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