EX-99.2 3 chk-ex_992x20231231x8kxpr.htm EX-99.2 Document
Exhibit 99.2
CHESAPEAKE ENERGY CORPORATION - SUPPLEMENTAL TABLES
1


CONSOLIDATED BALANCE SHEETS (unaudited)
($ in millions, except per share data)December 31, 2023December 31, 2022
Assets
Current assets:
Cash and cash equivalents$1,079 $130 
Restricted cash74 62 
Accounts receivable, net593 1,438 
Short-term derivative assets637 34 
Assets held for sale— 819 
Other current assets226 215 
Total current assets2,6092,698
Property and equipment:
Natural gas and oil properties, successful efforts method
Proved natural gas and oil properties11,468 11,096 
Unproved properties1,806 2,022 
Other property and equipment497 500 
Total property and equipment13,771 13,618 
Less: accumulated depreciation, depletion and amortization(3,674)(2,431)
Total property and equipment, net10,097 11,187 
Long-term derivative assets74 47 
Deferred income tax assets933 1,351 
Other long-term assets663 185 
Total assets$14,376 $15,468 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$425 $603 
Accrued interest39 42 
Short-term derivative liabilities3 432 
Other current liabilities847 1,627 
Total current liabilities1,314 2,704 
Long-term debt, net2,028 3,093 
Long-term derivative liabilities9 174 
Asset retirement obligations, net of current portion265 323 
Other long-term liabilities31 50 
Total liabilities3,647 6,344 
Contingencies and commitments
Stockholders' equity:
Common stock, $0.01 par value, 450,000,000 shares authorized: 130,789,936 and 134,715,094 shares issued1 1 
Additional paid-in capital5,754 5,724 
Retained earnings4,974 3,399 
Total stockholders' equity10,729 9,124 
Total liabilities and stockholders' equity$14,376 $15,468 
2

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended December 31,Year Ended December 31,
2023202220232022
($ in millions, except per share data)
Revenues and other:
Natural gas, oil and NGL$763 $2,201 $3,547 $9,892 
Marketing513 935 2,500 4,231 
Natural gas and oil derivatives533 988 1,728 (2,680)
Gains on sales of assets139 2 946 300 
Total revenues and other1,948 4,126 8,721 11,743 
Operating expenses:
Production63 126 356 475 
Gathering, processing and transportation190 257 853 1,059 
Severance and ad valorem taxes31 55 167 242 
Exploration8 9 27 23 
Marketing514 936 2,499 4,215 
General and administrative32 40 127 142 
Separation and other termination costs2 5 5 5 
Depreciation, depletion and amortization379 453 1,527 1,753 
Other operating expense, net3 17 18 49 
Total operating expenses1,222 1,898 5,579 7,963 
Income from operations726 2,228 3,142 3,780 
Other income (expense):
Interest expense(22)(40)(104)(160)
Losses on purchases, exchanges or extinguishments of debt— (5)— (5)
Other income31 7 79 36 
Total other income (expense)9 (38)(25)(129)
Income before income taxes735 2,190 3,117 3,651 
Income tax expense (benefit)166 (1,390)698 (1,285)
Net income5693,5802,4194,936
Deemed dividend on warrants— (67)— (67)
Net income available to common stockholders$569 $3,513 $2,419 $4,869 
Earnings per common share:
Basic$4.34 $26.16 $18.21 $38.71 
Diluted$4.02 $24.00 $16.92 $33.36 
Weighted average common shares outstanding (in thousands):
Basic130,999134,275132,840125,785
Diluted141,491146,346142,976145,961

3

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
 Three Months Ended December 31,Year Ended December 31,
($ in millions)2023202220232022
Cash flows from operating activities:
Net income$569 $3,580 $2,419 $4,936 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization379 453 1,527 1,753 
Deferred income tax expense (benefit)109 (1,351)428 (1,332)
Derivative (gains) losses, net(533)(988)(1,728)2,680 
Cash receipts (payments) on derivative settlements, net187 (716)354 (3,561)
Share-based compensation8 6 33 22 
Gains on sales of assets(139)(2)(946)(300)
Exploration3 4 12 14 
Losses on purchases, exchanges or extinguishments of debt— 5 — 5 
Other(20)12 6 31 
Changes in assets and liabilities(93)47 275 (123)
Net cash provided by operating activities4701,0502,3804,125
Cash flows from investing activities:
Capital expenditures(379)(524)(1,829)(1,823)
Business combination, net— — — (1,967)
Contributions to investments(82)(18)(231)(18)
Proceeds from divestitures of property and equipment566 (2)2,533 407 
Net cash provided by (used in) investing activities105(544)473(3,401)
Cash flows from financing activities:
Proceeds from New Credit Facility— 1,600 1,125 1,600 
Payments on New Credit Facility— (550)(2,175)(550)
Proceeds from Exit Credit Facility— 2,328 — 9,583 
Payments on Exit Credit Facility— (2,999)— (9,804)
Funds held for transition services(91)— — — 
Proceeds from warrant exercise— 24 — 27 
Debt issuance and other financing costs— (17)— (17)
Cash paid to repurchase and retire common stock(42)(406)(355)(1,073)
Cash paid for common stock dividends(75)(424)(487)(1,212)
Net cash used in financing activities(208)(444)(1,892)(1,446)
Net increase (decrease) in cash, cash equivalents and restricted cash36762961(722)
Cash, cash equivalents and restricted cash, beginning of period786130192914
Cash, cash equivalents and restricted cash, end of period$1,153 $192 $1,153 $192 
Cash and cash equivalents$1,079 $130 $1,079 $130 
Restricted cash74 62 74 62 
Total cash, cash equivalents and restricted cash$1,153 $192 $1,153 $192 
4

NATURAL GAS, OIL AND NGL PRODUCTION AND AVERAGE SALES PRICES (unaudited)
Three Months Ended December 31, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,801 2.15 — — — — 1,801 2.15 
Haynesville1,497 2.41 — — — — 1,497 2.41 
Eagle Ford52 2.42 6 82.49 7 25.67 129 6.30 
Total3,350 2.27 6 82.49 7 25.67 3,427 2.42 
Average NYMEX Price2.88 78.35 
Average Realized Price (including realized derivatives)2.87 82.49 25.67 3.01 
Three Months Ended December 31, 2022
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,941 5.35 — — — — 1,941 5.35 
Haynesville1,572 5.17 — — — — 1,572 5.17 
Eagle Ford127 4.30 52 84.55 16 26.31 538 10.03 
Total3,640 5.24 52 84.55 16 26.31 4,051 5.90 
Average NYMEX Price6.26 82.64 
Average Realized Price (including realized derivatives)3.40 64.67 26.31 3.99 
Year Ended December 31, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,834 2.22 — — — — 1,834 2.22 
Haynesville1,551 2.30 — — — — 1,551 2.30 
Eagle Ford85 2.25 21 77.80 10 25.62 274 7.64 
Total3,470 2.25 21 77.80 10 25.62 3,659 2.66 
Average NYMEX Price2.74 77.63 
Average Realized Price (including realized derivatives)2.64 72.89 25.62 2.99 
Year Ended December 31, 2022
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,836 6.03 — — — — 1,836 6.03 
Haynesville1,611 5.92 — — — — 1,611 5.92 
Eagle Ford127 5.64 51 96.10 16 36.76 529 11.76 
Powder River Basin10 5.45 2 95.18 1 53.96 26 10.66 
Total3,584 5.96 53 96.07 17 37.48 4,002 6.77 
Average NYMEX Price6.64 94.23 
Average Realized Price (including realized derivatives)3.67 66.36 37.48 4.32 

5

CAPITAL EXPENDITURES ACCRUED (unaudited)

Three Months Ended December 31,Year Ended December 31,
2023202220232022
($ in millions)
Drilling and completion capital expenditures:
Marcellus$119 $123 $443 $461 
Haynesville187 216 891 834 
Eagle Ford— 64 222 414 
Powder River Basin— — — 22 
Total drilling and completion capital expenditures306 403 1,556 1,731 
Non-drilling and completion - field50 41 150 115 
Non-drilling and completion - corporate20 23 76 90 
Total capital expenditures$376 $467 $1,782 $1,936 
6

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.

7

RECONCILIATION OF NET INCOME AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED NET INCOME (unaudited)
Three Months Ended December 31,Year Ended December 31,
($ in millions)2023202220232022
Net income available to common stockholders (GAAP)$569 $3,513 $2,419 $4,869 
Adjustments:
Unrealized gains on natural gas and oil derivatives(347)(1,702)(1,278)(895)
Separation and other termination costs25 55 
Gains on sales of assets(139)(2)(946)(300)
Other operating expense, net4 25 22 78 
Other interest expense— — — 12 
Losses on purchases, exchanges or extinguishments of debt— 5 — 5 
Other(18)9 (37)(10)
Deferred income tax benefit(a)
— (1,351)— (1,332)
Tax effect of adjustments(b)
114 49 517 14 
Adjusted net income available to common stockholders (Non-GAAP)$185 $551 $702 $2,446 
Deemed dividend on warrants— 67 — 67 
Adjusted net income (Non-GAAP)$185 $618 $702 $2,513 
(a)
During the three and twelve month periods ended December 31, 2022, we recorded a net deferred tax asset of $1.3 billion as a result of a partial release of the valuation allowance for potential tax benefits that will more likely than not be realized.
(b)
The three and twelve month periods ended December 31, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%. The three and twelve month periods ended December 31, 2022 include tax effects attributed to the reconciling adjustments using blended rates of 3.0% and 1.3%, respectively.
8


RECONCILIATION OF EARNINGS PER COMMON SHARE TO ADJUSTED DILUTED EARNINGS PER COMMON SHARE (unaudited)
Three Months Ended December 31,Year Ended December 31,
($/share)2023202220232022
Earnings per common share (GAAP)$4.34 $26.16 $18.21 $38.71 
Effect of dilutive securities(0.32)(2.16)(1.29)(5.35)
Diluted earnings per common share (GAAP)$4.02 $24.00 $16.92 $33.36 
Adjustments:
Unrealized gains on natural gas and oil derivatives(2.44)(11.63)(8.94)(6.13)
Separation and other termination costs0.01 0.03 0.04 0.03 
Gains on sales of assets(0.99)(0.02)(6.62)(2.06)
Other operating expense, net0.03 0.17 0.15 0.53 
Other interest expense— — — 0.08 
Losses on purchases, exchanges or extinguishments of debt— 0.04 — 0.04 
Other(0.13)0.06 (0.26)(0.07)
Deferred income tax benefit(a)
— (9.22)— (9.12)
Tax effect of adjustments(b)
0.81 0.33 3.62 0.10 
Adjusted diluted earnings available to common stockholders per common share (Non-GAAP)$1.31 $3.76 $4.91 $16.76 
Deemed dividend on warrants— 0.46 — 0.46 
Adjusted diluted earnings per common share (Non-GAAP)$1.31 $4.22 $4.91 $17.22 
(a)
During the three and twelve month periods ended December 31, 2022, we recorded a net deferred tax asset of $1.3 billion as a result of a partial release of the valuation allowance for potential tax benefits that will more likely than not be realized.
(b)
The three and twelve month periods ended December 31, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%. The three and twelve month periods ended December 31, 2022 include tax effects attributed to the reconciling adjustments using blended rates of 3.0% and 1.3%, respectively.
9

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDAX (unaudited)
Three Months Ended December 31,Year Ended December 31,
2023202220232022
($ in millions)
Net income (GAAP)$569 $3,580 $2,419 $4,936 
Adjustments:
Interest expense22 40 104 160 
Income tax expense (benefit)166 (1,390)698 (1,285)
Depreciation, depletion and amortization379 453 1,527 1,753 
Exploration8 9 27 23 
Unrealized gains on natural gas and oil derivatives(347)(1,702)(1,278)(895)
Separation and other termination costs2 5 5 5 
Gains on sales of assets(139)(2)(946)(300)
Other operating expense, net4 25 22 78 
Losses on purchases, exchanges or extinguishments of debt— 5 — 5 
Other(29)9 (65)(10)
Adjusted EBITDAX (Non-GAAP)$635 $1,032 $2,513 $4,470 

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW (unaudited)
Three Months Ended December 31,Year Ended December 31,
2023202220232022
($ in millions)
Net cash provided by operating activities (GAAP)$470 $1,050 $2,380 $4,125 
Cash capital expenditures(379)(524)(1,829)(1,823)
Free cash flow (Non-GAAP)91 526 551 2,302 
Cash paid for acquisition costs— — — 23 
Cash contributions to investments(82)(18)(231)(18)
Free cash flow associated with divested assets(a)
(48)(235)(243)(235)
Adjusted free cash flow (Non-GAAP)$(39)$273 $77 $2,072 
(a)In March and April of 2023, we closed two divestitures of certain Eagle Ford assets to WildFire Energy I LLC and INEOS Upstream Holdings Limited, respectively. Due to the structure of these transactions, both of which had an effective date of October 1, 2022, the cash generated by these assets was delivered to the respective buyers through a reduction in the proceeds we received at the closing of each transaction. Additionally, in November 2023, we closed the divestiture of the final portion of our Eagle Ford assets to SilverBow Resources, Inc., with an effective date of February 1, 2023 and the cash generated by these assets was delivered to the buyer through a reduction in the proceeds we received at the closing of the transaction.
RECONCILIATION OF TOTAL DEBT TO NET DEBT (unaudited)
($ in millions)December 31, 2023
Total debt (GAAP)$2,028 
Premiums and issuance costs on debt(78)
Principal amount of debt1,950 
Cash and cash equivalents(1,079)
Net debt (Non-GAAP)$871 
10