​

​

​

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

​

​

For the fiscal year ended December 31 2019, 2021

Commission File No. 1-8726

RPC, INC.

​

​

2801 BUFORD HIGHWAY NE, SUITE 300

ATLANTA, GEORGIA 30329

(404) 321-2140

​

​

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ◻ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ◻ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every interactive data file required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

​

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐⌧

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of RPC, Inc. Common Stock held by non-affiliates on June 30, 2019,2021, the last business day of the registrant’s most recently completed second fiscal quarter, was $410,695,775$355,427,058 based on the closing price on the New York Stock Exchange on June 28, 201930, 2021 of $7.21$4.95 per share.

RPC, Inc. had 214,432,084216,586,626 shares of Common Stock outstanding as of February 14, 2020.18, 2022.

Documents Incorporated by Reference

Portions of the Proxy Statement for the 20202022 Annual Meeting of Stockholders of RPC, Inc. are incorporated by reference into Part III, Items 10 through 14 of this report.

​

​

​

PART I

Throughout this report, we refer to RPC, Inc., together with its subsidiaries, as “we,” “us,” “RPC” or “the Company.”

Forward-Looking Statements

Certain statements made in this report that are not historical facts are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements that relate to our business strategy,and financial strategies, plans and objectives, and our beliefs and expectations regarding future demand for our equipment and services and other events and conditions that may influence the oilfield services market and our performance in the future. Forward-looking statements made elsewhere in this report also include without limitation statements regardingregarding: our belief that the demand for our oil and gas services is generally influenced by customers’ decisions to invest capital toward initiating production in a new oil or natural gas well, improving production flows in an existing formation, or addressing well control issues; our belief that the common drivers of operational and financial success of Technical Services include diligent equipment maintenance, strong logistical processes, and appropriately trained personnel who function well in a team environment; our belief that the primary drivers of operational success for services and equipment provided off the well site without our personnel are offering safe, high quality and in-demand equipment appropriate for the well design characteristics; our belief that the primary drivers of operational success for other Support Services relate to meeting customer needs off the well site and competitive marketing of such services; our belief that demand for equipment and services offered tends to be influenced primarily by customer drilling-related activity levels; our belief that our supply sources are adequate; our belief that customer activity levels are influenced by their decisions about capital investment toward the development and product of oil and gas reserves; natural gas prices, production levels and drilling activities; our belief that oil-directed drilling will continue to represent the majority of the total drilling rig activity; our belief thatcount for the long-term demand outlook for natural gas is favorable and that natural gas-directed drilling will increase over the long-term;foreseeable future; our continued belief in the long-term growth opportunitiesimportance of our business due to continued worldwide demand for hydrocarbons generally and the high production of oil in the domestic U.S. market; our belief that unconventional wells will continue to comprise the majority of drilling activity because of their high initial production rates; our belief that the advent of unconventional drilling in the U.S. domestic market will be a permanent change and will continue to have a positive impact on the demand for our business;services; our expectation to continue to focus on the selected development of international business opportunities in current and other international markets;markets and our belief that international revenues will continue to be less than ten percent of total revenues in 2022; our primary objective, which is to generate excellent long-term returns on investment through the effective and conservative management of our invested capital to generate strong cash flow; our plans to continue to pursue such primary objective through strategic investments and opportunities designed to enhance the long-term value of our company while improving market share, product offerings and the profitability of existing businesses; our expectations regarding acquisition targets in our industry; our belief that the passingprincipal competitive factors in the market areas that we serve are product availability and quality of our equipment and raw materials used to provide our services, service quality, reputation for safety and technical proficiency and price; our belief that our facilities are adequate for our current operations and reasonably anticipated future needs; our belief that oil production in the United States has become an increasingly important determinant of global oil prices; our belief that statistics regarding well completions are meaningful indicators of the proposed ban on hydraulic fracturing would reduce the demandoutlook for our services;activity levels and revenues; our belief that current and projected prices of oil, natural gas and natural gas liquids are important catalysts for U.S. domestic drilling activity; the adequacy of our insurance coverage; the impact of lawsuits, legal proceedings and claims on our business and financial condition; our belief that industry factors will continuerecent price increases have encouraged our customers to depress natural gas directedincrease drilling activity during the near-term; our belief that U.S. oilfield activity will have a negative impact on RPC’s revenues and earnings during the near-term;completion activities; our belief that oil-directed drilling will remain the majority of domestic drilling and that natural gas-directed drilling will remain a low percentage of U.S. domestic drilling in the near-term; our belief that oilfield well completion activitynatural gas-directed drilling has increased and will decline during the near-term; the fact that drilling and completion activities continue to be highly service-intensiveincrease in natural gas-directed basins in the United States due to the current and require a large amountprojected high prices of equipmentnatural gas and raw materials carries favorable implications for our activity levels; higher industry efficiencies have caused the market for several oil completion services including pressure pumping to be oversupplied and that this development carries negative consequences for pricing of our services, utilization of our equipment and our financial results during the near-term; our belief that newly acquiredthis trend should be favorable for the demand for our services in such basins; our belief that the competitive market for our services will improve during the near term; our belief that our response to the near-term potential of lower activity levels and ordered equipment will provide acceptable financial returns when placed in service at high utilization levels; our plans to undertake moderate fleet expansions whichcompetitive pricing will allow us to maintain a strong balance sheet;sheet and position us for long-term growth and strong financial results;; our belief that declining activity levels may reduce the costs of providingliquidity provided by our servicescash and reduce logistical constraints;cash equivalents and our overall strong capitalization will provide sufficient liquidity to meet our requirements for at least the next twelve months; our expectation that we will not need our revolving credit facility to meet liquidity requirements in the near term; our expectations about cash contributions to the defined benefit pension plan in 2020;2022; our ability to fund capital requirements in the future; the estimated amount of our capital expenditures and contractual obligations for future periods; our expectations to resume payments of cash dividends; our expectations regarding the costs of skilled labor and many of the raw materials used in providing our services; estimates made with respect to our critical accounting policies; the effect of new accounting standards; and the effect of the changes in foreign exchange rates on our consolidated results of operations or financial condition.

The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “estimate,” and similar expressions generally identify forward-looking statements. Such statements are based on certain assumptions and analyses made by our management in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes to be appropriate. We caution you that such statements are only predictions and not guarantees of future performance and that actual results, developments and business decisions may differ from those envisioned by the forward-looking statements. See “Risk Factors” contained in Item 1A. for a discussion of factors that may cause actual results to differ from our projections.projections..

Item 1. Business

Organization and Overview

RPC is a Delaware corporation originally organized in 1984 as a holding company for several oilfield services companies and is headquartered in Atlanta, Georgia.

RPC provides a broad range of specialized oilfield services and equipment primarily to independent and major oil and gas companies engaged in the exploration, production and development of oil and gas properties throughout the United States, including the southwest, mid-continent, Gulf of Mexico Rocky Mountain and Appalachian regions, and in selected international markets. RPC acts as a holding company for the following legal entity groupings: Cudd Energy Services, Cudd Pressure Control, Thru Tubing Solutions and Patterson Services. Selected overhead including centralized support services and regulatory compliance are classified as Corporate. RPC is further organized into Technical Services and Support Services which are its operating segments. As of December 31, 2019,2021, RPC had approximately 2,7002,250 employees.

additives. Generally, these items are available from several suppliers, and the Company utilizes more than one supplier for each item. Pressure pumping services offered include:

Fracturing — Fracturing services are performed to stimulate production of oil and natural gas by increasing the permeability of a formation. Fracturing is particularly important in shale formations, which have low permeability, and unconventional completion, because the formation containing hydrocarbons is not concentrated in one area and requires multiple fracturing operations. The fracturing process consists of pumping fluid gelfluids and sometimes nitrogen into a cased well at sufficient pressure to fracture the formation at desired locations and depths. Sand, ceramics, or synthetic materials, which are often coated with a material to increase their resistance to crushing, are pumped into the fracture. When the pressure is released at the surface, the fluid gel returns to the well surface, but the proppant remains in the fracture, thus keeping it open so thatto allow oil and natural gas canto flow through the fracture into the production tubing and ultimately to the well surface. In some cases, fracturing is performed in formations with a high amount of carbonate rock by an acid solution pumped under pressure without a proppant or with small amounts of proppant.

Nitrogen. Nitrogen accounted for four percent of revenues in 2019, three2021, five percent of revenues in 20182020 and twofour percent of revenues in 2017.2019. There are a number of uses for nitrogen, an inert, non-combustible element, in providing services to oilfield customers and industrial users outside of the oilfield. For our oilfield customers, nitrogen can be used to clean drilling and production pipe and displace fluids in various drilling applications. Increasingly, it is used as a displacement medium to increase production in older wells in which production has depleted. It also can be used to create a fire-retardant environment in hazardous blowout situations and as a fracturing medium for our fracturing service. In addition, nitrogen can be complementary to our snubbing and coiled tubing services, because it is a non-corrosive medium and is frequently injected into a well using coiled tubing. Nitrogen is complementary to our pressure pumping service as well, because foam-based nitrogen stimulation is appropriate in certain sensitive formations in which the fluids used in fracturing or acidizing would damage a customer's well.

Patterson Rental Tools offers a broad range of rental tools including:including drill pipe and associated handling tools, blowout preventers and a variety of tool assemblages that provide well control.

​

​

Oilfield Pipe Inspection Services, Pipe Management and Pipe Storage. Pipe inspection services include Full Body Electromagnetic and Phased Array Ultrasonic inspection of pipe used in oil and gas wells. These services are provided at both the Company’s inspection facilities and at independent tubular mills in accordance with negotiated sales and/or service contracts. Our customers are major oil companies and steel mills, for which we provide in-house inspection services, inventory management and process control of tubing, casing and drill pipe. Our locations in Channelview, Texas and Morgan City, Louisiana are equipped with large capacity cranes, specially designed forklifts and a computerized inventory system to serve a variety of storage and handling services for both oilfield and non-oilfield customers.

Well Control School. Well Control School provides industry and government accredited training for the oil and gas industry both in the United States and in limited international locations. Well Control School provides training in various formats including conventional classroom training, interactive computer training including training delivered over the internet, and mobile simulator training.

Energy Personnel International. Energy Personnel International provides drilling and production engineers, well site supervisors, project management specialists, and workover and completion specialists on a consulting basis to the oil and gas industry to meet customers’ needs for staff engineering and well site management.

Refer to Note 1415 in the Notes to the Consolidated Financial Statementsconsolidated financial statements for additional financial information on our business segments.

Industry

United States. RPC provides its services to its domestic customers through a network of facilities strategically located to serve oil and gas drilling and production activities of its customers in Texas, the mid-continent, the southwest, the Gulf of Mexico the Rocky Mountains and the Appalachian regions. Demand for RPC’s services in the U.S. tends to beis extremely volatile and fluctuates with current and projected price levels of oil and natural gas and activity levels in the oil and gas industry. Customer activity levels are influenced by their decisions about capital investment toward the development and production of oil and gas reserves.

Due to aging oilfields and lower-cost sources of oil internationally,improved drilling technology, the drilling rig count in the U.S. has declined by approximately 83 percent from its peak in 1981. However, duedramatically since the early 1980’s. Due to continuously enhanced rig and other technologies moreduring the last decade, an increased number of wells arehave been drilled during periods of strong industry activity, and these wells are increasingly productive. For these reasons, the domestic production of both oil and natural gas in these wells rose to record levels in the fourth quarter of 2019. Oil and gas industry activity levels have historically been volatile, experiencing multiple cycles, including sixseven down cycle troughs between 1981 and 2016,2020, with May 2016August 2020 marking the lowest U.S. domestic rig count in U.S. oilfield history. In the current cycle, the rig count peaked late in the fourth quarter of 2018,Between August 2020 and by early in the first quarter of 2020, had fallen by approximately 27 percent.

Because of the increased efficiency of drilling rigs, the Company also monitors well completions in2022, the U.S. domestic oilfield. Well completions are particularly important to RPC becauserig count rose by approximately 138 percent.

Since the majority of itsRPC’s services are utilized duringat the completion stage of an oil or gas well’s life cycle, so they are an important indicator of the demand for RPC’s services.Company closely monitors well completion trends in the U.S. domestic oilfield. As recently reported by the U.S. Energy Information Administration, during the first quarter of 2020, annual well completions fell from a cyclical peak of 21,38121,382 in 2014 to 8,1238,135 in 2016. Between 2016 and 2019, annual well completions increased by 7,6846,227 or 94.676.6 percent. In spiteDuring the oilfield downturn that occurred in 2020, only 7,387 wells were completed, the lowest number of the increase in well completions during the past three years, annual well completions in 2019 were 26.1recorded during the seven years that these data have been reported. During 2021, reported well completions increased to 9,810, an increase of 2,423 wells or 32.8 percent lower than the 2014 cyclical peak.compared to 2020.

Although U.S. domestic demand for natural gas has increased, and U.S. exports of liquified natural gas have become approximately three percenta source of demand for U.S. natural gas, production, the price of natural gas generally has fallen in recent years due to increased domestic reserves, productivity of new wells, and high associated natural gas production from oil-directed wells. In spite of these unfavorable near-term dynamics,years. Unlike oil demand, which is impacted by numerous global factors, the long-term demand outlook for natural gas is still favorable because, unlike oil, foreign imports of natural gas do not compete withdetermined by U.S. domestic production to a meaningful degree. In addition, liquified natural gas exports, which began in 2013, have increased tremendously and now account for a meaningful use of U.S. natural gas production.export demand. We anticipate that oil-directed drilling will continue to represent the majority of the total drilling rig count for the foreseeable future. We do not believe that natural gas-directed drilling will increase during the near term because of the tremendous productivity of existing natural gas wells, as well as the associated production of natural gas in wells that are directed towards oil drilling. We continue to believe in the long-term growth opportunities forimportance of our business due to the continued highworldwide demand for hydrocarbons generally and the growinghigh production of oil in the domestic U.S. market in particular.market.

Unconventional wells generateare drilled in a higher demand for RPC’s services because they are difficult and costly to complete. They comprisedirection other than a straight vertical direction from the majority of U.S. domestic drilling and during the fourth quarter of 2019 and early in the first quarter of 2020, have reached a historical high of approximately 95 percent of total drilling.Earth’s surface. Because they are drilled through a typically narrow and relatively impermeable formationformations such as shale, they require additional stimulation when they are completed. Also, many of these formations require high pumping rates of stimulation fluids under high pressures, which in turn requirecan only be accomplished by using a great deal of pressure pumping horsepower on location to complete the well. Furthermore, since theythese types of wells are not drilled in a straight vertical direction, from the Earth’s surface, they require tools and drilling mechanisms that are flexible, rather than rigid, and can be steered once they are downhole. For these reasons, unconventional wells require more of RPC’s services than conventional wells. Specifically, these types of wells require RPC’s pressure pumping and coiled tubing services, as well as our downhole tools and services. Since 2016, unconventional oil and gas wells have comprised greater than 80 percent of U.S. domestic drilling and RPC believes that they will continue to comprise the majority of drilling activity because of their high initial production rates. The advent of unconventional drilling in the U.S. domestic market, which RPC believes to be a permanent change, continues to have a positive impact on the demand for RPC’s services.

International.RPC has historically operated in several countries outside of the United States, and international revenues accounted for fivefour percent of RPC’s consolidated revenues in 2019,2021, six percent in 2020 and five percent in 2018 and four percent in 2017.2019. RPC’s allocation of growth capital over the last several years have emphasized domestic rather than international expansion because of higher domestic activity levels and expected financial returns. International revenues increased 61.9decreased 13.0 percent in 20192021 compared to the prior year primarily due to higherlower customer activity levels in Algeria and to a lesser extent, Mexico and Pakistan,Saudi Arabia, partially offset by lowerhigher activity in Gabon.Canada. During 2019,2021, RPC provided downhole motors and tools in Argentina, Canada, Mexico and Oman, as well as rental tools in Pakistan. We also provided snubbing services in Gabon.Saudi Arabia. We continue to focus on the selected development of international opportunities in these and other markets, although we believe that it will continue to be less than ten percent of total revenues in 2020.2022.

no outstanding balance on this credit facility as of December 31, 2019.2021. Our capital structure is more conservative than that of many of our peers.

Customers

Demand for RPC’s services and equipment depends primarily upon the number of oil and natural gas wells being drilled, the depth and drilling conditions of such wells, the number of well completions and the level of production enhancement activity worldwide. RPC’s principal customers consist of major and independent oil and natural gas producing companies. During 2019,2021, RPC provided oilfield services to several hundred customers. Of these customers, there was no customer in 20192021 or 20182020 that accounted for more than 10 percent or more of revenues.

Sales are generated by RPC’s sales force and through referrals from existing customers. We monitor closely the financial condition of these customers, their capital expenditure plans, and other indications of their drilling and completion activities. Due to the short lead time between ordering services or equipment and providing services or delivering equipment, there is no significant sales backlog.

Competition

RPC operates in highly competitive areas of the oilfield services industry. We sell our equipment and services in highly competitive markets, and the revenues and earnings generated are affected by changes in prices for our services, fluctuations in the level of customer activity in major markets, general economic conditions and governmental regulation. RPC competes with many large and small oilfield industry competitors, including the largest integrated oilfield services companies. During the oilfield downturn ofthat began in 2015, and 2016, a number of smaller oilfield services companies as well as several of our publicly traded peers reduced the scope of their operations or became insolvent. During 2017, however, an improving industry environment and the positive outlook onmost recent downturn that began in 2019, fewer oilfield services companies became insolvent than in the industry from the financial markets facilitated the formationprevious downturn, partially because of new companies and allowed existing companies to expand their operations. RPC believesCOVID-19 – related Federal stimulus that these expanded or newly formed companies increased competitive pressures during the near term, since theysupported operations that would otherwise have become insolvent. Oilfield activity levels began to provide services to our existing customers at lower prices, and hired experienced personnel from more established companies such as RPC. Pricing for our services improved significantly during 2017, but began to declineimprove during the fourth quarter of 20172020, and throughout 2019. Rising oilpricing for our services began to improve during the fourth quarter of 2021, both of which supported the operations of oilfield services companies that remained in operation. In addition, improving completion services efficiency during this period served to increase effective capacity and gas production becauseimpose another catalyst for declining pricing and utilization. The combination of completion efficiencies is contributinga large number of oilfield services companies and the increased efficiency with which these companies provide services have caused the oilfield services business to competitive pricing.remain competitive. RPC believes that the principal competitive factors in the market areas that it serves are product availability and quality of our equipment and raw materials used to provide our services, service quality, reputation for safety and technical proficiency, and price.

Development and Training - The Company’s management team and all its employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. We have implemented and maintained a corporate compliance program to provide guidance for everyone associated with the Company, including its employees, officers and directors (the "Code"). Annual review of the Code is required, and the code prohibits unlawful or unethical activity, including discrimination, and directs our employees, officers, and directors to avoid actions that, even if not unlawful or unethical, might create an appearance of illegality or impropriety. In addition, the Company provides annual training for preventing, identifying, reporting and ending any type of unlawful discrimination. The Company also provides a wide variety of opportunities for professional growth for all employees with in-classroom and online training, on-the-job experience and counseling.

Compensation and Benefits - The Company focuses on attracting and retaining employees by providing compensation and benefit packages that are competitive in the market, taking into account the location and responsibilities of the job. We provide competitive financial benefits such as a 401(k) retirement plan with a company match, and generally grant awards of restricted stock for certain of our salaried employees. We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs that support their physical and mental health by providing tools and resources to help them improve or maintain their health status.

RPC has always believed in the long-term value of education, and has demonstrated this belief through a college scholarship program for the children of employees. This program, which awards four-year college scholarships based on merit, parents' tenure, and need has invested more than $1 million to support hundreds of children of employees as they earn college degrees. A number of these college graduates have come to work for RPC and have followed their parents to become valuable employees.

RPC and its subsidiaries have regularly participated in efforts to support the communities in which we live. We have participated in the United Way Campaign in the city in which our corporate headquarters is located for more than 30 years. In addition, we have sponsored several emergency relief efforts following natural disasters, such as hurricanes and tornados, in communities in which our field offices are located.

Safety - The Company adheres to a comprehensive safety program to promote a safe working environment for its employees, contractors and customers at its operational locations and active job sites. This program complies with applicable regulatory guidelines for oilfield operations and is enhanced by our analysis of workplace-related incidents and evolving preventative measures. We monitor our workplace safety record and compare it to industry benchmarks and our internal metrics to find areas for improvement. In addition, a component of our field employee compensation plans is based on safety measures.

RPC is making technology and process investments which reduce the number of employees on a job location and change the roles of the remaining employees in ways that reduce their exposure to safety hazards. We believe that this reduced exposure to active areas of a job location has led to fewer safety incidents in a service line which has a high concentration of employees.

In response to the COVID-19 pandemic, we implemented a response plan that we believe was in the best interest of our employees and the communities in which we operate. This included transitioning our workforce to a remote work model where possible, while implementing additional safety measures for essential employees continuing critical on-site work.

Facilities/Equipment

RPC’s equipment consists primarily of oil and gas services equipment used either in servicing customer wells or provided on a rental basis for customer use. Substantially all of this equipment is Company owned. RPC purchases oilfield service equipment from a limited number of manufacturers. These manufacturers may not be able to meet our requests for timely delivery during periods of high demand which may result in delayed deliveries of equipment and higher prices for equipment.

RPC owns and leases regional and district facilities from which its oilfield services are provided to land-based and offshore customers. RPC’s principal executive offices in Atlanta, Georgia are leased. The Company has twofour primary administrative buildings, two leased facilities, one leased facility in each of The Woodlands, Texas, and Midland, Texas, that includesinclude the Company’s operations, engineering, sales and marketing headquarters, and onetwo owned facilityfacilities, one in Houma, Louisiana that includes certain administrative functions.functions and one in Newcastle, Oklahoma that includes certain administrative functions, operations, engineering, sales and equipment storage yards. RPC believes that its facilities are adequate for its current operations. For additional information with respect to RPC’s lease commitments, see Note 1016 of the Notes to Consolidatedconsolidated Financial Statements.

Governmental Regulation

RPC’s business is affected by state, federal and foreign laws and other regulations relating to the oil and gas industry, as well as laws and regulations relating to worker safety and environmental protection. RPC cannot predict the level of enforcement of existing

laws and regulations or how such laws and regulations may be interpreted by enforcement agencies or court rulings, whether additional laws and regulations will be adopted, or the effect such changes may have on it, its businesses or financial condition. More stringent environmental standards compel the Company to buy more expensive equipment to meet those standards and also renders older equipment obsolete.

In addition, our customers are affected by laws and regulations relating to the exploration and production of natural resources such as oil and natural gas. These regulations are subject to change, and new regulations may curtail or eliminate our customers’ activities. We cannot determine the extent to which new legislation may impact our customers’ activity levels, and ultimately, the demand for our services.

Intellectual Property

RPC uses several patented items in its operations which management believes are important, but are not indispensable, to RPC’s success. Although RPC anticipates seeking patent protection when possible, it relies to a greater extent on the technical expertise and know-how of its personnel to maintain its competitive position.

Availability of Filings

RPC makes available, free of charge, on its website, rpc.net, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports on the same day they are filed with the Securities and Exchange Commission.

​

Item 1A. Risk Factors

Risks Related to our Business.

Demand for our equipment and services is affected by the volatility of oil and natural gas prices.

Oil and natural gas prices affect demand throughout the oil and gas industry, including the demand for our equipment and services. Our business depends in large part on the conditions of the oil and gas industry, and specifically on the capital investments of our customers related to the exploration and production of oil and natural gas. When these capital investments decline, our customers’ demand for our services declines.

The price of oil, a world-wide commodity, is affected by, among other things, the potential of armed conflict in politically unstable areas such as the Middle East as well as the actions of OPEC, an oil cartel which controls approximately 3240 percent of global oil production. OPEC’s actions have historically been unpredictable and can contribute to the volatility of the price of oil on the world market.

Although the production sector of the oil and gas industry is less immediately affected by changing prices, and, as a result, less volatile than the exploration sector, producers react to declining oil and gas prices by curtailing capital spending, which would adversely affect our business. A prolonged low level of customer activity in the oil and gas industry adversely affects the demand for our equipment and services and our financial condition and results of operations.

Our business depends on capital spending by our customers, many of whom rely on outside financing to fund their operations.

Many of our customers rely on their ability to raise equity capital and debt financing from capital markets to fund their operations. Their ability to raise outside capital depends upon, among other things, the availability of capital, near-term operating prospects of oil and gas companies, current and projected prices of oil and natural gas, and relative attractiveness of competing investments for available investment capital. These factors are outside of our control, and in the event our customers cannot continue to raise outside capital to fund their operations, RPC’s financial results would be negatively impacted.

RPC’s success will depend on its key personnel, and the loss of any key personnel may affect its revenues.

RPC’s success will depend to a significant extent on the continued service of key management personnel. The loss or interruption of the services of any senior management personnel or the inability to attract and retain other qualified management, sales, marketing and technical employees could disrupt RPC’s operations and cause a decrease in its revenues and profit margins.

We may be unable to compete in the highly competitive oil and gas industry in the future.

We operate in highly competitive areas of the oilfield services industry. The equipment and services in our industry segments are sold in highly competitive markets, and our revenues and earnings have in the past been affected by changes in competitive prices, fluctuations in the level of activity in major markets and general economic conditions. We compete with the oil and gas industry’s many large and small industry competitors, including the largest integrated oilfield service providers. We believe that the principal competitive factors in the market areas that we serve are product and service quality and availability, reputation for safety, technical proficiency and price. Although we believe that our reputation for safety and quality service is good, we cannot assure you that we will be able to maintain our competitive position.

We may be unable to identify or complete acquisitions.

Acquisitions have been and may continue to be a key element of our business strategy. We cannot assure you that we will be able to identify and acquire acceptable acquisition candidates on terms favorable to us in the future. We may be required to incur substantial indebtedness to finance future acquisitions and also may issue equity securities in connection with such acquisitions. The issuance of additional equity securities could result in significant dilution to our stockholders. We cannot assure you that we will be able to integrate successfully the operations and assets of any acquired business with our own business. Any inability on our part to integrate and manage the growth from acquired businesses could have a material adverse effect on our results of operations and financial condition.

of equipment and higher prices for equipment. There are a limited number of suppliers for certain materials used in pressure pumping services, our largest service line. While these materials are generally available, supply disruptions can occur due to factors beyond our control. Such disruptions, delayed deliveries, and higher prices may limit our ability to provide services, or increase the costs of providing services, which could reduce our revenues and profits.

We have used outside financing in prior years to accomplish our growth strategy, and outside financing may become unavailable or may be unfavorable to us.

Our business requires a great deal of capital to maintain our equipment and increase our fleet of equipment to expand our operations, and we have access to our credit facility to fund our necessary working capital and other capital requirements. Our credit facility, as amended September 25, 2020, provides a borrowing base of $100 million less the amount of any outstanding letters of credit, and bears interest at a floating rate, which exposes us to market risks as interest rates rise. If our existing capital resources become unavailable, inadequate or unfavorable for purposes of funding our capital requirements, we would need to raise additional funds through alternative debt or equity financings to maintain our equipment and continue our growth. Such additional financing sources may not be available when we need them, or may not be available on favorable terms. If we fund our growth through the issuance of public equity, the holdings of stockholders will be diluted. If capital generated either by cash provided by operating activities or outside financing is not available or sufficient for our needs, we may be unable to maintain our equipment, expand our fleet of equipment, or take advantage of other potentially profitable business opportunities, which could reduce our future revenues and profits.

Our international operations could have a material adverse effect on our business.

Our operations in various international markets including, but not limited to, Africa, Canada, Argentina, China, Mexico, Eastern Europe, Latin America and the Middle East are subject to risks. These risks include, but are not limited to, political changes, expropriation, currency restrictions and changes in currency exchange rates, taxes, boycotts and other civil disturbances. The occurrence of any one of these events could have a material adverse effect on our operations.

Our financial results could continue to be negatively impacted by the COVID-19 pandemic.

The oil and gas industry experienced an unprecedented disruption during 2020 due to the substantial decline in global oil demand caused partly by the COVID-19 pandemic. Although global demand began to rebound in 2021, a worsening of the pandemic could continue to impact the economic conditions in the United States, as federal, state and local governments react to the public health crisis, creating uncertainties in the United States, as well as the global economy. RPC instituted strict procedures to assess employee health and safety while in its facilities or on operational locations and attempted to hire redundant crews in order to continue to provide services to its customers. These measures increased the Company’s operating expenses, and such higher operating expenses could continue if the COVID-19 pandemic continues during 2022.

Risk Management Risks.

Our business has potential liability for litigation, personal injury and property damage claims assessments.

Our operations involve the use of heavy equipment and exposure to inherent risks, including blowouts, explosions and fires. If any of these events were to occur, it could result in liability for personal injury and property damage, pollution or other environmental hazards or loss of production. Litigation may arise from a catastrophic occurrence at a location where our equipment and services are used. This litigation could result in large claims for damages. The frequency and severity of such incidents will affect our operating costs, insurability and relationships with customers, employees and regulators. These occurrences could have a material adverse effect on us. We maintain what we believe is prudent insurance protection. We cannot assure you that we will be able to maintain adequate insurance in the future at rates we consider reasonable or that our insurance coverage will be adequate to cover future claims and assessments that may arise.

Our operations may be adversely affected if we are unable to comply with regulations and environmental laws.

Our business is significantly affected by stringent environmental laws and other regulations relating to the oil and gas industry and by changes in such laws and the level of enforcement of such laws. We are unable to predict the level of enforcement of existing laws and regulations, how such laws and regulations may be interpreted by enforcement agencies or court rulings, or whether additional laws and regulations will be adopted. The adoption of laws and regulations curtailing exploration and development of oil and gas fields in our areas of operations for economic, environmental or other policy reasons would adversely affect our operations by limiting demand for our services. We also have potential environmental liabilities with respect to our offshore and onshore operations, and could be liable for cleanup costs, or environmental and natural resource damage due to conduct that was lawful at the time it

occurred, but is later ruled to be unlawful. We also may be subject to claims for personal injury and property damage due to the generation of hazardous substances in connection with our operations. We believe that our present operations substantially comply with applicable federal and state pollution control and environmental protection laws and regulations. We also believe that compliance with such laws has had no material adverse effect on our operations to date. However, such environmental laws are changed frequently. We are unable to predict whether environmental laws will, in the future, materially adversely affect our operations and financial condition. Penalties for noncompliance with these laws may include cancellation of permits, fines, and other corrective actions, which would negatively affect our future financial results.

Company and its affiliates, and other persons, including retained outside advisers, concerning the Company’s business, management, strategic alternatives and direction, and in their sole discretion, consider, formulate and implement various plans or proposals intended to enhance the value of their investment in the Company. In the event the Controlling Group were to engage in any of these actions, our common stock price could be negatively impacted, such actions could cause volatility in the market for our common stock or could have a material adverse effect on our results of operations and our financial condition.

Our management has a substantial ownership interest, and the availability of the Company’s common stock to the investing public may be limited.

The availability of RPC’s common stock to the investing public may be limited to those shares not held by the executive officers, directors and their affiliates, which could negatively impact RPC’s stock trading prices and affect the ability of minority stockholders to sell their shares. Future sales by executive officers, directors and their affiliates of all or a portion of their shares could also negatively affect the trading price of our common stock.

Item 2. Properties

RPC owns or leases approximately 10065 offices and operating facilities. The Company leases approximately 21,200 square feet of office space in Atlanta, Georgia that serves as its headquarters, a portion of which is allocated and charged to Marine Products Corporation. See “Related Party Transactions” contained in Item 7. As of December 31, 2019,2021, the lease agreement on the headquarters is effective through May 2031. RPC believes its current operating facilities are suitable and adequate to meet current and reasonably anticipated future needs. Descriptions of the major facilities used in our operations are as follows:

​

​

Item 3. Legal Proceedings

RPC is a party to various routine legal proceedings primarily involving commercial claims, workers’ compensation claims and claims for personal injury. RPC insures against these risks to the extent deemed prudent by its management, but no assurance can be given that the nature and amount of such insurance will, in every case, fully indemnify RPC against liabilities arising out of pending and future legal proceedings related to its business activities. While the outcome of these lawsuits, legal proceedings and claims cannot be predicted with certainty, management believes that the outcome of all such proceedings, even if determined adversely, would not have a material adverse effect on RPC’s business or financial condition.

​

Item 4. Mine Safety Disclosures

The information required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Form 10-K.

​

Item 4A. Information About Our Executive Officers

EachIn April of 2021, the Executive Officers of the executive officers of RPC wasCompany were elected by the Board of Directors to serve at least one year, or until the April 2022 Board of Directors’ meeting, immediately following the next annual meeting of stockholders or until histheir earlier removal by the Board of Directors or histheir resignation. The following table lists the executive officers of RPC and their ages, offices, and terms of office with RPC.

​

​

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

RPC’s common stock is listed for trading on the New York Stock Exchange under the symbol RES. As of February 14, 202018, 2022 there were 214,432,084216,586,626 shares of common stock outstanding and approximately 13,50010,700 beneficial holders of our common stock.

Issuer Purchases of Equity Securities

Shares repurchased by the Company and affiliated purchases in the fourth quarter of 20192021 are outlined below.

​

Performance Graph

The following graph shows a five-year comparison of the cumulative total stockholder return based on the performance of the stock of the Company, assuming dividend reinvestment, as compared with both a broad equity market index and an industry or peer group index. The indices included in the following graph are the Russell 2000 Index (“Russell 2000”), the Philadelphia Stock Exchange’s Oil Service Index (“OSX”), and a peer group which includes companies that are considered peers of the Company (the “Peer Group”). The Company has voluntarily chosen to provide both an industry and a peer group index.

Statements of Operations Data:

​

​

safety in its facilities and operational locations and attempted to hire redundant crews in order to continue to provide services to its customers.

Current industry conditions are characterized by oil prices which have fallenrisen from a cyclical peak of $75less than $20 per barrel in the fourthsecond quarter of 20182020 to $53approximately $86 per barrel early in the first quarter of 2022, the highest recorded oil price since the fourth quarter of 2014. While there are many factors influencing the price of oil, we note that the global oil market was oversupplied by approximately six percent during the second and third quarters of 2020 but was undersupplied by approximately two percent during the third and fourth quarters of 2020 and throughout 2021. We believe that the imbalance in global supply and demand have been an important catalyst for the significant increase in the price of oil since the cyclical low during the second quarter of 2020. In spite ofresponse to this significant decreaseincrease in the price of oil, the U.S. domestic rig count andhas risen from a low of 244 in the third quarter of 2020 to 610 early in the first quarter of 2022. In addition, well completion countscompletions have not fallen significantly duringincreased from 1,110 in the third quarter of 2020 to 2,578 in the fourth quarter of 2019 and into the first quarter of 2020. However, many of our customers indicate that they are curtailing or delaying their drilling and completion plans early in 2020, and we believe that this will have a negative impact on RPC’s revenues and earnings during the near term. One catalyst for the recent decrease in the price of oil relates to global supply and demand for the commodity. Early in 2020, a potential slowdown in economic growth is perceived to be a catalyst for lower oil prices, a factor which is exacerbated by continued growth in oil production, particularly in the United States. 2021.

RPC believes that oil production in the United States has also become an increasingly important determinant of global oil prices, because the United States grewhas grown to be the world’s largest producer of oil duringand is more flexible in its ability to increase or decrease drilling and production activities more rapidly than the second quarter of 2016. Following its recent peak, U.S.state-owned oil production fell by 25 percent as ofcompanies which comprise OPEC membership. During the third quarter of 2017. Since that time, however,past several years, improving drilling and completion activity have caused U.S. domestic oil production to continue to rise and as of the most recent monthly reported statistics, current U.S. oil production has increased to a record production level that is 42in December 2019. Oil production fell during 2020 during the downturn caused by the COVID-19 pandemic, but by the end of 2021 had increased by approximately 17 percent higher thancompared to the cyclical lowlowest oil production recorded during the thirdsecond quarter of 2016. During the fourth quarter of 2018, U.S. oil production rose to its highest level on record. We believe that record U.S. oil production is a catalyst for lower oil prices during the near term.2020. Customer activities directed towards natural gas drilling and production have been weak for several years with the U.S. domestic natural gas rig count during the first quarter of 2017 falling to the lowest level ever recorded. The U.S. domestic natural gas rig count has increased from this historic low but is still low by historical standards. We believe that customer activities directed towards drilling for natural gas has been weak because of the high production of shale-directed natural gas wells, the high amount of natural gas production associated with oil-directed shale wells in the U.S. domestic market, and relatively constant consumption of natural gas in the United States. We believe thatOne of these factors will continue to depresshas been mitigated by the decline in oil-directed drilling. As a result, the price of natural gas-directed drilling during the near term. Fromgas has recovered from a low of $1.72$1.63 per Mcf during the second quarter of 2017, the price of natural gas had risen2020 to $1.95$4.30 per Mcf early in the first quarter of 2020. While current2022. The price increases in natural gas pricesduring the 2021 and early 2022 are higher than at the recent cyclical trough, we believeencouraging, and RPC believes that they are still too low to encouragehave encouraged our customers to conduct explorationincrease drilling and production activities directed exclusively towards natural gas.completion activities.

In 2019, theThe Company’s strategy of utilizing equipment in unconventional basins has continued. During 2019,2021, we made capital expenditures, excluding the equipment acquired under a finance lease, totaling $250.6$67.6 million, an increase of $2.6 million compared to the prior year. Capital expenditures during 2021 were primarily for new revenue-producing equipment anddirected towards capitalized maintenance of our existing equipment.and selected growth opportunities.

Revenues during 20192021 totaled $1.2 billion, a decrease$864.9 million, an increase of 29.044.6 percent compared to 20182020. This increase was primarily as a result of lowerdue to higher customer activity levels and lower pricing for certain service lines. Cost of revenues decreased $263.5 million in 2019during 2021 compared to the prior year which was negatively impacted by COVID-19 shutdowns. Cost of revenues increased $182.5 million in 2021 compared to the prior year primarily due to lower employment costs, maintenance and repairsincreases in expenses consistent with higher activity levels, such as materials and supplies expenseexpenses, employment costs and fuel costs. In addition, these costs increased due to higher market prices for materials and supplies, fuel and other costs, all of which were driven by lower activity levels.raw materials. As a percentage of revenues, cost of revenues increaseddecreased to 75.276.7 percent in 20192021 compared to 68.780.4 percent in 2018.2020 due to the leverage of higher revenues over direct employment costs and improved pricing for RPC’s services.

Selling, general and administrative expenses as a percentage of revenues increaseddecreased to 13.814.3 percent in 20192021 compared to 9.820.7 percent in 2018 due to lower revenues over primarily fixed expenses.

Impairment and other charges were $82.3 million in 2019,2020, primarily due to equipment disposals, closing operating locations and reducing employee staffing.leverage of higher revenues over costs that are relatively fixed during the short term.

LossIncome before income taxes was $113.1$16.4 million for 20192021 compared to incomeloss before income taxes of $221.3$309.4 million in 2018.2020. Net lossincome for 20192021 was $87.1$7.2 million, or $0.41 loss$0.03 earnings per share compared to net incomeloss of $175.4$212.2 million, or $0.82 earnings$1.00 loss per share in 2018. Net income2020. The net loss in 2019 and 2018 reflect the lower income tax rates as a result2020 includes non cash charges of the Tax Cuts and Jobs Act enacted in 2017.$211.0 million related primarily to asset impairments.

Cash flows from operating activities decreased to $209.1$47.7 million in 20192021 compared to $389.0$78.0 million in 20182020 primarily due to lower earnings, partially offset by a favorable changesincreased working capital requirements in 2021 compared to decreased working capital.capital requirements in 2020. As of December 31, 2019,2021, there were no outstanding borrowings under our credit facility.

Outlook

Drilling activity in the U.S. domestic oilfields, as measured by the rotary drilling rig count, reached a cyclical peak of 1,9311,083 during the fourth quarter of 2018. Between the fourth quarter of 2018 and the third quarter of 2014. Between the third quarter of 2014 and the second quarter of 2016,2020, the drilling rig count fell by 7977 percent. During the secondthird quarter of 2016,2020, the U.S. domestic drilling rig count reached the lowest level ever recorded.recorded up to that time. The principal catalyst for this steep rig count decline was the decrease in the price of oil in the world markets resulting from the decline in global oil demand associated with the COVID-19 pandemic which began in the thirdfirst quarter of 2014. The price of oil began to fall at that time due to the perceived oversupply of oil, weak global demand growth, and the strength of the U.S. dollar on world currency markets. During the second quarter of 2016, the price of oil and the U.S. domestic rig count began to increase, and increased steadily throughout the remainder of 2016, 2017 and 2018. At the end of 2019, the U.S. domestic rig count had fallen by approximately 26 percent compared with the end of 2018. 2020.

RPC monitors rig count efficiencies and well completion trends because the majority of our services are directed toward well completions. Improvements in drilling rig efficiencies have increased the number of potential well completions for a given drilling rig

count; therefore, we believe the statistics regarding well completions are more meaningful indicators of the outlook for RPC’s activity levels and revenues. Annual well completions in the U.S. completions

Results of Operations

​

Year Ended December 31, 20192021 Compared to Year Ended December 31, 20182020

Revenues.Revenues in 2019 decreased $498.62021 increased $266.6 million or 29.044.6 percent compared to 2018.2020 primarily due to higher activity levels as 2020 was negatively impacted by COVID-19 shutdowns. The Technical Services segment revenues in 2019 decreased $501.72021 increased $258.6 million or 30.546.5 percent compared to the prior year. The decreaseincrease is due primarily to lowerhigher activity levels and lowerhigher pricing in severalwithin most of our service lines as compared to the prior year. The Support Services segment revenues in 20192021 increased $3.1$8.1 million or 4.219.3 percent compared to 20182020 due primarily to improvedhigher activity levels and pricing in the rental tools service line, which is the largest service line within this segment. Technical Services reported operating income of $24.4 million during 2021 compared to an operating loss of $33.0 million during 2019 compared to a profit of $216.7$82.5 million in the prior year, while Support Services reported an operating incomeloss of $10.0$5.7 million in 20192021 compared to $4.6an operating loss of $6.7 million in the prior year. The average price of oil decreased 12.5increased 72.5 percent and the average price of natural gas decreased 19.2increased 93.0 percent during 20192021 compared to the prior year. The average domestic rig count during 20192021 was 8.69.5 percent lowerhigher than 2018.2020. International revenues, which decreased from $90.4$35.9 million in 20182020 to $64.6$31.2 million in 2019,2021, were fivefour percent of consolidated revenues in both 2019 and 2018.2021 compared to six percent in 2020. International revenues decreased in 20192021 primarily due to lower customer activity levels in ArgentinaAlgeria, and to a lesser extent, Canada and Gabon,Saudi Arabia, partially offset by higher activity in AlgeriaCanada compared to the prior year. Our international revenues are impacted by the timing of project initiation and their ultimate duration.

Cost of revenues.Cost of revenues in 2019 was $919.62021 increased $182.5 million or 38.0 percent compared to $1.2 billion in 2018, a decrease of $22.3 percent2020 primarily due to lower employment costs, maintenance and repairincreases in expenses consistent with higher activity levels, such as materials and supplies expenseexpenses, employment costs and fuel costs. In addition, these costs increased due to higher market prices for materials and supplies, fuel and other costs, all of which were driven by lower activity levels.raw materials. As a percentage of revenues, cost of revenues increaseddecreased to 75.276.7 percent in 20192021 compared to 68.780.4 percent in 2018 primarily2020 due to lower activity levelsthe leverage of higher revenues over direct employment costs and more competitive pricing.improved pricing for RPC’s services.

Selling, general and administrative expenses.expenses. Selling, general and administrative expenses decreased slightly to $168.1$123.6 million in 20192021 compared to $168.2$123.7 million in 2018.2020. Selling, general and administrative expenses as a percentage of revenues increaseddecreased to 13.814.3 percent of revenues in 20192021 compared to 9.820.7 percent of revenues in 20182020 due to the negative leverage of lowerhigher revenues over primarilycosts that are relatively fixed expenses.during the short term.

Depreciation and amortization.Depreciation and amortization were $170.4$72.7 million in 2019, an increase2021, a decrease of $7.3$22.8 million, compared to $163.1$95.5 million in 2018 due to capital expenditures made during 2019. As a percentage of revenues, depreciation2020. Depreciation and amortization increased in 2019 compared to 2018 primarily due to lower revenues.decreased significantly because of the asset impairment charges recorded during the first quarter of 2020.

Impairment and other charges. There were no impairment and other charges for the year ended December 31, 2021 compared to $217.5 million in 2020. Impairment and other charges were $82.3 million in 2019,2020 was comprised primarily dueof the total amount by which several of our asset groups’ carrying amounts exceeded their fair value, a non-cash pension settlement loss, costs to equipment disposals, closing operating locationsfinalize the disposal of our former sand facility and reducing employee staffing.severance costs.

Gain on disposition of assets, net.Gain on disposition of assets, net was $3.7$10.9 million in 20192021 compared to $3.3$9.5 million in 2018.2020. The gain on disposition of assets, net is generally comprised of gains or losses related to various property and equipment dispositions or sales to customers of lost or damaged rental equipment.

Otherincome (expense),net. Other income, net. Other expense, net was $0.4$2.0 million in 20192021 compared to other income,expense, net of $9.3$0.1 million in 2018. Other income recorded in 2018 includes property insurance proceeds totaling $9.6 million.2020.

Interest expense and interest income.Interest expense was $0.3$1.9 million in 20192021 compared to $0.5$0.4 million in 2018.2020. The increase in interest expense during 2021compared to the same period in the prior year is primarily due to interest expense related to the resolution of a long-term contractual dispute with a vendor and an indirect tax audit assessment. Interest expense in 20192021 and 2018 principally consists of2020 also includes fees on the unused portion of the credit facility. Interest income decreased to $1.9$0.1 million in 20192021 compared to $2.4 million in 2018 due to lower investable cash balances.

Income tax (benefit) provision. The income tax benefit was $26.0 million in 2019 compared to a provision of $45.9 million in 2018. The effective tax rate was 23.0 percent in 2019 compared to 20.7 percent in 2018. The increase in the effective tax rate in 2019 is due primarily to certain state taxes based on revenues rather than taxable income or losses and unfavorable discrete adjustments in 2019 compared to 2018.

Net (loss) income and diluted (loss) earnings per share. Net loss was $87.1 million in 2019, or $0.41 loss per diluted share, compared to net income of $175.4 million in 2018, or $0.82 earnings per diluted share. This decrease in earnings per share was due to lower profitability as average shares outstanding was essentially unchanged.

Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Revenues. Revenues in 2018 increased $125.8 million or 7.9 percent compared to 2017. The Technical Services segment revenues in 2018 increased $108.9 million or 7.1 percent compared to the prior year. The increase is due primarily to higher activity levels and improved pricing in a few of our services lines as compared to the prior year. The Support Services segment revenues in 2018 increased $16.9 million or 29.7 percent compared to 2017 due primarily to improved activity levels and pricing in the rental tool service line, which is the largest service line within this segment. Technical Services reported an operating profit of $216.7 million during 2018 compared to $251.5 million in the prior year, while Support Services reported an operating income of $4.6 million in 2018 compared to an operating loss of $12.2 million in the prior year. The average price of oil increased 27.9 percent while the average price of natural gas increased 6.4 percent during 2018 compared to the prior year. The average domestic rig count during 2018 was 17.7 percent higher than 2017. International revenues, which increased from $55.9 million in 2017 to $90.4 million in 2018, were five percent of consolidated revenues in 2018 compared to four percent of consolidated revenues in 2017. International revenues increased primarily due to higher customer activity levels in Argentina and to a lesser extent, Mexico and Pakistan in 2018, partially offset by lower activity in Gabon compared to the prior year. Our international revenues are impacted by the timing of project initiation and their ultimate duration.

Cost of revenues. Cost of revenues in 2018 was $1.2 billion compared to $1.1 billion in 2017, an increase of $132.2 million or 12.6 percent due to higher employment costs, maintenance and repair expenses and other costs, all of which were driven by higher activity levels. As a percentage of revenues, cost of revenues increased to 68.7 percent in 2018 compared to 65.9 percent in 2017.

Selling, general and administrative expenses. Selling, general and administrative expenses increased 5.6 percent to $168.2 million in 2018 compared to $159.2 million in 2017. These expenses increased due to higher salaries and wages expense consistent with higher activity levels as well as an increase in information technology costs. Selling, general and administrative expenses as a percentage of revenues decreased slightly to 9.8 percent of revenues in 2018 compared to 10.0 percent of revenues in 2017 due to the leverage of higher revenues over primarily fixed expenses.

Depreciation and amortization. Depreciation and amortization were $163.1 million in 2018, a decrease of $0.4 million, compared to $163.5 million in 2017 due to lower capital expenditures in the prior year. As a percentage of revenues, depreciation and amortization decreased in 2018 compared to 2017 primarily due to higher revenues.

Gain on disposition of assets, net. Gain on disposition of assets, net was $3.3 million in 2018 compared to $4.5 million in 2017. The decrease is due to the sale of operating equipment related to its oilfield pipe inspection service line during the second quarter of 2017 that did not recur in the current period. The gain on disposition of assets, net is generally comprised of gains or losses related to various property and equipment dispositions or sales to customers of lost or damaged rental equipment.

Other income (expense), net. Other income, net was $9.3 million in 2018 compared to of $5.5 million in 2017. Other income recorded in 2018 includes property insurance proceeds totaling $9.6 million. Income recorded in 2017 included a favorable settlement of $2.0 million associated with the resolution of a sales tax matter, as well as a property insurance proceeds of $1.9 million.

next twelve months. The Company’s decisions about the amount of cash to be used for investing and financing activities are influenced by our capital position, and the expected amount of cash to be provided by operations. RPC does not expect to need our revolving credit facility to meet these liquidity requirements in the near term.

The Company currently has a $125$100 million revolving credit facility that matures in July 2023.October 2023, as recently amended. The facility contains customary terms and conditions, including restrictions on indebtedness, dividend payments, business combinations and other related items. On July 26, 2018,September 25, 2020, the Company further amended the revolving credit facility to, amongfacility. Among other matters, the amendment (1) replacereduced the existingmaximum amount available for borrowing from $125 million to $100 million, (2) decreased the minimum tangible net worth covenant as well as, (2) extendlevel from not less than $600 million to not less than $400 million, and (3) increased the maturity date of the revolving credit facility to July 26, 2023, (3) eliminate any borrowing base limitations on revolving loans when certain criteria exist, (4) reduce themargin spreads and commitment fees payable by RPC37.5 and (5) reduce5 basis points, respectively, at each pricing level of the letter of credit sublimit from $50 millionapplicable rate without any changes to $35 million.the leverage ratios used to calculate such spreads. As of December 31, 2019,2021, RPC had no outstanding borrowings under the revolving credit facility, and letters of credit outstanding relating to self-insurance programs and contract bids totaled $19.5$16.3 million; therefore, a total of $105.5$83.7 million of the facility was available. The Company was in compliance with the credit facility financial covenants as of December 31, 2021. For additional information with respect to RPC’s facility, see Note 89 of the Notes to Consolidated Financial Statements included in this report.

The Company’s decisions about the amount of cash to be used for investing and financing purposes are influenced by its capital position, including the expected amount of cash to be provided by operations and access to borrowings under our facility. We believe our liquidity will continue to provide the opportunity to grow our asset base and revenues during periods with positive business conditions and strong customer activity levels. In addition, the Company's decisions about the amount of cash to be used for investing and financing activities may also be influenced by theconsolidated financial covenants in our credit facility but we do not expect the covenants to restrict our planned activities. The Company is in compliance with these financial covenants.statements.

Cash Requirements

Capital expenditures were $250.6$67.6 million in 2019,2021, and we currently expect capital expenditures to be approximately $80$120 million in 2020. We expect that a majority2022, comprised primarily of these expenditures in 2020 will be directed towards capitalized maintenance for existing equipment and selected growth opportunities. During the third quarter of our existing equipment.2021, RPC made the strategic decision to add a Tier IV dual-fuel fleet. This fleet was put into service late in the third quarter and is reflected as a finance lease with a balloon payment at the end of 12 months. The actual amount of capital expenditures will depend primarily on equipment maintenance requirements, expansion opportunities, and equipment delivery schedules.

The Company’s Retirement Income Plan, a multiple employer trusteedCompany has ongoing sales and use tax audits in various jurisdictions subject to varying interpretations of statutes. The Company has recorded the exposure from these audits to the extent issues are resolved or can be reasonably estimated. There are issues that could result in unfavorable outcomes that cannot be currently estimated. See Note 12 for additional information.

During the fourth quarter of 2021, the Company initiated actions to terminate the defined benefit pension plan provides monthly benefits upon retirement at age 65and as such, the year-end pension obligation has been valued on a termination basis. Specifically, the actuaries utilized an approach based on their experience with other plan terminations that (i) estimated a take rate for lump sums; (ii) for those participants electing a lump-sum, calculated the amount using the November 2021 IRS segment rates and (iii) for those participants with annuities purchased, calculated the amount using estimated insurance settlement rates. The Company currently expects to eligible employees. During 2019, the Company did not make anyno cash contributions to the plan in 2022 and does not expect to make any contributionsapproximately $6.0 million in final cash contribution to the benefit plan during 2020.in early 2023 as part of termination.

The Company has aAs of December 31, 2021, the Company’s stock buyback program initially adopted in 1998 and subsequently amended in 2013 and 2018, that authorizes the aggregate repurchase of up to 41,578,125 shares. On February 12, 2018, the Board of Directors increased the number ofshares, including an additional 10,000,000 shares authorized for repurchase by 10 million shares. Therethe Board of Directors on February 12, 2018. No shares were 595,585 shares repurchasedpurchased on the open market byduring the Company during 2019,twelve months ended December 31, 2021, and 8,248,184 shares remain available to be repurchased under the current authorization as of December 31, 2019.authorization. The Company may repurchase outstanding common shares periodically based on market conditions and our capital allocation strategies considering restrictions under our credit facility. The stock buyback program does not have a predetermined expiration date.

The Company recorded impairment and other charges of $82.3 million during 2019, of which $8.7 million is expected to have a cash impact during 2020.

On July 22, 2019, the Board of Directors voted to suspend RPC’s dividend to common stockholders. The Company expects to resume cash dividends to common stockholders, subject to the earnings and financial condition of the Company and other relevant factors. The Company has no timetable for the resumption of dividends.