11-K 1 swn401k123101-11k.htm 401K FINANCIAL STATEMENTS 12/31/01 swn401k123101-11k

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

 

 

 

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, 2001

 

 

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

 

 

 

 

 

 

 

 

______________________________________________________________________________________

SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN

 

FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
AS OF DECEMBER 31, 2001 AND 2000
TOGETHER WITH REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS

______________________________________________________________________________________

 

SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2001 AND 2000

 

FINANCIAL STATEMENTS

 

 

 

 

Page

 

 

Report of Independent Public Accountants

1

 

 

Statements of Net Assets Available for Plan Benefits
  as of December 31, 2001 and 2000

2

 

 

Statement of Changes in Net Assets Available for Plan Benefits
  for the year ended December 31, 2001

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, 2001

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 plan benefits of the Southwestern Energy Company 401(k) Savings Plan (the Plan) as of December 31, 2001 and 2000, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 2001.  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 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 plan benefits of the Plan as of December 31, 2001 and 2000, and the changes in its net assets available for plan benefits for the year ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

Our audits were 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.

 

 

 

Tulsa, Oklahoma
  May 3, 2002

 

 

1

______________________________________________________________________________________

SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN

STATEMENTS OF NET ASSETS
AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2001 AND 2000

 

 

 

 

2001

 

2000

 

 

 

 

 

ASSETS:

 

 

 

 

 

Investments, at quoted market value (Notes 1, 4 and 6):

 

 

 

 

 

Mutual funds

$

9,103,120

$

10,614,180

 

Common collective trusts

 

7,878,263

 

7,057,979

 

Common stock

 

611,540

 

697,907

 

Participant loans

 

441,163

 

440,428

 

 

 

18,034,086

 

18,810,494

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

Contributions receivable

 

105,653

 

102,193

 

 

 

 

 

NET ASSETS AVAILABLE FOR PLAN BENEFITS

$

18,139,739

$

18,912,687

 

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, 2001

 

 

NET ASSETS AVAILABLE FOR PLAN BENEFITS, beginning of year

$

  18,912,687

 

 

 

 

 

CHANGES DURING THE YEAR (Note 1):

 

 

 

 

Contributions-

 

 

 

 

Employee

 

1,808,073

 

 

Employer

 

655,221

 

 

Interest and dividend income

 

460,376

 

 

Net depreciation in fair value of investments

 

(1,707,437

)

 

Withdrawals by participants

 

(1,985,312

)

 

Other

 

       (3,869

)

 

 

 

 

 

Net change during the year

 

    (772,948

)

 

 

 

 

 

 

 

 

NET ASSETS AVAILABLE FOR PLAN BENEFITS, end of year

$

  18,139,739

 

 

 

The accompanying notes are an integral part of this statement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

______________________________________________________________________________________

SOUTHWESTERN ENERGY COMPANY
401(k) SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000

 

 

 

 

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 who are 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 2001, the Company paid $3,869 in expenses on behalf of the Plan.  Brokerage commissions and transfer taxes incurred connection with securities transactions are treated as part of the purchase cost or a reduction of proceeds.

Contributions and Funding Policy

Participants may contribute from 1% to 16% of their compensation in Salary Reduction Contributions, as defined.  The Company matches 50% up to 6% of the employee's compensation.  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 that remain following payment of Plan expenses will be used to reduce employer matching contributions.  At December 31, 2001, there was $66 in forfeitures available to be used 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, which 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% 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 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
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

______________________________________________________________________________________

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% 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 5% or more of the net assets available for benefits at December 31:

 

  Market Value at December 31,

 

       2001      

       2000      

Scudder Trust Company Collective Investment Trust
   Stable Value Fund


 $  4,360,529


 $   3,441,662

Scudder Trust Company Growth and Income Fund

     4,253,013

      5,323,676

Scudder Trust Company Collective Investment Trust
   Stock Index Fund


     3,517,734


      3,616,317

Pimco Total Return - Administrative Fund

     1,671,192

              -  

Scudder Trust Company Pathway Series Moderate
   Fund


     1,404,380


      1,780,476

PBHG Mid Cap Value Fund

     1,109,598

              -  

INVESCO Funds Group, Inc. Selected Income Fund

             -  

      1,551,501

Baron Asset Fund

             -  

      1,146,322

5.  BENEFITS PAYABLE:

Amounts allocated for benefits requested by participants before year end but not paid until after year
end were $248,800 and $66,837 at December 31, 2001 and 2000, respectively.

6.  NET DEPRECIATION IN FAIR VALUE OF INVESTMENTS:

Net depreciation by investment type for the year ended December 31, 2001 was as follows:

 

Mutual funds

$

(1,243,368

)

 

Common collective trusts

 

(460,578

)

 

Common stock

 

(3,491

)

 

$

1,707,437

)

 

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 in June 2001.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2001

 

 


      Identity of Issue, Borrower,        
       Lessor or Similar Party            

      Description of Investment Including
  Maturity Date, Rate of Interest, Collateral, 
             Par or Maturity Value               



Current Value 

Scudder Trust Company Collective
   Investment Trust*

Stable Value Fund


$   4,360,529

Scudder Trust Company*

Growth and Income Fund

    4,253,013

Scudder Trust Company Collective
   Investment Trust*

Stock Index Fund


    3,517,734

Pimco Total Return

Administrative Fund

    1,671,192

Scudder Trust Company*

Pathway Series - Moderate Fund

     1,404,380

PBHG

Mid Cap Value Fund

     1,109,598

Southwestern Energy Company*

43,316.10 Common Shares

      450,487

Scudder Trust Company*

International Fund

      414,064

Scudder Trust Company*

21st Century Growth Fund

      250,873

Entergy Corporation

4,117.95 Common Shares

       161,053

Various plan participants*

Participant loans with interest rates from
   5.75% to 10.5% and various maturities


       441,163

$  18,034,086

 

*  Parties-in-interest

 

 

 

8

______________________________________________________________________________________

EXHIBIT INDEX


EXHIBIT
NUMBER

 



   EXHIBIT

 

 SEQUENTIALLY
 NUMBERED
 PAGE

23

 

Consent of Independent Public Accountants

 

10

 

 

 

 

 

99

 

Letter to commission Pursuant to Temporary
Note 3T

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

______________________________________________________________________________________

 

 

EXHIBIT 23.1

 

 

Consent of Independent Public Accountants

 

As independent public accountants, we hereby consent to the incorporation of our report dated May 3, 2002, included in this Form 11-K, into the Company's previously filed Registration Statements on Form S-8 (File Nos. 333-03787, 333-03789, 333-64961, 333-96161, 333-42494 and 333-69720).

 

 

/s/    AUTHUR ANDERSEN LLP

 

Arthur Andersen LLP

 

 

Tulsa, Oklahoma

 

 

June 3,2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

______________________________________________________________________________________

 

EXHIBIT 99.1

 

SOUTHWESTERN ENERGY COMPANY

 

2350 N. Sam Houston Parkway East

Suite 300

Houston, Texas 77032

 

LETTER TO COMMISSION PURSUANT TO TEMPORARY NOTE 3T

June 4, 2002

 

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

 

Ladies and Gentlemen:

 

Pursuant to Temporary Note 3T to Article 3 of Regulation S-X, Southwestern Energy Company 401(k) Savings Plan (the "Plan") has obtained a letter of representation from Arthur Andersen LLP stating that the December 31, 2001 audit of the Plan was subject to their quality control system for the U.S. accounting and auditing practice to provide reasonable assurance that the engagement was conducted in compliance with professional standards, that there was appropriate continuity of Arthur Andersen LLP personnel working on the audit and availability of national office consultation. Availability of personnel at foreign affiliates of Arthur Andersen LLP is not relevant to this audit.

 

 

Very truly yours,

Southwestern Energy Company 401(k) Savings Plan

Greg D. Kerley
Executive Vice President
and Chief Financial Officer,
Southwestern Energy Company

 

 

 

 

 

 

 

11

______________________________________________________________________________________

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 04, 2002

By:        /s/ GREG D. KERLEY

Greg D. Kerley
Executive Vice President
and Chief Financial Officer,
Southwestern Energy Company