EX-99.2 3 chk-ex_992x20211231x8kxpr.htm EX-99.2

Exhibit 99.2

CHESAPEAKE ENERGY CORPORATION - SUPPLEMENTAL TABLES

Table of Contents:			Page
Consolidated Balance Sheets			2
Consolidated Statements of Operations			3
Consolidated Statements of Cash Flows			5
Oil, Natural Gas and NGL Production and Average Sales Prices			7
Gross Margin			9
Capital Expenditures Accrued			11
Oil and Natural Gas Hedging Positions			12
Non-GAAP Financial Measures			14
Reconciliation of Adjusted Net Income (Loss) Attributable to Chesapeake			15
Reconciliation of Adjusted EBITDAX			17
Adjusted Free Cash Flow			18
Net Debt			18

1

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CONSOLIDATED BALANCE SHEETS (unaudited)

						Successor									Predecessor
($ in millions)						December 31, 2021									December 31, 2020
Assets
Current assets:
Cash and cash equivalents						$	905								$	279
Restricted cash						9									—
Accounts receivable, net						1,115									746
Short-term derivative assets						5									19
Other current assets						69									64
Total current assets						2,103									1,108
Property and equipment:
Oil and natural gas properties, successful efforts method
Proved oil and natural gas properties						7,682									25,734
Unproved properties						1,530									1,550
Other property and equipment						495									1,754
Total property and equipment						9,707									29,038
Less: accumulated depreciation, depletion and amortization						(908)									(23,806)
Property and equipment held for sale, net						3									10
Total property and equipment, net						8,802									5,242
Other long-term assets						104									234
Total assets						$	11,009								$	6,584
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable						$	308								$	346
Current maturities of long-term debt, net						—									1,929
Accrued interest						38									3
Short-term derivative liabilities						899									93
Other current liabilities						1,202									723
Total current liabilities						2,447									3,094
Long-term debt, net						2,278									—
Long-term derivative liabilities						249									44
Asset retirement obligations, net of current portion						349									139
Other long-term liabilities						15									5
Liabilities subject to compromise						—									8,643
Total liabilities						5,338									11,925
Contingencies and commitments
Stockholders’ equity (deficit):
Predecessor preferred stock, $0.01 par value, 20,000,000 shares authorized: 0 and 5,563,458 shares outstanding						—									1,631
Predecessor common stock, $0.01 par value, 22,500,000 shares authorized: 0 and 9,780,547 shares issued						—									—
Predecessor additional paid-in capital						—									16,937
Predecessor accumulated other comprehensive income						—									45
Successor common stock, $0.01 par value, 450,000,000 shares authorized: 117,917,349 and 0 shares issued						1									—
Successor additional paid-in capital						4,845									—
Retained earnings (accumulated deficit)						825									(23,954)
Total stockholders’ equity (deficit)						5,671									(5,341)
Total liabilities and stockholders’ equity (deficit)						$	11,009								$	6,584

2

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CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

						Successor									Predecessor
						Three Months Ended December 31, 2021									Three Months Ended December 31, 2020
($ in millions except per share data)
Revenues and other:
Oil, natural gas and NGL						$	1,786								$	739
Marketing						820									457
Oil and natural gas derivatives						477									23
Gains on sales of assets						3									29
Total revenues and other						3,086									1,248
Operating expenses:
Production						103									78
Gathering, processing and transportation						239									269
Severance and ad valorem taxes						52									33
Exploration						3									10
Marketing						817									451
General and administrative						28									38
Separation and other termination costs						—									1
Depreciation, depletion and amortization						340									166
Impairments						—									13
Other operating expense, net						83									13
Total operating expenses						1,665									1,072
Income from operations						1,421									176
Other income (expense):
Interest expense						(26)									(24)
Other income						—									5
Reorganization items, net						—									(579)
Total other expense						(26)									(598)
Income (loss) before income taxes						1,395									(422)
Income tax benefit						(39)									(6)
Net income (loss)						1,434									(416)
Net loss attributable to noncontrolling interests						—									—
Net income (loss) available to common stockholders						$	1,434								$	(416)
Earnings (loss) per common share:
Basic						$	12.90								$	(42.54)
Diluted						$	11.13								$	(42.54)
Weighted average common shares outstanding (in thousands):
Basic						111,160									9,780
Diluted						128,846									9,780

3

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						Successor									Predecessor
						Period from February 10, 2021 through December 31, 2021									Period from January 1, 2021 through February 9, 2021						Year Ended December 31, 2020
($ in millions except per share data)
Revenues and other:
Oil, natural gas and NGL						$	4,401								$	398					$	2,745
Marketing						2,263									239						1,869
Oil and natural gas derivatives						(1,127)									(382)						596
Gains on sales of assets						12									5						30
Total revenues and other						5,549									260						5,240
Operating expenses:
Production						297									32						373
Gathering, processing and transportation						780									102						1,082
Severance and ad valorem taxes						158									18						149
Exploration						7									2						427
Marketing						2,257									237						1,889
General and administrative						97									21						267
Separation and other termination costs						11									22						44
Depreciation, depletion and amortization						919									72						1,097
Impairments						1									—						8,535
Other operating expense (income), net						84									(12)						80
Total operating expenses						4,611									494						13,943
Income (loss) from operations						938									(234)						(8,703)
Other income (expense):
Interest expense						(73)									(11)						(331)
Gains on purchases or exchanges of debt						—									—						65
Other income (expense)						31									2						(4)
Reorganization items, net						—									5,569						(796)
Total other income (expense)						(42)									5,560						(1,066)
Income (loss) before income taxes						896									5,326						(9,769)
Income tax benefit						(49)									(57)						(19)
Net income (loss)						945									5,383						(9,750)
Net loss attributable to noncontrolling interests						—									—						16
Net income (loss) attributable to Chesapeake						945									5,383						(9,734)
Preferred stock dividends						—									—						(22)
Net income (loss) available to common stockholders						$	945								$	5,383					$	(9,756)
Earnings (loss) per common share:
Basic						$	9.29								$	550.35					$	(998.26)
Diluted						$	8.12								$	534.51					$	(998.26)
Weighted average common shares outstanding (in thousands):
Basic						101,754									9,781						9,773
Diluted						116,341									10,071						9,773

4

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CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

						Successor									Predecessor
						Three Months Ended December 31, 2021									Three Months Ended December 31, 2020
($ in millions)
Cash flows from operating activities:
Net income (loss)						$	1,434								$	(416)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization						340									166
Deferred income tax benefit						(49)									—
Derivative losses, net						(477)									(23)
Cash payments on derivative settlements, net						(705)									(6)
Share-based compensation						4									5
Gains on sales of assets						(3)									(29)
Impairments						—									13
Non-cash reorganization items, net						—									87
Exploration						1									8
Other						36									(18)
Changes in assets and liabilities						(18)									222
Net cash provided by operating activities						563									9
Cash flows from investing activities:
Capital expenditures						(265)									(169)
Business combination, net						(194)									—
Proceeds from divestitures of property and equipment						4									135
Net cash used in investing activities						(455)									(34)
Cash flows from financing activities:
Cash paid for common stock dividends						(52)									—
Other						—									(2)
Net cash used in financing activities						(52)									(2)
Net increase in cash, cash equivalents and restricted cash						56									(27)
Cash, cash equivalents and restricted cash, beginning of period						858									306
Cash, cash equivalents and restricted cash, end of period						$	914								$	279
Cash and cash equivalents						$	905								$	279
Restricted cash						9									—
Total cash, cash equivalents and restricted cash						$	914								$	279

5

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						Successor									Predecessor
						Period from February 10, 2021 through December 31, 2021									Period from January 1, 2021 through February 9, 2021						Year Ended December 31, 2020
($ in millions)
Cash flows from operating activities:
Net income (loss)						$	945								$	5,383					$	(9,750)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization						919									72						1,097
Deferred income tax benefit						(49)									(57)						(10)
Derivative (gains) losses, net						1,127									382						(596)
Cash receipts (payments) on derivative settlements, net						(1,142)									(17)						884
Share-based compensation						9									3						21
Gains on sales of assets						(12)									(5)						(30)
Impairments						1									—						8,535
Non-cash reorganization items, net						—									(6,680)						(213)
Exploration						2									2						417
Gains on purchases or exchanges of debt						—									—						(65)
Other						46									45						(41)
Changes in assets and liabilities						(37)									851						915
Net cash provided by (used in) operating activities						1,809									(21)						1,164
Cash flows from investing activities:
Capital expenditures						(669)									(66)						(1,142)
Business combination, net						(194)									—						—
Proceeds from divestitures of property and equipment						13									—						150
Net cash used in investing activities						(850)									(66)						(992)
Cash flows from financing activities:
Proceeds from Exit Credit Facility - Tranche A Loans						30									—						—
Payments on Exit Credit Facility - Tranche A Loans						(80)									(479)						—
Proceeds from pre-petition revolving credit facility borrowings						—									—						3,656
Payments on pre-petition revolving credit facility borrowings						—									—						(3,317)
Proceeds from DIP Facility borrowings						—									—						60
Payments on DIP Facility borrowings						—									(1,179)						(60)
Proceeds from issuance of senior notes, net						—									1,000						—
Proceeds from issuance of common stock						—									600						—
Proceeds from warrant exercise						2									—						—
Debt issuance and other financing costs						(3)									(8)						(109)
Cash paid to purchase debt						—									—						(94)
Cash paid for common stock dividends						(119)									—						—
Cash paid for preferred stock dividends						—									—						(22)
Other						(1)									—						(13)
Net cash provided by (used in) financing activities						(171)									(66)						101
Net increase (decrease) in cash, cash equivalents and restricted cash						788									(153)						273
Cash, cash equivalents and restricted cash, beginning of period						126									279						6
Cash, cash equivalents and restricted cash, end of period						$	914								$	126					$	279
Cash and cash equivalents						$	905								$	40					$	279
Restricted cash						9									86						—
Total cash, cash equivalents and restricted cash						$	914								$	126					$	279

6

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OIL, NATURAL GAS AND NGL PRODUCTION AND AVERAGE SALES PRICES (unaudited)

						Successor
						Three Months Ended December 31, 2021
						Oil												Natural Gas												NGL												Total
						MBbl per day						$/Bbl						MMcf per day						$/Mcf						MBbl per day						$/Bbl						MBoe per day						$/Boe
Marcellus						—						—						1,315						4.94						—						—						219						29.66
Haynesville						—						—						1,249						5.20						—						—						208						31.18
Eagle Ford						54						77.67						125						4.59						18						36.16						92						58.31
Powder River Basin						8						76.41						48						5.48						3						47.91						20						53.71
Total						62						77.50						2,737						5.05						21						38.06						539						36.02
Average Realized Price (including realized derivatives)												50.93												2.92												38.06												22.18
						Predecessor
						Three Months Ended December 31, 2020
						Oil												Natural Gas												NGL												Total
						MBbl per day						$/Bbl						MMcf per day						$/Mcf						MBbl per day						$/Bbl						MBoe per day						$/Boe
Marcellus						—						—						1,113						1.82						—						—						186						10.92
Haynesville						—						—						559						2.28						—						—						92						13.68
Eagle Ford						125						41.27						172						2.60						21						15.26						125						31.13
Powder River Basin						10						40.39						51						2.69						3						20.78						22						27.81
Mid-Continent						3						39.99						25						2.56						3						15.11						10						22.60
Total						138						41.15						1,920						2.06						27						15.97						435						18.44
Average Realized Price (including realized derivatives)												40.77												1.95												15.97												17.90

7

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						Successor
						Period from February 10, 2021 through December 31, 2021
						Oil												Natural Gas												NGL												Total
						MBbl per day						$/Bbl						MMcf per day						$/Mcf						MBbl per day						$/Bbl						MBoe per day						$/Boe
Marcellus						—						—						1,296						3.25						—						—						216						19.52
Haynesville						—						—						750						4.10						—						—						125						24.57
Eagle Ford						60						69.25						137						4.02						19						29.76						101						51.91
Powder River Basin						9						67.90						53						4.33						3						40.00						21						46.09
Total						69						69.07						2,236						3.61						22						31.37						463						29.19
Average Realized Price (including realized derivatives)												46.85												2.52												25.55												21.72
						Predecessor
						Period from January 1, 2021 through February 9, 2021
						Oil												Natural Gas												NGL												Total
						MBbl per day						$/Bbl						MMcf per day						$/Mcf						MBbl per day						$/Bbl						MBoe per day						$/Boe
Marcellus						—						—						1,233						2.42						—						—						206						14.49
Haynesville						—						—						543						2.44						—						—						90						14.62
Eagle Ford						74						53.37						165						2.57						18						23.94						120						40.27
Powder River Basin						10						51.96						61						2.92						4						34.31						24						34.25
Total						84						53.21						2,002						2.45						22						25.92						440						22.63
Average Realized Price (including realized derivatives)												49.06												2.62												31.42												21.46
						Non-GAAP Combined
						Year Ended December 31, 2021
						Oil												Natural Gas												NGL												Total
						MBbl per day						$/Bbl						MMcf per day						$/Mcf						MBbl per day						$/Bbl						MBoe per day						$/Boe
Marcellus						—						—						1,289						3.16						—						—						215						18.99
Haynesville						—						—						727						3.96						—						—						121						23.76
Eagle Ford						62						67.14						140						3.84						18						29.14						104						50.42
Powder River Basin						9						66.08						54						4.16						4						39.26						22						44.66
Total						71						67.01						2,210						3.49						22						30.77						462						28.51
Average Realized Price (including realized derivatives)												48.77												2.61												30.77												21.49
						Predecessor
						Year Ended December 31, 2020
						Oil												Natural Gas												NGL												Total
						MBbl per day						$/Bbl						MMcf per day						$/Mcf						MBbl per day						$/Bbl						MBoe per day						$/Boe
Marcellus						—						—						1,052						1.64						—						—						175						9.82
Haynesville						—						—						543						1.83						—						—						90						10.99
Eagle Ford						86						38.38						185						1.90						24						10.93						141						27.72
Powder River Basin						13						36.64						58						1.92						4						14.94						26						24.22
Mid-Continent						4						38.17						34						1.98						3						12.36						13						20.18
Total						103						38.16						1,872						1.73						31						11.55						445						16.84
Average Realized Price (including realized derivatives)												56.74												1.97												11.55												22.09

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GROSS MARGIN (unaudited)

						Successor															Predecessor
						Three Months Ended December 31,															Three Months Ended December 31,
						2021															2020
($ in millions, except per unit)												$/Boe															$/Boe
Marcellus
Oil, natural gas and NGL sales						$	598					29.66									$	186					10.92
Production expenses						11						0.55									8						0.52
Gathering, processing and transportation expenses						83						4.13									75						4.40
Severance and ad valorem taxes						3						0.12									2						0.09
Gross margin						$	501					24.86									$	101					5.91
Haynesville
Oil, natural gas and NGL sales						$	597					31.18									$	117					13.68
Production expenses						29						1.51									9						1.23
Gathering, processing and transportation expenses						54						2.83									51						5.97
Severance and ad valorem taxes						10						0.55									8						0.94
Gross margin						$	504					26.29									$	49					5.54
Eagle Ford
Oil, natural gas and NGL sales						$	495					58.31									$	359					31.13
Production expenses						53						6.25									45						3.88
Gathering, processing and transportation expenses						79						9.29									117						10.19
Severance and ad valorem taxes						29						3.44									17						1.49
Gross margin						$	334					39.33									$	(179)					15.57
Powder River Basin
Oil, natural gas and NGL sales						$	96					53.71									$	56					27.81
Production expenses						10						5.54									8						3.60
Gathering, processing and transportation expenses						23						12.80									21						10.71
Severance and ad valorem taxes						10						5.43									5						2.55
Gross margin						$	53					29.94									$	(34)					10.95
Mid-Continent
Oil, natural gas and NGL sales						$	—					—									$	21					22.60
Production expenses						—						—									8						9.23
Gathering, processing and transportation expenses						—						—									5						5.49
Severance and ad valorem taxes						—						—									1						1.49
Gross margin						$	—					—									$	(14)					6.39

						Successor															Predecessor												Non-GAAP Combined												Predecessor
						Period from February 10, 2021 through December 31,															Period from January 1, 2021 through February 9,												Year Ended December 31,												Year Ended December 31,
						2021															2021												2021												2020
($ in millions, except per unit)												$/Boe															$/Boe												$/Boe												$/Boe
Marcellus
Oil, natural gas and NGL sales						$	1,370					19.52									$	119					14.49						$	1,489					18.99						$	631					9.82
Production expenses						34						0.49									4						0.50						38						0.49						32						0.50
Gathering, processing and transportation expenses						287						4.09									34						4.17						321						4.10						292						4.55
Severance and ad valorem taxes						9						0.12									1						0.07						10						0.12						6						0.09
Gross margin						$	1,040					14.82									$	80					9.75						$	1,120					14.28						$	301					4.68
Haynesville
Oil, natural gas and NGL sales						$	998					24.57									$	53					14.62						$	1,051					23.76						$	362					10.99
Production expenses						59						1.44									4						1.12						63						1.42						41						1.28
Gathering, processing and transportation expenses						118						2.91									11						2.93						129						2.91						188						5.69
Severance and ad valorem taxes						22						0.55									2						0.54						24						0.55						23						0.69
Gross margin						$	799					19.67									$	36					10.03						$	835					18.88						$	110					3.33
Eagle Ford
Oil, natural gas and NGL sales						$	1,712					51.91									$	193					40.27						$	1,905					50.42						$	1,428					27.72
Production expenses						173						5.25									21						4.24						194						5.13						201						3.89
Gathering, processing and transportation expenses						290						8.79									45						9.32						335						8.85						475						9.23
Severance and ad valorem taxes						96						2.91									13						2.69						109						2.88						92						1.79
Gross margin						$	1,153					34.96									$	114					24.02						$	1,267					33.56						$	660					12.81
Powder River Basin
Oil, natural gas and NGL sales						$	321					46.09									$	33					34.25						$	354					44.66						$	231					24.22
Production expenses						31						4.45									3						3.37						34						4.32						42						4.41
Gathering, processing and transportation expenses						85						12.20									12						12.53						97						12.24						100						10.52
Severance and ad valorem taxes						31						4.48									2						2.88						33						4.29						23						2.41
Gross margin						$	174					24.96									$	16					15.47						$	190					23.81						$	66					6.88
Mid-Continent
Oil, natural gas and NGL sales						$	—					—									$	—					—						$	—					—						$	93					20.18
Production expenses						—						—									—						—						—						—						57						12.56
Gathering, processing and transportation expenses						—						—									—						—						—						—						27						5.76
Severance and ad valorem taxes						—						—									—						—						—						—						5						1.16
Gross margin						$	—					—									$	—					—						$	—					—						$	4					0.70

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CAPITAL EXPENDITURES ACCRUED (unaudited)

						Successor									Predecessor
						Three Months Ended December 31, 2021									Three Months Ended December 31, 2020
($ in millions)
Drilling and completion capital expenditures:
Marcellus						$	72								$	71
Haynesville						131									39
Eagle Ford						32									45
Powder River Basin						21									4
Total drilling and completion capital expenditures						256									159
Leasehold and additions to other PP&E						7									4
Capitalized interest						5									2
Total capital expenditures						$	268								$	165

						Successor									Predecessor						Non-GAAP Combined						Predecessor
						Period from February 10, 2021 through December 31, 2021									Period from January 1, 2021 through February 9, 2021						Year Ended December 31, 2021						Year Ended December 31, 2020
($ in millions)
Drilling and completion capital expenditures:
Marcellus						$	239								$	30					$	269					$	263
Haynesville						278									22						300						141
Eagle Ford						109									9						118						378
Powder River Basin						35									—						35						95
Mid-Continent						—									—						—						2
Total drilling and completion capital expenditures						661									61						722						879
Leasehold and additions to other PP&E						12									—						12						26
Capitalized interest						11									1						12						15
Total capital expenditures						$	684								$	62					$	746					$	920

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OIL AND NATURAL GAS HEDGING POSITIONS AS OF FEBRUARY 21, 2022 (a)

Crude Oil Swaps
			Volume (MMBbls)						Avg. NYMEX Price of Swaps
Q1 2022 (b)			3.1						$	43.57
Q2 2022			2.8						$	43.12
Q3 2022			2.7						$	44.85
Q4 2022			2.6						$	45.92
Total 2022			11.2						$	44.30
Total 2023			1.9						$	47.17

Crude Oil Two-Way Collars
			Volume (Bcf)						Avg. NYMEX Bought Put Price						Avg. NYMEX Sold Call Price
Total 2023			4.4						$	65.00					$	79.09

Oil Basis Protection Swaps
			Volume (MMBbls)						Avg. NYMEX plus/(minus)
Q1 2022 (b)			3.2						$	0.53
Q2 2022			3.6						$	0.60
Q3 2022			3.5						$	0.89
Q4 2022			3.5						$	0.89
Total 2022			13.8						$	0.73
Total 2023			6.2						$	0.96

Natural Gas Swaps
			Volume (Bcf)						Avg. NYMEX Price of Swaps
Q1 2022 (b)			177						$	2.88
Q2 2022			130						$	2.60
Q3 2022			134						$	2.63
Q4 2022			117						$	2.60
Total 2022			558						$	2.69
Total 2023			229						$	2.69
Total 2024			103						$	2.67
Total 2025			27						$	2.65

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Natural Gas Two-Way Collars
			Volume (Bcf)						Avg. NYMEX Bought Put Price						Avg. NYMEX Sold Call Price
Q1 2022 (b)			18						$	2.50					$	2.86
Q2 2022			90						$	3.33					$	4.41
Q3 2022			94						$	3.41					$	4.56
Q4 2022			120						$	3.12					$	4.27
Total 2022			322						$	3.23					$	4.31
Total 2023			234						$	3.02					$	4.03

Natural Gas Three-Way Collars
			Volume (Bcf)						Avg. NYMEX Sold Put Price						Avg. NYMEX Bought Put Price						Avg. NYMEX Sold Call Price
Q2 2022			7						$	2.41					$	2.90					$	3.43
Q3 2022			6						$	2.41					$	2.90					$	3.43
Q4 2022			6						$	2.41					$	2.90					$	3.43
Total 2022			19						$	2.41					$	2.90					$	3.43
Total 2023			4						$	2.50					$	3.40					$	3.79

Natural Gas Written Call Options
			Volume (Bcf)						Avg. NYMEX strike price
Total 2023			18						$	3.29

Natural Gas Basis Protection Swaps
			Volume (Bcf)						Avg. NYMEX plus/(minus)
Q1 2022 (b)			92						$	(0.07)
Q2 2022			56						$	(0.14)
Q3 2022			56						$	(0.14)
Q4 2022			49						$	0.05
Total 2022			253						$	(0.08)
Total 2023			97						$	0.05
Total 2024			30						$	(0.19)
Total 2025			5						$	(0.21)

____________________________________________

(a)Assumes closing of the Chief transaction prior to April 2022.

(b)Includes amounts settled in January and February 2022.

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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 (Loss) Attributable to Chesapeake, Adjusted EBITDAX, 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.

These financial measures are non-GAAP and should not be considered as an alternative to, or more meaningful than, net income (loss), earnings (loss) per common share or cash flow provided by operating activities prepared in accordance with GAAP.

Chesapeake believes that the non-GAAP measures presented, when viewed in combination with its financial measures prepared in accordance with GAAP, provide useful information as they exclude certain items management believes affects the comparability of operating results. 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 relative to other oil and natural gas producing companies, (b) these financial measures are comparable to estimates provided by securities analysts, and (c) items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provide by the company generally excludes information regarding these types of items.

Because not all companies use identical calculations, Chesapeake’s non-GAAP measures may not be comparable to similar titled measures of other companies.

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RECONCILIATION OF ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO CHESAPEAKE (unaudited)

						Successor															Predecessor
						Three Months Ended December 31, 2021															Three Months Ended December 31, 2020
						$						$/Share									$						$/Share
($ in millions, except per share data)
Net income (loss) available to common stockholders (GAAP)						$	1,434					$	12.90								$	(416)					$	(42.54)
Effect of dilutive securities						—						(1.77)									—						—
Diluted income (loss) available to common stockholders (GAAP)						$	1,434					$	11.13								$	(416)					$	(42.54)
Adjustments:
Unrealized gains on oil and natural gas derivatives						(1,163)						(9.03)									(45)						(4.59)
Separation and other termination costs						—						—									1						0.10
Gains on sales of assets						(3)						(0.02)									(29)						(2.97)
Other operating expense, net						89						0.69									11						1.12
Impairments						—						—									13						1.33
Reorganization items, net						—						—									579						59.21
Other						—						—									(4)						(0.41)
Income tax benefit(a)						(49)						(0.38)									—						—
Adjusted net income attributable to common stockholders (Non-GAAP)						$	308					$	2.39								$	110					$	11.25

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						Successor															Predecessor
						Period from February 10, 2021 through December 31, 2021															Period from January 1, 2021 through February 9, 2021												Year Ended December 31, 2020
						$						$/Share									$						$/Share						$						$/Share
($ in millions, except per share data)
Net income (loss) available to common stockholders (GAAP)						$	945					9.29									$	5,383					550.35						$	(9,756)					(998.26)
Effect of dilutive securities						—						(1.17)									—						(14.84)						—						—
Diluted income (loss) available to common stockholders (GAAP)						$	945					8.12									$	5,383					$	534.51					$	(9,756)					(998.26)
Adjustments:
Unrealized (gains) losses on oil and natural gas derivatives						(41)						(0.35)									369						36.64						259						26.50
Separation and other termination costs						11						0.09									22						2.18						44						4.50
Gains on sales of assets						(12)						(0.10)									(5)						(0.50)						(30)						(3.07)
Other operating expense (income), net						93						0.79									(12)						(1.19)						79						8.08
Impairments						1						0.01									—						—						8,535						873.33
Exploration expense - impairment of unproved properties						—						—									—						—						272						27.83
Noncontrolling interests - impairment of unproved properties						—						—									—						—						(16)						(1.64)
Gains on purchases or exchanges of debt						—						—									—						—						(65)						(6.65)
G&A reorganization expenses						—						—									—						—						43						4.40
Reorganization items, net						—						—									(5,569)						(552.97)						796						81.46
Other						(18)						(0.15)									—						—						17						1.74
Income tax benefit(a)						(49)						(0.42)									—						—						—						—
Tax effect of adjustments(b)						(13)						(0.11)									(57)						(5.66)						(11)						(1.13)
Adjusted net income available to common stockholders (Non-GAAP)						917						7.88									131						13.01						167						17.09
Preferred stock dividends						—						—									—						—						22						2.25
Adjusted net income attributable to Chesapeake (Non-GAAP)						$	917					$	7.88								$	131					$	13.01					$	189					19.34

(a)			In the 2021 Successor Period and 2021 Successor Quarter, we recorded a net deferred tax liability of $49 million associated with the acquisition of Vine Energy, Inc. As a result of recording this net deferred tax liability through business combination accounting, we released a corresponding amount of the valuation allowance that we maintain against our net deferred tax asset position. This release resulted in an income tax benefit of $49 million.
(b)			The 2021 Successor Period includes a tax effect attributed to the 2021 Successor Third Quarter reconciling adjustments using an estimated 2% annual effective tax rate. The 2021 Predecessor Period includes an income tax benefit of $57 million attributed to deferred income tax effects associated with Predecessor accumulated other comprehensive income, eliminated in fresh start accounting. The 2020 Predecessor Period includes a tax effect attributed to the 2020 Predecessor First Quarter reconciling adjustments using an estimated 0.14% annual effective tax rate.

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RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDAX (unaudited)

						Successor									Predecessor
						Three Months Ended December 31, 2021									Three Months Ended December 31, 2020
($ in millions)
Net income (loss) (GAAP)						$	1,434								$	(416)
Adjustments:
Interest expense						26									24
Income tax benefit						(39)									(6)
Depreciation, depletion and amortization						340									166
Exploration						3									10
Unrealized gains on oil and natural gas derivatives						(1,163)									(45)
Separation and other termination costs						—									1
Gains on sales of assets						(3)									(29)
Other operating expense, net						89									11
Impairments						—									13
Reorganization items, net						—									579
Other						—									(4)
Adjusted EBITDAX (Non-GAAP)						$	687								$	304

						Successor									Predecessor						Non-GAAP Combined						Predecessor
						Period from February 10, 2021 through December 31, 2021									Period from January 1, 2021 through February 9, 2021						Year Ended December 31, 2021						Year Ended December 31, 2020
($ in millions)
Net income (loss) (GAAP)						$	945								$	5,383					$	6,328					$	(9,750)
Adjustments:
Interest expense						73									11						84						331
Income tax benefit						(49)									(57)						(106)						(19)
Depreciation, depletion and amortization						919									72						991						1,097
Exploration						7									2						9						427
Unrealized (gains) losses on oil and natural gas derivatives						(41)									369						328						259
Separation and other termination costs						11									22						33						44
Gains on sales of assets						(12)									(5)						(17)						(30)
Other operating expense (income), net						93									(12)						81						79
Impairments						1									—						1						8,535
Gains on purchases or exchanges of debt						—									—						—						(65)
G&A reorganization expenses						—									—						—						43
Reorganization items, net						—									(5,569)						(5,569)						796
Other						(18)									—						(18)						17
Adjusted EBITDAX (Non-GAAP)						$	1,929								$	216					$	2,145					$	1,764

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ADJUSTED FREE CASH FLOW

						Successor									Predecessor
						Three Months Ended December 31, 2021									Three Months Ended December 31, 2020
($ in millions)
Net cash provided by operating activities (GAAP)						$	563								$	9
Cash paid for reorganization items, net						—									22
Cash paid for acquisition costs						74									—
Capital expenditures						(265)									(169)
Adjusted free cash flow (Non-GAAP)						$	372								$	(138)

						Successor									Predecessor						Non-GAAP Combined						Predecessor
						Period from February 10, 2021 through December 31, 2021									Period from January 1, 2021 through February 9, 2021						Year Ended December 31, 2021						Year Ended December 31, 2020
($ in millions)
Net cash provided by (used in) operating activities (GAAP)						$	1,809								$	(21)					$	1,788					$	1,164
Cash paid for reorganization items, net						65									66						131						140
Cash paid for acquisition costs						74									—						74						—
Capital expenditures						(669)									(66)						(735)						(1,142)
Adjusted free cash flow (Non-GAAP)						$	1,279								$	(21)					$	1,258					$	162

NET DEBT

						Successor
						December 31, 2021
($ in millions)
Total debt (GAAP)						$	2,278
Premiums and issuance costs on debt						(107)
Principal amount of debt						2,171
Cash and cash equivalents						905
Net debt (Non-GAAP)						$	1,266

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