(15) CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The Company is providing condensed consolidating financial information for SEECO, SEPCO and SES, its subsidiaries that are currently guarantors of the Company's registered public debt, and for its other subsidiaries that are not guarantors of such debt. These wholly owned subsidiary guarantors have jointly and severally, fully and unconditionally guaranteed the Company's 7.35% Senior Notes and 7.125% Senior Notes. The subsidiary guarantees (i) rank equally in right of payment with all of the existing and future senior debt of the subsidiary guarantors; (ii) rank senior to all of the existing and future subordinated debt of the subsidiary guarantors; (iii) are effectively subordinated to any future secured obligations of the subsidiary guarantors to the extent of the value of the assets securing such obligations; and (iv) are structurally subordinated to all debt and other obligations of the subsidiaries of the guarantors. In the case of each series of notes, if no default or event of default has occurred and is continuing, these guarantees will be released (i) automatically upon any sale, exchange or transfer of all of the Company's equity interests in the guarantor; (ii) automatically upon the liquidation and dissolution of a guarantor; (iii) following delivery of notice to the trustee of the release of the guarantor of its obligations under the Company's credit facility; and (iv) upon legal or covenant defeasance or other satisfaction of the obligations under the notes.

The Company has not presented separate financial and narrative information for each of the subsidiary guarantors because it believes that such financial and narrative information would not provide any additional information that would be material in evaluating the sufficiency of the guarantees. The following condensed consolidating financial information summarizes the results of operations, financial position and cash flows for the Company's guarantor and non-guarantor subsidiaries.


CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
	Parent	Guarantors	Non-Guarantors	Eliminations	Consolidated
	(in thousands)
Year ended December 31, 2011:
Operating revenues	$ 0	$ 2,803,385	$ 411,998	$ (262,477)	$ 2,952,906
Operating costs and expenses:
Gas purchases	0	710,487	0	(1,396)	709,091
Operating expenses	0	380,154	118,713	(257,923)	240,944
General and administrative expenses	0	141,499	19,700	(3,158)	158,041
Depreciation, depletion and amortization	0	665,615	38,896	0	704,511
Taxes, other than income taxes	0	53,950	11,568	0	65,518
Total operating costs and expenses	0	1,951,705	188,877	(262,477)	1,878,105
Operating income	0	851,680	223,121	0	1,074,801
Other income, net	0	306	(42)	0	264
Equity in earnings of subsidiaries	637,769	0	0	(637,769)	0
Interest expense	0	11,277	12,798	0	24,075
Income (loss) before income taxes	637,769	840,709	210,281	(637,769)	1,050,990
Provision for income taxes	0	332,795	80,426	0	413,221
Net income (loss)	637,769	507,914	129,855	(637,769)	637,769

Year ended December 31, 2010:
Operating revenues	$ 0	$ 2,488,105	$ 318,232	$ (195,674)	$ 2,610,663
Operating costs and expenses:
Gas purchases	0	612,745	0	(1,584)	611,161
Operating expenses	0	293,713	91,164	(193,106)	191,771
General and administrative expenses	0	127,022	19,525	(984)	145,563
Depreciation, depletion and amortization	0	559,845	30,487	0	590,332
Taxes, other than income taxes	0	44,200	6,408	0	50,608
Total operating costs and expenses	0	1,637,525	147,584	(195,674)	1,589,435
Operating income	0	850,580	170,648	0	1,021,228
Other income, net	0	242	185	0	427
Equity in earnings of subsidiaries	604,118	0	0	(604,118)	0
Interest expense	0	10,777	15,386	0	26,163
Income (loss) before income taxes	604,118	840,045	155,447	(604,118)	995,492
Provision for income taxes	0	330,879	60,780	0	391,659
Net income (loss)	604,118	509,166	94,667	(604,118)	603,833
Less: Net loss attributable to noncontrolling interest	0	(285)	0	0	(285)
Net income (loss) attributable to Southwestern Energy	$ 604,118	$ 509,451	$ 94,667	$ (604,118)	$ 604,118

Year ended December 31, 2009:
Operating revenues	$ 0	$ 2,071,746	$ 207,672	$ (133,639)	$ 2,145,779
Operating costs and expenses:
Gas purchases	0	483,922	0	(1,086)	482,836
Operating expenses	0	201,964	66,682	(132,105)	136,541
General and administrative expenses	0	109,870	13,196	(448)	122,618
Depreciation, depletion and amortization	0	472,757	20,901	0	493,658
Impairment of natural gas & oil properties	0	907,812	0	0	907,812
Taxes, other than income taxes	0	33,935	3,345	0	37,280
Total operating costs and expenses	0	2,210,260	104,124	(133,639)	2,180,745
Operating income (loss)	0	(138,514)	103,548	0	(34,966)
Other income, net	0	1,388	61	0	1,449
Equity in earnings of subsidiaries	(35,650)	0	0	35,650	0
Interest expense	0	12,760	5,878	0	18,638
Income (loss) before income taxes	(35,650)	(149,886)	97,731	35,650	(52,155)
Provision (benefit) for income taxes	0	(53,549)	37,186	0	(16,363)
Net income (loss)	(35,650)	(96,337)	60,545	35,650	(35,792)
Less: Net loss attributable to noncontrolling interest	0	(142)	0	0	(142)
Net income (loss) attributable to Southwestern Energy	$ (35,650)	$ (96,195)	$ 60,545	$ 35,650	$ (35,650)


CONDENSED CONSOLIDATING BALANCE SHEETS

	Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
	(in thousands)
December 31, 2011:

ASSETS

Cash and cash equivalents	$ 14,711	$ 0	$ 916	$ 0	$ 15,627
Accounts receivable	2,914	309,038	29,963	0	341,915
Inventories	0	45,260	974	0	46,234
Other current assets	6,087	563,635	4,780	0	574,502
Total current assets	23,712	917,933	36,633	0	978,278
Intercompany receivables	2,053,132	53	23,517	(2,076,702)	0
Property and equipment	180,300	9,731,944	1,148,575	0	11,060,819
Less: Accumulated depreciation, depletion and amortization	57,254	4,220,205	137,880	0	4,415,339
	123,046	5,511,739	1,010,695	0	6,645,480
Investments in subsidiaries (equity method)	3,256,195	0	0	(3,256,195)	0
Other assets	28,641	227,152	23,346	0	279,139
Total assets	$ 5,484,726	$ 6,656,877	$ 1,094,191	$ (5,332,897)	$ 7,902,897

LIABILITIES AND EQUITY

Accounts and notes payable	$ 206,541	$ 332,710	$ 37,276	$ 0	$ 576,527
Other current liabilities	4,712	301,170	2,504	0	308,386
Total current liabilities	211,253	633,880	39,780	0	884,913
Intercompany payables	0	1,628,750	447,952	(2,076,702)	0
Long-term debt	1,342,100	0	0	0	1,342,100
Deferred income taxes	(97,045)	1,442,576	241,267	0	1,586,798
Other liabilities	59,114	54,826	5,842	0	119,782
Total liabilities	1,515,422	3,760,032	734,841	(2,076,702)	3,933,593
Commitments and contingencies
Total equity	3,969,304	2,896,845	359,350	(3,256,195)	3,969,304
Total liabilities and equity	$ 5,484,726	$ 6,656,877	$ 1,094,191	$ (5,332,897)	$ 7,902,897




December 31, 2010:

ASSETS

Cash and cash equivalents	$ 8,381	$ 7,631	$ 43	$ 0	$ 16,055
Accounts receivable	382	331,154	20,037	0	351,573
Inventories	0	34,263	835	0	35,098
Other current assets	5,015	171,060	2,092	0	178,167
Total current assets	13,778	544,108	23,007	0	580,893
Intercompany receivables	1,820,857	131	18,724	(1,839,712)	0
Investments	0	11,103	(11,102)	(1)	0
Property and equipment	124,823	7,871,279	984,783	0	8,980,885
Less: Accumulated depreciation, depletion and amortization	52,256	3,526,010	104,422	0	3,682,688
	72,567	4,345,269	880,361	0	5,298,197
Investments in subsidiaries (equity method)	2,253,871	0	0	(2,253,871)	0
Other assets	18,918	92,747	26,708	0	138,373
Total assets	$ 4,179,991	$ 4,993,358	$ 937,698	$ (4,093,584)	$ 6,017,463

LIABILITIES AND EQUITY

Accounts and notes payable	$ 175,476	$ 336,411	$ 33,208	$ 0	$ 545,095
Other current liabilities	3,288	142,839	2,761	0	148,888
Total current liabilities	178,764	479,250	35,969	0	693,983
Intercompany payable	0	1,317,696	522,017	(1,839,713)	0
Long-term debt	1,093,000	0	0	0	1,093,000
Deferred income taxes	(98,206)	1,066,166	162,332	0	1,130,292
Other liabilities	41,557	89,986	3,769	0	135,312
Total liabilities	1,215,115	2,953,098	724,087	(1,839,713)	3,052,587
Commitments and contingencies
Total equity	2,964,876	2,040,260	213,611	(2,253,871)	2,964,876
Total liabilities and equity	$ 4,179,991	$ 4,993,358	$ 937,698	$ (4,093,584)	$ 6,017,463


CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
	Parent	Guarantors	Non-Guarantors	Eliminations	Consolidated
	(in thousands)
Year ended December 31, 2011:
Net cash provided by operating activities	$ 14,688	$ 1,482,853	$ 242,276	$ 0	$ 1,739,817
Investing activities:
Capital investments	(66,647)	(1,916,246)	(201,581)	0	(2,184,474)
Proceeds from sale of property and equipment	0	154,261	265	0	154,526
Transfers to restricted cash	(85,055)	0	0	0	(85,055)
Transfers from restricted cash	85,055	0	0	0	85,055
Other	16,263	(43,961)	32,856	0	5,158
Net cash used in investing activities	(50,384)	(1,805,946)	(168,460)	0	(2,024,790)
Financing activities:
Intercompany activities	(242,277)	315,462	(73,185)	0	0
Payments on current portion of long-term debt	(1,200)	0	0	0	(1,200)
Payments on revolving long-term debt	(3,445,900)	0	0	0	(3,445,900)
Borrowings under revolving long-term debt	3,696,200	0	0	0	3,696,200
Other	35,203	0	0	0	35,203
Net cash provided by financing activities	42,026	315,462	(73,185)	0	284,303
Effect of exchange rate changes on cash	0	0	242	0	242
Increase (decrease) in cash and cash equivalents	6,330	(7,631)	873	0	(428)
Cash and cash equivalents at beginning of year	8,381	7,631	43	0	16,055
Cash and cash equivalents at end of year	$ 14,711	$ 0	$ 916	$ 0	$ 15,627

Year ended December 31, 2010:
Net cash provided by operating activities	$ 25,865	$ 1,368,248	$ 248,472	$ 0	$ 1,642,585
Investing activities:
Capital investments	(46,062)	(1,718,847)	(308,265)	0	(2,073,174)
Proceeds from sale of property and equipment	0	348,274	1,953	0	350,227
Transfers to restricted cash	(356,035)	0	0	0	(356,035)
Transfers from restricted cash	356,035	0	0	0	356,035
Other	11,864	(22,719)	8,171	0	(2,684)
Net cash used in investing activities	(34,198)	(1,393,292)	(298,141)	0	(1,725,631)
Financing activities:
Intercompany activities	(76,904)	26,899	50,005	0	0
Payments on current portion of long-term debt	(1,200)	0	0	0	(1,200)
Payments on revolving long-term debt	(2,958,100)	0	0	0	(2,958,100)
Borrowings under revolving long-term debt	3,054,800	0	0	0	3,054,800
Other	(9,260)	0	0	0	(9,260)
Net cash provided by financing activities	9,336	26,899	50,005	0	86,240
Effect of exchange rate changes on cash	0	0	(323)	0	(323)
Increase in cash and cash equivalents	1,003	1,855	13	0	2,871
Cash and cash equivalents at beginning of year	7,378	5,776	30	0	13,184
Cash and cash equivalents at end of year	$ 8,381	$ 7,631	$ 43	$ 0	$ 16,055

Year ended December 31, 2009:
Net cash provided by operating activities	$ 58,212	$ 1,198,995	$ 102,169	$ 0	$ 1,359,376
Investing activities:
Capital investments	(17,075)	(1,517,990)	(245,100)	0	(1,780,165)
Proceeds from sale of property and equipment	0	763	55	0	818
Other	10,980	(29,238)	17,001	0	(1,257)
Net cash used in investing activities	(6,095)	(1,546,465)	(228,044)	0	(1,780,604)
Financing activities:
Intercompany activities	(478,843)	353,246	125,597	0	0
Payments on current portion of long-term debt	(61,200)	0	0	0	(61,200)
Payments on revolving long-term debt	(1,371,700)	0	0	0	(1,371,700)
Borrowings under revolving long-term debt	1,696,200	0	0	0	1,696,200
Other	(25,165)	0	0	0	(25,165)
Net cash provided by (used in) financing activities	(240,708)	353,246	125,597	0	238,135
Increase (decrease) in cash and cash equivalents	(188,591)	5,776	(278)	0	(183,093)
Cash and cash equivalents at beginning of year	195,969	0	308	0	196,277
Cash and cash equivalents at end of year	$ 7,378	$ 5,776	$ 30	$ 0	$ 13,184