Chesapeake Energy 2012 Annual Report Download - page 64

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In 2010, we completed and settled tender offers to purchase $3.434 billion in principal amount of our senior notes
for $3.434 billion in cash.
We paid dividends on our common stock of $227 million, $207 million and $189 million in 2012, 2011 and 2010,
respectively. We paid dividends on our preferred stock of $171 million, $172 million and $92 million in 2012, 2011 and
2010, respectively. The increase in 2011 was due to the issuance of 2.6 million shares of preferred stock in 2010.
During 2012, we had net additions to investments of $395 million, including $109 million of additional investment
in FTS International, Inc., $50 million of additional investment in Clean Energy Fuels Corp., $80 million of additional
investment in Sundrop Fuels, Inc. and $220 million for three midstream investments that were sold in December 2012
as part of the sale of substantially all of our midstream business to ACMP. See Note 12 of the notes to our consolidated
financial statements included in Item 8 of this report for further discussion of these investments.
Bank Credit Facilities
During 2012, we used three revolving bank credit facilities as sources of liquidity. In June 2012, we paid off and
terminated our midstream credit facility. Our two remaining revolving bank credit facilities are described below.
Corporate
Credit Facility(a) Oilfield Services Credit Facility(b)
($ in millions)
Facility structure .....................................................................................
Senior secured
revolving
Senior secured
revolving
Maturity date .......................................................................................... December 2015 November 2016
Borrowing capacity ................................................................................ $ 4,000 $ 500
Amount outstanding as of December 31, 2012 ...................................... $ — $ 418
Letters of credit outstanding as of December 31, 2012 ......................... $ 31 $ —
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(a) Co-borrowers are Chesapeake Exploration, L.L.C., Chesapeake Appalachia, L.L.C. and Chesapeake Louisiana,
L.P.
(b) Borrower is Chesapeake Oilfield Operating, L.L.C.
Our credit facilities do not contain material adverse change or adequate assurance covenants. Although the
applicable interest rates under our corporate credit facility fluctuate slightly based on our long-term senior unsecured
credit ratings, our credit facilities do not contain provisions which would trigger an acceleration of amounts due under
the respective facilities or a requirement to post additional collateral in the event of a downgrade of our credit ratings.
Corporate Credit Facility. Our $4.0 billion syndicated revolving bank credit facility is used for general corporate
purposes. Borrowings under the facility are secured by proved reserves and bear interest at a variable rate. We were
in compliance with all covenants under the amended agreement as of December 31, 2012. For further discussion on
the terms of our corporate credit facility, see Note 3 of the notes to our consolidated financial statements included in
Item 8 of this report.
As described above in Liquidity Overview, in September 2012, we entered into an amendment to the credit facility
agreement, effective September 30, 2012. The amendment, among other things, adjusts our required indebtedness
to EBITDA ratio covenant through the earlier of (a) December 31, 2013 and (b) the date on which we elect to reinstate
the indebtedness to EBITDA ratio in effect prior to the amendment (in either case, the "Amendment Effective Period").
The amendment increased the maximum indebtedness to EBITDA ratio as of September 30, 2012 from 4.00 to 1.00
to 6.00 to 1.00 and revised the required ratio for the next four quarters as shown below. The ratio returns to 4.00 to
1.00 as of December 31, 2013 and thereafter.
Effective Date Indebtedness to EBITDA Ratio
December 31, 2012 5.00 to 1.00
March 31, 2013 4.75 to 1.00
June 30, 2013 4.50 to 1.00
September 30, 2013 4.25 to 1.00