Acquisition (Tables)

9 Months Ended

Sep. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable

The following table presents the fair value of consideration transferred to Indigo equity holders as a result of the Indigo Merger:

(in millions, except share, per share amounts)	As of September 1, 2021
Shares of Southwestern common stock issued	337,827,171
NYSE closing price per share of Southwestern common shares on September 1, 2021	$	4.70
	$	1,588
Cash consideration	373
Total consideration	$	1,961

The following table presents the fair value of consideration transferred to Montage stockholders as a result of the Montage Merger:

(in millions, except share, per share amounts)	As of November 13, 2020
Shares of Southwestern common stock issued in respect of outstanding Montage common stock	67,311,166
Shares of Southwestern common stock issued in respect of Montage stock-based awards	2,429,682
	69,740,848
NYSE closing price per share of Southwestern common shares on November 13, 2020	$	3.05
Total consideration (fair value of Southwestern common shares issued)	$	213
Increase in Southwestern common stock ($0.01 par value per share)	1
Increase in Southwestern additional paid-in capital	$	212

Schedule of Business Acquisitions, by Acquisition

The following table sets forth the preliminary fair value of the assets acquired and liabilities assumed as of the acquisition date. Certain data and studies necessary to complete the purchase price allocation are still under evaluation, including, but not limited to, the valuation of natural gas and oil properties and the resolution of certain matters that the Company is indemnified for under the Indigo Merger Agreement for which not enough information is available to assess the final fair value of at this time. The Company will finalize the purchase price allocation during the twelve-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.

(in millions)	As of September 1, 2021
Consideration:
Total consideration	$	1,961
Fair Value of Assets Acquired:
Cash and cash equivalents	55
Accounts receivable	192
Other current assets	2
Commodity derivative assets	2
Evaluated oil and gas properties	2,724
Unevaluated oil and gas properties	676
Other property, plant and equipment	4
Other long-term assets	27
Total assets acquired	3,682
Fair Value of Liabilities Assumed:
Accounts payable	266
Other current liabilities	55
Derivative liabilities	501
Revolving credit facility	95
Senior unsecured notes	726
Asset retirement obligations	8
Other noncurrent liabilities	70
Total liabilities assumed	1,721
Net Assets Acquired and Liabilities Assumed	$	1,961

The following table sets forth the fair value of the assets acquired and liabilities assumed as of the acquisition date. The purchase price allocation related to the Montage Merger is substantially complete as of the date of this filing. The Company is currently finalizing its analysis on potential liabilities and natural gas and oil property valuation. Any final adjustments in the fourth quarter of 2021 are expected to be immaterial. For the nine months ended September 30, 2021 there were no changes to the allocation presented in the 2020 Form 10-K.

(in millions)	As of November 13, 2020
Consideration:
Fair value of Southwestern’s stock issued on November 13, 2020	$	213
Fair Value of Assets Acquired:
Cash and cash equivalents	3
Accounts receivable	73
Other current assets	1
Commodity derivative assets	11
Evaluated oil and gas properties	1,012
Unevaluated oil and gas properties	90
Other property, plant and equipment	28
Other long-term assets	26
Total assets acquired	1,244
Fair Value of Liabilities Assumed:
Accounts payable	145
Other current liabilities	49
Derivative liabilities	70
Revolving credit facility	200
Senior unsecured notes	522
Asset retirement obligations	28
Other noncurrent liabilities	17
Total liabilities assumed	1,031
Net Assets Acquired and Liabilities Assumed	$	213

Business Acquisition, Pro Forma Information

The following table presents selected unaudited pro forma condensed financial information for the three and nine months ended September 30, 2020 as if the Montage Merger had occurred on January 1, 2019 and the Indigo Merger had occurred on January 1, 2020:

	For the three months ended September 30,				For the nine months ended September 30,
(in millions)	2021		2020		2021		2020
Revenues	$	1,864	$	844	$	4,531	$	2,388
Loss from continuing operations	$	(1,588)	$	(871)	$	(2,371)	$	(3,337)

Schedule of Acquisition Related Costs

The following table summarizes the merger-related expenses incurred:

	For the three months ended September 30,				For the nine months ended September 30,
(in millions)	2021		2020		2021		2020
Indigo Merger-related expenses	$	35	$	—	$	37	$	—
Montage Merger-related expenses	—		3		2		3
Total merger-related expenses	$	35	$	3	$	39	$	3