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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to _____________________
Commission file number 1-8246
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Southwestern Energy Company 401(k) Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Southwestern Energy Company
2350 N. Sam Houston Parkway E.
Suite 300
Houston, Texas 77032
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SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2000 AND 1999
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPORTING SCHEDULE
DECEMBER 31, 2000 AND 1999
FINANCIAL STATEMENTS
Page
Report of Independent Public Accountants 1
Statements of Net Assets Available for Plan Benefits
as of December 31, 2000 and 1999 2
Statement of Changes in Net Assets Available for Plan Benefits
for the year ended December 31, 2000 3
Notes to Financial Statements 4
SCHEDULE SUPPORTING FINANCIAL STATEMENTS
Schedule of Assets Held for Investment Purposes, Form 5500, Schedule H,
Item 4i - December 31, 2000 8
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Retirement Committee of
Southwestern Energy Company:
We have audited the accompanying statements of net assets available for
benefits of the Southwestern Energy Company 401(k) Savings Plan (the Plan)
as of December 31, 2000 and 1999, and the related statement of changes in
net assets available for benefits for the year ended December 31, 2000.
These financial statements and the schedule referred to below are the
responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan
as of December 31, 2000 and 1999, and the changes in its net assets
available for benefits for the year ended December 31, 2000, in conformity
with accounting principles generally accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes is presented for purposes of additional
analysis and is not a required part of the basic financial statements but
is supplementary information required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. The supplemental schedule has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects
in relation to the basic financial statements taken as a whole.
Authur Andersen LLP
Tulsa, Oklahoma
May 11, 2001
1
SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2000 AND 1999
2000 1999
------------ ------------
ASSETS:
Investments (Notes 1 and 4):
Mutual funds $ 10,614,180 $ 12,351,416
Common collective trusts 7,057,979 8,203,248
Common stock 697,907 602,225
Participant loans 440,428 420,255
------------ ------------
18,810,494 21,577,144
------------ ------------
Other assets:
Contributions receivable 102,193 136,342
LIABILITIES:
Payable to plan participants - 3,364
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 18,912,687 $ 21,710,122
============ ============
The accompanying notes are an integral
part of these statements.
2
SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2000
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year $ 21,710,122
------------
CHANGES DURING THE YEAR (Note 1):
Contributions:
Employee 2,184,767
Employer 694,173
Interest and dividend income 1,200,353
Net depreciation in fair value of investments (1,301,938)
Withdrawals by participants (2,081,496)
Other (4,437)
------------
Net change during the year 691,422
------------
Distribution to acquiring company (Note 7) (3,488,857)
------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $ 18,912,687
============
The accompanying notes are an
integral part of this statement.
3
SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
1. DESCRIPTION OF THE PLAN AND ACCOUNTING POLICIES:
Scope of the Plan
The Southwestern Energy Company 401(k) Savings Plan (the Plan) is a defined
contribution plan that covers all employees of Southwestern Energy Company
(the Company) and its subsidiaries except for:
(a) Employees who have not yet completed thirty (30) days of service.
(b) Employees under the age of twenty-one (21).
(c) Seasonal employees who have one thousand (1,000) or less hours of
service for the applicable computation period.
Participation by eligible employees in the Plan is voluntary.
Administration
The trust under the Plan is operated under a trust agreement with Scudder
Trust Company.
Plan Assets
Mutual funds, common collective trusts, and common stock are valued at
year-end market prices. Interest earned and dividends declared but not yet
received are accrued and included in earnings of the Plan for the
respective periods.
Plan Expenses
Expenses incurred in connection with the Plan are paid by the Company.
During 2000, the Company paid $21,779 in expenses on behalf of the Plan.
Brokerage commissions and transfer taxes incurred in connection with
securities transactions are treated as a part of the purchase cost or a
reduction of sale proceeds.
Contributions and Funding Policy
Participants may contribute from one percent to sixteen percent of their
compensation in Salary Reduction Contributions, as defined. The Company
matches fifty percent of the first six percent of employee contributions.
All contributions to the Plan are invested under the direction of the
participant in nine separate funds.
4
Vesting
Contributions made by participants are fully vested. Participants vest in
the Company's contributions to the Plan as set forth in the following
schedule:
Years of
Vesting Service Percent Vested
--------------- --------------
1 0%
2 50%
3 100%
Forfeitures
Forfeited nonvested amounts will be applied to restore matching
contributions of any Plan participants because of a valid repayment.
Remaining forfeitures will be used to reduce Plan expenses. Any forfeiture
amounts which remain following payment of Plan expenses will be used to
reduce employer matching contributions. At December 31, 2000, there was $89
in forfeitures available to be used for the purposes stated above.
Participants' Accounts
Each participant's account is credited with the participant's contribution
and an allocation of:
(a) The Company's contribution.
(b) The Plan's investment earnings.
The allocation of the Plan's investment earnings is performed at the end of
each calendar quarter.
The Plan permits current participants to apply for and receive loans that
represent borrowings from a participant's account. The maximum amount of
any loan available under the Plan is limited to the lesser of $50,000 or 50
percent of a participant's vested account balance.
Although withdrawals from active participants' accounts are restricted by
the Plan, various options are available to participants which are based on
the type of contributions made, age of the participant and other factors.
On termination of service due to death or disability, a participant or a
participant's estate may receive the full value of his or her account in a
lump sum. For termination of service due to other reasons, a participant
may receive the value of the vested interest in his or her account as a
lump sum distribution.
Participants may change their contribution percentages, investment
elections, transfer balances between funds, and apply for distributions
24-hours a day either through telephone access on the Pilot System or
internet access on the Scudder InterActive Account.
Basis of Accounting
The Plan's financial statements are presented on the accrual basis of
accounting. The preparation of the financial statements in conformity with
accounting principles generally accepted in the United States requires the
Plan's management to use estimates and assumptions that affect the
accompanying financial statements and disclosures. Actual results could
differ from these estimates.
5
Plan Amendments
Effective during the year, the Board of Directors approved the Vice
President - Human Resources as the Plan Administrator for administrative
duties associated with the Savings Plan.
2. TERMINATION OF THE PLAN:
The Plan gives the Company the right to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). In the event of
Plan termination, participants will become 100 percent vested in the
contributions made by the Company.
3. TAX STATUS:
The Internal Revenue Service issued a determination letter dated November
7, 1994, stating that the Plan was designed in accordance with applicable
requirements of the Internal Revenue Code. On January 1, 1999, the Plan
adopted the Scudder Non-Standardized Plan Document which received a
favorable Internal Revenue Service determination letter on May 9, 1996. The
Plan has been amended since receiving the determination letter. However,
the Plan administrator and the Plan's legal counsel believe that the Plan
is currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provision for
income taxes has been included in the Plan's financial statements.
4. INVESTMENTS:
The following investments represent five percent or more of the net assets
available for benefits at December 31, 2000 and 1999:
Market Value at December 31,
Description of Asset 2000 1999
-------------------- ----------- -----------
Scudder Trust Company Growth and Income Fund $ 5,323,676 $ 7,324,630
Scudder Trust Company Collective Investment
Trust Stable Value Fund 3,441,662 4,642,777
Scudder Trust Company Collective Investment
Trust Stock Index Fund 3,616,317 3,560,471
Scudder Trust Company Pathway Series -
Balanced Fund 1,780,476 2,118,333
INVESCO Funds Group, Inc. Selected Income Fund 1,551,501 1,523,300
Baron Asset Fund 1,146,322 733,199
5. BENEFITS PAYABLE:
Amounts allocated for benefits requested by participants before year end
but not paid until after year end were $66,837 and $92,514 at December 31,
2000 and 1999, respectively.
6. NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS:
Net appreciation (depreciation) by investment type for the year ended
December 31, 2000 was as follows:
Mutual funds $ (348,498)
Common collective trusts (1,229,944)
Common stock 276,504
-----------
$(1,301,938)
===========
6
7. SALE OF SUBSIDIARY ASSETS:
On May 31, 2000, the Missouri assets of one of the Company's subsidiaries
were sold to another company. As a result, 87 employees and their related
Plan accounts were transferred to a defined contribution plan of the
acquiring company.
7
SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES-FORM 5500, SCHEDULE H, ITEM 4i
EIN 71-0205415
DECEMBER 31, 2000
DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE,
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, CURRENT
LESSOR, OR SIMILAR PARTY PAR, OR MATURITY VALUE VALUE
-------------------------------- ----------------------------- ----------
Entergy Corporation 4,435.16 Common Shares $ 187,663
Southwestern Energy Company* 50,731.50 Common Shares 510,244
Scudder Trust Company Collective
Investment Trust* Stable Value Fund 3,441,662
Scudder Trust Company Collective
Investment Trust* Stock Index Fund 3,616,317
Scudder Trust Company* Pathway Series-Balanced Fund 1,780,476
Scudder Trust Company* Growth and Income Fund 5,323,676
Scudder Trust Company* International Fund 563,414
Scudder Trust Company* 21st Century Growth Fund 248,791
Baron Capital Inc. Asset Fund 1,146,322
INVESCO Funds Group, Inc. Select Income Fund 1,551,501
Various plan participants* Participant loans with
interest rates from 8.75%
to 10.50% and various
maturities 440,428
-----------
$18,810,494
===========
* Parties-in-interest
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrator of the Plan has duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN
Date: June 28, 2001 BY: /s/ GREG D. KERLEY
--------------------------- -----------------------------
Greg D. Kerley
Executive Vice President
And Chief Financial Officer
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report dated May 11, 2001, included in this 11-K, into the Company's previously
filed Registration Statements on Form S-8 (File Nos. 333-03787, 333-03789,
333-64961, 333-96161, and 333-42494).
Arthur Andersen LLP
Tulsa, Oklahoma
June 27, 2001
Southwestern Energy Company
P.O. Box 1408
Fayetteville, AR 72702-1408
June 28, 2001
Securities and Exchange Commission
ATTN: Filing Desk, Stop 1-4
450 Fifth Street, N.W.
Washington, DC 20549-1004
Gentlemen:
Pursuant to regulations of the Securities and Exchange Commission,
submitted herewith for filing on behalf of Southwestern Energy Company is
the Annual Report on Form 11-k, dated June 28, 2001.
This filing is being effected by direct transmission to the Commission's
EDGAR System.
Very truly yours,
Stan Wilson
Controller