Cheniere Energy, Inc.

Good day and welcome to the Chenier Energy Incorporated 1Q 2020 earnings call and webcast. At this time, I would like to turn the conference over to Mr. Randy Batia, VP of Investor Relations. Please go ahead, sir.

Thank you, Operator. Good morning, everyone, and welcome to Chenier's first quarter 2020 earnings conference call. The slide presentation and access to the webcast for today's call are available at Chenier.com. Joining me today are Jack Fusco, Chenier's president and CEO, Anatole Fagan, executive vice president and chief commercial officer, and Michael Wortley, executive vice president and CFO. Before we begin, I would like to remind all listeners that our remarks, including answers to your questions, may contain forward-looking statements. and actual results could differ materially from what is described in these statements. Slide two of our presentation contains a discussion of those forward-looking statements and associated risks. In addition, we may include references to certain non-GAAP financial measures, such as consolidated adjusted EBITDA and distributable cash flow. A reconciliation of these measures to the most comparable GAAP financial measure can be found in the appendix to the slide presentation. As part of our discussion of Chenier's results, today's call may also include selected financial information and results for Chenier Energy Partners LP or CQP. We do not intend to cover CQP's results separately from those of Chenier Energy Inc. The call agenda is shown on slide three. Jack will begin with operating and financial highlights. Anatole will then provide an update on the LNG market, and Michael will review our financial results and guidance. After prepared remarks, we will open the call for Q&A. I will now turn the call over to Jack Fusco, Schneer's President and CEO.

Thank you, Randy. Good morning, everyone. I'm pleased to be here today in downtown Houston to review our results from the first quarter of 2020. While we usually host these earnings calls with a room full of executives and an office building full of employees, today it's just the four of us in a large conference room as we are complying with the CDC recommended guidelines and our headquarter professionals, our telecommuting. The first quarter of 2020 was a historic period for us, and the global outbreak of COVID-19 has impacted our personal and professional lives in many ways. Our daily routines from commuting to work, educating our children, interfacing with colleagues, to visiting with friends and family, and everything in between has been upended. And we've all been forced to embrace a new reality. Watching this pandemic spread with lethal force across the globe has been an unbelievable experience. Likewise, the response to stop the spread and focus on ultimately finding a solution to eradicate this virus has been unprecedented. I want to personally thank all of the medical professionals who care for us and the first responders who test us, feed us, and provide for our safety for their tireless efforts. and we pray for their good health. Turn now to slide five. At Cheniere, we have built a strong, resilient, customer-focused business, which is capable of weathering volatility in both the energy and financial markets. While skeptics may question this at times, we find ourselves in this historic volatility and uncertainty in both of these markets, and the resilience of our business model is on full display. For the first quarter of 2020, we generated a record amount of consolidated adjusted EBITDA of $1.04 billion and distributable cash flow of approximately $250 million on revenues of $2.7 billion. And we generated net income attributable to common stockholders of $375 million. Despite both supply and demand driven near-term weakness in the LNG market, I am pleased today to reconfirm our 2020 full-year guidance ranges of $3.8 to $4.1 billion in consolidated adjusted EBITDA and $1.0 to $1.3 billion of distributable cash flow. The highly contracted nature of our business, the proactive risk management of our market exposure, and our maniacal focus on operational excellence are key enablers of these results in a weak market environment. Our first quarter financial results and the reconfirmation of our full year 2020 guidance are testaments to the resilience of our operational, contractual, and financial foundations. We repurchased $155 million of stock under a repurchase program during the quarter, And as we disclosed in our previous earnings call, we paid down $300 million of the CCH whole code convertible notes with cash. Michael will address our financial results and guidance in more detail in a few minutes. During the first quarter, we produced and exported 128 cargoes of LNG, including the 100th cargo from Corpus Christi and the 1,000th cumulative cargo. Since the startup of operations, We have produced and exported more than 75 million tons of LNG from our projects, which has reached 35 countries and regions worldwide. Looking ahead, the long-term SBAs tied to Train 2 at Corpus Christi are set to commence tomorrow. We have been in the process of onboarding those customers, and we welcome them to the Chenier Complex. Construction on Corpus Christi Train 3 and being passed Train 6 continues to progress on accelerated schedules. Corpus Christi train three is approximately 84% project completion, and Sabine Pass train six is around 54% project completion. And both trains are forecast to be significantly ahead of their guaranteed completion dates. Now turn to slide six, where I will spend a few moments describing Cheniere's response to COVID-19. as it has been significant. We recognize the risk of COVID-19 and began implementing response measures early prior to many government-imposed requirements. We have activated various emergency response teams, including an executive management team, a business support team, and a site management team, all of whom are focused on employee safety and welfare, business continuity, and maintaining operations at our liquefaction sites. These teams monitor status, develop and implement policies and protocols specific to each office location and site. In addition, they enforce protective measures, and most importantly, regularly communicate with all the relevant personnel. In early March, we began consulting with a medical advisor and implemented social distancing to revise shift schedules, isolating work groups, work from home policies, and restricted non-essential business travel, just to mention a few proactive items. In addition, we instituted minimum staffing levels at our sites, isolated our critical operating personnel, and began utilizing temporary onsite housing for our workforce at our sites. I'm extremely grateful and proud of our employees and their performance throughout this pandemic. On the engineering and construction side, we and our EPC partner, Bechtel, have implemented significant safety and emergency response protocols at both Sabine Pass and Corpus Christi to ensure workplace safety and business continuity. We've implemented many changes at the sites in pursuit of these priorities. That said, we do not currently expect these measures of COVID-19 to have a material impact on our project cost or schedule for either Corpus Christi Train 3 or Sabine Pass Train 6. I applaud our engineering and construction team and the Bechtel Group for their swift and effective implementation of these protocols to ensure a flawless execution. The impact of COVID-19 to our country, communities, and those countries of our foundation customers has been unprecedented. As a company, community involvement, and paying it forward is in our DNA. Today, Cheniere has pledged over a million dollars to global COVID-19 relief efforts. Our commitments and contributions are focused on the communities where we live and work. Texas, Louisiana, Oklahoma, Washington, D.C., London, Singapore, and China. We're proud to do our part during this global outbreak to help reduce food insecurity for those most in need and provide provisions and equipment for first responders and frontline healthcare workers. I'm extremely proud of our success of the personal protective equipment drive in partnership with Houston, the Astros Foundation, and Project CARE. Now turn to slide seven. Before I call over to Anna's call, I want to quickly discuss certain aspects of our long-term contracts. In the wake of the dislocations we've seen in both the financial and energy markets over these last few weeks, we've received countless investor inquiries regarding our long-term contracts. First, regarding our contract sanctity, I remind you that our long-term contracts do not include provisions for renegotiation. We intend to meet all of our contractual obligations. And in return, we expect our customers to do the same. Second, regarding cargo lifting elections, as I mentioned on our call in February, we won't make it a practice to describe the details of ordinary interactions with our customers for the market, including their decisions regarding lifting of cargoes. But as you all know, One of the primary flexibilities granted to our long-term customers within their contracts is their right to cancel or suspend cargoes with appropriate notice. In instances where that occurs, the fixed liquefaction fee is still paid to us, and our marketing affiliate has the option to market the volume into the global marketplace. As global markets remain weak, we have had customers elect to cancel some additional cargoes. We won't quantify the amount, but we reiterate that our customers value the flexibility inherent in the contract structure, and our visibility to achieving our financial guidance for the year is unchanged. Similarly, regarding speculation and confusion around force majeure or FM, which we addressed in our prior call as well, FM clauses in our FOB contracts specifically exclude such events as the unavailability of or any event affecting downstream LNG facilities, changes in the customer's market factors, or other commercial, financial, or economic conditions. As such, depressed gas prices globally or economic fallout or decreased gas demand from COVID-19 do not provide a valid legal basis on which a counterpart can claim FM. And now I'll turn the call over to Anatole, who will provide an update on the LNG market.