SEC Filings

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

Fair Values—Reported

The following presents the carrying amounts and the fair values of our financial instruments as of September 30, 2018 and December 31, 2017 (in thousands):

 

 

 

 

September 30, 2018

 

 

December 31, 2017

 

 

 

Carrying
Value

 

 

Fair
Value

 

 

Carrying
Value

 

 

Fair
Value

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity swaps, options and basis swaps

 

$

1,217

 

 

$

1,217

 

 

$

58,880

 

 

$

58,880

 

Marketable securities (a)

 

 

67,108

 

 

 

67,108

 

 

 

67,117

 

 

 

67,117

 

(Liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity swaps, options and basis swaps

 

 

(109,007

)

 

 

(109,007

)

 

 

(54,022

)

 

 

(54,022

)

Bank credit facility (b)

 

 

(1,266,000

)

 

 

(1,266,000

)

 

 

(1,211,000

)

 

 

(1,211,000

)

5.75% senior notes due 2021 (b)

 

 

(475,952

)

 

 

(489,555

)

 

 

(475,952

)

 

 

(493,872

)

5.00% senior notes due 2022 (b)

 

 

(580,032

)

 

 

(574,493

)

 

 

(580,032

)

 

 

(578,727

)

5.875% senior notes due 2022 (b)

 

 

(329,244

)

 

 

(334,439

)

 

 

(329,244

)

 

 

(339,200

)

Other senior notes due 2022 (b)

 

 

(590

)

 

 

(586

)

 

 

(590

)

 

 

(591

)

5.00% senior notes due 2023 (b)

 

 

(741,531

)

 

 

(728,576

)

 

 

(741,531

)

 

 

(735,614

)

4.875% senior notes due 2025 (b)

 

 

(750,000

)

 

 

(712,193

)

 

 

(750,000

)

 

 

(733,755

)

5.75% senior subordinated notes due 2021 (b)

 

 

(22,214

)

 

 

(22,825

)

 

 

(22,214

)

 

 

(22,192

)

5.00% senior subordinated notes due 2022 (b)

 

 

(19,054

)

 

 

(18,863

)

 

 

(19,054

)

 

 

(18,741

)

5.00% senior subordinated notes due 2023 (b)

 

 

(7,712

)

 

 

(7,567

)

 

 

(7,712

)

 

 

(7,614

)

Deferred compensation plan (c)

 

 

(112,827

)

 

 

(112,827

)

 

 

(114,414

)

 

 

(114,414

)

(a)

Marketable securities, which are held in our deferred compensation plans, are actively traded on major exchanges.

(b)

The book value of our bank debt approximates fair value because of its floating rate structure. The fair value of our senior notes and our senior subordinated notes is based on end of period market quotes which are Level 2 inputs.

(c)

The fair value of our deferred compensation plan is updated at the closing price on the balance sheet date which is a Level 1 input.

Our current assets and liabilities include financial instruments, the most significant of which are trade accounts receivable and payable. We believe the carrying values of our current assets and liabilities approximate fair value. Our fair value assessment incorporates a variety of considerations, including (1) the short-term duration of the instruments and (2) our historical and expected incurrence of bad debt expense. Non-financial liabilities initially measured at fair value include asset retirement obligations. For additional information, see Note 10.

Concentrations of Credit Risk

As of September 30, 2018, our primary concentrations of credit risk are the risks of not collecting accounts receivable and the risk of a counterparty’s failure to perform under derivative obligations. Most of our receivables are from a diverse group of companies, including major energy companies, pipeline companies, local distribution companies, financial institutions and end-users in various industries. Letters of credit or other appropriate securities are obtained as deemed necessary to limit our risk of loss. Our allowance for uncollectable receivables was $5.9 million at September 30, 2018 and $7.1 million at December 31, 2017. Our derivative exposure to credit risk is diversified primarily among major investment grade financial institutions, where we have master netting agreements which provide for offsetting payables against receivables from separate derivative contracts. To manage counterparty risk associated with our derivatives, we select and monitor our counterparties based on our assessment of their financial strength and/or credit ratings. We may also limit the level of exposure with any single counterparty. At September 30, 2018, our derivative counterparties include twenty-one financial institutions, of which all but five are secured lenders in our bank credit facility. At September 30, 2018, our net derivative liability includes a net payable of $23.9 million to these five counterparties that are not participants in our bank credit facility.

(13) STOCK-BASED COMPENSATION PLANS

Stock-Based Awards

We have one active equity-based stock plan, our Amended and Restated 2005 Equity-Based Incentive Compensation Plan, which we refer to as the 2005 Plan. Under this plan, various awards may be issued to non-employee directors and employees pursuant to decisions of the Compensation Committee, which is composed of only non-employee, independent directors. To better align the timing of senior officer equity awards with our proxy statement filing in 2018, senior officer equity grants were in March 2018 rather than May, as in previous years.

Total Stock-Based Compensation Expense

Stock-based compensation represents amortization of restricted stock and performance units. Unlike the other forms of stock-based compensation, the mark-to-market adjustment of the liability related to the vested restricted stock held in our deferred

23