Condensed Consolidating Financial Information (Tables)

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed consolidated balance sheets

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2019

($ in millions)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	16	$	1	$	5	$	(16	)	$	6
Other current assets	51		1,090		104		—			1,245
Intercompany receivable, net	7,702		—		—		(7,702		)	—
Total Current Assets	7,769		1,091		109		(7,718		)	1,251
PROPERTY AND EQUIPMENT:
Oil and natural gas properties at cost, based on successful efforts accounting, net	—		9,440		4,188		—			13,628
Other property and equipment, net	—		1,030		88		—			1,118
Property and equipment held for sale, net	—		10		—		—			10
Total Property and Equipment, Net	—		10,480		4,276		—			14,756
LONG-TERM ASSETS:
Other long-term assets	41		125		19		1			186
Investments in subsidiaries and intercompany advances	6,101		4,171		—		(10,272		)	—
TOTAL ASSETS	$	13,911	$	15,867	$	4,404	$	(17,989	)	$	16,193
CURRENT LIABILITIES:
Current liabilities	$	466	$	1,765	$	176	$	(15	)	$	2,392
Intercompany payable, net	—		7,702		—		(7,702		)	—
Total Current Liabilities	466		9,467		176		(7,717		)	2,392
LONG-TERM LIABILITIES:
Long-term debt, net	9,071		—		2		—			9,073
Deferred income tax liabilities	10		—		—		—			10
Other long-term liabilities	—		299		18		—			317
Total Long-Term Liabilities	9,081		299		20		—			9,400
EQUITY:
Chesapeake stockholders’ equity	4,364		6,101		4,171		(10,272		)	4,364
Noncontrolling interests	—		—		37		—			37
Total Equity	4,364		6,101		4,208		(10,272		)	4,401
TOTAL LIABILITIES AND EQUITY	$	13,911	$	15,867	$	4,404	$	(17,989	)	$	16,193

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

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
REVENUES AND OTHER:
Oil, natural gas and NGL	$	—		$	3,760		$	762		$	—	$	4,522
Marketing	—			3,967			—			—		3,967
Total Revenues	—			7,727			762			—		8,489
Other	—			60			3			—		63
Gains on sales of assets	—			43			—			—		43
Total Revenues and Other	—			7,830			765			—		8,595
OPERATING EXPENSES:
Oil, natural gas and NGL production	—			436			84			—		520
Oil, natural gas and NGL gathering, processing and transportation	—			1,062			20			—		1,082
Severance and ad valorem taxes	—			174			50			—		224
Exploration	—			77			7			—		84
Marketing	—			4,003			—			—		4,003
General and administrative	1			237			77			—		315
Restructuring and other termination costs	—			12			—			—		12
Provision for legal contingencies, net	—			19			—			—		19
Depreciation, depletion and amortization	—			1,719			545			—		2,264
Impairments	—			11			—			—		11
Other operating expense	—			52			40			—		92
Total Operating Expenses	1			7,802			823			—		8,626
INCOME (LOSS) FROM OPERATIONS	(1		)	28			(58		)	—		(31		)
OTHER INCOME (EXPENSE):
Interest income (expense)	(598		)	16			(69		)	—		(651		)
Losses on investments	—			(47		)	(24		)	—		(71		)
Gains on purchases or exchanges of debt	65			—			10			—		75
Other income	—			39			—			—		39
Equity in net earnings (losses) of subsidiary	(105		)	(141		)	—			246		—
Total Other Expense	(638		)	(133		)	(83		)	246		(608		)
LOSS BEFORE INCOME TAXES	(639		)	(105		)	(141		)	246		(639		)
INCOME TAX BENEFIT	(331		)	—			—			—		(331		)
NET LOSS	(308		)	(105		)	(141		)	246		(308		)
Net income attributable to noncontrolling interests	—			—			—			—		—
NET LOSS ATTRIBUTABLE TO CHESAPEAKE	(308		)	(105		)	(141		)	246		(308		)
Other comprehensive income	—			35			—			—		35
COMPREHENSIVE LOSS ATTRIBUTABLE TO CHESAPEAKE	$	(308	)	$	(70	)	$	(141	)	$	246	$	(273	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

($ in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES AND OTHER:
Oil, natural gas and NGL	$	—		$	5,136		$	19		$	—		$	5,155
Marketing	—			5,076			—			—			5,076
Total Revenues	—			10,212			19			—			10,231
Other	—			63			—			—			63
Losses on sales of assets	—			(264		)	—			—			(264		)
Total Revenues and Other	—			10,011			19			—			10,030
OPERATING EXPENSES:
Oil, natural gas and NGL production	—			474			—			—			474
Oil, natural gas and NGL gathering, processing and transportation	—			1,391			7			—			1,398
Severance and ad valorem taxes	—			188			1			—			189
Exploration	—			162			—			—			162
Marketing	—			5,158			—			—			5,158
General and administrative	2			332			1			—			335
Restructuring and other termination costs	—			38			—			—			38
Provision for legal contingencies, net	—			26			—			—			26
Depreciation, depletion and amortization	—			1,730			7			—			1,737
Impairments	—			131			—			—			131
Total Operating Expenses	2			9,630			16			—			9,648
INCOME (LOSS) FROM OPERATIONS	(2		)	381			3			—			382
OTHER INCOME (EXPENSE):
Interest expense	(631		)	(2		)	—			—			(633		)
Gains on investments	—			139			—			—			139
Gains on purchases or exchanges of debt	263			—			—			—			263
Other income	3			64			—			—			67
Equity in net earnings of subsidiary	583			1			—			(584		)	—
Total Other Income (Expense)	218			202			—			(584		)	(164		)
INCOME BEFORE INCOME TAXES	216			583			3			(584		)	218
INCOME TAX BENEFIT	(10		)	—			—			—			(10		)
NET INCOME	226			583			3			(584		)	228
Net income attributable to noncontrolling interests	—			—			(2		)	—			(2		)
NET INCOME ATTRIBUTABLE TO CHESAPEAKE	226			583			1			(584		)	226
Other comprehensive income	—			34			—			—			34
COMPREHENSIVE INCOME ATTRIBUTABLE TO CHESAPEAKE	$	226		$	617		$	1		$	(584	)	$	260

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2017

($ in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
REVENUES AND OTHER:
Oil, natural gas and NGL	$	—		$	4,962		$	23		$	—	$	4,985
Marketing	—			4,511			—			—		4,511
Total Revenues	—			9,473			23			—		9,496
Other	—			67			—			—		67
Gains on sales of assets	—			476			—			—		476
Total Revenues and Other	—			10,016			23			—		10,039
OPERATING EXPENSES:
Oil, natural gas and NGL production	—			517			—			—		517
Oil, natural gas and NGL gathering, processing and transportation	—			1,463			8			—		1,471
Severance and ad valorem taxes	—			133			1			—		134
Exploration	—			235			—			—		235
Marketing	—			4,598			—			—		4,598
General and administrative	1			330			2			—		333
Provision for legal contingencies, net	(79		)	41			—			—		(38		)
Depreciation, depletion and amortization	—			1,688			9			—		1,697
Impairments	—			814			—			—		814
Other operating expense	—			416			—			—		416
Total Operating (Income) Expenses	(78		)	10,235			20			—		10,177
INCOME (LOSS) FROM OPERATIONS	78			(219		)	3			—		(138		)
OTHER INCOME (EXPENSE):
Interest expense	(599		)	(2		)	—			—		(601		)
Gains on purchases or exchanges of debt	233			—			—			—		233
Other income	1			5			—			—		6
Equity in net losses of subsidiary	(216		)	—			—			216		—
Total Other Income (Expense)	(581		)	3			—			216		(362		)
INCOME (LOSS) BEFORE INCOME TAXES	(503		)	(216		)	3			216		(500		)
INCOME TAX EXPENSE	2			—			—			—		2
NET INCOME (LOSS)	(505		)	(216		)	3			216		(502		)
Net income attributable to noncontrolling interests	—			—			(3		)	—		(3		)
NET LOSS ATTRIBUTABLE TO CHESAPEAKE	(505		)	(216		)	—			216		(505		)
Other comprehensive income	—			39			—			—		39
COMPREHENSIVE LOSS ATTRIBUTABLE TO CHESAPEAKE	$	(505	)	$	(177	)	$	—		$	216	$	(466	)

Condensed consolidated cash flow statements

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2019

($ in millions) 

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Cash Provided By Operating Activities	$	1		$	1,270		$	356		$	(4	)	$	1,623
CASH FLOWS FROM INVESTING ACTIVITIES:
Drilling and completion costs	—			(1,548		)	(632		)	—			(2,180		)
Business combination, net	—			(381		)	28			—			(353		)
Acquisitions of proved and unproved properties	—			(35		)	—			—			(35		)
Proceeds from divestitures of proved and unproved properties	—			130			—			—			130
Additions to other property and equipment	—			(32		)	(16		)	—			(48		)
Proceeds from sales of other property and equipment	—			6			—			—			6
Net Cash Used In Investing Activities	—			(1,860		)	(620		)	—			(2,480		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility borrowings	9,839			—			837			—			10,676
Payments on revolving credit facility borrowings	(8,668		)	—			(1,512		)	—			(10,180		)
Proceeds from issuance of senior notes, net	108			—			—			—			108
Proceeds from issuance of term loan, net	1,455			—			—			—			1,455
Cash paid to purchase debt	(380		)	—			(693		)	—			(1,073		)
Cash paid for preferred stock dividends	(91		)	—			—			—			(91		)
Contribution from parent	(1,644		)	—			1,644			—			—
Other financing activities	(24		)	(8		)	(8		)	4			(36		)
Intercompany advances, net	(713		)	713			—			—			—
Net Cash Provided By (Used In) Financing Activities	(118		)	705			268			4			859
Net increase (decrease) in cash and cash equivalents	(117		)	115			4			—			2
Cash and cash equivalents, beginning of period	4			1			1			(2		)	4
Cash and cash equivalents, end of period	$	(113	)	$	116		$	5		$	(2	)	$	6

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		$	1,642		$	10		$	(7	)	$	1,730
CASH FLOWS FROM INVESTING ACTIVITIES:
Drilling and completion costs	—			(1,848		)	—			—			(1,848		)
Acquisitions of proved and unproved properties	—			(128		)	—			—			(128		)
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	—			455			—			—			455
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		$	466		$	14		$	(10	)	$	475
CASH FLOWS FROM INVESTING ACTIVITIES:
Drilling and completion costs	—			(2,113		)	—			—			(2,113		)
Acquisitions of proved and unproved properties	—			(88		)	—			—			(88		)
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	—			(918		)	—			—			(918		)
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