Chesapeake Energy 1999 Annual Report Download - page 50

Download and view the complete annual report

Please find page 50 of the 1999 Chesapeake Energy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 87

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87

Comprehensive Income
In 1998, the Company adopted SFAS No. 130, Reporting Comprehensive Income. This statement establishes
rules for the reporting of comprehensive income and its components. Comprehensive income consists of net income
and foreign currency translation adjustments and is presented in the Consolidated Statements of Stockholders' Equity
(Deficit) and Comprehensive Income (Loss). The adoption of SFAS 130 had no impact on total stockholders'
equity. Prior year financial statements have been reclassified to conform to the SFAS 130 requirements. All balance
sheet accounts of foreign operations are translated into U.S. dollars at the year-end rate of exchange and statement of
operations items are translated at the weighted average exchange rates for theyear.
Rec1ass/ications
Certain reclassifications have been made to the consolidated fmancial statements for 1998, the Transition Period,
and fiscal 1997 to conform to the presentation used for the 1999 consolidated financial statements.
2. Senior Notes
On April 22, 1998, the Company issued $500 million principal amount of 9.625% Senior Notes due 2005
("9.625% Senior Notes"). The 9.625% Senior Notes are redeemable at the option of the Companyat any time on or
after May 1, 2002 at the redemption prices set forth in the indenture or at the make-whole prices, as set forth in the
indenture, if redeemed prior to May 1, 2002. The Company may also redeem at its optionup to $167 million of the
9.625% Senior Notes at 109.625% of their principal amount with the proceeds ofan equity offering completed prior
to May 1,2001.
On March 17, 1997, the Company issued $150 million principal amount of 7.875% Senior Notes due 2004
("7.875% Senior Notes"). The 7.875% Senior Notes are redeemable at the option of the Company at any time prior
to March 15, 2004 at the make-whole prices determined in accordance with the indenture.
Also on March 17, 1997, the Company issued $150 million principal amount of 8.5% Senior Notes due 2012
("8.5% Senior Notes"). The 8.5% Senior Notes are redeemable at the option of the Company at any time prior to
March 15, 2004 at the make-whole prices determined in accordance with the indenture and, on or after March 15,
2004 at the redemption prices set forth therein.
On April 9, 1996, the Company issued $120 million principal amount of 9.125% Senior Notes due 2006
("9.125% Senior Notes"). The 9.125% Senior Notes are redeemable at the option of the Company at any time prior
to April 15, 2001 at the make-whole prices determined in accordance with the indenture and, on or after April 15,
2001 at the redemption prices set forth therein.
On May 25, 1995, the Company issued $90 million principal amount of 10.5% Senior Notes due 2002 ("10.5%
Senior Notes"). In April 1998, the Company purchased all of its 10.5% Senior Notes for approximately $99 million.
The early retirement of these notes resulted in an extraordinary charge of $13.3 million.
The Company is a holding company and owns no operating assets and has no significant operations independent
of its subsidiaries. The Company's obligations under the 9.625% Senior Notes, the 9.125% Senior Notes, the
7.875% Senior Notes and the 8.5% Senior Notes have been filly and unconditionally guaranteed, on a joint and
several basis, by each of the Company's "Restricted Subsidiaries" (as defined in the respective indentures governing
the Senior Notes) (collectively, the "Guarantor Subsidiaries"). Each of the Guarantor Subsidiaries is a direct or
indirect wholly-owned subsidiary of the Company.
The senior note indentures contain certain covenants, including covenants limiting the Company and the
Guarantor Subsidiaries with respect to asset sales; restricted payments; the incurrence of additional indebtedness and
the issuance of preferred stock; liens; sale and leaseback transactions; lines of business; dividend and other payment
restrictions affecting Guarantor Subsidiaries; mergers or consolidations; and transactions with affiliates. The
Company is obligated to repurchase the 9.625% and 9.125% Senior Notes in the event of a change of control or
certain asset sales.
-40-