Form 8-K CHESAPEAKE ENERGY CORP For: May 11

May 11, 2021 4:06 PM EDT

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Exhibit 99.1
N E W S   R E L E A S E
chesapeakelogocolora401.jpg
FOR IMMEDIATE RELEASE
MAY 11, 2021
CHESAPEAKE ENERGY CORPORATION REPORTS 2021 FIRST QUARTER RESULTS, INITIATES COMMON STOCK DIVIDEND AND ANNOUNCES UPDATED GUIDANCE
OKLAHOMA CITY, May 11, 2021 – Chesapeake Energy Corporation (NASDAQ:CHK) today reported 2021 first quarter results, launched a cash dividend program based on strong operating cash flow performance and announced its updated 2021 guidance. Highlights include:
Successor net income totaled $295 million, or $2.75 per diluted share
Generated adjusted EBITDAX (a non-GAAP measure) of $510 million for the combined 2021 Successor and Predecessor Periods (January 1, 2021 - March 31, 2021)
March 31, 2021 unrestricted cash balance of $340 million; reducing March 31, 2021 net debt (a non-GAAP measure) to adjusted 2021E EBITDAX ratio to 0.6x
Launched sustainable dividend at an initial annual rate of $1.375 per share to be paid quarterly beginning in the 2021 Second Quarter; base dividend built to withstand commodity price volatility with incremental cash return strategy to be defined by year end 2021
Increased five-year cumulative free cash flow (a non-GAAP measure) outlook to ~$3 billion
Mike Wichterich, Chesapeake’s Board Chairman and Interim Chief Executive Officer, commented, “Our strong first quarter results demonstrate the significant value creating opportunities that lie ahead for Chesapeake. We are committed to returning meaningful cash to our shareholders and are pleased to announce a highly competitive dividend that is built to withstand commodity price cycles. With our talented employees, pristine balance sheet, operational leadership, and free cash flow outlook, I firmly believe Chesapeake is poised to deliver differential returns to our shareholders.”
Dividend Policy and Balance Sheet Update
Following Chesapeake’s emergence from Chapter 11 restructuring proceedings, the company generated $409 million of operating cash flow and ended the quarter with $340 million of unrestricted cash on hand. As of April 30, 2021, Chesapeake had approximately $500 million of unrestricted cash on hand. With the company’s strong liquidity position and free cash flow generation, Chesapeake's Board of Directors has declared an annual dividend on its common shares of $1.375 per share. The dividend will be paid quarterly, with the first such payment to be payable on June 10, 2021 to shareholders of record at the close of business on May 24, 2021.
Operations Update
Chesapeake achieved an average net production rate of approximately 436,000 barrels of oil equivalent per day (approximately 77 percent natural gas and 23 percent total liquids) during the 2021 first quarter. Chesapeake is currently operating seven rigs across its portfolio, with three rigs in Appalachia, three rigs in Haynesville and one rig in South Texas.
Fresh Start Accounting and Predecessor and Successor Periods
In connection with our emergence from bankruptcy on February 9, 2021, Chesapeake qualified for and applied fresh start accounting. In applying fresh start accounting, Chesapeake allocated its reorganization value to its individual assets based on their estimated fair values. Accordingly, the consolidated financial statements after February 9, 2021 are not comparable with the consolidated financial statements as of or prior to that date. References to "Successor" refer to the post-emergence reorganized Chesapeake after February 9, 2021, and references to "Predecessor" refer to pre-emergence Chesapeake for periods on or before February 9, 2021.
INVESTOR CONTACT:MEDIA CONTACT:CHESAPEAKE ENERGY CORPORATION
Brad Sylvester, CFA
(405) 935-8870
ir@chk.com
Gordon Pennoyer
(405) 935-8878
media@chk.com
6100 North Western Avenue
P.O. Box 18496
Oklahoma City, OK 73154


Outlook and Guidance Update
Today, Chesapeake released its first complete post-restructuring guidance and outlook for the full year 2021, including full-year cost estimates and projections for production and capital expenditures. In addition, the company announced that it expects total production levels in 2022 to remain flat to 2021, with natural gas increasing to approximately 85% of the total production mix for 2022.
Conference Call Information
Chesapeake will conduct a conference call to discuss these results on Wednesday, May 12, 2021 at 9:00 am EDT. The telephone number to access the conference call is 888-317-6003 or 412-317-6061 for international callers. The passcode for the call is 2667856.
Financial Statements and Guidance Documents
The company’s 2021 first quarter financial and operational results, along with non-GAAP measures that adjust for items that are typically excluded by securities analysts, and management’s updated guidance for the remainder of 2021 are available on our website at www.chk.com.
Non-GAAP Disclosures
This news release includes non-GAAP financial measures. Such non-GAAP measures should be not considered as an alternative to GAAP measures. Reconciliations of these non-GAAP measures and other disclosures are provided with the supplemental financial tables available on our website at www.chk.com.
Headquartered in Oklahoma City, Chesapeake Energy Corporation's (NASDAQ: CHK) operations are focused on discovering and responsibly developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States.
Forward-Looking Statements
This news release and the accompanying outlook include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other than statements of historical fact. They include statements that give our current expectations, management's outlook guidance or forecasts of future events, expected natural gas and oil growth trajectory, projected cash flow and liquidity, our ability to enhance our cash flow and financial flexibility, dividend plans, future production and commodity mix, plans and objectives for future operations, the ability of our employees, portfolio strength and operational leadership to create long-term value, and the assumptions on which such statements are based. Although we believe the expectations and forecasts reflected in the forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate or changed assumptions or by known or unknown risks and uncertainties.
Factors that could cause actual results to differ materially from expected results include those described under "Risk Factors" in Item 1A of our annual report on Form 10-K and any updates to those factors set forth in Chesapeake's subsequent quarterly reports on Form 10-Q or current reports on Form 8-K (available at http://www.chk.com/investors/sec-filings). These risk factors include: the impact of the COVID-19 pandemic and its effect on the company's business, financial condition, employees, contractors and vendors, and on the global demand for oil and natural gas and U.S. and world financial markets; the volatility of oil, natural gas and NGL prices; the limitations our level of indebtedness may have on our financial flexibility; our inability to access the capital markets on favorable terms; the availability of cash flows from operations and other funds to fund cash dividends, to finance reserve replacement costs or satisfy our debt obligations; write-downs of our oil and natural gas asset carrying values due to low commodity prices; our ability to replace reserves and sustain production; uncertainties inherent in estimating quantities of oil, natural gas and NGL reserves and projecting future rates of production and the amount and timing of development expenditures; our ability to generate profits or achieve targeted results in drilling and well operations; leasehold terms expiring before production can be established; commodity derivative activities resulting in lower prices realized on oil, natural gas and NGL sales; the need to secure derivative liabilities and the inability of counterparties to satisfy their obligations; adverse developments or losses from pending or future litigation and regulatory proceedings, including royalty claims; charges incurred in response to market conditions; drilling and operating risks and resulting liabilities; effects of environmental protection laws and regulations on our business; legislative and regulatory initiatives further regulating hydraulic fracturing; our need to secure adequate supplies of water for our drilling operations and to dispose of or recycle the water used; impacts of
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potential legislative and regulatory actions addressing climate change; federal and state tax proposals affecting our industry; potential OTC derivatives regulation limiting our ability to hedge against commodity price fluctuations; competition in the oil and gas exploration and production industry; a deterioration in general economic, business or industry conditions; negative public perceptions of our industry; limited control over properties we do not operate; pipeline and gathering system capacity constraints and transportation interruptions; terrorist activities and cyber-attacks adversely impacting our operations; and an interruption in operations at our headquarters due to a catastrophic event.
In addition, disclosures concerning the estimated contribution of derivative contracts to our future results of operations are based upon market information as of a specific date. These market prices are subject to significant volatility. Our production forecasts are also dependent upon many assumptions, including estimates of production decline rates from existing wells and the outcome of future drilling activity. We caution you not to place undue reliance on our forward-looking statements that speak only as of the date of this news release, and we undertake no obligation to update any of the information provided in this release, except as required by applicable law. In addition, this news release contains time-sensitive information that reflects management's best judgment only as of the date of this news release.

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Exhibit 99.2
CHESAPEAKE ENERGY CORPORATION - SUPPLEMENTAL TABLES
1


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
SuccessorPredecessor
Period from February 10, 2021 through March 31, 2021Period from January 1, 2021 through February 9, 2021Three Months Ended
March 31, 2020
($ in millions except per share data)
Revenues and other:
Oil, natural gas and NGL$553 $398 $894 
Marketing277 239 724 
Oil and natural gas derivatives46 (382)907 
Gains on sales of assets— 
Total revenues and other880 260 2,525 
Operating expenses:
Production40 32 122 
Gathering, processing and transportation111 102 285 
Severance and ad valorem taxes24 18 54 
Exploration282 
Marketing280 237 746 
General and administrative15 21 65 
Separation and other termination costs— 22 
Depreciation, depletion and amortization122 72 603 
Impairments— — 8,522 
Other operating expense (income), net(12)68 
Total operating expenses595 494 10,752 
Income (loss) from operations285 (234)(8,227)
Other income (expense):
Interest expense(12)(11)(145)
Gains on purchases or exchanges of debt— — 63 
Other income (expense)22 (17)
Reorganization items, net— 5,569 — 
Total other income (expense)10 5,560 (99)
Income (loss) before income taxes295 5,326 (8,326)
Income tax benefit
— (57)(13)
Net income (loss)295 5,383 (8,313)
Net loss attributable to noncontrolling interests— — 16 
Net income (loss) attributable to Chesapeake295 5,383 (8,297)
Preferred stock dividends— — (22)
Net income (loss) available to common stockholders$295 $5,383 $(8,319)
Earnings (loss) per common share:
Basic$3.01 $550.35 $(852.97)
Diluted$2.75 $534.51 $(852.97)
Weighted average common shares outstanding (in thousands):
Basic97,907 9,781 9,753 
Diluted107,159 10,071 9,753 

2



CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
SuccessorPredecessor
($ in millions)March 31,
2021
December 31,
2020
Assets
Current assets:
Cash and cash equivalents$340 $279 
Restricted cash68 — 
Accounts receivable, net704 746 
Short-term derivative assets19 
Other current assets74 64 
Total current assets1,190 1,108 
Property and equipment:
Oil and natural gas properties, successful efforts method
     Proved oil and natural gas properties 4,748 25,734 
     Unproved properties 483 1,550 
     Other property and equipment 491 1,754 
Total property and equipment5,722 29,038 
Less: accumulated depreciation, depletion and amortization(120)(23,806)
Property and equipment held for sale, net10 
Total property and equipment, net5,604 5,242 
Long-term derivative assets— 
Other long-term assets108 234 
Total assets$6,904 $6,584 
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable$346 $346 
Current maturities of long-term debt, net— 1,929 
Accrued interest11 
Short-term derivative liabilities 305 93 
Other current liabilities781 723 
Total current liabilities1,443 3,094 
Long-term debt, net1,262 — 
Long-term derivative liabilities76 44 
Asset retirement obligations, net of current portion237 139 
Other long-term liabilities
Liabilities subject to compromise— 8,643 
Total liabilities3,023 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: 97,907,081 and 0 shares issued— 
Successor additional paid-in capital3,585 — 
Retained earnings (accumulated deficit)295 (23,954)
Total stockholders’ equity (deficit)3,881 (5,341)
Total liabilities and stockholders’ equity (deficit)$6,904 $6,584 
3


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
SuccessorPredecessor
 Period from February 10, 2021 through March 31, 2021Period from January 1, 2021 through February 9, 2021Three Months Ended
March 31, 2020
($ in millions)
Cash flows from operating activities:
Net income (loss)$295 $5,383 $(8,313)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation, depletion and amortization122 72 603 
Deferred income tax benefit— (57)(10)
Derivative (gains) losses, net(46)382 (907)
Cash receipts (payments) on derivative settlements, net(32)(17)89 
Stock-based compensation— 
Gains on sales of assets(4)(5)— 
Impairments— — 8,522 
Non-cash reorganization items, net— (6,680)— 
Exploration— 279 
Gains on purchases or exchanges of debt— — (63)
Other45 31 
Changes in assets and liabilities70 851 161 
Net cash provided by (used in) operating activities409 (21)397 
Cash flows from investing activities:
Capital expenditures(77)(66)(518)
Proceeds from divestitures of property and equipment— 
Net cash used in investing activities(73)(66)(511)
Cash flows from financing activities:
Proceeds from Exit Credit Facility - Tranche A Loans30 — — 
Payments on Exit Credit Facility - Tranche A Loans(80)(479)— 
Proceeds from pre-petition revolving credit facility borrowings— — 2,331 
Payments on pre-petition revolving credit facility borrowings— — (2,021)
Payments on DIP Facility borrowings— (1,179)— 
Proceeds from issuance of senior notes, net— 1,000 — 
Proceeds from issuance of common stock— 600 — 
Debt issuance and other financing costs(3)(8)— 
Cash paid to purchase debt — — (93)
Cash paid for preferred stock dividends— — (22)
Other— (1)(5)
Net cash provided by (used in) financing activities(53)(67)190 
Net increase (decrease) in cash, cash equivalents and restricted cash283 (154)76 
Cash, cash equivalents and restricted cash, beginning of period125 279 
Cash, cash equivalents and restricted cash, end of period$408 $125 $82 
Cash and cash equivalents$340 $39 $82 
Restricted cash68 86 — 
Total cash, cash equivalents and restricted cash$408 $125 $82 
4


OIL, NATURAL GAS AND NGL PRODUCTION AND AVERAGE SALES PRICES (unaudited)
Successor
Period from February 10, 2021 through March 31, 2021
 OilNatural GasNGLTotal
 MBbl
per day
$/BblMMcf
per day
$/McfMBbl
per day
$/BblMBoe
per day
$/Boe
Appalachia— — 1,283 2.53 — — 214 15.21 
Gulf Coast— — 524 2.68 — — 87 16.09 
South Texas37 62.10 109 5.12 14 28.51 69 47.24 
Brazos Valley29 60.76 34 8.99 16.49 38 55.09 
Powder River Basin10 58.95 57 4.82 34.75 23 42.57 
Total76 61.19 2,007 2.89 21 27.20 431 25.57 
Predecessor
Period from January 1, 2021 through February 9, 2021
OilNatural GasNGLTotal
MBbl
per day
$/BblMMcf
per day
$/McfMBbl
per day
$/BblMBoe
per day
$/Boe
Appalachia— — 1,233 2.42 — — 206 14.49 
Gulf Coast— — 543 2.44 — — 90 14.62 
South Texas42 54.12 127 3.00 14 26.04 78 39.20 
Brazos Valley32 52.37 38 1.14 16.09 42 42.23 
Powder River Basin10 51.96 61 2.92 34.31 24 34.25 
Total84 53.21 2,002 2.45 22 25.92 440 22.63 
Non-GAAP Combined
Three Months Ended March 31, 2021
OilNatural GasNGLTotal
MBbl
per day
$/BblMMcf
per day
$/McfMBbl
per day
$/BblMBoe
per day
$/Boe
Appalachia— — 1,261 2.48 — — 210 14.90 
Gulf Coast— — 532 2.57 — — 89 15.42 
South Texas40 58.30 117 4.09 14 27.39 73 43.44 
Brazos Valley30 56.84 36 5.27 16.32 41 49.13 
Powder River Basin10 55.84 59 3.94 34.54 23 38.75 
Total80 57.45 2,005 2.69 22 26.62 436 24.25 
Average Realized Price46.23 2.70 26.62 22.20 
Predecessor
Three Months Ended March 31, 2020
 OilNatural GasNGLTotal
 MBbl
per day
$/BblMMcf
per day
$/McfMBbl
per day
$/BblMBoe
per day
$/Boe
Appalachia— — 976 1.97 — — 163 11.85 
Gulf Coast— — 556 1.68 — — 93 10.10 
South Texas63 48.53 159 2.18 19 11.71 108 33.38 
Brazos Valley41 46.30 69 0.60 5.26 61 32.55 
Powder River Basin17 43.23 89 1.84 13.30 38 26.01 
Retained assets121 46.93 1,849 1.86 34 10.71 463 20.53 
Mid-Continent44.75 49 2.24 14.06 16 23.38 
Total126 46.93 1,898 1.86 37 10.71 479 20.53 
Average Realized Price57.99 2.15 10.71 24.60 
5


GROSS MARGIN (unaudited)
SuccessorPredecessorNon-GAAP CombinedPredecessor
Period from February 10, 2021 through
March 31,
Period from
January 1, 2021 through
February 9,
Three Months Ended
March 31,
Three Months Ended
March 31,
2021202120212020
($ in millions, except per unit)$$/Boe$$/Boe$$/Boe$$/Boe
Appalachia
Oil, natural gas and NGL sales$163 $15.21 $119 $14.49 $282 $14.90 $175 $11.85 
Production expenses$0.50 $0.50 $0.50 $0.58 
Gathering, processing and transportation expenses42 $3.94 34 $4.17 76 $4.04 71 $4.83 
Severance and ad valorem taxes$0.09 $0.07 $0.08 $0.12 
Gross margin$115 $10.68 $80 $9.75 $195 $10.28 $93 $6.32 
Gulf Coast
Oil, natural gas and NGL sales$70 $16.09 $53 $14.62 $123 $15.42 $85 $10.10 
Production expenses$1.50 $1.12 10 $1.32 11 $1.30 
Gathering, processing and transportation expenses11 $2.45 11 $2.93 22 $2.67 51 $6.10 
Severance and ad valorem taxes$0.56 $0.54 $0.55 $0.66 
Gross margin$51 $11.58 $36 $10.03 $87 $10.88 $17 $2.04 
South Texas
Oil, natural gas and NGL sales$164 $47.24 $122 $39.20 $286 $43.44 $328 $33.38 
Production expenses14 $4.07 12 $3.90 26 $3.99 36 $3.62 
Gathering, processing and transportation expenses42 $11.99 42 $13.35 84 $12.63 109 $11.11 
Severance and ad valorem taxes$2.61 $2.53 17 $2.57 19 $1.94 
Gross margin$99 $28.57 $60 $19.42 $159 $24.25 $164 $16.71 
Brazos Valley
Oil, natural gas and NGL sales$108 $55.09 $71 $42.23 $179 $49.13 $180 $32.55 
Production expenses10 $4.99 $4.85 19 $4.93 27 $4.98 
Gathering, processing and transportation expenses$1.05 $1.92 $1.45 $1.56 
Severance and ad valorem taxes$3.71 $2.99 12 $3.38 16 $2.99 
Gross margin$89 $45.34 $54 $32.47 $143 $39.37 $128 $23.02 
Powder River Basin
Oil, natural gas and NGL sales$48 $42.57 $33 $34.25 $81 $38.75 $90 $26.01 
Production expenses$4.37 $3.37 $3.91 18 $5.28 
Gathering, processing and transportation expenses14 $12.65 12 $12.53 26 $12.59 35 $10.02 
Severance and ad valorem taxes$3.92 $2.88 $3.44 $2.76 
Gross margin$24 $21.63 $16 $15.47 $40 $18.81 $28 $7.95 
Mid-Continent
Oil, natural gas and NGL sales$— $— $— $— $— $— $36 $23.38 
Production expenses— $— — $— — $— 21 $13.95 
Gathering, processing and transportation expenses— $— — $— — $— 10 $6.45 
Severance and ad valorem taxes— $— — $— — $— $1.01 
Gross margin$— $— $— $— $— $— $$1.97 
6


CAPITAL EXPENDITURES ACCRUED (unaudited)
SuccessorPredecessorNon-GAAP CombinedPredecessor
Period from February 10, 2021 through
March 31, 2021
Period from
January 1, 2021 through
February 9, 2021
Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
($ in millions)
Drilling and completion capital expenditures:
Appalachia$39 $30 $69 $63 
Gulf Coast11 22 33 29 
South Texas134 
Brazos Valley154 
Powder River Basin— 83 
Retained assets59 61 120 463 
Mid-Continent— — — 
Total drilling and completion capital expenditures59 61 120 465 
Leasehold and additions to other PP&E— 13 
Capitalized interest
Total capital expenditures$61 $62 $123 $484 
7


OIL AND NATURAL GAS HEDGING POSITIONS AS OF APRIL 30, 2021
Crude Oil Swaps
Volume
(MMBbls)
Avg. NYMEX
Price of Swaps
Q2 2021(a)
4.8 $42.62 
Q3 20214.6 $42.62 
Q4 20214.3 $42.62 
Total 202113.7 $42.62 
Total 202211.2 $44.30 
Total 20231.9 $47.17 
Oil Basis Protection Swaps
Volume
(MMBbls)
Avg. NYMEX
plus/(minus)
Q2 2021(a)
0.6 $1.10 
Q3 20211.7 $0.45 
Q4 20211.7 $0.45 
Total 20214.0 $0.54 
Total 20222.0 $0.09 
Natural Gas Swaps
Volume
(Bcf)
Avg. NYMEX
Price of Swaps
Q2 2021(a)
135 $2.66 
Q3 2021127 $2.66 
Q4 2021115 $2.67 
Total 2021377 $2.66 
Total 2022249 $2.55 
Total 202345 $2.75 
Natural Gas Two-Way Collars
Volume
(Bcf)
Avg. NYMEX
Bought Put Price
Avg. NYMEX
Sold Call Price
Q2 2021(a)
$2.80 $3.29 
Q3 2021$2.80 $3.29 
Q4 2021$2.80 $3.29 
Total 202124 $2.80 $3.29 
Total 202296 $2.45 $2.88 
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Natural Gas Basis Protection Swaps
Volume
(Bcf)
Avg. NYMEX
plus/(minus)
Q2 2021(a)
50 $(0.66)
Q3 202150 $(0.78)
Q4 202134 $(0.33)
Total 2021134 $(0.62)
Total 202265 $(0.44)
Total 202323 $0.76 
____________________________________________
(a)Includes amounts settled in April and May 2021.
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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, 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)
SuccessorPredecessor
Period from
February 10, 2021 through
March 31, 2021
Period from
January 1, 2021 through
February 9, 2021
Three Months Ended
March 31, 2020
$$/Share$$/Share$$/Share
($ in millions, except per share data)
Net income (loss) available to common stockholders (GAAP)$295 $3.01 $5,383 $550.35 $(8,319)$(852.97)
Effect of dilutive securities— (0.26)— (14.84)— — 
Diluted income (loss) available to common stockholders (GAAP)$295 $2.75 $5,383 $534.51 $(8,319)$(852.97)
Adjustments:
Unrealized (gains) losses on oil, natural gas and NGL derivatives(113)(1.05)369 36.64 (729)(74.75)
Separation and other termination costs— — 22 2.18 0.51 
Gains on sales of assets(4)(0.04)(5)(0.50)— — 
Other operating expense (income)0.02 (12)(1.19)68 6.97 
Impairments— — — — 8,522 873.78 
Exploration expense - impairment of unproved properties— — — — 272 27.89 
Noncontrolling interests - impairment of unproved properties— — — — (16)(1.64)
Gains on purchases or exchanges of debt— — — — (63)(6.46)
Reorganization items, net— — (5,569)(552.97)— — 
Other(21)(0.20)— — 23 2.36 
Tax effect of adjustments(a)
— — (57)(5.66)(11)(1.13)
Adjusted net income (loss) available to common stockholders (Non-GAAP)
159 1.48 131 13.01 (248)(25.44)
Preferred stock dividends— — — — 22 2.26 
Total adjusted net income (loss) attributable to Chesapeake (Non-GAAP)
$159 $1.48 $131 $13.01 $(226)$(23.18)
(a)
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. 2020 Predecessor Period includes a deferred tax benefit attributed to the reconciling adjustments using a 0.14% effective tax rate.
11


RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDAX (unaudited)
SuccessorPredecessorNon-GAAP CombinedPredecessor
Period from February 10, 2021 through March 31, 2021Period from January 1, 2021 through February 9, 2021Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
($ in millions)
Net income (loss) (GAAP)$295 $5,383 $5,678 $(8,313)
Adjustments:
Interest expense12 11 23 145 
Income tax benefit— (57)(57)(13)
Depreciation, depletion and amortization122 72 194 603 
Exploration282 
Unrealized (gains) losses on oil, natural gas and NGL derivatives(113)369 256 (729)
Separation and other termination costs— 22 22 
Gains on sales of assets(4)(5)(9)— 
Other operating expense (income)(12)(10)68 
Impairments — — — 8,522 
Gains on purchases or exchanges of debt— — — (63)
Reorganization items, net— (5,569)(5,569)— 
Other(21)— (21)23 
Adjusted EBITDAX (Non-GAAP)$294 $216 $510 $530 

12


FREE CASH FLOW
SuccessorPredecessorNon-GAAP CombinedPredecessor
Period from February 10, 2021 through March 31, 2021Period from January 1, 2021 through February 9, 2021Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
($ in millions)
Net cash provided by (used in) operating activities (GAAP)$409 $(21)$388 $397 
Cash paid for reorganization items, net18 66 84 — 
Capital expenditures(77)(66)(143)(518)
Free cash flow (Non-GAAP)$350 $(21)$329 $(121)

NET DEBT
Successor
March 31, 2021
($ in millions)
Total debt (GAAP)$1,262 
Premiums and issuance costs on debt(41)
Principal amount of debt1,221 
Cash and cash equivalents(340)
Net debt (Non-GAAP)$881 
13
Exhibit 99.3
CHESAPEAKE ENERGY CORPORATION - MANAGEMENT’S OUTLOOK AS OF MAY 11, 2021

Chesapeake periodically provides guidance on certain factors that affect the company’s future financial performance.
Year Ending
12/31/2021
Total production:
Oil - mmbbls23.0 - 25.0
NGL - mmbbls6.5 - 8.5
Natural gas - bcf715 - 735
Total daily rate - mboe per day410 - 420
Estimated basis to NYMEX prices, based on 4/30/21 strip prices:
Oil - $/bbl($0.20) - ($0.60)
Natural gas - $/mcf($0.40) - ($0.50)
NGL - realizations as a % of WTI40% - 45%
Operating costs per boe of projected production:
Production expense$1.85 - $2.15
Gathering, processing and transportation expenses
$4.90 - $5.40
Oil - $/bbl$2.65 - $2.85
Natural Gas - $/mcf$0.90 - $1.00
Severance and ad valorem taxes$0.90 - $1.10
General and administrative(a)
$0.85 - $1.15
Depreciation, depletion and amortization expense
$5.00 - $6.00
Marketing net margin and Other ($ in millions)$0 - $10
Interest expense ($ in millions)(b)
$70 - $80
Cash taxes ($ in millions)$0 - $20
Adjusted EBITDAX, based on 4/30/21 strip prices ($ in millions)(c)
$1,550 - $1,650
Total capital expenditures ($ in millions)$670 - $740
(a)Includes ~$0.08/boe of expenses associated with stock-based compensation, which are recorded in general and administrative expenses in Chesapeake's Condensed Consolidated Statement of Operations.
(b)Includes ~$15 million of non-cash interest expense due to timing of interest payments in 2021.
(c)Adjusted EBITDAX is a non-GAAP measure used by management to evaluate the company's operational trends and performance relative to other oil and natural gas producing companies. Adjusted EBITDAX excludes certain items that management believes affect the comparability of operating results. The most directly comparable GAAP measure is net income (loss), but it is not possible, without unreasonable efforts, to identify the amount or significance of events or transactions that may be included in future GAAP net income (loss) but that management does not believe to be representative of underlying business performance. The company further believes that providing estimates of the amounts that would be required to reconcile forecasted adjusted EBITDAX to forecasted GAAP net income (loss) would imply a degree of precision that may be confusing or misleading to investors. Items excluded from net income to arrive at adjusted EBITDAX include interest expense, income taxes, depreciation, depletion and amortization expense, and exploration expense as well as one-time items or items whose timing or amount cannot be reasonably estimated.
1


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