Cheniere Energy, Inc. · NYSE:LNG
Cheniere Energy — Corporate Update (September 2021)
32 slides from Cheniere Energy's corporate update, Sep 7, 2021
Slide 1: Cheniere Energy, Inc. Capital Allocation Update September 2021
Cheniere Energy, Inc. Capital Allocation Update September 2021 NYSE American: LNG
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements This presentation 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, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, o
Slide 3: Agenda
Agenda 3 Introduction Randy Bhatia Vice President, Investor Relations Capital Allocation Plan Zach Davis Senior Vice President and Chief Financial Officer Q & A Company Highlights Jack Fusco President and Chief Executive Officer
Slide 4: Company Highlights
Company Highlights Jack Fusco, President and CEO
Slide 5: From Developer to World Class LNG Operator
5 Years: From Developer to World Class LNG Operator COVID-19 Pandemic CCL Train 3 FID SPL Train 6 FID CCL Train 3 SC 1,000th Cargo #2 SECOND LARGEST LIQUEFACTION PLATFORM GLOBALLY 1,700+ CARGOES EXPORTED FROM CHENIERE PROJECTS 36 COUNTRIES & REGIONS DELIVERED TO FROM CHENIERE +5 mtpa INCREASE IN RUN
Slide 6: "All of the Above" Capital Allocation Strategy
“All of the Above” Capital Allocation Strategy 6 Cheniere has reached its cash flow inflection point, enabling execution on balance sheet, capital return, and growth priorities Capital Allocation Operational Excellence ESG and Climate Growth and Strategy GUIDING PRINCIPLES Strengthen Balance Sheet F
Slide 7: Achieving Excellence Across the Cheniere Platform
Achieving Excellence Across the Cheniere Platform 7 Full Year 2021 Guidance Consolidated Adj. EBITDA, $ in billions Confident in continued successful execution and ability to achieve financial results at the high end of the 2021 guidance ranges Sabine Pass Train 6 substantial completion expected in
Slide 8: Cheniere's Leadership on Climate & Sustainability
Cheniere’s Leadership on Climate & Sustainability 8 Climate and Sustainability Principles established in 2018 Collaboration with natural gas suppliers and academic institutions to quantify, monitor, report, and verify GHG emissions at natural gas production sites Cheniere plans to provide estimated
Slide 9: Continued Commercial Momentum Across Platform
Continued Commercial Momentum Across Platform ~45 mtpa platform ~90% contracted through mid-20s and ~85% longer term Term LNG sales executed in 2021 with diverse customer base to increase cash flow visibility: Corpus Christi Stage 3 9 Capital Allocation Operational Excellence ESG and Climate Growth
Slide 10: Potential Growth Opportunities at Corpus Christi and Sabine Pass
Potential Growth Opportunities at Corpus Christi and Sabine Pass 10 Stage 3 Trains 1-3 A d d itio n a l L a n d F o r E xp a n sio n Potential development of significant future brownfield capacity additions • Corpus Christi Stage 3 is shovel-ready and represents an incremental ~10+ mtpa of liquefact
Slide 11: Capital Allocation Plan
Capital Allocation Plan Zach Davis, Senior Vice President and CFO
Slide 12: Cheniere's Capital Allocation Plan
Cheniere’s Capital Allocation Plan 12 Today we are announcing an “All of the Above” Capital Allocation Plan DEBT PAYDOWN Target ~$1 Billion Annually Until Investment Grade Metrics Started This Year Initiation of Inaugural Quarterly Dividend Declared Today DIVIDEND SHARE REPURCHASE Share Repurchase P
Slide 13: Cheniere Has Reached Its Cash Flow Inflection Point
Note: Graphs do not include the impacts of FID of Corpus Christi Stage 3. Values above include forecasted figures. “DCF” stands for Distributable Cash Flow. Assumes CMI sales at strip through 2023, $2.25 / MMBtu thereafter. Consolidated Adjusted EBITDA and Distributable Cash Flow are non-GAAP measur
Slide 14: Capital Allocation Plan Efficiently Utilizes Projected DCF
Note: $ in bn unless otherwise noted. Distributable Cash Flow per Share (“DCF”) is a non-GAAP measure. We have not made any forecast of net income on a run-rate basis, which would be the most directly comparable measure under GAAP, and we are unable to reconcile differences between these run-rate fo
Slide 15: Cheniere's Substantial Run-Rate Cash Generation
Note: Distributable Cash Flow per Share (“DCF”) is a non-GAAP measure. We have not made any forecast of net income on a run-rate basis, which would be the most directly comparable measure under GAAP, and we are unable to reconcile differences between these run-rate forecasts and net income. See Slid
Slide 16: Capital Allocation Priorities
Capital Allocation Priorities 16 Meaningful Shareholder Returns ▪ Provide steady and meaningful capital returns to our shareholders in addition to growth and stronger balance sheet ▪ Initiate quarterly dividend in Q3 with plan to grow at mid-single digit growth rate through mid- 2020s, in line with
Slide 17: Balance Sheet Strategy Built for Sustainability
Note: Adjusted EBITDA is a non-GAAP measure. We have not made any forecast of net income on a run-rate basis, which would be the most directly comparable measure under GAAP, and we are unable to reconcile differences between these run-rate forecasts and net income. See Slide 27 for further detail on
Slide 18: Inaugural LNG Dividend
Inaugural LNG Dividend 18 B ▪ $0.33 Q3 dividend equates to yield of ~1.5%, above S&P 500 yield of ~1.3% ▪ Provides for stable shareholder cash return ▪ Sized with consideration of other capital allocation priorities ▪ Provides opportunity for yield-focused equity investors to participate in the Chen
Slide 19: LNG Share Repurchase Plan
LNG Share Repurchase Plan 19 C Run-Rate Share Count Reduction (in million shares) Reset share repurchase program back to $1 billion beginning in Q4 – Restarted share repurchases in Q3 under previous 2019 authorization, which since inception has repurchased ~7 million shares for over $400 million – C
Slide 20: Stage 3 Progressing to Anticipated FID in 2022
Note: Distributable Cash Flow per Share (“DCF”) and Adjusted EBITDA are non-GAAP measures. We have not made any forecast of net income on a run-rate basis, which would be the most directly comparable measure under GAAP, and we are unable to reconcile differences between these run-rate forecasts and
Slide 21: Summary Capital Allocation
Note: Run rate EBITDA and Distributable Cash Flow per Share (“DCF”) figures assume further contracting and CMI sales of $2.00 / MMBtu for the low end of the range and $2.50 / MMBtu for the high end of the range. DCF and Adjusted EBITDA are non-GAAP measures. We have not made any forecast of net inco
Slide 22: Cheniere Energy, Inc. Capital Allocation Update September 2021
Cheniere Energy, Inc. Capital Allocation Update September 2021 NYSE American: LNG
Slide 23: Appendix
Cheniere Energy, Inc. Appendix
Slide 24: Underpinned By Long-Term Creditworthy Contracts
Note: Ratings denote S&P, Moody’s, Fitch and subject to change, suspension or withdrawal at anytime and are not a recommendation to buy, hold or sell any security. (1) Includes long-term, mid-term, and short-term SPAs and IPM agreements. (2) Includes long-term SPAs and IPM agreements. (3) Represents
Slide 25: Balance Sheet Strategy Accelerates Ratings Progress
Balance Sheet Strategy Accelerates Ratings Progress 25 Focus on simple consolidated credit metrics for corporate entities CEI and CQP – Target less than 5x consolidated debt-to-EBITDA by early-to-mid-2020s to achieve investment grade credit metrics Pay down ~$4 billion of consolidated debt through 2
Slide 26: Cheniere Debt Summary
Note: This organizational chart is provided for illustrative purposes only, is not and does not purport to be a complete organizational chart of Cheniere. Total commitments for Term Loan, Credit, and Working Capital facilities are shown above and are inclusive of undrawn balances. (1) Unrestricted c
Slide 27: Run-Rate Guidance
Note: Numbers may not foot due to rounding. Range driven by production range of 4.9 – 5.1 MTPA per train and marketing margin of $2.00 - $2.50 / MMBtu. Additional assumptions include 80/20 profit-sharing tariff with SPL/CCH projects, $3.00 / MMBtu Henry Hub, 5.00% interest rates for refinancings, an
Slide 28: Forecasting Points
Forecasting Points 28 Tax Assumptions ▪ Production range of 4.9 – 5.1 mtpa per train ▪ CMI sales assume range of $2.00 - $2.50 / MMBtu and include 80 / 20 profit-sharing tariff with SPL / CCL projects ▪ Long-term Henry Hub price of $3.00 / MMBtu ▪ Refinancing rate of 5.00% for maturing debt ▪ Assign
Slide 29: Market Dynamics Point to a Tightening LNG Market
Sources: Cheniere Research, GIIGNL, Wood Mackenzie for historical figures. (1) Capacity additions include project debottlenecking. (2) Next period of rapid supply growth (mid/late 2020’s) likely deferred / moderated. Market Dynamics Point to a Tightening LNG Market 29 LNG capacity additions tapering
Slide 30: Market Fundamentals Support LNG Growth for Decades
Driven by growing economies and demand for secure, affordable and cleaner-burning fuels Source: Cheniere Research estimates (July 2021), Wood Mackenzie for historical figures. Area chart includes all recent FIDs through February 2021 (up to and including QG NFE). Market Fundamentals Support LNG Grow
Slide 31: Regulation G Reconciliations
Regulation G Reconciliations This presentation contains non-GAAP financial measures. Consolidated Adjusted EBITDA, Distributable Cash Flow, Distributable Cash Flow per Share, and Distributable Cash Flow per Unit are non-GAAP financial measures that we use to facilitate comparisons of operating perfo
Slide 32: Investor Relations Contacts
© 2021 Cheniere Energy, Inc. All Rights Reserved Investor Relations Contacts Randy Bhatia Vice President, Investor Relations – (713) 375-5479, randy.bhatia@cheniere.com Frances Smith Manager, Investor Relations – (713) 375-5753, frances.smith@cheniere.com Zak Broderick Senior Analyst, Investor Relat