BUSINESS SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2023

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

8.    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, cementing, 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)	2023		2022		2023		2022
Technical Services:
Pressure Pumping	$	110,622	$	257,933	$	585,243	$	572,472
Downhole Tools		96,261		102,831		305,254		273,828
Coiled Tubing		36,820		37,407		115,241		100,572
Cementing		26,731		6,489		38,995		15,429
Nitrogen		12,211		10,335		37,027		28,727
Snubbing		5,669		7,100		20,432		20,337
All other		14,755		13,680		42,886		46,862
Total Technical Services	$	303,069	$	435,775	$	1,145,078	$	1,058,227
Support Services:
Rental Tools	$	20,119	$	17,880	$	56,129	$	45,257
All other		7,229		5,946		21,736		16,248
Total Support Services	$	27,348	$	23,826	$	77,865	$	61,505
Total revenues	$	330,417	$	459,601	$	1,222,943	$	1,119,732

The following summarizes revenues for the United States and separately for all international locations combined for the three and nine months ended September 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				Nine months ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
United States revenues	$	323,159	$	450,359	$	1,201,977	$	1,094,528
International revenues		7,258		9,242		20,966		25,204
Total revenues	$	330,417	$	459,601	$	1,222,943	$	1,119,732

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, 2023, and 2022 are shown in the following table:

	Three months ended				Nine months ended
	September 30,				September 30,
(in thousands)	2023		2022		2023		2022
Revenues:
Technical Services	$	303,069	$	435,775	$	1,145,078	$	1,058,227
Support Services		27,348		23,826		77,865		61,505
Total revenues	$	330,417	$	459,601	$	1,222,943	$	1,119,732
Operating income:
Technical Services	$	18,912	$	89,455	$	199,462	$	171,093
Support Services		6,861		5,278		21,425		11,392
Corporate expenses		(4,840)		(4,106)		(14,593)		(13,160)
Pension settlement charges		—		—		(18,286)		—
Gain on disposition of assets, net		1,778		1,543		7,729		6,295
Total operating income	$	22,711	$	92,170	$	195,737	$	175,620
Interest expense		(101)		(143)		(246)		(543)
Interest income		1,450		329		6,003		472
Other income (expense), net		804		(67)		2,196		516
Income before income taxes	$	24,864	$	92,289	$	203,690	$	176,065

As of and for the nine months ended	Technical		Support
September 30, 2023	Services		Services		Corporate		Total
(in thousands)
Depreciation and amortization	$	71,175	$	7,503	$	38	$	78,716
Capital expenditures		136,237		9,159		3,420		148,816
Identifiable assets		873,819		84,156		289,398		1,247,373

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