Chesapeake Energy 2000 Annual Report Download - page 93
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(e) Basic and diluted earnings per share have been calculated assuming the transaction was consummated at
the beginning of the period and are calculated as follows (in 000's):
To eliminate dividends on Gothic's preferred stock held by Chesapeake.
To eliminate interest expense related to the Gothic senior discount notes and Gothic Production senior
secured notes acquired by Chesapeake.
To reclassify overhead reimbursements recognized by Gothic as operator of certain oil and gas properties
and reported as well operations revenue. These reimbursements have been reclassified as a reduction to general and
administrative expenses to conform with Chesapeake's presentation of similar reimbursements.
To record the remaining financing fees (net of income tax) incurred by Chesapeake to establish a standby
credit facility to fund purchases of Gothic Production senior secured notes tendered after the merger pursuant to a
change-of-control offer to purchase the notes at 101% principal amount. The standby credit facility was not utilized,
and therefore the associated fees were expensed when the holders' change-of-control put options expired in
February 2001. Chesapeake incurred $2.8 million in financing fees prior to December 31, 2000 and $0.4 million
subsequent thereto.
To record the purchase of $1.0 million principal amount of Gothic Production senior secured notes which
were tendered pursuant to the post-acquisition change-of-control offer to purchase at 101%. These notes were
adjusted to their market value of 106% in the purchase price allocation (see note a). The gain on extinguishment is
tax effected.
To adjust the purchase price allocation and accrued merger-related costs for $1.24 million incurred
through December 31, 2000. This amount includes $913 thousand paid by Chesapeake, included in Other Assets,
and $336 thousand paid and expensed by Gothic.
(1) To record amortization of the 6% premium on remaining Gothic senior secured notes held by third parties.
-82-
Year Ended
December 31, 2000
Chesapeake's basic shares outstanding (as reported) 128,993
Adjustment to reflect issuance of common stock to acquire Gothic debt at January 1,
2000 6,543
Issuance of common stock to Gothic - merger consideration 4,000
Basic shares outstanding as adjusted 139,536
Chesapeake's diluted shares outstanding (as reported) 151,564
Adjustment to reflect issuance of common stock to acquire Gothic debt at January 1,
2000 6,543
Issuance of common stock to Gothic merger consideration 4,000
Diluted shares outstanding - as adjusted 162,107