UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017March 31, 2022
ORor
¨ ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
Commission file number 333-215435
Cheniere Corpus Christi Holdings, LLC
(Exact name of registrant as specified in its charter)
Delaware333-21543547-1929160
(State or other jurisdiction of incorporation or organization)(Commission File Number)(I.R.S. Employer Identification No.)
700 Milam Street, Suite 1900
Houston, Texas
77002
(Address of principal executive offices)(Zip Code)
700 Milam Street, Suite 1900
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
(713) 375-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
NoneNoneNone
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x☐    No ¨☒
Note: The registrant was a voluntary filer until March 25, 2022. The registrant has filed all reports required pursuant to Sections 13 or 15(d) during the preceding 12 months as if the registrant was subject to such filing requirements.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x ☒No ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer¨
☐
Accelerated filer¨☐
Non-accelerated filerx (Do not check if a smaller reporting company)
☒
Smaller reporting company¨☐
Emerging growth company¨

☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ¨☐   No x☒
Indicate the number of shares outstanding of the issuer’s classes of common stock, as of the latest practicable date: Not applicable





CHENIERE CORPUS CHRISTI HOLDINGS, LLC
TABLE OF CONTENTS






1
Part I. Financial Information
3
Consolidated Balance Sheets
3
Consolidated Statements of Operations
43
Consolidated StatementBalance Sheets
4
Consolidated Statements of Member’s Equity
5
Consolidated Statements of Cash Flows
6
Notes to Consolidated Financial Statements
7
Note 1—Nature of Operations and Basis of Presentation
7
Note 2—Restricted Cash and Cash Equivalents
7
Note 3—Trade and Other Receivables, Net of Current Expected Credit Losses
8
Note 4—Inventory
8
Note 5—Property, Plant and Equipment, Net of Accumulated Depreciation
8
Note 6—Derivative Instruments
8
Note 7—Accrued Liabilities
12
Note 8—Debt
13
Note 9—Revenues from Contracts with Customers
14
Note 10—Related Party Transactions
16
Note 11—Customer Concentration
19
Note 12—Supplemental Cash Flow Information
20
2521
3328
3329
Part II. Other Information
3430
3430
30
3530
3631



i

Table of Contents
DEFINITIONS

As used in this quarterly report, the terms listed below have the following meanings: 


Common Industry and Other Terms

BcfASUAccounting Standards Update
Bcfbillion cubic feet
Bcf/dbillion cubic feet per day
Bcf/yrbillion cubic feet per year
Bcfebillion cubic feet equivalent
DOEU.S. Department of Energy
EPCengineering, procurement and construction
FERCFASBFinancial Accounting Standards Board
FERCFederal Energy Regulatory Commission
FTA countriescountries with which the United States has a free trade agreement providing for national treatment for trade in natural gas
GAAPgenerally accepted accounting principles in the United States
Henry Hubthe final settlement price (in USD per MMBtu) for the New York Mercantile Exchange’s Henry Hub natural gas futures contract for the month in which a relevant cargo’s delivery window is scheduled to begin
LIBORIPM agreementsintegrated production marketing agreements in which the gas producer sells to us gas on a global LNG index price, less a fixed liquefaction fee, shipping and other costs
LIBORLondon Interbank Offered Rate
LNGliquefied natural gas, a product of natural gas that, through a refrigeration process, has been cooled to a liquid state, which occupies a volume that is approximately 1/600th of its gaseous state
MMBtumillion British thermal units, anunits; one British thermal unit measures the amount of energy unitrequired to raise the temperature of one pound of water by one degree Fahrenheit
mtpamillion tonnes per annum
non-FTA countriescountries with which the United States does not have a free trade agreement providing for national treatment for trade in natural gas and with which trade is permitted
SECU.S. Securities and Exchange Commission
SPASOFRSecured Overnight Financing Rate
SPALNG sale and purchase agreement
TBtutrillion British thermal units, anunits; one British thermal unit measures the amount of energy unitrequired to raise the temperature of one pound of water by one degree Fahrenheit
Trainan industrial facility comprised of a series of refrigerant compressor loops used to cool natural gas into LNG

1
Table of Contents
Abbreviated OrganizationalLegal Entity Structure


The following diagram depicts our abbreviated organizationallegal entity structure as of September 30, 2017,March 31, 2022, including our ownership of certain subsidiaries, and the references to these entities used in this quarterly report:
cchorgcharta10.jpg
cch-20220331_g1.jpg

Unless the context requires otherwise, references to “CCH,” “the Company,the “Company,” “we,” “us,” and “our” refer to Cheniere Corpus Christi Holdings, LLC and its consolidated subsidiaries.

2
PART I.FINANCIAL INFORMATION
Table of Contents
PART I.    FINANCIAL INFORMATION

ITEM 1.CONSOLIDATED FINANCIAL STATEMENTS
ITEM 1.     CONSOLIDATED FINANCIAL STATEMENTS
CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETSSTATEMENTS OF OPERATIONS
(in thousands)millions)

(unaudited)



Three Months Ended March 31,
20222021
Revenues
LNG revenues$1,324 $615 
LNG revenues—affiliate671 268 
Total revenues1,995 883 
Operating costs and expenses
Cost of sales (excluding items shown separately below)2,341 186 
Cost of sales—affiliate12 35 
Cost of sales—related party— 35 
Operating and maintenance expense113 83 
Operating and maintenance expense—affiliate30 24 
Operating and maintenance expense—related party2 2 
General and administrative expense2 1 
General and administrative expense—affiliate8 5 
Depreciation and amortization expense110 89 
Total operating costs and expenses2,618 460 
Income (loss) from operations(623)423 
Other income (expense)
Interest expense, net of capitalized interest(118)(93)
Loss on modification or extinguishment of debt(2)— 
Interest rate derivative gain, net3 1 
Total other expense(117)(92)
Net income (loss)$(740)$331 


  September 30, December 31,
  2017 2016
ASSETS (unaudited)  
Current assets    
Cash and cash equivalents $—
 $—
Restricted cash 116,513
 197,201
Advances to affiliate 10,600
 20,108
Other current assets 1,164
 37,195
Other current assets—affiliate 279
 141
Total current assets 128,556
 254,645
     
Non-current restricted cash —
 73,339
Property, plant and equipment, net 7,834,810
 6,076,672
Debt issuance and deferred financing costs, net 103,879
 155,847
Non-current advances under long-term contracts —
 46,398
Other non-current assets, net 37,545
 29,547
Total assets $8,104,790
 $6,636,448
     
LIABILITIES AND MEMBER’S EQUITY    
Current liabilities    
Accounts payable $7,576
 $9,120
Accrued liabilities 178,665
 137,648
Due to affiliates 16,578
 7,050
Derivative liabilities 30,099
 43,383
Total current liabilities 232,918
 197,201
     
Long-term debt, net 6,333,804
 5,081,715
Non-current derivative liabilities 49,231
 43,105
Other non-current liabilities—affiliate —
 618
     
Member’s equity 1,488,837
 1,313,809
Total liabilities and member’s equity $8,104,790
 $6,636,448




The accompanying notes are an integral part of these consolidated financial statements.


3
Table of Contents

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONSBALANCE SHEETS
(in thousands)millions)
(unaudited)



March 31,December 31,
20222021
ASSETS(unaudited)
Current assets
Restricted cash and cash equivalents$50 $44 
Trade and other receivables, net of current expected credit losses197 280 
Accounts receivable—affiliate317 315 
Advances to affiliate91 128 
Inventory133 156 
Current derivative assets21 17 
Margin deposits64 13 
Other current assets9 15 
Total current assets882 968 
Property, plant and equipment, net of accumulated depreciation12,509 12,607 
Debt issuance and deferred financing costs, net of accumulated amortization6 7 
Derivative assets13 37 
Other non-current assets, net175 145 
Total assets$13,585 $13,764 
LIABILITIES AND MEMBER’S EQUITY 
Current liabilities 
Accounts payable$78 $119 
Accrued liabilities632 631 
Accrued liabilities—related party1 1 
Current debt, net of discount and debt issuance costs62 366 
Due to affiliates18 35 
Current derivative liabilities1,077 668 
Other current liabilities2 1 
Total current liabilities1,870 1,821 
Long-term debt, net of discount and debt issuance costs9,757 9,986 
Derivative liabilities1,231 638 
Other non-current liabilities48 38 
Member’s equity679 1,281 
Total liabilities and member’s equity$13,585 $13,764 

 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
        
Revenues$—
 $—
 $—
 $—
        
Expenses       
Operating and maintenance expense533
 338
 2,097
 875
Operating and maintenance expense (recovery)—affiliate1,504
 (3) 1,653
 17
Development expense (recovery)82
 77
 497
 (107)
Development expense (recovery)—affiliate—
 86
 8
 (34)
General and administrative expense861
 1,066
 3,824
 2,843
General and administrative expense—affiliate289
 180
 753
 471
Depreciation and amortization expense248
 65
 537
 149
Impairment expense and loss on disposal of assets2,059
 —
 2,064
 —
Total expenses5,576
 1,809
 11,433
 4,214
        
Loss from operations(5,576) (1,809) (11,433) (4,214)
        
Other income (expense)       
Loss on early extinguishment of debt—
 —
 (32,480) (29,011)
Derivative gain (loss), net(2,906) 20,113
 (35,002) (215,940)
Other expense(95) (74) (177) (74)
Total other income (expense)(3,001) 20,039
 (67,659) (245,025)

       
Net income (loss)$(8,577) $18,230
 $(79,092) $(249,239)




The accompanying notes are an integral part of these consolidated financial statements.


4
Table of Contents

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTSTATEMENTS OF MEMBER’S EQUITY
(in thousands)millions)
(unaudited)






Three Months Ended March 31, 2022
Cheniere CCH HoldCo I, LLC
Total Member’s Equity
Balance at December 31, 2021$1,281 $1,281 
Capital contributions138 138 
Net loss(740)(740)
Balance at March 31, 2022$679 $679 

Three Months Ended March 31, 2021
Cheniere CCH HoldCo I, LLC
Total Member’s Equity
Balance at December 31, 2020$2,624 $2,624 
Net income331 331 
Balance at March 31, 2021$2,955 $2,955 
 Cheniere CCH HoldCo I, LLC 
Total Member’s
Equity
Balance at December 31, 2016$1,313,809
 $1,313,809
Capital contributions254,120
 254,120
Net loss(79,092) (79,092)
Balance at September 30, 2017$1,488,837
 $1,488,837





The accompanying notes are an integral part of these consolidated financial statements.


5
Table of Contents

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)millions)
(unaudited)


Nine Months Ended September 30,Three Months Ended March 31,
2017 201620222021
Cash flows from operating activities   Cash flows from operating activities 
Net loss$(79,092) $(249,239)
Adjustments to reconcile net loss to net cash used in operating activities:   
Net income (loss)Net income (loss)$(740)$331 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense537
 149
Depreciation and amortization expense110 89 
Loss on early extinguishment of debt32,480
 29,011
Total losses on derivatives, net34,707
 215,940
Amortization of discount and debt issuance costsAmortization of discount and debt issuance costs6 5 
Loss on modification or extinguishment of debtLoss on modification or extinguishment of debt2 — 
Total losses on derivatives instruments, netTotal losses on derivatives instruments, net1,052 9 
Total gains on derivatives, net—related partyTotal gains on derivatives, net—related party— (1)
Net cash used for settlement of derivative instruments(42,160) (23,400)Net cash used for settlement of derivative instruments(30)(18)
Impairment expense and loss on disposal of assets2,064
 —
Changes in operating assets and liabilities:   Changes in operating assets and liabilities:
Trade and other receivablesTrade and other receivables83 41 
Accounts receivable—affiliateAccounts receivable—affiliate(2)(35)
Advances to affiliateAdvances to affiliate37 51 
InventoryInventory22 (2)
Accounts payable and accrued liabilities495
 (89)Accounts payable and accrued liabilities(28)66 
Accrued liabilities—related partyAccrued liabilities—related party— 1 
Due to affiliates1,176
 (214)Due to affiliates(15)(12)
Other, net(1,032) (1,125)Other, net(44)(1)
Other, net—affiliate(756) 154
Net cash used in operating activities(51,581) (28,813)
Net cash provided by operating activitiesNet cash provided by operating activities453 524 
   
Cash flows from investing activities 
  Cash flows from investing activities 
Property, plant and equipment, net(1,629,173) (1,573,923)
Property, plant and equipmentProperty, plant and equipment(45)(71)
Other25,995
 (44,362)Other— (1)
Net cash used in investing activities(1,603,178) (1,618,285)Net cash used in investing activities(45)(72)
   
Cash flows from financing activities 
  Cash flows from financing activities 
Proceeds from issuances of debt2,706,000
 2,871,000
Repayments of debt(1,436,050) (1,050,660)Repayments of debt(540)(140)
Debt issuance and deferred financing costs(23,309) (27,282)
Capital contributions254,120
 92
Capital contributions138 — 
Other(29) (10)
Net cash provided by financing activities1,500,732
 1,793,140
   
Net increase (decrease) in cash, cash equivalents and restricted cash(154,027) 146,042
Cash, cash equivalents and restricted cash—beginning of period270,540
 46,770
Cash, cash equivalents and restricted cash—end of period$116,513
 $192,812
Net cash used in financing activitiesNet cash used in financing activities(402)(140)
Net increase in restricted cash and cash equivalentsNet increase in restricted cash and cash equivalents6 312 
Restricted cash and cash equivalents—beginning of periodRestricted cash and cash equivalents—beginning of period44 70 
Restricted cash and cash equivalents—end of periodRestricted cash and cash equivalents—end of period$50 $382 


Balances per Consolidated Balance Sheet:
 September 30, 2017
Cash and cash equivalents$—
Restricted cash116,513
Total cash, cash equivalents and restricted cash$116,513




The accompanying notes are an integral part of these consolidated financial statements.


6
Table of Contents

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)




NOTE 1—NATURE OF OPERATIONS AND BASIS OF PRESENTATION

We are developing and constructingoperate a natural gas liquefaction and export facility atlocated near Corpus Christi, Texas (the “Corpus Christi LNG Terminal”) through CCL, which has natural gas liquefaction facilities consisting of 3 operational Trains for a total production capacity of approximately 15 mtpa of LNG. Additionally, we operate through CCP a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal (the “Liquefaction Facility”), which is on nearly 2,000 acres of land that we own or control near Corpus Christi, Texas,Terminal with several interstate and a 23-mileintrastate natural gas supply pipelinepipelines (the “Corpus Christi Pipeline” and together with the Liquefaction Facility,Trains, the “Liquefaction Project”) through wholly owned subsidiaries CCL and CCP, respectively.. The Liquefaction Project is being developed in stages. The first stage (“Stage 1”)also includes Trains 1 and 2, two3 LNG storage tanks one completeand 2 marine berth and a second partial berth and all of the Liquefaction Project’s necessary infrastructure facilities. The second stage includes Train 3, one LNG storage tank and the completion of the second partial berth. Stage 1 and the Corpus Christi Pipeline are currently under construction, and Train 3 is being commercialized and has all necessary regulatory approvals in place.berths.


Basis of Presentation


The accompanying unaudited Consolidated Financial Statements of CCH have been prepared in accordance with GAAP for interim financial information and in accordance with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Consolidated and Combined Financial Statements and accompanying notes included in our registration statementannual report on Form S-4, as amended, filed withForm 10-K for the SEC and declared effective on April 10, 2017fiscal year ended December 31, 2021. InReclassifications that are not material to our opinion, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation, have been included. Certain reclassifications have beenConsolidated Financial Statements, if any, are made to conform prior period financial information to conform to the current year presentation.  The reclassifications had no effect on our overall consolidated financial position, results of operations or cash flows.


Results of operations for the three and nine months ended September 30, 2017March 31, 2022 are not necessarily indicative of the results of operations that will be realized for the year ending December 31, 2017.2022.


We are a disregarded entity for federal and state income tax purposes. Our taxable income or loss, which may vary substantially from the net income or loss reported on our Consolidated Statements of Operations, is included in the consolidated federal income tax return of Cheniere. TheAccordingly, no provision or liability for federal or state income taxes taxes payableis included in the accompanying Consolidated Financial Statements.

Recent Accounting Standards

ASU 2020-04

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance primarily provides temporary optional expedients which simplify the accounting for contract modifications to existing contracts expected to arise from the market transition from LIBOR to alternative reference rates. The transition period under this standard is effective March 12, 2020 and deferred income tax balanceswill apply through December 31, 2022.

We have been recordedvarious credit facilities and interest rate swaps indexed to LIBOR, as iffurther described in Note 8—Debt. To date, we had filed all tax returnshave amended certain of our credit facilities to incorporate a fallback replacement rate indexed to SOFR as a result of the expected LIBOR transition. We elected to apply the optional expedients as applicable to certain modified terms, however the impact of applying the optional expedients was not material, and we do not expect the transition to a replacement rate indexed to SOFR to have a material impact on a separate return basis (“hypothetical carve-out basis”) from Cheniere.our future cash flows.. We will continue to elect to apply the optional expedients to qualifying contract modifications in the future.


NOTE 2—RESTRICTED CASH AND CASH EQUIVALENTS


Restricted cash consistsand cash equivalents consist of funds that are contractually or legally restricted as to usage or withdrawalwithdrawal. As of March 31, 2022 and have been presented separately fromDecember 31, 2021, we had $50 million and $44 million of restricted cash and cash equivalents, on our Consolidated Balance Sheets. As of September 30, 2017 and December 31, 2016, restricted cash consisted of the following (in thousands):respectively.
  September 30, December 31,
  2017 2016
Current restricted cash    
Liquefaction Project $116,513
 $197,201
     
Non-current restricted cash    
Liquefaction Project —
 73,339


Pursuant to the accounts agreement entered into with the collateral trustee for the benefit of our debt holders, we are required to deposit all cash received into reserve accounts controlled by the collateral trustee.  The usage or withdrawal of such cash is restricted to the payment of liabilities related to the Liquefaction Project and other restricted payments.



7
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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


NOTE 3—TRADE AND OTHER RECEIVABLES, NET OF CURRENT EXPECTED CREDIT LOSSES

Trade and other receivables, net of current expected credit losses consisted of the following (in millions):
March 31,December 31,
20222021
Trade receivables$160 $256 
Other receivables37 24 
Total trade and other receivables, net of current expected credit losses$197 $280 

NOTE 4—INVENTORY

Inventory consisted of the following (in millions):
March 31,December 31,
20222021
Materials$89 $88 
LNG24 45 
Natural gas19 21 
Other1 2 
Total inventory$133 $156 

NOTE 5—PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION
 
Property, plant and equipment, net consists of accumulated depreciation consisted of the following (in millions):
March 31,December 31,
20222021
LNG terminal
LNG terminal and interconnecting pipeline facilities$13,263 $13,222 
LNG site and related costs294 294 
LNG terminal construction-in-process37 66 
Accumulated depreciation(1,090)(981)
Total LNG terminal, net of accumulated depreciation12,504 12,601 
Fixed assets
Fixed assets22 23 
Accumulated depreciation(17)(17)
Total fixed assets, net of accumulated depreciation5 6 
Property, plant and equipment, net of accumulated depreciation$12,509 $12,607 

The following table shows depreciation expense and offsets to LNG terminal costs and fixed assets, as follows (in thousands)millions):
  September 30, December 31,
  2017 2016
LNG terminal costs    
LNG terminal construction-in-process $7,816,238
 $6,060,299
LNG site and related costs 13,844
 14,006
Total LNG terminal costs 7,830,082
 6,074,305
Fixed assets    
Fixed assets 5,432
 2,620
Accumulated depreciation (704) (253)
Total fixed assets, net 4,728
 2,367
Property, plant and equipment, net $7,834,810
 $6,076,672
Three Months Ended March 31,
20222021
Depreciation expense$110 $88 
Offsets to LNG terminal costs (1)— 143 

Depreciation expense was $0.3 million and $47 thousand in(1)We recognize offsets to LNG terminal costs related to the three months ended September 30, 2017 and 2016, respectively, and $0.5 million and $0.1 million insale of commissioning cargoes because these amounts were earned or loaded prior to the nine months ended September 30, 2017 and 2016, respectively.start of commercial operations of the respective Trains of the Liquefaction Project during the testing phase for its construction.


NOTE 4—6—DERIVATIVE INSTRUMENTS
 
We have entered into the following derivative instruments that are reported at fair value:
•interest rate swaps (“Interest Rate Derivatives”) to protect againsthedge the exposure to volatility of future cash flows and hedgein a portion of the variable-ratefloating-rate interest payments on our amended and restated term loan credit facility (the “2015 CCH“CCH Credit Facility”) and
•commodity derivatives consisting of natural gas supply contracts, including those under our IPM agreement, for the commissioning and operation of the Liquefaction Project (“Physical Liquefaction Supply Derivatives”) and
8
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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
associated economic hedges (“Financial Liquefaction Supply Derivatives,” and collectively with the Physical Liquefaction Supply Derivatives, the “Liquefaction Supply Derivatives”).


We recognize our derivative instruments as either assets or liabilities and measure those instruments at fair value. None of our derivative instruments are designated as cash flow or fair value hedging instruments, and changes in fair value are recorded within our Consolidated Statements of Operations to the extent not utilized for the commissioning process.process, in which case it is capitalized.


Interest Rate Derivatives

As of September 30, 2017, we had theThe following Interest Rate Derivatives outstanding:
Initial Notional AmountMaximum Notional AmountEffective DateMaturity DateWeighted Average Fixed Interest Rate PaidVariable Interest Rate Received
Interest Rate Derivatives$28.8 million$4.9 billionMay 20, 2015May 31, 20222.29%One-month LIBOR

Our Interest Rate Derivatives are categorized within Level 2 oftable shows the fair value hierarchy andof our derivative instruments that are required to be measured at fair value on a recurring basis. basis (in millions):
Fair Value Measurements as of
March 31, 2022December 31, 2021
Quoted Prices in Active Markets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		TotalQuoted Prices in Active Markets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Total
Interest Rate Derivatives liability$— $(12)$— $(12)$— $(40)$— $(40)
Liquefaction Supply Derivatives asset (liability)(49)22 (2,235)(2,262)5 4 (1,221)(1,212)

We value our Interest Rate Derivatives using valuations based on the initial trade prices. Using an income-based approach subsequent valuations are based onutilizing observable inputs to the valuation model including interest rate curves, risk adjusted discount rates, credit spreads and other relevant data. We value our Liquefaction Supply Derivatives using a market-based approach or option-based approach incorporating present value techniques, as needed, using observable commodity price curves, when available, and other relevant data.


In May 2017, we settledThe fair value of our Physical Liquefaction Supply Derivatives is predominantly driven by observable and unobservable market commodity prices and, as applicable to our natural gas supply contracts, our assessment of the associated events deriving fair value including, but not limited to, evaluation of whether the respective market exists from the perspective of market participants as infrastructure is developed.

We include a portion of our Interest RatePhysical Liquefaction Supply Derivatives as Level 3 within the valuation hierarchy as the fair value is developed through the use of internal models which incorporate significant unobservable inputs. In instances where observable data is unavailable, consideration is given to the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks, such as future prices of energy units for unobservable periods, liquidity and recognizedvolatility.

The Level 3 fair value measurements of natural gas positions within our Physical Liquefaction Supply Derivatives could be materially impacted by a derivative losssignificant change in certain natural gas and international LNG prices. The following table includes quantitative information for the unobservable inputs for our Level 3 Physical Liquefaction Supply Derivatives as of $13.0 millionMarch 31, 2022:
Net Fair Value Liability
(in millions)		Valuation ApproachSignificant Unobservable InputRange of Significant Unobservable Inputs / Weighted Average (1)
Physical Liquefaction Supply Derivatives$(2,235)Market approach incorporating present value techniquesHenry Hub basis spread$(0.815) - $0.103 / $(0.156)
Option pricing modelInternational LNG pricing spread, relative to Henry Hub (2)266% - 533% / 363%
(1)Unobservable inputs were weighted by the relative fair value of the instruments.
(2)Spread contemplates U.S. dollar-denominated pricing.    

Increases or decreases in conjunction withbasis or pricing spreads, in isolation, would decrease or increase, respectively, the terminationfair value of approximately $1.4 billion of commitments under the 2015 CCH Credit Facility, as discussed in Note 6—Debt.our Physical Liquefaction Supply Derivatives.

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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)



The following table (in thousands) shows the fair value and location of our Interest Rate Derivatives on our Consolidated Balance Sheets:
  September 30, December 31,
Balance Sheet Location 2017 2016
Derivative liabilities $(30,099) $(43,383)
Non-current derivative liabilities (49,231) (43,105)
Total derivative liabilities $(79,330) $(86,488)

The following table (in thousands) shows the changes in the fair value and settlements of our Level 3 Physical Liquefaction Supply Derivatives, including those with related parties (in millions):
Three Months Ended March 31,
20222021
Balance, beginning of period$(1,221)$12 
Realized and mark-to-market losses:
Included in cost of sales(1,170)(66)
Purchases and settlements:
Purchases(5)3 
Settlements161 37 
Balance, end of period$(2,235)$(14)
Change in unrealized loss relating to instruments still held at end of period$(1,170)$(66)

Except for Interest Rate Derivatives, recorded inall counterparty derivative gain (loss), net on our Consolidated Statementscontracts provide for the unconditional right of Operations during the three and nine months ended September 30, 2017 and 2016:
  Three Months Ended September 30, Nine Months Ended September 30,
  2017 2016 2017 2016
Interest Rate Derivatives gain (loss) $(2,906) $20,113
 $(35,002) $(215,940)

Liquefaction Supply Derivatives

CCL entered into the Liquefaction Supply Derivatives during the nine months ended September 30, 2017. The fair value of the Liquefaction Supply Derivatives is predominantly driven by market commodity basis prices and our assessment of the associated conditions precedent, including evaluating whether the respective market is available as pipeline infrastructure is developed. Upon the satisfaction of conditions precedent, including completion and placement into service of relevant pipeline infrastructure to accommodate marketable physical gas flow, we recognize a gain or loss based on the fair value of the respective natural gas supply contracts as of the reporting date.

The fair value of substantially all of the Liquefaction Supply Derivatives is developed through the use of internal models which are impacted by inputs that are unobservableset-off in the marketplace. As a result, the fair valueevent of the Liquefaction Supply Derivatives is designated as Level 3 within the valuation hierarchy. The curves useddefault. We have elected to generate the fair value of the Liquefaction Supply Derivatives are based on basis adjustments applied to forward curves for a liquid trading point. In addition, there may be observable liquid market basis information in the near term, but terms of a Liquefaction Supply Derivatives contract may exceed the period for which such information is available, resulting in a Level 3 classification. In these instances, the fair value of the contract incorporates extrapolation assumptions made in the determination of the market basis price for future delivery periods in which applicable commodity basis prices were either not observable or lacked corroborative market data. Internal fair value models include conditions precedent to the respective long-term natural gas supply contracts. As of September 30, 2017, some of the Liquefaction Supply Derivatives existed within markets for which the pipeline infrastructure is under development to accommodate marketable physical gas flow. The forward notional natural gas buy position of the Liquefaction Supply Derivatives was approximately 362 TBtu as of September 30, 2017.

The following table includes quantitative information for the unobservable inputs for our Liquefaction Supply Derivatives as of September 30, 2017:
Net Fair Value Asset
(in thousands)
Valuation TechniqueSignificant Unobservable InputSignificant Unobservable Inputs Range
Liquefaction Supply Derivatives$295Income ApproachBasis Spread$(0.095) - $0.078

Derivativereport derivative assets and liabilities arising from ourthose derivative contracts with the same counterparty are reportedand the unconditional contractual right of set-off on a net basis, as all counterparty derivative contracts provide for net settlement.basis. The use of derivative instruments exposes us to counterparty credit risk, or the risk that a counterparty will be unable to meet its commitments in instances when our derivative instruments are in an asset position. OurAdditionally, counterparties are at risk that we will be unable to meet our commitments in instances where our derivative instruments are subject to contractual provisions which providein a liability position. We incorporate both our own nonperformance risk and the respective counterparty’s nonperformance risk in fair value measurements. In adjusting the fair value of our derivative contracts for the unconditional righteffect of nonperformance risk, we have considered the impact of any applicable credit enhancements, such as collateral postings, set-off rights and guarantees.

Interest Rate Derivatives

We have entered into interest rate swaps to protect against volatility of future cash flows and hedge a portion of the variable interest payments on the CCH Credit Facility.

As of March 31, 2022, we had the following Interest Rate Derivatives outstanding:
Notional Amounts
March 31, 2022December 31, 2021Latest Maturity DateWeighted Average Fixed Interest Rate PaidVariable Interest Rate Received
Interest Rate Derivatives$4.5 billion$4.5 billionMay 31, 20222.30%One-month LIBOR

The following table shows the effect and location of our Interest Rate Derivatives on our Consolidated Statements of Operations (in millions):
Gain (Loss) Recognized in Consolidated Statements of Operations
Consolidated Statements of Operations LocationThree Months Ended March 31,
20222021
Interest Rate DerivativesInterest rate derivative gain, net$3 $1 

Liquefaction Supply Derivatives

CCL has entered into primarily index-based Liquefaction Supply Derivatives. The remaining terms of the physical natural gas supply contracts range up to 15 years, some of which commence upon the satisfaction of certain conditions precedent. The terms of the Financial Liquefaction Supply Derivatives range up to approximately three years.

The forward notional amount for all derivative assetsour Liquefaction Supply Derivatives was approximately 2,889 TBtu and liabilities with a given counterparty in the event2,915 TBtu as of default.March 31, 2022 and December 31, 2021, respectively.



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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


The following table shows the effect and location of our Liquefaction Supply Derivatives recorded on our Consolidated Statements of Operations (in thousands)millions):
Gain (Loss) Recognized in Consolidated Statements of Operations
Consolidated Statements of Operations Location (1)Three Months Ended March 31,
20222021
LNG revenues$(5)$1 
Cost of sales(1,050)(11)
Cost of sales—related party (2)— 1 
(1)Does not include the realized value associated with derivative instruments that settle through physical delivery. Fair value fluctuations associated with commodity derivative activities are classified and presented consistently with the item economically hedged and the nature and intent of the derivative instrument.
(2)Includes amounts recorded related to natural gas supply contracts that we had with a related party. This agreement ceased to be considered a related party agreement as of November 1, 2021 as discussed in Note 10—Related Party Transactions.

Fair Value and Location of Derivative Assets and Liabilities on the Consolidated Balance Sheets

The following table shows the fair value and location of our Liquefaction Supply Derivativesderivative instruments on our Consolidated Balance Sheets:Sheets (in millions):
March 31, 2022
Interest Rate DerivativesLiquefaction Supply Derivatives (1)Total
Consolidated Balance Sheets Location
Current derivative assets$— $21 $21 
Derivative assets— 13 13 
Total derivative assets— 34 34 
Current derivative liabilities(12)(1,065)(1,077)
Derivative liabilities— (1,231)(1,231)
Total derivative liabilities(12)(2,296)(2,308)
Derivative liability, net$(12)$(2,262)$(2,274)
December 31, 2021
Interest Rate DerivativesLiquefaction Supply Derivatives (1)Total
Consolidated Balance Sheets Location
Current derivative assets$— $17 $17 
Derivative assets— 37 37 
Total derivative assets— 54 54 
Current derivative liabilities(40)(628)(668)
Derivative liabilities— (638)(638)
Total derivative liabilities(40)(1,266)(1,306)
Derivative liability, net$(40)$(1,212)$(1,252)
  September 30, December 31,
Balance Sheet Location 2017 2016
Other non-current assets, net $295
 $—

The following table (in thousands) shows the changes(1)Does not include collateral posted with counterparties by us of $64 million and $13 million, which are included in the fair value from the mark-to-market gains of our Liquefaction Supply Derivatives recordedother current assets in our Consolidated StatementsBalance Sheets as of Operations during the threeMarch 31, 2022 and nine months ended September 30, 2017 and 2016:December 31, 2021, respectively.

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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
   Three Months Ended September 30, Nine Months Ended September 30,
 Statement of Operations Location 2017 2016 2017 2016
Liquefaction Supply Derivatives gainOperating and maintenance expense $(678) $—
 $(295) $—

Consolidated Balance SheetSheets Presentation


Our derivative instruments are presented on a net basis on our Consolidated Balance Sheets as described above. The following table (in thousands) shows the fair value of our derivatives outstanding on a gross and net basis:basis (in millions):
Liquefaction Supply Derivatives
As of March 31, 2022
Gross assets$39 
Offsetting amounts(5)
Net assets$34 
Gross liabilities$(2,307)
Offsetting amounts11 
Net liabilities$(2,296)
As of December 31, 2021
Gross assets$76 
Offsetting amounts(22)
Net assets$54 
Gross liabilities$(1,295)
Offsetting amounts29 
Net liabilities$(1,266)
  Gross Amounts Recognized Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets
Offsetting Derivative Assets (Liabilities)   
As of September 30, 2017      
Interest Rate Derivatives $(79,937) $607
 $(79,330)
Liquefaction Supply Derivatives 328
 (33) 295
As of December 31, 2016      
Interest Rate Derivatives (95,923) 9,435
 (86,488)


NOTE 5—7—ACCRUED LIABILITIES
 
As of September 30, 2017 and December 31, 2016, accruedAccrued liabilities consisted of the following (in thousands)millions): 
March 31,December 31,
20222021
Accrued natural gas purchases$464 $531 
Interest costs and related debt fees110 7 
Liquefaction Project costs41 43 
Other accrued liabilities17 50 
Total accrued liabilities$632 $631 

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  September 30, December 31,
  2017 2016
Interest costs and related debt fees $72,769
 $59,994
Liquefaction Project costs 94,886
 73,150
Other 11,010
 4,504
Total accrued liabilities $178,665
 $137,648


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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


NOTE 6—8—DEBT


As of September 30, 2017 and December 31, 2016, ourOur debt consisted of the following (in thousands)millions): 
March 31,December 31,
20222021
Senior Secured Notes:
7.000% due 2024$1,250 $1,250 
5.875% due 20251,500 1,500 
5.125% due 20271,500 1,500 
3.700% due 20291,500 1,500 
3.72% weighted average rate due 20392,721 2,721 
Total Senior Secured Notes8,471 8,471 
CCH Credit Facility (1)1,439 1,728 
$1.2 billion CCH Working Capital Facility (“CCH Working Capital Facility”) (2)— 250 
Total debt9,910 10,449 
Current portion of long-term debt(62)(117)
Short-term debt— (250)
Unamortized discount and debt issuance costs, net(91)(96)
Total long-term debt, net of discount and debt issuance costs$9,757 $9,986 
  September 30, December 31,
  2017 2016
Long-term debt    
7.000% Senior Secured Notes due 2024 (“2024 CCH Senior Notes”) $1,250,000
 $1,250,000
5.875% Senior Secured Notes due 2025 (“2025 CCH Senior Notes”) 1,500,000
 1,500,000
5.125% Senior Secured Notes due 2027 (“2027 CCH Senior Notes”) 1,500,000
 —
2015 CCH Credit Facility 2,150,737
 2,380,788
Unamortized debt issuance costs (66,933) (49,073)
Total long-term debt, net 6,333,804
 5,081,715
     
Current debt    
$350 million CCH Working Capital Facility (“CCH Working Capital Facility”) —
 —
Total debt, net $6,333,804
 $5,081,715

2017 Debt Issuances and Redemptions

2027 CCH Senior Notes

In May 2017, we issued an aggregate principal amount of $1.5 billion of the 2027 CCH Senior Notes, which are jointly and severally guaranteed by our subsidiaries CCL, CCP and CCP GP (each a “Guarantor” and collectively, the “Guarantors”). Net proceeds of the offering of approximately $1.4 billion, after deducting commissions, fees and expenses and provisioning for incremental interest required under the 2027 CCH Senior Notes during construction, were used to prepay a(1)A portion of the outstanding borrowings under the 2015balance that is due within one year is classified as current portion of long-term debt.
(2)The CCH Working Capital Facility is classified as short-term debt.

Credit Facility, resultingFacilities

Below is a summary of our credit facilities outstanding as of March 31, 2022 (in millions):
CCH Credit FacilityCCH Working Capital Facility
Total facility size$1,439 $1,200 
Less:
Outstanding balance1,439 — 
Letters of credit issued— 276 
Available commitment$— $924 
Priority rankingSenior securedSenior secured
Interest rate on available balanceLIBOR plus 1.75% or base rate plus 0.75% (1)LIBOR plus 1.25% - 1.75% or base rate plus 0.25% - 0.75% (1)
Weighted average interest rate of outstanding balance2.21%n/a
Commitment fees on undrawn balancen/a0.50%
Maturity dateJune 30, 2024June 29, 2023
(1)These facilities were amended in 2021 to establish a write-off of debt issuance costs associated with the 2015 CCH Credit Facility of $32.5 million during the nine months ended September 30, 2017. Borrowings under the 2027 CCH Senior Notes accrue interest at a fixedSOFR-indexed replacement rate of 5.125%, and interest on the 2027 CCH Senior Notes is payable semi-annually in arrears. for LIBOR.

Restrictive Debt Covenants

The 2027 CCH Senior Notes are governed by the same common indenture asindentures governing our other senior notes (the “CCH Indenture”), which containsand other agreements underlying our debt contain customary terms and events of default and certain covenants that, among other things, may limit us and redemption terms.our restricted subsidiaries’ ability to make certain investments or pay dividends or distributions.


At any time priorAs of March 31, 2022, we were in compliance with all covenants related to January 1, 2027, we may redeem all or a part of the 2027 CCH Senior Notes at a redemption price equal to the “make-whole” price set forth in the CCH Indenture, plus accrued and unpaid interest, if any, to the date of redemption. We also may at any time on or after January 1, 2027 through the maturity date of June 30, 2027, redeem the 2027 CCH Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2027 CCH Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to the date of redemption.

In connection with the closing of the sale of the 2027 CCH Senior Notes, we and the Guarantors entered into a registration rights agreement (the “CCH Registration Rights Agreement”). Under the CCH Registration Rights Agreement, we and the Guarantors have agreed, and any future guarantors of the 2027 CCH Senior Notes will agree, to use commercially reasonable efforts to file with the SEC and cause to become effective a registration statement relating to an offer to exchange any and all of the 2027 CCH Senior Notes for a like aggregate principal amount of our debt securities with terms identical in all material respects to the 2027 CCH Senior Notes sought to be exchanged (other than with respect to restrictions on transfer or to any increase in annual interest rate), within 360 days after May 19, 2017. Under specified circumstances, we and the Guarantors have also agreed, and any future guarantorsagreements.

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Table of the 2027 CCH Senior Notes will also agree, to use commercially reasonable efforts to cause to become effective a shelf registration statement relating to resales of the 2027 CCH Senior Notes. We will be obligated to pay additional interest on the 2027 CCH Senior Notes if we fail to comply with our obligation to register them within the specified time period.


Contents
CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


Credit Facilities

Below is a summary (in thousands) of our credit facilities outstanding as of September 30, 2017:
  2015 CCH Credit Facility CCH Working Capital Facility
Original facility size $8,403,714
 $350,000
Outstanding balance 2,150,737
 —
Commitments terminated 3,832,263
 —
Letters of credit issued —
 162,503
Available commitment $2,420,714
 $187,497
     
Interest rate LIBOR plus 2.25% or base rate plus 1.25% (1) LIBOR plus 1.50% - 2.00% or base rate plus 0.50% - 1.00%
Maturity date Earlier of May 13, 2022 or second anniversary of CCL Trains 1 and 2 completion date December 14, 2021, with various terms for underlying loans
(1)There is a 0.25% step-up for both LIBOR and base rate loans following the completion of Trains 1 and 2 of the Liquefaction Project as defined in the common terms agreement.

Interest Expense


Total interest expense, net of capitalized interest consisted of the following (in thousands)millions):
 Three Months Ended March 31,
20222021
Total interest cost$119 $119 
Capitalized interest, including amounts capitalized as an allowance for funds used during construction(1)(26)
Total interest expense, net of capitalized interest$118 $93 
  Three Months Ended September 30, Nine Months Ended September 30,
  2017 2016 2017 2016
Total interest cost $95,204
 $61,649
 $263,560
 $154,404
Capitalized interest, including amounts capitalized as an Allowance for Funds Used During Construction (95,204) (61,649) (263,560) (154,404)
Total interest expense, net $—
 $—
 $—
 $—


Fair Value Disclosures


The following table (in thousands) shows the carrying amount and estimated fair value of our debt:debt (in millions):
  September 30, 2017 December 31, 2016
  Carrying
Amount		 Estimated
Fair Value		 Carrying
Amount		 Estimated
Fair Value
Senior notes (1) $4,250,000
 $4,583,750
 $2,750,000
 $2,901,563
Credit facilities (2) 2,150,737
 2,150,737
 2,380,788
 2,380,788
 March 31, 2022December 31, 2021
 Carrying
Amount		Estimated
Fair Value		Carrying
Amount		Estimated
Fair Value
Senior notes — Level 2 (1)$6,500 $6,675 $6,500 $7,095 
Senior notes — Level 3 (2)1,971 2,059 1,971 2,227 
(1)The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of these senior notes and other similar instruments.
(2)The Level 3 estimated fair value was calculated based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including interest rates based on debt issued by parties with comparable credit ratings to us and inputs that are not observable in the market. 

The estimated fair value of our credit facilities approximates the principal amount outstanding because the interest rates are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty.

NOTE 9—REVENUES FROM CONTRACTS WITH CUSTOMERS

The following table represents a disaggregation of revenue earned from contracts with customers (in millions):
Three Months Ended March 31,
20222021
LNG revenues$1,329 $614 
LNG revenues—affiliate671 268 
Total revenues from customers2,000 882 
Net derivative gain (loss) (1)(5)1 
Total revenues$1,995 $883 
(1)Includes 2024 CCH Senior Notes, 2025 CCH Senior Notes and 2027 CCH Senior Notes (collectively, the “CCH Senior Notes”). The Level 2 estimated fair value was based on quotes obtained from broker-dealers or market makers of the CCH Senior Notes and other similar instruments.
(2)Includes 2015 CCH Credit Facility and CCH Working Capital Facility. The Level 3 estimated fair value approximates the principal amount because the interest rates are variable and reflective of market rates and the debt may be repaid, in full or in part, at any time without penalty.

(1)See Note 6—Derivative Instruments for additional information about our derivatives.

Contract Assets and Liabilities

The following table shows our contract assets, net of current expected credit losses, which are classified as other current assets and other non-current assets, net on our Consolidated Balance Sheets (in millions):
March 31,December 31,
20222021
Contract assets, net of current expected credit losses$115 $104 


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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)

The following table reflects the changes in our contract liabilities, which we classify as other non-current liabilities on our Consolidated Balance Sheets (in millions):
Three Months Ended March 31, 2022
Deferred revenue, beginning of period$35 
Cash received but not yet recognized in revenue45 
Revenue recognized from prior period deferral(35)
Deferred revenue, end of period$45 

Transaction Price Allocated to Future Performance Obligations

Because many of our sales contracts have long-term durations, we are contractually entitled to significant future consideration which we have not yet recognized as revenue. The following table discloses the aggregate amount of the transaction price that is allocated to performance obligations that have not yet been satisfied as of March 31, 2022 and December 31, 2021:
March 31, 2022December 31, 2021
Unsatisfied Transaction Price (in billions)Weighted Average Recognition Timing (years) (1)Unsatisfied Transaction Price (in billions)Weighted Average Recognition Timing (years) (1)
LNG revenues$32.6 9$31.7 9
LNG revenues—affiliate1.0 101.1 10
Total revenues$33.6 $32.8 
(1)The weighted average recognition timing represents an estimate of the number of years during which we shall have recognized half of the unsatisfied transaction price.

We have elected the following exemptions which omit certain potential future sources of revenue from the table above:
(1)We omit from the table above all performance obligations that are part of a contract that has an original expected duration of one year or less.
(2)The table above excludes substantially all variable consideration under our SPAs. We omit from the table above all variable consideration that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation when that performance obligation qualifies as a series. The amount of revenue from variable fees that is not included in the transaction price will vary based on the future prices of Henry Hub throughout the contract terms, to the extent customers elect to take delivery of their LNG, and adjustments to the consumer price index. Certain of our contracts contain additional variable consideration based on the outcome of contingent events and the movement of various indexes. We have not included such variable consideration in the transaction price to the extent the consideration is considered constrained due to the uncertainty of ultimate pricing and receipt. Approximately 64% and 47% of our LNG revenues from contracts included in the table above during the three months ended March 31, 2022 and 2021, respectively, were related to variable consideration received from customers. None of our LNG revenues—affiliates from the contract included in the table above were related to variable consideration received from customers during the three months ended March 31, 2022 and 2021.

We may enter into contracts to sell LNG that are conditioned upon one or both of the parties achieving certain milestones such as reaching a final investment decision on a certain liquefaction Train, obtaining financing or achieving substantial completion of a Train and any related facilities. These contracts are considered completed contracts for revenue recognition purposes and are included in the transaction price above when the conditions are considered probable of being met.

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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
NOTE 7—10—RELATED PARTY TRANSACTIONS


Below is a summary of our related party transactions as reported on our Consolidated Statements of Operations (in millions):
Three Months Ended March 31,
20222021
LNG revenues—affiliate
Cheniere Marketing Agreements$665 $260 
Contracts for Sale and Purchase of Natural Gas and LNG6 8 
Total LNG revenues—affiliate671 268 
Cost of sales—affiliate
Contracts for Sale and Purchase of Natural Gas and LNG12 4 
Cheniere Marketing Agreements— 31 
Total cost of sales—affiliate12 35 
Cost of sales—related party
Natural Gas Supply Agreement (1)— 35 
Operating and maintenance expense—affiliate
Services Agreements30 24 
Operating and maintenance expense—related party
Natural Gas Transportation Agreements2 2 
General and administrative expense—affiliate
Services Agreements8 5 
(1)Includes amounts recorded related to natural gas supply contracts that we had with a related party. This agreement ceased to be considered a related party agreement as of December 31, 2021 as discussed below.

We had $16.6$18 million and $7.1$35 million due to affiliates and zero and $0.6 million of other non-current liabilities—affiliate as of September 30, 2017March 31, 2022 and December 31, 2016,2021, respectively, under agreements with affiliates, as described below.


LNG Sale and PurchaseCheniere Marketing Agreements


Cheniere Marketing SPA

CCL has twoa fixed price 20-year SPAsSPA with Cheniere Marketing International LLP (“Cheniere Marketing UK”). Under the first SPA (the “Amended Cheniere Marketing Foundation SPA”Marketing”), Cheniere Marketing UK will purchase LNG from CCL for a price consistingwholly owned subsidiary of a fixed fee of $3.50 per MMBtu (a portion of which is subject to annual adjustment for inflation) of LNG plus a variable fee equal to 115% of Henry Hub per MMBtu of LNG. At Cheniere, Marketing UK’s option, which has not been exercised yet, the Amended Cheniere Marketing Foundation SPA commences upon the date of first commercial delivery for Train 2 and includes an annual contract quantity of 40 TBtu of LNG. The second SPA (the “Cheniere Marketing Base SPA”) with a term of 20 years which allows Cheniere Marketing UK to purchase, at its option, (1) up to a cumulative total of 150 TBtu of LNG within the commissioning periods for Trains 1 through 3 (2) any LNG produced from the end of the commissioning period for Train 1 until the date of first commercial delivery of LNG from Train 1 and (3)(2) any excess LNG produced by the Liquefaction FacilityProject that is not committed to customers under third-party SPAs or to Cheniere Marketing UK under the Amended Cheniere Marketing Foundation SPA, as determined by CCL in each contract year, in each case for a price consisting of a fixed fee of $3.00 per MMBtu of LNG plus a variable fee equal to 115% of Henry Hub per MMBtu of LNG.third party SPAs. Under the Cheniere Marketing Base SPA, Cheniere Marketing UK may, without charge, elect to suspend deliveries of cargoes (other than commissioning cargoes) scheduled for any month under the applicable annual delivery program by providing specified notice in advance. Additionally, CCL has: (1) a fixed price SPA with a term through 2043 with Cheniere Marketing which allows them to purchase volumes of approximately 15 TBtu per annum of LNG and (2) an SPA with Cheniere Marketing for approximately 44 TBtu of LNG with a maximum term up to 2026 associated with the integrated production marketing gas supply agreement between CCL and EOG Resources, Inc. As of March 31, 2022 and December 31, 2021, CCL had $317 million and $314 million of accounts receivable—affiliate, respectively, under these agreements with Cheniere Marketing.


Facility Swap Agreement

We have entered into an arrangement with subsidiaries of Cheniere to provide the ability, in limited circumstances, to potentially fulfill commitments to LNG buyers in the event operational conditions impact operations at either the Sabine Pass or Corpus Christi liquefaction facilities. The purchase price for such cargoes would be (i) 115% of the applicable natural gas feedstock purchase price or (ii) a free-on-board U.S. Gulf Coast LNG market price, whichever is greater.
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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
Services Agreements

We recorded aggregate expenses from affiliates on our Consolidated Statements of Operations of $1.7 million and $0.3 million during the three months ended September 30, 2017 and 2016, respectively, and $2.2 million and $0.5 million for the nine months ended September 30, 2017 and 2016, respectively, under the services agreements below.

Gas and Power Supply Services Agreement (“G&P Agreement”)


CCL has a G&P Agreement with Cheniere Energy Shared Services, Inc. (“Shared Services”), a wholly owned subsidiary of Cheniere, pursuant to which Shared Services will manage the gas and power procurement requirements of CCL. The services include, among other services, exercising the day-to-day management of CCL’s natural gas and power supply requirements, negotiating agreements on CCL’s behalf and providing other administrative services. Prior to the substantial completion of each Train of the Liquefaction Facility,Project, no monthly fee payment is required except for reimbursement of operating expenses. After substantial completion of each Train of the Liquefaction Facility,Project, for services performed while the Liquefaction FacilityProject is operational, CCL will pay, in addition to the reimbursement of operating expenses, a fixed monthly fee of $125,000 (indexed for inflation) for services with respect to such Train.


Operation and Maintenance Agreements (“O&M Agreements”)


CCL has an O&M Agreement (“CCL O&M Agreement”) with Cheniere LNG O&M Services, LLC (“O&M Services”), a wholly owned subsidiary of Cheniere, pursuant to which CCL receives all of the necessary services required to construct, operate and maintain the Liquefaction Facility.Project. The services to be provided include, among other services, preparing and maintaining staffing plans, identifying and arranging for procurement of equipment and materials, overseeing contractors, administering various agreements, information technology services and other services required to operate and maintain the Liquefaction Facility.Project. Prior to the substantial completion of each Train of the Liquefaction Facility,Project, no monthly fee payment is required except for reimbursement of operating expenses. After substantial completion of each Train of the Liquefaction Facility,Project, for services performed while the Liquefaction FacilityProject is operational, CCL will pay, in addition to the reimbursement of operating expenses, a fixed monthly fee of $125,000 (indexed for inflation) for services with respect to such Train.


CCP has an O&M Agreement (“CCP O&M Agreement”) with O&M Services pursuant to which CCP receives all of the necessary services required to construct, operate and maintain the Corpus Christi Pipeline. The services to be provided include, among other services, preparing and maintaining staffing plans, identifying and arranging for procurement of equipment and

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


materials, overseeing contractors, information technology services and other services required to operate and maintain the Corpus Christi Pipeline. CCP is required to reimburse O&M Services for all operating expenses incurred on behalf of CCP.


Management Services Agreements (“MSAs”)


CCL has ana MSA with Shared Services pursuant to which Shared Services manages the construction and operation of the Liquefaction Facility,Project, excluding those matters provided for under the G&P Agreement and the CCL O&M Agreement. The services include, among other services, exercising the day-to-day management of CCL’s affairs and business, managing CCL’s regulatory matters, preparing status reports, providing contract administration services for all contracts associated with the Liquefaction FacilityProject and obtaining insurance. Prior to the substantial completion of each Train of the Liquefaction Facility,Project, no monthly fee payment is required except for reimbursement of expenses. After substantial completion of each Train, CCL will pay, in addition to the reimbursement of related expenses, a monthly fee equal to 3% of the capital expenditures incurred in the previous month and a fixed monthly fee of $375,000 for services with respect to such Train.


CCP has ana MSA with Shared Services pursuant to which Shared Services manages CCP’s operations and business, excluding those matters provided for under the CCP O&M Agreement. The services include, among other services, exercising the day-to-day management of CCP’s affairs and business, managing CCP’s regulatory matters, preparing status reports, providing contract administration services for all contracts associated with the Corpus Christi Pipeline and obtaining insurance. CCP is required to reimburse Shared Services for the aggregate of all costs and expenses incurred in the course of performing the services under the MSA.


Natural Gas Supply Agreement

CCL is party to a natural gas supply agreement with a related party in the ordinary course of business, to obtain a fixed minimum daily volume of feed gas for the operation of the Liquefaction Project. The related party entity was acquired by a non-related party on November 1, 2021; therefore, as of such date, this agreement ceased to be considered a related party transaction.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
Natural Gas Transportation Agreements

Agreements with Related Party

CCL is party to natural gas transportation agreements with a related party in the ordinary course of business for the operation of the Liquefaction Project, for a period of 10 years which began in May 2020. Cheniere accounts for its investment in this related party as an equity method investment. In addition to the amounts recorded on our Consolidated Statements of Operations in the table above, CCL recorded accrued liabilities—related party of $1 million as of both March 31, 2022 and December 31, 2021 related to this agreement.

Agreements with Cheniere Corpus Christi Liquefaction Stage III, LLC

Cheniere Corpus Christi Liquefaction Stage III, LLC, a wholly owned subsidiary of Cheniere, has a transportation precedent agreement with CCP to secure firm pipeline transportation capacity for the transportation of natural gas feedstock to the expansion of the Corpus Christi LNG Terminal it is constructing adjacent to the Liquefaction Project. The agreement will have a primary term of 20 years from the service commencement date with right to extend the term for 2 successive five-year terms.

Contracts for Sale and Purchase of Natural Gas and LNG

CCL has an agreement with Sabine Pass Liquefaction, LLC that allows them to sell and purchase natural gas with each other. Natural gas purchased under this agreement is initially recorded as inventory and then to cost of sales—affiliate upon its sale, except for purchases related to commissioning activities which are capitalized as LNG terminal construction-in-process. Natural gas sold under this agreement is recorded as LNG revenues—affiliate.

CCL also has an agreement with Midship Pipeline Company, LLC that allows them to sell and purchase natural gas with each other.

Land Agreements

Lease Agreements


CCL has agreements with Cheniere Land Holdings, LLC (“Cheniere Land Holdings”), a wholly owned subsidiary of Cheniere, to lease approximately 60 acres ofthe land owned by Cheniere Land Holdings for the Liquefaction Facility.Project. The total annual lease payment paid in advance upon 30 days of the effective date of the respective leases, is $0.4$0.6 million and the terms of the agreements range from three to five10 years. We recorded $0.1 million and $0.2 million of lease expense related to these

Easement Agreements

CCL has agreements as operating and maintenance expense—affiliate for the three and nine months ended September 30, 2017, respectively, and $11,000 of expense during each of the three and nine months ended September 30, 2016. As of September 30, 2017, we had $0.3 million of prepaid expense related to this agreement in other current assets—affiliate.

In September 2016, CCP entered into a pipeline right of way easement agreement with Cheniere Land Holdings granting CCP the right to construct, install and operate a natural gas pipelinewhich grant CCL easements on land owned by Cheniere Land Holdings. CCP had made a one-time payment of $0.3 million to Cheniere Land Holdings for the permanentLiquefaction Project. The total annual payment for easement agreements is $0.1 million, excluding any previously paid one-time payments, and the terms of this land as of December 31, 2016.the agreements range from three to five years.


Dredge Material Disposal Agreement


CCL has a dredge material disposal agreement with Cheniere Land Holdings that terminates in 20252042 which grants CCL permission to use land owned by Cheniere Land Holdings for the deposit of dredge material from the construction and maintenance of the Liquefaction Facility.Project. Under the terms of the agreement, CCL will pay Cheniere Land Holdings $0.50 per cubic yard of dredge material deposits up to 5.0 million cubic yards.yards and $4.62 per cubic yard for any quantities above that.


Tug Hosting Agreement


In February 2017, CCL entered into a tug hosting agreement with Corpus Christi Tug Services, LLC (“Tug Services”), a wholly owned subsidiary of Cheniere, to provide certain marine structures, support services and access necessary at the Liquefaction FacilityProject for Tug Services to provide its customers with tug boat and marine services. Tug Services is required to reimburse CCL for any third party costs incurred by CCL in connection with providing the goods and services.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
State Tax Sharing Agreements

CCL has a state tax sharing agreement with Cheniere. Under this agreement, Cheniere has agreed to prepare and file all state and local tax returns which CCL and Cheniere are required to file on a combined basis and to timely pay the combined state and local tax liability. If Cheniere, in its sole discretion, demands payment, CCL will pay to Cheniere an amount equal to the state and local tax that CCL would be required to pay if CCL’s state and local tax liability were calculated on a separate company basis.

CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


There To date, there have been no state and local taxes paidtax payments demanded by Cheniere for which Cheniere could have demanded payment from CCL under this agreement; therefore, Cheniere has not demanded any such payments from CCL.the tax sharing agreement. The agreement is effective for tax returns due on or after May 2015.


CCP has a state tax sharing agreement with Cheniere. Under this agreement, Cheniere has agreed to prepare and file all state and local tax returns which CCP and Cheniere are required to file on a combined basis and to timely pay the combined state and local tax liability. If Cheniere, in its sole discretion, demands payment, CCP will pay to Cheniere an amount equal to the state and local tax that CCP would be required to pay if CCP’s state and local tax liability were calculated on a separate company basis. ThereTo date, there have been no state and local taxes paidtax payments demanded by Cheniere for which Cheniere could have demanded payment from CCP under this agreement; therefore, Cheniere has not demanded any such payments from CCP.the tax sharing agreement. The agreement is effective for tax returns due on or after May 2015.


Equity Contribution Agreements

Equity Contribution Agreement


We have anIn May 2018, we amended and restated the existing equity contribution agreement with Cheniere (the “Equity Contribution Agreement”) pursuant to which Cheniere has agreed to provide directly or indirectly, at our request based on reaching specified milestones of the Liquefaction Project, cash contributions up to approximately $2.6$1.1 billion, for Stage 1.not including $2.0 billion previously contributed under the original equity contribution agreement. As of September 30, 2017,March 31, 2022, we have received $1.8 billion$841 million in contributions under the Equity Contribution Agreement and Cheniere has no outstanding letters of credit on our behalf. Cheniere is only required to make additional contributions under the Equity Contribution Agreement after the commitments under the CCH Credit Facility have been reduced to zero and to the extent cash flows from Cheniere under this agreement.operations of the Liquefaction Project are unavailable for Liquefaction Project costs.


NOTE 8—SUPPLEMENTAL CASH FLOW INFORMATION11—CUSTOMER CONCENTRATION

The balance in property, plantfollowing table shows external customers with revenues of 10% or greater of total revenues from external customers and equipment,external customers with trade and other receivables, net funded with accounts payableof current expected credit losses and accrued liabilities (including affiliate) was $194.2 millioncontract assets, net of current expected credit losses balances of 10% or greater of total trade and $213.8 million, asother receivables, net of September 30, 2017current expected credit losses from external customers and 2016, respectively.contract assets, net of current expected credit losses from external customers, respectively:

Percentage of Total Revenues from External CustomersPercentage of Trade and Other Receivables, Net and Contract Assets, Net from External Customers
Three Months Ended March 31,March 31,December 31,
2022202120222021
Customer A26%22%21%*
Customer B14%21%**
Customer C12%18%11%*
Customer D**32%31%
Customer E*——11%
Customer F**10%*
* Less than 10%


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


NOTE 9—RECENT ACCOUNTING STANDARDS12—SUPPLEMENTAL CASH FLOW INFORMATION


The following table provides a brief descriptionsupplemental disclosure of recent accounting standards that had not been adopted by the Company ascash flow information (in millions):
Three Months Ended March 31,
20222021
Cash paid during the period for interest, net of amounts capitalized$11 $12 
Non-cash investing activities:
Property, plant and equipment, net of accumulated depreciation funded with accounts payable and accrued liabilities (including affiliate)7 174 

20
Table of September 30, 2017:
Contents
StandardDescriptionExpected Date of AdoptionEffect on our Consolidated Financial Statements or Other Significant Matters
ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and subsequent amendments theretoITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


This standard provides a single, comprehensive revenue recognition model which replaces and supersedes most existing revenue recognition guidance and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard requires that the costs to obtain and fulfill contracts with customers should be recognized as assets and amortized to match the pattern of transfer of goods or services to the customer if expected to be recoverable. The standard also requires enhanced disclosures. This guidance may be adopted either retrospectively to each prior reporting period presented subject to allowable practical expedients (“full retrospective approach”) or as a cumulative-effect adjustment as of the date of adoption (“modified retrospective approach”).January 1, 2018We continue to evaluate the effect of this standard on our Consolidated Financial Statements. We plan to adopt this standard using the full retrospective approach. Preliminarily, we do not anticipate that the adoption will have a material impact upon our revenues. Furthermore, we routinely enter into new contracts and we cannot predict with certainty whether the accounting for any future contract under the new standard would result in a significant change from existing guidance. Because this assessment is preliminary and the accounting for revenue recognition is subject to significant judgment, this conclusion could change as we finalize our assessment.
ASU 2016-02, Leases (Topic 842)
This standard requires a lessee to recognize leases on its balance sheet by recording a lease liability representing the obligation to make future lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. A lessee is permitted to make an election not to recognize lease assets and liabilities for leases with a term of 12 months or less. The standard also modifies the definition of a lease and requires expanded disclosures. This guidance may be early adopted, and must be adopted using a modified retrospective approach with certain available practical expedients.
January 1, 2019

We continue to evaluate the effect of this standard on our Consolidated Financial Statements. Preliminarily, we expect that the requirement to recognize all leases on our Consolidated Balance Sheets will be a significant change from current practice but will not have a material impact upon our Consolidated Balance Sheets. Because this assessment is preliminary and the accounting for leases is subject to significant judgment, this conclusion could change as we finalize our assessment. We have not yet determined the impact of the adoption of this standard upon our results of operations or cash flows, whether we will elect to early adopt this standard or which, if any, practical expedients we will elect upon transition.
ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory
This standard requires the immediate recognition of the tax consequences of intercompany asset transfers other than inventory. This guidance may be early adopted, but only at the beginning of an annual period, and must be adopted using a modified retrospective approach.
January 1, 2018

We are currently evaluating the impact of the provisions of this guidance on our Consolidated Financial Statements and related disclosures.


CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


NOTE 10—SUPPLEMENTAL GUARANTOR INFORMATION

Our CCH Senior Notes are jointly and severally guaranteed by our subsidiaries, CCL, CCP and CCP GP (each a “Guarantor” and collectively, the “Guarantors”). These guarantees are full and unconditional, subject to certain customary release provisions including (1) the sale, exchange, disposition or transfer (by merger, consolidation or otherwise) of the capital stock or all or substantially all of the assets of the Guarantors, (2) the designation of the Guarantor as an “unrestricted subsidiary” in accordance with the CCH Indenture, (3) upon the legal defeasance or covenant defeasance or discharge of obligations under the CCH Indenture and (4) the release and discharge of the Guarantors pursuant to the Common Security and Account Agreement. See Note 6—Debt for additional information regarding the CCH Senior Notes.

The following is condensed consolidating financial information for CCH (“Parent Issuer”) and the Guarantors. We did not have any non-guarantor subsidiaries as of September 30, 2017.
Condensed Consolidating Balance Sheet
September 30, 2017
(in thousands)
        
 Parent Issuer Guarantors Eliminations Consolidated
ASSETS       
Current assets       
Cash and cash equivalents$—
 $—
 $—
 $—
Restricted cash116,513
 —
 —
 116,513
Advances to affiliate—
 10,600
 —
 10,600
Other current assets317
 847
 —
 1,164
Other current assets—affiliate—
 280
 (1) 279
Total current assets116,830
 11,727
 (1) 128,556
        
Property, plant and equipment, net558,367
 7,276,443
 —
 7,834,810
Debt issuance and deferred financing costs, net103,879
 —
 —
 103,879
Investments in subsidiaries7,312,131
 —
 (7,312,131) —
Other non-current assets, net—
 37,545
 —
 37,545
Total assets$8,091,207
 $7,325,715
 $(7,312,132) $8,104,790
        
LIABILITIES AND MEMBER’S EQUITY       
Current liabilities       
Accounts payable$68
 $7,508
 $—
 $7,576
Accrued liabilities73,018
 105,647
 —
 178,665
Due to affiliates—
 16,578
 —
 16,578
Derivative liabilities30,099
 —
 —
 30,099
Total current liabilities103,185
 129,733
 —
 232,918
        
Long-term debt, net6,333,804
 —
 —
 6,333,804
Non-current derivative liabilities49,231
 —
 —
 49,231
Deferred tax liability—
 3,677
 (3,677) —
        
Member’s equity1,604,987
 7,192,305
 (7,308,455) 1,488,837
Total liabilities and member’s equity$8,091,207
 $7,325,715
 $(7,312,132) $8,104,790




CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


Condensed Consolidating Balance Sheet
December 31, 2016
(in thousands)
        
 Parent Issuer Guarantors Eliminations Consolidated
ASSETS       
Current assets       
Cash and cash equivalents$—
 $—
 $—
 $—
Restricted cash197,201
 —
 —
 197,201
Advances to affiliate—
 20,108
 —
 20,108
Other current assets152
 37,043
 —
 37,195
Other current assets—affiliate—
 142
 (1) 141
Total current assets197,353
 57,293
 (1) 254,645
        
Non-current restricted cash73,339
 —
 —
 73,339
Property, plant and equipment, net306,342
 5,770,330
 —
 6,076,672
Debt issuance and deferred financing costs, net155,847
 —
 —
 155,847
Investments in subsidiaries5,927,833
 —
 (5,927,833) —
Non-current advances under long-term contracts—
 46,398
 —
 46,398
Other non-current assets, net50
 29,497
 —
 29,547
Total assets$6,660,764
 $5,903,518
 $(5,927,834) $6,636,448
        
LIABILITIES AND MEMBER’S EQUITY       
Current liabilities       
Accounts payable$332
 $8,788
 $—
 $9,120
Accrued liabilities61,328
 76,320
 —
 137,648
Due to affiliates—
 7,050
 —
 7,050
Derivative liabilities43,383
 —
 —
 43,383
Total current liabilities105,043
 92,158
 —
 197,201
        
Long-term debt, net5,081,715
 —
 —
 5,081,715
Non-current derivative liabilities43,105
 —
 —
 43,105
Other non-current liabilities—affiliate—
 618
 —
 618
        
Member’s equity1,430,901
 5,810,742
 (5,927,834) 1,313,809
Total liabilities and member’s equity$6,660,764
 $5,903,518
 $(5,927,834) $6,636,448


CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2017
(in thousands)
        
 Parent Issuer Guarantors Eliminations Consolidated
        
Revenues$—
 $—
 $—
 $—
        
Expenses       
Operating and maintenance expense—
 533
 —
 533
Operating and maintenance expense—affiliate—
 1,516
 (12) 1,504
Development expense—
 82
 —
 82
General and administrative expense192
 669
 —
 861
General and administrative expense—affiliate—
 289
 —
 289
Depreciation and amortization expense—
 248
 —
 248
Impairment expense and loss on disposal of assets—
 2,059
 —
 2,059
Total expenses192
 5,396
 (12) 5,576
        
Loss from operations(192) (5,396) 12
 (5,576)
        
Other income (expense)       
Derivative loss, net(2,906) —
 —
 (2,906)
Other income (expense)(97) 3,722
 (3,720) (95)
Other income—affiliate—
 12
 (12) —
Total other income (expense)(3,003) 3,734
 (3,732) (3,001)
        
Loss before income taxes(3,195) (1,662) (3,720) (8,577)
Income tax provision—
 (3,677) 3,677
 —
Net loss$(3,195) $(5,339) $(43) $(8,577)


CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2016
(in thousands)
        
 Parent Issuer Guarantors Eliminations Consolidated
        
Revenues$—
 $—
 $—
 $—
        
Expenses       
Operating and maintenance expense—
 338
 —
 338
Operating and maintenance expense recovery —affiliate—
 (3) —
 (3)
Development expense—
 77
 —
 77
Development expense—affiliate—
 86
 —
 86
General and administrative expense120
 946
 —
 1,066
General and administrative expense—affiliate—
 180
 —
 180
Depreciation and amortization expense—
 65
 —
 65
Total expenses120
 1,689
 —
 1,809
        
Loss from operations(120) (1,689) —
 (1,809)
        
Other income (expense)       
Derivative gain, net20,113
 —
 —
 20,113
Other income (expense)(76) 2
 —
 (74)
Total other income20,037
 2
 —
 20,039
        
Net income (loss)$19,917
 $(1,687) $—
 $18,230


CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2017
(in thousands)
        
 Parent Issuer Guarantors Eliminations Consolidated
        
Revenues$—
 $—
 $—
 $—
        
Expenses       
Operating and maintenance expense—
 2,097
 —
 2,097
Operating and maintenance expense—affiliate—
 1,665
 (12) 1,653
Development expense—
 497
 —
 497
Development expense—affiliate—
 8
 —
 8
General and administrative expense832
 2,992
 —
 3,824
General and administrative expense—affiliate—
 753
 —
 753
Depreciation and amortization expense—
 537
 —
 537
Impairment expense and loss on disposal of assets—
 2,064
 —
 2,064
Total expenses832
 10,613
 (12) 11,433
        
Loss from operations(832) (10,613) 12
 (11,433)
        
Other income (expense)       
Loss on early extinguishment of debt(32,480) —
 —
 (32,480)
Derivative loss, net(35,002) —
 —
 (35,002)
Other income (expense)(182) 11,540
 (11,535) (177)
Other income—affiliate—
 12
 (12) —
Total other income (expense)(67,664) 11,552
 (11,547) (67,659)
        
Income (loss) before income taxes(68,496) 939
 (11,535) (79,092)
Income tax provision—
 (3,677) 3,677
 —
        
Net income (loss)$(68,496) $(2,738) $(7,858) $(79,092)


CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2016
(in thousands)
        
 Parent Issuer Guarantors Eliminations Consolidated
        
Revenues$—
 $—
 $—
 $—
        
Expenses       
Operating and maintenance expense—
 875
 —
 875
Operating and maintenance expense—affiliate—
 17
 —
 17
Development expense recovery—
 (107) —
 (107)
Development expense recovery—affiliate—
 (34) —
 (34)
General and administrative expense454
 2,389
 —
 2,843
General and administrative expense—affiliate—
 471
 —
 471
Depreciation and amortization expense—
 149
 —
 149
Total expenses454
 3,760
 —
 4,214
        
Loss from operations(454) (3,760) —
 (4,214)
        
Other income (expense)       
Loss on early extinguishment of debt(29,011) —
 —
 (29,011)
Derivative loss, net(215,940) —
 —
 (215,940)
Other income (expense)(79) 5
 —
 (74)
Total other income (expense)(245,030) 5
 —
 (245,025)
        
Net loss$(245,484) $(3,755) $—
 $(249,239)


CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2017
(in thousands)
        
 Parent Issuer Guarantors Eliminations Consolidated
Cash flows from operating activities       
Net income (loss)$(68,496) $(2,738) $(7,858) $(79,092)
Adjustments to reconcile net income (loss) to net cash used in operating activities:       
Depreciation and amortization expense—
 537
 —
 537
Allowance for funds used during construction—
 (11,535) 11,535
 —
Deferred income taxes—
 3,677
 (3,677) —
Loss on early extinguishment of debt32,480
 —
 —
 32,480
Total losses (gains) on derivatives, net35,002
 (295) —
 34,707
Net cash used for settlement of derivative instruments(42,160) —
 —
 (42,160)
Impairment expense and loss on disposal of assets—
 2,064
 —
 2,064
Changes in operating assets and liabilities:       
Accounts payable and accrued liabilities22
 473
 —
 495
Due to affiliates—
 1,176
 —
 1,176
Other, net(163) (869) —
 (1,032)
Other, net—affiliate—
 (756) —
 (756)
Net cash used in operating activities(43,315) (8,266) —
 (51,581)
        
Cash flows from investing activities       
Property, plant and equipment, net(227,143) (1,402,030) —
 (1,629,173)
Investments in subsidiaries(1,384,301) —
 1,384,301
 —
Other—
 25,995
 —
 25,995
Net cash used in investing activities(1,611,444) (1,376,035) 1,384,301
 (1,603,178)
        
Cash flows from financing activities       
Proceeds from issuances of debt2,706,000
 —
 —
 2,706,000
Repayments of debt(1,436,050) —
 —
 (1,436,050)
Debt issuance and deferred financing costs(23,309) —
 —
 (23,309)
Capital contributions254,120
 1,384,458
 (1,384,458) 254,120
Distributions—
 (157) 157
 —
Other(29) —
 —
 (29)
Net cash provided by financing activities1,500,732
 1,384,301
 (1,384,301) 1,500,732
        
Net decrease in cash, cash equivalents and restricted cash(154,027) —
 —
 (154,027)
Cash, cash equivalents and restricted cash—beginning of period270,540
 —
 —
 270,540
Cash, cash equivalents and restricted cash—end of period$116,513
 $—
 $—
 $116,513




CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2016
(in thousands)
        
 Parent Issuer Guarantors Eliminations Consolidated
Cash flows from operating activities       
Net loss$(245,484) $(3,755) $—
 $(249,239)
Adjustments to reconcile net loss to net cash used in operating activities:       
Depreciation and amortization expense—
 149
 —
 149
Loss on early extinguishment of debt29,011
 —
 —
 29,011
Total losses on derivatives, net215,940
 —
 —
 215,940
Net cash used for settlement of derivative instruments(23,400) —
 —
 (23,400)
Changes in operating assets and liabilities:       
Accounts payable and accrued liabilities134
 (223) —
 (89)
Due to affiliates—
 (214) —
 (214)
Other, net(247) (878) —
 (1,125)
Other, net—affiliate—
 154
 —
 154
Net cash used in operating activities(24,046) (4,767) —
 (28,813)
        
Cash flows from investing activities       
Property, plant and equipment, net(95,340) (1,478,583) —
 (1,573,923)
Investments in subsidiaries(1,527,712) —
 1,527,712
 —
Other—
 (44,362) —
 (44,362)
Net cash used in investing activities(1,623,052) (1,522,945) 1,527,712
 (1,618,285)
        
Cash flows from financing activities       
Proceeds from issuances of debt2,871,000
 —
 —
 2,871,000
Repayments of debt(1,050,660) —
 —
 (1,050,660)
Debt issuance and deferred financing costs(27,282) —
 —
 (27,282)
Capital contributions92
 1,527,712
 (1,527,712) 92
Other(10) —
 —
 (10)
Net cash provided by financing activities1,793,140
 1,527,712
 (1,527,712) 1,793,140
        
Net increase in cash, cash equivalents and restricted cash146,042
 —
 —
 146,042
Cash, cash equivalents and restricted cash—beginning of period46,770
 —
 —
 46,770
Cash, cash equivalents and restricted cash—end of period$192,812
 $—
 $—
 $192,812



ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Information Regarding Forward-Looking Statements
This quarterly report contains certain statements that are, or may be deemed to be, “forward-looking statements.”statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical or present facts or conditions, included herein or incorporated herein by reference are “forward-looking statements.” Included among “forward-looking statements” are, among other things:
•statements that we expect to commence or complete construction of our proposed LNG terminal, liquefaction facilities,facility, pipeline facilitiesfacility or other projects, or any expansions or portions thereof, by certain dates, or at all; 
•statements regarding future levels of domestic and international natural gas production, supply or consumption or future levels of LNG imports into or exports from North America and other countries worldwide or purchases of natural gas, regardless of the source of such information, or the transportation or other infrastructure or demand for and prices related to natural gas, LNG or other hydrocarbon products;
•statements regarding any financing transactions or arrangements, or our ability to enter into such transactions;
•statements regarding our future sources of liquidity and cash requirements;
•statements relating to the construction of our Trains and pipeline, including statements concerning the engagement of any EPC contractor or other contractor and the anticipated terms and provisions of any agreement with any such EPC or other contractor, and anticipated costs related thereto;
•statements regarding any SPA or other agreement to be entered into or performed substantially in the future, including any revenues anticipated to be received and the anticipated timing thereof, and statements regarding the amounts of total natural gas liquefaction or storage capacities that are, or may become, subject to contracts;
•statements regarding counterparties to our commercial contracts, construction contracts and other contracts;
•statements regarding our planned development and construction of additional Trains and pipeline,pipelines, including the financing of such Trains;Trains and pipelines;
•statements that our Trains, when completed, will have certain characteristics, including amounts of liquefaction capacities;
•statements regarding our business strategy, our strengths, our business and operation plans or any other plans, forecasts, projections, or objectives, including anticipated revenues, capital expenditures, maintenance and operating costs and cash flows, any or all of which are subject to change;
•statements regarding legislative, governmental, regulatory, administrative or other public body actions, approvals, requirements, permits, applications, filings, investigations, proceedings or decisions;
•statements regarding the COVID-19 pandemic and its impact on our business and operating results, including any customers not taking delivery of LNG cargoes, the ongoing creditworthiness of our contractual counterparties, any disruptions in our operations or construction of our Trains and the health and safety of Cheniere’s employees, and on our customers, the global economy and the demand for LNG; and
•any other statements that relate to non-historical or future information.

All of these types of statements, other than statements of historical or present facts or conditions, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,“achieve,” “anticipate,” “believe,” “contemplate,” “continue,” “estimate,” “expect,” “intend,” “plan,” “potential,” “predict,” “potential,“project,” “pursue,” “target,” “continue,” the negative of such terms or other comparable terminology. The forward-looking statements contained in this quarterly report are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe that such estimates are reasonable, they are inherently uncertain and involve a number of risks and uncertainties beyond our control. In addition, assumptions may prove to be inaccurate. We caution that the forward-looking statements contained in this quarterly report are not guarantees of future performance and that such statements may not be realized or the forward-looking statements or events may not occur. Actual results may differ materially
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from those anticipated or implied in forward-looking statements as a result of a variety of factors described in this quarterly report and in the other reports and other information that we file with the SEC, including those discussed under “Risk Factors” in our registration statementannual report on Form S-4, as amended, filed with10-K for the SEC and declared effective on April 10, 2017fiscal year ended December 31, 2021. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these risk factors. These forward-looking statements speak only as of the date made, and other than as required by law, we undertake no obligation to update or revise any forward-looking statement or provide reasons why actual results may differ, whether as a result of new information, future events or otherwise.


Introduction
 
The following discussion and analysis presents management’s view of our business, financial condition and overall performance and should be read in conjunction with our Consolidated Financial Statements and the accompanying notes. This information is intended to provide investors with an understanding of our past performance, current financial condition and outlook for the future.

Our discussion and analysis includes the following subjects: 
•Overview of Business 
•Overview of Significant Events
•Results of Operations
•Liquidity and Capital Resources
Results of Operations 
Off-Balance Sheet Arrangements 
•Summary of Critical Accounting Estimates
•Recent Accounting Standards


Overview of Business


We wereare a Delaware limited liability company formed in September 2014 by Cheniere. We provide clean, secure and affordable LNG to develop, construct,integrated energy companies, utilities and energy trading companies around the world. We aspire to conduct our business in a safe and responsible manner, delivering a reliable, competitive and integrated source of LNG to our customers.

LNG is natural gas (methane) in liquid form. The LNG we produce is shipped all over the world, turned back into natural gas (called “regasification”) and then transported via pipeline to homes and businesses and used as an energy source that is essential for heating, cooking and other industrial uses. Natural gas is a cleaner-burning, abundant and affordable source of energy. When LNG is converted back to natural gas, it can be used instead of coal, which reduces the amount of pollution traditionally produced from burning fossil fuels, like sulfur dioxide and particulate matter that enters the air we breathe. Additionally, compared to coal, it produces significantly fewer carbon emissions. By liquefying natural gas, we are able to reduce its volume by 600 times so that we can load it onto special LNG carriers designed to keep the LNG cold and in liquid form for efficient transport overseas.

We operate maintain and own a natural gas liquefaction and export facility (the “Liquefaction Facility”) and a pipeline facility (collectively, the “Liquefaction Project”) on nearly 2,000 acres of land that we own or controllocated near Corpus Christi, Texas (the “Corpus Christi LNG Terminal”) through wholly-owned subsidiaries CCL, and CCP, respectively.

The Liquefaction Project is being developedwhich has natural gas liquefaction facilities consisting of three operational Trains for up to three Trains, with expected aggregate nominala total production capacity, which is prior to adjusting for planned maintenance, production reliability and potential overdesign, of approximately 13.5 mtpa of LNG, three LNG storage tanks with aggregate capacity of approximately 10.1 Bcfe and two marine berths that can each accommodate vessels with nominal capacity15 mtpa of up to 266,000 cubic meters. The Liquefaction Project is being developed in stages. The first stage (“Stage 1”) includes Trains 1 and 2, two LNG storage tanks, one complete marine berth andLNG. Additionally, we operate through CCP a second partial berth and all of the Liquefaction Project’s necessary infrastructure facilities. The second stage (“Stage 2”) includes Train 3, one LNG storage tank and the completion of the second partial berth. The Liquefaction Project also includes a 23-mile21.5-mile natural gas supply pipeline that will interconnectinterconnects the Corpus Christi LNG terminalTerminal with several interstate and intrastate natural gas pipelines (the “Corpus Christi Pipeline”). Stage 1 and the Corpus Christi Pipeline are currently under construction, and Train 3 is being commercialized and has all necessary regulatory approvals in place.

Overview of Significant Events

Our significant accomplishments since January 1, 2017 and through the filing date of this Form 10-Q include our issuance of an aggregate principal amount of $1.5 billion of 5.125% Senior Secured Notes due 2027 (the “2027 CCH Senior Notes”). Net proceeds of the offering of approximately $1.4 billion, after deducting commissions, fees and expenses and provisioning for incremental interest required under the 2027 CCH Senior Notes during construction, were used to prepay a portion of the outstanding borrowings under our credit facility (the “2015 CCH Credit Facility”).

Liquidity and Capital Resources
The following table (in thousands) provides a summary of our liquidity position at September 30, 2017 and December 31, 2016:
 September 30, December 31,
 2017 2016
Cash and cash equivalents$—
 $—
Restricted cash designated for the Liquefaction Project116,513
 270,540
Available commitments under the following credit facilities:   
2015 CCH Credit Facility2,420,714
 3,602,714
$350 million CCH Working Capital Facility (“CCH Working Capital Facility”)187,497
 350,000


For additional information regarding our debt agreements, see Note 6—Debt of our Notes to Consolidated Financial Statements in this quarterly report and Note 7—Debt of our Notes to Consolidated and Combined Financial Statements in our registration statement on Form S-4, as amended, filedtogether with the SEC and declared effective on April 10, 2017Trains, the “Liquefaction Project”).

Liquefaction Facilities

Liquefaction Facilities

The Liquefaction Project is being developedalso includes three LNG storage tanks and constructed attwo marine berths.

Our customer arrangements provide us with significant, stable and long-term cash flows. We contract our anticipated production capacity under SPAs, in which our customers are generally required to pay a fixed fee with respect to the Corpus Christicontracted volumes irrespective of their election to cancel or suspend deliveries of LNG terminal,cargoes, and under IPM agreements, in which the gas producer sells gas on nearly 2,000 acresa global LNG index price, less a fixed liquefaction fee, shipping and other costs. Our long-term customer arrangements form the foundation of land that we own or control near Corpus Christi, Texas. In December 2014, we received authorization from the FERC to site, constructour business and operate Stages 1 and 2provide us with significant, stable, long-term cash flows. We have contracted approximately 85% of the Liquefaction Project. The following table summarizes the overall project status of Stage 1 oftotal production capacity from the Liquefaction Project with approximately 18 years of weighted average remaining life as of September 30, 2017:
Stage 1
Overall project completion percentage72.4%
Project completion percentage of:
Engineering100%
Procurement89.4%
Subcontract work49.4%
Construction49.2%
Expected date of substantial completionTrain 11H 2019
Train 22H 2019

TheMarch 31, 2022. In March 2022, the DOE has authorized the export of an additional
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108.16 Bcf/yr of domestically produced LNG by vessel from the Corpus Christi LNG terminal to FTA countries for a 25-year term andTerminal through December 31, 2050 to non-FTA countries, that were previously authorized for a 20-year term up to a combined totalFTA countries only. For further discussion of the equivalentcontracted future cash flows under our revenue arrangements, see the liquidity and capital resources disclosures in our annual report on Form 10-K for the fiscal year ended December 31, 2021.

We remain focused on operational excellence and customer satisfaction. Increasing demand for LNG has allowed us to expand our liquefaction infrastructure in a financially disciplined manner. We have increased available liquefaction capacity at our Liquefaction Project as a result of 767 Bcf/yr (approximately 15 mtpa)debottlenecking and other optimization projects. We hold a significant land position at the Corpus Christi LNG Terminal, which provides opportunity for further liquefaction capacity expansion. The development of these sites or other projects, including infrastructure projects in support of natural gas. A partygas supply and LNG demand, will require, among other things, acceptable commercial and financing arrangements before we can make a final investment decision (“FID”).

Additionally, we are committed to the proceeding requestedresponsible and proactive management of our most important environmental, social and governance (“ESG”) impacts, risks and opportunities. Cheniere published its 2020 Corporate Responsibility (“CR”) report, which details our strategy and progress on ESG issues, as well as our efforts on integrating climate considerations into our business strategy and taking a rehearingleadership position on increased environmental transparency, including conducting a climate scenario analysis and our plan to provide LNG customers with Cargo Emission Tags. In April 2022, Cheniere announced a collaboration with natural gas midstream companies, methane detection technology providers and leading academic institutions to implement quantification, monitoring, reporting and verification of greenhouse gas emissions at natural gas gathering, processing, transmission and storage systems specific to our supply chain. Cheniere’s CR report is available at cheniere.com/IMPACT. Information on our website, including the authorization to non-FTA countries, which was deniedCR report, is not incorporated by reference into this Quarterly Report on Form 10-Q.

Overview of Significant Events

Our significant events since January 1, 2022 and through the DOE in May 2016. In July 2016, the same party petitioned the U.S. Court of Appeals for the District of Columbia Circuit (the “Court of Appeals”) to review the authorization to non-FTA countries and the DOE order denying the request for rehearing of the same. The Court of Appeals denied the petition in November 2017, and the time for review of the court’s denial has not yet expired. The terms of each of these authorizations begin on the earlier of thefiling date of first export thereunder orthis Form 10-Q include the date specified infollowing:
Strategic
•In March 2022, CCL amended its existing long-term SPA with Engie SA (“Engie”), increasing the particular order, which rangesvolume Engie has agreed to purchase from 7 to 10 years from the date the order was issued.

Customers

CCL has entered into seven fixed price, 20-year SPAs with extension rights with six third parties to make available an aggregate amount of LNG that equates to approximately 7.70.9 mtpa of LNG on a free-on-board basis, and extending the term to approximately 20 years, which isbegan in September 2021.

Operational
•As of April 30, 2022, approximately 86%500 cumulative LNG cargoes totaling approximately 35 million tonnes of the expected aggregate nominal production capacity of Trains 1LNG have been produced, loaded and 2. The obligation to make LNG available under these SPAs commencesexported from the dateLiquefaction Project.

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Results of Operations

The following charts summarize the total revenues and total LNG volumes loaded (including both operational and commissioning volumes) during the three months ended March 31, 2022 and 2021:
cch-20220331_g2.jpgcch-20220331_g3.jpg
(1)The three months ended March 31, 2021 excludes four TBtu that were loaded at our affiliate’s facility.
Net income (loss)

Our consolidated net loss was $740 million for Trains 1the three months ended March 31, 2022, compared to net income of $331 million for the three months ended March 31, 2021. This $1.1 billion decrease was primarily due to the increase in commodity derivatives losses from changes in fair value and 2,settlements of $1.0 billion between the periods as specified in each SPA. In addition, CCL has entered into one fixed price, 20-year SPA with a third party for another 0.8 mtpa of LNG that commenceswell as increased costs associated with the datesale of first commercial deliverycertain unutilized natural gas procured for Train 3. Under these eight SPAs, the customers will purchaseliquefaction process, as further described below, which were partially offset by increased margin on LNG from CCL for a price consisting of a fixed fee of $3.50 per MMBtu of LNG (a portion of which is subject to annual adjustment for inflation) plus a variable fee equal to 115% of Henry Hub per MMBtu of LNG. In certain circumstances, the customers may elect to cancel or suspend deliveries of LNG cargoes, in which case the customers would still be required to pay the fixed fee with respect to the contracted volumes that are not delivered as a result of such cancellationincreases in both volume delivered and gross margin on LNG delivered per MMBtu.

Substantially all derivative losses relate to the use of commodity derivative instruments related to our IPM agreement, which are indexed to international LNG prices. While operationally we utilize commodity derivatives to mitigate price volatility for commodities procured or suspension. The SPAssold over a period of time, as a result of significant appreciation in forward international LNG commodity curves during the three months ended March 31, 2022, we recognized approximately $0.8 billion of non-cash unfavorable changes in fair value attributed to positions related to our IPM agreement.

Derivative instruments, which in addition to managing exposure to commodity-related marketing and contracted volumesprice risks are utilized to be made availablemanage exposure to changing interest rates volatility, are reported at fair value on our Consolidated Financial Statements. In some cases, the underlying transactions being economically hedged are accounted for under the SPAsaccrual method of accounting, whereby revenues and expenses are not tiedrecognized only upon delivery, receipt or realization of the underlying transaction. Because the recognition of derivative instruments at fair value has the effect of recognizing gains or losses relating to a specific Train; however,future period exposure, and given the termsignificant volumes, long-term duration and volatility in price basis for certain of each SPA commences upon the startour derivative contracts, use of derivative instruments may result in continued volatility of our results of operations based on changes in market pricing, counterparty credit risk and other relevant factors, notwithstanding the operational intent to mitigate risk exposure over time.

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Revenues
Three Months Ended March 31,
(in millions, except volumes)20222021Variance
LNG revenues$1,324 $615 $709 
LNG revenues—affiliate671 268 403 
Total revenues$1,995 $883 $1,112 
LNG volumes recognized as revenues (in TBtu) (1)200 135 65 
(1)During the three months ended March 31, 2021, includes four TBtu that were loaded at our affiliate’s facility.

Total revenues increased by approximately $1.1 billion during the three months ended March 31, 2022 from the three months ended March 31, 2021, primarily due to increased revenues per MMBtu as a specified Train.

In aggregate,result of increases in Henry Hub prices. Additionally, there were higher volumes of LNG delivered between the fixed fee portion to be paid by the third-party SPA customers is approximately $1.4 billion annually for Trains 1 and 2, and $1.5 billion if we makeperiods as a positive FID with respect to Stage 2result of production from Train 3 of the Liquefaction Project, with the applicable fixed fees startingwhich achieved substantial completion on March 26, 2021.

Prior to substantial completion of a Train, amounts received from the datesale of first commercial deliverycommissioning cargoes from that Train are offset against LNG terminal construction-in-process, because these amounts are earned or loaded during the applicabletesting phase for the construction of that Train. These fixed fees equal approximately $550During the three months ended March 31, 2021, we realized offsets to LNG terminal costs of $143 million $846 million and $140 million for each of Trains 1 through 3, respectively.

In addition, CCL has entered into two fixed price 20-year SPAs with Cheniere Marketing International LLP (“Cheniere Marketing UK”). Under the first SPA (the “Amended Cheniere Marketing Foundation SPA”), Cheniere Marketing UK will purchase LNG from CCL for a price consisting of a fixed fee of $3.50 (a portion of which is subjectcorresponding to annual adjustment for inflation) per MMBtu of LNG plus a variable fee equal to 115% of Henry Hub per MMBtu of LNG. At Cheniere Marketing UK’s option, which has not been exercised yet, the Amended Cheniere Marketing Foundation SPA commences upon the date of first commercial

delivery for Train 2 and includes an annual contract quantity of 40 TBtu of LNG. The second SPA (the “Cheniere Marketing Base SPA”) allows Cheniere Marketing UK to purchase, at its option, (1) up to a cumulative total of 15028 TBtu of LNG withinthat were related to the sale of commissioning periodscargoes. We did not record any offsets to LNG terminal costs during the three months ended March 31, 2022.

Also included in LNG revenues are sales of certain unutilized natural gas procured for Trains 1the liquefaction process and gains and losses from certain commodity derivative instruments, which include the realized value associated with a portion of derivative instruments that settle through 3, (2) any LNG producedphysical delivery. We recognized revenues of $16 million and $59 million during the three months ended March 31, 2022 and 2021, respectively, related to these transactions.

Operating costs and expenses
Three Months Ended March 31,
(in millions)20222021Variance
Cost of sales$2,341 $186 $2,155 
Cost of sales—affiliate12 35 (23)
Cost of sales—related party— 35 (35)
Operating and maintenance expense113 83 30 
Operating and maintenance expense—affiliate30 24 6 
Operating and maintenance expense—related party2 2 — 
General and administrative expense2 1 1 
General and administrative expense—affiliate8 5 3 
Depreciation and amortization expense110 89 21 
Total operating costs and expenses$2,618 $460 $2,158 

Total operating costs and expenses increased during the three months ended March 31, 2022 from the endthree months ended March 31, 2021, primarily as a result of increased cost of sales. Cost of sales includes costs incurred directly for the commissioning period for Train 1 until the date of first commercialproduction and delivery of LNG from Train 1 and (3) any excess LNG produced by the Liquefaction Facility that is not committed to customers under third-party SPAs or to Cheniere Marketing UK under the Amended Cheniere Marketing Foundation SPA, as determined by CCL in each contract year, in each case for a price consisting of a fixed fee of $3.00 per MMBtu of LNG plus a variable fee equal to 115% of Henry Hub per MMBtu of LNG. Under the Cheniere Marketing Base SPA, Cheniere Marketing UK may, without charge, elect to suspend deliveries of cargoes (other than commissioning cargoes) scheduled for any month under the applicable annual delivery program by providing specified notice in advance.
Natural Gas Transportation, Storage and Supply

To ensure CCL is able to transport adequate natural gas feedstockProject, to the Corpus Christi LNG terminal, it has entered into transportation precedent agreements to secure firm pipeline transportation capacity with CCP and certain third-party pipeline companies. CCL has entered into a firm storage services agreement with a third party to assist in managing volatility in natural gas needsextent those costs are not utilized for the Liquefaction Project. CCL has also entered into enabling agreementscommissioning process. Cost of sales (including affiliate and long-term natural gas supply contracts with third parties, and will continue to enter into such agreements,related party) increased during the three months ended March 31, 2022 from the comparable 2021 period, primarily as a result of unfavorable changes in orderour commodity derivatives to secure natural gas feedstock for the Liquefaction Project. We expect to enter into gas supply contractsProject driven by unfavorable shifts in international forward commodity curves, as discussed above under these enabling agreements as and when required for the Liquefaction Project. As of September 30, 2017, CCL has secured up to approximately 362 TBtuNet income (loss), increased cost of natural gas feedstock through long-termas a result of higher US natural gas supply contracts.

Construction

CCL entered into separate lump sum turnkey contractsprices and, to a lesser extent, increased volume of LNG delivered and increased costs associated with Bechtel Oil, Gas and Chemicals, Inc. (“Bechtel”)the sale of certain unutilized natural gas procured for the engineering, procurementliquefaction process.

Operating and constructionmaintenance expense (including affiliate and related party) primarily includes costs associated with operating and maintaining the Liquefaction Project. During the three months ended March 31, 2022, operating and maintenance expense increased from the comparable period in 2021, primarily due to increased natural gas transportation and storage capacity demand charges as a result of Stages 1Train 3 that was in operation for the full three months ended March 31, 2022 as
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compared to a limited number of days during the three months ended March 31, 2021 following its substantial completion. Operating and 2maintenance (including affiliates) also includes third party service and maintenance, insurance, regulatory costs and other operating costs.

Depreciation and amortization expense increased during the three months ended March 31, 2022 from the comparable period in 2021 as a result of commencing operations of Train 3 of the Liquefaction Project under which Bechtel charges a lump sum for all work performed and generally bears project cost risk unless certain specified events occur, in which case Bechtel may cause CCLMarch 2021.

Other expense (income)
Three Months Ended March 31,
(in millions)20222021Variance
Interest expense, net of capitalized interest$118 $93 $25 
Loss on modification or extinguishment of debt2 — 2 
Interest rate derivative loss, net(3)(1)(2)
Total other expense$117 $92 $25 

Interest expense, net of capitalized interest increased during the three months ended March 31, 2022 compared to enter into a change order, or CCL agrees with Bechtel to a change order.

The total contract price of the EPC contract for Stage 1, which does not includecomparable period in 2021, primarily because the Corpus Christi Pipeline, is approximately $7.8 billion, reflecting amounts incurred under change orders through September 30, 2017. Total expected capital costs for Stage 1 and the Corpus Christi Pipeline are estimated to be between $9.0 billion and $10.0 billion before financing costs, and between $11.0 billion and $12.0 billion after financing costs including, in each case, estimated owner’s costs and contingencies and total expected capital costs for the Corpus Christi Pipeline of between $350 million and $400 million.

Pipeline Facilities

In December 2014, the FERC issued a certificate of public convenience and necessity under Section 7(c) of the Natural Gas Act of 1938, as amended, authorizing CCP to construct and operate the Corpus Christi Pipeline. The Corpus Christi Pipeline is designed to transport 2.25 Bcf/d of natural gas feedstock required by the Liquefaction Project from the existing regional natural gas pipeline grid. The construction of the Corpus Christi Pipeline commenced in January 2017 and is nearing completion.

Final Investment Decision on Stage 2

We will contemplate making an FID to commence construction of Stage 2Train 3 of the Liquefaction Project based upon, among other things, entering into acceptable commercial arrangementswas completed on March 26, 2021, which eliminated the portion of total interest costs that was eligible for capitalization. During the three months ended March 31, 2022 and obtaining adequate financing2021, we incurred $119 million and $119 million of total interest cost, respectively, of which we capitalized $1 million and $26 million, respectively. Capitalized interest primarily related to interest costs incurred to construct the facility.


Capital Resources

We expect to finance the construction costsassets of the Liquefaction Project from one or moreProject.

Liquidity and Capital Resources

The following information describes our ability to generate and obtain adequate amounts of cash to meet our requirements in the following: project debtshort term and borrowings,the long term. In the short term, we expect to meet our cash requirements using operating cash flow from CCLflows and CCPavailable liquidity, consisting of restricted cash and equity contributions from Cheniere.cash equivalents and available commitments under our credit facilities. In the long term, we expect to meet our cash requirements using operating cash flows and other future potential sources of liquidity, which may include debt offerings. The following table (in thousands)below provides a summary of our capital resources for the Liquefaction Project, excluding any equity contributions, at September 30, 2017 and December 31, 2016:
  September 30, December 31,
  2017 2016
Senior notes (1) $4,250,000
 $2,750,000
Credit facilities outstanding balance (2) 2,150,737
 2,380,788
Letters of credit issued (2) 162,503
 —
Available commitments under credit facilities (2) 2,608,211
 3,952,714
Total capital resources from borrowings and available commitments $9,171,451
 $9,083,502
available liquidity (in millions). Future material sources of liquidity are discussed below.
March 31, 2022
(1)Includes 7.000% Senior Secured Notes due 2024 (the “2024 CCH Senior Notes”), 5.875% Senior Secured Notes due 2025 (the “2025 CCH Senior Notes”) and 2027 CCH Senior Notes (collectively, the “CCH Senior Notes”).
(2)Includes 2015 CCH Credit Facility
Restricted cash and cash equivalents designated for the Liquefaction Project$50 
Available commitments under the $1.2 billion CCH Working Capital Facility.Facility (“CCH Working Capital Facility”) (1)924 
Total available liquidity$974 

For additional information regarding our debt agreements related to
(1)Available commitments represent total commitments less loans outstanding and letters of credit issued under each of the Liquefaction Project, see CCH Working Capital Facility as of March 31, 2022. See Note 6—8—Debt of our Notes to Consolidated Financial Statements for additional information on the CCH Working Capital Facility and Note 7—Debtother debt instruments.

Our liquidity position subsequent to March 31, 2022 is driven by future sources of ourliquidity and future cash requirements. Future sources of liquidity are expected to be composed of (1) cash receipts from executed contracts, under which we are contractually entitled to future revenues, and (2) additional sources of liquidity, from which we expect to receive cash although the cash is not underpinned by executed contracts. Future cash requirements are expected to be composed of (1) cash payments under executed contracts, under which we are contractually obligated to make payments, and (2) additional cash requirements, under which we expect to make payments although we are not contractually obligated to make the payments under executed contracts.
Supplemental Guarantor Information

The 7.000% Senior Secured Notes to Consolidateddue 2024, 5.875% Senior Secured Notes due 2025, 5.125% Senior Secured Notes due 2027, 3.700% Senior Secured Notes due 2029, and Combined Financial Statements in our registration statement on Form S-4, as amended, filedthe series of Senior Secured Notes due 2039 with weighted average rate of 3.72% (collectively, the SEC and declared effective on April 10, 2017.

CCH“CCH Senior Notes

In May 2017, we issued an aggregate principal amount of $1.5 billion of the 2027 CCH Senior Notes, in addition to the existing 2024 CCH Senior Notes and 2025 CCH Senior Notes. The CCH Senior NotesNotes”) are jointly and severally guaranteed by each of our consolidated subsidiaries, CCL, CCP and Corpus Christi Pipeline GP, LLC (“CCP GP”, and collectively with CCL and CCP, each(each a “Guarantor” and collectively, the “Guarantors”).


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The indentureGuarantors’ guarantees are full and unconditional, subject to certain release provisions including (1) the sale, exchange, disposition or transfer (by merger, consolidation or otherwise) of all or substantially all of the capital stock or the assets of the Guarantors, (2) the designation of the Guarantor as an “unrestricted subsidiary” in accordance with the indentures governing the CCH Senior Notes (the “CCH Indenture”Indentures”) contains customary terms, (3) upon the legal defeasance or covenant defeasance or discharge of obligations under the CCH Indentures and events of default(4) the release and certain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: incur additional indebtedness or issue preferred stock; make certain investments or pay dividends or distributions on membership interests or subordinated indebtedness or purchase, redeem or retire membership interests; sell or transfer assets, including membership or partnership interests of our restricted subsidiaries; restrict dividends or other payments by restricted subsidiaries to us or any of our restricted subsidiaries; incur liens; enter into transactions with affiliates; dissolve, liquidate, consolidate, merge, sell or lease all or substantially alldischarge of the propertiesGuarantors pursuant to the Common Security and Account Agreement. In the event of a default in payment of the principal or assets ofinterest by us, and our restricted subsidiaries taken as a whole; or permit any Guarantor to dissolve, liquidate, consolidate, merge, sell or lease all or substantially all of its properties and assets.

At any time prior to six months before the respective dates ofwhether at maturity for each series of the CCH Senior Notes weor by declaration of acceleration, call for redemption or otherwise, legal proceedings may redeem all or partbe instituted against the Guarantors to enforce the guarantee.

The rights of such seriesholders of the CCH Senior Notes at a redemption price equal toagainst the “make-whole” price set forth in the CCH Indenture, plus accrued and unpaid interest, if any, to the date of redemption. We alsoGuarantors may at any time within six months of the respective dates of maturity for each series of the CCH Senior Notes, redeem all or part of such series of the CCH Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the CCH Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to the date of redemption.

2015 CCH Credit Facility

In May 2015, we entered into the 2015 CCH Credit Facility. Our obligationslimited under the 2015 CCH Credit Facility are secured byU.S. Bankruptcy Code or federal or state fraudulent transfer or conveyance law. Each guarantee contains a first priority lien on substantially all of our assets and the assets of our subsidiaries and by a pledge by CCH HoldCo I of its limited liability company interests in us. As of September 30, 2017 and December 31, 2016, we had $2.4 billion and $3.6 billion of available commitments and $2.2 billion and $2.4 billion of outstanding borrowings under the 2015 CCH Credit Facility, respectively.


The principal of the loans made under the 2015 CCH Credit Facility must be repaid in quarterly installments, commencing on the earlier of (1) the first quarterly payment date occurring more than three calendar months following project completion and (2) a set date determined by reference to the date under which a certain LNG buyer linked to Train 2 of the Liquefaction Project is entitled to terminate its SPA for failure to achieve the date of first commercial delivery for that agreement. Scheduled repayments will be based upon a 19-year tailored amortization, commencing the first full quarter after the project completion and designed to achieve a minimum projected fixed debt service coverage ratio of 1.55:1.

Under the 2015 CCH Credit Facility, we are required to hedge not less than 65% of the variable interest rate exposure of our senior secured debt. We are restricted from making distributions under agreements governing our indebtedness generally until, among other requirements, the completion of the construction of Trains 1 and 2 of the Liquefaction Project, funding of a debt service reserve account equal to six months of debt service and achieving a historical debt service coverage ratio and fixed projected debt service coverage ratio of at least 1.25:1.00.
CCH Working Capital Facility

In December 2016, we entered into the $350 million CCH Working Capital Facility, which isprovision intended to be used for loans (“CCH Working Capital Loans”),limit the issuance of letters of credit, as well as for swing line loans (“CCH Swing Line Loans”) for certain working capital requirements related to developing and placing into operation the Liquefaction Project. Loans under the CCH Working Capital Facility are guaranteed by the Guarantors. We may, from time to time, request increases in the commitments under the CCH Working Capital Facility of upGuarantor’s liability to the maximum allowedamount that it could incur without causing the incurrence of obligations under the Common Terms Agreement that was entered into concurrently with the 2015 CCH Credit Facility. We did not have any amounts outstandingits guarantee to be a fraudulent conveyance or transfer under the CCH Working Capital FacilityU.S. federal or state law. However, there can be no assurance as of both September 30, 2017 and December 31, 2016 and $162.5 million and zero aggregate amount of letters of credit were issued as of September 30, 2017 and December 31, 2016, respectively.

The CCH Working Capital Facility matures on December 14, 2021, and we may prepay the CCH Working Capital Loans, CCH Swing Line Loans and loans madeto what standard a court will apply in connection withmaking a draw upon any letter of credit (“CCH LC Loans”) at any time without premium or penalty upon three business days’ notice and may re-borrow at any time. CCH LC Loans have a term of up to one year. CCH Swing Line Loans terminate upon the earliest of (1) the maturity date or earlier terminationdetermination of the CCH Working Capital Facility, (2)maximum liability of the dateGuarantors. Moreover, this provision may not be effective to protect the guarantee from being voided under fraudulent conveyance laws. There is a possibility that is 15 days after such CCH Swing Line Loan is madethe entire guarantee may be set aside, in which case the entire liability may be extinguished.

Summarized financial information about us and (3) the first borrowing date for a CCH Working Capital Loan or CCH Swing Line Loan occurring at least four business days following the date the CCH Swing Line Loan is made. We are required to reduce the aggregate outstanding principal amount of all CCH Working Capital Loans to zero for a period of five consecutive business days at least once each year.

The CCH Working Capital Facility contains conditions precedent for extensions of credit, as well as customary affirmative and negative covenants. Our obligations under the CCH Working Capital Facility are secured by substantially all our assets and the assets of the Guarantors as well as all ofa group is omitted herein because such information would not be materially different from our membership interests and each of the Guarantors on a pari passu basis with the CCH Senior Notes and the 2015 CCH Credit Facility.Consolidated Financial Statements.


Equity Contribution Agreement

In May 2015, we entered into an equity contribution agreement with Cheniere (the “Equity Contribution Agreement”) pursuant to which Cheniere agreed to provide tiered equity contributions of approximately $2.6 billion for Stage 1 and the Corpus Christi Pipeline. The first tier of equity funding of approximately $1.5 billion (the “First Tier Equity Funding”) was contributed to us concurrently with the closing of the 2015 CCH Credit Facility. The second tier of equity funding, up to a maximum amount of approximately $1.1 billion, will be contributed concurrently and pro rata with funding under our project financing debt starting on the date on which further disbursements of such debt would result in a senior debt to equity ratio of greater than 75/25 (the “Second Tier Pro Rata Equity Funding”). As of September 30, 2017, we have received $1.8 billion in contributions under the Equity Contribution Agreement, of which approximately $1.5 billion was the First Tier Equity Funding and approximately $0.3 billion was part of the Second Tier Pro Rata Equity Funding. On March 2, 2017, Cheniere entered into a $750 million senior secured revolving credit facility (the “CEI Revolving Credit Facility”). The proceeds of the CEI Revolving Credit Facility are available to Cheniere to back-stop its obligations under the Equity Contribution Agreement to provide the Second Tier Pro Rata Equity Funding to us and for general corporate purposes.


Sources and Uses of Cash


The following table (in thousands) summarizes the sources and uses of our restricted cash and cash equivalents and restricted cash for the nine months ended September 30, 2017 and 2016.(in millions). The table presents capital expenditures on a cash basis; therefore, these amounts differ from the amounts of capital expenditures, including accruals, which are referred to elsewhere in this report. Additional discussion of these items follows the table. 
Three Months Ended March 31,
20222021
Net cash provided by operating activities$453 $524 
Net cash used in investing activities(45)(72)
Net cash used in financing activities(402)(140)
Net increase in restricted cash and cash equivalents$6 $312 
 Nine Months Ended September 30,
 2017 2016
Operating cash flows$(51,581) $(28,813)
Investing cash flows(1,603,178) (1,618,285)
Financing cash flows1,500,732
 1,793,140
    
Net increase (decrease) in cash, cash equivalents and restricted cash(154,027) 146,042
Cash, cash equivalents and restricted cash—beginning of period270,540
 46,770
Cash, cash equivalents and restricted cash—end of period$116,513
 $192,812


Operating Cash Flows


Operating cash outflowsflows during the ninethree months ended September 30, 2017March 31, 2022 and 20162021 were $51.6$453 million and $28.8$524 million, respectively. The increase$71 million decrease in operating cash outflowsinflows in 20172022 compared to 20162021 was primarily related to increased cash used as working capital as a result of payment timing differences and timing of cash receipts from the sale of LNG cargoes. Additionally, to a lesser extent, the decrease in operating cash inflows was due to higher costs associated with the sale of certain unutilized natural gas procured for settlement of derivative instruments.the liquefaction process during the three months ended March 31, 2022.


Investing Cash Flows


Investing cashCash outflows during each of the nine months ended September 30, 2017for property, plant and 2016equipment were $1.6 billion and are primarily used to fundfor the construction costs for Stage 1 of the Liquefaction Project. These costsProject, which are capitalized as construction-in-process until achievement of substantial completion. In addition to cash outflows for construction costs for the Liquefaction Project, we received $36.3 million during the nine months ended September 30, 2017 from the returnOn March 26, 2021, substantial completion of collateral payments previously paid for the Liquefaction Project, which was offset by $10.3 million paid for infrastructure to support the Liquefaction Project. During the nine months ended September 30, 2016, we used an additional $44.4 million primarily for infrastructureTrain 3 of the Liquefaction Project which included the $36.3 million of collateral payments that were returned to us during the nine months ended September 30, 2017.was achieved.


Financing Cash Flows


Financing cash inflows duringDuring the ninethree months ended September 30, 2017 were $1.5 billion, primarily as a result of:
$1.2 billion of borrowings under the 2015 CCH Credit Facility;
issuance of an aggregate principal amount of $1.5 billionMarch 31, 2022, we repaid all of the 2027 CCH Senior Notes, which was used to prepay $1.4 billion of outstanding borrowings under the 2015 CCH Credit Facility;
$24.0 million of borrowings and $24.0 million of repayments made under the CCH Working Capital Facility;
$23.3Facility. Additionally, $290 million of debt issuance and deferred financing costs related to up-front fees paid upon the closing of these transactions; and
$254.1 million of equity contributions from Cheniere.

Financing cash inflows during the nine months ended September 30, 2016 were $1.8 billion, primarily as a result of:
$1.6 billion of borrowings under the 2015 CCHour amended and restated term loan credit facility (the “CCH Credit Facility;
issuance of an aggregate principal amount of $1.25 billion of the 2024 CCH Senior Notes, whichFacility”) was used to prepay $1.1 billion of outstanding borrowings under the 2015 CCH Credit Facility; and
$27.3 million of debt issuance costs related to up-front fees paid upon the closing of these transactions.


Results of Operations

Our consolidated net loss was $8.6 million in the three months ended September 30, 2017, compared to net income of $18.2 million in the three months ended September 30, 2016. This $26.8 million increase in net loss in 2017 was primarily a result of increased derivative loss, net associated with interest rate derivative activity.

Our consolidated net loss was $79.1 million in the nine months ended September 30, 2017, compared to a net loss of $249.2 million in the nine months ended September 30, 2016. This $170.1 million decrease in net loss in 2017 was primarily a result of decreased derivative loss, net associated with interest rate derivative activity.

In August 2017, Hurricane Harvey struck the Texas and Louisiana coasts, and the Corpus Christi LNG terminal experienced a temporary suspension in construction. The terminal did not sustain significant damage, and the effects of Hurricane Harvey did not have a material impact on our Consolidated Financial Statements.

Loss from operations
 Three Months Ended September 30, Nine Months Ended September 30,
(in thousands)2017 2016 Change 2017 2016 Change
Revenues$—
 $—
 $—
 $—
 $—
 $—
           

Operating and maintenance expense533
 338
 195
 2,097
 875
 1,222
Operating and maintenance expense (recovery)—affiliate1,504
 (3) 1,507
 1,653
 17
 1,636
Development expense (recovery)82
 77
 5
 497
 (107) 604
Development expense (recovery)—affiliate—
 86
 (86) 8
 (34) 42
General and administrative expense861
 1,066
 (205) 3,824
 2,843
 981
General and administrative expense—affiliate289
 180
 109
 753
 471
 282
Depreciation and amortization expense248
 65
 183
 537
 149
 388
Impairment expense and loss on disposal of assets2,059
 —
 2,059
 2,064
 —
 2,064
           

Loss from operations$(5,576) $(1,809) $(3,767) $(11,433) $(4,214) $(7,219)

Our loss from operations increased $3.8 million and $7.2 million during the three and nine months ended September 30, 2017, respectively, from the comparable periods in 2016 primarily as a result of increased expenses from increased ad valorem taxes, insurance costs, labor costs and professional fees.

Other expense (income)
 Three Months Ended September 30, Nine Months Ended September 30,
(in thousands)2017 2016 Change 2017 2016 Change
Loss on early extinguishment of debt$—
 $—
 $—
 $32,480
 $29,011
 $3,469
Derivative loss (gain), net2,906
 (20,113) 23,019
 35,002
 215,940
 (180,938)
Other expense95
 74
 21
 177
 74
 103
Total other expense (income)$3,001
 $(20,039) $23,040
 $67,659
 $245,025
 $(177,366)

Derivative loss, net increased from a net gainrepaid during the three months ended September 30, 2016 to a net loss duringMarch 31, 2022.

During the three months ended September 30, 2017 primarily due to an unfavorable shift inMarch 31, 2021, we repaid all of the long-term forward LIBOR curve betweenoutstanding borrowings under the periods. Derivative loss, net decreased duringCCH Working Capital Facility.


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Debt Repayments and Related Extinguishment Costs

The following table shows the ninerepayments of debt, including intra-quarter repayments (in millions):
Three Months Ended March 31,
20222021
CCH Credit Facility$(290)$— 
CCH Working Capital Facility(250)(140)
Total repayments$(540)$(140)

Capital Contributions

During the three months ended September 30, 2017 compared to the nine months ended September 30, 2016 primarily due to a favorable shift in the long-term forward LIBOR curve between the periods. During the nine months ended September 30, 2017,March 31, 2022 and 2021, we also recognized a $13.0received capital contributions of $138 million loss in May 2017 upon the settlement of interest rate swaps associated with approximately $1.4 billion of commitments that were terminated under the 2015 CCH Credit Facility.and zero, respectively, from Cheniere.



Off-Balance Sheet Arrangements
As of September 30, 2017, we had no transactions that met the definition of off-balance sheet arrangements that may have a current or future material effect on our consolidated financial position or operating results. 

Summary of Critical Accounting Estimates


The preparation of our Consolidated Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our registration statementannual report on Form S-4, as amended, filed with10-K for the SEC and declared effective on April 10, 2017fiscal year ended December 31, 2021.


Recent Accounting Standards


For descriptionsa summary of recently issued accounting standards, see Note 9—Recent Accounting Standards1—Nature of Operations and Basis of Presentation of our Notes to Consolidated Financial Statements.


ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Marketing and Trading Commodity Price Risk


We have entered into commodity derivatives consisting of natural gas supply contracts to secure natural gas feedstock for the commissioning and operation of the Liquefaction Project (“Liquefaction Supply Derivatives”). In order to test the sensitivity of the fair value of the Liquefaction Supply Derivatives to changes in underlying commodity prices, management modeled a 10% change in the commodity price for natural gas for each delivery location as follows (in thousands)millions):
March 31, 2022December 31, 2021
Fair ValueChange in Fair ValueFair ValueChange in Fair Value
Liquefaction Supply Derivatives$(2,262)$287 $(1,212)$186 
 September 30, 2017 December 31, 2016
 Fair Value Change in Fair Value Fair Value Change in Fair Value
Liquefaction Supply Derivatives$295
 $34
 $—
 $—


See Note 6—Derivative Instruments of our Notes to Consolidated Financial Statements for additional details about our derivative instruments.

Interest Rate Risk


We are exposed to interest rate risk primarily when we incur debt related to project financing. Interest rate risk is managed in part by replacing outstanding floating-rate debt with fixed-rate debt with varying maturities. We have entered into interest rate swaps to hedge the exposure to volatility in a portion of the floating-rate interest payments under the 2015 CCH Credit Facility (“Interest Rate Derivatives”). In order to test the sensitivity of the fair value of the Interest Rate Derivatives to changes in interest rates, management modeled a 10% change in the forward 1-monthone-month LIBOR curve across the remaining terms of the Interest Rate Derivatives as follows (in thousands)millions):
March 31, 2022December 31, 2021
Fair ValueChange in Fair ValueFair ValueChange in Fair Value
Interest Rate Derivatives$(12)$1 $(40)$— 
 September 30, 2017 December 31, 2016
 Fair Value Change in Fair Value Fair Value Change in Fair Value
Interest Rate Derivatives$(79,330) $42,638
 $(86,488) $52,047


See Note 4—6—Derivative Instruments of our Notes to Consolidated Financial Statements for additional details about our derivative instruments.

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ITEM 4.
CONTROLS AND PROCEDURES

ITEM 4.CONTROLS AND PROCEDURES

We maintain a set of disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports voluntarily filed by us under the Securities Exchange Act, of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. As of the end of the period covered by this report, we evaluated, under the supervision and with the participation of our management, including our President and Chief Financial Officer, the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. Based on that evaluation, our President and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

During the most recent fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 
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Table of Contents

PART II.    OTHER INFORMATION


ITEM 1.
ITEM 1.LEGAL PROCEEDINGS
LEGAL PROCEEDINGS
 
We may in the future be involved as a party to various legal proceedings, which are incidental to the ordinary course of business. We regularly analyze current information and, as necessary, provide accruals for probable liabilities on the eventual disposition of these matters. There have been no material changes to the legal proceedings disclosed in our annual report on Form 10-K for the fiscal year ended December 31, 2021.


ITEM 1A.
ITEM 1A.    RISK FACTORS


There have been no material changes from the risk factors disclosed in our registration statementannual report on Form S-4, as amended, filed with10-K for the SECfiscal year ended December 31, 2021.

ITEM 5.    OTHER INFORMATION

On May 2, 2022, CCL and declared effective on AprilCheniere Marketing International LLP entered into a letter agreement, subject to the satisfaction of certain conditions specified therein, for the sale of (1) up to 22 cargoes scheduled to be delivered in 2023, (2) up to between nine cargoes and 10 2017.cargoes scheduled to be delivered in 2024 and (3) up to between 13 cargoes and 16 cargoes scheduled to be delivered in 2025, in each case at a price equal to 115% of Henry Hub plus $1.97 per MMBtu.



ITEM 6.    EXHIBITS
ITEM 6.EXHIBITS
Exhibit No.Description
10.1Exhibit No.Description
10.1*
Consent for Amendment toLetter agreement, dated May 2, 2022, regarding the Common SecurityAmended and AccountRestated LNG Sale and Purchase Agreement (FOB), dated September 7, 2017, amongNovember 28, 2014, between CCL and Cheniere Corpus Christi Holdings, LLC, as Company, Corpus Christi Liquefaction, LLC, Cheniere Corpus Christi Pipeline, L.P.,Marketing International LLP
22.1
List of Issuers and Corpus Christi Pipeline GP, LLC, as Guarantors, the Senior Creditor Group Representatives party thereto from time to time, Société Générale, as Intercreditor Agent and Security Trustee, and Mizuho Bank, Ltd., as Account BankGuarantor Subsidiaries (Incorporated by reference to Exhibit 10.5122.1 to the Company’s Registration StatementReport on Form S-4 (SEC File No. 333-221307)333-215435), filed on November 2, 2017)March 11, 2022
10.231.1*
Consent for Amendment to the Common Terms Agreement, dated September 7, 2017, among Cheniere Corpus Christi Holdings, LLC, as Borrower, Corpus Christi Liquefaction, LLC, Cheniere Corpus Christi Pipeline, L.P., Corpus Christi Pipeline GP, LLC, as Guarantors, Société Générale, as Term Loan Facility Agent and Intercreditor Agent and any other facility agents party thereto from time to time (Incorporated by reference to Exhibit 10.52 to the Company’s Registration Statement on Form S-4 (SEC File No. 333-221307), filed on November 2, 2017)
10.3
Change orders to the Fixed Price Separated Turnkey Agreement for the Engineering, Procurement and Construction of the Corpus Christi Stage 1 Liquefaction Facility, dated as of December 6, 2013, between Corpus Christi Liquefaction, LLC and Bechtel Oil, Gas and Chemicals, Inc.: (i) the Change Order CO-00036 Security Fencing Revisions, 138kV Overhead Power Stop Work, Additional Permanent Plant Access Control System Changes, and Wet/Dry Flare Expansion Loop Relocation, dated August 3, 2017 and (ii) the Change Order CO-00037 9% Nickel Lump Sum Conversion, dated September 14, 2017 (Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.) (Incorporated by reference to Exhibit 10.50 to the Company’s Registration Statement on Form S-4 (SEC File No. 333-221307), filed on November 2, 2017)
31.1*
Certification by President and Chief Financial Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act
32.1**
Certification by President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*XBRL Instance Document
101.SCH*XBRL Taxonomy Extension Schema Document
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*Filed herewith.
**Furnished herewith.



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SIGNATURES




Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CHENIERE CORPUS CHRISTI HOLDINGS, LLC
Date:May 3, 2022By:/s/ Zach Davis
Zach Davis
President and Chief Financial Officer
(Principal Executive and Financial Officer)
Date:May 3, 2022CHENIERE CORPUS CHRISTI HOLDINGS, LLCBy:/s/ David Slack
David Slack
Date:November 8, 2017By:/s/ Michael J. WortleyChief Accounting Officer
Michael J. Wortley
President and Chief Financial Officer
(on behalf of the registrant and
as principal financial officer)
Date:November 8, 2017By:/s/ Leonard Travis
Leonard Travis
Chief Accounting Officer
(on behalf of the registrant and

as principal accounting officer)




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