Chesapeake Energy 1993 Annual Report Download - page 33

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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The effective income tax rate differed from the computed 'expected" federal income tax rate on earnings
before income taxes for the following reasons:
Years Ended June 30,
Deferred income taxes are provided to reflect temporary differences in the basis of net assets for income
tax and financial reporting purposes. The tax effected temporary differences and tax loss carryforwards which
comprise deferred taxes are as follows:
Years Eflded June 30,
23
At June 30, 1993 the Company had an operating loss carryforward of approximately $15.7 million for
income tax purposes, available to offset future income taxes payable to the extent regular income taxes
payable exceeds alternative minimum taxes payable. These loss carryforward amounts will expire during
2007 and 2008;
6. RELATED PARTY TRANSACTIONS
Certain directors, shareholders and employees of the Company have acquired working interests in
certain of the Company's oil and gas properties. The owners of such working interests are required to pay
their proportionate share of all costs. As of June 30, 1993, 1992 and 1991 the Company had accounts
receivable from these directors, shareholders, and employees of $1,580,000, $0, and $4,710,000. The
aggregate average receivable balance due from these parties for fiscal 1993, 1992, and 1991 approximated
$1,153,000, $3,779,000, and $4,795,O00, respectively.
A director serves as general counsel to the Company. During Fiscal 1993, 1992, and 1991, the Company
incurred legal expenses of $723,000, $507,000, and $132,000, respectively,for legal services provided by the
law firm of which the.director isa member.
The Company has assigned carried interests in oil and gas properties to certain of its employees and.
consultants. During fiscal 1992, the Company ceased assigning such interests.
Effective July ,1, 1990, CI and TLW were engaged as consultants to the Company at a monthly fee of
$8,333 to each, of CI and TLW, through June 30, 1991 and $10,000 each month thereafter. The Company
recorded $200,000 and $240,000 as general and administrative expense in the accompanying statements of
operations during fiscal 1991 and 1992, respectively, related to these consulting arrangements. In the June
30, 1992 consolidated balance sheet, the Company recorded a total of $160,000 payable to CI and TLW
related to their consulting services. The consulting engagement terminated on July 1, 1992.
Beginning in January 1990, the Company leased two of its office buildings from CI and TLW at aggregate
monthly rentals ranging from $2,000 to $20,000. During fiscal 1991 and 1992, the company recorded
1993 1992. 1991
(I in thousands,)
Computed "expected" income tax provision (benefit) ($158) $927 $240
Partnership operations prior to the Combination -. 299
Other 59 111 3
($ 99) $1,337 $243
1993 1992 1991
($ in thousands)
Accelerated depreciation, depletion and
amortization of intangible drilling costs ($6,295) ($2,449). ($163).
Tax loss carryforwards 5,332 1,387
TotalNoncurrent ($ 963) ($1062) ($163)