Page 99

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) the specified period in the fourth quarter of 2015, the price of our common stock was below the threshold level for each series of the contingent convertible senior notes and, as a result, the holders do not have the option to convert their notes into cash and common stock in the first quarter of 2016 under this provision. The notes are also convertible, at the holder’s option, during specified five-day periods if the trading price of the notes is below certain levels determined by reference to the trading price of our common stock. The notes were not convertible under this provision during the years ended December 31, 2015, 2014 or 2013. In general, upon conversion of a contingent convertible senior note, the holder will receive cash equal to the principal amount of the note and common stock for the note’s conversion value in excess of the principal amount. Contingent Interest. We will pay contingent interest on the convertible senior notes after they have been outstanding at least ten years during certain periods if the average trading price of the notes exceeds the threshold defined in the indenture. The holders’ demand repurchase dates, the common stock price conversion threshold amounts (as adjusted to give effect to cash dividends on our common stock) and the ending date of the first six-month period in which contingent interest may be payable for the contingent convertible senior notes are as follows: Contingent Convertible Senior Notes 2.75% due 2035 2.5% due 2037 2.25% due 2038

Holders' Demand Repurchase Dates November 15, 2020, 2025, 2030 May 15, 2017, 2022, 2027, 2032 December 15, 2018, 2023, 2028, 2033

Common Stock Price Conversion Thresholds $ 45.02 $ 59.44 $ 100.20

Contingent Interest First Payable (if applicable) May 14, 2016 November 14, 2017 June 14, 2019

Optional Redemption by the Company. We may redeem the contingent convertible senior notes once they have been outstanding for ten years at a redemption price of 100% of the principal amount of the notes, payable in cash. (d)

Discount as of December 31, 2015 and 2014 included $133 million and $224 million, respectively, associated with the equity component of our contingent convertible senior notes. This discount is amortized based on an effective yield method.

(e)

See Interest Rate Derivatives in Note 11 for further discussion related to these instruments.

(f)

As of December 31, 2015, current maturities of long-term debt, net includes the carrying amount of our 3.25% Senior Notes due March 2016. As of December 31, 2014, there was $15 million of discount associated with the equity component of the 2.75% Contingent Convertible Senior Notes due 2035. As discussed in footnote (c) above, holders of our 2.75% Contingent Convertible Senior Notes due 2035 exercised their demand repurchase rights on November 15, 2015, which required us to repurchase such holders’ notes.

Total principal amount of debt maturities, using the earliest demand repurchase date for contingent convertible senior notes, for the five years ended after December 31, 2015 and thereafter are as follows:

2016 ............................................................................................................................... 2017 ............................................................................................................................... 2018 ............................................................................................................................... 2019 ............................................................................................................................... 2020 ............................................................................................................................... 2021 and thereafter ........................................................................................................ Total .......................................................................................................................

94

Principal Amount of Debt Securities ($ in millions) $ 381 1,892 878 1,104 1,128 4,323 $ 9,706

Profile for Chesapeake Energy

2015 Annual Report  

2015 Annual Report