UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2020~~2021

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-16383

CHENIERE ENERGY, INC.

(Exact name of registrant as specified in its charter)



Delaware			95-4352386
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

700 Milam Street,, Suite 1900

Houston,, Texas77002

(Address of principal executive offices) (Zip Code)

(~~713~~) (713) 375-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $ 0.003 par value	LNG	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April ~~24, 2020,~~30, 2021, the issuer had ~~252,107,558~~253,537,331 shares of Common Stock outstanding.

CHENIERE ENERGY, INC.

TABLE OF CONTENTS






















			Definitions	1
Part I. Financial Information
Item 1.			Consolidated Financial Statements	3
			~~Consolidated Balance Sheets~~	3
	Consolidated Statements of Operations	43
			Consolidated Balance Sheets	4
			Consolidated Statements of Stockholders’ Equity	5
			Consolidated Statements of Cash Flows	6
			Notes to Consolidated Financial Statements	7
			Note 1—Nature of Operations and Basis of Presentation	7
			Note 2—Restricted Cash	8
			Note 3—Accounts and Other Receivables	8
			Note 4—Inventory	9
			Note 5—Property, Plant and Equipment	9
			Note 6—Derivative Instruments	10
			Note 7—Other Non-Current Assets	15
			Note 8—Non-Controlling Interest and Variable Interest Entity	16
			Note 9—Accrued Liabilities	16
			Note 10—Debt	17
			Note 11—Leases	21
			Note 12—Revenues from Contracts with Customers	22
			Note 13—Related Party Transactions	24
			Note 14—Income Taxes	25
			Note 15—Share-Based Compensation	25
			Note 16—Net Income per Share Attributable to Common Stockholders	26
			Note 17—Commitments and Contingencies	27
			Note 18—Customer Concentration	27
			Note 19—Supplemental Cash Flow Information	27

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.			Quantitative and Qualitative Disclosures about Market Risk	49

Item 4.			Controls and Procedures	50

Part II. Other Information
Item 1.			Legal Proceedings	51

Item 1A.			Risk Factors	51

Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	5351

Item 6.			Exhibits	5452

			Signatures	5553

DEFINITIONS

As used in this quarterly report, the terms listed below have the following meanings:

Common Industry and Other Terms



Bcf						billion cubic feet
Bcf/d						billion cubic feet per day
Bcf/yr						billion cubic feet per year
Bcfe						billion cubic feet equivalent
DOE						U.S. Department of Energy
EPC						engineering, procurement and construction
FERC						Federal Energy Regulatory Commission
FTA countries						countries with which the United States has a free trade agreement providing for national treatment for trade in natural gas
GAAP						generally accepted accounting principles in the United States
Henry Hub						the final settlement price (in USD per MMBtu) for the New York Mercantile Exchange’s Henry Hub natural gas futures contract for the month in which a relevant cargo’s delivery window is scheduled to begin
LIBOR						London Interbank Offered Rate
LNG						liquefied natural gas, a product of natural gas that, through a refrigeration process, has been cooled to a liquid state, which occupies a volume that is approximately 1/600th of its gaseous state
MMBtu						million British thermal units, an energy unit
mtpa						million tonnes per annum

non-FTA countries						countries with which the United States does not have a free trade agreement providing for national treatment for trade in natural gas and with which trade is permitted
SEC						U.S. Securities and Exchange Commission
SPA						LNG sale and purchase agreement
TBtu						trillion British thermal units, an energy unit
Train						an industrial facility comprised of a series of refrigerant compressor loops used to cool natural gas into LNG
TUA						terminal use agreement

Abbreviated Legal Entity Structure

The following diagram depicts our abbreviated legal entity structure as of March 31, ~~2020,~~2021, including our ownership of certain subsidiaries, and the references to these entities used in this quarterly report:

Unless the context requires otherwise, references to “Cheniere,” the “Company,” “we,” “us” and “our” refer to Cheniere Energy, Inc. and its consolidated subsidiaries, including our publicly traded subsidiary, Cheniere Partners.

Unless the context requires otherwise, references to the “CCH Group” refer to CCH HoldCo II, CCH HoldCo I, CCH, CCL and CCP, collectively.


~~PART I.~~	~~FINANCIAL INFORMATION~~

PART I. FINANCIAL INFORMATION


~~ITEM 1.~~	~~CONSOLIDATED FINANCIAL STATEMENTS~~

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CHENIERE ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED ~~BALANCE SHEETS (1)~~STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited)

March 31, December 31,
2020 2019
ASSETS (unaudited)
Current assets
Cash and cash equivalents $ 2,399
$ 2,474
Restricted cash 430
520
Accounts and other receivables 468
491
Inventory 239
312
Derivative assets 322
323
Other current assets 79
92
Total current assets 3,937
4,212

Property, plant and equipment, net 29,802
29,673
Operating lease assets, net 350
439
Non-current derivative assets 705
174
Goodwill 77
77
Deferred tax assets 400
529
Other non-current assets, net 476
388
Total assets $ 35,747
$ 35,492

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities

Accounts payable $ 29
$ 66
Accrued liabilities 922
1,281
Current debt 2,137
—
Deferred revenue 94
161
Current operating lease liabilities 178
236
Derivative liabilities 244
117
Other current liabilities 53
13
Total current liabilities 3,657
1,874

Long-term debt, net 28,940
30,774
Non-current operating lease liabilities 164
189
Non-current finance lease liabilities 58
58
Non-current derivative liabilities 186
151
Other non-current liabilities 23
11

Commitments and contingencies (see Note 17)

Stockholders’ equity

Preferred stock, $0.0001 par value, 5.0 million shares authorized, none issued —
—
Common stock, $0.003 par value, 480.0 million shares authorized
Issued: 272.8 million shares at March 31, 2020 and 270.7 million shares at December 31, 2019

Outstanding: 252.1 million shares at March 31, 2020 and 253.6 million shares at December 31, 2019 1
1
Treasury stock: 20.7 million shares and 17.1 million shares at March 31, 2020 and December 31, 2019, respectively, at cost (868 ) (674 )
Additional paid-in-capital 4,196
4,167
Accumulated deficit (3,133 ) (3,508 )
Total stockholders’ equity (deficit) 196
(14 )
Non-controlling interest 2,523
2,449
Total equity 2,719
2,435
Total liabilities and stockholders’ equity $ 35,747
$ 35,492


	Three Months Ended March 31,
		2021		2020
Revenues
LNG revenues		$	2,999	$	2,568
Regasification revenues		67		67
Other revenues		24		74

Total revenues		3,090		2,709

Operating costs and expenses
Cost of sales (excluding items shown separately below)		1,386		724

Operating and maintenance expense		322		316
Development expense		1		4
Selling, general and administrative expense		81		81
Depreciation and amortization expense		236		233

Impairment expense and loss on disposal of assets		0		5

Total operating costs and expenses		2,026		1,363

Income from operations		1,064		1,346

Other income (expense)
Interest expense, net of capitalized interest		(356)		(412)
Loss on modification or extinguishment of debt		(55)		(1)
Interest rate derivative gain (loss), net		1		(208)
Other income, net		6		9
Total other expense		(404)		(612)

Income before income taxes and non-controlling interest		660		734
Income tax provision		(89)		(131)
Net income		571		603
Less: net income attributable to non-controlling interest		178		228
Net income attributable to common stockholders		$	393	$	375

Net income per share attributable to common stockholders—basic (1)		$	1.56	$	1.48
Net income per share attributable to common stockholders—diluted (1)		$	1.54	$	1.43

Weighted average number of common shares outstanding—basic		252.9		253.0
Weighted average number of common shares outstanding—diluted		258.9		299.6

~~(1)~~

(1) Earnings per share in the table may not recalculate exactly due to rounding because it is calculated based on whole numbers, not the rounded numbers presented.

~~Amounts presented include balances held by our consolidated variable interest entity (“VIE”), Cheniere Partners, as further discussed in~~ ~~Note 8— Non-controlling Interest and Variable Interest Entity.~~ As of March 31, 2020, total assets and liabilities of Cheniere Partners, which are included in our Consolidated Balance Sheets, were $19.0 billion and $18.4 billion, respectively, including $1.7 billion of cash and cash equivalents and $0.1 billion of restricted cash.

The accompanying notes are an integral part of these consolidated financial statements.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED ~~STATEMENTS OF OPERATIONS~~BALANCE SHEETS (1)

(in millions, except ~~per~~ share data)

~~(unaudited)~~

Three Months Ended March 31,
2020 2019
Revenues
LNG revenues $ 2,568
$ 2,143
Regasification revenues 67
66
Other revenues 74
52
Total revenues 2,709
2,261

Operating costs and expenses
Cost of sales (excluding items shown separately below) 724
1,214
Operating and maintenance expense 316
221
Development expense 4
1
Selling, general and administrative expense 81
73
Depreciation and amortization expense 233
144
Impairment expense and loss on disposal of assets 5
2
Total operating costs and expenses 1,363
1,655

Income from operations 1,346
606

Other income (expense)
Interest expense, net of capitalized interest (412 ) (247 )
Loss on modification or extinguishment of debt (1 ) —
Interest rate derivative loss, net (208 ) (35 )
Other income, net 9
16
Total other expense (612 ) (266 )

Income before income taxes and non-controlling interest 734

340
Income tax provision (131 )
(3 )
Net income 603

337
Less: net income attributable to non-controlling interest 228

196
Net income attributable to common stockholders $ 375

$ 141

Net income per share attributable to common stockholders—basic (1) $ 1.48

$ 0.55
Net income per share attributable to common stockholders—diluted (1) $ 1.43
$ 0.54

Weighted average number of common shares outstanding—basic 253.0
257.1
Weighted average number of common shares outstanding—diluted 299.6
258.5



	March 31,		December 31,
	2021		2020
ASSETS	(unaudited)
Current assets
Cash and cash equivalents	$	1,667	$	1,628
Restricted cash	731		449
Accounts and other receivables, net	675		647

Inventory	314		292
Derivative assets	67		32
Other current assets	120		121
Total current assets	3,574		3,169


Property, plant and equipment, net	30,409		30,421
Operating lease assets	1,181		759

Non-current derivative assets	306		376
Goodwill	77		77
Deferred tax assets	402		489
Other non-current assets, net	446		406
Total assets	$	36,395	$	35,697

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	84	$	35
Accrued liabilities	1,263		1,175

Current debt	1,105		372
Deferred revenue	102		138
Current operating lease liabilities	251		161
Derivative liabilities	342		313
Other current liabilities	5		2
Total current liabilities	3,152		2,196

Long-term debt, net	29,465		30,471
Non-current operating lease liabilities	928		597
Non-current finance lease liabilities	57		57

Non-current derivative liabilities	166		151
Other non-current liabilities	7		7

Commitments and contingencies (see Note 17)	0		0

Stockholders’ equity
Preferred stock, $0.0001 par value, 5.0 million shares authorized, NaN issued	0		0
Common stock, $0.003 par value, 480.0 million shares authorized; 274.9 million shares and 273.1 million shares issued at March 31, 2021 and December 31, 2020, respectively	1		1



Treasury stock: 21.4 million shares and 20.8 million shares at March 31, 2021 and December 31, 2020, respectively, at cost	(914)		(872)
Additional paid-in-capital	4,306		4,273
Accumulated deficit	(3,200)		(3,593)
Total stockholders' equity (deficit)	193		(191)
Non-controlling interest	2,427		2,409
Total equity	2,620		2,218
Total liabilities and stockholders’ equity	$	36,395	$	35,697


~~(1)~~	~~Earnings per share in the table may not recalculate exactly due to rounding because it is calculated based on whole numbers, not the rounded numbers presented.~~

(1) Amounts presented include balances held by our consolidated variable interest entity (“VIE”), Cheniere Partners, as further discussed in Note 8— Non-controlling Interest and Variable Interest Entity. As of March 31, 2021, total assets and liabilities of Cheniere Partners, which are included in our Consolidated Balance Sheets, were $18.9 billion and $18.6 billion, respectively, including $1.2 billion of cash and cash equivalents and $0.1 billion of restricted cash.

The accompanying notes are an integral part of these consolidated financial statements.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions)

(unaudited)


Three Months Ended March 31, 2020
Three Months Ended March 31, 2021																							Three Months Ended March 31, 2021
	Total Stockholders’ Equity																								Total Stockholders’ Equity
	Common Stock				Treasury Stock				Additional Paid-in Capital			Accumulated Deficit				Non-controlling Interest				Total Equity					Common Stock						Treasury Stock			Additional Paid-in Capital			Accumulated Deficit			Non-controlling Interest			Total Equity
	Shares		Par Value Amount		Shares	Amount									Shares								Par Value Amount				Shares			Amount
Balance at December 31, 2019	253.6		$	1	17.1	$	(674	)			$		4,167					$	(3,508			)		$	2,449	$	2,435

Balance at December 31, 2020																							Balance at December 31, 2020		252.3			$	1		20.8	$	(872)		$	4,273		$	(3,593)		$	2,409		$	2,218

Vesting of restricted stock units and performance stock units	2.1		—		—	—			—			—				—				—			Vesting of restricted stock units and performance stock units		1.8			0			0	0		0			0			0			0
Share-based compensation	—		—		—	—			29			—				—				29			Share-based compensation		—			0			—	0		33			0			0			33
Issued shares withheld from employees related to share-based compensation, at cost	(0.7	)	—		0.7	(39		)	—			—				—				(39		)	Issued shares withheld from employees related to share-based compensation, at cost		(0.6)			0			0.6	(42)		0			0			0			(42)
Shares repurchased, at cost	(2.9	)	—		2.9	(155		)	—			—				—				(155		)

Net income attributable to non-controlling interest	—		—		—	—			—			—				228				228			Net income attributable to non-controlling interest		—			0			—	0		0			0			178			178
Distributions and dividends to non-controlling interest	—		—		—	—			—			—				(154		)		(154		)

Distributions to non-controlling interest																							Distributions to non-controlling interest		—			0			—	0		0			0			(160)			(160)
Net income	—		—		—	—			—			375				—				375			Net income		—			0			—	0		0			393			0			393
Balance at March 31, 2020	252.1		$	1	20.7	$	(868	)	$	4,196		$	(3,133	)		$	2,523			$	2,719
Balance at March 31, 2021																							Balance at March 31, 2021		253.5			$	1		21.4	$	(914)	$	4,306		$	(3,200)		$	2,427		$	2,620


Three Months Ended March 31, 2020
	Total Stockholders’ Equity
	Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Deficit		Non-controlling Interest		Total Equity
	Shares	Par Value Amount		Shares	Amount
Balance at December 31, 2019	253.6	$	1	17.1	$	(674)	$	4,167	$	(3,508)	$	2,449	$	2,435
Vesting of restricted stock units and performance stock units	2.1	0		0	0		0		0		0		0
Share-based compensation	—	0		—	0		29		0		0		29
Issued shares withheld from employees related to share-based compensation, at cost	(0.7)	0		0.7	(39)		0		0		0		(39)
Shares repurchased, at cost	(2.9)	0		2.9	(155)		0		0		0		(155)
Net income attributable to non-controlling interest	—	0		—	0		0		0		228		228
Distributions to non-controlling interest	—	0		—	0		0		0		(154)		(154)
Net income	—	0		—	0		0		375		0		375
Balance at March 31, 2020	252.1	$	1	20.7	$	(868)	$	4,196	$	(3,133)	$	2,523	$	2,719

Three Months Ended March 31, 2019
Total Stockholders’ Equity
Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Non-controlling Interest Total
Equity
Shares Par Value Amount Shares Amount
Balance at December 31, 2018 257.0
$ 1
12.8
$ (406 ) $ 4,035
$ (4,156 ) $ 2,455
$ 1,929
Vesting of restricted stock units 0.6
—
—
—
—
—
—
—
Share-based compensation —
—
—
—
28
—
—
28
Issued shares withheld from employees related to share-based compensation, at cost (0.2 ) —
0.2
(12 ) —
—
—
(12 )
Net income attributable to non-controlling interest —
—
—
—
—
—
196
196
Distributions and dividends to non-controlling interest —
—
—
—
—
—
(144 ) (144 )
Net income —
—
—
—
—
141
—
141
Balance at March 31, 2019 257.4
$ 1
13.0
$ (418 ) $ 4,063
$ (4,015 ) $ 2,507
$ 2,138

The accompanying notes are an integral part of these consolidated financial statements.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


								Three Months Ended March 31,
	Three Months Ended March 31,
	2020			2019				2021		2020
Cash flows from operating activities							Cash flows from operating activities
Net income	$	603		$	337		Net income	$	571	$	603
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	233			144			Depreciation and amortization expense	236		233
Share-based compensation expense	29			28			Share-based compensation expense	32		29
Non-cash interest expense	17			33			Non-cash interest expense	8		17
Amortization of debt issuance costs, premium and discount	32			18			Amortization of debt issuance costs, premium and discount	20		32
Non-cash operating lease costs	96			79
Reduction of right-of-use assets							Reduction of right-of-use assets	85		96
Loss on modification or extinguishment of debt	1			—			Loss on modification or extinguishment of debt	55		1
Total gains on derivatives, net	(459		)	(122		)
Total losses (gains) on derivatives, net							Total losses (gains) on derivatives, net	74		(459)
Net cash provided by settlement of derivative instruments	91			16			Net cash provided by settlement of derivative instruments	5		91
Impairment expense and loss on disposal of assets	5			2			Impairment expense and loss on disposal of assets	0		5
Impairment or loss on equity method investments	1			—
Impairment or loss (income) on equity method investments							Impairment or loss (income) on equity method investments	(7)		1
Deferred taxes	129			—			Deferred taxes	87		129

Other							Other	1		0
Changes in operating assets and liabilities:							Changes in operating assets and liabilities:
Accounts and other receivables	23			99
Accounts and other receivables, net							Accounts and other receivables, net	(3)		23

Inventory	74			44			Inventory	(16)		74
Other current assets	13			(15		)	Other current assets	(1)		13
Accounts payable and accrued liabilities	(176		)	(146		)	Accounts payable and accrued liabilities	52		(176)

Deferred revenue	(67		)	(31		)	Deferred revenue	(36)		(67)
Operating lease liabilities	(90		)	(85		)	Operating lease liabilities	(86)		(90)
Finance lease liabilities	—			1

Other, net	19			10			Other, net	(11)		19
Net cash provided by operating activities	574			412			Net cash provided by operating activities	1,066		574

Cash flows from investing activities							Cash flows from investing activities
Property, plant and equipment, net	(556		)	(625		)	Property, plant and equipment, net	(190)		(556)
Investment in equity method investment	(90		)	(24		)	Investment in equity method investment	0		(90)
Other	(8		)	(2		)	Other	(10)		(8)
Net cash used in investing activities	(654		)	(651		)	Net cash used in investing activities	(200)		(654)

Cash flows from financing activities							Cash flows from financing activities
Proceeds from issuances of debt	596			692			Proceeds from issuances of debt	1,800		596
Repayments of debt	(300		)	(441		)	Repayments of debt	(2,088)		(300)
Debt issuance and other financing costs	(33		)	—			Debt issuance and other financing costs	(19)		(33)
Distributions and dividends to non-controlling interest	(154		)	(144		)
Debt modification or extinguishment costs							Debt modification or extinguishment costs	(40)		0

Distributions to non-controlling interest							Distributions to non-controlling interest	(160)		(154)
Payments related to tax withholdings for share-based compensation	(39		)	(12		)	Payments related to tax withholdings for share-based compensation	(42)		(39)
Repurchase of common stock	(155		)	—			Repurchase of common stock	0		(155)
Other	—			(1		)	Other	4		0
Net cash provided by (used in) financing activities	(85		)	94
Net cash used in financing activities							Net cash used in financing activities	(545)		(85)

Net decrease in cash, cash equivalents and restricted cash	(165		)	(145		)
Net increase (decrease) in cash, cash equivalents and restricted cash							Net increase (decrease) in cash, cash equivalents and restricted cash	321		(165)
Cash, cash equivalents and restricted cash—beginning of period	2,994			3,156			Cash, cash equivalents and restricted cash—beginning of period	2,077		2,994
Cash, cash equivalents and restricted cash—end of period	$	2,829		$	3,011		Cash, cash equivalents and restricted cash—end of period	$	2,398	$	2,829

Balances per Consolidated Balance ~~Sheet:~~Sheets:


	March 31,
	2021
Cash and cash equivalents	$	1,667
Restricted cash	731

Total cash, cash equivalents and restricted cash	$	2,398

March 31,
2020
Cash and cash equivalents $ 2,399
Restricted cash 430
Total cash, cash equivalents and restricted cash $ 2,829

The accompanying notes are an integral part of these consolidated financial statements.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1—NATURE OF OPERATIONS AND BASIS OF PRESENTATION

We are operating and constructing 2 natural gas liquefaction and export facilities at Sabine Pass and Corpus Christi. The Sabine Pass LNG terminal is located in Cameron Parish, Louisiana, on the Sabine-Neches Waterway less than four miles from the Gulf Coast. Cheniere Partners, through its subsidiary SPL, is currently operating 5 natural gas liquefaction Trains and is constructing 1 additional Train that is expected to be substantially completed in the first half of 2022, for a total production capacity of approximately 30 mtpa of LNG (the “SPL Project”) at the Sabine Pass LNG terminal. The Sabine Pass LNG terminal has operational regasification facilities owned by Cheniere Partners’ subsidiary, SPLNG, that include pre-existing infrastructure of 5 LNG storage tanks, 2 marine berths and ~~vaporizers.~~vaporizers and an additional marine berth that is under construction. Cheniere Partners also owns a 94-mile pipeline that interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines (the “Creole Trail Pipeline”) through its subsidiary, CTPL. As of March 31, ~~2020,~~2021, we owned 100% of the general partner interest and 48.6% of the limited partner interest in Cheniere Partners.

The Corpus Christi LNG terminal is located near Corpus Christi, Texas and is operated and constructed by our subsidiary, CCL. We are currently operating 23 Trains, ~~and are constructing 1 additional~~including the third Train which achieved substantial completion on March 26, 2021, for a total production capacity of approximately 15 mtpa of LNG. We also operate a 23-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with several interstate and intrastate natural gas pipelines (the “Corpus Christi Pipeline” and together with the Trains, the “CCL Project”) through our subsidiary, CCP. The CCL Project ~~once fully constructed, will contain~~also contains 3 LNG storage tanks and 2 marine berths.

Additionally, separate from the CCH Group, we are developing an expansion of the Corpus Christi LNG terminal adjacent to the CCL Project (“Corpus Christi Stage 3”) through our subsidiary CCL Stage III, for up to 7 midscale Trains with an expected total production capacity of approximately 10 mtpa of LNG. We received approval from FERC in November 2019 to site, construct and operate the expansion project.

We remain focused on operational excellence and customer satisfaction. Increasing demand offor 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 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. The development of these sites 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 final investment decision (“FID”).

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of Cheniere have been prepared in accordance with GAAP for interim financial information and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in our annual report on Form 10-K for the fiscal year ended December 31, ~~2019.~~2020 ~~In our opinion, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation, have been included.~~.

Results of operations for the three months ended March 31, ~~2020~~2021 are not necessarily indicative of the results of operations that will be realized for the year ending December 31, ~~2020.~~2021.

Recent Accounting Standards

In ~~March~~August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This guidance simplifies the accounting for convertible instruments primarily by eliminating the existing cash conversion and beneficial conversion models within Subtopic 470-20, which will result in fewer embedded conversion options being accounted for separately from the debt host. The guidance also amends and simplifies the calculation of earnings per share relating to convertible instruments. This guidance is effective for annual periods beginning after December 15, 2021, including interim periods within that reporting period, with earlier adoption permitted for fiscal years beginning after December 15, 2020, including interim periods within that reporting period, using either a full or modified retrospective approach. We plan to adopt

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

this guidance on January 1, 2022 and are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance primarily provides temporary optional expedients which simplify the accounting for contract modifications to existing ~~debt agreements~~contracts expected to arise from the market transition from LIBOR to alternative reference rates. We have various credit facilities and interest rate swaps indexed to LIBOR, as further described in Note 6—Derivative Instruments and Note 10—Debt. The optional expedients were available to be used upon issuance of this guidance but we have not yet applied the guidance because we have not yet modified any of our existing contracts for reference rate reform. Once we apply an optional expedient to a modified contract and adopt this standard, the guidance will be applied to all subsequent applicable contract modifications until December 31, 2022, at which time the optional expedients are no longer available.

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

NOTE 2—RESTRICTED CASH

Restricted cash consists of funds that are contractually or legally restricted as to usage or withdrawal and have been presented separately from cash and cash equivalents on our Consolidated Balance Sheets. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, restricted cash consisted of the following (in millions):

March 31, December 31,
2020 2019
Current restricted cash
SPL Project $ 109
$ 181
CCL Project 94
80
Cash held by our subsidiaries restricted to Cheniere 227
259
Total current restricted cash $ 430
$ 520



	March 31,		December 31,
	2021		2020
Restricted cash
SPL Project	$	123	$	97

CCL Project	382		70
Cash held by our subsidiaries that is restricted to Cheniere	226		282
Total restricted cash	$	731	$	449

Pursuant to the accounts agreements entered into with the collateral trustees for the benefit of SPL’s debt holders and CCH’s debt holders, SPL and CCH are required to deposit all cash received into reserve accounts controlled by the collateral trustees. The usage or withdrawal of such cash is restricted to the payment of liabilities related to the SPL Project and the CCL Project (collectively, the “Liquefaction Projects”) and other restricted payments. The majority of the cash held by our subsidiaries that is restricted to Cheniere relates to advance funding for operation and construction needs of the Liquefaction Projects.

NOTE 3—ACCOUNTS AND OTHER RECEIVABLES

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, accounts and other receivables, net consisted of the following (in millions):



	March 31,		December 31,
	2021		2020
Trade receivables
SPL and CCL	$	475	$	482

Cheniere Marketing	121		113
Other accounts receivable	79		52

Total accounts and other receivables, net	$	675	$	647

March 31, December 31,
2020 2019
Trade receivables
SPL and CCL $ 304
$ 328
Cheniere Marketing 88
113
Other accounts receivable 76
50
Total accounts and other receivables $ 468
$ 491

~~NOTE 4—INVENTORY~~

~~As of March 31, 2020 and December 31, 2019, inventory consisted of the following (in millions):~~

March 31, December 31,
2020 2019
Natural gas $ 13
$ 16
LNG 35
67
LNG in-transit 48
93
Materials and other 143
136
Total inventory $ 239
$ 312

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE 4—INVENTORY

As of March 31, 2021 and December 31, 2020, inventory consisted of the following (in millions):



	March 31,		December 31,
	2021		2020
Materials	$	158	$	150
LNG in-transit	94		88
LNG	42		27
Natural gas	18		26
Other	2		1
Total inventory	$	314	$	292

NOTE 5—PROPERTY, PLANT AND EQUIPMENT

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, property, plant and equipment, net consisted of the following (in millions):



	March 31,		December 31,
	2021		2020
LNG terminal costs
LNG terminal and interconnecting pipeline facilities	$	30,560	$	27,475
LNG site and related costs	324		324
LNG terminal construction-in-process	2,511		5,378
Accumulated depreciation	(3,161)		(2,935)
Total LNG terminal costs, net	30,234		30,242
Fixed assets and other
Computer and office equipment	25		25
Furniture and fixtures	20		19
Computer software	119		117
Leasehold improvements	45		45
Land	59		59
Other	25		25
Accumulated depreciation	(170)		(164)
Total fixed assets and other, net	123		126
Assets under finance lease
Tug vessels	60		60
Accumulated depreciation	(8)		(7)
Total assets under finance lease, net	52		53
Property, plant and equipment, net	$	30,409	$	30,421

March 31, December 31,
2020 2019
LNG terminal costs
LNG terminal and interconnecting pipeline facilities $ 27,330
$ 27,305
LNG site and related costs 322
322
LNG terminal construction-in-process 4,233
3,903
Accumulated depreciation (2,272 ) (2,049 )
Total LNG terminal costs, net 29,613
29,481
Fixed assets and other

Computer and office equipment 23
23
Furniture and fixtures 22
22
Computer software 112
110
Leasehold improvements 43
42
Land 59
59
Other 24
21
Accumulated depreciation (149 ) (141 )
Total fixed assets and other, net 134
136
Assets under finance lease
Tug vessels 60
60
Accumulated depreciation (5 ) (4 )
Total assets under finance lease, net 55
56
Property, plant and equipment, net $ 29,802
$ 29,673

~~Depreciation~~The following table shows depreciation expense ~~was $232 million~~ and ~~$143 million~~offsets to LNG terminal costs during the three months ended March 31, 2021 and 2020 ~~and 2019, respectively.~~(in millions):


	Three Months Ended March 31,
		2021		2020
Depreciation expense		$	234	$	232
Offsets to LNG terminal costs (1)		191		0

(1) We ~~realized~~recognize offsets to LNG terminal costs ~~of $202 million during the three months ended March 31, 2019 that were~~ related to the sale of commissioning cargoes because these amounts were earned or loaded prior to the start of commercial operations of the respective Trains of the Liquefaction Projects during the testing phase for its construction. ~~We did 0t realize any offsets to LNG terminal costs during the three months ended March 31, 2020.~~

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE 6—DERIVATIVE INSTRUMENTS

We have entered into the following derivative instruments that are reported at fair value:

•interest rate swaps (“CCH Interest Rate Derivatives”) to hedge the exposure to volatility in a portion of the floating-rate interest payments on CCH’s amended and restated credit facility (the “CCH Credit Facility”) and previously, to hedge against changes in interest rates that could impact anticipated future issuance of debt by CCH ~~which is anticipated by the end of 2020~~ (“CCH Interest Rate Forward Start Derivatives” and, collectively with the CCH Interest Rate Derivatives, the “Interest Rate Derivatives”);

•commodity derivatives consisting of natural gas supply contracts for the commissioning and operation of the Liquefaction Projects and potential future development of Corpus Christi Stage 3 (“Physical Liquefaction Supply Derivatives”) and associated economic hedges ~~(collectively,~~(“Financial Liquefaction Supply Derivatives,” and collectively with the Physical Liquefaction Supply Derivatives, the “Liquefaction Supply Derivatives”);

•physical derivatives consisting of liquified natural gas contracts in which we have contractual net settlement (“Physical LNG Trading Derivatives”) and financial derivatives to hedge the exposure to the commodity markets in which we have contractual arrangements to purchase or sell physical LNG ~~(“LNG~~(collectively, “LNG Trading Derivatives”); and

•foreign currency exchange (“FX”) contracts to hedge exposure to currency risk associated with both LNG Trading Derivatives and operations in countries outside of the United States (“FX Derivatives”).

We recognize our derivative instruments as either assets or liabilities and measure those instruments at fair value. None of our derivative instruments are designated as cash flow or fair value hedging instruments, and changes in fair value are recorded within our Consolidated Statements of Operations to the extent not utilized for the commissioning process.

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

The following table shows the fair value of our derivative instruments that are required to be measured at fair value on a recurring basis as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, which are classified as derivative assets, non-current derivative assets, derivative liabilities or non-current derivative liabilities in our Consolidated Balance Sheets (in millions):


	Fair Value Measurements as of
	March 31, 2021								December 31, 2020
	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
CCH Interest Rate Derivatives liability	$	0	$	(114)	$	0	$	(114)	$	0	$	(140)	$	0	$	(140)

Liquefaction Supply Derivatives asset (liability)	7		(5)		149		151		5		(6)		241		240
LNG Trading Derivatives liability	0		(155)		(18)		(173)		(3)		(131)		0		(134)
FX Derivatives asset (liability)	0		1		0		1		0		(22)		0		(22)

Fair Value Measurements as of
March 31, 2020 December 31, 2019
Quoted Prices in Active Markets
(Level 1) Significant Other Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) Total Quoted Prices in Active Markets
(Level 1) Significant Other Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) Total
CCH Interest Rate Derivatives liability $ —
$ (197 ) $ —
$ (197 ) $ —
$ (81 ) $ —
$ (81 )
CCH Interest Rate Forward Start Derivatives liability —
(92 ) —
(92 ) —
(8 ) —
(8 )
Liquefaction Supply Derivatives asset 1
3
674
678
5
6
138
149
LNG Trading Derivatives asset (liability) (3 ) 188
—
185
—
165
—
165
FX Derivatives asset —
23
—
23
—
4
—
4

We value our Interest Rate Derivatives using an income-based approach utilizing observable inputs to the valuation model including interest rate curves, risk adjusted discount rates, credit spreads and other relevant data. We value our LNG Trading Derivatives and our Liquefaction Supply Derivatives using a market or option-based approach incorporating present value techniques, as needed, using observable commodity price curves, when available, and other relevant data. We value our FX Derivatives with a market approach using observable FX rates and other relevant data.

The fair value of our Physical Liquefaction Supply Derivatives isand LNG Trading Derivatives are predominantly driven by observable and unobservable market commodity prices and, as applicable to our natural gas supply contracts, our assessment of the associated events deriving fair value, including evaluating whether the respective market is available as pipeline infrastructure is developed. The fair value of our Physical Liquefaction Supply Derivatives incorporates risk premiums related to the satisfaction of conditions precedent, such as completion and placement into service of relevant pipeline infrastructure to accommodate marketable physical gas flow. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, some of our Physical Liquefaction

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

Supply Derivatives existed within markets for which the pipeline infrastructure was under development to accommodate marketable physical gas flow.

We include our Physical LNG Trading Derivatives and a portion of our Physical Liquefaction Supply Derivatives as Level 3 within the valuation hierarchy as the fair value is developed through the use of internal models which incorporate significant unobservable inputs. In instances where observable data is unavailable, consideration is given to the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks, such as future prices of energy units for unobservable periods, liquidity, volatility and contract duration.

The Level 3 fair value measurements of our Physical LNG Trading Derivatives and the natural gas positions within our Physical Liquefaction Supply Derivatives could be materially impacted by a significant change in certain natural gas and international LNG prices. The following table includes quantitative information for the unobservable inputs for our Level 3 Physical Liquefaction Supply Derivatives and Physical LNG Trading Derivatives as of March 31, ~~2020:~~2021:

Net Fair Value Asset

(Liability)
(in millions)

Valuation Approach

Significant Unobservable Input

Range of Significant Unobservable Inputs / Weighted Average (1)

Physical Liquefaction Supply Derivatives

$~~674~~149

Market approach incorporating present value techniques

Henry Hub basis spread

$~~(0.619)~~(0.577) - ~~$0.054~~$0.265 / ~~(0.027)~~$(0.014)

Option pricing model

International LNG pricing spread, relative to Henry Hub (2)

~~48%~~127% - ~~154%~~215% / ~~117%~~160%

Physical LNG Trading Derivatives

$(18)

Market approach incorporating present value techniques

International LNG pricing spread, relative to Henry Hub or TTF, as applicable (2)

$(2.664) - $3.188 / $2.309

(1)Unobservable inputs were weighted by the relative fair value of the instruments.

(2)Spread contemplates U.S. dollar-denominated pricing.

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

Increases or decreases in basis or pricing spreads, in isolation, would decrease or increase, respectively, the fair value of our Physical LNG Trading Derivatives and our Physical Liquefaction Supply Derivatives.

The following table shows the changes in the fair value of our Level 3 Physical LNG Trading Derivatives and Physical Liquefaction Supply Derivatives during the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in millions):


	Three Months Ended March 31,						Three Months Ended March 31,
	2020		2019					2021		2020
Balance, beginning of period	$	138	$	(29	)	Balance, beginning of period		$	241	$	138
Realized and mark-to-market gains:
Realized and mark-to-market gains (losses):						Realized and mark-to-market gains (losses):
Included in cost of sales	534		12			Included in cost of sales		(129)		534

Purchases and settlements:						Purchases and settlements:
Purchases	1		1			Purchases		(14)		1
Settlements	—		47			Settlements		33		0
Transfers out of Level 3 (1)	1		—
Transfers into Level 3, net (1)						Transfers into Level 3, net (1)		0		1
Balance, end of period	$	674	$	31		Balance, end of period		$	131	$	674
Change in unrealized gains relating to instruments still held at end of period	$	534	$	12
Change in unrealized gains (losses) relating to instruments still held at end of period						Change in unrealized gains (losses) relating to instruments still held at end of period		$	(129)	$	534

(1)Transferred tointo Level 23 as a result of ~~observable~~unobservable market for the underlying natural gas purchase agreements.

~~Derivative assets and liabilities arising from our derivative contracts with the same counterparty are reported on a net basis, as all~~All counterparty derivative contracts provide for the unconditional right of set-off in the event of default. We have elected to report derivative assets and liabilities arising from our derivative contracts with the same counterparty on a net basis. The use of derivative instruments exposes us to counterparty credit risk, or the risk that a counterparty will be unable to meet its commitments in instances when our derivative instruments are in an asset position. Additionally, counterparties are at risk that we will be unable to meet our commitments in instances where our derivative instruments are in a liability position. We

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

incorporate both our own nonperformance risk and the respective counterparty’s nonperformance risk in fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of any applicable credit enhancements, such as collateral postings, set-off rights and guarantees.

Interest Rate Derivatives

CCH has entered into interest rate swaps to protect against volatility of future cash flows and hedge a portion of the variable interest payments on the CCH Credit Facility. CCH previously also had interest rate swaps to hedge against changes in interest rates that could impact anticipated future issuance of debt. In August 2020, we settled the outstanding CCH Interest Rate Forward Start Derivatives.

As of March 31, ~~2020,~~2021, we had the following Interest Rate Derivatives outstanding:

Notional Amounts

March 31, ~~2020~~2021

December 31, ~~2019~~2020

~~Effective Date~~

Latest Maturity Date

Weighted Average Fixed Interest Rate Paid

Variable Interest Rate Received

CCH Interest Rate Derivatives

$~~4.7~~4.6 billion

$~~4.5~~4.6 billion

~~May 20, 2015~~

May 31, 2022

2.30%

One-month LIBOR

~~CCH Interest Rate Forward Start Derivatives~~

~~$750 million~~

~~September 30, 2020~~

~~December 31, 2030~~

~~2.06%~~

~~Three-month LIBOR~~

The following table shows the ~~fair value and location of the Interest Rate Derivatives on our Consolidated Balance Sheets (in millions):~~

March 31, 2020 December 31, 2019
CCH Interest Rate Derivatives CCH Interest Rate Forward Start Derivatives Total CCH Interest Rate Derivatives CCH Interest Rate Forward Start Derivatives Total
Consolidated Balance Sheet Location
Derivative liabilities $ (92 ) $ (92 ) $ (184 ) $ (32 ) $ (8 ) $ (40 )
Non-current derivative liabilities (105 ) —
(105 ) (49 ) —
(49 )
Total derivative liabilities $ (197 )
$ (92 )
$ (289 )
$ (81 )
$ (8 )
$ (89 )

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

~~The following table shows the~~gain (loss) from changes in the fair value and settlements of our Interest Rate Derivatives recorded in interest rate derivative ~~loss,~~gain (loss), net on our Consolidated Statements of Operations during the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in millions):


	Three Months Ended March 31,
		2021		2020
CCH Interest Rate Derivatives		$	1	$	(123)
CCH Interest Rate Forward Start Derivatives		0		(85)

Three Months Ended March 31,
2020 2019
CCH Interest Rate Derivatives loss $ (123 ) $ (35 )
CCH Interest Rate Forward Start Derivatives loss (85 ) —

Commodity Derivatives

SPL, CCL and CCL Stage III have entered into physical natural gas supply contracts and associated economic hedges to purchase natural gas for the commissioning and operation of the Liquefaction Projects and potential future development of Corpus Christi Stage 3, respectively, which are primarily indexed to the natural gas market and international LNG indices. The remaining terms of the index-based physical natural gas supply contracts range up to approximately 15 years, some of which commence upon the satisfaction of certain events or states of affairs. The terms of the Financial Liquefaction Supply Derivatives range up to approximately three years.

Commencing in first quarter of 2021, we have, on occasion, entered into physical LNG transactions that provide for contractual net settlement. Such transactions are accounted for as LNG Trading Derivatives, and are designed to economically hedge exposure to the commodity markets in which we sell LNG. We have entered into, and may from time to time enter into, financial LNG Trading Derivatives in the form of swaps, forwards, options or ~~futures to economically hedge exposure to the commodity markets in which we have contractual arrangements to purchase or sell physical LNG. We have entered into~~futures. The terms of LNG Trading Derivatives range up to ~~secure a fixed price position to minimize future cash flow variability associated with LNG purchase and sale transactions.~~approximately two years.

The following table shows the ~~fair value and location~~notional amounts of our Liquefaction Supply Derivatives and LNG Trading Derivatives (collectively, “Commodity Derivatives”) ~~on our Consolidated Balance Sheets (in millions, except notional amount)~~:

March 31, 2020 December 31, 2019
Liquefaction Supply Derivatives (1) LNG Trading Derivatives (2) Total Liquefaction Supply Derivatives (1) LNG Trading Derivatives (2) Total
Consolidated Balance Sheet Location
Derivative assets $ 113
$ 190
$ 303
$ 93
$ 225
$ 318
Non-current derivative assets 665
35
700
174
—
174
Total derivative assets 778
225
1,003
267
225
492

Derivative liabilities (19 ) (40 ) (59 ) (16 ) (60 ) (76 )
Non-current derivative liabilities (81 ) —
(81 ) (102 ) —
(102 )
Total derivative liabilities (100 ) (40 ) (140 ) (118 ) (60 ) (178 )

Derivative asset, net $ 678
$ 185
$ 863
$ 149
$ 165
$ 314

Notional amount, net (in TBtu) (3) 10,988
22
9,177
4

March 31, 2021

December 31, 2020

Liquefaction Supply Derivatives

LNG Trading Derivatives

Liquefaction Supply Derivatives

LNG Trading Derivatives

Notional amount, net (in TBtu) (1)

10,510

10,483

(1) Includes notional amounts for natural gas supply contracts that SPL and CCL have with related parties. See Note 1 3 —Related Party Transactions.

~~(1)~~

Does not include collateral posted with counterparties by us of $11 million and $7 million for such contracts, which are included in other current assets in our Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, respectively. Includes derivative assets of $4 million and $3 million as of March 31, 2020 and December 31, 2019, respectively, and non-current assets of $2 million as of both March 31, 2020 and December 31, 2019 for natural gas supply contracts that SPL and CCL have with related parties.


~~(2)~~	Does not include collateral posted with counterparties by us of $11 million and $5 million deposited for such contracts, which are included in other current assets in our Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, respectively.


~~(3)~~	~~Includes 198 TBtu and 120 TBtu as of March 31, 2020 and December 31, 2019, respectively, for natural gas supply contracts that SPL and CCL have with related parties.~~

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

The following table shows the gain (loss) from changes in the fair value, settlements and location of our Commodity Derivatives recorded on our Consolidated Statements of Operations during the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in millions):

Consolidated Statements of Operations Location (1) Three Months Ended March 31,
2020 2019
LNG Trading Derivatives gain LNG revenues $ 140
$ 64
LNG Trading Derivatives loss Cost of sales (34 ) —
Liquefaction Supply Derivatives gain (loss) (2) LNG revenues (1 ) 2
Liquefaction Supply Derivatives gain (2)(3) Cost of sales 537
82


	Consolidated Statements of Operations Location (1)	Three Months Ended March 31,
			2021		2020

LNG Trading Derivatives	LNG revenues		$	(62)	$	140
LNG Trading Derivatives	Cost of sales		28		(34)
Liquefaction Supply Derivatives (2)	LNG revenues		1		(1)
Liquefaction Supply Derivatives (2)	Cost of sales		(63)		537

(1) Fair value fluctuations associated with commodity derivative activities are classified and presented consistently with the item economically hedged and the nature and intent of the derivative instrument.


~~(1)~~	Fair value fluctuations associated with commodity derivative activities are classified and presented consistently with the item economically hedged and the nature and intent of the derivative instrument.


~~(2)~~	(2) Does not include the realized value associated with derivative instruments that settle through physical delivery.

~~(3)~~

CCL recorded $23 million and $10 million in cost of sales under a natural gas supply contract with a related party during the three months ended March 31, 2020 and 2019, respectively, including $1 million of Liquefaction Supply Derivatives gain and $2 million of Liquefaction Supply Derivatives loss, respectively. As of March 31, 2020 and December 31, 2019, $7 million and $3 million, respectively, were included in accrued liabilities related to this contract.

FX Derivatives

Cheniere Marketing has entered into FX Derivatives to protect against the volatility in future cash flows attributable to changes in international currency exchange rates. The FX Derivatives economically hedge the foreign currency exposure arising from cash flows expended for both physical and financial LNG transactions.

The ~~following table shows the fair value and location~~terms of ~~our~~ FX Derivatives ~~on our Consolidated Balance Sheets (in millions):~~range up to approximately one year.

Fair Value Measurements as of
Consolidated Balance Sheet Location March 31, 2020 December 31, 2019
FX Derivatives Derivative assets $ 19
$ 5
FX Derivatives Non-current derivative assets 5
—
FX Derivatives Derivative liabilities (1 ) (1 )

The total notional amount of our FX Derivatives was ~~$496~~$420 million and ~~$827~~$786 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

The following table shows the gain from changes in the fair value, settlements and location of our FX Derivatives recorded on our Consolidated Statements of Operations during the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in millions):


		Three Months Ended March 31,
	Consolidated Statements of Operations Location		2021		2020
FX Derivatives	LNG revenues		$	21	$	25

Three Months Ended March 31,
Consolidated Statements of Operations Location 2020 2019
FX Derivatives gain LNG revenues $ 25
$ 9

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

Fair Value and Location of Derivative Assets and Liabilities on the Consolidated Balance Sheets

The following table shows the fair value and location of our derivative instruments on our Consolidated Balance Sheets (in millions):


	March 31, 2021
	CCH Interest Rate Derivatives		Liquefaction Supply Derivatives (1)		LNG Trading Derivatives (2)		FX Derivatives		Total
Consolidated Balance Sheets Location
Derivative assets	$	0	$	47	$	11	$	9	$	67
Non-current derivative assets	0		306		0		0		306
Total derivative assets	0		353		11		9		373

Derivative liabilities	(98)		(52)		(184)		(8)		(342)
Non-current derivative liabilities	(16)		(150)		0		0		(166)
Total derivative liabilities	(114)		(202)		(184)		(8)		(508)

Derivative asset (liability), net	$	(114)	$	151	$	(173)	$	1	$	(135)

	December 31, 2020
	CCH Interest Rate Derivatives		Liquefaction Supply Derivatives (1)		LNG Trading Derivatives (2)		FX Derivatives		Total
Consolidated Balance Sheets Location
Derivative assets	$	0	$	27	$	0	$	5	$	32
Non-current derivative assets	0		376		0		0		376
Total derivative assets	0		403		0		5		408

Derivative liabilities	(100)		(54)		(134)		(25)		(313)
Non-current derivative liabilities	(40)		(109)		0		(2)		(151)
Total derivative liabilities	(140)		(163)		(134)		(27)		(464)

Derivative asset (liability), net	$	(140)	$	240	$	(134)	$	(22)	$	(56)

(1) Does not include collateral posted with counterparties by us of $11 million and $9 million, which are included in other current assets in our Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020, respectively. Includes derivative assets for natural gas supply contracts that SPL and CCL have with related parties. See Note 13—Related Party Transactions.

(2) Does not include collateral posted with counterparties by us of $17 million and $7 million, which are included in other current assets in our Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020, respectively.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

Consolidated Balance ~~Sheet~~Sheets Presentation

Our derivative instruments are presented on a net basis on our Consolidated Balance Sheets as described above. The following table shows the fair value of our derivatives outstanding on a gross and net basis (in millions):


	CCH Interest Rate Derivatives		Liquefaction Supply Derivatives		LNG Trading Derivatives		FX Derivatives

As of March 31, 2021
Gross assets	$	0	$	430	$	15	$	14
Offsetting amounts	0		(77)		(4)		(5)
Net assets	$	0	$	353	$	11	$	9

Gross liabilities	$	(114)	$	(224)	$	(207)	$	(28)
Offsetting amounts	0		22		23		20
Net liabilities	$	(114)	$	(202)	$	(184)	$	(8)

As of December 31, 2020
Gross assets	$	0	$	452	$	0	$	6
Offsetting amounts	0		(49)		0		(1)
Net assets	$	0	$	403	$	0	$	5

Gross liabilities	$	(140)	$	(184)	$	(163)	$	(62)
Offsetting amounts	0		21		29		35
Net liabilities	$	(140)	$	(163)	$	(134)	$	(27)

Gross Amounts Recognized Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets
Offsetting Derivative Assets (Liabilities)
As of March 31, 2020
CCH Interest Rate Derivatives $ (197 ) $ —
$ (197 )
CCH Interest Rate Forward Start Derivatives (92 ) —
(92 )
Liquefaction Supply Derivatives 796
(18 ) 778
Liquefaction Supply Derivatives (104 ) 4
(100 )
LNG Trading Derivatives 225
—
225
LNG Trading Derivatives (47 ) 7
(40 )
FX Derivatives 27
(3 ) 24
FX Derivatives (1 ) —
(1 )
As of December 31, 2019

CCH Interest Rate Derivatives $ (81 ) $ —
$ (81 )
CCH Interest Rate Forward Start Derivatives (8 ) —
(8 )
Liquefaction Supply Derivatives 281
(14 ) 267
Liquefaction Supply Derivatives (126 ) 8
(118 )
LNG Trading Derivatives 229
(4 ) 225
LNG Trading Derivatives (60 ) —
(60 )
FX Derivatives 9
(4 ) 5
FX Derivatives (6 ) 5
(1 )

NOTE 7—OTHER NON-CURRENT ASSETS

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, other non-current assets, net consisted of the following (in millions):

March 31, December 31,
2020 2019
Advances made to municipalities for water system enhancements $ 86
$ 87
Advances and other asset conveyances to third parties to support LNG terminals 60
55
Advances made under EPC and non-EPC contracts 7
29
Equity method investments 197
108
Debt issuance costs and debt discount, net 48
45
Tax-related payments and receivables 20
20
Other 58
44
Total other non-current assets, net $ 476
$ 388



	March 31,		December 31,
	2021		2020

Contract assets, net	$	90	$	80
Advances made to municipalities for water system enhancements	83		84
Equity method investments	87		81
Advances and other asset conveyances to third parties to support LNG terminals	70		60
Debt issuance costs and debt discount, net	38		42
Advances made under EPC and non-EPC contracts	26		9
Advance tax-related payments and receivables	20		20
Other	32		30
Total other non-current assets, net	$	446	$	406

Equity Method Investments

~~Our~~As of March 31, 2021, our equity method ~~investments consist~~investment consists of ~~interests in privately-held companies. In 2017, we acquired an equity~~our interest in Midship Holdings, LLC (“Midship Holdings”), which manages the business and affairs of Midship Pipeline Company, LLC (“Midship Pipeline”)~~, which we account for as~~. Midship Pipeline is currently operating an ~~equity method investment. See~~ ~~Note 8—Other Non-Current Assets~~ ~~of our Notes~~approximately 200-mile natural gas pipeline project (the “Midship Project”) that connects production in the Anadarko Basin to ~~Consolidated Financial Statements~~Gulf Coast markets. The Midship Project commenced operations in ~~our annual report on Form 10-K for the year ended December 31, 2019 for further information.~~April 2020.

Our investment in Midship Holdings, net of impairment losses, was ~~$195~~$87 million and ~~$105~~$80 million atas of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Cheniere LNG O&M Services, LLC (“O&M Services”), our wholly owned subsidiary provides the development, construction, operation and maintenance services associated with the Midship Project pursuant to agreements in which O&M Services receives an agreed upon fee and reimbursement of costs incurred. O&M Services recorded $3 million and $4 million in the three months ended March 31, 2020 and 2019, respectively, of other revenues and $2 million and $3 million of accounts

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

receivable as of March 31, 2020 and December 31, 2019, respectively, for services provided to Midship Pipeline under these agreements. CCL has entered into a transportation precedent agreement and a negotiated rate agreement with Midship Pipeline to secure firm pipeline transportation capacity for a period of 10 years following commencement of the Midship Project. In March 2020, CCH and CCL entered into a guaranty agreement whereby CCH absolutely and irrevocably guarantees CCL’s obligation under the transportation precedent agreement with Midship Pipeline.

NOTE 8—NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITY

We own a 48.6% limited partner interest in Cheniere Partners in the form of ~~104.5~~239.9 million common ~~units and 135.4 million subordinated~~ units, with the remaining non-controlling limited partner interest held by The Blackstone ~~CQP Holdco LP (“Blackstone CQP Holdco”)~~Group Inc., Brookfield Asset Management Inc. and the public. We also own 100% of the general partner interest and the incentive distribution rights in Cheniere Partners. Cheniere Partners is accounted for as a consolidated ~~variable interest entity.~~VIE. See Note 9—9 —Non-Controlling Interest and Variable ~~Interest Entity~~Inter e st E ntity of our Notes to Consolidated Financial Statements in our annual report on Form 10-K for the fiscal year ended December 31, ~~2019~~2020 for further information.

The following table presents the summarized assets and liabilities (in millions) of Cheniere Partners, our consolidated VIE, which are included in our Consolidated Balance Sheets. The assets in the table below may only be used to settle obligations of Cheniere Partners. In addition, there is no recourse to us for the consolidated VIE’s liabilities. The assets and liabilities in the table below include third-party assets and liabilities of Cheniere Partners only and exclude intercompany balances that eliminate in consolidation.



	March 31,		December 31,
	2021		2020
ASSETS
Current assets
Cash and cash equivalents	$	1,219	$	1,210
Restricted cash	123		97
Accounts and other receivables, net	373		318
Other current assets	178		182
Total current assets	1,893		1,807


Property, plant and equipment, net	16,734		16,723
Other non-current assets, net	299		287

Total assets	$	18,926	18,817

LIABILITIES
Current liabilities

Accrued liabilities	$	704	658
Current debt	850		0
Other current liabilities	149		171

Total current liabilities	1,703		829

Long-term debt, net	16,732		17,580

Other non-current liabilities	131		126
Total liabilities	$	18,566	$	18,535

March 31, December 31,
2020 2019
ASSETS
Current assets
Cash and cash equivalents $ 1,734
$ 1,781
Restricted cash 109
181
Accounts and other receivables 259
297
Other current assets 160
184
Total current assets 2,262
2,443

Property, plant and equipment, net 16,476
16,368
Other non-current assets, net 309
309
Total assets $ 19,047
$ 19,120

LIABILITIES
Current liabilities
Accrued liabilities $ 569
$ 709
Current debt 1,996
—
Other current liabilities 120
210
Total current liabilities 2,685
919

Long-term debt, net 15,591
17,579
Other non-current liabilities 88
104
Total liabilities $ 18,364
$ 18,602

NOTE 9—ACCRUED LIABILITIES

As of March 31, 2021 and December 31, 2020, accrued liabilities consisted of the following (in millions):



	March 31,		December 31,
	2021		2020
Interest costs and related debt fees	$	390	$	245
Accrued natural gas purchases	599		576
LNG terminals and related pipeline costs	162		147
Compensation and benefits	44		123
Accrued LNG inventory	3		4
Other accrued liabilities	65		80
Total accrued liabilities	$	1,263	$	1,175

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE ~~9—ACCRUED LIABILITIES~~10—DEBT

As of March 31, ~~2020~~2021 and December 31, ~~2019, accrued liabilities~~2020, our debt consisted of the following (in millions):



	March 31,		December 31,
	2021		2020
Long-term debt:











SPL — 4.200% to 6.25% senior secured notes due between March 2022 and September 2037 and working capital facility (“2020 SPL Working Capital Facility”)	$	12,797	$	13,650






Cheniere Partners — 4.000% to 5.625% senior notes due between October 2025 and March 2031 and credit facilities (“2019 CQP Credit Facilities”)	4,100		4,100









CCH — 3.52% to 7.000% senior secured notes due between June 2024 and December 2039 and CCH Credit Facility	10,195		10,217







Cheniere — 4.625% senior secured notes due October 2028 (the “2028 Cheniere Senior Secured Notes”), convertible notes, revolving credit facility (“Cheniere Revolving Credit Facility”) and term loan facility (“Cheniere Term Loan Facility”)	2,997		3,145
Unamortized premium, discount and debt issuance costs, net	(624)		(641)
Total long-term debt, net	29,465		30,471

Current debt:
SPL — current portion of 6.25% senior secured notes due March 2022 (“2022 SPL Senior Notes”) (1)	853		0

CCH — $1.2 billion CCH working capital facility (“CCH Working Capital Facility”) and current portion of CCH Credit Facility	153		271
Cheniere Marketing — trade finance facilities	0		0
Cheniere — current portion of 4.875% convertible unsecured notes due May 2021 (“2021 Cheniere Convertible Unsecured Notes”) (2)	104		104
Unamortized premium, discount and debt issuance costs, net	(5)		(3)
Total current debt	1,105		372

Total debt, net	$	30,570	$	30,843

March 31, December 31,
2020 2019
Interest costs and related debt fees $ 380
$ 293
Accrued natural gas purchases 318
460
LNG terminals and related pipeline costs 120
327
Compensation and benefits 42
115
Accrued LNG inventory 14
6
Other accrued liabilities 48
80
Total accrued liabilities $ 922
$ 1,281

(1)$147 million of the 2022 SPL Senior Notes is categorized as long-term debt because the proceeds from the expected sale of approximately $147 million aggregate principal amount of 2.95% Senior Secured Notes due 2037, expected to be issued in the second half of 2021 pursuant to a note purchase agreement entered into by SPL in February 2021, are expected to be used to refinance a portion of 2022 SPL Senior Notes.

(2)$372 million of the 2021 Cheniere Convertible Unsecured Notes is categorized as long-term debt because the remaining available commitments under the Cheniere Term Loan Facility are expected to be used to repay and/or repurchase a portion of the remaining outstanding principal amount of the 2021 Cheniere Convertible Unsecured Notes.

Issuances and Redemptions

The following table shows the issuances and redemptions of long-term debt during the three months ended March 31, 2021 (in millions):


Issuances			Principal Amount Issued

CQP — 4.000% Senior Notes due 2031 (the “2031 CQP Senior Notes”) (1)			$	1,500










Redemptions			Amount Redeemed
CQP — 5.250% Senior Notes due 2025 (the “2025 CQP Senior Notes”) (1)	$	1,500
Cheniere — Cheniere Term Loan Facility			148




Three Months Ended March 31, 2021 total			$	1,648

(1)Proceeds of the 2031 CQP Senior Notes, together with cash on hand, were used to redeem all of CQP’s outstanding 2025 CQP Senior Notes, resulting in the recognition of debt extinguishment costs of $54 million for the three months ended March 31, 2021 relating to the payment of early redemption fees and write off of unamortized debt premium and issuance costs.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

~~NOTE 10—DEBT~~Credit Facilities and Delayed Draw Term Loan

AsBelow is a summary of our credit facilities and delayed draw term loan facility outstanding as of March 31, ~~2020 and December 31, 2019, our debt consisted of the following~~2021 (in millions):

March 31, December 31,
2020 2019
Long-term debt:
SPL
5.625% Senior Secured Notes due 2021 (“2021 SPL Senior Notes”) $ —
$ 2,000
6.25% Senior Secured Notes due 2022 (“2022 SPL Senior Notes”) 1,000
1,000
5.625% Senior Secured Notes due 2023 (“2023 SPL Senior Notes”) 1,500
1,500
5.75% Senior Secured Notes due 2024 (“2024 SPL Senior Notes”) 2,000
2,000
5.625% Senior Secured Notes due 2025 (“2025 SPL Senior Notes”) 2,000
2,000
5.875% Senior Secured Notes due 2026 (“2026 SPL Senior Notes”) 1,500
1,500
5.00% Senior Secured Notes due 2027 (“2027 SPL Senior Notes”) 1,500
1,500
4.200% Senior Secured Notes due 2028 (“2028 SPL Senior Notes”) 1,350
1,350
5.00% Senior Secured Notes due 2037 (“2037 SPL Senior Notes”) 800
800
$1.2 billion SPL Working Capital Facility executed in 2020 (“2020 SPL Working Capital Facility”)

—
—
Cheniere Partners
5.250% Senior Notes due 2025 (“2025 CQP Senior Notes”) 1,500
1,500
5.625% Senior Notes due 2026 (“2026 CQP Senior Notes”) 1,100
1,100
4.500% Senior Notes due 2029 (“2029 CQP Senior Notes”) 1,500
1,500
CQP Credit Facilities executed in 2019 (“2019 CQP Credit Facilities”) —
—
CCH
7.000% Senior Secured Notes due 2024 (“2024 CCH Senior Notes”) 1,250
1,250
5.875% Senior Secured Notes due 2025 (“2025 CCH Senior Notes”) 1,500
1,500
5.125% Senior Secured Notes due 2027 (“2027 CCH Senior Notes”) 1,500
1,500
4.80% Senior Secured Notes due 2039 (“4.80% CCH Senior Notes”) 727
727
3.925% Senior Secured Notes due 2039 (“3.925% CCH Senior Notes”) 475
475
3.700% Senior Secured Notes due 2029 (“2029 CCH Senior Notes”) 1,500
1,500
CCH Credit Facility 3,283
3,283
CCH HoldCo II
11.0% Convertible Senior Secured Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”) 1,278
1,578
Cheniere
4.875% Convertible Unsecured Notes due 2021 (“2021 Cheniere Convertible Unsecured Notes”) 1,278
1,278
4.25% Convertible Senior Notes due 2045 (“2045 Cheniere Convertible Senior Notes”) 625
625
$1.25 billion Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”) 455
—
Unamortized premium, discount and debt issuance costs, net (681 ) (692 )
Total long-term debt, net 28,940

30,774

Current debt:
2021 SPL Senior Notes 2,000
—
$1.2 billion SPL Working Capital Facility executed in 2015 (“2015 SPL Working Capital Facility”) —
—
$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”) 141
—
Cheniere Marketing trade finance facilities —
—
Unamortized premium, discount and debt issuance costs, net (4 ) —
Total current debt 2,137

—

Total debt, net $ 31,077

$ 30,774


	2020 SPL Working Capital Facility (1)		2019 CQP Credit Facilities		CCH Credit Facility		CCH Working Capital Facility		Cheniere Revolving Credit Facility		Cheniere Term Loan Facility (2)
Original facility size	$	1,200	$	1,500	$	8,404	$	350	$	750	$	2,620
Incremental commitments	0		0		1,566		850		500		75
Less:
Outstanding balance	0		0		2,627		0		0		0
Commitments prepaid or terminated	0		750		7,343		0		0		2,323
Letters of credit issued	413		0		0		293		0		0
Available commitment	$	787	$	750	$	0	$	907	$	1,250	$	372

Priority ranking	Senior secured		Senior secured		Senior secured		Senior secured		Senior secured		Senior secured
Interest rate on available balance	LIBOR plus 1.125% - 1.750% or base rate plus 0.125% - 0.750%		LIBOR plus 1.25% - 2.125% or base rate plus 0.25% - 1.125%		LIBOR plus 1.75% or base rate plus 0.75%		LIBOR plus 1.25% - 1.75% or base rate plus 0.25% - 0.75%		LIBOR plus 1.75% - 2.50% or base rate plus 0.75% - 1.50%		(3)
Weighted average interest rate of outstanding balance	n/a		n/a		1.86%		n/a		n/a		n/a
Maturity date	March 19, 2025		May 29, 2024		June 30, 2024		June 29, 2023		December 13, 2022		June 18, 2023

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

~~2020 Material Debt Activities~~

~~2020 SPL Working Capital Facility~~

~~In March 2020, SPL entered into the 2020 SPL Working Capital Facility with aggregate commitments of $1.2 billion, which replaced the 2015 SPL Working Capital Facility.~~ (1)The 2020 SPL Working Capital Facility ~~is intended to be used~~contains customary conditions precedent for ~~loans to SPL (“SPL Revolving Loans”), swing line loans to SPL (“SPL Swing Line Loans”) and the issuance of letters~~extensions of credit, ~~on behalf of SPL, primarily for (1) the refinancing of the 2015 SPL Working Capital Facility, (2) fees~~as well as customary affirmative and expenses related to the 2020 SPL Working Capital Facility, (3) SPL’s gas purchase obligations and (4) SPL and certain of its future subsidiaries’ general corporate purposes. SPL may, from time to time, request increases in the commitments under the 2020 SPL Working Capital Facility of up to $800 million.

Loans under the 2020 SPL Working Capital Facility accrue interest at a variable rate per annum equal to LIBOR or the base rate (equal to the highest of the senior facility agent’s published prime rate, the federal funds rate, as published by the Federal Reserve Bank of New York, plus 0.50% and one month LIBOR plus 0.50%), plus the applicable margin. The applicable margin for LIBOR loans under the 2020 SPL Working Capital Facility is 1.125% to 1.750% per annum (depending on the then-current rating of SPL), and the applicable margin for base rate loans under the 2020 SPL Working Capital Facility is 0.125% to 0.750% per annum (depending on the then-current rating of SPL). Interest on LIBOR loans is due and payable at the end of each applicable LIBOR period, and interest on base rate loans is due and payable at the end of each fiscal quarter.

negative covenants. SPL pays a commitment fee equal to an annual rate of 0.1% to 0.3% (depending on the then-current rating of SPL), which accrues on the daily amount of the total commitment less the sum of (1) the outstanding principal amount of ~~SPL Revolving Loans,~~loans, (2) letters of credit issued and (3) the outstanding principal amount of ~~SPL Swing Line Loans. If draws are made upon a letter of credit issued~~swing line loans.

(2)Borrowings under the ~~2020 SPL Working Capital~~Cheniere Term Loan Facility ~~and SPL does not elect for such draw~~are subject to customary conditions precedent. The remaining commitments under the Cheniere Term Loan Facility are expected to be ~~deemed an SPL LC Loan (an “SPL LC Draw”), SPL is required~~used to ~~pay the full amount of the SPL LC Draw on~~ repay and/or prior to noon eastern time on the business day of the SPL LC Draw. An SPL LC Draw accrues interest at the base rate plus the applicable margin. As of March 31, 2020, 0 SPL LC Draws had been made upon any letters of credit issued under the 2020 SPL Working Capital Facility.

The 2020 SPL Working Capital Facility matures on March 19, 2025, but may be extended with consent of the lenders. The 2020 SPL Working Capital Facility provides for mandatory prepayments under customary circumstances.

The 2020 SPL Working Capital Facility contains customary conditions precedent for extensions of credit, as well as customary affirmative and negative covenants. SPL is restricted from making certain distributions under agreements governing its indebtedness generally until, among other requirements, satisfaction of a 12-month forward-looking and backward-looking 1.25:1.00 debt service reserve ratio test. The obligations of SPL under the 2020 SPL Working Capital Facility are secured by substantially all of the assets of SPL as well as a pledge of all of the membership interests in SPL and certain future subsidiaries of SPL on a ~~pari passu~~ ~~basis by a first priority lien with the SPL Senior Notes.~~

~~2025 CCH HoldCo II Convertible Senior Notes~~

~~In February 2020, the amended and restated note purchase agreement for the 2025 CCH HoldCo II Convertible Senior Notes was amended to allow CCH HoldCo II the option to redeem all or~~repurchase a portion of the outstanding notes with cash at a price of $1,080 per $1,000 principal amount, at the time of any CCH HoldCo II- or noteholder-initiated conversion through September 2, 2020. In March 2020, CCH HoldCo II redeemed an aggregate outstandingremaining principal amount of ~~$300 million with cash. CCH HoldCo II retains~~ the ~~ability to convert~~2021 Cheniere Convertible Unsecured Notes and for the ~~2025 CCH HoldCo II Convertible Senior Notes into our common stock at~~payment of related fees and expenses. We pay a ~~conversion price~~commitment fee equal to 30% of the ~~lower~~margin for LIBOR loans multiplied by the average daily amount of ~~(1) a 10% discount~~undrawn commitments. If the Cheniere Term Loan Facility is still outstanding on the first anniversary of the Closing Date, as defined by the credit agreement, we will pay duration fees in an amount equal to 0.25% of the aggregate amount of commitments as of July 10, 2020, which was the date the loans were first borrowed under the Cheniere Term Loan Facility (the “Payment Date”). Furthermore, if the Cheniere Term Loan Facility is still outstanding on the second anniversary of the Closing Date, as defined by the credit agreement, we will pay 0.50% of the aggregate amount of commitments as of the Payment Date. Annual administrative fees must also be paid to the ~~average of the daily volume-weighted average price (“VWAP”) of our common stock~~administrative agent for the ~~90 trading day period prior~~Cheniere Term Loan Facility. Subject to customary exceptions, we are required to make mandatory prepayments with respect to the ~~date~~Cheniere Term Loan Facility using the net proceeds of certain events on ~~which notice of conversion is provided~~a pro rata basis and on terms consistent with required prepayments under the Cheniere Revolving Credit Facility.

(3)LIBOR plus (1) 2.00% to 2.75% per annum in the first year, (2) ~~a 10% discount~~2.50% to 3.25% per annum in the ~~closing price of our common stock on~~second year and (3) 3.00% to 3.75% per annum in the ~~trading day preceding~~third year until maturity, or base rate plus (1) 1.00% to 1.75% per annum in the ~~date on which notice of conversion is provided. The noteholders retain~~first year, (2) 1.50% to 2.25% per annum in the ~~ability~~second year and (3) 2.00% to ~~request conversion into our common stock at a conversion price equal to~~2.75% per annum in the average of the daily VWAP of our common stock for the 90 trading day period preceding the date on which notice of requested conversion is provided. Conversions remain subject to various limitations and conditions.third year until maturity.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

~~Credit Facilities~~

~~Below is a summary of our credit facilities outstanding as of March 31, 2020 (in millions):~~

2020 SPL Working Capital Facility 2019 CQP Credit Facilities CCH Credit Facility CCH Working Capital Facility Cheniere Revolving Credit Facility
Original facility size $ 1,200
$ 1,500
$ 8,404
$ 350
$ 750
Incremental commitments —
—
1,566
850
500
Less:
Outstanding balance —
—
3,283
141
455
Commitments prepaid or terminated —
750
6,687
—
—
Letters of credit issued 414
—
—
399
365
Available commitment $ 786

$ 750

$ —

$ 660
$ 430

Interest rate on available balance LIBOR plus 1.125% - 1.750% or base rate plus 0.125% - 0.750% LIBOR plus 1.25% - 2.125% or base rate plus 0.25% - 1.125% LIBOR plus 1.75% or base rate plus 0.75% LIBOR plus 1.25% - 1.75% or base rate plus 0.25% - 0.75% LIBOR plus 1.75% - 2.50% or base rate plus 0.75% - 1.50%
Weighted average interest rate of outstanding balance n/a n/a 2.74% 2.77% 2.70%
Maturity date
March 19, 2025

May 29, 2024

June 30, 2024

June 29, 2023

December 13, 2022

Convertible Notes

Below is a summary of our convertible notes outstanding as of March 31, ~~2020~~2021 (in millions):

2021 Cheniere Convertible Unsecured Notes 2025 CCH HoldCo II Convertible Senior Notes 2045 Cheniere Convertible Senior Notes
Aggregate original principal $ 1,000
$ 1,000
$ 625
Add: interest paid-in-kind 278
578
—
Less: aggregate principal redeemed —
(300 ) —
Aggregate remaining principal $ 1,278
$ 1,278
$ 625

Debt component, net of discount and debt issuance costs $ 1,230
$ 1,250
$ 315
Equity component $ 211
$ —
$ 194
Interest payment method Paid-in-kind
Paid-in-kind / cash (1)
Cash
Conversion by us (2) —
(3)
(4)
Conversion by holders (2) (5)
(3)
(6)
Conversion basis Cash and/or stock
Cash and/or stock
Cash and/or stock
Conversion value in excess of principal $ —
n/a
$ —
Maturity date
May 28, 2021

May 13, 2025

March 15, 2045

Contractual interest rate 4.875 % 11.0 % 4.25 %
Effective interest rate (7) 8.2 % 12.2 % 9.4 %
Remaining debt discount and debt issuance costs amortization period (8) 1.2 years
0.5 years
25.0 years


	2021 Cheniere Convertible Unsecured Notes			2045 Cheniere Convertible Senior Notes
Aggregate original principal	$	1,000		$	625
Add: interest paid-in-kind	320			0
Less: aggregate principal redeemed	(844)			0
Aggregate remaining principal	$	476		$	625

Debt component, net of discount and debt issuance costs	$	473		$	318
Equity component	$	201		$	194
Interest payment method	Paid-in-kind			Cash
Conversion by us (1)	—			(2)
Conversion by holders (1)	(3)			(4)
Conversion basis	Cash and/or stock			Cash and/or stock
Conversion value in excess of principal	$	0		$	0
Maturity date	May 28, 2021			March 15, 2045
Contractual interest rate	4.875		%	4.25		%
Effective interest rate (5)	8.1		%	9.4		%
Remaining debt discount and debt issuance costs amortization period (6)	0.2 years			24.0 years


~~(1)~~	Prior to the substantial completion of Train 2 of the CCL Project in August 2019, interest was paid entirely in kind. Following substantial completion, the interest has been paid in cash; however, a portion of the interest may, in the future, be paid in kind under certain specified circumstances.


~~(2)~~	~~Conversion is subject to various limitations and conditions.~~

~~(3)~~

~~Convertible into cash or stock at our option on or after March 1, 2020 until September 2, 2020, and into stock upon conversion notice by us or note holders after September 2, 2020,~~

(1)Conversion is subject to various limitations and conditions, which have not been met as of the balance sheet date.

(2)Redeemable at any time at a redemption price payable in cash equal to the accreted amount of the $625 million aggregate principal amount of 4.25% Convertible Senior Notes due 2045 (the “2045 Cheniere Convertible Senior Notes”) to be redeemed, plus accrued and unpaid interest, if any, to such redemption date.

(3)Initially convertible at $93.64 (subject to adjustment upon the occurrence of certain specified events, which have not been met as of the balance sheet date), provided that our market capitalization is not less than $10.0 billion (“Eligible Conversion Date”). The conversion price for stock is the lower of (1) a 10% discount to the average of the VWAP of our common stock for the 90 trading day period prior to the date notice is provided, and (2) a

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

~~10% discount to~~ the closing price of our common stock is greater than or equal to the conversion price on the ~~trading day preceding~~conversion date.

(4)Prior to December 15, 2044, convertible only under certain circumstances as specified in the ~~date notice is provided.~~indenture; thereafter, holders may convert their notes regardless of these circumstances. The conversion ~~price for cash is $1,080~~rate will initially equal 7.2265 shares of our common stock per $1,000 principal amount of the ~~notes. In March 2020, we delivered~~2045 Cheniere Convertible Senior Notes, which corresponds to an initial conversion price of approximately $138.38 per share of our ~~first notice~~common stock (subject to ~~convert~~adjustment upon the occurrence of certain specified events).

(5)Rate to accrete the discounted carrying value of the convertible notes ~~in an aggregate outstanding principal amount of $300 million into cash.~~to the face value over the remaining amortization period.


~~(4)~~	Redeemable at any time after March 15, 2020 at a redemption price payable in cash equal to the accreted amount of the 2045 Cheniere Convertible Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to such redemption date.


~~(5)~~	Initially convertible at $93.64 (subject to adjustment upon the occurrence of certain specified events), provided that the closing price of our common stock is greater than or equal to the conversion price on the conversion date.

~~(6)~~

Prior to December 15, 2044, convertible only under certain circumstances as specified in the indenture; thereafter, holders may convert their notes regardless of these circumstances. The conversion rate will initially equal 7.2265 shares of our common stock per $1,000 principal amount of the 2045 Cheniere Convertible Senior Notes, which corresponds to an initial conversion price of approximately $138.38 per share of our common stock (subject to adjustment upon the occurrence of certain specified events).


~~(7)~~	~~Rate to accrete the discounted carrying value of the convertible notes to the face value over the remaining amortization period.~~


~~(8)~~	We amortize any debt discount and debt issuance costs using the effective interest over the period through contractual maturity except for the 2025 CCH HoldCo II Convertible Senior Notes, which are amortized through the date they are first convertible by holders into our common stock.

(6)We amortize any debt discount and debt issuance costs using the effective interest over the period through contractual maturity.

Restrictive Debt Covenants

The indentures governing our senior notes and other agreements underlying our debt contain customary terms and events of default and certain covenants that, among other things, may limit us, our subsidiaries’ and its restricted subsidiaries’ ability to make certain investments or pay dividends or distributions.

As of March 31, ~~2020,~~2021, each of our issuers was in compliance with all covenants related to their respective debt agreements.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

Interest Expense

Total interest expense, net of capitalized interest, including interest expense related to our convertible notes, consisted of the following (in millions):


	Three Months Ended March 31,
		2021		2020
Interest cost on convertible notes:
Interest per contractual rate		$	12	$	63
Amortization of debt discount		5		14
Amortization of debt issuance costs		0		3
Total interest cost related to convertible notes		17		80
Interest cost on debt and finance leases excluding convertible notes		400		391
Total interest cost		417		471
Capitalized interest		(61)		(59)
Total interest expense, net of capitalized interest		$	356	$	412

Three Months Ended March 31,
2020 2019
Interest cost on convertible notes:
Interest per contractual rate $ 63
$ 62
Amortization of debt discount 14
10
Amortization of debt issuance costs 3
3
Total interest cost related to convertible notes
80

75
Interest cost on debt and finance leases excluding convertible notes 391

373
Total interest cost 471
448
Capitalized interest (59 ) (201 )
Total interest expense, net
$ 412
$ 247

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

Fair Value Disclosures

The following table shows the carrying amount and estimated fair value of our debt (in millions):

March 31, 2020 December 31, 2019
Carrying
Amount Estimated
Fair Value Carrying
Amount Estimated
Fair Value
Senior notes (1) $ 22,700
$ 20,805
$ 22,700
$ 24,650
2037 SPL Senior Notes (2) 800
709
800
934
4.80% CCH Senior Notes (2) 727
594
727
830
3.925% CCH Senior Notes (2) 475
350
475
495
Credit facilities (3) 3,879
3,879
3,283
3,283
2021 Cheniere Convertible Unsecured Notes (2) 1,278
1,248
1,278
1,312
2025 CCH HoldCo II Convertible Senior Notes (2) 1,278
1,406
1,578
1,807
2045 Cheniere Convertible Senior Notes (4) 625
281
625
498


	March 31, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Senior notes — Level 2 (1)	$	24,700	$	27,229	$	24,700	$	27,897
Senior notes — Level 3 (2)	2,771		3,129		2,771		3,423
Credit facilities (3)	2,627		2,627		2,915		2,915
2021 Cheniere Convertible Unsecured Notes (2)	476		484		476		480

2045 Cheniere Convertible Senior Notes (4)	625		522		625		496


~~(1)~~	Includes the SPL Senior Notes except the 2037 SPL Senior Notes, the CQP Senior Notes and the 144A CCH Senior Notes. The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of these senior notes and other similar instruments.


~~(2)~~	The Level 3 estimated fair value was calculated based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including our stock price and interest rates based on debt issued by parties with comparable credit ratings to us and inputs that are not observable in the market.

~~(3)~~

Includes 2015 SPL Working Capital Facility, 2020 SPL Working Capital Facility, 2019 CQP Credit Facilities, CCH Credit Facility, CCH Working Capital Facility, Cheniere Revolving Credit Facility and Cheniere Marketing trade finance facilities. The Level 3 estimated fair value approximates the principal amount because the interest rates are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty.


~~(4)~~	~~The Level 1 estimated fair value was based on unadjusted quoted prices in active markets for identical liabilities that we had the ability to access at the measurement date.~~

(1)The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of these senior notes and other similar instruments.

(2)The Level 3 estimated fair value was calculated based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including our stock price and interest rates based on debt issued by parties with comparable credit ratings to us and inputs that are not observable in the market.

(3)The Level 3 estimated fair value approximates the principal amount because the interest rates are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty.

(4)The Level 1 estimated fair value was based on unadjusted quoted prices in active markets for identical liabilities that we had the ability to access at the measurement date.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE 11—LEASES

Our leased assets consist primarily of (1) LNG vessel time charters (“vessel charters”), (2) tug vessels, (3) office space and facilities and (4) land sites, all of which are classified as operating leases except for our tug vessels atsupporting the Corpus Christi LNG terminal, which are classified as finance leases.

The following table shows the classification and location of our right-of-use assets and lease liabilities on our Consolidated Balance Sheets (in millions):



		March 31,		December 31,
	Consolidated Balance Sheets Location	2021		2020
Right-of-use assets—Operating	Operating lease assets	$	1,181	$	759
Right-of-use assets—Financing	Property, plant and equipment, net	52		53
Total right-of-use assets		$	1,233	$	812

Current operating lease liabilities	Current operating lease liabilities	$	251	$	161
Current finance lease liabilities	Other current liabilities	2		2
Non-current operating lease liabilities	Non-current operating lease liabilities	928		597
Non-current finance lease liabilities	Non-current finance lease liabilities	57		$	57
Total lease liabilities		$	1,238	$	817

Consolidated Balance Sheet Location March 31, 2020 December 31, 2019
Right-of-use assets—Operating Operating lease assets, net $ 350
$ 439
Right-of-use assets—Financing Property, plant and equipment, net 55
56
Total right-of-use assets $ 405
$ 495

Current operating lease liabilities Current operating lease liabilities $ 178
$ 236
Current finance lease liabilities Other current liabilities 1
1
Non-current operating lease liabilities Non-current operating lease liabilities 164
189
Non-current finance lease liabilities Non-current finance lease liabilities 58
58
Total lease liabilities $ 401
$ 484

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

The following table shows the classification and location of our lease ~~cost~~costs on our Consolidated Statements of Operations (in millions):

Consolidated Statement of Operations Location Three Months Ended March 31,
2020 2019
Operating lease cost (1) Operating costs and expenses (2) $ 141
$ 137
Finance lease cost:

Amortization of right-of-use assets Depreciation and amortization expense 1
1
Interest on lease liabilities Interest expense, net of capitalized interest 2
2
Total lease cost $ 144
$ 140


	Consolidated Statements of Operations Location	Three Months Ended March 31,
			2021		2020
Operating lease cost (a)	Operating costs and expenses (1)		$	151	$	141
Finance lease cost:
Amortization of right-of-use assets	Depreciation and amortization expense		1		1
Interest on lease liabilities	Interest expense, net of capitalized interest		2		2

Total lease cost			$	154	$	144

(a) Included in operating lease cost:
Short-term lease costs			$	51	$	35
Variable lease costs			2		5


~~(1)~~	Includes $35 million and $47 million of short-term lease costs during the three months ended March 31, 2020 and 2019, respectively, and $5 million of variable lease costs paid to the lessor during each of the three months ended March 31, 2020 and 2019.


~~(2)~~	~~Presented in cost of sales, operating and maintenance expense or selling, general and administrative expense consistent with the nature of the asset under lease.~~

(1) Presented in cost of sales, operating and maintenance expense or selling, general and administrative expense consistent with the nature of the asset under lease.

Future annual minimum lease payments for operating and finance leases as of March 31, ~~2020~~2021 are as follows (in millions):

Years Ending December 31, Operating Leases (1) Finance Leases
2020 $ 158
$ 8
2021 58
10
2022 23
10
2023 22
10
2024 22
10
Thereafter 166
136
Total lease payments 449
184
Less: Interest (107 ) (125 )
Present value of lease liabilities $ 342
$ 59


Years Ending December 31,	Operating Leases (1)		Finance Leases
2021	$	233	$	8
2022	253		10
2023	214		10
2024	192		10
2025	163		10
Thereafter	342		127
Total lease payments	1,397		175
Less: Interest	(218)		(116)
Present value of lease liabilities	$	1,179	$	59


~~(1)~~	Does not include $2.0 billion of legally binding minimum lease payments primarily for vessel charters which were executed as of March 31, 2020 but will commence in future period primarily in the next two years and have fixed minimum lease terms of up to seven years.

(1) Does not include $1.1 billion of legally binding minimum lease payments primarily for vessel charters which were executed as of March 31, 2021 but will commence in future period primarily in the next year and have fixed minimum lease terms of up to seven years.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

The following table shows the weighted-average remaining lease term ~~(in years)~~ and the weighted-average discount rate for our operating leases and finance leases:

March 31, 2020 December 31, 2019
Operating Leases Finance Leases Operating Leases Finance Leases
Weighted-average remaining lease term (in years) 9.8 18.4 8.4 18.7
Weighted-average discount rate (1) 5.0% 16.2% 5.2% 16.2%


	March 31, 2021		December 31, 2020
	Operating Leases	Finance Leases	Operating Leases	Finance Leases
Weighted-average remaining lease term (in years)	7.2	17.4	8.2	17.7
Weighted-average discount rate (1)	4.5%	16.2%	5.4%	16.2%


~~(1)~~	The finance leases commenced prior to the adoption of the current leasing standard under GAAP. In accordance with previous accounting guidance, the implied rate is based on the fair value of the underlying assets.

(1)The finance leases commenced prior to the adoption of the current leasing standard under GAAP. In accordance with previous accounting guidance, the implied rate is based on the fair value of the underlying assets.

The following table includes other quantitative information for our operating and finance leases (in millions):


	Three Months Ended March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	97	$	94
Operating cash flows from finance leases	2		2

Right-of-use assets obtained in exchange for operating lease liabilities	507		8

Three Months Ended March 31,
2020 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 94
$ 90
Operating cash flows from finance leases 2
2
Financing cash flows from finance leases —
—
Right-of-use assets obtained in exchange for new operating lease liabilities 8
64

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

LNG Vessel Subcharters

From time to time, we sublease certain LNG vessels under charter to third parties while retaining our existing obligation to the original lessor. As of both March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we ~~had $3 million and $9 million in~~did 0t have any future minimum sublease payments to be received from LNG vessel ~~subcharters, respectively, which will be recognized entirely within 2020. We recognized $52 million and $37 million of~~subcharters. The following table shows the sublease income ~~including $15 million and $5 million of variable lease payments, during the three months ended March 31, 2020 and 2019, respectively,~~recognized in other revenues on our Consolidated Statements of ~~Operations.~~Operations (in millions):


	Three Months Ended March 31,
		2021		2020
Fixed income		$	3	$	37
Variable income		1		15
Total sublease income		$	4	$	52

NOTE 12—REVENUES FROM CONTRACTS WITH CUSTOMERS

The following table represents a disaggregation of revenue earned from contracts with customers during the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in millions):

Three Months Ended March 31,
2020 2019
LNG revenues (1) $ 2,404
$ 2,068
Regasification revenues 67
66
Other revenues 22
15
Total revenues from customers 2,493
2,149
Net derivative gains (2) 164
75
Other (3) 52
37
Total revenues $ 2,709
$ 2,261


	Three Months Ended March 31,
		2021		2020
LNG revenues (1)		$	3,039	$	2,404
Regasification revenues		67		67
Other revenues		20		22

Total revenues from customers		3,126		2,493
Net derivative gain (loss) (2)		(40)		164
Other (3)		4		52
Total revenues		$	3,090	$	2,709

~~(1)~~

LNG revenues include revenues for LNG cargoes in which our customers exercised their contractual right to not take delivery but remained obligated to pay fixed fees irrespective of such election. Revenue associated with canceled LNG cargoes is generally recognized upon notice of customer cancellation because our customers have no contractual right to take delivery of canceled LNG cargoes in future periods and our performance obligations with respect to such canceled LNG cargoes have been satisfied.

~~(2)~~

(1) LNG revenues include revenues for LNG cargoes in which our customers exercised their contractual right to not take delivery but remained obligated to pay fixed fees irrespective of such election. During the three months ended March 31, 2020, we recognized $53 million in LNG revenues associated with LNG cargoes for which customers notified us that they would not take delivery, which would have been recognized subsequent to March 31, 2020 had the cargoes been lifted pursuant to the delivery schedules with the customers. We did 0t have such revenues during the three months ended March 31, 2021. Revenue is generally recognized upon receipt of irrevocable notice that a customer will not take delivery because our customers have no contractual right to take delivery of such LNG cargo in future periods and our performance obligations with respect to such LNG cargo have been satisfied.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

(2) See Note 6—Derivative Instruments for additional information about our derivatives.

(3) Includes revenues from LNG vessel subcharters. See Note 11—Leases for additional information about our subleases.

~~Note 6—Derivative Instruments~~ ~~for additional information about our derivatives.~~


~~(3)~~	~~Includes revenues from LNG vessel subcharters. See~~ ~~Note 11—Leases~~ ~~for additional information about our subleases.~~

Contract Assets and Liabilities

The following table shows our contract assets, net, which are classified as other current assets and other non-current assets, net on our Consolidated Balance Sheets (in millions):



	March 31,		December 31,
	2021		2020
Contract assets, net	$	94	$	80

March 31, December 31,
2020 2019
Contract assets $ 34
$ 18

Contract assets represent our right to consideration for transferring goods or services to the customer under the terms of a sales contract when the associated consideration is not yet due. Changes in contract assets during the three months ended March 31, ~~2020~~2021 were primarily attributable to revenue recognized due to the delivery of LNG under certain SPAs for which the associated consideration was not yet due.

The following table reflects the changes in our contract liabilities, which we classify as deferred revenue on our Consolidated Balance Sheets (in millions):



	Three Months Ended March 31, 2021
Deferred revenues, beginning of period	$	138
Cash received but not yet recognized in revenue	102
Revenue recognized from prior period deferral	(138)
Deferred revenues, end of period	$	102

Three Months Ended March 31, 2020
Deferred revenues, beginning of period $ 161
Cash received but not yet recognized 94
Revenue recognized from prior period deferral (161 )
Deferred revenues, end of period $ 94

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

Transaction Price Allocated to Future Performance Obligations

Because many of our sales contracts have long-term durations, we are contractually entitled to significant future consideration which we have not yet recognized as revenue. The following table discloses the aggregate amount of the transaction price that is allocated to performance obligations that have not yet been satisfied as of March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

March 31, 2020 December 31, 2019
Unsatisfied Transaction Price (in billions) Weighted Average Recognition Timing (years) (1) Unsatisfied Transaction Price (in billions) Weighted Average Recognition Timing (years) (1)
LNG revenues $ 105.4
11 $ 106.4
11
Regasification revenues 2.3
5 2.4
5
Total revenues $ 107.7

$ 108.8


	March 31, 2021			December 31, 2020
	Unsatisfied Transaction Price (in billions)		Weighted Average Recognition Timing (years) (1)	Unsatisfied Transaction Price (in billions)		Weighted Average Recognition Timing (years) (1)
LNG revenues	$	101.2	10	$	102.3	10
Regasification revenues	2.1		5	2.1		5
Total revenues	$	103.3		$	104.4

(1) The weighted average recognition timing represents an estimate of the number of years during which we shall have recognized half of the unsatisfied transaction price.

We have elected the following exemptions which omit certain potential future sources of revenue from the table above:


~~(1)~~	~~We omit from the table above all performance obligations that are part of a contract that has an original expected duration of one year or less.~~

~~(2)~~

The table above excludes substantially all variable consideration under our SPAs and TUAs. We omit from the table above all variable consideration that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation when that performance obligation qualifies as a series. The amount of revenue from variable fees that is not included in the transaction price will vary based on the future prices of Henry Hub throughout the contract terms, to the extent customers elect to take delivery of their LNG, and adjustments to the consumer price index. Certain of our contracts contain additional variable consideration based on the outcome of contingent events and the movement of various indexes. We have not included such variable consideration in the transaction price to the extent the consideration is considered constrained due to the uncertainty of ultimate pricing and receipt. Approximately 42% and 58% of our LNG revenues from contracts with a duration of over one year during the three months ended March 31, 2020 and 2019, respectively, were related to variable consideration received from customers. During each of the three months ended March 31, 2020 and 2019, approximately 3% of our regasification revenues were related to variable consideration received from customers.

(1)We omit from the table above all performance obligations that are part of a contract that has an original expected duration of one year or less.

(2)The table above excludes substantially all variable consideration under our SPAs and TUAs. We omit from the table above all variable consideration that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation when that performance obligation qualifies as a series. The amount of revenue from variable fees that is not included in the transaction price will vary based on the future prices of Henry Hub throughout the contract terms, to the extent customers elect to take delivery of their LNG, and adjustments to the consumer price index. Certain of our contracts contain additional variable consideration based on the outcome of contingent events and the movement of various indexes. We have not included such variable consideration in the transaction price to the

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

extent the consideration is considered constrained due to the uncertainty of ultimate pricing and receipt. Approximately 51% and 42% of our LNG revenues from contracts included in the table above during the three months ended March 31, 2021 and 2020, respectively, were related to variable consideration received from customers. During each of the three months ended March 31, 2021 and 2020, approximately 3% of our regasification revenues were related to variable consideration received from customers.

We ~~have entered~~may enter into contracts to sell LNG that are conditioned upon one or both of the parties achieving certain milestones such as reaching FID on a certain liquefaction Train, obtaining financing or achieving substantial completion of a Train and any related facilities. These contracts are considered completed contracts for revenue recognition purposes and are included in the transaction price above when the conditions are considered probable of being met.

NOTE 13—RELATED PARTY TRANSACTIONS

Natural Gas Supply Agreements

SPL and CCL are party to natural gas supply agreements with related parties in the ordinary course of business, to obtain a fixed minimum daily volume of feed gas for the operation of the Liquefaction Projects. These related parties are partially owned by The Blackstone Group Inc., who also partially owns Cheniere Partners’ limited partner interests.

SPL Natural Gas Supply Agreement

The term of the SPL agreement is for five years, which can commence no earlier than November 1, 2021 and no later than November 1, 2022, following the achievement of contractually-defined conditions precedent. As of both March 31, 2021 and December 31, 2020, the notional amount for this agreement was 91 TBtu and had a fair value of 0.

CCL Natural Gas Supply Agreement

The term of the CCL agreement extends through March 2022. Under this agreement, CCL recorded $13 million in accrued liabilities, as of both March 31, 2021 and December 31, 2020.

The Liquefaction Supply Derivatives related to this agreement are recorded on our Consolidated Balance Sheets as follows (in millions, except notional amount):



	March 31,		December 31,
	2021		2020
Derivative assets	$	5	$	3
Non-current derivative assets	0		1

Notional amount (in TBtu)	55		60

We recorded the following amounts on our Consolidated Statements of Operations during the three months ended March 31, 2021 and 2020 related to this agreement (in millions):


	Three Months Ended March 31,
		2021		2020
Cost of sales (a)		$	35	$	23

(a) Included in costs of sales:
Liquefaction Supply Derivative gain		$	1	$	1

Natural Gas Transportation and Storage Agreements

SPL is party to various natural gas transportation and storage agreements and CTPL is party to an operational balancing agreement with a related party in the ordinary course of business for the operation of the SPL Project, with initial primary terms of up to 10 years with extension rights. This related party is partially owned by Brookfield Asset Management, Inc., who acquired a portion of Cheniere Partners’ limited partner interests in September 2020. We recorded operating and maintenance

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

expense of $10 million in the three months ended March 31, 2021 and accrued liabilities of $3 million and $4 million as of March 31, 2021 and December 31, 2020, respectively, with this related party.

Operation and Maintenance Service Agreements

Cheniere LNG O&M Services, LLC (“O&M Services”), our wholly owned subsidiary, provides the development, construction, operation and maintenance services to Midship Pipeline pursuant to agreements in which O&M Services receives an agreed upon fee and reimbursement of costs incurred. O&M Services recorded $2 million and $3 million in the three months ended March 31, 2021 and 2020, respectively, of other revenues and $1 million and $2 million of accounts receivable as of March 31, 2021 and December 31, 2020, respectively, for services provided to Midship Pipeline under these agreements.

NOTE 14—INCOME TAXES

We recorded an income tax provision of ~~$131~~$89 million and $3$131 million during the three months ended March 31, 2021 and 2020, ~~and 2019,~~ respectively. The effective tax rate for the three months ended March 31, 2021 was 13.5%, which was lower than the 21% federal statutory tax rate primarily due to income allocated to non-controlling interest that is not taxable to Cheniere. The effective tax rate for the three months ended March 31, 2020 was 17.8%, which iswas lower than the 21% federal statutory tax rate primarily due to income allocated to non-controlling interest that is not taxable to Cheniere, partially offset by a one-time discrete event related to an internal ~~tax~~ restructuring. The discrete item resulted in expense of $38 million for the three months ended March 31, 2020. The effective tax rate for the three months ended March 31, 2019 was 0.9%, which is lower than the 21% federal statutory rate primarily due to maintaining a valuation allowance against our federal deferred tax assets.

NOTE ~~14—~~15—SHARE-BASED COMPENSATION

We have granted restricted stock shares, restricted stock units, performance stock units and phantom units to employees and non-employee directors under the 2011 Incentive Plan, as amended (the “2011 Plan”) and the ~~2015 Employee Inducement~~2020 Incentive Plan.

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

For the three months ended March 31, ~~2020,~~2021, we granted ~~1.2~~1.5 million restricted stock units and 0.3 million performance stock units at target performance under the ~~2011~~2020 Plan to certain employees. Additionally, 0.2 million incremental shares of our common stock were issued based on performance results from previously-granted performance stock unit awards.

Restricted stock units are stock awards that vest over a service period of three years and entitle the holder to receive shares of our common stock upon vesting, subject to restrictions on transfer and to a risk of forfeiture if the recipient terminates employment with us prior to the lapse of the restrictions. Performance stock units provide for cliff vesting after a period of three years with payouts based on metrics dependent upon market and performance achieved over the defined performance period ~~from January 1, 2020 through December 31, 2022~~ compared to pre-established performance targets. The settlement amounts of the awards are based on market and performance metrics which include cumulative distributable cash flow per share, and in certain circumstances, absolute total shareholder return (“ATSR”) of our common stock. Where applicable, the compensation for performance stock units is based on fair value assigned to the market metric of ATSR using a Monte Carlo model upon grant, which remains constant through the vesting period, and a performance metric, which will vary due to changing estimates regarding the expected achievement of the performance metric of cumulative distributable cash flow per share. The number of shares that may be earned at the end of the vesting period ranges from 0% up to 300% of the target award amount. Both restricted stock units and performance stock units will be settled in Cheniere common stock (on a one-for-one basis) and are classified as equity awards, however, a portion of the performance stock units granted in 2021 will partially settle in cash, subject to individual limits. The portion of performance stock units expected to settle in Cheniere common stock (on a one-for-one basis) are classified as equity awards and the portion of performance stock units expected to settle in cash are classified as liability awards.

Total share-based compensation consisted of the following (in millions):


	Three Months Ended March 31,
		2021		2020
Share-based compensation costs, pre-tax:
Equity awards		$	33	$	30
Liability awards		1		0
Total share-based compensation		34		30
Capitalized share-based compensation		(2)		(1)
Total share-based compensation expense		$	32	$	29
Tax benefit associated with share-based compensation expense		$	25	$	18

Three Months Ended March 31,
2020 2019
Share-based compensation costs, pre-tax:
Equity awards $ 30
$ 29
Liability awards —
3
Total share-based compensation
30
32
Capitalized share-based compensation (1 ) (4 )
Total share-based compensation expense
$ 29
$ 28
Tax benefit associated with share-based compensation expense $ 18
$ 1

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE ~~15—~~16—NET INCOME PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

Basic net income per share attributable to common stockholders (“EPS”) excludes dilution and is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects potential dilution and is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if the potential common shares had been issued. The dilutive effect of unvested stock is calculated using the treasury-stock method and the dilutive effect of convertible securities is calculated using the treasury or if-converted ~~method.~~method, as referenced below.

The following table reconciles basic and diluted weighted average common shares outstanding for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in millions, except per share data):


	Three Months Ended March 31,
		2021		2020
Weighted average common shares outstanding:
Basic		252.9		253.0
Dilutive unvested stock		1.5		1.1
Dilutive convertible securities		4.5		45.5
Diluted		258.9		299.6

Basic net income per share attributable to common stockholders		$	1.56	$	1.48
Diluted net income per share attributable to common stockholders		$	1.54	$	1.43

Three Months Ended March 31,
2020 2019
Weighted average common shares outstanding:
Basic 253.0
257.1
Dilutive unvested stock 1.1
1.4
Dilutive convertible securities 45.5
—
Diluted 299.6
258.5

Basic net income per share attributable to common stockholders $ 1.48
$ 0.55
Diluted net income per share attributable to common stockholders $ 1.43
$ 0.54

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

Potentially dilutive securities that were not included in the diluted net income per share computations because their effects would have been anti-dilutive were as follows (in millions):

Three Months Ended March 31,
2020 2019
Unvested stock (1) 2.1
2.4
Convertible notes (2) —
17.7
Total potentially dilutive common shares 2.1
20.1


	Three Months Ended March 31,
		2021	2020
Unvested stock (1)		1.9	2.1
Convertible notes
2021 Cheniere Convertible Unsecured Notes (2)		0	0
11% Convertible Senior Secured Notes due 2025 (“2025 CCH HoldCo II Convertible Senior Notes”) (3)		0	0
2045 Cheniere Convertible Senior Notes		0	0
Total potentially dilutive common shares		1.9	2.1


~~(1)~~	(1)Does not include 0.5 million shares and 0.7 ~~million shares and 0.6~~ million shares for ~~the three months ended March 31, 2020 and 2019, respectively, of unvested stock because the performance conditions had not yet been satisfied as of the respective dates.~~


~~(2)~~	Includes number of shares in aggregate issuable upon conversion of the 2021 Cheniere Convertible Unsecured Notes and the 2045 Cheniere Convertible Senior Notes for all periods presented and additionally the 2025 CCH HoldCo II Convertible Senior Notes for the three months ended March 31, 2020, following the substantial completion of Train 2 of the CCL Project in August 2019.

~~NOTE 16—SHARE REPURCHASE PROGRAM~~

~~On June 3, 2019, we announced that our Board authorized a 3-year, $1.0 billion share repurchase program. During~~ the three months ended March 31, 2021 and 2020, respectively, of unvested stock because the performance conditions had not yet been satisfied as of the respective dates.

(2)Since we ~~repurchased an aggregate~~have the intent and ability to settle the remaining outstanding principal amount of ~~2.9 million~~the 2021 Cheniere Convertible Unsecured Notes in cash and the excess conversion premium (the “conversion spread”) in either cash or shares, the treasury stock method was applied for calculating any potential dilutive effect of the conversion spread on net income per share for the three months ended March 31, 2021. However, since the average market price of our common stock ~~for $155 million, for a weighted average~~did not exceed the conversion price of our 2021 Cheniere Convertible Unsecured Notes, the conversion spread was excluded from the computation of diluted net income per share ~~of $53.88.~~

~~As of~~for the three months ended March 31, ~~2020,~~2021.

(3)Since we ~~had up to $596 million~~redeemed the remaining principal amount of the 2025 CCH HoldCo II Convertible Senior Notes and the related premium in cash in July 2020, the 2025 CCH HoldCo II Convertible Senior Notes were not included in the computation of diluted net income per share ~~repurchase program available. Under~~for the share repurchase program, 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 SEC and other applicable legal requirements. The timing and amount of any shares of our common stock that are repurchased under the share repurchase program will be determined by our management based on market conditions and other factors. The share repurchase program does not obligate us to acquire any particular amount of common stock, and may be modified, suspended or discontinued at any time or from time to time at our discretion.three months ended March 31, 2021.

CHENIERE ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE 17—COMMITMENTS AND CONTINGENCIES

We have various contractual obligations which are recorded as liabilities in our Consolidated Financial Statements. Other items, such as certain purchase commitments and other executed contracts which do not meet the definition of a liability as of March 31, ~~2020,~~2021, are not recognized as liabilities but require disclosures in our Consolidated Financial Statements.

Environmental and Regulatory Matters

Our LNG terminals and pipelines are subject to extensive regulation under federal, state and local statutes, rules, regulations and laws. These laws require that we engage in consultations with appropriate federal and state agencies and that we obtain and maintain applicable permits and other authorizations. Failure to comply with such laws could result in legal proceedings, which may include substantial penalties. We believe that, based on currently known information, compliance with these laws and regulations will not have a material adverse effect on our results of operations, financial condition or cash flows.

Legal Proceedings

We are, and may in the future be, involved as a party to various legal proceedings, which are incidental to the ordinary course of business. We regularly analyze current information and, as necessary, provide accruals for probable liabilities on the eventual disposition of these matters. While the results of these litigation matters and claims cannot be predicted with certainty, we believe the reasonably possible losses from such matters, individually and in the aggregate, are not material. Additionally, we believe the probable final outcome of such matters will not have a material adverse effect on our consolidated results of operations, financial position or cash flows.

~~CHENIERE ENERGY, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

NOTE 18—CUSTOMER CONCENTRATION

The following table shows external customers with revenues of 10% or greater of total revenues from external customers and external customers with accounts receivable, net and contract assets, net balances of 10% or greater of total accounts receivable, net and contract assets, net from external customers:

Percentage of Total Revenues from External Customers Percentage of Accounts Receivable from External Customers
Three Months Ended March 31, March 31, December 31,
2020 2019 2020 2019
Customer A 16% 20% 12% 13%
Customer B * 12% * *
Customer C * 12% 15% 13%
Customer D * 14% * *


		Percentage of Total Revenues from External Customers		Percentage of Accounts Receivable, Net and Contract Assets, Net from External Customers
	Three Months Ended March 31,		March 31,	December 31,

		2021	2020		2021	2020
Customer A		15%	20%		11%	14%
Customer B		12%	12%		11%	12%
Customer C		13%	12%		12%	*
Customer D		*	14%		*	*

* Less than 10%

NOTE 19—SUPPLEMENTAL CASH FLOW INFORMATION

The following table provides supplemental disclosure of cash flow information (in millions):


	Three Months Ended March 31,
	2021		2020
Cash paid during the period for interest on debt, net of amounts capitalized	$	211	$	295
Cash paid for income taxes, net of refunds	0		1

Three Months Ended March 31,
2020 2019
Cash paid during the period for interest on debt, net of amounts capitalized $ 295
$ 108
Cash paid for income taxes 1
20

The balance in property, plant and equipment, net funded with accounts payable and accrued liabilities was ~~$255~~$360 million and ~~$509~~$255 million as of March 31, 2021 and 2020 ~~and 2019,~~, respectively.


~~ITEM 2.~~	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 regarding the amount and timing of share repurchases;

•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 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;

•statements regarding the outbreak of COVID-19 and its impact on our business and operating results, including any customers not taking delivery of LNG cargoes, the ongoing credit worthiness of our contractual counterparties, any disruptions in our operations or construction of our Trains and the health and safety of our employees, and on our customers, the global economy and the demand for LNG; 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, ~~2019~~20 20. 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 of Business

•Overview of Significant Events

~~Impact~~•Results of ~~COVID-19 and Market Environment~~Operations

•Liquidity and Capital Resources

~~Results of Operations~~

•Off-Balance Sheet Arrangements

•Summary of Critical Accounting Estimates

•Recent Accounting Standards

Overview of Business

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. We own and operate the Sabine Pass LNG terminal in Louisiana, one of the largest LNG production facilities in the world, through our ownership interest in and management agreements with Cheniere Partners, which is a publicly traded limited partnership that we created in 2007. As of March 31, ~~2020,~~2021, we owned 100% of the general partner interest and 48.6% of the limited partner interest in Cheniere Partners. We also own and operate the Corpus Christi LNG terminal in Texas, which is wholly owned by us.

The Sabine Pass LNG terminal is located in Cameron Parish, Louisiana, on the Sabine-Neches Waterway less than four miles from the Gulf Coast. Cheniere Partners, through its subsidiary SPL, is currently operating five natural gas liquefaction Trains and is constructing one additional Train that is expected to be substantially completed in the first half of 2022, for a total production capacity of approximately 30 mtpa of LNG (the “SPL Project”) at the Sabine Pass LNG terminal. The Sabine Pass LNG terminal has operational regasification facilities owned by Cheniere Partners’ subsidiary, SPLNG, that include pre-existing infrastructure of five LNG storage tanks with aggregate capacity of approximately 17 Bcfe, two existing marine berths and one under construction that can each accommodate vessels with nominal capacity of up to 266,000 cubic meters and vaporizers with regasification capacity of approximately 4 Bcf/d. Cheniere Partners also owns a 94-mile pipeline through its subsidiary, CTPL, that interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines.

We also own the Corpus Christi LNG terminal near Corpus Christi, Texas, and are currently operating ~~two~~three Trains, ~~and are constructing one additional~~including the third Train ~~for~~which achieved substantial completion on March 26, 2021, with a total production capacity of approximately 15 mtpa of LNG. Additionally, we are operating a 23-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with several interstate and intrastate natural gas pipelines (the “Corpus Christi Pipeline” and together with the Trains, the “CCL Project”) through our subsidiaries CCL and CCP, respectively. The CCL Project ~~once fully constructed, will contain~~also

contains 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 have contracted approximately 85% of the total production capacity from the SPL Project and the CCL Project (collectively, the “Liquefaction Projects”) on a term ~~basis.~~basis, with approximately 18 years of average remaining life as of March 31, 2021. This includes volumes contracted under SPAs in which the customers are required to pay a fixed fee with respect to the contracted volumes irrespective of their election to cancel or suspend deliveries of LNG cargoes, as well as volumes contracted under integrated production marketing (“IPM”) gas supply agreements.

Additionally, separate from the CCH Group, we are developing an expansion of the Corpus Christi LNG terminal adjacent to the CCL Project (“Corpus Christi Stage 3”) through our subsidiary CCL Stage III for up to seven midscale Trains with an expected total production capacity of approximately 10 mtpa of LNG. We received approval from FERC in November 2019 to site, construct and operate the expansion project.

Overview of Significant Events

Our significant events since January 1, ~~2020~~2021 and through the filing date of this Form 10-Q include the following:

~~Strategic~~

~~In April 2020, Midship Pipeline Company, LLC, in which we have an equity investment, placed into service the Midship natural gas pipeline and related compression and interconnect facilities.~~

Operational

•As of April ~~27, 2020,~~30, 2021, more than ~~1,100~~1,525 cumulative LNG cargoes totaling ~~over 75~~approximately 105 million tonnes of LNG have been produced, loaded and exported from the Liquefaction Projects.

•On March 26, 2021, substantial completion of Train 3 of the CCL Project was achieved.

Financial

•We completed the following financing transactions:

◦In ~~March 2020,~~February 2021, SPL entered into a $1.2 billion Working Capital Revolving Credit and Letter of Credit Reimbursement Agreement (the “2020 SPL Working Capital Facility”), which refinanced its previous working capital facility, reduced the interest rate and extended the maturity date to March 2025.

~~In February 2020, the amended and restated~~ note purchase agreement for the ~~11.0% Convertible~~sale of approximately $147 million aggregate principal amount of 2.95% Senior Secured Notes due 2037 (the “2.95% SPL 2037 Senior Secured Notes”) on a private placement basis. The 2.95% SPL 2037 Senior Secured Notes are expected to be issued in the second half of 2021, and the net proceeds are expected to be used to refinance a portion of SPL’s outstanding Senior Secured Notes due 2022. The 2.95% SPL 2037 Senior Secured Notes will be fully amortizing, with a weighted average life of over 10 years.

◦In March 2021, Cheniere Partners issued an aggregate principal amount of approximately $1.5 billion of 4.000% Senior Notes due 2031 (the “2031 CQP Senior Notes”). The net proceeds of the 2031 CQP Senior Notes, along with cash on hand, were used to refinance the 5.250% Senior Notes due 2025 (the “2025 ~~CCH HoldCo II Convertible~~CQP Senior Notes”) ~~was amended~~and to ~~allow CCH HoldCo II~~pay fees and expenses in connection with the ~~option~~refinancing.

•During the three months ended March 31, 2021, in line with our previously announced capital allocation priorities, we prepaid $148 million of outstanding borrowings under Cheniere’s term loan facility (“Cheniere Term Loan Facility”) with available cash.

•In January 2021, the term commenced on Cheniere Marketing International LLP’s 25 year SPA with CPC Corporation, Taiwan.

•In February 2021, Fitch Ratings (“Fitch”) changed the outlook of SPL’s senior secured notes rating to ~~redeem all or a portion~~positive from stable and the outlook of Cheniere Partners’ long-term issuer default rating and senior unsecured rating to positive from stable.

•In April 2021, S&P Global Ratings changed the ~~outstanding notes with cash at a price~~outlook of ~~$1,080 per $1,000 principal amount, at the time~~Cheniere and Cheniere Partners’ ratings to positive from negative.

Results of ~~any CCH HoldCo II- or noteholder-initiated conversion through September 2, 2020. In March 2020, CCH HoldCo II redeemed an aggregate outstanding principal amount of $300 million with cash.~~Operations

~~Impact of COVID-19 and Market Environment~~

The ~~business environment in which we operate has been impacted by~~following charts summarize the ~~recent downturn in the energy market as well as the outbreak of COVID-19~~total revenues and ~~its progression into a pandemic in March 2020. As a result of these developments,~~total LNG volumes loaded from our growth estimates for LNG in 2020 have moderated from previous expectations. Annual LNG demand grew by 13% in 2019 to approximately 360 mtpa. In a report published in the month of April 2020, IHS Markit projected LNG demand in 2020 to reach 363 mtpa, down from a pre-COVID-19 estimate of approximately 377 mtpa. This implies a year-over-year rate of growth of approximately 0.8% in 2020 compared to the implied 4.7% pre-COVID-19 year-over-year growth estimate. While worldwide demand increased by approximately 10%Liquefaction Projects (including both operational and commissioning volumes) during the three months ended March 31, ~~2020 compared to~~2021 and 2020:

The following table summarizes the ~~comparable period~~volumes of ~~2019, we expect to potentially see year-over-year declines in some future quarters as reduced economic activity affects~~operational and commissioning LNG ~~demand and high storage inventory levels reduce~~cargoes that were loaded from the ~~need for imports. The robust LNG supply additions over the past several years, along with warmer winters and now strict virus containment measures, have exerted downward pressure~~Liquefaction Projects, which were recognized on global gas prices. As an example, the Dutch Title Transfer Facility (“TTF”), a virtual trading point for natural gas in the Netherlands, averaged $3.35 during the quarter ended March 31, 2020, 51% lower than the comparable period of 2019, while the Japan Korean Marker (“JKM”), an LNG benchmark price assessment for spot physical cargoes delivered ex-ship into certain key markets in Asia, averaged $4.82our Consolidated Financial Statements during the three months ended March 31, ~~2020, 43% lower than~~2021:


	Three Months Ended March 31, 2021
(in TBtu)	Operational	Commissioning
Volumes loaded during the current period	448	28
Volumes loaded during the prior period but recognized during the current period	26	3
Less: volumes loaded during the current period and in transit at the end of the period	(32)	(6)
Total volumes recognized in the current period	442	25

Net income attributable to common stockholders


	Three Months Ended March 31,
(in millions, except per share data)		2021		2020		Change
Net income attributable to common stockholders		$	393	$	375	$	18
Net income per share attributable to common stockholders—basic		1.56		1.48		0.08
Net income per share attributable to common stockholders—diluted		1.54		1.43		0.11

Net income attributable to common stockholders increased by $18 million during the three months ended March 31, 2021 from the comparable period in 2020, as increased commodity margins for the three months ended March 31, 2021 were substantially offset by a $414 million decrease in derivative-related after-tax gains attributable to common stockholders. Increases in commodity margins were primarily related to increased margins per MMBtu of ~~2019. As~~LNG delivered, as well as higher than normal contributions from LNG and natural gas portfolio optimization activities due to significant volatility in LNG and natural gas markets during the three months ended March 31, 2021. Comparable period changes in derivative gains (losses) are primarily attributable to the non-recurrence of commodity-related derivative gains from the three months ended March 31, 2020, partially offset by declines in interest rate derivative losses as a result of ~~the weaker LNG market environment,~~favorable shifts in long-term forward LIBOR curves relative to our economically hedged position.

~~as well as customer-specific variables, we have recently experienced an increase in the number of LNG cargoes for which~~

We enter into derivative instruments to manage our ~~customers have notified us they will not take delivery. While this may impact our expected LNG production, we do not expect it~~exposure to ~~have a material impact~~(1) changing interest rates, (2) commodity-related marketing and price risks and (3) foreign exchange volatility. Derivative instruments are reported at fair value on our ~~forecasted financial results~~Consolidated Financial Statements. In some cases, the underlying transactions being economically hedged are accounted for ~~2020, due~~under the accrual method of accounting, whereby revenues and expenses are recognized only upon delivery, receipt or realization of the underlying transaction. Because the recognition of derivative instruments at fair value has the effect of recognizing gains or losses relating to future period exposure, use of derivative instruments may increase the ~~highly contracted nature~~volatility of our ~~business~~results of operations based on changes in market pricing, counterparty credit risk and other relevant factors.

Revenues


	Three Months Ended March 31,
(in millions)		2021		2020		Change
LNG revenues		$	2,999	$	2,568	$	431
Regasification revenues		67		67		—
Other revenues		24		74		(50)

Total revenues		$	3,090	$	2,709	$	381

Total revenues increased during the ~~fact that customers continue to be obligated to pay fixed fees for cargoes~~three months ended March 31, 2021 from the comparable period in ~~relation to which they have exercised their contractual right to cancel. Revenue associated with canceled LNG cargoes is generally recognized upon notice~~2020, primarily as a result of ~~customer cancellation.~~ increased revenues per MMBtu.During the three months ended March 31, 2020, we recognized ~~revenue of approximately~~ $53 million in LNG revenues associated with ~~canceled~~ LNG ~~cargoes.~~

~~In addition, in response~~cargoes for which customers notified us that they would not take delivery, which would have been recognized subsequent to March 31, 2020 had the cargoes been lifted pursuant to the ~~COVID-19 pandemic,~~delivery schedules with the customers. We did not have such revenues during the three months ended March 31, 2021.

Prior to substantial completion of a Train, amounts received from the sale of commissioning cargoes from that Train are offset against LNG terminal construction-in-process, because these amounts are earned or loaded during the testing phase for the construction of that Train. During the three months ended March 31, 2021, we ~~have modified~~realized offsets to LNG terminal costs of $191 million, corresponding to 25 TBtu that were related to the sale of commissioning cargoes from the Liquefaction Projects. We did not realize any offsets to LNG terminal costs during the three months ended March 31, 2020.

Also included in LNG revenues are sale of certain ~~business~~unutilized natural gas procured for the liquefaction process and ~~workforce practices to protect~~gains and losses from derivative instruments, which include the safety and welfare of our employees who continue to work at our facilities and offices worldwide, as well as implemented certain mitigation efforts to ensure business continuity. In March 2020, we began consultingrealized value associated with a ~~medical advisor,~~portion of derivative instruments that settle through physical delivery. We recognized revenues of $65 million and ~~implemented social distancing through revised shift schedules, work~~$212 million during the three months ended March 31, 2021 and 2020, respectively, related to these transactions.

We expect our LNG revenues to increase in the future with Train 3 of the CCL Project now fully operational and upon Train 6 of the SPL Project becoming operational.

The following table presents the components of LNG revenues and the corresponding LNG volumes sold:


	Three Months Ended March 31,
		2021		2020
LNG revenues (in millions):
LNG from the Liquefaction Projects sold under third party long-term agreements (1)		$	2,319	$	1,907
LNG from the Liquefaction Projects sold by our integrated marketing function under short-term agreements		519		325
LNG procured from third parties		96		71
LNG revenues associated with cargoes not delivered per customer notification (2)		—		53
Other revenues and net derivative gains		65		212
Total LNG revenues		$	2,999	$	2,568

Volumes delivered as LNG revenues (in TBtu):
LNG from the Liquefaction Projects sold under third party long-term agreements (1)		381		366
LNG from the Liquefaction Projects sold by our integrated marketing function under short-term agreements		61		93
LNG procured from third parties		14		14
Total volumes delivered as LNG revenues		456		473

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

(2) LNG revenues include revenues with no corresponding volumes due to revenues attributable to LNG cargoes for which customers notified us that they would not take delivery.

Operating costs and expenses


	Three Months Ended March 31,
(in millions)		2021		2020		Change
Cost of sales		$	1,386	$	724	$	662

Operating and maintenance expense		322		316		6
Development expense		1		4		(3)
Selling, general and administrative expense		81		81		—
Depreciation and amortization expense		236		233		3

Impairment expense and loss on disposal of assets		—		5		(5)

Total operating costs and expenses		$	2,026	$	1,363	$	663

Our total operating costs and expenses increased during the three months ended March 31, 2021 from ~~home policies~~the three months ended March 31, 2020, primarily as a result of increased cost of sales.

Cost of sales includes costs incurred directly for the production and ~~designated remote work locations where appropriate, restricted non-essential business travel~~delivery of LNG from the Liquefaction Projects, to the extent those costs are not utilized for the commissioning process. Cost of sales increased during the three months ended March 31, 2021 from the comparable 2020 period, primarily due to (1) $538 million attributable to the non-recurrence of commodity-related derivative gains from the three months ended March 31, 2020 and began requiring self-screening for employees and contractors. In April 2020, we began utilizing temporary on-site housing for our workforce at our facilities, implemented temperature testing, incorporated medical and social workers to support employees, enforced prior self-isolation and screening for on-site housing and implemented marine operations with zero contact during loading activities. These measures have resulted(2) increased pricing of natural gas feedstock. Partially offsetting these increases were decreases in ~~increased~~net costs ~~which we expect to continue until the risks~~ associated with the ~~COVID-19 pandemic diminish. As~~sale of ~~April 28,~~certain unutilized natural gas procured for the liquefaction process and a portion of derivative instruments that settle through physical delivery. Cost of sales also includes port and canal fees, variable transportation and storage costs, net of margins from the sale of natural gas procured for the liquefaction process and other costs to convert natural gas into LNG.

We expect our operating costs and expenses to generally increase in the future upon Train 6 of the SPL Project achieving substantial completion, although we expect certain costs will not proportionally increase with the number of operational Trains as cost efficiencies will be realized.

Other income (expense)


	Three Months Ended March 31,
(in millions)		2021		2020		Change
Interest expense, net of capitalized interest		$	356	$	412	$	(56)
Loss on modification or extinguishment of debt		55		1		54
Interest rate derivative loss (gain), net		(1)		208		(209)
Other income, net		(6)		(9)		3
Total other expense		$	404	$	612	$	(208)

Interest expense, net of capitalized interest, decreased during the three months ended March 31, 2021 from the comparable 2020 period as a result of lower interest costs as a result of refinancing higher cost debt. During the three months ended March 31, 2021 and 2020, we ~~have~~ incurred ~~approximately $30~~$417 million and $471 million of total interest cost, respectively, of which we capitalized $61 million and $59 million, respectively, which was primarily related to interest costs incurred for the construction of the Liquefaction Projects.

Loss on modification or extinguishment of debt increased during the three months ended March 31, 2021 from the comparable period in 2020, primarily due to the recognition of $54 million of debt extinguishment costs relating to the payment of early redemption fees and premiums and write off of unamortized debt issuance costs with the redemption of the 2025 CQP Senior Notes.

Interest rate derivative loss, net decreased during the three months ended March 31, 2021 compared to the comparable 2020 period, primarily due to declines in interest rate derivative losses as a result of favorable shifts in long-term forward LIBOR curves relative to our economically hedged position and the settlement of our outstanding derivatives hedged against changes in interest rates that could impact anticipated future issuances of debt by CCH (“CCH Interest Rate Forward Start Derivatives”) in August 2020.

Income tax provision


	Three Months Ended March 31,
(in millions)		2021			2020			Change
Income before income taxes and non-controlling interest		$	660		$	734		$	(74)
Income tax provision		(89)			(131)			42
Effective tax rate		13.5		%	17.8		%

The effective tax rate of 13.5% for the three months ended March 31, 2021 was lower than the 21% federal statutory tax rate primarily due to income allocated to non-controlling interest that is not taxable to Cheniere. The effective tax rate of 17.8% for the three months ended March 31, 2020 was primarily due to income allocated to non-controlling interest that is not taxable to Cheniere, partially offset by a one-time discrete event related to an internal restructuring resulting in expense of $38 million for the three months ended March 31, 2020. Our effective tax rate may continue to experience volatility prospectively due to variability in our pre-tax and taxable earnings and the proportion of such ~~costs.~~earnings attributable to non-controlling interests.

Net income attributable to non-controlling interest


	Three Months Ended March 31,
(in millions)		2021		2020		Change
Net income attributable to non-controlling interest		$	178	$	228	$	(50)

Net income attributable to non-controlling interest decreased during the three months ended March 31, 2021 from the three months ended March 31, 2020 primarily due to a decrease in consolidated net income recognized by Cheniere Partners. The consolidated net income recognized by Cheniere Partners decreased from $435 million in the three months ended March 31, 2020 to $347 million in the three months ended March 31, 2021, primarily as a result of increased loss on the extinguishment of the 2025 CQP Senior Notes and decreased margins due to the increased pricing of natural gas feedstock, partially offset by decreased interest expense, net of capitalized interest.

Liquidity and Capital Resources

Although results are consolidated for financial reporting, ~~Cheniere,~~SPL, Cheniere Partners, ~~SPL~~CCH Group and ~~the CCH Group~~Cheniere operate with independent capital structures. Our capital requirements include capital and investment expenditures, repayment of long-term debt and repurchase of our shares. We expect the cash needs for at least the next twelve months will be met for each of these independent capital structures as follows:

•SPL through operating cash flows, project debt and borrowings ~~operating cash flows~~ and equity contributions from Cheniere Partners;

•Cheniere Partners through operating cash flows from SPLNG, SPL and CTPL, ~~and~~ debt or equity ~~offerings;~~offerings and borrowings;

•CCH Group through operating cash flows from CCL and CCP, project debt and borrowings and equity contributions from Cheniere; and

•Cheniere through existing unrestricted cash, debt and equity offerings by us or our subsidiaries, operating cash flows, borrowings, services fees from our subsidiaries and distributions from our investment in Cheniere Partners.

The following table provides a summary of our liquidity position at March 31, ~~2020~~2021 and December 31, ~~2019~~2020 (in millions):

March 31, December 31,
2020 2019
Cash and cash equivalents (1) $ 2,399
$ 2,474
Restricted cash designated for the following purposes:
SPL Project 109
181
CCL Project 94
80
Other 227
259
Available commitments under the following credit facilities:
$1.2 billion Amended and Restated SPL Working Capital Facility (“2015 SPL Working Capital Facility”) —
786
2020 SPL Working Capital Facility

786
—
CQP Credit Facilities executed in 2019 (“2019 CQP Credit Facilities”) 750
750
$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”) 660
729
$1.25 billion Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”) 430
665



	March 31,		December 31,
	2021		2020
Cash and cash equivalents (1)	$	1,667	$	1,628
Restricted cash designated for the following purposes:

SPL Project	123		97


CCL Project	382		70
Other	226		282
Available commitments under the following credit facilities:

$1.2 billion Working Capital Revolving Credit and Letter of Credit Reimbursement Agreement (the “2020 SPL Working Capital Facility”)	787		787
CQP Credit Facilities executed in 2019 (“2019 CQP Credit Facilities”)	750		750

Amended and restated CCH Credit Facility (the “CCH Credit Facility”)	—		—
$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”)	907		767
$1.25 billion Cheniere Revolving Credit Facility (“Cheniere Revolving Credit Facility”)	1,250		1,126
Cheniere Term Loan Facility	372		372

~~(1)~~

~~Amounts presented include balances held by our consolidated variable interest entity (“VIE”), Cheniere Partners as discussed in~~ ~~Note 8—Non-controlling Interest and Variable Interest Entity~~ of our Notes to Consolidated Financial Statements. As of March 31, 2020 and December 31, 2019, assets of Cheniere Partners, which are included in our Consolidated Balance Sheets, included $1.7 billion and $1.8 billion, respectively, of cash and cash equivalents.

~~For additional information regarding~~(1) Amounts presented include balances held by our ~~debt agreements, see~~consolidated variable interest entity (“VIE”), Cheniere Partners, as discussed in Note ~~10—Debt~~8 —Non-controlling Interest and Variable Interest Entity of our Notes to Consolidated Financial ~~Statements in this quarterly report~~Statements. As of both March 31, 2021 and ~~Note 11—Debt~~December 31, 2020, assets of ~~our Notes to Consolidated Financial Statements~~Cheniere Partners, which are included in our ~~annual report on Form 10-K for the year ended December 31, 2019.~~Consolidated Balance Sheets, included $1.2 billion of cash and cash equivalents.

Sabine Pass LNG Terminal

Liquefaction Facilities

The SPL Project is one of the largest LNG production facilities in the world. Through Cheniere Partners, we are currently operating five Trains and two marine berths at the SPL Project, and are constructing one additional ~~Train. We have received authorization from~~Train that is expected to be substantially completed in the ~~FERC to site, construct~~first half of 2022, and ~~operate Trains 1 through 6, as well as for the construction of~~ a third marine berth. We have achieved substantial completion of the first five Trains of the SPL Project and commenced commercial operating activities for each Train at various times starting in May 2016. The following table summarizes the project completion and construction status of Train 6 of the SPL Project as of March 31, ~~2020:~~

2021:



						SPL Train 6
Overall project completion percentage						~~53.9%~~83.0%
Completion percentage of:
Engineering						~~93.8%~~99.6%
Procurement						~~78.4%~~99.9%
Subcontract work						~~39.5%~~64.9%
Construction						~~15.0%~~61.7%
Date of expected substantial completion						1H ~~2023~~2022

The following orders have been issued by the DOE authorizing the export of domestically produced LNG by vessel from the Sabine Pass LNG terminal:

•Trains 1 through 4—FTA countries ~~for a 30-year term, which commenced in May 2016,~~ and non-FTA countries ~~for a 20-year term, which commenced in June 2016,~~through December 31, 2050, in an amount up to a combined total of the equivalent of 16 mtpa (approximately 803 Bcf/yr of natural gas).

•Trains 1 through 4—FTA countries ~~for a 25-year term~~ and non-FTA countries ~~for a 20-year term, both of which commenced in~~through December ~~2018,~~31, 2050, in an amount up to a combined total of the equivalent of approximately 203 Bcf/yr of natural gas (approximately 4 mtpa).

•Trains 5 and 6—FTA countries and non-FTA countries ~~for a 20-year term, which partially commenced in June 2019 and the remainder commenced in September 2019,~~through December 31, 2050, in an amount up to a combined total of 503.3 Bcf/yr of natural gas (approximately 10 mtpa).

In ~~each case,~~December 2020, the ~~terms of these~~DOE announced a new policy in which it would no longer issue short-term export authorizations ~~began on~~separately from long-term authorizations. Accordingly, the ~~earlier of the date of first export thereunder or the date specified in the particular order. In addition, SPL received an order providing for a three-year makeup period with respect to~~DOE amended each of SPL’s long-term authorizations to include short-term export authority, and vacated the ~~non-FTA orders for LNG volumes SPL was authorized but unable to export during any portion of the initial 20-year export period of such order.~~short-term orders.

The DOE issued an order authorizing SPL to export domestically produced LNG by vessel from the Sabine Pass LNG terminal to FTA countries and non-FTA countries over a two-year period commencing January 2020, in an aggregate amount up to the equivalent of 600 Bcf of natural gas (however, exports under this order, when combined with exports under the orders above, may not exceed 1,509 Bcf/yr).

An application was filed in September 2019 seeking authorization to make additional exports from the SPL Project to FTA countries for a 25-year term and to non-FTA countries for a 20-year term in an amount up to the equivalent of approximately 153 Bcf/yr of natural gas, for a total SPL Project export capacity of approximately 1,662 Bcf/yr. The terms of the authorizations are requested to commence on the date of first commercial export from the SPL Project of the volumes contemplated in the application. In April 2020, the DOE issued an order authorizing SPL to export to FTA countries related to this application, for which the term was subsequently extended through December 31, 2050, but has not yet issued an order authorizing SPL to export to non-FTA countries for the corresponding LNG volume. A corresponding application for authorization to increase the total LNG production capacity of the SPL Project from the currently authorized level to approximately 1,662 Bcf/yr was also submitted to the FERC and is currently pending.

Customers

SPL has entered into fixed price long-term SPAs generally with terms of 20 years (plus extension rights) and with ~~eight third parties~~a weighted average remaining contract length of approximately 17 years (plus extension rights) for Trains 1 through 6 of the SPL Project. Under these SPAs, the customers will purchase LNG from SPL ~~on a free on board (“FOB”) basis~~ for a price consisting of a fixed fee per MMBtu of LNG (a portion of which is subject to annual adjustment for inflation) plus a variable fee per MMBtu of LNG generally equal to approximately 115% of Henry Hub. The customers may elect to cancel or suspend deliveries of LNG cargoes, with advance notice as governed by each respective SPA, in which case the customers would still be required to pay the fixed fee with respect to the contracted volumes that are not delivered as a result of such cancellation or suspension. We refer to the fee component that is applicable regardless of a cancellation or suspension of LNG cargo deliveries under the SPAs as the fixed fee component of the price under SPL’s SPAs. We refer to the fee component that is applicable only in connection with LNG cargo deliveries as the variable fee component of the price under SPL’s SPAs. The variable fees under SPL’s SPAs were generally sized at the

time of entry into each SPA with the intent to cover the costs of gas purchases and transportation and liquefaction fuel to produce the LNG to be sold under each such SPA. The SPAs and contracted volumes to be made available under the SPAs are not tied to a specific Train; however, the term of each SPA generally commences upon the date of first commercial delivery of a specified Train.

In aggregate, the annual fixed fee portion to be paid by the third-party SPA customers is approximately $2.9 billion for Trains 1 through 5. After giving effect to an SPA that Cheniere has committed to provide to SPL, ~~by the end of 2020,~~ the annual fixed fee portion to be paid by the third-party SPA customers would increase to at least $3.3 billion, which is expected to occur upon the date of first commercial delivery of Train 6.

In addition, Cheniere Marketing has ~~agreements~~an agreement with SPL to purchase, at Cheniere Marketing’s option, any LNG produced by SPL in excess of that required for other customers. See Marketing section for additional information regarding agreements entered into by Cheniere Marketing.

Natural Gas Transportation, Storage and Supply

To ensure SPL is able to transport adequate natural gas feedstock to the Sabine Pass LNG terminal, it has entered into transportation precedent and other agreements to secure firm pipeline transportation capacity with CTPL and third-party pipeline companies. SPL has entered into firm storage services agreements with third parties to assist in managing variability in natural gas needs for the SPL Project. SPL has also entered into enabling agreements and long-term natural gas supply contracts with third parties in order to secure natural gas feedstock for the SPL Project. As of March 31, ~~2020,~~2021, SPL had secured up to approximately ~~5,300~~4,974 TBtu of natural gas feedstock through long-term and short-term natural gas supply contracts with remaining terms that range up to 10 years, a portion of which is subject to conditions precedent.

Construction

SPL entered into lump sum turnkey contracts with Bechtel Oil, Gas and Chemicals, Inc. (“Bechtel”) for the engineering, procurement and construction of Trains 1 through 6 of the SPL Project, under which Bechtel charges a lump sum for all work performed and generally bears project cost, schedule and performance risks unless certain specified events occur, in which case Bechtel may cause SPL to enter into a change order, or SPL agrees with Bechtel to a change order.

The total contract price of the EPC contract for Train 6 of the SPL Project is approximately $2.5 billion, including estimated costs for ~~an optional~~the third marine ~~berth.~~berth that is currently under construction. As of March 31, ~~2020,~~2021, we have incurred ~~$1.3~~$2.0 billion under this contract.

Regasification Facilities

The Sabine Pass LNG terminal has operational regasification capacity of approximately 4 Bcf/d and aggregate LNG storage capacity of approximately 17 Bcfe. Approximately 2 Bcf/d of the regasification capacity at the Sabine Pass LNG terminal has been reserved under two long-term third-party TUAs, under which SPLNG’s customers are required to pay fixed monthly fees, whether or not they use the LNG terminal. Each of Total Gas & Power North America, Inc. (“Total”) and Chevron U.S.A. Inc. (“Chevron”) has reserved approximately 1 Bcf/d of regasification capacity and is obligated to make monthly capacity payments to SPLNG aggregating approximately $125 million annually, prior to inflation adjustments, for 20 years that commenced in 2009. Total S.A. has guaranteed Total’s obligations under its TUA up to $2.5 billion, subject to certain exceptions, and Chevron Corporation has guaranteed Chevron’s obligations under its TUA up to 80% of the fees payable by Chevron.

The remaining approximately 2 Bcf/d of capacity has been reserved under a TUA by SPL. SPL is obligated to make monthly capacity payments to SPLNG aggregating approximately $250 million annually, prior to inflation adjustments, continuing until at least May 2036. SPL entered into a partial TUA assignment agreement with Total, whereby upon substantial completion of Train 5 of the SPL Project, SPL gained access to substantially all of Total’s capacity and other services provided under Total’s TUA with SPLNG. This agreement provides SPL with additional berthing and storage capacity at the Sabine Pass LNG terminal that may be used to provide increased flexibility in managing LNG cargo loading and unloading activity, permit SPL to more flexibly manage its LNG storage capacity and accommodate the development of Train 6. Notwithstanding any arrangements between Total and SPL, payments required to be made by Total to SPLNG will continue to be made by Total

to SPLNG in accordance with its TUA. During each of the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, SPL recorded $32 million ~~and $7.5 million, respectively,~~ as operating and maintenance expense under this partial TUA assignment agreement.

Under each of these TUAs, SPLNG is entitled to retain 2% of the LNG delivered to the Sabine Pass LNG terminal.

Capital Resources

We currently expect that SPL’s capital resources requirements with respect to the SPL Project will be financed through project debt and borrowings, cash flows under the SPAs and equity contributions from Cheniere Partners. We believe that with the net proceeds of borrowings, available commitments under the 2020 SPL Working Capital Facility, 2019 CQP Credit Facilities, cash flows from operations and equity contributions from Cheniere Partners, SPL will have adequate financial resources available to meet its currently anticipated capital, operating and debt service requirements with respect to Trains 1 through 6 of the SPL Project. Additionally, SPLNG generates cash flows from the TUAs, as discussed above.

The following table provides a summary of our capital resources from borrowings and available commitments for the Sabine Pass LNG Terminal, excluding equity contributions to our subsidiaries and cash flows from operations (as described in Sources and Uses of Cash), at March 31, ~~2020~~2021 and December 31, ~~2019~~2020 (in millions):

March 31, December 31,
2020 2019
Senior notes (1) $ 17,750
$ 17,750
Credit facilities outstanding balance (2) —
—
Letters of credit issued (3) 414
414
Available commitments under credit facilities (3) 1,536
1,536
Total capital resources from borrowings and available commitments (4) $ 19,700
$ 19,700


	March 31,		December 31,

	2021		2020
Senior notes (1)	$	17,750	$	17,750
Credit facilities outstanding balance (2)	—		—
Letters of credit issued (3)	413		413
Available commitments under credit facilities (3)	1,537		1,537
Total capital resources from borrowings and available commitments (4)	$	19,700	$	19,700

~~(1)~~

Includes SPL’s 5.625% Senior Secured Notes due 2021, 6.25% Senior Secured Notes due 2022, 5.625% Senior Secured Notes due 2023, 5.75% Senior Secured Notes due 2024, 5.625% Senior Secured Notes due 2025, 5.875% Senior Secured Notes due 2026 (the “2026 SPL Senior Notes”), 5.00% Senior Secured Notes due 2027 (the “2027 SPL Senior Notes”), 4.200% Senior Secured Notes due 2028 (the “2028 SPL Senior Notes”) and 5.00% Senior Secured Notes due 2037 (the “2037 SPL Senior Notes”) (collectively, the “SPL Senior Notes”), as well as CQP’s $1.5 billion of 5.250% Senior Notes due 2025 (the “2025 CQP Senior Notes”), $1.1 billion of 5.625% Senior Notes due 2026 (the “2026 CQP Senior Notes”) and the 4.500% Senior Notes due 2029 (the “2029 CQP Senior Notes”) (collectively, the “CQP Senior Notes”).


~~(2)~~	Includes outstanding balances under the 2015 SPL Working Capital Facility, 2020 SPL Working Capital Facility and 2019 CQP Credit Facilities, inclusive of any portion of the 2020 SPL Working Capital Facility and 2019 CQP Credit Facilities that may be used for general corporate purposes.


~~(3)~~	~~Consists of 2015 SPL Working Capital Facility, 2020 SPL Working Capital Facility and 2019 CQP Credit Facilities.~~


~~(4)~~	~~Does not include equity contributions that may be available from Cheniere’s borrowings under its convertible notes, which may be used for the Sabine Pass LNG Terminal.~~

(1) Includes SPL’s 2021 SPL Senior Notes, 6.25% Senior Secured Notes due 2022, 5.625% Senior Secured Notes due 2023, 5.75% Senior Secured Notes due 2024, 5.625% Senior Secured Notes due 2025, 5.875% Senior Secured Notes due 2026 (the “2026 SPL Senior Notes”), 5.00% Senior Secured Notes due 2027 (the “2027 SPL Senior Notes”), 4.200% Senior Secured Notes due 2028 (the “2028 SPL Senior Notes”), 4.500% Senior Secured Notes due 2030 (the “2030 SPL Senior Notes”) and 5.00% Senior Secured Notes due 2037 (the “2037 SPL Senior Notes”) (collectively, the “SPL Senior Notes”), as well as the 2025 CQP Senior Notes, $1.1 billion of 5.625% Senior Notes due 2026 (the “2026 CQP Senior Notes”), the 4.500% Senior Notes due 2029 (the “2029 CQP Senior Notes”) and the 2031 CQP Senior Notes (collectively, the “CQP Senior Notes”).

(2) Includes outstanding balances under the 2020 SPL Working Capital Facility and 2019 CQP Credit Facilities, inclusive of any portion of the 2020 SPL Working Capital Facility and 2019 CQP Credit Facilities that may be used for general corporate purposes.

(3) Consists of 2020 SPL Working Capital Facility and 2019 CQP Credit Facilities.

(4) Does not include equity contributions that may be available from Cheniere’s borrowings and available cash and cash equivalents.

~~For additional information regarding our debt agreements related to the Sabine Pass LNG Terminal, see~~
~~Note 10—Debt~~ ~~of our Notes to Consolidated Financial Statements in this quarterly report and~~ ~~Note 11—Debt~~ ~~of our Notes to Consolidated Financial Statements in our annual report on Form 10-K for the year ended December 31, 2019.~~

SPL Senior Notes

The SPL Senior Notes are governed by a common indenture (the “SPL Indenture”) and the terms of the 2037 SPL Senior Notes are governed by a separate indenture (the “2037 SPL Senior Notes Indenture”). Both the SPL Indenture and the 2037 SPL Senior Notes Indenture contain terms and events of default and certain covenants that, among other things, limit SPL’s ability and the ability of SPL’s restricted subsidiaries to incur additional indebtedness or issue preferred stock, make certain investments or pay dividends or distributions on capital stock or subordinated indebtedness or purchase, redeem or retire capital stock, sell or transfer assets, including capital stock of SPL’s restricted subsidiaries, restrict dividends or other payments by restricted subsidiaries, incur liens, enter into transactions with affiliates, dissolve, liquidate, consolidate, merge, sell or lease all or substantially all of SPL’s assets and enter into certain LNG sales contracts. Subject to permitted liens, the SPL Senior Notes are secured on a pari passu first-priority basis by a security interest in all of the membership interests in SPL and substantially all of SPL’s assets. SPL may not make any distributions until, among other requirements, deposits are made into debt service reserve accounts as required and a debt service coverage ratio test of 1.25:1.00 is satisfied.

At any time prior to three months before the respective dates of maturity for each series of the SPL Senior Notes (except for the 2026 SPL Senior Notes, 2027 SPL Senior Notes, 2028 SPL Senior Notes, 2030 SPL Senior Notes and 2037 SPL Senior Notes, in which case the time period is six months before the respective dates of maturity), SPL may redeem all or part of such series of the SPL Senior Notes at a redemption price equal to the ~~“make-whole”~~‘make-whole’ price (except for the 2037 SPL Senior Notes, in which case the redemption price is equal to the “optional redemption” price) set forth in the respective indentures governing the SPL Senior Notes, plus accrued and unpaid interest, if any, to the date of redemption. SPL may also, at any time within three months of the respective maturity dates for each series of the SPL Senior Notes (except for the 2026 SPL Senior Notes, 2027 SPL Senior Notes, 2028 SPL Senior Notes, 2030 SPL Senior Notes and 2037 SPL Senior Notes, in which case the time period is within six months of the respective dates of maturity), redeem all or part of such series of the SPL Senior Notes at a redemption price equal to 100% of the principal amount of such series of the SPL Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to the date of redemption.

Both the indenture governing the 2037 SPL Senior Notes (the “2037 SPL Senior Notes Indenture”) and the common indenture governing the remainder of the SPL Senior Notes (the “SPL Indenture”) include restrictive covenants. SPL may incur additional indebtedness in the future, including by issuing additional notes, and such indebtedness could be at higher interest rates and have different maturity dates and more restrictive covenants than the current outstanding indebtedness of SPL, including the SPL Senior Notes and the 2020 SPL Working Capital Facility. Under the 2037 SPL Senior Notes Indenture and the SPL Indenture, SPL may not make any distributions until, among other requirements, deposits are made into debt service reserve accounts as required and a debt service coverage ratio test of 1.25:1.00 is satisfied. Semi-annual principal payments for the 2037 SPL Senior Notes are due on March 15 and September 15 of each year beginning September 15, 2025 and are fully amortizing according to a fixed sculpted amortization schedule.

~~2015 SPL Working Capital Facility~~

In ~~March 2020,~~February 2021, SPL ~~terminated~~entered into a note purchase agreement for the ~~remaining commitments under the 2015 SPL Working Capital Facility. As~~sale of ~~December 31, 2019, SPL had $786 million of available commitments, $414~~approximately $147 million aggregate principal amount of the 2.95% SPL 2037 Senior Secured Notes on a private placement basis. The 2.95% SPL 2037 Senior Secured Notes are expected to be issued ~~letters~~in the second half of ~~credit~~2021, and nothe net proceeds are expected to be used to refinance a portion of SPL’s outstanding ~~borrowings under the 2015~~Senior Secured Notes due 2022. The 2.95% SPL ~~Working Capital Facility.~~2037 Senior Secured Notes will be fully amortizing, with a weighted average life of over 10 years.

2020 SPL Working Capital Facility

In March 2020, SPL entered into the 2020 SPL Working Capital Facility with aggregate commitments of $1.2 billion, which replaced the ~~2015~~$1.2 billion Amended and Restated SPL Working Capital ~~Facility.~~Facility (the “2015 SPL Working Capital Facility”). The 2020 SPL Working Capital Facility is intended to be used for loans to SPL, swing line loans to SPL and the issuance of letters of credit on behalf of SPL, primarily for (1) the refinancing of the 2015 SPL Working Capital Facility, (2) fees and expenses related to the 2020 SPL Working Capital Facility, (3) ~~SPL’s~~SPL and its future subsidiaries’ gas purchase obligations and (4) SPL and certain of its future subsidiaries’ general corporate purposes. SPL may, from time to time, request increases in the commitments under the 2020 SPL Working Capital Facility of up to $800 million. As of both March 31, 2021 and December 31, 2020, SPL had ~~$786~~$787 million of available commitments, ~~$414~~$413 million aggregate amount of issued letters of credit and no outstanding borrowings under the 2020 SPL Working Capital Facility.

The 2020 SPL Working Capital Facility contains customary conditions precedent for extensions of credit, as well as customary affirmative and negative covenants. SPL is restricted from making certain distributions under agreements governing its indebtedness generally until, among other requirements, satisfaction of a 12-month forward-looking and backward-looking 1.25:1.00 debt service reserve ratio test. The obligations of SPL under the 2020 SPL Working Capital Facility are secured by substantially all of the assets of SPL as well as a pledge of all of the membership interests in SPL and certain future subsidiaries of SPL on a pari passu basis by a first priority lien with the SPL Senior Notes.

Cheniere Partners

CQP Senior Notes

The CQP Senior Notes are jointly and severally guaranteed by each of Cheniere Partners’ subsidiaries other than SPL and, subject to certain conditions governing its guarantee, Sabine Pass LP ~~(the~~(each a “Guarantor” and collectively, the “CQP Guarantors”). The CQP Senior Notes are governed by the same base indenture (the “CQP Base Indenture”). The ~~2025 CQP Senior Notes are further governed by the First Supplemental Indenture, the~~ 2026 CQP Senior Notes are further governed by the Second Supplemental Indenture, ~~and~~ the 2029 CQP Senior Notes are further governed by the Third Supplemental Indenture and the 2031 CQP Senior Notes are further governed by the Fifth Supplemental Indenture. The indentures governing the CQP Senior Notes contain ~~customary~~ terms and events of default and certain covenants that, among other

things, limit the ability of Cheniere Partners and the CQP Guarantors to incur liens and sell assets, enter into transactions with affiliates, enter into sale-leaseback transactions and consolidate, merge or sell, lease or otherwise dispose of all or substantially all of the applicable entity’s properties or assets.

At any time prior to ~~October 1, 2020 for the 2025 CQP Senior Notes,~~ October 1, 2021 for the 2026 CQP Senior Notes, ~~and~~ October 1, 2024 for the 2029 CQP Senior Notes and March 1, 2026 for the 2031 CQP Senior Notes, Cheniere Partners may redeem all or a part of the applicable CQP Senior Notes at a redemption price equal to 100% of the aggregate principal amount of the CQP Senior Notes redeemed, plus the “applicable premium” set forth in the respective indentures governing the CQP Senior Notes, plus accrued and unpaid interest, if any, to the date of redemption. In addition, at any time prior to October 1, ~~2020 for the 2025 CQP Senior Notes, October 1,~~ 2021 for the 2026 CQP Senior Notes, ~~and~~ October 1, 2024 for the 2029 CQP Senior Notes and March 1, 2024 for the 2031 CQP Senior Notes, Cheniere Partners may redeem up to 35% of the aggregate principal amount of the CQP Senior Notes with an amount of cash not greater than the net cash proceeds from certain equity offerings at a redemption price equal to ~~105.250% of the aggregate principal amount of the 2025 CQP Senior Notes,~~ 105.625% of the aggregate principal amount of the 2026 CQP Senior Notes, ~~and~~ 104.5% of the aggregate principal amount of the 2029 CQP Senior Notes and 104.000% of the aggregate principal amount of the 2031 CQP Senior Notes redeemed, plus accrued and unpaid interest, if any, to the date of redemption. Cheniere Partners also may at any time on or after October 1, ~~2020 through the maturity date of October 1, 2025 for the 2025 CQP Senior Notes, October 1,~~ 2021 through the maturity date of October 1, 2026 for the 2026 CQP Senior Notes, ~~and~~ October 1, 2024 through the maturity date of October 1, 2029 for the 2029 CQP Senior Notes and March 1, 2026 through the maturity date of March 1, 2031 for the 2031 CQP Senior Notes, redeem the CQP Senior Notes, in whole or in part, at the redemption prices set forth in the respective indentures governing the CQP Senior Notes.

The CQP Senior Notes are Cheniere Partners’ senior obligations, ranking equally in right of payment with Cheniere Partners’ other existing and future unsubordinated debt and senior to any of its future subordinated debt. In the event that the aggregate amount of Cheniere Partners’ secured indebtedness and the secured indebtedness of the CQP Guarantors (other than the CQP Senior Notes or any other series of notes issued under the CQP Base Indenture) outstanding at any one time exceeds the greater of (1) $1.5 billion and (2) 10% of net tangible assets, the CQP Senior Notes will be secured to the same extent as such obligations under the 2019 CQP Credit Facilities. The obligations under the 2019 CQP Credit Facilities are secured on a first-priority basis (subject to permitted encumbrances) with liens on substantially all the existing and future tangible and intangible assets and rights of Cheniere Partners and the CQP Guarantors and equity interests in the CQP Guarantors (except, in each case, for certain excluded properties set forth in the 2019 CQP Credit Facilities). The liens securing the CQP Senior Notes, if applicable, will be shared equally and ratably (subject to permitted liens) with the holders of other senior secured obligations, which include the 2019 CQP Credit Facilities obligations and any future additional senior secured debt obligations.

2019 CQP Credit Facilities

~~In May 2019, Cheniere Partners entered into the 2019~~ CQP ~~Credit Facilities, which consisted of the $750 million term loan (“CQP Term Facility”), which was prepaid and terminated upon issuance of the 2029 CQP Senior Notes in September 2019, and the~~has a $750 million revolving credit facility (“under the 2019 CQP ~~Revolving Facility”).~~Credit Facilities. Borrowings under the 2019 CQP Credit Facilities will be used to fund the development and construction of Train 6 of the SPL Project and for general corporate purposes, subject to a sublimit, and the 2019 CQP Credit Facilities are also available for the issuance of letters of credit. As of both March 31, ~~2020~~2021 and December 31, ~~2019, CQP~~2020, Cheniere Partners had $750 million of available commitments and no letters of credit issued or loans outstanding under the 2019 CQP Credit Facilities.

The 2019 CQP Credit Facilities mature on May 29, 2024. Any outstanding balance may be repaid, in whole or in part, at any time without premium or penalty, except for interest rate breakage costs. The 2019 CQP Credit Facilities contain conditions precedent for extensions of credit, as well as customary affirmative and negative covenants, and limit Cheniere Partners’ ability to make restricted payments, including distributions, to once per fiscal quarter and one true-up per fiscal quarter as long as certain conditions are satisfied.

The 2019 CQP Credit Facilities are unconditionally guaranteed and secured by a first priority lien (subject to permitted encumbrances) on substantially all of Cheniere Partners’ and the CQP Guarantors’ existing and future tangible and intangible assets and rights and equity interests in the CQP Guarantors (except, in each case, for certain excluded properties set forth in the 2019 CQP Credit Facilities).

Corpus Christi LNG Terminal

Liquefaction Facilities

We are currently operating ~~two~~three Trains and ~~one~~two marine ~~berth~~berths at ~~the CCL Project and are constructing one additional Train and marine berth. We have received authorization from the FERC to site, construct and operate Trains 1 through 3 of~~ the CCL Project. We completed construction of Trains 1, 2 and 23 of the CCL Project and commenced commercial operating activities in February 2019, ~~and~~ August 2019 ~~respectively. The following table summarizes the project completion~~ and ~~construction status of Train 3 of the CCL Project, including the related infrastructure, as of~~ March ~~31, 2020:~~2021, respectively.



		~~CCL Train 3~~
~~Overall project completion percentage~~		~~83.7%~~
~~Completion percentage of:~~
~~Engineering~~		~~99.2%~~
~~Procurement~~		~~99.6%~~
~~Subcontract work~~		~~69.5%~~
~~Construction~~		~~63.0%~~
~~Expected date of substantial completion~~		~~1H 2021~~

Separate from the CCH Group, we are also developing Corpus Christi Stage 3 through our subsidiary CCL Stage III, adjacent to the CCL Project. We received approval from FERC in November 2019 to site, construct and operate seven midscale Trains with an expected total production capacity of approximately 10 mtpa of LNG.

The following orders have been issued by the DOE authorizing the export of domestically produced LNG by vessel from the Corpus Christi LNG terminal:

•CCL Project—FTA countries ~~for a 25-year term~~ and to non-FTA countries ~~for a 20-year term, both of which commenced in June 2019,~~through December 31, 2050, up to a combined total of the equivalent of 767 Bcf/yr (approximately 15 mtpa) of natural gas.

•Corpus Christi Stage 3—FTA countries ~~for a 25-year term~~ and to non-FTA countries ~~for a 20-year term~~through December 31, 2050 in an amount equivalent to 582.14 Bcf/yr (approximately 11 mtpa) of natural gas.

In December 2020, the DOE announced a new policy in which it would no longer issue short-term export authorizations separately from long-term authorizations. Accordingly, the DOE amended each ~~case,~~of CCL’s long-term authorizations to include short-term export authority, and vacated the terms of these authorizations begin on the earlier of the date of first export thereunder or the date specified in the particular order, which ranges from seven to 10 years from the date the order was issued.short-term orders.

An application was filed in September 2019 to authorize additional exports from the CCL Project to FTA countries for a 25-year term and to non-FTA countries for a 20-year term in an amount up to the equivalent of approximately 108 Bcf/yr of natural gas, for a total CCL Project export of 875.16 Bcf/yr. The terms of the authorizations are requested to commence on the date of first commercial export from the CCL Project of the volumes contemplated in the application. ~~The~~In April 2020, the DOE issued an order authorizing CCL to export to FTA countries related to this application, for which the term was subsequently extended through December 31, 2050, but has not yet issued an order authorizing CCL to export to non-FTA countries for the corresponding LNG volume. A corresponding application for authorization to increase the total LNG production capacity of the CCL Project from the currently authorized level to approximately 875.16 Bcf/yr was also submitted to the FERC and is currently ~~pending before DOE.~~pending.

Customers

CCL has entered into fixed price long-term SPAs generally with terms of 20 years (plus extension rights) and with ~~nine third parties~~a weighted average remaining contract length of approximately 19 years (plus extension rights) for Trains 1 through 3 of the CCL Project. Under these SPAs, the customers will purchase LNG from CCL on a ~~FOB~~free on board (“FOB”) basis for a price consisting of a fixed fee per MMBtu of LNG (a portion of which is subject to annual adjustment for inflation) plus a variable fee per MMBtu of LNG equal to approximately 115% of Henry Hub. The customers may elect to cancel or suspend deliveries of LNG cargoes, with advance notice as governed by each respective SPA, in which case the customers would still be required to pay the fixed fee with respect to the contracted volumes that are not delivered as a result of such cancellation or suspension. We refer to the fee component that is applicable regardless of a cancellation or suspension of LNG cargo deliveries under the SPAs as the fixed fee component of the price under our SPAs. We refer to the fee component that is applicable only in connection with LNG cargo deliveries as the variable fee component of the price under our SPAs. The variable fee under CCL’s

SPAs entered into in connection with the development of the CCL Project was sized at the time of entry into each SPA with the intent to cover the costs of gas purchases and transportation and liquefaction fuel to produce the LNG to be sold under each such SPA. The SPAs and contracted volumes to be made available under the SPAs are not tied to a specific Train; however, the term of each SPA generally commences upon the date of first commercial delivery for the applicable Train, as specified in each SPA.

In aggregate, the minimum annual fixed fee portion to be paid by the third-party SPA customers ~~is approximately $550 million for Train 1, increasing to~~was approximately $1.4 billion ~~upon the date of first commercial delivery~~ for ~~Train~~Trains 1 and 2 and ~~further increasing~~increased to approximately $1.8 billion following the substantial completion of Train 3 of the CCL ~~Project.~~Project on March 26, 2021.

In addition, Cheniere Marketing has agreements with CCL to purchase: (1) approximately 15 TBtu per annum of LNG with an approximate term of 23 years, (2) any LNG produced by CCL in excess of that required for other customers at Cheniere Marketing’s option and (3) ~~0.85 mtpa~~approximately 44 TBtu of LNG with a term of up to seven years associated with the IPM gas supply agreement between CCL and ~~EOG.~~EOG Resources, Inc. See Marketing section for additional information regarding agreements entered into by Cheniere Marketing.

Natural Gas Transportation, Storage and Supply

To ensure CCL is able to transport adequate natural gas feedstock to the Corpus Christi LNG terminal, it has entered into transportation precedent agreements to secure firm pipeline transportation capacity with CCP and certain third-party pipeline companies. CCL has entered into a firm storage services agreement with a third party to assist in managing variability in natural gas needs for the CCL Project. CCL has also entered into enabling agreements and long-term natural gas supply contracts with third parties, and will continue to enter into such agreements, in order to secure natural gas feedstock for the CCL Project. As of March 31, ~~2020,~~2021, CCL had secured up to approximately ~~3,182~~2,923 TBtu of natural gas feedstock through long-term natural gas supply contracts with remaining terms that range up to 10 years, a portion of which is subject to the achievement of certain project milestones and other conditions precedent.

CCL Stage III has also entered into long-term natural gas supply contracts with third parties, and anticipates continuing to enter into such agreements, in order to secure natural gas feedstock for Corpus Christi Stage 3. As of March 31, ~~2020,~~2021, CCL Stage III had secured up to approximately 2,361 TBtu of natural gas feedstock through long-term natural gas supply contracts with remaining terms that range up to approximately 15 years, which is subject to the achievement of certain project milestones and other conditions precedent.

A portion of the natural gas feedstock transactions for CCL and CCL Stage III are IPM transactions, in which the natural gas producers are paid based on a global gas market price less a fixed liquefaction fee and certain costs incurred by us.

Construction

CCL entered into separate lump sum turnkey contracts with Bechtel for the engineering, procurement and construction of Trains 1 through 3 of the CCL Project under which Bechtel ~~charges~~charged a lump sum for all work performed and generally ~~bears~~bore project cost, schedule and performance risks unless certain specified events ~~occur,~~occurred, in which case Bechtel may ~~cause~~have caused CCL to enter into a change order, or CCL ~~agrees~~agreed with Bechtel to a change order.

The total contract price of the EPC contract for Train 3, which is currently under construction, is approximately $2.4 billion, reflecting amounts incurred under change orders through March 31, 2020. As of March 31, 2020, we have incurred $2.1 billion under this contract.

Final Investment Decision for Corpus Christi Stage 3

FID for Corpus Christi Stage 3 will be subject to, among other things, entering into an EPC contract, obtaining additional commercial support for the project and securing the necessary financing arrangements.

Pipeline Facilities

In November 2019, the FERC authorized CCP to construct and operate the pipeline for Corpus Christi Stage 3. The pipeline will be designed to transport 1.5 Bcf/d of natural gas feedstock required by Corpus Christi Stage 3 from the existing regional natural gas pipeline grid.

Capital Resources

The CCH Group expects to finance the construction costs of the CCL Project from one or more of the following: operating cash flows from CCL and CCP, project debt and equity contributions from Cheniere. The following table provides a summary of the capital resources of the CCH Group from borrowings and available commitments for the CCL Project, excluding equity contributions from Cheniere, at March 31, ~~2020~~2021 and December 31, ~~2019~~2020 (in millions):

March 31, December 31,
2020 2019
Senior notes (1) $ 6,952
$ 6,952
11.0% Convertible Senior Secured Notes due 2025 (2) 700
1,000
Credit facilities outstanding balance (3) 3,424
3,283
Letters of credit issued (3) 399
471
Available commitments under credit facilities (3) 660
729
Total capital resources from borrowings and available commitments (4) $ 12,135
$ 12,435



	March 31,		December 31,
	2021		2020
Senior notes (1)	$	7,721	$	7,721

Credit facilities outstanding balance (2)	2,627		2,767
Letters of credit issued (2)	293		293
Available commitments under credit facilities (2)	907		767
Total capital resources from borrowings and available commitments (3)	$	11,548	$	11,548

~~(1)~~

(1) Includes CCH’s 7.000% Senior Secured Notes due 2024, 5.875% Senior Secured Notes due 2025, 5.125% Senior Secured Notes due 2027, 3.700% Senior Secured Notes due 2029, 4.80% Senior Secured Notes due 2039, 3.925% Senior Secured Notes due 2039 and 3.52% CCH Senior Secured Notes due 2024 (the “2024 CCH Senior Notes”), 5.875% Senior Secured Notes due 2025 (the “2025 CCH Senior Notes”), 5.125% Senior Secured Notes due 2027 (the “2027 CCH Senior Notes”), 3.700% Senior Secured Notes due 2029 (the "2029 CCH Senior Notes"), 4.80% Senior Secured Notes due 2039 (the “4.80% CCH Senior Notes”) and 3.925% Senior Secured Notes due 2039 (the "3.925% CCH Senior Notes") (collectively, the “CCH Senior Notes”).


~~(2)~~	~~Aggregate original principal amount before debt discount and debt issuance costs and interest paid-in-kind.~~


~~(3)~~	~~Includes CCH’s amended and restated credit facility (“CCH Credit Facility”) and CCH Working Capital Facility.~~


~~(4)~~	Does not include equity contributions that may be available from Cheniere’s borrowings under the 4.875% Convertible Unsecured Notes due 2021 (the “2021 Cheniere Convertible Unsecured Notes”), 4.25% Convertible Senior Notes due 2045 (the “2045 Cheniere Convertible Senior Notes”) and Cheniere Revolving Credit Facility, which may be used for the CCL Project.

~~2025 CCH HoldCo II Convertible Senior Notes~~

In May 2015, CCH HoldCo II issued $1.0 billion aggregate principal amount of the 2025 CCH HoldCo II Convertible Senior Notes on a private placement basis. The 2025 CCH HoldCo II Convertible Senior Notes are convertible at the option of CCH HoldCo II or the holders on or after March 1, 2020 and September 1, 2020, respectively, provided the total market capitalization of Cheniere at that time is not less than $10.0 billion and certain other conditions are satisfied. CCH HoldCo II is restricted from making distributions to Cheniere under agreements governing its indebtedness generally until, among other requirements, a historical debt service coverage ratio and a projected fixed debt service coverage ratio of 1.20:1.00 are achieved. The 2025 CCH HoldCo II Convertible Senior Notes are secured by a pledge by us of 100% of the equity interests in CCH HoldCo II, and a pledge by CCH HoldCo II of 100% of the equity interests in CCH HoldCo I. In addition, the 2025 CCH HoldCo II Convertible Senior Notes are secured by a security interest in the account into which all distributions from CCH HoldCo I to CCH HoldCo II must be deposited.

In May 2018, the amended and restated note purchase agreement under which the 2025 CCH HoldCo II Convertible Senior Notes were issued was subsequently amended in connection with commercialization and financing of Train 3 of the CCL Project and to provide the note holders with certain prepayment rights related thereto consistent with those under(2) Includes the CCH Credit ~~Facility. All terms of~~Facility and the ~~2025~~ CCH ~~HoldCo II Convertible Senior Notes substantially remained unchanged.~~Working Capital Facility.

(3) Does not include equity contributions that may be available from Cheniere’s borrowings and available cash and cash equivalents.

In February 2020, the amended and restated note purchase agreement for the 2025 CCH HoldCo II Convertible Senior Notes was amended to allow CCH HoldCo II the option to redeem all or a portion of the outstanding notes with cash at a price of $1,080 per $1,000 principal amount, at the time of any CCH HoldCo II- or noteholder-initiated conversion through September 2, 2020. In March 2020, CCH HoldCo II redeemed an aggregate outstanding principal amount of $300 million with cash. CCH HoldCo II retains the ability to convert the 2025 CCH HoldCo II Convertible Senior Notes into our common stock at a conversion price equal to the lower of (1) a 10% discount to the average of the daily volume-weighted average price (“VWAP”) of our common stock for the 90 trading day period prior to the date on which notice of conversion is provided and (2) a 10% discount to the closing price of our common stock on the trading day preceding the date on which notice of conversion is provided. The noteholders retain the ability to request conversion into our common stock at a conversion price equal to the average of the daily VWAP of

~~our common stock for the 90 trading day period preceding the date on which notice of requested conversion is provided. Conversions remain subject to various limitations and conditions.~~

CCH Senior Notes

The CCH Senior Notes are jointly and severally guaranteed by CCH’s subsidiaries, CCL, CCP and Corpus Christi Pipeline GP, LLC (each a “CCH Guarantor” and collectively, the “CCH Guarantors”). The indentures governing the CCH Senior Notes contain customary terms and events of default and certain covenants that, among other things, limit CCH’s ability and the ability of CCH’s restricted subsidiaries to: incur additional indebtedness or issue preferred stock; make certain investments or pay dividends or distributions on membership interests or subordinated indebtedness or purchase, redeem or retire membership interests; sell or transfer assets, including membership or partnership interests of CCH’s restricted subsidiaries; restrict dividends or other payments by restricted subsidiaries to CCH or any of CCH’s restricted subsidiaries; incur liens; enter into transactions with affiliates; dissolve, liquidate, consolidate, merge, sell or lease all or substantially all of the properties or assets of CCH and its restricted subsidiaries taken as a whole; or permit any CCH Guarantor to dissolve, liquidate, consolidate, merge, sell or lease all or substantially all of its properties and assets. The covenants included in the respective indentures that govern the CCH Senior Notes are subject to a number of important limitations and exceptions.

The CCH Senior Notes are CCH’s senior secured obligations, ranking senior in right of payment to any and all of CCH’s future indebtedness that is subordinated to the CCH Senior Notes and equal in right of payment with CCH’s other existing and future indebtedness that is senior and secured by the same collateral securing the CCH Senior Notes. The CCH Senior Notes are secured by a first-priority security interest in substantially all of CCH’s and the CCH Guarantors’ assets.

At any time prior to six months before the respective dates of maturity for each of the CCH Senior Notes, CCH may redeem all or part of such series of the CCH Senior Notes at a redemption price equal to the “make-whole” price set forth in the appropriate indenture, plus accrued and unpaid interest, if any, to the date of redemption. At any time within six months of the respective dates of maturity for each of the CCH Senior Notes, CCH may redeem all or part of such series of the CCH Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the CCH Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to the date of redemption.

CCH Credit Facility

~~In May 2018,~~ CCH ~~amended and restated the CCH Credit Facility to increase~~has total commitments under the CCH Credit Facility ~~from $4.6 billion to~~of $6.1 billion. The obligations of CCH under the CCH Credit Facility are secured by a first priority lien on substantially all of the assets of CCH and its subsidiaries and by a pledge by CCH HoldCo I of its limited liability company interests in CCH. As of both March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, CCH had no available commitments and ~~$3.3~~$2.6 billion of loans outstanding under the CCH Credit Facility.

The CCH Credit Facility matures on June 30, 2024, with principal payments due quarterly commencing on the earlier of (1) the first quarterly payment date occurring more than three calendar months following the completion of the CCL Project as

defined in the common terms agreement and (2) a set date determined by reference to the date under which a certain LNG buyer linked to the last Train of the CCL Project to become operational is entitled to terminate its SPA for failure to achieve the date of first commercial delivery for that agreement. Scheduled repayments will be based upon a 19-year tailored amortization, commencing the first full quarter after the completion of Trains 1 through 3 and designed to achieve a minimum projected fixed debt service coverage ratio of 1.50:1.

Under the CCH Credit Facility, CCH is required to hedge not less than 65% of the variable interest rate exposure of its senior secured debt. CCH is restricted from making certain distributions under agreements governing its indebtedness generally until, among other requirements, the completion of the construction of Trains 1 through 3 of the CCL Project, funding of a debt service reserve account equal to six months of debt service and achieving a historical debt service coverage ratio and fixed projected debt service coverage ratio of at least 1.25:1.00.

CCH Working Capital Facility

~~In June 2018,~~ CCH ~~amended and restated the CCH Working Capital Facility to increase~~has total commitments under the CCH Working Capital Facility ~~from $350 million to~~of $1.2 billion. The CCH Working Capital Facility is intended to be used for loans to CCH (“CCH Working Capital Loans”) and the issuance of letters of credit on behalf of CCH for certain working capital

requirements related to developing and operating the CCL Project and for related business purposes. Loans under the CCH Working Capital Facility are guaranteed by the CCH Guarantors. CCH may, from time to time, request increases in the commitments under the CCH Working Capital Facility of up to the maximum allowed for working capital under the Common Terms Agreement that was entered into concurrently with the CCH Credit Facility. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, CCH had ~~$660~~$907 million and ~~$729~~$767 million of available commitments ~~$399 million and $471 million aggregate amount of issued letters of credit and $141 million~~ and zero and $140 million of loans outstanding under the CCH Working Capital Facility, respectively. CCH had $293 million aggregate amount of issued letters of credit under the CCH Working Capital Facility as of both March 31, 2021 and December 31, 2020.

The CCH Working Capital Facility matures on June 29, 2023, and CCH may prepay the CCH Working Capital Loans and loans made in connection with a draw upon any letter of credit (“CCH LC Loans”) at any time without premium or penalty upon three business days’ notice and may re-borrow at any time. CCH LC Loans have a term of up to one year. CCH is required to reduce the aggregate outstanding principal amount of all CCH Working Capital Loans to zero for a period of five consecutive business days at least once each year.

The CCH Working Capital Facility contains conditions precedent for extensions of credit, as well as customary affirmative and negative covenants. The obligations of CCH under the CCH Working Capital Facility are secured by substantially all of the assets of CCH and the CCH Guarantors as well as all of the membership interests in CCH and each of the CCH Guarantors on a pari passu basis with the CCH Senior Notes and the CCH Credit Facility.

Cheniere

Senior Notes

We have an aggregate principal amount of $2.0 billion of the 4.625% senior secured notes due October 2028 (the “2028 Cheniere Senior Secured Notes”), the proceeds of which were used to prepay a portion of the outstanding indebtedness under the Cheniere Term Loan Facility and to pay related fees and expenses. The associated indentures (“Cheniere Indenture”) contain customary terms and events of default and certain covenants that, among other things, limit our ability to create liens or other encumbrances, enter into sale-leaseback transactions and merge or consolidate with other entities or sell all or substantially all of our assets. The Cheniere Indenture covenants are subject to a number of important limitations and exceptions.

At any time prior to October 15, 2023, we may redeem all or a part of the 2028 Cheniere Senior Secured Notes at a redemption price equal to 100% of the aggregate principal amount thereof, plus the “applicable premium” and accrued and unpaid interest, if any, to but not including the date of redemption. We also may, at any time prior to October 15, 2023, redeem up to 40% of the aggregate principal amount of the 2028 Cheniere Senior Secured Notes with an amount of cash not greater than the net cash proceeds from certain equity offerings at a redemption price equal to 104.625% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest, if any, to but not including, the date of redemption. At any time on or after October 15, 2023 through the maturity date of October 15, 2028, we may redeem all or part of the 2028 Cheniere Senior Secured Notes at the redemption prices described in the Cheniere Indenture.

The 2028 Cheniere Senior Secured Notes are our general senior obligations and rank senior in right of payment to all of our future obligations that are, by their terms, expressly subordinated in right of payment to the 2028 Cheniere Senior Secured Notes and equally in right of payment with all of our other existing and future unsubordinated indebtedness. The 2028 Cheniere Senior Secured Notes will initially be secured on a first-priority basis by a lien on substantially all of our assets and equity interests in our direct subsidiaries (other than certain excluded subsidiaries) (the “Collateral”), which liens will rank pari passu with the liens securing the Cheniere Revolving Credit Facility and Cheniere Term Loan Facility. The 2028 Cheniere Senior Secured Notes will remain secured as long as (1) there are any obligations or undrawn commitments outstanding under the Cheniere Term Loan Facility that are secured by liens on the Collateral or (2) the outstanding aggregate principal amount of our secured indebtedness exceeds $1.25 billion. As of March 31, 2021, the 2028 Cheniere Senior Secured Notes are not guaranteed by any of our subsidiaries. In the future, the 2028 Cheniere Senior Secured Notes will be guaranteed by our subsidiaries who guarantee our other material indebtedness.

Convertible Notes

~~In November 2014, we issued~~We have an aggregate principal amount of $1.0 billion of the 4.875% convertible unsecured notes due May 2021 (the “2021 Cheniere Convertible Unsecured ~~Notes.~~Notes”). The 2021 Cheniere Convertible Unsecured Notes are convertible at the option of the holder into our common stock at the then applicable conversion rate, initially at $93.64 (subject to adjustment upon the occurrence of certain specified events, which have not been met as of March 31, 2021), provided that the closing price of our common stock is greater than or equal to the conversion price on the date of conversion. In ~~March 2015,~~July 2020, we ~~issued~~repurchased $844 million in aggregate principal amount of the outstanding 2021 Cheniere Convertible Unsecured Notes at individually negotiated prices from a small number of investors.

We have $625 million aggregate principal amount of ~~unsecured~~4.25% Convertible Senior Notes due 2045 (the “2045 Cheniere Convertible Senior ~~Notes.~~Notes”). We have the right, at our option, at any time after March 15, 2020, to redeem all or any part of the 2045 Cheniere Convertible Senior Notes at a redemption price equal to the accreted amount of the 2045 Cheniere Convertible Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to such redemption date. Prior to December 15, 2044, the 2045 Cheniere Convertible Senior Notes are convertible only under certain circumstances as specified in the indenture; thereafter, holders may convert their notes regardless of these circumstances. The conversion rate will initially equal 7.2265 shares of our common stock per $1,000 principal amount of the 2045 Cheniere Convertible Senior Notes, which corresponds to an initial conversion price of approximately $138.38 per share of our common stock (subject to adjustment upon the occurrence of certain specified events).

We have the option to satisfy the conversion obligation for the 2021 Cheniere Convertible Unsecured Notes and the 2045 Cheniere Convertible Senior Notes with cash, common stock or a combination thereof.

Cheniere Revolving Credit Facility

~~In December 2018, we amended and restated the Cheniere Revolving Credit Facility to increase~~We have total commitments under the Cheniere Revolving Credit Facility ~~from $750 million to~~of $1.25 billion. The Cheniere Revolving Credit Facility is intended to fund, through loans and letters of credit, equity capital contributions to CCH HoldCo II and its subsidiaries for the development of the CCL Project and, provided that certain conditions are met, for general corporate purposes. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we had ~~$430 million~~$1.3 billion and ~~$665 million~~$1.1 billion of available commitments, ~~$365 million~~respectively, and ~~$585~~no loans outstanding under the Cheniere Revolving Credit Facility. We had zero and $124 million aggregate amount of issued letters of credit ~~and $455 million and zero of loans outstanding~~ under the Cheniere Revolving Credit Facility as of March 31, 2021 and December 31, 2020, respectively.

The Cheniere Revolving Credit Facility matures on December 13, 2022 and contains representations, warranties and affirmative and negative covenants customary for companies like us with lenders of the type participating in the Cheniere Revolving Credit Facility that limit our ability to make restricted payments, including distributions, unless certain conditions are satisfied, as well as limitations on indebtedness, guarantees, hedging, liens, investments and affiliate transactions. Under the Cheniere Revolving Credit Facility, we are required to ensure that the sum of our unrestricted cash and the amount of undrawn commitments under the Cheniere Revolving Credit Facility is at least equal to the lesser of (1) 20% of the commitments under the Cheniere Revolving Credit Facility and (2) $200 million (the “Liquidity Covenant”).

From and after the time at which certain specified conditions are met (the “Trigger Point”), we will have increased flexibility under the Cheniere Revolving Credit Facility to, among other things, (1) make restricted payments and (2) raise incremental commitments. The Trigger Point will occur once (1) completion has occurred for each of Train 1 of the CCL Project (as defined in the CCH Indenture) and Train 5 of the SPL Project (as defined in SPL’s common terms agreement), which has occurred in February 2019 and March 2019, respectively; (2) the aggregate principal amount of outstanding loans plus drawn and unreimbursed letters of credit under the Cheniere Revolving Credit Facility is less than or equal to 10% of aggregate commitments under the

Cheniere Revolving Credit Facility and (3) we elect on a go-forward basis to be governed by a non-consolidated leverage ratio covenant not to exceed 5.75:1.00 (the “Springing Leverage Covenant”), which following such election will apply However, at any time that the aggregate principal amount of outstanding loans plus drawn and unreimbursed letters of credit under the Cheniere Revolving Credit Facility is greater than 30% of aggregate commitments under the Cheniere Revolving Credit ~~Facility. Following the Trigger Point, at any time that the Springing Leverage Covenant is in effect,~~Facility, the Liquidity Covenant will not ~~apply.~~apply and we will instead be governed by a quarterly non-consolidated leverage ratio covenant not to exceed 5.75:1.00 (the “Springing Leverage Covenant”).

The Cheniere Revolving Credit Facility is secured by a first priority security interest (subject to permitted liens and other customary exceptions) in substantially all of our assets, including our interests in our direct subsidiaries (excluding CCH HoldCo II and certain other subsidiaries).

Cheniere Term Loan Facility

In June 2020, we entered into the Cheniere Term Loan Facility, which was subsequently increased to $2.695 billion in July 2020. In July 2020, borrowings under the Cheniere Term Loan Facility were used to (1) redeem the outstanding principal amount of the 11% Convertible Senior Secured Notes due 2025 (the “2025 CCH HoldCo II Convertible Senior Notes”), (2) repurchase $844 million in aggregate principal amount of outstanding 2021 Cheniere Convertible Unsecured Notes at individually negotiated prices from a small number of investors and (3) pay the related fees and expenses. The remaining commitments under the Cheniere Term Loan Facility are expected to be used to repay and/or repurchase a portion of the remaining principal amount of the 2021 Cheniere Convertible Unsecured Notes and for the payment of related fees and expenses. In September 2020, we prepaid approximately $2.1 billion of the outstanding indebtedness of the Cheniere Term Loan Facility with net proceeds from the 2028 Cheniere Senior Secured Notes and available cash. As of both March 31, 2021 and December 31, 2020, we had $372 million of available commitments. We had zero and $148 million of loans outstanding under the Cheniere Term Loan Facility as of March 31, 2021 and December 31, 2020, respectively.

The Cheniere Term Loan Facility matures on June 18, 2023. Loans under the Cheniere Term Loan Facility may be voluntarily prepaid, in whole or in part, at any time, without premium or penalty. Borrowings under the Cheniere Term Loan Facility are subject to customary conditions precedent. The Cheniere Term Loan Facility includes representations, warranties, affirmative and negative covenants and events of default customary for companies like us with lenders of the type participating in the Cheniere Term Loan Facility and consistent with the equivalent provisions contained in the Cheniere Revolving Credit Facility.

The Cheniere Term Loan Facility is secured by a first priority security interest (subject to permitted liens and other customary exceptions) on a pari passu basis with the Cheniere Revolving Credit Facility in substantially all of our assets and equity interests in direct subsidiaries (other than certain excluded subsidiaries). Upon redemption of the 2025 CCH HoldCo II Convertible Senior Notes in July 2020, the equity interests in CCH HoldCo II were pledged as collateral to secure the obligations under the Cheniere Revolving Credit Facility and the Cheniere Term Loan Facility.

Cash Receipts from Subsidiaries

Our ownership interest in the Sabine Pass LNG terminal is held through Cheniere Partners. As of March 31, ~~2020,~~2021, we owned a 48.6% limited partner interest in Cheniere Partners in the form of ~~104.5~~239.9 million common ~~units and 135.4 million subordinated~~ units. We also own 100% of the general partner interest and the incentive distribution rights in Cheniere Partners. We are eligible to receive quarterly equity distributions from Cheniere Partners related to our ownership interests and our incentive distribution rights.

We also receive fees for providing management services to some of our subsidiaries. We received ~~$25~~$29 million and ~~$20~~$25 million in total service fees from these subsidiaries during the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

Share Repurchase Program

On June 3, 2019, we announced that our Board of Directors (“Board”) authorized a 3-year, $1.0 billion share repurchase program. ~~During~~The following table presents information with respect to repurchases of common stock during the three months ended March 31, ~~2020, we repurchased an aggregate of 2.9 million shares of our common stock for $155 million, for a weighted average price per share of $53.88.~~ 2021 and 2020:


	Three Months Ended March 31,
		2021		2020
Aggregate common stock repurchased		—		2,875,376
Weighted average price paid per share		$	—	$	53.88
Total amount paid (in millions)		$	—	$	155

As of March 31, ~~2020,~~2021, we had up to $596 million of the share repurchase program available. Under the share repurchase program, 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 SEC and other applicable legal

requirements. The timing and amount of any shares of our common stock that are repurchased under the share repurchase program will be determined by our management based on market conditions and other factors. The share repurchase program does not obligate us to acquire any particular amount of common stock, and may be modified, suspended or discontinued at any time or from time to time at our discretion.

Marketing

We market and sell LNG produced by the Liquefaction Projects that is not required for other customers through our integrated marketing function. We have, and continue to develop, a portfolio of long-, medium- and short-term SPAs to transport and unload commercial LNG cargoes to locations worldwide. These volumes are expected to be primarily sourced by LNG produced by the Liquefaction Projects but supplemented by volumes procured from other locations worldwide, as needed. As of March 31, ~~2020,~~2021, we have sold or have options to sell approximately ~~4,856~~5,005 TBtu of LNG to be delivered to customers between ~~2020~~2021 and 2045, ~~excluding volumes for agreements that may be assigned~~including volume from an SPA Cheniere Marketing has committed to ~~SPL in the future.~~provide to SPL. The cargoes have been sold either on a FOB basis (delivered to the customer at the Sabine Pass LNG terminal or the Corpus Christi LNG terminal, as applicable) or a delivered at terminal (“DAT”) basis (delivered to the customer at their specified LNG receiving terminal). We have chartered LNG vessels to be utilized for cargoes sold on a DAT basis. ~~In addition, we have entered into a long-term agreement to sell LNG cargoes on a DAT basis that is conditioned upon the buyer achieving certain milestones.~~

Cheniere Marketing entered into uncommitted trade finance facilities with available ~~commitments~~credit of ~~$420~~$248 million as of March 31, ~~2020,~~2021, primarily to be used for the purchase and sale of LNG for ultimate resale in the course of its operations. The finance facilities are intended to be used for advances, guarantees or the issuance of letters of credit or standby letters of credit on behalf of Cheniere Marketing. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, Cheniere Marketing had $4$27 million and ~~$41~~$34 million, respectively, in standby letters of credit and guarantees outstanding under the finance facilities. As of March 31, ~~2020~~2021 and December ~~31, 2019, Cheniere Marketing had zero and $71 million, respectively, in loans outstanding under the finance facilities. As of March~~ 31, 2020, there were no loans outstanding under the finance facilities. Cheniere Marketing pays interest or fees on utilized commitments.

Corporate and Other Activities

We are required to maintain corporate and general and administrative functions to serve our business activities described above. The development of our sites 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 an FID.

We have made an equity investment in Midship Holdings, LLC (“Midship Holdings”), which manages the business and affairs of Midship ~~Pipeline.~~Pipeline Company, LLC (“the Midship Pipeline”). Midship Pipeline ~~is constructing~~operates the Midship Project with ~~expected~~current capacity of up to ~~1.44~~1.1 million Dekatherms per day that ~~will connect~~connects new gas production in the Anadarko Basin to Gulf Coast markets, including markets serving the Liquefaction Projects. ~~Construction of the Midship Project commenced in the first quarter of 2019 and the~~The Midship Project was placed in service in April 2020.

Restrictive Debt Covenants

As of March 31, ~~2020,~~2021, each of our issuers was in compliance with all covenants related to their respective debt agreements.

LIBOR

The use of LIBOR is expected to be phased out by ~~the end of 2021.~~June 2023. It is currently unclear whether LIBOR will be utilized beyond that date or whether it will be replaced by a particular rate. We intend to continue ~~to work~~working with our lenders and counterparties to pursue any amendments to our debt and derivative agreements that are currently subject to LIBOR following LIBOR cessation and will continue to monitor, assess and plan for the phase out of LIBOR.

Sources and Uses of Cash

The following table summarizes the sources and uses of our cash, cash equivalents and restricted cash for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (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.


	Three Months Ended March 31,
	2021		2020
Sources of cash, cash equivalents and restricted cash:
Net cash provided by operating activities	$	1,066	$	574
Proceeds from issuances of debt	1,800		596
Other	4		—
	$	2,870	$	1,170
Uses of cash, cash equivalents and restricted cash:
Property, plant and equipment, net	$	(190)	$	(556)
Investment in equity method investment	—		(90)
Repayments of debt	(2,088)		(300)
Debt issuance and other financing costs	(19)		(33)
Debt modification or extinguishment costs	(40)		—

Distributions to non-controlling interest	(160)		(154)
Payments related to tax withholdings for share-based compensation	(42)		(39)
Repurchase of common stock	—		(155)
Other	(10)		(8)
	(2,549)		(1,335)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	321	$	(165)

Three Months Ended March 31,
2020 2019
Operating cash flows $ 574
$ 412
Investing cash flows (654 ) (651 )
Financing cash flows (85 ) 94

Net decrease in cash, cash equivalents and restricted cash (165 )
(145 )
Cash, cash equivalents and restricted cash—beginning of period 2,994
3,156
Cash, cash equivalents and restricted cash—end of period $ 2,829
$ 3,011

Operating Cash Flows

Our operating cash net inflows during the three months ended March 31, 2021 and 2020 ~~and 2019~~ were ~~$574~~$1,066 million and ~~$412~~$574 million, respectively. The ~~$162~~$492 million increase in operating cash inflows in ~~2020~~2021 compared to ~~2019~~2020 was primarily related to ~~increased operating costs and expenses, which were partially offset by~~ increased cash receipts from the sale of LNG cargoes ~~as a result of the additional Trains that were operating at the Liquefaction Projects~~due to higher revenue per MMBtu and from higher than normal contributions from LNG and natural gas portfolio optimization activities due to significant volatility in ~~2020.~~

~~Investing Cash Flows~~

~~Investing cash net outflows~~LNG and natural gas markets during the three months ended March 31, 2021.

Proceeds from Issuance of Debt, Repayments of Debt, Debt Issuance and Other Financing Costs and Debt Modification or Extinguishment Costs

During the three months ended March 31, 2021, Cheniere Partners issued an aggregate principal amount of $1.5 billion of the 2031 CQP Senior Notes and incurred $19 million of debt issuance costs related to this issuance. The proceeds from this issuance, together with cash on hand, were used to redeem all of the outstanding 2025 CQP Senior Notes, and Cheniere Partners paid $40 million of debt extinguishment costs, mainly related to premiums associated with this redemption. Net repayments of $0.3 billion was made on our credit facilities during the three months ended March 31, 2021, in line with our previously announced capital allocation priorities.

During the three months ended March 31, 2020, borrowings of $0.6 billion under our credit facilities were used to redeem the 2025 CCH HoldCo II Convertible Senior Notes, to fund our working capital requirements or for general corporate purposes.

Property, Plant and ~~2019 were $654 million~~Equipment, net

Cash outflows for property, plant and ~~$651 million, respectively, and~~equipment were primarily ~~used to fund~~for the construction costs for the Liquefaction Projects. These costs are capitalized as construction-in-process until achievement of substantial completion. ~~Additionally, we~~

Distributions to Non-controlling Interest

We own a 48.6% limited partner interest in Cheniere Partners, with the remaining non-controlling interest held by The Blackstone Group Inc., Brookfield Asset Management Inc. and the public, to whom Cheniere Partners paid distributions during the three months ended March 31, 2021 and 2020.

Investment in Equity Method Investment

We invested $90 ~~million and $24~~ million in Midship Holdings, our equity method investment, during the three months ended March 31, ~~2020 and 2019, respectively.~~2020.

Repurchase of Common Stock

~~Financing Cash Flows~~

~~Financing cash net outflows during~~During the three months ended March 31, 2020, ~~were $85~~we paid $155 million ~~primarily as a result of:~~

~~$455 million of borrowings under the Cheniere Revolving Credit Facility;~~

~~$141 million of borrowings under the CCH Working Capital Facility;~~

~~$300 million principal amount of the 2025 CCH HoldCo II Convertible Senior Notes converted into cash;~~

~~$154 million of distributions to non-controlling interest by Cheniere Partners;~~

~~$155 million paid~~ to repurchase approximately 3 million shares of our common stock under the share repurchase ~~program; and~~program.

~~$39 million paid for tax withholdings for share-based compensation.~~

~~Financing cash net inflows during the three months ended March 31, 2019 were $94 million, primarily as a result of:~~

~~$491 million of borrowings under the CCH Credit Facility;~~

~~$201 million of borrowings and $369 million in repayments under the CCH Working Capital Facility;~~

~~$72 million of net repayments related to our Cheniere Marketing trade financing facilities;~~

~~$144 million of distributions to non-controlling interest by Cheniere Partners; and~~

~~$12 million paid for tax withholdings for share-based compensation.~~

~~Results of Operations~~

The following charts summarize the number of Trains that were in operation during the year ended December 31, 2019 and the three months ended March 31, 2020 and total revenues and total LNG volumes loaded from our Liquefaction Projects (including both operational and commissioning volumes) during the three months ended March 31, 2020 and 2019:

The following table summarizes the volumes of operational and commissioning LNG cargoes that were loaded from the Liquefaction Projects, which were recognized on our Consolidated Financial Statements during the three months ended March 31, 2020:



	~~Three Months Ended March 31, 2020~~
~~(in TBtu)~~	~~Operational~~		~~Commissioning~~
~~Volumes loaded during the current period~~	~~455~~		—
~~Volumes loaded during the prior period but recognized during the current period~~	33		—
~~Less: volumes loaded during the current period and in transit at the end of the period~~	~~(29~~	)	—
~~Total volumes recognized in the current period~~	~~459~~		—

Our consolidated net income attributable to common stockholders was $375 million, or $1.48 per share—basic and $1.43 per share—diluted, in the three months ended March 31, 2020, compared to net income attributable to common stockholders of

$141 million, or $0.55 per share—basic and $0.54 per share—diluted, in the three months ended March 31, 2019. This $234 million increase in net income attributable to common stockholders in 2020 was primarily attributable to increased gross margins due to increased volume of LNG sold partially offset by decreased pricing on LNG and from increased derivative gains on commodity derivatives, which were partially offset by increases in (1) interest rate derivative loss, net, (2) interest expense, net of amounts capitalized, (3) income tax provision, (4) operating and maintenance expense and (5) depreciation and amortization expense.

We enter into derivative instruments to manage our exposure to (1) changing interest rates, (2) commodity-related marketing and price risks and (3) foreign exchange volatility. Derivative instruments are reported at fair value on our Consolidated Financial Statements. In some cases, the underlying transactions economically hedged receive accrual accounting treatment, whereby revenues and expenses are recognized only upon delivery, receipt or realization of the underlying transaction. Because the recognition of derivative instruments at fair value has the effect of recognizing gains or losses relating to future period exposure, use of derivative instruments may increase the volatility of our results of operations based on changes in market pricing, counterparty credit risk and other relevant factors.

~~Revenues~~

Three Months Ended March 31,
(in millions) 2020 2019 Change
LNG revenues $ 2,568
$ 2,143
$ 425
Regasification revenues 67
66
1
Other revenues 74
52
22
Total revenues $ 2,709

$ 2,261

$ 448

We begin recognizing LNG revenues from the Liquefaction Projects following the substantial completion and the commencement of operating activities of the respective Trains. Increased Trains in operation over the comparable period resulted in additional revenue from the increased volume of LNG sold. The increase in revenue attributable to LNG volume sold during the three months ended March 31, 2020 from the comparable period in 2019 was partially offset by decreased LNG revenues per MMBtu, which was primarily affected by decreased pricing on LNG and to a lesser degree, market prices realized for volumes sold by our integrated marketing function. Additionally, the increase in other revenues was primarily due to an increase in sub-chartering income. LNG revenues during the three months ended March 31, 2020 also included $53 million in revenues attributable to LNG cargoes contractually canceled by our customers, for which revenue is generally recognized upon notice of customer cancellation. We expect our LNG revenues to increase in the future upon Train 3 of the CCL Project and Train 6 of the SPL Project becoming operational.

Prior to substantial completion of a Train, amounts received from the sale of commissioning cargoes from that Train are offset against LNG terminal construction-in-process, because these amounts are earned or loaded during the testing phase for the construction of that Train. During the three months ended March 31, 2019, we realized offsets to LNG terminal costs of $202 million corresponding to 28 TBtu, respectively, that were related to the sale of commissioning cargoes from the Liquefaction Projects. We did not realize any offsets to LNG terminal costs during the three months ended March 31, 2020.

Also included in LNG revenues are gains and losses from derivative instruments and the sale of unutilized natural gas procured for the liquefaction process. We recognized revenues of $265 million and $134 million during the three months ended March 31, 2020 and 2019, respectively, related to derivative instruments and other revenues from these transactions.

~~The following table presents the components of LNG revenues and the corresponding LNG volumes sold:~~

Three Months Ended March 31,
2020 2019
LNG revenues (in millions):

LNG from the Liquefaction Projects sold under third party long-term agreements (1) $ 1,907
$ 1,517
LNG from the Liquefaction Projects sold by our integrated marketing function under short-term agreements 325
339
LNG procured from third parties 71
153
Other revenues and derivative gains 265
134
Total LNG revenues $ 2,568
$ 2,143

Volumes delivered as LNG revenues (in TBtu):

LNG from the Liquefaction Projects sold under third party long-term agreements (1) 366
236
LNG from the Liquefaction Projects sold by our integrated marketing function under short-term agreements 93
46
LNG procured from third parties 14
18
Total volumes delivered as LNG revenues 473
300


~~(1)~~	Long-term agreements include agreements with a tenure of 12 months or more. LNG revenues include revenues with no corresponding volumes attributable to LNG cargoes contractually canceled by our customers, with revenue generally recognized upon notice of customer cancellation.

~~Operating costs and expenses~~

Three Months Ended March 31,
(in millions) 2020 2019 Change
Cost of sales $ 724
$ 1,214
$ (490 )
Operating and maintenance expense 316
221
95
Development expense 4
1
3
Selling, general and administrative expense 81
73
8
Depreciation and amortization expense 233
144
89
Impairment expense and loss on disposal of assets 5
2
3
Total operating costs and expenses $ 1,363
$ 1,655
$ (292 )

Our total operating costs and expenses decreased during the three months ended March 31, 2020 from the three months ended March 31, 2019, primarily as a result of decreased cost of sales from increased derivative gains and lower pricing of natural gas feedstock, partially offset by increased operating and maintenance expense from additional operating Trains between the periods and increased depreciation and amortization expense.

Cost of sales includes costs incurred directly for the production and delivery of LNG from the Liquefaction Projects, to the extent those costs are not utilized for the commissioning process. Cost of sales decreased during the three months ended March 31, 2020 from the three months ended March 31, 2019 primarily due to increased derivative gains from an increase in fair value of the derivatives associated with economic hedges to secure natural gas feedstock for the Liquefaction Projects, primarily due to a favorable shift in long-term forward prices relative to our hedged position. Additionally, cost of natural gas feedstock decreased between the periods due to decreased pricing, which was partially offset by increased volume. Partially offsetting these decreases was an increase in vessel charter costs. Cost of sales also includes port and canal fees, variable transportation and storage costs and the sale of natural gas procured for the liquefaction process and other costs to convert natural gas into LNG.

Operating and maintenance expense primarily includes costs associated with operating and maintaining the Liquefaction Projects. The increase in operating and maintenance expense during the three months ended March 31, 2020 from the comparable 2019 period was primarily as a result of the increase in operating Trains. The increase during the three months ended March 31, 2020 from the comparable period in 2019 was primarily related to: (1) increased natural gas transportation and storage capacity demand charges from operating Train 5 of the SPL Project and Trains 1 and 2 of the CCL Project following the respective substantial completions, (2) increased TUA reservation charges due to Total under the partial TUA assignment agreement and (3) increased payroll and benefit costs from increased headcount to operate Train 5 of the SPL Project and Trains 1 and 2 of the CCL Project.

Depreciation and amortization expense increased during the three months ended March 31, 2020 from the three months ended March 31, 2019 as a result of an increased number of operational Trains, as the related assets began depreciating upon reaching substantial completion.

We expect our operating costs and expenses to generally increase in the future upon Train 3 of the CCL Project and Train 6 of the SPL Project achieving substantial completion, although we expect certain costs will not proportionally increase with the number of operational Trains as cost efficiencies will be realized.

~~Other expense (income)~~

Three Months Ended March 31,
(in millions) 2020 2019 Change
Interest expense, net of capitalized interest $ 412
$ 247
$ 165
Loss on modification or extinguishment of debt 1
—
1
Interest rate derivative loss, net 208
35
173
Other income, net (9 ) (16 ) 7
Total other expense $ 612
$ 266
$ 346

Interest expense, net of capitalized interest, increased during the three months ended March 31, 2020 from the three months ended March 31, 2019 as a result of a decrease in the portion of total interest costs that is eligible for capitalization as additional Trains of the Liquefaction Projects completed construction between the periods. During the three months ended March 31, 2020 and 2019, we incurred $471 million and $448 million of total interest cost, respectively, of which we capitalized $59 million and $201 million, respectively, which was primarily related to interest costs incurred to construct the remaining assets of the Liquefaction Projects.

Derivative loss, net increased during the three months ended March 31, 2020 compared to the three months ended March 31, 2019, primarily due to an unfavorable shift in the long-term forward LIBOR curve between the periods.

Other income, net decreased during the three months ended March 31, 2020 compared to the three months ended March 31, 2019, primarily due to a decrease in interest income earned on our cash and cash equivalents and restricted cash.

~~Income tax provision~~

Three Months Ended March 31,
(in millions) 2020 2019 Change
Income before income taxes and non-controlling interest $ 734
$ 340
$ 394
Income tax provision (131 ) (3 ) (128 )
Effective tax rate 17.8 % 0.9 %

The effective tax rate for the three months ended March 31, 2020 is lower than the 21% federal statutory rate primarily due to income allocated to non-controlling interest that is not taxable to Cheniere, partially offset by a one-time discrete event related to an internal tax restructuring. The discrete item resulted in expense of $38 million for the three months ended March 31, 2020. The effective tax rate for the three months ended March 31, 2019 is lower than the 21% federal statutory rate primarily due to maintaining a valuation allowance against our federal deferred tax assets.

On March 27, 2020, the Coronavirus Aid, Relief and Economic (CARES) Act (“the CARES Act”) was signed into law which provides numerous tax changes in response to the COVID-19 pandemic. The most significant provision expected to impact us is the modification to the business interest expense limitation. The CARES Act increases the adjusted taxable income limitation from 30% to 50% for business interest deductions in 2019 and 2020 and will allow us to deduct additional business interest expense in 2020.

~~Net income attributable to non-controlling interest~~

Three Months Ended March 31,
(in millions) 2020 2019 Change
Net income attributable to non-controlling interest $ 228
$ 196
$ 32

Net income attributable to non-controlling interest increased during the three months ended March 31, 2020 from the three months ended March 31, 2019 primarily due to an increase in consolidated net income recognized by Cheniere Partners. The consolidated net income recognized by Cheniere Partners increased from $385 million in the three months ended March 31, 2019 to $435 million in the three months ended March 31, 2020 primarily due increased gross margins due to higher volumes of LNG, partially offset by increases in (1) interest expense, net of capitalized interest, (2) depreciation and amortization expense and (3) operating and maintenance expense.

Off-Balance Sheet Arrangements

As of March 31, ~~2020,~~2021, we had no transactions that met the definition of off-balance sheet arrangements that may have a current or future material effect on our consolidated financial position or operating results.

Summary of Critical Accounting Estimates

The preparation of ~~our~~ 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~~F orm 10-K for the fiscal year ended December 31, ~~2019~~2020.

Recent Accounting Standards

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Marketing and Trading Commodity Price Risk

We have entered into commodity derivatives consisting of natural gas supply contracts for the commissioning and operation of the SPL Project, the CCL Project and potential future development of Corpus Christi Stage 3 (“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 ~~(“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):


	March 31, 2021				December 31, 2020
	Fair Value		Change in Fair Value		Fair Value		Change in Fair Value
Liquefaction Supply Derivatives	$	151	$	198	$	240	$	204
LNG Trading Derivatives	(173)		24		(134)		44

March 31, 2020 December 31, 2019
Fair Value Change in Fair Value Fair Value Change in Fair Value
Liquefaction Supply Derivatives $ 678
$ 180
$ 149
$ 179
LNG Trading Derivatives 185
2
165
22

Interest Rate Risk

We are exposed to interest rate risk primarily when we incur debt related to project financing. Interest rate risk is managed in part by replacing outstanding floating-rate debt with fixed-rate debt with varying maturities. CCH has entered into interest rate swaps to hedge the exposure to volatility in a portion of the floating-rate interest payments under the CCH Credit Facility (“CCH Interest Rate Derivatives”) ~~and to hedge against changes in interest rates that could impact anticipated future issuance of debt by CCH (“CCH Interest Rate Forward Start Derivatives”)~~. In order to test the sensitivity of the fair value of the CCH Interest Rate Derivatives to changes in interest rates, management modeled a 10% change in the forward one-month LIBOR curve across the remaining terms of the CCH Interest Rate Derivatives ~~and CCH Interest Rate Forward Start Derivatives~~ as follows (in millions):


	March 31, 2021				December 31, 2020
	Fair Value		Change in Fair Value		Fair Value		Change in Fair Value
CCH Interest Rate Derivatives	$	(114)	$	1	$	(140)	$	1

March 31, 2020 December 31, 2019
Fair Value Change in Fair Value Fair Value Change in Fair Value
CCH Interest Rate Derivatives $ (197 ) $ 4
$ (81 ) $ 19
CCH Interest Rate Forward Start Derivatives (92 ) 9
(8 ) 15

Foreign Currency Exchange Risk

We have entered into foreign currency exchange (“FX”) contracts to hedge exposure to currency risk associated with operations in countries outside of the United States (“FX Derivatives”). In order to test the sensitivity of the fair value of the FX Derivatives to changes in FX rates, management modeled a 10% change in FX rate between the U.S. dollar and the applicable foreign currencies as follows (in millions):


	March 31, 2021				December 31, 2020
	Fair Value		Change in Fair Value		Fair Value		Change in Fair Value
FX Derivatives	$	1	$	—	$	(22)	$	2

March 31, 2020 December 31, 2019
Fair Value Change in Fair Value Fair Value Change in Fair Value
FX Derivatives $ 23
$ 2
$ 4
$ —

See Note 6—6 —Derivative Instruments for additional details about our derivative instruments.


~~ITEM 4.~~	~~CONTROLS AND PROCEDURES~~

ITEM 4. CONTROLS AND PROCEDURES

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.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We may in the future be involved as a party to various legal proceedings, which are incidental to the ordinary course of business. We regularly analyze current information and, as necessary, provide accruals for probable liabilities on the eventual disposition of these matters. There have been no material changes to the legal proceedings disclosed in our annual report on Form 10-K for the fiscal year ended December 31, ~~2019~~2020.


~~ITEM 1A.~~	~~RISK FACTORS~~

ITEM 1A. RISK FACTORS

~~The information presented below updates, and should be read in conjunction with, the risk factors disclosed in our~~ ~~annual report on Form 10-K for the year ended December 31, 2019. Except as presented below, there~~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, ~~2019~~2020.

~~The outbreak of COVID-19 and volatility in the energy markets may materially and adversely affect our business, financial condition, operating results, cash flow, liquidity and prospects.~~

The outbreak of COVID-19 and its development into a pandemic in March 2020 have resulted in significant disruption globally. Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of COVID-19 have restricted travel, business operations, and the overall level of individual movement and in-person interaction across the globe. Additionally, recent disputes over production levels between members of the Organization of Petroleum Exporting Countries and other oil producing countries has resulted in increased volatility in oil and natural gas prices.

The extent, duration and magnitude of the COVID-19 pandemic’s effects will depend on future developments, all of which are highly uncertain and difficult to predict, including the impact of the pandemic on global and regional economies, travel, and economic activity, as well as actions taken by governments, business and individuals in response to the pandemic or any future resurgence. These developments include the impact of the COVID-19 pandemic on unemployment rates, the demand for oil and natural gas, levels of consumer confidence and the post-pandemic pace of recovery.

Many uncertainties remain with respect to the COVID-19 pandemic, and we continue to monitor the rapidly evolving situation. The COVID-19 pandemic alone or coupled with continued volatility in the energy markets may materially and adversely affect our business, financial condition, operating results, cash flow, liquidity and prospects or have the effect of heightening many of the other risks described herein and in our ~~annual report on Form 10-K for the year ended December 31, 2019~~. The extent to which our business, contracts, financial condition, operating results, cash flow, liquidity and prospects are affected by the COVID-19 outbreak or volatility in the energy markets will depend on various factors beyond our control and are highly uncertain, including the duration and scope of the outbreak, decreased demand for LNG and the resulting economic effects of the outbreak of COVID-19.

Our ability to generate cash is substantially dependent upon the performance by customers under long-term contracts that we have entered into, and we could be materially and adversely affected if any significant customer fails to perform its contractual obligations for any reason.

Our future results and liquidity are substantially dependent upon performance by our customers to make payments under long-term contracts. As of March 31, 2020, SPL had SPAs with eight third-party customers, CCL had SPAs with nine third-party customers and our integrated marketing function had a limited number of SPAs with third-party customers. In addition, SPLNG had TUAs with two third-party customers. We are dependent on each customer’s continued willingness and ability to perform its obligations under its SPA or TUA. We are exposed to the credit risk of any guarantor of these customers’ obligations under their respective agreements in the event that we must seek recourse under a guaranty. As a result of the disruptions caused by the COVID-19 pandemic and the volatility in the energy markets, we believe we are exposed to heightened credit and performance risk of our customers. Additionally, some customers have indicated to us that COVID-19 has begun to impact their operations and/or may impact their operations in the future. Some of our SPA customers’ primary countries of business have experienced a significant number of COVID-19 cases and/or have been subject to government imposed lockdown or quarantine measures. Although we believe that impacts of the COVID-19 pandemic on LNG regasification facilities, downstream markets and broader energy demand do not constitute valid force majeure claims under our FOB LNG SPAs, if any significant customer fails to perform its obligations under its SPA or TUA, our business, contracts, financial condition, operating results, cash flow, liquidity and prospects

~~could be materially and adversely affected, even if we were ultimately successful in seeking damages from that customer or its guarantor for a breach of the agreement.~~

Cost overruns and delays in the completion of one or more Trains, as well as difficulties in obtaining sufficient financing to pay for such costs and delays, could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects.

The actual construction costs of the Trains may be significantly higher than our current estimates as a result of many factors, including change orders under existing or future EPC contracts resulting from the occurrence of certain specified events that may give our EPC contractor the right to cause us to enter into change orders or resulting from changes with which we otherwise agree. We have already experienced increased costs due to change orders. As construction progresses, we may decide or be forced to submit change orders to our contractor that could result in longer construction periods, higher construction costs or both, including change orders to comply with existing or future environmental or other regulations.

The outbreak of COVID-19 and the resulting actions taken by governmental and regulatory authorities to prevent the spread of COVID-19 may cause a slow-down in the construction of one or more Trains. Our EPC contractor has advised us of voluntary proactive measures it is taking to protect employees and to mitigate risks associated with COVID-19, however, it has not indicated that there will be any changes to the project cost or schedule and is still performing its obligations under its EPC contracts. While the construction of Trains is continuing, if there was a major outbreak of COVID-19 at any construction site or the implementation of restrictions by the government that prevented construction for an extended period, we could experience significant delays in the construction of one or more Trains.

Delays in the construction of one or more Trains beyond the estimated development periods, as well as change orders to our existing EPC contracts or any future EPC contract related to additional Trains, could increase the cost of completion beyond the amounts that we estimate, which could require us to obtain additional sources of financing to fund our operations until the applicable liquefaction project is fully constructed (which could cause further delays). Our ability to obtain financing that may be needed to provide additional funding to cover increased costs will depend, in part, on factors beyond our control. Accordingly, we may not be able to obtain financing on terms that are acceptable to us, or at all. Even if we are able to obtain financing, we may have to accept terms that are disadvantageous to us or that may have a material adverse effect on our current or future business, contracts, financial condition, operating results, cash flow, liquidity and prospects.

~~Outbreaks of infectious diseases, such as the outbreak of COVID-19, at one or more of our facilities could adversely affect our operations.~~

Federal, state and local governments have enacted various measures to try to contain the outbreak of COVID-19, such as travel bans and restrictions, quarantines, shelter-in-place orders and business shutdowns. Our facilities at the Sabine Pass LNG terminal and Corpus Christi LNG terminal are critical infrastructure and have continued to operate during the outbreak, which means that we must keep our employees who operate our facilities safe and minimize unnecessary risk of exposure to the virus. In response, we have taken extra precautionary measures to protect the continued safety and welfare of our employees who continue to work at our facilities and have modified certain business and workforce practices, such as implementing work from home policies where appropriate. The measures taken to prevent an outbreak at our facilities have resulted in increased costs. If a large number of our employees in those critical facilities were to contract COVID-19 at the same time, our operations could be adversely affected.


~~ITEM 2.~~	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

The following table summarizes stock repurchases for the three months ended March 31, ~~2020:~~

2021:

Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as a Part of Publicly Announced Plans Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans (3)
January 1 - 31, 2020 689,407 $60.91 681,100 $709,400,285
February 1 - 29, 2020 961,734 $55.97 225,892 $695,992,139
March 1 - 31, 2020 1,968,384 $50.80 1,968,384 $595,952,809
Total 3,619,525 $54.11 2,875,376


Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share (2)	Total Number of Shares Purchased as a Part of Publicly Announced Plans	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans (3)
January 1 - 31, 2021	8,442	$64.94	—	$595,952,809
February 1 - 28, 2021	611,686	$67.60	—	$595,952,809
March 1 - 31, 2021	—	$—	—	$595,952,809
Total	620,128	$67.56	—


~~(1)~~	(1)Includes issued shares surrendered to us by participants in our share-based compensation plans for payment of applicable tax withholdings on the vesting of share-based compensation awards. Associated shares surrendered by participants are repurchased pursuant to terms of the plan and award agreements and not as part of the publicly announced share repurchase plan.


~~(2)~~	~~The price paid per share was based on the average trading price of our common stock on the dates on which we repurchased the shares.~~


~~(3)~~	~~On June 3, 2019, we announced that our Board authorized a 3-year, $1 billion share repurchase program. For additional information, see~~ ~~Note 16—Share Repurchase Program~~.

(2)The price paid per share was based on the average trading price of our common stock on the dates on which we repurchased the shares.

(3)On June 3, 2019, we announced that our Board authorized a 3-year, $1 billion share repurchase program. For additional information, see Share Repurchase Program in Liquidity and Capital Resources.

ITEM 6. EXHIBITS


~~ITEM 6.~~	~~EXHIBITS~~

~~Exhibit No.~~

~~Description~~

10.1*Exhibit No.

Description

4.1

~~Omnibus Amendment 4 to Amended and Restated Note Purchase Agreement, Amendment to Registration Rights Agreement and Administrative Agent and Technical Agent Resignation and Appointment Agreement,~~Fifth Supplemental Indenture, dated as of ~~February 18, 2020, by~~March 11, 2021, among Cheniere Partners, the guarantors party thereto and ~~among CCH HoldCo II, as Issuer, EIG Management Company, LLC, as resigning administrative agent and as technical agent,~~ The Bank of New York Mellon, as ~~collateral agent and as Successor Agent and~~Trustee under the ~~note holders identified therein~~Indenture (

~~10.2~~

Amendment 5 to Amended and Restated Note Purchase Agreement, dated as of February 24, 2020, by and among CCH HoldCo II, as Issuer, the Company, EIG Management Company, LLC, as technical agent, The Bank of New York Mellon, as administrative agent and collateral agent and the note holders identified therein (IncorporatedI ncorporated by reference to Exhibit ~~10.1~~4.1 to ~~the Company’s~~Cheniere Partners Current Report on Form 8-K (SEC File No. ~~001-16383)~~001-33366), filed on ~~February 25, 2020)~~March 11, 2021)

~~10.3~~10.1

~~Working Capital Revolving Credit and Letter~~Registration Rights Agreement, dated as of ~~Credit Reimbursement Agreement,~~March 11, 2021, among ~~SPL, as borrower, certain subsidiaries of SPL, The Bank of Nova Scotia, as Senior Facility Agent, Société Générale, as~~Cheniere Partners the ~~Common Security Trustee, the issuing banks and lenders from time to time~~guarantors party thereto and ~~other participants (Incorporated~~J.P. Morgan Securities LLC (I ncorporated by reference to Exhibit 10.1 to ~~SPL’s~~Cheniere Partners Current Report on Form 8-K (SEC File No. ~~333-192373)~~001-33366), filed on March ~~23, 2020)~~11, 2021)

~~10.4~~10.2*

Third Amended and Restated Common Terms Agreement, among SPL, as borrower, the Secured Debt Holder Group Representatives party thereto, the Secured Hedge Representatives party thereto, the Secured Gas Hedge Representatives party thereto and Société Générale, as the Common Security Trustee and the Intercreditor Agent (Incorporated by reference to Exhibit 10.2 to SPL’s Current Report on Form 8-K (SEC File No. 333-192373), filed on March 23, 2020)

~~10.5~~

Third Amended and Restated Accounts Agreement, among SPL, certain subsidiaries of SPL, Société Générale, as the Common Security Trustee, and Citibank, N.A. as the Accounts Bank (Incorporated by reference to Exhibit 10.3 to SPL’s Current Report on Form 8-K (SEC File No. 333-192373), filed on March 23, 2020)

10.6*

10.7*10.3*

Change orders to the Amended and Restated Fixed Price Separated Turnkey Agreement for the Engineering, Procurement and Construction of the Corpus Christi Stage 2 Liquefaction Facility, dated as of December 12, 2017, between CCL and Bechtel Oil, Gas and Chemicals, Inc.: ~~(i)~~ the Change Order CO-00024 East Jetty Cooldown Line & Simultaneous Ship Loading, dated January 6, 2020, (ii) the Change Order CO-00025 East Jetty Manual Gas Sampler, dated January 7, 2020, (iii) the Change Order CO-00026 Study for Adding Valve Actuator for E-W Jetty Flow Segregation, dated January 8, 2020, (iv) the Change Order CO-00027CO-000 4 3 Early Turnover of Tank B ~~Isolation of Proposed Fourth In-Tank LNG Pump - Long Lead Items, dated January 8, 2020, (v) the Change Order CO-00028 Tank B Rundown Line (Part I)~~, dated January 31, 2020, (vi) the Change Order CO-00029 9% Nickel and Cryogenic Rebar Provisional Sum Closeout, dated February 18, 2020 and (vii) the Change Order CO-00030 Additional Valve for Isolation in CCL Stage 2 to CCL Stage 3 from Tank B, dated February 18, 202013, 2021 (Portions of this exhibit have been omitted)

31.1*

Certification by Chief Executive Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act

31.2*

Certification by Chief Financial Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act

32.1**

Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**

Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*

XBRL Instance Document

101.SCH*

XBRL Taxonomy Extension Schema Document

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

XBRL Taxonomy Extension Labels Linkbase Document

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

104*

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)



*			Filed herewith.
**			Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		CHENIERE ENERGY, INC.




		~~CHENIERE ENERGY, INC.~~

~~Date:~~	~~April 29, 2020~~	~~By:~~	~~/s/ Michael J. Wortley~~
Date:	May 3, 2021	By:	~~Michael J. Wortley~~/s/ Zach Davis
			~~Executive~~Zach Davis
			Senior Vice President and Chief Financial Officer
			(on behalf of the registrant and as principal financial officer)

Date:	~~April 29, 2020~~May 3, 2021	By:	/s/ Leonard E. Travis
			Leonard E. Travis
			Senior Vice President and Chief Accounting Officer
			(on behalf of the registrant and as principal accounting officer)

5553



Three Months Ended March 31, 2019
	Total Stockholders’ Equity
	Common Stock				Treasury Stock				Additional Paid-in Capital		Accumulated Deficit			Non-controlling Interest			Total Equity
	Shares		Par Value Amount		Shares	Amount			Additional Paid-in Capital		Accumulated Deficit			Non-controlling Interest			Total Equity
Balance at December 31, 2018	257.0		$	1	12.8	$	(406	)	$	4,035	$	(4,156	)	$	2,455		$	1,929
Vesting of restricted stock units	0.6		—		—	—			—		—			—			—
Share-based compensation	—		—		—	—			28		—			—			28
Issued shares withheld from employees related to share-based compensation, at cost	(0.2	)	—		0.2	(12		)	—		—			—			(12		)
Net income attributable to non-controlling interest	—		—		—	—			—		—			196			196
Distributions and dividends to non-controlling interest	—		—		—	—			—		—			(144		)	(144		)
Net income	—		—		—	—			—		141			—			141
Balance at March 31, 2019	257.4		$	1	13.0	$	(418	)	$	4,063	$	(4,015	)	$	2,507		$	2,138



	Fair Value Measurements as of
	March 31, 2020											December 31, 2019
	Quoted Prices in Active Markets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
CCH Interest Rate Derivatives liability	$	—		$	(197	)	$	—	$	(197	)	$	—	$	(81	)	$	—	$	(81	)
CCH Interest Rate Forward Start Derivatives liability	—			(92		)	—		(92		)	—		(8		)	—		(8		)
Liquefaction Supply Derivatives asset	1			3			674		678			5		6			138		149
LNG Trading Derivatives asset (liability)	(3		)	188			—		185			—		165			—		165
FX Derivatives asset	—			23			—		23			—		4			—		4



		Fair Value Measurements as of
	Consolidated Balance Sheet Location	March 31, 2020			December 31, 2019
FX Derivatives	Derivative assets	$	19		$	5
FX Derivatives	Non-current derivative assets	5			—
FX Derivatives	Derivative liabilities	(1		)	(1		)



	Gross Amounts Recognized			Gross Amounts Offset in the Consolidated Balance Sheets			Net Amounts Presented in the Consolidated Balance Sheets
Offsetting Derivative Assets (Liabilities)	Gross Amounts Recognized			Gross Amounts Offset in the Consolidated Balance Sheets			Net Amounts Presented in the Consolidated Balance Sheets
As of March 31, 2020
CCH Interest Rate Derivatives	$	(197	)	$	—		$	(197	)
CCH Interest Rate Forward Start Derivatives	(92		)	—			(92		)
Liquefaction Supply Derivatives	796			(18		)	778
Liquefaction Supply Derivatives	(104		)	4			(100		)
LNG Trading Derivatives	225			—			225
LNG Trading Derivatives	(47		)	7			(40		)
FX Derivatives	27			(3		)	24
FX Derivatives	(1		)	—			(1		)
As of December 31, 2019
CCH Interest Rate Derivatives	$	(81	)	$	—		$	(81	)
CCH Interest Rate Forward Start Derivatives	(8		)	—			(8		)
Liquefaction Supply Derivatives	281			(14		)	267
Liquefaction Supply Derivatives	(126		)	8			(118		)
LNG Trading Derivatives	229			(4		)	225
LNG Trading Derivatives	(60		)	—			(60		)
FX Derivatives	9			(4		)	5
FX Derivatives	(6		)	5			(1		)



	2021 Cheniere Convertible Unsecured Notes			2025 CCH HoldCo II Convertible Senior Notes			2045 Cheniere Convertible Senior Notes
Aggregate original principal	$	1,000		$	1,000		$	625
Add: interest paid-in-kind	278			578			—
Less: aggregate principal redeemed	—			(300		)	—
Aggregate remaining principal	$	1,278		$	1,278		$	625

Debt component, net of discount and debt issuance costs	$	1,230		$	1,250		$	315
Equity component	$	211		$	—		$	194
Interest payment method	Paid-in-kind			Paid-in-kind / cash (1)			Cash
Conversion by us (2)	—			(3)			(4)
Conversion by holders (2)	(5)			(3)			(6)
Conversion basis	Cash and/or stock			Cash and/or stock			Cash and/or stock
Conversion value in excess of principal	$	—		n/a			$	—
Maturity date	May 28, 2021			May 13, 2025			March 15, 2045
Contractual interest rate	4.875		%	11.0		%	4.25		%
Effective interest rate (7)	8.2		%	12.2		%	9.4		%
Remaining debt discount and debt issuance costs amortization period (8)	1.2 years			0.5 years			25.0 years



	Three Months Ended March 31, 2020
Deferred revenues, beginning of period	$	161
Cash received but not yet recognized	94
Revenue recognized from prior period deferral	(161		)
Deferred revenues, end of period	$	94



	Percentage of Total Revenues from External Customers		Percentage of Accounts Receivable from External Customers
	Three Months Ended March 31,		March 31,	December 31,
	2020	2019	2020	2019
Customer A	16%	20%	12%	13%
Customer B	*	12%	*	*
Customer C	*	12%	15%	13%
Customer D	*	14%	*	*