FORM U-3A-2
File No. 69-248
SECURITIES & EXCHANGE COMMISSION
Washington, D.C.
Statement by Holding Company Claiming Exemption
Under Rule U-3A-2 from the Provisions of the
Public Utility Holding Company Act of 1935
SOUTHWESTERN ENERGY COMPANY hereby files with the Securities & Exchange
Commission, pursuant to Rule U-3A-2, its statement claiming exemption as a
holding company from the provisions of the Public Utility Holding Company Act of
1935. In support of such claim for exemption, the following information is
submitted:
1. Southwestern Energy Company, an Arkansas corporation, is located at
2350 North Sam Houston Parkway East, Suite 300, Houston, Texas 77032.
Southwestern Energy Company is a holding company with seven wholly
owned subsidiaries. The wholly owned subsidiaries of the holding
company are Arkansas Western Gas Company, an Arkansas utility; SEECO,
Inc., an Arkansas based gas exploration and production company;
Southwestern Energy Production Company (formerly Arkansas Western
Production Company), an oil and gas exploration and production company
with offices in Texas and Arkansas; Diamond "M" Production Company, a
Texas based oil and gas exploration and production company;
Southwestern Energy Services Company, an Oklahoma based gas marketing
company; Southwestern Energy Pipeline Company, a corporation that owns
a minority interest in the NOARK Pipeline System Limited Partnership
(NOARK), (NOARK owns an interstate natural gas pipeline in Arkansas and
Oklahoma); and A. W. Realty Company, an Arkansas real estate company
which holds real estate interests. Overton Partners, L.L.C., is an
Arkansas limited liability company owned by Southwestern Energy
Production Company. Overton Partners, L.L.C., owns a majority interest
in Overton Partners, L.P., a Texas limited partnership. The financial
results of Overton Partners, L.P., are consolidated with the financial
results for Southwestern Energy Company and its other subsidiaries.
Arkansas Gas Gathering Company is a wholly owned subsidiary of SEECO,
Inc., and is currently inactive.
The main location of Arkansas Western Gas Company is 1001 Sain Street,
Fayetteville, Arkansas 72703. The main location of SEECO, Inc.,
Arkansas Gas Gathering Company, A. W. Realty Company, Overton Partners,
L.L.C., and Overton Partners, L.P., is 1083 Sain Street, Fayetteville,
Arkansas 72703. The main location of Southwestern Energy Production
Company and Diamond "M" Production Company is 2350 North Sam Houston
Parkway East, Suite 300, Houston, Texas 77032. The main location of
Southwestern Energy Services Company and Southwestern Energy Pipeline
Company is 2200 Mid-Continent Tower, 401 South Boston, Tulsa, Oklahoma
74103.
All of the Claimant's subsidiaries, with the exception of Diamond "M"
Production Company, Overton Partners, L.P., and Overton Parners,
L.L.C., are Arkansas corporations with Southwestern Energy Production
Company being authorized to do business in Oklahoma, Texas, Colorado,
Wyoming, Louisiana, North Dakota, South Dakota, Kansas, New Mexico,
Mississippi and Nebraska. SEECO, Inc., has authority to operate only in
Arkansas. Arkansas Western Gas Company is also authorized to do
business in Missouri, although it has sold all of its Missouri
operations effective May 31, 2000. Southwestern Energy Pipeline Company
is authorized to do business in Oklahoma. Southwestern Energy Services
Company is authorized to do business in Oklahoma, Louisiana and Texas.
Diamond "M" Production Company is a Delaware corporation authorized to
do business in Texas. Overton Partners, L.L.C., is an Arkansas limited
liability company authorized to do business in Arkansas and Texas.
Overton Partners, L.P., is Texas limited partnership authorized to do
business in Texas.
- 2 -
2. Claimant, Southwestern Energy Company, is the parent company and owns
beneficially and of record 100% of the issued and outstanding shares of
stock of its seven corporate subsidiaries.
Arkansas Western Gas Company (AWG), Claimant's only public utility
subsidiary, operates 5,127 miles of pipeline. This system is located
entirely within the state of Arkansas and includes a gathering and
storage system with 387 miles of pipeline, 984 miles of transmission
pipeline and 3,756 miles of distribution pipeline.
AWG's northwest Arkansas gas utility system gathers its primary gas
supply in Arkansas from the Arkoma Basin where it also provides
distribution service to communities in that area, including the towns
of Ozark and Clarksville. AWG's transmission and distribution lines
extend north and supply communities in the northwest part of the state,
including the towns of Fayetteville, Springdale and Rogers. AWG's
service area also extends to the Harrison and Mountain Home areas. The
section of the AWG system serving Harrison and Mountain Home receives a
protion of its gas supply from a lateral line off of the Ozark Pipeline
System.
AWG's northeast Arkansas gas utility system obtains its primary gas
supply from interstate pipelines. Through its northeast Arkansas gas
utility system, AWG provides distribution of natural gas to the major
communities of Blytheville, Piggott and Osceola.
3. Arkansas Western Gas Company made gas sales for the 12 months ended
December 31, 2001, as follows:
(a) Natural gas distributed at retail:
Average
Utility Sales Consumers Mcf Sales
------------- --------- --- -----
Residential 117,765 8,442,456 $ 77,061,157
Commercial 16,017 6,070,642 47,947,486
Industrial 215 2,486,199 15,339,773
------- ---------- -------------
Total 133,997 16,999,297 $ 140,348,416
======= ========== =============
(b) The public utility subsidiary purchased outside the state of
Arkansas 5,776,061 Mcf of natural gas costing $33,651,041 and
utilized the services of interstate pipelines to deliver the
gas to its service territory or to storage facilities pending
later delivery.
4. The Claimant holds no direct or indirect interest in an EWG or a
foreign utility company.
EXHIBIT A
Consolidating Statements of Income and Surplus along with Consolidating Balance
Sheets for the year ended December 31, 2001.
EXHIBIT B
Financial Data Schedule for the year ended December 31, 2001.
EXHIBIT C
The Claimant holds no direct or indirect interest in an EWG or a foreign utility
company.
- 3 -
The above named Claimant has caused this statement to be duly executed on its
behalf by its authorized officer on this 27th day of February, 2002.
SOUTHWESTERN ENERGY COMPANY
By: /s/ GREG D. KERLEY
----------------------------
Greg D. Kerley
Executive Vice President
and Chief Financial Officer
ATTEST:
/s/ MARK K. BOLING
--------------------------
MARK K. BOLING
Secretary
Notices and correspondence concerning this statement should be addressed to:
Greg D. Kerley, Executive Vice President and Chief Financial Officer
Southwestern Energy Company
2350 North Sam Houston Parkway East, Suite 300
Houston, Texas 77032
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES Exhibit A
CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2001
(in thousands)
Southwestern Diamond
Southwestern Arkansas Energy "M" Overton Overton
Energy Western Gas Production Production Partners Partners
Company Company SEECO, Inc. Company Company L.P. L.L.C.
------------ ----------- ----------- ------------ ---------- --------- ---------
Operating Revenues:
Gas sales $ - $ 140,348 $ 70,209 $ 61,295 $ 127 $ 4,904 $ -
Gas marketing - - - - - - -
Oil sales - - - 14,011 2,638 282
Gas transportation - 4,366 - - - - -
Other - 2,568 471 - - - -
------------ ----------- ----------- ------------ ---------- --------- ---------
- 147,282 70,680 75,306 2,765 5,186 -
------------ ----------- ----------- ------------ ---------- --------- ---------
Operating Costs and Expenses:
Gas purchases - utility - 96,058 - - - - -
Gas purchases - marketing - - - - - - -
Operating and general - 32,386 11,834 17,383 1,969 211 -
Depreciation, depletion and
amortization - 6,163 16,925 26,732 901 1,972 -
Taxes, other than income - 2,329 424 5,719 146 381 -
------------ ----------- ----------- ------------ ---------- --------- ---------
- 136,936 29,183 49,834 3,016 2,564 -
------------ ----------- ----------- ------------ ---------- --------- ---------
Operating Income (Loss) - 10,346 41,497 25,472 (251) 2,622 -
------------ ----------- ----------- ------------ ---------- --------- ---------
Interest Expense:
Interest on long-term debt 23,920 - - - - - -
Intercompany interest (6,529) 3,888 2,029 (467) (89) - 230
Other interest charges 704 531 - 29 - - -
Interest capitalized - (6) (278) (1,311) - - -
------------ ----------- ----------- ------------ ---------- --------- ---------
18,095 4,413 1,751 (1,749) (89) - 230
------------ ----------- ----------- ------------ ---------- --------- ---------
Other Income (Expense) 13,945 600 1 143 - 35 -
------------ ----------- ----------- ------------ ---------- --------- ---------
Minority Interest - Partnership - - - 930 - - -
------------ ----------- ----------- ------------ ---------- --------- ---------
Income (Loss) before Provision (Benefit)
for Income Taxes (4,150) 6,533 39,747 26,434 (162) 2,657 (230)
Provision (Benefit) for Income Taxes (6,884) 2,505 15,786 10,320 (58) - -
------------ ----------- ----------- ------------ ---------- --------- ---------
Net Income (Loss) $ 2,734 $ 4,028 $ 23,961 $ 16,114 $ (104) $ 2,657 $ (230)
============ =========== =========== ============ ========== ========= =========
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES Exhibit A
CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2001
(in thousands)
Southwestern Southwestern
A.W. Energy Energy
Realty Pipeline Services
Company Company Company Eliminations Consolidated
------- ------------ ------------ ------------ ------------
Operating Revenues:
Gas sales $ - $ - $ - $ (27,931)(a) $ 248,952
Gas marketing - - 190,325 (118,486)(a) 71,839
Oil sales - - - - 16,931
Gas transportation - - - - 4,366
Other 448 - - (648)(b) 2,839
------- ------------ ------------ ------------- ------------
448 - 190,325 (147,065) 344,927
------- ------------ ------------ ------------- ------------
Operating Costs and Expenses:
Gas purchases - utility - - - (27,897)(a)(b) 68,161
Gas purchases - marketing - - 186,496 (118,486)(a) 68,010
Operating and general 29 72 960 (736)(b) 64,108
Depreciation, depletion and
amortization 90 5 111 - 52,899
Taxes, other than income 24 2 55 - 9,080
------- ------------ ------------ ------------ ------------
143 79 187,622 (147,119) 262,258
------- ------------ ------------ ------------ ------------
Operating Income (Loss) 305 (79) 2,703 54 82,669
------- ------------ ------------ ------------ ------------
Interest Expense:
Interest on long-term debt - - - - 23,920
Intercompany interest 41 773 124 - -
Other interest charges - - 110 - 1,374
Interest capitalized - - - - (1,595)
------- ------------ ------------ ------------ ------------
41 773 234 - 23,699
------- ------------ ------------ ------------ ------------
Other Income (Expense) 15 (1,484) - (14,054)(b)(c) (799)
------- ------------ ------------ ------------ ------------
Minority Interest - Partnership - - - - 930
------- ------------ ------------ ------------ ------------
Income (Loss) Before Provision (Benefit)
for Income Taxes 279 (2,336) 2,469 (14,000)(c) 57,241
Provision (Benefit) for Income Taxes 111 (859) 996 - 21,917
------- ------------ ------------ ------------ ------------
Net Income (Loss) $ 168 $ (1,477) $ 1,473 $ (14,000) $ 35,324
======= ============ ============ ============ ============
(a) To eliminate intercompany sales and purchases.
(b) To eliminate intercompany income and expense items.
(c) To eliminate intercompany dividends.
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES Exhibit A
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2001
(in thousands)
Southwestern Diamond
Southwestern Arkansas Energy "M" Overton Overton
Energy Western Gas Production Production Partners Partners
Company Company SEECO, Inc. Company Company L.P. L.L.C.
------------ ----------- ----------- ------------ ---------- --------- ---------
Assets
------
Current Assets:
Cash $ 1,189 $ 977 $ - $ 70 $ - $ 1,404 $ -
Accounts receivable 813 23,217 2,453 5,779 97 3,656 1,082
Intercompany accounts receivable 32,710 - (19,499) 18,182 1,599 (43) (9,757)
Income taxes receivable 265 - - - - - -
Inventories, at average cost - 10,293 16,313 - - - -
Hedging Asset - - 9,381 - - - -
Regulatory Asset - Hedging - 5,817 - - - - -
Other 2,446 1,351 (2) 994 (3) - -
------------ ----------- ----------- ------------ ---------- --------- ---------
Total Current Assets 37,423 41,655 8,646 25,025 1,693 5,017 (8,675)
------------ ----------- ----------- ------------ ---------- --------- ---------
Investments:
Investment in subsidiaries, at cost 412,661 - - - - - -
Other - - - 1,216 - - 10,610
------------ ----------- ----------- ------------ ---------- --------- ---------
412,661 - - 1,216 - - 10,610
------------ ----------- ----------- ------------ ---------- --------- ---------
Property, Plant and Equipment:
Oil and gas properties, using the
full cost method - - 292,140 645,971 7,440 25,129 -
Gas utility system - 192,784 - - - - -
Gas in underground storage - 15,998 16,048 - - - -
Other 16,978 921 461 5,398 - - -
------------ ----------- ----------- ------------ ---------- --------- ---------
16,978 209,703 308,649 651,369 7,440 25,129 -
Less - Accumulated depreciation,
depletion and amortization 12,728 84,927 166,986 332,376 5,560 1,972 -
------------ ----------- ----------- ------------ ---------- --------- ---------
4,250 124,776 141,663 318,993 1,880 23,157 -
------------ ----------- ----------- ------------ ---------- --------- ---------
Other Assets 9,331 3,500 1,006 793 (79) - -
------------ ----------- ----------- ------------ ---------- --------- ---------
$ 463,665 $ 169,931 $ 151,315 $ 346,027 $ 3,494 $ 28,174 $ 1,935
============ =========== =========== ============ ========== ========= =========
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES Exhibit A
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2001
(in thousands)
Southwestern Southwestern
A.W. Energy Energy
Realty Pipeline Services
Company Company Company Eliminations Consolidated
------- ------------ ------------ ------------ ------------
Assets
------
Current Assets:
Cash $ - $ - $ 1 $ - $ 3,641
Accounts receivable 3 - 7,956 (2,293)(d) 42,763
Intercompany accounts receivable (449) (12,614) 1,942 (12,071)(d) -
Income taxes receivable - - - - 265
Inventories, at average cost - - - - 26,606
Hedging Asset - - - - 9,381
Regulatory Asset - Hedging - - - - 5,817
Other 2 - (57) - 4,731
------- ------------ ------------ ------------ ------------
Total Current Assets (444) (12,614) 9,842 (14,364) 93,204
------- ------------ ------------ ------------ ------------
Investments:
Investment in subsidiaries, at cost - - - (412,661)(e) -
Other 50 15,488 - (11,826)(d) 15,538
------- ------------ ------------ ------------ ------------
50 15,488 - (424,487) 15,538
------- ------------ ------------ ------------ ------------
Property, Plant and Equipment:
Oil and gas properties, using the
full cost method - - - - 970,680
Gas utility system - - - - 192,784
Gas in underground storage - - - - 32,046
Other 5,968 - 384 - 30,110
------- ------------ ------------ ------------ ------------
5,968 - 384 - 1,225,620
Less - Accumulated depreciation,
depletion and amortization 983 - 258 - 605,790
------- ------------ ------------ ------------ ------------
4,985 - 126 - 619,830
------- ------------ ------------ ------------ ------------
Other Assets - - - - 14,551
------- ------------ ------------ ------------ ------------
$4,591 $ 2,874 $ 9,968 $ (438,851) $ 743,123
======= ============ ============ ============ ============
(d) To eliminate intercompany amounts related to Overton Partners, L.P., activity.
(e) To eliminate investments in subsidiaries.
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES Exhibit A
CONSOLIDATING BALANCE SHEET (continued)
DECEMBER 31, 2001
(in thousands)
Southwestern Diamond
Southwestern Arkansas Energy "M" Overton Overton
Energy Western Gas Production Production Partners Partners
Company Company SEECO, Inc. Company Company L.P. L.L.C.
------------ ----------- ----------- ------------ ---------- --------- ---------
Liabilities and Shareholders' Equity
------------------------------------
Current Liabilities:
Accounts payable $ 14,686 $ 5,743 $ 5,711 $ 11,721 $ 147 $ 2,619 $ 1,165
Taxes payable 548 2,827 280 78 - - -
Interest payable 2,503 150 - - - - -
Deferred gas purchases - 8,184 - - - - -
Hedging liability 958 5,817 215 - - - -
Customer deposits - 4,845 - - - - -
Other (2,916) 707 3,859 739 - - -
------------ ----------- ----------- ------------ ---------- --------- ---------
Total Current Liabilities 15,779 28,273 10,065 12,538 147 2,619 1,165
------------ ----------- ----------- ------------ ---------- --------- ---------
Long-Term Debt, less current
portion 350,000 59,352 - - - - -
------------ ----------- ----------- ------------ ---------- --------- ---------
Other Liabilities:
Deferred income taxes (56,886) 20,733 60,269 85,197 (581) - -
Deferred investment tax credits - 1,195 - - - - -
Long-term hedging liability - - 100 - - - -
Other 1,638 561 - 889 - - -
------------ ----------- ----------- ------------ ---------- --------- ---------
(55,248) 22,489 60,369 86,086 (581) - -
------------ ----------- ----------- ------------ ---------- --------- ---------
Minority Interest - Partnership - - - 13,001 - - -
------------ ----------- ----------- ------------ ---------- --------- ---------
Shareholders' Equity:
Common stock 2,774 24,214 8,244 1 - - -
Additional paid-in capital 19,764 29,000 22,000 253,545 7,000 - -
Retained earnings 160,072 6,603 44,290 (19,144) (3,072) 2,657 (230)
Partnership capital - - - - - 22,898 1,000
Other comprehensive income (584) - 6,347 - - - -
Common stock in treasury, at cost (25,196) - - - - - -
Unamortized cost of restricted
shares issued under stock
incentive plan (3,696) - - - - - -
------------ ----------- ----------- ------------ ---------- --------- ---------
153,134 59,817 80,881 234,402 3,928 25,555 770
------------ ----------- ----------- ------------ ---------- --------- ---------
$ 463,665 $ 169,931 $ 151,315 $ 346,027 $ 3,494 $ 28,174 $ 1,935
============ =========== =========== ============ ========== ========= =========
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES Exhibit A
CONSOLIDATING BALANCE SHEET (continued)
DECEMBER 31, 2001
(in thousands)
Southwestern Southwestern
A.W. Energy Energy
Realty Pipeline Services
Company Company Company Eliminations Consolidated
------- ------------ ------------ ------------ ------------
Liabilities and Shareholders' Equity
------------------------------------
Current Liabilities:
Accounts payable $ - $ - $ 2,144 $ (2,292)(d) $ 41,644
Taxes payable 76 - 591 - 4,400
Interest payable - - - - 2,653
Deferred gas purchases - - - - 8,184
Hedging liabilities - - - - 6,990
Customer deposits - - - - 4,845
Other - - 363 - 2,752
------- ------------ ------------ ------------ ------------
Total Current Liabilities 76 - 3,098 (2,292) 71,468
------- ------------ ------------ ------------ ------------
Long-Term Debt, less current
portion - - - (59,352)(e) 350,000
------- ------------ ------------ ------------ ------------
Other Liabilities:
Deferred income taxes 555 10,860 1,038 - 121,185
Deferred investment tax credits - - - - 1,195
Long-term hedging liability - - - - 100
Other - - - - 3,088
------- ------------ ------------ ------------ ------------
555 10,860 1,038 - 125,568
------- ------------ ------------ ------------ ------------
Minority Interest - Partnership - - - - 13,001
------- ------------ ------------ ------------ ------------
Shareholders' Equity:
Common stock 1 2 2 (32,464)(e) 2,774
Additional paid-in capital 1,728 7,572 - (320,845)(e) 19,764
Retained earnings 2,231 (15,560) 5,830 - 183,677
Partnership capital - - - (23,898)(d) -
Other comprehensive income - - - - 5,763
Common stock in treasury, at cost - - - - (25,196)
Unamortized cost of restricted
shares issued under stock
incentive plan - - - - (3,696)
------- ------------ ------------ ------------ ------------
3,960 (7,986) 5,832 (377,207) 183,086
------- ------------ ------------ ------------ ------------
$4,591 $ 2,874 $ 9,968 $ (438,851) $ 743,123
======= ============ ============ ============ ============
(d) To eliminate intercompany amounts related to Overton Partners, L.P., activity.
(e) To eliminate investments in subsidiaries.
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES Exhibit A
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2001
(in thousands)
Southwestern Diamond
Southwestern Arkansas Energy "M" Overton Overton
Energy Western Gas Production Production Partners Partners
Company Company SEECO, Inc. Company Company L.P. L.L.C.
------------ ----------- ----------- ------------ ---------- --------- ---------
RETAINED EARNINGS, beginning of year $ 157,338 $ 16,575 $ 20,329 $ (35,258) $ (2,968) $ - $ -
Net income (loss) 2,734 4,028 23,961 16,114 (104) 2,657 (230)
Cash dividends - (14,000) - - - - -
------------ ----------- ----------- ------------ ---------- --------- ---------
RETAINED EARNINGS, end of year $ 160,072 $ 6,603 $ 44,290 $ (19,144) $ (3,072) $ 2,657 $ (230)
============ =========== =========== ============ ========== ========= =========
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES Exhibit A
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2001
(in thousands)
Southwestern Southwestern
A.W. Energy Energy
Realty Pipeline Services
Company Company Company Eliminations Consolidated
------- ------------ ------------ ------------ ------------
RETAINED EARNINGS, beginning of year $2,063 $ (14,083) $ 4,357 $ - $ 148,353
Net income (loss) 168 (1,477) 1,473 (14,000)(e) 35,324
Cash dividends - - - 14,000 (e) -
------- ------------ ------------ ------------ ------------
RETAINED EARNINGS, end of year $2,231 $ (15,560) $ 5,830 $ - $ 183,677
======= ============ ============ ============ ============
(c) To eliminate intercompany dividends.
Exhibit B
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING FINANCIAL DATA SCHEDULE
FOR THE YEAR ENDED DECEMBER 31, 2001
(in thousands)
Total Assets $ 743,123
Total Operating Revenues $ 344,927
Net Income $ 35,324
Southwestern Energy Company
P.O. Box 1408
Fayetteville, AR 72702-1408
February 27, 2002
Securities & Exchange Commission
ATTN: Filing Desk, Stop 1-4
450 Fifth Street, N. W.
Washington, DC 20549-1004
Gentlemen:
Enclosed is Form U-3A-2, Statement by Holding Company Claiming
Exemption Under Rule U-3A-2 from the Provisions of the Public
Utility Holding Company Act of 1935, on behalf of Southwestern
Energy Company for the year ended December 31, 2001.
This filing is being effected by direct transmission to the
Commission's EDGAR System.
Sincerely,
Stan Wilson
Controller