HOUSTON--(BUSINESS WIRE)-- Cheniere Energy, Inc. (“Cheniere”) (NYSE: LNG) today announced its financial results for the second quarter 2024.
SECOND QUARTER 2024 SUMMARY FINANCIAL RESULTS
(in billions)
Three Months Ended
June 30, 2024
Six Months Ended
June 30, 2024
Consolidated Adjusted EBITDA 2
Distributable Cash Flow 2
2024 FULL YEAR FINANCIAL GUIDANCE
(in billions)
2024 Previous
2024 Revised
Consolidated Adjusted EBITDA 2
Distributable Cash Flow 2
RECENT HIGHLIGHTS
CEO COMMENT
“The second quarter of 2024 marked another outstanding quarter for Cheniere, highlighting our team’s ability to execute safely, reliably and strategically throughout our business,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “Our strong financial and operational results year-to-date, coupled with our constructive outlook for the remainder of the year, have enabled us to increase our full year 2024 Consolidated Adjusted EBITDA and Distributable Cash Flow guidance ranges. For the remainder of the year, we are focused on executing on our recently updated capital allocation plan and upholding our track record for operational excellence and safety while advancing future growth across our leading infrastructure platform to reliably meet the energy needs of our customers worldwide.”
SUMMARY AND REVIEW OF FINANCIAL RESULTS
(in millions, except LNG data)
Three Months Ended June 30,
Six Months Ended June 30,
Consolidated Adjusted EBITDA 2
Number of cargoes
LNG volumes loaded (TBtu)
Net income 1 decreased approximately $489 million and $5.4 billion for the three and six months ended June 30, 2024, respectively, as compared to the corresponding 2023 periods. The decrease for the three months ended June 30, 2024 was primarily attributable to lower total margins per MMBtu of LNG delivered compared to the prior period (further described below), as well as a $176 million unfavorable variance due to a gain of $606 million for the three months ended June 30, 2024, as compared to a gain of $782 million in the corresponding 2023 period, related to changes in the fair value of our derivative instruments (before tax and non-controlling interests) (further described below). The decrease for the six months ended June 30, 2024 was primarily attributable to an approximately $5.2 billion unfavorable variance due to a gain of $321 million for the six months ended June 30, 2024, as compared to a gain of $5.5 billion in the corresponding 2023 period, related to changes in the fair value of our derivative instruments (before tax and non-controlling interests). The unfavorable variances for the three and six months ended June 30, 2024 were partially offset by lower provisions for income tax, as well as lower net income attributable to non-controlling interests for both periods.
Consolidated Adjusted EBITDA decreased approximately $536 million and $2.4 billion for the three and six months ended June 30, 2024, respectively, as compared to the corresponding 2023 periods. The decreases were primarily due to moderating international gas prices and the higher proportion of our LNG being sold under long-term contracts, resulting in lower total margins per MMBtu of LNG delivered compared to the prior period.
A significant portion of the derivative gains (losses) relate to the use of commodity derivative instruments indexed to international gas and LNG prices, primarily related to our long-term Integrated Production Marketing (“IPM”) agreements. Our IPM agreements are designed to provide stable margins on purchases of natural gas and sales of LNG over the life of the agreements and have a fixed fee component, similar to that of LNG sold under our long-term, fixed fee LNG SPAs. However, the long-term duration and international price basis of our IPM agreements make them particularly susceptible to fluctuations in fair market value from period to period. In addition, accounting requirements prescribe recognition of these long-term gas supply agreements at fair value each reporting period on a mark-to-market basis, but do not currently permit mark-to-market recognition of the associated sale of LNG, resulting in a mismatch of accounting recognition for the purchase of natural gas and sale of LNG. As a result of continued moderation of international gas price volatility and changes in international forward commodity curves during the three and six months ended June 30, 2024, we recognized $819 million and $494 million, respectively, of non-cash favorable changes in fair value attributable to such positions (before tax and non-controlling interests), compared to $593 million and $4.6 billion of non-cash favorable changes in fair value in the corresponding 2023 periods, respectively.
Share-based compensation expenses included in net income totaled $52 million and $92 million for the three and six months ended June 30, 2024, respectively, compared to $36 million and $86 million for the corresponding 2023 periods, respectively.
Our financial results are reported on a consolidated basis. Our ownership interest in Cheniere Partners as of June 30, 2024 consisted of 100% ownership of the general partner and a 48.6% limited partner interest.
BALANCE SHEET MANAGEMENT
Capital Resources
The table below provides a summary of our available liquidity (in millions) as of June 30, 2024:
June 30, 2024
Cash and cash equivalents (1)
Restricted cash and cash equivalents (2)
Available commitments under our credit facilities:
SPL Revolving Credit Facility
Cheniere Partners Revolving Credit Facility
CCH Credit Facility
CCH Working Capital Facility
Cheniere Revolving Credit Facility
Total available commitments under our credit facilities
Total available liquidity
(1) $351 million of cash and cash equivalents was held by our consolidated variable interest entities (“VIEs”).
(2) $79 million of restricted cash and cash equivalents was held by our consolidated VIEs.
Recent Key Financial Transactions and Updates
In May 2024, Cheniere Partners issued $1.2 billion aggregate principal amount of 5.750% Senior Notes due 2034. In June 2024, the net proceeds, together with cash on hand, were used to retire $1.2 billion outstanding aggregate principal amount of SPL’s 5.625% Senior Secured Notes due 2025.
During the three and six months ended June 30, 2024 respectively, SPL repaid the remaining $150 million and $300 million in principal amount of its 5.750% Senior Secured Notes due 2024 with cash on hand.
LIQUEFACTION PROJECTS OVERVIEW
Through Cheniere Partners, we operate six natural gas liquefaction Trains for a total production capacity of approximately 30 mtpa of LNG at the Sabine Pass LNG terminal in Cameron Parish, Louisiana (the “SPL Project”).
SPL Expansion Project
Through Cheniere Partners, we are developing an expansion adjacent to the SPL Project with an expected total production capacity of up to approximately 20 mtpa of LNG (the “SPL Expansion Project”), inclusive of estimated debottlenecking opportunities. In February 2024, certain subsidiaries of Cheniere Partners submitted an application to the FERC for authorization to site, construct and operate the SPL Expansion Project, as well as an application to the DOE requesting authorization to export LNG to Free-Trade Agreement (“FTA”) and non-FTA countries, both of which applications exclude debottlenecking.
We operate three natural gas liquefaction Trains for a total production capacity of approximately 15 mtpa of LNG at the Corpus Christi LNG terminal near Corpus Christi, Texas (the “CCL Project”).
CCL Stage 3 Project
We are constructing an expansion adjacent to the CCL Project consisting of seven midscale Trains with an expected total production capacity of over 10 mtpa of LNG (the “CCL Stage 3 Project”). First LNG production from the first train of the CCL Stage 3 Project is currently forecast to be achieved by the end of 2024.
CCL Stage 3 Project Progress as of June 30, 2024:
CCL Stage 3 Project
Project Completion Percentage
Expected Substantial Completion
1H 2025 - 2H 2026
(1) Engineering 93.7% complete, procurement 80.3% complete, subcontract work 83.9% complete and construction 24.4% complete.
CCL Midscale Trains 8 & 9 Project
We are developing two additional midscale Trains with an expected total production capacity of approximately 3 mtpa of LNG (the “CCL Midscale Trains 8 & 9 Project”) adjacent to the CCL Stage 3 Project. In March 2023, certain of our subsidiaries filed an application with the FERC for authorization to site, construct and operate the CCL Midscale Trains 8 & 9 Project, and in April 2023, filed an application with the DOE requesting authorization to export LNG to FTA and non-FTA countries. In July 2023, we received authorization from the DOE to export LNG to FTA countries. In June 2024, we received a positive EA from the FERC and anticipate receiving all remaining necessary regulatory approvals for the project in 2025.
INVESTOR CONFERENCE CALL AND WEBCAST
We will host a conference call to discuss our financial and operating results for the second quarter 2024 on Thursday, August 8, 2024, 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.
1 Net income as used herein refers to Net income attributable to Cheniere Energy, Inc. on our Consolidated Statements of Operations.
2 Non-GAAP financial measure. See “Reconciliation of Non-GAAP Measures” for further details.
About Cheniere
Cheniere Energy, Inc. is the leading producer and exporter of 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 total production capacity of approximately 45 mtpa of LNG in operation and an additional 10+ mtpa of expected production capacity 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, 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 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.
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.
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 regulatory authorization and approval expectations, (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, (vii) statements relating to Cheniere’s capital deployment, including intent, ability, extent, and timing of capital expenditures, debt repayment, dividends, share repurchases and execution on the capital allocation plan, and (viii) statements relating to our goals, commitments and strategies in relation to environmental matters. 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 and Supplementary Information Follow)
LNG VOLUME SUMMARY
As of August 2, 2024, approximately 3,570 cumulative LNG cargoes totaling over 245 million tonnes of LNG have been produced, loaded and exported from our liquefaction projects.
During the three and six months ended June 30, 2024, we exported 553 and 1,155 TBtu, respectively, of LNG from our liquefaction projects. 30 TBtu of LNG exported from our liquefaction projects and sold on a delivered basis was in transit as of June 30, 2024, none of which was related to commissioning activities.
The following table summarizes the volumes of 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 six months ended June 30, 2024:
Three Months Ended
June 30, 2024
Six Months Ended
June 30, 2024