Business Context and Reporting Period
This Form 8-K Current Report was filed by Cheniere Energy Partners, L.P. on March 18, 2014. The filing addresses a change in the Partnership's independent registered public accounting firm.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. It is a disclosure regarding corporate governance and audit oversight.
Material Changes
The primary material change reported is the replacement of the independent auditor:
- Outgoing Auditor: Ernst & Young LLP (EY) was dismissed effective March 18, 2014.
- Incoming Auditor: KPMG LLP was appointed as the independent registered public accounting firm for the fiscal year ending December 31, 2014.
- Audit History: EY's reports for the years ended December 31, 2013, and 2012 were unqualified and contained no adverse opinions, disclaimers, or modifications regarding uncertainty, scope, or accounting principles.
- Disagreements: There were no disagreements with EY on accounting principles, practices, or auditing scope during the 2012-2013 fiscal years or through the date of the report.
Management Commentary and Consultations
The Partnership disclosed specific consultations with KPMG prior to its appointment regarding complex accounting matters:
- Class B Units: Consultations covered the classification of Class B units as debt or equity (ASC 480), derivatives (ASC 815), debt (ASC 470), and earnings per share (ASC 260).
- Debt and Swaps: Discussions included accounting for debt issuance costs, embedded derivatives, and cash flow hedge accounting for interest rate swaps.
- Consistency: The Partnership confirmed that its accounting treatment for these items, as reflected in the 2012 and 2013 audited financial statements, was consistent with the views provided by KPMG and had been discussed with EY.
- No Reportable Events: No "reportable events" as defined in Regulation S-K Item 304(a)(1)(v) occurred during the relevant periods.
Investor Verification Checklist
- Verify the content of the letter from Ernst & Young LLP (Exhibit 16.1) to confirm their agreement with the Partnership's statements regarding the dismissal.
- Review the letter from KPMG LLP (Exhibit 16.2) for any clarifications or disagreements with the Partnership's disclosure.
- Confirm that the change in auditors was approved by the Audit Committee of the Board of Directors of Cheniere Energy Partners GP, LLC.
- Monitor future filings to ensure the transition of audit responsibilities proceeds without qualification or delay.