SEC Filings

10-Q
RANGE RESOURCES CORP filed this Form 10-Q on 10/23/2018
Entire Document
 

Our trading securities held in the deferred compensation plan are accounted for using the mark-to-market accounting method and are included in other assets in the accompanying consolidated balance sheets. We elected to adopt the fair value option to simplify our accounting for the investments in our deferred compensation plan. Interest, dividends, and mark-to-market gains or losses are included in deferred compensation plan expense in the accompanying consolidated statements of operations. For third quarter 2018, interest and dividends were $225,000 and the mark-to-market adjustment was a gain of $1.3 million compared to interest and dividends of $1.5 million and a mark-to-market gain of $1.1 million in third quarter 2017. For first nine months 2018, interest and dividends were $606,000 and the mark-to-market gain was $522,000 compared to interest and dividends of $2.4 million and mark-to-market gain of $4.1 million in the same period of the prior year.

Fair Values—Goodwill

During 2016, we recorded goodwill associated with the MRD Merger, which represented the cost of the acquired entity over the net amounts assigned to assets acquired and liabilities assumed. Goodwill is assessed for impairment whenever events or circumstances indicate that impairment of the carrying value of goodwill is likely, but no less often than annually. Our policy is to first assess qualitative factors in order to determine whether fair value is more likely than not less than carrying value. Certain qualitative factors used in our evaluation include, among other things, the result of the most recent quantitative assessment of the goodwill impairment test, macroeconomic conditions; industry and market conditions (including commodity prices and cost factors); overall financial performance; and others relevant entity-specific events. If, after considering these events and circumstances, we determine that it is more likely than not that the fair value is less than carrying value, a quantitative goodwill test is performed. During fourth quarter 2017, we performed our annual qualitative assessment of goodwill to determine whether it was more likely than not that the fair value of our business (our reporting unit) was less than its carrying amount. Based on the results of this assessment, we determined it was not likely that goodwill was impaired. We are not aware of any events or circumstances that occurred during first nine months 2018 that would have more likely than not reduced the fair value of our reporting unit below its carrying value.

Fair Values—Non-recurring

Our proved natural gas and oil properties are reviewed for impairment periodically as events or changes in circumstances indicate the carrying amount may not be recoverable. In second quarter 2018, we increased our interest in certain properties in our shallow legacy oil and natural gas assets in Northwest Pennsylvania for a minimal dollar amount for which the fair value was previously determined to be zero. As a result, in second quarter 2018, we recorded additional impairment of $15.3 million related to these properties. In first quarter 2018, there were indicators that the carrying value of certain of our oil gas properties in Oklahoma may be impaired and undiscounted future cash flows attributed to these assets indicated their carrying amounts were not expected to be recovered. Their remaining fair value was measured using a market approach based upon the potential sale of these properties, which is a Level 3 input. We recorded non-cash charges in first quarter 2018 of $7.3 million related to these properties. In third quarter 2017, there were indicators that the carrying value of certain of our properties in Oklahoma and the Texas Panhandle may be impaired and undiscounted future cash flows attributed to these assets indicated their carrying amounts were not expected to be recovered. We also considered the potential sale of these assets. We recorded non-cash charges in third quarter 2017 of $63.7 million related to these properties. The following presents the value of these assets measured at fair value on a non-recurring basis at the time impairment was recorded (in thousands):

 

 

Three Months Ended

September 30,

 

 

 

Nine Months Ended

September 30,

 

2018

 

 

 

2017

 

 

 

2018

 

 

2017

 

 

Fair

Value

 

 

 

Impairment

 

 

 

Fair Value

 

 

 

Impairment

 

 

 

Fair Value

 

 

 

Impairment

 

 

Fair Value

 

 

 

Impairment

Natural gas and oil properties

$

 

 

$

 

 

$

85,597

 

 

$

63,679

 

 

$

32,516

 

 

$

22,614

 

$

85,597

 

 

$

63,679

22