costs and expenses
|
4,213
|
|
|
1,313
|
|
|
720
|
|
|||
|
|
|
|
|
|
||||||
Income (loss) from operations
|
1,388
|
|
|
(30
|
)
|
|
(449
|
)
|
|||
|
|
|
|
|
|
||||||
Other income (expense)
|
|
|
|
|
|
||||||
Interest expense, net of capitalized interest
|
(747
|
)
|
|
(488
|
)
|
|
(322
|
)
|
|||
Loss on early extinguishment of debt
|
(100
|
)
|
|
(135
|
)
|
|
(124
|
)
|
|||
Derivative gain (loss), net
|
7
|
|
|
(10
|
)
|
|
(204
|
)
|
|||
Other income
|
18
|
|
|
—
|
|
|
2
|
|
|||
Total other expense
|
(822
|
)
|
|
(633
|
)
|
|
(648
|
)
|
|||
|
|
|
|
|
|
||||||
Income (loss) before income taxes and non-controlling interest
|
566
|
|
|
(663
|
)
|
|
(1,097
|
)
|
|||
Income tax provision
|
(3
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Net income (loss)
|
563
|
|
|
(665
|
)
|
|
(1,097
|
)
|
|||
Less: net income (loss) attributable to non-controlling interest
|
956
|
|
|
(55
|
)
|
|
(122
|
)
|
|||
Net loss attributable to common stockholders
|
$
|
(393
|
)
|
|
$
|
(610
|
)
|
|
$
|
(975
|
)
|
|
|
|
|
|
|
|
|
||||
Net loss per share attributable to common stockholders—basic and diluted (1)
|
$
|
(1.68
|
)
|
|
$
|
(2.67
|
)
|
|
$
|
(4.30
|
)
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding—basic and diluted
|
233.1
|
|
|
228.8
|
|
|
226.9
|
|
|
|
|
|
|
(1)
|
Earnings per share in the table may not recalculate exactly due to rounding because it is calculated based on whole numbers, not the rounded numbers presented.
|
|
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, 2014
|
236.7
|
|
|
$
|
1
|
|
|
10.6
|
|
|
$
|
(293
|
)
|
|
$
|
2,777
|
|
|
$
|
(2,649
|
)
|
|
$
|
2,666
|
|
|
$
|
2,502
|
|
Exercise of stock options
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Forfeitures of restricted stock
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
—
|
|
|
90
|
|
||||||
Shares repurchased related to share-based compensation
|
(1.0
|
)
|
|
—
|
|
|
1.0
|
|
|
(61
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
||||||
Excess tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Loss attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122
|
)
|
|
(122
|
)
|
||||||
Equity portion of convertible notes, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
205
|
|
|
—
|
|
|
—
|
|
|
205
|
|
||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
(80
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(975
|
)
|
|
—
|
|
|
(975
|
)
|
||||||
Balance at December 31, 2015
|
235.6
|
|
|
1
|
|
|
11.6
|
|
|
(354
|
)
|
|
3,076
|
|
|
(3,624
|
)
|
|
2,464
|
|
|
1,563
|
|
||||||
Issuances of restricted stock
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of stock to acquire additional interest in Cheniere Holdings
|
3.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
(94
|
)
|
|
—
|
|
||||||
Forfeitures of restricted stock
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||||
Shares repurchased related to share-based compensation
|
(0.6
|
)
|
|
—
|
|
|
0.6
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
||||||
Loss attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
(55
|
)
|
||||||
Equity portion of convertible notes, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
(80
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(610
|
)
|
|
—
|
|
|
(610
|
)
|
||||||
Balance at December 31, 2016
|
238.0
|
|
|
1
|
|
|
12.2
|
|
|
(374
|
)
|
|
3,211
|
|
|
(4,234
|
)
|
|
2,235
|
|
|
839
|
|
||||||
Issuances of restricted stock
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of stock to acquire additional interest in Cheniere Holdings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||||
Forfeitures of restricted stock
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||||
Shares repurchased related to share-based compensation
|
(0.3
|
)
|
|
—
|
|
|
0.3
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||||
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
956
|
|
|
956
|
|
||||||
Equity portion of convertible notes, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(185
|
)
|
|
(185
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(393
|
)
|
|
—
|
|
|
(393
|
)
|
||||||
Balance at December 31, 2017
|
237.6
|
|
|
$
|
1
|
|
|
12.5
|
|
|
$
|
(386
|
)
|
|
$
|
3,248
|
|
|
$
|
(4,627
|
)
|
|
$
|
3,004
|
|
|
$
|
1,240
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
563
|
|
|
$
|
(665
|
)
|
|
$
|
(1,097
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Non-cash LNG inventory write-downs
|
—
|
|
|
—
|
|
|
18
|
|
|||
Depreciation and amortization expense
|
356
|
|
|
174
|
|
|
83
|
|
|||
Share-based compensation expense
|
91
|
|
|
101
|
|
|
172
|
|
|||
Non-cash interest expense
|
75
|
|
|
77
|
|
|
59
|
|
|||
Amortization of debt issuance costs, deferred commitment fees, premium and discount
|
69
|
|
|
62
|
|
|
48
|
|
|||
Loss on early extinguishment of debt
|
100
|
|
|
135
|
|
|
124
|
|
|||
Total losses (gains) on derivatives, net
|
62
|
|
|
(28
|
)
|
|
168
|
|
|||
Net cash used for settlement of derivative instruments
|
(106
|
)
|
|
(45
|
)
|
|
(100
|
)
|
|||
Impairment expense and loss on disposal of assets
|
19
|
|
|
13
|
|
|
91
|
|
|||
Other
|
(4
|
)
|
|
4
|
|
|
1
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts and other receivables
|
(139
|
)
|
|
(207
|
)
|
|
(1
|
)
|
|||
Accounts receivable—related party
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
Inventory
|
(73
|
)
|
|
(119
|
)
|
|
(28
|
)
|
|||
Accounts payable and accrued liabilities
|
225
|
|
|
64
|
|
|
2
|
|
|||
Deferred revenue
|
34
|
|
|
42
|
|
|
(4
|
)
|
|||
Other, net
|
(39
|
)
|
|
(12
|
)
|
|
(19
|
)
|
|||
Net cash provided by (used in) operating activities
|
1,231
|
|
|
(404
|
)
|
|
(483
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
(3,357
|
)
|
|
(4,356
|
)
|
|
(6,853
|
)
|
|||
Investment in equity method investment
|
(41
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
17
|
|
|
(57
|
)
|
|
(131
|
)
|
|||
Net cash used in investing activities
|
(3,381
|
)
|
|
(4,413
|
)
|
|
(6,984
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from issuances of debt
|
6,854
|
|
|
12,865
|
|
|
7,073
|
|
|||
Repayments of debt
|
(3,632
|
)
|
|
(7,671
|
)
|
|
—
|
|
|||
Debt issuance and deferred financing costs
|
(89
|
)
|
|
(172
|
)
|
|
(513
|
)
|
|||
Debt extinguishment costs
|
—
|
|
|
(14
|
)
|
|
—
|
|
|||
Distributions and dividends to non-controlling interest
|
(185
|
)
|
|
(80
|
)
|
|
(80
|
)
|
|||
Proceeds from exercise of stock options
|
—
|
|
|
—
|
|
|
2
|
|
|||
Payments related to tax withholdings for share-based compensation
|
(12
|
)
|
|
(20
|
)
|
|
(61
|
)
|
|||
Other
|
—
|
|
|
—
|
|
|
2
|
|
|||
Net cash provided by financing activities
|
2,936
|
|
|
4,908
|
|
|
6,423
|
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
786
|
|
|
91
|
|
|
(1,044
|
)
|
|||
Cash, cash equivalents and restricted cash—beginning of period
|
1,827
|
|
|
1,736
|
|
|
2,780
|
|
|||
Cash, cash equivalents and restricted cash—end of period
|
$
|
2,613
|
|
|
$
|
1,827
|
|
|
$
|
1,736
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash and cash equivalents
|
$
|
722
|
|
|
$
|
876
|
|
Restricted cash
|
1,880
|
|
|
860
|
|
||
Non-current restricted cash
|
11
|
|
|
91
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
2,613
|
|
|
$
|
1,827
|
|
•
|
inability to recover cost increases due to rate caps and rate case moratoriums;
|
•
|
inability to recover capitalized costs, including an adequate return on those costs through the rate-making process and the FERC proceedings;
|
•
|
excess capacity;
|
•
|
increased competition and discounting in the markets we serve; and
|
•
|
impacts of ongoing regulatory initiatives in the natural gas industry.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Current restricted cash
|
|
|
|
|
||||
SPL Project
|
|
$
|
544
|
|
|
$
|
358
|
|
Cheniere Partners and cash held by guarantor subsidiaries
|
|
1,045
|
|
|
247
|
|
||
CCL Project
|
|
227
|
|
|
197
|
|
||
Cash held by our subsidiaries restricted to Cheniere
|
|
64
|
|
|
58
|
|
||
Total current restricted cash
|
|
$
|
1,880
|
|
|
$
|
860
|
|
|
|
|
|
|
||||
Non-current restricted cash
|
|
|
|
|
||||
CCL Project
|
|
$
|
—
|
|
|
$
|
73
|
|
Other
|
|
11
|
|
|
18
|
|
||
Total non-current restricted cash
|
|
$
|
11
|
|
|
$
|
91
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Trade receivables
|
|
|
|
|
||||
SPL
|
|
$
|
185
|
|
|
$
|
88
|
|
Cheniere Marketing
|
|
163
|
|
|
121
|
|
||
Other accounts receivable
|
|
21
|
|
|
9
|
|
||
Total accounts and other receivables
|
|
$
|
369
|
|
|
$
|
218
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Natural gas
|
|
$
|
17
|
|
|
$
|
15
|
|
LNG
|
|
44
|
|
|
50
|
|
||
LNG in-transit
|
|
130
|
|
|
58
|
|
||
Materials and other
|
|
52
|
|
|
37
|
|
||
Total inventory
|
|
$
|
243
|
|
|
$
|
160
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
LNG terminal costs
|
|
|
|
|
||||
LNG terminal
|
|
$
|
12,687
|
|
|
$
|
7,978
|
|
LNG terminal construction-in-process
|
|
11,932
|
|
|
12,995
|
|
||
LNG site and related costs
|
|
86
|
|
|
41
|
|
||
Accumulated depreciation
|
|
(882
|
)
|
|
(555
|
)
|
||
Total LNG terminal costs, net
|
|
23,823
|
|
|
20,459
|
|
||
Fixed assets and other
|
|
|
|
|
|
|
||
Computer and office equipment
|
|
14
|
|
|
13
|
|
||
Furniture and fixtures
|
|
19
|
|
|
17
|
|
||
Computer software
|
|
92
|
|
|
85
|
|
||
Leasehold improvements
|
|
41
|
|
|
43
|
|
||
Land
|
|
59
|
|
|
61
|
|
||
Other
|
|
16
|
|
|
22
|
|
||
Accumulated depreciation
|
|
(86
|
)
|
|
(65
|
)
|
||
Total fixed assets and other, net
|
|
155
|
|
|
176
|
|
||
Property, plant and equipment, net
|
|
$
|
23,978
|
|
|
$
|
20,635
|
|
Components
|
|
Useful life (yrs)
|
LNG storage tanks
|
|
50
|
Natural gas pipeline facilities
|
|
40
|
Marine berth, electrical, facility and roads
|
|
35
|
Regasification processing equipment
|
|
30
|
Sendout pumps
|
|
20
|
Liquefaction processing equipment
|
|
6-50
|
Other
|
|
15-30
|
•
|
interest rate swaps to hedge the exposure to volatility in a portion of the floating-rate interest payments under certain credit facilities
(“Interest Rate Derivatives”)
;
|
•
|
commodity derivatives consisting of natural gas supply contracts for the commissioning and operation of the
SPL Project
and the
CCL 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 both LNG Trading Derivatives and operations in countries outside of the United States
(“FX Derivatives”)
.
|
|
Fair Value Measurements as of
|
||||||||||||||||||||||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
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
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
CQP Interest Rate Derivatives asset
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||||||
CCH Interest Rate Derivatives liability
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
(86
|
)
|
|
—
|
|
|
(86
|
)
|
||||||||
Liquefaction Supply Derivatives asset (liability)
|
2
|
|
|
10
|
|
|
43
|
|
|
55
|
|
|
(4
|
)
|
|
(2
|
)
|
|
79
|
|
|
73
|
|
||||||||
LNG Trading Derivatives asset (liability)
|
(13
|
)
|
|
5
|
|
|
—
|
|
|
(8
|
)
|
|
2
|
|
|
(5
|
)
|
|
—
|
|
|
(3
|
)
|
||||||||
FX Derivatives liability
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Net Fair Value Asset
(in millions)
|
|
Valuation Approach
|
|
Significant Unobservable Input
|
|
Significant Unobservable Inputs Range
|
Physical Liquefaction Supply Derivatives
|
|
$43
|
|
Market approach incorporating present value techniques
|
|
Basis Spread
|
|
$(0.703) - $0.432
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance, beginning of period
|
|
$
|
79
|
|
|
$
|
32
|
|
|
$
|
—
|
|
Realized and mark-to-market gains (losses):
|
|
|
|
|
|
|
||||||
Included in cost of sales (1)
|
|
(37
|
)
|
|
48
|
|
|
32
|
|
|||
Purchases and settlements:
|
|
|
|
|
|
|
||||||
Purchases
|
|
14
|
|
|
1
|
|
|
—
|
|
|||
Settlements (1)
|
|
(12
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Transfers out of Level 3
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||
Balance, end of period
|
|
$
|
43
|
|
|
$
|
79
|
|
|
$
|
32
|
|
Change in unrealized gains relating to instruments still held at end of period
|
|
$
|
(37
|
)
|
|
$
|
49
|
|
|
$
|
32
|
|
|
(1)
|
Does not include the decrease in fair value of
$1 million
related to the realized gains capitalized during the
year ended December 31, 2016
.
|
|
|
Initial Notional Amount
|
|
Maximum Notional Amount
|
|
Effective Date
|
|
Maturity Date
|
|
Weighted Average Fixed Interest Rate Paid
|
|
Variable Interest Rate Received
|
CQP Interest Rate Derivatives
|
|
$225 million
|
|
$1.3 billion
|
|
March 22, 2016
|
|
February 29, 2020
|
|
1.19%
|
|
One-month LIBOR
|
CCH Interest Rate Derivatives
|
|
$29 million
|
|
$4.9 billion
|
|
May 20, 2015
|
|
May 31, 2022
|
|
2.29%
|
|
One-month LIBOR
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
|
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 assets
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-current derivative assets
|
|
—
|
|
|
14
|
|
|
3
|
|
|
17
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||||||
Total derivative assets
|
|
—
|
|
|
21
|
|
|
3
|
|
|
24
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative liabilities
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(43
|
)
|
|
(50
|
)
|
||||||||
Non-current derivative liabilities
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
|
(2
|
)
|
|
—
|
|
|
(43
|
)
|
|
(45
|
)
|
||||||||
Total derivative liabilities
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
(35
|
)
|
|
(6
|
)
|
|
(3
|
)
|
|
(86
|
)
|
|
(95
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative asset (liability), net
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
(32
|
)
|
|
$
|
(11
|
)
|
|
$
|
(6
|
)
|
|
$
|
13
|
|
|
$
|
(86
|
)
|
|
$
|
(79
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
SPL Interest Rate Derivatives loss
|
|
$
|
(2
|
)
|
|
$
|
(6
|
)
|
|
$
|
(42
|
)
|
CQP Interest Rate Derivatives gain
|
|
6
|
|
|
12
|
|
|
—
|
|
|||
CCH Interest Rate Derivatives gain (loss)
|
|
3
|
|
|
(16
|
)
|
|
(162
|
)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Liquefaction Supply Derivatives (1)
|
|
LNG Trading Derivatives (2)
|
|
Total
|
|
Liquefaction Supply Derivatives (1)
|
|
LNG Trading Derivatives (2)
|
|
Total
|
||||||||||||
Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
$
|
41
|
|
|
$
|
9
|
|
|
$
|
50
|
|
|
$
|
13
|
|
|
$
|
7
|
|
|
$
|
20
|
|
Non-current derivative assets
|
17
|
|
|
—
|
|
|
17
|
|
|
67
|
|
|
—
|
|
|
67
|
|
||||||
Total derivative assets
|
58
|
|
|
9
|
|
|
67
|
|
|
80
|
|
|
7
|
|
|
87
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities
|
—
|
|
|
(17
|
)
|
|
(17
|
)
|
|
(7
|
)
|
|
(10
|
)
|
|
(17
|
)
|
||||||
Non-current derivative liabilities
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total derivative liabilities
|
(3
|
)
|
|
(17
|
)
|
|
(20
|
)
|
|
(7
|
)
|
|
(10
|
)
|
|
(17
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative asset (liability), net
|
$
|
55
|
|
|
$
|
(8
|
)
|
|
$
|
47
|
|
|
$
|
73
|
|
|
$
|
(3
|
)
|
|
$
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Notional amount (in TBtu) (3)
|
2,539
|
|
|
25
|
|
|
|
|
1,117
|
|
|
—
|
|
|
|
|
(1)
|
Does not include collateral call of
$1 million
and collateral deposit of
$6 million
for such contracts, which are included in
other current assets
in our Consolidated Balance Sheets as of
December 31, 2017
and
2016
, respectively.
|
(2)
|
Does not include collateral of
$28 million
and
$10 million
deposited for such contracts, which are included in
other current assets
in our Consolidated Balance Sheets as of
December 31, 2017
and
2016
, respectively.
|
(3)
|
SPL had secured up to approximately
2,214
TBtu and
1,994
TBtu of natural gas feedstock through natural gas supply contracts as of
December 31, 2017
and
2016
, respectively. CCL has secured up to approximately
2,024
TBtu and
zero
TBtu of natural gas feedstock through natural gas supply contracts, a portion of which is subject to the achievement of certain project milestones and other conditions precedent, as of
December 31, 2017
and
2016
, respectively.
|
|
Statement of Operations Location (1)
|
|
Year Ended December 31,
|
|||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
LNG Trading Derivatives gain (loss)
|
LNG revenues
|
|
$
|
(44
|
)
|
|
$
|
(4
|
)
|
|
1
|
|
Liquefaction Supply Derivatives loss (gain) (2)
|
Cost (cost recovery) of sales
|
|
24
|
|
|
(42
|
)
|
|
(33
|
)
|
|
(1)
|
Fair value fluctuations associated with commodity derivative activities are classified and presented consistently with the item economically hedged and the nature and intent of the derivative instrument.
|
(2)
|
Does not include the realized value associated with derivative instruments that settle through physical delivery.
|
|
|
|
Fair Value Measurements as of
|
||||||
|
Balance Sheet Location
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
FX Derivatives
|
Derivative assets
|
|
$
|
—
|
|
|
$
|
4
|
|
FX Derivatives
|
Derivative liabilities
|
|
—
|
|
|
(4
|
)
|
||
FX Derivatives
|
Non-current derivative liabilities
|
|
(1
|
)
|
|
—
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
Statement of Operations Location
|
|
2017
|
|
2016
|
|
2015
|
||||||
FX Derivatives loss
|
LNG revenues
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
FX Derivatives loss
|
Other income
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
|
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 December 31, 2017
|
|
|
|
|
|
|
||||||
CQP Interest Rate Derivatives
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
21
|
|
CCH Interest Rate Derivatives
|
|
3
|
|
|
—
|
|
|
3
|
|
|||
CCH Interest Rate Derivatives
|
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|||
Liquefaction Supply Derivatives
|
|
64
|
|
|
(6
|
)
|
|
58
|
|
|||
Liquefaction Supply Derivatives
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||
LNG Trading Derivatives
|
|
9
|
|
|
—
|
|
|
9
|
|
|||
LNG Trading Derivatives
|
|
(37
|
)
|
|
20
|
|
|
(17
|
)
|
|||
FX Derivatives
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
As of December 31, 2016
|
|
|
|
|
|
|
|
|||||
SPL Interest Rate Derivatives
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
CQP Interest Rate Derivatives
|
|
16
|
|
|
—
|
|
|
16
|
|
|||
CQP Interest Rate Derivatives
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||
CCH Interest Rate Derivatives
|
|
(95
|
)
|
|
9
|
|
|
(86
|
)
|
|||
Liquefaction Supply Derivatives
|
|
82
|
|
|
(2
|
)
|
|
80
|
|
|||
Liquefaction Supply Derivatives
|
|
(11
|
)
|
|
4
|
|
|
(7
|
)
|
|||
LNG Trading Derivatives
|
|
21
|
|
|
(15
|
)
|
|
6
|
|
|||
LNG Trading Derivatives
|
|
(17
|
)
|
|
8
|
|
|
(9
|
)
|
|||
FX Derivatives
|
|
5
|
|
|
(1
|
)
|
|
4
|
|
|||
FX Derivatives
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Advances made under EPC and non-EPC contracts
|
|
$
|
26
|
|
|
$
|
69
|
|
Advances made to municipalities for water system enhancements
|
|
97
|
|
|
99
|
|
||
Advances and other asset conveyances to third parties to support LNG terminals
|
|
48
|
|
|
53
|
|
||
Tax-related payments and receivables
|
|
29
|
|
|
31
|
|
||
Equity method investments
|
|
64
|
|
|
10
|
|
||
Other
|
|
24
|
|
|
40
|
|
||
Total other non-current assets, net
|
|
$
|
288
|
|
|
$
|
302
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Interest costs and related debt fees
|
|
$
|
397
|
|
|
$
|
273
|
|
Compensation and benefits
|
|
141
|
|
|
56
|
|
||
LNG terminals and related pipeline costs
|
|
490
|
|
|
284
|
|
||
Other accrued liabilities
|
|
50
|
|
|
24
|
|
||
Total accrued liabilities
|
|
$
|
1,078
|
|
|
$
|
637
|
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Long-term debt:
|
|
|
|
|
||||
SPL
|
|
|
|
|
|
|||
5.625% Senior Secured Notes due 2021 (“2021 SPL Senior Notes”), net of unamortized premium of $6 and $7
|
|
$
|
2,006
|
|
|
$
|
2,007
|
|
6.25% Senior Secured Notes due 2022 (“2022 SPL Senior Notes”)
|
|
1,000
|
|
|
1,000
|
|
||
5.625% Senior Secured Notes due 2023 (“2023 SPL Senior Notes”), net of unamortized premium of $5 and $6
|
|
1,505
|
|
|
1,506
|
|
||
5.75% Senior Secured Notes due 2024 (“2024 SPL Senior Notes”)
|
|
2,000
|
|
|
2,000
|
|
||
5.625% Senior Secured Notes due 2025 (“2025 SPL Senior Notes”)
|
|
2,000
|
|
|
2,000
|
|
||
5.875% Senior Secured Notes due 2026 (“2026 SPL Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.00% Senior Secured Notes due 2027 (“2027 SPL Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
4.200% Senior Secured Notes due 2028 (“2028 SPL Senior Notes”), net of unamortized discount of $1 and zero
|
|
1,349
|
|
|
—
|
|
||
5.00% Senior Secured Notes due 2037 (“2037 SPL Senior Notes”)
|
|
800
|
|
|
—
|
|
||
2015 SPL Credit Facilities
|
|
—
|
|
|
314
|
|
||
Cheniere Partners
|
|
|
|
|
||||
5.250% Senior Notes due 2025 (“2025 CQP Senior Notes”)
|
|
1,500
|
|
|
—
|
|
||
2016 CQP Credit Facilities
|
|
1,090
|
|
|
2,560
|
|
||
CCH
|
|
|
|
|
||||
7.000% Senior Secured Notes due 2024 (“2024 CCH Senior Notes”)
|
|
1,250
|
|
|
1,250
|
|
||
5.875% Senior Secured Notes due 2025 (“2025 CCH Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.125% Senior Secured Notes due 2027 (“2027 CCH Senior Notes”)
|
|
1,500
|
|
|
—
|
|
||
2015 CCH Credit Facility
|
|
2,485
|
|
|
2,381
|
|
||
CCH HoldCo II
|
|
|
|
|
||||
11.0% Convertible Senior Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”)
|
|
1,305
|
|
|
1,171
|
|
||
Cheniere
|
|
|
|
|
||||
4.875% Convertible Unsecured Notes due 2021 (“2021 Cheniere Convertible Unsecured Notes”), net of unamortized discount of $121 and $146
|
|
1,040
|
|
|
960
|
|
||
4.25% Convertible Senior Notes due 2045 (“2045 Cheniere Convertible Senior Notes”), net of unamortized discount of $314 and $317
|
|
311
|
|
|
308
|
|
||
$750 million Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”)
|
|
—
|
|
|
—
|
|
||
Unamortized debt issuance costs
|
|
(305
|
)
|
|
(269
|
)
|
||
Total long-term debt, net
|
|
25,336
|
|
|
21,688
|
|
||
|
|
|
|
|
||||
Current debt:
|
|
|
|
|
||||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
|
—
|
|
|
224
|
|
||
$350 million CCH Working Capital Facility (“CCH Working Capital Facility”)
|
|
—
|
|
|
—
|
|
||
Cheniere Marketing trade finance facilities
|
|
—
|
|
|
23
|
|
||
Total current debt
|
|
—
|
|
|
247
|
|
||
|
|
|
|
|
||||
Total debt, net
|
|
$
|
25,336
|
|
|
$
|
21,935
|
|
Years Ending December 31,
|
|
Principal Payments
|
||
2018
|
|
$
|
—
|
|
2019
|
|
55
|
|
|
2020
|
|
1,035
|
|
|
2021
|
|
3,161
|
|
|
2022
|
|
3,485
|
|
|
Thereafter
|
|
18,330
|
|
|
Total
|
|
$
|
26,066
|
|
|
|
SPL Working Capital Facility
|
|
2016 CQP Credit Facilities
|
|
2015 CCH Credit Facility
|
|
CCH Working Capital Facility
|
|
Cheniere Revolving Credit Facility
|
||||||||||
Original facility size
|
|
$
|
1,200
|
|
|
$
|
2,800
|
|
|
$
|
8,404
|
|
|
$
|
350
|
|
|
$
|
750
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Outstanding balance
|
|
—
|
|
|
1,090
|
|
|
2,485
|
|
|
—
|
|
|
—
|
|
|||||
Commitments prepaid or terminated
|
|
—
|
|
|
1,470
|
|
|
3,832
|
|
|
—
|
|
|
—
|
|
|||||
Letters of credit issued
|
|
730
|
|
|
20
|
|
|
—
|
|
|
164
|
|
|
—
|
|
|||||
Available commitment
|
|
$
|
470
|
|
|
$
|
220
|
|
|
$
|
2,087
|
|
|
$
|
186
|
|
|
$
|
750
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate
|
|
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)
|
|
LIBOR plus 1.50% - 2.00% or base rate plus 0.50% - 1.00%
|
|
LIBOR plus 3.25% or base rate plus 2.25%
|
||||||||||
Maturity date
|
|
December 31, 2020, with various terms for underlying loans
|
|
February 25, 2020, with principal payments due quarterly commencing on March 31, 2019
|
|
Earlier of May 13, 2022 or second anniversary of CCL Trains 1 and 2 completion date
|
|
December 14, 2021, with various terms for underlying loans
|
|
March 2, 2021
|
|
(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 the completion of Trains 1 and 2 of the
CCL Project
as defined in the common terms agreement.
|
|
|
2021 Cheniere Convertible Unsecured Notes
|
|
2025 CCH HoldCo II Convertible Senior Notes
|
|
2045 Cheniere Convertible Senior Notes
|
||||||
Aggregate original principal
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
$
|
625
|
|
Debt component, net of discount
|
|
$
|
1,040
|
|
|
$
|
1,305
|
|
|
$
|
311
|
|
Equity component
|
|
$
|
206
|
|
|
$
|
—
|
|
|
$
|
194
|
|
Maturity date
|
|
May 28, 2021
|
|
|
March 1, 2025
|
|
|
March 15, 2045
|
|
|||
Contractual interest rate
|
|
4.875
|
%
|
|
11.0
|
%
|
|
4.25
|
%
|
|||
Effective interest rate (1)
|
|
8.3
|
%
|
|
11.9
|
%
|
|
9.4
|
%
|
|||
Remaining debt discount and debt issuance costs amortization period (2)
|
|
3.4 years
|
|
|
2.8 years
|
|
|
27.2 years
|
|
(1)
|
Rate to accrete the discounted carrying value of the convertible notes to the face value over the remaining amortization period.
|
(2)
|
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 by holders into our common stock.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest cost on convertible notes:
|
|
|
|
|
|
|
||||||
Interest per contractual rate
|
|
$
|
219
|
|
|
$
|
202
|
|
|
$
|
146
|
|
Amortization of debt discount
|
|
29
|
|
|
31
|
|
|
28
|
|
|||
Amortization of debt issuance costs
|
|
7
|
|
|
5
|
|
|
3
|
|
|||
Total interest cost related to convertible notes
|
|
255
|
|
|
238
|
|
|
177
|
|
|||
Interest cost on debt excluding convertible notes
|
|
1,271
|
|
|
1,063
|
|
|
820
|
|
|||
Total interest cost
|
|
1,526
|
|
|
1,301
|
|
|
997
|
|
|||
Capitalized interest
|
|
(779
|
)
|
|
(813
|
)
|
|
(675
|
)
|
|||
Total interest expense, net
|
|
$
|
747
|
|
|
$
|
488
|
|
|
$
|
322
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Carrying
Amount |
|
Estimated
Fair Value |
|
Carrying
Amount |
|
Estimated
Fair Value |
||||||||
Senior notes, net of premium or discount (1)
|
|
$
|
18,610
|
|
|
$
|
20,075
|
|
|
$
|
14,263
|
|
|
$
|
15,210
|
|
2037 SPL Senior Notes (2)
|
|
800
|
|
|
871
|
|
|
—
|
|
|
—
|
|
||||
Credit facilities (3)
|
|
3,575
|
|
|
3,575
|
|
|
5,502
|
|
|
5,502
|
|
||||
2021 Cheniere Convertible Unsecured Notes, net of discount (2)
|
|
1,040
|
|
|
1,136
|
|
|
960
|
|
|
983
|
|
||||
2025 CCH HoldCo II Convertible Senior Notes (2)
|
|
1,305
|
|
|
1,535
|
|
|
1,171
|
|
|
1,328
|
|
||||
2045 Cheniere Convertible Senior Notes, net of discount (4)
|
|
311
|
|
|
447
|
|
|
308
|
|
|
375
|
|
|
(1)
|
Includes
2021 SPL Senior Notes
,
2022 SPL Senior Notes
,
2023 SPL Senior Notes
,
2024 SPL Senior Notes
,
2025 SPL Senior Notes
,
2026 SPL Senior Notes
,
2027 SPL Senior Notes
,
2028 SPL Senior Notes
,
2025 CQP Senior Notes
,
2024 CCH Senior Notes
,
2025 CCH Senior Notes
and
2027 CCH Senior Notes
. The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of these senior notes and other similar instruments.
|
(2)
|
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.
|
(3)
|
Includes
2015 SPL Credit Facilities
,
SPL Working Capital Facility
,
2016 CQP Credit Facilities
,
2015 CCH Credit Facility
,
CCH Working Capital Facility
,
Cheniere Revolving Credit Facility
and
Cheniere Marketing trade finance facilities
. 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.
|
(4)
|
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.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
LNG revenues
|
|
$
|
5,342
|
|
|
$
|
1,015
|
|
|
$
|
—
|
|
Regasification revenues
|
|
260
|
|
|
259
|
|
|
259
|
|
|||
Other revenues (losses)
|
|
21
|
|
|
8
|
|
|
(2
|
)
|
|||
Other—related party
|
|
3
|
|
|
—
|
|
|
—
|
|
|||
Total revenues from customers
|
|
5,626
|
|
|
1,282
|
|
|
257
|
|
|||
Revenues (losses) from derivative instruments
|
|
(25
|
)
|
|
1
|
|
|
14
|
|
|||
Total revenues
|
|
$
|
5,601
|
|
|
$
|
1,283
|
|
|
$
|
271
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Deferred revenues, beginning of period
|
|
$
|
78
|
|
|
$
|
36
|
|
|
$
|
40
|
|
Cash received but not yet recognized
|
|
110
|
|
|
71
|
|
|
25
|
|
|||
Revenue recognized from prior period deferral
|
|
(76
|
)
|
|
(29
|
)
|
|
(29
|
)
|
|||
Deferred revenues, end of period
|
|
$
|
112
|
|
|
$
|
78
|
|
|
$
|
36
|
|
|
|
Unsatisfied
Transaction Price
(in billions)
|
|
Weighted Average Recognition Timing (years) (1)
|
||
LNG revenues
|
|
$
|
83.7
|
|
|
10.8
|
Regasification revenues
|
|
2.9
|
|
|
5.7
|
|
Total revenues
|
|
$
|
86.6
|
|
|
|
|
(1)
|
The weighted average recognition timing represents an estimate of the number of years during which we shall have recognized half of the unsatisfied transaction price.
|
(1)
|
We omit from the table above all performance obligations that are part of a contract that has an original expected duration of one year or less.
|
(2)
|
We omit from the table above all variable consideration that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation when that performance obligation qualifies as a series. The table above excludes all variable consideration under our SPAs and TUAs. The amount of revenue from variable fees that is not included in the transaction price will vary based on the future prices of Henry Hub throughout the contract terms, to the extent customers elect to take delivery of their LNG, and adjustments to the consumer price index. Certain of our contracts contain additional variable consideration based on the outcome of contingent events and the movement of various indexes. The receipt of such variable consideration is considered constrained due to the uncertainty of ultimate pricing and receipt and we have not included such variable consideration in the transaction price. During the
year ended December 31, 2017
, approximately
56%
of our LNG Revenues from contracts with a duration of over one year and approximately
2%
of our Regasification Revenues were related to variable consideration received from customers.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign
|
|
(6
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Total current
|
|
(6
|
)
|
|
—
|
|
|
(2
|
)
|
|||
|
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
State
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign
|
|
3
|
|
|
(2
|
)
|
|
2
|
|
|||
Total deferred
|
|
3
|
|
|
(2
|
)
|
|
2
|
|
|||
Total income tax provision
|
|
$
|
(3
|
)
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
U.S. federal statutory tax rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Non-controlling interest
|
|
2.9
|
%
|
|
(2.1
|
)%
|
|
(2.3
|
)%
|
State tax rate
|
|
(0.2
|
)%
|
|
1.8
|
%
|
|
1.9
|
%
|
U.S. tax reform rate change
|
|
71.4
|
%
|
|
—
|
%
|
|
—
|
%
|
Share-based compensation
|
|
(6.2
|
)%
|
|
—
|
%
|
|
—
|
%
|
Nondeductible interest expense
|
|
8.5
|
%
|
|
(6.6
|
)%
|
|
(2.6
|
)%
|
Other
|
|
(1.2
|
)%
|
|
(0.9
|
)%
|
|
(1.8
|
)%
|
Valuation allowance
|
|
(109.7
|
)%
|
|
(27.5
|
)%
|
|
(30.1
|
)%
|
Effective tax rate
|
|
0.5
|
%
|
|
(0.3
|
)%
|
|
0.1
|
%
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Balance at beginning of the year
|
$
|
103
|
|
|
$
|
104
|
|
Additions based on tax positions related to current year
|
—
|
|
|
—
|
|
||
Additions for tax positions of prior years
|
—
|
|
|
—
|
|
||
Reductions for tax positions of prior years
|
(1
|
)
|
|
(1
|
)
|
||
Settlements
|
—
|
|
|
—
|
|
||
U.S. tax reform rate change
|
(40
|
)
|
|
—
|
|
||
Balance at end of the year
|
$
|
62
|
|
|
$
|
103
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Share-based compensation costs, pre-tax:
|
|
|
|
|
|
|
||||||
Equity awards
|
|
$
|
34
|
|
|
$
|
41
|
|
|
$
|
90
|
|
Liability awards
|
|
80
|
|
|
76
|
|
|
105
|
|
|||
Total share-based compensation
|
|
114
|
|
|
117
|
|
|
195
|
|
|||
Capitalized share-based compensation
|
|
(23
|
)
|
|
(16
|
)
|
|
(23
|
)
|
|||
Total share-based compensation expense
|
|
$
|
91
|
|
|
$
|
101
|
|
|
$
|
172
|
|
Tax benefit associated with share-based compensation expense
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Unrecognized Compensation Cost
(in millions)
|
Recognized over a weighted average period (years)
|
||
Restricted Stock Share Awards
|
$
|
7
|
|
1.5
|
Restricted Share Unit and Performance Stock Unit Awards
|
$
|
44
|
|
1.5
|
Phantom Units Awards
|
$
|
49
|
|
1.1
|
|
|
Shares
|
|
Weighted
Average Grant
Date Fair Value
Per Share
|
|||
Non-vested at January 1, 2017
|
|
5.7
|
|
|
$
|
24.12
|
|
Granted
|
|
—
|
|
|
—
|
|
|
Vested
|
|
(3.3
|
)
|
|
23.80
|
|
|
Forfeited
|
|
(0.2
|
)
|
|
28.28
|
|
|
Non-vested at December 31, 2017
|
|
2.2
|
|
|
$
|
24.29
|
|
|
|
Units
|
|
Weighted
Average Grant
Date Fair Value
Per Unit
|
|||
Non-vested at January 1, 2017
|
|
—
|
|
|
$
|
—
|
|
Granted (1)
|
|
1.4
|
|
|
47.16
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
(0.1
|
)
|
|
46.71
|
|
|
Non-vested at December 31, 2017
|
|
1.3
|
|
|
$
|
47.18
|
|
|
(1)
|
This number excludes
0.2 million
performance stock units, which represent the maximum number of common units that would be issued if the maximum level of performance under the target awards amount is achieved.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Units Issued (in millions)
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|||
Weighted Average Grant Date Fair Value Per Unit
|
|
$
|
47.16
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fair Value vested (in millions)
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Units
|
|
Non-vested at January 1, 2017
|
|
3.9
|
|
Granted
|
|
—
|
|
Vested
|
|
(1.8
|
)
|
Forfeited
|
|
(0.3
|
)
|
Non-vested at December 31, 2017
|
|
1.8
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
233.1
|
|
|
228.8
|
|
|
226.9
|
|
|||
Dilutive unvested stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted
|
|
233.1
|
|
|
228.8
|
|
|
226.9
|
|
|||
|
|
|
|
|
|
|
||||||
Basic and diluted net loss per share attributable to common stockholders
|
|
$
|
(1.68
|
)
|
|
$
|
(2.67
|
)
|
|
$
|
(4.30
|
)
|
|
|
Year Ended December 31,
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Stock options and unvested stock (1)
|
|
3.4
|
|
|
0.6
|
|
|
2.1
|
|
Convertible notes (2)
|
|
16.9
|
|
|
16.3
|
|
|
15.8
|
|
Total potentially dilutive common shares
|
|
20.3
|
|
|
16.9
|
|
|
17.9
|
|
|
(1)
|
Does not include
0.2 million
shares,
5.0 million
shares and
5.4 million
shares for the
years ended December 31, 2017, 2016 and 2015
, respectively, of unvested stock because the performance conditions had not yet been satisfied as of
December 31, 2017
,
2016
and
2015
, respectively.
|
(2)
|
Includes number of shares in aggregate issuable upon conversion of the
2021 Cheniere Convertible Unsecured Notes
and the
2045 Cheniere Convertible Senior Notes
. There were
no
shares included in the computation of diluted
net loss
per share for the
2025 CCH HoldCo II Convertible Senior Notes
because substantive non-market-based contingencies underlying the eligible conversion date have not been met as of
December 31, 2017
.
|
Years Ending December 31,
|
Operating Leases (1)
|
||
2018 (2)
|
$
|
140
|
|
2019 (2)
|
127
|
|
|
2020
|
119
|
|
|
2021
|
76
|
|
|
2022
|
58
|
|
|
Thereafter
|
236
|
|
|
Total
|
$
|
756
|
|
|
(1)
|
Includes certain lease option renewals that are reasonably assured
.
|
(2)
|
Does not include
$19 million
in aggregate payments we will receive from our LNG vessel time charter subleases.
|
Years Ending December 31,
|
Capital Leases
|
||
2018
|
$
|
5
|
|
2019
|
10
|
|
|
2020
|
10
|
|
|
2021
|
10
|
|
|
2022
|
10
|
|
|
Thereafter
|
154
|
|
|
Total
|
$
|
199
|
|
Years Ending December 31,
|
Payments Due (1)
|
||
2018
|
$
|
2,274
|
|
2019
|
1,527
|
|
|
2020
|
1,397
|
|
|
2021
|
981
|
|
|
2022
|
336
|
|
|
Thereafter
|
1,169
|
|
|
Total
|
$
|
7,684
|
|
|
(1)
|
Pricing of natural gas supply contracts are variable based on market commodity basis prices adjusted for basis spread
.
Amounts included are based on prices and basis spreads as of
December 31, 2017
.
|
|
|
|
|
Percentage of Accounts Receivable from Third Parties
|
||||||
|
|
Year Ended December 31,
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
Customer A
|
|
24%
|
|
39%
|
|
—%
|
|
28%
|
|
34%
|
Customer B
|
|
14%
|
|
*
|
|
—%
|
|
16%
|
|
21%
|
Customer C
|
|
14%
|
|
—%
|
|
—%
|
|
14%
|
|
—%
|
Customer D
|
|
17%
|
|
—%
|
|
—%
|
|
—%
|
|
—%
|
Customer E
|
|
*
|
|
13%
|
|
—%
|
|
—%
|
|
—%
|
Customer F
|
|
*
|
|
*
|
|
—%
|
|
15%
|
|
28%
|
Customer G
|
|
*
|
|
*
|
|
—%
|
|
—%
|
|
12%
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash paid during the period for interest, net of amounts capitalized
|
|
$
|
305
|
|
|
$
|
66
|
|
|
$
|
123
|
|
Contribution of assets to equity method investee
|
|
14
|
|
|
—
|
|
|
—
|
|
|||
Non-cash conveyance of assets
|
|
—
|
|
|
—
|
|
|
13
|
|
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 provides a single, comprehensive revenue recognition model which replaces and supersedes most 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. The standard requires that the costs to obtain and fulfill contracts with customers should be recognized as assets and amortized to match the pattern of transfer of goods or services to the customer if expected to be recoverable. The standard also requires enhanced disclosures. This guidance may be adopted either retrospectively to each prior reporting period presented subject to allowable practical expedients (“full retrospective approach”) or as a cumulative-effect adjustment as of the date of adoption (“modified retrospective approach”).
|
|
January 1, 2018
|
|
We will adopt this standard on January 1, 2018 using the full retrospective approach. The adoption of this standard will not have a material impact upon our Consolidated Financial Statements but will result in significant additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and assumptions used in applying the standard. For the purpose of these Consolidated Financial Statements, we have retrospectively applied this standard and have included the additional disclosures at
Note 13—Revenues from Contracts with Customers
.
|
ASU 2016-02,
Leases (Topic 842)
, and subsequent amendments thereto
|
|
This standard requires a lessee to recognize leases on its balance sheet by recording a lease 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 continue to evaluate the effect of this standard on our Consolidated Financial Statements. Preliminarily, we anticipate a material impact from the requirement to recognize all leases upon our Consolidated Balance Sheets. Because this assessment is preliminary and the accounting for leases is subject to significant judgment, this conclusion could change as we finalize our assessment. We have not yet determined the impact of the adoption of this standard upon our results of operations or cash flows
.
We expect to elect the practical expedient to retain our existing accounting for land easements which were not previously accounted for as leases. We have not yet determined whether we will elect any other practical expedients upon transition.
|
Standard
|
|
Description
|
|
Expected Date of Adoption
|
|
Effect on our Consolidated Financial Statements or Other Significant Matters
|
ASU 2016-16,
Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory
|
|
This standard requires the immediate recognition of the tax consequences of intercompany asset transfers other than inventory. This guidance may be early adopted, but only at the beginning of an annual period, and must be adopted using a modified retrospective approach.
|
|
January 1, 2018
|
|
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 2015-11,
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.
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January 1, 2017
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The adoption of this guidance did not have a material impact on our Consolidated Financial Statements or related disclosures.
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ASU 2016-09,
Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
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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.
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January 1, 2017
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Upon adoption of this guidance, we made a cumulative effect adjustment to accumulated deficit for all excess tax benefits not previously recognized, offset by the change in valuation allowance, and for our election to account for forfeitures as they occur. The adoption of this guidance did not have a material impact on our Consolidated Financial Statements or related disclosures.
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ASU 2017-04,
Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
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This standard simplifies the measurement of goodwill impairment by eliminating the requirement for an entity to perform a hypothetical purchase price allocation. An entity will instead measure the impairment as the difference between the carrying amount and the fair value of the reporting unit. This guidance may be early adopted beginning January 1, 2017, and must be adopted prospectively.
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January 1, 2017
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The adoption of this guidance did not have a material impact on our Consolidated Financial Statements or related disclosures.
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ASU 2017-09,
Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting
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This standard clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. An entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability award are the same prior to and after the change. This guidance may be early adopted and must be adopted prospectively.
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June 30, 2017
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The adoption of this guidance did not have a material impact on our Consolidated Financial Statements or related disclosures.
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