BUSINESS SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2018

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 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				Six months ended
	June 30,				June 30,
(in thousands)	2018		2017		2018		2017
Technical Services:
Pressure Pumping	$	269,040	$	253,743	$	525,195	$	436,675
Downhole Tools		107,521		71,862		200,562		124,207
Coiled Tubing		27,404		25,956		52,600		47,335
Nitrogen		11,784		9,271		23,215		17,948
Snubbing		6,055		6,588		10,027		12,231
All other		28,048		18,042		57,316		33,264
Total Technical Services	$	449,852	$	385,462	$	868,915	$	671,660
Support Services:
Rental Tools	$	12,550	$	6,459	$	22,570	$	11,847
All other		5,524		6,889		12,775		13,422
Total Support Services	$	18,074	$	13,348	$	35,345	$	25,269
Total revenues	$	467,926	$	398,810	$	904,260	$	696,929

The following summarizes revenues for the United States and separately for all international locations combined for the six months ended June 30, 2018. 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				Six months ended
	June 30,				June 30,
(in thousands)	2018		2017		2018		2017
United States revenues	$	443,922	$	387,667	$	861,306	$	672,101
International revenues		24,004		11,143		42,954		24,828
Total revenues	$	467,926	$	398,810	$	904,260	$	696,929

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 six months ended June 30, 2018 and 2017 are shown in the following table:

	Three months ended  June 30,						Six months ended  June 30,
(in thousands)	2018			2017			2018			2017
Revenues:
Technical Services	$	449,852		$	385,462		$	868,915		$	671,660
Support Services		18,074			13,348			35,345			25,269
Total revenues	$	467,926		$	398,810		$	904,260		$	696,929
Operating income (loss):
Technical Services	$	75,624		$	70,901		$	140,629		$	80,106
Support Services		1,193			(3,339	)		288			(8,560	)
Corporate		(3,598	)		(4,319	)		(8,263	)		(8,246	)
Gain on disposition of assets, net		1,810			3,759			3,173			5,276
Total operating income	$	75,029		$	67,002		$	135,827		$	68,576
Interest expense		(113	)		(114	)		(218	)		(217	)
Interest income		458			411			860			540
Other income , net		4,104			2,010			9,499			2,222
Income before income taxes	$	79,478		$	69,309		$	145,968		$	71,121

As of and for the six months ended  June 30,2018	Technical  Services		Support  Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	70,910	$	6,444	$	220	$	77,574
Capital expenditures		144,511		4,467		714		149,692
Identifiable assets	$	983,177	$	77,372	$	158,099	$	1,218,648

As of and for the six months ended  June 30,2017	Technical  Services		Support  Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	76,242	$	9,451	$	233	$	85,926
Capital expenditures		25,282		5,165		198		30,645
Identifiable assets	$	857,482	$	75,117	$	173,286	$	1,105,885