10-QPeriod: Q2 FY2013

Cheniere Energy, Inc. Quarterly Report for Q2 Ended Jun 30, 2013

Filed August 2, 2013For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) reported a significant increase in total assets to $8.58 billion for the quarter ending June 30, 2013, up from $4.64 billion at the end of 2012. This growth is driven by substantial investments in property, plant, and equipment, primarily related to the Liquefaction Project at the Sabine Pass LNG terminal. The company also saw a considerable increase in long-term debt, rising from $2.17 billion to $5.57 billion, reflecting the substantial financing secured for its expansion projects. Operationally, Cheniere experienced a widening net loss attributable to common stockholders, reaching $154.8 million for the quarter ($0.71 per share) compared to $73.0 million ($0.43 per share) in the prior year's quarter. This was largely due to increased general and administrative expenses, notably related to bonus plans for the Liquefaction Project, and a significant loss on the early extinguishment of debt associated with refinancing credit facilities. Despite the increased loss, the company secured substantial financing for its large-scale infrastructure projects, indicating a forward-looking investment strategy.

Financial Highlights

53 data points
Beta

Revenue

$67.18M

Net Income

-$154.76M

-230.4% Net Margin

EPS (Diluted)

$217397000.00

Total Assets

$8.58B

Cash & Equivalents

$396.92M

Free Cash Flow

-$816.72M

Financial Statements
Beta
Revenue$67.18M
R&D Expenses$22.08M
Operating Expenses$203.46M
Operating Income-$136.28M
Interest Expense$42.02M
Net Income-$154.76M
EPS (Basic)$-0.71
EPS (Diluted)$217397000.00
Shares Outstanding (Basic)217.40M
Shares Outstanding (Diluted)217.40M

Key Highlights

  • 1Total assets grew significantly to $8.58 billion as of June 30, 2013, up from $4.64 billion at the end of 2012, primarily due to investments in property, plant, and equipment for the Liquefaction Project.
  • 2Long-term debt increased substantially from $2.17 billion to $5.57 billion, reflecting significant debt financings for project development.
  • 3Net loss attributable to common stockholders widened to $154.8 million ($0.71 per share) for the three months ended June 30, 2013, from $73.0 million ($0.43 per share) in the same period of 2012.
  • 4General and administrative expenses increased significantly, largely due to bonus plans related to the Liquefaction Project.
  • 5A substantial loss on the early extinguishment of debt was incurred due to refinancing activities related to credit facilities.
  • 6The company secured significant new debt financing, including $2.0 billion in 2021 Senior Secured Notes, $1.0 billion in 2023 Senior Secured Notes, and $5.9 billion in 2013 Liquefaction Credit Facilities.
  • 7Cheniere Partners successfully raised $372.4 million in net proceeds through the sale of common units to fund the Liquefaction Project and general business purposes.

Frequently Asked Questions

The substantial increase in assets is primarily driven by significant capital expenditures on property, plant, and equipment, particularly for the ongoing development of the Liquefaction Project at the Sabine Pass LNG terminal. The corresponding rise in long-term debt reflects the substantial debt financings secured to fund these large-scale infrastructure development projects.

The increase in net loss is attributed to several factors, including higher general and administrative expenses, largely due to bonus plans associated with the Liquefaction Project, and a significant loss recognized from the early extinguishment of debt. This latter item resulted from the refinancing and amendment of existing credit facilities to secure new project financing.

Cheniere Energy successfully secured significant financing for its expansion projects. Key activities include the issuance of $2.0 billion in 2021 Senior Secured Notes and $1.0 billion in 2023 Senior Secured Notes by Sabine Pass Liquefaction. Additionally, Sabine Pass Liquefaction closed on $5.9 billion in 2013 Liquefaction Credit Facilities to fund the development of Trains 1 through 4. Cheniere Partners also raised $372.4 million through a common unit offering.

Total revenues remained relatively stable compared to the prior year's quarter, primarily driven by LNG terminal revenues. However, operating costs and expenses increased substantially, particularly LNG terminal operating expenses and general and administrative expenses. The company is actively engaging in derivative hedging for LNG inventory and fuel costs, with changes in fair value impacting reported gains and losses.