[PART I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20Financial%20Information) [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents RPC, Inc.'s unaudited consolidated financial statements for Q2 2022 and FY2021, covering key financial statements and detailed accounting notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets show RPC's financial position as of June 30, 2022, with increased total assets and equity, driven by higher receivables and retained earnings | Metric | June 30, 2022 (Unaudited) (in millions) | December 31, 2021 (Note 1) (in millions) | | :-------------------------------- | :-------------------------------------- | :--------------------------------------- | | Total Assets | $965.079 | $864.365 | | Total Liabilities | $258.417 | $222.574 | | Total Stockholders' Equity | $706.662 | $641.791 | | Accounts receivable, net | $357.582 | $258.635 | | Retained earnings | $705.133 | $640.936 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated statements of operations show a turnaround from net loss in 2021 to net income in 2022, driven by increased revenues and improved operating efficiency | Metric | Three months ended June 30, 2022 (in millions, except per share) | Three months ended June 30, 2021 (in thousands, except per share) | Six months ended June 30, 2022 (in millions, except per share) | Six months ended June 30, 2021 (in millions, except per share) | | :-------------------------------- | :----------------------------------------------- | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Revenues | $375.507 | $188.757 | $660.131 | $371.367 | | Operating income (loss) | $60.415 | $(1.220) | $83.450 | $(11.741) | | Net income (loss) | $46.939 | $(726) | $62.018 | $(10.388) | | Basic Earnings (loss) per share | $0.22 | $0.00 | $0.29 | $(0.05) | | Diluted Earnings (loss) per share | $0.22 | $0.00 | $0.29 | $(0.05) | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Consolidated statements of comprehensive income (loss) show a positive shift from losses in 2021 to income in 2022, driven by improved net income and minor pension/FX adjustments | Metric | Three months ended June 30, 2022 (in millions/thousands) | Three months ended June 30, 2021 (in thousands) | Six months ended June 30, 2022 (in millions/thousands) | Six months ended June 30, 2021 (in millions/thousands) | | :-------------------------------- | :----------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net income (loss) | $46.939 | $(726) | $62.018 | $(10.388) | | Pension adjustment, net of taxes | $195 | $153 | $390 | $306 | | Foreign currency translation | $65 | $69 | $181 | $205 | | Comprehensive income (loss) | $47.199 | $(504) | $62.589 | $(9.877) | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Consolidated statements of stockholders' equity show increased total equity for H1 2022, driven by net income and stock issued for incentive plans, partially offset by repurchases | Metric | December 31, 2021 (in millions, except shares) | June 30, 2022 (in millions, except shares) | | :-------------------------------- | :--------------------------------------------- | :----------------------------------------- | | Total Stockholders' Equity | $641.791 | $706.662 | | Shares Outstanding | 215.629 | 216.662 | | Net Income (Six months) | - | $62.018 | | Stock issued for stock incentive plans, net (Six months) | - | $3.192 | | Stock purchased and retired (Six months) | - | $(0.910) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated statements of cash flows show decreased operating cash flow for H1 2022 due to working capital changes, with increased cash used in investing activities for capital expenditures | Metric | Six months ended June 30, 2022 (in millions) | Six months ended June 30, 2021 (in millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $42.853 | $54.866 | | Net cash used for investing activities | $(43.430) | $(17.781) | | Net cash used for financing activities | $(3.623) | $(0.566) | | Net (decrease) increase in cash and cash equivalents | $(4.200) | $36.519 | | Cash and cash equivalents at end of period | $78.233 | $121.015 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the consolidated financial statements, covering accounting policies, standards, revenue, EPS, stock compensation, segments, credit losses, inventories, commitments, pensions, credit facilities, income taxes, fair value, and comprehensive income [1. GENERAL](index=9&type=section&id=1.%20GENERAL) This note outlines the basis of presentation for the unaudited interim consolidated financial statements, confirming adherence to GAAP and SEC regulations, and states that all necessary adjustments have been included. It also notes that a group including a Board member controls over 50% of the Company's voting power - **GAAP** and **SEC Form 10-Q** instructions guide the preparation of unaudited consolidated financial statements[17](index=17&type=chunk) - A group including a Board member controls **over 50% of the Company's voting power**[20](index=20&type=chunk) [2. RECENT ACCOUNTING STANDARDS](index=9&type=section&id=2.%20RECENT%20ACCOUNTING%20STANDARDS) This note details recently adopted and issued accounting standards. The company adopted ASU No. 2020-04 (Reference Rate Reform) in Q2 2022, replacing LIBOR with Term SOFR, with no material impact. It plans to adopt ASU No. 2021-08 (Business Combinations) prospectively from January 1, 2023, also not expecting a material impact - RPC adopted **ASU No. 2020-04 (Reference Rate Reform)** in Q2 2022, replacing LIBOR with Term SOFR, with no material financial impact[21](index=21&type=chunk) - The Company plans to adopt **ASU No. 2021-08 (Business Combinations)** from January 1, 2023, with no expected material impact[22](index=22&type=chunk) [3. REVENUES](index=11&type=section&id=3.%20REVENUES) This note describes RPC's revenue recognition policies, primarily from oilfield services, which are recognized over time using the output method. Services are categorized into Technical Services (well-site) and Support Services (off-well-site). Contract terms are generally short-term, with invoicing upon completion and expected collection within 30-60 days. Unbilled trade receivables increased significantly to $92.8 million as of June 30, 2022 - RPC generates contract revenues primarily from **specialized oilfield services**, recognized over time using the output method[24](index=24&type=chunk)[30](index=30&type=chunk) - Services are categorized into **Technical Services** (e.g., pressure pumping) and **Support Services** (e.g., rental tools)[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | | :-------------------- | :-------------------------- | :-------------------------- | | Unbilled trade receivables | $92.756 | $50.370 | [4. EARNINGS PER SHARE](index=12&type=section&id=4.%20EARNINGS%20PER%20SHARE) This note details the calculation of basic and diluted earnings per share, accounting for participating securities (restricted shares with dividend rights). Net income used in EPS calculation for the six months ended June 30, 2022, was $61.1 million, resulting in $0.29 per share - **Basic and diluted EPS** are calculated by dividing net income by weighted average shares outstanding, adjusted for participating securities[33](index=33&type=chunk) | Metric | Three months ended June 30, 2022 (in millions/shares) | Three months ended June 30, 2021 (in thousands/shares) | Six months ended June 30, 2022 (in millions/shares) | Six months ended June 30, 2021 (in millions/shares) | | :-------------------------------- | :---------------------------------------------------- | :------------------------------------------------

RPC, Inc. (NYSE:RES) Q2 2022 Earnings Conference Call July 27, 2022 9:00 AM ET Company Participants James Landers - VP, Corporate Finance Ben Palmer - CEO, President & Director Michael Schmit - CFO & Corporate Secretary Conference Call Participants Stephen Gengaro - Stifel, Nicolaus & Company John Daniel - Daniel Energy Partners Donald Crist - Johnson Rice & Company Joel Etzler - Coeli Energy Operator Good morning, and thank you for joining us for RPC, Inc.'s Second Quarter 2020 Financial Earnings Conferenc ...

| --- | --- | |-------------------------------------------|-------| | | | | | | | RPC, Inc. | | | | | | Second Quarter 2022 Financial Summary and | | | Corporate Overview | | | July 27, 2022 | | | | | FORWARD LOOKING STATEMENTS Certain statements and information included in this discussion constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including all statements that look forward in time or express management's beliefs, expectations or hopes ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2022 Commission File No. 1-8726 RPC, INC. (Exact name of registrant as specified in its charter) Delaware 58-1550825 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 2801 Buford Highway, Suite 300, Atlanta, Georgia 30329 (Address ...

RPC, Inc. (NYSE:RES) Q1 2022 Earnings Conference Call April 27, 2022 9:00 AM ET Company Participants James Landers - VP, Corporate Finance Richard Hubbell - CEO, President & Director Ben Palmer - VP, CFO & Corporate Secretary Conference Call Participants John Daniel - Daniel Energy Operator Good morning, and thank you for joining us for RPC, Inc.'s First Quarter 2022 Financial Earnings Conference Call. Today's call will be hosted by Rick Hubbell, President and CEO; and Ben Palmer, Chief Financial Officer. A ...

[PART I](index=3&type=section&id=PART%20I) [Item 1. Business](index=5&type=section&id=Item%201.%20Business) RPC, Inc. is a holding company providing specialized oilfield services and equipment primarily to oil and gas companies in the U.S. and select international markets, with performance tied to commodity prices and drilling activity - RPC, Inc. operates as a holding company for several oilfield services companies, including Cudd Energy Services and Patterson Services, organized into Technical and Support Services segments[9](index=9&type=chunk)[10](index=10&type=chunk) - In 2021, an estimated **65% of revenues** were related to oil-directed activities, while **35%** were related to natural gas[11](index=11&type=chunk) - International revenues accounted for **4% of consolidated revenues** in 2021, a decrease from 6% in 2020, primarily due to lower activity in Algeria and Saudi Arabia[44](index=44&type=chunk) - The company's primary growth strategy is to generate long-term returns through effective capital management, focusing on organic growth, strategic investments, and selective acquisitions[46](index=46&type=chunk)[47](index=47&type=chunk) [Business Segments](index=5&type=section&id=Business%20Segments) RPC's operations are divided into Technical Services and Support Services, with Technical Services, particularly Pressure Pumping and Downhole Tools, being the primary revenue driver in 2021 Revenue Contribution by Key Service Lines (2019-2021) | Service Line | 2021 Revenue % | 2020 Revenue % | 2019 Revenue % | | :--- | :--- | :--- | :--- | | Pressure Pumping | 43% | 37% | 42% | | Downhole Tools | 29% | 34% | 34% | | Coiled Tubing | 10% | 9% | 7% | | Nitrogen | 4% | 5% | 4% | | Rental Tools (Support) | 4% | 4% | 4% | - Technical Services include capital and personnel-intensive services performed directly at the customer's well, such as pressure pumping, downhole tools, and coiled tubing[12](index=12&type=chunk) - Support Services primarily involve equipment rentals (like drill pipe) and consulting services offered off the well site, with demand driven by customer drilling activity levels[13](index=13&type=chunk) [Industry](index=11&type=section&id=Industry) The U.S. oil and gas industry, RPC's primary market, is highly volatile and has shifted towards unconventional wells, which comprise over 80% of U.S. drilling and require more of RPC's specialized services - The U.S. domestic rig count rose by approximately **138%** between August 2020 and early Q1 2022, recovering from a historic low[37](index=37&type=chunk) - U.S. well completions, a key activity driver for RPC, increased by **32.8%** in 2021 to **9,810 wells**, compared to 7,387 in 2020[38](index=38&type=chunk) - Unconventional wells, which require more of RPC's services like pressure pumping and coiled tubing, have comprised over **80% of U.S. domestic drilling** since 2016, a trend RPC views as a permanent positive driver[43](index=43&type=chunk) [Competition](index=15&type=section&id=Competition) RPC operates in a highly competitive oilfield services industry, competing on factors like equipment availability, service quality, safety reputation, technical proficiency, and price against a range of providers - The oilfield services industry is highly competitive, with principal competitive factors being product availability, service quality, safety, technical skill, and price[53](index=53&type=chunk) - Competitors range from dominant global players like Halliburton, Baker Hughes, and Schlumberger to more similarly sized peers such as Liberty Oilfield Services and Patterson-UTI Energy[54](index=54&type=chunk) [Human Capital](index=15&type=section&id=Human%20Capital) RPC's employee count increased to 2,250 in 2021, reflecting business cyclicality, with the company focusing on talent management through diversity, development, compensation, and safety programs Employee Headcount | Year End | Employees | | :--- | :--- | | 2021 | 2,250 | | 2020 | 2,005 | - Key human capital objectives include fostering diversity, employee development, providing competitive compensation and benefits, and ensuring workplace safety[55](index=55&type=chunk) - The company is investing in technology to reduce the number of employees on a job location and minimize their exposure to safety hazards[62](index=62&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) RPC faces significant risks primarily related to the volatility of oil and natural gas prices, competition, labor shortages, and the controlling ownership structure - Demand for services is highly dependent on volatile oil and natural gas prices, which affect customers' capital investment decisions[72](index=72&type=chunk) - The company operates in a highly competitive industry, and its ability to compete depends on service quality, availability, safety, and price[80](index=80&type=chunk) - A controlling group, including the Chairman of the Board, holds over **50% of the company's voting power**, effectively controlling operations and limiting the voice of public stockholders[96](index=96&type=chunk)[97](index=97&type=chunk) - The business is exposed to risk from potential shortages of skilled labor, which could impair growth and profitability[83](index=83&type=chunk) - The COVID-19 pandemic previously caused unprecedented disruption and could continue to negatively impact financial results if conditions worsen[89](index=89&type=chunk) [Item 2. Properties](index=28&type=section&id=Item%202.%20Properties) RPC owns or leases approximately 65 offices and operating facilities, with its corporate headquarters in Atlanta, Georgia, being leased and major operational hubs located across key oil and gas regions - The company owns and leases approximately **65 facilities**, with its principal executive offices in Atlanta, Georgia being leased[106](index=106&type=chunk) - Major owned operational hubs are located in Texas, Louisiana, Oklahoma, Wyoming, and Utah[107](index=107&type=chunk) - Key leased facilities for operations, sales, and administration are in Midland and The Woodlands, Texas[108](index=108&type=chunk) [Item 3. Legal Proceedings](index=28&type=section&id=Item%203.%20Legal%20Proceedings) RPC is involved in various routine legal proceedings, such as commercial and personal injury claims, which management believes will not materially adversely affect its financial condition - The company is party to routine legal proceedings, primarily involving commercial claims, workers' compensation, and personal injury[108](index=108&type=chunk) - Management believes the outcome of pending lawsuits and claims, even if adverse, would not materially impact the company's financial condition[108](index=108&type=chunk) [PART II](index=30&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) RPC's common stock trades on the NYSE under RES, with 216,586,626 shares outstanding as of February 18, 2022, and 8,248,184 shares remaining for repurchase under its program - RPC's common stock is listed on the NYSE under the symbol RES, with **216,586,626 shares outstanding** as of February 18, 2022[115](index=115&type=chunk) - No shares were repurchased during the fourth quarter of 2021. As of December 31, 2021, **8,248,184 shares** were available for repurchase under the existing program[117](index=117&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2021, RPC's financial performance improved significantly with revenues increasing 44.6% to $864.9 million and a return to profitability, driven by higher customer activity and stronger commodity prices [Outlook](index=34&type=section&id=Outlook) RPC's outlook is favorable, supported by a significant recovery in commodity prices and customer activity, with well completions rising 33% in 2021 and anticipated increased drilling - Well completions, a more meaningful indicator for RPC than rig count, increased by approximately **33%** in 2021 compared to 2020[138](index=138&type=chunk) - The company believes recent price increases in oil, natural gas, and natural gas liquids have encouraged customers to increase drilling and completion activities[139](index=139&type=chunk) - RPC believes the competitive market for its services will improve in the near term due to realized efficiency gains, the exit of some competitors, and increased customer activity[141](index=141&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) For the year ended December 31, 2021, RPC's revenues increased 44.6% to $864.9 million, resulting in an operating income of $16.3 million and net income of $7.2 million, a significant turnaround from the prior year's loss Consolidated Financial Highlights (2019-2021) | Metric (in thousands, except per share) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Consolidated Revenues** | **$864,929** | **$598,302** | **$1,222,409** | | Technical Services Revenues | $815,046 | $556,488 | $1,145,554 | | Support Services Revenues | $49,883 | $41,814 | $76,855 | | **Consolidated Operating Income (Loss)** | **$16,291** | **$(309,635)** | **$(114,288)** | | **Net Income (Loss)** | **$7,217** | **$(212,192)** | **$(87,111)** | | **Diluted Earnings (Loss) Per Share** | **$0.03** | **$(1.00)** | **$(0.41)** | - Revenues in 2021 increased by **$266.6 million (44.6%)** compared to 2020, primarily due to higher activity levels and improved pricing as the market recovered from COVID-19 shutdowns[145](index=145&type=chunk) - Cost of revenues as a percentage of revenues decreased from **80.4% in 2020 to 76.7% in 2021** due to better leverage of direct costs and improved pricing[146](index=146&type=chunk) - The significant improvement in net income for 2021 was driven by higher profitability and the absence of the large impairment charges (**$217.5 million**) recorded in 2020[150](index=150&type=chunk)[154](index=154&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) RPC maintained a strong liquidity position with $82.4 million in cash at year-end 2021, no outstanding debt, and projected capital expenditures of $120 million for 2022 Cash and Cash Flow Summary (in thousands) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Cash and cash equivalents (end of period) | $82,433 | $84,496 | | Net cash provided by operating activities | $47,719 | $77,958 | | Net cash used for investing activities | $(47,631) | $(42,659) | | Net cash used for financing activities | $(2,151) | $(826) | - The company's financial condition remains strong, with sufficient liquidity from cash on hand to meet requirements for at least the next twelve months without needing its credit facility[159](index=159&type=chunk)[161](index=161&type=chunk) - Capital expenditures are expected to increase to approximately **$120 million in 2022**, up from $67.6 million in 2021, for maintenance and selective growth[163](index=163&type=chunk) - As of December 31, 2021, there were no outstanding borrowings under the **$100 million revolving credit facility**, with **$83.7 million available**[162](index=162&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=50&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The consolidated financial statements for 2021 show total assets increased to $864.4 million, total liabilities rose to $222.6 million, and the company achieved a net income of $7.2 million [Consolidated Balance Sheets](index=50&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2021, RPC's total assets increased to $864.4 million, primarily due to higher accounts receivable, while total liabilities rose to $222.6 million Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $82,433 | $84,496 | | Accounts receivable, net | $258,635 | $161,771 | | Total current assets | $492,010 | $428,359 | | Property, plant and equipment, net | $254,408 | $264,411 | | **Total assets** | **$864,365** | **$790,505** | | Total current liabilities | $130,849 | $79,565 | | **Total liabilities** | **$222,574** | **$158,938** | | **Total stockholders' equity** | **$641,791** | **$631,567** | [Consolidated Statements of Operations](index=51&type=section&id=Consolidated%20Statements%20of%20Operations) For 2021, RPC reported revenues of $864.9 million, a 44.6% increase, achieving an operating income of $16.3 million and a net income of $7.2 million, reversing the prior year's loss Consolidated Statement of Operations Summary (in thousands) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Revenues | $864,929 | $598,302 | $1,222,409 | | Cost of revenues | $663,262 | $480,739 | $919,595 | | Operating income (loss) | $16,291 | $(309,635) | $(114,288) | | Income (loss) before income taxes | $16,448 | $(309,431) | $(113,101) | | **Net income (loss)** | **$7,217** | **$(212,192)** | **$(87,111)** | | **Diluted earnings (loss) per share** | **$0.03** | **$(1.00)** | **$(0.41)** | [Consolidated Statements of Cash Flows](index=54&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In 2021, RPC generated $47.7 million in cash from operating activities, used $47.6 million for investing, and saw cash and cash equivalents decrease slightly to $82.4 million at year-end Consolidated Statement of Cash Flows Summary (in thousands) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $47,719 | $77,958 | $209,141 | | Net cash used for investing activities | $(47,631) | $(42,659) | $(235,788) | | Net cash used for financing activities | $(2,151) | $(826) | $(39,592) | | Net (decrease) increase in cash | $(2,063) | $34,473 | $(66,239) | | **Cash and cash equivalents at end of period** | **$82,433** | **$84,496** | **$50,023** | [Note 15: Business Segment and Entity Wide Disclosures](index=88&type=section&id=Note%2015%3A%20Business%20Segment%20and%20Entity%20Wide%20Disclosures) In 2021, Technical Services generated $815.0 million in revenue with a $24.4 million operating profit, while the United States accounted for 96.4% of total revenues Segment Revenues and Operating Profit (Loss) - 2021 (in thousands) | Segment | Revenues | Operating Profit (Loss) | | :--- | :--- | :--- | | Technical Services | $815,046 | $24,434 | | Support Services | $49,883 | $(5,725) | | Corporate | — | $(13,300) | Revenues by Major Service Line - 2021 (in thousands) | Service Line | Revenues | | :--- | :--- | | Pressure Pumping | $369,028 | | Downhole Tools | $247,019 | | Coiled Tubing | $88,946 | Revenues by Geography (in thousands) | Region | 2021 | 2020 | | :--- | :--- | :--- | | United States | $833,686 | $562,390 | | International | $31,243 | $35,912 | | **Total** | **$864,929** | **$598,302** | [Item 9A. Controls and Procedures](index=96&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2021, RPC's management concluded that disclosure controls and internal control over financial reporting were effective, a conclusion affirmed by an unqualified audit opinion - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[360](index=360&type=chunk) - The independent registered public accounting firm, Grant Thornton LLP, audited the effectiveness of internal control over financial reporting and issued an unqualified opinion[361](index=361&type=chunk) [PART III](index=97&type=section&id=PART%20III) [Items 10-14 (Directors, Executive Compensation, Security Ownership, etc.)](index=97&type=section&id=Items%2010-14%20%28Directors%2C%20Executive%20Compensation%2C%20Security%20Ownership%2C%20etc.%29) Information for Items 10 through 14, covering directors, executive compensation, and security ownership, is incorporated by reference from the company's 2022 Proxy Statement - Detailed information regarding directors, executive compensation, stock ownership, and related party transactions is incorporated by reference from the 2022 Proxy Statement[366](index=366&type=chunk)[371](index=371&type=chunk)[372](index=372&type=chunk) [PART IV](index=98&type=section&id=PART%20IV) [Item 15. Exhibits and Financial Statement Schedules](index=98&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all consolidated financial statements, schedules, and exhibits filed as part of the Form 10-K report, including corporate documents and SEC-required certifications - This section contains the index of all financial statements, schedules, and exhibits filed with the 10-K report[380](index=380&type=chunk)

Financial Data and Key Metrics Changes - For Q4 2021, revenues increased to $268.3 million from $148.6 million in Q4 2020, reflecting higher customer activity and improved pricing [10] - Operating profit for Q4 was $20.1 million compared to an adjusted operating loss of $11.3 million in the same quarter of the prior year [10] - EBITDA for Q4 was $39.4 million compared to adjusted EBITDA of $7.8 million in Q4 2020 [11] - Diluted earnings per share for Q4 were $0.06 compared to an adjusted loss per share of $0.03 in the same quarter of the prior year [11] - Cost of revenues was $200.6 million or 74.8% of revenues, down from 79.3% in Q4 2020 [12] Business Line Data and Key Metrics Changes - Technical Services segment revenues for Q4 were $254.4 million, an 83.1% increase from $139 million in Q4 2020, with an operating profit of $20.5 million compared to an operating loss of $11.3 million [14] - Support Services segment revenues for Q4 were $13.8 million, a 43% increase from $9.7 million in Q4 2020, with an operating loss of $373,000 compared to a loss of $2.6 million in the prior year [15] Market Data and Key Metrics Changes - The average U.S. domestic rig count and oil prices both increased over 80% compared to Q4 2020, contributing to improved industry conditions [7] Company Strategy and Development Direction - The company plans to reactivate idle pressure pumping equipment as market pricing and customer demand improve, with a focus on upgrading equipment fleets [22] - Approximately two-thirds of the active horizontal pressure pumping fleet is ESG friendly, indicating a commitment to sustainability [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment and financial results, expecting continued improvements in 2022 despite potential supply chain and personnel challenges [28][59] - The company is focused on generating sufficient cash flow and may consider reinitiating dividends or stock buybacks in the future [70] Other Important Information - Capital expenditures for Q4 were $22.7 million, with full-year 2021 capital expenditures totaling $67.6 million; estimated capital expenditures for 2022 are approximately $125 million [20] Q&A Session Summary Question: Can you speak about pressure pumping pricing? - Management noted net pricing improvements and increased revenue to cover rising costs, with expectations for continued pricing traction [26][27] Question: Is any of the 2022 CapEx targeted towards reactivation of additional fleet? - Management indicated that the first half of 2022 would likely maintain a constant fleet count, assessing the activation of additional fleets based on demand [30] Question: What is the breakdown of product lines? - For Q4 2021, pressure pumping accounted for 46.8% of revenues, with other segments like Thru Tubing Solutions at 26.0% and Coiled Tubing at 10.1% [45] Question: Have there been disruptions due to sand delivery issues? - Management confirmed no job delays due to sand delivery disruptions, although there are risks associated with logistics [51] Question: What is the current contract status and pricing environment? - The majority of fleets are on spot work, with a mix of longer-term contracts, and management is pleased with the current pricing mix [67][68]

PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for the periods ended September 30, 2021, and December 31, 2020 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show an increase in total assets and liabilities from December 31, 2020, to September 30, 2021 Key Metrics | Metric | Sep 30, 2021 (in thousands) | Dec 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | $826,640 | $790,505 | | **Total Liabilities** | $195,857 | $158,938 | | **Total Stockholders' Equity** | $630,783 | $631,567 | | Cash and cash equivalents | $80,835 | $84,496 | | Accounts receivable, net | $238,192 | $161,771 | | Total current assets | $457,855 | $428,359 | | Total current liabilities | $120,721 | $79,565 | | Current portion of finance lease liabilities | $21,382 | — | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) RPC, Inc reported a significant increase in revenues and a return to net income for the quarter ended September 30, 2021 Key Metrics | Metric (in thousands, except per share) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $225,310 | $116,588 | $596,677 | $449,665 | | **Operating income (loss)** | $7,974 | $(31,752) | $(3,767) | $(287,989) | | **Net income (loss)** | $5,266 | $(16,437) | $(5,122) | $(201,953) | | **Earnings (loss) per share - Basic** | $0.02 | $(0.08) | $(0.02) | $(0.95) | | **Income tax provision (benefit)** | $1,891 | $(14,590) | $1,210 | $(86,882) | [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income was positive for Q3 2021 due to improved net income, partially offset by foreign currency translation losses Key Metrics | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net income (loss)** | $5,266 | $(16,437) | $(5,122) | $(201,953) | | Pension adjustment, net of taxes | $152 | $186 | $458 | $1,104 | | Foreign currency translation | $(239) | $(25) | $(34) | $(423) | | **Comprehensive income (loss)** | $5,179 | $(16,276) | $(4,698) | $(201,272) | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity slightly decreased from December 31, 2020, influenced by net losses for the nine-month period Key Metrics | Metric (in thousands) | Balance, Dec 31, 2020 | Balance, Sep 30, 2021 | | :--- | :--- | :--- | | **Total Stockholders' Equity** | $631,567 | $630,783 | | Retained earnings | $627,778 | $626,501 | | Accumulated other comprehensive loss | $(17,706) | $(17,282) | | Net loss (9 months ended Sep 30, 2021) | N/A | $(5,122) | | Net income (3 months ended Sep 30, 2021) | N/A | $5,266 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly decreased for the nine months ended September 30, 2021, due to an unfavorable change in accounts receivable Key Metrics | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $26,416 | $131,364 | | **Net cash used for investing activities** | $(29,114) | $(34,941) | | **Net cash used for financing activities** | $(963) | $(827) | | Net loss | $(5,122) | $(201,953) | | Accounts receivable (increase) decrease | $(71,702) | $119,272 | | Cash and cash equivalents at end of period | $80,835 | $145,619 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of RPC's accounting policies, segment performance, and other key financial disclosures [1. GENERAL](index=8&type=section&id=1.%20GENERAL) The unaudited interim financial statements are prepared per GAAP, and a group including the Chairman controls over 50% of voting power - The financial statements are unaudited and include normal recurring accruals, but **interim results are not necessarily indicative of full-year performance**[17](index=17&type=chunk)[18](index=18&type=chunk) - A group including the Chairman of the Board, Gary W Rollins, **controls over 50% of the Company's voting power**[20](index=20&type=chunk) [2. RECENT ACCOUNTING STANDARDS](index=8&type=section&id=2.%20RECENT%20ACCOUNTING%20STANDARDS) RPC adopted ASU No 2019-12 with no material impact and plans to adopt ASU No 2020-04 when LIBOR is discontinued - RPC adopted ASU No 2019-12 (Income Taxes) in the first quarter of 2021, which simplified accounting for income taxes, with **no material impact** on consolidated financial statements[21](index=21&type=chunk) - RPC will adopt ASU No 2020-04 (Reference Rate Reform) when LIBOR is discontinued, and **does not expect a material impact** on its consolidated financial statements[22](index=22&type=chunk) [3. REVENUES](index=10&type=section&id=3.%20REVENUES) RPC generates contract revenues from specialized oilfield services, categorized into Technical and Support Services, recognized over time - RPC's contract revenues are primarily from oilfield services, **recognized over time** as services are performed, based on mutually agreed pricing[23](index=23&type=chunk) - Services are categorized into **Technical Services** (e g, pressure pumping, coiled tubing) and **Support Services** (e g, rental tools, pipe inspection)[25](index=25&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) Revenue by Type | Revenue Type (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Oilfield services transferred over time | $225,310 | $116,588 | $596,677 | $449,665 | | Total revenues | $225,310 | $116,588 | $596,677 | $449,665 | Contract Balances | Contract Balance (in thousands) | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Unbilled trade receivables | $52,710 | $29,574 | [4. IMPAIRMENT AND OTHER CHARGES](index=11&type=section&id=4.%20IMPAIRMENT%20AND%20OTHER%20CHARGES) No impairment charges were recorded in 2021, unlike the significant charges for long-lived assets and severance in 2020 - Long-lived asset impairments in 2020 primarily related to **pressure pumping and coiled tubing assets** within the Technical Services segment[33](index=33&type=chunk) Impairment Details | Charge Type (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Long Lived Asset Impairments | $— | $— | $— | $204,765 | | Severance Costs | $— | $— | $— | $1,882 | | Other | $— | $— | $— | $528 | | **Total** | $— | $— | $— | $207,175 | [5. EARNINGS PER SHARE](index=12&type=section&id=5.%20EARNINGS%20PER%20SHARE) Basic and diluted EPS was $0.02 in Q3 2021, a significant improvement from a loss of $0.08 in Q3 2020 EPS Calculation | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) available for stockholders | $5,266 | $(16,437) | $(5,122) | $(201,953) | | Net income (loss) used in calculating EPS | $5,225 | $(16,437) | $(5,122) | $(201,953) | | Shares used in calculating basic and diluted EPS | 213,028 | 212,544 | 212,983 | 212,391 | [6. STOCK-BASED COMPENSATION](index=12&type=section&id=6.%20STOCK-BASED%20COMPENSATION) Stock-based compensation expense decreased in 2021, with $40.3 million in unrecognized cost remaining as of September 30, 2021 - As of September 30, 2021, **3,180,060 shares were available for grant** under the 2014 Stock Incentive Plan[36](index=36&type=chunk) - Total unrecognized compensation cost related to non-vested restricted shares was **$40,322,000** as of September 30, 2021, with a weighted-average recognition period of **4.1 years**[41](index=41&type=chunk) Compensation Expense | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Pre-tax expense | $1,471 | $5,207 | $4,481 | $9,321 | | After tax expense | $1,103 | $3,419 | $3,360 | $6,525 | [7. BUSINESS SEGMENT INFORMATION](index=14&type=section&id=7.%20BUSINESS%20SEGMENT%20INFORMATION) Both Technical and Support Services segments saw significant revenue increases in 2021, with Technical Services returning to operating income - **Technical Services** include pressure pumping, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline, and fishing, characterized by high capital and personnel intensity[43](index=43&type=chunk) - **Support Services** include drill pipe and related tools, pipe handling, inspection, storage, and oilfield training/consulting, influenced by customer drilling activity[44](index=44&type=chunk) Segment Revenues | Segment Revenues (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Technical Services | $211,842 | $109,278 | $560,602 | $417,511 | | Support Services | $13,468 | $7,310 | $36,075 | $32,154 | | **Total revenues** | $225,310 | $116,588 | $596,677 | $449,665 | Segment Operating Income (Loss) | Segment Operating Income (Loss) (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Technical Services | $8,272 | $(24,941) | $3,938 | $(71,248) | | Support Services | $(55) | $(3,840) | $(5,353) | $(4,139) | | Corporate Expenses | $(3,080) | $(6,534) | $(9,760) | $(13,003) | | **Total operating income (loss)** | $7,974 | $(31,752) | $(3,767) | $(287,989) | [8. CURRENT EXPECTED CREDIT LOSSES](index=17&type=section&id=8.%20CURRENT%20EXPECTED%20CREDIT%20LOSSES) The allowance for credit losses increased to $7.3 million at September 30, 2021, driven by a provision for expected losses - The Company's expected credit loss allowance for accounts receivable is based on **historical collection experience, current and future economic/market conditions, and customer financial status**[51](index=51&type=chunk) Allowance for Credit Losses | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Beginning balance | $4,815 | $5,181 | | Provision (benefit) for current expected credit losses | $3,848 | $(448) | | Write-offs | $(1,330) | $(315) | | Recoveries collected (net of expenses) | $9 | $(8) | | **Ending balance** | $7,342 | $4,410 | [9. INVENTORIES](index=17&type=section&id=9.%20INVENTORIES) Total inventories, consisting of raw materials, supplies, and finished goods, slightly decreased to $79.9 million at September 30, 2021 - Inventories consist of raw materials, supplies, spare parts, and components for manufactured equipment, recorded at the **lower of cost or net realizable value**[53](index=53&type=chunk) Inventory Balances | Inventory Type (in thousands) | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Raw materials and supplies | $78,298 | $81,278 | | Finished goods | $1,583 | $1,640 | | **Ending balance** | $79,881 | $82,918 | [10. COMMITMENTS AND CONTINGENCIES](index=17&type=section&id=10.%20COMMITMENTS%20AND%20CONTINGENCIES) RPC recorded a $4.5 million liability for a contractual dispute in Q3 2021 and is evaluating a state tax assessment - RPC recorded an estimated liability of **$4.5 million in Q3 2021** for a long-term contractual dispute with a vendor, with $3.3 million included in cost of revenues and the remainder in interest expense[57](index=57&type=chunk)[58](index=58&type=chunk) - A state tax assessment received on July 12, 2021, is currently being evaluated, but the Company believes the **likelihood of a material loss is remote**[56](index=56&type=chunk) [11. EMPLOYEE BENEFIT PLAN](index=19&type=section&id=11.%20EMPLOYEE%20BENEFIT%20PLAN) Net periodic benefit cost for the Retirement Income Plan decreased, while trading gains on SERP assets increased significantly - The Company **did not make contributions** to the Retirement Income Plan during the nine months ended September 30, 2021 or 2020[59](index=59&type=chunk) - SERP assets totaled **$31.6 million** as of September 30, 2021, and SERP liabilities totaled **$29.3 million**[61](index=61&type=chunk)[62](index=62&type=chunk) Benefit Plan Metrics | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net periodic benefit cost | $71 | $262 | $215 | $787 | | Trading gains related to SERP assets | $407 | $1,100 | $2,500 | $178 | | Unrealized gains on SERP liabilities | $502 | $1,200 | $2,800 | $486 | [12. NOTES PAYABLE TO BANKS](index=19&type=section&id=12.%20NOTES%20PAYABLE%20TO%20BANKS) RPC's $100 million revolving credit facility remained undrawn as of September 30, 2021, and the company was in compliance with all covenants - RPC has a **$100 million revolving Credit Agreement** with a maturity date of July 26, 2023[63](index=63&type=chunk)[65](index=65&type=chunk) - As of September 30, 2021, RPC had **no outstanding borrowings** under the revolving credit facility, with **$82.3 million available** after accounting for letters of credit[69](index=69&type=chunk) Interest Metrics | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Interest incurred | $20 | $86 | $192 | $173 | | Interest paid | $42 | $40 | $124 | $120 | [13. INCOME TAXES](index=21&type=section&id=13.%20INCOME%20TAXES) RPC recorded an income tax provision in 2021, contrasting with a benefit in 2020, due to unfavorable permanent and discrete adjustments - The effective tax rate for the nine months ended September 30, 2021, reflects **unfavorable permanent adjustments** and detrimental discrete adjustments related to restricted stock vesting and approximately **$0.6 million from the employee retention credit**[71](index=71&type=chunk)[72](index=72&type=chunk) Tax Metrics | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Income tax provision (benefit) | $1,891 | $(14,590) | $1,210 | $(86,882) | | Effective tax rate | 26.4% (provision) | 47.0% (benefit) | 30.9% (provision) | 30.1% (benefit) | [14. FAIR VALUE DISCLOSURES](index=23&type=section&id=14.%20FAIR%20VALUE%20DISCLOSURES) RPC categorizes financial instruments into a three-level hierarchy, with equity securities as Level 1 and assets held for sale as Level 2 - Fair value hierarchy: **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than Level 1), **Level 3** (unobservable inputs)[75](index=75&type=chunk) - Assets held for sale are valued using **observable market data** for comparable properties (Level 2 inputs)[76](index=76&type=chunk) Fair Value of Assets | Asset (in thousands) | Sep 30, 2021 Total | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Equity securities | $180 | $180 | $— | $— | | Investments measured at net asset value | $31,591 | N/A | N/A | N/A | | Assets held for sale | $692 | $— | $692 | $— | [15. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME](index=25&type=section&id=15.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20(LOSS)%20INCOME) Accumulated other comprehensive loss improved to $(17.3) million due to pension adjustment amortization AOCI Components | Component (in thousands) | Balance at Dec 31, 2020 | Change during period | Balance at Sep 30, 2021 | | :--- | :--- | :--- | :--- | | Pension Adjustment | $(15,181) | $458 | $(14,723) | | Foreign Currency Translation | $(2,525) | $(34) | $(2,559) | | **Total** | $(17,706) | $424 | $(17,282) | [16. LEASES](index=26&type=section&id=16.%20LEASES) RPC entered into two equipment rental agreements in Q3 2021, one classified as a finance lease and the other as a short-term operating lease - Agreement 1, for equipment rental, was classified as a **finance lease**, resulting in **$21.7 million** in finance lease right-of-use assets and short-term finance lease liabilities[80](index=80&type=chunk) - Agreement 2, for operating equipment, was accounted for as a **short-term lease** with variable payments, and no related right-of-use asset or lease liability was recognized[81](index=81&type=chunk) Lease Costs | Lease Costs (in thousands) | Amount | | :--- | :--- | | Amortization of leased assets (finance lease) | $363 | | Interest on lease liabilities (finance lease) | $29 | | Operating lease costs | $152 | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the business, industry outlook, and a detailed analysis of financial performance, liquidity, and capital resources [Overview](index=27&type=section&id=Overview) RPC's revenues significantly increased in Q3 2021 due to higher activity levels and slight pricing improvements - RPC provides specialized oilfield services primarily to independent and major oilfield companies in the U S and selected international markets[89](index=89&type=chunk) - Capital expenditures for the nine months ended September 30, 2021, totaled **$44.9 million**, primarily for capitalized maintenance and upgrades of existing equipment[90](index=90&type=chunk) - Q3 2021 revenues **increased by $108.7 million (93.3%)** to $225.3 million compared to Q3 2020, driven by activity increases across all service lines and slight pricing improvements[92](index=92&type=chunk) [Outlook](index=29&type=section&id=Outlook) Rising commodity prices and well completions signal an improved competitive market, with RPC investing in a new Tier IV dual-fuel fleet - Well completions for the nine months ended September 30, 2021, **increased by approximately 29%** compared to the same period in the prior year[99](index=99&type=chunk) - Average **oil prices rose over 72%** and **natural gas prices rose over 119%** in Q3 2021 compared to Q3 2020, encouraging increased drilling and completion activities[100](index=100&type=chunk) - RPC entered into an agreement for a **new Tier IV dual-fuel pressure pumping fleet** in Q3 2021, which began operations in Q4 2021[103](index=103&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) RPC's results show a strong recovery in 2021, with improved revenues and profitability driven by higher activity and commodity prices [THREE MONTHS ENDED SEPTEMBER 30, 2021 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2020](index=31&type=section&id=THREE%20MONTHS%20ENDED%20SEPTEMBER%2030%2C%202021%20COMPARED%20TO%20THREE%20MONTHS%20ENDED%20SEPTEMBER%2030%2C%202020) Q3 2021 revenues increased 93.3% to $225.3 million, driving a return to operating income as costs decreased as a percentage of revenues - Selling, general and administrative expenses for Q3 2020 included **$3.3 million of accelerated vesting** of restricted stock due to an officer's death[113](index=113&type=chunk) - Interest expense increased to **$1.3 million** in Q3 2021 from $73 thousand in Q3 2020, primarily due to a contractual dispute resolution[117](index=117&type=chunk) Q3 2021 vs Q3 2020 Performance | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Consolidated revenues (in thousands) | $225,310 | $116,588 | 93.3% | | Technical Services revenues (in thousands) | $211,842 | $109,278 | 93.9% | | Support Services revenues (in thousands) | $13,468 | $7,310 | 84.2% | | Technical Services operating income (loss) (in thousands) | $8,272 | $(24,941) | N/A | | Support Services operating loss (in thousands) | $(55) | $(3,840) | N/A | | Cost of revenues (in thousands) | $170,621 | $100,872 | 69.1% | | Cost of revenues as % of revenues | 75.7% | 86.5% | -10.8 pp | | Selling, general & administrative expenses (in thousands) | $31,446 | $32,376 | -2.9% | | SG&A as % of revenues | 14.0% | 27.8% | -13.8 pp | | Depreciation and amortization (in thousands) | $18,106 | $18,655 | -2.9% | | Average U S domestic rig count | 500 | 254 | 96.9% | | Average natural gas price (per mcf) | $4.39 | $2.00 | 119.5% | | Average oil price (per barrel) | $70.5 | $40.83 | 72.7% | [NINE MONTHS ENDED SEPTEMBER 30, 2021 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2020](index=33&type=section&id=NINE%20MONTHS%20ENDED%20SEPTEMBER%2030%2C%202021%20COMPARED%20TO%20NINE%20MONTHS%20ENDED%20SEPTEMBER%2030%2C%202020) Revenues for the nine months ended September 30, 2021, increased 32.7% to $596.7 million, with Technical Services returning to profitability - International revenues **decreased 13.5%** for the nine months ended September 30, 2021, compared to the same period in the prior year[119](index=119&type=chunk) - Interest expense increased to **$1.8 million** for the nine months ended September 30, 2021, primarily due to a contractual dispute resolution and a state well servicing tax audit[130](index=130&type=chunk) YTD 2021 vs YTD 2020 Performance | Metric | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Consolidated revenues (in thousands) | $596,677 | $449,665 | 32.7% | | Technical Services revenues (in thousands) | $560,602 | $417,511 | 34.3% | | Support Services revenues (in thousands) | $36,075 | $32,154 | 12.2% | | Technical Services operating income (loss) (in thousands) | $3,938 | $(71,248) | N/A | | Support Services operating loss (in thousands) | $(5,353) | $(4,139) | 29.3% | | Cost of revenues (in thousands) | $462,633 | $362,853 | 27.5% | | Cost of revenues as % of revenues | 77.5% | 80.7% | -3.2 pp | | Selling, general & administrative expenses (in thousands) | $91,444 | $97,681 | -6.5% | | SG&A as % of revenues | 15.3% | 21.7% | -6.4 pp | | Depreciation and amortization (in thousands) | $53,775 | $77,521 | -30.6% | | Impairment and other charges (in thousands) | $— | $207,175 | N/A | | Average U S domestic rig count | 425 | 477 | -10.9% | | Average natural gas price (per mcf) | $3.29 | $1.88 | 81.0% | | Average oil price (per barrel) | $62.4 | $38.46 | 67.3% | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) RPC maintains a strong financial condition and expects sufficient liquidity from existing cash, with its credit facility undrawn [Cash Flows](index=35&type=section&id=Cash%20Flows) Operating cash flow decreased significantly to $26.4 million due to an unfavorable change in accounts receivable - The decrease in operating cash flow was primarily due to an **unfavorable change in accounts receivable of $71.7 million**, partially offset by favorable changes in other working capital components[133](index=133&type=chunk) - Cash used for investing activities **decreased by $5.8 million**, mainly due to a reduction in capital expenditures[136](index=136&type=chunk) YTD Cash Flow Summary | Cash Flow Activity (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $26,416 | $131,364 | | Net cash used for investing activities | $(29,114) | $(34,941) | | Net cash used for financing activities | $(963) | $(827) | [Financial Condition and Liquidity](index=37&type=section&id=Financial%20Condition%20and%20Liquidity) RPC expects sufficient liquidity for the next twelve months from existing cash and has $82.3 million available under its credit facility - RPC expects its existing cash and strong capitalization to provide **sufficient liquidity for at least the next twelve months**[138](index=138&type=chunk) - As of September 30, 2021, RPC had **no outstanding borrowings** under its $100 million revolving credit facility, with **$82.3 million available**[139](index=139&type=chunk) - The Company was **in compliance with all credit facility financial covenants** as of September 30, 2021[139](index=139&type=chunk) [Cash Requirements](index=37&type=section&id=Cash%20Requirements) Expected 2021 capital expenditures are $65 million, while the stock buyback program continues and common stock dividends remain suspended - Expected capital expenditures for 2021 are approximately **$65 million**, directed mostly towards capitalized maintenance and selected growth opportunities[140](index=140&type=chunk) - RPC **does not expect to make any additional contributions** to its Retirement Income Plan for the remainder of 2021[142](index=142&type=chunk) - The stock buyback program has **8,248,184 shares remaining available** for repurchase, but the Company has **suspended cash dividends** to common stockholders with no timetable for resumption[143](index=143&type=chunk)[144](index=144&type=chunk) [INFLATION](index=39&type=section&id=INFLATION) RPC faces rising costs for equipment, materials, and labor, and is attempting to pass these increases on to customers - Costs for equipment, materials, and labor are increasing due to **rising oilfield activity and supply chain disruptions**[147](index=147&type=chunk) - Labor costs, which decreased in 2020, have begun to rise in Q4 2020 and the first nine months of 2021[147](index=147&type=chunk) - The Company is attempting to pass price increases to customers, but **success is not assured** due to the competitive nature of the oilfield services business[147](index=147&type=chunk) [OFF BALANCE SHEET ARRANGEMENTS](index=39&type=section&id=OFF%20BALANCE%20SHEET%20ARRANGEMENTS) The Company does not have any material off-balance sheet arrangements - RPC **does not have any material off-balance sheet arrangements**[148](index=148&type=chunk) [RELATED PARTY TRANSACTIONS](index=39&type=section&id=RELATED%20PARTY%20TRANSACTIONS) RPC engages in various transactions with related parties, including Marine Products Corporation and Rollins, Inc Summary of Transactions | Related Party Transaction | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :--- | :--- | :--- | | Charges to Marine Products Corporation | $670 | $646 | | Payments to affiliated suppliers | $751 | $710 | | Charges from Rollins, Inc (services & rent) | $78 | $78 | | Net operating costs for corporate aircraft (255 RC, LLC) | $150 | $150 | [CRITICAL ACCOUNTING POLICIES](index=39&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) There have been no significant changes in the Company's critical accounting policies since December 31, 2020 - **No significant changes** in critical accounting policies since the fiscal year ended December 31, 2020[153](index=153&type=chunk) [IMPACT OF RECENT ACCOUNTING STANDARDS](index=39&type=section&id=IMPACT%20OF%20RECENT%20ACCOUNTING%20STANDARDS) Information regarding recent accounting standards is detailed in Note 2 to the Consolidated Financial Statements - Refer to **Note 2** for details on recent accounting standards, adoption dates, and estimated effects[154](index=154&type=chunk) [SEASONALITY](index=41&type=section&id=SEASONALITY) Demand for RPC's services is primarily influenced by non-seasonal factors like commodity prices and customer capital expenditures - Demand for RPC's services is primarily affected by **oil and natural gas prices and customer capital expenditures**, which are not seasonal to any material degree[157](index=157&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) RPC is exposed to interest rate risk from its credit facility and foreign exchange risk, neither of which is expected to be material - RPC is subject to interest rate risk on its credit facility, which bears a floating rate, but had **no outstanding interest-bearing advances** as of September 30, 2021[160](index=160&type=chunk) - Foreign exchange rate risk is **not expected to have a material effect** on consolidated results, as most transactions occur in U S currency[161](index=161&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2021 - The Company's disclosure controls and procedures were **effective at a reasonable assurance level** as of September 30, 2021[165](index=165&type=chunk) - **No material changes** in internal control over financial reporting occurred during the most recent fiscal quarter[166](index=166&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=44&type=section&id=Item%201.%20Legal%20Proceedings) RPC is involved in ordinary course litigation not expected to have a material adverse effect on its financial position - RPC does not believe that the outcome of its ordinary course litigation will have a **material adverse effect** on its financial position or results of operations[169](index=169&type=chunk) [ITEM 1A. RISK FACTORS](index=44&type=section&id=Item%201A.%20Risk%20Factors) Risk factors affecting RPC's business are detailed in the Company's annual report on Form 10-K for the year ended December 31, 2020 - Risk factors are detailed in the Company's **annual report on Form 10-K** for the fiscal year ended December 31, 2020[170](index=170&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - **No unregistered sales** of equity securities or use of proceeds to report[172](index=172&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=44&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - **No defaults** upon senior securities to report[173](index=173&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to RPC, Inc - Mine Safety Disclosures are **not applicable** to the Company[174](index=174&type=chunk) [ITEM 5. OTHER INFORMATION](index=44&type=section&id=Item%205.%20Other%20Information) The Board of Directors adopted amendments to the Company's Bylaws, effective October 26, 2021 - The Board of Directors adopted **amendments to the Company's Bylaws**, effective October 26, 2021, to clarify board meeting parameters, annual stockholder meetings, and board size[175](index=175&type=chunk) [ITEM 6. EXHIBITS](index=44&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL taxonomy documents - Exhibits include restated and amended certificates of incorporation, amended and restated bylaws, form of stock certificate, **Section 302 and 906 certifications**, and various XBRL documents[176](index=176&type=chunk) [SIGNATURES](index=46&type=section&id=Signatures) The report is duly signed by the company's CEO and CFO on October 29, 2021 - The report was signed by **Richard A Hubbell, President and CEO**, and **Ben M Palmer, VP, CFO, and Corporate Secretary**, on October 29, 2021[180](index=180&type=chunk)

Financial Data and Key Metrics Changes - Revenues for Q3 2021 increased to $225.3 million from $116.6 million in Q3 2020, primarily due to higher activity levels and improved pricing [11] - Operating profit for Q3 2021 was $8 million compared to an operating loss of $31.8 million in the same quarter of the prior year [11] - EBITDA for Q3 2021 was $26.5 million, a significant improvement from negative $12.3 million in Q3 2020 [12] - Diluted earnings per share for Q3 2021 were $0.02, compared to a loss of $0.08 per share in the same quarter of the prior year [12] - Cost of revenues was $170.6 million or 75.7% of revenues in Q3 2021, down from 86.5% in Q3 2020 [13] Business Line Data and Key Metrics Changes - Technical Services segment revenues for Q3 2021 were $211.8 million, up from $109.3 million in the same quarter last year, with an operating profit of $8.3 million compared to a $24.9 million operating loss in Q3 2020 [16] - Support Services segment revenues increased to $13.5 million from $7.3 million in the same quarter last year, with an operating loss of $55,000 compared to a $3.8 million loss in Q3 2020 [17] Market Data and Key Metrics Changes - RPC's revenues increased 19.4% sequentially from $188.8 million in the prior quarter to $225.3 million in Q3 2021, driven by activity increases across all service lines [18] - Cost of revenues increased 17% sequentially to $170.6 million from $145.8 million in the prior quarter, with a slight decrease in the cost of revenues as a percentage of revenues from 77.2% to 75.7% [19] Company Strategy and Development Direction - The company is focusing on enhancing its pressure pumping fleet and has added a Tier 4 dual fuel fleet, aiming to optimize fuel burn and minimize emissions [23] - RPC is strategically positioning itself to capitalize on the improving market conditions and is optimistic about the fourth quarter and 2022 despite potential supply chain constraints [27][28] Management's Comments on Operating Environment and Future Outlook - Management noted that exploration and production companies are responding positively to higher commodity prices, leading to increased demand for RPC's services [7] - The company is monitoring challenges such as supply chain issues and cost increases but remains optimistic about its financial strength and competitive position [29] Other Important Information - Capital expenditures for Q3 2021 were $19 million, with an estimated total of approximately $65 million for the full year, focusing on maintenance and growth opportunities [25] - RPC ended Q3 2021 with a cash balance of approximately $81 million and remains debt-free [29] Q&A Session Summary Question: Insights on pressure pumping side and 2022 outlook - Management is seeing improvements in pressure pumping and is in the bidding season, hoping for pricing improvements and strong activity levels in 2022 [31][32] Question: Utilization and pricing trends for Tier 4 DGB fleet - There is a bifurcation in customer preferences for ESG-friendly equipment, and both older and newer equipment will have a market [33] Question: Product line revenue breakdown - Pressure pumping accounted for 42.8% of consolidated revenue, followed by downhole tools at 27.5%, and coiled tubing at 11.9% [34] Question: Plans for additional Tier 4 fleets - The company expects to have 8 active fleets in Q4 but has no current plans for additional orders [37][38] Question: Market dynamics and competitive bidding - There are fewer companies bidding, but idle equipment remains, keeping the competitive nature of pricing intact [41] Question: Leasing arrangement for the new fleet - The balloon payment for the new fleet is approximately $17 million after a year, and the leasing arrangement is not expected to become a trend in the industry [44] Question: Pricing negotiations and contract renewals - Pricing increases are being negotiated for both immediate and upcoming contracts, with expectations for more adjustments in January [49] Question: Incremental margins outlook for 2022 - Management anticipates that incremental margins will improve in 2022 compared to 2021, but cost increases may impact expectations [51] Question: Investment justification for new assets - There is currently no clear vision for returns on new investments, but the company is working on a roadmap to establish targets [52][55] Question: Upgrades to Tier 4 DGB - Upgrades to Tier 4 DGB are being evaluated as part of the company's roadmap, with potential for future investments [60]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20Financial%20Information) This section provides RPC, Inc.'s unaudited consolidated financial statements and management's discussion and analysis for the periods ended June 30, 2021 [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents RPC, Inc.'s unaudited consolidated financial statements for the periods ended June 30, 2021, and December 31, 2020, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows. It also includes detailed notes explaining accounting policies, segment information, and other financial disclosures [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section presents RPC, Inc.'s consolidated balance sheets as of June 30, 2021, and December 31, 2020 | ASSETS (in thousands) | June 30, 2021 | December 31, 2020 | | :------------------------------------------------------------------------------------------------ | :------------ | :------------------ | | Cash and cash equivalents | $121,015 | $84,496 | | Accounts receivable, net | 180,674 | 161,771 | | Inventories | 81,198 | 82,918 | | Total current assets | 446,228 | 428,359 | | Property, plant and equipment, less accumulated depreciation | 251,396 | 264,411 | | Total assets | $790,206 | $790,505 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | | | | Accounts payable | $53,524 | $41,080 | | Total current liabilities | 96,223 | 79,565 | | Total liabilities | 166,072 | 158,938 | | Total stockholders' equity | 624,134 | 631,567 | | Total liabilities and stockholders' equity | $790,206 | $790,505 | - Total assets remained relatively stable at **$790.2 million** as of June 30, 2021, compared to **$790.5 million** at December 31, 2020. Cash and cash equivalents increased by **$36.5 million**, while property, plant and equipment decreased by **$13.0 million**[7](index=7&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents RPC, Inc.'s consolidated statements of operations for the three and six months ended June 30, 2021 and 2020 | (in thousands except per share data) | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $188,757 | $89,300 | $371,367 | $333,077 | | Operating loss | $(1,220) | $(37,530) | $(11,741) | $(256,237) | | Net loss | $(726) | $(25,093) | $(10,388) | $(185,516) | | Basic loss per share | $0.00 | $(0.12) | $(0.05) | $(0.87) | | Diluted loss per share | $0.00 | $(0.12) | $(0.05) | $(0.87) | - Revenues for the three months ended June 30, 2021, significantly increased by **111.4% to $188.8 million** compared to **$89.3 million** in the prior year, leading to a substantial reduction in operating loss and net loss. For the six months, revenues increased by **11.5% to $371.4 million**, and net loss decreased significantly from **$185.5 million to $10.4 million**[9](index=9&type=chunk) [Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents RPC, Inc.'s consolidated statements of comprehensive loss for the three and six months ended June 30, 2021 and 2020 | (in thousands) | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(726) | $(25,093) | $(10,388) | $(185,516) | | Comprehensive loss | $(504) | $(24,593) | $(9,877) | $(184,996) | - Comprehensive loss significantly improved for both the three and six months ended June 30, 2021, primarily driven by the reduction in net loss. Other comprehensive income components, such as pension adjustments and foreign currency translation, had a minor positive impact[12](index=12&type=chunk) [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This section presents RPC, Inc.'s consolidated statements of stockholders' equity for the six months ended June 30, 2021 | (in thousands) | Balance, Dec 31, 2020 | Stock issued for incentive plans, net | Stock purchased and retired | Net loss | Pension adjustment, net of taxes | Foreign currency translation | Balance, June 30, 2021 | | :------------- | :-------------------- | :------------------------------------ | :-------------------------- | :------- | :------------------------------- | :--------------------------- | :--------------------- | | Common Stock | $21,495 | $93 | $(14) | — | — | — | $21,573 | | Retained Earnings | $627,778 | — | $903 | $(9,662) | — | — | $619,756 | | Total Stockholders' Equity | $631,567 | $1,539 | $(557) | $(9,662) | $153 | $136 | $624,134 | - Total stockholders' equity decreased from **$631.6 million** at December 31, 2020, to **$624.1 million** at June 30, 2021, primarily due to the **$9.7 million net loss** incurred during the period, partially offset by stock issued for incentive plans and positive adjustments from pension and foreign currency translation[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents RPC, Inc.'s consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 | (in thousands) | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $54,866 | $122,099 | | Net cash used for investing activities | $(17,781) | $(25,919) | | Net cash used for financing activities | $(566) | $(798) | | Net increase in cash and cash equivalents | $36,519 | $95,382 | | Cash and cash equivalents at end of period | $121,015 | $145,405 | - Net cash provided by operating activities decreased significantly to **$54.9 million** for the six months ended June 30, 2021, from **$122.1 million** in the prior year, mainly due to a smaller favorable change in working capital. Cash used for investing activities decreased due to reduced capital expenditures[18](index=18&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining RPC, Inc.'s accounting policies, segment information, and other financial disclosures [1. GENERAL](index=8&type=section&id=1.%20GENERAL) This note outlines the basis of presentation for RPC, Inc.'s unaudited consolidated financial statements and key ownership information - The unaudited consolidated financial statements include RPC, Inc. and its wholly-owned subsidiaries, prepared in accordance with GAAP for interim financial information. Management believes all necessary adjustments have been included for fair presentation, but interim results are not indicative of full-year results. A group including the Chairman controls over **50% of the Company's voting power**[20](index=20&type=chunk)[21](index=21&type=chunk)[23](index=23&type=chunk) [2. RECENT ACCOUNTING STANDARDS](index=8&type=section&id=2.%20RECENT%20ACCOUNTING%20STANDARDS) This note details the adoption and expected impact of recent accounting pronouncements on RPC, Inc.'s financial statements - RPC adopted ASU No. 2019-12 (Income Taxes) in Q2 2021, which did not materially impact its financial statements. The company plans to adopt ASU No. 2020-04 (Reference Rate Reform) when LIBOR is discontinued, with no expected material impact[24](index=24&type=chunk)[25](index=25&type=chunk) [3. REVENUES](index=10&type=section&id=3.%20REVENUES) This note describes RPC, Inc.'s revenue recognition policies, primary sources of contract revenue, and related unbilled receivables - RPC generates contract revenues primarily from oilfield services, recognized over time as services are performed. Services are categorized into Technical Services (well site equipment/personnel) and Support Services (off-well site tools/services). Contracts are generally short-term, with payment typically received **30-60 days** after invoicing[26](index=26&type=chunk)[28](index=28&type=chunk)[31](index=31&type=chunk) | (in thousands) | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Oilfield services transferred over time | $188,757 | $89,300 | $371,367 | $333,077 | | Total revenues | $188,757 | $89,300 | $371,367 | $333,077 | - Unbilled trade receivables increased to **$45.2 million** at June 30, 2021, from **$29.6 million** at December 31, 2020, with substantially all expected to be invoiced in the following quarter[35](index=35&type=chunk) [4. IMPAIRMENT AND OTHER CHARGES](index=11&type=section&id=4.%20IMPAIRMENT%20AND%20OTHER%20CHARGES) This note details impairment and other charges recorded by RPC, Inc. for the periods presented | (in thousands) | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Long Lived Asset Impairments | $— | $— | $— | $204,765 | | Severance Costs | $— | $1,487 | $— | $1,882 | | Other | $— | $152 | $— | $528 | | Total | $— | $1,639 | $— | $207,175 | - No impairment or other charges were recorded for the three and six months ended June 30, 2021. In contrast, the prior year periods saw significant charges, including **$1.6 million** for Q2 2020 (primarily severance) and **$207.2 million** for H1 2020 (primarily long-lived asset impairments in Technical Services)[36](index=36&type=chunk)[86](index=86&type=chunk)[121](index=121&type=chunk) [5. EARNINGS PER SHARE](index=12&type=section&id=5.%20EARNINGS%20PER%20SHARE) This note provides the calculation of basic and diluted earnings per share for RPC, Inc. | (In thousands) | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss used in calculating earnings per share | $(726) | $(25,093) | $(10,388) | $(185,516) | | Shares used in calculating basic and diluted earnings per share | 213,009 | 212,402 | 212,970 | 212,360 | - Basic and diluted loss per share for the three months ended June 30, 2021, was **$0.00**, a significant improvement from **$(0.12)** in the prior year. For the six months, it improved to **$(0.05)** from **$(0.87)** in the prior year[9](index=9&type=chunk) [6. STOCK-BASED COMPENSATION](index=12&type=section&id=6.%20STOCK-BASED%20COMPENSATION) This note details RPC, Inc.'s stock-based compensation plans, related expenses, and unrecognized compensation costs - As of June 30, 2021, **3,097,340 shares** were available for grant under the 2014 Stock Incentive Plan. Pre-tax stock-based compensation expense decreased to **$1.47 million** for Q2 2021 (from **$2.02 million** in Q2 2020) and to **$3.01 million** for H1 2021 (from **$4.11 million** in H1 2020)[39](index=39&type=chunk)[40](index=40&type=chunk) | Non-vested restricted shares (in thousands) | Shares | Weighted Average Grant-Date Fair Value | | :------------------------------------------ | :-------- | :------------------------------------- | | Non-vested shares at December 31, 2020 | 2,235,179 | $6.81 | | Granted | 1,010,700 | $3.87 | | Vested | (434,208) | $14.96 | | Forfeited | (95,260) | $6.85 | | Non-vested shares at June 30, 2021 | 2,716,411 | $7.91 | - Total unrecognized compensation cost for non-vested restricted shares was **$41.8 million** as of June 30, 2021, expected to be recognized over a weighted-average period of **4.4 years**[42](index=42&type=chunk) [7. BUSINESS SEGMENT INFORMATION](index=14&type=section&id=7.%20BUSINESS%20SEGMENT%20INFORMATION) This note provides financial information for RPC, Inc.'s two reportable segments: Technical Services and Support Services - RPC operates through two reportable segments: Technical Services (well site equipment/personnel, high capital/personnel intensive) and Support Services (off-well site tools/services, drilling activity influenced). Corporate expenses include centralized support and regulatory compliance[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) | Segment Revenues (in thousands) | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Technical Services | $176,119 | $80,532 | $348,760 | $308,232 | | Support Services | $12,638 | $8,768 | $22,607 | $24,845 | | Total revenues | $188,757 | $89,300 | $371,367 | $333,077 | | Segment Operating Income (Loss) (in thousands) | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Technical Services | $1,428 | $(34,100) | $(4,334) | $(46,307) | | Support Services | $(2,402) | $(1,846) | $(5,298) | $(299) | | Corporate Expenses | $(3,357) | $(3,139) | $(6,680) | $(6,469) | | Total operating loss | $(1,220) | $(37,530) | $(11,741) | $(256,237) | - Technical Services revenues increased significantly by **118.7%** in Q2 2021 and **13.1%** in H1 2021, moving from an operating loss to a profit in Q2 2021 and substantially reducing its H1 2021 operating loss. Support Services revenues increased in Q2 2021 but decreased in H1 2021, with operating losses widening in both periods due to lower rental tool pricing and reduced activity[102](index=102&type=chunk)[114](index=114&type=chunk) [8. CURRENT EXPECTED CREDIT LOSSES](index=17&type=section&id=8.%20CURRENT%20EXPECTED%20CREDIT%20LOSSES) This note describes RPC, Inc.'s accounting policy for expected credit losses on accounts receivable and changes in the allowance for credit losses - The Company uses an expected credit loss model for accounts receivable, based on historical collection, economic conditions, and customer financial status. Specific allowances are established for high-default-probability customers[52](index=52&type=chunk) | Allowance for credit losses (in thousands) | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $4,815 | $5,181 | | Provision (benefit) for current expected credit losses | $2,113 | $(828) | | Write-offs | $(530) | $(302) | | Recoveries collected (net of expenses) | $7 | $— | | Ending balance | $6,405 | $4,051 | - The allowance for credit losses increased to **$6.4 million** at June 30, 2021, from **$4.8 million** at the beginning of the period, primarily due to a **$2.1 million** provision for current expected credit losses[53](index=53&type=chunk) [9. INVENTORIES](index=17&type=section&id=9.%20INVENTORIES) This note details the composition and valuation of RPC, Inc.'s inventories - Inventories, consisting of raw materials, parts, and supplies, were **$81.2 million** at June 30, 2021, a slight decrease from **$82.9 million** at December 31, 2020. They are recorded at the lower of cost or net realizable value[54](index=54&type=chunk) [10. COMMITMENTS AND CONTINGENCIES](index=17&type=section&id=10.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines RPC, Inc.'s commitments and potential liabilities from ongoing sales and use tax audits - The Company is subject to ongoing sales and use tax audits in various jurisdictions. While some assessment costs are accrued, a recent state tax assessment received on July 12, 2021, is being evaluated, but the Company believes the likelihood of a material loss is remote and cannot be reasonably estimated[55](index=55&type=chunk)[56](index=56&type=chunk) [11. EMPLOYEE BENEFIT PLAN](index=18&type=section&id=11.%20EMPLOYEE%20BENEFIT%20PLAN) This note provides details on RPC, Inc.'s Retirement Income Plan and Supplemental Retirement Plan, including benefit costs and asset information | Net periodic benefit cost (in thousands) | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest cost | $247 | $412 | $494 | $823 | | Expected return on plan assets | $(377) | $(396) | $(754) | $(791) | | Amortization of net losses | $202 | $247 | $404 | $493 | | Net periodic benefit cost | $72 | $263 | $144 | $525 | - Net periodic benefit cost for the Retirement Income Plan decreased significantly to **$72 thousand** for Q2 2021 (from **$263 thousand** in Q2 2020) and to **$144 thousand** for H1 2021 (from **$525 thousand** in H1 2020). No contributions were made to the plan in H1 2021 or H1 2020[57](index=57&type=chunk) - The Supplemental Retirement Plan (SERP) assets, primarily mutual funds and COLI policies, totaled **$31.2 million** at June 30, 2021. Trading gains related to SERP assets were **$1.6 million** for Q2 2021 and **$2.1 million** for H1 2021. SERP liabilities were **$31.0 million** at June 30, 2021, with unrealized gains of **$1.7 million** for Q2 2021 and **$2.3 million** for H1 2021[59](index=59&type=chunk)[60](index=60&type=chunk) [12. NOTES PAYABLE TO BANKS](index=18&type=section&id=12.%20NOTES%20PAYABLE%20TO%20BANKS) This note describes RPC, Inc.'s revolving Credit Agreement, available liquidity, and compliance with covenants - RPC has a **$100 million** revolving Credit Agreement maturing July 26, 2023, which was amended in September 2020 to reduce the maximum borrowing amount, decrease the minimum tangible net worth covenant, and increase margin spreads/commitment fees. As of June 30, 2021, there were no outstanding borrowings, and **$82.1 million** was available after accounting for **$17.9 million** in letters of credit[61](index=61&type=chunk)[62](index=62&type=chunk)[66](index=66&type=chunk)[132](index=132&type=chunk) - The Company was in compliance with all credit facility covenants as of June 30, 2021[64](index=64&type=chunk)[132](index=132&type=chunk) | Interest (in thousands) | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest incurred | $40 | $65 | $106 | $153 | | Interest paid | $40 | $40 | $82 | $80 | [13. INCOME TAXES](index=20&type=section&id=13.%20INCOME%20TAXES) This note details RPC, Inc.'s effective income tax rates and the factors influencing them for the periods presented - For Q2 2021, the effective tax rate was a provision of **4.8%** compared to a benefit of **35.7%** in Q2 2020. For H1 2021, it was a benefit of **6.2%** compared to **28.0%** in H1 2020. The beneficial rate is mainly due to unfavorable permanent adjustments and detrimental discrete adjustments related to restricted stock vesting and the employee retention credit[68](index=68&type=chunk)[111](index=111&type=chunk)[125](index=125&type=chunk) [14. FAIR VALUE DISCLOSURES](index=22&type=section&id=14.%20FAIR%20VALUE%20DISCLOSURES) This note provides information on RPC, Inc.'s fair value measurements for financial assets, categorized by input levels - The Company categorizes fair value measurements into Level 1 (quoted active market prices), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[73](index=73&type=chunk) | Fair Value Measurements at June 30, 2021 (in thousands) | Total | Level 1 (Quoted prices in active markets for identical assets) | Level 2 (Significant other observable inputs) | Level 3 (Significant unobservable inputs) | | :------------------------------------------------------ | :--------- | :------------------------------------------------------------- | :-------------------------------------------- | :---------------------------------------- | | Assets: | | | | | | Equity securities | $184 | $184 | $— | $— | | Investments measured at net asset value | $31,183 | | | | | Assets held for sale | $4,032 | $— | $4,032 | $— | - Equity securities are valued at Level 1, while investments measured at net asset value (SERP assets) are primarily recorded at their net cash surrender values, approximating fair value. Assets held for sale are valued at Level 2 based on observable market data[71](index=71&type=chunk)[74](index=74&type=chunk) [15. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME](index=23&type=section&id=15.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20(LOSS)%20INCOME) This note details the components and changes in RPC, Inc.'s accumulated other comprehensive loss | (in thousands) | Pension Adjustment | Foreign Currency Translation | Total | | :------------- | :----------------- | :--------------------------- | :---- | | Balance at December 31, 2020 | $(15,181) | $(2,525) | $(17,706) | | Total activity for the period | $306 | $205 | $511 | | Balance at June 30, 2021 | $(14,875) | $(2,320) | $(17,195) | - Accumulated other comprehensive loss improved from **$(17.7) million** at December 31, 2020, to **$(17.2) million** at June 30, 2021, driven by positive changes in pension adjustment and foreign currency translation[76](index=76&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on RPC's financial performance, condition, and future outlook. It details the impact of market conditions, particularly oil and gas prices and the COVID-19 pandemic, on revenues, costs, and profitability. It also discusses liquidity, capital resources, and key operational strategies [Overview](index=24&type=section&id=Overview) This section provides an overview of RPC, Inc.'s business, key influencing factors, and a summary of recent financial performance - RPC provides specialized oilfield services primarily in the U.S. and selected international markets. Financial results are influenced by oil/natural gas prices, service pricing, equipment utilization, geopolitical factors, economic conditions, and weather[80](index=80&type=chunk) - The oil and gas industry experienced significant disruption in 2020 due to OPEC disputes and the COVID-19 pandemic, which continued into Q2 2021. RPC maintained operations as an essential infrastructure business, implementing employee health and safety procedures[82](index=82&type=chunk) - Q2 2021 revenues increased by **111.4% to $188.8 million** compared to Q2 2020, driven by significantly higher activity levels across all major service lines, recovering from the pandemic's impact. International revenues increased **6.0% to $7.2 million**[83](index=83&type=chunk) - Operating loss improved significantly to **$(1.2) million** in Q2 2021 from **$(37.5) million** in Q2 2020. Net loss also improved to **$(0.7) million** from **$(25.1) million** in the same period[9](index=9&type=chunk) [Outlook](index=26&type=section&id=Outlook) This section discusses the market outlook for the oil and gas industry, including drilling activity and RPC, Inc.'s strategic responses - U.S. domestic drilling rig count declined significantly from Q4 2018 to Q3 2020 due to decreased oil demand. However, oil prices rose over **66%** and natural gas prices over **74%** in Q2 2021 compared to Q2 2020, encouraging increased drilling and completion activities[91](index=91&type=chunk)[93](index=93&type=chunk) - Oil-directed drilling is expected to remain the majority of domestic drilling, with natural gas-directed drilling remaining a low percentage due to relatively low prices and high production from existing wells[94](index=94&type=chunk) - RPC continues to selectively upgrade existing equipment for dual-fuel capability and advanced technology. The company will monitor customer activity and financial returns before activating additional idle equipment, aiming for moderate fleet expansions to maintain a strong balance sheet and position for long-term growth[96](index=96&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) This section analyzes RPC, Inc.'s financial performance, comparing revenues, costs, and profitability across different periods [THREE MONTHS ENDED JUNE 30, 2021 COMPARED TO THREE MONTHS ENDED JUNE 30, 2020](index=28&type=section&id=THREE%20MONTHS%20ENDED%20JUNE%2030,%202021%20COMPARED%20TO%20THREE%20MONTHS%20ENDED%20JUNE%2030,%202020) This section provides a detailed comparison of RPC, Inc.'s financial results for the three months ended June 30, 2021, versus the prior year period | (in thousands) | June 30, 2021 | June 30, 2020 | Change (%) | | :------------- | :------------ | :------------ | :--------- | | Revenues | $188,757 | $89,300 | 111.4% | | Domestic Revenues | $181,530 | $82,506 | 120.0% | | International Revenues | $7,227 | $6,794 | 6.0% | | Cost of revenues | $145,789 | $80,037 | 82.2% | | Selling, general and administrative expenses | $29,403 | $28,775 | 2.2% | | Depreciation and amortization | $17,896 | $19,573 | -8.6% | | Impairment and other charges | $— | $1,639 | -100.0% | | Operating income (loss) | $(1,220) | $(37,530) | 96.8% | | Income tax provision (benefit) | $33 | $(13,921) | -100.2% | - Average natural gas price increased by **74.3%** and average oil price by **143.7%** in Q2 2021 compared to Q2 2020. The average domestic rig count increased by **15.6%**[101](index=101&type=chunk) - Technical Services operating income was **$1.4 million** in Q2 2021, a significant improvement from a **$34.1 million loss** in Q2 2020. Support Services operating loss widened to **$2.4 million** from **$1.8 million** due to lower rental tool pricing[102](index=102&type=chunk) [SIX MONTHS ENDED JUNE 30, 2021 COMPARED TO SIX MONTHS ENDED JUNE 30, 2020](index=30&type=section&id=SIX%20MONTHS%20ENDED%20JUNE%2030,%202021%20COMPARED%20TO%20SIX%20MONTHS%20ENDED%20JUNE%2030,%202020) This section provides a detailed comparison of RPC, Inc.'s financial results for the six months ended June 30, 2021, versus the prior year period | (in thousands) | June 30, 2021 | June 30, 2020 | Change (%) | | :------------- | :------------ | :------------ | :--------- | | Revenues | $371,367 | $333,077 | 11.5% | | Domestic Revenues | $354,459 | $310,500 | 14.2% | | International Revenues | $16,908 | $22,577 | -25.1% | | Cost of revenues | $292,012 | $261,981 | 11.5% | | Selling, general and administrative expenses | $59,998 | $65,305 | -8.1% | | Depreciation and amortization | $35,669 | $58,866 | -39.4% | | Impairment and other charges | $— | $207,175 | -100.0% | | Operating loss | $(11,741) | $(256,237) | 95.4% | | Income tax benefit | $(681) | $(72,292) | 99.1% | - Average natural gas price increased by **81.0%** and average oil price by **67.3%** in H1 2021 compared to H1 2020. The average domestic rig count decreased by **27.8%**[113](index=113&type=chunk) - Technical Services operating loss significantly reduced to **$4.3 million** in H1 2021 from **$46.3 million** in H1 2020. Support Services operating loss widened to **$5.3 million** from **$0.3 million** due to lower activity levels for rental tools[114](index=114&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses RPC, Inc.'s cash flows, financial condition, and capital requirements [Cash Flows](index=32&type=section&id=Cash%20Flows) This section analyzes RPC, Inc.'s cash flows from operating, investing, and financing activities - Cash and cash equivalents increased by **$36.5 million** to **$121.0 million** as of June 30, 2021, from **$84.5 million** at December 31, 2020[126](index=126&type=chunk) | (In thousands) | Six months ended June 30, 2021 | Six months ended June 30, 2020 | | :------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $54,866 | $122,099 | | Net cash used for investing activities | $(17,781) | $(25,919) | | Net cash used for financing activities | $(566) | $(798) | - Operating cash flow decreased due to a smaller favorable change in working capital, despite a federal tax refund. Investing cash flow decreased due to reduced capital expenditures, partially offset by lower proceeds from asset sales. Financing cash flow decreased due to lower costs for share repurchases related to restricted stock vesting[127](index=127&type=chunk)[128](index=128&type=chunk)[130](index=130&type=chunk) [Financial Condition and Liquidity](index=33&type=section&id=Financial%20Condition%20and%20Liquidity) This section assesses RPC, Inc.'s overall financial health and ability to meet its short-term and long-term obligations - RPC's financial condition remains strong, with existing cash and strong capitalization expected to provide sufficient liquidity for at least the next twelve months without needing the revolving credit facility[131](index=131&type=chunk) - The **$100 million** revolving credit facility had **$82.1 million** available as of June 30, 2021, after accounting for **$17.9 million** in letters of credit, and the Company was in compliance with all financial covenants[132](index=132&type=chunk) [Cash Requirements](index=33&type=section&id=Cash%20Requirements) This section outlines RPC, Inc.'s anticipated capital expenditures, pension contributions, and stock buyback plans - Expected capital expenditures for 2021 are approximately **$65 million**, with **$25.9 million** spent by June 30, 2021, primarily for maintenance and upgrades of existing equipment, including dual-fuel pressure pumping equipment[133](index=133&type=chunk) - The Company did not make cash contributions to its Retirement Income Plan in H1 2021 and does not expect to for the remainder of the year[135](index=135&type=chunk) - RPC has an authorized stock buyback program for up to **41.6 million shares**, with **8.2 million shares** remaining available. No open market purchases were made in H1 2021, only shares repurchased for taxes related to restricted stock vesting[136](index=136&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - The Board suspended common stock dividends on July 22, 2019, and expects to resume them subject to earnings and financial condition, with no set timetable[137](index=137&type=chunk) [INFLATION](index=34&type=section&id=INFLATION) This section discusses the impact of inflation on RPC, Inc.'s costs and its ability to pass these costs to customers - Increased oilfield activity in late 2020 and H1 2021 has led to rising labor costs due to skilled labor departure and increasing raw material prices due to supply chain disruptions. RPC is attempting to pass these costs to customers, but success is not assured due to competitive market conditions[139](index=139&type=chunk) [OFF BALANCE SHEET ARRANGEMENTS](index=34&type=section&id=OFF%20BALANCE%20SHEET%20ARRANGEMENTS) This section confirms that RPC, Inc. does not have any material off-balance sheet arrangements - The Company does not have any material off-balance sheet arrangements[140](index=140&type=chunk) [RELATED PARTY TRANSACTIONS](index=34&type=section&id=RELATED%20PARTY%20TRANSACTIONS) This section details transactions between RPC, Inc. and its related parties - RPC charged Marine Products Corporation **$437 thousand** for administrative services in H1 2021. The Company also purchased **$514 thousand** in products/services from suppliers owned by officers/stockholders and paid Rollins, Inc. **$52 thousand** for administrative services and rent in H1 2021. Jointly owned 255 RC, LLC incurred **$100 thousand** in net operating costs for a corporate aircraft[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=34&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) This section refers to RPC, Inc.'s critical accounting policies as disclosed in its annual report - There have been no significant changes in critical accounting policies since the fiscal year ended December 31, 2020, as referenced in the Company's annual report on Form 10-K[145](index=145&type=chunk) [IMPACT OF RECENT ACCOUNTING STANDARDS](index=34&type=section&id=IMPACT%20OF%20RECENT%20ACCOUNTING%20STANDARDS) This section directs readers to Note 2 for details on the impact of recent accounting standards - Refer to Note 2 of the Notes to Consolidated Financial Statements for details on recent accounting standards, including adoption dates and estimated effects[146](index=146&type=chunk) [SEASONALITY](index=36&type=section&id=SEASONALITY) This section explains that demand for RPC, Inc.'s services is driven by customer capital expenditures, not seasonal factors - Demand for RPC's services is primarily driven by customer capital expenditures in oil and gas exploration and production, which fluctuate with current and projected oil and natural gas prices and drilling activity, rather than being seasonal to any material degree[149](index=149&type=chunk) [FORWARD-LOOKING STATEMENTS](index=36&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section identifies forward-looking statements and outlines risks that could cause actual results to differ materially - This section identifies forward-looking statements related to business strategy, future demand, market conditions, and financial performance. It also outlines known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from projections, including the impact of the COVID-19 pandemic, oil/gas price declines, geopolitical factors, and competition[150](index=150&type=chunk)[151](index=151&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) RPC is exposed to interest rate risk from its credit facility and foreign exchange rate risk, though the latter is not expected to be material due to the majority of transactions being in U.S. currency - The Company is subject to interest rate risk on its credit facility, which bears a floating rate. As of June 30, 2021, there were no outstanding interest-bearing advances[152](index=152&type=chunk) - RPC is also exposed to market risk from foreign exchange rates, but this is not expected to materially affect consolidated results due to the majority of transactions occurring in U.S. currency[153](index=153&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of RPC's disclosure controls and procedures as of June 30, 2021, concluding they were effective at a reasonable assurance level. No material changes in internal control over financial reporting were identified during the quarter - As of June 30, 2021, RPC's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were **effective at a reasonable assurance level**[157](index=157&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[158](index=158&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=Part%20II.%20Other%20Information) This section provides additional disclosures including legal proceedings, risk factors, equity sales, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=28&type=section&id=Item%201.%20Legal%20Proceedings) RPC is involved in routine litigation but does not anticipate any material adverse effects on its financial position or results of operations from these proceedings - RPC is involved in litigation in the ordinary course of business but does not believe the outcome will have a material adverse effect on its financial position or results of operations[161](index=161&type=chunk) [ITEM 1A. RISK FACTORS](index=28&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors detailed in the Company's annual report on Form 10-K for the year ended December 31, 2020 - For a comprehensive list of risk factors, refer to the Company's annual report on Form 10-K for the year ended December 31, 2020[162](index=162&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2021, RPC repurchased 1,578 shares at an average price of $5.65, solely in connection with taxes related to the vesting of restricted shares. No open market purchases were made, and 8,248,184 shares remain available under the existing stock buyback program | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Number of Shares that May Yet Be Purchased Under Plans or Programs | | :------------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------- | | April 1, 2021 to April 30, 2021 | 1,578 | $5.65 | 8,248,184 | | May 1, 2021 to May 31, 2021 | — | — | 8,248,184 | | June 1, 2021 to June 30, 2021 | — | — | 8,248,184 | | Totals | 1,578 | $5.65 | 8,248,184 | - The repurchased shares were exclusively for taxes related to the vesting of restricted shares, not open market purchases. The stock buyback program, authorizing up to **41.6 million shares**, has no predetermined expiration date[164](index=164&type=chunk)[165](index=165&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=28&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) There were no defaults upon senior securities reported - No defaults upon senior securities were reported[166](index=166&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to RPC, Inc - Mine Safety Disclosures are not applicable to the Company[167](index=167&type=chunk) [ITEM 5. OTHER INFORMATION](index=28&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported[168](index=168&type=chunk) [ITEM 6. EXHIBITS](index=29&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the 10-Q report, including corporate organizational documents, stock certificates, Section 302 and 906 certifications, and XBRL taxonomy documents - Exhibits include Restated Certificate of Incorporation, Amended and Restated Bylaws, Form of Stock Certificate, Section 302 and 906 certifications for CEO and CFO, and various XBRL taxonomy documents[170](index=170&type=chunk) [SIGNATURES](index=30&type=section&id=Signatures) This section contains the official signatures of RPC, Inc.'s President, CEO, CFO, and Corporate Secretary, certifying the report - The report was signed on July 30, 2021, by Richard A. Hubbell, President and Chief Executive Officer, and Ben M. Palmer, Vice President, Chief Financial Officer and Corporate Secretary[174](index=174&type=chunk)