Chesapeake Energy 2012 Annual Report Download - page 62

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Cash flow from operations is a source of liquidity we use to fund capital expenditures, pay dividends and repay
debt. Cash provided by operating activities was $2.837 billion in 2012 compared to $5.903 billion in 2011 and $5.117
billion in 2010. The decline in cash flow from operations from 2011 to 2012 is primarily the result of a decrease in the
realized natural gas price (excluding the effect of unrealized gains or losses on derivatives) from $4.77 per mcf in 2011
to $2.07 per mcf in 2012. The increase in cash flow from operations from 2010 to 2011 is primarily the result of an
increase in production of 159 bcfe. Changes in cash flow from operations are largely due to the same factors that affect
our net income, excluding various non-cash items such as depreciation, depletion and amortization, impairments of
natural gas and oil properties and other assets, deferred income taxes and mark-to-market changes in our derivative
instruments. See the discussion below under Results of Operations.
The following table reflects the proceeds received from issuances of corporate securities in 2012, 2011 and 2010.
See Note 3 of the notes to our consolidated financial statements included in Item 8 of this report for further discussion.
2012 2011 2010
Total
Proceeds
Net
Proceeds
Total
Proceeds
Net
Proceeds
Total
Proceeds
Net
Proceeds
($ in millions)
Senior notes .................................... $1,300 $ 1,263 $ 1,650 $ 1,614 $ 2,000 $ 1,967
Term loans(a) .................................... 6,000 5,722 ————
Convertible preferred stock ............. —— — — 2,600 2,562
Total............................................... $7,300 $ 6,985 $ 1,650 $ 1,614 $ 4,600 $ 4,529
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(a) Includes principal amounts of $4.0 billion and $2.0 billion for our May 2012 term loans and November 2012 term
loan, respectively. The entire principal amount of the May 2012 term loans was repaid in October and November
2012 without penalty.
Our $4.0 billion corporate revolving bank credit facility, our $500 million oilfield services revolving bank credit
facility and cash and cash equivalents are other sources of liquidity. We use these revolving bank credit facilities and
cash on hand to fund daily operating activities and capital expenditures as needed. We borrowed $20.318 billion and
repaid $21.650 billion in 2012, borrowed $15.509 billion and repaid $17.466 billion in 2011 and borrowed $15.117
billion and repaid $13.303 billion in 2010 under our revolving bank credit facilities. Our corporate facility is secured by
natural gas and oil proved reserves. A significant portion of our natural gas and oil reserves are currently unencumbered
and therefore available to be pledged as additional collateral if needed to respond to borrowing base and collateral
redeterminations our lenders might make in the future. We believe our borrowing capacity under this facility will not be
reduced as a result of any such future redeterminations. Our oilfield services facility is secured by substantially all of
our wholly owned oilfield services assets and is not subject to periodic borrowing base redeterminations. From
September 2009 until June 2012, we also had a $600 million midstream revolving bank credit facility which we terminated
in June 2012. Our revolving bank credit facilities are described below under Bank Credit Facilities.