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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of these consolidated financial statements.
86
Years Ended December 31,
2012 2011 2010
($ in millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) ........................................................................................................ $ (594) $ 1,757 $ 1,774
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO CASH PROVIDED BY
OPERATING ACTIVITIES:
Depreciation, depletion and amortization ..................................................................... 2,811 1,923 1,614
Deferred income tax expense (benefit) ........................................................................ (427) 1,110 1,110
Unrealized (gains) losses on derivatives ...................................................................... (567) 796 592
Stock-based compensation ......................................................................................... 120 153 147
Gains on sales of fixed assets ..................................................................................... (267) (437) (137)
Impairments of fixed assets and other ......................................................................... 316 46 21
Impairment of natural gas and oil properties ................................................................ 3,315 — —
(Gains) losses on investments ..................................................................................... 164 (41) (107)
Gains on sales of investments ..................................................................................... (1,092) — —
Impairment of investments ........................................................................................... — — 16
Losses on purchases or exchanges of debt ................................................................. 200 5 29
Other ........................................................................................................................... 74 (3) 110
Increase in accounts receivable and other assets ........................................................ (68) (530) (769)
Increase (decrease) in accounts payable, accrued liabilities and other ........................ (1,148) 1,124 717
Cash provided by operating activities ...................................................................... 2,837 5,903 5,117
CASH FLOWS FROM INVESTING ACTIVITIES:
Drilling and completion costs ....................................................................................... (8,930) (7,467) (5,242)
Acquisitions of proved and unproved properties .......................................................... (3,161) (4,974) (6,945)
Proceeds from divestitures of proved and unproved properties ................................... 5,884 7,651 4,292
Additions to other property and equipment .................................................................. (2,651) (2,009) (1,326)
Proceeds from sales of other assets ............................................................................ 2,492 1,312 883
Proceeds from (additions to) investments .................................................................... (395) 101 (134)
Proceeds from sale of midstream investment .............................................................. 2,000 — —
Acquisition of drilling company ..................................................................................... — (339) —
Increase in restricted cash ........................................................................................... (222) (44) —
Other ........................................................................................................................... (1) (43) (31)
Cash used in investing activities ............................................................................. (4,984) (5,812) (8,503)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facilities borrowings .................................................................... 20,318 15,509 15,117
Payments on credit facilities borrowings ...................................................................... (21,650) (17,466) (13,303)
Proceeds from issuance of term loans, net of discount and offering costs ................... 5,722 — —
Proceeds from issuance of senior notes, net of discount and offering costs ................ 1,263 1,614 1,967
Proceeds from issuance of preferred stock, net of offering costs ................................. — — 2,562
Cash paid to purchase debt ......................................................................................... (4,000) (2,015) (3,434)
Cash paid for common stock dividends ....................................................................... (227) (207) (189)
Cash paid for preferred stock dividends ....................................................................... (171) (172) (92)
Cash (paid) received on financing derivatives .............................................................. (37) 1,043 621
Proceeds from sales of noncontrolling interests ........................................................... 1,077 1,348 —
Proceeds from other financings ................................................................................... 257 300 —
Distributions to noncontrolling interest owners ............................................................. (218) (9) —
Net increase (decrease) in outstanding payments in excess of cash balance .............. (172) 353 20
Other ........................................................................................................................... (79) (140) (88)
Cash provided by financing activities ...................................................................... 2,083 158 3,181
Net increase (decrease) in cash and cash equivalents ....................................................... (64) 249 (205)
Cash and cash equivalents, beginning of period ................................................................. 351 102 307
Cash and cash equivalents, end of period .......................................................................... $ 287 $ 351 $ 102