Cheniere Reports Record Fourth Quarter and Full Year 2019 Results and Reconfirms Full Year 2020 Guidance

HOUSTON--()--Cheniere Energy, Inc. (NYSE American: LNG):

Summary of Fourth Quarter and Full Year 2019 Results (in millions, except LNG data)

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2019

 

2018

 

% Change

 

2019

 

2018

 

% Change

Revenues

$

3,007

 

 

$

2,383

 

 

26

%

 

$

9,730

 

 

$

7,987

 

 

22

%

Net income1

$

939

 

 

$

67

 

 

nm

 

 

$

648

 

 

$

471

 

 

38

%

Consolidated Adjusted EBITDA2

$

987

 

 

$

634

 

 

56

%

 

$

2,946

 

 

$

2,641

 

 

12

%

LNG exported:

 

 

 

 

 

 

 

 

 

 

 

Number of cargoes

130

 

 

80

 

 

63

%

 

429

 

 

273

 

 

57

%

Volumes (TBtu)

462

 

 

285

 

 

62

%

 

1,516

 

 

976

 

 

55

%

LNG volumes loaded (TBtu)

457

 

 

284

 

 

61

%

 

1,514

 

 

975

 

 

55

%

Summary Full Year 2020 Guidance (in billions)

 

2020

Consolidated Adjusted EBITDA2

$

3.8

 

-

$

4.1

 

Distributable Cash Flow2

$

1.0

 

-

$

1.3

 

Recent Highlights

Strategic

  • In November 2019, we received approval from the U.S. Federal Energy Regulatory Commission (“FERC”) to site, construct and operate the Corpus Christi Stage 3 project, which is being developed for up to seven midscale liquefaction Trains with an expected aggregate nominal production capacity of approximately 10 million tonnes per annum (“mtpa”) of LNG.

Operational

  • As of February 21, 2020, over 1,000 cumulative LNG cargoes totaling over 70 million tonnes of LNG have been produced, loaded and exported from our liquefaction projects.

Financial

  • For the year ended December 31, 2019, we reported net income1 of $648 million, Consolidated Adjusted EBITDA2 of $2.95 billion, and Distributable Cash Flow2 of approximately $780 million.
  • During the year ended December 31, 2019, pursuant to our capital allocation framework, we repurchased an aggregate of 4.0 million shares of our common stock for $249 million under our share repurchase program and prepaid $153 million of outstanding borrowings under the Cheniere Corpus Christi Holdings, LLC (“CCH”) credit facility.
  • In October 2019, CCH issued an aggregate principal amount of $475 million of 3.925% Senior Secured Notes due 2039 pursuant to a note purchase agreement with certain accounts managed by BlackRock Real Assets and MetLife Investment Management, to prepay a portion of the outstanding indebtedness under the CCH credit facility.
  • In November 2019, CCH issued an aggregate principal amount of $1.5 billion of 3.700% Senior Secured Notes due 2029, to prepay a portion of the outstanding indebtedness under the CCH credit facility.

Liquefaction Projects Update

 

SPL Project

 

CCL Project

Liquefaction Train

Train 6

 

Train 3

Project Status

Under Construction

 

Under Construction

Project Completion Percentage(1)

43.7%(2)

 

74.8%(3)

Expected Substantial Completion

1H 2023

 

1H 2021

Note: Projects update excludes Trains in operation

(1) Project completion percentages as of December 31, 2019

(2) Engineering 91.5% complete, procurement 60.9% complete, and construction 9.7% complete

(3) Engineering 98.7% complete, procurement 99.5% complete, and construction 49.5% complete

Cheniere Energy, Inc. (“Cheniere”) (NYSE American: LNG) reported net income1 of $939 million, or $3.70 per share—basic and $3.34 per share—diluted, for the three months ended December 31, 2019, compared to $67 million, or $0.26 per share (basic and diluted), for the comparable 2018 period. Net income increased during the three months ended December 31, 2019 as compared to the comparable 2018 period primarily due to (i) increased total margins3, (ii) increased tax benefit from the release of a significant portion of the valuation allowance previously recorded against our deferred tax assets, and (iii) increased net gains related to interest rate derivatives, partially offset by (iv) increased operating costs and expenses primarily as a result of additional Trains in operation, (v) increased interest expense, and (vi) increased net income attributable to non-controlling interest. Total margins increased primarily due to increased volumes of LNG recognized in income and increased net gains from changes in fair value of commodity derivatives. Margins per MMBtu of LNG recognized in income were materially consistent for the three months ended December 31, 2019 as compared to the comparable 2018 period as decreased pricing on LNG was offset by decreased pricing of natural gas feedstock related to our LNG sales.

Cheniere reported net income of $648 million, or $2.53 per share—basic and $2.51 per share—diluted for the year ended December 31, 2019, compared to $471 million, or $1.92 per share—basic and $1.90 per share—diluted, for the comparable 2018 period. Net income increased during the year ended December 31, 2019 as compared to the comparable 2018 period primarily due to (i) increased total margins, (ii) increased tax benefit from the release of a significant portion of the valuation allowance previously recorded against our deferred tax assets, and (iii) decreased net income attributable to non-controlling interest, partially offset by (iv) increased operating costs and expenses primarily as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project, (v) increased interest expense, (vi) increased net loss related to interest rate derivatives, and (vii) increased other expense primarily related to an impairment of our equity method investment in Midship Holdings, LLC. Total margins increased primarily due to increased volumes of LNG recognized in income and net gains from changes in fair value of commodity derivatives, partially offset by decreased margins per MMBtu of LNG recognized in income. Margins per MMBtu of LNG recognized in income decreased during the year ended December 31, 2019 as compared to the comparable 2018 period primarily due to decreased pricing on LNG sold, partially offset by decreased pricing of natural gas feedstock related to our LNG sales.

Consolidated Adjusted EBITDA2 was $987 million for the three months ended December 31, 2019, compared to $634 million for the comparable 2018 period. The increase in Consolidated Adjusted EBITDA was primarily due to additional volumes of LNG recognized in income primarily due to additional Trains in operation, partially offset by increased operating costs and expenses primarily as a result of additional Trains in operation.

Consolidated Adjusted EBITDA was $2.95 billion for the year ended December 31, 2019, compared to $2.64 billion for the comparable 2018 period. The increase in Consolidated Adjusted EBITDA was primarily due to additional volumes of LNG recognized in income primarily due to additional Trains in operation, partially offset by decreased margins per MMBtu of LNG recognized in income and increased operating costs and expenses primarily as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project.

During the three months ended December 31, 2019, 130 LNG cargoes were exported from our liquefaction projects, none of which were commissioning cargoes. During the year ended December 31, 2019, 429 LNG cargoes were exported from our liquefaction projects, 13 of which were commissioning cargoes. Nine cargoes exported from our liquefaction projects and sold on a delivered basis were in transit as of December 31, 2019, none of which were commissioning cargoes.

“2019 was an incredible year for Cheniere as we achieved significant milestones in securing our growth, exhibiting execution and operating excellence, demonstrating capital discipline, and further solidifying our position as a global leader in LNG,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “2019 was highlighted by reaching a positive final investment decision (FID) on Train 6 at Sabine Pass, achieving major commercial and regulatory milestones for the Corpus Christi Stage 3 project, launching our capital allocation plan, and placing three Trains into service within budget and on average more than nine months ahead of schedule.

“We managed our operations effectively and delivered financial results within our guidance ranges for the year. Our focus on execution and operational excellence enabled us to increase our run-rate LNG production and financial guidance. We are laser-focused on delivering on our promises to our customers and stakeholders in 2020, despite some short-term LNG market headwinds. Today, we are reconfirming our 2020 guidance of Consolidated Adjusted EBITDA of $3.8 to $4.1 billion, and Distributable Cash Flow of $1.0 to $1.3 billion.”

LNG Volume Summary

The following table summarizes the volumes of operational and commissioning LNG that were loaded from our liquefaction projects and for which the financial impact was recognized on our Consolidated Financial Statements during the three and twelve months ended December 31, 2019:

 

Three Months Ended

 

Year Ended

 

December 31, 2019

 

December 31, 2019

(in TBtu)

Operational

 

Commissioning

 

Operational

 

Commissioning

Volumes loaded during the current period

457

 

 

 

 

1,466

 

 

48

 

Volumes loaded during the prior period but recognized during the current period

36

 

 

 

 

25

 

 

3

 

Less: volumes loaded during the current period and in transit at the end of the period

(33

)

 

 

 

(33

)

 

 

Total volumes recognized in the current period

460

 

 

 

 

1,458

 

 

51

 

In addition, during the three and twelve months ended December 31, 2019, we recognized the financial impact of 9 TBtu and 40 TBtu of LNG, respectively, on our Consolidated Financial Statements related to LNG cargoes sourced from third parties.

Additional Discussion and Analysis of Financial Condition and Results

Details Regarding Fourth Quarter and Full Year 2019 Results

Our financial results are reported on a consolidated basis. Our ownership interest in Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE American: CQP) as of December 31, 2019 consisted of 100% ownership of the general partner and a 48.6% limited partner interest.

Income from operations increased $500 million and $337 million during the three and twelve months ended December 31, 2019, respectively, as compared to the comparable 2018 periods, primarily due to an increase in total margins, partially offset by an increase in operating costs and expenses. Total margins for the three and twelve months ended December 31, 2019 increased primarily due to additional volumes of LNG recognized in income primarily due to additional Trains in operation and increased net gain from changes in fair value of commodity derivatives. During the twelve months ended December 31, 2019, this increase was partially offset by decreased margin per MMBtu of LNG recognized in income primarily as a result of decreased pricing on LNG sold, partially offset by decreased cost of natural gas feedstock related to our LNG sales. Operating costs and expenses for the three months ended December 31, 2019 increased primarily as a result of additional Trains in operation. Operating costs and expenses for the twelve months ended December 31, 2019 increased primarily as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project.

Selling, general and administrative expense included share-based compensation expenses of $26 million and $91 million, respectively, for the three and twelve months ended December 31, 2019, compared to $16 million and $74 million for the comparable 2018 periods.

The tax benefit of $517 million for the three and twelve months ended December 31, 2019 is primarily attributable to releasing a significant portion of the valuation allowance previously recorded against our federal and state deferred tax assets and the generation of investment tax credits in the current year, partially offset by current year tax expense.

Net income attributable to non-controlling interest increased $58 million during the three months ended December 31, 2019 as compared to the comparable 2018 period due to the increase in net income recognized by Cheniere Partners, in which the non-controlling interests are held. Net income attributable to non-controlling interest decreased $145 million during the year ended December 31, 2019 as compared to the comparable 2018 period primarily due to the decrease of non-controlling interest as a result of our merger with Cheniere Energy Partners LP Holdings, LLC in September 2018 and decreased net income recognized by Cheniere Partners, in which the non-controlling interests are held.

Capital Resources

As of December 31, 2019, we had cash and cash equivalents of $2.5 billion on a consolidated basis, of which $1.8 billion was held by Cheniere Partners. In addition, we had current restricted cash of $520 million designated for the following purposes: $181 million for the SPL Project, $80 million for the CCL Project and $259 million for other restricted purposes.

Liquefaction Projects

SPL Project

Through Cheniere Partners, we are currently operating five natural gas liquefaction Trains and constructing one additional Train for a total production capacity of approximately 30 mtpa of LNG at the Sabine Pass LNG terminal (the “SPL Project”).

CCL Project

We are currently operating two Trains and constructing one additional Train for a total production capacity of approximately 15 mtpa of LNG near Corpus Christi, Texas (the “CCL Project”).

Corpus Christi Stage 3

We are developing an expansion adjacent to the CCL Project for up to seven midscale Trains with an expected total production capacity of approximately 10 mtpa of LNG (“Corpus Christi Stage 3”). We expect to commence construction of the Corpus Christi Stage 3 project upon entering into an engineering, procurement, and construction contract and additional commercial agreements, and obtaining adequate financing.

Investor Conference Call and Webcast

We will host a conference call to discuss our financial and operating results for the fourth quarter and full year 2019 on Tuesday, February 25, 2020, at 10 a.m. Eastern time / 9 a.m. Central time. A listen-only webcast of the call and an accompanying slide presentation may be accessed through our website at www.cheniere.com. Following the call, an archived recording will be made available on our website.

___________________________

(1)

Net income as used herein refers to Net income attributable to common stockholders on our Consolidated Statements of Operations.

(2)

Non-GAAP financial measure. See “Reconciliation of Non-GAAP Measures” for further details.

(3)

Total margins as used herein refers to total revenues less cost of sales.

About Cheniere

Cheniere Energy, Inc. is the leading producer and exporter of liquefied natural gas (LNG) in the United States, reliably providing a clean, secure, and affordable solution to the growing global need for natural gas. Cheniere is a full-service LNG provider, with capabilities that include gas procurement and transportation, liquefaction, vessel chartering, and LNG delivery. Cheniere has one of the largest liquefaction platforms in the world, consisting of the Sabine Pass and Corpus Christi liquefaction facilities on the U.S. Gulf Coast, with expected adjusted aggregate nominal production capacity of up to 45 million tonnes per annum of LNG operating or under construction. Cheniere is also pursuing liquefaction expansion opportunities and other projects along the LNG value chain. Cheniere is headquartered in Houston, Texas, and has additional offices in London, Singapore, Beijing, Tokyo, and Washington, D.C.

For additional information, please refer to the Cheniere website at www.cheniere.com and Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission.

Forward-Looking Statements

This press release contains certain statements that may include “forward-looking statements” within the meanings of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical or present facts or conditions, included herein are “forward-looking statements.” Included among “forward-looking statements” are, among other things, (i) statements regarding Cheniere’s financial and operational guidance, business strategy, plans and objectives, including the development, construction and operation of liquefaction facilities, (ii) statements regarding expectations regarding regulatory authorizations and approvals, (iii) statements expressing beliefs and expectations regarding the development of Cheniere’s LNG terminal and pipeline businesses, including liquefaction facilities, (iv) statements regarding the business operations and prospects of third parties, (v) statements regarding potential financing arrangements, (vi) statements regarding future discussions and entry into contracts, and (vii) statements relating to the amount and timing of share repurchases. Although Cheniere believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere’s periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere does not assume a duty to update these forward-looking statements.

(Financial Tables Follow)

Cheniere Energy, Inc.

Consolidated Statements of Income

(in millions, except per share data)(1)

 

 

(Unaudited)

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

 

 

LNG revenues

$

2,871

 

 

$

2,245

 

 

$

9,246

 

 

$

7,572

 

Regasification revenues

67

 

 

65

 

 

266

 

 

261

 

Other revenues

69

 

 

73

 

 

218

 

 

154

 

Total revenues

3,007

 

 

2,383

 

 

9,730

 

 

7,987

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

 

 

 

 

 

Cost of sales (excluding depreciation and amortization expense shown separately below)

1,321

 

 

1,519

 

 

5,079

 

 

4,597

 

Operating and maintenance expense

330

 

 

156

 

 

1,154

 

 

613

 

Development expense

3

 

 

1

 

 

9

 

 

7

 

Selling, general and administrative expense

88

 

 

75

 

 

310

 

 

289

 

Depreciation and amortization expense

233

 

 

116

 

 

794

 

 

449

 

Impairment expense and loss on disposal of assets

16

 

 

 

 

23

 

 

8

 

Total operating costs and expenses

1,991

 

 

1,867

 

 

7,369

 

 

5,963

 

 

 

 

 

 

 

 

 

Income from operations

1,016

 

 

516

 

 

2,361

 

 

2,024

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense, net of capitalized interest

(418

)

 

(222

)

 

(1,432

)

 

(875

)

Loss on modification or extinguishment of debt

(28

)

 

 

 

(55

)

 

(27

)

Derivative gain (loss), net

53

 

 

(75

)

 

(134

)

 

57

 

Other income (expense)

13

 

 

16

 

 

(25

)

 

48

 

Total other expense

(380

)

 

(281

)

 

(1,646

)

 

(797

)

 

 

 

 

 

 

 

 

Income before income taxes and non-controlling interest

636

 

 

235

 

 

715

 

 

1,227

 

Income tax benefit (provision)

517

 

 

(12

)

 

517

 

 

(27

)

Net income

1,153

 

 

223

 

 

1,232

 

 

1,200

 

Less: net income attributable to non-controlling interest

214

 

 

156

 

 

584

 

 

729

 

Net income attributable to common stockholders

$

939

 

 

$

67

 

 

$

648

 

 

$

471

 

 

 

 

 

 

 

 

 

Net income per share attributable to common stockholders—basic (2)

$

3.70

 

 

$

0.26

 

 

$

2.53

 

 

$

1.92

 

Net income per share attributable to common stockholders—diluted (2)

$

3.34

 

 

$

0.26

 

 

$

2.51

 

 

$

1.90

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding—basic

254.4

 

 

256.7

 

 

256.2

 

 

245.6

 

Weighted average number of common shares outstanding—diluted

299.8

 

 

258.0

 

 

258.1

 

 

248.0

 

_____________________

(1)

Please refer to the Cheniere Energy, Inc. Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission.

(2)

Earnings per share in the table may not recalculate exactly due to rounding because it is calculated based on whole numbers, not the rounded numbers presented. Additionally, earnings per share for the three months ended December 31, 2019 does not recalculate due to the use of the if-converted method to calculate the dilutive effect of our convertible securities.

Cheniere Energy, Inc.

Consolidated Balance Sheets

(in millions, except share data)(1)(2)

 

 

December 31,

 

2019

 

2018

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

2,474

 

 

$

981

 

Restricted cash

520

 

 

2,175

 

Accounts and other receivables

491

 

 

585

 

Inventory

312

 

 

316

 

Derivative assets

323

 

 

63

 

Other current assets

92

 

 

114

 

Total current assets

4,212

 

 

4,234

 

 

 

 

 

Property, plant and equipment, net

29,673

 

 

27,245

 

Operating lease assets, net

439

 

 

 

Non-current derivative assets

174

 

 

54

 

Goodwill

77

 

 

77

 

Deferred tax assets

529

 

 

8

 

Other non-current assets, net

388

 

 

369

 

Total assets

$

35,492

 

 

$

31,987

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable

$

66

 

 

$

58

 

Accrued liabilities

1,281

 

 

1,169

 

Current debt

 

 

239

 

Deferred revenue

161

 

 

139

 

Current operating lease liabilities

236

 

 

 

Derivative liabilities

117

 

 

128

 

Other current liabilities

13

 

 

9

 

Total current liabilities

1,874

 

 

1,742

 

 

 

 

 

Long-term debt, net

30,774

 

 

28,179

 

Non-current operating lease liabilities

189

 

 

 

Non-current finance lease liabilities

58

 

 

57

 

Non-current derivative liabilities

151

 

 

22

 

Other non-current liabilities

11

 

 

58

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

Preferred stock, $0.0001 par value, 5.0 million shares authorized, none issued

 

 

 

Common stock, $0.003 par value, 480.0 million shares authorized

 

 

 

Issued: 270.7 million shares and 269.8 million shares at December 31, 2019 and 2018, respectively

 

 

 

Outstanding: 253.6 million shares and 257.0 million shares at December 31, 2019 and 2018, respectively

1

 

 

1

 

Treasury stock: 17.1 million shares and 12.8 million shares at December 31, 2019 and 2018, respectively, at cost

(674

)

 

(406

)

Additional paid-in-capital

4,167

 

 

4,035

 

Accumulated deficit

(3,508

)

 

(4,156

)

Total stockholders’ deficit

(14

)

 

(526

)

Non-controlling interest

2,449

 

 

2,455

 

Total equity

2,435

 

 

1,929

 

Total liabilities and stockholders’ equity

$

35,492

 

 

$

31,987

 

_____________________

(1)

Please refer to the Cheniere Energy, Inc. Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission.

(2)

Amounts presented include balances held by our consolidated variable interest entity, Cheniere Partners. As of December 31, 2019, total assets and liabilities of Cheniere Partners, which are included in our Consolidated Balance Sheets, were $19.1 billion and $18.6 billion, respectively, including $1.8 billion of cash and cash equivalents and $0.2 billion of restricted cash.

Reconciliation of Non-GAAP Measures

Regulation G Reconciliations

In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying news release contains non-GAAP financial measures. Consolidated Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures that we use to facilitate comparisons of operating performance across periods. These non-GAAP measures should be viewed as a supplement to and not a substitute for our U.S. GAAP measures of performance and the financial results calculated in accordance with U.S. GAAP and reconciliations from these results should be carefully evaluated.

Consolidated Adjusted EBITDA represents net income attributable to Cheniere before net income attributable to non-controlling interest, interest, taxes, depreciation and amortization, adjusted for certain non-cash items, other non-operating income or expense items, and other items not otherwise predictive or indicative of ongoing operating performance, as detailed in the following reconciliation. Consolidated Adjusted EBITDA is not intended to represent cash flows from operations or net income as defined by U.S. GAAP and is not necessarily comparable to similarly titled measures reported by other companies.

We believe Consolidated Adjusted EBITDA provides relevant and useful information to management, investors and other users of our financial information in evaluating the effectiveness of our operating performance in a manner that is consistent with management’s evaluation of business performance. We believe Consolidated Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization which vary substantially from company to company depending on capital structure, the method by which assets were acquired and depreciation policies. Further, the exclusion of certain non-cash items, other non-operating income or expense items, and items not otherwise predictive or indicative of ongoing operating performance enables comparability to prior period performance and trend analysis.

Consolidated Adjusted EBITDA is calculated by taking net income attributable to common stockholders before net income attributable to non-controlling interest, interest expense, net of capitalized interest, changes in the fair value and settlement of our interest rate derivatives, taxes, depreciation and amortization, and adjusting for the effects of certain non-cash items, other non-operating income or expense items, and other items not otherwise predictive or indicative of ongoing operating performance, including the effects of modification or extinguishment of debt, impairment expense and loss on disposal of assets, changes in the fair value of our commodity and FX derivatives and non-cash compensation expense. We believe the exclusion of these items enables investors and other users of our financial information to assess our sequential and year-over-year performance and operating trends on a more comparable basis and is consistent with management’s own evaluation of performance.

Distributable Cash Flow is defined as cash received, or expected to be received, from Cheniere’s ownership and interests in Cheniere Partners, cash received (used) by Cheniere’s integrated marketing function (other than cash for capital expenditures) less interest, taxes and maintenance capital expenditures associated with Cheniere and not the underlying entities. Management uses this measure and believes it provides users of our financial statements a useful measure reflective of our business’s ability to generate cash earnings to supplement the comparable GAAP measure.

We believe Distributable Cash Flow is a useful performance measure for management, investors and other users of our financial information to evaluate our performance and to measure and estimate the ability of our assets to generate cash earnings after servicing our debt, paying cash taxes and expending sustaining capital, that could be used for discretionary purposes such as common stock dividends, stock repurchases, retirement of debt, or expansion capital expenditures. Management uses this measure and believes it provides users of our financial statements a useful measure reflective of our business’s ability to generate cash earnings to supplement the comparable GAAP measure. Distributable Cash Flow is not intended to represent cash flows from operations or net income as defined by U.S. GAAP and is not necessarily comparable to similarly titled measures reported by other companies.

Non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or in lieu of an analysis of our results as reported under GAAP and should be evaluated only on a supplementary basis.

Consolidated Adjusted EBITDA

The following table reconciles our Consolidated Adjusted EBITDA to U.S. GAAP results for the three and twelve months ended December 31, 2019 and 2018 (in millions):

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2019

 

2018

 

2019

 

2018

Net income attributable to common stockholders

$

939

 

 

$

67

 

 

$

648

 

 

$

471

 

Net income attributable to non-controlling interest

214

 

 

156

 

 

584

 

 

729

 

Income tax provision (benefit)

(517

)

 

12

 

 

(517

)

 

27

 

Interest expense, net of capitalized interest

418

 

 

222

 

 

1,432

 

 

875

 

Loss on modification or extinguishment of debt

28

 

 

 

 

55

 

 

27

 

Derivative loss (gain), net

(53

)

 

75

 

 

134

 

 

(57

)

Other expense (income)

(13

)

 

(16

)

 

25

 

 

(48

)

Income from operations

$

1,016

 

 

$

516

 

 

$

2,361

 

 

$

2,024

 

Adjustments to reconcile income from operations to Consolidated Adjusted EBITDA:

 

 

 

 

 

 

 

Depreciation and amortization expense

233

 

 

116

 

 

794

 

 

449

 

Loss (gain) from changes in fair value of commodity and FX derivatives, net

(314

)

 

(19

)

 

(355

)

 

77

 

Total non-cash compensation expense

36

 

 

21

 

 

123

 

 

76

 

Impairment expense and loss on disposal of assets

16

 

 

 

 

23

 

 

8

 

Legal settlement expense

 

 

 

 

 

 

7

 

Consolidated Adjusted EBITDA

$

987

 

 

$

634

 

 

$

2,946

 

 

$

2,641

 

Consolidated Adjusted EBITDA and Distributable Cash Flow

The following table reconciles our actual Consolidated Adjusted EBITDA and Distributable Cash Flow to Net income attributable to common stockholders for the three and twelve months ended December 31, 2019 and forecast amounts for full year 2020 (in billions):

 

Three Months
Ended

 

Year Ended

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

Full Year

 

2019

 

2019

 

2020

Net income attributable to common stockholders

$

0.94

 

 

$

0.65

 

 

$

0.2

 

-

$

0.5

 

Net income attributable to non-controlling interest

0.21

 

 

0.58

 

 

0.7

 

-

0.8

 

Income tax provision (benefit)

(0.52

)

 

(0.52

)

 

0.1

 

-

0.2

 

Interest expense, net of capitalized interest

0.42

 

 

1.43

 

 

 

 

1.6

 

Depreciation and amortization expense

0.23

 

 

0.79

 

 

 

 

0.9

 

Other expense, financing costs, and certain non-cash operating expenses

(0.30

)

 

0.01

 

 

0.3

 

-

0.1

 

Consolidated Adjusted EBITDA

$

0.99

 

 

$

2.95

 

 

$

3.8

 

-

$

4.1

 

Distributions to Cheniere Partners non-controlling interest

(0.15

)

 

(0.60

)

 

 

 

(0.6

)

SPL and Cheniere Partners cash retained and interest expense

(0.42

)

 

(1.25

)

 

 

 

(1.6

)

Cheniere interest expense, income tax and other

(0.14

)

 

(0.31

)

 

 

 

(0.6

)

Cheniere Distributable Cash Flow

$

0.27

 

 

$

0.78

 

 

$

1.0

 

-

$

1.3

 

_____________________

Note: Totals may not sum due to rounding.

 

Contacts

Cheniere Energy, Inc.

Investors
Randy Bhatia, 713-375-5479
Megan Light, 713-375-5492
or
Media Relations
Eben Burnham-Snyder, 713-375-5764
Jenna Palfrey, 713-375-5491

Contacts

Cheniere Energy, Inc.

Investors
Randy Bhatia, 713-375-5479
Megan Light, 713-375-5492
or
Media Relations
Eben Burnham-Snyder, 713-375-5764
Jenna Palfrey, 713-375-5491