Condensed Consolidating Financial Information (Tables)

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed consolidated balance sheets

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2018

($ in millions)

	Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	4	$	1		$	1		$	(2	)	$	4
Other current assets	60		1,532			2			—			1,594
Intercompany receivable, net	6,098		203			—			(6,301		)	—
Total Current Assets	6,162		1,736			3			(6,303		)	1,598
PROPERTY AND EQUIPMENT:
Oil and natural gas properties at cost, based on full cost accounting, net	598		7,302			24			—			7,924
Other property and equipment, net	—		1,091			—			—			1,091
Property and equipment held for sale, net	—		15			—			—			15
Total Property and Equipment, Net	598		8,408			24			—			9,030
LONG-TERM ASSETS:
Other long-term assets	26		293			—			—			319
Investments in subsidiaries and intercompany advances	1,500		(97		)	—			(1,403		)	—
TOTAL ASSETS	$	8,286	$	10,340		$	27		$	(7,706	)	$	10,947
CURRENT LIABILITIES:
Current liabilities	$	523	$	2,306		$	1		$	(2	)	$	2,828
Intercompany payable, net	25		6,276			—			(6,301		)	—
Total Current Liabilities	548		8,582			1			(6,303		)	2,828
LONG-TERM LIABILITIES:
Long-term debt, net	7,341		—			—			—			7,341
Other long-term liabilities	53		258			—			—			311
Total Long-Term Liabilities	7,394		258			—			—			7,652
EQUITY:
Chesapeake stockholders’ equity	344		1,500			(97		)	(1,403		)	344
Noncontrolling interests	—		—			123			—			123
Total Equity	344		1,500			26			(1,403		)	467
TOTAL LIABILITIES AND EQUITY	$	8,286	$	10,340		$	27		$	(7,706	)	$	10,947

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2017

($ in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	5		$	1		$	2		$	(3	)	$	5
Other current assets	154			1,364			3			(1		)	1,520
Intercompany receivable, net	8,697			436			—			(9,133		)	—
Total Current Assets	8,856			1,801			5			(9,137		)	1,525
PROPERTY AND EQUIPMENT:
Oil and natural gas properties at cost, based on full cost accounting, net	435			8,888			27			—			9,350
Other property and equipment, net	—			1,314			—			—			1,314
Property and equipment held for sale, net	—			16			—			—			16
Total Property and Equipment, Net	435			10,218			27			—			10,680
LONG-TERM ASSETS:
Other long-term assets	52			168			—			—			220
Investments in subsidiaries and intercompany advances	806			(146		)	—			(660		)	—
TOTAL ASSETS	$	10,149		$	12,041		$	32		$	(9,797	)	$	12,425
CURRENT LIABILITIES:
Current liabilities	$	190		$	2,168		$	2		$	(4	)	$	2,356
Intercompany payable, net	433			8,648			52			(9,133		)	—
Total Current Liabilities	623			10,816			54			(9,137		)	2,356
LONG-TERM LIABILITIES:
Long-term debt, net	9,921			—			—			—			9,921
Other long-term liabilities	101			419			—			—			520
Total Long-Term Liabilities	10,022			419			—			—			10,441
EQUITY:
Chesapeake stockholders’ equity (deficit)	(496		)	806			(146		)	(660		)	(496		)
Noncontrolling interests	—			—			124			—			124
Total Equity (Deficit)	(496		)	806			(22		)	(660		)	(372		)
TOTAL LIABILITIES AND EQUITY	$	10,149		$	12,041		$	32		$	(9,797	)	$	12,425

Condensed consolidated income statements

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Oil, natural gas and NGL	$	—		$	5,136		$	19		$	—		$	5,155
Marketing	—			5,076			—			—			5,076
Total Revenues	—			10,212			19			—			10,231
OPERATING EXPENSES:
Oil, natural gas and NGL production	—			539			—			—			539
Oil, natural gas and NGL gathering, processing and transportation	—			1,391			7			—			1,398
Production taxes	—			123			1			—			124
Marketing	—			5,158			—			—			5,158
General and administrative	2			277			1			—			280
Restructuring and other termination costs	—			38			—			—			38
Provision for legal contingencies, net	—			26			—			—			26
Depreciation, depletion and amortization	—			1,142			3			—			1,145
Loss on sale of oil and natural gas properties	—			578			—			—			578
Impairments	—			53			—			—			53
Other operating expense	—			10			—			—			10
Total Operating Expenses	2			9,335			12			—			9,349
INCOME (LOSS) FROM OPERATIONS	(2		)	877			7			—			882
OTHER INCOME (EXPENSE):
Interest expense	(485		)	(2		)	—			—			(487		)
Gains on investments	—			139			—			—			139
Gains on purchases or exchanges of debt	263			—			—			—			263
Other income	3			67			—			—			70
Equity in net earnings of subsidiary	1,084			3			—			(1,087		)	—
Total Other Income (Expense)	865			207			—			(1,087		)	(15		)
INCOME BEFORE INCOME TAXES	863			1,084			7			(1,087		)	867
INCOME TAX BENEFIT	(10		)	—			—			—			(10		)
NET INCOME	873			1,084			7			(1,087		)	877
Net income attributable to noncontrolling interests	—			—			(4		)	—			(4		)
NET INCOME ATTRIBUTABLE TO CHESAPEAKE	873			1,084			3			(1,087		)	873
Other comprehensive income	—			34			—			—			34
COMPREHENSIVE INCOME ATTRIBUTABLE TO CHESAPEAKE	$	873		$	1,118		$	3		$	(1,087	)	$	907

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2017

($ in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Oil, natural gas and NGL	$	—		$	4,962		$	23		$	—		$	4,985
Marketing	—			4,511			—			—			4,511
Total Revenues	—			9,473			23			—			9,496
OPERATING EXPENSES:
Oil, natural gas and NGL production	—			562			—			—			562
Oil, natural gas and NGL gathering, processing and transportation	—			1,463			8			—			1,471
Production taxes	—			88			1			—			89
Marketing	—			4,598			—			—			4,598
General and administrative	1			259			2			—			262
Provision for legal contingencies, net	(79		)	41			—			—			(38		)
Depreciation, depletion and amortization	—			991			4			—			995
Impairments	—			5			—			—			5
Other operating expense	—			413			—			—			413
Total Operating Expenses	(78		)	8,420			15			—			8,357
INCOME FROM OPERATIONS	78			1,053			8			—			1,139
OTHER INCOME (EXPENSE):
Interest expense	(424		)	(2		)	—			—			(426		)
Gains on purchases or exchanges of debt	233			—			—			—			233
Other income	1			8			—			—			9
Equity in net earnings of subsidiary	1,063			4			—			(1,067		)	—
Total Other Income (Expense)	873			10			—			(1,067		)	(184		)
INCOME BEFORE INCOME TAXES	951			1,063			8			(1,067		)	955
INCOME TAX EXPENSE	2			—			—			—			2
NET INCOME	949			1,063			8			(1,067		)	953
Net income attributable to noncontrolling interests	—			—			(4		)	—			(4		)
NET INCOME ATTRIBUTABLE TO CHESAPEAKE	949			1,063			4			(1,067		)	949
Other comprehensive income	—			39			—			—			39
COMPREHENSIVE INCOME ATTRIBUTABLE TO CHESAPEAKE	$	949		$	1,102		$	4		$	(1,067	)	$	988

Condensed consolidated cash flow statements

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2018

($ in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Cash Provided By Operating Activities	$	85		$	1,912		$	10		$	(7	)	$	2,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Drilling and completion costs	—			(1,958		)	—			—			(1,958		)
Acquisitions of proved and unproved properties	—			(288		)	—			—			(288		)
Proceeds from divestitures of proved and unproved properties	—			2,231			—			—			2,231
Additions to other property and equipment	—			(21		)	—			—			(21		)
Proceeds from sales of other property and equipment	—			147			—			—			147
Proceeds from sales of investments	—			74			—			—			74
Net Cash Provided by Investing Activities	—			185			—			—			185
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility borrowings	11,697			—			—			—			11,697
Payments on revolving credit facility borrowings	(12,059		)	—			—			—			(12,059		)
Proceeds from issuance of senior notes, net	1,236			—			—			—			1,236
Cash paid to purchase debt	(2,813		)	—			—			—			(2,813		)
Cash paid for preferred stock dividends	(92		)	—			—			—			(92		)
Other financing activities	(26		)	(123		)	(13		)	7			(155		)
Intercompany advances, net	1,971			(1,974		)	2			1			—
Net Cash Used In Financing Activities	(86		)	(2,097		)	(11		)	8			(2,186		)
Net decrease in cash and cash equivalents	(1		)	—			(1		)	1			(1		)
Cash and cash equivalents, beginning of period	5			1			2			(3		)	5
Cash and cash equivalents, end of period	$	4		$	1		$	1		$	(2	)	$	4

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2017

($ in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Cash Provided By Operating Activities	$	5		$	736		$	14		$	(10	)	$	745
CASH FLOWS FROM INVESTING ACTIVITIES:
Drilling and completion costs	—			(2,186		)	—			—			(2,186		)
Acquisitions of proved and unproved properties	—			(285		)	—			—			(285		)
Proceeds from divestitures of proved and unproved properties	—			1,249			—			—			1,249
Additions to other property and equipment	—			(21		)	—			—			(21		)
Other investing activities	—			55			—			—			55
Net Cash Used In Investing Activities	—			(1,188		)	—			—			(1,188		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility borrowings	7,771			—			—			—			7,771
Payments on revolving credit facility borrowings	(6,990		)	—			—			—			(6,990		)
Proceeds from issuance of senior notes, net	1,585			—			—			—			1,585
Cash paid to purchase debt	(2,592		)	—			—			—			(2,592		)
Cash paid for preferred stock dividends	(183		)	—			—			—			(183		)
Other financing activities	(39		)	(5		)	(13		)	32			(25		)
Intercompany advances, net	(456		)	456			—			—			—
Net Cash Provided by (Used In) Financing Activities	(904		)	451			(13		)	32			(434		)
Net increase (decrease) in cash and cash equivalents	(899		)	(1		)	1			22			(877		)
Cash and cash equivalents, beginning of period	904			2			1			(25		)	882
Cash and cash equivalents, end of period	$	5		$	1		$	2		$	(3	)	$	5