|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delaware
|
001-16383
|
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)
|
|
|
|
|
|
Large accelerated filer
x
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
|
Emerging growth company
¨
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 that, through a refrigeration process, has been cooled to a liquid state, which occupies a volume that is approximately 1/600th of its gaseous state
|
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
|
|
U.S. Securities and Exchange Commission
|
SPA
|
|
LNG sale and purchase agreement
|
TBtu
|
|
trillion British thermal units, an energy unit
|
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
|
|
September 30,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
ASSETS
|
(unaudited)
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
989
|
|
|
$
|
722
|
|
Restricted cash
|
1,943
|
|
|
1,880
|
|
||
Accounts and other receivables
|
243
|
|
|
369
|
|
||
Accounts receivable—related party
|
3
|
|
|
2
|
|
||
Inventory
|
298
|
|
|
243
|
|
||
Derivative assets
|
63
|
|
|
57
|
|
||
Other current assets
|
131
|
|
|
96
|
|
||
Total current assets
|
3,670
|
|
|
3,369
|
|
||
|
|
|
|
||||
Non-current restricted cash
|
—
|
|
|
11
|
|
||
Property, plant and equipment, net
|
26,499
|
|
|
23,978
|
|
||
Debt issuance costs, net
|
78
|
|
|
149
|
|
||
Non-current derivative assets
|
121
|
|
|
34
|
|
||
Goodwill
|
77
|
|
|
77
|
|
||
Other non-current assets, net
|
295
|
|
|
288
|
|
||
Total assets
|
$
|
30,740
|
|
|
$
|
27,906
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
80
|
|
|
$
|
25
|
|
Accrued liabilities
|
987
|
|
|
1,078
|
|
||
Current debt
|
66
|
|
|
—
|
|
||
Deferred revenue
|
120
|
|
|
111
|
|
||
Derivative liabilities
|
96
|
|
|
37
|
|
||
Other current liabilities
|
1
|
|
|
—
|
|
||
Total current liabilities
|
1,350
|
|
|
1,251
|
|
||
|
|
|
|
||||
Long-term debt, net
|
27,438
|
|
|
25,336
|
|
||
Non-current capital lease obligations
|
29
|
|
|
—
|
|
||
Non-current derivative liabilities
|
16
|
|
|
19
|
|
||
Other non-current liabilities
|
76
|
|
|
60
|
|
||
|
|
|
|
||||
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 September 30, 2018 and December 31, 2017
|
|
|
|
||||
Issued: 269.7 million shares and 250.1 million shares at September 30, 2018 and December 31, 2017, respectively
|
|
|
|
|
|
||
Outstanding: 257.1 million shares and 237.6 million shares at September 30, 2018 and December 31, 2017, respectively
|
1
|
|
|
1
|
|
||
Treasury stock: 12.6 million shares and 12.5 million shares at September 30, 2018 and December 31, 2017, respectively, at cost
|
(396
|
)
|
|
(386
|
)
|
||
Additional paid-in-capital
|
4,009
|
|
|
3,248
|
|
||
Accumulated deficit
|
(4,223
|
)
|
|
(4,627
|
)
|
||
Total stockholders’ deficit
|
(609
|
)
|
|
(1,764
|
)
|
||
Non-controlling interest
|
2,440
|
|
|
3,004
|
|
||
Total equity
|
1,831
|
|
|
1,240
|
|
||
Total liabilities and equity
|
$
|
30,740
|
|
|
$
|
27,906
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
LNG revenues
|
$
|
1,719
|
|
|
$
|
1,332
|
|
|
$
|
5,327
|
|
|
$
|
3,646
|
|
Regasification revenues
|
66
|
|
|
65
|
|
|
196
|
|
|
195
|
|
||||
Other revenues
|
30
|
|
|
5
|
|
|
73
|
|
|
12
|
|
||||
Other—related party
|
4
|
|
|
1
|
|
|
8
|
|
|
2
|
|
||||
Total revenues
|
1,819
|
|
|
1,403
|
|
|
5,604
|
|
|
3,855
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating costs and expenses
|
|
|
|
|
|
|
|
||||||||
Cost of sales (excluding depreciation and amortization expense shown separately below)
|
1,027
|
|
|
824
|
|
|
3,078
|
|
|
2,140
|
|
||||
Operating and maintenance expense
|
170
|
|
|
114
|
|
|
457
|
|
|
309
|
|
||||
Development expense
|
2
|
|
|
3
|
|
|
6
|
|
|
7
|
|
||||
Selling, general and administrative expense
|
74
|
|
|
64
|
|
|
214
|
|
|
179
|
|
||||
Depreciation and amortization expense
|
113
|
|
|
92
|
|
|
333
|
|
|
252
|
|
||||
Restructuring expense
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Impairment expense and loss on disposal of assets
|
8
|
|
|
9
|
|
|
8
|
|
|
15
|
|
||||
Total operating costs and expenses
|
1,394
|
|
|
1,106
|
|
|
4,096
|
|
|
2,908
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
425
|
|
|
297
|
|
|
1,508
|
|
|
947
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense, net of capitalized interest
|
(221
|
)
|
|
(186
|
)
|
|
(653
|
)
|
|
(539
|
)
|
||||
Loss on modification or extinguishment of debt
|
(12
|
)
|
|
(25
|
)
|
|
(27
|
)
|
|
(100
|
)
|
||||
Derivative gain (loss), net
|
23
|
|
|
(2
|
)
|
|
132
|
|
|
(37
|
)
|
||||
Other income
|
15
|
|
|
4
|
|
|
32
|
|
|
11
|
|
||||
Total other expense
|
(195
|
)
|
|
(209
|
)
|
|
(516
|
)
|
|
(665
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes and non-controlling interest
|
230
|
|
|
88
|
|
|
992
|
|
|
282
|
|
||||
Income tax benefit (provision)
|
(3
|
)
|
|
2
|
|
|
(15
|
)
|
|
1
|
|
||||
Net income
|
227
|
|
|
90
|
|
|
977
|
|
|
283
|
|
||||
Less: net income attributable to non-controlling interest
|
162
|
|
|
379
|
|
|
573
|
|
|
803
|
|
||||
Net income (loss) attributable to common stockholders
|
$
|
65
|
|
|
$
|
(289
|
)
|
|
$
|
404
|
|
|
$
|
(520
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per share attributable to common stockholders—basic
|
$
|
0.26
|
|
|
$
|
(1.24
|
)
|
|
$
|
1.67
|
|
|
$
|
(2.24
|
)
|
Net income (loss) per share attributable to common stockholders—diluted
|
$
|
0.26
|
|
|
$
|
(1.24
|
)
|
|
$
|
1.65
|
|
|
$
|
(2.24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding—basic
|
247.2
|
|
|
232.6
|
|
|
241.9
|
|
|
232.5
|
|
||||
Weighted average number of common shares outstanding—diluted
|
250.2
|
|
|
232.6
|
|
|
244.6
|
|
|
232.5
|
|
|
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, 2017
|
237.6
|
|
|
$
|
1
|
|
|
12.5
|
|
|
$
|
(386
|
)
|
|
$
|
3,248
|
|
|
$
|
(4,627
|
)
|
|
$
|
3,004
|
|
|
$
|
1,240
|
|
Vesting of restricted stock units
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of stock to acquire additional interest in Cheniere Holdings and other merger related adjustments
|
19.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
694
|
|
|
—
|
|
|
(702
|
)
|
|
(8
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
65
|
|
||||||
Shares repurchased related to share-based compensation
|
(0.1
|
)
|
|
—
|
|
|
0.1
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||||
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
573
|
|
|
573
|
|
||||||
Equity portion of convertible notes, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(435
|
)
|
|
(435
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
404
|
|
|
—
|
|
|
404
|
|
||||||
Balance at September 30, 2018
|
257.1
|
|
|
$
|
1
|
|
|
12.6
|
|
|
$
|
(396
|
)
|
|
$
|
4,009
|
|
|
$
|
(4,223
|
)
|
|
$
|
2,440
|
|
|
$
|
1,831
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
977
|
|
|
$
|
283
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
333
|
|
|
252
|
|
||
Share-based compensation expense
|
89
|
|
|
64
|
|
||
Non-cash interest expense
|
52
|
|
|
54
|
|
||
Amortization of debt issuance costs, deferred commitment fees, premium and discount
|
53
|
|
|
53
|
|
||
Loss on modification or extinguishment of debt
|
27
|
|
|
100
|
|
||
Total losses on derivatives, net
|
17
|
|
|
108
|
|
||
Net cash used for settlement of derivative instruments
|
(54
|
)
|
|
(59
|
)
|
||
Impairment expense and loss on disposal of assets
|
8
|
|
|
15
|
|
||
Other
|
(5
|
)
|
|
(2
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts and other receivables
|
115
|
|
|
(33
|
)
|
||
Accounts receivable—related party
|
(1
|
)
|
|
(1
|
)
|
||
Inventory
|
(56
|
)
|
|
35
|
|
||
Other current assets
|
(35
|
)
|
|
(45
|
)
|
||
Accounts payable and accrued liabilities
|
(23
|
)
|
|
20
|
|
||
Deferred revenue
|
8
|
|
|
58
|
|
||
Other, net
|
(1
|
)
|
|
(7
|
)
|
||
Net cash provided by operating activities
|
1,504
|
|
|
895
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Property, plant and equipment, net
|
(2,712
|
)
|
|
(2,903
|
)
|
||
Investment in equity method investment
|
(25
|
)
|
|
(41
|
)
|
||
Other
|
15
|
|
|
18
|
|
||
Net cash used in investing activities
|
(2,722
|
)
|
|
(2,926
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from issuances of debt
|
3,443
|
|
|
6,537
|
|
||
Repayments of debt
|
(1,385
|
)
|
|
(3,609
|
)
|
||
Debt issuance and deferred financing costs
|
(53
|
)
|
|
(85
|
)
|
||
Debt extinguishment costs
|
(16
|
)
|
|
—
|
|
||
Distributions and dividends to non-controlling interest
|
(435
|
)
|
|
(60
|
)
|
||
Payments related to tax withholdings for share-based compensation
|
(10
|
)
|
|
(4
|
)
|
||
Other
|
(7
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
1,537
|
|
|
2,779
|
|
||
|
|
|
|
||||
Net increase in cash, cash equivalents and restricted cash
|
319
|
|
|
748
|
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
2,613
|
|
|
1,827
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
2,932
|
|
|
$
|
2,575
|
|
|
September 30, 2018
|
||
Cash and cash equivalents
|
$
|
989
|
|
Restricted cash
|
1,943
|
|
|
Total cash, cash equivalents and restricted cash
|
$
|
2,932
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||||
Current restricted cash
|
|
|
|
|
||||
SPL Project
|
|
$
|
649
|
|
|
$
|
544
|
|
Cheniere Partners and cash held by guarantor subsidiaries
|
|
808
|
|
|
1,045
|
|
||
CCL Project
|
|
220
|
|
|
227
|
|
||
Cash held by our subsidiaries restricted to Cheniere
|
|
266
|
|
|
64
|
|
||
Total current restricted cash
|
|
$
|
1,943
|
|
|
$
|
1,880
|
|
|
|
|
|
|
||||
Non-current restricted cash
|
|
|
|
|
||||
Other
|
|
$
|
—
|
|
|
$
|
11
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||||
Trade receivables
|
|
|
|
|
||||
SPL
|
|
$
|
213
|
|
|
$
|
185
|
|
Cheniere Marketing
|
|
16
|
|
|
163
|
|
||
Other accounts receivable
|
|
14
|
|
|
21
|
|
||
Total accounts and other receivables
|
|
$
|
243
|
|
|
$
|
369
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||||
Natural gas
|
|
$
|
10
|
|
|
$
|
17
|
|
LNG
|
|
42
|
|
|
44
|
|
||
LNG in-transit
|
|
181
|
|
|
130
|
|
||
Materials and other
|
|
65
|
|
|
52
|
|
||
Total inventory
|
|
$
|
298
|
|
|
$
|
243
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||||
LNG terminal costs
|
|
|
|
|
||||
LNG terminal and interconnecting pipeline facilities
|
|
$
|
13,162
|
|
|
$
|
12,687
|
|
LNG site and related costs
|
|
86
|
|
|
86
|
|
||
LNG terminal construction-in-process
|
|
14,269
|
|
|
11,932
|
|
||
Accumulated depreciation
|
|
(1,192
|
)
|
|
(882
|
)
|
||
Total LNG terminal costs, net
|
|
26,325
|
|
|
23,823
|
|
||
Fixed assets and other
|
|
|
|
|
|
|
||
Computer and office equipment
|
|
17
|
|
|
14
|
|
||
Furniture and fixtures
|
|
19
|
|
|
19
|
|
||
Computer software
|
|
97
|
|
|
92
|
|
||
Leasehold improvements
|
|
41
|
|
|
41
|
|
||
Land
|
|
59
|
|
|
59
|
|
||
Other
|
|
18
|
|
|
16
|
|
||
Accumulated depreciation
|
|
(107
|
)
|
|
(86
|
)
|
||
Total fixed assets and other, net
|
|
144
|
|
|
155
|
|
||
Tug vessels under capital lease
|
|
30
|
|
|
—
|
|
||
Property, plant and equipment, net
|
|
$
|
26,499
|
|
|
$
|
23,978
|
|
•
|
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
(collectively, 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
|
||||||||||||||||||||||||||||||
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
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
|
||||||||||||||||
CQP Interest Rate Derivatives asset
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
21
|
|
CCH Interest Rate Derivatives asset (liability)
|
—
|
|
|
94
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
(32
|
)
|
||||||||
Liquefaction Supply Derivatives asset (liability)
|
(1
|
)
|
|
4
|
|
|
26
|
|
|
29
|
|
|
2
|
|
|
10
|
|
|
43
|
|
|
55
|
|
||||||||
LNG Trading Derivatives asset (liability)
|
(19
|
)
|
|
(71
|
)
|
|
—
|
|
|
(90
|
)
|
|
(13
|
)
|
|
5
|
|
|
—
|
|
|
(8
|
)
|
||||||||
FX Derivatives asset (liability)
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
|
Net Fair Value Asset
(in millions)
|
|
Valuation Approach
|
|
Significant Unobservable Input
|
|
Significant Unobservable Inputs Range
|
Physical Liquefaction Supply Derivatives
|
|
$26
|
|
Market approach incorporating present value techniques
|
|
Basis Spread
|
|
$(0.748) - $0.079
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Balance, beginning of period
|
|
$
|
12
|
|
|
$
|
40
|
|
|
$
|
43
|
|
|
$
|
79
|
|
Realized and mark-to-market gains (losses):
|
|
|
|
|
|
|
|
|
||||||||
Included in cost of sales
|
|
5
|
|
|
(8
|
)
|
|
(4
|
)
|
|
(43
|
)
|
||||
Purchases and settlements:
|
|
|
|
|
|
|
|
|
||||||||
Purchases
|
|
9
|
|
|
(1
|
)
|
|
14
|
|
|
1
|
|
||||
Settlements
|
|
1
|
|
|
(2
|
)
|
|
(27
|
)
|
|
(8
|
)
|
||||
Transfers out of Level 3 (1)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of period
|
|
$
|
26
|
|
|
$
|
29
|
|
|
$
|
26
|
|
|
$
|
29
|
|
Change in unrealized gains relating to instruments still held at end of period
|
|
$
|
5
|
|
|
$
|
(8
|
)
|
|
$
|
(4
|
)
|
|
$
|
(43
|
)
|
|
|
|
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
|
|
$4.7 billion
|
|
May 20, 2015
|
|
May 31, 2022
|
|
2.30%
|
|
One-month LIBOR
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
CQP Interest Rate Derivatives
|
|
CCH Interest Rate Derivatives
|
|
Total
|
|
CQP Interest Rate Derivatives
|
|
CCH Interest Rate Derivatives
|
|
Total
|
||||||||||||
Consolidated Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
|
$
|
19
|
|
|
$
|
13
|
|
|
$
|
32
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
Non-current derivative assets
|
|
9
|
|
|
81
|
|
|
90
|
|
|
14
|
|
|
3
|
|
|
17
|
|
||||||
Total derivative assets
|
|
28
|
|
|
94
|
|
|
122
|
|
|
21
|
|
|
3
|
|
|
24
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
||||||
Non-current derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
||||||
Total derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
(35
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative asset (liability), net
|
|
$
|
28
|
|
|
$
|
94
|
|
|
$
|
122
|
|
|
$
|
21
|
|
|
$
|
(32
|
)
|
|
$
|
(11
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
CQP Interest Rate Derivatives gain
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
13
|
|
|
$
|
—
|
|
CCH Interest Rate Derivatives gain (loss)
|
|
21
|
|
|
(3
|
)
|
|
119
|
|
|
(35
|
)
|
||||
SPL Interest Rate Derivatives loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Liquefaction Supply Derivatives (1)
|
|
LNG Trading Derivatives (2)
|
|
Total
|
|
Liquefaction Supply Derivatives (1)
|
|
LNG Trading Derivatives (2)
|
|
Total
|
||||||||||||
Consolidated Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
$
|
13
|
|
|
$
|
7
|
|
|
$
|
20
|
|
|
$
|
41
|
|
|
$
|
9
|
|
|
$
|
50
|
|
Non-current derivative assets
|
27
|
|
|
4
|
|
|
31
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||||
Total derivative assets
|
40
|
|
|
11
|
|
|
51
|
|
|
58
|
|
|
9
|
|
|
67
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities
|
(6
|
)
|
|
(90
|
)
|
|
(96
|
)
|
|
—
|
|
|
(17
|
)
|
|
(17
|
)
|
||||||
Non-current derivative liabilities
|
(5
|
)
|
|
(11
|
)
|
|
(16
|
)
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Total derivative liabilities
|
(11
|
)
|
|
(101
|
)
|
|
(112
|
)
|
|
(3
|
)
|
|
(17
|
)
|
|
(20
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative asset (liability), net
|
$
|
29
|
|
|
$
|
(90
|
)
|
|
$
|
(61
|
)
|
|
$
|
55
|
|
|
$
|
(8
|
)
|
|
$
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Notional amount, net (in TBtu) (3)
|
4,769
|
|
|
20
|
|
|
|
|
2,539
|
|
|
25
|
|
|
|
|
(1)
|
Does not include collateral calls of
$3 million
and
$1 million
for such contracts, which are included in
other current assets
in our Consolidated Balance Sheets as of
September 30, 2018
and
December 31, 2017
, respectively.
|
(2)
|
Does not include collateral of
$58 million
and
$28 million
deposited for such contracts, which are included in
other current assets
in our Consolidated Balance Sheets as of
September 30, 2018
and
December 31, 2017
, respectively.
|
(3)
|
SPL had secured up to approximately
2,755
TBtu and
2,214
TBtu and CCL had secured up to approximately
2,640
TBtu and
2,024
TBtu of natural gas feedstock through natural gas supply contracts as of
September 30, 2018
and
December 31, 2017
, respectively.
|
|
Consolidated Statements of Operations Location (1)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
LNG Trading Derivatives loss
|
LNG revenues
|
|
$
|
(58
|
)
|
|
$
|
(16
|
)
|
|
$
|
(128
|
)
|
|
$
|
(20
|
)
|
Liquefaction Supply Derivatives gain (loss) (2)
|
Cost of sales
|
|
21
|
|
|
(11
|
)
|
|
(32
|
)
|
|
(51
|
)
|
|
(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
|
||||||
|
Consolidated Balance Sheet Location
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
FX Derivatives
|
Derivative assets
|
|
$
|
11
|
|
|
$
|
—
|
|
FX Derivatives
|
Non-current derivative liabilities
|
|
—
|
|
|
(1
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
FX Derivatives gain
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
|
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 September 30, 2018
|
|
|
|
|
|
|
||||||
CQP Interest Rate Derivatives
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
28
|
|
CCH Interest Rate Derivatives
|
|
94
|
|
|
—
|
|
|
94
|
|
|||
Liquefaction Supply Derivatives
|
|
46
|
|
|
(6
|
)
|
|
40
|
|
|||
Liquefaction Supply Derivatives
|
|
(22
|
)
|
|
11
|
|
|
(11
|
)
|
|||
LNG Trading Derivatives
|
|
50
|
|
|
(39
|
)
|
|
11
|
|
|||
LNG Trading Derivatives
|
|
(154
|
)
|
|
53
|
|
|
(101
|
)
|
|||
FX Derivatives
|
|
21
|
|
|
(10
|
)
|
|
11
|
|
|||
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
|
)
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||||
Advances made under EPC and non-EPC contracts
|
|
$
|
15
|
|
|
$
|
26
|
|
Advances made to municipalities for water system enhancements
|
|
90
|
|
|
97
|
|
||
Advances and other asset conveyances to third parties to support LNG terminals
|
|
48
|
|
|
48
|
|
||
Tax-related payments and receivables
|
|
21
|
|
|
29
|
|
||
Equity method investments
|
|
92
|
|
|
64
|
|
||
Other
|
|
29
|
|
|
24
|
|
||
Total other non-current assets, net
|
|
$
|
295
|
|
|
$
|
288
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||||
Interest costs and related debt fees
|
|
$
|
252
|
|
|
$
|
397
|
|
Accrued natural gas purchases
|
|
251
|
|
|
298
|
|
||
LNG terminals and related pipeline costs
|
|
228
|
|
|
192
|
|
||
Compensation and benefits
|
|
113
|
|
|
141
|
|
||
Accrued LNG inventory
|
|
76
|
|
|
1
|
|
||
Other accrued liabilities
|
|
67
|
|
|
49
|
|
||
Total accrued liabilities
|
|
$
|
987
|
|
|
$
|
1,078
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||||
Long-term debt:
|
|
|
|
|
||||
SPL
|
|
|
|
|
|
|||
5.625% Senior Secured Notes due 2021 (“2021 SPL Senior Notes”)
|
|
$
|
2,000
|
|
|
$
|
2,000
|
|
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”)
|
|
1,500
|
|
|
1,500
|
|
||
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”)
|
|
1,350
|
|
|
1,350
|
|
||
5.00% Senior Secured Notes due 2037 (“2037 SPL Senior Notes”)
|
|
800
|
|
|
800
|
|
||
Cheniere Partners
|
|
|
|
|
||||
5.250% Senior Notes due 2025 (“2025 CQP Senior Notes”)
|
|
1,500
|
|
|
1,500
|
|
||
5.625% Senior Notes due 2026 (“2026 CQP Senior Notes”)
|
|
1,100
|
|
|
—
|
|
||
CQP Credit Facilities
|
|
—
|
|
|
1,090
|
|
||
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
|
|
|
1,500
|
|
||
CCH Credit Facility
|
|
4,492
|
|
|
2,485
|
|
||
CCH HoldCo II
|
|
|
|
|
||||
11.0% Convertible Senior Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”)
|
|
1,416
|
|
|
1,305
|
|
||
Cheniere
|
|
|
|
|
||||
4.875% Convertible Unsecured Notes due 2021 (“2021 Cheniere Convertible Unsecured Notes”)
|
|
1,189
|
|
|
1,161
|
|
||
4.25% Convertible Senior Notes due 2045 (“2045 Cheniere Convertible Senior Notes”)
|
|
625
|
|
|
625
|
|
||
$750 million Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”)
|
|
—
|
|
|
—
|
|
||
Unamortized premium, discount and debt issuance costs, net
|
|
(784
|
)
|
|
(730
|
)
|
||
Total long-term debt, net
|
|
27,438
|
|
|
25,336
|
|
||
|
|
|
|
|
||||
Current debt:
|
|
|
|
|
||||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
|
—
|
|
|
—
|
|
||
$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”)
|
|
—
|
|
|
—
|
|
||
Cheniere Marketing trade finance facilities
|
|
66
|
|
|
—
|
|
||
Total current debt
|
|
66
|
|
|
—
|
|
||
|
|
|
|
|
||||
Total debt, net
|
|
$
|
27,504
|
|
|
$
|
25,336
|
|
|
|
SPL Working Capital Facility
|
|
CQP Credit Facilities
|
|
CCH Credit Facility
|
|
CCH Working Capital Facility
|
|
Cheniere Revolving Credit Facility
|
||||||||||
Original facility size
|
|
$
|
1,200
|
|
|
$
|
2,800
|
|
|
$
|
8,404
|
|
|
$
|
350
|
|
|
$
|
750
|
|
Incremental commitments
|
|
—
|
|
|
—
|
|
|
1,566
|
|
|
850
|
|
|
—
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Outstanding balance
|
|
—
|
|
|
—
|
|
|
4,492
|
|
|
—
|
|
|
—
|
|
|||||
Commitments prepaid or terminated
|
|
—
|
|
|
2,685
|
|
|
3,832
|
|
|
—
|
|
|
—
|
|
|||||
Letters of credit issued
|
|
494
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|
—
|
|
|||||
Available commitment
|
|
$
|
706
|
|
|
$
|
115
|
|
|
$
|
1,646
|
|
|
$
|
884
|
|
|
$
|
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 1.75% or base rate plus 0.75%
|
|
LIBOR plus 1.25% - 1.75% or base rate plus 0.25% - 0.75%
|
|
LIBOR plus 3.25% or base rate plus 2.25%
|
||||||||||
Maturity date
|
|
December 31, 2020, with various terms for underlying loans
|
|
February 25, 2020
|
|
June 30, 2024
|
|
June 29, 2023
|
|
March 2, 2021
|
|
(1)
|
There is a
0.50%
step-up for both LIBOR and base rate loans beginning on February 25, 2019.
|
|
|
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 and debt issuance costs
|
|
$
|
1,090
|
|
|
$
|
1,390
|
|
|
$
|
310
|
|
Equity component
|
|
$
|
207
|
|
|
$
|
—
|
|
|
$
|
194
|
|
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
|
|
|
May 13, 2025
|
|
|
March 15, 2045
|
|
|||
Contractual interest rate
|
|
4.875
|
%
|
|
11.0
|
%
|
|
4.25
|
%
|
|||
Effective interest rate (8)
|
|
8.4
|
%
|
|
11.9
|
%
|
|
9.4
|
%
|
|||
Remaining debt discount and debt issuance costs amortization period (9)
|
|
2.7 years
|
|
|
2.0 years
|
|
|
26.5 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)
|
Rate to accrete the discounted carrying value of the convertible notes to the face value over the remaining amortization period.
|
(9)
|
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.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interest cost on convertible notes:
|
|
|
|
|
|
|
|
|
||||||||
Interest per contractual rate
|
|
$
|
60
|
|
|
$
|
55
|
|
|
$
|
176
|
|
|
$
|
162
|
|
Amortization of debt discount
|
|
9
|
|
|
8
|
|
|
25
|
|
|
22
|
|
||||
Amortization of debt issuance costs
|
|
3
|
|
|
2
|
|
|
7
|
|
|
5
|
|
||||
Total interest cost related to convertible notes
|
|
72
|
|
|
65
|
|
|
208
|
|
|
189
|
|
||||
Interest cost on debt excluding convertible notes
|
|
354
|
|
|
324
|
|
|
1,034
|
|
|
931
|
|
||||
Total interest cost
|
|
426
|
|
|
389
|
|
|
1,242
|
|
|
1,120
|
|
||||
Capitalized interest
|
|
(205
|
)
|
|
(203
|
)
|
|
(589
|
)
|
|
(581
|
)
|
||||
Total interest expense, net
|
|
$
|
221
|
|
|
$
|
186
|
|
|
$
|
653
|
|
|
$
|
539
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Carrying
Amount |
|
Estimated
Fair Value |
|
Carrying
Amount |
|
Estimated
Fair Value |
||||||||
Senior notes (1)
|
|
$
|
19,457
|
|
|
$
|
20,552
|
|
|
$
|
18,350
|
|
|
$
|
20,075
|
|
2037 SPL Senior Notes (2)
|
|
791
|
|
|
831
|
|
|
790
|
|
|
871
|
|
||||
Credit facilities (3)
|
|
4,466
|
|
|
4,466
|
|
|
3,574
|
|
|
3,574
|
|
||||
2021 Cheniere Convertible Unsecured Notes (2)
|
|
1,090
|
|
|
1,267
|
|
|
1,040
|
|
|
1,136
|
|
||||
2025 CCH HoldCo II Convertible Senior Notes (2)
|
|
1,390
|
|
|
1,597
|
|
|
1,273
|
|
|
1,535
|
|
||||
2045 Cheniere Convertible Senior Notes (4)
|
|
310
|
|
|
497
|
|
|
309
|
|
|
447
|
|
|
(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
,
2026 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
SPL Working Capital Facility
,
CQP Credit Facilities
,
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.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
LNG revenues
|
|
$
|
1,712
|
|
|
$
|
1,345
|
|
|
$
|
5,327
|
|
|
$
|
3,646
|
|
Regasification revenues
|
|
66
|
|
|
65
|
|
|
196
|
|
|
195
|
|
||||
Other revenues
|
|
30
|
|
|
5
|
|
|
73
|
|
|
12
|
|
||||
Other—related party
|
|
4
|
|
|
1
|
|
|
8
|
|
|
2
|
|
||||
Total revenues from customers
|
|
1,812
|
|
|
1,416
|
|
|
5,604
|
|
|
3,855
|
|
||||
Gains (losses) from derivative instruments (1)
|
|
7
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
||||
Total revenues
|
|
$
|
1,819
|
|
|
$
|
1,403
|
|
|
$
|
5,604
|
|
|
$
|
3,855
|
|
|
(1)
|
Includes the realized value associated with a portion of derivative instruments that settle through physical delivery.
|
|
Nine Months Ended September 30, 2018
|
||
Deferred revenues, beginning of period
|
$
|
111
|
|
Cash received but not yet recognized
|
120
|
|
|
Revenue recognized from prior period deferral
|
(111
|
)
|
|
Deferred revenues, end of period
|
$
|
120
|
|
|
|
Unsatisfied
Transaction Price
(in billions)
|
|
Weighted Average Recognition Timing (years) (1)
|
||
LNG revenues
|
|
$
|
102.4
|
|
|
11.3
|
Regasification revenues
|
|
2.7
|
|
|
5.8
|
|
Total revenues
|
|
$
|
105.1
|
|
|
|
|
(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. A portion 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 each of the
three and nine months ended September 30, 2018
, approximately
55%
of our LNG revenues from contracts with a duration of over one year and approximately
3%
of our regasification revenues were related to variable consideration received from customers.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Share-based compensation costs, pre-tax:
|
|
|
|
|
|
|
|
|
||||||||
Equity awards
|
|
$
|
25
|
|
|
$
|
10
|
|
|
$
|
64
|
|
|
$
|
25
|
|
Liability awards
|
|
13
|
|
|
12
|
|
|
45
|
|
|
56
|
|
||||
Total share-based compensation
|
|
38
|
|
|
22
|
|
|
109
|
|
|
81
|
|
||||
Capitalized share-based compensation
|
|
(7
|
)
|
|
(4
|
)
|
|
(20
|
)
|
|
(17
|
)
|
||||
Total share-based compensation expense
|
|
$
|
31
|
|
|
$
|
18
|
|
|
$
|
89
|
|
|
$
|
64
|
|
Tax benefit associated with share-based compensation expense
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
247.2
|
|
|
232.6
|
|
|
241.9
|
|
|
232.5
|
|
||||
Dilutive unvested stock
|
|
3.0
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
||||
Diluted
|
|
250.2
|
|
|
232.6
|
|
|
244.6
|
|
|
232.5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per share attributable to common stockholders
|
|
$
|
0.26
|
|
|
$
|
(1.24
|
)
|
|
$
|
1.67
|
|
|
$
|
(2.24
|
)
|
Diluted net income (loss) per share attributable to common stockholders
|
|
$
|
0.26
|
|
|
$
|
(1.24
|
)
|
|
$
|
1.65
|
|
|
$
|
(2.24
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Unvested stock (1)
|
|
2.0
|
|
|
1.5
|
|
|
2.3
|
|
|
1.5
|
|
Convertible notes (2)
|
|
17.3
|
|
|
16.8
|
|
|
17.1
|
|
|
16.8
|
|
Total potentially dilutive common shares
|
|
19.3
|
|
|
18.3
|
|
|
19.4
|
|
|
18.3
|
|
|
(1)
|
Does not include
0.4 million
shares for each of the
three and nine months ended September 30, 2018
and
5.1 million
shares for each of the
three and nine months ended September 30, 2017
, of unvested stock because the performance conditions had not yet been satisfied as of
September 30, 2018
and
2017
, 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 income (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
September 30, 2018
.
|
|
|
Percentage of Total Third-Party Revenues
|
|
Percentage of Accounts Receivable from Third Parties
|
||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
September 30,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Customer A
|
|
17%
|
|
19%
|
|
18%
|
|
25%
|
|
26%
|
|
28%
|
Customer B
|
|
15%
|
|
14%
|
|
15%
|
|
13%
|
|
24%
|
|
16%
|
Customer C
|
|
15%
|
|
20%
|
|
20%
|
|
10%
|
|
20%
|
|
14%
|
Customer D
|
|
18%
|
|
—%
|
|
13%
|
|
—%
|
|
18%
|
|
—%
|
Customer E
|
|
—%
|
|
20%
|
|
*
|
|
19%
|
|
—%
|
|
—%
|
Customer F
|
|
*
|
|
*
|
|
*
|
|
*
|
|
—%
|
|
15%
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Cash paid during the period for interest, net of amounts capitalized
|
|
$
|
552
|
|
|
$
|
360
|
|
Non-cash investing and financing activities:
|
|
|
|
|
||||
Acquisition of non-controlling interest in Cheniere Holdings
|
|
702
|
|
|
—
|
|
||
Contribution of assets to equity method investee
|
|
—
|
|
|
14
|
|
||
Acquisition of assets under capital lease
|
|
30
|
|
|
—
|
|
Standard
|
|
Description
|
|
Expected Date of Adoption
|
|
Effect on our Consolidated Financial Statements or Other Significant Matters
|
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 may be adopted using either a modified retrospective approach to apply the standard at the beginning of the earliest period presented in the financial statements or an optional transition approach to apply the standard at the date of adoption with no retrospective adjustments to prior periods. Certain additional practical expedients are also available.
|
|
January 1, 2019
|
|
We continue to evaluate the effect of this standard on our Consolidated Financial Statements. This evaluation process includes reviewing all forms of leases, performing a completeness assessment over the lease population, analyzing the practical expedients and assessing opportunities to make certain changes to our lease accounting information technology system in order to determine the best implementation strategy. Preliminarily, we anticipate a material impact from the requirement to recognize all leases on 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 anticipate electing the optional transition method to initially apply the standard at the January 1, 2019 adoption date. We expect to elect the package of practical expedients permitted under the transition guidance which, among other things, allows the carryforward of prior conclusions related to lease identification and classification. We also 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
|
|
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 adopted this guidance on January 1, 2018, using the full retrospective method. The adoption of this guidance represents a change in accounting principle that will provide financial statement readers with enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of this guidance did not impact our previously reported consolidated financial statements in any prior period nor did it result in a cumulative effect adjustment to retained earnings. See
Note 11—Revenues from Contracts with Customers
for additional disclosures.
|
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
|
|
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 or portions 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 our ability to enter into such transactions;
|
•
|
statements relating to the construction of our Trains and pipelines, including statements concerning the engagement of any
EPC
contractor or other contractor and the anticipated terms and provisions of any agreement with any such
EPC
or other contractor, and anticipated costs related thereto;
|
•
|
statements regarding any
SPA
or 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 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, capital expenditures, maintenance and operating costs and cash flows, 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 marketing of volumes expected to be made available to our integrated marketing function; 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 May 2018, our board of directors made a positive
FID
with respect to
Stage 2
of the CCL Project and issued a full notice to proceed to Bechtel Oil, Gas and Chemicals, Inc.
(“Bechtel”)
under the EPC contract for Stage 2.
|
•
|
In June 2018, we filed an application with the FERC with respect to
Corpus Christi Stage 3
, consisting of seven midscale liquefaction Trains with an expected aggregate nominal production capacity of approximately 9.5 mtpa and one LNG storage tank.
|
•
|
We entered into the following agreements:
|
◦
|
In September 2018, we entered into a 15-year SPA with Vitol Inc. for the sale of approximately 0.7 mtpa of LNG beginning in 2018.
|
◦
|
In August 2018, we entered into a 25-year SPA with CPC Corporation, Taiwan for the sale of approximately 2.0 mtpa of LNG beginning in 2021.
|
◦
|
In February 2018, we entered into two SPAs with PetroChina International Company Limited, a subsidiary of China National Petroleum Corporation, for the sale of approximately 1.2 mtpa of LNG through 2043, with a portion of the supply beginning in 2018 and the balance beginning in 2023.
|
◦
|
In January 2018, we entered into a 15-year SPA with Trafigura Pte Ltd for the sale of approximately 1.0 mtpa of LNG beginning in 2019.
|
•
|
As of October 31, 2018, more than
215
cargoes have been produced, loaded and exported from the SPL Project year to date. To date, over
475
cumulative LNG cargoes have been exported from the
SPL Project
, with deliveries to
29
countries and regions worldwide.
|
•
|
In August 2018, feed gas was introduced to Train 1 of the CCL Project as part of the commissioning process. In September 2018, feed gas was introduced to Train 5 of the SPL Project as part of the commissioning process, and first LNG production from Train 5 occurred in October 2018.
|
•
|
In September 2018, we closed the previously announced merger of Cheniere Holdings with our wholly owned subsidiary. As a result of the merger, all of the publicly-held shares of Cheniere Holdings not owned by us were canceled and shareholders received 0.4750 shares of our common stock for each publicly-held share of Cheniere Holdings.
|
•
|
We completed the following debt transactions:
|
◦
|
In September 2018, Cheniere Partners issued an aggregate principal amount of $1.1 billion of 5.625% Senior Notes due 2026
(the “2026 CQP Senior Notes”)
. Net proceeds of the offering of approximately $1.1 billion, after deducting commissions, fees and expenses, were used to prepay all of the outstanding indebtedness under
|
◦
|
In June 2018, CCH amended and restated its working capital facility
(“CCH Working Capital Facility”)
to increase total commitments under the
CCH Working Capital Facility
to
$1.2 billion
. Borrowings will be used for certain working capital requirements related to developing and placing into operations the
CCL Project
and for related business purposes.
|
◦
|
In May 2018, CCH amended and restated its existing credit facilities
(the “CCH Credit Facility”)
to increase total commitments under the
CCH Credit Facility
to $6.1 billion. Borrowings will be used to fund a portion of the costs of developing, constructing and placing into service the three Trains and the related facilities of the
CCL Project
and for related business purposes.
|
•
|
We reached the following contractual milestones:
|
◦
|
In June 2018, the date of first commercial delivery was reached under the 20-year SPA with BG Gulf Coast LNG, LLC
(“BG”)
relating to Train 3 of the
SPL Project
.
|
◦
|
In March 2018, the date of first commercial delivery was reached under the 20-year SPA with GAIL (India) Limited
(“GAIL”)
relating to Train 4 of the
SPL Project
.
|
•
|
SPL through project debt and borrowings and operating cash flows;
|
•
|
Cheniere Partners through operating cash flows from SPLNG, SPL and CTPL and debt or equity offerings;
|
•
|
CCH Group through project debt and borrowings and equity contributions from Cheniere; and
|
•
|
Cheniere through project financing, existing unrestricted cash, debt and equity offerings by us or our subsidiaries, operating cash flows, services fees from Cheniere Partners and our other subsidiaries and distributions from our investment in Cheniere Partners.
|
|
September 30,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
Cash and cash equivalents
|
$
|
989
|
|
|
$
|
722
|
|
Restricted cash designated for the following purposes:
|
|
|
|
||||
SPL Project
|
649
|
|
|
544
|
|
||
Cheniere Partners and cash held by guarantor subsidiaries
|
808
|
|
|
1,045
|
|
||
CCL Project
|
220
|
|
|
227
|
|
||
Other
|
266
|
|
|
75
|
|
||
Available commitments under the following credit facilities:
|
|
|
|
||||
$1.2 billion SPL Working Capital Facility (“SPL Working Capital Facility”)
|
706
|
|
|
470
|
|
||
CQP Credit Facilities
|
115
|
|
|
220
|
|
||
CCH Credit Facility
|
1,646
|
|
|
2,087
|
|
||
CCH Working Capital Facility
|
884
|
|
|
186
|
|
||
$750 million Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”)
|
750
|
|
|
750
|
|
|
|
SPL Train 5
|
|
Overall project completion percentage
|
|
98.5%
|
|
Completion percentage of:
|
|
|
|
Engineering
|
|
100%
|
|
Procurement
|
|
100%
|
|
Subcontract work
|
|
92.7%
|
|
Construction
|
|
97.8%
|
|
Date of expected substantial completion
|
|
1Q 2019
|
•
|
Trains 1 through 4—
FTA countries
for a 30-year term, which commenced on May 15, 2016, and
non-FTA countries
for a 20-year term, which commenced on June 3, 2016, in an amount up to a combined total of the equivalent of 16
mtpa
(approximately 803
Bcf/yr
of natural gas).
|
•
|
Trains 1 through 4—
FTA countries
for a 25-year term and non-FTA countries for a 20-year term in an amount up to a combined total of the equivalent of approximately 203
Bcf/yr
of natural gas (approximately 4 mtpa).
|
•
|
Trains 5 and 6—
FTA countries
and
non-FTA countries
for a 20-year term, in an amount up to a combined total of 503.3
Bcf/yr
of natural gas (approximately 10 mtpa).
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||||
Senior notes (1)
|
|
$
|
16,250
|
|
|
$
|
15,150
|
|
Credit facilities outstanding balance (2)
|
|
—
|
|
|
1,090
|
|
||
Letters of credit issued (3)
|
|
494
|
|
|
730
|
|
||
Available commitments under credit facilities (3)
|
|
706
|
|
|
470
|
|
||
Total capital resources from borrowings and available commitments (4)
|
|
$
|
17,450
|
|
|
$
|
17,440
|
|
|
(1)
|
Includes SPL’s 5.625% Senior Secured Notes due 2021, 6.25% Senior Secured Notes due 2022, 5.625% Senior Secured Notes due 2023, 5.75% Senior Secured Notes due 2024, 5.625% Senior Secured Notes due 2025, 5.875% Senior Secured Notes due 2026
(the “2026 SPL Senior Notes”)
, 5.00% Senior Secured Notes due 2027
(the “2027 SPL Senior Notes”)
, 4.200% Senior Secured Notes due 2028
(the “2028 SPL Senior Notes”)
and 5.00% Senior Secured Notes due 2037
(the “2037 SPL Senior Notes”)
(collectively, the “SPL Senior Notes”)
and Cheniere Partners’
2025 CQP Senior Notes
and
2026 CQP Senior Notes
.
|
(2)
|
Includes outstanding balance under the
SPL Working Capital Facility
and CTPL and SPLNG tranche term loans outstanding under the CQP Credit Facilities.
|
(3)
|
Consists of
SPL Working Capital Facility
. Does not include the letters of credit issued or available commitments under the
CQP Credit Facilities
, which are not specifically for the Sabine Pass LNG Terminal.
|
(4)
|
Does not include Cheniere’s additional borrowings from the
2021 Cheniere Convertible Unsecured Notes
and the
2045 Cheniere Convertible Senior Notes
, which may be used for the Sabine Pass LNG Terminal.
|
|
CCL Stage 1
|
|
CCL Stage 2
|
||
Overall project completion percentage
|
93.9%
|
|
36.3%
|
||
Completion percentage of:
|
|
|
|
|
|
Engineering
|
100%
|
|
79.2%
|
||
Procurement
|
100%
|
|
57.3%
|
||
Subcontract work
|
83.6%
|
|
5.8%
|
||
Construction
|
86.9%
|
|
5.9%
|
||
Expected date of substantial completion
|
Train 1
|
1Q 2019
|
|
Train 3
|
2H 2021
|
|
Train 2
|
2H 2019
|
|
|
|
•
|
CCL Project—
FTA countries
for a 25-year term and to
non-FTA countries
for a 20-year term up to a combined total of the equivalent of 767
Bcf/yr
(approximately 15 mtpa) of natural gas.
|
•
|
Corpus Christi Stage 3
—FTA countries for a 20-year term in an amount equivalent to 514 Bcf/yr (approximately 10 mtpa) of natural gas (the “Stage 3 FTA”). The application for authorization to export that same 514 Bcf/yr of domestically produced LNG by vessel to non-FTA countries is currently pending before the DOE (the “Stage 3 Non-FTA”).
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||||
Senior notes (1)
|
|
$
|
4,250
|
|
|
$
|
4,250
|
|
11% Convertible Senior Secured Notes due 2025 (2)
|
|
1,000
|
|
|
1,000
|
|
||
Credit facilities outstanding balance (3)
|
|
4,492
|
|
|
2,485
|
|
||
Letters of credit issued (3)
|
|
316
|
|
|
164
|
|
||
Available commitments under credit facilities (3)
|
|
2,530
|
|
|
2,273
|
|
||
Total capital resources from borrowings and available commitments (4)
|
|
$
|
12,588
|
|
|
$
|
10,172
|
|
|
(1)
|
Includes CCH’s 7.000% Senior Secured Notes due 2024, 5.875% Senior Secured Notes due 2025 and 5.125% Senior Secured Notes due 2027
(the “2027 CCH Senior Notes”)
(collectively, the “CCH Senior Notes”)
.
|
(2)
|
Aggregate original principal amount before debt discount and debt issuance costs.
|
(3)
|
Includes
CCH Credit Facility
and
CCH Working Capital Facility
.
|
(4)
|
Does not include Cheniere’s additional borrowings from
2021 Cheniere Convertible Unsecured Notes
,
2045 Cheniere Convertible Senior Notes
and
Cheniere Revolving Credit Facility
, which may be used for the
CCL Project
.
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Operating cash flows
|
$
|
1,504
|
|
|
$
|
895
|
|
Investing cash flows
|
(2,722
|
)
|
|
(2,926
|
)
|
||
Financing cash flows
|
1,537
|
|
|
2,779
|
|
||
|
|
|
|
||||
Net increase in cash, cash equivalents and restricted cash
|
319
|
|
|
748
|
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
2,613
|
|
|
1,827
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
2,932
|
|
|
$
|
2,575
|
|
•
|
issuance of an aggregate principal amount of $1.1 billion of the
2026 CQP Senior Notes
, which was used to prepay $1.1 billion of the outstanding borrowings under the
CQP Credit Facilities
;
|
•
|
$2.3 billion
of borrowings and
$281 million
in repayments under the
CCH Credit Facility
;
|
•
|
$14 million
of borrowings and
$14 million
in repayments under the
CCH Working Capital Facility
;
|
•
|
$66 million
of net borrowings related to our Cheniere Marketing trade financing facilities;
|
•
|
$53 million
of debt issuance costs related to up-front fees paid upon the closing of these transactions;
|
•
|
$16 million
in debt extinguishment costs related to the prepayments of the
CQP Credit Facilities
and the
CCH Credit Facility
;
|
•
|
$435 million
of distributions and dividends to non-controlling interest by Cheniere Partners and Cheniere Holdings;
|
•
|
$10 million
paid for tax withholdings for share-based compensation; and
|
•
|
$7 million
of transaction costs to acquire additional interest of Cheniere Holdings.
|
•
|
issuances of SPL’s senior notes for an aggregate principal amount $2.15 billion;
|
•
|
$55 million of borrowings and $369 million of repayments made under the credit facilities SPL entered into in June 2015;
|
•
|
$110 million of borrowings and $334 million of repayments made under the
SPL Working Capital Facility
;
|
•
|
$1.2 billion of borrowings under the
CCH Credit Facility
;
|
•
|
issuance of aggregate principal amount of
$1.5 billion
of the
2027 CCH Senior Notes
, which was used to prepay $1.4 billion of outstanding borrowings under the
CCH Credit Facility
;
|
•
|
$24 million of borrowings and $24 million of repayments made under the
CCH Working Capital Facility
;
|
•
|
issuance of an aggregate principal amount of $1.5 billion of the
2025 CQP Senior Notes
, which was used to prepay $1.5 billion of the outstanding borrowings under the
CQP Credit Facilities
;
|
•
|
$17 million in net borrowings under the Cheniere Marketing trade finance facilities;
|
•
|
$85 million
of debt issuance costs related to up-front fees paid upon the closing of these transactions;
|
•
|
$60 million
of distributions and dividends to non-controlling interest by Cheniere Partners and Cheniere Holdings; and
|
•
|
$4 million
paid for tax withholdings for share-based compensation.
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||||||
(in TBtu)
|
Operational
|
|
Commissioning
|
|
Operational
|
|
Commissioning
|
||||
Volumes loaded during the current period
|
228
|
|
|
—
|
|
|
691
|
|
|
—
|
|
Volumes loaded during the prior period but recognized during the current period
|
3
|
|
|
—
|
|
|
43
|
|
|
—
|
|
Less: volumes loaded during the current period and in transit at the end of the period
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
Total volumes recognized in the current period
|
228
|
|
|
—
|
|
|
731
|
|
|
—
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
LNG revenues
|
$
|
1,719
|
|
|
$
|
1,332
|
|
|
$
|
387
|
|
|
$
|
5,327
|
|
|
$
|
3,646
|
|
|
$
|
1,681
|
|
Regasification revenues
|
66
|
|
|
65
|
|
|
1
|
|
|
196
|
|
|
195
|
|
|
1
|
|
||||||
Other revenues
|
30
|
|
|
5
|
|
|
25
|
|
|
73
|
|
|
12
|
|
|
61
|
|
||||||
Other—related party
|
4
|
|
|
1
|
|
|
3
|
|
|
8
|
|
|
2
|
|
|
6
|
|
||||||
Total revenues
|
$
|
1,819
|
|
|
$
|
1,403
|
|
|
$
|
416
|
|
|
$
|
5,604
|
|
|
$
|
3,855
|
|
|
$
|
1,749
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
LNG revenues
(in millions)
:
|
|
|
|
|
|
|
|
||||||||
LNG from the SPL Project sold under SPL’s third party long-term SPAs
|
$
|
1,182
|
|
|
$
|
715
|
|
|
$
|
3,293
|
|
|
$
|
1,669
|
|
LNG from the SPL Project sold by our integrated marketing function
|
316
|
|
|
200
|
|
|
1,619
|
|
|
1,337
|
|
||||
LNG procured from third parties
|
208
|
|
|
427
|
|
|
394
|
|
|
631
|
|
||||
Other revenues and derivative gains (losses)
|
13
|
|
|
(10
|
)
|
|
21
|
|
|
9
|
|
||||
Total LNG revenues
|
$
|
1,719
|
|
|
$
|
1,332
|
|
|
$
|
5,327
|
|
|
$
|
3,646
|
|
|
|
|
|
|
|
|
|
||||||||
Volumes sold as LNG revenues
(in TBtu)
:
|
|
|
|
|
|
|
|
||||||||
LNG from the SPL Project sold under SPL’s third party long-term SPAs
|
196
|
|
|
118
|
|
|
550
|
|
|
275
|
|
||||
LNG from the SPL Project sold by our integrated marketing function
|
32
|
|
|
33
|
|
|
181
|
|
|
176
|
|
||||
LNG procured from third parties
|
23
|
|
|
45
|
|
|
44
|
|
|
64
|
|
||||
Total volumes sold as LNG revenues
|
251
|
|
|
196
|
|
|
775
|
|
|
515
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Cost of sales
|
$
|
1,027
|
|
|
$
|
824
|
|
|
$
|
203
|
|
|
$
|
3,078
|
|
|
$
|
2,140
|
|
|
$
|
938
|
|
Operating and maintenance expense
|
170
|
|
|
114
|
|
|
56
|
|
|
457
|
|
|
309
|
|
|
148
|
|
||||||
Development expense
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
6
|
|
|
7
|
|
|
(1
|
)
|
||||||
Selling, general and administrative expense
|
74
|
|
|
64
|
|
|
10
|
|
|
214
|
|
|
179
|
|
|
35
|
|
||||||
Depreciation and amortization expense
|
113
|
|
|
92
|
|
|
21
|
|
|
333
|
|
|
252
|
|
|
81
|
|
||||||
Restructuring expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(6
|
)
|
||||||
Impairment expense and loss on disposal of assets
|
8
|
|
|
9
|
|
|
(1
|
)
|
|
8
|
|
|
15
|
|
|
(7
|
)
|
||||||
Total operating costs and expenses
|
$
|
1,394
|
|
|
$
|
1,106
|
|
|
$
|
288
|
|
|
$
|
4,096
|
|
|
$
|
2,908
|
|
|
$
|
1,188
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Interest expense, net of capitalized interest
|
$
|
221
|
|
|
$
|
186
|
|
|
$
|
35
|
|
|
$
|
653
|
|
|
$
|
539
|
|
|
$
|
114
|
|
Loss on modification or extinguishment of debt
|
12
|
|
|
25
|
|
|
(13
|
)
|
|
27
|
|
|
100
|
|
|
(73
|
)
|
||||||
Derivative loss (gain), net
|
(23
|
)
|
|
2
|
|
|
(25
|
)
|
|
(132
|
)
|
|
37
|
|
|
(169
|
)
|
||||||
Other income
|
(15
|
)
|
|
(4
|
)
|
|
(11
|
)
|
|
(32
|
)
|
|
(11
|
)
|
|
(21
|
)
|
||||||
Total other expense
|
$
|
195
|
|
|
$
|
209
|
|
|
$
|
(14
|
)
|
|
$
|
516
|
|
|
$
|
665
|
|
|
$
|
(149
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Income tax benefit (provision)
|
$
|
(3
|
)
|
|
$
|
2
|
|
|
$
|
(5
|
)
|
|
$
|
(15
|
)
|
|
$
|
1
|
|
|
$
|
(16
|
)
|
Net income attributable to non-controlling interest
|
162
|
|
|
379
|
|
|
(217
|
)
|
|
573
|
|
|
803
|
|
|
(230
|
)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Fair Value
|
|
Change in Fair Value
|
|
Fair Value
|
|
Change in Fair Value
|
||||||||
Liquefaction Supply Derivatives
|
$
|
29
|
|
|
$
|
7
|
|
|
$
|
55
|
|
|
$
|
5
|
|
LNG Trading Derivatives
|
(90
|
)
|
|
33
|
|
|
(8
|
)
|
|
2
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Fair Value
|
|
Change in Fair Value
|
|
Fair Value
|
|
Change in Fair Value
|
||||||||
CQP Interest Rate Derivatives
|
$
|
28
|
|
|
$
|
5
|
|
|
$
|
21
|
|
|
$
|
5
|
|
CCH Interest Rate Derivatives
|
94
|
|
|
42
|
|
|
(32
|
)
|
|
44
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Fair Value
|
|
Change in Fair Value
|
|
Fair Value
|
|
Change in Fair Value
|
||||||||
FX Derivatives
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
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
|
July 1 - 31, 2018
|
|
29,160
|
|
$65.01
|
|
—
|
|
—
|
August 1 - 31, 2018
|
|
3,121
|
|
$62.22
|
|
—
|
|
—
|
September 1 - 30, 2018
|
|
1,628
|
|
$67.44
|
|
—
|
|
—
|
|
(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 6.
|
EXHIBITS
|
Exhibit No.
|
|
Description
|
4.1
|
|
|
10.1*
|
|
|
10.2
|
|
|
10.3*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1**
|
|
|
32.2**
|
|
|
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.
|
|
|
CHENIERE ENERGY, INC.
|
|
|
|
|
|
Date:
|
November 7, 2018
|
By:
|
/s/ Michael J. Wortley
|
|
|
|
Michael J. Wortley
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(on behalf of the registrant and
as principal financial officer) |
|
|
|
|
Date:
|
November 7, 2018
|
By:
|
/s/ Leonard E. Travis
|
|
|
|
Leonard E. Travis
|
|
|
|
Vice President and Chief Accounting Officer
|
|
|
|
(on behalf of the registrant and
as principal accounting officer) |
SABINE PASS LIQUEFACTION, LLC
,
|
|
as the Borrower
|
|
|
|
|
|
By:
|
/s/ Lisa C. Cohen
|
Name: Lisa C. Cohen
|
|
Title: Treasurer
|
SOCIÉTÉ GÉNÉRALE,
|
|
as Common Security Trustee and Secured
|
|
Debt Holder Group Representative for the
|
|
Commercial Banks Facility
|
|
|
|
|
|
By:
|
/s/ Ellen Turkel
|
Name: Ellen Turkel
|
|
Title: Director
|
|
|
|
|
|
|
|
SOCIÉTÉ GÉNÉRALE,
|
|
as the Intercreditor Agent
|
|
|
|
|
|
By:
|
/s/ Ellen Turkel
|
Name: Ellen Turkel
|
|
Title: Director
|
|
|
|
|
|
|
|
SOCIÉTÉ GÉNÉRALE,
|
|
as Commercial Bank Lender, Swing Line Lender
|
|
and Working Capital Lender
|
|
|
|
|
|
By:
|
/s/ Ellen Turkel
|
Name: Ellen Turkel
|
|
Title: Director
|
THE BANK OF NOVA SCOTIA, HOUSTON BRANCH
|
|
as the Secured Debt Holder Group Representative for the Working Capital Facility
|
|
|
|
|
|
By:
|
/s/ Alfredo Brahim
|
Name: Alfredo Brahim
|
|
Title: Director
|
|
|
|
|
|
|
|
THE BANK OF NOVA SCOTIA, HOUSTON BRANCH
|
|
as Senior Issuing Bank and Working Capital Lender
|
|
|
|
|
|
By:
|
/s/ Alfredo Brahim
|
Name: Alfredo Brahim
|
|
Title: Director
|
ABN AMRO CAPITAL USA LLC,
|
|
as Senior Issuing Bank and Working Capital Lender
|
|
|
|
|
|
By:
|
/s/ Casey Lowary
|
Name: Casey Lowary
|
|
Title: Managing Director
|
|
|
|
|
|
By:
|
/s/ Darrell Holley
|
Name: Darrell Holley
|
|
Title: Managing Director
|
MUFG BANK, LTD.,
|
|
as Working Capital Lender
|
|
|
|
|
|
By:
|
/s/ Saad Iqbal
|
Name: Saad Iqbal
|
|
Title: Managing Director
|
INDUSTRIAL AND COMMERCIAL BANK
|
|
OF CHINA LIMITED, NEW YORK BANK,
|
|
as Working Capital Lender
|
|
|
|
|
|
By:
|
/s/ Michael Fabisiak
|
Name: Michael Fabisiak
|
|
Title: Head of Project Finance, Americas
|
|
|
|
|
|
By:
|
/s/ N/A
|
Name:
|
|
Title:
|
ING CAPITAL LLC,
|
|
as Working Capital Lender
|
|
|
|
|
|
By:
|
/s/ Subha Pasumarti
|
Name: Subha Pasumarti
|
|
Title: Managing Director
|
|
|
|
|
|
By:
|
/s/ Hans Beekmans
|
Name: Hans Beekmans
|
|
Title: Director
|
LANDESBANK BADEN-WÜRTTEMBERG,
|
|||
NEW YORK BRANCH,
|
|||
as Working Capital Lender
|
|||
|
|
||
|
|
||
By:
|
/s/ Adam Rahal
|
||
Name: Adam Rahal
|
|||
Title: Legal Counsel
|
|||
|
|
||
|
|
||
By:
|
/s/ Michael Thier
|
||
Name: Michael Thier
|
|||
Title: Senior Risk Manager
|
LLOYDS BANK PLC,
|
|
as Working Capital Lender
|
|
|
|
|
|
By:
|
/s/ Kamala Basdeo
|
Name: Kamala Basdeo
|
|
Title: Assistant Manager
|
|
|
Transaction Execution
|
|
Category A
|
|
B002
|
|
|
|
|
By:
|
/s/ Jennifer Larrow
|
Name: Jennifer Larrow
|
|
Title: Assistant Manager
|
|
|
Transaction Execution
|
|
Category A
|
|
L003
|
MORGAN STANLEY BANK, N.A.,
|
|
as Working Capital Lender
|
|
|
|
|
|
By:
|
/s/ Jake Dowden
|
Name: Jake Dowden
|
|
Title: Authorized Signatory
|
SUMITOMO MITSUI BANKING
|
|
CORPORATION,
|
|
as Working Capital Lender
|
|
|
|
|
|
By:
|
/s/ Juan Kreutz
|
Name: Juan Kreutz
|
|
Title: Managing Director
|
COMMONWEALTH BANK OF AUSTRALIA
,
|
|
as Working Capital Lender
|
|
|
|
By its attorney under Power of Attorney dated
|
|
24 June 2013:
|
|
|
|
|
|
Signature of Attorney:
|
/s/ Annette Tomoski
|
Name of Attorney:
|
Annette Tomoski
|
|
|
|
|
Signed by its duly constituted attorney in the
|
|
presence of:
|
|
|
|
|
|
Signature of Witness:
|
/s/ Daniel Sardelic
|
Name of Witness:
|
Daniel Sardelic
|
WELLS FARGO BANK, N.A.
,
|
|
as Working Capital Lender
|
|
|
|
|
|
By:
|
/s/ J. Michael Quigley
|
Name: J. Michael Quigley
|
|
Title: Assistant Vice President
|
PROJECT NAME:
Corpus Christi Stage 2 Liquefaction Facility
OWNER:
Corpus Christi Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 12, 2017
|
CHANGE ORDER NUMBER:
CO-00001
DATE OF CHANGE ORDER:
May 18, 2018
|
1.
|
Pursuant to Article 6 and Table A-2 of the Agreement, the Parties have agreed to amend Table A-2 by adding Table A-2-1 to the previous Table A-2. Table A-2-l incorporates (i) certain numbered correspondence issued between Contractor and Owner in connection with the Stage 1 EPC Agreement, and (ii) certain numbered conference notes between Contractor and Owner in connection with the Stage 1 EPC Agreement.
|
2.
|
Table A-2-1 is attached as Exhibit 1 hereto.
|
3.
|
Only those specified portions of the numbered correspondence and numbered conference notes are incorporated by Table A-2-1. No other portions of the numbered correspondence or numbered conference notes set forth in Table A-2-1 nor any other correspondence, conference notes or meeting minutes (including any compensation or other relief specified therein) are incorporated into the Agreement.
|
The original Contract Price was.........................................................................................................................
|
$
|
2,360,000,000
|
|
Net change by previously authorized Change Orders........................................................................................
|
$
|
0.00
|
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
0.00
|
|
The Aggregate Equipment Price will be (increased) (decreased) (unchanged) by this Change Order in the amount of...........................................................................................................................................................
|
$
|
Unchanged
|
|
The Aggregate Labor and Skills Price will be (increased) (decreased) (unchanged) by this Change Order in the amount of.....................................................................................................................................................
|
$
|
Unchanged
|
|
The Aggregate Provisional Sum will be (increased) (decreased) (unchanged) by this Change Order in the amount of...........................................................................................................................................................
|
$
|
Unchanged
|
|
The new Contract Price including this Change Order will be...........................................................................
|
$
|
2,360,000,000
|
|
/s/ Ed Lehotsky
|
|
/s/ Sergio Buoncristiano
|
Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Sergio Buoncristiano
|
Name
|
|
Name
|
SVP E&C
|
|
SVP
|
Title
|
|
Title
|
May 18, 2018
|
|
May 18, 2018
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME:
Corpus Christi Stage 2 Liquefaction Facility
OWNER:
Corpus Christi Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 12, 2017
|
CHANGE ORDER NUMBER:
CO-00002
DATE OF CHANGE ORDER:
May 18, 2018
|
1.
|
Pursuant to Article 6, the Parties have agreed to amend and restate Attachment C - Payment Schedule for Stage 2.
|
2.
|
The amended and restated Attachment C is attached as Exhibit 1 hereto.
|
The original Contract Price was.........................................................................................................................
|
$
|
2,360,000,000
|
|
Net change by previously authorized Change Orders (#00001)........................................................................
|
$
|
0.00
|
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
0.00
|
|
The Aggregate Equipment Price will be (increased) (decreased) (unchanged) by this Change Order in the amount of...........................................................................................................................................................
|
$
|
Unchanged
|
|
The Aggregate Labor and Skills Price will be (increased) (decreased) (unchanged) by this Change Order in the amount of.....................................................................................................................................................
|
$
|
Unchanged
|
|
The Aggregate Provisional Sum will be (increased) (decreased) (unchanged) by this Change Order in the amount of...........................................................................................................................................................
|
$
|
Unchanged
|
|
The new Contract Price including this Change Order will be...........................................................................
|
$
|
2,360,000,000
|
|
/s/ Ed Lehotsky
|
|
/s/ Sergio Buoncristiano
|
Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Sergio Buoncristiano
|
Name
|
|
Name
|
SVP E&C
|
|
SVP
|
Title
|
|
Title
|
May 18, 2018
|
|
May 18, 2018
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME:
Corpus Christi Stage 2 Liquefaction Facility
OWNER:
Corpus Christi Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 12, 2017
|
CHANGE ORDER NUMBER:
CO-00003
DATE OF CHANGE ORDER:
May 24, 2018
|
1.
|
The Fuel Provisional Sum in Section 1.2 of Attachment EE, Schedule EE-1 of the Agreement prior to this Change Order was Ten Million, Seven Hundred Eighty Four Thousand, Four Hundred Sixty Six U.S. Dollars (U.S. $10,784,466). The Fuel Provisional Sum is hereby decreased by Two Million, Thirty Six Thousand, Six Hundred Two U. S. Dollars (U.S. $2,036,602) and the new value as amended by this Change Order shall be Eight Million, Seven Hundred Forty Seven Thousand, Eight Hundred Sixty Four U.S. Dollars $8,747,864.
|
2.
|
Pursuant to instructions in Section 1.2 of Attachment EE, Schedule EE-1 of the Agreement, Exhibit 1 to this Change Order illustrates the calculation of the final fuel costs in the Agreement.
|
3.
|
Schedules C-1 Aggregate Labor and Skills Price Milestone Payment Schedule of Attachment C of the Agreement will be amended by including the milestones listed in Exhibit 2 of this Change Order.
|
The original Contract Price was.........................................................................................................................
|
$
|
2,360,000,000
|
|
Net change by previously authorized Change Orders (0001-00002).................................................................
|
$
|
—
|
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
2,360,000,000
|
|
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...........................................................................
|
$
|
2,357,963,398
|
|
The original Aggregate Equipment Price was...................................................................................................
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00002).................................................................
|
$
|
***
|
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 (0001-00002).................................................................
|
$
|
***
|
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 Contract Price including this Change Order will be...........................................................................
|
$
|
***
|
The original Aggregate Provisional Sum was....................................................................................................
|
$
|
295,549,906
|
|
Net change by previously authorized Change Orders (0001-00002).................................................................
|
$
|
—
|
|
The Aggregate Provisional Sum prior to this Change Order was......................................................................
|
$
|
295,549,906
|
|
The Aggregate Provisional Sum will be unchanged by this Change Order in the amount of...........................
|
$
|
(2,036,602
|
)
|
The new Aggregate Provisional Sum including this Change Order will be......................................................
|
$
|
293,513,304
|
|
/s/ Ed Lehotsky
|
|
/s/ Sergio Buoncristiano
|
For Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Sergio Buoncristiano
|
Name
|
|
Name
|
SVP E&C
|
|
SVP
|
Title
|
|
Title
|
June 13, 2018
|
|
May 24, 2018
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME:
Corpus Christi Stage 2 Liquefaction Facility
OWNER:
Corpus Christi Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 12, 2017
|
CHANGE ORDER NUMBER:
CO-00004
DATE OF CHANGE ORDER:
May 29, 2018
|
1.
|
The Currency Provisional Sum in Section 1.1 of Attachment EE, Schedule EE-1 of the Agreement prior to this Change Order was Two Hundred Twelve Million, Four Hundred Fifty Three Thousand, Four Hundred Forty Nine U.S. Dollars (U.S. $212,453,449). The Currency Provisional Sum is hereby increased by Five Hundred Seventy Three Thousand, Seventy One U. S. Dollars (U.S. $573,071) and the new value as amended by this Change Order shall be Two Hundred Thirteen Million, Twenty Six Thousand, Five Hundred Twenty U.S. Dollars (U.S. $213,026,520).
|
2.
|
Pursuant to instructions in Section 1.1 of Attachment EE, Schedule EE-1 of the Agreement, Exhibit 1 to this Change Order illustrates the calculation of the final currency costs in the Agreement.
|
3.
|
Schedules C-3 Aggregate Equipment Price Milestone Payment Schedule of Attachment C of the Agreement will be amended by including the milestones listed in Exhibit 2 of this Change Order.
|
The original Contract Price was.........................................................................................................................
|
$
|
2,360,000,000
|
|
Net change by previously authorized Change Orders (0001-00003).................................................................
|
$
|
(2,036,602
|
)
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
2,357,963,398
|
|
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...........................................................................
|
$
|
2,358,536,469
|
|
The original Aggregate Equipment Price was...................................................................................................
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00003).................................................................
|
$
|
***
|
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 (0001-00003).................................................................
|
$
|
***
|
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 Contract Price including this Change Order will be...........................................................................
|
$
|
***
|
The original Aggregate Provisional Sum was....................................................................................................
|
$
|
295,549,906
|
|
Net change by previously authorized Change Orders (0001-00003).................................................................
|
$
|
(2,036,602
|
)
|
The Aggregate Provisional Sum prior to this Change Order was......................................................................
|
$
|
293,513,304
|
|
The Aggregate Provisional Sum will be unchanged by this Change Order in the amount of...........................
|
$
|
573,071
|
|
The new Aggregate Provisional Sum including this Change Order will be......................................................
|
$
|
294,086,375
|
|
/s/ Ed Lehotsky
|
|
/s/ Sergio Buoncristiano
|
For Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Sergio Buoncristiano
|
Name
|
|
Name
|
SVP E&C
|
|
SVP
|
Title
|
|
Title
|
June 13, 2018
|
|
May 30, 2018
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME:
Corpus Christi Stage 2 Liquefaction Facility
OWNER:
Corpus Christi Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 12, 2017
|
CHANGE ORDER NUMBER:
CO-00005
DATE OF CHANGE ORDER:
July 10, 2018
|
1.
|
Pursuant to Article 6 of the Agreement, the Parties agree Contractor will implement changes to the trim on the JT valve 13PV-16002, located in the methane cold box of Train 3.
|
2.
|
The scope of this Change Order is further detailed in Exhibit 1.
|
3.
|
The cost breakdowns for the scope of work described in this Change Order are detailed in Exhibit 2.
|
4.
|
Schedules C-1 and C-3
(Milestone Payment Schedules) of
Exhibit C
of the Agreement will be amended by including the Milestones listed in Exhibit 3 of this Change Order.
|
The original Contract Price was.........................................................................................................................
|
$
|
2,360,000,000
|
|
Net change by previously authorized Change Orders (0001-00003).................................................................
|
$
|
(1,463,531
|
)
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
2,358,536,469
|
|
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...........................................................................
|
$
|
2,358,747,493
|
|
The original Aggregate Equipment Price was...................................................................................................
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00003).................................................................
|
$
|
***
|
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 (0001-00003).................................................................
|
$
|
***
|
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 Contract Price including this Change Order will be...........................................................................
|
$
|
***
|
The original Aggregate Provisional Sum was....................................................................................................
|
$
|
295,549,906
|
|
Net change by previously authorized Change Orders (0001-00003).................................................................
|
$
|
(1,463,531
|
)
|
The Aggregate Provisional Sum prior to this Change Order was......................................................................
|
$
|
294,086,375
|
|
The Aggregate Provisional Sum will be unchanged by this Change Order in the amount of...........................
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be......................................................
|
$
|
294,086,375
|
|
/s/ Ed Lehotsky
|
|
/s/ Bhupesh Thakkar
|
For Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Bhupesh Thakkar
|
Name
|
|
Name
|
SVP E&C
|
|
Senior Project Manager
|
Title
|
|
Title
|
July 16, 2018
|
|
July 10, 2018
|
Date of Signing
|
|
Date of Signing
|
PROJECT NAME:
Corpus Christi Stage 2 Liquefaction Facility
OWNER:
Corpus Christi Liquefaction, LLC
CONTRACTOR:
Bechtel Oil, Gas and Chemicals, Inc.
DATE OF AGREEMENT: December 12, 2017
|
CHANGE ORDER NUMBER:
CO-00006
DATE OF CHANGE ORDER:
September 5, 2018
|
A)
|
Pursuant to Article 6 of the Agreement, Parties agree Contractor will be compensated for costs incurred during performance of the Work while encountering soil conditions in Tank B area that differ from the Basic Engineering Design Data. The scope of this item is further detailed in Exhibit 1.
|
B)
|
Pursuant to Article 6 of the Agreement, Parties agree Contractor will be compensated for costs associated with the Change in the Law (2015 International Building Code) affecting the 23A-4010 Compressor Substation, the 23A-4011 Propane Substation and the 20A-4038 East Jetty Substation. The scope of this item is further detailed in Exhibit 1.
|
C)
|
Pursuant to Article 6 of the Agreement, Parties agree Contractor shall turnover the East Jetty Marine Facility to Owner no later than July 24, 2020
or as soon as reasonably practicable thereafter if the Parties mutually agree (both acting reasonably). The scope of this item is further detailed in Exhibit 1.
|
1.
|
“Phase 1” means the time period beginning upon the date this Change Order is executed and ending on the date the East Jetty Marine Facility is turned over to Owner.
|
2.
|
“Phase 2” means the time period beginning the date the East Jetty Marine Facility is turned over to Owner and ending on the date of Substantial Completion of Subproject 3.
|
3.
|
During Phase 1:
|
a)
|
Contractor shall perform the Work to complete the East Jetty Marine Facility in accordance with the Agreement.
|
b)
|
Contractor shall perform preventive maintenance on the East Jetty Marine Facility and its systems according to the operating and maintenance manuals.
|
c)
|
On or before July 24, 2020, Owner and Contractor shall jointly inspect the East Jetty Marine Facility to determine and record whether the Work for the East Jetty Marine Facility is completed for its safe operation, other than any punchlist items that may be completed after turnover to Owner (such punchlist items that may be completed after turnover is hereinafter referred to as “Remaining Work”). The Parties shall agree on the Remaining Work needing to be completed or corrected as a result of such inspection. Contractor shall complete the Work on the East Jetty Marine Facility other than the agreed upon Remaining Work.
|
d)
|
On or before July 24, 2020, or as soon as reasonably practicable thereafter if the Parties mutually agree (both acting reasonably), Contractor shall turn over to Owner the East Jetty Marine Facility. Upon such turnover, Owner shall maintain access control and security to and inside the East Jetty Marine Facility. Upon such turn over, Owner shall (i) immediately take care, custody and control of the East Jetty Marine Facility and (ii) provide Contractor, within one (1) day, a Turnover Certificate with respect to the East Jetty Marine Facility.
|
4.
|
During Phase 2:
|
a)
|
Owner shall have the right to occupy and use the East Jetty Marine Facility.
|
b)
|
Owner shall provide Contractor with reasonable access to complete Remaining Work so long as such access does not materially interfere with Owner’s use of the East Jetty Marine Facility.
|
c)
|
Owner will transport its personnel to the East Jetty Marine Facility.
|
d)
|
Owner will perform preventive maintenance on the East Jetty Marine Facility.
|
5.
|
Commencing on the commencement of Phase 2, Owner shall bear the full risk of physical loss and damage to the East
|
6.
|
The Defect Correction Period for the East Jetty Marine Facility shall commence upon the commencement of Phase 2 and end eighteen (18) months thereafter, as may be extended pursuant to Section 12.3 of the Agreement.
|
7.
|
Contractor shall maintain in full force and effect until turnover of the East Jetty Marine Facility all coverages under Attachment O of the Agreement. Owner’s operational insurance shall cover the East Jetty Marine Facility upon commencement of Phase 2.
|
8.
|
Section 13.1 of the Agreement shall not apply to the East Jetty Marine Facility unless Substantial Completion of Subproject 3 (including the East Jetty Marine Facility, as part of Subproject 3), occurs after the Guaranteed Substantial Completion Date.
|
9.
|
Owner shall manage Environmental, Safety & Health incidents involving Owner’s work within the East Jetty Marine Facility, with Contractor’s reasonable assistance as needed on a cost reimbursable basis.
|
10.
|
The Parties selection of item [A] on page 2 of this Change Order, which states this Change Order
shall
constitute full and final settlement and accord of all effects of the change reflected in this Change Order upon the Changed Criteria and
shall
be deemed to compensate Contractor fully for such change, shall not prejudice Contractor’s right to a Change Order in accordance with Section 6.2A.2 and 8.2C(ii) arising from Owner’s occupation or use of the East Jetty Marine Facility.
|
The original Contract Price was.........................................................................................................................
|
$
|
2,360,000,000
|
|
Net change by previously authorized Change Orders (0001-00005).................................................................
|
$
|
(1,252,507
|
)
|
The Contract Price prior to this Change Order was...........................................................................................
|
$
|
2,358,747,493
|
|
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...........................................................................
|
$
|
2,365,356,684
|
|
The original Aggregate Equipment Price was...................................................................................................
|
$
|
***
|
Net change by previously authorized Change Orders (0001-00005).................................................................
|
$
|
***
|
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 (0001-00005).................................................................
|
$
|
***
|
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 Contract Price including this Change Order will be...........................................................................
|
$
|
***
|
The original Aggregate Provisional Sum was....................................................................................................
|
$
|
295,549,906
|
|
Net change by previously authorized Change Orders (0001-00005).................................................................
|
$
|
(1,463,531
|
)
|
The Aggregate Provisional Sum prior to this Change Order was......................................................................
|
$
|
294,086,375
|
|
The Aggregate Provisional Sum will be unchanged by this Change Order in the amount of...........................
|
$
|
—
|
|
The new Aggregate Provisional Sum including this Change Order will be......................................................
|
$
|
294,086,375
|
|
/s/ Ed Lehotsky
|
|
/s/ Bhupesh Thakkar
|
For Owner
|
|
Contractor
|
Ed Lehotsky
|
|
Bhupesh Thakkar
|
Name
|
|
Name
|
SVP E&C
|
|
Senior Project Manager
|
Title
|
|
Title
|
September 12, 2018
|
|
September 15, 2018
|
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;
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c)
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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;
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ Michael J. Wortley
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Michael J. Wortley
Chief Financial Officer of |
Cheniere Energy, Inc.
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/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.
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/s/ Michael J. Wortley
|
Michael J. Wortley
Chief Financial Officer of |
Cheniere Energy, Inc.
|