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rrc-10q_20200930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-12209

RANGE RESOURCES CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware		34-1312571
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)
100 Throckmorton Street, Suite 1200 Fort Worth, Texas		76102
(Address of Principal Executive Offices)		(Zip Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, (Par Value $0.01)

RRC

New York Stock Exchange

Registrant’s telephone number, including area code

(817) 870-2601

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☑	Accelerated Filer	☐

Non-Accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

256,333,325 Common Shares were outstanding on October 26, 2020

RANGE RESOURCES CORPORATION

FORM 10-Q

Quarter Ended September 30, 2020

Unless the context otherwise indicates, all references in this report to “Range Resources,” “Range,” “we,” “us,” or “our” are to Range Resources Corporation and its directly and indirectly owned subsidiaries. For certain industry specific terms used in this Form 10-Q, please see “Glossary of Certain Defined Terms” in our 2019 Annual Report on Form 10-K.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
ITEM 1.	Financial Statements:
	Consolidated Balance Sheets (Unaudited)	3
	Consolidated Statements of Operations (Unaudited)	4
	Consolidated Statements of Comprehensive (Loss) Income (Unaudited)	5
	Consolidated Statements of Cash Flows (Unaudited)	6
	Consolidated Statements of Stockholders’ Equity (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	9
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	45
ITEM 4.	Controls and Procedures	48
PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	48
ITEM 1A.	Risk Factors	48
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
ITEM 6.	Exhibits	50

	SIGNATURES	52

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

RANGE RESOURCES CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	September 30,			December 31,
	2020			2019
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	517		$	546
Accounts receivable, less allowance for doubtful accounts of $3,004 and $8,784		182,698			272,900
Derivative assets		5,264			136,848
Other current assets		20,668			17,508
Total current assets		209,147			427,802
Derivative assets		15,062			706
Natural gas properties, successful efforts method		9,646,901			10,213,737
Accumulated depletion and depreciation		(3,975,930	)		(4,172,702	)
		5,670,971			6,041,035
Other property and equipment		79,632			102,083
Accumulated depreciation and amortization		(75,203	)		(96,708	)
		4,429			5,375
Operating lease right-of-use assets		43,763			62,053
Other assets		69,526			75,432
Total assets	$	6,012,898		$	6,612,403

Liabilities
Current liabilities:
Accounts payable	$	84,554		$	155,341
Asset retirement obligations		2,103			2,393
Accrued liabilities		310,376			356,392
Accrued interest		31,680			39,299
Derivative liabilities		53,408			13,119
Divestiture contract obligation		102,665			—
Current maturities of long-term debt		45,334			—
Total current liabilities		630,120			566,544
Bank debt		696,172			464,319
Senior notes		2,328,585			2,659,844
Senior subordinated notes		17,375			48,774
Deferred tax liabilities		62,319			160,196
Derivative liabilities		31,503			949
Deferred compensation liabilities		69,927			64,070
Operating lease liabilities		32,238			41,068
Asset retirement obligations and other liabilities		98,359			259,151
Divestiture contract obligation		383,796			—
Total liabilities		4,350,394			4,264,915
Commitments and contingencies

Stockholders’ Equity
Preferred stock, $1 par, 10,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.01 par, 475,000,000 shares authorized, 256,232,010 issued at September 30, 2020 and 251,438,936 issued at December 31, 2019		2,562			2,514
Common stock held in treasury, 10,005,795 shares at September 30, 2020 and 1,808,133 shares at December 31, 2019		(30,131	)		(7,236	)
Additional paid-in capital		5,679,197			5,659,832
Accumulated other comprehensive loss		(574	)		(788	)
Retained deficit		(3,988,550	)		(3,306,834	)
Total stockholders’ equity		1,662,504			2,347,488
Total liabilities and stockholders’ equity	$	6,012,898		$	6,612,403

The accompanying notes are an integral part of these consolidated financial statements.

RANGE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019

Revenues and other income:
Natural gas, NGLs and oil sales	$	381,553		$	474,754		$	1,162,907		$	1,709,987
Derivative fair value (loss) income		(124,690	)		74,676			102,182			208,190
Brokered natural gas, marketing and other		42,482			73,015			104,722			303,834
Total revenues and other income		299,345			622,445			1,369,811			2,222,011
Costs and expenses:
Direct operating		19,515			35,276			75,944			102,484
Transportation, gathering, processing and compression		268,108			295,912			831,748			899,786
Production and ad valorem taxes		6,106			7,805			20,682			29,004
Brokered natural gas and marketing		47,967			79,938			118,752			313,360
Exploration		8,086			11,013			23,190			27,333
Abandonment and impairment of unproved properties		5,667			16,202			16,604			41,631
General and administrative		38,153			41,047			118,695			138,316
Exit and termination costs		521,633		819				533,525			3,025
Deferred compensation plan		6,237			(8,871	)		10,287			(16,432	)
Interest		47,999			46,997			144,141			150,261
Loss (gain) on early extinguishment of debt		7,821			(2,985	)		(14,093	)		(2,985	)
Depletion, depreciation and amortization		96,167			137,751			303,779			417,974
Impairment of proved properties and other assets		1,955		—				78,955		—
Loss (gain) on the sale of assets		9,230			36,341			(112,443	)		30,663
Total costs and expenses		1,084,644			697,245			2,149,766			2,134,420
(Loss) income before income taxes		(785,299	)		(74,800	)		(779,955	)		87,591
Income tax (benefit) expense:
Current	—				4,079			(366	)		4,079
Deferred		(105,251	)		(51,298	)		(97,947	)		(5,511	)
		(105,251	)		(47,219	)		(98,313	)		(1,432	)
Net (loss) income	$	(680,048	)	$	(27,581	)	$	(681,642	)	$	89,023
Net (loss) income per common share:
Basic	$	(2.83	)	$	(0.11	)	$	(2.82	)	$	0.35
Diluted	$	(2.83	)	$	(0.11	)	$	(2.82	)	$	0.35
Dividends paid per common share	―			$	0.02		―			$	0.06
Weighted average common shares outstanding:
Basic		239,895			248,082			241,770			247,878
Diluted		239,895			248,082			241,770			248,823

The accompanying notes are an integral part of these consolidated financial statements.

RANGE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited, in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019

Net (loss) income	$	(680,048	)	$	(27,581	)	$	(681,642	)	$	89,023
Other comprehensive loss:
Postretirement benefits:
Actuarial (loss) gain		—			(12	)		7			(37	)
Amortization of prior service costs		92			92			277			276
Income tax expense		(22	)		(20	)		(70	)		(59	)
Total comprehensive (loss) income	$	(679,978	)	$	(27,521	)	$	(681,428	)	$	89,203

The accompanying notes are an integral part of these consolidated financial statements.

RANGE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Nine Months Ended September 30,
	2020			2019

Operating activities:
Net (loss) income	$	(681,642	)	$	89,023
Adjustments to reconcile net (loss) income to net cash provided from
operating activities:
Deferred income tax benefit		(97,947	)		(5,511	)
Depletion, depreciation and amortization and impairment of proved properties and other assets		382,734			417,974
Abandonment and impairment of unproved properties		16,604			41,631
Derivative fair value income		(102,182	)		(208,190	)
Cash settlements on derivative financial instruments		305,243			138,349
Divestiture contract obligation		486,689			—
Allowance for bad debt		400			(141	)
Amortization of deferred financing costs and other		5,023			4,862
Deferred and stock-based compensation		38,380			14,410
(Gain) loss on the sale of assets		(112,443	)		30,663
Gain on early extinguishment of debt		(14,093	)		(2,985	)
Changes in working capital:
Accounts receivable		91,343			241,514
Other current assets		(5,786	)		(4,024	)
Accounts payable		(52,820	)		(52,645	)
Accrued liabilities and other		(80,529	)		(155,499	)
Net cash provided from operating activities		178,974			549,431
Investing activities:
Additions to natural gas properties		(321,849	)		(550,355	)
Additions to field service assets		(2,493	)		(803	)
Acreage purchases		(18,554	)		(39,795	)
Proceeds from disposal of assets		246,083			784,527
Purchases of marketable securities held by the deferred compensation plan		(14,855	)		(16,741	)
Proceeds from the sales of marketable securities held by the deferred