BUSINESS SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2020

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

7.    BUSINESS SEGMENT INFORMATION

RPC’s reportable segments are the same as its operating segments. RPC manages its business under Technical Services and Support Services. Technical Services is comprised of service lines that generate revenue based on equipment, personnel or materials at the well site and are closely aligned with completion and production activities of the customers. Support Services is comprised of service lines which generate revenue from services and tools offered off the well site and are more closely aligned with the customers’ drilling activities. Selected overhead including centralized support services and regulatory compliance are classified as Corporate.

Technical Services consists primarily of pressure pumping, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline and fishing. The services offered under Technical Services are high capital and personnel intensive businesses. The Company considers all of these services to be closely integrated oil and gas well servicing businesses, and makes resource allocation and performance assessment decisions based on this operating segment as a whole across these various services.

Support Services consist primarily of drill pipe and related tools, pipe handling, pipe inspection and storage services, and oilfield training and consulting services. The demand for these services tends to be influenced primarily by customer drilling-related activity levels.

The Company’s Chief Operating Decision Maker (“CODM”) assesses performance and makes resource allocation decisions regarding, among others, staffing, growth and maintenance capital expenditures and key initiatives based on the operating segments outlined above.

Segment Revenues:

RPC’s operating segment revenues by major service lines are shown in the following table:

	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands)	2020		2019		2020		2019
Technical Services:
Pressure Pumping	$	43,133	$	111,163	$	163,614	$	428,988
Downhole Tools		34,331		111,619		148,994		334,053
Coiled Tubing		12,407		19,622		37,619		61,084
Nitrogen		8,281		10,140		23,834		33,667
Snubbing		1,974		4,407		5,371		12,225
All other		9,152		17,532		38,079		56,579
Total Technical Services	$	109,278	$	274,483	$	417,511	$	926,596
Support Services:
Rental Tools	$	3,752	$	12,479	$	19,227	$	40,377
All other		3,558		6,278		12,927		19,439
Total Support Services	$	7,310	$	18,757	$	32,154	$	59,816
Total revenues	$	116,588	$	293,240	$	449,665	$	986,412

The following summarizes revenues for the United States and separately for all international locations combined for the three and nine months ended September 30, 2020 and 2019. The revenues are presented based on the location of the use of the equipment or services. Assets related to international operations are less than 10 percent of RPC’s consolidated assets, and therefore are not presented.

	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands)	2020		2019		2020		2019
United States revenues	$	110,823	$	275,928	$	421,323	$	933,583
International revenues		5,765		17,312		28,342		52,829
Total revenues	$	116,588	$	293,240	$	449,665	$	986,412

The accounting policies of the reportable segments are the same as those described in Note 1 to these consolidated financial statements. RPC evaluates the performance of its segments based on revenues, operating profits and return on invested capital. Gains or losses on disposition of assets are reviewed by the CODM on a consolidated basis, and accordingly the Company does not report gains or losses at the segment level. Inter-segment revenues are generally recorded in segment operating results at prices that management believes approximate prices for arm’s length transactions and are not material to operating results.

Summarized financial information with respect RPC’s reportable segments for the three and nine months ended September 30, 2020 and 2019 are shown in the following table:

	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands)	2020		2019		2020		2019
Revenues:
Technical Services	$	109,278	$	274,483	$	417,511	$	926,596
Support Services		7,310		18,757		32,154		59,816
Total revenues	$	116,588	$	293,240	$	449,665	$	986,412
Operating (loss) gain:
Technical Services	$	(24,941)	$	(18,174)	$	(71,248)	$	(15,782)
Support Services		(3,840)		1,632		(4,139)		8,787
Corporate Expenses		(6,534)		(2,720)		(13,003)		(10,678)
Impairment and Other Charges (1)(2)		—		(71,650)		(207,175)		(71,650)
Gain (loss) on disposition of assets, net		3,563		(1,727)		7,576		2,910
Total operating loss	$	(31,752)	$	(92,639)	$	(287,989)	$	(86,413)
Interest expense		(73)		(8)		(257)		(261)
Interest income		29		182		431		1,576
Other income (expense) , net		769		(937)		(1,020)		(545)
Loss before income taxes	$	(31,027)	$	(93,402)	$	(288,835)	$	(85,643)

⁽¹⁾ 2020 Represents $541 related to Corporate and the remainder to Technical Services.

⁽²⁾ 2019 Represents $69,640 related to Technical Services and $2,010 related to Corporate.

As of and for the nine months ended	Technical			Support
September 30, 2020	Services			Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	77,224	(1)	$	5,088	$	209	$	77,521
Capital expenditures		43,437			8,338		538		52,313
Identifiable assets	$	475,168	(1)	$	64,463	$	261,246	$	800,877

⁽¹⁾ Reflects impact of impairment charges recorded during the nine months ended September 30, 2020.

As of and for the nine months ended	Technical		Support
September 30, 2019	Services		Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	122,827	$	7,026	$	234	$	130,087
Capital expenditures		198,757		8,546		1,960		209,263
Identifiable assets	$	963,544	$	77,848	$	68,471	$	1,109,863