This excerpt taken from the CHK 10-Q filed May 10, 2006.
Gain on Sale of Investment. In the Current Quarter, Chesapeake sold its investment in Pioneer Drilling Company (Pioneer) common stock, realizing proceeds of $158.9 million and a gain of $117.4 million. We owned 17% of the common stock of Pioneer, which we began acquiring in 2003.
Loss on Repurchases or Exchanges of Chesapeake Debt. We repurchased or exchanged Chesapeake debt in the Prior Quarter and incurred a loss in connection with the transaction. The following table shows the loss related to the transaction ($ in millions):
There were no repurchases or exchanges of Chesapeake debt in the Current Quarter.
Income Tax Expense. Chesapeake recorded income tax expense of $382.3 million in the Current Quarter, compared to income tax expense of $71.9 million in the Prior Quarter. Our effective income tax rate increased to 38% in the Current Quarter compared to 36.5% in the Prior Quarter. The increase in the Current Quarter reflected the impact state income taxes and permanent differences had on our overall effective rate. All 2005 income tax expense was deferred, and we expect most, if not all, of our 2006 income tax expense to be deferred.