Chesapeake Energy 2000 Annual Report Download - page 72

8. Major Customers and Segment Information
Sales to individual customers constituting 10% or more of total oil and gas sales were as follows:
Management believes that the loss of any of the above customers would not have a material impact on our
results of operations or our financial position.
Chesapeake has two reportable segments under SFAS No. 131 "Disclosures about Segments of an Enterprise
and Related Information" consisting of exploration and production, and marketing. The reportable segment
information can be derived from note 2 as Chesapeake Energy Marketing, Inc., which is our marketing segment, is
the only non-guarantor subsidiary for all periods presented. The geographic distribution of our revenue, operating
income and long-lived assets is summarized below:
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9. Stockholders' Equity and Stock-Based Compensation
During 1998, our Board of Directors approved the expenditure of up to $30 million to purchase our outstanding
common stock. During 1998, we purchased 8.5 million shares of common stock for an aggregate amount of $30
million pursuant to such authorization.
On April 28, 1998, we acquired by merger the Mid-Continent operations of DLB Oil & Gas, Inc. for $17.5
million in cash, 5 million shares of our common stock, and the assumption of $90 million in outstanding debt and
working capital obligations.
On April 22, 1998, we issued $230 million (4.6 million shares) of our 7% cumulative convertible preferred
stock, $50 per share liquidation preference, resulting in net proceeds to us of $223 million.
On March 10, 1998, we acquired Hugoton Energy Corporation pursuant to a merger by issuing 25.8 million
shares of our common stock in exchange for 100% of Hugoton's common stock.
In November 1999, the chief executive officer and the chief operating officer of Chesapeake tendered 2,320,107
shares of Chesapeake common stock in full satisfaction of two notes payable to Chesapeake Energy Marketing, Inc.
with a combined outstanding balance of $7.6 million. See note 6.
During 2000, Chesapeake entered into a number of unsolicited transactions whereby we issued 43.4 million
shares of our common stock, plus a cash payment of $8.3 million, in exchange for 3,972,363 shares of our preferred
stock. This reduced the liquidation amount of preferred stock outstanding by $198.6 million to $31.2 million, and
reduced the amount of preferred dividends in arrears by $22.9 million.
United
States Canada Combined
($ in thousands)
1998:
Revenue $369,968 $7,978 $377,946
Operating income (loss) (842,798) (13,399) (856,197)
Long-lived assets 617,431 77,185 694,616
1999:
Revenue $ 340,969 $ 13,977 $354,946
Operating income (loss) 103,188 4,332 107,520
Long-lived assets 648,841 104,146 752,987
2000:
Revenue $ 594,126 $ 33,826 $627,952
Operating income (loss) 259,828 18,941 278,769
Long-lived assets 1,163,952 109,548 1,273,500
($ in thousands)
1998 Koch Oil Company $30,564 12%
Aquila Southwest Pipeline Corporation $28,946 11%
1999 Aquila Southwest Pipeline Corporation $31,505 11%
2000 Aquila Southwest Pipeline Corporation $54,931 12%
Percent of
Year Ended December 31, Amount Oil and Gas Sales