CQP

Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE American: CQP) today announced its financial results for the fourth quarter and full year of 2021.

HIGHLIGHTS

• Net income of $506 million and $1.6 billion for the fourth quarter and full year 2021, respectively.
• Adjusted EBITDA1 of $868 million and $3.1 billion for the fourth quarter and full year 2021, respectively.
• Paid a distribution of $0.700 per common unit on February 14, 2022 to unitholders of record as of February 7, 2022.
• Raising full year 2022 distribution guidance to $4.00 - $4.25 per common unit and announcing the initiation of quarterly distributions to be comprised of a base amount plus a variable amount, which are expected to begin with the distribution related to the first quarter of 2022. It is anticipated that the quarterly distribution with respect to the first quarter of 2022 will be comprised of a base amount equal to $0.775 ($3.10 annualized), and a variable amount equal to the remaining available cash per unit, which will take into consideration, among other things, amounts reserved for annual debt repayment and capital allocation goals, anticipated capex to be funded with cash, and cash reserves to provide for the proper conduct of the business.
• On February 4, 2022, substantial completion was achieved on Train 6 of the SPL Project (defined below), upon which Bechtel Oil, Gas and Chemicals, Inc. (“Bechtel”) turned over care, custody, and control of Train 6 to Cheniere Partners. Cheniere Partners began producing and exporting commissioning LNG from Train 6 in December with a total of 12 TBtu exported in the fourth quarter.

2022 FULL YEAR DISTRIBUTION GUIDANCE

 

 

2022 Previous

 

2022 Revised

Distribution per Unit

$

3.00

-

$

3.25

 

$

4.00

-

$

4.25

SUMMARY AND REVIEW OF FINANCIAL RESULTS  

(in millions, except LNG data)

Three Months Ended December 31,

 

Year Ended December 31,

 

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

Revenues

$

3,257

 

$

1,997

 

63

%

 

$

9,434

 

$

6,167

 

53

%

Net income

$

506

 

$

409

 

24

%

 

$

1,630

 

$

1,183

 

38

%

Adjusted EBITDA1

$

868

 

$

772

 

12

%

 

$

3,076

 

$

2,762

 

11

%

LNG exported:

 

 

 

 

 

 

 

 

 

 

 

Number of cargoes

 

97

 

 

89

 

9

%

 

 

359

 

 

275

 

31

%

Volumes (TBtu)

 

345

 

 

315

 

10

%

 

 

1,284

 

 

971

 

32

%

LNG volumes loaded (TBtu)

 

342

 

 

318

 

8

%

 

 

1,280

 

 

974

 

31

%

Net income increased $97 million and $447 million while Adjusted EBITDA1 increased $96 million and $314 million during the fourth quarter and full year 2021, respectively, as compared to the corresponding 2020 periods, primarily as a result of increases in both margin per MMBtu of LNG and volume delivered, partially offset by the non-recurrence of revenues recognized on cancelled LNG cargoes.

During the fourth quarter and full year 2021, we recognized in income 330 and 1,269 TBtu, respectively, of LNG loaded from the SPL Project. Additionally, for the year ended December 31, 2021, we recognized in income 8 TBtu of LNG procured by Sabine Pass Liquefaction, LLC (“SPL”) from Cheniere Energy, Inc.’s Corpus Christi liquefaction facility. During the fourth quarter, approximately 12 TBtu of commissioning LNG was exported from the SPL Project.

During the fourth quarter and full year 2020, we recognized $40 million and $553 million, respectively, in LNG revenues associated with cancelled LNG cargoes. LNG revenues during fourth quarter 2020 excluded $21 million that would have otherwise been recognized during the quarter if the cargoes were lifted pursuant to the delivery schedules with the customers, as these revenues were recognized during third quarter 2020 when cancellations were received. We did not have any such revenue timing impacts during the fourth quarter 2021.

BALANCE SHEET MANAGEMENT

Capital Resources

As of December 31, 2021, our total liquidity position was over $2.5 billion. We had cash and cash equivalents of $0.9 billion. In addition, we had current restricted cash and cash equivalents of $98 million, $750 million of available commitments under our 2019 CQP Credit Facilities, and $805 million of available commitments under the SPL Working Capital Facility.

KEY FINANCIAL TRANSACTIONS

In December 2021, SPL issued Senior Secured Notes due 2037 on a private placement basis for an aggregate principal amount of approximately $482 million (the “2037 SPL Private Placement Senior Secured Notes”). The proceeds of the 2037 SPL Private Placement Senior Secured Notes, net of related fees, costs and expenses, were used to redeem a portion of the 2022 SPL Senior Notes. The remaining balance of the 2022 SPL Senior Notes was redeemed with cash on hand, including proceeds from the CQP 2032 Notes issued in September 2021. The 2037 SPL Private Placement Senior Secured Notes are fully amortizing, with a weighted average life of over 10 years and a weighted average interest rate of 3.07%.

SPL PROJECT OVERVIEW

We own natural gas liquefaction facilities consisting of six operational liquefaction Trains, with a total production capacity of approximately 30 million tonnes per annum (“mtpa”) of LNG at the Sabine Pass LNG terminal (the “SPL Project”). On February 4, 2022, Train 6 of the SPL Project reached substantial completion.

As of February 18, 2022, over 1,550 cumulative LNG cargoes totaling approximately 110 million tonnes of LNG have been produced, loaded, and exported from the SPL Project.

DISTRIBUTIONS TO UNITHOLDERS

We paid a cash distribution of $0.700 per common unit to unitholders of record as of February 7, 2022 and the related general partner distribution on February 14, 2022.

INVESTOR CONFERENCE CALL AND WEBCAST

Cheniere Energy, Inc. will host a conference call to discuss its financial and operating results for the fourth quarter and full year 2021 on Thursday, February 24, 2022, 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. The call and accompanying slide presentation may include financial and operating results or other information regarding Cheniere Partners.

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

About Cheniere Partners

Cheniere Partners owns the Sabine Pass LNG terminal located in Cameron Parish, Louisiana, which has natural gas liquefaction facilities consisting of six operational liquefaction Trains with a total production capacity of approximately 30 mtpa of LNG. The Sabine Pass LNG terminal also has operational regasification facilities that include five LNG storage tanks, vaporizers, and two marine berths with a third marine berth under construction. Cheniere Partners also owns the Creole Trail Pipeline, which interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines.

For additional information, please refer to the Cheniere Partners website at www.cheniere.com and Annual Report on Form 10-K for the year ended December 31, 2021, 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 a non-GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure that is used to facilitate comparisons of operating performance across periods. This non-GAAP measure should be viewed as a supplement to and not a substitute for our U.S. GAAP measures of performance and the financial results calculated in accordance with U.S. GAAP, and the reconciliation from these results should be carefully evaluated.

Forward-Looking Statements

This press release contains certain statements that may include “forward-looking statements.” All statements, other than statements of historical or present facts or conditions, included herein are “forward-looking statements.” Included among “forward-looking statements” are, among other things, (i) statements regarding Cheniere Partners’ financial and operational guidance, business strategy, plans and objectives, including the development, construction and operation of liquefaction facilities, (ii) statements regarding Cheniere Partners’ anticipated quarterly distributions and ability to make quarterly distributions at the base amount or any amount, (iii) statements regarding regulatory authorization and approval expectations, (iv) statements expressing beliefs and expectations regarding the development of Cheniere Partners’ LNG terminal and liquefaction business, (v) statements regarding the business operations and prospects of third-parties, (vi) statements regarding potential financing arrangements, (vii) statements regarding future discussions and entry into contracts, and (viii) statements regarding the COVID-19 pandemic and its impact on our business and operating results. Although Cheniere Partners believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere Partners’ actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere Partners’ periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere Partners does not assume a duty to update these forward-looking statements.

(Financial Tables Follow)

Cheniere Energy Partners, L.P.

Consolidated Statements of Income

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

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2021

 

2020

 

2021

 

2020

Revenues

 

 

 

 

 

 

 

LNG revenues

$

2,582

 

 

$

1,607

 

 

$

7,639

 

 

$

5,195

 

LNG revenues—affiliate

 

594

 

 

 

310

 

 

 

1,472

 

 

 

662

 

LNG revenues—related party

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

Regasification revenues

 

67

 

 

 

67

 

 

 

269

 

 

 

269

 

Other revenues

 

14

 

 

 

13

 

 

 

53

 

 

 

41

 

Total revenues

 

3,257

 

 

 

1,997

 

 

 

9,434

 

 

 

6,167

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

 

 

 

 

 

Cost of sales (excluding items shown separately below)

 

2,112

 

 

 

954

 

 

 

5,290

 

 

 

2,505

 

Cost of sales—affiliate

 

22

 

 

 

39

 

 

 

84

 

 

 

77

 

Cost of sales—related party

 

16

 

 

 

—

 

 

 

17

 

 

 

—

 

Operating and maintenance expense

 

170

 

 

 

166

 

 

 

635

 

 

 

629

 

Operating and maintenance expense—affiliate

 

39

 

 

 

37

 

 

 

142

 

 

 

152

 

Operating and maintenance expense—related party

 

12

 

 

 

13

 

 

 

46

 

 

 

13

 

Development expense

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

Development expense—affiliate

 

1

 

 

 

—

 

 

 

1

 

 

 

—

 

General and administrative expense

 

2

 

 

 

2

 

 

 

9

 

 

 

14

 

General and administrative expense—affiliate

 

21

 

 

 

23

 

 

 

85

 

 

 

96

 

Depreciation and amortization expense

 

140

 

 

 

138

 

 

 

557

 

 

 

551

 

Impairment expense and loss on disposal of assets

 

4

 

 

 

—

 

 

 

10

 

 

 

5

 

Total operating costs and expenses

 

2,539

 

 

 

1,372

 

 

 

6,877

 

 

 

4,042

 

 

 

 

 

 

 

 

 

Income from operations

 

718

 

 

 

625

 

 

 

2,557

 

 

 

2,125

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense, net of capitalized interest

 

(195

)

 

 

(218

)

 

 

(831

)

 

 

(909

)

Loss on modification or extinguishment of debt

 

(20

)

 

 

—

 

 

 

(101

)

 

 

(43

)

Other income, net

 

1

 

 

 

—

 

 

 

3

 

 

 

8

 

Other income—affiliate

 

2

 

 

 

2

 

 

 

2

 

 

 

2

 

Total other expense

 

(212

)

 

 

(216

)

 

 

(927

)

 

 

(942

)

 

 

 

 

 

 

 

 

Net income

$

506

 

 

$

409

 

 

$

1,630

 

 

$

1,183

 

 

 

 

 

 

 

 

 

Basic and diluted net income per common unit

$

0.93

 

 

$

0.77

 

 

$

3.00

 

 

$

2.32

 

 

 

 

 

 

 

 

 

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

 

484.0

 

 

 

484.0

 

 

 

484.0

 

 

 

399.3

 

______________

(1)

Please refer to the Cheniere Energy Partners, L.P. Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission.

Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

(in millions, except unit data) (1)

 

 

December 31,

 

2021

 

2020

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

876

 

 

$

1,210

 

Restricted cash and cash equivalents

 

98

 

 

 

97

 

Accounts and other receivables, net of current expected credit losses

 

580

 

 

 

318

 

Accounts receivable—affiliate

 

232

 

 

 

184

 

Accounts receivable—related party

 

1

 

 

 

—

 

Advances to affiliate

 

141

 

 

 

144

 

Inventory

 

176

 

 

 

107

 

Current derivative assets

 

21

 

 

 

14

 

Other current assets

 

87

 

 

 

61

 

Total current assets

 

2,212

 

 

 

2,135

 

 

 

 

 

Property, plant and equipment, net of accumulated depreciation

 

16,830

 

 

 

16,723

 

Operating lease assets

 

98

 

 

 

99

 

Debt issuance costs, net of accumulated amortization

 

12

 

 

 

17

 

Derivative assets

 

33

 

 

 

11

 

Other non-current assets, net

 

173

 

 

 

160

 

Total assets

$

19,358

 

 

$

19,145

 

 

 

 

 

LIABILITIES AND PARTNERS’ EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable

$

21

 

 

$

12

 

Accrued liabilities

 

1,073

 

 

 

658

 

Accrued liabilities—related party

 

4

 

 

 

4

 

Due to affiliates

 

67

 

 

 

53

 

Deferred revenue

 

155

 

 

 

137

 

Deferred revenue—affiliate

 

1

 

 

 

1

 

Current operating lease liabilities

 

8

 

 

 

7

 

Current derivative liabilities

 

16

 

 

 

11

 

Total current liabilities

 

1,345

 

 

 

883

 

 

 

 

 

Long-term debt, net of premium, discount and debt issuance costs

 

17,177

 

 

 

17,580

 

Non-current deferred revenue—affiliate

 

 

 

—

 

Operating lease liabilities

 

89

 

 

 

90

 

Derivative liabilities

 

11

 

 

 

35

 

Other non-current liabilities

 

—

 

 

 

1

 

Other non-current liabilities—affiliate

 

18

 

 

 

17

 

 

 

 

 

Partners’ equity

 

 

 

Common unitholders’ interest (484.0 million units issued and outstanding at both December 31, 2021 and 2020)

 

1,024

 

 

 

714

 

General partner’s interest (2% interest with 9.9 million units issued and outstanding at December 31, 2021 and 2020)

 

(306

)

 

 

(175

)

Total partners’ equity

 

718

 

 

 

539

 

Total liabilities and partners’ equity

$

19,358

 

 

$

19,145

 

______________

(1)

Please refer to the Cheniere Energy Partners, L.P. Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission.

Reconciliation of Non-GAAP Measures

Regulation G Reconciliations

Adjusted EBITDA

The following table reconciles our Adjusted EBITDA to U.S. GAAP results for the quarters ended and years ended December 31, 2021 and 2020 (in millions):

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2021

 

2020

 

2021

 

2020

Net income

$

506

 

 

$

409

 

 

$

1,630

 

 

$

1,183

 

Interest expense, net of capitalized interest

 

195

 

 

 

218

 

 

 

831

 

 

 

909

 

Loss on modification or extinguishment of debt

 

20

 

 

 

—

 

 

 

101

 

 

 

43

 

Other income, net

 

(1

)

 

 

—

 

 

 

(3

)

 

 

(8

)

Other income—affiliate

 

(2

)

 

 

(2

)

 

 

(2

)

 

 

(2

)

Income from operations

$

718

 

 

$

625

 

 

$

2,557

 

 

$

2,125

 

Adjustments to reconcile income from operations to Adjusted EBITDA:

 

 

 

 

 

 

 

Depreciation and amortization expense

 

140

 

 

 

138

 

 

 

557

 

 

 

551

 

Loss (gain) from changes in fair value of commodity derivatives, net (1)

 

5

 

 

 

9

 

 

 

(49

)

 

 

45

 

Impairment expense and loss on disposal of assets

 

4

 

 

 

—

 

 

 

10

 

 

 

5

 

Incremental costs associated with COVID-19 response

 

1

 

 

 

—

 

 

 

1

 

 

 

36

 

Adjusted EBITDA

$

868

 

 

$

772

 

 

$

3,076

 

 

$

2,762

 

______________

(1)

Change in fair value of commodity derivatives prior to contractual delivery or termination

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. Adjusted EBITDA is not intended to represent cash flows from operations or net income as defined by U.S. GAAP and is not necessarily comparable to similarly titled measures reported by other companies.

We believe Adjusted EBITDA provides relevant and useful information to management, investors and other users of our financial information in evaluating the effectiveness of our operating performance in a manner that is consistent with management’s evaluation of financial and operating performance.

Adjusted EBITDA is calculated by taking net income before interest expense, net of capitalized interest, 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 derivatives prior to contractual delivery or termination, and non-recurring costs related to our response to the COVID-19 outbreak which are incremental to and separable from normal operations. The change in fair value of commodity derivatives is considered in determining 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220223005984/en/

Cheniere Partners Investors Randy Bhatia, 713-375-5479 Frances Smith, 713-375-5753

Media Relations Eben Burnham-Snyder, 713-375-5764