Business Wire | Aug 5, 2021 08:00AM EDT

Cheniere Partners Reports Second Quarter Results and Reconfirms Full Year 2021 Distribution Guidance

Aug. 05, 2021

HOUSTON--(BUSINESS WIRE)--Aug. 05, 2021--Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE American: CQP) today announced its financial results for the second quarter of 2021.

HIGHLIGHTS

* Net income of $395 million and $742 million for the three and six months ended June 30, 2021, respectively. * Adjusted EBITDA1 of $690 million and $1,469 million for the three and six months ended June 30, 2021, respectively. * Declared a distribution of $0.665 per common unit that will be paid on August 13, 2021 to unitholders of record as of August 6, 2021. * Reconfirmed full year 2021 distribution guidance. * S&P Global Ratings changed the outlook on Cheniere Partners credit rating to positive from negative in April 2021.

2021 FULL YEAR DISTRIBUTION GUIDANCE

2021

Distribution per Unit $ 2.60 - $ 2.70

SUMMARY AND REVIEW OF FINANCIAL RESULTS

(in millions, except Three Months Ended June 30, Six Months Ended June 30,LNG data)

2021 2020 % 2021 2020 % Change Change

Revenues $ 1,889 $ 1,470 29 % $ 3,852 $ 3,188 21 %

Net income $ 395 $ 406 (3 )% $ 742 $ 841 (12 )%

Adjusted EBITDA^1 $ 690 $ 846 (18 )% $ 1,469 $ 1,638 (10 )%

LNG exported:

Number of cargoes 87 58 50 % 176 150 17 %

Volumes (TBtu) 311 205 52 % 632 530 19 %

LNG volumes loaded 313 207 51 % 630 534 18 %(TBtu)

Net income decreased $11 million during the three months ended June 30, 2021 as compared to the three months ended June 30, 2020, primarily as a result of decreased total margins2 due primarily to the non-recurrence of net accelerated revenues recognized from cancelled LNG cargoes during the three months ended June 30, 2020 of $228 million, which was partially offset by increased revenue from increased volume of LNG delivered between the periods. Additionally, the decrease in net income was partially offset by decreased loss on modification or extinguishment of debt and decreased interest expense, net of capitalized interest.

Net income decreased by $99 million during the six months ended June 30, 2021 from the comparable period in 2020, primarily as a result of decreased total margins2 due primarily to the non-recurrence of accelerated revenues recognized from cancelled LNG cargoes during the six months ended June 30, 2020 of $244 million, which were partially offset by increased revenue from increased volume of LNG delivered between the periods. Net income also decreased due to increased loss on extinguishment of debt, which was partially offset by decreased interest expense, net of capitalized interest.

During the three and six months ended June 30, 2021, we recognized in income 313 and 630 TBtu, respectively, of LNG loaded from the SPL Project (defined below). Additionally, in the six months ended June 30, 2021, we recognized in income 8 TBtu of LNG which was procured by Sabine Pass Liquefaction, LLC ("SPL") from Cheniere Energy, Inc.'s Corpus Christi liquefaction facility.

During the three and six months ended June 30, 2020, we recognized $388 million and $404 million, respectively, in LNG revenues associated with cancelled LNG cargoes, of which $244 million would have been recognized subsequent to June 30, 2020 had the cargoes been lifted pursuant to the delivery schedules with the customers. LNG revenues during the three months ended June 30, 2020 excluded $16 million that would have otherwise been recognized during the quarter if the cargoes were lifted pursuant to the delivery schedules with the customers. We did not have any such revenue timing impacts during the three and six months ended June 30, 2021.

KEY FINANCIAL TRANSACTIONS

Year to date, SPL has entered into a series of note purchase agreements for the sale of approximately $347 million aggregate principal amount of Senior Secured Notes due 2037 (the "2037 SPL Private Placement Senior Secured Notes") on a private placement basis. The 2037 SPL Private Placement Senior Secured Notes are expected to be issued in the second half of 2021, subject to customary closing conditions, and the net proceeds are expected to be used to refinance a portion of SPL's outstanding 6.25% SPL Senior Secured Notes due 2022 and related fees, costs, and expenses. The 2037 SPL Private Placement Senior Secured Notes will be fully amortizing, with a weighted average life of over 10 years.

SABINE PASS LIQUEFACTION PROJECT UPDATE

As of July 31, 2021, approximately 1,350 cumulative LNG cargoes totaling over 90 million tonnes of LNG have been produced, loaded, and exported from the SPL Project.

Construction Progress as of June 30, 2021

SPL Project

Train 6

Project Status Under Construction

Project Completion Percentage ^(1) 89.6% ^(1)

Expected Substantial Completion 1H 2022

(1) Engineering 99.7% complete, procurement 99.9% complete, and construction 79.3% complete

SPL Project Overview

We own natural gas liquefaction facilities consisting of five operational liquefaction Trains and one additional Train under construction, with a total production capacity of approximately 30 million tonnes per annum ("mtpa") of LNG at the Sabine Pass LNG terminal (the "SPL Project").

DISTRIBUTIONS TO UNITHOLDERS

We declared a cash distribution of $0.665 per common unit to unitholders of record as of August 6, 2021 and the related general partner distribution to be paid on August 13, 2021.

INVESTOR CONFERENCE CALL AND WEBCAST

Cheniere Energy, Inc. will host a conference call to discuss its financial and operating results for the second quarter 2021 on Thursday, August 5, 2021, at 11 a.m. Eastern time / 10 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. The call and accompanying slide presentation may include financial and operating results or other information regarding Cheniere Partners.

(1) Engineering 99.7% complete, procurement 99.9% complete, and construction79.3% complete

SPL Project Overview

We own natural gas liquefaction facilities consisting of five operational liquefaction Trains and one additional Train under construction, with a total production capacity of approximately 30 million tonnes per annum ("mtpa") of LNG at the Sabine Pass LNG terminal (the "SPL Project").

DISTRIBUTIONS TO UNITHOLDERS

We declared a cash distribution of $0.665 per common unit to unitholders of record as of August 6, 2021 and the related general partner distribution to be paid on August 13, 2021.

INVESTOR CONFERENCE CALL AND WEBCAST

Cheniere Energy, Inc. will host a conference call to discuss its financial and operating results for the second quarter 2021 on Thursday, August 5, 2021, at 11 a.m. Eastern time / 10 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. The call and accompanying slide presentation may include financial and operating results or other information regarding Cheniere Partners.

^1 Non-GAAP financial measure. See "Reconciliation of Non-GAAP Measures" forfurther details.

^2 Total margins as used herein refers to total revenues less cost of sales.

About Cheniere Partners

Cheniere Partners owns the Sabine Pass LNG terminal located in Cameron Parish, Louisiana, which has natural gas liquefaction facilities consisting of five operational liquefaction Trains and one additional Train under construction, with a total production capacity of approximately 30 mtpa of LNG. The Sabine Pass LNG terminal also has operational regasification facilities that include five LNG storage tanks, vaporizers, and two marine berths with a third marine berth under construction. Cheniere Partners also owns the Creole Trail Pipeline, which interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines.

For additional information, please refer to the Cheniere Partners website at www.cheniere.com and Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed with the Securities and Exchange Commission.

Use of Non-GAAP Financial Measures

In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying news release contains a non-GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure that is used to facilitate comparisons of operating performance across periods. This non-GAAP measure 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 the reconciliation from these results should be carefully evaluated.

Forward-Looking Statements

This press release contains certain statements that may include "forward-looking statements." 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 Partners' 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 Partners' LNG terminal and liquefaction business, (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 regarding the COVID-19 pandemic and its impact on our business and operating results. Although Cheniere Partners 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 Partners' 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 Partners' 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 Partners does not assume a duty to update these forward-looking statements.

(Financial Tables Follow)





Cheniere Energy Partners, L.P.

Consolidated Statements of Income

(in millions, except per unit data)^(1)

(unaudited)

Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Revenues

LNG revenues $ 1,597 $ 1,332 $ 3,266 $ 2,781

LNG revenues-affiliate 211 61 425 249

Regasification revenues 67 68 134 135

Other revenues 14 9 27 23

Total revenues 1,889 1,470 3,852 3,188



Operating costs and expenses

Cost of sales (excludingitems shown separately 888 398 1,836 1,097 below)

Cost of sales-affiliate 12 5 54 5

Cost of sales-related 1 - 1 - party

Operating and maintenance 168 165 317 317 expense

Operating and maintenance 35 48 69 81 expense-affiliate

Operating and maintenance 12 - 22 - expense-related party

Development expense 1 - 1 -

General and 3 8 5 10 administrative expense

General andadministrative 21 24 42 49 expense-affiliate

Depreciation and 138 138 277 276 amortization expense

Impairment expense andloss on disposal of 6 - 6 5 assets

Total operating costs and 1,285 786 2,630 1,840 expenses



Income from operations 604 684 1,222 1,348



Other income (expense)

Interest expense, net of (209 ) (236 ) (426 ) (470 ) capitalized interest

Loss on modification or - (42 ) (54 ) (43 ) extinguishment of debt

Other income, net - - - 6

Total other expense (209 ) (278 ) (480 ) (507 )



Net income $ 395 $ 406 $ 742 $ 841



Basic and diluted net $ 0.73 $ 0.78 $ 1.38 $ 1.62 income per common unit



Weighted average numberof common unitsoutstanding used for 484.0 348.6 484.0 348.6 basic and diluted netincome per common unitcalculation

_________________

Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on(1) Form 10-Q for the quarter ended June 30, 2021, filed with the Securities and Exchange Commission.

Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

(in millions, except unit data) (1)

June 30,

December 31,

2021

2020

ASSETS

(unaudited)

Current assets

Cash and cash equivalents

$

1,239

$

1,210

Restricted cash

65

97

Accounts and other receivables, net of current expected credit losses

285

318

Accounts receivable-affiliate

65

184

Advances to affiliate

154

144

Inventory

116

107

Current derivative assets

23

14

Other current assets

97

61

Other current assets-affiliate

1

-

Total current assets

2,045

2,135

Property, plant and equipment, net of accumulated depreciation

16,789

16,723

Operating lease assets, net of accumulated amortization

95

99

Debt issuance costs, net of accumulated amortization

14

17

Derivative assets

21

11

Other non-current assets, net

159

160

Total assets

$

19,123

$

19,145

LIABILITIES AND PARTNERS' EQUITY

Current liabilities

Accounts payable

$

16

$

12

Accrued liabilities

649

658

Accrued liabilities-related party

4

4

Current debt, net of discount and debt issuance costs

654

-

Due to affiliates

38

53

Deferred revenue

105

137

Deferred revenue-affiliate

11

1

Current operating lease liabilities

8

7

Current derivative liabilities

21

11

Total current liabilities

1,506

883

Long-term debt, net of premium, discount and debt issuance costs

16,935

17,580

Operating lease liabilities

87

90

Derivative liabilities

8

35

Other non-current liabilities

-

1

Other non-current liabilities-affiliate

16

17

Partners' equity

Common unitholders' interest (484.0 million units issued and outstanding at both June 30, 2021 and December 31, 2020)

805

714

General partner's interest (2% interest with 9.9 million units issued and outstanding at June 30, 2021 and December 31, 2020)

(234)

(175)

Total partners' equity

571

539

Total liabilities and partners' equity

$

19,123

$

19,145

_________________





Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

(in millions, except unit data) ^(1)

June 30, December 31,

2021 2020

ASSETS (unaudited)

Current assets

Cash and cash equivalents $ 1,239 $ 1,210

Restricted cash 65 97

Accounts and other receivables, net of current 285 318 expected credit losses

Accounts receivable-affiliate 65 184

Advances to affiliate 154 144

Inventory 116 107

Current derivative assets 23 14

Other current assets 97 61

Other current assets-affiliate 1 -

Total current assets 2,045 2,135



Property, plant and equipment, net of accumulated 16,789 16,723 depreciation

Operating lease assets, net of accumulated 95 99 amortization

Debt issuance costs, net of accumulated amortization 14 17

Derivative assets 21 11

Other non-current assets, net 159 160

Total assets $ 19,123 $ 19,145



LIABILITIES AND PARTNERS' EQUITY

Current liabilities

Accounts payable $ 16 $ 12

Accrued liabilities 649 658

Accrued liabilities-related party 4 4

Current debt, net of discount and debt issuance costs 654 -

Due to affiliates 38 53

Deferred revenue 105 137

Deferred revenue-affiliate 11 1

Current operating lease liabilities 8 7

Current derivative liabilities 21 11

Total current liabilities 1,506 883



Long-term debt, net of premium, discount and debt 16,935 17,580 issuance costs

Operating lease liabilities 87 90

Derivative liabilities 8 35

Other non-current liabilities - 1

Other non-current liabilities-affiliate 16 17



Partners' equity

Common unitholders' interest (484.0 million unitsissued and outstanding at both June 30, 2021 and 805 714 December 31, 2020)

General partner's interest (2% interest with 9.9million units issued and outstanding at June 30, 2021 (234) (175) and December 31, 2020)

Total partners' equity 571 539

Total liabilities and partners' equity $ 19,123 $ 19,145

_________________

Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on(1) Form 10-Q for the quarter ended June 30, 2021, filed with the Securities and Exchange Commission.

Reconciliation of Non-GAAP Measures Regulation G Reconciliations

Adjusted EBITDA

The following table reconciles our Adjusted EBITDA to U.S. GAAP results for the three and six months ended June 30, 2021 and 2020 (in millions):

Three Months Six Months Ended June Ended June 30, 30,

2021 2020 2021 2020

Net income $ 395 $ 406 $ 742 $ 841

Interest expense, net of capitalized 209 236 426 470 interest

Loss on modification or - 42 54 43 extinguishment of debt

Other income, net - - - (6 )

Income from operations $ 604 $ 684 $ 1,222 $ 1,348

Adjustments to reconcile income from operations to Adjusted EBITDA:

Depreciation and amortization expense 138 138 277 276

Gain from changes in fair value of (58 ) (9 ) (36 ) (26 )commodity derivatives, net^ (1)

Impairment expense and loss on 6 - 6 5 disposal of assets

Incremental costs associated with - 33 - 35 COVID-19 response

Adjusted EBITDA $ 690 $ 846 $ 1,469 $ 1,638

(1)

Change in fair value of commodity derivatives prior to contractual delivery or termination

Adjusted EBITDA is commonly used as a supplemental financial measure by our management and external users of our consolidated financial statements to assess the financial performance of our assets without regard to financing methods, capital structures, or historical cost basis. 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 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 financial and operating performance.

Adjusted EBITDA is calculated by taking net income before interest expense, net of capitalized interest, 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 derivatives prior to contractual delivery or termination, and non-recurring costs related to our response to the COVID-19 outbreak which are incremental to and separable from normal operations. The change in fair value of commodity derivatives is considered in determining Adjusted EBITDA given that the timing of recognizing gains and losses on these derivative contracts differs from the recognition of the related item economically hedged. 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.

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