What the changes say
- Cheniere faces new risks from U.S. trade policies restricting maritime transport and expiring property tax incentives for major LNG terminals.
What changed since the prior 10-K
New
- NewRisks Relating to Our Financial Matters
Our ability to generate cash is substantially dependent upon the performance by customers under long-term contracts that we have entered into, and we could be materially and adversely affected if any significant portion of our customers fails to perform its contractual obligations for any reason
Our cash generation depends heavily on customers performing under long-term sales and purchase agreements representing approximately 30 third-party customers.
- NewRisks Relating to Our Financial Matters
tax and the impact of non-controlling interests), substantially all of which were related to commodity derivative instruments indexed to international LNG prices, mainly our IPM agreements
Derivative instruments indexed to international LNG prices, like IPM agreements, cause GAAP earnings volatility and collateral cash margin requirements.
- NewRisks Relating to Our Operations and Industry
Our ability to complete development and/or construction of additional Trains, including the SPL Expansion Project and the CCL Expansion Project, will be contingent on our ability to obtain additional funding. If we are unable to obtain sufficient funding, we may be unable to fully execute our growth strategy
Completing the SPL Expansion Project and CCL Expansion Project depends on securing significant additional external funding.
- NewRisks Relating to Our Operations and Industry
owner, including disruptions due to off-hire and downtime periods or shipping delays. However, other events outside of our control where we may not be protected may have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
Short-term and spot LNG sales outside long-term SPAs depend heavily on the strength of international LNG markets.
- NewRisks Relating to Our Operations and Industry
Changes to U.S. trade policy could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
New U.S. trade policies require increasing percentages of U.S. LNG exports to be shipped on U.S.-built vessels starting in April 2029.
Dropped
- DroppedRisks Relating to Our Operations and Industry
natural gas under circumstances where we may not be protected could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
Reworded
- 96% rewrittenRisks Relating to Regulations
Additions or changes in tax laws and regulations or variables impacting our tax obligations could potentially affect our financial results or liquidity
Added expiration details for ad valorem legacy property tax incentives beginning in 2026 and 2027 for Corpus Christi and Sabine Pass terminals.
Was: Additions or changes in tax laws and regulations could potentially affect our financial results or liquidity
- 64% rewrittenRisks Relating to Our Financial Matters
Our use of derivative instruments, including our IPM agreements, to manage risks could have a significant adverse or otherwise volatile effect on our earnings reported under GAAP and our liquidity
Added language regarding the normal purchases and normal sales exception accounting method for derivatives.
Was: Our use of derivative instruments, including our IPM agreements, to manage risks could adversely affect our earnings reported under GAAP and our liquidity
- 50% rewrittenRisks Relating to Our Operations and Industry
We are dependent on our EPC partners and other contractors for the successful completion of the Corpus Christi Stage 3 Project, the CCL Midscale Trains 8 & 9 Project and any potential expansion projects, including the SPL Expansion Project and the CCL Expansion Project
Updated project references to include the CCL Midscale Trains 8 & 9 Project alongside Corpus Christi Stage 3 and expansion projects.
Was: We are dependent on our EPC partners and other contractors for the successful completion of the Corpus Christi Stage 3 Project and any potential expansion projects, including the CCL Midscale Trains 8 & 9 Project and the SPL Expansion Project
- 45% rewrittenRisks Relating to Our Operations and Industry
There may be impediments to the transport of LNG to customers, such as shortages of LNG vessels worldwide or operational impacts on LNG shipping, which could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
Changed delivery terms referenced for international LNG sales from DAT to DAP.
Was: There may be impediments to the transport of LNG, such as shortages of LNG vessels worldwide or operational impacts on LNG shipping, which could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
- 44% rewrittenRisks Relating to Our Financial Matters
An inability to source capital to supplement our available cash resources and existing credit facilities could cause us to have inadequate liquidity and could materially and adversely affect us
Updated 2024 financial figures to 2025 figures, showing cash and cash equivalents dropping to $1.1 billion and available credit commitments to $7.2 billion.
- 32% rewrittenRisks Relating to Regulations
Our interstate natural gas pipelines and their FERC gas tariffs are subject to FERC regulation. If we fail to comply with such regulation, we could be subject to substantial penalties and fines
Removed purchase of natural gas from FERC pipeline regulation scope.
- 30% rewrittenRisks Relating to Our Operations and Industry
Failure of exported LNG to be a long term competitive source of energy for international markets could adversely affect our customers and could materially and adversely affect our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
Replaced references from the United States to North America regarding LNG supply sources.
- 29% rewrittenRisks Relating to Our Operations and Industry
Cyclical or other changes in the demand for and price of LNG and natural gas may adversely affect our LNG business and the performance of our customers and could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
Refined factors affecting LNG price volatility to specify an increasingly competitive North American LNG landscape and worldwide demand changes.
- 29% rewrittenRisks Relating to Our Operations and Industry
Disruptions to the third party supply of natural gas to our pipelines and facilities could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
- 26% rewrittenRisks Relating to Our Operations and Industry
We may not be able to purchase or receive physical delivery of sufficient natural gas to satisfy our delivery obligations under the SPAs, which could have a material adverse effect on us
- 22% rewrittenRisks Relating to Our Financial Matters
Our ability to declare and pay dividends and repurchase shares is subject to certain considerations
All 26 risk factors
Headings as the filing states them, in filing order.
Risks Relating to Our Financial Matters
- 01An inability to source capital to supplement our available cash resources and existing credit facilities could cause us to have inadequate liquidity and could materially and adversely affect us44% rewritten
- 02Our ability to generate cash is substantially dependent upon the performance by customers under long-term contracts that we have entered into, and we could be materially and adversely affected if any significant portion of our customers fails to perform its contractual obligations for any reasonNew
- 03While substantially all of our long-term third party customer arrangements are executed with a creditworthy company or secured by a parent company guarantee or other form of collateral, we are nonetheless exposed to credit risk in the event of a customer default that requires us to seek recourse
- 04We and our subsidiaries may be restricted under the terms of our and their indebtedness from paying dividends or distributions under certain circumstances, which could materially and adversely affect our liquidity
- 05Restrictions in agreements governing us and our subsidiaries’ indebtedness may prevent us and our subsidiaries from engaging in certain beneficial transactions, which could materially and adversely affect us
- 06Our use of derivative instruments, including our IPM agreements, to manage risks could have a significant adverse or otherwise volatile effect on our earnings reported under GAAP and our liquidity64% rewritten
- 07tax and the impact of non-controlling interests), substantially all of which were related to commodity derivative instruments indexed to international LNG prices, mainly our IPM agreementsNew
- 08Our ability to declare and pay dividends and repurchase shares is subject to certain considerations22% rewritten
Risks Relating to Our Operations and Industry
- 09Catastrophic weather events or other disasters could result in an interruption of our operations, a delay in the construction of our Liquefaction Projects, damage to our Liquefaction Projects and increased insurance costs, all of which could adversely affect us
- 10Disruptions to the third party supply of natural gas to our pipelines and facilities could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects29% rewritten
- 11We may not be able to purchase or receive physical delivery of sufficient natural gas to satisfy our delivery obligations under the SPAs, which could have a material adverse effect on us26% rewritten
- 12We are subject to significant construction and operating hazards and uninsured risks, one or more of which may create significant liabilities and losses for us
- 13We are dependent on our EPC partners and other contractors for the successful completion of the Corpus Christi Stage 3 Project, the CCL Midscale Trains 8 & 9 Project and any potential expansion projects, including the SPL Expansion Project and the CCL Expansion Project50% rewritten
- 14Our ability to complete development and/or construction of additional Trains, including the SPL Expansion Project and the CCL Expansion Project, will be contingent on our ability to obtain additional funding. If we are unable to obtain sufficient funding, we may be unable to fully execute our growth strategyNew
- 15There may be impediments to the transport of LNG to customers, such as shortages of LNG vessels worldwide or operational impacts on LNG shipping, which could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects45% rewritten
- 16owner, including disruptions due to off-hire and downtime periods or shipping delays. However, other events outside of our control where we may not be protected may have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospectsNew
- 17Changes to U.S. trade policy could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospectsNew
- 18Cyclical or other changes in the demand for and price of LNG and natural gas may adversely affect our LNG business and the performance of our customers and could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and prospects29% rewritten
- 19Failure of exported LNG to be a long term competitive source of energy for international markets could adversely affect our customers and could materially and adversely affect our business, contracts, financial condition, operating results, cash flow, liquidity and prospects30% rewritten
- 20We face competition based upon the international market price for LNG
- 21We may experience increased labor costs, and the unavailability of skilled workers or our failure to attract and retain qualified personnel could adversely affect us. In addition, changes in our senior management or other key personnel could affect our business results
- 22Outbreaks of infectious diseases, such as COVID-19, at one or more of our facilities could adversely affect our operations or business
Risks Relating to Regulations
- 23Our interstate natural gas pipelines and their FERC gas tariffs are subject to FERC regulation. If we fail to comply with such regulation, we could be subject to substantial penalties and fines32% rewritten
- 24Existing and future safety, environmental and similar laws and governmental regulations could result in increased compliance costs or additional operating costs or construction costs and restrictions
- 25Pipeline safety and compliance programs and repairs may impose significant costs and liabilities on us
- 26Additions or changes in tax laws and regulations or variables impacting our tax obligations could potentially affect our financial results or liquidity96% rewritten
Other Cheniere Energy 10-Ks
- FY2024 10-K risk factors22 risks
Capital sourcing, debt covenants, and liquidity management dominate Cheniere Energy's financial risk profile.
Filed Feb 20, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.