Chesapeake Energy 2013 Annual Report Download - page 126

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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
118
A consolidated summary of the effect of derivative instruments on our consolidated statements of operations for
the years ended December 31, 2013, 2012 and 2011 is provided below, separating fair value, cash flow and
undesignated derivatives.
Fair Value Hedges. The following table presents the gain (loss) recognized in our consolidated statements of
operations for terminated instruments that were designated as fair value derivatives:
Years Ended December 31,
Fair Value Derivatives Location of Gain (Loss) 2013 2012 2011
($ in millions)
Interest rate contracts...................... Interest expense $ 5 $ 8 $ 16
Cash Flow Hedges. A reconciliation of the changes in accumulated other comprehensive income (loss) in our
consolidated statements of stockholders’ equity related to our cash flow hedges is presented below.
Years Ended December 31,
2013 2012 2011
Before
Tax After
Tax Before
Tax After
Tax Before
Tax After
Tax
($ in millions)
Balance, beginning of period ................................. $ (304) $ (189) $ (287) $ (178) $ (291) $ (181)
Net change in fair value....................................... 32 10 6 368 228
(Gains) losses reclassified to income .................. 32 20 (27) (17) (364) (225)
Balance, end of period........................................... $ (269) $ (167) $ (304) $ (189) $ (287) $ (178)
Approximately $159 million of the $167 million of accumulated other comprehensive loss as of December 31,
2013 represents the net deferred loss associated with commodity derivative contracts that were previously designated
as cash flow hedges for which the hedged production is still expected to occur. These amounts will be recognized in
earnings in the month in which the originally forecasted hedged production occurs. As of December 31, 2013, we
expect to transfer approximately $23 million of net loss included in accumulated other comprehensive income to net
income (loss) during the next 12 months. The remaining amounts will be transferred by December 31, 2022. As of
December 31, 2013, none of our open commodity derivative instruments were designated as cash flow hedges.