BUSINESS SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2017

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

6. BUSINESS SEGMENT INFORMATION

RPC’s reportable segments are the same as its operating segments. RPC manages its business as either services offered on the well site with equipment and personnel (Technical Services) or services and equipment offered off the well site (Support Services). Selected overhead including certain centralized support services and regulatory compliance are classified under Corporate.

Technical Services include RPC’s oil and gas services that utilize people and equipment to perform value-added completion, production and maintenance services directly to a customer’s well. The demand for these services is generally influenced by customers’ decisions to invest capital toward initiating production in a new oil or natural gas well, improving production flows in an existing well, or to address well control issues. This operating segment 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 common drivers of operational and financial success of these services include diligent equipment maintenance, strong logistical processes, and appropriately trained personnel who function well in a team environment. 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. The principal markets for this segment include the United States, including the Gulf of Mexico, the mid-continent, southwest, Rocky Mountain and Appalachian regions, and international locations including primarily Argentina, Canada, China, Gabon, Colombia and the Middle East. Customers include major multi-national and independent oil and gas producers, and selected nationally-owned oil companies.

Support Services include all of the services that provide (i) equipment for customers’ use on the well site without RPC personnel and (ii) services that are provided in support of customer operations off the well site such as classroom and computer training, and other consulting services. The primary drivers of operational success for equipment provided for customers’ use on the well site without RPC personnel are offering safe, high quality and in-demand equipment appropriate for the well design characteristics. The drivers of operational success for the other Support Services relate to meeting customer needs off the well site and competitive marketing of such services. The equipment and services offered include 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 equipment and services offered include drill pipe and related tools, pipe handling, inspection and storage services, and oilfield training services. The principal markets for this segment include the United States, including the Gulf of Mexico, the mid-continent and Appalachian regions, and selected international locations. Customers include domestic operations of major multi-national and independent oil and gas producers, and selected nationally-owned oil companies.

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 operating segments outlined above.

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 on disposition of assets 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 nine months ended September 30, 2017 and 2016 are shown in the following table:

	Three months ended September 30						Nine months ended September 30
(in thousands)	2017			2016			2017			2016
Revenues:
Technical Services	$	455,719		$	163,331		$	1,127,379		$	470,020
Support Services		15,280			12,553			40,549			37,957
Total revenues	$	470,999		$	175,884		$	1,167,928		$	507,977
Operating income (loss):
Technical Services	$	104,349		$	(48,627	)	$	184,455		$	(177,581	)
Support Services		(2,062	)		(5,541	)		(10,622	)		(19,340	)
Corporate		(5,433	)		(3,397	)		(13,679	)		(13,724	)
Gain on disposition of assets, net		503			1,148			5,779			3,919
Total operating income (loss)	$	97,357		$	(56,417	)	$	165,933		$	(206,726	)
Interest expense		(105	)		(115	)		(322	)		(566	)
Interest income		488			169			1,028			296
Other income, net		564			86			2,786			274
Income (loss) before income taxes	$	98,304		$	(56,277	)	$	169,425		$	(206,722	)

As of and for the nine months ended  September 30, 2017 (in thousands)	Technical  Services		Support  Services		Corporate		Total
Depreciation and amortization	$	111,567	$	13,599	$	347	$	125,513
Capital expenditures		66,445		7,669		902		75,016
Identifiable assets	$	894,714	$	75,550	$	178,362	$	1,148,626

As of and for the nine months ended  September 30, 2016 (in thousands)	Technical  Services		Support  Services		Corporate		Total
Depreciation and amortization	$	148,880	$	19,657	$	354	$	168,891
Capital expenditures		20,596		1,953		2,368		24,917
Identifiable assets	$	749,721	$	78,471	$	224,700	$	1,052,892