BUSINESS SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2022

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 certain 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)	2022		2021		2022		2021
Technical Services:
Pressure Pumping	$	257,933	$	96,322	$	572,472	$	243,401
Downhole Tools		102,831		61,979		273,828		177,209
Coiled Tubing		37,407		26,733		100,572		61,900
Nitrogen		10,335		8,996		28,727		28,195
Snubbing		7,100		3,748		20,337		10,685
All other		20,169		14,064		62,291		39,212
Total Technical Services	$	435,775	$	211,842	$	1,058,227	$	560,602
Support Services:
Rental Tools	$	17,880	$	8,545	$	45,257	$	23,126
All other		5,946		4,923		16,248		12,949
Total Support Services	$	23,826	$	13,468	$	61,505	$	36,075
Total revenues	$	459,601	$	225,310	$	1,119,732	$	596,677

The following summarizes revenues for the United States and separately for all international locations combined for the three and nine months ended September 30, 2022 and 2021. 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)	2022		2021		2022		2021
United States revenues	$	450,359	$	217,711	$	1,094,528	$	572,170
International revenues		9,242		7,599		25,204		24,507
Total revenues	$	459,601	$	225,310	$	1,119,732	$	596,677

The accounting policies of the reportable segments are the same as those referenced 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, 2022 and 2021 are shown in the following table:

	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands)	2022		2021		2022		2021
Revenues:
Technical Services	$	435,775	$	211,842	$	1,058,227	$	560,602
Support Services		23,826		13,468		61,505		36,075
Total revenues	$	459,601	$	225,310	$	1,119,732	$	596,677
Operating income (loss):
Technical Services	$	89,455	$	8,272	$	171,093	$	3,938
Support Services		5,278		(55)		11,392		(5,353)
Corporate expenses		(4,106)		(3,080)		(13,160)		(9,760)
Gain on disposition of assets, net		1,543		2,837		6,295		7,408
Total operating income (loss)	$	92,170	$	7,974	$	175,620	$	(3,767)
Interest expense		(143)		(1,280)		(543)		(1,763)
Interest income		329		15		472		47
Other (expense) income, net		(67)		448		516		1,571
Income (loss) before income taxes	$	92,289	$	7,157	$	176,065	$	(3,912)

As of and for the nine months ended	Technical		Support
September 30, 2022	Services		Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	53,002	$	7,346	$	153	$	60,501
Capital expenditures		79,828		9,558		841		90,227
Identifiable assets		836,310		79,546		139,727		1,055,583

As of and for the nine months ended	Technical		Support
September 30, 2021	Services		Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	46,341	$	7,232	$	202	$	53,775
Capital expenditures		38,794		5,436		695		44,925
Identifiable assets		556,385		74,135		196,120		826,640