(16) 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.

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
(Unaudited)

	Parent	Guarantors	Non-Guarantors	Eliminations	Consolidated
	(in thousands)
Three months ended March 31, 2012:
Operating revenues	$ 0	$ 614,445	$ 113,125	$ (71,101)	$ 656,469
Operating costs and expenses:
Gas purchases – midstream services	0	146,903	0	(227)	146,676
Operating expenses	0	103,056	27,981	(70,079)	60,958
General and administrative expenses	0	41,708	7,913	(795)	48,826
Depreciation, depletion and amortization	0	182,837	10,790	0	193,627
Taxes, other than income taxes	0	16,998	3,424	0	20,422
Total operating costs and expenses	0	491,502	50,108	(71,101)	470,509
Operating income	0	122,943	63,017	0	185,960
Other income (loss), net	0	(174)	(26)	0	(200)
Equity in earnings of subsidiaries	107,704	0	0	(107,704)	0
Interest expense	0	3,755	3,583	0	7,338
Income (loss) before income taxes	107,704	119,014	59,408	(107,704)	178,422
Provision for income taxes	0	46,892	23,826	0	70,718
Net income (loss) attributable to Southwestern Energy	107,704	72,122	35,582	(107,704)	107,704
Other comprehensive income	254	65,835	481	0	66,570
Comprehensive income (loss)	$ 107,958	$ 137,957	$ 36,063	$ (107,704)	$ 174,274

Three months ended March 31, 2011:
Operating revenues	$ 0	$ 641,843	$ 93,658	$ (59,166)	$ 676,335
Operating costs and expenses:
Gas purchases – midstream services	0	170,582	0	(352)	170,230
Operating expenses	0	86,852	27,984	(58,038)	56,798
General and administrative expenses	0	32,044	5,849	(776)	37,117
Depreciation, depletion and amortization	0	154,401	9,046	0	163,447
Taxes, other than income taxes	0	13,907	2,185	0	16,092
Total operating costs and expenses	0	457,786	45,064	(59,166)	443,684
Operating income	0	184,057	48,594	0	232,651
Other income (loss), net	0	345	29	0	374
Equity in earnings of subsidiaries	136,609	0	0	(136,609)	0
Interest expense	0	3,645	3,791	0	7,436
Income (loss) before income taxes	136,609	180,757	44,832	(136,609)	225,589
Provision for income taxes	0	71,362	17,618	0	88,980
Net income (loss) attributable to Southwestern Energy	$ 136,609	$ 109,395	$ 27,214	$ (136,609)	$ 136,609
Other comprehensive income	197	(24,992)	262	0	(24,533)
Comprehensive income (loss)	136,806	84,403	27,476	(136,609)	112,076


CONDENSED CONSOLIDATING BALANCE SHEETS
(Unaudited)

	Parent	Guarantors	Non- Guarantors	Eliminations	Consolidated
	(in thousands)
March 31, 2012:

ASSETS

Cash and cash equivalents	$ 205,415	$ 489	$ 263	$ 0	$ 206,167
Accounts receivable	2,940	260,402	35,974	0	299,316
Inventories	0	36,408	915	0	37,323
Other current assets	4,703	679,271	1,627	0	685,601
Total current assets	213,058	976,570	38,779	0	1,228,407
Intercompany receivables	2,068,919	41	22,329	(2,091,289)	0
Property and equipment	194,097	10,271,762	1,178,095	0	11,643,954
Less: Accumulated depreciation, depletion and amortization	61,540	4,405,113	151,229	0	4,617,882
	132,557	5,866,649	1,026,866	0	7,026,072
Investments in subsidiaries (equity method)	3,433,064	0	0	(3,433,064)	0
Other assets	36,212	240,120	23,350	0	299,682
Total assets	$ 5,883,810	$ 7,083,380	$ 1,111,324	$ (5,524,353)	$ 8,554,161

LIABILITIES AND EQUITY

Accounts and notes payable	$ 96,277	$ 430,906	$ 48,857	$ 0	$ 576,040
Other current liabilities	13,033	370,224	1,347	0	384,604
Total current liabilities	109,310	801,130	50,204	0	960,644
Intercompany payables	0	1,728,162	363,127	(2,091,289)	0
Long-term debt	1,669,380	0	0	0	1,669,380
Deferred income taxes	(96,880)	1,492,017	265,147	0	1,660,284
Other liabilities	50,241	56,198	5,655	0	112,094
Total liabilities	1,732,051	4,077,507	684,133	(2,091,289)	4,402,402
Commitments and contingencies
Total equity	4,151,759	3,005,873	427,191	(3,433,064)	4,151,759
Total liabilities and equity	$ 5,883,810	$ 7,083,380	$ 1,111,324	$ (5,524,353)	$ 8,554,161


CONDENSED CONSOLIDATING BALANCE SHEETS
(Unaudited)

	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


CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Unaudited)

	Parent	Guarantors	Non-Guarantors	Eliminations	Consolidated
	(in thousands)

Three months ended March 31, 2012:
Net cash provided by (used in) operating activities	$ (66,501)	$ 428,743	$ 82,421	$ 0	$ 444,663
Investing activities:
Capital investments	(15,673)	(502,036)	(39,922)	0	(557,631)
Proceeds from sale of property and equipment	0	651	0	0	651
Other	4,085	(9,440)	(7,125)	0	1,770
Net cash used in investing activities	(11,588)	(510,825)	(32,797)	0	(555,210)
Financing activities:
Intercompany activities	(32,324)	82,571	(50,247)	0	0
Payments on revolving long-term debt	(1,271,300)	0	0	0	(1,271,300)
Borrowings under revolving long-term debt	599,800	0	0	0	599,800
Proceeds from issuance of long-term debt	998,780	0	0	0	998,780
Other items	(26,163)	0	0	0	(26,163)
Net cash provided by (used in) financing activities	268,793	82,571	(50,247)	0	301,117
Effect of exchange rate changes on cash	0	0	(30)	0	(30)
Increase (decrease) in cash and cash equivalents	190,704	489	(653)	0	190,540
Cash and cash equivalents at beginning of year	14,711	0	916	0	15,627
Cash and cash equivalents at end of period	$ 205,415	$ 489	$ 263	$ 0	$ 206,167


Three months ended March 31, 2011:
Net cash provided by (used in) operating activities	$ (26,284)	$ 359,234	$ 63,529	$ 0	$ 396,479
Investing activities:
Capital investments	(15,533)	(469,341)	(41,265)	0	(526,139)
Proceeds from sale of property and equipment	0	11,056	0	0	11,056
Other	3,574	(6,100)	2,151	0	(375)
Net cash used in investing activities	(11,959)	(464,385)	(39,114)	0	(515,458)
Financing activities:
Intercompany activities	(75,684)	99,515	(23,831)	0	0
Payments on revolving long-term debt	(782,800)	0	0	0	(782,800)
Borrowings under revolving long-term debt	892,700	0	0	0	892,700
Other items	10,389	0	0	0	10,389
Net cash provided by (used in) financing activities	44,605	99,515	(23,831)	0	120,289
Effect of exchange rate changes on cash	0	0	22	0	22
Increase (decrease) in cash and cash equivalents	6,362	(5,636)	606	0	1,332
Cash and cash equivalents at beginning of year	8,381	7,631	43	0	16,055
Cash and cash equivalents at end of period	$ 14,743	$ 1,995	$ 649	$ 0	$ 17,387