Table of Contents Index to Financial Statements SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) (1) Includes a net cumulative-effect adjustment of $59 million related to the recognition of previously unrecognized windfall tax benefits resulting from the adoption of ASU 2016- 09 as of the beginning of 2017. This adjustment increased net deferred tax assets and the related income tax valuation allowance by the same amount. 80 The accompanying notes are an integral part of these consolidated financial statements. Preferred Retained Accumulated Common Stock Stock Additional Earnings Other Common Stock Shares Shares Paid-In (Accumulated Comprehensive in Treasury Issued Amount Issued Capital Deficit) (1) Income (Loss) Shares Amount Total (in millions, except share amounts) Balance at December 31, 2016 495,248,369  $ 5  1,725,000  $ 4,677  $ (3,725) $ (39) 31,269  $ (1) $ 917  Comprehensive income: Net income – – – – 351  – – – 351  Other comprehensive income – – – – – – – – – Total comprehensive income – – – – – – – – 351  Stock-based compensation – – – 10  – – – – 10  Preferred stock dividend 2,751,410  – – – – – – – – Issuance of restricted stock 4,549,122  – – – – – – – – Cancellation of restricted stock (113,185) – – – – – – – – Performance units vested 121,208  – – – – – – – – Tax withholding – stock compensation (59,455) – – – – – – – – Balance at March 31, 2017 502,497,469  $ 5  1,725,000  $ 4,687  $ (3,374) $ (39) 31,269  $ (1) $ 1,278  Comprehensive income: Net income – – – – 284  – – – 284  Other comprehensive income – – – – – 1  – – 1  Total comprehensive income – – – – – – – – 285  Stock-based compensation – – – 10  – – – – 10  Preferred stock dividend 3,346,865  – – – – – – – – Issuance of restricted stock 353,803  – – – – – – – – Cancellation of restricted stock (303,135) – – – – – – – – Tax withholding – stock compensation (1,729) – – – – – – – – Issuance of stock awards 72  – – – – – – – – Balance at June 30, 2017 505,893,345  $ 5  1,725,000  $ 4,697  $ (3,090) $ (38) 31,269  $ (1) $ 1,573  Comprehensive income: Net income – – – – 77  – – – 77  Other comprehensive income – – – – – 1  – – 1  Total comprehensive income – – – – – – – – 78  Stock-based compensation – – – 9  – – – – 9  Preferred stock dividend 3,346,738  – – (8) – – – – (8) Issuance of restricted stock 133,197  – – – – – – – – Cancellation of restricted stock (192,810) – – – – – – – – Tax withholding – stock compensation (37,811) – – – – – – – – Balance at September 30, 2017 509,142,659  $ 5  1,725,000  $ 4,698  $ (3,013) $ (37) 31,269  $ (1) $ 1,652  Comprehensive income: Net income – – – – 334  – – – 334  Other comprehensive loss – – – – – (7) – – (7) Total comprehensive income – – – – – – – – 327  Stock-based compensation – – – 9  – – – – 9  Preferred stock dividend 3,346,703  – – (8) – – – – (8) Issuance of restricted stock 19,086  – – – – – – – – Cancellation of restricted stock (132,898) – – – – – – – – Tax withholding – stock compensation (241,239) – – (1) – – – – (1) Balance at December 31, 2017 512,134,311  $ 5  1,725,000  $ 4,698  $ (2,679) $ (44) 31,269  $ (1) $ 1,979 