Chesapeake Reports 4Q and Full-Year 2009 Financial Results

Chesapeake announced financial results for the 2009 fourth quarter and full year. For the 2009 fourth quarter, Chesapeake reported a net loss to common shareholders of $530 million ($0.84 per fully diluted common share) and operating cash flow (defined as cash flow from operating activities before changes in assets and liabilities) of $1.212 billion on revenue of $2.222 billion and production of 241 billion cubic feet of natural gas equivalent (bcfe). For the 2009 full year, Chesapeake reported a net loss to common shareholders of $5.853 billion ($9.57 per fully diluted common share) and operating cash flow of $4.333 billion on revenue of $7.702 billion and production of 906 bcfe.

The company's 2009 fourth quarter and full year results include a realized natural gas and oil hedging gain of $544 million and $2.346 billion, respectively. The results also include various items that are typically not included in published estimates of the company's financial results by certain securities analysts. Excluding the items detailed below, for the 2009 fourth quarter, Chesapeake reported adjusted net income to common shareholders of $490 million ($0.77 per fully diluted common share) and adjusted ebitda of $1.256 billion. For the 2009 full year, Chesapeake generated adjusted net income to common shareholders of $1.585 billion ($2.55 per fully diluted common share) and adjusted ebitda of $4.407 billion. The excluded items and their effects on 2009 fourth quarter and full year reported results are detailed as follows:

  • a net non-cash unrealized after-tax mark-to-market loss of $126 million for 2009 fourth quarter and $311 million for the full year resulting from the company’s natural gas, oil and interest rate hedging programs;
  • a non-cash after-tax impairment charge of $875 million for the 2009 fourth quarter and $6.875 billion for the full year related to the carrying value of natural gas and oil properties under the full-cost method of accounting;
  • a non-cash combined after-tax impairment charge of $5 million for the 2009 fourth quarter and $80 million for the full year related primarily to certain midstream assets contributed to the newly formed midstream joint venture with Global Infrastructure Partners;
  • a non-cash after-tax impairment charge of $102 million for the full year related to certain investments;
  • a non-cash after-tax charge of $14 million for the 2009 fourth quarter and $25 million for the full year on exchanges of certain of the company’s contingent convertible senior notes for shares of common stock; and
  • a combined after-tax charge of $45 million for the 2009 full year related to restructuring and relocation costs related to the company’s Eastern Division, other workforce reduction costs and losses on the sales of certain gathering systems.
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