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, 20172023
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 is a voluntary filer not subject to the filing requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934. However, 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 (Deficit)
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—CCL Stage III Contribution and Merger
7
Note 3—Restricted Cash and Cash Equivalents
8
Note 4—Trade and Other Receivables, Net of Current Expected Credit Losses
8
Note 5—Inventory
8
Note 6—Property, Plant and Equipment, Net of Accumulated Depreciation
8
Note 7—Derivative Instruments
9
Note 8—Accrued Liabilities
12
Note 9—Debt
12
Note 10—Revenues
14
Note 11—Related Party Transactions
16
Note 12—Customer Concentration
16
Note 13—Supplemental Cash Flow Information
17
2518
3326
3326
Part II. Other Information
3427
3427
3527
3628




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
DOEDATdelivered at terminal
DOEU.S. Department of Energy
EPCengineering, procurement and construction
FERCESGenvironmental, social and governance
FASBFinancial Accounting Standards Board
FERCFederal Energy Regulatory Commission
FIDfinal investment decision
FOBfree-on-board
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, 2017,2023, including our ownership of certain subsidiaries, and the references to these entities used in this quarterly report:
cchorgcharta10.jpg
Updated CCH Org Chart.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.

In June 2022, as part of the internal restructuring of Cheniere’s subsidiaries, Cheniere contributed its equity interest in Corpus Christi Liquefaction Stage III, LLC (“CCL Stage III”), formerly a wholly owned direct subsidiary of Cheniere, to us, and CCL Stage III was subsequently merged with and into CCL, the surviving entity of the merger and our wholly owned subsidiary.

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 September 30,Nine Months Ended September 30,
2023202220232022
Revenues
LNG revenues$874 $1,737 $2,788 $4,668 
LNG revenues—affiliate385 1,126 1,222 2,560 
Total revenues1,259 2,863 4,010 7,228 
Operating costs and expenses (recoveries)
Cost (recovery) of sales (excluding items shown separately below)(443)5,929 (3,114)10,712 
Cost of sales—affiliate41 47 134 95 
Operating and maintenance expense125 119 359 350 
Operating and maintenance expense—affiliate27 28 84 86 
Operating and maintenance expense—related party3 2 7 7 
General and administrative expense2 2 4 6 
General and administrative expense—affiliate11 11 34 27 
Depreciation and amortization expense112 112 336 334 
Other2 1 2 5 
Total operating costs and expenses (recoveries)(120)6,251 (2,154)11,622 
Income (loss) from operations1,379 (3,388)6,164 (4,394)
Other income (expense)
Interest expense, net of capitalized interest(52)(106)(172)(340)
Loss on modification or extinguishment of debt— (6)(10)(36)
Other income, net2 2 7 5 
Total other expense(50)(110)(175)(371)
Net income (loss)$1,329 $(3,498)$5,989 $(4,765)


  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)



September 30,December 31,
20232022
ASSETS(unaudited)
Current assets
Restricted cash and cash equivalents$130 $738 
Trade and other receivables, net of current expected credit losses160 348 
Trade receivables—affiliate184 240 
Advances to affiliate121 132 
Inventory116 178 
Current derivative assets28 12 
Margin deposits1 76 
Other current assets, net23 18 
Total current assets763 1,742 
Property, plant and equipment, net of accumulated depreciation14,567 13,673 
Debt issuance costs, net of accumulated amortization35 40 
Derivative assets509 7 
Other non-current assets, net262 225 
Total assets$16,136 $15,687 
LIABILITIES AND MEMBER’S EQUITY 
Current liabilities 
Accounts payable$68 $85 
Accrued liabilities504 901 
Accrued liabilities—related party1 1 
Current debt, net of discount and debt issuance costs— 495 
Due to affiliates35 43 
Current derivative liabilities649 1,374 
Other current liabilities3 1 
Total current liabilities1,260 2,900 
Long-term debt, net of discount and debt issuance costs6,309 6,698 
Derivative liabilities1,151 4,923 
Other non-current liabilities77 78 
Other non-current liabilities—affiliate3 4 
Member’s equity7,336 1,084 
Total liabilities and member’s equity$16,136 $15,687 

 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 (DEFICIT)
(in thousands)millions)
(unaudited)






Three and Nine Months Ended September 30, 2023
Cheniere CCH HoldCo I, LLC
Total Member’s Equity
Balance at December 31, 2022$1,084 $1,084 
Contributions (excluding items shown separately below)45 45 
Contributions of cancelled senior secured notes (see Note 9)
396 396 
Distributions(60)(60)
Net income3,829 3,829 
Balance at March 31, 20235,294 5,294 
Contributions of cancelled senior secured notes (see Note 9)
2 2 
Net income831 831 
Balance at June 30, 20236,127 6,127 
Contributions60 60 
Distributions(180)(180)
Net income1,329 1,329 
Balance at September 30, 2023$7,336 $7,336 

Three and Nine Months Ended September 30, 2022
Cheniere CCH HoldCo I, LLC
Total Member’s Equity (Deficit)
Balance at December 31, 2021$1,281 $1,281 
Contributions138 138 
Net loss(740)(740)
Balance at March 31, 2022679 679 
Contributions801 801 
Contributions of CCL Stage III entity (see Note 2)
(1,482)(1,482)
Net loss(527)(527)
Balance at June 30, 2022(529)(529)
Contributions681 681 
Net loss(3,498)(3,498)
Balance at September 30, 2022$(3,346)$(3,346)
 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,Nine Months Ended September 30,
2017 201620232022
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)$5,989 $(4,765)
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense537
 149
Depreciation and amortization expense336 334 
Loss on early extinguishment of debt32,480
 29,011
Total losses on derivatives, net34,707
 215,940
Net cash used for settlement of derivative instruments(42,160) (23,400)
Impairment expense and loss on disposal of assets2,064
 —
Amortization of discount and debt issuance costsAmortization of discount and debt issuance costs8 15 
Loss on modification or extinguishment of debtLoss on modification or extinguishment of debt10 36 
Total losses (gains) on derivative instruments, netTotal losses (gains) on derivative instruments, net(5,028)5,754 
Net cash provided by (used for) settlement of derivative instrumentsNet cash provided by (used for) settlement of derivative instruments13 (106)
OtherOther3 4 
Changes in operating assets and liabilities:   Changes in operating assets and liabilities:
Trade and other receivablesTrade and other receivables188 (120)
Trade receivables—affiliateTrade receivables—affiliate56 (284)
Advances to affiliateAdvances to affiliate16 (25)
InventoryInventory58 16 
Margin depositsMargin deposits74 (80)
Accounts payable and accrued liabilities495
 (89)Accounts payable and accrued liabilities(451)462 
Due to affiliates1,176
 (214)Due to affiliates(8)(1)
Deferred revenue Deferred revenue— 32 
Other, net(1,032) (1,125)Other, net(35)(38)
Other, net—affiliate(756) 154
Other, net—affiliate(1)— 
Net cash used in operating activities(51,581) (28,813)
Net cash provided by operating activitiesNet cash provided by operating activities1,228 1,234 
   
Cash flows from investing activities 
  Cash flows from investing activities 
Property, plant and equipment, net(1,629,173) (1,573,923)Property, plant and equipment, net(1,184)(618)
Other25,995
 (44,362)Other(11)— 
Net cash used in investing activities(1,603,178) (1,618,285)Net cash used in investing activities(1,195)(618)
   
Cash flows from financing activities 
  Cash flows from financing activities 
Proceeds from issuances of debt2,706,000
 2,871,000
Proceeds from issuances of debt— 440 
Repayments of debt(1,436,050) (1,050,660)Repayments of debt(498)(2,419)
Debt issuance and deferred financing costs(23,309) (27,282)
Capital contributions254,120
 92
Other(29) (10)
Net cash provided by financing activities1,500,732
 1,793,140
Debt issuance costsDebt issuance costs— (44)
Debt extinguishment costsDebt extinguishment costs(8)(18)
ContributionsContributions105 1,583 
DistributionsDistributions(240)— 
Net cash used in financing activitiesNet cash used in financing activities(641)(458)
   
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 increase (decrease) in restricted cash and cash equivalentsNet increase (decrease) in restricted cash and cash equivalents(608)158 
Restricted cash and cash equivalents—beginning of periodRestricted cash and cash equivalents—beginning of period738 44 
Restricted cash and cash equivalents—end of periodRestricted cash and cash equivalents—end of period$130 $202 


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 located near Corpus Christi, Texas (the “Corpus Christi LNG Terminal”) through CCL, which has three operational Trains for a total production capacity of approximately 15 mtpa of LNG, three LNG storage tanks and two marine berths. Additionally, we are constructing an expansion of the Corpus Christi LNG Terminal (the “Corpus Christi Stage 3 Project”) for seven midscale Trains with an expected total production capacity of over 10 mtpa of LNG.

Through our subsidiary CCP, we also own a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG Terminal with several interstate and intrastate natural gas pipelines (the “Corpus Christi Pipeline” and together with the Corpus Christi LNG Terminal and the Corpus Christi Stage 3 Project, the “Liquefaction Project”).

We have increased available liquefaction capacity at our Liquefaction Project as a result of debottlenecking and other optimization projects. We hold a significant land position at the Corpus Christi LNG terminal (the “Liquefaction Facility”),Terminal which is on nearly 2,000 acresprovides opportunity for further liquefaction capacity expansion. In March 2023, CCL and another subsidiary of land that we ownCheniere submitted an application with the FERC under the Natural Gas Act for an expansion adjacent to the Liquefaction Project consisting of two midscale Trains with an expected total production capacity of approximately 3 mtpa of LNG. The development of this site or control near Corpus Christi, Texas, and a 23-mileother projects, including infrastructure projects in support of natural gas supply pipeline (the “Corpus Christi Pipeline” and togetherLNG demand, will require, among other things, acceptable commercial and financing arrangements before we make a positive FID.

We do not have employees and thus we have various services agreements with affiliates of Cheniere in the ordinary course of business, including services required to construct, operate and maintain the Liquefaction Facility, the “Liquefaction Project”) through wholly owned subsidiaries CCLProject, and CCP, respectively. 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 and a second partial berth and alladministrative services. See Note 11—Related Party Transactions for additional details of the Liquefaction Project’s necessary infrastructure facilities. The second stage includes Train 3, one LNG storage tankactivity under these services agreements during the three and the completion of the second partial berth. Stage 1nine months ended September 30, 2023 and the Corpus Christi Pipeline are currently under construction, and Train 3 is being commercialized and has all necessary regulatory approvals in place.2022.


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.S-X and reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the financial results for the interim periods presented. 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 with10-K for the SEC and declared effective on April 10, 2017fiscal year ended December 31, 2022. In our opinion, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation, have been included. Certain reclassifications have been made to conform prior period information to the current 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, 20172023 are not necessarily indicative of the results of operations that will be realized for the year ending December 31, 2017.2023.


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 payable and deferred income tax balances have been recorded as if we had filed all tax returns on a separate return basis (“hypothetical carve-out basis”) from Cheniere.is included in the accompanying Consolidated Financial Statements.


NOTE 2—RESTRICTED CASHCCL STAGE III CONTRIBUTION AND MERGER


Restricted cash consistsIn June 2022, Cheniere’s board of funds that are contractually restricteddirectors made a positive FID with respect to the investment in the construction and operation of the Corpus Christi Stage 3 Project and issued a full notice to proceed with construction to Bechtel Energy Inc. (“Bechtel”) effective June 16, 2022.In connection with the positive FID, CCL Stage III, through which Cheniere was developing and constructing the Corpus Christi Stage 3 Project, was contributed to us from Cheniere (the “Contribution”) on June 15, 2022.Immediately following the Contribution, CCL Stage III was merged with and into CCL (the “Merger”), the surviving entity of the merger and our wholly owned subsidiary.

The Contribution was accounted for as a common control transaction as the assets and liabilities were transferred between entities under Cheniere’s control. As a result, the net liability transferred to usage or withdrawalus was recognized as a contribution in our Consolidated Statements of Member’s Equity (Deficit) and have been presented separately from cash and cash equivalentsat the historical basis of Cheniere on June 15, 2022 in our Consolidated Balance Sheets. AsThe Contribution was presented prospectively as we have concluded that the Contribution did
7
Table of September 30, 2017 and December 31, 2016, restricted cash consisted of the following (in thousands):Contents
CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
  September 30, December 31,
  2017 2016
Current restricted cash    
Liquefaction Project $116,513
 $197,201
     
Non-current restricted cash    
Liquefaction Project —
 73,339
not represent a change in our reporting entity, primarily as we concluded that CCL Stage III did not constitute a business under FASB topic Accounting Standards Codification 805, Business Combinations. The Merger had no impact on our Consolidated Financial Statements as it occurred between our consolidated subsidiaries.


NOTE 3—RESTRICTED CASH AND CASH EQUIVALENTS

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

As of September 30, 2023 and December 31, 2022, we had $130 million and $738 million of restricted cash and cash equivalents, respectively, for which the usage or withdrawal of such cash is restricted to the payment of liabilities related to the Liquefaction Project as required under certain debt arrangements, and additionally, as of December 31, 2022, the balance included $498 million related to the cash contributed from Cheniere for the redemption of the remaining outstanding principal balance of the 7.000% Senior Notes due 2024 (the “2024 CCH Senior Notes”) in January 2023.

NOTE 4—TRADE AND OTHER RECEIVABLES, NET OF CURRENT EXPECTED CREDIT LOSSES

Trade and other restricted payments.receivables, net of current expected credit losses consisted of the following (in millions):

September 30,December 31,
20232022
Trade receivables$143 $319 
Other receivables17 29 
Total trade and other receivables, net of current expected credit losses$160 $348 

NOTE 5—INVENTORY

Inventory consisted of the following (in millions):
September 30,December 31,
20232022
Materials$95 $92 
LNG10 53 
Natural gas10 31 
Other1 2 
Total inventory$116 $178 

NOTE 6—PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION
Property, plant and equipment, net of accumulated depreciation consisted of the following (in millions):
September 30,December 31,
20232022
LNG terminal
Terminal and interconnecting pipeline facilities$13,313 $13,299 
Site and related costs302 302 
Construction-in-process2,699 1,486 
Accumulated depreciation(1,754)(1,421)
Total LNG terminal, net of accumulated depreciation14,560 13,666 
Fixed assets
Fixed assets29 26 
Accumulated depreciation(22)(19)
Total fixed assets, net of accumulated depreciation7 7 
Property, plant and equipment, net of accumulated depreciation$14,567 $13,673 

Depreciation expense was $112 million and $111 million during the three months ended September 30, 2023 and 2022 and $335 million and $332 million during the nine months ended September 30, 2023 and 2022, respectively.

8
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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


NOTE 3—PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net consists of LNG terminal costs and fixed assets, as follows (in thousands):
  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

Depreciation expense was $0.3 million and $47 thousand in the three months ended September 30, 2017 and 2016, respectively, and $0.5 million and $0.1 million in the nine months ended September 30, 2017 and 2016, respectively.

NOTE 4—7—DERIVATIVE INSTRUMENTS

We haveCCL has entered into the following derivative instruments that are reported at fair value:
interest rate swaps (“Interest Rate Derivatives”) to protect against volatilitycommodity derivatives consisting of future cash flows and hedge a portion of the variable-rate interest payments on our credit facility (the “2015 CCH Credit Facility”) and
natural gas and power supply contracts, including those under the IPM agreements, for the development, commissioning and operation of the Liquefaction Project (“and associated economic hedges (collectively, the “Liquefaction Supply Derivatives”).


We recognize CCL’s derivative instruments as either assets or liabilities and measure those instruments at fair value. None of ourCCL’s 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 such changes are 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 the derivative instruments that are required to be measured at fair value on a recurring basis. basis, by the fair value hierarchy levels prescribed by GAAP (in millions):
Fair Value Measurements as of
September 30, 2023December 31, 2022
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
Liquefaction Supply Derivatives asset (liability)$6 $55 $(1,324)$(1,263)$(54)$(19)$(6,205)$(6,278)

We value our Interest Ratethe Liquefaction Supply Derivatives using valuations based on the initial trade prices. Using an income-baseda market or option-based approach subsequent valuations are based onincorporating present value techniques, as needed, which incorporates observable inputs to the valuation model including interest ratecommodity price curves, risk adjusted discount rates, credit spreadswhen available, and other relevant data.


In May 2017, we settledThe fair value of the 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 significant portion of our Interest RateLiquefaction 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 may use in valuing the asset or liability. To the extent valued using an option pricing model, we consider the future prices of energy units for unobservable periods to be a significant unobservable input to estimated net fair value. In estimating the future prices of energy units, we make judgments about market risk related to liquidity of commodity indices and recognized a derivative lossvolatility utilizing available market data. Changes in facts and circumstances or additional information may result in revised estimates and judgments, and actual results may differ from these estimates and judgments. We derive our volatility assumptions based on observed historical settled global LNG market pricing or accepted proxies for global LNG market pricing as well as settled domestic natural gas pricing. Such volatility assumptions also contemplate, as of $13.0 million in conjunction with the terminationbalance sheet date, observable forward curve data of approximately $1.4 billionsuch indices, as well as evolving available industry data and independent studies. In developing our volatility assumptions, we acknowledge that the global LNG industry is inherently influenced by events such as unplanned supply constraints, geopolitical incidents, unusual climate events including drought and uncommonly mild, by historical standards, winters and summers, and real or threatened disruptive operational impacts to global energy infrastructure. Our current estimate of commitments undervolatility does not exclude the 2015 CCH Credit Facility, as discussed in Note 6—Debt.impact of otherwise rare events unless we believe market participants would exclude such events on account of their assertion that those events were specific to our company and deemed within our control.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)



The following table (in thousands) shows theLevel 3 fair value and locationmeasurements 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 Interest Rate Derivatives recorded in derivative gain (loss), net on our Consolidated Statements 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 intonatural gas positions within the Liquefaction Supply Derivatives during the nine months ended September 30, 2017. The fair value of the Liquefaction Supply Derivatives is predominantly drivencould be materially impacted 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 respectivesignificant change in certain 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 unobservable in the marketplace. As a result, the fair value of the Liquefaction Supply Derivatives is designated as Level 3 within the valuation hierarchy. The curves used 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.

and international LNG prices. The following table includes quantitative information for the unobservable inputs for ourthe Level 3 Liquefaction Supply Derivatives as of September 30, 2017:
2023:
Net Fair Value AssetLiability
(in thousands)millions)
Valuation TechniqueApproachSignificant Unobservable InputRange of Significant Unobservable Inputs Range/ Weighted Average (1)
Liquefaction Supply Derivatives$(1,324)Market approach incorporating present value techniquesHenry Hub basis spread$295(1.245) - $0.638 / $(0.112)
Income ApproachBasis SpreadOption pricing model$(0.095)International LNG pricing spread, relative to Henry Hub (2)83% - $0.078422% / 183%

Derivative(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 basis or pricing spreads, in isolation, would decrease or increase, respectively, the fair value of the Liquefaction Supply Derivatives.

The following table shows the changes in the fair value of the Level 3 Liquefaction Supply Derivatives (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Balance, beginning of period$(2,356)$(5,006)$(6,205)$(1,221)
Realized and change in fair value gains (losses) included in net income (loss) (1):
Included in cost of sales, existing deals (2)903 (4,123)4,075 (2,727)
Included in cost of sales, new deals (3)— — 3 — 
Purchases and settlements:
Purchases (4)— 1 — (5,290)
Settlements (5)128 346 801 457 
Transfers out of level 3 (6)1 1 2 — 
Balance, end of period$(1,324)$(8,781)$(1,324)$(8,781)
Favorable (unfavorable) changes in fair value relating to instruments still held at the end of the period$903 $(4,123)$4,078 $(2,727)
(1)Does not include the realized value associated with derivative instruments that settle through physical delivery, as settlement is equal to contractually fixed price from trade date multiplied by contractual volume.  See settlements line item in this table.
(2)Impact to earnings on deals that existed at the beginning of the period and continue to exist at the end of the period.
(3)Impact to earnings on deals that were entered into during the reporting period and continue to exist at the end of the period.
(4)Includes any day one gain (loss) recognized during the reporting period on deals that were entered into during the reporting period which continue to exist at the end of the period, in addition to any derivative contracts acquired from entities at a value other than zero on acquisition date, such as derivatives assigned or novated during the reporting period and continuing to exist at the end of the period.
(5)Roll-off in the current period of amounts recognized in our Consolidated Balance Sheets at the end of the previous period due to settlement of the underlying instruments in the current period.
(6)Transferred out of Level 3 as a result of observable market for the underlying natural gas purchase agreements.

All counterparty derivative contracts provide for the unconditional right of set-off in the event of default. We have elected to report 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 usCCL to counterparty credit
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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)
risk, or the risk that a counterparty will be unable to meet its commitments, in instances when ourthe derivative instruments are in an asset position. OurAdditionally, counterparties are at risk that CCL will be unable to meet its commitments in instances where the derivative instruments are subject to contractual provisions which providein a liability position. We incorporate both CCL’s nonperformance risk and the respective counterparty’s nonperformance risk in fair value measurements depending on the position of the derivative. In adjusting the fair value of the 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.

Liquefaction Supply Derivatives

CCL holds Liquefaction Supply Derivatives which are primarily indexed to the natural gas market and international LNG indices. The firm terms of the Liquefaction Supply Derivatives range up to approximately 15 years, some of which commence upon the satisfaction of certain events or states of affairs.

The forward notional amount for allthe Liquefaction Supply Derivatives was approximately 7,900 TBtu and 8,532 TBtu as of September 30, 2023 and December 31, 2022, respectively.
The following table shows the effect and location of the Liquefaction Supply Derivatives recorded on our Consolidated Statements of Operations (in millions):
Gain (Loss) Recognized in Consolidated Statements of Operations
Consolidated Statements of Operations Location (1)Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
LNG revenues$2 $— $(5)$7 
Recovery (cost) of sales1,038 (3,883)5,033 (5,763)
(1)Does not include the realized value associated with Liquefaction Supply Derivatives that settle through physical delivery. Fair value fluctuations associated with commodity derivative assetsactivities are classified and liabilitiespresented consistently with a given counterpartythe item economically hedged and the nature and intent of the derivative instrument.

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

The following table shows the fair value and location of the Liquefaction Supply Derivatives on our Consolidated Balance Sheets (in millions):
Fair Value Measurements as of (1)
September 30, 2023December 31, 2022
Consolidated Balance Sheets Location
Current derivative assets$28 $12 
Derivative assets509 7 
Total derivative assets537 19 
Current derivative liabilities(649)(1,374)
Derivative liabilities(1,151)(4,923)
Total derivative liabilities(1,800)(6,297)
Derivative liability, net$(1,263)$(6,278)
(1)Does not include collateral posted with counterparties by CCL of $1 million and $76 million as of September 30, 2023 and December 31, 2022, respectively, which are included in the event of default.margin deposits on our Consolidated Balance Sheets.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


Consolidated Balance Sheets Presentation

The following table (in thousands) shows the fair value of the derivatives outstanding on a gross and location of our Liquefaction Supply Derivatives on our Consolidated Balance Sheets:
  September 30, December 31,
Balance Sheet Location 2017 2016
Other non-current assets, net $295
 $—

The following tablenet basis (in thousands) showsmillions) for the changes in the fair value from the mark-to-market gains of our Liquefaction Supply Derivatives recorded in our Consolidated Statements of Operations during the three and nine months ended September 30, 2017 and 2016:
   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) $—

Balance Sheet Presentation

Our derivative instruments that 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:Sheets:
Liquefaction Supply Derivatives
September 30, 2023December 31, 2022
Gross assets$989 $19 
Offsetting amounts(452)— 
Net assets$537 $19 
Gross liabilities$(1,882)$(6,622)
Offsetting amounts82 325 
Net liabilities$(1,800)$(6,297)
  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—8—ACCRUED LIABILITIES
 
As of September 30, 2017 and December 31, 2016, accruedAccrued liabilities consisted of the following (in thousands)millions): 
September 30,December 31,
20232022
Natural gas purchases$229 $597 
Interest costs and related debt fees77 150 
Liquefaction Project costs157 103 
Other accrued liabilities41 51 
Total accrued liabilities$504 $901 

NOTE 9—DEBT

Debt consisted of the following (in millions): 
September 30,December 31,
20232022
Senior Secured Notes:
2024 CCH Senior Notes$— $498 
5.875% due 20251,491 1,491 
5.125% due 20271,201 1,271 
3.700% due 20291,125 1,361 
3.788% weighted average rate due 20392,539 2,633 
Total Senior Secured Notes6,356 7,254 
Term loan facility agreement (the “CCH Credit Facility”)
— — 
Working capital facility agreement (the “CCH Working Capital Facility”) (1)
— — 
Total debt6,356 7,254 
Current debt, net of discount and debt issuance costs— (495)
Long-term portion of unamortized discount and debt issuance costs, net(47)(61)
Total long-term debt, net of discount and debt issuance costs$6,309 $6,698 
(1)The CCH Working Capital Facility is classified as short-term debt as we are required to reduce the aggregate outstanding principal amount to zero for a period of five consecutive business days at least once each year.

12
  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)


Credit Facilities
NOTE 6—DEBT

AsBelow is a summary of our credit facilities outstanding as of September 30, 20172023 (in millions):
CCH Credit FacilityCCH Working Capital Facility
Total facility size$3,260 $1,500 
Less:
Outstanding balance— — 
Letters of credit issued— 155 
Available commitment$3,260 $1,345 
Priority rankingSenior securedSenior secured
Interest rate on available balance (1)SOFR plus credit spread adjustment of 0.1%, plus margin of 1.5% or base rate plus 0.5%SOFR plus credit spread adjustment of 0.1%, plus margin of 1.0% - 1.5% or base rate plus 0.0% - 0.5%
Commitment fees on undrawn balance (1)0.525%0.10% - 0.20%
Maturity date(2)June 15, 2027
(1)The margin on the interest rate and December 31, 2016, our debt consisted of the following (in thousands): commitment fees is subject to change based on the applicable entity’s credit rating.
  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 portion of the outstanding borrowings under the 2015(2)The CCH Credit Facility resultingmatures the earlier of June 15, 2029 or two years after the substantial completion of the last Train of the Corpus Christi Stage 3 Project.
Cancellation of CCH Senior Secured Notes Contributed from Cheniere

During the nine months ended September 30, 2023, Cheniere repurchased $400 million of our Senior Secured Notes due 2027, 2029 and 2039 on the open market, with all of such repurchases immediately contributed to us from Cheniere for no consideration under the equity contribution agreements described in Note 11—Related Party Transactions, and cancelled by us. It was determined that for accounting purposes, Cheniere repurchased the bonds on our behalf as a write-off ofprincipal as opposed to as an agent, and thus the debt issuance costs associatedextinguishment was accounted for as an extinguishment directly with Cheniere. We did not have any repurchases on the 2015 CCH Credit Facility of $32.5 millionopen market during the three months ended September 30, 2023 or during the three and nine months ended September 30, 2022.

Additionally, during the nine months ended September 30, 2017. Borrowings under2023, we recorded a net distribution to Cheniere totaling $2 million from associated operating activities, inclusive of a $4 million distribution to Cheniere associated with write off of associated debt issuance costs and discount, offset by a $2 million contribution from Cheniere associated with interest paid by Cheniere on our behalf that was due at the 2027 CCH Senior Notes accrue interest at a fixed ratetime of 5.125%, and interest on the 2027 CCH Senior Notes is payable semi-annually in arrears. debt repayment. We did not record any such distributions from Cheniere during the three months ended September 30, 2023.

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. We are restricted from making distributions under agreements governing our indebtedness generally until, among other requirements, appropriate reserves have been established for debt service using cash or letters of credit and a historical debt service coverage ratio and projected debt service coverage ratio of at least 1.25:1.00 is satisfied.


At any time priorAs of September 30, 2023, 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.

13
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 September 30,Nine Months Ended September 30,
2023202220232022
Total interest cost$81 $119 $245 $356 
Capitalized interest(29)(13)(73)(16)
Total interest expense, net of capitalized interest$52 $106 $172 $340 
  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:senior notes (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
 September 30, 2023December 31, 2022
 Carrying
Amount		Estimated
Fair Value (1)		Carrying
Amount		Estimated
Fair Value (1)
Senior notes$6,356 $5,726 $7,254 $6,752 
(1)As of both September 30, 2023 and December 31, 2022, $1.7 billion of the fair value of our senior notes were classified as Level 3 since these senior notes were valued by applying an unobservable illiquidity adjustment to the price derived from trades or indicative bids of instruments with similar terms, maturities and credit standing. The remainder of our senior notes are classified as Level 2, based on prices derived from trades or indicative bids of the instruments.

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 10—REVENUES

The following table represents a disaggregation of revenue earned (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Revenues from contracts with customers
LNG revenues$872 $1,737 $2,793 $4,661 
LNG revenues—affiliate385 1,126 1,222 2,560 
Total revenues from contracts with customers1,257 2,863 4,015 7,221 
Net derivative gain (loss) (1)2 — (5)7 
Total revenues$1,259 $2,863 $4,010 $7,228 
(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 7—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, net and other non-current assets, net on our Consolidated Balance Sheets (in millions):
September 30,December 31,
20232022
Contract assets, net of current expected credit losses$176 $144 


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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):
NOTE 7—RELATED PARTY TRANSACTIONS
Nine Months Ended September 30, 2023
Deferred revenue, beginning of period$76 
Cash received but not yet recognized in revenue76 
Revenue recognized from prior period deferral(76)
Deferred revenue, end of period$76 


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:
September 30, 2023December 31, 2022
Unsatisfied Transaction Price (in billions)Weighted Average Recognition Timing (years) (1)Unsatisfied Transaction Price (in billions)Weighted Average Recognition Timing (years) (1)
LNG revenues$50.0 10$50.9 10
LNG revenues—affiliate1.1 91.2 8
Total revenues$51.1 $52.1 
(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 had $16.6 million and $7.1 million due to affiliates and zero and $0.6 millionhave elected the following exemptions which omit certain potential future sources of other non-current liabilities—affiliate as of September 30, 2017 and December 31, 2016, respectively, under agreements with affiliates, as described below.revenue from the table above:

LNG Sale and Purchase Agreements

CCL has two fixed price 20-year SPAs with Cheniere Marketing International LLP (“Cheniere Marketing UK”). Under(1)We omit from the first SPA (the “Amended Cheniere Marketing Foundation SPA”), Cheniere Marketing UK will purchase LNG from CCL for a price consistingtable above all performance obligations that are part of a fixed feecontract that has an original expected duration of $3.50 per MMBtu (a portionone 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 whicha single performance obligation when that performance obligation qualifies as a series. The amount of revenue from variable fees that is subject to annual adjustment for inflation) of LNG plus a variable fee equal to 115%not included in the transaction price will vary based on the future prices of Henry Hub per MMBtu of LNG. At Cheniere Marketing UK’s option, which has not been exercised yet,throughout the Amended Cheniere Marketing Foundation SPA commences uponcontract terms, to 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 UKextent customers elect 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 commercialtake delivery of their 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.

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. Prioradjustments to the substantial completionconsumer price index. Certain of each Trainour contracts contain additional variable consideration based on the outcome of contingent events and the Liquefaction Facility, no monthly fee payment is required except for reimbursementmovement of operating expenses. After substantial completion of each Train ofvarious indexes. We have not included such variable consideration in the Liquefaction Facility, for services performed while the Liquefaction Facility is operational, CCL will pay, in additiontransaction price 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 ofextent the necessary services required to construct, operate and maintain the Liquefaction Facility. 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 and other services required to operate and maintain the Liquefaction Facility. Priorconsideration is considered constrained due to the substantial completionuncertainty of each Trainultimate pricing and receipt. Additionally, we have excluded variable consideration related to volumes that contractually are subject to additional liquefaction capacity beyond what is currently in construction or operation. The following table summarizes the amount of variable consideration earned under contracts with customers included in the Liquefaction Facility, no monthly fee payment is required except for reimbursement of operating expenses. After substantial completion of each Train of the Liquefaction Facility, for services performed while the Liquefaction Facility 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.table above:

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
LNG revenues46 %73 %48 %70 %
LNG revenues—affiliate78 %89 %78 %87 %
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

15
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CHENIERE CORPUS CHRISTI HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


NOTE 11—RELATED PARTY TRANSACTIONS
materials, overseeing contractors
Below is a summary of our related party transactions, all in the ordinary course of business, as reported on our Consolidated Statements of Operations (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
LNG revenues—affiliate
SPAs and Letter Agreements with Cheniere Marketing, LLC (“Cheniere Marketing”)
$385 $1,022 $1,222 $2,394 
Contracts for Sale and Purchase of Natural Gas and LNG with other affiliates— 104 — 166 
Total LNG revenues—affiliate385 1,126 1,222 2,560 
Cost of sales—affiliate
Contracts for Sale and Purchase of Natural Gas and LNG14 47 43 95 
SPAs and Letter Agreements with Cheniere Marketing27 — 91 — 
Total cost of sales—affiliate41 47 134 95 
Operating and maintenance expense—affiliate
Services Agreements (see Note 1)
27 28 84 86 
Operating and maintenance expense—related party
Natural Gas Transportation Agreements (1)3 2 7 7 
General and administrative expense—affiliate
Services Agreements (see Note 1)
11 11 34 27 
(1)This related party is a subsidiary of Cheniere’s equity method investment.

Equity Contribution Agreements

We have equity contribution agreements with Cheniere 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 behalfcertain of CCP.

Management Services Agreements (“MSAs”its subsidiaries (the “Equity Contribution Agreements”)

CCL has an MSA with Shared Services pursuant to which Shared Services managesCheniere agreed to contribute any of CCH’s Senior Secured Notes that Cheniere has repurchased to CCH for no consideration. During the construction and operation of the Liquefaction Facility, 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 Facility and obtaining insurance. Prior to the substantial completion of each Train of the Liquefaction Facility, 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 an 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.

Lease Agreements

CCL has agreements with Cheniere Land Holdings, LLC (“Cheniere Land Holdings”) to lease approximately 60 acres of land owned by Cheniere Land Holdings for the Liquefaction Facility. The total annual lease payment, paid in advance upon 30 days of the effective date of the respective leases, is $0.4 million, and the terms of the agreements range from three to five years. We recorded $0.1 million and $0.2 million of lease expense related to these agreements as operating and maintenance expense—affiliate for the three and nine months ended September 30, 2017, respectively, and $11,0002023, Cheniere repurchased a total of expense during each$400 million of the threeoutstanding principal amount of CCH’s Senior Secured Notes due 2027, 2029 and nine2039 on the open market, which were immediately contributed under the Equity Contribution Agreements to us from Cheniere and cancelled by us. We did not have any repurchases on the open market during the three months ended September 30, 2016. As2023.

NOTE 12—CUSTOMER CONCENTRATION
The concentration of September 30, 2017, we had $0.3 millionour customer credit risk in excess of prepaid expense related to this agreement in10% of total revenues and/or trade and other receivables, net of current assets—affiliate.expected credit losses and contract assets, net of current expected credit losses was as follows:

Percentage of Total Revenues from External CustomersPercentage of Trade and Other Receivables, Net and Contract Assets, Net from External Customers
Three Months Ended September 30,Nine Months Ended September 30,September 30,December 31,
202320222023202220232022
Customer A22%20%22%22%14%17%
Customer B15%15%15%15%**
Customer C16%15%14%14%**
Customer D****49%33%
Customer E*13%****
Customer F*12%*10%**
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 pipeline on land owned by Cheniere Land Holdings. CCP had made a one-time payment of $0.3 million to Cheniere Land Holdings for the permanent easement of this land as of December 31, 2016.

Dredge Material Disposal Agreement

CCL has a dredge material disposal agreement with Cheniere Land Holdings that terminates in 2025 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. 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.

Tug Hosting Agreement

In February 2017, CCL entered into a tug hosting agreement with Corpus Christi Tug Services, LLC (“Tug Services”) to provide certain marine structures, support services and access necessary at the Liquefaction Facility 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.

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.* Less than 10%

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(unaudited)


There have been no state and local taxes paid 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 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. There have been no state and local taxes paid 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 agreement is effective for tax returns due on or after May 2015.

Equity Contribution Agreement

We have an equity contribution agreement with Cheniere 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 billion for Stage 1. As of September 30, 2017, we have received $1.8 billion in contributions from Cheniere under this agreement.

NOTE 8—13—SUPPLEMENTAL CASH FLOW INFORMATION

The balance in property, plant and equipment, net funded with accounts payable and accrued liabilities (including affiliate) was $194.2 million and $213.8 million, as of September 30, 2017 and 2016, respectively.


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


NOTE 9—RECENT ACCOUNTING STANDARDS


The following table provides a brief descriptionsupplemental disclosure of recent accounting standards that had not been adopted bycash flow information (in millions):
Nine Months Ended September 30,
20232022
Cash paid during the period for interest on debt, net of amounts capitalized$215 $225 
Right-of-use assets obtained in exchange for new operating lease liabilities1 3 
Non-cash investing and financing activity:
Unpaid purchases of property, plant and equipment164 66 
Non-cash conveyance of property, plant and equipment— 17 
Non-cash contributions from affiliates for conveyance of assets— 7 
Cancellation of CCH Senior Secured Notes contributed to us from Cheniere (see Note 9)
400 30 

We recorded $1.5 billion of contributions in our Consolidated Statements of Member’s Equity (Deficit) during the Company as ofnine months ended September 30, 2017:
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 thereto

This standard provides a single, comprehensive revenue recognition model which replaces and supersedes most existing revenue recognition guidance and requires an entity2022 related 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)contribution of the capital stock or all or substantially allCCL Stage III entity to us from Cheniere on June 15, 2022, with such contribution representing a non-cash financing activity. See Note 2—CCL Stage III Contribution and Merger for further discussion.

17
Table 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—DebtContents 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
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





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.” 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 regarding our expected receipt of cash distributions from our subsidiaries; 
•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; 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 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, 2022. 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
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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, other industrial uses and back up for intermittent energy sources. 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 own and 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 13.515 mtpa of LNG, three LNG storage tanks with aggregate capacity of approximately 10.110 Bcfe and two marine berths that can each accommodate vessels with nominal capacity 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 and a second partial berth and allAdditionally, we are constructing an expansion of the Liquefaction Project’s necessary infrastructure facilities. The second stage (“Corpus Christi LNG Terminal (the “Corpus Christi Stage 2”3 Project”) includes Train 3, one LNG storage tankfor seven midscale Trains with an expected total production capacity of over 10 mtpa of LNG.

We also own and the completion of the second partial berth. The Liquefaction Project also includesoperate through CCP 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“Corpus Christi Pipeline”). Stage 1 and together with the Corpus Christi LNG Terminal and the Corpus Christi PipelineStage 3 Project, the “Liquefaction Project”).
Our long-term customer arrangements form the foundation of our business and provide us with significant, stable, long-term cash flows. We have contracted most of our anticipated production capacity under SPAs, in which our customers are currentlygenerally required to pay a fixed fee with respect to the contracted volumes irrespective of their election to cancel or suspend deliveries of LNG cargoes, and under construction,IPM agreements, in which the gas producer sells natural gas to us on a global LNG index price, less a fixed liquefaction fee, shipping and Trainother costs. Through our SPAs and IPM agreements, we have contracted approximately 90% of the total anticipated production capacity from the Liquefaction Project with approximately 18 years of weighted average remaining life as of September 30, 2023.

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We remain focused on safety, 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 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. In March 2023, CCL and another subsidiary of Cheniere submitted an application with the FERC under the Natural Gas Act (“NGA”) for an expansion adjacent to the Liquefaction Project consisting of two midscale Trains with an expected total production capacity of approximately 3 mtpa of LNG (the “Midscale Trains 8 & 9 Project”). The development of the Midscale Trains 8 & 9 Project or other projects, including infrastructure projects in support of natural gas supply and LNG demand, will require, among other things, acceptable commercial and financing arrangements before a positive FID is being commercializedmade.

Additionally, we are committed to the management of our most important environmental, social and has all necessary regulatory approvalsgovernance (“ESG”) impacts, risks and opportunities. In August 2023, Cheniere published The Power of Connection, its fourth Corporate Responsibility (“CR”) report, which details Cheniere’s approach and progress on ESG issues, including its collaboration with natural gas midstream companies, technology providers and leading academic institutions on life-cycle assessment (“LCA”) models, quantification, monitoring, reporting and verification (“QMRV”) of greenhouse gas emissions and other research and development projects. Cheniere also co-founded and sponsored the Energy Emissions Modeling and Data Lab (“EEMDL”), a multidisciplinary research and education initiative led by the University of Texas at Austin in place.collaboration with Colorado State University and the Colorado School of Mines. In addition, Cheniere commenced providing Cargo Emissions Tags (“CE Tags”) to our long-term customers in June 2022, and in October 2022 joined the Oil and Gas Methane Partnership (“OGMP”) 2.0, the United Nations Environment Programme’s (“UNEP”) flagship oil and gas methane emissions reporting and mitigation initiative. Cheniere’s CR report is available at cheniere.com/our-responsibility/reporting-center. Information on Cheniere’s website, including the CR report, is not incorporated by reference into this Quarterly Report on Form 10-Q.


Overview of Significant Events


Our significant accomplishmentsevents since January 1, 20172023 and through the filing date of this Form 10-Q include our issuancethe following:
Strategic

•In March 2023, CCL and another subsidiary of Cheniere submitted an aggregateapplication with the FERC under the NGA for the Midscale Trains 8 & 9 Project.

Operational

•As of October 26, 2023, over 800 cumulative LNG cargoes totaling approximately 55 million tonnes of LNG have been produced, loaded and exported from the Liquefaction Project.

Financial

•We received the following upgrades from credit rating agencies, each with a stable outlook:
DatePrevious RatingUpgraded RatingRating Agency
October 2023BBB-BBBS&P Global Ratings
August 2023Baa3Baa2Moody’s Investor Service
July 2023BBB-BBBFitch Ratings
•In January 2023, we redeemed with cash on hand the remaining $498 million outstanding principal amount of $1.5 billion of 5.125%our 7.000% Senior Secured Notes due 20272024 (the “2027“2024 CCH Senior Notes”).

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Results of Operations

Three Months Ended September 30,Nine Months Ended September 30,
(in millions)20232022Variance20232022Variance
Revenues
LNG revenues$874 $1,737 $(863)$2,788 $4,668 $(1,880)
LNG revenues—affiliate385 1,126 (741)1,222 2,560 (1,338)
Total revenues1,259 2,863 (1,604)4,010 7,228 (3,218)
Operating costs and expenses (recoveries)
Cost (recovery) of sales (excluding items shown separately below)(443)5,929 (6,372)(3,114)10,712 (13,826)
Cost of sales—affiliate41 47 (6)134 95 39 
Operating and maintenance expense125 119 6 359 350 9 
Operating and maintenance expense—affiliate27 28 (1)84 86 (2)
Operating and maintenance expense—related party3 2 1 7 7 — 
General and administrative expense2 2 — 4 6 (2)
General and administrative expense—affiliate11 11 — 34 27 7 
Depreciation and amortization expense112 112 — 336 334 2 
Other2 1 1 2 5 (3)
Total operating costs and expenses (recoveries)(120)6,251 (6,371)(2,154)11,622 (13,776)
Income (loss) from operations1,379 (3,388)4,767 6,164 (4,394)10,558 
Other income (expense)
Interest expense, net of capitalized interest(52)(106)54 (172)(340)168 
Loss on modification or extinguishment of debt— (6)6 (10)(36)26 
Other income, net2 2 — 7 5 2 
Total other expense(50)(110)60 (175)(371)196 
Net income (loss)$1,329 $(3,498)$4,827 $5,989 $(4,765)$10,754 

Operational volumes loaded and recognized from the Liquefaction Project

Three Months Ended September 30,Nine Months Ended September 30,
(in TBtu)20232022Variance20232022Variance
Volumes loaded during the current period186 196 (10)566 585 (19)
Volumes loaded during the prior period but recognized during the current period— — — 3 — 3 
Volumes loaded at our affiliate’s facility— — — 5 — 5 
Total volumes recognized in the current period186 196 (10)574 585 (11)

Net proceedsincome (loss)

Substantially all of the offeringfavorable variances of approximately $1.4$4.8 billion after deducting commissions, feesand $10.8 billion for the three and nine months ended September 30, 2023, respectively, as compared to the same periods of 2022 were attributable to favorable changes in fair value and settlements of derivatives of $4.9 billion and $10.8 billion, respectively, between the periods, of which $1.0 billion and $4.4 billion, respectively, related to non-cash favorable changes in fair value of our IPM agreements where we procure natural gas at a price indexed to international gas prices as a result of lower volatility in international gas prices compared to the same periods of 2022 and declines in international forward commodity curves.

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The following is additional discussion of the significant drivers of the variance in net income (loss) by line item:
Revenues

Substantially all of the $1.6 billion and $3.2 billion decreases between the three and nine months ended September 30, 2023, respectively, as compared to the same periods of 2022, were attributable to $1.5 billion and $3.0 billion decreases, respectively, from lower pricing per MMBtu as a result of decreased Henry Hub pricing.

Operating costs and expenses (recoveries)

The $6.4 billion and provisioning$13.8 billion favorable variances between the three and nine months ended September 30, 2023, respectively, as compared to the same periods of 2022, were primarily attributable to:
•$4.9 billion and $10.8 billion favorable variances between the three and nine months ended September 30, 2023, respectively, as compared to the same periods of 2022, from changes in fair value and settlements of derivatives included in cost of sales, from $3.9 billion and $5.8 billion of losses in the three and nine months ended September 30, 2022, respectively, to $1.0 billion and $5.0 billion of gains in the three and nine months ended September 30, 2023, respectively, primarily due to decreased international gas prices resulting in non-cash favorable changes in fair value of our commodity derivatives indexed to such prices and, to a lesser extent, an increase in forward notional amount of derivatives due to agreements contributed to us upon the merger of CCL Stage III with and into CCL in June 2022; and
•$1.5 billion and $3.0 billion decreases between the three and nine months ended September 30, 2023, respectively, as compared to the same periods of 2022, in cost of sales excluding the effect of derivative changes described above, primarily as a result of $1.3 billion and $2.8 billion, respectively, in decreased cost of natural gas feedstock largely due to lower U.S. natural gas prices.

Other income (expense)

The $60 million and $196 million decreases between the three and nine months ended September 30, 2023, respectively, as compared to the same periods of 2022, were primarily attributable to:
•$54 million and $168 million decreases in interest expense, net of capitalized interest, between the three and nine months ended September 30, 2023, respectively, as compared to the same periods of 2022, as a result of lower debt balances due to repayment of debt, as further detailed under Financing Cash Flows in Sources and Uses of Cash within Liquidity and Capital Resources. Additionally, the decrease in interest expense, net of capitalized interest between the comparable nine month periods is due to a higher portion of total interest costs eligible for incremental interest required undercapitalization following the 2027issuance of full notice to proceed to Bechtel Energy Inc. (“Bechtel”) on the Corpus Christi Stage 3 Project in June 2022; and
•$26 million decrease in loss on modification or extinguishment of debt between the nine months ended September 30, 2023 as compared to the same period of 2022, primarily due to higher losses recognized from the amendment and restatement of our term loan facility agreement (the “CCH Credit Facility”) and our working capital facility agreement (the “CCH Working Capital Facility”) during the second quarter of 2022 compared to the premiums paid for the early redemption of the 2024 CCH Senior Notes during construction, were usedthe nine months ended September 30, 2023 as further described in Overview of Significant Events.

Significant factors affecting our results of operations

Below are significant factors that affect our results of operations.

Gains and losses on derivative instruments

Derivative instruments, which in addition to prepay a portionmanaging exposure to commodity-related marketing and price risks are utilized to manage exposure to changing interest rates volatility, are reported at fair value on our Consolidated Financial Statements. For commodity derivative instruments related to our IPM agreements, the underlying LNG sales being economically hedged are accounted for under the accrual method of accounting, whereby revenues expected to be derived from the future LNG sales are recognized only upon delivery or realization of the outstanding borrowings underunderlying transaction. Because the recognition of
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derivative instruments at fair value has the effect of recognizing gains or losses relating to future period exposure, and given the significant volumes, long-term duration and volatility in price basis for certain of our derivative contracts, use of derivative instruments may result in continued volatility of our results of operations based on changes in market pricing, counterparty credit facility (the “2015 CCH Credit Facility”).risk and other relevant factors that may be outside of our control, notwithstanding the operational intent to mitigate risk exposure over time.


Liquidity and Capital Resources

The following information describes our ability to generate and obtain adequate amounts of cash to meet our requirements in the short term and the long term. In the short term, we expect to meet our cash requirements using operating cash flows and available liquidity, consisting of restricted cash and cash equivalents and available commitments under our credit facilities. Additionally, we expect to meet our long term cash requirements by using operating cash flows and other future potential sources of liquidity, which may include debt offerings. The table (in thousands)below provides a summary of our available liquidity position at(in millions). Future material sources of liquidity are discussed below.
September 30, 2023
Restricted cash and cash equivalents designated for the Liquefaction Project$130 
Available commitments under our credit facilities (1):
CCH Credit Facility3,260 
CCH Working Capital Facility1,345 
Total available commitments under our credit facilities4,605 
Total available liquidity$4,735 
(1)Available commitments represent total commitments less loans outstanding and letters of credit issued under each of our credit facilities as of September 30, 2017 and December 31, 2016:
 September 30, December 31,
 2017 2016
Cash and cash equivalents$—
 $—
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 2023. See Note 6—9—Debt of our Notes to Consolidated Financial Statements in this quarterly reportfor additional information on our credit facilities and Note 7—Debtother debt instruments.

Our liquidity position subsequent to September 30, 2023 will be driven by future sources of liquidity 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 consideration, 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. For further discussion of our Notes to Consolidatedfuture sources and Combined Financial Statementsuses of liquidity, see the liquidity and capital resources disclosures in our registration statementannual report on Form S-4, as amended, filed with the SEC and declared effective on April 10, 2017.

Liquefaction Facilities

Liquefaction Facilities

The Liquefaction Project is being developed and constructed at the Corpus Christi LNG terminal, on nearly 2,000 acres of land that we own or control near Corpus Christi, Texas. In December 2014, we received authorization from the FERC to site, construct and operate Stages 1 and 2 of the Liquefaction Project. The following table summarizes the overall project status of Stage 1 of the Liquefaction Project 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

The DOE has authorized the export of domestically produced LNG by vessel from the Corpus Christi LNG terminal to FTA countries for a 25-year term and to non-FTA countries for a 20-year term up to a combined total of the equivalent of 767 Bcf/yr (approximately 15 mtpa) of natural gas. A party to the proceeding requested a rehearing of the authorization to non-FTA countries, which was denied by the DOE in May 2016. In July 2016, the same party petitioned the U.S. Court of Appeals10-K for the District of Columbia Circuit (the “Court of Appeals”) to review the authorization to non-FTA countriesfiscal year ended December 31, 2022.

Supplemental Guarantor Information

The 5.875% Senior Secured Notes due 2025, 5.125% Senior Secured Notes due 2027, 3.700% Senior Secured Notes due 2029 and the DOE order denyingseries of Senior Secured Notes due 2039 with weighted average rate of 3.788% (collectively, 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 the date of first export thereunder or the date specified in the particular order, which ranges 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 7.7 mtpa of LNG, which is approximately 86% of the expected aggregate nominal production capacity of Trains 1 and 2. The obligation to make LNG available under these SPAs commences from the date of first commercial delivery for Trains 1 and 2, 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 commences with the date of first commercial delivery for Train 3. Under these eight SPAs, the customers will purchase 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 cancellation or suspension. The SPAs and contracted volumes to be made available under the SPAs are not tied to a specific Train; however, the term of each SPA commences upon the start of operations of a specified Train.

In aggregate, 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 make a positive FID with respect to Stage 2 of the Liquefaction Project, with the applicable fixed fees starting from the date of first commercial delivery from the applicable Train. These fixed fees equal approximately $550 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 subject 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 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) 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 feedstock 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 needs for the Liquefaction Project. CCL has also entered into enabling agreements and long-term natural gas supply contracts with third parties, and will continue to enter into such agreements, in order to secure natural gas feedstock for the Liquefaction Project. We expect to enter into gas supply contracts under these enabling agreements as and when required for the Liquefaction Project. As of September 30, 2017, CCL has secured up to approximately 362 TBtu of natural gas feedstock through long-term natural gas supply contracts.

Construction

CCL entered into separate lump sum turnkey contracts with Bechtel Oil, Gas and Chemicals, Inc. (“Bechtel”) for the engineering, procurement and construction of Stages 1 and 2 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 CCL 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 include 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 2 of the Liquefaction Project based upon, among other things, entering into acceptable commercial arrangements and obtaining adequate financing to construct the facility.


Capital Resources

We expect to finance the construction costs of the Liquefaction Project from one or more of the following: project debt and borrowings, operating cash flow from CCL and CCP and equity contributions from Cheniere. The following table (in thousands) 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
(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 and CCH Working Capital Facility.

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

“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 NotesSecured Notes”) 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”“Guarantor” and collectively, the “Guarantors”“Guarantors”).


The indenture governingGuarantors’ guarantees are full and unconditional, subject to certain release provisions including (1) the CCH Senior Notes (the “CCH Indenture”) contains customary terms and events of default 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; sellsale, exchange, disposition or transfer assets, including membership(by merger, consolidation or partnership interestsotherwise) 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 all of the propertiescapital stock or assets of 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 of maturity for each series of the CCH Senior Notes, we may redeem all or part of such series of the 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 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 obligations under the 2015 CCH Credit Facility are secured by 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 is intended to be used for loans (“CCH Working Capital Loans”), 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 up to the maximum allowed under the Common Terms Agreement that was entered into concurrently with the 2015 CCH Credit Facility. We did not have any amounts outstanding under the CCH Working Capital Facility 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 made in connection with 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 termination of the CCH Working Capital Facility, (2) the date that is 15 days after such CCH Swing Line Loan is made 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, (2) the designation of the Guarantor as well as allan “unrestricted subsidiary” in accordance with the indentures governing the CCH Senior Secured Notes (the “CCH Indentures”), (3) upon the legal defeasance or covenant defeasance or discharge of our membership interestsobligations under the CCH Indentures and each(4) the release and discharge of the Guarantors onpursuant to the Common Security and Account Agreement. In the event of a pari passu basis withdefault in payment of the principal or interest by us, whether at maturity of the CCH Senior Secured Notes or by declaration of acceleration, call for redemption or otherwise, legal proceedings may be instituted against the Guarantors to enforce the guarantee.

The rights of holders of the CCH Senior Secured Notes against the Guarantors may be limited under the U.S. Bankruptcy Code or federal or state fraudulent transfer or conveyance law. Each guarantee contains a provision intended to limit the Guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent conveyance or transfer under U.S. federal or state law. However, there can be no assurance as to
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what standard a court will apply in making a determination of the maximum liability of the Guarantors. Moreover, this provision may not be effective to protect the guarantee from being voided under fraudulent conveyance laws. There is a possibility that the entire guarantee may be set aside, in which case the entire liability may be extinguished.
Summarized financial information about us and the 2015 CCH Credit Facility.Guarantors as a group is omitted herein because such information would not be materially different from our Consolidated Financial Statements.


Equity Contribution AgreementCorpus Christi Stage 3 Project


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 contributionsThe following table summarizes the project completion and construction status 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”). AsStage 3 Project 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.2023:

Overall project completion percentage44.1%
Completion percentage of:
Engineering74.1%
Procurement63.3%
Subcontract work55.9%
Construction7.5%
Date of expected substantial completion2Q/3Q 2025 - 2H 2026


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. 
Nine Months Ended September 30,
20232022
Net cash provided by operating activities$1,228 $1,234 
Net cash used in investing activities(1,195)(618)
Net cash used in financing activities(641)(458)
Net increase (decrease) in restricted cash and cash equivalents$(608)$158 
 Nine Months Ended September 30,
 2017 2016
Operating cash flows$(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


OperatingThe $6 million decrease in operating cash flows between the nine months ended September 30, 2023 and 2022 was primarily related to lower cash receipts from the sale of LNG cargoes from lower pricing per MMBtu as a result of decreased Henry Hub pricing, which was partially offset by lower cash outflows for natural gas feedstock, mostly due to lower U.S. natural gas prices.

Investing Cash Flows

Our investing net cash outflows in both years primarily were for the construction costs for the Liquefaction Project. The $577 million increase in 2023 compared to 2022 was primarily due to $1.0 billion of cash outflows during the nine months ended September 30, 2017 and 2016 were $51.62023 related to construction of the Corpus Christi Stage 3 Project following our issuance of full notice to proceed to Bechtel in June 2022 compared to $545 million and $28.8 million, respectively. Thein the comparable period of 2022. We expect our capital expenditures to increase in operating cash outflows in 2017 compared to 2016 was primarily related to increased cash used for settlementfuture periods as construction work progresses on the Corpus Christi Stage 3 Project.
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Table of derivative instruments.Contents


InvestingFinancing Cash Flows


Investing cash outflows during eachThe following table summarizes our financing activities (in millions):
Nine Months Ended September 30,
20232022
Proceeds from issuances of debt$— $440 
Repayments of debt(498)(2,419)
Debt issuance costs— (44)
Debt extinguishment costs(8)(18)
Contributions105 1,583 
Distributions(240)— 
   Net cash used in financing activities$(641)$(458)
Debt Issuances and Related Financing Costs
The following table shows the issuances of debt, including intra-quarter borrowings (in millions):
Nine Months Ended September 30,
20232022
CCH Credit Facility$— $440 
Total debt issuances$— $440 

Repayments and Related Extinguishment Costs

The following table shows the repayments of debt, including intra-quarter repayments (in millions):
Nine Months Ended September 30,
20232022
CCH Credit Facility$— $(2,169)
CCH Working Capital Facility— (250)
2024 CCH Senior Notes(498)— 
Total repayments of debt$(498)$(2,419)

Capital Contributions and Distributions

During the nine months ended September 30, 20172023 and 2016 were2022, we received cash capital contributions of $105 million and $1.6 billion, and are primarilyrespectively, from Cheniere, used to fund the construction costs for Stage 1 of the Liquefaction Project. These costs are capitalized as construction-in-process until achievement of substantial completion. In additionworking capital and in 2022 to cash outflows for construction costs for the Liquefaction Project, we received $36.3 millionprimarily pay down our outstanding debt, and during the nine months ended September 30, 2017 from the return2023 and 2022, we made cash distributions 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 infrastructure 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.

Financing Cash Flows

Financing cash inflows during the nine 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 billion 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;
$23.3 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 CCH Credit Facility;
issuance of an aggregate principal amount of $1.25 billion of the 2024 CCH Senior Notes, which 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$240 million and $7.2 million during the three and nine months ended September 30, 2017,zero, 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.to Cheniere.


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 gain during the three months ended September 30, 2016 to a net loss during the three months ended September 30, 2017 primarily due to an unfavorable shift in the long-term forward LIBOR curve between the periods. Derivative loss, net decreased during the nine 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, we also recognized a $13.0 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.


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, 2022.


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.

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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 intoCCL has commodity derivatives consisting of natural gas supply contracts to secure natural gas feedstock for the commissioning and operation of the Liquefaction Project (“(the “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):
September 30, 2023December 31, 2022
Fair ValueChange in Fair ValueFair ValueChange in Fair Value
Liquefaction Supply Derivatives$(1,263)$1,246 $(6,278)$1,684 
 September 30, 2017 December 31, 2016
 Fair Value Change in Fair Value Fair Value Change in Fair Value
Liquefaction Supply Derivatives$295
 $34
 $—
 $—


Interest Rate Risk

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-month LIBOR curve across the remaining terms of the Interest Rate Derivatives as follows (in thousands):
 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—7—Derivative Instruments of our Notes to Consolidated Financial Statements for additional details about ourthe derivative instruments.

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 Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange“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, 2022.


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 SEC and declared effective on April 10, 2017fiscal year ended December 31, 2022.



ITEM 6.    EXHIBITS

ITEM 6.EXHIBITS
Exhibit No.Description
10.1Exhibit No.
Consent for Amendment to the Common Security and Account Agreement, dated September 7, 2017, among Cheniere Corpus Christi Holdings, LLC, as Company, Corpus Christi Liquefaction, LLC, Cheniere Corpus Christi Pipeline, L.P., 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 Bank (Incorporated by reference to Exhibit 10.51 to the Company’s Registration Statement on Form S-4 (SEC File No. 333-221307), filed on November 2, 2017)
Description
10.210.1*
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 SeparatedLump Sum Turnkey Agreement for the Engineering, Procurement and Construction of the Corpus Christi Liquefaction Stage 3 Project, dated March 1, Liquefaction Facility, dated as of December 6, 2013,2022, by and between Corpus Christi Liquefaction, LLCCCL and Bechtel Oil, Gas and Chemicals,Energy, 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,Payment Milestone Updates (Schedule C-1), dated August 3, 2017 andJune 19, 2023, (ii) the Change Order CO-00037 9% Nickel Lump Sum Conversion,Geotechnical Soils Investigation Period & Security Division of Responsibility Change, dated September 14, 2017June 20, 2023, (iii) the Change Order CO-00038 Power Monitoring System (ETAP HMI), dated June 29, 2023 and (iv) the Change Order CO-00039 EFG Firewater Connection, dated June 30, 2023 (Portions of this exhibit have been omittedomitted.)
22.1
List of Issuers and filed separately with the SEC pursuant to a request for confidential treatment.)Guarantor Subsidiaries (Incorporated by reference to Exhibit 10.5022.1 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)
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.
27



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:November 1, 2023By:/s/ Zach Davis
Zach Davis
President and Chief Financial Officer
(Principal Executive and Financial Officer)
Date:November 1, 2023CHENIERE 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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