EX-99.2 3 chk-ex_992x20240331x8kxpr.htm EX-99.2 Document
Exhibit 99.2
CHESAPEAKE ENERGY CORPORATION - SUPPLEMENTAL TABLES
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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
($ in millions, except per share data)March 31, 2024December 31, 2023
Assets
Current assets:
Cash and cash equivalents$1,179 $1,079 
Restricted cash75 74 
Accounts receivable, net314 593 
Short-term derivative assets592 637 
Other current assets218 226 
Total current assets2,3782,609
Property and equipment:
Natural gas and oil properties, successful efforts method
Proved natural gas and oil properties11,827 11,468 
Unproved properties1,799 1,806 
Other property and equipment499 497 
Total property and equipment14,125 13,771 
Less: accumulated depreciation, depletion and amortization(4,068)(3,674)
Total property and equipment, net10,057 10,097 
Long-term derivative assets46 74 
Deferred income tax assets926 933 
Other long-term assets611 663 
Total assets$14,018 $14,376 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$317 $425 
Accrued interest41 39 
Short-term derivative liabilities5 3 
Other current liabilities657 847 
Total current liabilities1,020 1,314 
Long-term debt, net2,025 2,028 
Long-term derivative liabilities1 9 
Asset retirement obligations, net of current portion269 265 
Other long-term liabilities21 31 
Total liabilities3,336 3,647 
Contingencies and commitments
Stockholders' equity:
Common stock, $0.01 par value, 450,000,000 shares authorized: 130,958,675 and 130,789,936 shares issued1 1 
Additional paid-in capital5,758 5,754 
Retained earnings4,923 4,974 
Total stockholders' equity10,682 10,729 
Total liabilities and stockholders' equity$14,018 $14,376 
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended March 31,
20242023
($ in millions, except per share data)
Revenues and other:
Natural gas, oil and NGL$589 $1,453 
Marketing312 652 
Natural gas and oil derivatives172 930 
Gains on sales of assets8 335 
Total revenues and other1,081 3,370 
Operating expenses:
Production59 131 
Gathering, processing and transportation173 264 
Severance and ad valorem taxes29 69 
Exploration2 7 
Marketing323 651 
General and administrative47 35 
Depreciation, depletion and amortization399 390 
Other operating expense, net17 3 
Total operating expenses1,049 1,550 
Income from operations32 1,820 
Other income (expense):
Interest expense(19)(37)
Other income20 10 
Total other income (expense)1 (27)
Income before income taxes33 1,793 
Income tax expense7 404 
Net income$26 $1,389 
Earnings per common share:
Basic$0.20 $10.31 
Diluted$0.18 $9.60 
Weighted average common shares outstanding (in thousands):
Basic130,893 134,742 
Diluted141,752144,731

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
 Three Months Ended March 31,
($ in millions)20242023
Cash flows from operating activities:
Net income$26 $1,389 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization399 390 
Deferred income tax expense7 378 
Derivative gains, net(172)(930)
Cash receipts (payments) on derivative settlements, net228 (285)
Share-based compensation9 7 
Gains on sales of assets(8)(335)
Other(13)12 
Changes in assets and liabilities76 263 
Net cash provided by operating activities552889
Cash flows from investing activities:
Capital expenditures(421)(497)
Receipts of deferred consideration60 — 
Contributions to investments(19)(39)
Proceeds from divestitures of property and equipment6 931 
Net cash provided by (used in) investing activities(374)395
Cash flows from financing activities:
Proceeds from Credit Facility— 1,000 
Payments on Credit Facility— (2,050)
Cash paid to repurchase and retire common stock— (54)
Cash paid for common stock dividends(77)(175)
Net cash used in financing activities(77)(1,279)
Net increase in cash, cash equivalents and restricted cash101 5 
Cash, cash equivalents and restricted cash, beginning of period1,153192
Cash, cash equivalents and restricted cash, end of period$1,254 $197 
Cash and cash equivalents$1,179 $130 
Restricted cash7567
Total cash, cash equivalents and restricted cash$1,254 $197 
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NATURAL GAS, OIL AND NGL PRODUCTION AND AVERAGE SALES PRICES (unaudited)
Three Months Ended March 31, 2024
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,720 2.03 — — — — 1,720 2.03 
Haynesville1,478 2.03 — — — — 1,478 2.03 
Total3,198 2.03 — — — — 3,198 2.03 
Average NYMEX Price2.24 — 
Average Realized Price (including realized derivatives)2.85 — — 2.85 

Three Months Ended March 31, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,974 3.47 — — — — 1,974 3.47 
Haynesville1,549 2.88 — — — — 1,549 2.88 
Eagle Ford128 1.97 54 76.82 16 26.71 546 8.82 
Total3,651 3.17 54 76.82 16 26.71 4,069 3.97 
Average NYMEX Price3.42 76.13 
Average Realized Price (including realized derivatives)2.74 66.79 26.71 3.45 

CAPITAL EXPENDITURES ACCRUED (unaudited)

Three Months Ended March 31,
20242023
($ in millions)
Drilling and completion capital expenditures:
Marcellus$105 $118 
Haynesville195 259 
Eagle Ford— 123 
Total drilling and completion capital expenditures300 500 
Non-drilling and completion - field35 24 
Non-drilling and completion - corporate19 20 
Total capital expenditures$354 $544 
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NON-GAAP FINANCIAL MEASURES

As a supplement to the financial results prepared in accordance with U.S. GAAP, Chesapeake’s quarterly earnings releases contain certain financial measures that are not prepared or presented in accordance with U.S. GAAP. These non-GAAP financial measures include Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, Adjusted EBITDAX, Free Cash Flow, Adjusted Free Cash Flow and Net Debt. A reconciliation of each financial measure to its most directly comparable GAAP financial measure is included in the tables below. Management believes these adjusted financial measures are a meaningful adjunct to earnings and cash flows calculated in accordance with GAAP because (a) management uses these financial measures to evaluate the company’s trends and performance, (b) these financial measures are comparable to estimates provided by certain securities analysts, and (c) items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items.

Chesapeake's definitions of each non-GAAP measure presented herein are provided below. Because not all companies or securities analysts use identical calculations, Chesapeake’s non-GAAP measures may not be comparable to similarly titled measures of other companies or securities analysts.

Adjusted Net Income: Adjusted Net Income is defined as net income (loss) adjusted to exclude unrealized (gains) losses on natural gas and oil derivatives, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect using applicable rates. Chesapeake believes that Adjusted Net Income facilitates comparisons of the company's period-over-period performance, which many investors use in making investment decisions and evaluating operational trends and performance. Adjusted Net Income should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.

Adjusted Diluted Earnings Per Common Share: Adjusted Diluted Earnings Per Common Share is defined as diluted earnings (loss) per common share adjusted to exclude the per diluted share amounts attributed to unrealized (gains) losses on natural gas and oil derivatives, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect using applicable rates. Chesapeake believes that Adjusted Diluted Earnings Per Common Share facilitates comparisons of the company's period-over-period performance, which many investors use in making investment decisions and evaluating operational trends and performance. Adjusted Diluted Earnings Per Common Share should not be considered an alternative to, or more meaningful than, earnings (loss) per common share as presented in accordance with GAAP.

Adjusted EBITDAX: Adjusted EBITDAX is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization expense, exploration expense, unrealized (gains) losses on natural gas and oil derivatives, separation and other termination costs, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results. Adjusted EBITDAX is presented as it provides investors an indication of the company's ability to internally fund exploration and development activities and service or incur debt. Adjusted EBITDAX should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.

Free Cash Flow: Free Cash Flow is defined as net cash provided by (used in) operating activities less cash capital expenditures. Free Cash Flow is a liquidity measure that provides investors additional information regarding the company's ability to service or incur debt and return cash to shareholders. Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.

Adjusted Free Cash Flow: Adjusted Free Cash Flow is defined as net cash provided by (used in) operating activities less cash capital expenditures and cash contributions to investments, adjusted to exclude certain items management believes affect the comparability of operating results. Adjusted Free Cash Flow is a liquidity measure that provides investors additional information regarding the company's ability to service or incur debt and return cash to shareholders and is used to determine Chesapeake's quarterly variable dividend. Adjusted Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.

Net Debt: Net Debt is defined as GAAP total debt excluding premiums, discounts, and deferred issuance costs less cash and cash equivalents. Net Debt is useful to investors as a widely understood measure of liquidity and leverage, but this measure should not be considered as an alternative to, or more meaningful than, total debt presented in accordance with GAAP.

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RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (unaudited)
Three Months Ended March 31,
($ in millions)20242023
Net income (GAAP)$26 $1,389 
Adjustments:
Unrealized (gains) losses on natural gas and oil derivatives67(1,119)
Gains on sales of assets(8)(335)
Other operating expense, net19 7 
Other(8)(6)
Tax effect of adjustments(a)
(16)334 
Adjusted net income (Non-GAAP)$80 $270 
(a)
The three month periods ended March 31, 2024 and March 31, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%.
RECONCILIATION OF EARNINGS PER COMMON SHARE TO ADJUSTED DILUTED EARNINGS PER COMMON SHARE (unaudited)
Three Months Ended March 31,
($/share)20242023
Earnings per common share (GAAP)$0.20 $10.31 
Effect of dilutive securities(0.02)(0.71)
Diluted earnings per common share (GAAP)$0.18 $9.60 
Adjustments:
Unrealized (gains) losses on natural gas and oil derivatives0.47 (7.73)
Gains on sales of assets(0.06)(2.32)
Other operating expense, net0.14 0.05 
Other(0.06)(0.04)
Tax effect of adjustments(a)
(0.11)2.31 
Adjusted diluted earnings per common share (Non-GAAP)$0.56 $1.87 
(a)
The three month periods ended March 31, 2024 and March 31, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%.
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RECONCILIATION OF NET INCOME TO ADJUSTED EBITDAX (unaudited)
Three Months Ended March 31,
20242023
($ in millions)
Net income (GAAP)$26 $1,389 
Adjustments:
Interest expense19 37 
Income tax expense7 404 
Depreciation, depletion and amortization399 390 
Exploration2 7 
Unrealized (gains) losses on natural gas and oil derivatives67 (1,119)
Gains on sales of assets(8)(335)
Other operating expense, net19 7 
Other(23)(6)
Adjusted EBITDAX (Non-GAAP)$508 $774 

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW (unaudited)
Three Months Ended March 31,
20242023
($ in millions)
Net cash provided by operating activities (GAAP)$552 $889 
Cash capital expenditures(421)(497)
Free cash flow (Non-GAAP)131 392 
Cash contributions to investments(19)(39)
Free cash flow associated with divested assets(a)
— (112)
Adjusted free cash flow (Non-GAAP)$112 $241 
(a)In March and April of 2023, we closed two divestitures of certain Eagle Ford assets. Due to the structure of these transactions, both of which had an effective date of October 1, 2022, the cash generated by these assets was delivered to the respective buyers through a reduction in the proceeds we received at the closing of each transaction.
RECONCILIATION OF TOTAL DEBT TO NET DEBT (unaudited)
($ in millions)March 31, 2024
Total debt (GAAP)$2,025 
Premiums and issuance costs on debt(75)
Principal amount of debt1,950 
Cash and cash equivalents(1,179)
Net debt (Non-GAAP)$771 
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