Cheniere Energy, Inc. (“Cheniere”) (NYSE: LNG) today announced
its financial results for the fourth quarter and full year
2023.
YEAR END 2023 SUMMARY FINANCIAL RESULTS
(in billions)
Three Months Ended
December 31, 2023
Twelve Months Ended
December 31, 2023
Revenues
$4.8
$20.4
Net Income1
$1.4
$9.9
Consolidated Adjusted EBITDA2
$1.65
$8.8
Distributable Cash Flow2
$1.1
$6.5
2024 FULL YEAR FINANCIAL GUIDANCE
(in billions)
2024
Consolidated Adjusted EBITDA2
$5.5
-
$6.0
Distributable Cash Flow2
$2.9
-
$3.4
RECENT HIGHLIGHTS
- During the three and twelve months ended December 31, 2023,
Cheniere generated revenues of approximately $4.8 billion and $20.4
billion, net income1 of approximately $1.4 billion and $9.9
billion, Consolidated Adjusted EBITDA2 of approximately $1.65
billion and $8.8 billion, and Distributable Cash Flow2 of
approximately $1.1 billion and $6.5 billion, respectively.
- Full year 2023 Consolidated Adjusted EBITDA2 results are at the
high end of the most recent guidance range, and full year 2023
Distributable Cash Flow2 results are above the most recent guidance
range.
- Introducing full year 2024 Consolidated Adjusted EBITDA2
guidance of $5.5 billion - $6.0 billion and full year 2024
Distributable Cash Flow2 guidance of $2.9 billion - $3.4
billion.
- Pursuant to Cheniere’s comprehensive capital allocation plan,
during the three and twelve months ended December 31, 2023,
Cheniere prepaid $50 million and approximately $1.2 billion,
respectively, of consolidated long-term indebtedness, repurchased
an aggregate of approximately 2.0 million shares and 9.5 million
shares of common stock for approximately $339 million and $1.5
billion, respectively, and paid quarterly dividends of $0.435 and
$1.62 per share of common stock, respectively.
- From January 1, 2024 through February 16, 2024, Cheniere has
repurchased approximately 2.9 million shares for over $450 million,
reducing the number of shares outstanding to below 235
million.
- In January 2024, Cheniere declared a dividend with respect to
the fourth quarter 2023 of $0.435 per share of common stock, which
is payable on February 23, 2024.
- Cheniere and Cheniere Energy Partners, L.P. (“Cheniere
Partners”) (NYSE: CQP) ceased trading on the NYSE American after
market close on February 2, 2024 and commenced trading on the New
York Stock Exchange effective at the opening of trading on February
5, 2024. Cheniere and Cheniere Partners continue trading under the
symbols “LNG” and “CQP” respectively.
- In November 2023, Cheniere announced that Sabine Pass
Liquefaction Stage V, LLC, a subsidiary of Cheniere Partners,
entered into a long-term Integrated Production Marketing (“IPM”)
gas supply agreement with ARC Resources U.S. Corp., a subsidiary of
ARC Resources Ltd., to purchase 140,000 MMBtu per day of natural
gas at a price based on the Dutch Title Transfer Facility (“TTF”),
less a fixed regasification fee, fixed LNG shipping costs and a
fixed liquefaction fee, for a term of approximately 15 years
commencing with commercial operations of the first train (“Train
7”) of the SPL Expansion Project (defined below). This agreement is
subject to Cheniere Partners making a positive Final Investment
Decision (“FID”) with respect to Train 7 of the SPL Expansion
Project or Cheniere Partners unilaterally waiving that requirement.
The liquefied natural gas (“LNG”) associated with this gas supply,
approximately 0.85 million tonnes per annum (“mtpa”), will be
marketed by Cheniere Marketing International LLP (“Cheniere
Marketing International”).
- In November 2023, Cheniere Marketing, LLC (“Cheniere
Marketing”) entered into a long-term LNG SPA with Foran Energy
Group Co. Ltd. (“Foran”), under which Foran has agreed to purchase
up to approximately 0.9 mtpa of LNG from Cheniere Marketing on a
free-on-board (“FOB”) basis for 20 years, with deliveries
commencing upon the start of commercial operations of the second
train (“Train 8”) of the SPL Expansion Project, subject to a
positive FID with respect to Train 8 of the SPL Expansion Project
or Cheniere unilaterally waiving that requirement.
CEO COMMENT
“The Cheniere workforce’s resolute commitment to excellence
delivered once again in 2023, as we generated financial results at
or above the high end of our guidance ranges, and significantly
advanced our growth projects at both Sabine Pass and Corpus
Christi, all while achieving a top decile safety record,” said Jack
Fusco, Cheniere’s President and Chief Executive Officer. “I am
exceptionally proud of our team’s ability to consistently perform
at the highest level across all facets of our business, further
distinguishing Cheniere in the global market.”
“2024 is off to an excellent start, and we expect to once again
deliver financial results above the midpoint of our 9-train
run-rate guidance ranges. With the progress we continue to make on
our expansion projects at both sites, and our highly-contracted
operating platform, our focus is centered on execution across
operations, construction, and project development. The structural
shift to natural gas is progressing, and the market continues to
call for additional reliable, flexible and price-certain LNG from
the United States in order to facilitate energy security and
environmental priorities the world over. Cheniere’s superior track
record on project execution, operational excellence, and commercial
reliability only reinforces my confidence in our expansion projects
at Sabine Pass and Corpus Christi further enabling the world to
realize the energy security and environmental benefits of U.S.
LNG.”
SUMMARY AND REVIEW OF FINANCIAL RESULTS
(in millions, except LNG data)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
% Change
2023
2022
% Change
Revenues
$
4,823
$
9,085
(47
)%
$
20,394
$
33,428
(39
)%
Net income1
$
1,377
$
3,937
(65
)%
$
9,881
$
1,428
592
%
Consolidated Adjusted EBITDA2
$
1,650
$
3,100
(47
)%
$
8,771
$
11,564
(24
)%
LNG exported:
Number of cargoes
169
166
2
%
637
638
—
%
Volumes (TBtu)
616
601
2
%
2,300
2,306
—
%
LNG volumes loaded (TBtu)
615
600
2
%
2,299
2,308
—
%
Net income was approximately $1.4 billion for the three months
ended December 31, 2023 as compared to approximately $3.9 billion
for the corresponding 2022 period. The unfavorable change was
primarily due to changes in fair value of our derivative portfolio
(further described below) of approximately $1.1 billion for the
three months ended December 31, 2023 (before tax and
non-controlling interests) as compared to $3.9 billion of changes
in fair value in the corresponding 2022 period, which was partially
offset by a lower provision for income tax as well as lower net
income attributable to noncontrolling interests during the
period.
Net income was approximately $9.9 billion for the twelve months
ended December 31, 2023 as compared to approximately $1.4 billion
for the corresponding 2022 period. The favorable change was
primarily due to changes in fair value of our derivative portfolio
(further described below) of approximately $8.0 billion for the
twelve months ended December 31, 2023 (before tax and
non-controlling interests) as compared to $(5.7) billion of changes
in fair value in the corresponding 2022 period, which was partially
offset by a higher provision for income tax as well as higher net
income attributable to noncontrolling interests during the
period.
Consolidated Adjusted EBITDA decreased approximately $1.5
billion and $2.8 billion for the three and twelve months ended
December 31, 2023, respectively, as compared to the corresponding
2022 periods. The decreases were due primarily to decreased total
margins per MMBtu of LNG delivered driven by lower international
gas prices, a higher proportion of volumes sold under long-term
contracts and lower total volumes sold into short-term markets. To
a lesser extent, the decreases were also driven by lower
regasification revenues due to the previously disclosed early
termination of one of our terminal use agreements in 2022. The
decreases were partially offset by an increased contribution from
certain portfolio optimization activities.
Substantially all derivative gains (losses) relate to the use of
commodity derivative instruments indexed to international gas and
LNG prices, primarily related to our long-term IPM agreements. Our
IPM agreements are designed to provide stable margins on purchases
of natural gas and sales of LNG over the life of the agreements and
have a fixed fee component, similar to that of LNG sold under our
long-term, fixed fee LNG SPAs. However, the long-term duration and
international price basis of our IPM agreements make them
particularly susceptible to fluctuations in fair market value from
period to period. In addition, accounting requirements prescribe
recognition of these long-term gas supply agreements at fair value
each reporting period on a mark-to-market basis, but do not
currently permit mark-to-market recognition of the associated sale
of LNG, resulting in a mismatch of accounting recognition for the
purchase of natural gas and sale of LNG. As a result of continued
moderation of international gas price volatility and declines in
international forward commodity curves during the three and twelve
months ended December 31, 2023, we recognized $1.3 billion and $7.1
billion, respectively, of non-cash favorable changes in fair value
attributable to such positions (before tax and non-controlling
interests).
Share-based compensation expenses included in net income totaled
$122 million and $250 million for the three and twelve months ended
December 31, 2023, respectively, compared to $90 million and $205
million for the three and twelve months ended December 31, 2022,
respectively.
Our financial results are reported on a consolidated basis. Our
ownership interest in Cheniere Partners as of December 31, 2023
consisted of 100% ownership of the general partner and a 48.6%
limited partner interest.
BALANCE SHEET MANAGEMENT
Capital Resources
As of December 31, 2023, our total consolidated available
liquidity was approximately $12.1 billion. We had cash and cash
equivalents of $4.1 billion, of which $575 million was held by
Cheniere Partners. In addition, we had restricted cash and cash
equivalents of $459 million, of which $56 million was held by
Cheniere Partners, $1.3 billion of available commitments under the
Cheniere Revolving Credit Facility, $1.3 billion of available
commitments under the Cheniere Corpus Christi Holdings, LLC (“CCH”)
Working Capital Facility, $3.3 billion of available commitments
under the CCH Credit Facility, $1.0 billion of available
commitments under the Cheniere Partners Revolving Credit Facility,
and $720 million of available commitments under the Sabine Pass
Liquefaction, LLC (“SPL”) Revolving Credit Facility.
Recent Key Financial Transactions and Updates
In November 2023, SPL redeemed $50 million in principal amount
of the 2024 SPL Senior Notes with cash on hand.
LIQUEFACTION PROJECTS OVERVIEW
SPL Project
Through Cheniere Partners, we operate six natural gas
liquefaction Trains for a total production capacity of
approximately 30 mtpa of LNG at the Sabine Pass LNG terminal in
Cameron Parish, Louisiana (the “SPL Project”).
SPL Expansion Project
Through Cheniere Partners, we are developing an expansion
adjacent to the SPL Project with a total production capacity of up
to approximately 20 mtpa of LNG (the “SPL Expansion Project”),
inclusive of estimated debottlenecking opportunities. In May 2023,
certain subsidiaries of Cheniere Partners entered the pre-filing
review process with respect to the SPL Expansion Project with the
Federal Energy Regulatory Commission (“FERC”) under the National
Environmental Policy Act, and in April 2023, a subsidiary of
Cheniere Partners executed a contract with Bechtel to provide the
Front-End Engineering and Design for the SPL Expansion Project. By
the end of the first quarter of 2024, we expect to file an
application with the FERC for authorization to site, construct and
operate the SPL Expansion Project.
CCL Project
We operate three natural gas liquefaction Trains for a total
production capacity of approximately 15 mtpa of LNG at the Corpus
Christi LNG terminal near Corpus Christi, Texas (the “CCL
Project”).
CCL Stage 3 Project
We are constructing an expansion adjacent to the CCL Project
consisting of seven midscale Trains with an expected total
production capacity of over 10 mtpa of LNG (the “CCL Stage 3
Project”). First LNG production from the first train of the CCL
Stage 3 Project is currently forecast to be achieved at the end of
2024.
CCL Stage 3 Project Progress as of December 31, 2023:
CCL Stage 3 Project
Project Status
Under Construction
Project Completion Percentage
51.4%(1)
Expected Substantial Completion
2Q/3Q 2025 - 2H 2026
(1)
Engineering 83.7% complete, procurement
72.2% complete, subcontract work 66.9% complete and construction
11.1% complete.
CCL Midscale Trains 8 & 9
Project
We are developing two midscale Trains with an expected total
production capacity of approximately 3 mtpa of LNG (the “CCL
Midscale Trains 8 & 9 Project”) adjacent to the CCL Stage 3
Project. In March 2023, certain of our subsidiaries filed an
application with the FERC for authorization to site, construct and
operate the CCL Midscale Trains 8 & 9 Project, and in April
2023, filed an application with the Department of Energy (“DOE”)
requesting authorization to export LNG to Free-Trade Agreement
(“FTA”) and non-FTA countries. In July 2023, we received
authorization from the DOE to export LNG to FTA countries.
INVESTOR CONFERENCE CALL AND WEBCAST
We will host a conference call to discuss our financial and
operating results for the fourth quarter and full year 2023 on
Thursday, February 22, 2024, at 11 a.m. Eastern time / 10 a.m.
Central time. A listen-only webcast of the call and an accompanying
slide presentation may be accessed through our website at
www.cheniere.com. Following the call, an archived recording will be
made available on our website.
______________________________
1
Net income as used herein refers to Net
income attributable to common stockholders on our Consolidated
Statements of Operations.
2
Non-GAAP financial measure. See “Reconciliation of Non-GAAP
Measures” for further details.
About Cheniere
Cheniere Energy, Inc. is the leading producer and exporter of
LNG in the United States, reliably providing a clean, secure, and
affordable solution to the growing global need for natural gas.
Cheniere is a full-service LNG provider, with capabilities that
include gas procurement and transportation, liquefaction, vessel
chartering, and LNG delivery. Cheniere has one of the largest
liquefaction platforms in the world, consisting of the Sabine Pass
and Corpus Christi liquefaction facilities on the U.S. Gulf Coast,
with total production capacity of approximately 45 mtpa of LNG in
operation and an additional 10+ mtpa of expected production
capacity under construction. Cheniere is also pursuing liquefaction
expansion opportunities and other projects along the LNG value
chain. Cheniere is headquartered in Houston, Texas, and has
additional offices in London, Singapore, Beijing, Tokyo, and
Washington, D.C.
For additional information, please refer to the Cheniere website
at www.cheniere.com and Annual Report on Form 10-K for the year
ended December 31, 2023, filed with the Securities and Exchange
Commission.
Use of Non-GAAP Financial Measures
In addition to disclosing financial results in accordance with
U.S. GAAP, the accompanying news release contains non-GAAP
financial measures. Consolidated Adjusted EBITDA and Distributable
Cash Flow are non-GAAP financial measures that we use to facilitate
comparisons of operating performance across periods. These non-GAAP
measures should be viewed as a supplement to and not a substitute
for our U.S. GAAP measures of performance and the financial results
calculated in accordance with U.S. GAAP and reconciliations from
these results should be carefully evaluated.
Non-GAAP measures have limitations as an analytical tool and
should not be considered in isolation or in lieu of an analysis of
our results as reported under GAAP and should be evaluated only on
a supplementary basis.
Forward-Looking Statements
This press release contains certain statements that may include
“forward-looking statements” within the meanings of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical or present facts or conditions, included herein are
“forward-looking statements.” Included among “forward-looking
statements” are, among other things, (i) statements regarding
Cheniere’s financial and operational guidance, business strategy,
plans and objectives, including the development, construction and
operation of liquefaction facilities, (ii) statements regarding
regulatory authorization and approval expectations, (iii)
statements expressing beliefs and expectations regarding the
development of Cheniere’s LNG terminal and pipeline businesses,
including liquefaction facilities, (iv) statements regarding the
business operations and prospects of third-parties, (v) statements
regarding potential financing arrangements, (vi) statements
regarding future discussions and entry into contracts, and (vii)
statements relating to Cheniere’s capital deployment, including
intent, ability, extent, and timing of capital expenditures, debt
repayment, dividends, share repurchases and execution on the
capital allocation plan. Although Cheniere believes that the
expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. Cheniere’s actual
results could differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including those discussed in Cheniere’s periodic reports that are
filed with and available from the Securities and Exchange
Commission. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Other than as required under the securities laws,
Cheniere does not assume a duty to update these forward-looking
statements.
(Financial Tables and Supplementary
Information Follow)
LNG VOLUME SUMMARY
As of February 16, 2024, approximately 3,280 cumulative LNG
cargoes totaling over 225 million tonnes of LNG have been produced,
loaded and exported from our liquefaction projects.
During the three and twelve months ended December 31, 2023, we
exported 616 TBtu and 2,300 TBtu, respectively, of LNG from our
liquefaction projects. 37 TBtu of LNG exported from our
liquefaction projects and sold on a delivered basis was in transit
as of December 31, 2023, none of which was related to commissioning
activities.
The following table summarizes the volumes of LNG that were
loaded from our liquefaction projects and for which the financial
impact was recognized on our Consolidated Financial Statements
during the three and twelve months ended December 31, 2023:
(in TBtu)
Three Months Ended
December 31, 2023
Twelve Months Ended
December 31, 2023
Volumes loaded during the current
period
615
2,299
Volumes loaded during the prior period but
recognized during the current period
29
56
Less: volumes loaded during the current
period and in transit at the end of the period
(37
)
(37
)
Total volumes recognized in the current
period
607
2,318
In addition, during the three and twelve months ended December
31, 2023, we recognized 11 TBtu and 35 TBtu of LNG, respectively,
on our Consolidated Financial Statements related to LNG cargoes
sourced from third-parties.
Cheniere Energy, Inc.
Consolidated Statements of Operations (in millions, except per
share data)(1)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
Revenues
LNG revenues
$
4,585
$
8,355
$
19,569
$
31,804
Regasification revenues
34
477
135
1,068
Other revenues
204
253
690
556
Total revenues
4,823
9,085
20,394
33,428
Operating costs and expenses
Cost of sales (excluding items shown
separately below) (2)
1,427
1,471
1,356
25,632
Operating and maintenance expense
459
454
1,835
1,681
Selling, general and administrative
expense
178
151
474
416
Depreciation and amortization expense
304
292
1,196
1,119
Other
20
6
44
21
Total operating costs and expenses
2,388
2,374
4,905
28,869
Income from operations
2,435
6,711
15,489
4,559
Other income (expense)
Interest expense, net of capitalized
interest
(270
)
(346
)
(1,141
)
(1,406
)
Gain (loss) on modification or
extinguishment of debt
—
(23
)
15
(66
)
Interest and dividend income
64
29
211
57
Other income (expense), net
(3
)
(3
)
4
(50
)
Total other expense
(209
)
(343
)
(911
)
(1,465
)
Income before income taxes and
non-controlling interest
2,226
6,368
14,578
3,094
Less: income tax provision
400
1,221
2,519
459
Net income
1,826
5,147
12,059
2,635
Less: net income attributable to
non-controlling interest
449
1,210
2,178
1,207
Net income attributable to common
stockholders
$
1,377
$
3,937
$
9,881
$
1,428
Net income per share attributable to
common stockholders—basic (3)
$
5.79
$
15.92
$
40.99
$
5.69
Net income per share attributable to
common stockholders—diluted (3)
$
5.76
$
15.78
$
40.72
$
5.64
Weighted average number of common shares
outstanding—basic
237.8
247.2
241.0
251.1
Weighted average number of common shares
outstanding—diluted
239.0
249.5
242.6
253.4
__________________________________
(1)
Please refer to the Cheniere Energy, Inc.
Annual Report on Form 10-K for the year ended December 31, 2023,
filed with the Securities and Exchange Commission.
(2)
Cost of Sales includes approximately $1.0
billion and $8.0 billion of gains from changes in the fair value of
commodity derivatives prior to contractual delivery or termination
during the three and twelve months ended December 31, 2023,
respectively, as compared to $3.8 billion and $(6.0) billion of
gains (losses) in the corresponding 2022 periods, respectively.
(3)
Earnings per share in the table may not
recalculate exactly due to rounding because it is calculated based
on whole numbers, not the rounded numbers presented.
Cheniere Energy, Inc.
Consolidated Balance Sheets (in millions, except share
data)(1)(2)
December 31,
2023
2022
ASSETS
Current assets
Cash and cash equivalents
$
4,066
$
1,353
Restricted cash and cash equivalents
459
1,134
Trade and other receivables, net of
current expected credit losses
1,106
1,944
Inventory
445
826
Current derivative assets
141
120
Margin deposits
18
134
Other current assets, net
96
97
Total current assets
6,331
5,608
Property, plant and equipment, net of
accumulated depreciation
32,456
31,528
Operating lease assets
2,641
2,625
Derivative assets
863
35
Deferred tax assets
26
864
Other non-current assets, net
759
606
Total assets
$
43,076
$
41,266
LIABILITIES AND STOCKHOLDERS’
EQUITY (DEFICIT)
Current liabilities
Accounts payable
$
181
$
124
Accrued liabilities
1,780
2,679
Current debt, net of discount and debt
issuance costs
300
813
Deferred revenue
179
234
Current operating lease liabilities
655
616
Current derivative liabilities
750
2,301
Other current liabilities
43
28
Total current liabilities
3,888
6,795
Long-term debt, net of discount and debt
issuance costs
23,397
24,055
Operating lease liabilities
1,971
1,971
Finance lease liabilities
467
494
Derivative liabilities
2,378
7,947
Deferred tax liabilities
1,545
—
Other non-current liabilities
410
175
Stockholders’ equity (deficit)
Preferred stock: $0.0001 par value, 5.0
million shares authorized, none issued
—
—
Common stock: $0.003 par value, 480.0
million shares authorized; 277.9 million shares and 276.7 million
shares issued at December 31, 2023 and 2022, respectively
1
1
Treasury stock: 40.9 million shares and
31.2 million shares at December 31, 2023 and 2022, respectively, at
cost
(3,864
)
(2,342
)
Additional paid-in-capital
4,377
4,314
Accumulated income (deficit)
4,546
(4,942
)
Total Cheniere stockholders’ equity
(deficit)
5,060
(2,969
)
Non-controlling interest
3,960
2,798
Total stockholders’ equity (deficit)
9,020
(171
)
Total liabilities and stockholders’ equity
(deficit)
$
43,076
$
41,266
__________________________________
(1)
Please refer to the Cheniere Energy, Inc.
Annual Report on Form 10-K for the year ended December 31, 2023,
filed with the Securities and Exchange Commission.
(2)
Amounts presented include balances held by
our consolidated variable interest entity, Cheniere Partners. As of
December 31, 2023, total assets and liabilities of Cheniere
Partners, which are included in our Consolidated Balance Sheets,
were $17.7 billion and $18.8 billion, respectively, including $575
million of cash and cash equivalents and $56 million of restricted
cash and cash equivalents.
Reconciliation of Non-GAAP
Measures Regulation G Reconciliations
Consolidated Adjusted EBITDA
The following table reconciles our
Consolidated Adjusted EBITDA to U.S. GAAP results for the three and
twelve months ended December 31, 2023 and 2022 (in millions):
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Net income attributable to common
stockholders
$
1,377
$
3,937
$
9,881
$
1,428
Net income attributable to non-controlling
interest
449
1,210
2,178
1,207
Income tax provision
400
1,221
2,519
459
Interest expense, net of capitalized
interest
270
346
1,141
1,406
Loss (gain) on modification or
extinguishment of debt
—
23
(15
)
66
Interest and dividend income
(64
)
(29
)
(211
)
(57
)
Other expense (income), net
3
3
(4
)
50
Income from operations
$
2,435
$
6,711
$
15,489
$
4,559
Adjustments to reconcile income (loss)
from operations to Consolidated Adjusted EBITDA:
Depreciation and amortization expense
304
292
1,196
1,119
Loss (gain) from changes in fair value of
commodity and FX derivatives, net (1)
(1,085
)
(3,910
)
(8,026
)
5,773
Total non-cash compensation expense
(recovery)
(18
)
5
96
108
Other
14
2
16
5
Consolidated Adjusted EBITDA
$
1,650
$
3,100
$
8,771
$
11,564
__________________________________
(1)
Change in fair value of commodity and FX
derivatives prior to contractual delivery or termination
Consolidated Adjusted EBITDA is commonly used as a supplemental
financial measure by our management and external users of our
Consolidated Financial Statements to assess the financial
performance of our assets without regard to financing methods,
capital structures, or historical cost basis. Consolidated Adjusted
EBITDA is not intended to represent cash flows from operations or
net income as defined by U.S. GAAP and is not necessarily
comparable to similarly titled measures reported by other
companies.
We believe Consolidated Adjusted EBITDA provides relevant and
useful information to management, investors and other users of our
financial information in evaluating the effectiveness of our
operating performance in a manner that is consistent with
management’s evaluation of financial and operating performance.
Consolidated Adjusted EBITDA is calculated by taking net income
attributable to common stockholders before net income attributable
to non-controlling interest, interest expense, net of capitalized
interest, taxes, depreciation and amortization, and adjusting for
the effects of certain non-cash items, other non-operating income
or expense items, and other items not otherwise predictive or
indicative of ongoing operating performance, including the effects
of modification or extinguishment of debt, impairment expense and
loss on disposal of assets, changes in the fair value of our
commodity and FX derivatives prior to contractual delivery or
termination, and non-cash compensation expense. The change in fair
value of commodity and FX derivatives is considered in determining
Consolidated Adjusted EBITDA given that the timing of recognizing
gains and losses on these derivative contracts differs from the
recognition of the related item economically hedged. We believe the
exclusion of these items enables investors and other users of our
financial information to assess our sequential and year-over-year
performance and operating trends on a more comparable basis and is
consistent with management’s own evaluation of performance.
Consolidated Adjusted EBITDA and Distributable Cash
Flow
The following table reconciles our actual Consolidated Adjusted
EBITDA and Distributable Cash Flow to Net income attributable to
common stockholders for the three and twelve months ended December
31, 2023 and forecast amounts for full year 2024 (in billions):
Three Months Ended
December 31,
Twelve Months Ended
December 31,
Full Year
2023
2023
2024
Net income attributable to common
stockholders
$
1.38
$
9.88
$
1.6
-
$
2.0
Net income attributable to non-controlling
interest
0.45
2.18
1.0
-
1.1
Income tax provision
0.40
2.52
0.4
-
0.5
Interest expense, net of capitalized
interest
0.27
1.14
1.1
-
1.1
Depreciation and amortization expense
0.30
1.20
1.2
-
1.2
Other expense (income), financing costs,
and certain non-cash operating expenses
(1.15
)
(8.14
)
0.2
-
0.1
Consolidated Adjusted EBITDA
$
1.65
$
8.77
$
5.5
-
$
6.0
Interest expense (net of capitalized
interest and amortization) and realized interest rate
derivatives
(0.25
)
(1.08
)
(1.0
)
-
(1.0
)
Maintenance capital expenditures
(0.08
)
(0.24
)
(0.2
)
-
(0.2
)
Income tax
(0.03
)
(0.13
)
(0.4
)
-
(0.5
)
Other income (expense)
0.05
0.18
(0.1
)
-
0.1
Consolidated Distributable Cash
Flow
$
1.34
$
7.50
$
3.8
-
$
4.4
Cheniere Partners’ distributable cash flow
attributable to non-controlling interest
(0.29
)
(0.99
)
(0.9
)
-
(1.0
)
Cheniere Distributable Cash
Flow
$
1.05
$
6.51
$
2.9
-
$
3.4
Note: Totals may not sum due to
rounding.
Distributable Cash Flow is defined as cash generated from the
operations of Cheniere and its subsidiaries and adjusted for
non-controlling interest. The Distributable Cash Flow of Cheniere’s
subsidiaries is calculated by taking the subsidiaries’ EBITDA less
interest expense, net of capitalized interest, interest rate
derivatives, taxes, maintenance capital expenditures and other
non-operating income or expense items, and adjusting for the effect
of certain non-cash items and other items not otherwise predictive
or indicative of ongoing operating performance, including the
effects of modification or extinguishment of debt, amortization of
debt issue costs, premiums or discounts, changes in fair value of
interest rate derivatives, impairment of equity method investment
and deferred taxes. Cheniere’s Distributable Cash Flow includes
100% of the Distributable Cash Flow of Cheniere’s wholly-owned
subsidiaries. For subsidiaries with non-controlling investors, our
share of Distributable Cash Flow is calculated as the Distributable
Cash Flow of the subsidiary reduced by the economic interest of the
non-controlling investors as if 100% of the Distributable Cash Flow
were distributed in order to reflect our ownership interests and
our incentive distribution rights, if applicable. The Distributable
Cash Flow attributable to non-controlling interest is calculated in
the same method as Distributions to non-controlling interest as
presented on our Consolidated Statements of Stockholders’ Equity in
our Forms 10-Q and Forms 10-K filed with the Securities and
Exchange Commission. This amount may differ from the actual
distributions paid to non-controlling investors by the subsidiary
for a particular period.
We believe Distributable Cash Flow is a useful performance
measure for management, investors and other users of our financial
information to evaluate our performance and to measure and estimate
the ability of our assets to generate cash earnings after servicing
our debt, paying cash taxes and expending sustaining capital, that
could be considered for deployment by our Board of Directors
pursuant to our capital allocation plan, such as by way of common
stock dividends, stock repurchases, retirement of debt, or
expansion capital expenditures1. Distributable Cash Flow is not
intended to represent cash flows from operations or net income as
defined by U.S. GAAP and is not necessarily comparable to similarly
titled measures reported by other companies.
______________________________
1
Capital spending for our business consists
primarily of:
- Maintenance capital expenditures. These expenditures include
costs which qualify for capitalization that are required to sustain
property, plant and equipment reliability and safety and to address
environmental or other regulatory requirements rather than to
generate incremental distributable cash flow; and
- Expansion capital expenditures. These expenditures are
undertaken primarily to generate incremental distributable cash
flow and include investment in accretive organic growth,
acquisition or construction of additional complementary assets to
grow our business, along with expenditures to enhance the
productivity and efficiency of our existing facilities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240221214817/en/
Cheniere Energy, Inc.
Investors Randy Bhatia,
713-375-5479 Frances Smith, 713-375-5753
Media Relations Eben
Burnham-Snyder, 713-375-5764 Bernardo Fallas, 713-375-5593
Cheniere Energy (NYSE:LNG)
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