10-K/APeriod: FY2012

Cheniere Energy, Inc. Annual Report (Amendment), Year Ended Dec 31, 2012

Filed March 1, 2013For Securities:LNG

Summary

This filing from Cheniere Energy, Inc. (LNG) on March 1, 2013, primarily details significant debt financing activities and amendments to key LNG sale and purchase agreements (SPAs). Sabine Pass LNG, L.P. successfully closed the sale of $420 million in 6.5% Senior Secured Notes due 2020, private placement in reliance on Section 4(2) and Rule 144A/Regulation S. Additionally, Sabine Pass Liquefaction, LLC raised $1.5 billion through a private placement of 5.625% Senior Secured Notes due 2021. Furthermore, the company announced amendments to its SPAs with KOGAS and GAIL for Train 3 and Train 4, respectively. These amendments adjust the timelines for first commercial delivery and extend the deadline for satisfying certain conditions precedent to December 31, 2013. These actions are crucial for progressing the development of Cheniere's liquefaction projects.

Financial Highlights

52 data points
Beta

Revenue

$266.22M

Net Income

-$332.78M

-125.0% Net Margin

EPS (Diluted)

$-1.83

Total Assets

$4.64B

Cash & Equivalents

$201.71M

Free Cash Flow

-$1.23B

Financial Statements
Beta
Revenue$266.22M
R&D Expenses$66.11M
Operating Expenses$342.05M
Operating Income-$75.83M
Interest Expense$200.81M
Net Income-$332.78M
EPS (Basic)$-1.83
Shares Outstanding (Basic)181.77M

Key Highlights

  • 1Sabine Pass LNG, L.P. issued $420 million in 6.5% Senior Secured Notes due 2020 via a private placement.
  • 2Sabine Pass Liquefaction, LLC issued $1.5 billion in 5.625% Senior Secured Notes due 2021 via a private placement.
  • 3The 2020 Notes mature on November 1, 2020, and the 2021 Notes mature on February 1, 2021.
  • 4Amendments to the SPAs with KOGAS and GAIL were executed on February 18, 2013, extending project development timelines.
  • 5The deadline for satisfying certain conditions precedent for Train 3 and Train 4 construction has been extended to December 31, 2013.
  • 6Cheniere Energy confirmed no engagement in transactions with Iran or Iran-related entities during 2012.
  • 7Disclosures regarding potential affiliate activities related to Iran by third-party portfolio companies of Blackstone were noted, though Cheniere Energy did not independently verify these.

Frequently Asked Questions

The debt issuances are intended to provide financing for Cheniere's liquefied natural gas (LNG) projects. The $420 million in 2020 Notes from Sabine Pass LNG and the $1.5 billion in 2021 Notes from Sabine Pass Liquefaction represent significant steps in securing the capital required for project development and construction.

The amendments extend the deadlines for satisfying critical conditions precedent for the construction of Train 3 (KOGAS) and Train 4 (GAIL) to December 31, 2013. They also adjust the timing for the first commercial delivery of LNG, aligning them with the completion schedules of the engineering, procurement, and construction (EPC) contracts.

Cheniere Energy explicitly stated that neither the company nor any of its affiliates engaged in any transactions with Iran or Iran-related entities during the 2012 fiscal year, thus complying with the Iran Threat Reduction and Syria Human Rights Act of 2012. However, the company noted disclosures from a third-party affiliate regarding its portfolio companies' activities, which Cheniere did not independently verify.

The 'make-whole' redemption clauses allow Sabine Pass Liquefaction to redeem the 2021 Notes before their maturity date (November 1, 2020) at a 'make-whole' price. This provision gives the company flexibility to potentially refinance the debt at a lower cost in the future if market conditions allow, while compensating noteholders for early redemption.