BUSINESS SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2023

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				Six months ended
	June 30,				June 30,
(in thousands)	2023		2022		2023		2022
Technical Services:
Pressure Pumping	$	209,820	$	194,641	$	474,621	$	314,539
Downhole Tools		101,589		89,927		208,993		170,997
Coiled Tubing		38,355		36,315		78,421		63,165
Nitrogen		12,719		10,789		24,816		18,392
Snubbing		7,672		7,025		14,763		13,237
All other		19,863		17,406		40,395		42,122
Total Technical Services	$	390,018	$	356,103	$	842,009	$	622,452
Support Services:
Rental Tools	$	18,334	$	14,314	$	36,010	$	27,377
All other		7,506		5,090		14,507		10,302
Total Support Services	$	25,840	$	19,404	$	50,517	$	37,679
Total revenues	$	415,858	$	375,507	$	892,526	$	660,131

The following summarizes revenues for the United States and separately for all international locations combined for the three and six months ended June 30, 2023 and 2022. 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)	2023		2022		2023		2022
United States revenues	$	409,431	$	368,824	$	878,818	$	644,169
International revenues		6,427		6,683		13,708		15,962
Total revenues	$	415,858	$	375,507	$	892,526	$	660,131

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 six months ended June 30, 2023, and 2022 are shown in the following table:

	Three months ended				Six months ended
	June 30,				June 30,
(in thousands)	2023		2022		2023		2022
Revenues:
Technical Services	$	390,018	$	356,103	$	842,009	$	622,452
Support Services		25,840		19,404		50,517		37,679
Total revenues	$	415,858	$	375,507	$	892,526	$	660,131
Operating income:
Technical Services	$	77,017	$	59,827	$	180,550	$	81,638
Support Services		7,920		3,334		14,564		6,114
Corporate expenses		(4,672)		(4,544)		(9,753)		(9,054)
Pension settlement charges		(911)		—		(18,286)		—
Gain on disposition of assets, net		3,015		1,798		5,951		4,752
Total operating income	$	82,369	$	60,415	$	173,026	$	83,450
Interest expense		(73)		(222)		(145)		(400)
Interest income		2,698		128		4,553		143
Other income, net		631		79		1,392		583
Income before income taxes	$	85,625	$	60,400	$	178,826	$	83,776

As of and for the six months ended	Technical		Support
June 30, 2023	Services		Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	45,580	$	4,723	$	25	$	50,328
Capital expenditures		97,317		5,285		1,886		104,488
Identifiable assets		853,837		87,972		286,379		1,228,188

As of and for the six months ended	Technical		Support
June 30, 2022	Services		Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	34,682	$	4,752	$	126	$	39,560
Capital expenditures		43,418		7,066		94		50,578
Identifiable assets		702,162		76,205		186,712		965,079