Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 17, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | RPC INC | ||
Entity Central Index Key | 742,278 | ||
Trading Symbol | res | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-Known Seasoned Issuer | Yes | ||
Entity Common Stock, Shares Outstanding | 217,792,539 | ||
Entity Public Float | $ 905,616,000 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 131,835 | $ 65,196 |
Accounts receivable, net | 169,166 | 232,187 |
Inventories | 108,316 | 128,441 |
Income taxes receivable | 57,174 | 51,392 |
Prepaid expenses | 6,718 | 8,961 |
Other current assets | 5,848 | 6,031 |
Current assets | 479,057 | 492,208 |
Property, plant and equipment, net | 497,986 | 688,335 |
Goodwill | 32,150 | 32,150 |
Other assets | 26,259 | 24,401 |
Total assets | 1,035,452 | 1,237,094 |
LIABILITIES | ||
Accounts payable | 70,536 | 75,811 |
Accrued payroll and related expenses | 12,130 | 16,654 |
Accrued insurance expenses | 4,099 | 4,296 |
Accrued state, local and other taxes | 3,094 | 2,838 |
Income taxes payable | 4,929 | 7,639 |
Other accrued expenses | 6,680 | 226 |
Current liabilities | 101,468 | 107,464 |
Long-term accrued insurance expenses | 9,537 | 11,348 |
Long-term pension liabilities | 32,864 | 33,009 |
Deferred income taxes | 81,466 | 115,495 |
Other long-term liabilities | 3,318 | 17,497 |
Total liabilities | 228,653 | 284,813 |
Commitments and contingencies (Note 9) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.10 par value, 1,000,000 shares authorized, none issued | ||
Common stock, $0.10 par value, 349,000,000 shares authorized, 217,489,402 and 216,991,357 shares issued and outstanding in 2016 and 2015, respectively | 21,749 | 21,699 |
Capital in excess of par value | ||
Retained earnings | 803,152 | 948,551 |
Accumulated other comprehensive loss | (18,102) | (17,969) |
Total stockholders' equity | 806,799 | 952,281 |
Total liabilities and stockholders' equity | $ 1,035,452 | $ 1,237,094 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 349,000,000 | 349,000,000 |
Common stock, shares issued | 217,489,402 | 216,991,357 |
Common stock, shares outstanding | 217,489,402 | 216,991,357 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
REVENUES | $ 728,974 | $ 1,263,840 | $ 2,337,413 |
COSTS AND EXPENSES: | |||
Cost of revenues (exclusive of items shown separately below) | 607,888 | 986,144 | 1,493,082 |
Selling, general and administrative expenses | 150,690 | 156,579 | 197,117 |
Depreciation and amortization | 217,258 | 270,977 | 230,813 |
(Gain) loss on disposition of assets, net | (7,920) | 6,417 | 15,472 |
Operating (loss) profit | (238,942) | (156,277) | 400,929 |
Interest expense | (681) | (2,032) | (1,431) |
Interest income | 467 | 83 | 19 |
Other (expense) income, net | (204) | 5,185 | (131) |
(Loss) income before income taxes | (239,360) | (153,041) | 399,386 |
Income tax (benefit) provision | (98,114) | (53,480) | 154,193 |
Net (loss) income | $ (141,246) | $ (99,561) | $ 245,193 |
(LOSS) EARNINGS PER SHARE | |||
Basic (in dollars per share) | $ (0.66) | $ (0.47) | $ 1.14 |
Diluted (in dollars per share) | (0.66) | (0.47) | 1.14 |
Dividends paid per share (in dollars per share) | $ 0.050 | $ 0.155 | $ 0.420 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement Of Other Comprehensive Income [Abstract] | |||
NET (LOSS) INCOME | $ (141,246) | $ (99,561) | $ 245,193 |
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAXES: | |||
Pension adjustment | (788) | 1,531 | (6,486) |
Foreign currency translation | 652 | (1,801) | (1,124) |
Unrealized gain (loss) on securities, net reclassification adjustments | 3 | 134 | (108) |
COMPREHENSIVE (LOSS) INCOME | $ (141,379) | $ (99,697) | $ 237,475 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2013 | $ 21,899 | $ 956,918 | $ (10,115) | $ 968,702 | |
Balance (in shares) at Dec. 31, 2013 | 218,986,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock issued for stock incentive plans, net | $ 57 | $ 9,017 | 9,074 | ||
Stock issued for stock incentive plans, net (in shares) | 569,000 | ||||
Stock purchased and retired | $ (302) | (13,353) | (35,942) | (49,597) | |
Stock purchased and retired (in shares) | (3,016,000) | ||||
Net (loss) income | 245,193 | 245,193 | |||
Pension adjustment, net of taxes | (6,486) | (6,486) | |||
Foreign currency translation | (1,124) | (1,124) | |||
Unrealized gain (loss) on securities, net of taxes and reclassification adjustment | (108) | (108) | |||
Dividends declared | (91,608) | (91,608) | |||
Excess tax benefits for share- based payments | 4,336 | 4,336 | |||
Balance at Dec. 31, 2014 | $ 21,654 | 1,074,561 | (17,833) | 1,078,382 | |
Balance (in shares) at Dec. 31, 2014 | 216,539,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock issued for stock incentive plans, net | $ 79 | 9,802 | 9,881 | ||
Stock issued for stock incentive plans, net (in shares) | 791,000 | ||||
Stock purchased and retired | $ (34) | (11,212) | 7,153 | (4,093) | |
Stock purchased and retired (in shares) | (339,000) | ||||
Net (loss) income | (99,561) | (99,561) | |||
Pension adjustment, net of taxes | 1,531 | 1,531 | |||
Foreign currency translation | (1,801) | (1,801) | |||
Unrealized gain (loss) on securities, net of taxes and reclassification adjustment | 134 | 134 | |||
Dividends declared | (33,602) | (33,602) | |||
Excess tax benefits for share- based payments | 1,410 | 1,410 | |||
Balance at Dec. 31, 2015 | $ 21,699 | 948,551 | (17,969) | $ 952,281 | |
Balance (in shares) at Dec. 31, 2015 | 216,991,000 | 216,991,357 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock issued for stock incentive plans, net | $ 80 | 9,508 | $ 9,588 | ||
Stock issued for stock incentive plans, net (in shares) | 796,000 | ||||
Stock purchased and retired | $ (30) | (9,935) | 6,708 | (3,257) | |
Stock purchased and retired (in shares) | (298,000) | ||||
Net (loss) income | (141,246) | (141,246) | |||
Pension adjustment, net of taxes | (788) | (788) | |||
Foreign currency translation | 652 | 652 | |||
Unrealized gain (loss) on securities, net of taxes and reclassification adjustment | 3 | 3 | |||
Dividends declared | (10,861) | (10,861) | |||
Excess tax benefits for share- based payments | $ 427 | 427 | |||
Balance at Dec. 31, 2016 | $ 21,749 | $ 803,152 | $ (18,102) | $ 806,799 | |
Balance (in shares) at Dec. 31, 2016 | 217,489,000 | 217,489,402 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
OPERATING ACTIVITIES | |||
Net (loss) income | $ (141,246) | $ (99,561) | $ 245,193 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation, amortization and other non-cash charges | 221,038 | 275,413 | 233,940 |
Stock-based compensation expense | 10,218 | 9,960 | 9,074 |
(Gain) loss on disposition of assets, net | (7,920) | 6,417 | 15,472 |
Deferred income tax (benefit) provision | (34,209) | (33,013) | 12,354 |
Excess tax benefits for share-based payments | (427) | (1,410) | (4,336) |
(Increase) decrease in assets: | |||
Accounts receivable | 64,715 | 401,753 | (198,021) |
Income taxes receivable | (5,355) | (20,867) | (19,059) |
Inventories | 20,294 | 26,667 | (29,708) |
Prepaid expenses | 2,244 | 161 | 2 |
Other current assets | 2 | (2,881) | (749) |
Other non-current assets | (1,851) | 1,768 | (2,238) |
Increase (decrease) in liabilities: | |||
Accounts payable | (6,250) | (62,446) | 36,421 |
Income taxes payable | (2,710) | 6,695 | 944 |
Accrued payroll and related expenses | (4,540) | (33,143) | 13,221 |
Accrued insurance expenses | (197) | (1,336) | (440) |
Accrued state, local and other taxes | 256 | (3,983) | 1,819 |
Other accrued expenses | 5,017 | (180) | (775) |
Pension liabilities | (1,385) | 1,021 | 2,219 |
Long-term accrued insurance expenses | (1,811) | 1,249 | (126) |
Other long-term liabilities | (14,179) | 1,508 | 7,550 |
Net cash provided by operating activities | 101,704 | 473,792 | 322,757 |
INVESTING ACTIVITIES | |||
Capital expenditures | (33,938) | (167,426) | (371,502) |
Proceeds from sale of assets | 12,599 | 9,843 | 18,707 |
Investment in joint venture | (2,554) | ||
Net cash used for investing activities | (21,339) | (157,583) | (355,349) |
FINANCING ACTIVITIES | |||
Payment of dividends | (10,861) | (33,602) | (91,608) |
Borrowings from notes payable to banks | 613,300 | 1,168,100 | |
Repayments of notes payable to banks | (837,800) | (996,900) | |
Debt issue costs for notes payable to banks | (35) | (667) | |
Excess tax benefits for share-based payments | 427 | 1,410 | 4,336 |
Cash paid for common stock purchased and retired | (3,257) | (4,093) | (49,597) |
Net cash (used for) provided by financing activities | (13,726) | (260,785) | 33,664 |
Net increase in cash and cash equivalents | 66,639 | 55,424 | 1,072 |
Cash and cash equivalents at beginning of year | 65,196 | 9,772 | 8,700 |
Cash and cash equivalents at end of year | $ 131,835 | $ 65,196 | $ 9,772 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies | |
Significant Accounting Policies | Note 1: Significant Accounting Policies Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of RPC, Inc. and its wholly-owned subsidiaries (“RPC” or the “Company”). All significant intercompany accounts and transactions have been eliminated. Nature of Operations 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 of America, including the southwest, mid-continent, Gulf of Mexico, Rocky Mountain and Appalachian regions, and in selected international markets. The services and equipment provided include Technical Services such as pressure pumping services, coiled tubing services, snubbing services (also referred to as hydraulic workover services), nitrogen services, and firefighting and well control, and Support Services such as the rental of drill pipe and other specialized oilfield equipment and oilfield training and consulting. Common Stock RPC is authorized to issue 349,000,000 shares of common stock, $0.10 par value. Holders of common stock are entitled to receive dividends when, as, and if declared by the Board of Directors out of legally available funds. Each share of common stock is entitled to one vote on all matters submitted to a vote of stockholders. Holders of common stock do not have cumulative voting rights. In the event of any liquidation, dissolution or winding up of the Company, holders of common stock are entitled to ratable distribution of the remaining assets available for distribution to stockholders. Preferred Stock RPC is authorized to issue up to 1,000,000 shares of preferred stock, $0.10 par value. As of December 31, 2016, there were no shares of preferred stock issued. The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of preferred stock as a class without series or, if so determined from time to time, in one or more series, and by filing a certificate pursuant to the applicable laws of the state of Delaware and to fix the designations, powers, preferences and rights, exchangeability for shares of any other class or classes of stock. Any preferred stock to be issued could rank prior to the common stock with respect to dividend rights and rights on liquidation. Dividends On July 28, 2015, the Board of Directors voted to temporarily suspend RPC’s regular quarterly dividend to common stockholders. However, the Company paid a special year-end cash dividend of $0.05 per share to common stockholders during the fourth quarter of 2016. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are used in the determination of the allowance for doubtful accounts, income taxes, accrued insurance expenses, depreciable lives of assets, and pension liabilities. Revenues RPC’s revenues are generated principally from providing services and the related equipment. Revenues are recognized when the services are rendered and collectibility is reasonably assured. Revenues from services and equipment are based on fixed or determinable priced purchase orders or contracts with the customer and do not include the right of return. Rates for services and equipment are priced on a per day, per unit of measure, per man hour or similar basis. Sales tax charged to customers is presented on a net basis within the consolidated statements of operations and excluded from revenues. Concentration of Credit Risk Substantially all of the Company’s customers are engaged in the oil and gas industry. This concentration of customers may impact overall exposure to credit risk, either positively or negatively, in that customers may be similarly affected by changes in economic and industry conditions. The Company provided oilfield services to several hundred customers during each of the last three years. There were no customers that accounted for more than 10 percent of the Company’s revenues in 2016 and 2014; and one customer accounted for approximately 23 percent of revenues in 2015. Additionally, there were no customers that accounted for more than 10 percent of accounts receivable as of December 31, 2016 and one customer accounted for approximately 14 percent of accounts receivable as of December 31, 2015. Cash and Cash Equivalents Highly liquid investments with original maturities of three months or less when acquired are considered to be cash equivalents. The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits. RPC maintains cash equivalents and investments in one or more large financial institutions, and RPC’s policy restricts investment in any securities rated less than “investment grade” by national rating services. Investments Investments classified as available-for-sale securities are stated at their fair values, with the unrealized gains and losses, net of tax, reported as a separate component of stockholders’ equity. The cost of securities sold is based on the specific identification method. Realized gains and losses, declines in value judged to be other than temporary, interest, and dividends with respect to available-for-sale securities are included in interest income. The Company realized no gains or losses on its available-for-sale securities during 2016 and 2014, and an immaterial realized loss during 2015. Securities that are held in the non-qualified Supplemental Executive Retirement Plan (“SERP”) are classified as trading. See Note 10 for further information regarding the SERP. The change in fair value of trading securities is presented as compensation cost in selling, general and administrative expenses on the consolidated statements of operations. Management determines the appropriate classification of investments at the time of purchase and re-evaluates such designations as of each balance sheet date. Accounts Receivable The majority of the Company’s accounts receivable is due principally from major and independent oil and natural gas exploration and production companies. Credit is extended based on evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are considered past due after 60 days and are stated at amounts due from customers, net of an allowance for doubtful accounts. Allowance for Doubtful Accounts Accounts receivable are carried at the amounts due from customers, reduced by an allowance for estimated amounts that may not be collectible in the future. The estimated allowance for doubtful accounts is based on an evaluation of industry trends, financial condition of customers, historical write-off experience, current economic conditions, and in the case of international customers, judgments about the economic and political environment of the related country and region. Accounts are written off against the allowance for doubtful accounts when the Company determines that amounts are uncollectible and recoveries of previously written-off accounts are recorded when collected. Inventories Inventories, which consist principally of (i) raw materials and supplies that are consumed providing services to the Company’s customers, (ii) spare parts for equipment used in providing these services and (iii) components and attachments for manufactured equipment used in providing services, are recorded at the lower of cost or market value. Cost is determined using first-in, first-out (“FIFO”) method or the weighted average cost method. Market value is determined based on replacement cost for materials and supplies. The Company regularly reviews inventory quantities on hand and records a write-down for excess or obsolete inventory based primarily on its estimated forecast of product demand, market conditions, production requirements and technological developments. Property, Plant and Equipment Property, plant and equipment, including software costs, are reported at cost less accumulated depreciation and amortization, which is provided on a straight-line basis over the estimated useful lives of the assets. Annual depreciation and amortization expenses are computed using the following useful lives: operating equipment, 3 to 20 years; buildings and leasehold improvements, 15 to 39 years or the life of the lease; furniture and fixtures, 5 to 7 years; software, 5 years; and vehicles, 3 to 5 years. The cost of assets retired or otherwise disposed of and the related accumulated depreciation and amortization are eliminated from the accounts in the year of disposal with the resulting gain or loss credited or charged to income from operations. Expenditures for additions, major renewals, and betterments are capitalized. Expenditures for restoring an identifiable asset to working condition or for maintaining the asset in good working order constitute repairs and maintenance and are expensed as incurred. RPC records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. The Company periodically reviews the values assigned to long-lived assets, such as property, plant and equipment, to determine if any impairments should be recognized. Management believes that the long-lived assets in the accompanying balance sheets have not been impaired. During 2015, RPC recorded immaterial write-downs on certain equipment to comply with the Company’s policy to store and maintain key equipment in an efficient manner. Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets of businesses acquired. The carrying amount of goodwill was $32,150,000 at December 31, 2016 and 2015. Goodwill is reviewed annually, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount, for impairment. In light of the operating losses for the years ended December 31, 2016 and 2015, the Company proceeded to step 1 of the goodwill impairment test at the annual test date in 2016. The Company estimated the fair value of each of its reporting unit using a discounted cash flow analysis based on management’s short-term and long-term forecast of operating results. The discounted cash flow analysis for each reporting unit includes assumptions regarding discount rates, revenue growth rates, expected profitability margins, forecasted capital expenditures, the timing of an anticipated market recovery and the timing of expected future cash flows. Based on the analysis, the Company concluded that the fair value of its reporting units exceeded their carrying amount and therefore no impairment of goodwill occurred for the year ended December 31, 2016. The Company completed on an annual basis a comprehensive qualitative assessment of the various factors that impact goodwill for the years ended December 31, 2015 and 2014, and concluded it is more likely than not that the fair value of its reporting units exceeded their carrying amounts as of the annual test date. Therefore, the Company did not proceed to Step 1 of the goodwill impairment test in 2015 and 2014. Based on the qualitative assessment in 2015 and 2014, the Company concluded that no impairment of its goodwill occurred for the years ended December 31, 2015 and 2014. Advertising Advertising expenses are charged to expense during the period in which they are incurred. Advertising expenses totaled $1,296,000 in 2016, $2,058,000 in 2015, and $3,959,000 in 2014. Insurance Expenses RPC self-insures, up to certain policy-specified limits, certain risks related to general liability, workers’ compensation, vehicle and equipment liability, and employee health insurance plan costs. The estimated cost of claims under these self-insurance programs is estimated and accrued as the claims are incurred (although actual settlement of the claims may not be made until future periods) and may subsequently be revised based on developments relating to such claims. The portion of these estimated outstanding claims expected to be paid more than one year in the future is classified as long-term accrued insurance expenses. Income Taxes Deferred tax liabilities and assets are determined based on the difference between the financial and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance against the carrying value of deferred tax assets when the Company determines that it is more likely than not that the asset will not be realized through future taxable income. Defined Benefit Pension Plan The Company has a defined benefit pension plan that provides monthly benefits upon retirement at age 65 to eligible employees with at least one year of service prior to 2002. In 2002, the Company’s Board of Directors approved a resolution to cease all future retirement benefit accruals under the defined benefit pension plan. See Note 10 for a full description of this plan and the related accounting and funding policies. Share Repurchases The Company records the cost of share repurchases in stockholders’ equity as a reduction to common stock to the extent of par value of the shares acquired and the remainder is allocated to capital in excess of par value and retained earnings if capital in excess of par value is depleted. The Company tracks capital in excess of par value on a cumulative basis and at each reporting period, discloses the excess over capital in excess of par value as part of stock purchased and retired in the consolidated statements of stockholders’ equity. Earnings per Share FASB ASC Topic 260-10 “Earnings Per Share-Overall,” requires a basic earnings per share and diluted earnings per share presentation. The Company considers all outstanding unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, to be participating securities. The Company has periodically issued share-based payment awards that contain non-forfeitable rights to dividends, and therefore are considered participating securities. See Note 10 for further information on restricted stock granted to employees. The basic and diluted calculations differ as a result of the dilutive effect of stock options, time lapse restricted shares and performance restricted shares included in diluted earnings per share, but excluded from basic (loss) earnings per share. Basic and diluted (loss) earnings per share are computed by dividing net (loss) income by the weighted average number of shares outstanding during the respective periods. Restricted shares of common stock (participating securities) outstanding and a reconciliation of weighted average shares outstanding is as follows: (In thousands except per share data ) 2016 2015 2014 Net (loss) income available for stockholders $ (141,246 ) $ (99,561 ) $ 245,193 Less: Adjustments for losses attributable to participating securities (147 ) (240 ) (3,913 ) Net loss used in calculating losses per share $ (141,393 ) $ (99,801 ) $ 241,280 Weighted average shares outstanding (including participating securities) 217,509 213,632 214,840 Adjustment for participating securities (3,282 ) (3,359 ) (3,632 ) Shares used in calculating basic losses per share 214,227 210,273 211,208 Dilutive effect of stock based awards — — 1,049 Shares used in calculating diluted losses per share 214,227 210,273 212,257 Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, investments, accounts payable, and debt. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short-term nature of such instruments. The Company’s investments are classified as available-for-sale securities with the exception of investments held in the non-qualified Supplemental Executive Retirement Plan (“SERP”) which are classified as trading securities. All of these securities are carried at fair value in the accompanying consolidated balance sheets. See Note 8 for additional information. Stock-Based Compensation Stock-based compensation expense is recognized for all share-based payment awards, net of an estimated forfeiture rate. Thus, compensation cost is amortized for those shares expected to vest on a straight-line basis over the requisite service period of the award. See Note 10 for additional information. Recent Accounting Pronouncements During the year ended December 31, 2016, the Financial Accounting Standards Board (FASB) issued the following applicable Accounting Standards Updates (ASUs): Recently Adopted Accounting Pronouncements: · ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. · ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). · ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Recently Issued Accounting Pronouncements Not Yet Adopted: To be adopted in 2017: · ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. · ASU No. 2016-07, Investments — Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. · ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. · ASU No. 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That are under Common Control. To be adopted in 2018: REVENUE RECOGNITION: The Financial Accounting Standards Board and International Accounting Standards Board issued their converged standard on revenue recognition in May 2014. The standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries and significantly reduce the complexity inherent in today’s revenue recognition guidance. The various ASUs related to Revenue from Contracts with Customers (Topic 606) · ASU No. 2014-09. · ASU No. 2015-14 · ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net). · ASU No. 2016-10, Identifying Performance Obligations and Licensing. · ASU No. 2016-11, Rescission of SEC Guidance Because of ASUs 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting. · ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients. · ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. Current Status of implementation: The Company is currently analyzing the effect of the standard across all of its revenue streams to evaluate the impact of the new standard on revenue contracts. This includes reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new standard. · ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. · ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. · ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. · ASU No. 2016-18, Statement of Cash Flows (230): Restricted Cash. To be adopted in 2019 and later: · ASU No. 2016-02, Leases (Topic 842). · ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable | |
Accounts Receivable | Note 2: Accounts Receivable Accounts receivable, net consists of the following: December 31, 2016 2015 (in thousands) Trade receivables: Billed $ 122,216 $ 190,567 Unbilled 39,223 40,731 Other receivables 10,280 11,494 Total 171,719 242,792 Less: allowance for doubtful accounts (2,553 ) (10,605 ) Accounts receivable, net $ 169,166 $ 232,187 Trade receivables relate to sale of our services and products, for which credit is extended based on our evaluation of the customer’s credit worthiness. Unbilled receivables represent revenues earned but not billed to the customer until future dates, usually within one month. Other receivables relate primarily to sale of Company property and rebates from suppliers. Changes in the Company’s allowance for doubtful accounts are as follows: Years Ended December 31, 2016 2015 (in thousands) Beginning balance $ 10,605 $ 15,351 Bad debt expense (reduction) 6,021 (2,958 ) Accounts written-off (14,101 ) (2,825 ) Recoveries 28 1,037 Ending balance $ 2,553 $ 10,605 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Inventories | Note 3: Inventories Inventories are $108,316,000 at December 31, 2016 and $128,441,000 at December 31, 2015 and consist of raw materials, parts and supplies. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | Note 4: Property, Plant and Equipment Property, plant and equipment are presented at cost net of accumulated depreciation and consist of the following: December 31, 2016 2015 (in thousands) Land $ 19,070 $ 19,056 Buildings and leasehold improvements 142,741 142,715 Operating equipment 1,432,007 1,440,508 Computer software 22,050 19,650 Furniture and fixtures 8,056 8,043 Vehicles 469,570 480,899 Construction in progress — 6 Gross property, plant and equipment 2,093,494 2,110,877 Less: accumulated depreciation (1,595,508 ) (1,422,542 ) Net property, plant and equipment $ 497,986 $ 688,335 Depreciation expense was $220.6 million in 2016, $274.4 million in 2015, and $233.4 million in 2014, and includes amounts recorded as costs of revenues and inventory. There were no capital leases outstanding as of December 31, 2016 and December 31, 2015. The Company had accounts payable for purchases of property and equipment of $3.4 million as of December 31, 2016, $2.4 million as of December 31, 2015, and $38.5 million as of December 31, 2014. Effective January 1, 2015, the Company reassessed the useful life of a specific component of its pressure pumping equipment. Prior to January 1, 2015, this component was recorded as property, plant and equipment and depreciated over an expected useful life of 18 months. As a result of this reassessment, the Company concluded that this component is no longer a long-lived asset, but instead a consumable supply inventory item. Accordingly, effective January 1, 2015, the cost of this component was expensed as repairs and maintenance as part of cost of revenues at the time of installation. Management deemed the change preferable because it more closely reflects the pattern of consumption of this component as a result of continual increases in wear and tear resulting from harsher geological environments. This change was accounted for as a change in accounting estimate effected by a change in accounting principle. The net impact of this change in accounting estimate effected by a change in accounting principle on operating income and net income is not material. The change has resulted in an increase in the cost of revenues of $41,919,000 during 2015, while loss on dispositions and depreciation expense relating to this component decreased by a comparable amount during the period. Additionally, due to the change in accounting estimate effected by a change in accounting principle, purchases and deployment of this component will no longer be reflected as a capital expenditure under the investing activities section in the consolidated statement of cash flows, but instead will be reflected within cash flows from operating activities. The remaining net book value of these components at December 31, 2014 was $16,406,000 and was depreciated over an estimated weighted average remaining useful life of approximately 12 months. Loss on disposition related to this component totaled $21,408,000 in 2014. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | Note 5: Income Taxes The following table lists the components of the (benefit) provision for income taxes: Years ended December 31, 2016 2015 2014 (in thousands) Current (benefit) provision: Federal $ (43,993 ) $ (24,727 ) $ 119,074 State (24,479 ) (3,638 ) 19,858 Foreign 4,567 7,898 2,907 Deferred (benefit) provision: Federal (31,505 ) (31,178 ) 11,514 State (2,704 ) (1,835 ) 840 Total income tax (benefit) provision $ (98,114 ) $ (53,480 ) $ 154,193 Reconciliation between the federal statutory rate and RPC’s effective tax rate is as follows: Years ended December 31, 2016 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 1.3 — 3.3 Tax credits 0.1 0.3 (0.7 ) Non-deductible expenses (0.7 ) (1.3 ) 0.4 Change in contingencies 6.6 — — Other (1.3 ) 0.9 0.6 Effective tax rate 41.0 % 34.9 % 38.6 % Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2016 2015 (in thousands) Deferred tax assets: Self-insurance $ 5,907 $ 7,274 Pension 11,995 12,048 State net operating loss carryforwards 1,455 370 Bad debt 991 4,041 Accrued payroll 857 1,330 Stock-based compensation 5,847 5,885 All others 2,483 4,704 Valuation allowance (356 ) (276 ) Gross deferred tax assets 29,179 35,376 Deferred tax liabilities: Depreciation (95,606 ) (137,606 ) Goodwill amortization (9,340 ) (8,887 ) Basis differences in variable interest entities (5,281 ) (4,876 ) Basis differences in joint ventures (396 ) 518 All others (22 ) (20 ) Gross deferred tax liabilities (110,645 ) (150,871 ) Net deferred tax liabilities $ (81,466 ) $ (115,495 ) As of December 31, 2016, undistributed earnings of the Company’s foreign subsidiaries totaled $10.2 million. Additional U.S. taxes due upon full repatriation would be negligible. However, those earnings are considered to be indefinitely reinvested and, accordingly, no U.S. federal and state income taxes have been provided thereon. Upon distribution of these earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes and withholding taxes payable to the foreign countries. The Company’s current intention is to permanently reinvest funds held in our foreign subsidiaries outside of the U.S., with the possible exception of repatriation of funds that have been previously subject to U.S. federal and state taxation or when it would be tax effective through the utilization of foreign tax credits, or would otherwise create no additional U.S. tax cost. As of December 31, 2016, the Company has net operating loss carryforwards related to state income taxes of approximately $33.5 million that will expire between 2017 and 2035. As of December 31, 2016, the Company has a valuation allowance of approximately $356 thousand, representing the tax affected amount of loss carryforwards that the Company does not expect to utilize, against the corresponding deferred tax asset. Total net income tax (refunds) payments were $(42.4) million in 2016, $(7.9) million in 2015, and $152.2 million in 2014. The Company and its subsidiaries are subject to U.S. federal and state income taxes in multiple jurisdictions. In many cases our uncertain tax positions are related to tax years that remain open and subject to examination by the relevant taxing authorities. The Company’s 2013 through 2016 tax years remain open to examination. Additional years may be open to the extent attributes are being carried forward to an open year. The Company’s subsidiaries are also subject to foreign income taxes in certain jurisdictions. In November 2016, the Canadian Revenue Agency (CRA) initiated an examination of the Company’s Canadian subsidiary for the periods 2013 – 2015. As of December 31, 2016, the CRA has not proposed any adjustments in connection with this examination. During 2016, the Company recognized a decrease in its liability for unrecognized tax benefits in the current year related primarily due to settlements with state tax authorities. The remaining liability, if recognized, would affect our effective rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2016 2015 Balance at January 1 $ 26,152,000 $ 23,267,000 Additions based on tax positions related to the current year 0 2,171,000 Additions for tax positions of prior years 0 714,000 Reductions for tax positions of prior years (23,937,000 ) 0 Balance at December 31 $ 2,215,000 $ 26,152,000 The Company’s policy is to record interest and penalties related to income tax matters as income tax expense. Accrued interest and penalties as of December 31, 2016 and 2015 were approximately $76 thousand and $411 thousand, respectively. It is reasonably possible that the amount of the unrecognized tax benefits with respect to our unrecognized tax positions will significantly decrease in the next 12 months. These changes may result from, among other things, state tax settlements under or conclusions of ongoing examinations or reviews, however, quantification of an estimated range cannot be made at this time. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Long-Term Debt | |
Long-Term Debt | Note 6: Long-Term Debt The Company has a revolving credit facility with Banc of America Securities, LLC, SunTrust Robinson Humphrey, Inc., and Regions Capital Markets as Joint Lead Arrangers and Joint Book Managers, and a syndicate of four other lenders. The facility has a general term of five years ending January 17, 2019 and provides for a line of credit of up to $125 million, including a $50 million letter of credit subfacility, and a $35 million swingline subfacility. The revolving credit facility contains customary terms and conditions, including restrictions on indebtedness, dividend payments, business combinations and other related items. The revolving credit facility includes a full and unconditional guarantee by the Company’s 100 percent owned domestic subsidiaries whose assets equal substantially all of the consolidated assets of the Company and its subsidiaries. Certain of the Company’s minor subsidiaries are not guarantors. On June 30, 2016, the Company amended the revolving credit facility to (1) establish a borrowing base to be the lesser of (a) $125 million or (b) the difference between (i) a specified percentage (ranging from 70% to 80%) of eligible accounts receivable less (ii) the amount of any outstanding letters of credit, (2) secure payment obligations under the credit facility with a security interest in the consolidated accounts receivable, and (3) replace the financial covenants related to minimum leverage and debt service coverage ratios with a covenant to maintain a minimum tangible net worth of not less than $700 million. As of December 31, 2016, the Company was in compliance with this covenant. Revolving loans under the amended revolving credit facility bear interest at one of the following two rates at the Company’s election: · the Base Rate, which is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) Bank of America’s publicly announced “prime rate,” and (c) the Eurodollar Rate plus 1.00%; in each case plus a margin that ranges from 0.125% to 1.125% based on a quarterly consolidated leverage ratio calculation; or · the Eurodollar Rate, which is the rate per annum equal to the London Interbank Offering Rate (“LIBOR”); plus, a margin ranging from 1.125% to 2.125%, based upon a quarterly debt covenant calculation. In addition, the Company pays an annual fee ranging from 0.225% to 0.325%, based on a quarterly consolidated leverage ratio calculation, on the unused portion of the credit facility. The Company has incurred loan origination fees and other debt related costs associated with the revolving credit facility in the aggregate of approximately $3.0 million. These costs, net of amounts written off as a result of a reduction in the size of the revolving credit facility in 2015, are being amortized to interest expense over the remaining term of the five-year loan, and the remaining net balance of $0.2 million at December 31, 2016 is classified as part of non-current other assets. On January 4, 2016, the Company entered into a separate one year $35 million uncommitted letter of credit facility with Bank of America, N.A. Under the terms of the letter of credit facility, the Company paid 0.75% per annum on outstanding letters of credit. This letter of credit facility expired on January 3, 2017. All letters of credit are currently issued under RPC’s $125 million credit facility. Letters of credit outstanding totaled $19.1 million as of December 31, 2016 and $29.3 million as of December 31, 2015. As of December 31, 2016, RPC had no outstanding borrowings under the revolving credit facility. Interest incurred and paid on the credit facility, interest capitalized related to facilities and equipment under construction, and the related weighted average interest rates were as follows for the periods indicated: Years Ended December 31, 2016 2015 2014 (in thousands except interest rate data) Interest incurred $ 449 $ 1,913 $ 2,295 Capitalized interest $ — $ 534 $ 563 Interest paid (net of capitalized interest) $ 284 $ 1,169 $ 1,314 Weighted average interest rate — % 2.2 % 2.2 % |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive (Loss) Income | |
Accumulated Other Comprehensive (Loss) Income | Note 7: Accumulated Other Comprehensive (Loss) Income Accumulated other comprehensive (loss) income consists of the following (in thousands): Pension Unrealized Foreign Total Balance at December 31, 2014 $ (16,246 ) $ (98 ) $ (1,489 ) $ (17,833 ) Change during 2015: Before-tax amount 1,621 (16 ) (1,801 ) (196 ) Tax (expense) benefit (592 ) 6 — (586 ) Reclassification adjustment, net of taxes: Realized loss on securities — 144 — 144 Amortization of net loss (1) 502 — — 502 Total activity in 2015 1,531 134 (1,801 ) (136 ) Balance at December 31, 2015 (14,715 ) 36 (3,290 ) (17,969 ) Change during 2016: Before-tax amount (2,039 ) 5 652 (1,382 ) Tax (expense) benefit 744 (2 ) — 742 Reclassification adjustment, net of taxes: Realized loss on securities — — — — Amortization of net loss (1) 507 — — 507 Total activity in 2016 (788 ) 3 652 (133 ) Balance at December 31, 2016 $ (15,503 ) $ 39 $ (2,638 ) $ (18,102 ) (1) Reported as part of selling, general and administrative expenses. |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures | |
Fair Value Disclosures | Note 8: Fair Value Disclosures The various inputs used to measure assets at fair value establish a hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three broad levels as follows: 1. Level 1 – Quoted market prices in active markets for identical assets or liabilities. 2. Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. 3. Level 3 – Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that market participants would use. The following table summarizes the valuation of financial instruments measured at fair value on a recurring basis on the balance sheet as of December 31, 2016 and 2015: Fair Value Measurements at December 31, 2016 with: (in thousands) Total Quoted prices in Significant Significant (Level 1) (Level 2) (Level 3) Assets: Available-for-sale securities – equity securities $ 264 $ 264 $ — $ — Investments measured at net asset value - trading securities $ 18,367 Fair Value Measurements at December 31, 2015 with: (in thousands) Total Quoted prices in Significant Significant (Level 1) (Level 2) (Level 3) Assets: Available-for-sale securities – equity securities $ 259 $ 259 $ — $ — Investments measured at net asset value - trading securities $ 16,081 The Company determines the fair value of marketable securities classified as available-for-sale through quoted market prices. The total fair value is the final closing price, as defined by the exchange in which the asset is actively traded, on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs. Marketable securities classified as trading are comprised of the SERP assets, as described in Note 10, and are recorded primarily at their net cash surrender values, calculated using their net asset values, which approximates fair value, as provided by the issuing insurance company. Significant observable inputs, in addition to quoted market prices, were used to value the trading securities. The Company’s policy is to recognize transfers between levels at the beginning of quarterly reporting periods. For the year ended December 31, 2016 there were no significant transfers in or out of levels 1, 2 or 3. Under the Company’s revolving credit facility, there was no balance outstanding at December 31, 2016 and 2015. Outstanding balances based on the quote from the lender (level 2 inputs) is similar to the fair value at the same date. The borrowings under our revolving credit facility bear variable interest rates as described in Note 6. The Company is subject to interest rate risk on the variable component of the interest rate. The carrying amounts of other financial instruments reported in the balance sheet for current assets and current liabilities approximate their fair values because of the short maturity of these instruments. The Company currently does not use the fair value option to measure any of its existing financial instruments and has not determined whether or not it will elect this option for financial instruments it may acquire in the future. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure | |
Commitments and Contingencies | Note 9: Commitments and Contingencies Lease Commitments - (in thousands) 2017 $ 10,267 2018 10,280 2019 7,797 2020 4,786 2021 3,288 Thereafter 4,195 Total rental commitments $ 40,613 Total rental expense, including short-term rentals, charged to operations was $15,723,000 in 2016, $20,658,000 in 2015, and $22,968,000 in 2014. Income Taxes - Sales and Use Taxes - Litigation - |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 10: Employee Benefit Plans Defined Benefit Pension Plan The Company’s Retirement Income Plan, a trusteed defined benefit pension plan, provides monthly benefits upon retirement at age 65 to substantially all employees with at least one year of service prior to 2002. During 2001, the plan became a multiple employer plan, with Marine Products Corporation as an adopting employer. The Company’s projected benefit obligation exceeds the fair value of the plan assets under its pension plan by $9.6 million and thus the plan was under-funded as of December 31, 2016. The following table sets forth the funded status of the Retirement Income Plan and the amounts recognized in RPC’s consolidated balance sheets: December 31, 2016 2015 (in thousands) Accumulated benefit obligation at end of year $ 44,315 $ 42,894 CHANGE IN PROJECTED BENEFIT OBLIGATION: Benefit obligation at beginning of year $ 42,894 $ 47,410 Service cost — — Interest cost 2,006 1,898 Amendments — — Actuarial loss (gain) 1,371 (4,593 ) Benefits paid (1,956 ) (1,821 ) Projected benefit obligation at end of year $ 44,315 $ 42,894 CHANGE IN PLAN ASSETS: Fair value of plan assets at beginning of year $ 30,937 $ 32,622 Actual return on plan assets 1,464 (714 ) Employer contribution 4,300 850 Benefits paid (1,956 ) (1,821 ) Fair value of plan assets at end of year $ 34,745 $ 30,937 Funded status at end of year $ (9,570 ) $ (11,957 ) December 31, 2016 2015 (in thousands) AMOUNTS (PRE-TAX) RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) CONSIST OF: Net loss (gain) $ 24,412 $ 23,172 Prior service cost (credit) — — Net transition obligation (asset) — — $ 24,412 $ 23,172 The accumulated benefit obligation for the Retirement Income Plan at December 31, 2016 and 2015 has been disclosed above. The Company uses a December 31 measurement date for this qualified plan. Amounts recognized in the consolidated balance sheets consist of: December 31, 2016 2015 (in thousands) Funded status of the Retirement Income Plan $ (9,570 ) $ (11,957 ) SERP liability (23,294 ) (21,052 ) Long-term pension liabilities $ (32,864 ) $ (33,009 ) RPC’s funding policy is to contribute to the defined benefit pension plan the amount required, if any, under the Employee Retirement Income Security Act of 1974. Amounts contributed to the plan totaled $4,300,000 in 2016 and $850,000 in 2015. The components of net periodic benefit cost of the Retirement Income Plan are summarized as follows: Years ended December 31, 2016 2015 2014 (in thousands) Service cost for benefits earned during the period $ — $ — $ — Interest cost on projected benefit obligation 2,006 1,898 1,946 Expected return on plan assets (2,131 ) (2,259 ) (2,240 ) Amortization of net loss 799 790 531 Net periodic benefit plan cost $ 674 $ 429 $ 237 The Company recognized pre-tax (increases) decreases to the funded status in accumulated other comprehensive loss of $1,240,000 in 2016, $(2,411,000) in 2015, and $10,214,000 in 2014. There were no previously unrecognized prior service costs as of December 31, 2016, 2015 and 2014. The pre-tax amounts recognized in accumulated other comprehensive loss for the years ended December 31, 2016, 2015 and 2014 are summarized as follows: (in thousands) 2016 2015 2014 Net loss (gain) $ 2,039 $ (1,621 ) $ 10,745 Amortization of net loss (799 ) (790 ) (531 ) Net transition obligation (asset) — — — Amount recognized in accumulated other comprehensive loss $ 1,240 $ (2,411 ) $ 10,214 The amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost in 2017 are as follows: (in thousands) 2017 Amortization of net loss $ 825 Prior service cost (credit) — Net transition obligation (asset) — Estimated net periodic benefit plan cost $ 825 The weighted average assumptions as of December 31 used to determine the projected benefit obligation and net benefit cost were as follows: December 31, 2016 2015 2014 Projected Benefit Obligation: Discount rate 4.45 % 4.70 % 4.15 % Rate of compensation increase N/A N/A N/A Net Benefit Cost: Discount rate 4.70 % 4.15 % 5.20 % Expected return on plan assets 7.00 % 7.00 % 7.00 % Rate of compensation increase N/A N/A N/A The Company’s expected return on assets assumption is derived from a detailed periodic assessment conducted by its management and its investment advisor. It includes a review of anticipated future long-term performance of individual asset classes and consideration of the appropriate asset allocation strategy given the anticipated requirements of the plan to determine the average rate of earnings expected on the funds invested to provide for the pension plan benefits. While the study gives appropriate consideration to recent fund performance and historical returns, the rate of return assumption is derived primarily from a long-term, prospective view. Based on its recent assessment, the Company has concluded that its expected long-term return assumption of seven percent is reasonable. The plan’s weighted average asset allocation at December 31, 2016 and 2015 by asset category along with the target allocation for 2017 are as follows: Asset Category Target Percentage of Percentage of Cash and cash equivalents 0% - 5 % 3.3 % 0.7 % Fixed income securities 15% - 50 % 25.3 % 25.8 % Domestic equity securities 0% - 40 % 25.5 % 27.6 % International equity securities 0% - 40 % 20.8 % 19.1 % Investments measured at net asset value 0% - 20 % 25.1 % 26.8 % Total 100.0 % 100.0 % The Company’s overall investment strategy is to achieve a mix of approximately 70 percent of investments for long-term growth and 30 percent for near-term benefit payments, with a wide diversification of asset types, fund strategies and fund managers. Equity securities primarily include investments in large-cap and small-cap companies domiciled domestically and internationally. Fixed-income securities include corporate bonds, mortgage-backed securities, sovereign bonds, and U.S. Treasuries. Other types of investments include real estate funds and private equity funds that follow several different investment strategies. For each of the asset categories in the pension plan, the investment strategy is identical – maximize the long-term rate of return on plan assets with an acceptable level of risk in order to minimize the cost of providing pension benefits. The investment policy establishes a target allocation for each asset class which is rebalanced as required. The plan utilizes a number of investment approaches, including but not limited to individual market securities, equity and fixed income funds in which the underlying securities are marketable, and debt funds to achieve this target allocation. Company management does not expect to make any contribution to the pension plan during fiscal year 2017. Some of our assets, primarily our private equity and real estate funds, do not have readily determinable market values given the specific investment structures involved and the nature of the underlying investments. For plan asset reporting as of December 31, 2016, publicly traded asset pricing was used where possible. For assets without readily determinable values, estimates were derived from investment manager statements combined with discussions focusing on underlying fundamentals and significant events. Additionally, these investments are valued based on the net asset value per share calculated by the funds in which the plan has invested and the valuation is based on significant non-observable inputs which do not have a readily determinable fair value. These assets have been excluded from the fair value hierarchy applied retrospectively based on the accounting guidance recently adopted. The valuations are subject to judgments and assumptions of the funds which may prove to be incorrect, resulting in risks of incorrect valuation of these investments. The Company seeks to mitigate these risks by evaluating the appropriateness of the funds’ judgments and assumptions by reviewing the financial data included in the funds’ financial statements for reasonableness. The following tables present our plan assets using the fair value hierarchy as of December 31, 2016 and 2015. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. See Note 8 for a brief description of the three levels under the fair value hierarchy. Fair Value Hierarchy as of December 31, 2016: Investments (in thousands) Total Level 1 Level 2 Cash and Cash Equivalents (1 ) $ 1,154 $ 1,154 $ — Fixed Income Securities (2 ) 8,804 — 8,804 Domestic Equity Securities (3 ) 8,865 4,469 4,396 International Equity Securities (4 ) 7,215 — 7,215 Total Assets in the Fair Value Hierarchy $ 26,038 $ 5,623 $ 20,415 Investments measured at Net Asset Value 8,707 Investments at Fair Value $ 34,745 Fair Value Hierarchy as of December 31, 2015: Investments (in thousands) Total Level 1 Level 2 Cash and Cash Equivalents (1 ) $ 210 $ 210 $ — Fixed Income Securities (2 ) 7,987 — 7,987 Domestic Equity Securities (3 ) 8,527 4,285 4,242 International Equity Securities (4 ) 5,911 — 5,911 Total Assets in the Fair Value Hierarchy $ 22,635 $ 4,495 $ 18,140 Investments measured at Net Asset Value 8,302 Investments at Fair Value $ 30,937 (1) Cash and cash equivalents, which are used to pay benefits and plan administrative expenses, are held in Rule 2a-7 money market funds. (2) Fixed income securities are primarily valued using a market approach with inputs that include broker quotes, benchmark yields, base spreads and reported trades. (3) Domestic equity securities are valued using a market approach based on the quoted market prices of identical instruments in their respective markets. (4) International equity securities are valued using a market approach based on the quoted market prices of identical instruments in their respective markets. The Company estimates that the future benefits payable for the Retirement Income Plan over the next ten years are as follows: (in thousands) 2017 $ 2,432 2018 2,530 2019 2,589 2020 2,626 2021 2,710 2022-2026 14,194 Supplemental Executive Retirement Plan (SERP) The Company permits selected highly compensated employees to defer a portion of their compensation into the SERP. The SERP assets are invested primarily in company-owned life insurance (“COLI”) policies as a funding source to satisfy the obligations of the SERP. The assets are subject to claims by creditors, and the Company can designate them to another purpose at any time. Investments in COLI policies consisted of $47.7 million in variable life insurance policies as of December 31, 2016 and $46.8 million as of December 31, 2015. In the COLI policies, the Company is able to allocate investment of the assets across a set of choices provided by the insurance company, including fixed income securities and equity funds. The COLI policies are recorded at their net cash surrender values, which approximates fair value, as provided by the issuing insurance company, whose Standard & Poor’s credit rating was A+. The Company classifies the SERP assets as trading securities as described in Note 1. The fair value of these assets totaled $18,367,000 as of December 31, 2016 and $16,081,000 as of December 31, 2015. The SERP assets are reported in other assets on the balance sheet. The changes in the fair value of these assets, and normal insurance expenses are recorded in the consolidated statement of operations as compensation cost within selling, general and administrative expenses. Trading (losses) gains related to the SERP assets totaled $966,000 in 2016, $(519,000) in 2015, and $959,000 in 2014. The SERP liability is recorded on the balance sheet in long-term pension liabilities with any change in the fair value of the liabilities recorded as compensation cost within selling, general and administrative expenses in the consolidated statements of operations. 401(k) Plan RPC sponsors a defined contribution 401(k) plan that is available to substantially all full-time employees with more than three months of service. This plan allows employees to make tax-deferred contributions from one to 25 percent of their annual compensation, not exceeding the permissible contribution imposed by the Internal Revenue Code. RPC matches 50 percent of each employee’s contributions that do not exceed six percent of the employee’s compensation, as defined by the plan. Employees vest in the RPC contributions after three years of service. The charges to expense for the Company’s contributions to the 401(k) plan were $3,250,000 in 2016, $4,796,000 in 2015, and $6,970,000 in 2014. Stock Incentive Plans The Company has issued stock options and restricted stock to employees under three 10-year stock incentive plans that were approved by stockholders in 1994, 2004 and 2014. The 1994 plan expired in 2004 and the 2004 Plan expired in 2014. In April 2015, the Company reserved 8,000,000 shares of common stock under the 2014 Stock Incentive Plan with a term of 10 years expiring in April 2024. This plan provides for the issuance of various forms of stock incentives, including, among others, incentive and non-qualified stock options and restricted shares. As of December 31, 2016, 6,250,634 shares were available for grant. The Company recognizes compensation expense for the unvested portion of awards outstanding over the remainder of the service period. The compensation cost recorded for these awards is based on their fair value at the grant date less the cost of estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods to reflect actual forfeitures. Cash flows related to share-based payment awards to employees that result in tax benefits in excess of recognized cumulative compensation cost (excess tax benefits) are classified as a financing activity in the accompanying consolidated statements of cash flows. Pre-tax stock-based employee compensation expense was $10,218,000 in 2016 ($6,488,000 after tax), $9,960,000 in 2015 ($6,325,000 after tax), and $9,074,000 in 2014 ($5,762,000 after tax). Stock Options Stock options are granted at an exercise price equal to the fair market value of the Company’s common stock at the date of grant except for grants of incentive stock options to owners of greater than 10 percent of the Company’s voting securities which must be made at 110 percent of the fair market value of the Company’s common stock. Options generally vest ratably over a period of five years and expire in 10 years, except incentive stock options granted to owners of greater than 10 percent of the Company’s voting securities, which expire in five years. The Company estimates the fair value of stock options as of the date of grant using the Black-Scholes option pricing model. The Company has not granted stock options to employees since 2003 and there are none outstanding. There were no stock options exercised during 2016, 2015 or 2014 and there are no stock options outstanding as of December 31, 2016. Restricted Stock The Company has granted employees time lapse restricted stock which vest after a stipulated number of years from the grant date, depending on the terms of the issue. Time lapse restricted shares issued vest in 20 percent increments annually starting with the second anniversary of the grant. Grantees receive dividends declared and retain voting rights for the granted shares. The agreement under which the restricted stock is issued provides that shares awarded may not be sold or otherwise transferred until restrictions established under the stock plans have lapsed. Upon termination of employment from RPC (other than due to death, disability or retirement on or after age 65), shares with restrictions must be returned to the Company. The following is a summary of the changes in non-vested restricted shares for the year ended December 31, 2016: Shares Weighted Average Grant- Non-vested shares at January 1, 2016 3,312,175 $ 13.17 Granted 920,100 10.77 Vested (891,245 ) 11.58 Forfeited (123,955 ) 13.41 Non-vested shares at December 31, 2016 3,217,075 $ 12.91 The following is a summary of the changes in non-vested restricted shares for the year ended December 31, 2015: Shares Weighted Average Grant- Non-vested shares at January 1, 2015 3,575,150 $ 12.04 Granted 895,725 12.30 Vested (1,054,625 ) 8.66 Forfeited (104,075 ) 12.78 Non-vested shares at December 31, 2015 3,312,175 $ 13.17 The fair value of restricted share awards is based on the market price of the Company’s stock on the date of the grant and is amortized to compensation expense, net of estimated forfeitures, on a straight-line basis over the requisite service period. The weighted average grant date fair value per share of these restricted stock awards was $10.77 for 2016, $12.30 for 2015 and $18.84 for 2014. The total fair value of shares vested was $9,751,000 during 2016, $12,727,000 during 2015 and $20,664,000 during 2014. The tax benefit for compensation tax deductions in excess of compensation expense was credited to capital in excess of par value aggregating $427,000 for 2016, $1,410,000 for 2015 and $4,336,000 for 2014. The excess tax deductions are classified as a financing activity in the accompanying consolidated statements of cash flows. Other Information As of December 31, 2016, total unrecognized compensation cost related to non-vested restricted shares was $38,673,000 which is expected to be recognized over a weighted-average period of 3.4 years. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions | Note 11: Related Party Transactions Marine Products Corporation Effective in 2001, the Company spun off the business conducted through Chaparral Boats, Inc. (“Chaparral”), RPC’s former powerboat manufacturing segment. RPC accomplished the spin-off by contributing 100 percent of the issued and outstanding stock of Chaparral to Marine Products Corporation (a Delaware corporation) (“Marine Products”), a newly formed wholly owned subsidiary of RPC, and then distributing the common stock of Marine Products to RPC stockholders. In conjunction with the spin-off, RPC and Marine Products entered into various agreements that define the companies’ relationship. In accordance with a Transition Support Services agreement, which may be terminated by either party, RPC provides certain administrative services, including financial reporting and income tax administration, acquisition assistance, etc., to Marine Products. Charges from the Company (or from corporations that are subsidiaries of the Company) for such services were $739,000 in 2016, $753,000 in 2015, and $663,000 in 2014. The Company’s receivable (payable) due to (from) Marine Products for these services was $60,000 as of December 31, 2016 and $(11,000) as of December 31, 2015. The Company’s directors are also directors of Marine Products and all of the executive officers are employees of both the Company and Marine Products. Other The Company periodically purchases in the ordinary course of business products or services from suppliers, who are owned by significant officers or stockholders, or affiliated with the directors of RPC. The total amounts paid to these affiliated parties were $890,000 in 2016, $1,127,000 in 2015 and $1,092,000 in 2014. RPC receives certain administrative services and rents office space from Rollins, Inc. (a company of which Mr. R. Randall Rollins is also Chairman and which is otherwise affiliated with RPC). The service agreements between Rollins, Inc. and the Company provide for the provision of services on a cost reimbursement basis and are terminable on six months’ notice. The services covered by these agreements include office space, administration of certain employee benefit programs, and other administrative services. Charges to the Company (or to corporations which are subsidiaries of the Company) for such services and rent totaled $111,000 in 2016, $100,000 in 2015 and $84,000 in 2014. A group that includes the Company’s Chairman of the Board, R. Randall Rollins and his brother Gary W. Rollins, who is also a director of the Company, and certain companies under their control, controls in excess of fifty percent of the Company’s voting power. RPC and Marine Products own 50 percent each of a limited liability company called 255 RC, LLC that was created for the joint purchase and ownership of a corporate aircraft. The purchase of the aircraft was completed in January 2015, and the purchase was funded primarily by a $2,554,000 contribution by each company to 255 RC, LLC. Each of RPC and Marine Products is a party to an operating lease agreement with 255 RC, LLC for a period of five years. RPC recorded certain net operating costs comprised of rent and an allocable share of fixed costs of approximately $197,000 in 2016 and $186,000 in 2015 for the corporate aircraft. The Company accounts for this investment using the equity method and its proportionate share of income or loss is recorded in selling, general and administrative expenses. As of December 31, 2016, the investment closely approximates the underlying equity in the net assets of 255 RC, LLC. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Business Segment Information | |
Business Segment Information | Note 12: Business Segment Information RPC’s reportable segments are the same as its operating segments. RPC manages its business as either services offered on the well site with equipment and personnel (Technical Services) or services and equipment offered off the well site (Support Services). The businesses under Technical Services generate revenue based on equipment, personnel operating the equipment and the materials utilized to provide the service. They are all managed, analyzed and reported based on the similarities of the operational characteristics and costs associated with providing the service. The businesses under Support Services are primarily able to generate revenue through one source, which is either a hard asset or a personnel resource. Selected overhead including centralized support services and regulatory compliance are classified under Corporate. Technical Services include RPC’s oil and gas services that utilize people and equipment to perform value-added completion, production and maintenance services directly to a customer’s well. The demand for these 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 to address well control issues. This operating segment consists primarily of pressure pumping, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline and fishing. The services offered under Technical Services are high capital and personnel intensive businesses. The common drivers of operational and financial success of these service lines include diligent equipment maintenance, strong logistical processes, and appropriately trained personnel who function well in a team environment. The Company considers all of these service to be closely integrated oil and gas well servicing businesses, and makes resource allocation and performance assessment decisions based on this operating segment as a whole across these various services. The principal markets for this segment include the United States, including the Gulf of Mexico, the mid-continent, southwest, Rocky Mountain and Appalachian regions, and international locations including primarily Argentina, Canada, Gabon, Bolivia, China, Mexico and the Middle East. Customers include major multi-national and independent oil and gas producers, and selected nationally-owned oil companies. Support Services include all of the services that provide (i) equipment for customers’ use on the well site without RPC personnel and (ii) services that are provided in support of customer operations off the well site such as class room and computer training, and other consulting services. The primary drivers of operational success for equipment provided for customers’ use on the well site without RPC personnel are offering safe, high quality and in-demand equipment appropriate for the well design characteristics. The drivers of operational success for the other Support Services relate to meeting customer needs off the well site and competitive marketing of such services. The equipment and services offered include drill pipe and related tools, pipe handling, pipe inspection and storage services, and oilfield training and consulting services. The demand for these services tends to be influenced primarily by customer drilling-related activity levels. The equipment and services offered include drill pipe and related tools, pipe handling, inspection and storage services, and oilfield training services. The principal markets for this segment include the United States, including the Gulf of Mexico, the mid-continent and Appalachian regions, and selected international locations. Customers include domestic operations of major multi-national and independent oil and gas producers, and selected nationally-owned oil companies. The Company’s Chief Operating Decision Maker (“CODM”) assesses performance and makes resource allocation decisions regarding, among others, staffing, growth and maintenance capital expenditures and key initiatives based on operating segments outlined above . The accounting policies of the reportable segments are the same as those described in Note 1 to these consolidated financial statements. RPC evaluates the performance of its segments based on revenues, operating profits and return on invested capital. Gains or losses on disposition of assets are reviewed by the CODM on a consolidated basis, and accordingly the Company does not report gains or losses at the segment level. Inter-segment revenues are generally recorded in segment operating results at prices that management believes approximate prices for arm’s length transactions and are not material to operating results. Summarized financial information concerning RPC’s reportable segments for the years ended December 31, 2016, 2015 and 2014 are shown in the following table: (in thousands) Technical Support Corporate Loss on disposition of Total 2016 Revenues $ 679,654 $ 49,320 $ — $ — $ 728,974 Operating (loss) (203,804 ) (26,021 ) (17,037 ) 7,920 (238,942 ) Capital expenditures 28,380 2,928 2,630 — 33,938 Depreciation and amortization 191,181 25,606 471 — 217,258 Identifiable assets 733,008 76,876 225,568 — 1,035,452 2015 Revenues $ 1,175,293 $ 88,547 $ — $ — $ 1,263,840 Operating (loss) (132,982 ) (2,363 ) (14,515 ) (6,417 ) (156,277 ) Capital expenditures 155,361 11,055 1,010 — 167,426 Depreciation and amortization 237,778 32,697 502 — 270,977 Identifiable assets 976,761 108,262 152,071 — 1,237,094 2014 Revenues $ 2,180,457 $ 156,956 $ — $ — $ 2,337,413 Operating profit (loss) 390,004 42,510 (16,113 ) (15,472 ) 400,929 Capital expenditures 342,932 27,148 1,422 — 371,502 Depreciation and amortization 198, 636 31,578 599 — 230,813 Identifiable assets 1,514,084 157,688 87,586 — 1,759,358 The following summarizes selected information between the United States and all international locations combined for the years ended December 31, 2016, 2015 and 2014. The revenues are presented based on the location of the use of the product or service. Assets related to international operations are less than 10 percent of RPC’s consolidated assets, and therefore are not presented. Years ended December 31, 2016 2015 2014 (in thousands) United States Revenues $ 677,755 $ 1,191,704 $ 2,249,260 International Revenues 51,219 72,136 88,153 $ 728,974 $ 1,263,840 $ 2,337,413 |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2016 | |
VALUATION AND QUALIFYING ACCOUNTS | |
VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS For the years ended (in thousands) Balance at Charged to Net (Deductions) Balance Year ended December 31, 2016 Allowance for doubtful accounts $ 10,605 $ 6,021 $ (14,073 )(1) $ 2,553 Deferred tax asset valuation allowance $ 276 $ 80 $ — (2) $ 356 Year ended December 31, 2015 Allowance for doubtful accounts $ 15,351 $ (2,958 ) $ (1,788 )(1) $ 10,605 Deferred tax asset valuation allowance $ 2 $ 274 $ — (2) $ 276 Year ended December 31, 2014 Allowance for doubtful accounts $ 13,497 $ 2,280 $ (426 )(1) $ 15,351 Deferred tax asset valuation allowance $ 83 $ — $ (81 )(2) $ 2 (1) Net (deductions) recoveries in the allowance for doubtful accounts principally reflect the write-off of previously reserved accounts net of recoveries. (2) The valuation allowance for deferred tax assets is increased or decreased each year to reflect the state net operating losses that management believes will not be utilized before they expire. |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of RPC, Inc. and its wholly-owned subsidiaries (“RPC” or the “Company”). All significant intercompany accounts and transactions have been eliminated. |
Nature of Operations | Nature of Operations 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 of America, including the southwest, mid-continent, Gulf of Mexico, Rocky Mountain and Appalachian regions, and in selected international markets. The services and equipment provided include Technical Services such as pressure pumping services, coiled tubing services, snubbing services (also referred to as hydraulic workover services), nitrogen services, and firefighting and well control, and Support Services such as the rental of drill pipe and other specialized oilfield equipment and oilfield training and consulting. |
Common Stock | Common Stock RPC is authorized to issue 349,000,000 shares of common stock, $0.10 par value. Holders of common stock are entitled to receive dividends when, as, and if declared by the Board of Directors out of legally available funds. Each share of common stock is entitled to one vote on all matters submitted to a vote of stockholders. Holders of common stock do not have cumulative voting rights. In the event of any liquidation, dissolution or winding up of the Company, holders of common stock are entitled to ratable distribution of the remaining assets available for distribution to stockholders. |
Preferred Stock | Preferred Stock RPC is authorized to issue up to 1,000,000 shares of preferred stock, $0.10 par value. As of December 31, 2016, there were no shares of preferred stock issued. The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of preferred stock as a class without series or, if so determined from time to time, in one or more series, and by filing a certificate pursuant to the applicable laws of the state of Delaware and to fix the designations, powers, preferences and rights, exchangeability for shares of any other class or classes of stock. Any preferred stock to be issued could rank prior to the common stock with respect to dividend rights and rights on liquidation. |
Dividends | Dividends On July 28, 2015, the Board of Directors voted to temporarily suspend RPC’s regular quarterly dividend to common stockholders. However, the Company paid a special year-end cash dividend of $0.05 per share to common stockholders during the fourth quarter of 2016. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are used in the determination of the allowance for doubtful accounts, income taxes, accrued insurance expenses, depreciable lives of assets, and pension liabilities. |
Revenues | Revenues RPC’s revenues are generated principally from providing services and the related equipment. Revenues are recognized when the services are rendered and collectibility is reasonably assured. Revenues from services and equipment are based on fixed or determinable priced purchase orders or contracts with the customer and do not include the right of return. Rates for services and equipment are priced on a per day, per unit of measure, per man hour or similar basis. Sales tax charged to customers is presented on a net basis within the consolidated statements of operations and excluded from revenues. |
Concentration of Credit Risk | Concentration of Credit Risk Substantially all of the Company’s customers are engaged in the oil and gas industry. This concentration of customers may impact overall exposure to credit risk, either positively or negatively, in that customers may be similarly affected by changes in economic and industry conditions. The Company provided oilfield services to several hundred customers during each of the last three years. There were no customers that accounted for more than 10 percent of the Company’s revenues in 2016 and 2014; and one customer accounted for approximately 23 percent of revenues in 2015. Additionally, there were no customers that accounted for more than 10 percent of accounts receivable as of December 31, 2016 and one customer accounted for approximately 14 percent of accounts receivable as of December 31, 2015. |
Cash and Cash Equivalents | Cash and Cash Equivalents Highly liquid investments with original maturities of three months or less when acquired are considered to be cash equivalents. The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits. RPC maintains cash equivalents and investments in one or more large financial institutions, and RPC’s policy restricts investment in any securities rated less than “investment grade” by national rating services. |
Investments | Investments Investments classified as available-for-sale securities are stated at their fair values, with the unrealized gains and losses, net of tax, reported as a separate component of stockholders’ equity. The cost of securities sold is based on the specific identification method. Realized gains and losses, declines in value judged to be other than temporary, interest, and dividends with respect to available-for-sale securities are included in interest income. The Company realized no gains or losses on its available-for-sale securities during 2016 and 2014, and an immaterial realized loss during 2015. Securities that are held in the non-qualified Supplemental Executive Retirement Plan (“SERP”) are classified as trading. See Note 10 for further information regarding the SERP. The change in fair value of trading securities is presented as compensation cost in selling, general and administrative expenses on the consolidated statements of operations. Management determines the appropriate classification of investments at the time of purchase and re-evaluates such designations as of each balance sheet date. |
Accounts Receivable | Accounts Receivable The majority of the Company’s accounts receivable is due principally from major and independent oil and natural gas exploration and production companies. Credit is extended based on evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are considered past due after 60 days and are stated at amounts due from customers, net of an allowance for doubtful accounts. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Accounts receivable are carried at the amounts due from customers, reduced by an allowance for estimated amounts that may not be collectible in the future. The estimated allowance for doubtful accounts is based on an evaluation of industry trends, financial condition of customers, historical write-off experience, current economic conditions, and in the case of international customers, judgments about the economic and political environment of the related country and region. Accounts are written off against the allowance for doubtful accounts when the Company determines that amounts are uncollectible and recoveries of previously written-off accounts are recorded when collected. |
Inventories | Inventories Inventories, which consist principally of (i) raw materials and supplies that are consumed providing services to the Company’s customers, (ii) spare parts for equipment used in providing these services and (iii) components and attachments for manufactured equipment used in providing services, are recorded at the lower of cost or market value. Cost is determined using first-in, first-out (“FIFO”) method or the weighted average cost method. Market value is determined based on replacement cost for materials and supplies. The Company regularly reviews inventory quantities on hand and records a write-down for excess or obsolete inventory based primarily on its estimated forecast of product demand, market conditions, production requirements and technological developments. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, including software costs, are reported at cost less accumulated depreciation and amortization, which is provided on a straight-line basis over the estimated useful lives of the assets. Annual depreciation and amortization expenses are computed using the following useful lives: operating equipment, 3 to 20 years; buildings and leasehold improvements, 15 to 39 years or the life of the lease; furniture and fixtures, 5 to 7 years; software, 5 years; and vehicles, 3 to 5 years. The cost of assets retired or otherwise disposed of and the related accumulated depreciation and amortization are eliminated from the accounts in the year of disposal with the resulting gain or loss credited or charged to income from operations. Expenditures for additions, major renewals, and betterments are capitalized. Expenditures for restoring an identifiable asset to working condition or for maintaining the asset in good working order constitute repairs and maintenance and are expensed as incurred. RPC records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. The Company periodically reviews the values assigned to long-lived assets, such as property, plant and equipment, to determine if any impairments should be recognized. Management believes that the long-lived assets in the accompanying balance sheets have not been impaired. During 2015, RPC recorded immaterial write-downs on certain equipment to comply with the Company’s policy to store and maintain key equipment in an efficient manner. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets of businesses acquired. The carrying amount of goodwill was $32,150,000 at December 31, 2016 and 2015. Goodwill is reviewed annually, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount, for impairment. In light of the operating losses for the years ended December 31, 2016 and 2015, the Company proceeded to step 1 of the goodwill impairment test at the annual test date in 2016. The Company estimated the fair value of each of its reporting unit using a discounted cash flow analysis based on management’s short-term and long-term forecast of operating results. The discounted cash flow analysis for each reporting unit includes assumptions regarding discount rates, revenue growth rates, expected profitability margins, forecasted capital expenditures, the timing of an anticipated market recovery and the timing of expected future cash flows. Based on the analysis, the Company concluded that the fair value of its reporting units exceeded their carrying amount and therefore no impairment of goodwill occurred for the year ended December 31, 2016. The Company completed on an annual basis a comprehensive qualitative assessment of the various factors that impact goodwill for the years ended December 31, 2015 and 2014, and concluded it is more likely than not that the fair value of its reporting units exceeded their carrying amounts as of the annual test date. Therefore, the Company did not proceed to Step 1 of the goodwill impairment test in 2015 and 2014. Based on the qualitative assessment in 2015 and 2014, the Company concluded that no impairment of its goodwill occurred for the years ended December 31, 2015 and 2014. |
Advertising | Advertising Advertising expenses are charged to expense during the period in which they are incurred. Advertising expenses totaled $1,296,000 in 2016, $2,058,000 in 2015, and $3,959,000 in 2014. |
Insurance Expenses | Insurance Expenses RPC self-insures, up to certain policy-specified limits, certain risks related to general liability, workers’ compensation, vehicle and equipment liability, and employee health insurance plan costs. The estimated cost of claims under these self-insurance programs is estimated and accrued as the claims are incurred (although actual settlement of the claims may not be made until future periods) and may subsequently be revised based on developments relating to such claims. The portion of these estimated outstanding claims expected to be paid more than one year in the future is classified as long-term accrued insurance expenses. |
Income Taxes | Income Taxes Deferred tax liabilities and assets are determined based on the difference between the financial and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company establishes a valuation allowance against the carrying value of deferred tax assets when the Company determines that it is more likely than not that the asset will not be realized through future taxable income. |
Defined Benefit Pension Plan | Defined Benefit Pension Plan The Company has a defined benefit pension plan that provides monthly benefits upon retirement at age 65 to eligible employees with at least one year of service prior to 2002. In 2002, the Company’s Board of Directors approved a resolution to cease all future retirement benefit accruals under the defined benefit pension plan. See Note 10 for a full description of this plan and the related accounting and funding policies. |
Share Repurchases | Share Repurchases The Company records the cost of share repurchases in stockholders’ equity as a reduction to common stock to the extent of par value of the shares acquired and the remainder is allocated to capital in excess of par value and retained earnings if capital in excess of par value is depleted. The Company tracks capital in excess of par value on a cumulative basis and at each reporting period, discloses the excess over capital in excess of par value as part of stock purchased and retired in the consolidated statements of stockholders’ equity. |
Earnings per Share | Earnings per Share FASB ASC Topic 260-10 “Earnings Per Share-Overall,” requires a basic earnings per share and diluted earnings per share presentation. The Company considers all outstanding unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, to be participating securities. The Company has periodically issued share-based payment awards that contain non-forfeitable rights to dividends, and therefore are considered participating securities. See Note 10 for further information on restricted stock granted to employees. The basic and diluted calculations differ as a result of the dilutive effect of stock options, time lapse restricted shares and performance restricted shares included in diluted earnings per share, but excluded from basic (loss) earnings per share. Basic and diluted (loss) earnings per share are computed by dividing net (loss) income by the weighted average number of shares outstanding during the respective periods. Restricted shares of common stock (participating securities) outstanding and a reconciliation of weighted average shares outstanding is as follows: (In thousands except per share data ) 2016 2015 2014 Net (loss) income available for stockholders $ (141,246 ) $ (99,561 ) $ 245,193 Less: Adjustments for losses attributable to participating securities (147 ) (240 ) (3,913 ) Net loss used in calculating losses per share $ (141,393 ) $ (99,801 ) $ 241,280 Weighted average shares outstanding (including participating securities) 217,509 213,632 214,840 Adjustment for participating securities (3,282 ) (3,359 ) (3,632 ) Shares used in calculating basic losses per share 214,227 210,273 211,208 Dilutive effect of stock based awards — — 1,049 Shares used in calculating diluted losses per share 214,227 210,273 212,257 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, investments, accounts payable, and debt. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short-term nature of such instruments. The Company’s investments are classified as available-for-sale securities with the exception of investments held in the non-qualified Supplemental Executive Retirement Plan (“SERP”) which are classified as trading securities. All of these securities are carried at fair value in the accompanying consolidated balance sheets. See Note 8 for additional information. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is recognized for all share-based payment awards, net of an estimated forfeiture rate. Thus, compensation cost is amortized for those shares expected to vest on a straight-line basis over the requisite service period of the award. See Note 10 for additional information. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements During the year ended December 31, 2016, the Financial Accounting Standards Board (FASB) issued the following applicable Accounting Standards Updates (ASUs): Recently Adopted Accounting Pronouncements: · ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. · ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). · ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Recently Issued Accounting Pronouncements Not Yet Adopted: To be adopted in 2017: · ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. · ASU No. 2016-07, Investments — Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. · ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. · ASU No. 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That are under Common Control. To be adopted in 2018: REVENUE RECOGNITION: The Financial Accounting Standards Board and International Accounting Standards Board issued their converged standard on revenue recognition in May 2014. The standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries and significantly reduce the complexity inherent in today’s revenue recognition guidance. The various ASUs related to Revenue from Contracts with Customers (Topic 606) · ASU No. 2014-09. · ASU No. 2015-14 · ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net). · ASU No. 2016-10, Identifying Performance Obligations and Licensing. · ASU No. 2016-11, Rescission of SEC Guidance Because of ASUs 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting. · ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients. · ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. Current Status of implementation: The Company is currently analyzing the effect of the standard across all of its revenue streams to evaluate the impact of the new standard on revenue contracts. This includes reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new standard. Most of the Company’s services are primarily short-term in nature, and the assessment at this stage is that the Company does not expect the adoption of the new revenue recognition standard to have a material impact on its financial statements. The Company plans to adopt the standard in the first quarter of 2018 using the modified retrospective method by recognizing the cumulative effect of initially applying the new standard as an adjustment to the opening balance of retained earnings. · ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. · ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. · ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. · ASU No. 2016-18, Statement of Cash Flows (230): Restricted Cash. To be adopted in 2019 and later: · ASU No. 2016-02, Leases (Topic 842). · ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. |
Significant Accounting Polici22
Significant Accounting Policies (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies | |
Schedule of reconciliation of weighted average shares outstanding | (In thousands except per share data ) 2016 2015 2014 Net (loss) income available for stockholders $ (141,246 ) $ (99,561 ) $ 245,193 Less: Adjustments for losses attributable to participating securities (147 ) (240 ) (3,913 ) Net loss used in calculating losses per share $ (141,393 ) $ (99,801 ) $ 241,280 Weighted average shares outstanding (including participating securities) 217,509 213,632 214,840 Adjustment for participating securities (3,282 ) (3,359 ) (3,632 ) Shares used in calculating basic losses per share 214,227 210,273 211,208 Dilutive effect of stock based awards — — 1,049 Shares used in calculating diluted losses per share 214,227 210,273 212,257 |
Accounts Receivable (Table)
Accounts Receivable (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable | |
Schedule of components of accounts receivables | December 31, 2016 2015 (in thousands) Trade receivables: Billed $ 122,216 $ 190,567 Unbilled 39,223 40,731 Other receivables 10,280 11,494 Total 171,719 242,792 Less: allowance for doubtful accounts (2,553 ) (10,605 ) Accounts receivable, net $ 169,166 $ 232,187 |
Schedule of changes in allowance for doubtful accounts | Years Ended December 31, 2016 2015 (in thousands) Beginning balance $ 10,605 $ 15,351 Bad debt expense (reduction) 6,021 (2,958 ) Accounts written-off (14,101 ) (2,825 ) Recoveries 28 1,037 Ending balance $ 2,553 $ 10,605 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment | |
Schedule of property, plant and equipment at cost net of accumulated depreciation | December 31, 2016 2015 (in thousands) Land $ 19,070 $ 19,056 Buildings and leasehold improvements 142,741 142,715 Operating equipment 1,432,007 1,440,508 Computer software 22,050 19,650 Furniture and fixtures 8,056 8,043 Vehicles 469,570 480,899 Construction in progress — 6 Gross property, plant and equipment 2,093,494 2,110,877 Less: accumulated depreciation (1,595,508 ) (1,422,542 ) Net property, plant and equipment $ 497,986 $ 688,335 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of components of provision (benefit) for income taxes | Years ended December 31, 2016 2015 2014 (in thousands) Current (benefit) provision: Federal $ (43,993 ) $ (24,727 ) $ 119,074 State (24,479 ) (3,638 ) 19,858 Foreign 4,567 7,898 2,907 Deferred (benefit) provision: Federal (31,505 ) (31,178 ) 11,514 State (2,704 ) (1,835 ) 840 Total income tax (benefit) provision $ (98,114 ) $ (53,480 ) $ 154,193 |
Schedule of reconciliation between the federal statutory rate and effective tax rate | Years ended December 31, 2016 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 1.3 — 3.3 Tax credits 0.1 0.3 (0.7 ) Non-deductible expenses (0.7 ) (1.3 ) 0.4 Change in contingencies 6.6 — — Other (1.3 ) 0.9 0.6 Effective tax rate 41.0 % 34.9 % 38.6 % |
Schedule of deferred tax assets and liabilities | December 31, 2016 2015 (in thousands) Deferred tax assets: Self-insurance $ 5,907 $ 7,274 Pension 11,995 12,048 State net operating loss carryforwards 1,455 370 Bad debt 991 4,041 Accrued payroll 857 1,330 Stock-based compensation 5,847 5,885 All others 2,483 4,704 Valuation allowance (356 ) (276 ) Gross deferred tax assets 29,179 35,376 Deferred tax liabilities: Depreciation (95,606 ) (137,606 ) Goodwill amortization (9,340 ) (8,887 ) Basis differences in variable interest entities (5,281 ) (4,876 ) Basis differences in joint ventures (396 ) 518 All others (22 ) (20 ) Gross deferred tax liabilities (110,645 ) (150,871 ) Net deferred tax liabilities $ (81,466 ) $ (115,495 ) |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | 2016 2015 Balance at January 1 $ 26,152,000 $ 23,267,000 Additions based on tax positions related to the current year 0 2,171,000 Additions for tax positions of prior years 0 714,000 Reductions for tax positions of prior years (23,937,000 ) 0 Balance at December 31 $ 2,215,000 $ 26,152,000 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Long-Term Debt | |
Schedule of interest incurred and paid on the credit facility, interest capitalized related to facilities and equipment under construction, and the related weighted average interest rates on long term debt | Years Ended December 31, 2016 2015 2014 (in thousands except interest rate data) Interest incurred $ 449 $ 1,913 $ 2,295 Capitalized interest $ — $ 534 $ 563 Interest paid (net of capitalized interest) $ 284 $ 1,169 $ 1,314 Weighted average interest rate — % 2.2 % 2.2 % |
Accumulated Other Comprehensi27
Accumulated Other Comprehensive (Loss) Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive (Loss) Income | |
Schedule of accumulated other comprehensive (loss) income | Pension Unrealized Foreign Total Balance at December 31, 2014 $ (16,246 ) $ (98 ) $ (1,489 ) $ (17,833 ) Change during 2015: Before-tax amount 1,621 (16 ) (1,801 ) (196 ) Tax (expense) benefit (592 ) 6 — (586 ) Reclassification adjustment, net of taxes: Realized loss on securities — 144 — 144 Amortization of net loss (1) 502 — — 502 Total activity in 2015 1,531 134 (1,801 ) (136 ) Balance at December 31, 2015 (14,715 ) 36 (3,290 ) (17,969 ) Change during 2016: Before-tax amount (2,039 ) 5 652 (1,382 ) Tax (expense) benefit 744 (2 ) — 742 Reclassification adjustment, net of taxes: Realized loss on securities — — — — Amortization of net loss (1) 507 — — 507 Total activity in 2016 (788 ) 3 652 (133 ) Balance at December 31, 2016 $ (15,503 ) $ 39 $ (2,638 ) $ (18,102 ) (1) Reported as part of selling, general and administrative expenses. |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures | |
Schedule of valuation of financial instruments measured at fair value on a recurring basis | Fair Value Measurements at December 31, 2016 with: (in thousands) Total Quoted prices in Significant Significant (Level 1) (Level 2) (Level 3) Assets: Available-for-sale securities – equity securities $ 264 $ 264 $ — $ — Investments measured at net asset value - trading securities $ 18,367 Fair Value Measurements at December 31, 2015 with: (in thousands) Total Quoted prices in Significant Significant (Level 1) (Level 2) (Level 3) Assets: Available-for-sale securities – equity securities $ 259 $ 259 $ — $ — Investments measured at net asset value - trading securities $ 16,081 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure | |
Schedule of future minimum rental payments for operating leases | (in thousands) 2017 $ 10,267 2018 10,280 2019 7,797 2020 4,786 2021 3,288 Thereafter 4,195 Total rental commitments $ 40,613 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Employee Benefit Plans | |
Schedule of funded status of the retirement income plan | December 31, 2016 2015 (in thousands) Accumulated benefit obligation at end of year $ 44,315 $ 42,894 CHANGE IN PROJECTED BENEFIT OBLIGATION: Benefit obligation at beginning of year $ 42,894 $ 47,410 Service cost — — Interest cost 2,006 1,898 Amendments — — Actuarial loss (gain) 1,371 (4,593 ) Benefits paid (1,956 ) (1,821 ) Projected benefit obligation at end of year $ 44,315 $ 42,894 CHANGE IN PLAN ASSETS: Fair value of plan assets at beginning of year $ 30,937 $ 32,622 Actual return on plan assets 1,464 (714 ) Employer contribution 4,300 850 Benefits paid (1,956 ) (1,821 ) Fair value of plan assets at end of year $ 34,745 $ 30,937 Funded status at end of year $ (9,570 ) $ (11,957 ) December 31, 2016 2015 (in thousands) AMOUNTS (PRE-TAX) RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) CONSIST OF: Net loss (gain) $ 24,412 $ 23,172 Prior service cost (credit) — — Net transition obligation (asset) — — $ 24,412 $ 23,172 |
Schedule of amounts recognized in balance sheet | December 31, 2016 2015 (in thousands) Funded status of the Retirement Income Plan $ (9,570 ) $ (11,957 ) SERP liability (23,294 ) (21,052 ) Long-term pension liabilities $ (32,864 ) $ (33,009 ) |
Schedule of net periodic benefit cost | Years ended December 31, 2016 2015 2014 (in thousands) Service cost for benefits earned during the period $ — $ — $ — Interest cost on projected benefit obligation 2,006 1,898 1,946 Expected return on plan assets (2,131 ) (2,259 ) (2,240 ) Amortization of net loss 799 790 531 Net periodic benefit plan cost $ 674 $ 429 $ 237 |
Schedule of amounts recognized in other comprehensive loss | (in thousands) 2016 2015 2014 Net loss (gain) $ 2,039 $ (1,621 ) $ 10,745 Amortization of net loss (799 ) (790 ) (531 ) Net transition obligation (asset) — — — Amount recognized in accumulated other comprehensive loss $ 1,240 $ (2,411 ) $ 10,214 |
Schedule of components of net periodic benefit | (in thousands) 2017 Amortization of net loss $ 825 Prior service cost (credit) — Net transition obligation (asset) — Estimated net periodic benefit plan cost $ 825 |
Schedule of weighted average assumptions | December 31, 2016 2015 2014 Projected Benefit Obligation: Discount rate 4.45 % 4.70 % 4.15 % Rate of compensation increase N/A N/A N/A Net Benefit Cost: Discount rate 4.70 % 4.15 % 5.20 % Expected return on plan assets 7.00 % 7.00 % 7.00 % Rate of compensation increase N/A N/A N/A |
Schedule of allocation of plan assets | Asset Category Target Percentage of Percentage of Cash and cash equivalents 0% - 5 % 3.3 % 0.7 % Fixed income securities 15% - 50 % 25.3 % 25.8 % Domestic equity securities 0% - 40 % 25.5 % 27.6 % International equity securities 0% - 40 % 20.8 % 19.1 % Investments measured at net asset value 0% - 20 % 25.1 % 26.8 % Total 100.0 % 100.0 % |
Schedule of level three defined benefit plan assets | Fair Value Hierarchy as of December 31, 2016: Investments (in thousands) Total Level 1 Level 2 Cash and Cash Equivalents (1 ) $ 1,154 $ 1,154 $ — Fixed Income Securities (2 ) 8,804 — 8,804 Domestic Equity Securities (3 ) 8,865 4,469 4,396 International Equity Securities (4 ) 7,215 — 7,215 Total Assets in the Fair Value Hierarchy $ 26,038 $ 5,623 $ 20,415 Investments measured at Net Asset Value 8,707 Investments at Fair Value $ 34,745 Fair Value Hierarchy as of December 31, 2015: Investments (in thousands) Total Level 1 Level 2 Cash and Cash Equivalents (1 ) $ 210 $ 210 $ — Fixed Income Securities (2 ) 7,987 — 7,987 Domestic Equity Securities (3 ) 8,527 4,285 4,242 International Equity Securities (4 ) 5,911 — 5,911 Total Assets in the Fair Value Hierarchy $ 22,635 $ 4,495 $ 18,140 Investments measured at Net Asset Value 8,302 Investments at Fair Value $ 30,937 (1) Cash and cash equivalents, which are used to pay benefits and plan administrative expenses, are held in Rule 2a-7 money market funds. (2) Fixed income securities are primarily valued using a market approach with inputs that include broker quotes, benchmark yields, base spreads and reported trades. (3) Domestic equity securities are valued using a market approach based on the quoted market prices of identical instruments in their respective markets. (4) International equity securities are valued using a market approach based on the quoted market prices of identical instruments in their respective markets. |
Schedule of future benefits payable for the retirement income plan over the next ten years | (in thousands) 2017 $ 2,432 2018 2,530 2019 2,589 2020 2,626 2021 2,710 2022-2026 14,194 |
Schedule of summary of the changes in non-vested restricted shares | Shares Weighted Average Grant- Non-vested shares at January 1, 2016 3,312,175 $ 13.17 Granted 920,100 10.77 Vested (891,245 ) 11.58 Forfeited (123,955 ) 13.41 Non-vested shares at December 31, 2016 3,217,075 $ 12.91 Shares Weighted Average Grant- Non-vested shares at January 1, 2015 3,575,150 $ 12.04 Granted 895,725 12.30 Vested (1,054,625 ) 8.66 Forfeited (104,075 ) 12.78 Non-vested shares at December 31, 2015 3,312,175 $ 13.17 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Segment Information | |
Schedule of summarized financial information concerning reportable segments | (in thousands) Technical Support Corporate Loss on disposition of Total 2016 Revenues $ 679,654 $ 49,320 $ — $ — $ 728,974 Operating (loss) (203,804 ) (26,021 ) (17,037 ) 7,920 (238,942 ) Capital expenditures 28,380 2,928 2,630 — 33,938 Depreciation and amortization 191,181 25,606 471 — 217,258 Identifiable assets 733,008 76,876 225,568 — 1,035,452 2015 Revenues $ 1,175,293 $ 88,547 $ — $ — $ 1,263,840 Operating (loss) (132,982 ) (2,363 ) (14,515 ) (6,417 ) (156,277 ) Capital expenditures 155,361 11,055 1,010 — 167,426 Depreciation and amortization 237,778 32,697 502 — 270,977 Identifiable assets 976,761 108,262 152,071 — 1,237,094 2014 Revenues $ 2,180,457 $ 156,956 $ — $ — $ 2,337,413 Operating profit (loss) 390,004 42,510 (16,113 ) (15,472 ) 400,929 Capital expenditures 342,932 27,148 1,422 — 371,502 Depreciation and amortization 198, 636 31,578 599 — 230,813 Identifiable assets 1,514,084 157,688 87,586 — 1,759,358 |
Schedule of revenues are presented based on the location of the use of the product or service | Years ended December 31, 2016 2015 2014 (in thousands) United States Revenues $ 677,755 $ 1,191,704 $ 2,249,260 International Revenues 51,219 72,136 88,153 $ 728,974 $ 1,263,840 $ 2,337,413 |
Significant Accounting Polici32
Significant Accounting Policies - Summary of reconciliation of weighted average shares outstanding along with earnings per share attributable to restricted shares of common stock (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Significant Accounting Policies | |||
Net (loss) income available for stockholders | $ (141,246) | $ (99,561) | $ 245,193 |
Less: Adjustments for losses attributable to participating securities | (147) | (240) | (3,913) |
Net loss used in calculating losses per share | $ (141,393) | $ (99,801) | $ 241,280 |
Weighted average shares outstanding (including participating securities) | 217,509 | 213,632 | 214,840 |
Adjustment for participating securities | (3,282) | (3,359) | (3,632) |
Shares used in calculating basic losses per share | 214,227 | 210,273 | 211,208 |
Dilutive effect of stock based awards | 1,049 | ||
Shares used in calculating diluted losses per share | 214,227 | 210,273 | 212,257 |
Significant Accounting Polici33
Significant Accounting Policies (Detail Textuals) | 12 Months Ended | ||
Dec. 31, 2016$ / sharesshares | Dec. 31, 2015Customer$ / sharesshares | Dec. 31, 2014$ / shares | |
Significant Accounting Policies [Line Items] | |||
Common stock, shares authorized (in shares) | shares | 349,000,000 | 349,000,000 | |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | |
Number of votes each common shareholders entitled to provide | one vote | ||
Preferred Stock, shares authorized (in shares) | shares | 1,000,000 | 1,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | |
Cash dividends paid (in dollars per share) | $ 0.050 | $ 0.155 | $ 0.420 |
Customer concentration risk | Revenue | |||
Significant Accounting Policies [Line Items] | |||
Number of customer | Customer | 1 | ||
Description of customers accounted for concentration of credit risk | no customers that accounted for more than 10 percent of the Company's revenues | one customer accounted for approximately 23 percent of revenues | no customers that accounted for more than 10 percent of the Company's revenues |
Customer concentration risk benchmark percentage | 10 | 23 | 10 |
Customer concentration risk | Accounts receivable | |||
Significant Accounting Policies [Line Items] | |||
Number of customer | Customer | 1 | ||
Description of customers accounted for concentration of credit risk | no customers that accounted for more than 10 percent of accounts receivable | one customer accounted for approximately 14 percent of accounts receivable | |
Customer concentration risk benchmark percentage | 10 | 14 |
Significant Accounting Polici34
Significant Accounting Policies (Detail Textuals 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Significant Accounting Policies [Line Items] | |||
Depreciation method used for property, plant and equipment | straight-line basis | ||
Goodwill | $ 32,150,000 | $ 32,150,000 | |
Advertising expenses | 1,296,000 | $ 2,058,000 | $ 3,959,000 |
Accounting change resulted in a beneficial adjustment in 2017 | $ 2,500,000 | ||
Defined Benefit Pension Plan | |||
Significant Accounting Policies [Line Items] | |||
Defined benefit pension plan eligibility criteria | Defined benefit pension plan that provides monthly benefits upon retirement at age 65 to eligible employees with at least one year of service prior to 2002 | ||
Operating equipment | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 3 years | ||
Operating equipment | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 20 years | ||
Buildings and leasehold improvements | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 15 years | ||
Buildings and leasehold improvements | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 39 years | ||
Furniture and fixtures | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 5 years | ||
Furniture and fixtures | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 7 years | ||
Software | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 5 years | ||
Vehicles | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 3 years | ||
Vehicles | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 5 years |
Accounts Receivable - Summary o
Accounts Receivable - Summary of components of accounts receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Trade receivables: | ||
Billed | $ 122,216 | $ 190,567 |
Unbilled | 39,223 | 40,731 |
Other receivables | 10,280 | 11,494 |
Total | 171,719 | 242,792 |
Less: allowance for doubtful accounts | (2,553) | (10,605) |
Accounts receivable, net | $ 169,166 | $ 232,187 |
Accounts Receivable - Summary36
Accounts Receivable - Summary of changes in allowance for doubtful accounts (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Beginning balance | $ 10,605 | $ 15,351 |
Bad debt expense (reduction) | 6,021 | (2,958) |
Accounts written-off | (14,101) | (2,825) |
Recoveries | 28 | 1,037 |
Ending balance | $ 2,553 | $ 10,605 |
Inventories (Detail Textuals)
Inventories (Detail Textuals) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventories | ||
Raw materials, parts and supplies of inventories | $ 108,316 | $ 128,441 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of property, plant and equipment presented at cost net of accumulated depreciation (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | $ 2,093,494 | $ 2,110,877 |
Less: accumulated depreciation | (1,595,508) | (1,422,542) |
Net property, plant and equipment | 497,986 | 688,335 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | 19,070 | 19,056 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | 142,741 | 142,715 |
Operating equipment | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | 1,432,007 | 1,440,508 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | 22,050 | 19,650 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | 8,056 | 8,043 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | 469,570 | 480,899 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Gross property, plant and equipment | $ 6 |
Property, Plant and Equipment39
Property, Plant and Equipment (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment | |||
Depreciation expense | $ 220,600 | $ 274,400 | $ 233,400 |
Accounts payable for purchases of property and equipment | $ 3,400 | 2,400 | 38,500 |
Change in accounting principle, property plant and equipment estimated useful life | 18 months | ||
Increase in the cost of revenues | $ 41,919,000 | ||
Change in accounting principle remaining net book value of components | $ 16,406,000 | ||
Estimated weighted average remaining useful life | 12 months | ||
Change in accounting principle loss on disposition | $ 21,408,000 |
Income Taxes - Summary of compo
Income Taxes - Summary of components of provision (benefit) for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current (benefit) provision: | |||
Federal | $ (43,993) | $ (24,727) | $ 119,074 |
State | (24,479) | (3,638) | 19,858 |
Foreign | 4,567 | 7,898 | 2,907 |
Deferred (benefit) provision: | |||
Federal | (31,505) | (31,178) | 11,514 |
State | (2,704) | (1,835) | 840 |
Total income tax (benefit) provision | $ (98,114) | $ (53,480) | $ 154,193 |
Income Taxes - Summary of recon
Income Taxes - Summary of reconciliation between federal statutory rate and effective tax rate (Details 1) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 1.30% | 3.30% | |
Tax credits | 0.10% | 0.30% | (0.70%) |
Non-deductible expenses | (0.70%) | (1.30%) | 0.40% |
Change in contingencies | 6.60% | ||
Other | (1.30%) | 0.90% | 0.60% |
Effective tax rate | 41.00% | 34.90% | 38.60% |
Income Taxes - Summary of signi
Income Taxes - Summary of significant components of deferred tax assets and liabilities (Details 2) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Self-insurance | $ 5,907 | $ 7,274 |
Pension | 11,995 | 12,048 |
State net operating loss carryforwards | 1,455 | 370 |
Bad debt | 991 | 4,041 |
Accrued payroll | 857 | 1,330 |
Stock-based compensation | 5,847 | 5,885 |
All others | 2,483 | 4,704 |
Valuation allowance | (356) | (276) |
Gross deferred tax assets | 29,179 | 35,376 |
Deferred tax liabilities: | ||
Depreciation | (95,606) | (137,606) |
Goodwill amortization | (9,340) | (8,887) |
Basis differences in variable interest entities | (5,281) | (4,876) |
Basis differences in joint ventures | (396) | 518 |
All others | (22) | (20) |
Gross deferred tax liabilities | (110,645) | (150,871) |
Net deferred tax liabilities | $ (81,466) | $ (115,495) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of beginning and ending amount of unrecognized tax benefits (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | ||
Balance at January 1 | $ 26,152,000 | $ 23,267,000 |
Additions based on tax positions related to the current year | 0 | 2,171,000 |
Additions for tax positions of prior years | 0 | 714,000 |
Reductions for tax positions of prior years | (23,937,000) | 0 |
Balance at December 31 | $ 2,215,000 | $ 26,152,000 |
Income Taxes (Detail Textuals)
Income Taxes (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | |||
Undistributed earnings of foreign subsidiaries | $ 10,200 | ||
Deferred tax assets, valuation allowance | 356 | $ 276 | |
Total net income tax (refunds) payments | (42,400) | (7,900) | $ 152,200 |
Accrued interest and penalties | 76 | $ 411 | |
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards related to state income taxes | 33,500 | ||
Deferred tax assets, valuation allowance | $ 356 |
Long-Term Debt (Details)
Long-Term Debt (Details) - Revolving credit facility - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Line of Credit Facility [Line Items] | |||
Interest incurred | $ 449 | $ 1,913 | $ 2,295 |
Capitalized interest | 534 | 563 | |
Interest paid (net of capitalized interest) | $ 284 | $ 1,169 | $ 1,314 |
Weighted average interest rate | 2.20% | 2.20% |
Long-Term Debt (Detail Textuals
Long-Term Debt (Detail Textuals) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Revolving credit facility | |
Line of Credit Facility [Line Items] | |
Amount of credit facility | $ 125 |
Percentage of ownership | 100.00% |
Term of line of credit facility | 5 years |
Loan origination fees and other debt related costs | $ 3 |
Non-current other assets net | $ 0.2 |
Description of variable rate basis of debt instrument | Revolving loans under the amended revolving credit facility bear interest at one of the following two rates at the Company’s election: · the Base Rate, which is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) Bank of America’s publicly announced “prime rate,” and (c) the Eurodollar Rate plus 1.00%; in each case plus a margin that ranges from 0.125% to 1.125% based on a quarterly consolidated leverage ratio calculation; or · the Eurodollar Rate, which is the rate per annum equal to the London Interbank Offering Rate (“LIBOR”); plus, a margin ranging from 1.125% to 2.125%, based upon a quarterly debt covenant calculation. |
Borrowing base of line of credit | $ 125 |
Borrowing capacity description | Company amended the revolving credit facility to (1) establish a borrowing base to be the lesser of (a) $125 million or (b) the difference between (i) a specified percentage (ranging from 70% to 80%) of eligible accounts receivable less (ii) the amount of any outstanding letters of credit, (2) secure payment obligations under the credit facility with a security interest in the consolidated accounts receivable, and (3) replace the financial covenants related to minimum leverage and debt service coverage ratios with a covenant to maintain a minimum tangible net worth of not less than $700 million. |
Minimum tangible net worth | $ 700 |
Revolving credit facility | Minimum | |
Line of Credit Facility [Line Items] | |
Fees on unused portion of facility | 0.225% |
Account receivable percentage for line of credit determination | 70.00% |
Revolving credit facility | Maximum | |
Line of Credit Facility [Line Items] | |
Fees on unused portion of facility | 0.325% |
Account receivable percentage for line of credit determination | 80.00% |
Revolving credit facility | Option 1 A | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.50% |
Description of reference rate basis | Federal Funds Rate |
Revolving credit facility | Option 1 B | |
Line of Credit Facility [Line Items] | |
Description of reference rate basis | Prime rate |
Revolving credit facility | Option 1 C | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.00% |
Description of reference rate basis | Eurodollar Rate |
Revolving credit facility | Option 1 | Minimum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.125% |
Revolving credit facility | Option 1 | Maximum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.125% |
Letter of credit subfacility | |
Line of Credit Facility [Line Items] | |
Amount of credit facility | $ 50 |
Letter of swingline subfacility | |
Line of Credit Facility [Line Items] | |
Amount of credit facility | $ 35 |
Long-Term Debt (Detail Textua47
Long-Term Debt (Detail Textuals 1) - Revolving credit facility - Option 2 - Eurodollar Borrowings | 12 Months Ended |
Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | |
Description of reference rate basis | London Interbank Offering Rate ("LIBOR") |
Minimum | |
Line of Credit Facility [Line Items] | |
Range of margin based on quarterly debt covenant calculation | 1.125% |
Maximum | |
Line of Credit Facility [Line Items] | |
Range of margin based on quarterly debt covenant calculation | 2.125% |
Long-Term Debt (Detail Textua48
Long-Term Debt (Detail Textuals 2) - Uncommitted letter of credit facility - USD ($) $ in Millions | Jan. 04, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Line of Credit Facility [Line Items] | |||
Amount of credit facility | $ 35 | ||
Term of line of credit facility | 1 year | ||
Commitment fee percentage, per annum on outstanding letters of credit | 0.75% | ||
Available borrowing under the facility | $ 125 | ||
Letter of credit outstanding amount | $ 19.1 | $ 29.3 |
Accumulated Other Comprehensi49
Accumulated Other Comprehensive (Loss) Income - Summary of components of accumulated other comprehensive (loss) income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Accumulated Other Comprehensive Income Loss [Roll Forward] | |||
Balance | $ (17,969) | $ (17,833) | |
Change during the period | |||
Before-tax amount | (1,382) | (196) | |
Tax (expense) benefit | 742 | (586) | |
Reclassification adjustment, net of taxes: | |||
Realized loss on securities | 144 | ||
Amortization of net loss | [1] | 507 | 502 |
Total activity in period | (133) | (136) | |
Balance | (18,102) | (17,969) | |
Pension Adjustment | |||
Accumulated Other Comprehensive Income Loss [Roll Forward] | |||
Balance | (14,715) | (16,246) | |
Change during the period | |||
Before-tax amount | (2,039) | 1,621 | |
Tax (expense) benefit | 744 | (592) | |
Reclassification adjustment, net of taxes: | |||
Realized loss on securities | |||
Amortization of net loss | [1] | 507 | 502 |
Total activity in period | (788) | 1,531 | |
Balance | (15,503) | (14,715) | |
Unrealized Gain (Loss) On Securities | |||
Accumulated Other Comprehensive Income Loss [Roll Forward] | |||
Balance | 36 | (98) | |
Change during the period | |||
Before-tax amount | 5 | (16) | |
Tax (expense) benefit | (2) | 6 | |
Reclassification adjustment, net of taxes: | |||
Realized loss on securities | 144 | ||
Amortization of net loss | [1] | ||
Total activity in period | 3 | 134 | |
Balance | 39 | 36 | |
Foreign Currency Translation | |||
Accumulated Other Comprehensive Income Loss [Roll Forward] | |||
Balance | (3,290) | (1,489) | |
Change during the period | |||
Before-tax amount | 652 | (1,801) | |
Tax (expense) benefit | |||
Reclassification adjustment, net of taxes: | |||
Realized loss on securities | |||
Amortization of net loss | [1] | ||
Total activity in period | 652 | (1,801) | |
Balance | $ (2,638) | $ (3,290) | |
[1] | Reported as part of selling, general and administrative expenses. |
Fair Value Disclosures - Summar
Fair Value Disclosures - Summary of valuation of financial instruments measured at fair value on recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Available-for-sale securities - equity securities | $ 264 | $ 259 |
Investments measured at net asset value - trading securities | 18,367 | 16,081 |
Fair value on a recurring basis | Quoted prices in active markets for identical assets (Level 1) | ||
Assets: | ||
Available-for-sale securities - equity securities | 264 | 259 |
Fair value on a recurring basis | Significant other observable inputs (Level 2) | ||
Assets: | ||
Available-for-sale securities - equity securities | ||
Fair value on a recurring basis | Significant unobservable inputs (Level 3) | ||
Assets: | ||
Available-for-sale securities - equity securities |
Fair Value Disclosures (Detail
Fair Value Disclosures (Detail Textuals) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Revolving credit facility | ||
Line of Credit Facility [Line Items] | ||
Outstanding borrowings under the facility | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of minimum annual rentals (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure | |
2,017 | $ 10,267 |
2,018 | 10,280 |
2,019 | 7,797 |
2,020 | 4,786 |
2,021 | 3,288 |
Thereafter | 4,195 |
Total rental commitments | $ 40,613 |
Commitments and Contingencies53
Commitments and Contingencies (Detail Textuals) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure | |||
Total rental expense, including short-term rentals | $ 15,723,000 | $ 20,658,000 | $ 22,968,000 |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of funded status of Retirement Income Plan and amounts recognized in consolidated balance sheets (Details) - Retirement Income Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation at end of year | $ 44,315 | $ 42,894 | |
CHANGE IN PROJECTED BENEFIT OBLIGATION: | |||
Benefit obligation at beginning of year | 42,894 | 47,410 | |
Service cost | |||
Interest cost | 2,006 | 1,898 | 1,946 |
Amendments | |||
Actuarial loss (gain) | 1,371 | (4,593) | |
Benefits paid | (1,956) | (1,821) | |
Projected benefit obligation at end of year | 44,315 | 42,894 | 47,410 |
CHANGE IN PLAN ASSETS: | |||
Fair value of plan assets at beginning of year | 30,937 | 32,622 | |
Actual return on plan assets | 1,464 | (714) | |
Employer contribution | 4,300 | 850 | |
Benefits paid | (1,956) | (1,821) | |
Fair value of plan assets at end of year | 34,745 | 30,937 | 32,622 |
Funded status at end of year | (9,570) | (11,957) | |
AMOUNTS (PRE-TAX) RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) CONSIST OF: | |||
Net loss (gain) | 24,412 | 23,172 | |
Prior service cost (credit) | |||
Net transition obligation (asset) | |||
Before-tax amount | $ 24,412 | $ 23,172 |
Employee Benefit Plans - Summ55
Employee Benefit Plans - Summary of amounts recognized in consolidated balance sheets (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plan Disclosure [Line Items] | ||
Long-term pension liabilities | $ (32,864) | $ (33,009) |
Retirement Income Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded status of the Retirement Income Plan | (9,570) | (11,957) |
SERP liability | (23,294) | (21,052) |
Long-term pension liabilities | $ (32,864) | $ (33,009) |
Employee Benefit Plans - Summ56
Employee Benefit Plans - Summary of components of net periodic benefit cost (Details 2) - Retirement Income Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost for benefits earned during the period | |||
Interest cost on projected benefit obligation | 2,006 | 1,898 | 1,946 |
Expected return on plan assets | (2,131) | (2,259) | (2,240) |
Amortization of net loss | 799 | 790 | 531 |
Net periodic benefit plan cost | $ 674 | $ 429 | $ 237 |
Employee Benefit Plans - Summ57
Employee Benefit Plans - Summary of pre tax amounts recognized in comprehensive loss (Details 3) - Retirement Income Plan - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Defined Benefit Plan Disclosure [Line Items] | |||
Net loss (gain) | $ 2,039 | $ (1,621) | $ 10,745 |
Amortization of net loss | (799) | (790) | (531) |
Net transition obligation (asset) | |||
Amount recognized in accumulated other comprehensive loss | $ 1,240 | $ (2,411) | $ 10,214 |
Employee Benefit Plans - Summ58
Employee Benefit Plans - Summary of accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost in 2017 (Details 4) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Employee Benefit Plans | |
Amortization of net loss | $ 825 |
Prior service cost (credit) | |
Net transition obligation (asset) | |
Estimated net periodic benefit plan cost | $ 825 |
Employee Benefit Plans - Summ59
Employee Benefit Plans - Summary of weighted average assumptions used to determine projected benefit obligation and net benefit cost (Details 5) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Projected Benefit Obligation: | |||
Discount rate | 4.45% | 4.70% | 4.15% |
Rate of compensation increase | |||
Net Benefit Cost: | |||
Discount rate | 4.70% | 4.15% | 5.20% |
Expected return on plan assets | 7.00% | 7.00% | 7.00% |
Rate of compensation increase |
Employee Benefit Plans - Summ60
Employee Benefit Plans - Summary of plan weighted average asset allocation by asset category along with target allocation for 2017 (Details 6) - Retirement Income Plan | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of Plan Assets | 100.00% | 100.00% |
Cash and Cash Equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation for 2017 minimum percentage | 0.00% | |
Target Allocation for 2017 maximum percentage | 5.00% | |
Percentage of Plan Assets | 3.30% | 0.70% |
Debt Securities - Core Fixed Income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation for 2017 minimum percentage | 15.00% | |
Target Allocation for 2017 maximum percentage | 50.00% | |
Percentage of Plan Assets | 25.30% | 25.80% |
Domestic Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation for 2017 minimum percentage | 0.00% | |
Target Allocation for 2017 maximum percentage | 40.00% | |
Percentage of Plan Assets | 25.50% | 27.60% |
International Equity Securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation for 2017 minimum percentage | 0.00% | |
Target Allocation for 2017 maximum percentage | 40.00% | |
Percentage of Plan Assets | 20.80% | 19.10% |
Investments measured at net asset value | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Allocation for 2017 minimum percentage | 0.00% | |
Target Allocation for 2017 maximum percentage | 20.00% | |
Percentage of Plan Assets | 25.10% | 26.80% |
Employee Benefit Plans - Summ61
Employee Benefit Plans - Summary of plan assets using fair value hierarchy (Details 7) - Retirement Income Plan - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | $ 34,745 | $ 30,937 | $ 32,622 | |
Total | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 26,038 | 22,635 | ||
Investments measured at Net Asset Value | 8,707 | 8,302 | ||
Investments at Fair Value | 34,745 | 30,937 | ||
Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 5,623 | 4,495 | ||
Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | 20,415 | 18,140 | ||
Cash and Cash Equivalents | Total | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [1] | 1,154 | 210 | |
Cash and Cash Equivalents | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [1] | 1,154 | 210 | |
Cash and Cash Equivalents | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [1] | |||
Fixed Income Securities | Total | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [2] | 8,804 | 7,987 | |
Fixed Income Securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [2] | |||
Fixed Income Securities | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [2] | 8,804 | 7,987 | |
Domestic Equity Securities | Total | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [3] | 8,865 | 8,527 | |
Domestic Equity Securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [3] | 4,469 | 4,285 | |
Domestic Equity Securities | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [3] | 4,396 | 4,242 | |
International Equity Securities | Total | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [4] | 7,215 | 5,911 | |
International Equity Securities | Level 1 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [4] | |||
International Equity Securities | Level 2 | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Fair value of plan assets | [4] | $ 7,215 | $ 5,911 | |
[1] | Cash and cash equivalents, which are used to pay benefits and plan administrative expenses, are held in Rule 2a-7 money market funds. | |||
[2] | Fixed income securities are primarily valued using a market approach with inputs that include broker quotes, benchmark yields, base spreads and reported trades. | |||
[3] | Domestic equity securities are valued using a market approach based on the quoted market prices of identical instruments in their respective markets. | |||
[4] | International equity securities are valued using a market approach based on the quoted market prices of identical instruments in their respective markets. |
Employee Benefit Plans - Summ62
Employee Benefit Plans - Summary of future benefits payable for Retirement Income Plan over next ten years (Details 8) - Retirement Income Plan $ in Thousands | Dec. 31, 2016USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2,017 | $ 2,432 |
2,018 | 2,530 |
2,019 | 2,589 |
2,020 | 2,626 |
2,021 | 2,710 |
2022-2026 | $ 14,194 |
Employee Benefit Plans - Summ63
Employee Benefit Plans - Summary of changes in non vested restricted shares (Details 9) - Restricted Stock - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Shares | |||
Non-vested shares at January 1 | 3,312,175 | 3,575,150 | |
Granted | 920,100 | 895,725 | |
Vested | (891,245) | (1,054,625) | |
Forfeited | (123,955) | (104,075) | |
Non-vested shares at December 31 | 3,217,075 | 3,312,175 | 3,575,150 |
Weighted Average Grant-Date Fair Value | |||
Non-vested shares at January 1 | $ 13.17 | $ 12.04 | |
Granted | 10.77 | 12.30 | $ 18.84 |
Vested | 11.58 | 8.66 | |
Forfeited | 13.41 | 12.78 | |
Non-vested shares at December 31 | $ 12.91 | $ 13.17 | $ 12.04 |
Employee Benefit Plans (Detail
Employee Benefit Plans (Detail Textuals) - Retirement Income Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Benefit obligation exceeds fair value of the plan assets | $ (9,570) | $ (11,957) | |
Employer contribution | 4,300 | 850 | |
Accumulated other comprehensive loss, before tax | $ 1,240 | $ (2,411) | $ 10,214 |
Percentage of investment for long term growth | 70.00% | ||
Percentage for near term benefit payments | 30.00% |
Employee Benefit Plans (Detai65
Employee Benefit Plans (Detail Textuals 1) - Supplemental Retirement Plan ('SERP') - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Variable life insurance policies investment amount | $ 47,700,000 | $ 46,800,000 | |
Fair value of plan assets | 18,367,000 | 16,081,000 | |
Trading (losses) gains related to the SERP assets | $ 966,000 | $ (519,000) | $ 959,000 |
Employee Benefit Plans (Detai66
Employee Benefit Plans (Detail Textuals 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Benefit Plans | |||
Minimum percentage of annual contribution per employee | 1.00% | ||
Maximum percentage of annual contribution per employee | 25.00% | ||
Percentage of employer matching contribution | 50.00% | ||
Threshold limit percentage of employee compensation | 6.00% | ||
Minimum number of service period for employees to be fully vested | 3 years | ||
Employer contribution | $ 3,250,000 | $ 4,796,000 | $ 6,970,000 |
Employee Benefit Plans (Detai67
Employee Benefit Plans (Detail Textuals 3) - Stock Incentive Plans - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Period of stock options and restricted stock issued | 10 years | ||
Common stock reserved for future issuance | 8,000,000 | ||
Number of shares available for grants | 6,250,634 | ||
Pre-tax stock-based employee compensation expense | $ 10,218,000 | $ 9,960,000 | $ 9,074,000 |
After tax stock-based employee compensation expense | $ 6,488,000 | $ 6,325,000 | $ 5,762,000 |
Employee Benefit Plans (Detai68
Employee Benefit Plans (Detail Textuals 4) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Tax benefits for compensation expense for restricted stock awards | $ 427,000 | $ 1,410,000 | $ 4,336,000 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Minimum ownership considered major owner | 10.00% | ||
Percentage of fair market value of the common stock for major owners | 110.00% | ||
Vesting period | 5 years | ||
Expiration period of the stock | 10 years | ||
Expiration period of the stock of majority owners | 5 years | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation award, vesting percentage | 20.00% | ||
Weighted average grant date fair value (in dollars per share) | $ 10.77 | $ 12.30 | $ 18.84 |
Total fair value of shares vested | $ 9,751,000 | $ 12,727,000 | $ 20,664,000 |
Tax benefits for compensation expense for restricted stock awards | 427,000 | $ 1,410,000 | $ 4,336,000 |
Unrecognized compensation cost related to non-vested restricted shares | $ 38,673,000 | ||
Period for recognition of compensation cost related to non-vested restricted shares | 3.4 years |
Related Party Transactions (Det
Related Party Transactions (Detail Textuals) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Voting power held by entity | one vote | ||
Investment in joint venture | $ 2,554,000 | ||
Marine Products | |||
Related Party Transaction [Line Items] | |||
Spinoff transaction percentage | 100.00% | ||
Transition Support Services Agreement | Marine Products | |||
Related Party Transaction [Line Items] | |||
Aggregate amount of services received | $ 739,000 | $ 753,000 | 663,000 |
Receivable (payable) due from (to) related party | 60,000 | (11,000) | |
Other | |||
Related Party Transaction [Line Items] | |||
Products or services from suppliers | 890,000 | 1,127,000 | 1,092,000 |
Administrative services and rent | $ 111,000 | 100,000 | $ 84,000 |
Voting power held by entity | excess of fifty percent | ||
255 RC, LLC | Marine Products | |||
Related Party Transaction [Line Items] | |||
Joint venture ownership interest percentage | 50.00% | ||
Operating lease agreement term | 5 years | ||
Investment in joint venture | $ 2,554,000 | ||
Rent and allocable fixed cost for corporate aircraft | $ 197,000 | $ 186,000 |
Business Segment Information -
Business Segment Information - Summary of financial information concerning reportable segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 728,974 | $ 1,263,840 | $ 2,337,413 |
Operating profit (loss) | (238,942) | (156,277) | 400,929 |
Capital expenditures | 33,938 | 167,426 | 371,502 |
Depreciation and amortization | 217,258 | 270,977 | 230,813 |
Identifiable assets | 1,035,452 | 1,237,094 | 1,759,358 |
Operating Segments | Technical Services | |||
Segment Reporting Information [Line Items] | |||
Revenues | 679,654 | 1,175,293 | 2,180,457 |
Operating profit (loss) | (203,804) | (132,982) | 390,004 |
Capital expenditures | 28,380 | 155,361 | 342,932 |
Depreciation and amortization | 191,181 | 237,778 | 198,636 |
Identifiable assets | 733,008 | 976,761 | 1,514,084 |
Operating Segments | Support Services | |||
Segment Reporting Information [Line Items] | |||
Revenues | 49,320 | 88,547 | 156,956 |
Operating profit (loss) | (26,021) | (2,363) | 42,510 |
Capital expenditures | 2,928 | 11,055 | 27,148 |
Depreciation and amortization | 25,606 | 32,697 | 31,578 |
Identifiable assets | 76,876 | 108,262 | 157,688 |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Revenues | |||
Operating profit (loss) | (17,037) | (14,515) | (16,113) |
Capital expenditures | 2,630 | 1,010 | 1,422 |
Depreciation and amortization | 471 | 502 | 599 |
Identifiable assets | 225,568 | 152,071 | 87,586 |
Loss on disposition of assets, net | |||
Segment Reporting Information [Line Items] | |||
Revenues | |||
Operating profit (loss) | 7,920 | (6,417) | (15,472) |
Capital expenditures | |||
Depreciation and amortization | |||
Identifiable assets |
Business Segment Information 71
Business Segment Information - Summary of selected information between United States and all international locations (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 728,974 | $ 1,263,840 | $ 2,337,413 |
United States Revenues | |||
Segment Reporting Information [Line Items] | |||
Revenues | 677,755 | 1,191,704 | 2,249,260 |
International Revenues | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ 51,219 | $ 72,136 | $ 88,153 |
Business Segment Information (D
Business Segment Information (Detail Textuals) | 12 Months Ended |
Dec. 31, 2016Segment | |
Business Segment Information | |
Number of reportable segments | 2 |
Percentage of assets related to international operations | less than 10 percent |
VALUATION AND QUALIFYING ACCO73
VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Allowance for doubtful accounts | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Period | $ 10,605 | $ 15,351 | $ 13,497 | |
Charged to Costs and Expenses | 6,021 | (2,958) | 2,280 | |
Net (Deductions) Recoveries | [1] | (14,073) | (1,788) | (426) |
Balance at End of Period | 2,553 | 10,605 | 15,351 | |
Deferred tax asset valuation allowance | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Period | 276 | 2 | 83 | |
Charged to Costs and Expenses | 80 | 274 | ||
Net (Deductions) Recoveries | [2] | (81) | ||
Balance at End of Period | $ 356 | $ 276 | $ 2 | |
[1] | Net (deductions) recoveries in the allowance for doubtful accounts principally reflect the write-off of previously reserved accounts net of recoveries. | |||
[2] | The valuation allowance for deferred tax assets is increased or decreased each year to reflect the state net operating losses that management believes will not be utilized before they expire. |