10-QPeriod: Q1 FY2013

Cheniere Energy, Inc. Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 3, 2013For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) reported a net loss of $117.1 million for the first quarter of 2013, a widening from the $56.4 million net loss in the same period of 2012. This loss was primarily driven by increased general and administrative expenses and derivative losses, despite a reduction in interest expenses. The company's balance sheet saw a significant increase in total assets to $6.58 billion from $4.64 billion year-over-year, largely due to substantial investments in property, plant, and equipment, particularly for the ongoing Liquefaction Project. Financially, Cheniere's cash position decreased, with unrestricted cash and cash equivalents at $178.0 million, down from $201.7 million at the end of 2012. However, total assets were bolstered by a significant increase in restricted cash and cash equivalents, totaling over $2.18 billion, which is earmarked for project development. The company raised substantial capital during the quarter through debt issuances, notably $1.5 billion in 2021 Sabine Pass Liquefaction Notes, to fund its ongoing construction of liquefaction trains. Key developments include the significant progress on Train 1 and Train 2 of the Liquefaction Project, which are ahead of schedule, and the securing of new Sale and Purchase Agreements (SPAs) for Train 5. The company is actively advancing its large-scale LNG export projects, which represent substantial long-term growth potential, though these ventures require significant capital investment and carry inherent construction and financial risks.

Financial Statements
Beta
Revenue$65.91M
R&D Expenses$17.09M
Operating Expenses$133.36M
Operating Income-$67.45M
Interest Expense$40.26M
Net Income-$117.11M
EPS (Basic)$-0.54
EPS (Diluted)$215634000.00
Shares Outstanding (Basic)215.63M

Key Highlights

  • 1Cheniere reported a net loss of $117.1 million for Q1 2013, an increase from $56.4 million in Q1 2012, mainly due to higher G&A expenses and derivative losses.
  • 2Total assets grew to $6.58 billion, driven by significant investments in property, plant, and equipment for the Liquefaction Project.
  • 3Unrestricted cash and cash equivalents decreased to $178.0 million, while restricted cash and cash equivalents increased substantially to over $2.18 billion, primarily for project funding.
  • 4The company raised $1.5 billion through the issuance of 5.625% Senior Secured Notes due 2021 to fund the construction of its liquefaction trains.
  • 5Construction on Train 1 and Train 2 of the Liquefaction Project is progressing well, with completion estimated for late 2015 for Train 1, ahead of schedule.
  • 6New long-term LNG Sale and Purchase Agreements (SPAs) were secured for Train 5, adding to the contracted export capacity.
  • 7Long-term debt increased significantly to $3.67 billion, reflecting the financing of large-scale infrastructure projects.

Frequently Asked Questions

Cheniere Energy reported a net loss of $117.1 million, or $0.54 per share, for the first quarter of 2013. This represents a wider loss compared to the $56.4 million net loss, or $0.43 per share, reported in the same period of 2012. The increased loss was primarily attributed to higher general and administrative expenses and derivative losses, partially offset by lower interest expenses.

Cheniere is funding the Liquefaction Project through a combination of debt issuances, equity financing, and project debt. During the first quarter of 2013, the company issued $1.5 billion in 5.625% Senior Secured Notes due 2021 and received substantial proceeds from the sale of common units by Cheniere Partners. These funds are primarily used for capital costs associated with the construction of liquefaction trains.

Construction on Train 1 and Train 2 of the Liquefaction Project is significantly ahead of schedule, with Train 1 expected to commence operations as early as the end of 2015. The company has also secured new Sale and Purchase Agreements (SPAs) for Train 5 and is progressing with regulatory processes for additional trains. The project involves significant capital investment and is a key driver of Cheniere's future growth.

Cheniere's total assets have grown substantially to $6.58 billion as of March 31, 2013, from $4.64 billion at the end of 2012. This growth is largely due to increased investment in property, plant, and equipment for the Liquefaction Project. While unrestricted cash and cash equivalents decreased to $178.0 million, restricted cash and cash equivalents increased significantly to over $2.18 billion, primarily held for project development.