10-QPeriod: Q1 FY2022

Cheniere Energy, Inc. Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 4, 2022For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) reported a significant net loss of $865 million for the first quarter of 2022, a substantial decrease from the $393 million net income in the prior year's quarter. This loss was primarily driven by a sharp increase in derivative losses, amounting to $3.5 billion (pre-tax), largely due to the appreciation of international LNG commodity curves. Despite the reported net loss, total revenues saw a substantial increase to $7.48 billion from $3.09 billion in Q1 2021, driven by higher LNG prices and increased delivery volumes, including contributions from new liquefaction trains. Operationally, the company achieved substantial completion of Train 6 at the Sabine Pass LNG Terminal in February 2022, boosting its total production capacity. Financially, Cheniere used $1.1 billion of cash to reduce outstanding indebtedness, including early redemption of convertible notes, and continued its share repurchase program and dividend payments. The company maintained a strong liquidity position with $6.66 billion in available liquidity as of March 31, 2022, and reported compliance with all debt covenants.

Financial Highlights

52 data points
Beta

Revenue

$7.66B

Net Income

-$865.00M

-11.3% Net Margin

EPS (Diluted)

$-3.41

Total Assets

$40.05B

Cash & Equivalents

$2.49B

Free Cash Flow

$2.48B

Financial Statements
Beta
Revenue$7.66B
R&D Expenses$5.00M
SG&A Expenses$96.00M
Operating Expenses$8.10B
Operating Income-$613.00M
Interest Expense$349.00M
Net Income-$865.00M
EPS (Basic)$-3.41
EPS (Diluted)$-3.41
Shares Outstanding (Basic)254.00M
Shares Outstanding (Diluted)254.00M

Key Highlights

  • 1Reported a net loss of $865 million for Q1 2022, a significant decline from a net income of $393 million in Q1 2021, largely due to $3.5 billion in derivative losses.
  • 2Total revenues increased significantly to $7.48 billion in Q1 2022 from $3.09 billion in Q1 2021, driven by higher LNG prices and increased volumes.
  • 3Achieved substantial completion of Train 6 at the Sabine Pass LNG Terminal in February 2022, increasing total production capacity.
  • 4Used $1.1 billion of cash for debt reduction, including the early redemption of convertible notes.
  • 5Maintained a robust liquidity position with $6.66 billion in available liquidity as of March 31, 2022.
  • 6Repurchased $25 million of common stock and paid a quarterly dividend of $0.33 per share.
  • 7Corpus Christi Stage 3 project advanced with an EPC contract signed with Bechtel in March 2022.

Frequently Asked Questions

The primary reason for the substantial net loss of $865 million in the first quarter of 2022, compared to a net income in the prior year, was a significant increase in derivative losses, totaling $3.5 billion (pre-tax). This was primarily driven by the appreciation of international LNG commodity curves and is largely a non-cash accounting impact from commodity derivative instruments used to manage price volatility.

Cheniere's total revenues increased substantially to $7.48 billion in the first quarter of 2022, up from $3.09 billion in the same period of 2021. This growth was driven by higher average realized LNG prices and an increase in the volume of LNG delivered, partly due to the operational status of new liquefaction trains at its facilities.

A major operational milestone was the substantial completion of Train 6 at the Sabine Pass LNG Terminal in February 2022, enhancing the facility's total production capacity. Additionally, the company advanced the Corpus Christi Stage 3 expansion by signing an EPC contract with Bechtel in March 2022.

Cheniere actively managed its debt by using $1.1 billion in cash for debt reduction, including the early redemption of its 4.25% Convertible Senior Notes due 2045. The company also maintained a strong liquidity position, with $6.66 billion in available liquidity as of March 31, 2022, comprising cash, restricted cash, and available credit facilities.