EX-99.2 3 chk-ex_992x20230930x8kxpr.htm EX-99.2 Document
Exhibit 99.2
CHESAPEAKE ENERGY CORPORATION - SUPPLEMENTAL TABLES
1


CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
($ in millions, except per share data)September 30, 2023December 31, 2022
Assets
Current assets:
Cash and cash equivalents$713 $130 
Restricted cash73 62 
Accounts receivable, net685 1,438 
Short-term derivative assets361 34 
Assets held for sale520 819 
Other current assets163 215 
Total current assets2,515 2,698 
Property and equipment:
Natural gas and oil properties, successful efforts method
Proved natural gas and oil properties11,002 11,096 
Unproved properties1,907 2,022 
Other property and equipment496 500 
Total property and equipment13,405 13,618 
Less: accumulated depreciation, depletion and amortization(3,299)(2,431)
Total property and equipment, net10,106 11,187 
Long-term derivative assets30 47 
Deferred income tax assets1,032 1,351 
Other long-term assets565 185 
Total assets$14,248 $15,468 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$540 $603 
Accrued interest41 42 
Short-term derivative liabilities20 432 
Other current liabilities1,013 1,627 
Total current liabilities1,614 2,704 
Long-term debt, net2,032 3,093 
Long-term derivative liabilities40 174 
Asset retirement obligations, net of current portion273 323 
Other long-term liabilities21 50 
Total liabilities3,980 6,344 
Contingencies and commitments
Stockholders' equity:
Common stock, $0.01 par value, 450,000,000 shares authorized:
  131,182,918 and 134,715,094 shares issued		1 1 
Additional paid-in capital5,735 5,724 
Retained earnings4,532 3,399 
Total stockholders' equity10,268 9,124 
Total liabilities and stockholders' equity$14,248 $15,468 
2

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
($ in millions, except per share data)
Revenues and other:
Natural gas, oil and NGL$682 $2,987 $2,784 $7,691 
Marketing724 1,206 1,987 3,296 
Natural gas and oil derivatives106 (1,029)1,195 (3,668)
Gains (losses) on sales of assets— (2)807 298 
Total revenues and other1,512 3,162 6,773 7,617 
Operating expenses:
Production73 121 293 349 
Gathering, processing and transportation192 286 663 802 
Severance and ad valorem taxes27 67 136 187 
Exploration4 2 19 14 
Marketing723 1,200 1,985 3,279 
General and administrative29 40 95 102 
Separation and other termination costs— — 3 — 
Depreciation, depletion and amortization382 440 1,148 1,300 
Other operating expense, net3 1 15 32 
Total operating expenses1,433 2,157 4,357 6,065 
Income from operations79 1,005 2,416 1,552 
Other income (expense):
Interest expense(23)(52)(82)(120)
Other income15 4 48 29 
Total other expense(8)(48)(34)(91)
Income before income taxes71 957 2,382 1,461 
Income tax expense1 74 532 105 
Net income$70 $883 $1,850 $1,356 
Earnings per common share:
Basic$0.53 $7.29 $13.86 $11.03 
Diluted$0.49 $6.12 $12.90 $9.35 
Weighted average common shares outstanding (in thousands):
Basic132,153 121,150 133,460 122,924 
Diluted142,348 144,390 143,463 145,031 


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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2023202220232022
Cash flows from operating activities:
Net income$70 $883 $1,850 $1,356 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization382 440 1,148 1,300 
Deferred income tax expense(80)19 319 19 
Derivative (gains) losses, net(106)1,029 (1,195)3,668 
Cash receipts (payments) on derivative settlements, net216 (1,234)167 (2,845)
Share-based compensation9 6 25 16 
(Gains) losses on sales of assets— 2 (807)(298)
Exploration1 — 9 10 
Other5 14 26 19 
Changes in assets and liabilities9 154 368 (170)
Net cash provided by operating activities506 1,313 1,910 3,075 
Cash flows from investing activities:
Capital expenditures(423)(540)(1,450)(1,299)
Business combination, net— 39 — (1,967)
Contributions to investments(61)— (149)— 
Proceeds from divestitures of property and equipment4 6 1,967 409 
Net cash provided by (used in) investing activities(480)(495)368 (2,857)
Cash flows from financing activities:
Proceeds from New Credit Facility— — 1,125 — 
Payments on New Credit Facility— — (2,175)— 
Proceeds from Exit Credit Facility— 2,705 — 7,255 
Payments on Exit Credit Facility— (3,030)— (6,805)
Funds held for transition services(6)— 91 — 
Proceeds from warrant exercise— — — 3 
Cash paid to repurchase and retire common stock(132)(109)(313)(667)
Cash paid for common stock dividends(77)(280)(412)(788)
Net cash used in financing activities(215)(714)(1,684)(1,002)
Net increase (decrease) in cash, cash equivalents and restricted cash(189)104 594 (784)
Cash, cash equivalents and restricted cash, beginning of period975 26 192 914 
Cash, cash equivalents and restricted cash, end of period$786 $130 $786 $130 
Cash and cash equivalents$713 $74 $713 $74 
Restricted cash73 56 73 56 
Total cash, cash equivalents and restricted cash$786 $130 $786 $130 
4

NATURAL GAS, OIL AND NGL PRODUCTION AND AVERAGE SALES PRICES (unaudited)
Three Months Ended September 30, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,734 1.63 — — — — 1,734 1.63 
Haynesville1,568 2.15 — — — — 1,568 2.15 
Eagle Ford76 2.52 9 82.33 10 25.76 193 6.36 
Total3,378 1.89 9 82.33 10 25.76 3,495 2.12 
Average NYMEX Price2.55 82.26 
Average Realized Price
  (including realized derivatives)		2.58 82.33 25.76 2.79 
Three Months Ended September 30, 2022
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,987 7.25 — — — — 1,987 7.25 
Haynesville1,605 7.40 — — — — 1,605 7.40 
Eagle Ford121 7.04 50 94.62 16 37.53 516 11.99 
Total3,713 7.31 50 94.62 16 37.53 4,108 7.90 
Average NYMEX Price8.20 91.56 
Average Realized Price
  (including realized derivatives)		4.10 65.90 37.53 4.65 
Nine Months Ended September 30, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,845 2.24 — — — — 1,845 2.24 
Haynesville1,569 2.26 — — — — 1,569 2.26 
Eagle Ford96 2.22 26 77.41 12 25.61 323 7.82 
Total3,510 2.25 26 77.41 12 25.61 3,737 2.73 
Average NYMEX Price2.69 77.39 
Average Realized Price
  (including realized derivatives)		2.56 72.10 25.61 2.99 
Nine Months Ended September 30, 2022
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,801 6.27 — — — — 1,801 6.27 
Haynesville1,624 6.16 — — — — 1,624 6.16 
Eagle Ford127 6.10 51 100.11 16 40.40 526 12.35 
Powder River Basin13 5.45 2 95.18 1 53.96 34 10.66 
Total3,565 6.21 53 99.87 17 41.14 3,985 7.07 
Average NYMEX Price6.77 98.09 
Average Realized Price
  (including realized derivatives)		3.77 66.91 41.14 4.44 



5

CAPITAL EXPENDITURES ACCRUED (unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2023202220232022
Drilling and completion capital expenditures:
Marcellus$91 $151 $324 $338 
Haynesville191 237 704 618 
Eagle Ford9 172 222 350 
Powder River Basin— — — 22 
Total drilling and completion capital expenditures291 560 1,250 1,328 
Non-drilling and completion - field48 33 100 74 
Non-drilling and completion - corporate18 26 56 67 
Total capital expenditures$357 $619 $1,406 $1,469 
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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 use identical calculations, Chesapeake’s non-GAAP measures may not be comparable to similarly titled measures of other companies.

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 September 30,Nine Months Ended September 30,
($ in millions)2023202220232022
Net income (GAAP)$70 $883 $1,850 $1,356 
Adjustments:
Unrealized (gains) losses on natural gas and oil derivatives110(199)(931)807 
Separation and other termination costs—— 3— 
(Gains) losses on sales of assets— 2 (807)(298)
Other operating expense, net3 6 18 53 
Other interest expense— 12 — 12 
Other(4)(4)(19)(19)
Deferred income tax expense(a)
— 19 — 19 
Tax effect of adjustments(b)
(24)11 403 (35)
Adjusted net income (Non-GAAP)$155 $730 $517 $1,895 
(a)
In the Prior Period and Prior Quarter, we adjusted the net deferred tax liability associated with our acquisition of Vine. As a result of this adjustment to the deferred tax liability, we increased the valuation allowance that we maintained against our net deferred tax asset position and recorded $19 million of deferred income tax expense.
(b)
The Current Quarter and Current Period include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%. The Prior Quarter and Prior Period include a tax effect attributed to the reconciling adjustments using blended rates of 5.7% and 6.3%, respectively.
RECONCILIATION OF EARNINGS PER COMMON SHARE TO ADJUSTED DILUTED EARNINGS PER COMMON SHARE (unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
($/share)2023202220232022
Earnings per common share (GAAP)$0.53 $7.29 $13.86 $11.03 
Effect of dilutive securities(0.04)(1.17)(0.96)(1.68)
Diluted earnings per common share (GAAP)$0.49 $6.12 $12.90 $9.35 
Adjustments:
Unrealized (gains) losses on natural gas and oil derivatives0.78 (1.38)(6.49)5.56 
Separation and other termination costs— — 0.02 — 
(Gains) losses on sales of assets— 0.02 (5.63)(2.06)
Other operating expense, net0.02 0.04 0.13 0.37 
Other interest expense— 0.08 — 0.08 
Other(0.03)(0.03)(0.13)(0.13)
Deferred income tax expense(a)
— 0.13 — 0.13 
Tax effect of adjustments(b)
(0.17)0.08 2.81 (0.24)
Adjusted diluted earnings per common share (Non-GAAP)$1.09 $5.06 $3.61 $13.06 
(a)
In the Prior Period and Prior Quarter, we adjusted the net deferred tax liability associated with our acquisition of Vine. As a result of this adjustment to the deferred tax liability, we increased the valuation allowance that we maintained against our net deferred tax asset position and recorded $19 million of deferred income tax expense.
(b)
The Current Quarter and Current Period include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%. The Prior Quarter and Prior Period include a tax effect attributed to the reconciling adjustments using blended rates of 5.7% and 6.3%, respectively.
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RECONCILIATION OF NET INCOME TO ADJUSTED EBITDAX (unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2023202220232022
Net income (GAAP)$70 $883 $1,850 $1,356 
Adjustments:
Interest expense23 52 82 120 
Income tax expense1 74 532 105 
Depreciation, depletion and amortization382 440 1,148 1,300 
Exploration4 2 19 14 
Unrealized (gains) losses on natural gas and oil derivatives110 (199)(931)807 
Separation and other termination costs— — 3 — 
(Gains) losses on sales of assets— 2 (807)(298)
Other operating expense, net3 6 18 53 
Other(13)(4)(36)(19)
Adjusted EBITDAX (Non-GAAP)$580 $1,256 $1,878 $3,438 

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW (unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2023202220232022
Net cash provided by operating activities (GAAP)$506 $1,313 $1,910 $3,075 
Cash capital expenditures(423)(540)(1,450)(1,299)
Free cash flow (Non-GAAP)83 773 460 1,776 
Cash paid for acquisition costs— — — 23 
Cash contributions to investments(61)— (149)— 
Free cash flow associated with assets under contract and divested assets(a)
(57)— (195)— 
Adjusted free cash flow (Non-GAAP)$(35)$773 $116 $1,799 
(a)In March and April of 2023, we closed two divestitures of certain Eagle Ford assets to WildFire Energy I LLC and INEOS Upstream Holdings Limited, respectively. Due to the structure of these transactions, both of which had an effective date of October 1, 2022, the cash generated by these assets was delivered to the respective buyers through a reduction in the proceeds we received at the closing of each transaction. Additionally, in August 2023, we entered into an agreement to sell the final portion of our Eagle Ford assets to SilverBow Resources, Inc., with an economic effective date of February 1, 2023. Included within the adjustment above reflects the cash flows from the three months ended September 30, 2023, associated with these assets to be sold to SilverBow Resources, Inc. This transaction is expected to close in 2023 and the cash generated by these assets are expected to be delivered to the buyer through a reduction in the proceeds we anticipate receiving once the transaction closes.
RECONCILIATION OF TOTAL DEBT TO NET DEBT (unaudited)
($ in millions)September 30, 2023
Total debt (GAAP)$2,032 
Premiums and issuance costs on debt(82)
Principal amount of debt1,950 
Cash and cash equivalents(713)
Net debt (Non-GAAP)$1,237 
9