# Cheniere Energy, Inc.: Form 10-Q for the period ended Sep 30, 2024

- Company: [Cheniere Energy, Inc.](/companies/lng.md) (CIK 3570)
- Form: 10-Q
- Filed: 2024-10-31
- Accepted by EDGAR: Oct 30, 2024, 17:39 ET
- Period: 2024-09-30
- Accession: 0000003570-24-000120
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/3570/000000357024000120/lng-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/3570/000000357024000120/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $3.68bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $10.95bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Selling, general and administrative | 3 months, 2024-07-01 to 2024-09-30 | $99.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2024-01-01 to 2024-09-30 | $299.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | $1.65bn | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | $4.39bn | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-07-01 to 2024-09-30 | $247.0m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 9 months, 2024-01-01 to 2024-09-30 | $770.0m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $231.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $550.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | $893.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | $2.27bn | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | $3.93 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | $9.88 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | $3.95 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | $9.91 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 227,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 230,300,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $3.75bn | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $1.67bn | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2024-01-01 to 2024-09-30 | $300.0m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2024-01-01 to 2024-09-30 | $1.98bn | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-09-30 | $2.66bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $4.46bn | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $43.08bn | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $4.16bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-09-30 | $33.72bn | us-gaap:Liabilities |
| Long-term debt | at 2024-09-30 | $22.55bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2024-09-30 | $700.0m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2024-09-30 | $5.10bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 44,121 characters.

### Information Regarding Forward-Looking Statements

This quarterly report contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “**Securities Act”**), and Section 21E of the Securities Exchange Act of 1934, as amended (the “**Exchange Act”**). All statements, other than statements of historical or present facts or conditions, included herein or incorporated herein by reference are “forward-looking statements.” Included among “forward-looking statements” are, among other things:

- statements that we expect to commence or complete construction of our proposed LNG terminals, liquefaction facilities, pipeline facilities or other projects, or any expansions or portions thereof, by certain dates, or at all;
- statements regarding future levels of domestic and international natural gas production, supply or consumption or future levels of LNG imports into or exports from North America and other countries worldwide or purchases of natural gas, regardless of the source of such information, or the transportation or other infrastructure or demand for and prices related to natural gas, LNG or other hydrocarbon products;
- statements regarding any financing transactions or arrangements, or our ability to enter into such transactions;
- 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;
- statements regarding our future sources of liquidity and cash requirements;
- statements relating to the construction of our Trains and pipelines, including statements concerning the engagement of any EPC contractor or other contractor and the anticipated terms and provisions of any agreement with any EPC or other contractor, and anticipated costs related thereto;
- statements regarding any SPA or other agreement to be entered into or performed substantially in the future, including any revenues anticipated to be received and the anticipated timing thereof, and statements regarding the amounts of total LNG regasification, natural gas liquefaction or storage capacities that are, or may become, subject to contracts;
- statements regarding counterparties to our commercial contracts, construction contracts and other contracts;
- statements regarding our planned development and construction of additional Trains or pipelines, including the financing of such Trains or pipelines;
- statements that our Trains, when completed, will have certain characteristics, including amounts of liquefaction capacities;
- statements regarding our business strategy, our strengths, our business and operation plans or any other plans, forecasts, projections, or objectives, including anticipated revenues, capital expenditures, maintenance and operating costs and cash flows, any or all of which are subject to change;
- statements relating to our goals, commitments and strategies in relation to environmental matters;
- statements regarding legislative, governmental, regulatory, administrative or other public body actions, approvals, requirements, permits, applications, filings, investigations, proceedings or decisions;
- statements regarding our anticipated LNG and natural gas marketing activities; and
- any other statements that relate to non-historical or future information.

All of these types of statements, other than statements of historical or present facts or conditions, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “achieve,” “anticipate,” “believe,” “contemplate,” “continue,” “estimate,” “expect,” “intend,” “plan,” “potential,” “predict,” “project,” “pursue,” “target,” the negative of such terms or other comparable terminology. The forward-looking statements contained in this quarterly report are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe that such estimates are reasonable, they are inherently uncertain and involve a number of risks and uncertainties beyond our control. In addition, assumptions may prove to be inaccurate. We caution that the forward-looking statements contained in this quarterly report are not guarantees of future performance and that such statements may not be realized or the forward-looking statements or events may not occur. Actual results may differ materially from those anticipated or implied in forward-looking statements as a result of a variety of factors described in this quarterly report and in the other reports and other information that we file with the SEC, including those discussed under “Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2023. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these risk factors. These forward-looking statements speak only as of the date made, and other than as required by law, we undertake no obligation to update or revise any forward-looking statement or provide reasons why actual results may differ, whether as a result of new information, future events or otherwise.

### Introduction

The following discussion and analysis presents management’s view of our business, financial condition and overall performance and should be read in conjunction with our Consolidated Financial Statements and the accompanying notes. This information is intended to provide investors with an understanding of our past performance, current financial condition and outlook for the future.

Our discussion and analysis includes the following subjects:

- Overview
- Overview of Significant Events
- Results of Operations
- Liquidity and Capital Resources
- Summary of Critical Accounting Estimates
- Recent Accounting Standards

### Overview

Cheniere, a Delaware corporation, is a Houston-based energy infrastructure company primarily engaged in LNG-related businesses. We provide clean, secure and affordable LNG to integrated energy companies, utilities and energy trading companies around the world. We aspire to conduct our business in a safe and responsible manner, delivering a reliable, competitive and integrated source of LNG to our customers.

LNG is natural gas (methane) in liquid form. The LNG we produce is shipped all over the world, converted back into natural gas (called “regasification”) and then transported via pipeline to homes and businesses and used as an energy source that is essential for heating, cooking, other industrial uses and back up for intermittent energy sources. Natural gas is a cleaner-burning, abundant and affordable source of energy. When LNG is converted back to natural gas, it can be used instead of coal, which reduces the amount of pollution traditionally produced from burning fossil fuels, like sulfur dioxide and particulate matter that enters the air we breathe. Additionally, compared to coal, it produces significantly fewer carbon emissions. By liquefying natural gas, we are able to reduce its volume by 600 times so that we can load it onto special LNG carriers designed to keep the LNG cold and in liquid form for efficient transport overseas.

We are the largest producer of LNG in the United States and we are the second largest LNG operator globally, based on the total production capacity of our liquefaction facilities, which totaled approximately 45 mtpa as of September 30, 2024.

We own and operate a natural gas liquefaction and export facility located in Cameron Parish, Louisiana at Sabine Pass (the “**Sabine Pass LNG Terminal”**), one of the largest LNG production facilities in the world, through our ownership interest in and management agreements with CQP, which is a publicly traded limited partnership that we formed in 2007. As of September 30, 2024, we owned 100% of the general partner interest, a 48.6% limited partner interest and 100% of the incentive distribution rights of CQP. The Sabine Pass LNG Terminal has six operational Trains, for a total production capacity of approximately 30 mtpa of LNG (the “**SPL Project”**). The Sabine Pass LNG Terminal also has operational regasification facilities that include five LNG storage tanks with aggregate capacity of approximately 17 Bcfe and vaporizers with regasification capacity of approximately 4 Bcf/d, as well as three marine berths, two of which can accommodate vessels with nominal capacity of up to 266,000 cubic meters and the third berth which can accommodate vessels with nominal capacity of up to 200,000 cubic meters. We also own and operate a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several large interstate and intrastate pipelines (the “**Creole Trail Pipeline”).**

Additionally, we own and operate a natural gas liquefaction and export facility located near Corpus Christi, Texas (the “**Corpus Christi LNG Terminal”**) through CCL, which currently has natural gas liquefaction facilities consisting of three operational Trains for a total production capacity of approximately 15 mtpa of LNG, three LNG storage tanks with aggregate capacity of approximately 10 Bcfe and two marine berths that can each accommodate vessels with nominal capacity of up to 266,000 cubic meters. We are constructing an expansion of the Corpus Christi LNG Terminal (the “**Corpus Christi Stage 3 Project”**) consisting of seven midscale Trains with an expected total production capacity of over 10 mtpa of LNG. We also own and operate a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG Terminal with several large interstate and intrastate natural gas pipelines (the “**Corpus Christi Pipeline”** and together with the existing assets at the Corpus Christi LNG Terminal and the Corpus Christi Stage 3 Project, the “**CCL Project”).**

Our long-term customer arrangements form the foundation of our business and provide us with significant, stable, long-term cash flows. We have contracted substantially all of our anticipated production capacity under SPAs, in which our customers are generally required to pay a fixed fee with respect to the contracted volumes irrespective of their election to cancel or suspend deliveries of LNG cargoes, and under IPM agreements, in which a gas producer sells natural gas to us on a global LNG or natural gas index price, less a fixed liquefaction fee, shipping and other costs. The SPAs also have a variable fee component, which is generally structured to cover the cost of natural gas purchases, transportation and liquefaction fuel consumed to produce LNG. Since we procure most of our feedstock for LNG production from the U.S., the structure of these contracts helps limit our exposure to fluctuations in U.S. natural gas prices. Through our SPAs and IPM agreements, we have contracted approximately 95% of the total anticipated production from the SPL Project and the CCL Project (collectively, the “**Liquefaction Projects”**) through the mid-2030s with approximately 16 years of weighted average remaining life as of September 30, 2024, excluding volumes from contracts with terms less than 10 years and volumes that are contractually subject to additional liquefaction capacity beyond what is currently in construction or operation. We also market and sell LNG produced by the Liquefaction Projects that is not contracted by CCL or SPL through our integrated marketing function.

We remain focused on safety, operational excellence and customer satisfaction. Increasing demand for LNG has allowed us to expand our liquefaction infrastructure in a financially disciplined manner. We have increased available liquefaction capacity at our Liquefaction Projects as a result of debottlenecking and other optimization projects. We believe these factors provide a foundation for additional growth in our portfolio of customer contracts in the future. We hold significant land positions at both the Sabine Pass LNG Terminal and the Corpus Christi LNG Terminal, which provide opportunity for further liquefaction capacity expansion. In March 2023, certain of our subsidiaries submitted an application with the FERC under the Natural Gas Act (the “**NGA”**) for an expansion adjacent to the CCL Project consisting of two midscale Trains with an expected total production capacity of approximately 3 mtpa of LNG (the “**CCL Midscale Trains 8 & 9 Project”**). Additionally, we are developing an expansion adjacent to the SPL Project with a total production capacity of up to approximately 20 mtpa of LNG, inclusive of estimated debottlenecking opportunities (the “**SPL Expansion Project”**). In February 2024, certain subsidiaries of CQP submitted an application to the FERC under the NGA 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 FTA countries and non-FTA countries, both of which applications exclude debottlenecking. The development of the CCL Midscale Trains 8 & 9 Project, the SPL Expansion Project or other projects, including infrastructure projects in support of natural gas supply and LNG demand, will require, among other things, acceptable commercial and financing arrangements before we make a positive FID.

Additionally, we are committed to the management of our most important ESG impacts, risks and opportunities. In August 2024, we published *Energy Secured, Benefits Delivered*, our fifth Corporate Responsibility (“**CR”**) report, which details our approach and progress on ESG matters. Our CR report is available at cheniere.com/our-responsibility/reporting-center. Information on our website, including the CR report, is not incorporated by reference into this Quarterly Report on Form 10-Q.

### Overview of Significant Events

Our significant events since January 1, 2024 and through the filing date of this Form 10-Q include the following:

### Strategic

- In July 2024, Cheniere Marketing entered into a long-term SPA with Galp Trading S.A. (“**Galp”**), a subsidiary of Galp Energia, SGPS, S.A., under which Galp has agreed to purchase approximately 0.5 mtpa of LNG from Cheniere Marketing on a free-on-board basis for a term of 20 years. Deliveries are expected to commence in the early 2030s and are subject to, among other things, a positive FID with respect to the second train of the SPL Expansion Project (“**SPL Train 8”**) and includes a limited number of early cargoes to be purchased by Galp prior to the start of SPL Train 8.
- In June 2024, we received a positive Environmental Assessment from the FERC relating to the CCL Midscale Trains 8 & 9 Project. We expect to receive all remaining necessary regulatory approvals for the project in 2025.
- In February 2024, certain subsidiaries of CQP submitted an application to the FERC under the NGA 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 FTA countries and non-FTA countries, both of which applications exclude debottlenecking. In October 2024, the authorization from the DOE to export LNG to FTA countries was received.

### Operational

- As of October 25, 2024, approximately 3,720 cumulative LNG cargoes totaling over 255 million tonnes of LNG have been produced, loaded and exported from the Liquefaction Projects.

### Financial

- In June 2024, we announced updates to our ‘20/20 Vision’ comprehensive long-term capital allocation plan, which included an increase to our share repurchase authorization by $4 billion through 2027 and a plan to increase our quarterly dividend by approximately 15% to $2.00 per common share annualized, which commenced with the dividend pertaining to the third quarter of 2024.
- In May 2024, CQP issued $1.2 billion aggregate principal amount of 5.750% Senior Notes due 2034 (the “**2034 CQP Senior Notes”**). 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 (the “**2025 SPL Senior Notes”).**
- In May 2024, in connection with the 2034 CQP Senior Notes issuance, Moody’s Ratings (“**Moody’s”**) upgraded CQP’s issuer credit rating to Baa2 from Ba1 and revised CQP’s outlook to stable from positive. Moody’s also upgraded SPL’s issuer credit rating to Baa1 from Baa2 and revised SPL’s outlook to stable from positive. In July 2024, Fitch Ratings upgraded CCH’s issuer credit rating to BBB+ from BBB with a stable outlook. In October 2024, S&P Global Ratings changed the outlook of CCH’s senior secured debt rating to positive from stable.
- In March 2024, Cheniere issued $1.5 billion aggregate principal amount of 5.650% Senior Notes due 2034 (the “**2034 Cheniere Senior Notes”**). In April 2024, the net proceeds, together with cash on hand, were used to retire the approximately $1.5 billion outstanding aggregate principal amount of CCH’s 5.875% Senior Secured Notes due 2025 (the “**2025 CCH Senior Notes”).**
- During the three and nine months ended September 30, 2024, we accomplished the following pursuant to our capital allocation priorities:
- We repurchased approximately 1.6 million and over 12.2 million shares of our common stock, respectively, as part of our share repurchase program for approximately $282 million and $2.0 billion, respectively.
- SPL repaid $150 million and $450 million, respectively, of outstanding aggregate principal amounts of its senior secured notes.
- We paid dividends of $0.435 and $1.305 per share of common stock, respectively.
- We continued to invest in accretive organic growth, including our investment in the Corpus Christi Stage 3 Project, as further described under *Investing Cash Flows* in Sources and Uses of Cash within Liquidity and Capital Resources.

### Results of Operations

### Consolidated results of operations

*(in millions, except per share data)*

| Revenues | Three Months Ended September 30, 2024 | 2023 | Variance | Nine Months Ended September 30, 2024 | 2023 | Variance |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| LNG revenues | $3,554 | $3,974 | $(420) | $10,633 | $14,984 | $(4,351) |
| Regasification revenues | 34 | 34 | — | 102 | 101 | 1 |
| Other revenues | 175 | 151 | 24 | 532 | 486 | 46 |
| Total revenues | 3,763 | 4,159 | (396) | 11,267 | 15,571 | (4,304) |
| Operating costs and expenses (recoveries) |  |  |  |  |  |  |
| Cost (recovery) of sales (excluding items shown separately below) | 1,255 | 556 | 699 | 4,275 | (71) | 4,346 |
| Operating and maintenance expense | 450 | 445 | 5 | 1,364 | 1,376 | (12) |
| Selling, general and administrative expense | 99 | 102 | (3) | 299 | 296 | 3 |
| Depreciation and amortization expense | 306 | 298 | 8 | 912 | 892 | 20 |
| Other operating costs and expenses | 6 | 3 | 3 | 28 | 24 | 4 |
| Total operating costs and expenses | 2,116 | 1,404 | 712 | 6,878 | 2,517 | 4,361 |
| Income from operations | 1,647 | 2,755 | (1,108) | 4,389 | 13,054 | (8,665) |
| Other income (expense) |  |  |  |  |  |  |
| Interest expense, net of capitalized interest | (247) | (283) | 36 | (770) | (871) | 101 |
| Gain (loss) on modification or extinguishment of debt | — | (3) | 3 | (9) | 15 | (24) |
| Interest and dividend income | 41 | 58 | (17) | 149 | 147 | 2 |
| Other income (expense), net | (3) | 4 | (7) | (1) | 7 | (8) |
| Total other expense | (209) | (224) | 15 | (631) | (702) | 71 |
| Income before income taxes and non-controlling interest | 1,438 | 2,531 | (1,093) | 3,758 | 12,352 | (8,594) |
| Less: income tax provision | 231 | 440 | (209) | 550 | 2,119 | (1,569) |
| Net income | 1,207 | 2,091 | (884) | 3,208 | 10,233 | (7,025) |
| Less: net income attributable to non-controlling interest | 314 | 390 | (76) | 933 | 1,729 | (796) |
| Net income attributable to Cheniere | $893 | $1,701 | $(808) | $2,275 | $8,504 | $(6,229) |
| Net income per share attributable to common stockholders—basic | $3.95 | $7.08 | $(3.13) | $9.91 | $35.12 | $(25.21) |
| Net income per share attributable to common stockholders—diluted | $3.93 | $7.03 | $(3.10) | $9.88 | $34.87 | $(24.99) |

29

### Volumes loaded and recognized from the Liquefaction Projects

| (in TBtu) | Three Months Ended September 30, 2024 | 2023 | Variance | Nine Months Ended September 30, 2024 | 2023 | Variance |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Volumes loaded during the current period | 568 | 548 | 20 | 1,721 | 1,684 | 37 |
| Volumes loaded during the prior period but recognized during the current period | 30 | 26 | 4 | 37 | 56 | (19) |
| Less: volumes loaded during the current period and in transit at the end of the period | (38) | (29) | (9) | (38) | (29) | (9) |
| Total volumes recognized in the current period | 560 | 545 | 15 | 1,720 | 1,711 | 9 |

### Components of LNG revenues and corresponding LNG volumes delivered

| LNG revenues (in millions): | Three Months Ended September 30, 2024 | 2023 | Variance | Nine Months Ended September 30, 2024 | 2023 | Variance |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| LNG from the Liquefaction Projects sold under third party long-term agreements (1) | $2,903 | $2,928 | $(25) | $8,701 | $9,420 | $(719) |
| LNG from the Liquefaction Projects sold by our integrated marketing function under short-term agreements | 565 | 835 | (270) | 1,587 | 5,116 | (3,529) |
| LNG procured from third parties | 49 | 93 | (44) | 168 | 225 | (57) |
| Net derivative gain (loss) | (15) | 33 | (48) | 19 | 34 | (15) |
| Other revenues | 52 | 85 | (33) | 158 | 189 | (31) |
| Total LNG revenues | $3,554 | $3,974 | $(420) | $10,633 | $14,984 | $(4,351) |
| Volumes delivered as LNG revenues (in TBtu): |  |  |  |  |  |  |
| LNG from the Liquefaction Projects sold under third party long-term agreements (1) | 511 | 487 | 24 | 1,573 | 1,493 | 80 |
| LNG from the Liquefaction Projects sold by our integrated marketing function under short-term agreements | 49 | 58 | (9) | 147 | 218 | (71) |
| LNG procured from third parties | 3 | 10 | (7) | 14 | 24 | (10) |
| Total volumes delivered as LNG revenues | 563 | 555 | 8 | 1,734 | 1,735 | (1) |

(1) Long-term agreements include agreements with an initial tenor of 12 months or more.

### Net income attributable to Cheniere

Net income attributable to Cheniere declined $808 million and $6.2 billion for the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023. The decline between the respective three and nine month periods was primarily attributable to unfavorable changes in fair value of derivatives of $923 million and $6.1 billion (before tax and the impact of non-controlling interest), respectively, principally attributable to our IPM agreements, where the associated gains decreased mainly due to the impact on fair value from the nonrecurrence of significant declines of historic volatility in international gas prices and moderated and sustained spot prices in the current periods relative to the same periods of 2023. The remaining changes in fair value of derivatives were primarily due to an unfavorable shift in long-term U.S. natural gas forward prices. In addition, there was a $159 million and $2.7 billion decrease in LNG revenues, net of cost of sales and excluding the effect of derivatives, for the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023, the majority of which was attributable to a reduction of volumes sold under short-term agreements as a higher proportion of our LNG was sold under long-term contracts, as further described in *Revenues* below.

These unfavorable variances were partially offset by:

- $209 million and $1.6 billion favorable variances in income tax provision between the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023, primarily due to lower taxable earnings; and
- $76 million and $796 million reduction in net income attributable to non-controlling interest between the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023, substantially all of which is due to a decrease in CQP’s consolidated net income between the comparable periods from declining gains related to changes in fair value of derivatives between the three and nine month periods.

The following is an additional discussion of the significant drivers of the variance in net income attributable to common stockholders by line item:

### Revenues

The decreases of $396 million and $4.3 billion between the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023 were primarily attributable to:

- $314 million and $3.6 billion decreases in revenues generated by our marketing function under short-term agreements between the three and nine month periods, respectively, due to declining international LNG and gas prices and a reduction of volumes sold under short-term agreements as a result of additional long-term agreements commencing after the third quarter of 2023; and
- $25 million and $719 million decreases in revenues attributable to declining Henry Hub pricing, to which the majority of our long-term LNG sales contracts are indexed, between the three and nine month periods, respectively.

### Operating costs and expenses (recoveries)

There was a $712 million unfavorable variance between the three months ended September 30, 2024 and 2023 primarily as a result of a $915 million unfavorable variance from changes in fair value of derivatives included in cost of sales, as described above under the caption *Net income attributable to Cheniere*, partially offset by a $203 million decrease in cost of natural gas feedstock largely due to lower U.S. natural gas prices.

There was a $4.4 billion unfavorable variance between the nine months ended September 30, 2024 and 2023 primarily attributable to a $6.1 billion unfavorable variance from changes in fair value of derivatives included in cost of sales, as described above under the caption *Net income attributable to Cheniere.* This unfavorable variance was partially offset by a $1.6 billion decrease between the periods in cost of sales excluding the effect of derivative changes described above, primarily as a result of a $1.5 billion decrease in cost of natural gas feedstock largely due to lower U.S. natural gas prices.

### Other income (expense)

The $15 million and $71 million favorable variances between the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023 were primarily attributable to:

- $36 million and $101 million decreases in interest expense, net of capitalized interest, between the three and nine month periods, respectively, primarily due to $24 million and $69 million increases, respectively, in interest costs qualifying for capitalization, given the higher carrying value of assets under construction, and additionally due to lower overall interest cost due to debt reduction activities associated with our long-term capital allocation plan;

These favorable variances were partially offset by:

- $24 million increase in losses on modification or extinguishment of debt between the nine month periods from debt reduction activities, as further detailed under *Financing Cash Flows* in Sources and Uses of Cash within Liquidity and Capital Resources; and
- $17 million decrease in interest and dividend income between the three month periods, primarily as a result of lower average cash and cash equivalents balances between the respective periods.

### Income tax provision

The $209 million and $1.6 billion favorable variances between the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023, were primarily attributable to $1.1 billion and $8.6 billion decreases in pre-tax income, respectively, and, to a lesser extent, a lower effective tax rate between the periods.

Our effective tax rate was 16.1% and 14.6% for the three and nine months ended September 30, 2024, respectively, as compared to 17.4% and 17.2% for the same periods of 2023, respectively. Our effective tax rate decreased between both comparable periods because a larger percentage of pre-tax income was attributable to CQP’s income that is not taxable to us. The effective tax rate for the periods was lower than the statutory rate of 21.0% primarily due to CQP’s income that is not taxable to us.

### Net income attributable to non-controlling interests

The $76 million and $796 million decreases between the three and nine months ended September 30, 2024, respectively, as compared to the same periods of 2023 were attributable to $156 million and $1.5 billion decreases in CQP’s consolidated net income between the three and nine month periods, respectively, primarily from unfavorable changes in fair value of derivatives related to its IPM agreement of $185 million and $1.2 billion, respectively.

### Significant factor affecting our results of operations

Below is a significant factor that affects our results of operations.

#### Gains and losses on derivative instruments

Derivative instruments, which in addition to managing exposure to commodity-related marketing and price risks are utilized to manage exposure to foreign exchange volatility, are reported at fair value on our Consolidated Financial Statements. For commodity derivative instruments related to our IPM agreements, the underlying LNG sales being economically hedged are accounted for under the accrual method of accounting, whereby revenues expected to be derived from the future LNG sales are recognized only upon delivery or realization of the underlying transaction. Notwithstanding the operational intent to mitigate risk exposure over time, the recognition of derivative instruments at fair value has the effect of recognizing gains or losses relating to future period exposure, and given the significant volumes, long-term duration and volatility in price basis for certain of our derivative contracts, the use of derivative instruments may result in continued volatility of our results of operations based on changes in market pricing, counterparty credit risk and other relevant factors that may be outside of our control. For example, as described in Note 5—Derivative Instruments of our Notes to Consolidated Financial Statements, the fair value of the Liquefaction Supply Derivatives incorporates, as applicable, market participant-based assumptions pertaining to certain contractual uncertainties, including those related to the availability of market information for delivery points, which may require future development of infrastructure, as well as the timing of satisfaction of certain events or development of infrastructure to support natural gas gathering and transport. We may recognize changes in fair value through earnings that could significantly impact our results of operations if and when such uncertainties are resolved.

### Liquidity and Capital Resources

The following information describes our ability to generate and obtain adequate amounts of cash to meet our requirements in the short term and the long term. In the short term, we expect to meet our cash requirements using operating cash flows and available liquidity, consisting of cash and cash equivalents, restricted cash and cash equivalents and available commitments under our credit facilities. Additionally, we expect to meet our long term cash requirements by using operating cash flows and other future potential sources of liquidity, which may include debt and equity offerings by us or our subsidiaries. The table below provides a summary of our available liquidity (in millions). Future material sources of liquidity are discussed below.

|  | September 30, 2024 |
| --- | ---: |
| Cash and cash equivalents (1) | $2,663 |
| Restricted cash and cash equivalents (1) | 413 |
| Available commitments under our credit facilities (2): |  |
| SPL Revolving Credit Facility | 766 |
| CQP Revolving Credit Facility | 1,000 |
| CCH Credit Facility | 3,260 |
| CCH Working Capital Facility | 1,390 |
| Cheniere Revolving Credit Facility | 1,250 |
| Total available commitments under our credit facilities | 7,666 |
| Total available liquidity | $10,742 |

(1) Amounts presented include balances held by our consolidated variable interest entities (“**VIEs”**), as discussed in Note 6—Non-controlling Interests and Variable Interest Entities of our Notes to Consolidated Financial Statements. As of September 30, 2024, assets of our VIEs, which are included in our Consolidated Balance Sheets, included $331 million of cash and cash equivalents and $103 million of restricted cash and cash equivalents.

(2) Available commitments represent total commitments less loans outstanding and letters of credit issued under each of our credit facilities as of September 30, 2024. See Note 8—Debt of our Notes to Consolidated Financial Statements for additional information on our credit facilities and other debt instruments.

Our liquidity position subsequent to September 30, 2024 will be driven by future sources of liquidity and future cash requirements. For a discussion of our future sources and uses of liquidity, see the liquidity and capital resources disclosures in our annual report on Form 10-K for the fiscal year ended December 31, 2023.

Although our sources and uses of cash are presented below from a consolidated standpoint, SPL, CQP, CCH and Cheniere operate with independent capital structures. Certain restrictions or requirements under debt and equity instruments executed by our subsidiaries limit the entity’s use of cash, including the following:

- SPL and CCH are required to deposit all cash received into restricted cash and cash equivalents accounts under certain of their debt agreements. The usage or withdrawal of such cash is restricted to the payment of liabilities related to the Liquefaction Projects and other restricted payments. In addition, SPL and CCH’s operating costs are managed by our subsidiaries under affiliate agreements, which may require SPL and CCH to advance cash to the respective affiliates, however the cash remains restricted for operation and construction of the Liquefaction Projects;
- CQP is required under its partnership agreement to distribute to unitholders all available cash on hand at the end of a quarter less the amount of any reserves established by its general partner. Beginning with the distribution paid in the second quarter of 2022, quarterly distributions by CQP are currently comprised of a base amount plus a variable amount equal to the remaining available cash per unit, which takes into consideration, among other things, amounts reserved for annual debt repayment and capital allocation goals, anticipated capital expenditures to be funded with cash, and cash reserves to provide for the proper conduct of CQP’s business;
- Our 48.6% limited partner interest, 100% general partner interest and incentive distribution rights in CQP limit our right to receive cash held by CQP to the amounts specified by the provisions of CQP’s partnership agreement; and
- SPL and CCH are restricted by affirmative and negative covenants included in certain of their debt agreements in their ability to make certain payments, including distributions, unless specific requirements are satisfied.

Despite the restrictions noted above, we believe that sufficient flexibility exists within the Cheniere complex to enable each independent capital structure to meet its currently anticipated cash requirements. The sources of liquidity at SPL, CQP and CCH primarily fund the cash requirements of the respective entity, and any remaining liquidity not subject to restriction, as supplemented by liquidity provided by Cheniere Marketing, is available to enable Cheniere to meet its cash requirements.

### Corpus Christi Stage 3 Project

The following table summarizes the project completion and construction status of the Corpus Christi Stage 3 Project as of September 30, 2024:

|  |  |
| --- | ---: |
| Overall project completion percentage | 67.8% |
| Completion percentage of: |  |
| Engineering | 95.7% |
| Procurement | 85.2% |
| Subcontract work | 87.2% |
| Construction | 32.0% |
| Date of expected substantial completion | 1H 2025 - 2H 2026 |

### Sources and Uses of Cash

The following table summarizes the sources and uses of our cash, cash equivalents and restricted cash and cash equivalents (in millions). The table presents capital expenditures on a cash basis; therefore, these amounts differ from the amounts of capital expenditures, including accruals, which are referred to elsewhere in this report. Additional discussion of these items follows the table.

|  | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $3,753 | $6,698 |
| Net cash used in investing activities | (1,706) | (1,478) |
| Net cash used in financing activities | (3,493) | (3,426) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | (3) | 2 |
| Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | $(1,449) | $1,796 |

#### Operating Cash Flows

The $2.9 billion decrease between the periods was primarily related to lower cash receipts from the sale of LNG cargoes due to a reduction in both pricing per MMBtu and volumes sold under short-term agreements, although this exposed us less to declining international LNG and gas prices in the current year as a higher proportion of our LNG was sold under long-term agreements. The decrease was partially offset by lower cash outflows for natural gas feedstock, mostly due to lower U.S. natural gas prices.

We became subject to the 15% CAMT beginning in 2024 and expect to owe CAMT in excess of our regular tax liability. During 2024, the Internal Revenue Service (the “**IRS”**) issued a series of notices that extended the due date of our second, third and fourth estimated tax payments of our regular tax and CAMT liability from 2024 to February 3, 2025 and April 15, 2025, respectively. On September 12, 2024, the U.S. Department of Treasury and the IRS released proposed regulations relating to the application and implementation of the CAMT. For a discussion of the CAMT as originally enacted, including its potential impacts to our liquidity position, see the risk factors and liquidity and capital resource disclosures in our annual report on Form 10-K for the fiscal year ended December 31, 2023. Although not required, the proposed regulations permit early adoption and taxpayers can generally choose to rely on the proposed regulations, either fully or partially in some cases, for tax years ending before, on or after September 13, 2024, if consistently applied. The proposed regulations address a wide range of topics relating to the operation of CAMT; however, significant uncertainty continues to exist regarding many of the operative implementing provisions. Importantly, however, the rules clarify that unrealized derivative gains and losses arising from ordinary course transactions aimed at managing price, interest or currency risk should generally be excluded from the CAMT base until realized. Thus, although the proposed regulations are a potentially favorable development that has the potential to mitigate cash tax volatility attributable to changes in fair value of our derivative instruments in the future, our assessment of the proposed CAMT rules across our portfolio of derivative instruments is ongoing and we continue to evaluate its impact to us, including the three transition-year methods discussed in the preamble to the proposed rules which are under consideration for adoption and which could cause our CAMT liability to significantly increase depending on ultimate adoption in the final regulations.

#### Investing Cash Flows

Our investing net cash outflows in both periods primarily were for the construction costs for the Corpus Christi Stage 3 Project, which were $1.3 billion during the nine months ended September 30, 2024 compared to $1.0 billion in the comparable period of 2023, as well as for optimization and other site improvement projects. We expect to incur a proportional level of capital expenditures for the remainder of the year as construction work progresses on the Corpus Christi Stage 3 Project.

#### Financing Cash Flows

The following table summarizes our financing activities (in millions):

|  | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Proceeds from issuances of debt | $2,725 | $1,397 |
| Redemptions, repayments and repurchases of debt | (3,171) | (2,548) |
| Distributions to non-controlling interest | (648) | (764) |
| Payments related to tax withholdings for share-based compensation | (45) | (62) |
| Repurchase of common stock | (1,981) | (1,132) |
| Dividends to stockholders | (300) | (291) |
| Other, net | (73) | (26) |
| Net cash used in financing activities | $(3,493) | $(3,426) |

#### Debt Issuances

The following table shows our debt issuances (in millions):

| Proceeds from issuances of debt Cheniere: | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| 2034 Cheniere Senior Notes | $1,497 | $— |
| **CQP:** |  |  |
| 2034 CQP Senior Notes | 1,198 | — |
| 5.950% Senior Notes due 2033 | — | 1,397 |
| **SPL:** |  |  |
| SPL Revolving Credit Facility | 30 | — |
| Total proceeds from issuances of debt | $2,725 | $1,397 |

35

#### Debt Redemptions, Repayments and Repurchases

The following table shows the redemptions, repayments and repurchases of debt, including intra-quarter repayments (in millions):

| Redemptions, repayments and repurchases of debt SPL: | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| 5.750% Senior Secured Notes due 2024 | $(300) | $(1,650) |
| 5.625% Senior Secured Notes due 2025 | (1,350) | — |
| SPL Revolving Capital Facility | (30) | — |
| **CCH:** |  |  |
| 7.000% Senior Notes due 2024 | — | (498) |
| 5.625% Senior Notes due 2025 | (1,491) | — |
| 5.125% Senior Notes due 2027 | — | (69) |
| 3.700% Senior Notes due 2029 | — | (237) |
| 2.742% Senior Notes due 2039 | — | (94) |
| Total redemptions, repayments and repurchases of debt | $(3,171) | $(2,548) |

#### Repurchase of Common Stock

During the nine months ended September 30, 2024 and 2023, we paid $2.0 billion and $1.1 billion to repurchase 12.2 million and 7.6 million shares of our common stock, respectively, under our share repurchase program. As of September 30, 2024, we had approximately $4.2 billion remaining under our share repurchase program.

#### Cash Dividends to Stockholders

During the nine months ended September 30, 2024, we paid aggregate dividends of $1.305 per share of common stock, for a total of $300 million. We paid aggregate dividends of $1.185 per share of common stock for a total of $291 million during the nine months ended September 30, 2023.

On October 29, 2024, we declared a quarterly dividend of $0.50 per share of common stock that is payable on November 18, 2024 to stockholders of record as of the close of business on November 8, 2024.

### Summary of Critical Accounting Estimates

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. There have been no significant changes to our critical accounting estimates from those disclosed in our annual report on Form 10-K for the fiscal year ended December 31, 2023.

### Recent Accounting Standards

For a summary of recently issued accounting standards, see Note 1—Nature of Operations and Basis of Presentation of our Notes to Consolidated Financial Statements.

## Market risk

As filed, 1,292 characters.

### Marketing and Trading Commodity Price Risk

We have derivatives consisting of natural gas and power supply contracts for the commissioning and operation of the SPL Project and the CCL Project, and associated economic hedges (collectively, the “**Liquefaction Supply Derivatives”**). We have also entered into physical and financial derivatives to hedge the exposure to the commodity markets in which we have contractual arrangements to purchase or sell physical LNG (collectively, “**LNG Trading Derivatives”**). In order to test the sensitivity of the fair value of the Liquefaction Supply Derivatives and the LNG Trading Derivatives to changes in underlying commodity prices, management modeled a 10% change in the commodity price for natural gas for each delivery location and a 10% change in the commodity price for LNG, respectively, as follows (in millions):

|  | September 30, 2024 Fair Value | Change in Fair Value | December 31, 2023 Fair Value | Change in Fair Value |
| --- | ---: | ---: | ---: | ---: |
| Liquefaction Supply Derivatives | $(1,268) | $2,514 | $(2,117) | $1,526 |
| LNG Trading Derivatives | 9 | 19 | 10 | 12 |

See Note 5—Derivative Instruments of our Notes to Consolidated Financial Statements for additional details about our commodity derivative instruments.

## Controls and procedures

As filed, 1,000 characters.

We maintain a set of disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports filed by us under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. As of the end of the period covered by this report, we evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective.

During the most recent fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 146 characters.

There have been no material changes from the risk factors disclosed in our annual report on Form 10-K for the fiscal year ended December 31, 2023.

Filed Oct 31, 2024.
Source: SEC EDGAR, the filing index for accession 0000003570-24-000120. Last ingested by Listed: Oct 29, 2026, 07:37 ET. No prices; not investment advice.