USA: Chesapeake Reports Financial and Operational Results for the 2010 Fourth Quarter and Full Year

Chesapeake Energy Corporation announced financial and operational results for the 2010 fourth quarter and full year.

For the 2010 fourth quarter, Chesapeake reported net income to common stockholders of $180 million ($0.28 per fully diluted common share) and operating cash flow (defined as cash flow from operating activities before changes in assets and liabilities) of $1.186 billion on revenue of $1.975 billion and production of 269 billion cubic feet of natural gas equivalent (bcfe). For the 2010 full year, Chesapeake reported net income to common stockholders of $1.663 billion ($2.51 per fully diluted common share) and operating cash flow of $4.548 billion on revenue of $9.366 billion and production of 1.035 trillion cubic feet of natural gas equivalent (tcfe).

The company’s 2010 fourth quarter and full year results include realized natural gas and oil hedging gains of $571 million and $2.056 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 2010 fourth quarter, Chesapeake reported adjusted net income to common stockholders of $478 million ($0.70 per fully diluted common share) and adjusted ebitda of $1.274 billion and, for the 2010 full year, Chesapeake reported adjusted net income to common stockholders of $1.971 billion ($2.95 per fully diluted common share) and adjusted ebitda of $5.083 billion. The excluded items and their effects on the 2010 fourth quarter and full year reported results are detailed as follows:

* a net unrealized after-tax mark-to-market loss of $392 million for the 2010 fourth quarter and $364 million for the full year resulting from the company’s natural gas, oil and interest rate hedging programs;

* a net after-tax gain of $95 million for the 2010 fourth quarter and $84 million for the full year related to the sale of certain of the company’s fixed assets;

* an after-tax gain of $74 million for the full year associated with certain equity investments where the investee sold additional equity to third parties at a price in excess of the company’s basis;

* an after-tax loss of $80 million for the full year related to the redemption or exchange of certain of the company’s senior notes;

* an after-tax charge of $1 million for the 2010 fourth quarter and $22 million for the full year for the impairment of certain of the company’s assets.

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Source: Chesapeake, February 23, 2011;