Cheniere Energy, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual filing, not a standalone fourth-quarter report; the supplied text does not provide a separate Q4 income statement or cash-flow summary. Cheniere is an LNG infrastructure and marketing company operating the Sabine Pass and Corpus Christi facilities. At year-end, nine trains were operational, with approximately 45 mtpa of capacity.
Financial and operating performance
| Metric | FY2022 | FY2021 |
|---|---|---|
| Total revenue | $33.428 billion | $15.864 billion |
| Operating income (loss) | $4.559 billion | $(701) million |
| Net income (loss) attributable to common stockholders | $1.428 billion | $(2.343) billion |
| Diluted earnings (loss) per share | $5.64 | $(9.25) |
| Net cash provided by operating activities | $10.523 billion | $2.469 billion |
| Net cash used in investing activities | $1.844 billion | $912 million |
| Net cash used in financing activities | $8.014 billion | $1.817 billion |
Revenue rose about 111% year over year, while LNG volumes delivered increased 16% to 2,317 TBtu. Management attributed the improvement primarily to higher LNG and natural-gas prices and higher volumes, including the completion of Sabine Pass Train 6. LNG revenues included $10.169 billion from integrated marketing short-term sales and $20.702 billion from long-term agreements. The filing does not present a single consolidated margin measure; operating income was approximately 13.6% of revenue, calculated from reported figures.
Reported earnings were materially affected by derivative accounting: derivative fair-value changes and settlements produced $5.7 billion of losses in 2022, versus $4.3 billion in 2021, largely related to IPM agreements indexed to international LNG prices. The year-end Level 3 physical liquefaction supply derivative liability was $9.924 billion. Management cautions that fair values rely partly on unobservable assumptions and may change materially; much of the reported volatility does not align in timing with revenue recognition on the LNG sales being economically hedged.
Debt, liquidity and capital allocation
- Gross consolidated debt was $25.1 billion at December 31, 2022, down from $30.4 billion a year earlier; the weighted-average contractual interest rate on senior notes was 4.76%. Credit facilities had no drawn balances at year-end.
- Available liquidity was reported as $9.941 billion: $1.353 billion cash and equivalents, $1.134 billion restricted cash, and $7.454 billion of available credit commitments. Restricted cash and subsidiary-level debt agreements limit access to some funds.
- Cash from operations increased substantially, reflecting higher cargo receipts and the Chevron termination payment, partly offset by higher feed-gas costs. The company used $5.4 billion to prepay consolidated long-term debt under its capital-allocation plan and repurchased 9.35 million shares for $1.373 billion.
- FY2022 dividends paid were $1.385 per share. The board increased the quarterly dividend to $0.395 per share and set a target of approximately 10% annual dividend growth through Corpus Christi Stage 3 construction. The board also lowered the consolidated long-term leverage target to approximately 4x and expanded repurchase authorization; $3.6 billion remained authorized at year-end. These plans are subject to board discretion, cash needs and other conditions.
Material changes, outlook and risks
- Corpus Christi Stage 3: The board approved FID in June 2022 and issued full notice to proceed to Bechtel. The EPC contract was approximately $5.4 billion after change orders through year-end, with about $3.9 billion remaining. Project completion was 24.5% as of January 31, 2023; expected substantial completion spans the second half of 2025 through the first half of 2027.
- Expansion pipeline: CCL Midscale Trains 8 and 9, approximately 3 mtpa, entered FERC pre-filing review in September 2022; no FID was reported. In February 2023, subsidiaries began FERC pre-filing for a potential Sabine Pass expansion of up to three trains and approximately 20 mtpa. Both remain development opportunities, not completed projects.
- Commercial position: Approximately 95% of anticipated production from the liquefaction projects was contracted through the mid-2030s, including contracts supporting capacity beyond Stage 3. Weighted-average remaining contract life was approximately 17 years when shorter-term and certain expansion-support contracts are excluded. The company signed or amended long-term SPAs totaling approximately 140 million tonnes for delivery from 2026 to 2050; some volumes depend on additional capacity and FID or waiver conditions.
- Market commentary: Management described tight global LNG supply and exceptional benchmark-price volatility in 2022, citing the Russia-Ukraine war and reduced Russian gas flows to Europe. Cheniere reported exporting 44 million tonnes in 2022. These conditions are not a guarantee of future demand or pricing.
- Key risks: Significant debt and interest costs; restricted subsidiary cash and distribution covenants; exposure to customer performance; LNG price and demand cycles; feed-gas and pipeline availability; construction delays, cost increases and contractor performance; vessel availability; severe weather, cyberattacks, and regulatory or environmental changes. The Inflation Reduction Act’s methane charge begins in 2024 and the new 15% corporate alternative minimum tax is effective in 2023; management did not expect a material operating impact from the methane charge but noted CAMT implementation uncertainty.
- Unusual and legal items: Chevron paid a $765 million lump-sum fee to terminate its Sabine Pass terminal-use and marine-services arrangements; the filing recognized $799 million of regasification revenue and a $31 million loss on extinguishing a related revenue-sharing obligation. A PHMSA proposed penalty of $1.458 million relating to a 2018 tank incident was paid and the case closed; one affected tank had returned to service. The company reported continuing discussions with Louisiana regulators regarding historical self-reported permit deviations and did not expect a material adverse outcome.
KPMG issued an unqualified opinion on the consolidated financial statements and on internal control over financial reporting. Management also concluded that disclosure controls were effective.
Important facts for investors to verify
- How much of operating cash flow is sustainable at normalized commodity prices, excluding the Chevron payment and working-capital or derivative-settlement effects.
- The assumptions, cash implications and potential earnings volatility associated with the $9.924 billion Level 3 derivative liability and IPM contracts.
- Stage 3 construction progress, remaining cost exposure, change orders, financing needs and whether completion dates or customer contract milestones change.
- Availability of unrestricted cash at the parent versus cash held in restricted or independently financed subsidiaries, along with debt maturities, covenants and subsidiary distribution capacity.
- Conditions attached to expansion-related SPAs and whether future projects obtain permits, financing, acceptable commercial arrangements and FID.
- Actual exposure to methane regulation, CAMT and other evolving environmental requirements, and the status or resolution of the Louisiana permit matter.