Condensed Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2012

Condensed Consolidating Financial Information [Abstract]

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF MARCH 31, 2012

($ in millions)

		XXXXX.X			XXXXX.X		XXXXX.X		XXXXX.X			XXXXX.X
	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	—		$	1	$	437	$	—		$	438
Other		2			3,272		640		(428	)		3,486

Total Current Assets		2			3,273		1,077		(428	)		3,924

PROPERTY AND EQUIPMENT:
Natural gas and oil properties, at cost based on full cost accounting, net		—			31,065		2,982		(522	)		33,525
Other property and equipment at cost, net		—			3,012		3,082		(3	)		6,091

Total Property and Equipment, Net		—			34,077		6,064		(525	)		39,616


LONG-TERM ASSETS:
Other assets		188			1,058		1,180		(377	)		2,049
Investments in subsidiaries and intercompany advances		3,286			622		—		(3,908	)		—

TOTAL ASSETS	$	3,476		$	39,030	$	8,321	$	(5,238	)	$	45,589


CURRENT LIABILITIES:
Current liabilities	$	225		$	6,209	$	652	$	(422	)	$	6,664
Intercompany payable to (receivable from) parent		(23,256	)		21,298		2,180		(222	)		—

Total Current Liabilities		(23,031	)		27,507		2,832		(644	)		6,664


LONG-TERM LIABILITIES:
Long-term debt, net		9,540			2,462		1,080		—			13,082
Deferred income tax liabilities		413			3,383		497		(309	)		3,984
Other liabilities		23			2,392		927		(377	)		2,965

Total Long-Term Liabilities		9,976			8,237		2,504		(686	)		20,031


EQUITY:
Chesapeake stockholders' equity		16,531			3,286		622		(3,908	)		16,531
Noncontrolling interests		—			—		2,363		—			2,363

Total Equity		16,531			3,286		2,985		(3,908	)		18,894


TOTAL LIABILITIES AND EQUITY	$	3,476		$	39,030	$	8,321	$	(5,238	)	$	45,589

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2011

($ in millions)

		XXXXX.X			XXXXX.X		XXXXX.X		XXXXX.X			XXXXX.X
	Parent(a)			Guarantor Subsidiaries(a)		Non- Guarantor Subsidiaries		Eliminations			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	—		$	1	$	350	$	—		$	351
Other		1			2,664		418		(257	)		2,826

Total Current Assets		1			2,665		768		(257	)		3,177

PROPERTY AND EQUIPMENT:
Natural gas and oil properties, at cost, based on full cost accounting, net		—			29,659		2,017		(476	)		31,200
Other property and equipment at cost, net		—			2,831		2,708		—			5,539

Total Property and Equipment, Net		—			32,490		4,725		(476	)		36,739


LONG-TERM ASSETS:
Other assets		161			1,004		1,131		(377	)		1,919
Investments in subsidiaries and intercompany advances		3,284			819		—		(4,103	)		—

TOTAL ASSETS	$	3,446		$	36,978	$	6,624	$	(5,213	)	$	41,835


CURRENT LIABILITIES:
Current liabilities	$	288		$	6,509	$	543	$	(258	)	$	7,082
Intercompany payable to (receivable from) parent		(22,139	)		20,283		2,045		(189	)		—

Total Current Liabilities		(21,851	)		26,792		2,588		(447	)		7,082


LONG-TERM LIABILITIES:
Long-term debt, net		8,226			1,719		681		—			10,626
Deferred income tax liabilities		409			2,897		464		(286	)		3,484
Other liabilities		38			2,286		735		(377	)		2,682

Total Long-Term Liabilities		8,673			6,902		1,880		(663	)		16,792


EQUITY:
Chesapeake stockholders' equity		16,624			3,284		819		(4,103	)		16,624
Noncontrolling interests		—			—		1,337		—			1,337

Total Equity		16,624			3,284		2,156		(4,103	)		17,961


TOTAL LIABILITIES AND EQUITY	$	3,446		$	36,978	$	6,624	$	(5,213	)	$	41,835

(a) We have revised the amounts presented as long-term debt in the Guarantor Subsidiaries and Parent columns to properly reflect the long-term debt issued by the Parent of $8.2 billion, which was incorrectly presented as long-term debt attributable to the Guarantors subsidiaries as of December 31, 2011. The impact of this error was not material to the prior period December 31, 2011 financial statements.

Condensed Consolidating Statement Of Operations

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2012

($ in millions)

		XXXXX.X			XXXXX.X			XXXXX.X			XXXXX.X			XXXXX.X
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Natural gas and oil	$	—		$	1,044		$	24		$	—		$	1,068
Marketing, gathering and compression		—			1,201			43			(28	)		1,216
Oilfield services		—			—			447			(312	)		135

Total Revenues		—			2,245			514			(340	)		2,419

OPERATING EXPENSES:
Natural gas and oil production		—			348			1			—			349
Production taxes		—			46			1			—			47
Marketing, gathering and compression		—			1,188			27			(18	)		1,197
Oilfield services		—			1			353			(258	)		96
General and administrative		—			109			26			1			136
Natural gas and oil depreciation, depletion and amortization		—			492			14			—			506
Depreciation and amortization of other assets		—			46			72			(34	)		84
Gains on sales of fixed assets		—			(1	)		(1	)		—			(2	)

Total Operating Expenses		—			2,229			493			(309	)		2,413

INCOME (LOSS) FROM OPERATIONS		—			16			21			(31	)		6

OTHER INCOME (EXPENSE):
Interest expense		(161	)		(2	)		(18	)		169			(12	)
Earnings (losses) on investments		—			(30	)		25			—			(5	)
Losses on purchases or exchanges of debt		—			—			—			—			—
Other income		163			8			34			(199	)		6
Equity in net earnings of subsidiary		(29	)		1			—			28			—

Total Other Income (Expense)		(27	)		(23	)		41			(2	)		(11	)

INCOME (LOSS) BEFORE INCOME TAXES		(27	)		(7	)		62			(33	)		(5	)
INCOME TAX EXPENSE (BENEFIT)		1			(3	)		24			(24	)		(2	)

NET INCOME (LOSS)		(28	)		(4	)		38			(9	)		(3	)
Other comprehensive income (loss), net of income tax		3			4			—			—			7

COMPREHENSIVE INCOME (LOSS)		(25	)		—			38			(9	)		4
Net income attributable to noncontrolling interests		—			—			(25	)		—			(25	)

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE	$	(25	)	$	—		$	13		$	(9	)	$	(21	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2011

($ in millions)

		XXXXX.X			XXXXX.X			XXXXX.X			XXXXX.X			XXXXX.X
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
REVENUES:
Natural gas and oil	$	—		$	494		$	—		$	—		$	494
Marketing, gathering and compression		—			991			55			(29	)		1,017
Oilfield services		—			—			248			(147	)		101

Total Revenues		—			1,485			303			(176	)		1,612

OPERATING EXPENSES:
Natural gas and oil production		—			238			—			—			238
Production taxes		—			45			—			—			45
Marketing, gathering and compression		—			968			39			(22	)		985
Oilfield services		—			—			182			(105	)		77
General and administrative		—			114			16			—			130
Natural gas and oil depreciation, depletion and amortization		—			358			—			—			358
Depreciation and amortization of other assets		—			43			43			(18	)		68
(Gains) losses on sales of fixed assets		—			2			(7	)		—			(5	)

Total Operating Expenses		—			1,768			273			(145	)		1,896

INCOME (LOSS) FROM OPERATIONS		—			(283	)		30			(31	)		(284	)

OTHER INCOME (EXPENSE):
Interest expense		(183	)		7			(8	)		177			(7	)
Earnings on investments		—			6			19			—			25
Losses on purchases or exchanges of debt		(2	)		—			—			—			(2	)
Other income		177			1			3			(179	)		2
Equity in net earnings of subsidiary		(157	)		7			—			150			—

Total Other Income (Expense)		(165	)		21			14			148			18

INCOME (LOSS) BEFORE INCOME TAXES		(165	)		(262	)		44			117			(266	)
INCOME TAX EXPENSE (BENEFIT)		(3	)		(105	)		17			(13	)		(104	)

NET INCOME (LOSS)		(162	)		(157	)		27			130			(162	)
Other comprehensive income (loss), net of income tax		(11	)		(33	)		—			—			(44	)

COMPREHENSIVE INCOME (LOSS)		(173	)		(190	)		27			130			(206	)
Net income attributable to noncontrolling interests		—			—			—			—			—

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE	$	(173	)		(190	)		27			130			(206	)

Condensed Consolidating Statements Of Cash Flows

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2012

($ in millions)

		XXXXX.X			XXXXX.X			XXXXX.X			XXXXX.X			XXXXX.X
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES	$	—		$	1,313		$	48		$	(1,087	)	$	274

CASH FLOWS FROM INVESTING ACTIVITIES:

Additions to proved and unproved properties		—			(3,520	)		(189	)		—			(3,709	)
Proceeds from divestitures of proved and unproved properties		—			821			—			—			821
Additions to other property and equipment		—			(228	)		(461	)		(1	)		(690	)
Other investing activities		—			(231	)		(36	)		195			(72	)

Cash used in investing activities		—			(3,158	)		(686	)		194			(3,650	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facilities borrowings		—			4,945			743			—			5,688
Payments on credit facilities borrowings		—			(4,203	)		(343	)		—			(4,546	)
Proceeds from issuance of senior notes, net of offering costs		1,263			—			—			—			1,263
Cash paid to purchase debt		—			—			—			—			—
Proceeds from sales of noncontrolling interests		—			—			1,044			—			1,044
Other financing activities		(131	)		(24	)		(724	)		893			14
Intercompany advances, net		(1,132	)		1,127			5			—			—

Cash provided by financing activities		—			1,845			725			893			3,463


Net increase (decrease) in cash and cash equivalents		—			—			87			—			87
Cash and cash equivalents, beginning of period		—			1			350			—			351

Cash and cash equivalents, end of period	$	—		$	1		$	437		$	—		$	438

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2011

($ in millions)

		XXXXX.X			XXXXX.X			XXXXX.X			XXXXX.X			XXXXX.X
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES	$	—		$	842		$	101		$	(225	)	$	718


CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to proved and unproved properties		—			(2,950	)		—			—			(2,950	)
Proceeds from divestitures of proved and unproved properties		—			5,182			—			—			5,182
Additions to other property and equipment		—			(95	)		(328	)		(8	)		(431	)
Other investing activities		—			(9	)		374			60			425

Cash provided by investing activities		—			2,128			46			52			2,226


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facilities borrowings		—			3,202			415			—			3,617
Payments on credit facilities borrowings		—			(6,814	)		(509	)		—			(7,323	)
Proceeds from issuance of senior notes, net of offering costs		977			—			—			—			977
Cash paid to purchase debt		(128	)		—			—			—			(128	)
Other financing activities		(120	)		758			(89	)		111			660
Intercompany advances, net		(729	)		667			—			62			—

Cash provided by (used in) financing activities		—			(2,187	)		(183	)		173			(2,197	)


Net increase (decrease) in cash and cash equivalents		—			783			(36	)		—			747
Cash and cash equivalents, beginning of period		—			2			100			—			102

Cash and cash equivalents, end of period	$	—		$	785		$	64		$	—		$	849