Condensed Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidated Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF MARCH 31, 2019

($ in millions)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	3	$	1	$	6	$	(2	)	$	8
Other current assets	53		1,208		96		—			1,357
Intercompany receivable, net	6,350		—		—		(6,350		)	—
Total Current Assets	6,406		1,209		102		(6,352		)	1,365
PROPERTY AND EQUIPMENT:
Oil and natural gas properties at cost, based on successful efforts accounting, net	—		9,673		4,094		—			13,767
Other property and equipment, net	—		1,077		79		—			1,156
Property and equipment held for sale, net	—		16		—		—			16
Total Property and Equipment, Net	—		10,766		4,173		—			14,939
LONG-TERM ASSETS:
Other long-term assets	347		245		51		(310		)	333
Investments in subsidiaries and intercompany advances	5,692		2,328		—		(8,020		)	—
TOTAL ASSETS	$	12,445	$	14,548	$	4,326	$	(14,682	)	$	16,637
CURRENT LIABILITIES:
Current liabilities	$	521	$	2,203	$	208	$	(2	)	$	2,930
Intercompany payable, net	—		6,350		—		(6,350		)	—
Total Current Liabilities	521		8,553		208		(6,352		)	2,930
LONG-TERM LIABILITIES:
Long-term debt, net	7,775		—		1,392		—			9,167
Other long-term liabilities	52		303		357		(310		)	402
Total Long-Term Liabilities	7,827		303		1,749		(310		)	9,569
EQUITY:
Chesapeake stockholders’ equity	4,097		5,692		2,328		(8,020		)	4,097
Noncontrolling interests	—		—		41		—			41
Total Equity	4,097		5,692		2,369		(8,020		)	4,138
TOTAL LIABILITIES AND EQUITY	$	12,445	$	14,548	$	4,326	$	(14,682	)	$	16,637

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	6,671		—		—		(6,671		)	—
Total Current Assets	6,735		1,533		3		(6,673		)	1,598
PROPERTY AND EQUIPMENT:
Oil and natural gas properties at cost, based on successful efforts accounting, net	—		9,664		48		—			9,712
Other property and equipment, net	—		1,091		—		—			1,091
Property and equipment held for sale, net	—		15		—		—			15
Total Property and Equipment, Net	—		10,770		48		—			10,818
LONG-TERM ASSETS:
Other long-term assets	26		293		—		—			319
Investments in subsidiaries and intercompany advances	3,248		9		—		(3,257		)	—
TOTAL ASSETS	$	10,009	$	12,605	$	51	$	(9,930	)	$	12,735
CURRENT LIABILITIES:
Current liabilities	$	523	$	2,365	$	1	$	(2	)	$	2,887
Intercompany payable, net	—		6,671		—		(6,671		)	—
Total Current Liabilities	523		9,036		1		(6,673		)	2,887
LONG-TERM LIABILITIES:
Long-term debt, net	7,341		—		—		—			7,341
Other long-term liabilities	53		321		—		—			374
Total Long-Term Liabilities	7,394		321		—		—			7,715
EQUITY:
Chesapeake stockholders’ equity	2,092		3,248		9		(3,257		)	2,092
Noncontrolling interests	—		—		41		—			41
Total Equity	2,092		3,248		50		(3,257		)	2,133
TOTAL LIABILITIES AND EQUITY	$	10,009	$	12,605	$	51	$	(9,930	)	$	12,735

Condensed Consolidated Income Statements

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2019

($ in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
REVENUES:
Oil, natural gas and NGL	$	—		$	850		$	79		$	—	$	929
Marketing	—			1,233			—			—		1,233
Total Revenues	—			2,083			79			—		2,162
Other	—			15			—			—		15
Gains on sales of assets	—			19			—			—		19
Total Revenues and Other	—			2,117			79			—		2,196
OPERATING EXPENSES:
Oil, natural gas and NGL production	—			117			15			—		132
Oil, natural gas and NGL gathering, processing and transportation	—			269			5			—		274
Production taxes	—			28			6			—		34
Exploration	—			20			4			—		24
Marketing	—			1,230			—			—		1,230
General and administrative	—			85			18			—		103
Provision for legal contingencies, net	—			—			—			—		—
Depreciation, depletion and amortization	—			435			84			—		519
Impairments	—			1			—			—		1
Other operating income	—			23			38			—		61
Total Operating Expenses	—			2,208			170			—		2,378
INCOME FROM OPERATIONS	—			(91		)	(91		)	—		(182		)
OTHER INCOME (EXPENSE):
Interest expense	(154		)	5			(12		)	—		(161		)
Losses on investments	—			—			(1		)	—		(1		)
Other income	—			9			—			—		9
Equity in net earnings of subsidiary	(177		)	(100		)	—			277		—
Total Other Expense	(331		)	(86		)	(13		)	277		(153		)
LOSS BEFORE INCOME TAXES	(331		)	(177		)	(104		)	277		(335		)
INCOME TAX BENEFIT	(310		)	—			(4		)	—		(314		)
NET LOSS	(21		)	(177		)	(100		)	277		(21		)
Net income attributable to noncontrolling interests	—			—			—			—		—
NET LOSS ATTRIBUTABLE TO CHESAPEAKE	(21		)	(177		)	(100		)	277		(21		)
Other comprehensive income	—			10			—			—		10
COMPREHENSIVE LOSS ATTRIBUTABLE TO CHESAPEAKE	$	(21	)	$	(167	)	$	(100	)	$	277	$	(11	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2018

($ in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Oil, natural gas and NGL	$	—		$	1,238		$	5		$	—		$	1,243
Marketing	—			1,246			—			—			1,246
Total Revenues	—			2,484			5			—			2,489
Other	—			16			—			—			16
Gains on sales of assets	—			19			—			—			19
Total Revenues and Other	—			2,519			5			—			2,524
OPERATING EXPENSES:
Oil, natural gas and NGL production	—			147			—			—			147
Oil, natural gas and NGL gathering, processing and transportation	—			355			1			—			356
Production taxes	—			31			—			—			31
Exploration	—			81			—			—			81
Marketing	—			1,268			—			—			1,268
General and administrative	—			87			—			—			87
Restructuring and other termination costs	—			38			—			—			38
Provision for legal contingencies, net	—			5			—			—			5
Depreciation, depletion and amortization	—			457			2			—			459
Impairments	—			10			—			—			10
Total Operating Expenses	—			2,479			3			—			2,482
INCOME FROM OPERATIONS	—			40			2			—			42
OTHER INCOME (EXPENSE):
Interest expense	(162		)	—			—			—			(162		)
Gains on investments	—			139			—			—			139
Other expense	—			(1		)	—			—			(1		)
Equity in net earnings of subsidiary	179			1			—			(180		)	—
Total Other Income (Expense)	17			139			—			(180		)	(24		)
INCOME BEFORE INCOME TAXES	17			179			2			(180		)	18
INCOME TAX EXPENSE	—			—			—			—			—
NET INCOME	17			179			2			(180		)	18
Net income attributable to noncontrolling interests	—			—			(1		)	—			(1		)
NET INCOME ATTRIBUTABLE TO CHESAPEAKE	17			179			1			(180		)	17
Other comprehensive income	—			10			—			—			10
COMPREHENSIVE INCOME ATTRIBUTABLE TO CHESAPEAKE	$	17		$	189		$	1		$	(180	)	$	27

Condensed Consolidated Cash Flow Statements

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2019

($ in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Cash Provided By Operating Activities	$	—		$	421		$	36		$	(1	)	$	456
CASH FLOWS FROM INVESTING ACTIVITIES:
Drilling and completion costs	—			(406		)	(109		)	—			(515		)
Business combination, net	—			(381		)	28			—			(353		)
Acquisitions of proved and unproved properties	—			(6		)	—			—			(6		)
Proceeds from divestitures of proved and unproved properties	—			26			—			—			26
Additions to other property and equipment	—			(6		)	(3		)	—			(9		)
Other investing activities	—			1			—			—			1
Net Cash Used In Investing Activities	—			(772		)	(84		)	—			(856		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility borrowings	3,449			—			123			—			3,572
Payments on revolving credit facility borrowings	(3,026		)	—			(110		)	—			(3,136		)
Cash paid to purchase debt	(1		)	—			—			—			(1		)
Cash paid for preferred stock dividends	(23		)	—			—			—			(23		)
Other financing activities	(7		)	(1		)	(1		)	1			(8		)
Intercompany advances, net	(393		)	352			41			—			—
Net Cash Provided By (Used In) Financing Activities	(1		)	351			53			1			404
Net increase (decrease) in cash and cash equivalents	(1		)	—			5			—			4
Cash and cash equivalents, beginning of period	4			1			1			(2		)	4
Cash and cash equivalents, end of period	$	3		$	1		$	6		$	(2	)	$	8

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2018

($ in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Cash Provided By Operating Activities	$	78		$	509		$	5		$	(4	)	$	588
CASH FLOWS FROM INVESTING ACTIVITIES:
Drilling and completion costs	—			(420		)	—			—			(420		)
Acquisitions of proved and unproved properties	—			(17		)	—			—			(17		)
Proceeds from divestitures of proved and unproved properties	—			319			—			—			319
Additions to other property and equipment	—			(3		)	—			—			(3		)
Other investing activities	—			142			—			—			142
Net Cash Provided by Investing Activities	—			21			—			—			21
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility borrowings	2,904			—			—			—			2,904
Payments on revolving credit facility borrowings	(3,485		)	—			—			—			(3,485		)
Cash paid for preferred stock dividends	(23		)	—			—			—			(23		)
Other financing activities	25			(2		)	(4		)	(25		)	(6		)
Intercompany advances, net	530			(528		)	(2		)	—			—
Net Cash Used In Financing Activities	(49		)	(530		)	(6		)	(25		)	(610		)
Net increase (decrease) in cash and cash equivalents	29			—			(1		)	(29		)	(1		)
Cash and cash equivalents, beginning of period	5			1			2			(3		)	5
Cash and cash equivalents, end of period	$	34		$	1		$	1		$	(32	)	$	4