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, ~~2022~~2023

☐ 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 333-215435

Cheniere Corpus Christi Holdings, LLC

(Exact name of registrant as specified in its charter)


Delaware			47-1929160
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

700 Milam Street, Suite 1900

Houston, Texas 77002

(Address of principal executive offices) (Zip Code)

(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
None	None	None

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 ☒

Note: The registrant ~~was~~is a voluntary filer ~~until March 25, 2022. The~~not subject to the filing requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934. However, the registrant has filed all reports required pursuant to Sections 13 or 15(d) during the preceding 12 months as if the registrant was subject to such filing requirements.

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 ☒

Indicate the number of shares outstanding of the issuer’s classes of common stock, as of the latest practicable date: Not applicable

CHENIERE CORPUS CHRISTI HOLDINGS, LLC

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	Definitions	1
Part I. Financial Information
Item 1.	Consolidated Financial Statements	3
	Consolidated Statements of Operations	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Member’s 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—2 —Restricted Cash and Cash Equivalents	78
	Note 3—~~Trade~~3 —Trade and Other Receivables, Net of Current Expected Credit Losses	8
	Note 4—4 —Inventory	8
	Note 5—5 —Property, Plant and Equipment, Net of Accumulated Depreciation	8
	Note 6—6 —Derivative Instruments	89

	Note 7—7 —Accrued Liabilities	12
	Note 8—8 —Debt	1312
	Note 9—9 —Revenues ~~from Contracts with Customers~~	14
	Note ~~10—~~1 0 —Related Party Transactions	1615
	Note ~~11—~~1 1 —Customer Concentration	1917
	Note ~~12—~~1 2 —Supplemental Cash Flow Information	2017

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2118

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2825

Item 4.	Controls and Procedures	2926

Part II. Other Information
Item 1.	Legal Proceedings	3027

Item 1A.	Risk Factors	3027

~~Item 5.~~	~~Other Information~~	30

Item 6.	Exhibits	3027

	Signatures	3128

Table of Contents

DEFINITIONS

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

Common Industry and Other Terms


ASU						Accounting Standards Update
Bcf						billion cubic feet
Bcf/d						billion cubic feet per day
Bcf/yr						billion cubic feet per year
Bcfe						billion cubic feet equivalent
DAT						delivered at terminal
DOE						U.S. Department of Energy
EPC						engineering, procurement and construction
FASB						Financial Accounting Standards Board
FERC						Federal Energy Regulatory Commission
FID						final investment decision
FOB						free-on-board
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
IPM agreements						integrated production marketing agreements in which the gas producer sells to us gas on a global LNG index price, less a fixed liquefaction fee, shipping and other costs
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; one British thermal unit measures the amount of energy required to raise the temperature of one pound of water by one degree Fahrenheit
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
SOFR						Secured Overnight Financing Rate
SPA						LNG sale and purchase agreement
TBtu						trillion British thermal units; one British thermal unit measures the amount of energy required to raise the temperature of one pound of water by one degree Fahrenheit
Train						an industrial facility comprised of a series of refrigerant compressor loops used to cool natural gas into LNG

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Abbreviated Legal Entity Structure

The following diagram depicts our abbreviated legal entity structure as of March 31, ~~2022,~~2023, including our ownership of certain subsidiaries, and the references to these entities used in this quarterly report:

Unless the context requires otherwise, references to “CCH,” the “Company,” “we,” “us,” and “our” refer to Cheniere Corpus Christi Holdings, LLC and its consolidated subsidiaries.

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PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CHENIERE CORPUS CHRISTI HOLDINGS, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions)

(unaudited)


		Three Months Ended March 31,					Three Months Ended March 31,
			2022		2021				2023		2022
Revenues	Revenues							Revenues
LNG revenues	LNG revenues		$	1,324	$	615		LNG revenues	$	1,093	$	1,324
LNG revenues—affiliate	LNG revenues—affiliate		671		268			LNG revenues—affiliate	555		671

Total revenues	Total revenues		1,995		883			Total revenues	1,648		1,995

Operating costs and expenses
Cost of sales (excluding items shown separately below)			2,341		186
Operating costs and expenses (recovery)								Operating costs and expenses (recovery)
Cost (recovery) of sales (excluding items shown separately below)								Cost (recovery) of sales (excluding items shown separately below)	(2,540)		2,341
Cost of sales—affiliate	Cost of sales—affiliate		12		35			Cost of sales—affiliate	15		12
Cost of sales—related party			—		35

Operating and maintenance expense	Operating and maintenance expense		113		83			Operating and maintenance expense	116		113
Operating and maintenance expense—affiliate	Operating and maintenance expense—affiliate		30		24			Operating and maintenance expense—affiliate	30		30
Operating and maintenance expense—related party	Operating and maintenance expense—related party		2		2			Operating and maintenance expense—related party	2		2

General and administrative expense	General and administrative expense		2		1			General and administrative expense	2		2
General and administrative expense—affiliate	General and administrative expense—affiliate		8		5			General and administrative expense—affiliate	12		8
Depreciation and amortization expense	Depreciation and amortization expense		110		89			Depreciation and amortization expense	112		110

Total operating costs and expenses			2,618		460
Total operating costs and expenses (recovery)								Total operating costs and expenses (recovery)	(2,251)		2,618

Income (loss) from operations	Income (loss) from operations		(623)		423			Income (loss) from operations	3,899		(623)

Other income (expense)	Other income (expense)							Other income (expense)
Interest expense, net of capitalized interest	Interest expense, net of capitalized interest		(118)		(93)			Interest expense, net of capitalized interest	(63)		(118)
Loss on modification or extinguishment of debt	Loss on modification or extinguishment of debt		(2)		—			Loss on modification or extinguishment of debt	(10)		(2)
Interest rate derivative gain, net	Interest rate derivative gain, net		3		1			Interest rate derivative gain, net	—		3

Other income, net								Other income, net	3		—
Total other expense	Total other expense		(117)		(92)			Total other expense	(70)		(117)

Net income (loss)	Net income (loss)		$	(740)	$	331		Net income (loss)	$	3,829	$	(740)

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

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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions)


		March 31,		December 31,			March 31,		December 31,
		2022		2021			2023		2022
ASSETS	ASSETS	(unaudited)				ASSETS	(unaudited)
Current assets	Current assets					Current assets

Restricted cash and cash equivalents	Restricted cash and cash equivalents	$	50	$	44	Restricted cash and cash equivalents	$	93	$	738
Trade and other receivables, net of current expected credit losses	Trade and other receivables, net of current expected credit losses	197		280		Trade and other receivables, net of current expected credit losses	140		348
Accounts receivable—affiliate		317		315
Trade receivables—affiliate						Trade receivables—affiliate	157		240
Advances to affiliate	Advances to affiliate	91		128		Advances to affiliate	93		132
Inventory	Inventory	133		156		Inventory	120		178
Current derivative assets	Current derivative assets	21		17		Current derivative assets	20		12

Margin deposits	Margin deposits	64		13		Margin deposits	14		76
Other current assets	Other current assets	9		15		Other current assets	10		18

Total current assets	Total current assets	882		968		Total current assets	647		1,742

Property, plant and equipment, net of accumulated depreciation	Property, plant and equipment, net of accumulated depreciation	12,509		12,607		Property, plant and equipment, net of accumulated depreciation	14,030		13,673
Debt issuance and deferred financing costs, net of accumulated amortization		6		7
Debt issuance, net of accumulated amortization						Debt issuance, net of accumulated amortization	39		40
Derivative assets	Derivative assets	13		37		Derivative assets	168		7

Other non-current assets, net	Other non-current assets, net	175		145		Other non-current assets, net	307		225

Total assets	Total assets	$	13,585	$	13,764	Total assets	$	15,191	$	15,687

LIABILITIES AND MEMBER’S EQUITY	LIABILITIES AND MEMBER’S EQUITY					LIABILITIES AND MEMBER’S EQUITY
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	78	$	119	Accounts payable	$	14	$	85

Accrued liabilities	Accrued liabilities	632		631		Accrued liabilities	398		901
Accrued liabilities—related party	Accrued liabilities—related party	1		1		Accrued liabilities—related party	1		1
Current debt, net of discount and debt issuance costs	Current debt, net of discount and debt issuance costs	62		366		Current debt, net of discount and debt issuance costs	—		495
Due to affiliates	Due to affiliates	18		35		Due to affiliates	26		43
Current derivative liabilities	Current derivative liabilities	1,077		668		Current derivative liabilities	818		1,374
Other current liabilities	Other current liabilities	2		1		Other current liabilities	2		1

Total current liabilities	Total current liabilities	1,870		1,821		Total current liabilities	1,259		2,900

Long-term debt, net of discount and debt issuance costs	Long-term debt, net of discount and debt issuance costs	9,757		9,986		Long-term debt, net of discount and debt issuance costs	6,307		6,698
Derivative liabilities	Derivative liabilities	1,231		638		Derivative liabilities	2,250		4,923

Other non-current liabilities	Other non-current liabilities	48		38		Other non-current liabilities	77		78

Other non-current liabilities—affiliate						Other non-current liabilities—affiliate	4		4

Member’s equity	Member’s equity	679		1,281		Member’s equity	5,294		1,084
Total liabilities and member’s equity	Total liabilities and member’s equity	$	13,585	$	13,764	Total liabilities and member’s equity	$	15,191	$	15,687

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

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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF MEMBER’S EQUITY

(in millions)

(unaudited)

Three Months Ended March 31, 2022
Cheniere CCH HoldCo I, LLC
Total Member’s Equity
Balance at December 31, 2021 $ 1,281 $ 1,281
Capital contributions 138 138
Net loss (740) (740)
Balance at March 31, 2022 $ 679 $ 679


Three Months Ended March 31, 2023
	Cheniere CCH HoldCo I, LLC		Total Member’s Equity








Balance at December 31, 2022	$	1,084	$	1,084







Contributions (excluding items shown separately below)	45		45

Contributions of cancelled senior secured notes (see Note 8)	396		396
Distributions	(60)		(60)
Net income	3,829		3,829
Balance at March 31, 2023	$	5,294	$	5,294

Three Months Ended March 31, 2021
Cheniere CCH HoldCo I, LLC
Total Member’s Equity
Balance at December 31, 2020 $ 2,624 $ 2,624
Net income 331 331
Balance at March 31, 2021 $ 2,955 $ 2,955


Three Months Ended March 31, 2022
	Cheniere CCH HoldCo I, LLC		Total Member’s Equity
Balance at December 31, 2021	$	1,281	$	1,281
Contributions	138		138
Net loss	(740)		(740)
Balance at March 31, 2022	$	679	$	679

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

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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


		Three Months Ended March 31,				Three Months Ended March 31,
		2022		2021				2023		2022
Cash flows from operating activities	Cash flows from operating activities						Cash flows from operating activities
Net income (loss)	Net income (loss)	$	(740)	$	331		Net income (loss)	$	3,829	$	(740)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	Adjustments to reconcile net income (loss) to net cash provided by operating activities:						Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense	Depreciation and amortization expense	110		89			Depreciation and amortization expense	112		110
Amortization of discount and debt issuance costs	Amortization of discount and debt issuance costs	6		5			Amortization of discount and debt issuance costs	3		6
Loss on modification or extinguishment of debt	Loss on modification or extinguishment of debt	2		—			Loss on modification or extinguishment of debt	10		2
Total losses on derivatives instruments, net		1,052		9
Total gains on derivatives, net—related party		—		(1)
Net cash used for settlement of derivative instruments		(30)		(18)
Total losses (gains) on derivative instruments, net							Total losses (gains) on derivative instruments, net	(3,406)		1,052

Net cash provided by (used for) settlement of derivative instruments							Net cash provided by (used for) settlement of derivative instruments	8		(30)

Other							Other	4		—
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:						Changes in operating assets and liabilities:
Trade and other receivables		83		41
Accounts receivable—affiliate		(2)		(35)
Trade and other receivables, net of current expected credit losses							Trade and other receivables, net of current expected credit losses	208		83
Trade receivables—affiliate							Trade receivables—affiliate	82		(2)
Advances to affiliate	Advances to affiliate	37		51			Advances to affiliate	37		37
Inventory	Inventory	22		(2)			Inventory	58		22
Margin deposits							Margin deposits	61		51
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	(28)		66			Accounts payable and accrued liabilities	(506)		(28)
Accrued liabilities—related party		—		1

Due to affiliates	Due to affiliates	(15)		(12)			Due to affiliates	(17)		(15)

Other, net	Other, net	(44)		(1)			Other, net	(1)		(95)

Net cash provided by operating activities	Net cash provided by operating activities	453		524			Net cash provided by operating activities	482		453

Cash flows from investing activities	Cash flows from investing activities						Cash flows from investing activities
Property, plant and equipment	Property, plant and equipment	(45)		(71)			Property, plant and equipment	(606)		(45)
Other		—		(1)

Net cash used in investing activities	Net cash used in investing activities	(45)		(72)			Net cash used in investing activities	(606)		(45)

Cash flows from financing activities	Cash flows from financing activities						Cash flows from financing activities

Repayments of debt	Repayments of debt	(540)		(140)			Repayments of debt	(498)		(540)

Capital contributions		138		—

Debt extinguishment costs							Debt extinguishment costs	(8)		—
Contributions							Contributions	45		138
Distributions							Distributions	(60)		—
Net cash used in financing activities	Net cash used in financing activities	(402)		(140)			Net cash used in financing activities	(521)		(402)

Net increase in restricted cash and cash equivalents		6		312
Net increase (decrease) in restricted cash and cash equivalents							Net increase (decrease) in restricted cash and cash equivalents	(645)		6
Restricted cash and cash equivalents—beginning of period	Restricted cash and cash equivalents—beginning of period	44		70			Restricted cash and cash equivalents—beginning of period	738		44
Restricted cash and cash equivalents—end of period	Restricted cash and cash equivalents—end of period	$	50	$	382		Restricted cash and cash equivalents—end of period	$	93	$	50

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

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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1—NATURE OF OPERATIONS AND BASIS OF PRESENTATION

We operate a natural gas liquefaction and export facility located near Corpus Christi, Texas (the “Corpus Christi LNG Terminal”) through CCL, which has ~~natural gas liquefaction facilities consisting of 3~~three operational Trains for a total production capacity of approximately 15 mtpa of ~~LNG.~~LNG, three LNG storage tanks and two marine berths. Additionally, we ~~operate through~~are constructing an expansion of the Corpus Christi LNG Terminal (the “Corpus Christi Stage 3 Project”) for up to seven midscale Trains with an expected total production capacity of over 10 mtpa of LNG.

Through our subsidiary CCP, we also own a 21.5-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,~~Corpus Christi LNG Terminal and the Corpus Christi Stage 3 Project, the “Liquefaction Project”). ~~The~~

We have increased available liquefaction capacity at our Liquefaction Project ~~also includes~~as a result of debottlenecking and other optimization projects. We hold a significant land position at the Corpus Christi LNG Terminal which provides opportunity for further liquefaction capacity expansion. In March 2023, CCL and another subsidiary of Cheniere submitted an application with the FERC under the Natural Gas Act for an expansion adjacent to the Liquefaction Project consisting of two midscale Trains with an expected total production capacity of approximately 3 mtpa of LNG. The development of this site or other projects, including infrastructure projects in support of natural gas supply and LNG ~~storage tanks~~demand, will require, among other things, acceptable commercial and ~~2 marine berths.~~financing arrangements before we make a positive FID.

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of CCH have been prepared in accordance with GAAP for interim financial information and in accordance with Rule 10-01 of Regulation ~~S-X.~~S-X and reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the financial results for the interim periods presented. 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 F ~~orm~~Form 10-K for the fi ~~scal~~fiscal year ended December 31, ~~2021~~2022. ~~Reclassifications that are not material to our Consolidated Financial Statements, if any, are made to prior period financial information to conform to the current year presentation.~~

Results of operations for the three months ended March 31, ~~2022~~2023 are not necessarily indicative of the results of operations that will be realized for the year ending December 31, ~~2022.~~2023.

We are a disregarded entity for federal and state income tax purposes. Our taxable income or loss, which may vary substantially from the net income or loss reported on our Consolidated Statements of Operations, is included in the consolidated federal income tax return of Cheniere. Accordingly, no provision or liability for federal or state income taxes is included in the accompanying Consolidated Financial Statements.

Recent Accounting Standards

ASU 2020-04

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 contracts expected to arise from the market transition from LIBOR to alternative reference rates. The ~~transition period~~temporary optional expedients under ~~this~~the standard isbecame effective March 12, 2020 and will ~~apply through~~be available until December 31, ~~2022.~~2024 following a subsequent amendment to the standard.

We have various credit facilities ~~and interest rate swaps~~ indexed to LIBOR, as further described in Note 8 —8—Debt. ~~To date,~~In June 2022, we ~~have~~ amended ~~certain of~~ our credit facilities to ~~incorporate~~bear interest at a ~~fallback replacement~~variable rate ~~indexed to~~per annum based on SOFR as a result of the expected LIBOR transition. WeSince adoption of the standard, we elected to apply the optional expedients as applicable to certain modified ~~terms,~~facilities; however, the impact of applying the optional expedients was not material, and ~~we do not expect~~ the transition to ~~a replacement rate indexed to~~ SOFR todid not have a material impact on our ~~future~~ cash ~~flows.. We will continue to elect to apply the optional expedients to qualifying contract modifications in the future.~~flows.

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE 2—RESTRICTED CASH AND CASH EQUIVALENTS

Restricted cash and cash equivalents consist of funds that are contractually or legally restricted as to usage or withdrawal. As of March 31, 2022 and December 31, 2021, we had $50 million and $44 million of restricted cash and cash equivalents, respectively.

Pursuant to the accounts agreement entered into with the collateral trustee for the benefit of our debt holders, we are required to deposit all cash received into reserve accounts controlled by the collateral trustee. The usage or withdrawal of such cash is restricted to the payment of liabilities related to the Liquefaction Project and other restricted payments.

As of March 31, 2023 and December 31, 2022, we had $93 million and $738 million of restricted cash and cash equivalents, respectively, as required by the above agreement, of which $498 million as of December 31, 2022 related to the cash contributed from Cheniere for the redemption of the remaining outstanding principal balance of the 7.000% Senior Notes due 2024 (the “2024 CCH Senior Notes”) in January 2023.

~~Table of Contents~~

~~CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

NOTE 3—TRADE AND OTHER RECEIVABLES, NET OF CURRENT EXPECTED CREDIT LOSSES

Trade and other receivables, net of current expected credit losses consisted of the following (in millions):


		March 31,		December 31,			March 31,		December 31,
		2022		2021			2023		2022
Trade receivables	Trade receivables	$	160	$	256	Trade receivables	$	132	$	319
Other receivables	Other receivables	37		24		Other receivables	8		29
Total trade and other receivables, net of current expected credit losses	Total trade and other receivables, net of current expected credit losses	$	197	$	280	Total trade and other receivables, net of current expected credit losses	$	140	$	348

NOTE 4—INVENTORY

Inventory consisted of the following (in millions):


		March 31,		December 31,			March 31,		December 31,
		2022		2021			2023		2022
Materials	Materials	$	89	$	88	Materials	$	92	$	92
LNG	LNG	24		45		LNG	7		53

Natural gas	Natural gas	19		21		Natural gas	19		31
Other	Other	1		2		Other	2		2
Total inventory	Total inventory	$	133	$	156	Total inventory	$	120	$	178

NOTE 5—PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION

Property, plant and equipment, net of accumulated depreciation consisted of the following (in millions):


		March 31,		December 31,			March 31,		December 31,
		2022		2021			2023		2022
LNG terminal	LNG terminal					LNG terminal
LNG terminal and interconnecting pipeline facilities		$	13,263	$	13,222
LNG site and related costs		294		294
LNG terminal construction-in-process		37		66
Terminal and interconnecting pipeline facilities						Terminal and interconnecting pipeline facilities	$	13,324	$	13,299
Site and related costs						Site and related costs	302		302
Construction-in-process						Construction-in-process	1,928		1,486
Accumulated depreciation	Accumulated depreciation	(1,090)		(981)		Accumulated depreciation	(1,532)		(1,421)
Total LNG terminal, net of accumulated depreciation	Total LNG terminal, net of accumulated depreciation	12,504		12,601		Total LNG terminal, net of accumulated depreciation	14,022		13,666
Fixed assets	Fixed assets					Fixed assets
Fixed assets	Fixed assets	22		23		Fixed assets	28		26
Accumulated depreciation	Accumulated depreciation	(17)		(17)		Accumulated depreciation	(20)		(19)
Total fixed assets, net of accumulated depreciation	Total fixed assets, net of accumulated depreciation	5		6		Total fixed assets, net of accumulated depreciation	8		7
Property, plant and equipment, net of accumulated depreciation	Property, plant and equipment, net of accumulated depreciation	$	12,509	$	12,607	Property, plant and equipment, net of accumulated depreciation	$	14,030	$	13,673

~~The following table shows depreciation~~Depreciation expense was $112 million and ~~offsets to LNG terminal costs (in millions):~~

Three Months Ended March 31,
2022 2021
Depreciation expense $ 110 $ 88
Offsets to LNG terminal costs (1) — 143

$110 million during three months ended March 31, 2023 and 2022, respectively.

~~(1)~~

We recognize offsets to LNG terminal costs 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 Project during the testing phase for its construction.

~~NOTE 6—DERIVATIVE INSTRUMENTS~~

We ~~have entered into~~did not record any offsets to LNG terminal costs during the ~~following derivative instruments that are reported at fair value:~~

•~~interest rate swaps (“Interest Rate Derivatives”) to hedge the exposure to volatility in a portion of the floating-rate interest payments on our amended~~three months ended March 31, 2023 and ~~restated term loan credit facility (the “CCH Credit Facility”) and~~

•commodity derivatives consisting of natural gas supply contracts, including those under our IPM agreement, for the commissioning and operation of the Liquefaction Project (“Physical Liquefaction Supply Derivatives”) and2022.

~~Table of Contents~~

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE 6—DERIVATIVE INSTRUMENTS

CCL has entered into commodity derivatives consisting of natural gas and power supply contracts, including those under the IPM agreements, for the development, commissioning and operation of the Liquefaction Project and associated economic hedges ~~(“Financial Liquefaction Supply Derivatives,” and collectively with the Physical Liquefaction Supply Derivatives, the~~(collectively, “Liquefaction Supply Derivatives”).

We recognize ~~our~~CCL’s derivative instruments as either assets or liabilities and measure those instruments at fair value. None of ~~our~~CCL’s 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, in which case ~~it is~~such changes are capitalized.

The following table shows the fair value of ~~our~~the derivative instruments that are required to be measured at fair value on a recurring basis (in millions):

Fair Value Measurements as of
March 31, 2022 December 31, 2021
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
Interest Rate Derivatives liability $ — $ (12) $ — $ (12) $ — $ (40) $ — $ (40)
Liquefaction Supply Derivatives asset (liability) (49) 22 (2,235) (2,262) 5 4 (1,221) (1,212)


	Fair Value Measurements as of
	March 31, 2023								December 31, 2022
	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


Liquefaction Supply Derivatives asset (liability)	$	6	$	38	$	(2,924)	$	(2,880)	$	(54)	$	(19)	$	(6,205)	$	(6,278)

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~~ Liquefaction Supply Derivatives using a ~~market-based approach~~market or option-based approach incorporating present value techniques, as needed, using observable commodity price curves, when available, and other relevant data.

The fair value of ~~our Physical~~the Liquefaction Supply Derivatives is 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, but not limited to, evaluation of whether the respective market exists from the perspective of market participants as infrastructure is developed.

We include a significant portion of ~~our Physical~~the 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 and volatility.

The Level 3 fair value measurements of the natural gas positions within ~~our Physical~~the 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~~the Level 3 ~~Physical~~ Liquefaction Supply Derivatives as of March 31, ~~2022:~~2023:

Net Fair Value Liability
(in millions)

Valuation Approach

Significant Unobservable Input

Range of Significant Unobservable Inputs / Weighted Average (1)

~~Physical~~ Liquefaction Supply Derivatives

$~~(2,235)~~(2,924)

Market approach incorporating present value techniques

Henry Hub basis spread

$~~(0.815)~~(0.828) - ~~$0.103~~$0.370 / ~~$(0.156)~~$(0.159)

Option pricing model

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

~~266%~~86% - ~~533%~~574% / ~~363%~~173%

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

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

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

~~Table of Contents~~

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

The following table shows the changes in the fair value of ~~our~~the Level 3 ~~Physical~~ Liquefaction Supply Derivatives ~~including those with related parties~~ (in millions):

Three Months Ended March 31,
2022 2021
Balance, beginning of period $ (1,221) $ 12
Realized and mark-to-market losses:
Included in cost of sales (1,170) (66)
Purchases and settlements:
Purchases (5) 3
Settlements 161 37
Balance, end of period $ (2,235) $ (14)
Change in unrealized loss relating to instruments still held at end of period $ (1,170) $ (66)


	Three Months Ended March 31,
		2023		2022
Balance, beginning of period		$	(6,205)	$	(1,221)
Realized and change in fair value gains (losses) included in net income (1):
Included in cost of sales, existing deals (2)		3,048		(1,170)
Included in cost of sales, new deals (3)		—		—
Purchases and settlements:
Purchases (4)		—		(5)
Settlements (5)		233		161



Balance, end of period		$	(2,924)	$	(2,235)
Favorable (unfavorable) changes in fair value relating to instruments still held at the end of the period		$	3,048	$	(1,170)

(1)Does not include the realized value associated with derivative instruments that settle through physical delivery, as settlement is equal to contractually fixed price from trade date multiplied by contractual volume. See settlements line item in this table.

(2)Impact to earnings on deals that existed at the beginning of the period and continue to exist at the end of the period.

(3)Impact to earnings on deals that were entered into during the reporting period and continue to exist at the end of the period.

(4)Includes any day one gain (loss) recognized during the reporting period on deals that were entered into during the reporting period which continue to exist at the end of the period, in addition to any derivative contracts acquired from entities at a value other than zero on acquisition date, such as derivatives assigned or novated during the reporting period and continuing to exist at the end of the period.

(5)Roll-off in the current period of amounts recognized in our Consolidated Balance Sheets at the end of the previous period due to settlement of the underlying instruments in the current period.

~~Except for Interest Rate Derivatives, 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 those derivative contracts with the same counterparty and the unconditional contractual right of set-off on a net basis. The use of derivative instruments exposes usCCL to counterparty credit risk, or the risk that a counterparty will be unable to meet its commitments, in instances when ~~our~~the derivative instruments are in an asset position. Additionally, counterparties are at risk that weCCL will be unable to meet ~~our~~its commitments in instances where ~~our~~the derivative instruments are in a liability position. We incorporate both ~~our own~~CCL’s nonperformance risk and the respective counterparty’s nonperformance risk in fair value ~~measurements.~~measurements depending on the position of the derivative. In adjusting the fair value of ~~our~~the 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~~

~~We have 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.~~

~~As of March 31, 2022, we had the following Interest Rate Derivatives outstanding:~~

~~Notional Amounts~~

~~March 31, 2022~~

~~December 31, 2021~~

~~Latest Maturity Date~~

~~Weighted Average Fixed Interest Rate Paid~~

~~Variable Interest Rate Received~~

~~Interest Rate Derivatives~~

~~$4.5 billion~~

~~May 31, 2022~~

~~2.30%~~

~~One-month LIBOR~~

~~The following table shows the effect and location of our Interest Rate Derivatives on our Consolidated Statements of Operations (in millions):~~

Gain (Loss) Recognized in Consolidated Statements of Operations
Consolidated Statements of Operations Location Three Months Ended March 31,
2022 2021
Interest Rate Derivatives Interest rate derivative gain, net $ 3 $ 1

Liquefaction Supply Derivatives

CCL ~~has entered into primarily index-based~~holds Liquefaction Supply ~~Derivatives.~~Derivatives which are primarily indexed to the natural gas market and international LNG indices. The ~~remaining~~ terms of the ~~physical natural gas supply contracts~~Liquefaction Supply Derivatives range up to approximately 15 years, some of which commence upon the satisfaction of certain ~~conditions precedent. The terms~~events or states of ~~the Financial Liquefaction Supply Derivatives range up to approximately three years.~~affairs.

The forward notional amount for ~~our~~the Liquefaction Supply Derivatives was approximately ~~2,889~~8,332 TBtu and ~~2,915~~8,532 TBtu as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

~~Table of Contents~~

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

The following table shows the effect and location of ~~our~~the Liquefaction Supply Derivatives recorded on our Consolidated Statements of Operations (in millions):


			Gain (Loss) Recognized in Consolidated Statements of Operations							Gain (Loss) Recognized in Consolidated Statements of Operations
Consolidated Statements of Operations Location (1)	Consolidated Statements of Operations Location (1)	Three Months Ended March 31,			Consolidated Statements of Operations Location (1)			Three Months Ended March 31,
			2022			2021			Consolidated Statements of Operations Location (1)		2023		2022
LNG revenues	LNG revenues		$	(5)		$	1				$	(5)	$	(5)
Cost of sales			(1,050)			(11)
Cost of sales—related party (2)			—			1
Recovery (cost) of sales									Recovery (cost) of sales		3,411		(1,050)

(1)Does not include the ~~realized~~ value associated with derivative instruments that settle through physical delivery. 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)~~Includes amounts recorded related to natural gas supply contracts that we had with a related party. This agreement ceased to be considered a related party agreement as of November 1, 2021 as discussed in ~~Note 1~~0 ~~—Related Party Transactions~~.

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~~the Liquefaction Supply Derivatives on our Consolidated Balance Sheets (in millions):


		March 31, 2022							Fair Value Measurements as of (1)
		Interest Rate Derivatives		Liquefaction Supply Derivatives (1)		Total				March 31, 2023		December 31, 2022
Consolidated Balance Sheets Location	Consolidated Balance Sheets Location							Consolidated Balance Sheets Location
Current derivative assets	Current derivative assets	$	—	$	21	$	21	Current derivative assets		$	20	$	12

Derivative assets	Derivative assets	—		13		13		Derivative assets		168		7

Total derivative assets	Total derivative assets	—		34		34		Total derivative assets		188		19

Current derivative liabilities	Current derivative liabilities	(12)		(1,065)		(1,077)		Current derivative liabilities		(818)		(1,374)
Derivative liabilities	Derivative liabilities	—		(1,231)		(1,231)		Derivative liabilities		(2,250)		(4,923)
Total derivative liabilities	Total derivative liabilities	(12)		(2,296)		(2,308)		Total derivative liabilities		(3,068)		(6,297)

Derivative liability, net	Derivative liability, net	$	(12)	$	(2,262)	$	(2,274)	Derivative liability, net		$	(2,880)	$	(6,278)

		December 31, 2021
		Interest Rate Derivatives		Liquefaction Supply Derivatives (1)		Total
Consolidated Balance Sheets Location
Current derivative assets		$	—	$	17	$	17

Derivative assets		—		37		37

Total derivative assets		—		54		54

Current derivative liabilities		(40)		(628)		(668)
Derivative liabilities		—		(638)		(638)
Total derivative liabilities		(40)		(1,266)		(1,306)

Derivative liability, net		$	(40)	$	(1,212)	$	(1,252)

(1)Does not include collateral posted with counterparties by usCCL of ~~$64~~$14 million and ~~$13~~$76 million as of March 31, 2023 and December 31, 2022, respectively, which are included in ~~other current assets~~margin deposits in our Consolidated Balance ~~Sheets as of March 31, 2022 and December 31, 2021, respectively.~~Sheets.

~~Table of Contents~~

~~CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

Consolidated Balance Sheets Presentation

~~Our~~The following table shows the fair value of the derivatives outstanding on a gross and net basis (in millions) for the derivative instruments that 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):~~Sheets:


	~~Liquefaction Supply Derivatives~~

~~As of March 31, 2022~~
~~Gross assets~~	$	39
~~Offsetting amounts~~	~~(5)~~
~~Net assets~~	$	34

~~Gross liabilities~~	$	~~(2,307)~~
~~Offsetting amounts~~	11
~~Net liabilities~~	$	~~(2,296)~~

~~As of December 31, 2021~~
~~Gross assets~~	$	76
~~Offsetting amounts~~	~~(22)~~
~~Net assets~~	$	54

~~Gross liabilities~~	$	~~(1,295)~~
~~Offsetting amounts~~	29
~~Net liabilities~~	$	~~(1,266)~~

~~NOTE 7—ACCRUED LIABILITIES~~

~~Accrued liabilities consisted of the following (in millions):~~

March 31, December 31,
2022 2021
Accrued natural gas purchases $ 464 $ 531
Interest costs and related debt fees 110 7
Liquefaction Project costs 41 43
Other accrued liabilities 17 50
Total accrued liabilities $ 632 $ 631


	Liquefaction Supply Derivatives
	March 31, 2023		December 31, 2022
Gross assets	$	281	$	19
Offsetting amounts	(93)		—
Net assets	$	188	$	19

Gross liabilities	$	(3,268)	$	(6,622)
Offsetting amounts	200		325
Net liabilities	$	(3,068)	$	(6,297)

1211

~~Table of Contents~~

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE ~~8—DEBT~~7—ACCRUED LIABILITIES

~~Our debt~~Accrued liabilities consisted of the following (in millions):

March 31, December 31,
2022 2021
Senior Secured Notes:
7.000% due 2024 $ 1,250 $ 1,250
5.875% due 2025 1,500 1,500
5.125% due 2027 1,500 1,500
3.700% due 2029 1,500 1,500
3.72% weighted average rate due 2039 2,721 2,721
Total Senior Secured Notes 8,471 8,471
CCH Credit Facility (1) 1,439 1,728
$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”) (2) — 250
Total debt 9,910 10,449
Current portion of long-term debt (62) (117)
Short-term debt — (250)
Unamortized discount and debt issuance costs, net (91) (96)
Total long-term debt, net of discount and debt issuance costs $ 9,757 $ 9,986



	March 31,		December 31,
	2023		2022
Natural gas purchases	$	262	$	597
Interest costs and related debt fees	77		150
Liquefaction Project costs	41		103
Other accrued liabilities	18		51
Total accrued liabilities	$	398	$	901

NOTE 8—DEBT

Debt consisted of the following (in millions):



	March 31,		December 31,
	2023		2022
Senior Secured Notes:
2024 CCH Senior Notes	$	—	$	498
5.875% due 2025	1,491		1,491
5.125% due 2027	1,201		1,271
3.700% due 2029	1,125		1,361
3.788% weighted average rate due 2039	2,541		2,633
Total Senior Secured Notes	6,358		7,254
CCH Credit Facility	—		—
CCH Working Capital Facility (1)	—		—
Total debt	6,358		7,254

Current portion of long-term debt	—		(495)

Long-term portion of unamortized discount and debt issuance costs, net	(51)		(61)
Total long-term debt, net of discount and debt issuance costs	$	6,307	$	6,698

(1)~~A portion of the outstanding balance that is due within one year is classified as current portion of long-term debt.~~

~~(2)~~The CCH Working Capital Facility is classified as short-term ~~debt.~~debt as we are required to reduce the aggregate outstanding principal amount of the CCH Working Capital Facility to zero for a period of five consecutive business days at least once each year.

Credit Facilities

Below is a summary of our credit facilities outstanding as of March 31, ~~2022~~2023 (in millions):

CCH Credit Facility

CCH Working Capital Facility

CCH Credit Facility

CCH Working Capital Facility

Total facility size

1,439

1,200

Total facility size

3,260

1,500

Less:

Outstanding balance

1,439

—

Outstanding balance

—

Letters of credit issued

—

276

Letters of credit issued

—

162

Available commitment

—

924

Available commitment

3,260

1,338

Priority ranking

Senior secured

Priority ranking

Senior secured

Interest rate on available balance(1)

LIBOR plus 1.75% or base rate plus 0.75% (1)

LIBOR plus 1.25% - 1.75% or base rate plus 0.25% - 0.75% (1)

Interest rate on available balance(1)

SOFR plus credit spread adjustment of 0.1%, plus margin of 1.5% or base rate plus 0.5%

SOFR plus credit spread adjustment of 0.1%, plus margin of 1.0% - 1.5% or base rate plus 0.0% - 0.5%

Weighted average interest rate of outstanding balance

2.21%

n/a

Commitment fees on undrawn balance(1)

n/a

0.50%

Commitment fees on undrawn balance(1)

0.525%

0.10% - 0.20%

Maturity date

June 30, 2024

June 29, 2023

Maturity date

(2)

June 15, 2027

(1)~~These facilities were amended in 2021~~The margin on the interest rate and the commitment fees is subject to ~~establish~~change based on the applicable entity’s credit rating.

(2)The CCH Credit Facility matures the earlier of June 15, 2029 or two years after the substantial completion of the last Train of the Corpus Christi Stage 3 Project.

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

Cancellation of CCH Senior Secured Notes Contributed from Cheniere

During the three months ended March 31, 2023, Cheniere repurchased $398 million of our Senior Secured Notes due 2027, 2029 and 2039 on the open market, with all of such repurchases immediately contributed to us from Cheniere for no consideration, and cancelled by us. It was determined that for accounting purposes, Cheniere repurchased the bonds on our behalf as a ~~SOFR-indexed replacement rate~~principal as opposed to as an agent, and thus the debt extinguishment was accounted for ~~LIBOR.~~as an extinguishment directly with Cheniere.

Additionally, we recorded a net distribution from Cheniere totaling $2 million from associated operating activities, inclusive of $2 million of interest due to the extinguishment of debt at the time of repayment offset by our write off of associated debt issuance costs and discount of $4 million.

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 and our restricted subsidiaries’ ability to make certain investments or pay dividends or distributions. We are restricted from making distributions under agreements governing our indebtedness generally until, among other requirements, appropriate reserves have been established for debt service using cash or letters of credit and a historical debt service coverage ratio and projected debt service coverage ratio of at least 1.25:1.00 is satisfied.

As of March 31, ~~2022,~~2023, we were in compliance with all covenants related to our debt agreements.

~~Table of Contents~~

~~CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

Interest Expense

Total interest expense, net of capitalized interest, consisted of the following (in millions):

Three Months Ended March 31,
2022 2021
Total interest cost $ 119 $ 119
Capitalized interest, including amounts capitalized as an allowance for funds used during construction (1) (26)
Total interest expense, net of capitalized interest $ 118 $ 93


	Three Months Ended March 31,
		2023		2022
Total interest cost		$	83	$	119
Capitalized interest		(20)		(1)
Total interest expense, net of capitalized interest		$	63	$	118

Fair Value Disclosures

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


		March 31, 2022				December 31, 2021					March 31, 2023				December 31, 2022
		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Senior notes — Level 2 (1)	Senior notes — Level 2 (1)	$	6,500	$	6,675	$	6,500	$	7,095	Senior notes — Level 2 (1)	$	4,387	$	4,210	$	5,283	$	5,014
Senior notes — Level 3 (2)	Senior notes — Level 3 (2)	1,971		2,059		1,971		2,227		Senior notes — Level 3 (2)	1,971		1,853		1,971		1,738

(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 interest rates based on debt issued by parties with comparable credit ratings to us and inputs that are not observable in the market.

The estimated fair value of our credit facilities approximates the principal amount outstanding 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.

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE 9—REVENUES ~~FROM CONTRACTS WITH CUSTOMERS~~

The following table represents a disaggregation of revenue earned ~~from contracts with customers~~ (in millions):


		Three Months Ended March 31,					Three Months Ended March 31,
			2022		2021				2023		2022
Revenues from contracts with customers								Revenues from contracts with customers
LNG revenues	LNG revenues		$	1,329	$	614		LNG revenues	$	1,098	$	1,329
LNG revenues—affiliate	LNG revenues—affiliate		671		268			LNG revenues—affiliate	555		671
Total revenues from customers			2,000		882
Net derivative gain (loss) (1)			(5)		1
Total revenues from contracts with customers								Total revenues from contracts with customers	1,653		2,000
Net derivative loss (1)								Net derivative loss (1)	(5)		(5)
Total revenues	Total revenues		$	1,995	$	883		Total revenues	$	1,648	$	1,995

(1)SeeNote 6—6 —Derivative Instruments for additional information about our derivatives.

Contract Assets and Liabilities

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

March 31, December 31,
2022 2021
Contract assets, net of current expected credit losses $ 115 $ 104



	March 31,		December 31,
	2023		2022
Contract assets, net of current expected credit losses	$	154	$	144

~~Table of Contents~~

~~CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

The following table reflects the changes in our contract liabilities, which we classify as other non-current liabilities on our Consolidated Balance Sheets (in millions):



	Three Months Ended March 31, ~~2022~~2023
Deferred revenue, beginning of period	$	3576
Cash received but not yet recognized in revenue	4576
Revenue recognized from prior period deferral	~~(35)~~(76)
Deferred revenue, end of period	$	4576

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, 2022 and December 31, 2021:~~satisfied:


		March 31, 2022			December 31, 2021				March 31, 2023			December 31, 2022
		Unsatisfied Transaction Price (in billions)		Weighted Average Recognition Timing (years) (1)	Unsatisfied Transaction Price (in billions)		Weighted Average Recognition Timing (years) (1)		Unsatisfied Transaction Price (in billions)		Weighted Average Recognition Timing (years) (1)	Unsatisfied Transaction Price (in billions)		Weighted Average Recognition Timing (years) (1)
LNG revenues	LNG revenues	$	32.6	9	$	31.7	9	LNG revenues	$	50.5	10	$	50.9	10
LNG revenues—affiliate	LNG revenues—affiliate	1.0		10	1.1		10	LNG revenues—affiliate	1.2		9	1.2		8
Total revenues	Total revenues	$	33.6		$	32.8		Total revenues	$	51.7		$	52.1

(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. 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

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

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. Additionally, we have excluded variable consideration related to contracts where there is uncertainty that one or both of the parties will achieve certain milestones. Approximately ~~64%~~55% and ~~47%~~64% of our LNG revenues from contracts included in the table above during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, were related to variable consideration received from customers. Approximately 83% of our LNG revenues—affiliate from contracts included in the table above during the three months ended March 31, 2023 were related to variable consideration received from customers. Noneof our LNG revenues—affiliates from the contract included in the table above were related to variable consideration received from customers during the three months ended March 31, ~~2022 and 2021.~~2022.

We may enter into contracts to sell LNG that are conditioned upon one or both of the parties achieving certain milestones such as reaching ~~a final investment decision~~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.

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~~CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

NOTE 10—RELATED PARTY TRANSACTIONS

Below is a summary of our related party transactions as reported on our Consolidated Statements of Operations (in millions):

Three Months Ended March 31,
2022 2021
LNG revenues—affiliate
Cheniere Marketing Agreements $ 665 $ 260
Contracts for Sale and Purchase of Natural Gas and LNG 6 8
Total LNG revenues—affiliate 671 268
Cost of sales—affiliate
Contracts for Sale and Purchase of Natural Gas and LNG 12 4
Cheniere Marketing Agreements — 31
Total cost of sales—affiliate 12 35
Cost of sales—related party
Natural Gas Supply Agreement (1) — 35
Operating and maintenance expense—affiliate
Services Agreements 30 24
Operating and maintenance expense—related party
Natural Gas Transportation Agreements 2 2
General and administrative expense—affiliate
Services Agreements 8 5


	Three Months Ended March 31,
		2023		2022
LNG revenues—affiliate
Cheniere Marketing Agreements (1)		$	555	$	665
Contracts for Sale and Purchase of Natural Gas and LNG (2)		—		6
Total LNG revenues—affiliate		555		671




Cost of sales—affiliate
Contracts for Sale and Purchase of Natural Gas and LNG (2)		15		12








Operating and maintenance expense—affiliate
Services Agreements (3)		30		30




Operating and maintenance expense—related party
Natural Gas Transportation Agreements (4)		2		2




General and administrative expense—affiliate
Services Agreements (3)		12		8

(1)~~Includes amounts recorded related~~CCL primarily sells LNG to ~~natural gas supply contracts that we had with a related party. This agreement ceased to be considered a related party agreement as of December 31, 2021 as discussed below.~~

~~We had $18 million and $35 million due to affiliates as of March 31, 2022 and December 31, 2021, respectively, under agreements with affiliates, as described below.~~

~~Cheniere Marketing Agreements~~

~~Cheniere Marketing SPA~~

~~CCL has a fixed price SPA with~~ Cheniere Marketing International LLP (“Cheniere Marketing”), a wholly owned subsidiary of Cheniere, ~~(the “Cheniere Marketing Base SPA”) with~~under SPAs and a ~~term~~letter agreement at a price equal to 115% of 20 years which allows Cheniere Marketing to purchase, at its option, (1) up to a cumulative total of 150 TBtu of LNG within the commissioning periods for Trains 1 through 3 and (2) any excess LNG produced by the Liquefaction Project that is not committed to customers under third party SPAs. Under the Cheniere Marketing Base SPA, Cheniere Marketing may, without charge, elect to suspend deliveries of cargoes (other than commissioning cargoes) scheduled for any month under the applicable annual delivery program by providing specified notice in advance. Additionally, CCL has: (1)Henry Hub plus a fixed ~~price SPA with a term through 2043 with Cheniere Marketing which allows them to purchase volumes of approximately 15 TBtu per annum of LNG and (2) an SPA with Cheniere Marketing~~fee, except for ~~approximately 44 TBtu of LNG with a maximum term up to 2026~~SPAs associated with ~~the integrated production marketing~~IPM agreements for which pricing is linked to international natural gas ~~supply agreement between~~prices. In addition, CCL and EOG Resources, Inc. As of March 31, 2022 and December 31, 2021, CCL had $317 million and $314 million of accounts receivable—affiliate, respectively, under these agreements with Cheniere Marketing.

~~Facility Swap Agreement~~

~~We have entered into~~has an arrangement with subsidiaries of Cheniere to provide the ability, in limited circumstances, to potentially fulfill commitments to LNG buyers in the event operational conditions impact operations at either the Sabine Pass or Corpus Christi liquefaction facilities. The purchase price for such cargoes would be ~~(i)~~the greater of: (a) 115% of the applicable natural gas feedstock purchase price or ~~(ii) a free-on-board~~(b) an FOB U.S. Gulf Coast LNG market ~~price, whichever is greater.~~

~~Table~~price. As of ~~Contents~~

~~CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

~~Services Agreements~~

~~Gas and Power Supply Services Agreement (“G&P Agreement”)~~

CCL has a G&P Agreement with Cheniere Energy Shared Services, Inc. (“Shared Services”), a wholly owned subsidiary of Cheniere, pursuant to which Shared Services will manage the gas and power procurement requirements of CCL. The services include, among other services, exercising the day-to-day management of CCL’s natural gas and power supply requirements, negotiating agreements on CCL’s behalf and providing other administrative services. Prior to the substantial completion of each Train of the Liquefaction Project, no monthly fee payment is required except for reimbursement of operating expenses. After substantial completion of each Train of the Liquefaction Project, for services performed while the Liquefaction Project is operational, CCL will pay, in addition to the reimbursement of operating expenses, a fixed monthly fee of $125,000 (indexed for inflation) for services with respect to such Train.

~~Operation and Maintenance Agreements (“O&M Agreements”)~~

CCL has an O&M Agreement (“CCL O&M Agreement”) with Cheniere LNG O&M Services, LLC (“O&M Services”), a wholly owned subsidiary of Cheniere, pursuant to which CCL receives all of the necessary services required to construct, operate and maintain the Liquefaction Project. The services to be provided include, among other services, preparing and maintaining staffing plans, identifying and arranging for procurement of equipment and materials, overseeing contractors, administering various agreements, information technology services and other services required to operate and maintain the Liquefaction Project. Prior to the substantial completion of each Train of the Liquefaction Project, no monthly fee payment is required except for reimbursement of operating expenses. After substantial completion of each Train of the Liquefaction Project, for services performed while the Liquefaction Project is operational, CCL will pay, in addition to the reimbursement of operating expenses, a fixed monthly fee of $125,000 (indexed for inflation) for services with respect to such Train.

CCP has an O&M Agreement (“CCP O&M Agreement”) with O&M Services pursuant to which CCP receives all of the necessary services required to construct, operate and maintain the Corpus Christi Pipeline. The services to be provided include, among other services, preparing and maintaining staffing plans, identifying and arranging for procurement of equipment and materials, overseeing contractors, information technology services and other services required to operate and maintain the Corpus Christi Pipeline. CCP is required to reimburse O&M Services for all operating expenses incurred on behalf of CCP.

~~Management Services Agreements (“MSAs”)~~

CCL has a MSA with Shared Services pursuant to which Shared Services manages the construction and operation of the Liquefaction Project, excluding those matters provided for under the G&P Agreement and the CCL O&M Agreement. The services include, among other services, exercising the day-to-day management of CCL’s affairs and business, managing CCL’s regulatory matters, preparing status reports, providing contract administration services for all contracts associated with the Liquefaction Project and obtaining insurance. Prior to the substantial completion of each Train of the Liquefaction Project, no monthly fee payment is required except for reimbursement of expenses. After substantial completion of each Train, CCL will pay, in addition to the reimbursement of related expenses, a monthly fee equal to 3% of the capital expenditures incurred in the previous month and a fixed monthly fee of $375,000 for services with respect to such Train.

CCP has a MSA with Shared Services pursuant to which Shared Services manages CCP’s operations and business, excluding those matters provided for under the CCP O&M Agreement. The services include, among other services, exercising the day-to-day management of CCP’s affairs and business, managing CCP’s regulatory matters, preparing status reports, providing contract administration services for all contracts associated with the Corpus Christi Pipeline and obtaining insurance. CCP is required to reimburse Shared Services for the aggregate of all costs and expenses incurred in the course of performing the services under the MSA.

~~Natural Gas Supply Agreement~~

CCL is party to a natural gas supply agreement with a related party in the ordinary course of business, to obtain a fixed minimum daily volume of feed gas for the operation of the Liquefaction Project. The related party entity was acquired by a non-related party on November 1, 2021; therefore, as of such date, this agreement ceased to be considered a related party transaction.

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~~CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

~~Natural Gas Transportation Agreements~~

~~Agreements with Related Party~~

CCL is party to natural gas transportation agreements with a related party in the ordinary course of business for the operation of the Liquefaction Project, for a period of 10 years which began in May 2020. Cheniere accounts for its investment in this related party as an equity method investment. In addition to the amounts recorded on our Consolidated Statements of Operations in the table above, CCL recorded accrued liabilities—related party of $1 million as of both March 31, ~~2022~~2023 and December 31, ~~2021 related to this agreement.~~

~~Agreements~~2022, CCL had $157 million and $223 million of trade receivables—affiliate, respectively, under these agreements with Cheniere ~~Corpus Christi Liquefaction Stage III, LLC~~

Marketing.

Cheniere Corpus Christi Liquefaction Stage III, LLC, a wholly owned subsidiary of Cheniere, has a transportation precedent agreement with CCP to secure firm pipeline transportation capacity for the transportation of natural gas feedstock to the expansion of the Corpus Christi LNG Terminal it is constructing adjacent to the Liquefaction Project. The agreement will have a primary term of 20 years from the service commencement date with right to extend the term for 2 successive (2)~~five-year terms.~~

~~Contracts for Sale and Purchase of Natural Gas and LNG~~

CCL has an agreement with Sabine Pass Liquefaction, LLC (“SPL”) that allows ~~them~~the parties to sell and purchase natural gas with each other. Natural gas purchased under this agreement is initially recorded as inventory and then to cost of sales—affiliate upon its sale, except for purchases related to commissioning activities which are capitalized as LNG terminal construction-in-process. ~~Natural gas sold~~As of March 31, 2023 and December 31, 2022, CCL had zero and $16 million of accounts receivable—affiliate, respectively, under ~~this agreement is recorded as LNG revenues—affiliate.~~

~~CCL also has an agreement with Midship Pipeline Company, LLC that allows them to sell and purchase natural gas with each other.~~

~~Land Agreements~~

~~Lease Agreements~~

~~CCL has~~these agreements with Cheniere Land Holdings, LLC (“Cheniere Land Holdings”), a wholly owned subsidiary of Cheniere, to lease the land owned by Cheniere Land Holdings for the Liquefaction Project. The total annual lease payment is $0.6 million and the terms of the agreements range from ~~three~~SPL. ~~to 10 years.~~

~~Easement Agreements~~

CCL has agreements with Cheniere Land Holdings which grant CCL easements on land owned by Cheniere Land Holdings for the Liquefaction Project. The total annual payment for easement agreements is $0.1 million, excluding any previously paid one-time payments, and the terms of the agreements range from ~~three~~ ~~to five years.~~

~~Dredge Material Disposal Agreement~~

CCL has a dredge material disposal agreement with Cheniere Land Holdings that terminates in 2042 which grants CCL permission to use land owned by Cheniere Land Holdings for the deposit of dredge material from the construction and maintenance of the Liquefaction Project. Under the terms of the agreement, CCL will pay Cheniere Land Holdings $0.50 per cubic yard of dredge material deposits up to 5.0 million cubic yards and $4.62 per cubic yard for any quantities above that.

~~Tug Hosting Agreement~~

In February 2017, CCL entered into a tug hosting agreement with Corpus Christi Tug Services, LLC (“Tug Services”), a wholly owned subsidiary of Cheniere, to provide certain marine structures, support services and access necessary at the Liquefaction Project for Tug Services to provide its customers with tug boat and marine services. Tug Services is required to reimburse CCL for any third party costs incurred by CCL in connection with providing the goods and services.

1815

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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

(3)We do not have employees and thus our subsidiaries have various services agreements with affiliates of Cheniere in the ordinary course of business, including services required to construct, operate and maintain the Liquefaction Project, and administrative services. Prior to the substantial completion of each Train of the Liquefaction Project, our payments under the services agreements are primarily based on a cost reimbursement structure, and following the completion of each Train, our payments include a fixed monthly fee (indexed for inflation) per mtpa in addition to the reimbursement of costs. As of March 31, 2023 and December 31, 2022, we had $93 million and $132 million of advances to affiliates, respectively, under the services agreements. The non-reimbursement amounts incurred under these agreements are recorded in general and administrative expense—affiliate.

(4)CCL is party to natural gas transportation agreements with a related party in the ordinary course of business for the operation of the Liquefaction Project. CCL had accrued liabilities—related party of $1 million as of both March 31, 2023 and December 31, 2022 with this related party.

We had $26 million and $43 million due to affiliates as of March 31, 2023 and December 31, 2022, respectively, under agreements with affiliates as described above.

Disclosure of future consideration under revenue contracts with affiliates is included in Note 9 —Revenues.

Other Agreements

State Tax Sharing Agreements

CCL ~~has~~and CCP each have a state tax sharing agreement with Cheniere. Under ~~this agreement,~~these agreements, Cheniere has agreed to prepare and file all state and local tax returns which ~~CCL~~each of the entities and Cheniere are required to file on a combined basis and to timely pay the combined state and local tax liability. If Cheniere, in its sole discretion, demands payment, ~~CCL~~each of the respective entities will pay to Cheniere an amount equal to the state and local tax that ~~CCL~~each of the entities would be required to pay if ~~CCL’s~~its state and local tax liability were calculated on a separate company basis. To date, there have been no state and local tax payments demanded by Cheniere under the tax sharing ~~agreement.~~agreements. The ~~agreement is effective~~agreements for ~~tax returns due on or after May 2015.~~

both CCL and CCP has a state tax sharing agreement with Cheniere. Under this agreement, Cheniere has agreed to prepare and file all state and local tax returns which CCP and Cheniere are required to file on a combined basis and to timely pay the combined state and local tax liability. If Cheniere, in its sole discretion, demands payment, CCP will pay to Cheniere an amount equal to the state and local tax that CCP would be required to pay if CCP’s state and local tax liability were ~~calculated on a separate company basis. To date, there have been no state and local tax payments demanded by Cheniere under the tax sharing agreement. The agreement is~~ effective for tax returns due on or after May 2015.

Equity Contribution Agreements

~~Equity Contribution Agreement~~

~~In May 2018, we amended and restated the existing~~We have equity contribution ~~agreement~~agreements with Cheniere and certain of its subsidiaries (the “Equity Contribution ~~Agreement”~~Agreements”) pursuant to which Cheniere agreed to ~~provide cash contributions up~~contribute any of CCH’s Senior Secured Notes that Cheniere has repurchased to ~~approximately $1.1 billion, not including $2.0 billion previously contributed under~~CCH. During the ~~original equity contribution agreement. As of~~three months ended March 31, ~~2022, we have received $841~~2023, Cheniere repurchased a total of $398 million ~~in contributions~~of the outstanding principal amount of CCH’s Senior Secured Notes due 2027, 2029 and 2039 on the open market, which were immediately contributed under the Equity Contribution ~~Agreement~~Agreements to us from Cheniere and Cheniere has no outstanding letters of credit on our behalf. Cheniere is only required to make additional contributions under the Equity Contribution Agreement after the commitments under the CCH Credit Facility have been reduced to zero and to the extent cash flows from operations of the Liquefaction Project are unavailable for Liquefaction Project costs.cancelled by us.

Arrangement with ADCC Pipeline, LLC

In June 2022, Cheniere acquired a 30% equity interest in ADCC Pipeline, LLC and its wholly owned subsidiary (collectively, “ADCC Pipeline”) through its wholly owned subsidiary Cheniere ADCC Investments, LLC. ADCC Pipeline will develop, construct and operate an approximately 42-mile natural gas pipeline project (the “ADCC Pipeline Project”) connecting the Agua Dulce natural gas hub to the CCL Project. CCL is party to a natural gas transportation agreement with ADCC Pipeline for the operation of the CCL Project, with an initial term of 20 years with extension rights, which will commence upon the completion of the ADCC Pipeline Project.

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

NOTE 11—CUSTOMER CONCENTRATION

The ~~following table shows external customers with revenues~~concentration of our customer credit risk in excess of 10% or greater of total revenues ~~from external customers and external customers with~~and/or trade and other receivables net of current expected credit losses and contract assets, net of current expected credit losses balances of 10% or greater of total trade and other receivables, net of current expected credit losses from external customers and contract assets, net of current expected credit losses from external customers, respectively:was as follows:


			Percentage of Total Revenues from External Customers		Percentage of Trade and Other Receivables, Net and Contract Assets, Net from External Customers					Percentage of Total Revenues from External Customers		Percentage of Trade and Other Receivables, Net and Contract Assets, Net from External Customers

		Three Months Ended March 31,			March 31,	December 31,			Three Months Ended March 31,			March 31,	December 31,
			2022	2021		2022	2021				2023	2022		2023	2022
Customer A	Customer A		26%	22%		21%	*	Customer A			23%	26%		*	17%
Customer B	Customer B		14%	21%		*	*	Customer B			14%	14%		*	*
Customer C	Customer C		12%	18%		11%	*	Customer C			15%	12%		*	*
Customer D	Customer D		*	*		32%	31%	Customer D			*	*		48%	33%
Customer E	Customer E		*	—		—	11%	Customer E			*	*		11%	*
Customer F			*	*		10%	*

* Less than 10%

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~~CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED~~

~~(unaudited)~~

NOTE 12—SUPPLEMENTAL CASH FLOW INFORMATION

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

Three Months Ended March 31,
2022 2021
Cash paid during the period for interest, net of amounts capitalized $ 11 $ 12
Non-cash investing activities:
Property, plant and equipment, net of accumulated depreciation funded with accounts payable and accrued liabilities (including affiliate) 7 174


	Three Months Ended March 31,
	2023		2022
Cash paid during the period for interest on debt, net of amounts capitalized	$	115	$	11


Non-cash investing activity:
Unpaid purchases of property, plant and equipment	38		18


Non-cash financing activity:
Cancellation of CCH Senior Secured Notes contributed to us from Cheniere (see Note 8)	398		—

2017

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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED

(unaudited)

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 regarding our expected receipt of cash distributions from our subsidiaries;

•statements that we expect to commence or complete construction of our proposed LNG terminal, liquefaction facility, pipeline facility 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 our future sources of liquidity and cash requirements;

•statements relating to the construction of our Trains and pipeline, 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 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 and pipelines, including the financing of such Trains and 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 the COVID-19 pandemic and its impact on our business and operating results, including any customers not taking delivery of LNG cargoes, the ongoing creditworthiness of our contractual counterparties, any disruptions in our operations or construction of our Trains and the health and safety of Cheniere’s 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

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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, ~~2021~~2022. All forward-looking statements attributable to

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us or persons acting on our behalf are expressly qualified in their entirety by these risk factors. These forward-looking statements speak only as of the date made, and other than as required by law, we undertake no obligation to update or revise any forward-looking statement or provide reasons why actual results may differ, whether as a result of new information, future events or otherwise.

Introduction

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

Our discussion and analysis includes the following subjects:

•Overview

•Overview of Significant Events

•Results of Operations

•Liquidity and Capital Resources

•Summary of Critical Accounting Estimates

•Recent Accounting Standards

Overview

We are a Delaware limited liability company formed in ~~September~~ 2014 by Cheniere. We provide clean, secure and affordable LNG to integrated energy companies, utilities and energy trading companies around the world. We aspire to conduct our business in a safe and responsible manner, delivering a reliable, competitive and integrated source of LNG to our customers.

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

We own and operate a natural gas liquefaction and export facility located near Corpus Christi, Texas (the “Corpus Christi LNG Terminal”) through CCL, which has natural gas liquefaction facilities consisting of three operational Trains for a total production capacity of approximately 15 mtpa of ~~LNG.~~LNG, three LNG storage tanks with aggregate capacity of approximately 10 Bcfe and two marine berths that can each accommodate vessels with nominal capacity of up to 266,000 cubic meters. Additionally, we are constructing an expansion of the Corpus Christi LNG Terminal (the “Corpus Christi Stage 3 Project”) for up to seven midscale Trains with an expected total production capacity of over 10 mtpa of LNG. In June 2022, Cheniere’s board of directors (the “Board”) made a positive FID with respect to the Corpus Christi Stage 3 Project and issued a full notice to proceed with construction to Bechtel Energy Inc. (“Bechtel”) effective June 16, 2022.

We also own and operate through CCP a 21.5-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,~~Corpus Christi LNG Terminal and the Corpus Christi Stage 3 Project, the “Liquefaction Project”). ~~The Liquefaction Project also includes three LNG storage tanks and two marine berths.~~

Our long-term customer arrangements form the foundation of our business and provide us with significant, stable, ~~and~~ long-term cash flows. We ~~contract~~have contracted most of our anticipated production capacity under SPAs, in which our customers are generally required to pay a fixed fee with respect to the contracted volumes irrespective of their election to cancel or suspend deliveries of LNG cargoes, and under IPM agreements, in which the gas producer sells natural gas to us on a global LNG index price, less a fixed liquefaction fee, shipping and other costs. ~~Our long-term customer arrangements form the foundation~~Through our SPAs and IPM agreements, we have contracted

Table of ~~our business and provide us with significant, stable, long-term cash flows. We have contracted~~ Contents

approximately ~~85%~~88% of the total anticipated production capacity from the Liquefaction Project with approximately 18 years of weighted average remaining life as of March 31, ~~2022. In March 2022, the DOE authorized the export of an additional~~

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108.16 Bcf/yr of domestically produced LNG by vessel from the Corpus Christi LNG Terminal through December 31, 2050 to non-FTA countries, that were previously authorized for FTA countries only. For further discussion of the contracted future cash flows under our revenue arrangements, see the liquidity and capital resources disclosures in our ~~annual report on Form 10-K for the fiscal year ended December 31, 2021~~.2023.

We remain focused on safety, operational excellence and customer satisfaction. Increasing demand for LNG has allowed us to expand our liquefaction infrastructure in a financially disciplined manner. We have increased available liquefaction capacity at our Liquefaction Project as a result of debottlenecking and other optimization projects. We hold a significant land position at the Corpus Christi LNG Terminal, which provides opportunity for further liquefaction capacity expansion. In March 2023, CCL and another subsidiary of Cheniere submitted an application with the FERC under the Natural Gas Act (“NGA”) for an expansion adjacent to the Liquefaction Project consisting of two midscale Trains with an expected total production capacity of approximately 3 mtpa of LNG (the “Midscale Trains 8 & 9 Project”). The development of ~~these sites~~the Midscale Trains 8 & 9 Project or other projects, including infrastructure projects in support of natural gas supply and LNG demand, will require, among other things, acceptable commercial and financing arrangements before ~~we can make~~ a ~~final investment decision (“FID”).~~positive FID is made.

Additionally, we are committed to the responsible and proactive management of our most important environmental, social and governance (“ESG”) impacts, risks and opportunities. In 2022, Cheniere published Acting Today, Securing Tomorrow, its ~~2020~~third Corporate Responsibility (“CR”) report, which details ~~our strategy~~Cheniere’s approach and progress on ESG issues, ~~as well as our efforts on integrating climate considerations into our business strategy and taking a leadership position on increased environmental transparency,~~ including ~~conducting a climate scenario analysis and our plan to provide LNG customers with Cargo Emission Tags. In April 2022, Cheniere announced a~~its collaboration with natural gas midstream companies, ~~methane detection~~ technology providers and leading academic institutions ~~to implement~~on life-cycle assessment (“LCA”) models, quantification, monitoring, reporting and verification (“QMRV”) of greenhouse gas emissions and other research and development projects. Cheniere also co-founded and sponsored the Energy Emissions Modeling and Data Lab (“EEMDL”), a multidisciplinary research and education initiative led by the University of Texas at ~~natural gas gathering, processing, transmission~~Austin in collaboration with Colorado State University and ~~storage systems specific~~the Colorado School of Mines. In addition, Cheniere commenced providing Cargo Emissions Tags (“CE Tags”) to our ~~supply chain.~~long-term customers in June 2022 and joined the Oil and Gas Methane Partnership (“OGMP”) 2.0, the United Nations Environment Programme’s (“UNEP”) flagship oil and gas methane emissions reporting and mitigation initiative, in October 2022. Cheniere’s CR report is available at cheniere.com/~~IMPACT.~~our-responsibility/reporting-center. Information on ~~our~~Cheniere’s website, including the CR report, is not incorporated by reference into this Quarterly Report on Form 10-Q.

Overview of Significant Events

Our significant events since January 1, ~~2022~~2023 and through the filing date of this Form 10-Q include the following:

Strategic

~~Strategic~~

•In March ~~2022,~~2023, CCL ~~amended its existing long-term SPA~~and another subsidiary of Cheniere submitted an application with ~~Engie SA (“Engie”), increasing~~ the ~~volume Engie has agreed to purchase from CCL to approximately 0.9 mtpa of LNG on a free-on-board basis, and extending~~FERC under the ~~term to approximately 20 years, which began in September 2021.~~NGA for the Midscale Trains 8 & 9 Project.

Operational

•As of April ~~30, 2022, approximately 500~~26, 2023, over 700 cumulative LNG cargoes totaling ~~approximately 35~~over 48 million tonnes of LNG have been produced, loaded and exported from the Liquefaction Project.

Financial

•In January 2023, we redeemed with cash on hand the remaining $498 million outstanding principal amount of our 7.000% Senior Secured Notes due 2024 (the “2024 CCH Senior Notes”).

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Results of Operations


	Three Months Ended March 31,
(in millions)		2023		2022		Variance
Revenues
LNG revenues		$	1,093	$	1,324	$	(231)
LNG revenues—affiliate		555		671		(116)

Total revenues		1,648		1,995		(347)

Operating costs and expenses (recovery)
Cost (recovery) of sales (excluding items shown separately below)		(2,540)		2,341		(4,881)
Cost of sales—affiliate		15		12		3

Operating and maintenance expense		116		113		3
Operating and maintenance expense—affiliate		30		30		—
Operating and maintenance expense—related party		2		2		—


General and administrative expense		2		2		—
General and administrative expense—affiliate		12		8		4
Depreciation and amortization expense		112		110		2

Total operating costs and expenses (recovery)		(2,251)		2,618		(4,869)

Income (loss) from operations		3,899		(623)		4,522

Other income (expense)
Interest expense, net of capitalized interest		(63)		(118)		55
Loss on modification or extinguishment of debt		(10)		(2)		(8)
Interest rate derivative gain, net		—		3		(3)
Other income, net		3		—		3
Total other expense		(70)		(117)		47




Net income (loss)		$	3,829	$	(740)	$	4,569

Operational volumes loaded and recognized from the Liquefaction Project


	Three Months Ended March 31,
(in TBtu)		2023	2022
Volumes loaded during the current period		200	200
Volumes loaded during the prior period but recognized during the current period		3	—

Total volumes recognized in the current period		203	200

Net income (loss)

Substantially all of the favorable variance of $4.6 billion for the three months ended March 31, 2023 as compared to the same period of 2022 was attributable to favorable changes in fair value and settlements of derivatives of $4.5 billion between the years, of which $3.7 billion related to non-cash favorable changes in fair value of our IPM agreements where we procure natural gas at a price indexed to international gas prices.

The following ~~charts summarize~~is an additional discussion of the significant variance drivers of the change in net income (loss) by line item:

Revenues. $347 million decrease between comparable periods primarily attributable to:

•$366 million decrease due to lower pricing per MMBtu from decreased Henry Hub pricing; which was offset by

•$28 million increase due to slightly higher volumes of LNG delivered between the periods, which increased 6 TBtu or 3%.

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Operating costs and expenses. $4.9 billion favorable variance between comparable periods primarily attributable to:

•$4.4 billion favorable variance from changes in fair value of derivatives included in cost of sales, from $1.0 billion of losses in the three months ended March 31, 2022 to $3.4 billionof gains in the three months ended March 31, 2023, primarily due to decreased international gas prices resulting in non-cash favorable changes in fair value of our commodity derivatives indexed to such prices and, to a lesser extent, an increase in forward notional amount of derivatives due to agreements contributed to us upon the merger of Corpus Christ Liquefaction Stage III, LLC with and into CCL in June 2022; and

•$416 million decrease in cost of sales excluding the effect of derivative changes described above, primarily as a result of $409 million in decreased cost of natural gas feedstock largely due to lower U.S. natural gas prices and partially offset by increased volume of LNG delivered, as discussed above under the caption Revenues.

Other income (expense). $47 million decrease in total ~~revenues~~other income (expense) between comparable periods primarily attributable to:

•$55 million decrease in interest expense, net of capitalized interest, as a result of lower debt balances due to repayment of debt and lower interest costs due to refinancing higher cost debt, as further described under Financing Cash Flows in Sources and Uses of Cash within Liquidity and Capital Resources. Additionally, the decrease in interest expense, net of capitalized interest is due to a higher portion of total ~~LNG volumes loaded (including both operational and commissioning volumes)~~interest costs eligible for capitalization following the issuance of full notice to proceed to Bechtel on the Corpus Christi Stage 3 Project in 2022; partially offset by

•$8 million increase in loss on modification or extinguishment of debt primarily due to premiums paid for the early redemption of the 2024 CCH Senior Notes during the three months ended March 31, ~~2022 and 2021:~~

~~(1)~~2023.

~~The three months ended March 31, 2021 excludes four TBtu that were loaded at our affiliate’s facility.~~

~~Net income (loss)~~

~~Our consolidated net loss was $740 million for the three months ended March 31, 2022, compared to net income~~Significant factors affecting our results of $331 million for the three months ended March 31, 2021. This $1.1 billion decrease was primarily due to the increase in commodity derivatives losses from changes in fair value and settlements of $1.0 billion between the periods as well as increased costs associated with the sale of certain unutilized natural gas procured for the liquefaction process, as further described below, which were partially offset by increased margin on LNG delivered as a result of increases in both volume delivered and gross margin on LNG delivered per MMBtu.operations

~~Substantially all~~Below are significant factors that affect our results of operations.

Gains and losses on derivative ~~losses relate to the use of commodity derivative~~ instruments related to our IPM agreement, which are indexed to international LNG prices. While operationally we utilize commodity derivatives to mitigate price volatility for commodities procured or sold over a period of time, as a result of significant appreciation in forward international LNG commodity curves during the three months ended March 31, 2022, we recognized approximately $0.8 billion of non-cash unfavorable changes in fair value attributed to positions related to our IPM agreement.

Derivative instruments, which in addition to managing exposure to commodity-related marketing and price risks are utilized to manage exposure to changing interest rates volatility, are reported at fair value on our Consolidated Financial Statements. ~~In some cases,~~For commodity derivative instruments related to our IPM agreements, the underlying ~~transactions~~LNG sales being economically hedged are accounted for under the accrual method of accounting, whereby revenues ~~and expenses~~expected to be derived from the future LNG sales 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, and given the significant volumes, long-term duration and volatility in price basis for certain of our derivative contracts, use of derivative instruments may result in continued volatility of our results of operations based on changes in market pricing, counterparty credit risk and other relevant factors that may be outside of our control, notwithstanding the operational intent to mitigate risk exposure over time.

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~~Revenues~~

Three Months Ended March 31,
(in millions, except volumes) 2022 2021 Variance
LNG revenues $ 1,324 $ 615 $ 709
LNG revenues—affiliate 671 268 403
Total revenues $ 1,995 $ 883 $ 1,112
LNG volumes recognized as revenues (in TBtu) (1) 200 135 65

~~(1)During the three months ended March 31, 2021, includes four TBtu that were loaded at our affiliate’s facility.~~

Total revenues increased by approximately $1.1 billion during the three months ended March 31, 2022 from the three months ended March 31, 2021, primarily due to increased revenues per MMBtu as a result of increases in Henry Hub prices. Additionally, there were higher volumes of LNG delivered between the periods as a result of production from Train 3 of the Liquefaction Project, which achieved substantial completion on March 26, 2021.Commissioning cargoes

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 realized offsets to LNG terminal costs of $143 million corresponding to 28 TBtu of LNG that were related to the sale of commissioning cargoes.~~ We did not record any offsets to LNG terminal costs during the three months ended March 31, 2023 and 2022.

Also included in LNG revenues are sales of certain unutilized natural gas procured for the liquefaction process and gains and losses from certain commodity derivative instruments, which include the realized value associated with a portion of derivative instruments that settle through physical delivery. We recognized revenues of $16 million and $59 million during the three months ended March 31, 2022 and 2021, respectively, related to these transactions.

~~Operating costs and expenses~~

Three Months Ended March 31,
(in millions) 2022 2021 Variance
Cost of sales $ 2,341 $ 186 $ 2,155
Cost of sales—affiliate 12 35 (23)
Cost of sales—related party — 35 (35)
Operating and maintenance expense 113 83 30
Operating and maintenance expense—affiliate 30 24 6
Operating and maintenance expense—related party 2 2 —
General and administrative expense 2 1 1
General and administrative expense—affiliate 8 5 3
Depreciation and amortization expense 110 89 21
Total operating costs and expenses $ 2,618 $ 460 $ 2,158

Total operating costs and expenses increased during the three months ended March 31, 2022 from the three months ended March 31, 2021, primarily as a result of increased cost of sales. Cost of sales includes costs incurred directly for the production and delivery of LNG from the Liquefaction Project, to the extent those costs are not utilized for the commissioning process. Cost of sales (including affiliate and related party) increased during the three months ended March 31, 2022 from the comparable 2021 period, primarily as a result of unfavorable changes in our commodity derivatives to secure natural gas feedstock for the Liquefaction Project driven by unfavorable shifts in international forward commodity curves, as discussed above under ~~Net income (loss),~~ increased cost of natural gas feedstock as a result of higher US natural gas prices and, to a lesser extent, increased volume of LNG delivered and increased costs associated with the sale of certain unutilized natural gas procured for the liquefaction process.

Operating and maintenance expense (including affiliate and related party) primarily includes costs associated with operating and maintaining the Liquefaction Project. During the three months ended March 31, 2022, operating and maintenance expense increased from the comparable period in 2021, primarily due to increased natural gas transportation and storage capacity demand charges as a result of Train 3 that was in operation for the full three months ended March 31, 2022 as

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compared to a limited number of days during the three months ended March 31, 2021 following its substantial completion. Operating and maintenance (including affiliates) also includes third party service and maintenance, insurance, regulatory costs and other operating costs.

Depreciation and amortization expense increased during the three months ended March 31, 2022 from the comparable period in 2021 as a result of commencing operations of Train 3 of the Liquefaction Project in March 2021.

~~Other expense (income)~~

Three Months Ended March 31,
(in millions) 2022 2021 Variance
Interest expense, net of capitalized interest $ 118 $ 93 $ 25
Loss on modification or extinguishment of debt 2 — 2
Interest rate derivative loss, net (3) (1) (2)
Total other expense $ 117 $ 92 $ 25

Interest expense, net of capitalized interest increased during the three months ended March 31, 2022 compared to the comparable period in 2021, primarily because the construction of Train 3 of the Liquefaction Project was completed on March 26, 2021, which eliminated the portion of total interest costs that was eligible for capitalization. During the three months ended March 31, 2022 and 2021, we incurred $119 million and $119 million of total interest cost, respectively, of which we capitalized $1 million and $26 million, respectively. Capitalized interest primarily related to interest costs incurred to construct the assets of the Liquefaction Project.

Liquidity and Capital Resources

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


	March 31, ~~2022~~2023




Restricted cash and cash equivalents designated for the Liquefaction Project	$	5093


Available commitments under ~~the $1.2 billion~~ our credit facilities (1):
CCH Credit Facility	3,260
CCH Working Capital Facility ~~(“CCH Working Capital Facility”) (1)~~	~~924~~1,338
Total available commitments under our credit facilities	4,598

Total available liquidity	$	~~974~~4,691

(1)Available commitments represent total commitments less loans outstanding and letters of credit issued under each of ~~the CCH Working Capital Facility~~our credit facilities as of March 31, ~~2022.~~2023. See Note 8—8 —Debt of our Notes to Consolidated Financial Statements for additional information on ~~the CCH Working Capital Facility~~our credit facilities and other debt instruments.

Our liquidity position subsequent to March 31, ~~2022 is~~2023 will be driven by future sources of liquidity and future cash requirements. Future sources of liquidity are expected to be composed of (1) cash receipts from executed contracts, under which we are contractually entitled to future ~~revenues,~~consideration, and (2) additional sources of liquidity, from which we expect to receive cash although the cash is not underpinned by executed contracts. Future cash requirements are expected to be composed of (1) cash payments under executed contracts, under which we are contractually obligated to make payments, and (2) additional cash requirements, under which we expect to make payments although we are not contractually obligated to make the payments under executed contracts. For further discussion of our future sources and uses of liquidity, see the liquidity and capital resources disclosures in our annual report on Form 10-K for the fiscal year ended December 31, 2022.

Supplemental Guarantor Information

The ~~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 and the series of Senior Secured Notes due 2039 with weighted average rate of ~~3.72%~~3.788% (collectively, the “CCH Senior Notes”) are jointly and severally guaranteed by each of our consolidated subsidiaries, CCL, CCP and Corpus Christi Pipeline GP, LLC (each a “Guarantor” and collectively, the “Guarantors”).

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The Guarantors’ guarantees are full and unconditional, subject to certain release provisions including (1) the sale, exchange, disposition or transfer (by merger, consolidation or otherwise) of all or substantially all of the capital stock or the assets of the Guarantors, (2) the designation of the Guarantor as an “unrestricted subsidiary” in accordance with the indentures governing the CCH Senior Notes (the “CCH Indentures”), (3) upon the legal defeasance or covenant defeasance or discharge of obligations under the CCH Indentures and (4) the release and discharge of the Guarantors pursuant to the Common Security and Account Agreement. In the event of a default in payment of the principal or interest by us, whether at maturity of the CCH Senior Notes or by declaration of acceleration, call for redemption or otherwise, legal proceedings may be instituted against the Guarantors to enforce the guarantee.

The rights of holders of the CCH Senior Notes against the Guarantors may be limited under the U.S. Bankruptcy Code or federal or state fraudulent transfer or conveyance law. Each guarantee contains a provision intended to limit the Guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent conveyance or transfer under U.S. federal or state law. However, there can be no assurance as to what standard a court will apply in making a determination of the maximum liability of the Guarantors. Moreover, this provision may not be effective to protect the guarantee from being voided under fraudulent conveyance laws. There is a possibility that the entire guarantee may be set aside, in which case the entire liability may be extinguished.

Summarized financial information about us and the Guarantors as a group is omitted herein because such information would not be materially different from our Consolidated Financial Statements.

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Corpus Christi Stage 3 Project

The following table summarizes the project completion and construction status of the Corpus Christi Stage 3 Project as of March 31, 2023:



Overall project completion percentage						28.7%
Completion percentage of:
Engineering						49.5%
Procurement						41.8%
Subcontract work						37.1%
Construction						3.4%
Date of expected substantial completion						2H 2025 - 1H 2027

Sources and Uses of Cash

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


		Three Months Ended March 31,				Three Months Ended March 31,
		2022		2021				2023		2022

Net cash provided by operating activities	Net cash provided by operating activities	$	453	$	524		Net cash provided by operating activities	$	482	$	453
Net cash used in investing activities	Net cash used in investing activities	(45)		(72)			Net cash used in investing activities	(606)		(45)
Net cash used in financing activities	Net cash used in financing activities	(402)		(140)			Net cash used in financing activities	(521)		(402)

Net increase in restricted cash and cash equivalents		$	6	$	312
Net increase (decrease) in restricted cash and cash equivalents							Net increase (decrease) in restricted cash and cash equivalents	$	(645)	$	6

Operating Cash Flows

~~Operating~~Our operating cash ~~flows~~net inflows during the three months ended March 31, 2023 and 2022 ~~and 2021~~ were ~~$453~~$482 million and ~~$524~~$453 million, respectively. The ~~$71~~$29 million ~~decrease in operating cash inflows in 2022 compared to 2021~~favorable variance between the periods was primarily related to lower cash ~~used as working capital as a result of payment timing differences and timing of~~outflows for natural gas feedstock, partially offset by an unfavorable variance due to lower cash receipts from the sale of LNG ~~cargoes. Additionally, to a lesser extent, the decrease in operating cash inflows was~~cargoes, both primarily due to ~~higher costs associated with the sale of certain unutilized~~lower U.S. natural gas ~~procured for the liquefaction process during the three months ended March 31, 2022.~~prices. This favorable variance was partially offset by an unfavorable variance due to timing of cash receipts and payments.

Investing Cash Flows

~~Cash~~Our investing cash net outflows ~~for property, plant and equipment~~in both years primarily were ~~primarily~~ for the construction costs for the Liquefaction Project. The $561 million increase in 2023 compared to 2022 was primarily due to spend during the three months ended March 31, 2023 related to construction work performed by Bechtel for the Corpus Christi Stage 3 Project ~~which are capitalized~~following the issuance of full notice to proceed to Bechtel in June 2022. We expect our capital expenditures to increase in future periods as ~~construction-in-process until achievement of substantial completion. On March 26, 2021, substantial completion of Train~~construction work progresses on the Corpus Christi Stage 3 ~~of the Liquefaction Project was achieved.~~

Project.

Financing Cash Flows

~~During the three months ended March 31, 2022, we repaid all of the outstanding borrowings under the CCH Working Capital Facility. Additionally, $290 million of borrowings under~~The following table summarizes our ~~amended and restated term loan credit facility (the “CCH Credit Facility”) was repaid during the three months ended March 31, 2022.~~financing activities (in millions):

~~During the three months ended March 31, 2021, we repaid all of the outstanding borrowings under the CCH Working Capital Facility.~~


	Three Months Ended March 31,
	2023		2022

Repayments of debt	$	(498)	$	(540)

Debt extinguishment costs	(8)		—
Contributions	45		138
Distributions	(60)		—
Net cash used in financing activities	$	(521)	$	(402)

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~~Debt~~ Repayments and Related Extinguishment Costs

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


		Three Months Ended March 31,				Three Months Ended March 31,
		2022		2021				2023		2022
CCH Credit Facility	CCH Credit Facility	$	(290)	$	—		CCH Credit Facility	$	—	$	(290)
CCH Working Capital Facility	CCH Working Capital Facility	(250)		(140)			CCH Working Capital Facility	—		(250)
Total repayments		$	(540)	$	(140)
2024 CCH Senior Notes							2024 CCH Senior Notes	(498)		—
Total repayments of debt							Total repayments of debt	$	(498)	$	(540)

During the three months ended March 31, 2023 and 2022, we paid debt modification or extinguishment costs of $8 millionandzero, respectively, related to these repayments.

Capital Contributions and Distributions

During the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, we received cash capital contributions of $45 million and $138 million, respectively, from Cheniere, primarily used to redeem our outstanding debt, and during the three months ended March 31, 2023 and 2022, we made cash distributions of $60 million and zero, respectively, ~~from~~to Cheniere.

Summary of Critical Accounting Estimates

The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our annual report on Form 10-K for the fiscal year ended December 31, ~~2021~~20 2 2.

Recent Accounting Standards

For a summary of recently issued accounting standards, see Note 1—1 —Nature of ~~Operations~~Operation s 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~~CCL has commodity derivatives consisting of natural gas supply contracts for the commissioning and operation of the Liquefaction Project (“Liquefaction Supply Derivatives”). In order to test the sensitivity of the fair value of the Liquefaction Supply Derivatives to changes in underlying commodity prices, management modeled a 10% change in the commodity price for natural gas for each delivery location as follows (in millions):

March 31, 2022 December 31, 2021
Fair Value Change in Fair Value Fair Value Change in Fair Value
Liquefaction Supply Derivatives $ (2,262) $ 287 $ (1,212) $ 186


	March 31, 2023				December 31, 2022
	Fair Value		Change in Fair Value		Fair Value		Change in Fair Value
Liquefaction Supply Derivatives	$	(2,880)	$	1,368	$	(6,278)	$	1,684

See Note 6—6 —Derivative Instruments of our Notes to Consolidated Financial Statements for additional details about ~~our derivative instruments.~~

~~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. We have 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 (“Interest Rate Derivatives”). In order to test the sensitivity of the fair value of the 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 Interest Rate Derivatives as follows (in millions):

March 31, 2022 December 31, 2021
Fair Value Change in Fair Value Fair Value Change in Fair Value
Interest Rate Derivatives $ (12) $ 1 $ (40) $ —

~~See~~ ~~Note 6—Derivative Instruments~~ ~~of our Notes to Consolidated Financial Statements for additional details about our~~ derivative instruments.

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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 voluntarily 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 President and 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 President and 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.

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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, ~~2021.~~2022 .

ITEM 1A. RISK FACTORS

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, ~~2021~~202 2.

~~ITEM 5. OTHER INFORMATION~~

On May 2, 2022, CCL and Cheniere Marketing International LLP entered into a letter agreement, subject to the satisfaction of certain conditions specified therein, for the sale of (1) up to 22 cargoes scheduled to be delivered in 2023, (2) up to between nine cargoes and 10 cargoes scheduled to be delivered in 2024 and (3) up to between 13 cargoes and 16 cargoes scheduled to be delivered in 2025, in each case at a price equal to 115% of Henry Hub plus $1.97 per MMBtu.

ITEM 6. EXHIBITS

Exhibit No.

Description

10.1*

22.1

List of Issuers and Guarantor Subsidiaries (Incorporated by reference to Exhibit 22.1 to the Company’s Registration Report on Form S-4 (SEC File No. 333-215435), filed on March 11, ~~2022~~2022)

31.1*

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

32.1**

Certification by President and 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.

3027

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 CORPUS CHRISTI HOLDINGS, LLC

Date:	May ~~3, 2022~~1, 2023	By:	/s/ Zach Davis
			Zach Davis
			President and Chief Financial Officer
			(Principal Executive and Financial Officer)


Date:	May ~~3, 2022~~1, 2023	By:	/s/ David Slack
			David Slack
			Chief Accounting Officer
			(on behalf of the registrant and as principal accounting officer)

3128


Three Months Ended March 31, 2021
	Cheniere CCH HoldCo I, LLC		Total Member’s Equity
Balance at December 31, 2020	$	2,624	$	2,624
Net income	331		331
Balance at March 31, 2021	$	2,955	$	2,955


	Three Months Ended March 31,
(in millions, except volumes)		2022		2021		Variance
LNG revenues		$	1,324	$	615	$	709
LNG revenues—affiliate		671		268		403

Total revenues		$	1,995	$	883	$	1,112

LNG volumes recognized as revenues (in TBtu) (1)		200		135		65