UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---

Form 10-Q

|ý    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 
|---------------------------------------------------------------------------------------------
|For the quarterly period ended March 31, 2004                                                
|OR                                                                                           
|o    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|For the transition period from  to                                                           

Commission File No. 333-40708

---

Chesapeake Funding LLC(Exact name of Registrant as specified in its charter)

|Delaware(State or other jurisdiction
of incorporation or organization)      |  | 51-0391968(I.R.S. Employer
Identification Number)
|--------------------------------------------------------------------------- |  | -------------------------------------------------
|940 Ridgebrook Road
Sparks, Maryland(Address of principal executive office) |  | 21152(Zip Code)                                  
|(410) 771-1900(Registrant's telephone number, including area code)         

---

Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes
ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). Yes o No ý



---



Chesapeake Funding LLC
Table of Contents

|        |  |                                                                                       |  | Page
|------- |  | ------------------------------------------------------------------------------------- |  | ----
|PART I  |  | Financial Information                                                                 |  |     
|Item 1. |  | Financial Statements                                                                  |  |     
|        |  | Condensed Statements of Income for the Three Months Ended March 31, 2004 and 2003     |  | 2   
|        |  | Condensed Balance Sheets as of March 31, 2004 and December 31, 2003                   |  | 3   
|        |  | Condensed Statements of Cash Flows for the Three Months Ended March 31, 2004 and 2003 |  | 4   
|        |  | Notes to Condensed Financial Statements                                               |  | 5   
|Item 2. |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 7   
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 13  
|Item 4. |  | Controls and Procedures                                                               |  | 13  
|PART II |  | Other Information                                                                     |  |     
|Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  | 13  
|        |  | Signatures                                                                            |  | 14  

---



FORWARD-LOOKING STATEMENTS

Forward-looking
statements in our public filings or other public statements are subject to known and unknown risks, uncertainties and other factors which may cause our actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on
various factors and were derived utilizing numerous important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements.
Forward-looking statements include information concerning our future financial performance, business strategy, projected plans and objectives. Statements preceded by, followed by or that otherwise
include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", "may increase", "may fluctuate" and similar expressions or future or conditional verbs such as
"will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. You should understand that the following important factors and assumptions could affect
our future results and could cause actual results to differ materially from those expressed in such forward-looking statements:



Other
factors and assumptions not identified above were also involved in the derivation of these forward-looking statements, and the failure of such other assumptions to be realized as well as other
factors may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our control.

You
should consider the areas of risk described above in connection with any forward-looking statements that may be made by us. Except for our ongoing obligations to disclose material information
under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events
unless required by law. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.

1

---





PART IFINANCIAL INFORMATION

Item 1. Financial Statements

Chesapeake Funding LLC
STATEMENTS OF INCOME
(In thousands)

|                                                                                      |                                                                           | Three Months Ended
March 31,
|------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ----------------------------
|
|Income:                                                                               |                                                                           |                             
|Income from investment in related party special unit of beneficial interest in leases |                                                                           | $                           
|                                                                                      |                                                                           |                             
|Expenses:                                                                             |                                                                           |                             
|                                                                                      | Interest expense                                                          |                             
|                                                                                      | Interest expense on mandatorily redeemable preferred membership interests |                             
|                                                                                      | Service fees to related party                                             |                             
|                                                                                      |                                                                           |                             
|                                                                                      |                                                                           | Total expenses              
|                                                                                      |                                                                           |                             
|Operating income                                                                      |                                                                           |                             
|Interest income                                                                       |                                                                           |                             
|                                                                                      |                                                                           |                             
|Income before income taxes                                                            |                                                                           |                             
|Income tax provision                                                                  |                                                                           |                             
|                                                                                      |                                                                           |                             
|Net income                                                                            |                                                                           | $                           
|                                                                                      |                                                                           |                             

See
Notes to Condensed Financial Statements.

2

---



Chesapeake Funding LLC
CONDENSED BALANCE SHEETS
(In thousands)

|                                      |                                                                          | March 31,
2004 |           | December 31,
2003 |  
|------------------------------------- | ------------------------------------------------------------------------ | -------------- | --------- | ----------------- | -
|Assets:                               |                                                                          |                |           |                   |  
|                                      | Cash and cash equivalents                                                |                | $         | 124,131           |  
|                                      | Restricted cash                                                          |                |           | 82,967            |  
|                                      | Income tax receivable                                                    |                |           |                  |  
|                                      | Special unit of beneficial interest in fleet receivables (related party) |                |           | 98,853            |  
|                                      | Other assets                                                             |                |           | 23,346            |  
|                                      | Special unit of beneficial interest in leases (related party)            |                |           | 3,366,569         |  
|                                      |                                                                          |                |           |                   |  
|Total assets                          |                                                                          | $              | 3,695,866 |                   | $
|                                      |                                                                          |                |           |                   |  
|Liabilities and members' equity       |                                                                          |                |           |                   |  
|Liabilities:                          |                                                                          |                |           |                   |  
|                                      | Accrued interest and income taxes payable                                |                | $         | 4,239             |  
|                                      | Deferred income taxes                                                    |                |           | 8,537             |  
|                                      | Medium-term notes                                                        |                |           | 2,412,263         |  
|                                      | Mandatorily redeemable preferred membership interests                    |                |           | 408,116           |  
|                                      | Variable funding notes                                                   |                |           | 195,000           |  
|                                      |                                                                          |                |           |                   |  
|Total liabilities                     |                                                                          |                | 3,028,155 |                   |  
|                                      |                                                                          |                |           |                   |  
|Members' equity:                      |                                                                          |                |           |                   |  
|                                      | Common membership interests, no par value                                |                |           | 398,335           |  
|                                      | Note receivable from common member                                       |                |           | (25,830           | )
|                                      | Retained earnings                                                        |                |           | 295,206           |  
|                                      |                                                                          |                |           |                   |  
|Total members' equity                 |                                                                          |                | 667,711   |                   |  
|                                      |                                                                          |                |           |                   |  
|Total liabilities and members' equity |                                                                          | $              | 3,695,866 |                   | $
|                                      |                                                                          |                |           |                   |  

See
Notes to Condensed Financial Statements.

3

---



Chesapeake Funding LLC
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)

|                                                                                  |                                                                                      | Three Months Ended
March 31,              |        
|--------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | ----------------------------------------- | -------
|
|Operating Activities                                                              |                                                                                      |                                           |        
|Net income                                                                        |                                                                                      | $                                         | 9,733  
|Adjustments to reconcile net income to net cash provided by operating activities: |                                                                                      |                                           |        
|                                                                                  | Amortization                                                                         |                                           |        
|                                                                                  | Net losses (gains) on interest rate cap                                              |                                           |        
|                                                                                  | Net changes in other assets and liabilities:                                         |                                           |        
|                                                                                  |                                                                                      | Accrued interest and income taxes payable |        
|                                                                                  |                                                                                      | Income tax receivable                     |        
|                                                                                  |                                                                                      | Other assets                              |        
|                                                                                  |                                                                                      |                                           |        
|Net cash provided by operating activities                                         |                                                                                      |                                           | 13,237 
|                                                                                  |                                                                                      |                                           |        
|Investing Activities                                                              |                                                                                      |                                           |        
|                                                                                  | Decrease in restricted cash                                                          |                                           |        
|                                                                                  | Decrease (increase) in special unit of beneficial interest in leases (related party) |                                           |        
|                                                                                  | Increase in special unit of beneficial interest in fleet receivables (related party) |                                           |        
|                                                                                  |                                                                                      |                                           |        
|Net cash provided by (used in) investing activities                               |                                                                                      |                                           | (12,412
|                                                                                  |                                                                                      |                                           |        
|Financing Activities                                                              |                                                                                      |                                           |        
|                                                                                  | Payment of deferred financing fees                                                   |                                           |        
|                                                                                  | Payment of preferred membership interests                                            |                                           |        
|                                                                                  | Capital contribution from (distribution to) common member                            |                                           |        
|                                                                                  | Preferred membership interests dividends paid                                        |                                           |        
|                                                                                  | Proceeds from issuance of variable funding notes                                     |                                           |        
|                                                                                  | Payment of medium-term notes                                                         |                                           |        
|                                                                                  |                                                                                      |                                           |        
|Net cash used in financing activities                                             |                                                                                      |                                           | (59,393
|                                                                                  |                                                                                      |                                           |        
|Net decrease in cash and cash equivalents                                         |                                                                                      |                                           | (58,568
|Cash and cash equivalents, beginning of period                                    |                                                                                      |                                           | 182,699
|                                                                                  |                                                                                      |                                           |        
|Cash and cash equivalents, end of period                                          |                                                                                      | $                                         | 124,131
|                                                                                  |                                                                                      |                                           |        
|Supplemental disclosures of cash flow information:                                |                                                                                      |                                           |        
|Interest on notes and dividends on preferred membership interests paid            |                                                                                      | $                                         | 9,813  
|                                                                                  |                                                                                      |                                           |        
|Interest on mandatorily redeemable preferred membership interests paid            |                                                                                      | $                                         | 5,292  
|                                                                                  |                                                                                      |                                           |        
|Income taxes paid, net of refunds                                                 |                                                                                      | $                                         | 1      
|                                                                                  |                                                                                      |                                           |        

See
Notes to Condensed Financial Statements.

4

---



Chesapeake Funding LLC
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unless otherwise noted, all amounts are in millions)

1.     Summary of Significant Accounting Policies



5

---



2.     Debt



3.     Related Party Transactions



*****

6

---





Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited Condensed Financial Statements and accompanying Notes thereto included elsewhere herein and with our
2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2004. Unless otherwise noted, all dollar amounts are in
thousands.

We
are a limited purpose entity formed in 1999. Our activities are limited to acquiring and holding an investment in the Lease SUBI (which is a special unit of beneficial interest in certain leases
and vehicles owned by DLPT) and a portion of the Fleet Receivable SUBI (which is a special unit of beneficial interest in certain fleet management receivables owned by DLPT), issuing indebtedness and
preferred membership interests to finance such investment and engaging in other activities that are related or incidental to the foregoing and necessary, convenient or advisable to accomplish the
foregoing. We do not conduct operating activities.

Income
from investment in related party special unit of beneficial interest in leases for the three months ended March 31, 2004 decreased by $5.3 million compared to the corresponding
period in 2003. Such decrease resulted primarily from declines in the floating rate indices on which interest billings under the leases allocated to the Lease SUBI are based. Interest expense for the
three months ended March 31, 2004 decreased by $.2 million as a result of decreases in commercial paper rates and LIBOR (the rates at which our floating rate debt accrues interest).
Interest expense on mandatorily redeemable preferred membership interest increased $5.3 million as a result of the adoption of Statement of Financial Accounting Standards No. 150 ("SFAS
No. 150"). Before adoption of this standard, dividends on preferred membership interests were recorded as equity distributions. Operating income for the three months ended March 31, 2004
decreased by $10.3 million compared to the corresponding period in 2003, primarily as a result of (i) the treatment of preferred membership dividends as interest expense under SFAS
No. 150 and (ii) the fact that the floating rate indices on which interest billings under the leases allocated to the Lease SUBI are based declined more than the rates at which our
floating rate debt accrues interest.

The
principal source of our revenue is payments received on the Lease SUBI held by us. Set forth below is certain historical data with respect to delinquency experience, loss and recovery experience,
residual value loss experience, conversions of floating rate leases to fixed rate leases, and fleet
management receivable billing experience, in each case for leases and fleet management receivables that are of the same type as those allocated to the Lease SUBI and the Fleet Receivable SUBI.

In
presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several
of the estimates and assumptions that we are required to make pertain to matters that are inherently uncertain as they relate to future events. We do not believe the estimates and assumptions that we
are required to make are particularly subjective or complex and as such we do not believe that any change in these estimates or assumptions would have a material impact on our results of operations or
financial condition.

7

---



Delinquency Experience

The following table sets forth delinquency data with respect to aggregate billings of lease payments for all of VMS' leases and fleet management receivables for the three
months ended March 31, 2004 and 2003. These leases and fleet management receivables are of the same type as the leases allocated to the Lease SUBI and the fleet management receivables allocated
to the Fleet Receivable SUBI and do not include any other types of leases or fleet management receivables.

|                                          |  | Three Months Ended
March 31, |  
|----------------------------------------- |  | ---------------------------- | -
|
|Percentage of billings delinquent (1)(2): |  |                              |  
|30-59 days                                |  | 0.59                         | %
|60 days or more                           |  | 2.61                         | %
|                                          |  |                              |  
|Total 30 or more days delinquent          |  | 3.20                         | %
|                                          |  |                              |  

---

Total delinquencies for the three months ended March 31, 2004 remained below 5% of total billings, which is consistent with the performance of the
portfolio over the last several years. Delinquencies of 30-59 days increased slightly, but remained well within the range of historical levels. Management is not aware of any
factors, which would negatively impact delinquencies for the remainder of 2004 beyond historical levels.

8

---



Loss and Recovery Experience

The following table sets forth loss and recovery data with respect to VMS' leases and fleet management receivables for the three months ended March 31, 2004 and 2003.
These leases and fleet management receivables are of the same type as the leases allocated to the Lease SUBI and the fleet management receivables allocated to the Fleet Receivable SUBI and do not
include any other types of leases or fleet management receivables.

|                                                             |  | Three Months Ended
March 31, |          
|------------------------------------------------------------ |  | ---------------------------- | ---------
|
|Ending dollar amount of leases (1)                           |  | $                            | 3,366,569
|                                                             |  |                              |          
|Total billings for period                                    |  | $                            | 561,417  
|                                                             |  |                              |          
|Gross losses (2)                                             |  |                              | 120      
|Recoveries (3)                                               |  |                              | (87      
|                                                             |  |                              |          
|Net losses                                                   |  | $                            | 33       
|                                                             |  |                              |          
|Net losses as a percentage of ending dollar amount of leases |  |                              | 0.00     
|Net losses as a percentage of total billings for period      |  |                              | 0.01     

---

Net losses as a percentage of total billings decreased during the three months ended March 31, 2004 compared to the corresponding period in 2003 due to
higher recoveries from previous losses.

Gross
losses with respect to bankrupt obligors generally are not recognized by VMS until it receives payment upon the confirmation of the plan of reorganization of the bankrupt obligor and receives
any terminal rental adjustment payments that may be applied to satisfy outstanding obligations with respect to fleet management receivables. Losses are charged against previously established accounts
receivable reserves. Reserve adequacy for the purposes of VMS' financial statements is determined at the time of a client's bankruptcy filing and any necessary charge is recorded to the income
statement at that time. The principal amount outstanding under all leases where the related vehicles are repossessed was immaterial for the three months ended March 31, 2004 and 2003.

9

---



Residual Value Loss Experience

The following table sets forth residual value loss performance data for VMS' closed-end leases for the three months ended March 31, 2004 and 2003. These
closed-end leases are of the same type as the closed-end leases allocated to the Lease SUBI and do not include any other types of closed-end leases.

|                                                                    |  | Three Months Ended
March 31, |      
|------------------------------------------------------------------- |  | ---------------------------- | -----
|
|Total number of closed-end leases scheduled to terminate            |  |                              | 836  
|Number of sold vehicles                                             |  |                              | 675  
|Full termination ratio (1)                                          |  |                              | 80.74
|Total loss on sold vehicles (2)                                     |  | $                            | (13  
|Average loss per sold vehicles (3)                                  |  | $                            | (19  
|Loss as a percentage of stated residual values of sold vehicles (4) |  |                              | (0.22

---

Total residual value losses decreased $138 during the three months ended March 31, 2004 compared to the corresponding period in 2003. For the same
period, the total number of vehicles sold decreased by 35% compared to the corresponding period in 2003. The average loss per vehicle sold decreased $127 per unit compared to the corresponding period
in 2003 as a result of higher values realized on vehicles sold in the marketplace.

Conversions of Floating Rate Leases to Fixed Rate Leases

The following table sets forth data with respect to conversions of VMS' floating rate leases to fixed rate leases during the three months ended March 31, 2004 and 2003.

|                                                              |  | Three Months Ended
March 31, |          
|------------------------------------------------------------- |  | ---------------------------- | ---------
|
|Dollar amount of conversions for period (1)                   |  | $                            | 223      
|Ending dollar amount of leases (2)                            |  |                              | 3,366,569
|Conversions as a percentage of ending dollar amount of leases |  |                              | 0.01     

---

Conversion of floating rate leases to fixed rate leases are at the discretion of the client. Management believes that the low amount of conversions in the three
months ended March 31, 2004 is due to the clients' perception that floating rates will not increase materially from current levels in the near term.

10

---



Fleet Management Receivable Billing Experience

The following tables set forth data for VMS' aggregate billings of fleet management receivables. These fleet management receivables are of the same type as the fleet management
receivables allocated to the Fleet Receivable SUBI and do not include any other types of fleet management receivables.

Three Months Ended
March 31,2004

2003Aggregate billings

$
231,619

$
215,381Average monthly billings


77,206


71,794Maximum monthly billings


83,518


76,880Minimum monthly billings


71,665


66,628


Aggregate
fleet management receivable billings increased in the three months ended March 31, 2004 compared to the corresponding period in 2003 primarily due to an increase in billings for fuel
and maintenance and for customer-owned vehicles, which are purchased directly for the customer's account.

The
information set forth in the following table with respect to billings for fleet management receivables for the years ended December 31, 2003 through December 31, 1999, has been
revised to eliminate certain customer charges and credits that do not meet the criteria to be included in the billing statistics related to fleet management receivables. The information is presented
on a basis consistent with the information presented in the above table for the three months ended March 31, 2004 and 2003.

Year Ended December 31,2003

2002

2001

2000

1999Aggregate billings

$
915,318

$
876,290

$
1,012,080

$
852,470

$
769,983Average monthly billings


76,277


73,024


84,340


71,039


64,165Maximum monthly billings


89,707


84,189


106,661


79,893


70,686Minimum monthly billings


66,628


56,124


69,804


61,194


55,120


Aggregate
fleet management receivable billings increased to $915 million for 2003 compared to $876 million for 2002. The primary factor for this increase was an increase in fuel and
maintenance billings partially offset by a decrease in billings for company-owned vehicles, which are purchased directly for customers.

11

---



Characteristics of Leases Allocated to Lease SUBI

The following tables contain certain statistical information relating to the leases allocated to the Lease SUBI as of March 18, 2004 (the last Lease SUBI monthly reporting
period cutoff date during the first quarter of 2004). The following information does not include vehicles ordered at the request of lessees party to a master lease agreement allocated to the Lease
SUBI, having an aggregate cost of $130.7 million as of that date because such vehicles were not yet subject to a lease. For the purposes of preparing the following tables, we assumed the original term
of each lease to be the period over which the related vehicle is scheduled to be depreciated.

|Composition of Leases                                                                       |  |                       
|------------------------------------------------------------------------------------------- |  | ----------------------
|Aggregate unit balance of leases                                                            |  | $3,074,592,852.11     
|Number of leases                                                                            |  | 209,208               
|Average unit balance                                                                        |  | $14,696.34            
|Range of unit balances                                                                      |  | $3.50 to $1,030,310.38
|Aggregate unit balance of open-end leases                                                   |  | $2,978,578,285.74     
|Aggregate unit balance of floating rate leases                                              |  | $2,398,457,077.20     
|Aggregate lease balance of CP rate index floating rate leases*                              |  | $2,251,821,655.76     
|Weighted average spread over CP rate                                                        |  | 0.336%                
|Range of spreads over CP rate                                                               |  | 0.000% to 3.000%      
|Aggregate unit balance of floating rate leases indexed to floating rates other than CP rate |  | $146,635,421.44       
|Aggregate unit balance of fixed rate leases                                                 |  | $676,135,774.91       
|Weighted average fixed rate                                                                 |  | 4.319%                
|Range of fixed rates                                                                        |  | 0.000% to 45.372%     
|Weighted average original lease term                                                        |  | 61.69                 
|Range of original lease terms                                                               |  | 3 to 132 months       
|Weighted average remaining term                                                             |  | 41.21                 
|Range of remaining terms                                                                    |  | 0 to 119 months       
|Aggregate unit balance of closed-end leases                                                 |  | $96,014,566.37        
|Average unit balance of closed-end leases                                                   |  | $15,830.93            
|Range of unit balances of closed-end leases                                                 |  | $214.43 to $434,734.85
|Average stated residual value of leased vehicles                                            |  | $9,040.91             

---

Note: Dollar amounts are in whole amounts

As of March 18, 2004, the aggregate lease balance of the leases allocated to the Lease SUBI with the lessee having the largest aggregate lease balances was
$143.9 million, the aggregate lease balance of the leases allocated to the Lease SUBI with the lessees having the five largest aggregate lease balances was $527.8 million and the aggregate lease
balance of the leases allocated to the Lease SUBI with the lessees having the ten largest aggregate lease balances was $819.4 million.

12

---



Item 3. Quantitative and Qualitative Disclosures About Market Risk

As
previously discussed in our 2003 Annual Report on Form 10-K, we use interest rate caps to manage and reduce the interest rate risk related specifically to our asset-backed debt.
Interest rate risk is our only market exposure. We do not engage in trading, market-making, or other speculative activities in the derivatives markets. We assess our interest rate risk based on
changes in the interest rates utilizing a sensitivity analysis, which measures the potential loss in earnings, fair values and cash flows based on a hypothetical 10% change (increase and decrease) in
our asset-backed debt and interest rate caps. We used March 31, 2004 interest rates to perform a sensitivity analysis. We have determined, through such analyses, that the impact of a 10% change
in interest rates on our earnings, fair values and cash flows would not be material.

Item 4. Controls and Procedures

(a)Disclosure Controls and Procedures.Our management, with the participation of our Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this quarterly report. Based on such evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.

(b)Internal Control Over Financial Reporting.There have not been any changes in our internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART IIOTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K





13

---



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.

| | CHESAPEAKE FUNDING LLC                                                                                                             
| | -----------------------------------------------------------------------------------------------------------------------------------
| | /s/Neil J. CashenNeil J. Cashen
Chief Financial Officer
(Principal Financial Officer and duly authorized officer of the Registrant)

Date:
May 14, 2004

14

---



Exhibit Index

|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                        
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         |  | Certificate of Formation of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC), incorporated by reference to the Registration Statement on Form S-1 (File no. 333-40708) filed with the Securities and Exchange Commission on June 30,
2000.                                                                                                                         
|3.2         |  | Certificate of Amendment to Certificate of Formation of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC) dated April 25, 2002, incorporated by reference to the Registration Statement on Form S-3 (File no. 333-87568) filed with the
Securities and Exchange Commission on May 3, 2002.                                                                          
|3.3         |  | Certificate of Amendment to Certificate of Formation of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC), dated June 24, 2002, incorporated by reference to the Registration Statement on Form S-3 (File no. 333-103678) filed with the
Securities and Exchange Commission on August 1, 2003.                                                                      
|3.4         |  | Amended and Restated Limited Liability Company Agreement of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC) dated as of October 28, 1999, incorporated by reference to the Registration Statement on Form S-1 (File no. 333-40708) filed
with the Securities and Exchange Commission on June 30,
2000.                                                            
|3.5         |  | First Amendment, dated as of April 25, 2002, to the Amended and Restated Limited Liability Company Agreement of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC), dated as of October 28, 1999, incorporated by reference to the
Registration Statement on Form S-3 (File no. 333-87568) filed with the Securities and Exchange Commission on May 3, 2002.         
|3.6         |  | Second Amendment, dated as of June 18, 2003, to the Amended and Restated Limited Liability Company Agreement of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC), dated as of October 28, 1999, incorporated by reference to the
Registration Statement on Form S-3 (File no. 333-103678) filed with the Securities and Exchange Commission on August 1, 2003.     
|3.7         |  | Third Amendment, dated as of August 14, 2003, to the Amended and Restated Limited Liability Company Agreement of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC), dated as of October 28, 1999, incorporated by reference to the
Registration Statement on Form S-3 (File no. 333-109007) filed with the Securities and Exchange Commission on September 22, 2003.
|31.1        |  | Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) Promulgated Under the Securities Exchange Act of 1934, as amended.                                                                                                                                                                                                                              
|31.2        |  | Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) Promulgated Under the Securities Exchange Act of 1934, as amended.                                                                                                                                                                                                                              
|32          |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                            

---



QuickLinks