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rrc-10q_20210331.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 March 31, 2021

☐	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 ☑

259,595,233 Common Shares were outstanding on April 23, 2021

RANGE RESOURCES CORPORATION

FORM 10-Q

Quarter Ended March 31, 2021

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 2020 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 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	28
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	40
ITEM 4.	Controls and Procedures	43
PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	43
ITEM 1A.	Risk Factors	44
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
ITEM 6.	Exhibits	45

	SIGNATURES	46

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

RANGE RESOURCES CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	March 31,			December 31,
	2021			2020
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	449		$	458
Accounts receivable, less allowance for doubtful accounts of $3,004 and $3,004		286,491			252,642
Derivative assets		8,111			23,332
Other current assets		13,581			13,408
Total current assets		308,632			289,840
Derivative assets		21,242			16,680
Natural gas properties, successful efforts method		9,853,906			9,751,114
Accumulated depletion and depreciation		(4,150,811	)		(4,064,305	)
		5,703,095			5,686,809
Other property and equipment		80,365			79,878
Accumulated depreciation and amortization		(76,228	)		(75,717	)
		4,137			4,161
Operating lease right-of-use assets		58,199			63,581
Other assets		79,355			75,865
Total assets	$	6,174,660		$	6,136,936

Liabilities
Current liabilities:
Accounts payable	$	160,323		$	132,421
Asset retirement obligations		6,689			6,689
Accrued liabilities		311,469			348,333
Accrued interest		45,125			54,742
Derivative liabilities		38,319			26,707
Divestiture contract obligation		88,132			92,593
Current maturities of long-term debt		45,377			45,356
Total current liabilities		695,434			706,841
Bank debt		116,074			693,123
Senior notes		2,921,750			2,329,745
Senior subordinated notes		17,393			17,384
Deferred tax liabilities		137,810			135,267
Derivative liabilities		5,959			9,746
Deferred compensation liabilities		107,001			81,481
Operating lease liabilities		38,026			43,155
Asset retirement obligations and other liabilities		87,549			91,157
Divestiture contract obligation		383,816			391,502
Total liabilities		4,510,812			4,499,401
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, 259,595,233 issued at March 31, 2021 and 256,353,887 issued at December 31, 2020		2,596			2,563
Common stock held in treasury, 10,004,683 shares at March 31, 2021 and 10,005,795 shares at December 31, 2020		(30,085	)		(30,132	)
Additional paid-in capital		5,683,428			5,684,268
Accumulated other comprehensive loss		(409	)		(479	)
Retained deficit		(3,991,682	)		(4,018,685	)
Total stockholders’ equity		1,663,848			1,637,535
Total liabilities and stockholders’ equity	$	6,174,660		$	6,136,936

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 March 31,
	2021			2020

Revenues and other income:
Natural gas, NGLs and oil sales	$	603,347		$	432,096
Derivative fair value (loss) income		(57,879	)		233,175
Brokered natural gas, marketing and other		80,564			28,649
Total revenues and other income		626,032			693,920
Costs and expenses:
Direct operating		17,650			32,035
Transportation, gathering, processing and compression		274,330			284,765
Production and ad valorem taxes		4,625			9,019
Brokered natural gas and marketing		72,335			32,624
Exploration		5,538			7,077
Abandonment and impairment of unproved properties		3,029			5,413
General and administrative		38,004			42,254
Exit and termination costs		13,714			1,595
Deferred compensation plan		19,811			(8,537	)
Interest		56,878			47,518
Loss (gain) on early extinguishment of debt		35			(12,923	)
Depletion, depreciation and amortization		88,383			102,986
Impairment of proved properties		—			77,000
Loss (gain) on the sale of assets		1,860			(122,099	)
Total costs and expenses		596,192			498,727
Income before income taxes		29,840			195,193
Income tax expense (benefit):
Current		168			(363	)
Deferred		2,521			29,361
		2,689			28,998
Net income	$	27,151		$	166,195
Net income per common share:
Basic	$	0.11		$	0.67
Diluted	$	0.11		$	0.66
Weighted average common shares outstanding:
Basic		242,159			246,218
Diluted		247,527			247,684

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

RANGE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in thousands)

	Three Months Ended March 31,
	2021			2020

Net income	$	27,151		$	166,195
Other comprehensive loss:
Postretirement benefits:
Actuarial gain		—			7
Amortization of prior service costs		92			92
Income tax expense		(22	)		(26	)
Total comprehensive income	$	27,221		$	166,268

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

RANGE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Three Months Ended March 31,
	2021			2020

Operating activities:
Net income	$	27,151		$	166,195
Adjustments to reconcile net income to net cash provided from
operating activities:
Deferred income tax expense		2,521			29,361
Depletion, depreciation and amortization and impairment of proved properties		88,383			179,986
Abandonment and impairment of unproved properties		3,029			5,413
Derivative fair value loss (income)		57,879			(233,175	)
Cash settlements on derivative financial instruments		(39,395	)		99,929
Divestiture contract obligation accretion		12,995			—
Allowance for bad debt		—			400
Amortization of deferred financing costs and other		2,081			1,657
Deferred and stock-based compensation		30,054			476
Loss (gain) on the sale of assets		1,860			(122,099	)
Loss (gain) on early extinguishment of debt		35			(12,923	)
Changes in working capital:
Accounts receivable		(33,146	)		84,345
Other current assets		122			(4,432	)
Accounts payable		34,418			18,660
Accrued liabilities and other		(78,735	)		(89,287	)
Net cash provided from operating activities		109,252			124,506
Investing activities:
Additions to natural gas properties		(99,233	)		(129,962	)
Additions to field service assets		(487	)		(896	)
Acreage purchases		(11,849	)		(10,811	)
Proceeds from disposal of assets		8			1,059
Purchases of marketable securities held by the deferred compensation plan		(3,172	)		(7,648	)
Proceeds from the sales of marketable securities held by the deferred
compensation plan		2,333			8,393
Net cash used in investing activities		(112,400	)		(139,865	)
Financing activities:
Borrowings on credit facilities		478,000			543,000
Repayments on credit facilities		(1,056,000	)		(463,000	)
Issuance of senior notes		600,000			550,000
Repayment of senior or senior subordinated notes		—			(580,099	)
Treasury stock purchases		—			(22,548	)
Debt issuance costs		(8,559	)		(8,538	)
Taxes paid for shares withheld		(9,097	)		(1,554	)
Change in cash overdrafts		(1,646	)		(1,933	)
Proceeds from the sales of common stock held by the deferred compensation plan		441			13
Net cash provided from financing activities		3,139			15,341
Decrease in cash and cash equivalents		(9	)		(18	)
Cash and cash equivalents at beginning of period		458			546
Cash and cash equivalents at end of period	$	449		$	528

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

RANGE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands)

Fiscal Year 2021					Common									Accumulated
					stock			Additional						other
	Common stock				held in			paid-in			Retained			comprehensive
	Shares		Par value		treasury			capital			deficit			loss			Total
Balance as of December 31, 2020		256,354	$	2,563	$	(30,132	)	$	5,684,268		$	(4,018,685	)	$	(479	)	$	1,637,535
Issuance of common stock		3,218		33		—			(7,654	)		—			—			(7,621	)
Issuance of common stock upon vesting of PSUs		—		—		—			148			(148	)		—			—
Stock-based compensation expense		—		—		—			6,713			—			—			6,713
Treasury stock		—		—		47			(47	)		—			—			—
Other comprehensive income		—		—		—			—			—			70			70
Net income		—		—		—			—			27,151			—			27,151
Balance as of March 31, 2021		259,572	$	2,596	$	(30,085	)	$	5,683,428		$	(3,991,682	)	$	(409	)	$	1,663,848

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

RANGE RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands, except per share data)

Fiscal Year 2020

Common