Cheniere announces “20/20 vision” long-term capital allocation plan and increases 2022 financial guidance

Cheniere Energy, Inc. announced that its Board of Directors has approved a revised comprehensive, long-term capital allocation plan designed to maintain investment grade credit metrics through cycles, further return capital to shareholders over time, and continue to invest in accretive organic growth.

Executing under the capital allocation plan announced in September 2021, Cheniere has repaid or redeemed over $4 billion of long-term indebtedness, repurchased more than $0.6 billion of shares, initiated and paid $1.32 per common share in dividends as of the second quarter of 2022, and reached a positive final investment decision (FID) on the Corpus Christi Stage 3 Liquefaction Project (CCL Stage 3). Given the Company’s progress on its prior capital allocation plan significantly ahead of schedule, which is driven by the Company’s continued outperformance, Cheniere has reached a new cash flow inflection point and now expects to generate over $20 billion of available cash through 2026¹ and construction of CCL Stage 3, enabling further execution on its balance sheet, capital return and growth priorities. The plan is designed to achieve a run-rate Distributable Cash Flow² (“DCF”) of over $20 per share on a run-rate basis.

Cheniere is also raising full year 2022 Consolidated Adjusted EBITDA² guidance to $11.0 - $11.5 billion and full year 2022 DCF² guidance to $8.1 - $8.6 billion due primarily to a change in the expected timing of several cargoes accelerating into 2022 which were previously forecast for 2023 as well as sustained higher margins on LNG throughout 2022.

“Today’s revised capital allocation plan marks another significant milestone for Cheniere and reflects the success achieved by the Cheniere team, particularly in terms of operational excellence and safety. The accelerated progress on our 2021 plan would not have been possible without the hard work and dedication of our entire workforce,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “As a market leading LNG operator, we are proud of our accomplishments thus far and look forward to continuing to reliably supply the global market with our flexible, cleaner-burning LNG in support of our customers and end-users abroad, while delivering on our commitment to create value for our all of our stakeholders. Energy security has never been more critical, and we are confident in the significant long-term role of North American natural gas in the global energy supply mix.”

The objectives and design of the plan include:

Long-Term Sustainable Balance Sheet

• Initial $4 billion debt paydown target achieved
• Further debt paydown with revised target run-rate, long-term leverage of ~4x with investment grade credit metrics maintained through CCL Stage 3 construction
• Achieve and maintain investment grade ratings across the Cheniere complex to support cash flow sustainability through cycles

Meaningful Shareholder Returns

• Upsize share repurchase program by $4 billion for an additional 3-year authorization with potential to repurchase ~10% or more of Cheniere’s market capitalization with excess capital
• Cumulative debt paydown to share repurchase allocation ratio reset from 4:1 to 1:1
• Increase annualized dividend by 20% to $1.58 per common share from inaugural $1.32 per common share dividend initiated last year
• Plan to increase mid-single digit future growth rate of dividend to ~10% through CCL Stage 3 construction

Disciplined Accretive Growth

• Pre-filed Corpus Christi Midscale Trains 8 & 9 with FERC in August 2022 with near-term goal to achieve ~60 MTPA platform
• Develop large-scale brownfield growth opportunities at both Sabine Pass and Corpus Christi, with long-term potential to reach ~90 MTPA platform

“Thanks to Cheniere’s continued financial and operational outperformance since we announced our capital allocation framework last fall, we have achieved significant progress on each of the four key pillars of that plan – in a matter of quarters, not years – and are proud to announce our new, revised plan today,” said Zach Davis, Cheniere’s executive vice president and chief financial officer. “Our new ‘20/20 vision’ is designed to return significant capital to shareholders, while solidifying investment grade credit metrics and pursuing accretive growth of our platform within our disciplined capital investment parameters. We expect to generate over $20 billion of available cash through 2026 and over $20 of Distributable Cash Flow per share on a run-rate basis. This revised plan supports our efforts to ensure the long-term success and sustainability of Cheniere, while creating and delivering substantial long-term value for our all of our stakeholders.”