Chesapeake Energy 2010 Annual Report Download - page 132

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
3. Debt
Our long-term debt consisted of the following at December 31, 2010 and 2009:
December 31,
2010 2009
($ in millions)
7.5% senior notes due 2013 .......................................... $ — $ 364
7.625% senior notes due 2013 ........................................ 500 500
7.0% senior notes due 2014 .......................................... — 300
7.5% senior notes due 2014 .......................................... — 300
6.375% senior notes due 2015 ........................................ — 600
9.5% senior notes due 2015 .......................................... 1,425 1,425
6.625% senior notes due 2016 ........................................ — 600
6.875% senior notes due 2016 ........................................ — 670
6.25% euro-denominated senior notes due 2017(a) ....................... 796 860
6.5% senior notes due 2017 .......................................... 1,100 1,100
6.25% senior notes due 2018 ......................................... — 600
6.875% senior notes due 2018 ........................................ 600 —
7.25% senior notes due 2018 ......................................... 800 800
6.625% senior notes due 2020 ........................................ 1,400 —
6.875% senior notes due 2020 ........................................ 500 500
2.75% contingent convertible senior notes due 2035(b) .................... 451 451
2.5% contingent convertible senior notes due 2037(b) ..................... 1,378 1,378
2.25% contingent convertible senior notes due 2038(b) .................... 752 763
Corporate revolving bank credit facility ................................. 3,612 1,892
Midstream revolving bank credit facility ................................. 94 —
Midstream joint venture revolving bank credit facility(c) .................... — 44
Discount on senior notes(d) ........................................... (777) (921)
Interest rate derivatives(e) ............................................ 9 69
Total notes payable and long-term debt .............................. $ 12,640 $ 12,295
(a) The principal amount shown is based on the dollar/euro exchange rate of $1.3269 to €1.00 and $1.4332 to
€1.00 as of December 31, 2010 and 2009, respectively. See Note 9 for information on our related foreign
currency derivatives.
(b) The holders of our contingent convertible senior notes may require us to repurchase, in cash, all or a portion of
their notes at 100% of the principal amount of the notes on any of four dates that are five, ten, fifteen and
twenty years before the maturity date. The notes are convertible, at the holder’s option, prior to maturity under
certain circumstances into cash and, if applicable, shares of our common stock using a net share settlement
process. One such triggering circumstance is when the price of our common stock exceeds a threshold amount
during a specified period in a fiscal quarter. Convertibility based on common stock price is measured quarter by
quarter. In the fourth quarter of 2010, the price of our common stock was below the threshold level for each
series of the contingent convertible senior notes during the specified period 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 2011 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. 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 such principal
amount. We will pay contingent interest on the convertible senior notes after they have been outstanding at
least ten years, under certain conditions. We may redeem the 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.
The optional repurchase dates, the common stock price conversion threshold amounts and the ending date of
the first six-month period contingent interest may be payable for the contingent convertible senior notes are as
follows:
86