BUSINESS SEGMENT INFORMATION

9 Months Ended

Sep. 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				Nine months ended
	September 30,				September 30,
(in thousands)	2018		2017		2018		2017
Technical Services:
Pressure Pumping	$	237,487	$	303,631	$	762,527	$	740,120
Downhole Tools		112,798		81,383		313,360		205,591
Coiled Tubing		26,248		32,385		78,848		79,720
Nitrogen		12,645		12,412		35,860		30,360
Snubbing		4,257		5,385		14,284		17,616
All other		27,836		20,523		85,307		53,972
Total Technical Services	$	421,271	$	455,719	$	1,290,186	$	1,127,379
Support Services:
Rental Tools	$	13,957	$	8,547	$	36,527	$	20,394
All other		4,766		6,733		17,541		20,155
Total Support Services	$	18,723	$	15,280	$	54,068	$	40,549
Total revenues	$	439,994	$	470,999	$	1,344,254	$	1,167,928

The following summarizes revenues for the United States and separately for all international locations combined for the three and nine months ended September 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				Nine months ended
	September 30,				September 30,
(in thousands)	2018		2017		2018		2017
United States revenues	$	417,349	$	457,428	$	1,278,655	$	1,129,529
International revenues		22,645		13,571		65,599		38,399
Total revenues	$	439,994	$	470,999	$	1,344,254	$	1,167,928

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, 2018 and 2017 are shown in the following table:

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2018			2017			2018			2017
Revenues:
Technical Services	$	421,271		$	455,719		$	1,290,186		$	1,127,379
Support Services		18,723			15,280			54,068			40,549
Total revenues	$	439,994		$	470,999		$	1,344,254		$	1,167,928
Operating income (loss):
Technical Services	$	56,209		$	104,349		$	196,838		$	184,455
Support Services		1,787			(2,062	)		2,075			(10,622	)
Corporate		(3,729	)		(5,433	)		(11,992	)		(13,679	)
Gain on disposition of assets, net		286			503			3,459			5,779
Total operating income	$	54,553		$	97,357		$	190,380		$	165,933
Interest expense		(150	)		(105	)		(368	)		(322	)
Interest income		783			488			1,643			1,028
Other income , net		287			564			9,786			2,786
Income before income taxes	$	55,473		$	98,304		$	201,441		$	169,425

As of and for the nine months ended  September 30, 2018	Technical  Services		Support Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	110,991	$	9,247	$	329	$	120,567
Capital expenditures		194,115		4,260		1,206		199,581
Identifiable assets	$	984,397	$	77,870	$	183,395	$	1,245,662

As of and for the nine months ended September 30, 2017	Technical  Services		Support  Services		Corporate		Total
(in thousands)
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