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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
119
The following table presents the pre-tax gain (loss) recognized in, and reclassified from, accumulated other
comprehensive income (AOCI) related to instruments designated as cash flow derivatives:
Years Ended December 31,
Cash Flow Derivatives Location of Gain (Loss) 2013 2012 2011
($ in millions)
Gain (Loss) Recognized in AOCI
(Effective Portion):
Commodity contracts................................ AOCI $ — $ — $ 392
Foreign currency contracts ....................... AOCI 3 10 (24)
$ 3 $ 10 $ 368
Gain (Loss) Reclassified from AOCI
(Effective Portion):
Commodity contracts................................ Natural gas, oil and NGL sales $ (32) $ 27 $ 402
Foreign currency contracts ....................... Interest expense — — (18)
Foreign currency contacts ........................ Loss on purchase of debt — — (20)
$ (32) $ 27 $ 364
Gain (Loss) Recognized in Income:
Ineffective portion ..................................... Natural gas, oil and NGL sales $ — $ — $ (7)
Amount initially excluded from
effectiveness testing.............................. Natural gas, oil and NGL sales — — 22
$ — $ — $ 15
Undesignated Derivatives. The following table presents the gain (loss) recognized in our consolidated
statements of operations for instruments not designated as either cash flow or fair value hedges:
Years Ended December 31,
Derivative Contracts Location of Gain (Loss) 2013 2012 2011
($ in millions)
Commodity contracts ...................................... Natural gas, oil and NGL $ 159 $ 892 $ 348
Interest rate contracts ..................................... Interest expense (63) (1) (12)
Total ............................................................................................................... $ 96 $ 891 $ 336
Credit Risk
Over-the-counter traded derivative instruments expose us to our counterparties’ credit risk. To mitigate this risk,
we enter into derivative contracts only with counterparties that are rated investment-grade and deemed by management
to be competent and competitive market makers, and we attempt to limit our exposure to non-performance by any
single counterparty. As of December 31, 2013, our natural gas, oil and interest rate derivative instruments were spread
among 16 counterparties.