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Cheniere Energy Partners LP Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 5, 2010 06:16AM
Cheniere Energy Partners LP (CQP) filed Quarterly Report for the period ended 2010-09-30. Cheniere Energy Partners Lp has a market cap of $490.3 million; its shares were traded at around $18.86 with a P/E ratio of 12.2 and P/S ratio of 1.3. The dividend yield of Cheniere Energy Partners Lp stocks is 9.1%.CQP is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
As of September 30, 2010, we had $57.0 million of cash and cash equivalents and $137.3 million of restricted cash and cash equivalents, which is restricted to pay interest on the Senior Notes described below.
In November 2006, Cheniere Marketing reserved approximately 2.0 Bcf/d of regasification capacity under a TUA and was required to make capacity payments aggregating approximately $250 million per year for the period from January 1, 2009, through at least September 30, 2028. In June 2010, Cheniere Marketing assigned its TUA with Sabine Pass LNG to Investments, including all of its rights, titles, interests, obligations and liabilities in and under the TUA. In connection with the assignment, Cheniere s guarantee of Cheniere Marketing s obligations under the TUA was terminated. Investments is required to make capacity payments aggregating approximately $250 million per year through at least September 30, 2028; however, the revenue earned by Sabine Pass LNG and from Investments capacity payments under the TUA is eliminated upon consolidation of our financial statements. We have guaranteed Investments obligations under its TUA.
Operating cash flow decreased $73.4 million for the nine-month period ended September 30, 2010 compared to the same period in 2009. The decrease in operating cash flow primarily resulted from the June 2010 TUA assignment from Cheniere Marketing to Investments that resulted in the TUA payments being made by Investments, our wholly owned subsidiary, instead of being received from Cheniere Marketing effective July 1, 2010. As a result, instead of receiving $187.5 million from Cheniere Marketing TUA payments in the nine-month period ended September 2009, we received only $62.8 million from Cheniere Marketing TUA payments in the nine-month period ended September 30, 2010, resulting in a cash flow decrease of $124.7 million. This operating cash flow decrease was partially offset by obtaining full TUA reservation fee payments from Total and Chevron in the first nine months of 2010 compared to receiving seven payments from Total and four payments from Chevron in the first nine months of 2009, which resulted in $74.3 million of increased operating cash flow. The remaining $23.0 million decrease in operating cash flow resulted primarily from timing in operating and maintenance payments and increased development costs associated with the proposed liquefaction project.
During each of the nine-month periods ended September 30, 2010 and 2009, we made $151.8 million and $210.5 million, respectively, of distributions to our common and subordinated unitholders and to our general partner. The decreased distributions to owners during the nine-month period ended September 30, 2010 resulted from decreased available cash in excess of the common unit and general partner distributions to be distributed as a result of the TUA assignment from Cheniere Marketing to Investments.
Sabine Pass LNG has issued an aggregate principal amount of $2,215.5 million of Senior Notes consisting of $550.0 million of 7¼% Senior Secured Notes due 2013 and $1,665.5 million of 7½% Senior Secured Notes due 2016. Interest on the Senior Notes is payable semi-annually in arrears on May 30 and November 30 of each year. The Senior Notes are secured on a first-priority basis by a security interest in all of Sabine Pass LNG s equity interests and substantially all of its operating assets. Under the Sabine Pass Indenture governing the Senior Notes, except for permitted tax distributions, Sabine Pass LNG may not make distributions until certain conditions are satisfied: there must be on deposit in an interest payment account an amount equal to one-sixth of the semi-annual interest payment multiplied by the number of elapsed months since the last semi-annual interest payment, and there must be on deposit in a permanent debt service reserve fund an amount equal to one semi-annual interest payment of $82.4 million. Distributions are permitted only after satisfying the foregoing funding requirements, a fixed charge coverage ratio test of 2:1 and other conditions specified in the Sabine Pass Indenture. During the three- and nine-month periods ended September 30, 2010, Sabine Pass LNG made distributions of $86.8 million and $298.6 million, respectively, to us after satisfying all the applicable conditions in the Sabine Pass Indenture. During the three- and nine-month periods ended September 30, 2009, Sabine Pass LNG made distributions of $73.2 million and $222.5 million, respectively, to us after satisfying all of the applicable conditions in the Sabine Pass Indenture.
During the three- and nine-month periods ended September 30, 2010, we paid an aggregate of $2.0 million and $11.3 million, respectively, under the following service agreements from restricted cash and cash equivalents. During the three- and nine-month periods ended September 30, 2009, we paid an aggregate of $4.6 million and $13.9 million, respectively, under the following service agreements from restricted cash and cash equivalents.
Stocks Discussed: CQP,