Chesapeake Energy 2010 Annual Report Download - page 142

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Other Related Parties
During 2010, our 42%-owned affiliate, Chesapeake Midstream Partners, L.P. (CHKM), provided us natural
gas gathering and treating services in the ordinary course of business. In addition, there are agreements in
place whereby we support CHKM in various functions for which we are reimbursed. During 2010, our
transactions with CHKM included the following:
Year Ended
December 31, 2010
($ in millions)
Amounts paid to CHKM:
Gas gathering fees .................................................... $ 378
Amounts received from CHKM:
Compressor rentals ................................................... 48
Inventory purchases ................................................... 47
Other services provided(a) .............................................. 73
Total amounts received from CHKM .................................... $ 168
(a) Includes amounts received related to the General and Administrative Services and Reimbursement
Agreement, the Employee Secondment Agreement, the Shared Services Agreement and the Additional
Services and Reimbursement Agreement agreed to at the formation of the joint venture.
As of December 31, 2010, we had a net payable to CHKM of $45 million.
During 2010 and 2009, our 26%-owned affiliate, Frac Tech Holdings, LLC, provided us hydraulic fracturing
and other services in the ordinary course of business. During 2010 and 2009, we paid Frac Tech $89 million
and $43 million, respectively, for these services. As of December 31, 2010 and 2009 we had $30 million and $8
million, respectively, due Frac Tech for services provided and not yet paid.
7. Employee Benefit Plans
Our qualified 401(k) profit sharing plan (401(k) Plan) is the Chesapeake Energy Corporation Savings and
Incentive Stock Bonus Plan, which is open to employees of Chesapeake and all our subsidiaries except certain
employees of Chesapeake Appalachia, L.L.C. Eligible employees may elect to defer compensation through
voluntary contributions to their 401(k) Plan accounts, subject to plan limits and those set by the Internal
Revenue Service. Chesapeake matches employee contributions dollar for dollar (subject to a maximum
contribution of 15% of an employee’s annual salary and bonus compensation) with Chesapeake common stock
purchased in the open market. The company contributed $54 million, $48 million and $40 million to the 401(k)
Plan in 2010, 2009 and 2008, respectively.
Chesapeake also maintains a nonqualified deferred compensation plan, the Chesapeake Energy
Corporation Amended and Restated Deferred Compensation Plan (DC Plan). Prior to 2009, to be eligible to
participate in the DC Plan, an employee must have received annual compensation (base salary and bonus
combined in the prior 12 months) of at least $100,000, had a minimum of one year of service as a company
employee and have made the maximum contribution allowable under the 401(k) Plan. For employees with at
least five years of service as a company employee, the company matched employee contributions to the plan
in Chesapeake common stock. On January 1, 2009, the plan was amended to allow for participation for any
employees who received compensation (base salary only) of at least $150,000 and had an employment
agreement with the company. In addition, in 2009 and 2010 the company matched employee contributions with
Chesapeake common stock once the employee had at least three years of service as a company employee.
Chesapeake matches 100% of employee contributions up to 15% of base salary and bonus in the aggregate
for the DC Plan. In 2011, the company began matching contributions immediately upon an employee’s
participation in the DC Plan. The maximum compensation that can be deferred by employees under all
company deferred compensation plans, including the Chesapeake 401(k) plan, is a total of 75% of base salary
and 100% of performance bonus. We contributed $9 million, $7 million and $6 million to the DC Plan during
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