10-Q/APeriod: Q1 FY2015

Cheniere Energy, Inc. Quarterly Report (Amendment) for Q1 Ended Mar 31, 2015

Filed May 11, 2015For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) filed an amendment to its Form 10-Q for the period ending March 30, 2015, primarily to address compliance disclosures related to Section 13(r) of the Securities Exchange Act of 1934. The company stated that it and its affiliates did not engage in any transactions with Iran during the quarter. However, the filing notes that an affiliate of The Blackstone Group, which holds a significant stake in Cheniere Energy Partners, L.P., disclosed certain activities by one of its portfolio companies, Travelport Limited. Travelport, through its parent company Travelport Worldwide Limited, reported providing travel-related services to Iran Air and Iran Air Tours. The gross revenues and net profits from these activities for the quarter were approximately $157,000 and $109,000, respectively. Cheniere Energy clarified that it has not independently verified this disclosure from Blackstone Group, but it is being included due to the broad definition of "affiliate" under SEC rules. Investors should note that Cheniere itself had no direct dealings with Iran during this period, but the indirect disclosure via an affiliate is a point of administrative transparency.

Financial Statements
Beta
Revenue$68.37M
Cost of Revenue$693K
Gross Profit$67.68M
R&D Expenses$16.10M
Operating Expenses$128.61M
Operating Income-$60.24M
Interest Expense$59.61M
Net Income-$267.71M
EPS (Basic)$-1.18
Shares Outstanding (Basic)226.33M
Shares Outstanding (Diluted)226.33M

Key Highlights

  • 1Cheniere Energy confirmed no direct transactions with Iran or Iranian entities during the quarter ended March 31, 2015.
  • 2The filing is an amendment to the Form 10-Q, primarily for compliance with Iran Threat Reduction and Syria Human Rights Act (ITRA).
  • 3Blackstone Group, a significant stakeholder in a Cheniere affiliate, disclosed activities of its portfolio company, Travelport Limited, concerning Iran.
  • 4Travelport reported providing travel commerce and technology services to Iran Air and Iran Air Tours.
  • 5Gross revenues from Travelport's Iran-related activities were approximately $157,000, with net profits of $109,000 for the quarter.
  • 6Cheniere Energy explicitly stated it has not independently verified the disclosure made by Blackstone Group regarding Travelport.
  • 7The disclosure is noted due to the broad definition of 'affiliate' in securities regulations, linking Cheniere indirectly to Travelport's activities through Blackstone.

Frequently Asked Questions

No, Cheniere Energy stated that neither it nor its direct affiliates engaged in any transactions with Iran or persons/entities related to Iran during the quarter ended March 31, 2015.

The disclosure is indirect. The Blackstone Group, which is an affiliate of a major stakeholder in Cheniere Energy Partners, L.P. (an affiliate of Cheniere Energy), has a portfolio company named Travelport. Travelport provided certain services to Iran Air and Iran Air Tours. This disclosure is included because Blackstone Group, through its ownership in Cheniere Partners, could be considered an affiliate of Cheniere Energy under SEC rules, and it reported its portfolio company's activities.

There were no direct financial implications for Cheniere Energy from Travelport's activities. Travelport reported gross revenues of approximately $157,000 and net profits of $109,000 from its Iran-related business during the quarter. Cheniere Energy has stated that it has not independently verified this information and that these activities were attributed to Travelport, not Cheniere itself.

Yes, this is an amendment (10-Q/A) to the original quarterly report. It means Cheniere Energy is making a correction or adding information. In this case, the amendment is to provide additional compliance disclosures related to certain foreign transactions as required by law, specifically regarding potential indirect connections to Iran through its affiliates and their stakeholders. For investors, it's important to understand that the company is adhering to regulatory disclosure requirements, even if the reported activities are indirect and not by Cheniere itself.