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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Reclassifications Certain reclassifications have been made to our consolidated financial statements for 2014 and 2013 to conform to the presentation used for the 2015 consolidated financial statements. Beginning in the fourth quarter of 2015, we have reclassified our presentation of third party transportation and gathering costs to report the costs as a component of operating expenses in the accompanying statements of operations. Previously, these costs were reflected as deductions to oil, natural gas and NGL sales. The net effect of this reclassification did not impact our previously reported net income, stockholders’ equity or cash flows; however, previously reported oil, natural gas and NGL sales have increased from the amounts previously reported, and total operating expenses have increased by those same amounts. The following table reflects the reclassifications made:

Oil, natural gas and NGL sales, previously reported................................. Reclassification of oil, natural gas and NGL gathering, processing and transportation expenses ........................................................................ Oil, natural gas and NGL sales, as currently reported........................

$

$

Years Ended December 31, 2014 2013 $ in millions 8,180 $ 7,052 2,174 10,354

$

1,574 8,626

The corresponding amounts have been reflected in oil, natural gas and NGL gathering, processing and transportation expenses for 2014 and 2013 as shown below: Years Ended December 31, 2014 2013 $ in millions Oil, natural gas and NGL gathering, processing and transportation expenses, previously reported ............................................................... Reclassification of oil, natural gas and NGL gathering, processing and transportation expenses ........................................................................ Oil, natural gas and NGL gathering, processing and transportation expenses, as currently reported ......................................................

$

$

2,174 $

2,174

— 1,574

$

1,574

In November 2015, the FASB issued an accounting standards update, which requires deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. This standards update is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted and we elected to adopt the updated standard effective December 31, 2015. This change in accounting principle is preferable since the current presentation does not generally align with the time period in which the deferred tax amounts are expected to be recognized. A retrospective change to the December 31, 2014 consolidated balance sheet as previously presented is required pursuant to this updated standard. We retrospectively adjusted the December 31, 2014 consolidated balance sheet and reclassified $207 million of our current deferred income tax liabilities to noncurrent deferred income tax liabilities.

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Profile for Chesapeake Energy

2015 Annual Report  

2015 Annual Report