2018 Form 10-K Financial Statement

#000138365019000005 Filed on February 26, 2019

View on sec.gov

Income Statement

Concept 2018 2017 Q4 2017 Q3
Revenue $6.426B $1.518B $903.0M
YoY Change 49.3% 175.5% 172.81%
Cost Of Revenue $3.403B $857.0M $490.0M
YoY Change 46.68% 226.85% 208.18%
Gross Profit $3.023B $661.0M $413.0M
YoY Change 52.37% 129.2% 140.12%
Gross Profit Margin 47.04% 43.54% 45.74%
Selling, General & Admin $84.00M $19.00M $23.00M
YoY Change -8.7% -25.49% -16.06%
% of Gross Profit 2.78% 2.87% 5.57%
Research & Development $2.000M $1.000M $1.000M
YoY Change -33.33%
% of Gross Profit 0.07% 0.15% 0.24%
Depreciation & Amortization $424.0M $100.0M $87.00M
YoY Change 25.07% 57.23% 97.73%
% of Gross Profit 14.03% 15.13% 21.07%
Operating Expenses $4.447B $121.0M $706.0M
YoY Change 41.26% 35.96% 149.47%
Operating Profit $1.979B $540.0M $197.0M
YoY Change 71.19% 171.36% 310.42%
Interest Expense $733.0M -$171.0M $153.0M
YoY Change 19.38% 77.57% 34.21%
% of Operating Profit 37.04% -31.67% 77.66%
Other Income/Expense, Net -$705.0M $5.000M -$174.0M
YoY Change 5.86% 900.0% 33.85%
Pretax Income $1.274B $374.0M $23.00M
YoY Change 160.0% 338.45% -128.22%
Income Tax
% Of Pretax Income
Net Earnings $1.274B $374.0M $23.00M
YoY Change 160.0% 334.88% -128.05%
Net Earnings / Revenue 19.83% 24.64% 2.55%
Basic Earnings Per Share
Diluted Earnings Per Share $2.632M $655.5K $53.09K
COMMON SHARES
Basic Shares Outstanding
Diluted Shares Outstanding

Balance Sheet

Concept 2018 2017 Q4 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $0.00 $0.00 $0.00
YoY Change -100.0%
Cash & Equivalents $0.00 $0.00 $0.00
Short-Term Investments
Other Short-Term Assets $1.567B $65.00M $35.00M
YoY Change -5.26% 124.14% 116.26%
Inventory $99.00M $95.00M $77.00M
Prepaid Expenses
Receivables $672.0M $384.0M $229.0M
Other Receivables $18.00M $6.000M $18.00M
Total Short-Term Assets $2.356B $2.139B $1.754B
YoY Change 10.14% 123.28% 116.97%
LONG-TERM ASSETS
Property, Plant & Equipment $15.39B $15.14B $15.10B
YoY Change 1.66% 6.93% 9.49%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $0.00
YoY Change
Other Assets $71.00M $206.0M $213.0M
YoY Change -74.18% -7.21% -1.81%
Total Long-Term Assets $15.62B $15.41B $15.44B
YoY Change 1.32% 5.69% 9.22%
TOTAL ASSETS
Total Short-Term Assets $2.356B $2.139B $1.754B
Total Long-Term Assets $15.62B $15.41B $15.44B
Total Assets $17.97B $17.55B $17.19B
YoY Change 2.4% 12.94% 15.05%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $15.00M $12.00M $24.00M
YoY Change 25.0% -55.56% 18.03%
Accrued Expenses $821.0M $637.0M $419.0M
YoY Change 28.89% 52.39% 8.17%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $0.00 $0.00
YoY Change -100.0% -100.0%
Total Short-Term Liabilities $1.068B $829.0M $637.0M
YoY Change 28.83% -3.15% -72.45%
LONG-TERM LIABILITIES
Long-Term Debt $16.07B $16.05B $16.04B
YoY Change 0.12% 12.93% 31.52%
Other Long-Term Liabilities $40.00M $11.00M $29.00M
YoY Change 2.56% 17265.27%
Total Long-Term Liabilities $16.11B $16.06B $16.04B
YoY Change 0.13% 13.01% 31.52%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.068B $829.0M $637.0M
Total Long-Term Liabilities $16.11B $16.06B $16.04B
Total Liabilities $17.17B $16.89B $16.68B
YoY Change 1.54% 12.09% 14.95%
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $800.0M $639.0M $485.0M
YoY Change
Total Liabilities & Shareholders Equity $17.97B $17.55B $17.19B
YoY Change 2.4% 12.94% 15.05%

Cashflow Statement

Concept 2018 2017 Q4 2017 Q3
OPERATING ACTIVITIES
Net Income $1.274B $374.0M $23.00M
YoY Change 160.0% 334.88% -128.05%
Depreciation, Depletion And Amortization $424.0M $100.0M $87.00M
YoY Change 25.07% 57.23% 97.73%
Cash From Operating Activities $1.874B $464.0M $189.0M
YoY Change 91.81% 1010.05% 237.5%
INVESTING ACTIVITIES
Capital Expenditures $804.0M -$95.00M -$297.0M
YoY Change -37.67% -77.96% -55.0%
Acquisitions
YoY Change
Other Investing Activities $0.00 $0.00 $0.00
YoY Change -100.0%
Cash From Investing Activities -$804.0M -$95.00M -$297.0M
YoY Change -37.67% -77.93% -55.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -$1.118B -223.0M -12.00M
YoY Change -186.2% -156.0% -101.66%
NET CHANGE
Cash From Operating Activities $1.874B 464.0M 189.0M
Cash From Investing Activities -$804.0M -95.00M -297.0M
Cash From Financing Activities -$1.118B -223.0M -12.00M
Net Change In Cash -$48.00M 146.0M -120.0M
YoY Change -104.88% 1420.83% -200.84%
FREE CASH FLOW
Cash From Operating Activities $1.874B $464.0M $189.0M
Capital Expenditures $804.0M -$95.00M -$297.0M
Free Cash Flow $1.070B $559.0M $486.0M
YoY Change -441.85% 18.21% -32.12%

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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Concentration of Credit Risk</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash and cash equivalents and restricted cash. We maintain cash balances at financial institutions, which may at times be in excess of federally insured levels. We have not incurred losses related to these balances to date.</font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The use of derivative instruments exposes us to counterparty credit risk, or the risk that a counterparty will be unable to meet its commitments. Certain of our commodity derivative transactions are executed through over-the-counter contracts which are subject to nominal credit risk as these transactions are settled on a daily margin basis with investment grade financial institutions. Collateral deposited for such contracts is recorded within other current assets. Our interest rate derivative instruments are placed with investment grade financial institutions whom we believe are acceptable credit risks. We monitor counterparty creditworthiness on an ongoing basis; however, we cannot predict sudden changes in counterparties&#8217; creditworthiness. In addition, even if such changes are not sudden, we may be limited in our ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, we may not realize the benefit of some of our derivative instruments.</font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">SPL has entered into fixed price SPAs with terms of at least </font><font style="font-family:inherit;font-size:10pt;">20</font><font style="font-family:inherit;font-size:10pt;"> years with </font><font style="font-family:inherit;font-size:10pt;">seven</font><font style="font-family:inherit;font-size:10pt;"> unaffiliated third parties. SPL is dependent on the respective customers&#8217; creditworthiness and their willingness to perform under their respective SPAs. See </font><a style="font-family:inherit;font-size:10pt;" href="#s7FB0FA0FFB386E99548D5AC7A79C65A9"><font style="font-family:inherit;font-size:10pt;">Note 17&#8212;Customer Concentration</font></a><font style="font-family:inherit;font-size:10pt;"> for additional details about our customer concentration.</font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">SPLNG has entered into </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> long-term TUAs with unaffiliated third parties for regasification capacity at the Sabine Pass LNG terminal. SPLNG is dependent on the respective customers&#8217; creditworthiness and their willingness to perform under their respective TUAs. SPLNG has mitigated this credit risk by securing TUAs for a significant portion of its regasification capacity with creditworthy third-party customers with a minimum Standard&#160;&amp; Poor&#8217;s rating of A. </font></div></div>
CY2018 us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">ORGANIZATION AND NATURE OF OPERATIONS</font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We are a publicly traded Delaware limited partnership formed by Cheniere. </font><font style="font-family:inherit;font-size:10pt;color:#231f20;">T</font><font style="font-family:inherit;font-size:10pt;">hrough SPL, we are developing, constructing and operating </font><font style="font-family:inherit;font-size:10pt;color:#231f20;">natural gas liquefaction facilities </font><font style="font-family:inherit;font-size:10pt;">(the &#8220;Liquefaction Project&#8221;)</font><font style="font-family:inherit;font-size:10pt;color:#231f20;"> at the Sabine Pass LNG terminal</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;color:#231f20;">located </font><font style="font-family:inherit;font-size:10pt;">in Cameron Parish, Louisiana, </font><font style="font-family:inherit;font-size:10pt;color:#231f20;">on </font><font style="font-family:inherit;font-size:10pt;">the Sabine-Neches Waterway</font><font style="font-family:inherit;font-size:10pt;color:#231f20;"> less than four miles from the Gulf Coast. </font><font style="font-family:inherit;font-size:10pt;">We plan to construct up to </font><font style="font-family:inherit;font-size:10pt;">six</font><font style="font-family:inherit;font-size:10pt;"> Trains, which are in various stages of development, construction and operations. Trains 1 through 4 are operational, Train 5 is undergoing commissioning and Train 6 is being commercialized and has all necessary regulatory approvals in place. Each Train is expected to have a nominal production capacity, which is prior to adjusting for planned maintenance, production reliability, potential overdesign and debottlenecking opportunities, of approximately </font><font style="font-family:inherit;font-size:10pt;">4.5</font><font style="font-family:inherit;font-size:10pt;"> mtpa of LNG per Train, and run rate adjusted nominal production capacity of approximately </font><font style="font-family:inherit;font-size:10pt;">4.5</font><font style="font-family:inherit;font-size:10pt;"> to </font><font style="font-family:inherit;font-size:10pt;">4.9</font><font style="font-family:inherit;font-size:10pt;"> mtpa of LNG per Train. Through our wholly owned subsidiary, SPLNG, we own and operate regasification facilities at</font><font style="font-family:inherit;font-size:10pt;color:#231f20;"> the Sabine Pass LNG terminal, which includes pre-existing infrastructure of </font><font style="font-family:inherit;font-size:10pt;color:#231f20;">five</font><font style="font-family:inherit;font-size:10pt;color:#231f20;"> LNG storage tanks with aggregate capacity of </font><font style="font-family:inherit;font-size:10pt;">approximately </font><font style="font-family:inherit;font-size:10pt;">16.9</font><font style="font-family:inherit;font-size:10pt;color:#231f20;"> Bcfe, </font><font style="font-family:inherit;font-size:10pt;color:#231f20;">two</font><font style="font-family:inherit;font-size:10pt;color:#231f20;"> marine berths that can each accommodate </font><font style="font-family:inherit;font-size:10pt;">vessels with nominal capacity of</font><font style="font-family:inherit;font-size:10pt;color:#231f20;"> up to </font><font style="font-family:inherit;font-size:10pt;color:#231f20;">266,000</font><font style="font-family:inherit;font-size:10pt;color:#231f20;"> cubic meters and vaporizers with regasification capacity of approximately </font><font style="font-family:inherit;font-size:10pt;color:#231f20;">4.0</font><font style="font-family:inherit;font-size:10pt;color:#231f20;"> Bcf/d. We also own</font><font style="font-family:inherit;font-size:10pt;"> a </font><font style="font-family:inherit;font-size:10pt;">94</font><font style="font-family:inherit;font-size:10pt;">-mile pipeline that interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines </font><font style="font-family:inherit;font-size:10pt;">(the &#8220;Creole Trail Pipeline&#8221;)</font><font style="font-family:inherit;font-size:10pt;"> through our wholly owned subsidiary, CTPL.</font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As of December&#160;31, 2018, Cheniere owned </font><font style="font-family:inherit;font-size:10pt;">48.6%</font><font style="font-family:inherit;font-size:10pt;"> of our limited partner interest in the form of </font><font style="font-family:inherit;font-size:10pt;">104.5 million</font><font style="font-family:inherit;font-size:10pt;"> of our common units and </font><font style="font-family:inherit;font-size:10pt;">135.4 million</font><font style="font-family:inherit;font-size:10pt;"> of our subordinated units. Cheniere also owns </font><font style="font-family:inherit;font-size:10pt;">100%</font><font style="font-family:inherit;font-size:10pt;"> of our general partner interest and our incentive distribution rights.</font></div></div>
CY2018 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. Management evaluates its estimates and related assumptions regularly, including those related to the recoverability of property, plant and equipment, derivative instruments, asset retirement obligations </font><font style="font-family:inherit;font-size:10pt;">(&#8220;AROs&#8221;)</font><font style="font-family:inherit;font-size:10pt;"> and fair value measurements. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.</font></div></div>

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