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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
2010 2009
($ in millions)
2008
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) ...................................................... $
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH PROVIDED BY
OPERATING ACTIVITIES:
1,774 $ (5,805) $ 604
Depreciation, depletion and amortization ..................................... 1,614 1,615 2,144
Deferred income tax expense (benefit) ...................................... 1,110 (3,487) (36)
Unrealized (gains) losses on derivatives ..................................... 592 497 (712)
Realized (gains) losses on financing derivatives ............................... (621) (154) 38
Stock-based compensation ................................................ 147 140 132
Accretion of discount on contingent convertible notes .......................... 78 79 79
Restructuring costs ...................................................... — 12 —
(Gains) losses on sales of other property and equipment ........................ (137) 38 —
(Gains) losses on equity investments ........................................ (107) 39 38
Losses on redemptions or exchanges of debt ................................. 29 40 4
Impairment of natural gas and oil properties .................................. — 11,000 2,800
Impairment of investments ................................................ 16 162 180
Other impairments ....................................................... 21 130 30
Other .................................................................. 32 27 (2)
(Increase) decrease in accounts receivable and other assets .................... (769) (31) (22)
Increase (decrease) in accounts payable, accrued liabilities and other ............. 1,338 54 80
Cash provided by operating activities ...................................... 5,117 4,356 5,357
CASH FLOWS FROM INVESTING ACTIVITIES:
Exploration and development of natural gas and oil properties ................... (5,242) (3,572) (6,104)
Acquisitions of natural gas and oil proved and unproved properties ............... (6,945) (2,268) (8,593)
Additions to other property and equipment ................................... (1,326) (1,683) (3,073)
Proceeds from divestitures of proved and unproved properties ................... 4,292 1,926 7,670
Proceeds from sales of other assets ........................................ 883 176 219
Additions to investments .................................................. (134) (40) (74)
Other .................................................................. (31) (1) (10)
Cash used in investing activities .......................................... (8,503) (5,462) (9,965)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facilities borrowings .................................... 15,117 7,761 13,291
Payments on credit facilities borrowings ..................................... (13,303) (9,758) (11,307)
Proceeds from issuance of senior notes, net of offering costs .................... 1,967 1,346 2,136
Proceeds from issuance of preferred stock, net of offering costs .................. 2,562 — —
Proceeds from issuance of common stock, net of offering costs .................. — — 2,598
Cash paid to redeem debt ................................................. (3,434) — (312)
Cash paid for common stock dividends ...................................... (189) (181) (148)
Cash paid for preferred stock dividends ...................................... (92) (23) (35)
Proceeds from sale of noncontrolling interest in midstream joint venture ........... — 588 —
Realized gains on financing derivatives ...................................... 621 109 (167)
Proceeds from mortgage of building ......................................... — 54 —
Proceeds from sale/leaseback of real estate surface assets ..................... — 145 —
Net increase (decrease) in outstanding payments in excess of cash balance ....... 20 (249) 330
Other .................................................................. (88) (128) (30)
Cash provided by (used in) financing activities .............................. 3,181 (336) 6,356
Net increase (decrease) in cash and cash equivalents ............................ (205) (1,442) 1,748
Cash and cash equivalents, beginning of period ................................. 307 1,749 1
Cash and cash equivalents, end of period ...................................... $ 102 $ 307 $ 1,749
The accompanying notes are an integral part of these consolidated financial statements.
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