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
1083 Sain Street, Fayetteville, Arkansas (P.O. Box 1408, Fayetteville,
Arkansas 72702-1408). 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, a gas 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), which indirectly 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. 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 72701. SEECO, Inc., Arkansas Gas Gathering
Company, and A. W. Realty Company, occupy the same location as that of
Claimant. 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, 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, and Southwestern Energy Pipeline
Company is also authorized to do business in Oklahoma. Southwestern
Energy Services Company is also authorized to do business in Oklahoma,
Louisiana and Texas. Diamond "M" Production Company is a Delaware
corporation authorized to do business in Texas.
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 subsidiaries.
Arkansas Western Gas Company (AWG), Claimant's only public utility
subsidiary, operates 5,062 miles of pipeline. This system includes, in
Arkansas, a gathering and storage system with 386 miles of pipeline,
984 miles of transmission pipeline and 3,692 miles of distribution
pipeline.
-2-
AWG's northwest Arkansas gas utility system gathers its 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 east to the Harrison and Mountain Home areas. This
eastern section of the AWG system receives a portion of its gas supply
from a lateral line off of the Ozark Pipeline System. Through its
division, Associated Natural Gas Company (Associated), AWG provides
distribution of natural gas to communities in northeast Arkansas. Major
communities served in northeast Arkansas include Blytheville, Piggott
and Osceola. The Associated distribution system also served the
"bootheel" area in southeast Missouri prior to the sale of its Missouri
assets on May 31, 2000, including the communities of Sikeston, New
Madrid and Caruthersville, and extended north to the Jackson area. In
addition, prior to May 31, 2000, Associated provided service to Butler,
Missouri, near the state's western border, and Kirksville, Missouri,
near the state's northern border, through connections off of interstate
pipelines in those areas. The Company previously served approximately
48,000 customers in Missouri.
3. Arkansas Western Gas Company made gas sales for the 12 months ended
December 31, 2000, as follows:
(a) Natural gas distributed at retail:
Average
Utility Sales Consumers Mcf Sales
------------- --------- --- -----
Residential 134,099 10,947,779 $ 79,441,092
Commercial 18,371 7,627,412 47,003,749
Industrial 257 3,488,270 18,149,834
------- ---------- -------------
Total 152,727 22,063,461 $ 144,594,675
======== ========== =============
(b) The public utility subsidiary distributed 2,740,694 Mcf of natural
gas for revenues of $16,302,494 to retail customers in the state
of Missouri.
(c) The public utility subsidiary distributed 224,483 Mcf of natural
gas for revenues of $1,003,631 to industrial customers in the
state if Missouri.
(d) The public utility subsidiary purchased outside the state of
Arkansas 7,100,274 Mcf of natural gas costing $26,604,108 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, 2000.
EXHIBIT B
Financial Data Schedule for the year ended December 31, 2000.
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 28th day of February, 2001.
SOUTHWESTERN ENERGY COMPANY
By: /s/ GREG D. KERLEY
----------------------------
Greg D. Kerley
Executive Vice President
and Chief Financial Officer
ATTEST:
/s/ GEORGE A. TAAFFE
--------------------------
George A. Taaffe
Secretary
Notices and correspondence concerning this statement should be addressed to:
Greg D. Kerley, Executive Vice President and Chief Financial Officer
Southwestern Energy Company
P.O. Box 1408
Fayetteville, Arkansas 72702-1408
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2000
(in thousands)
Southwestern Diamond Southwestern
Southwestern Arkansas Energy "M" A.W. Energy
Energy Western Gas Production Production Realty Pipeline
Company Company SEECO, Inc. Company Company Company Company
------------ ----------- ----------- ------------ --------- -------- ------------
Operating Revenues:
Gas sales $ - $ 144,595 $ 54,560 $ 36,316 $ 147 $ - $ -
Gas marketing - - - - - - -
Oil sales - - - 12,445 3,093 - -
Gas transportation - 4,901 - - - - -
Other - 1,739 4,359 - - 448 -
------------ ----------- ----------- ------------ --------- -------- ------------
- 151,235 58,919 48,761 3,240 448 -
------------ ----------- ----------- ------------ --------- -------- ------------
Operating Costs and Expenses:
Gas purchases - utility - 93,992 - - - - -
Gas purchases - marketing - - - - - - -
Operating and general - 33,128 7,891 15,240 2,448 341 50
Unusual items - - 111,288 - - - -
Depreciation, depletion and
amortization - 6,625 12,947 25,173 928 90 (3)
Taxes, other than income - 2,834 119 5,307 164 27 2
------------ ----------- ----------- ------------ --------- -------- ------------
- 136,579 132,245 45,720 3,540 458 49
------------ ----------- ----------- ------------ --------- -------- ------------
Operating Income (Loss) - 14,656 (73,326) 3,041 (300) (10) (49)
------------ ----------- ----------- ------------ --------- -------- ------------
Interest Expense:
Interest on long-term debt 24,089 - - - - - -
Intercompany interest (7,915) 4,185 2,563 410 (35) 68 738
Other interest charges 1,111 441 4 2 - - -
Interest capitalized - (18) (337) (2,092) - - -
------------ ----------- ----------- ------------ --------- -------- ------------
17,285 4,608 2,230 (1,680) (35) 68 738
------------ ----------- ----------- ------------ --------- -------- ------------
Other Income (Expense) 14,850 2,599 (342) 32 - 685 (1,767)
------------ ----------- ----------- ------------ --------- -------- ------------
Income (Loss) before Provision (Benefit)
for Income Taxes (2,435) 12,647 (75,898) 4,753 (265) 607 (2,554)
Provision (Benefit) for Income Taxes (6,587) 4,869 (22,420) (5,242) 62 203 (702)
------------ ----------- ----------- ------------ --------- -------- ------------
Extraordinary Loss due to early
Retirement of L-T Debt
(Net of Tax) - - - (862) - (29) -
Net Income (Loss) $ 4,152 $ 7,778 $ (53,478) $ 9,133 $ (327) $ 375 $ (1,852)
============ =========== =========== ============ ========= ======== ============
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2000
(in thousands)
Southwestern
Energy
Services
Company Eliminations Consolidated
------------ ------------ ------------
Operating Revenues:
Gas sales $ - $ (35,349)(b) $ 200,269
Gas marketing 207,748 (70,514)(b) 137,234
Oil sales - - 15,538
Gas transportation - - 4,901
Other - (604)(c) 5,942
------------ ------------ ------------
207,748 (106,467) 363,884
------------ ------------ ------------
Operating Costs and Expenses:
Gas purchases - utility - (35,323)(b)(c) 58,669
Gas purchases - marketing 203,735 (70,514)(b) 133,221
Operating and general 1,382 (690)(c) 59,790
Unusual items - - 111,288
Depreciation, depletion and
amortization 109 - 45,869
Taxes, other than income 62 - 8,515
------------ ------------ ------------
205,288 (106,527) 417,352
------------ ------------ ------------
Operating Income (Loss) 2,460 60 (53,468)
------------ ------------ ------------
Interest Expense:
Interest on long-term debt - - 24,089
Intercompany interest (14) - -
Other interest charges 30 - 1,588
Interest capitalized - - (2,447)
------------ ------------ ------------
16 - 23,230
------------ ------------ ------------
Other Income (Expense) - (14,060)(c)(d) 1,997
------------ ------------ ------------
Income (Loss) Before Provision (Benefit)
for Income Taxes 2,444 (14,000) (74,701)
Provision (Benefit) for Income Taxes 912 - (28,905)
------------ ------------ ------------
Extraordinary Loss due to early
Retirement of L-T Debt
(Net of Tax) - - (891)
Net Income (Loss) $ 1,532 $ (14,000) $ (46,687)
============ ============ ============
(b) To eliminate intercompany sales and purchases.
(c) To eliminate intercompany income and expense items.
(d) To eliminate intercompany dividends.
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2000
(in thousands)
Southwestern Diamond Southwestern
Southwestern Arkansas Energy "M" A.W. Energy
Energy Western Gas Production Production Realty Pipeline
Company Company SEECO, Inc. Company Company Company Company
------------ ----------- ----------- ------------ ---------- -------- ------------
Assets
Current Assets:
Cash $ 1,489 $ 846 $ - $ 50 $ - $ - $ -
Accounts receivable 288 36,349 3,028 16,468 158 3 -
Intercompany accounts receivable 64,612 - (44,475) (6,826) 761 (797) (10,314)
Income taxes receivable 265 - - - - - -
Inventories, at average cost - 10,339 6,661 - - - -
Other 1,613 14,275 (3) 280 (3) 1 -
------------ ---------- ----------- ------------ ---------- -------- ------------
Total Current Assets 68,267 61,809 (34,789) 9,972 916 (793) (10,314)
------------ ---------- ----------- ------------ ---------- -------- ------------
Investments:
Investment in subsidiaries, at cost 417,967 - - - - - -
Other - - - - - 49 15,525
------------ ---------- ----------- ------------ ---------- -------- ------------
417,967 - - - - 49 15,525
------------ ---------- ----------- ------------ ---------- -------- ------------
Property, Plant and Equipment:
Oil and gas properties, using the
full cost method - - 272,711 591,974 7,338 - -
Gas utility system - 190,893 - - - - -
Gas in underground storage - 11,818 16,049 - - - -
Other 15,427 878 233 5,076 - 5,939 -
------------ ---------- ----------- ------------ ---------- -------- ------------
15,427 203,589 288,993 597,050 7,338 5,939 -
Less - Accumulated depreciation,
depletion and amortization 11,987 80,707 150,214 305,947 4,660 895 -
------------ ---------- ----------- ------------ ---------- -------- ------------
3,440 122,882 138,779 291,103 2,678 5,044 -
------------ ---------- ----------- ------------ ---------- -------- ------------
Other Assets 7,625 4,119 168 903 25 2 -
------------ ---------- ----------- ------------ ---------- -------- ------------
$ 497,299 $ 188,810 $ 104,158 $ 301,978 $ 3,619 $ 4,302 $ 5,211
============ ========== =========== ============ ========== ======== ============
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2000
(in thousands)
Southwestern
Energy
Services
Company Eliminations Consolidated
------------ ------------ ------------
Assets
Current Assets:
Cash $ 1 $ - $ 2,386
Accounts receivable 20,747 - 77,041
Intercompany accounts receivable (2,961) - -
Income taxes receivable - - 265
Inventories, at average cost - - 17,000
Other - - 16,163
------------ ------------ ------------
Total Current Assets 17,787 - 112,855
------------ ------------ ------------
Investments:
Investment in subsidiaries, at cost - (417,967)(a) -
Other - - 15,574
------------ ------------ ------------
- (417,967) 15,574
------------ ------------ ------------
Property, Plant and Equipment:
Oil and gas properties, using the
full cost method - - 872,023
Gas utility system - - 190,893
Gas in underground storage - - 27,867
Other 387 - 27,940
------------ ------------ ------------
387 - 1,118,723
Less - Accumulated depreciation,
depletion and amortization 206 - 554,616
------------ ------------ ------------
181 - 564,107
------------ ------------ ------------
Other Assets - - 12,842
------------ ------------ ------------
$ 17,968 $ (417,967) $ 705,378
============ ============ ============
(a) To eliminate investment in subsidiaries.
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET (continued)
DECEMBER 31, 2000
(in thousands)
Southwestern Diamond Southwestern
Southwestern Arkansas Energy "M" A.W. Energy
Energy Western Gas Production Production Realty Pipeline
Company Company SEECO, Inc. Company Company Company Company
------------ ----------- ----------- ------------ ---------- -------- ------------
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term debt $ 171,000 $ - $ - $ - $ - $ - $ -
Accounts payable 12,422 12,743 8,929 7,319 110 - -
Taxes payable 558 2,918 386 108 - 66 -
Interest payable 2,657 150 - - - - -
Customer deposits - 4,799 - - - - -
Other (10,557) 11,946 144 626 - - -
------------ ----------- ----------- ------------ ---------- -------- ------------
Total Current Liabilities 176,080 32,556 9,459 8,053 110 66 -
------------ ----------- ----------- ------------ ---------- -------- ------------
Long-Term Debt, less current
portion 225,000 64,658 - - - - -
------------ ----------- ----------- ------------ ---------- -------- ------------
Other Liabilities:
Deferred income taxes (54,507) 19,966 44,127 74,842 (523) 444 11,720
Deferred investment tax credits - 1,314 - - - - -
Other 450 527 - 795 - - -
------------ ----------- ----------- ------------ ---------- -------- ------------
(54,057) 21,807 44,127 75,637 (523) 444 11,720
------------ ----------- ----------- ------------ ---------- -------- ------------
Shareholders' Equity:
Common stock 2,774 24,214 8,244 1 - 1 2
Additional paid-in capital 20,220 29,000 22,000 253,545 6,999 1,728 7,573
Retained earnings 157,338 16,575 20,328 (35,258) (2,967) 2,063 (14,084)
Common stock in treasury, at cost (28,485) - - - - - -
Unamortized cost of restricted
shares issued under stock
incentive plan (1,571) - - - - - -
------------ ----------- ----------- ------------ --------- -------- ------------
150,276 69,789 50,572 218,288 4,032 3,792 (6,509)
------------ ----------- ----------- ------------ --------- -------- ------------
$ 497,299 $ 188,810 $ 104,158 $ 301,978 $ 3,619 $ 4,302 $ 5,211
============ =========== =========== ============ ========= ======== ============
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET (continued)
DECEMBER 31, 2000
(in thousands)
Southwestern
Energy
Services
Company Eliminations Consolidated
------------ ------------ ------------
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term debt $ - $ - $ 171,000
Accounts payable 12,781 - 54,304
Taxes payable 310 - 4,346
Interest payable - - 2,807
Customer deposits - - 4,799
Other 470 - 2,629
------------ ------------ ------------
Total Current Liabilities 13,561 - 239,885
------------ ------------ ------------
Long-Term Debt, less current
portion - (64,658)(a) 225,000
------------ ------------ ------------
Other Liabilities:
Deferred income taxes 48 - 96,117
Deferred investment tax credits - - 1,314
Other - - 1,772
------------ ------------ ------------
48 - 99,203
------------ ------------ ------------
Shareholders' Equity:
Common stock 2 (32,464)(a) 2,774
Additional paid-in capital - (320,845)(a) 20,220
Retained earnings 4,357 - 148,352
Common stock in treasury, at cost - - (28,485)
Unamortized cost of restricted
shares issued under stock
incentive plan - - (1,571)
------------ ------------ ------------
4,359 (353,309) 141,290
------------ ------------ ------------
$ 17,968 $ (417,967) $ 705,378
============ ============ ============
(a) To eliminate investment in subsidiaries.
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2000
(in thousands)
Southwestern Diamond Southwestern
Southwestern Arkansas Energy "M" A.W. Energy
Energy Western Gas Production Production Realty Pipeline
Company Company SEECO, Inc. Company Company Company Company
------------ ----------- ----------- ------------ ---------- -------- ------------
RETAINED EARNINGS, beginning of year $ 156,190 $ 22,797 $ 73,806 $ (44,391) $ (2,640) $ 1,688 $ (12,232)
Net income (loss) 4,152 7,778 (53,478) 9,133 (327) 375 (1,852)
Cash dividends (3,004) (14,000) - - - - -
------------ ----------- ----------- ------------ ---------- -------- ------------
RETAINED EARNINGS, end of year $ 157,338 $ 16,575 $ 20,328 $ (35,258) $ (2,967) $ 2,063 $ (14,084)
============ =========== =========== ============ ========== ======== ============
SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2000
(in thousands)
Southwestern
Energy
Services
Company Eliminations Consolidated
------------ ------------ ------------
RETAINED EARNINGS, beginning of year $ 2,825 $ - $ 198,043
Net income (loss) 1,532 (14,000)(d) (46,687)
Cash dividends - 14,000 (d) (3,004)
------------ ------------ ------------
RETAINED EARNINGS, end of year $ 4,357 $ - $ 148,352
============ ============ ============
(d) To eliminate intercompany dividends.