01—Abstract
Summary
Summary of the 10-K filed February 19, 2016. Cited figures are marked; the original filing is the authoritative source.
Cheniere Energy, Inc. (LNG) has reported its annual results for the fiscal year ending December 31, 2015.
The company is heavily invested in the development and construction of two major Liquefied Natural Gas (LNG) export facilities: the Sabine Pass LNG terminal in Louisiana and the Corpus Christi LNG terminal in Texas. Financially, Cheniere reported a significant net loss attributable to common stockholders of $975.1 milliona for the year, an increase from the previous year's loss of $547.9 million. This widened loss is attributed to increased interest expenses, general and administrative expenses, impairment charges, and derivative losses.
The company's operations are capital-intensive, with substantial ongoing investments in construction. As of December 31, 2015, Cheniere had approximately $17.3 billionb in total debt outstanding.
Despite the net loss, the company is progressing with its construction milestones, with Trains 1 and 2 at Sabine Pass nearing completion and expected to produce LNG in early to mid-2016. Investors should closely monitor construction progress, financing activities for future trains, and the securing of long-term contracts.
02—Key points
Key Highlights
- Cheniere Energy reported a net loss of $975.1 million for the year ended December 31, 2015, an increase from the prior year's loss.
- The company is actively developing two major LNG export facilities: Sabine Pass LNG terminal (Louisiana) and Corpus Christi LNG terminal (Texas), with multiple liquefaction 'Trains' under construction.
- Total debt outstanding as of December 31, 2015, was $17.3 billion.
- Construction progress at Sabine Pass LNG terminal was advanced, with Trains 1 & 2 approximately 97.4% complete and expected to commence operations in early to mid-2016.
- The Corpus Christi LNG terminal project was approximately 29.2% complete for Stage 1 as of December 31, 2015, with Trains 1 & 2 anticipated to produce LNG in late 2018.
- Cheniere has secured long-term Sale and Purchase Agreements (SPAs) for a significant portion of the planned LNG export capacity at both facilities.
- The company's business strategy focuses on integrating the abundant U.S. natural gas market with international markets.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 19, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $271.00M$267.95M | +1.1% |
| Cost of Revenue | -$15.00M-$342K | −4286.0% |
| Gross Profit | $286.00M$268.30M | +6.6% |
| R&D Expenses | $42.00M$54.38M | −22.8% |
| SG&A Expenses | $363.00M$323.71M | +12.1% |
| Operating Expenses | $720.00M$540.13M | +33.3% |
| Operating Income | -$449.00M-$272.18M | −65.0% |
| Interest Expense | $322.00M$181.24M | +77.7% |
| Net Income | -$975.00M-$547.93M | −77.9% |
| EPS (Basic) | $-4.30$-2.44 | −76.2% |
| Shares Outstanding (Basic) | 226.90M224.34M | +1.1% |
| Shares Outstanding (Diluted) | 226.90M224.34M | +1.1% |
05—Questions
Frequently Asked Questions
What is Cheniere Energy's current financial position?
As of December 31, 2015, Cheniere reported a significant net loss of $975.1 million for the year, and had $17.3 billion in total debt outstanding. The company is in a capital-intensive development phase for its LNG export facilities, with substantial ongoing investment in construction.
What are the key development projects for Cheniere?
Cheniere is developing two primary LNG export facilities. The Sabine Pass LNG terminal in Louisiana is constructing five liquefaction 'Trains' (with a sixth planned), and the Corpus Christi LNG terminal in Texas is developing up to three 'Trains' (with additional stages planned). These projects are designed to liquefy and export U.S. natural gas.
When is Cheniere expected to generate revenue from its export facilities?
The company anticipates receiving cash flows from its Sale and Purchase Agreements (SPAs) starting in early 2016, with Train 1 of the Sabine Pass project expected to produce its first LNG in February 2016, and Train 2 shortly thereafter. Corpus Christi trains are expected to commence operations later, starting in late 2018.
What are the major risks facing Cheniere?
Key risks include the company's high level of debt, potential construction delays and cost overruns at its large-scale projects, reliance on third-party customers to fulfill contractual obligations, and the inherent operational and regulatory risks associated with the energy infrastructure sector. The company has not historically been profitable and may not achieve profitability in the future until its projects are fully operational and generating significant revenue.
06—Continue