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|Cheniere Announces Capital Allocation Framework, Makes Positive Final Investment Decision on Train 6 at the Sabine Pass Liquefaction Project, and Raises Run-Rate Production and Financial Guidance|
Capital allocation framework prioritizes reinvestment of available cash in growth capital projects, achievement of investment-grade credit metrics, and return of excess capital to shareholders
Final Investment Decision reached on
Run-rate production guidance increased to 4.7 – 5.0 mtpa per Train
Run-rate Consolidated Adjusted EBITDA guidance raised to
Run-rate Distributable Cash Flow per share guidance raised to
Cheniere expects to generate over
“The capital allocation framework we announced today prioritizes
continued investment in our LNG platform through new high-return growth
projects, beginning with
To fund a portion of the construction of Train 6 and a third LNG berth
and required supporting infrastructure at the
Increased Run-Rate Production and Financial Guidance
Cheniere has also raised its run-rate production guidance to 4.7 – 5.0
mtpa per Train, up from 4.4 – 4.9 mtpa per Train. The increase in
run-rate production is based on the impact of production optimization,
maintenance optimization, and debottlenecking projects at both the
Incorporating the impact of
Cheniere has provided a presentation for investors which includes additional details about the capital allocation framework, the upwardly revised financial guidance, and additional updates on strategic priorities at the Company. The presentation is available on the Company’s website at www.cheniere.com.
Share Repurchase Authorization
Under the share repurchase authorization, repurchases can be made from
time to time using a variety of methods, which may include open market
purchases, privately negotiated transactions or otherwise, all in
accordance with the rules of the
For additional information, please refer to the Cheniere website at www.cheniere.com
and Quarterly Report on Form 10-Q for the quarter ended
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 expectations regarding regulatory authorizations and
approvals, (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, and (vii) statements
relating to the amount and timing of share repurchases. 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
Reconciliation of Non-GAAP Measures
Regulation G Reconciliations
The accompanying news release contains non-GAAP financial measures. Consolidated Adjusted EBITDA, Distributable Cash Flow, and Distributable Cash Flow per share 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.
Consolidated Adjusted EBITDA represents net income attributable to Cheniere before net income attributable to the non-controlling interest, interest, taxes, depreciation and amortization, adjusted for certain non-cash items, other non-operating income or expense items, and other items not otherwise predictive or indicative of ongoing operating performance, as detailed in the following reconciliation. Consolidated 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 Consolidated 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 business performance. We believe Consolidated Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization which vary substantially from company to company depending on capital structure, the method by which assets were acquired and depreciation policies. Further, the exclusion of certain non-cash items, other non-operating income or expense items, and items not otherwise predictive or indicative of ongoing operating performance enables comparability to prior period performance and trend analysis.
Consolidated Adjusted EBITDA is calculated by taking net income attributable to common stockholders before net income attributable to non-controlling interest, interest expense, net of capitalized interest, changes in the fair value and settlement of our interest rate derivatives, taxes, 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 and foreign currency exchange derivatives and non-cash compensation expense. 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.
Distributable Cash Flow is defined as cash received, or expected to be
received, from Cheniere’s ownership and interests in
Distributable Cash Flow per share is calculated by dividing Distributable Cash Flow by the weighted average number of common shares or units outstanding.
We believe Distributable Cash Flow is a useful performance measure for management, investors and other users of our financial information to evaluate our performance and to measure and estimate the ability of our assets to generate cash earnings after servicing our debt, paying cash taxes and expending sustaining capital, that could be used for discretionary purposes such as common stock dividends, stock repurchases, retirement of debt, or expansion capital expenditures. Management uses this measure and believes it provides users of our financial statements a useful measure reflective of our business’s ability to generate cash earnings to supplement the comparable GAAP measure. Distributable Cash Flow 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.
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.
We have not made any forecast of net income on a run rate basis, which would be the most directly comparable financial measure under GAAP, and we are unable to reconcile differences between run rate Consolidated Adjusted EBITDA and Distributable Cash Flow and net income.
Cheniere Energy, Inc.