SEC Filings

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

standards update and assessing the impact, if any, it may have on our consolidated results of operations, financial position and financial disclosures.

Fair Value Measurement

In August 2018, an accounting standards update was issued which provides additional disclosure requirements for fair value measurements. This new standards update eliminates the requirement to disclose transfers between Level 1 and Level 2 of the fair value hierarchy and provides for additional disclosures for Level 3 fair value measurements. This new standards update is effective for us in first quarter 2020 and will be adopted on a prospective or retrospective basis depending on the changes that apply. We are evaluating the provisions of this standards update and assessing the impact, if any, it may have on our financial disclosures.

Recently Adopted

Pension Accounting Standard

In March 2017, an accounting standards update was issued which provides additional guidance on the presentation of net benefit cost in the statement of operations. Employers will present the service cost component of net periodic benefit cost in the same consolidated results of operations line item as other employee compensation costs arising from services rendered during the period. This new standards update was effective for annual reporting periods in first quarter 2018 and must be applied retrospectively. We adopted this standards update in first quarter 2018. The adoption did not impact our consolidated results of operations, financial position, cash flows or disclosures. We had no service cost recorded prior to 2018 due to the implementation of our postretirement benefit plan at the end of 2017. In 2018, our service cost is recorded in general and administrative expense.

Modification of Share – Based Awards

In May 2017, an accounting standards update was issued which clarifies what constitutes a modification of a share-based award. This standards update is intended to provide clarity and reduce both diversity in practice and cost and complexity to a change to the terms or conditions of a share-based payment award. We adopted this standards update in first quarter 2018. The adoption of this standard did not have a material impact on our consolidated financial position or results of operations.

Revenue Recognition Standard

In May 2014, an accounting standards update was issued that superseded the existing revenue recognition requirements. This standard included a five-step revenue recognition model to depict the transfer of goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Among other things, the standard also eliminated industry-specific revenue guidance, required enhanced disclosures about revenue, provided guidance for transactions that were not previously addressed comprehensively and improved guidance for multiple-element arrangements. This standard was effective for us in first quarter 2018 and we adopted the new standards using the modified retrospective method to all open contracts as of January 1, 2018. Our implementation of this standard did not result in a cumulative-effect adjustment on date of adoption; however, our financial statement presentation related to revenue received from certain gas processing contracts changed. Based on previous accounting guidance, certain of our gas processing contracts were reported in revenue at the net price (net of processing costs) we receive. Upon adoption of this accounting standards update, these contracts are now reported as a gross price received at a delivery point and separate transportation, marketing and processing expense. The impact of adoption of the new revenue recognition standard on our current period results is as follows (in thousands):

 

Three Months Ended September 30, 2018

As Reported

 

 

Previous Revenue

Recognition Method

 

 

 

 

 

 

 

 

 

 

$

 

 

 

$ Per mcfe

 

 

 

$

 

 

 

$ Per

mcfe

 

 

 

Increase

 

 

 

$ Per

mcfe

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas, NGLs and oil sales

$

736,431

 

 

$

3.53

 

 

$

688,684

 

 

$

3.30

 

 

$

47,747

 

 

$

0.23

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation, gathering, processing and compression

$

304,562

 

 

$

1.46

 

 

$

256,815

 

 

$

1.23

 

 

$

47,747

 

 

$

0.23

 

Net income

$

48,539

 

 

 

 

 

 

$

48,539

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Nine Months Ended September 30, 2018

As Reported

 

 

Previous Revenue

Recognition Method

 

 

 

 

 

 

 

 

 

$

 

 

 

$ Per

mcfe

 

 

 

$

 

 

 

$ Per

mcfe

 

 

 

Increase

 

 

 

$ Per

mcfe

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas, NGLs and oil sales

$

2,094,450

 

 

$

3.45

 

 

$

1,966,731

 

 

$

3.24

 

 

$

127,719

 

 

$

0.21

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation, gathering, processing and compression

$

819,100

 

 

$

1.35

 

 

$

691,381

 

 

$

1.14

 

 

$

127,719

 

 

$

0.21

Net income

$

17,941

 

 

 

 

 

 

$

17,941

 

 

 

 

 

 

$

 

 

 

 

8