Business Wire | Nov 4, 2021 08:00AM EDT

Cheniere Partners Reports Third Quarter Results and Provides Full Year 2022 Distribution Guidance

Nov. 04, 2021

HOUSTON--(BUSINESS WIRE)--Nov. 04, 2021--Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE American: CQP) today announced its financial results for the third quarter of 2021.

HIGHLIGHTS

* Net income of $381 million and $1.1 billion for the three and nine months ended September 30, 2021, respectively. * Adjusted EBITDA1 of $738 million and $2.2 billion for the three and nine months ended September 30, 2021, respectively. * Declared a distribution of $0.680 per common unit that will be paid on November 12, 2021 to unitholders of record as of November 5, 2021. * Reconfirming full year 2021 distribution guidance of $2.60 - $2.70 per unit. * Introducing full year 2022 distribution guidance of $3.00 - $3.25 per unit. * In September 2021, feed gas was introduced into Train 6 of the SPL Project (defined below) as part of the commissioning process. Train 6 is expected to achieve substantial completion in the first quarter of 2022.

2021 FULL YEAR DISTRIBUTION GUIDANCE

2021

Distribution per Unit $ 2.60 - $ 2.70



2022 FULL YEAR DISTRIBUTION GUIDANCE

2022

Distribution per Unit $ 3.00 - $ 3.25

SUMMARY AND REVIEW OF FINANCIAL RESULTS

(in millions, except LNG data)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

% Change

2021

2020

% Change

Revenues

$

2,324

$

982

137

%

$

6,176

$

4,170

48

%

Net income (loss)

$

381

$

(67

)

nm

$

1,123

$

774

45

%

Adjusted EBITDA1

$

738

$

352

110

%

$

2,207

$

1,990

11

%

LNG exported:

Number of cargoes

86

36

139

%

262

186

41

%

Volumes (TBtu)

307

126

144

%

939

656

43

%

LNG volumes loaded (TBtu)

308

122

152

%

938

656

43

%

Net income increased $448 million and $349 million during the three and nine months ended September 30, 2021, respectively, as compared to the corresponding 2020 periods, primarily due to increased revenues from higher volumes of LNG delivered, while higher prices per MMBtu of LNG delivered were offset by higher feedstock costs.

During the three and nine months ended September 30, 2021, we recognized in income 308 and 938 TBtu, respectively, of LNG loaded from the SPL Project. Additionally, in the nine months ended September 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 nine months ended September 30, 2020, we recognized $109 million and $513 million, respectively, in LNG revenues associated with cancelled LNG cargoes, of which $21 million would have been recognized subsequent to September 30, 2020 had the cargoes been lifted pursuant to the delivery schedules with the customers. LNG revenues during the three months ended September 30, 2020 excluded $244 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 nine months ended September 30, 2021.

KEY FINANCIAL TRANSACTIONS

In September 2021, we issued $1.2 billion of 3.25% Senior Notes due 2032 (the "2032 CQP Senior Notes"). Net proceeds from the 2032 CQP Senior Notes were used to redeem a portion of the outstanding $1.1 billion aggregate principal amount of the 5.625% Senior Notes due 2026 (the "2026 CQP Senior Notes") in September 2021 pursuant to a tender offer and consent solicitation. In October 2021, the remaining net proceeds from the 2032 CQP Senior Notes were used to redeem the remaining outstanding aggregate principal amount of the 2026 CQP Senior Notes and, together with cash on hand, redeem $318 million of the 6.25% Senior Secured Notes due 2022 (the "2022 SPL Senior Notes").

During 2021, SPL entered into a series of note purchase agreements for the sale of approximately $482 million aggregate principal amount of Senior Secured Notes due 2037, on a private placement basis (the "2037 SPL Private Placement Senior Secured Notes"). The 2037 SPL Private Placement Senior Secured Notes are expected to be issued in the fourth quarter of 2021, subject to customary closing conditions, and the net proceeds will be used to redeem a portion of SPL's outstanding 2022 SPL Senior Notes. The 2037 SPL Private Placement Senior Secured Notes will be fully amortizing, with a weighted average life of over 10 years and a weighted average interest rate of 3.07%.

SABINE PASS LIQUEFACTION PROJECT UPDATE

As of October 31, 2021, over 1,430 cumulative LNG cargoes totaling approximately 110 million tonnes of LNG have been produced, loaded, and exported from the SPL Project.

SUMMARY AND REVIEW OF FINANCIAL RESULTS



(in millions, except Three Months Ended Nine Months EndedLNG data) September 30, September 30,

2021 2020 % 2021 2020 % Change Change

Revenues $ 2,324 $ 982 137 % $ 6,176 $ 4,170 48 %

Net income (loss) $ 381 $ (67 ) nm $ 1,123 $ 774 45 %

Adjusted EBITDA^1 $ 738 $ 352 110 % $ 2,207 $ 1,990 11 %

LNG exported:

Number of cargoes 86 36 139 % 262 186 41 %

Volumes (TBtu) 307 126 144 % 939 656 43 %

LNG volumes loaded 308 122 152 % 938 656 43 %(TBtu)

Net income increased $448 million and $349 million during the three and nine months ended September 30, 2021, respectively, as compared to the corresponding 2020 periods, primarily due to increased revenues from higher volumes of LNG delivered, while higher prices per MMBtu of LNG delivered were offset by higher feedstock costs.

During the three and nine months ended September 30, 2021, we recognized in income 308 and 938 TBtu, respectively, of LNG loaded from the SPL Project. Additionally, in the nine months ended September 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 nine months ended September 30, 2020, we recognized $109 million and $513 million, respectively, in LNG revenues associated with cancelled LNG cargoes, of which $21 million would have been recognized subsequent to September 30, 2020 had the cargoes been lifted pursuant to the delivery schedules with the customers. LNG revenues during the three months ended September 30, 2020 excluded $244 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 nine months ended September 30, 2021.

KEY FINANCIAL TRANSACTIONS

In September 2021, we issued $1.2 billion of 3.25% Senior Notes due 2032 (the "2032 CQP Senior Notes"). Net proceeds from the 2032 CQP Senior Notes were used to redeem a portion of the outstanding $1.1 billion aggregate principal amount of the 5.625% Senior Notes due 2026 (the "2026 CQP Senior Notes") in September 2021 pursuant to a tender offer and consent solicitation. In October 2021, the remaining net proceeds from the 2032 CQP Senior Notes were used to redeem the remaining outstanding aggregate principal amount of the 2026 CQP Senior Notes and, together with cash on hand, redeem $318 million of the 6.25% Senior Secured Notes due 2022 (the "2022 SPL Senior Notes").

During 2021, SPL entered into a series of note purchase agreements for the sale of approximately $482 million aggregate principal amount of Senior Secured Notes due 2037, on a private placement basis (the "2037 SPL Private Placement Senior Secured Notes"). The 2037 SPL Private Placement Senior Secured Notes are expected to be issued in the fourth quarter of 2021, subject to customary closing conditions, and the net proceeds will be used to redeem a portion of SPL's outstanding 2022 SPL Senior Notes. The 2037 SPL Private Placement Senior Secured Notes will be fully amortizing, with a weighted average life of over 10 years and a weighted average interest rate of 3.07%.

SABINE PASS LIQUEFACTION PROJECT UPDATE

As of October 31, 2021, over 1,430 cumulative LNG cargoes totaling approximately 110 million tonnes of LNG have been produced, loaded, and exported from the SPL Project.

Construction Progress as of September 30, 2021

SPL Project

Train 6

Project Status Commissioning

Project Completion Percentage ^(1) 97.1% ^(1)

Expected Substantial Completion 1Q 2022

(1)

Engineering 100.0% complete, procurement 100.0% complete, and construction 92.9% complete

SPL Project Overview

We own natural gas liquefaction facilities consisting of five operational liquefaction Trains and one additional Train in commissioning, with a total production capacity of approximately 30 million tonnes per annum ("mtpa") of LNG at the Sabine Pass LNG terminal (the "SPL Project"). Train 6 is expected to reach substantial completion in the first quarter of 2022.

DISTRIBUTIONS TO UNITHOLDERS

We declared a cash distribution of $0.680 per common unit to unitholders of record as of November 5, 2021 and the related general partner distribution to be paid on November 12, 2021.

INVESTOR CONFERENCE CALL AND WEBCAST

Cheniere Energy, Inc. will host a conference call to discuss its financial and operating results for the third quarter 2021 on Thursday, November 4, 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 100.0% complete, procurement 100.0% complete, and construction 92.9% complete

SPL Project Overview

We own natural gas liquefaction facilities consisting of five operational liquefaction Trains and one additional Train in commissioning, with a total production capacity of approximately 30 million tonnes per annum ("mtpa") of LNG at the Sabine Pass LNG terminal (the "SPL Project"). Train 6 is expected to reach substantial completion in the first quarter of 2022.

DISTRIBUTIONS TO UNITHOLDERS

We declared a cash distribution of $0.680 per common unit to unitholders of record as of November 5, 2021 and the related general partner distribution to be paid on November 12, 2021.

INVESTOR CONFERENCE CALL AND WEBCAST

Cheniere Energy, Inc. will host a conference call to discuss its financial and operating results for the third quarter 2021 on Thursday, November 4, 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" for further details.

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 in commissioning, 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 September 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 Operations

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

(unaudited)



Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Revenues

LNG revenues $ 1,791 $ 807 $ 5,057 $ 3,588

LNG revenues-affiliate 453 103 878 352

Regasification revenues 68 67 202 202

Other revenues 12 5 39 28

Total revenues 2,324 982 6,176 4,170



Operating costs and expenses

Cost of sales (excluding items 1,342 454 3,178 1,551 shown separately below)

Cost of sales-affiliate 8 33 62 38

Cost of sales-related party - - 1 -

Operating and maintenance 148 146 465 463 expense

Operating and maintenance 34 34 103 115 expense-affiliate

Operating and maintenance 12 - 34 - expense-related party

Development expense - - 1 -

General and administrative 2 2 7 12 expense

General and administrative 22 24 64 73 expense-affiliate

Depreciation and amortization 140 137 417 413 expense

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

Total operating costs and 1,708 830 4,338 2,670 expenses



Income from operations 616 152 1,838 1,500



Other income (expense)

Interest expense, net of (210 ) (221 ) (636 ) (691 )capitalized interest

Loss on modification or (27 ) - (81 ) (43 )extinguishment of debt

Other income, net 2 2 2 8

Total other expense (235 ) (219 ) (715 ) (726 )



Net income (loss) $ 381 $ (67 ) $ 1,123 $ 774



Basic and diluted net income $ 0.69 $ (0.08 ) $ 2.07 $ 1.55 (loss) per common unit



Weighted average number ofcommon units outstanding usedfor basic and diluted net 484.0 414.8 484.0 370.9 income (loss) per common unitcalculation

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

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

Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

(in millions, except unit data) (1)

September 30,

December 31,

2021

2020

ASSETS

(unaudited)

Current assets

Cash and cash equivalents

$

1,713

$

1,210

Restricted cash

133

97

Accounts and other receivables, net of current expected credit losses

358

318

Accounts receivable-affiliate

198

184

Advances to affiliate

130

144

Inventory

134

107

Current derivative assets

44

14

Other current assets

105

61

Total current assets

2,815

2,135

Property, plant and equipment, net of accumulated depreciation

16,820

16,723

Operating lease assets, net of accumulated amortization

93

99

Debt issuance costs, net of accumulated amortization

13

17

Derivative assets

25

11

Other non-current assets, net

163

160

Total assets

$

19,929

$

19,145

LIABILITIES AND PARTNERS' EQUITY

Current liabilities

Accounts payable

$

14

$

12

Accrued liabilities

846

658

Accrued liabilities-related party

5

4

Current debt, net of discount and debt issuance costs

944

-

Due to affiliates

45

53

Deferred revenue

166

137

Deferred revenue-affiliate

4

1

Current operating lease liabilities

8

7

Current derivative liabilities

23

11

Total current liabilities

2,055

883

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

17,171

17,580

Non-current deferred revenue

1

-

Operating lease liabilities

85

90

Derivative liabilities

13

35

Other non-current liabilities

-

1

Other non-current liabilities-affiliate

15

17

Partners' equity

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

856

714

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

(267

)

(175

)

Total partners' equity

589

539

Total liabilities and partners' equity

$

19,929

$

19,145

Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

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

September December 30, 31,

2021 2020

ASSETS (unaudited)

Current assets

Cash and cash equivalents $ 1,713 $ 1,210

Restricted cash 133 97

Accounts and other receivables, net of current 358 318 expected credit losses

Accounts receivable-affiliate 198 184

Advances to affiliate 130 144

Inventory 134 107

Current derivative assets 44 14

Other current assets 105 61

Total current assets 2,815 2,135



Property, plant and equipment, net of accumulated 16,820 16,723 depreciation

Operating lease assets, net of accumulated 93 99 amortization

Debt issuance costs, net of accumulated amortization 13 17

Derivative assets 25 11

Other non-current assets, net 163 160

Total assets $ 19,929 $ 19,145



LIABILITIES AND PARTNERS' EQUITY

Current liabilities

Accounts payable $ 14 $ 12

Accrued liabilities 846 658

Accrued liabilities-related party 5 4

Current debt, net of discount and debt issuance costs 944 -

Due to affiliates 45 53

Deferred revenue 166 137

Deferred revenue-affiliate 4 1

Current operating lease liabilities 8 7

Current derivative liabilities 23 11

Total current liabilities 2,055 883



Long-term debt, net of premium, discount and debt 17,171 17,580 issuance costs

Non-current deferred revenue 1 -

Operating lease liabilities 85 90

Derivative liabilities 13 35

Other non-current liabilities - 1

Other non-current liabilities-affiliate 15 17



Partners' equity

Common unitholders' interest (484.0 million unitsissued and outstanding at both September 30, 2021 and 856 714 December 31, 2020)

General partner's interest (2% interest with 9.9million units issued and outstanding at September 30, (267 ) (175 )2021 and December 31, 2020)

Total partners' equity 589 539

Total liabilities and partners' equity $ 19,929 $ 19,145

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

______________ Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on(1) Form 10-Q for the quarter ended September 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 nine months ended September 30, 2021 and 2020 (in millions):

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net income (loss)

$

381

$

(67

)

$

1,123

$

774

Interest expense, net of capitalized interest

210

221

636

691

Loss on modification or extinguishment of debt

27

-

81

43

Other income, net

(2

)

(2

)

(2

)

(8

)

Income from operations

$

616

$

152

$

1,838

$

1,500

Adjustments to reconcile income from operations to Adjusted EBITDA:

Depreciation and amortization expense

140

137

417

413

Loss (gain) from changes in fair value of commodity derivatives, net (1)

(18

)

62

(54

)

36

Impairment expense and loss on disposal of assets

-

-

6

5

Incremental costs associated with COVID-19 response

-

1

-

36

Adjusted EBITDA

$

738

$

352

$

2,207

$

1,990

Reconciliation of Non-GAAP Measures

Regulation G Reconciliations

Adjusted EBITDA

The following table reconciles our Adjusted EBITDA to U.S. GAAP results for thethree and nine months ended September 30, 2021 and 2020 (in millions):

Three Months Nine Months Ended Ended September September 30, 30,

2021 2020 2021 2020

Net income (loss) $ 381 $ (67 ) $ 1,123 $ 774

Interest expense, net of capitalized 210 221 636 691 interest

Loss on modification or 27 - 81 43 extinguishment of debt

Other income, net (2 ) (2 ) (2 ) (8 )

Income from operations $ 616 $ 152 $ 1,838 $ 1,500

Adjustments to reconcile income from operations to Adjusted EBITDA:

Depreciation and amortization 140 137 417 413 expense

Loss (gain) from changes in fairvalue of commodity derivatives, net^ (18 ) 62 (54 ) 36 (1)

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

Incremental costs associated with - 1 - 36 COVID-19 response

Adjusted EBITDA $ 738 $ 352 $ 2,207 $ 1,990

(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 (loss) 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104005148/en/

CONTACT: Cheniere Partners Investors Randy Bhatia 713-375-5479

CONTACT: Media Relations Eben Burnham-Snyder 713-375-5764