SECURITIES AND EXCHANGE COMMISSION
(Mark One) | |
☒ | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware (State of Incorporation) | 58-1550825 (I.R.S. Employer Identification No.) |
Title of each class COMMON STOCK, $0.10 PAR VALUE | Name of each exchange on which registered NEW YORK STOCK EXCHANGE |
☒ Yes ☐ No
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Blowout Preventors | Diverters |
High Pressure Manifolds and Valves | Drill Pipe |
Hevi-wate Drill Pipe | Drill Collars |
Tubing | Handling Tools |
Production Related Rental Tools | Coflexip® Hoses |
Pumps | Wear KnotTM Drill Pipe |
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Name and Office with Registrant | Age | Date First Elected to Present Office |
R. Randall Rollins (1) | 83 | 1/24/84 |
Chairman of the Board | ||
Richard A. Hubbell (2) | 70 | 4/22/03 |
President and Chief Executive Officer | ||
Linda H. Graham (3) | 78 | 1/27/87 |
Vice President and Secretary | ||
Ben M. Palmer (4) | 54 | 7/8/96 |
Vice President, Chief Financial Officer and Treasurer |
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2014 | 2013 | |||||||||||||||||||||||
Quarter | High | Low | Dividends | High | Low | Dividends | ||||||||||||||||||
First | $ | 21.09 | $ | 16.16 | $ | 0.105 | $ | 17.40 | $ | 12.46 | $ | 0.10 | ||||||||||||
Second | 23.75 | 19.27 | 0.105 | 15.55 | 12.41 | 0.10 | ||||||||||||||||||
Third | 25.15 | 20.67 | 0.105 | 15.94 | 13.48 | 0.10 | ||||||||||||||||||
Fourth | 22.15 | 11.55 | 0.105 | 18.88 | 15.34 | 0.10 |
Period | Total Number of Shares (or Units) Purchased (1) | Average Price Paid Per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1) | |||||||||||||
October 1, 2014 to October 31, 2014 | 780,000 | $ | 16.08 | 780,000 | 3,323,138 | ||||||||||||
November 1, 2014 to November 30, 2014 | 1,252,984 | 15.36 | 1,252,984 | 2,070,154 | |||||||||||||
December 1, 2014 to December 31, 2014 | 1,664,260 | (2) | 12.15 | 20,000 | 2,050,154 | ||||||||||||
Totals | 3,697,244 | $ | 14.06 | 2,052,984 | 2,050,154 |
(1) | The Company has a stock buyback program initially adopted in 1998 and subsequently amended in 2013 that authorizes the repurchase of up to 31,578,125 shares. There were 2,052,984 shares repurchased as part of this program during the fourth quarter of 2014. As of December 31, 2014, there are 2,050,154 shares available to be repurchased under the current authorization. Currently the program does not have a predetermined expiration date. |
(2) | Includes shares purchased by “affiliated purchasers” under Rule 10b - 18 of the Securities Exchange Act in open market transactions. These affiliated purchases were made by RFPS Investment II, L.P. and RFPS Management Co. II, L.P. of which LOR, Inc. is the manager. Mr. R. Randall Rollins and Mr. Gary W. Rollins have voting control of LOR, Inc. |
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Years Ended December 31, | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
(in thousands, except employee and per share amounts) | ||||||||||||||||||||
Revenues | $ | 2,337,413 | $ | 1,861,489 | $ | 1,945,023 | $ | 1,809,807 | $ | 1,096,384 | ||||||||||
Cost of revenues | 1,493,082 | 1,178,412 | 1,105,886 | 992,704 | 606,098 | |||||||||||||||
Selling, general and administrative expenses | 198,076 | 185,165 | 175,749 | 151,286 | 121,839 | |||||||||||||||
Depreciation and amortization | 230,813 | 213,128 | 214,899 | 179,905 | 133,360 | |||||||||||||||
Loss (gain) on disposition of assets, net | 15,472 | 9,371 | 6,099 | 3,831 | (3,758 | ) | ||||||||||||||
Operating profit | 399,970 | 275,413 | 442,390 | 482,081 | 238,845 | |||||||||||||||
Interest expense | (1,431 | ) | (1,822 | ) | (1,976 | ) | (3,453 | ) | (2,662 | ) | ||||||||||
Interest income | 19 | 419 | 30 | 18 | 46 | |||||||||||||||
Other income, net | 828 | 2,260 | 2,175 | 169 | 1,303 | |||||||||||||||
Income before income taxes | 399,386 | 276,270 | 442,619 | 478,815 | 237,532 | |||||||||||||||
Income tax provision | 154,193 | 109,375 | 168,183 | 182,434 | 90,790 | |||||||||||||||
Net income | $ | 245,193 | $ | 166,895 | $ | 274,436 | $ | 296,381 | $ | 146,742 | ||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | 1.14 | $ | 0.77 | $ | 1.28 | $ | 1.36 | $ | 0.67 | ||||||||||
Diluted | $ | 1.14 | $ | 0.77 | $ | 1.27 | $ | 1.35 | $ | 0.67 | ||||||||||
Dividends paid per share | $ | 0.42 | $ | 0.40 | $ | 0.52 | $ | 0.21 | $ | 0.09 | ||||||||||
OTHER DATA: | ||||||||||||||||||||
Operating margin percent | 17.1 | % | 14.8 | % | 22.7 | % | 26.6 | % | 21.8 | % | ||||||||||
Net cash provided by operating activities | $ | 322,757 | $ | 365,624 | $ | 559,933 | $ | 386,007 | $ | 168,657 | ||||||||||
Net cash used for investing activities | (355,349 | ) | (207,654 | ) | (315,838 | ) | (391,637 | ) | (171,769 | ) | ||||||||||
Net cash (used for) provided by financing activities | 33,664 | (163,433 | ) | (237,325 | ) | 3,988 | 7,658 | |||||||||||||
Capital expenditures | $ | 371,502 | $ | 201,681 | $ | 328,936 | $ | 416,400 | $ | 187,486 | ||||||||||
Employees at end of period | 4,500 | 3,900 | 3,600 | 3,400 | 2,500 | |||||||||||||||
BALANCE SHEET DATA AT END OF YEAR: | ||||||||||||||||||||
Accounts receivable, net | $ | 634,730 | $ | 437,132 | $ | 387,530 | $ | 461,272 | $ | 294,002 | ||||||||||
Working capital | 612,616 | 436,873 | 403,316 | 447,089 | 281,174 | |||||||||||||||
Property, plant and equipment, net | 849,383 | 726,307 | 756,326 | 675,360 | 453,017 | |||||||||||||||
Total assets | 1,759,358 | 1,383,860 | 1,367,163 | 1,338,211 | 887,871 | |||||||||||||||
Long-term debt | 224,500 | 53,300 | 107,000 | 203,300 | 121,250 | |||||||||||||||
Total stockholders’ equity | $ | 1,078,382 | $ | 968,702 | $ | 899,232 | $ | 762,592 | $ | 538,895 |
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- | To focus our management resources on and invest our capital in equipment and geographic markets that we believe will earn high returns on capital. |
- | To maintain a flexible cost structure that can respond quickly to volatile industry conditions and business activity levels. |
- | To maintain an efficient, low-cost capital structure which includes an appropriate use of debt financing. |
- | To maintain high asset utilization which leads to increased revenues and leverage of direct and overhead costs, while also ensuring that increased maintenance resulting from high utilization does not interfere with customer performance requirements or jeopardize safety. |
- | To deliver equipment and services to our customers safely. |
- | To secure adequate sources of supplies of certain high-demand raw materials used in our operations, both in order to conduct our operations and to enhance our competitive position. |
- | To maintain and selectively increase market share. |
- | To maximize stockholder return by optimizing the balance between cash invested in the Company’s productive assets, the payment of dividends to stockholders, and the repurchase of our common stock on the open market. |
- | To align the interests of our management and stockholders. |
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Years Ended December 31, | 2014 | 2013 | 2012 | |||||||||
(in thousands except per share amounts and industry data) | ||||||||||||
Consolidated revenues | $ | 2,337,413 | $ | 1,861,489 | $ | 1,945,023 | ||||||
Revenues by business segment: | ||||||||||||
Technical | $ | 2,180,457 | $ | 1,729,732 | $ | 1,794,015 | ||||||
Support | 156,956 | 131,757 | 151,008 | |||||||||
Consolidated operating profit | $ | 399,970 | $ | 275,413 | $ | 442,390 | ||||||
Operating profit by business segment: | ||||||||||||
Technical | $ | 390,004 | $ | 276,246 | $ | 420,231 | ||||||
Support | 42,510 | 26,223 | 45,912 | |||||||||
Corporate expenses | (17,072 | ) | (17,685 | ) | (17,654 | ) | ||||||
Loss on disposition of assets, net | (15,472 | ) | (9,371 | ) | (6,099 | ) | ||||||
Net income | $ | 245,193 | $ | 166,895 | $ | 274,436 | ||||||
Earnings per share — diluted | $ | 1.14 | $ | 0.77 | $ | 1.27 | ||||||
Percentage of cost of revenues to revenues | 64 | % | 63 | % | 57 | % | ||||||
Percentage of selling, general and administrative expenses to revenues | 9 | % | 10 | % | 9 | % | ||||||
Percentage of depreciation and amortization expenses to revenues | 10 | % | 11 | % | 11 | % | ||||||
Effective income tax rate | 38.6 | % | 39.6 | % | 38.0 | % | ||||||
Average U.S. domestic rig count | 1,862 | 1,762 | 1,919 | |||||||||
Average natural gas price (per thousand cubic feet (mcf)) | $ | 4.25 | $ | 3.71 | $ | 2.73 | ||||||
Average oil price (per barrel) | $ | 93.25 | $ | 98.06 | $ | 94.20 |
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(in thousands) | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Net cash provided by operating activities | $ | 322,757 | $ | 365,624 | $ | 559,933 | ||||||
Net cash used for investing activities | (355,349 | ) | (207,654 | ) | (315,838 | ) | ||||||
Net cash provided by (used for) financing activities | 33,664 | (163,433 | ) | (237,325 | ) |
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Contractual obligations | Payments due by period | |||||||||||||||||||
(in thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Long-term debt obligations | $ | 224,500 | $ | — | $ | — | $ | 224,500 | $ | — | ||||||||||
Interest on long-term debt obligations | 24,650 | 4,850 | �� | 9,698 | 9,698 | 404 | ||||||||||||||
Capital lease obligations | — | — | — | — | — | |||||||||||||||
Operating leases (1) | 41,458 | 10,938 | 12,669 | 8,402 | 9,449 | |||||||||||||||
Purchase obligations (2) | 218,577 | 178,977 | 39,600 | — | — | |||||||||||||||
Other long-term liabilities (3) | 2,554 | 50 | 2,404 | 100 | — | |||||||||||||||
Total contractual obligations | $ | 511,739 | $ | 194,815 | $ | 64,371 | $ | 242,700 | $ | 9,853 |
(1) | Operating leases include agreements for various office locations, office equipment, and certain operating equipment. |
(2) | Includes agreements to purchase raw materials, goods or services that have been approved and that specify all significant terms (pricing, quantity, and timing). As part of the normal course of business the Company occasionally enters into purchase commitments to manage its various operating needs. |
(3) | Includes expected cash payments for long-term liabilities reflected on the balance sheet where the timing of the payments are known. These amounts include incentive compensation. These amounts exclude pension obligations with uncertain funding requirements and deferred compensation liabilities. |
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/s/ Richard A. Hubbell | /s/ Ben M. Palmer | ||
Richard A. Hubbell President and Chief Executive Officer | Ben M. Palmer Chief Financial Officer and Treasurer |
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RPC, INC. AND SUBSIDIARIES
December 31, | 2014 | 2013 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 9,772 | $ | 8,700 | ||||
Accounts receivable, net | 634,730 | 437,132 | ||||||
Inventories | 155,611 | 126,604 | ||||||
Deferred income taxes | 9,422 | 14,185 | ||||||
Income taxes receivable | 29,115 | 5,720 | ||||||
Prepaid expenses | 9,135 | 9,143 | ||||||
Other current assets | 3,843 | 3,441 | ||||||
Current assets | 851,628 | 604,925 | ||||||
Property, plant and equipment, net | 849,383 | 726,307 | ||||||
Goodwill | 32,150 | 31,861 | ||||||
Other assets | 26,197 | 20,767 | ||||||
Total assets | $ | 1,759,358 | $ | 1,383,860 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
LIABILITIES | ||||||||
Accounts payable | $ | 175,416 | $ | 119,170 | ||||
Accrued payroll and related expenses | 49,798 | 36,638 | ||||||
Accrued insurance expenses | 5,632 | 6,072 | ||||||
Accrued state, local and other taxes | 6,821 | 5,002 | ||||||
Income taxes payable | 944 | — | ||||||
Other accrued expenses | 401 | 1,170 | ||||||
Current liabilities | 239,012 | 168,052 | ||||||
Long-term accrued insurance expenses | 10,099 | 10,225 | ||||||
Notes payable to banks | 224,500 | 53,300 | ||||||
Long-term pension liabilities | 34,399 | 21,966 | ||||||
Deferred income taxes | 156,977 | 153,176 | ||||||
Other long-term liabilities | 15,989 | 8,439 | ||||||
Total liabilities | 680,976 | 415,158 | ||||||
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, 216,539,015 and 218,985,816 shares issued and outstanding in 2014 and 2013, respectively | 21,654 | 21,899 | ||||||
Capital in excess of par value | — | — | ||||||
Retained earnings | 1,074,561 | 956,918 | ||||||
Accumulated other comprehensive loss | (17,833 | ) | (10,115 | ) | ||||
Total stockholders’ equity | 1,078,382 | 968,702 | ||||||
Total liabilities and stockholders’ equity | $ | 1,759,358 | $ | 1,383,860 |
33 |
RPC, INC. AND SUBSIDIARIES
Years ended December 31, | 2014 | 2013 | 2012 | |||||||||
REVENUES | $ | 2,337,413 | $ | 1,861,489 | $ | 1,945,023 | ||||||
COSTS AND EXPENSES: | ||||||||||||
Cost of revenues (exclusive of items shown separately below) | 1,493,082 | 1,178,412 | 1,105,886 | |||||||||
Selling, general and administrative expenses | 198,076 | 185,165 | 175,749 | |||||||||
Depreciation and amortization | 230,813 | 213,128 | 214,899 | |||||||||
Loss on disposition of assets, net | 15,472 | 9,371 | 6,099 | |||||||||
Operating profit | 399,970 | 275,413 | 442,390 | |||||||||
Interest expense | (1,431 | ) | (1,822 | ) | (1,976 | ) | ||||||
Interest income | 19 | 419 | 30 | |||||||||
Other income, net | 828 | 2,260 | 2,175 | |||||||||
Income before income taxes | 399,386 | 276,270 | 442,619 | |||||||||
Income tax provision | 154,193 | 109,375 | 168,183 | |||||||||
Net income | $ | 245,193 | $ | 166,895 | $ | 274,436 | ||||||
EARNINGS PER SHARE | ||||||||||||
Basic | $ | 1.14 | $ | 0.77 | $ | 1.28 | ||||||
Diluted | $ | 1.14 | $ | 0.77 | $ | 1.27 | ||||||
Dividends paid per share | $ | 0.42 | $ | 0.40 | $ | 0.52 |
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Years ended December 31, | 2014 | 2013 | 2012 | |||||||||
NET INCOME | $ | 245,193 | $ | 166,895 | $ | 274,436 | ||||||
OTHER COMPREHENSIVE INCOME, NET OF TAXES: | ||||||||||||
Pension adjustment | (6,486 | ) | 4,928 | (1,707 | ) | |||||||
Foreign currency translation | (1,124 | ) | (778 | ) | 265 | |||||||
Unrealized loss on securities, net of reclassification adjustments | (108 | ) | (19 | ) | (158 | ) | ||||||
COMPREHENSIVE INCOME | $ | 237,475 | $ | 171,026 | $ | 272,836 |
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RPC, INC. AND SUBSIDIARIES
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||
Three Years Ended December 31, 2014 | Common Stock | Capital in Excess of Par Value | Retained Earnings | Total | ||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||
Balance, December 31, 2011 | 221,188 | $ | 22,119 | $ | — | $ | 753,119 | $ | (12,646 | ) | $ | 762,592 | ||||||||||||
Stock issued for stock incentive plans and other, net | 1,530 | 152 | 11,105 | — | — | 11,257 | ||||||||||||||||||
Stock purchased and retired | (2,011 | ) | (201 | ) | (13,885 | ) | (16,515 | ) | — | (30,601 | ) | |||||||||||||
Increased ownership interest in subsidiary, net of taxes | — | — | — | (5,507 | ) | — | (5,507 | ) | ||||||||||||||||
Net income | — | — | — | 274,436 | — | 274,436 | ||||||||||||||||||
Pension adjustment, net of taxes | — | — | — | — | (1,707 | ) | (1,707 | ) | ||||||||||||||||
Foreign currency translation, net of taxes | — | — | — | — | 265 | 265 | ||||||||||||||||||
Unrealized loss on securities, net of taxes | — | — | — | — | (158 | ) | (158 | ) | ||||||||||||||||
Dividends declared | — | — | — | (114,069 | ) | — | (114,069 | ) | ||||||||||||||||
Excess tax benefits for share-based payments | — | — | 2,724 | — | — | 2,724 | ||||||||||||||||||
Three-for-two stock split | (563 | ) | (56 | ) | 56 | — | — | — | ||||||||||||||||
Balance, December 31, 2012 | 220,144 | 22,014 | — | 891,464 | (14,246 | ) | 899,232 | |||||||||||||||||
Stock issued for stock incentive plans, net | 699 | 70 | 8,107 | — | — | 8,177 | ||||||||||||||||||
Stock purchased and retired | (1,857 | ) | (185 | ) | (11,285 | ) | (13,652 | ) | — | (25,122 | ) | |||||||||||||
Net income | — | — | — | 166,895 | — | 166,895 | ||||||||||||||||||
Pension adjustment, net of taxes | — | — | — | — | 4,928 | 4,928 | ||||||||||||||||||
Foreign currency translation | — | — | — | — | (778 | ) | (778 | ) | ||||||||||||||||
Unrealized loss on securities, net of taxes | — | — | — | — | (19 | ) | (19 | ) | ||||||||||||||||
Dividends declared | — | — | — | (87,789 | ) | — | (87,789 | ) | ||||||||||||||||
Excess tax benefits for share-based payments | — | — | 3,178 | — | — | 3,178 | ||||||||||||||||||
Balance, December 31, 2013 | 218,986 | 21,899 | — | 956,918 | (10,115 | ) | 968,702 | |||||||||||||||||
Stock issued for stock incentive plans, net | 569 | 57 | 9,017 | — | — | 9,074 | ||||||||||||||||||
Stock purchased and retired | (3,016 | ) | (302 | ) | (13,353 | ) | (35,942 | ) | — | (49,597 | ) | |||||||||||||
Net income | — | — | — | 245,193 | — | 245,193 | ||||||||||||||||||
Pension adjustment, net of taxes | — | — | — | — | (6,486 | ) | (6,486 | ) | ||||||||||||||||
Foreign currency translation | — | — | — | — | (1,124 | ) | (1,124 | ) | ||||||||||||||||
Unrealized loss on securities, net of taxes | — | — | — | — | (108 | ) | (108 | ) | ||||||||||||||||
Dividends declared | — | — | — | (91,608 | ) | — | (91,608 | ) | ||||||||||||||||
Excess tax benefits for share-based payments | — | — | 4,336 | — | — | 4,336 | ||||||||||||||||||
Balance, December 31, 2014 | 216,539 | $ | 21,654 | $ | — | $ | 1,074,561 | $ | (17,833 | ) | $ | 1,078,382 |
36 |
RPC, Inc. and Subsidiaries
Years ended December 31, | 2014 | 2013 | 2012 | |||||||||
OPERATING ACTIVITIES | ||||||||||||
$ | 245,193 | $ | 166,895 | $ | 274,436 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation, amortization and other non-cash charges | 233,940 | 215,812 | 214,153 | |||||||||
Stock-based compensation expense | 9,074 | 8,177 | 7,860 | |||||||||
Loss on disposition of assets, net | 15,472 | 9,371 | 6,099 | |||||||||
Deferred income tax provision (benefit) | 12,354 | (13,060 | ) | 4,821 | ||||||||
Excess tax benefits for share-based payments | (4,336 | ) | (3,178 | ) | (2,724 | ) | ||||||
(Increase) decrease in assets: | ||||||||||||
Accounts receivable | (198,021 | ) | (49,959 | ) | 73,809 | |||||||
Income taxes receivable | (19,059 | ) | 1,692 | 9,295 | ||||||||
Inventories | (29,708 | ) | 14,078 | (40,354 | ) | |||||||
Prepaid expenses | 2 | 1,519 | (2,284 | ) | ||||||||
Other current assets | (749 | ) | 1,114 | 26,189 | ||||||||
Other non-current assets | (2,238 | ) | (1,881 | ) | (6,415 | ) | ||||||
Increase (decrease) in liabilities: | ||||||||||||
Accounts payable | 36,421 | 14,062 | (4,929 | ) | ||||||||
Income taxes payable | 944 | (6,428 | ) | (4,277 | ) | |||||||
Accrued payroll and related expenses | 13,221 | 4,585 | (1,627 | ) | ||||||||
Accrued insurance expenses | (440 | ) | (80 | ) | 408 | |||||||
Accrued state, local and other taxes | 1,819 | (2,324 | ) | 2,260 | ||||||||
Other accrued expenses | (775 | ) | (1,548 | ) | 1,412 | |||||||
Pension liabilities | 2,219 | 3,183 | (589 | ) | ||||||||
Long-term accrued insurance expenses | (126 | ) | (175 | ) | 1,400 | |||||||
Other long-term liabilities | 7,550 | 3,769 | 990 | |||||||||
Net cash provided by operating activities | 322,757 | 365,624 | 559,933 | |||||||||
INVESTING ACTIVITIES | ||||||||||||
Capital expenditures | (371,502 | ) | (201,681 | ) | (328,936 | ) | ||||||
Proceeds from sale of assets | 18,707 | 11,071 | 19,309 | |||||||||
Purchase of business | — | (17,044 | ) | — | ||||||||
Increased ownership interest in subsidiary | — | — | (6,211 | ) | ||||||||
Investment in joint venture | (2,554 | ) | — | — | ||||||||
Net cash used for investing activities | (355,349 | ) | (207,654 | ) | (315,838 | ) | ||||||
FINANCING ACTIVITIES | ||||||||||||
Payment of dividends | (91,608 | ) | (87,789 | ) | (114,069 | ) | ||||||
Borrowings from notes payable to banks | 1,168,100 | 686,700 | 844,050 | |||||||||
Repayments of notes payable to banks | (996,900 | ) | (740,400 | ) | (940,350 | ) | ||||||
Debt issue costs for notes payable to banks | (667 | ) | — | — | ||||||||
Excess tax benefits for share-based payments | 4,336 | 3,178 | 2,724 | |||||||||
Cash paid for common stock purchased and retired | (49,597 | ) | (25,122 | ) | (30,224 | ) | ||||||
Proceeds received upon exercise of stock options | — | — | 544 | |||||||||
Net cash provided by (used for) financing activities | 33,664 | (163,433 | ) | (237,325 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 1,072 | (5,463 | ) | 6,770 | ||||||||
Cash and cash equivalents at beginning of year | 8,700 | 14,163 | 7,393 | |||||||||
Cash and cash equivalents at end of year | $ | 9,772 | $ | 8,700 | $ | 14,163 |
37 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
38 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
39 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
40 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
(In thousands except per share data ) | 2014 | 2013 | 2012 | |||||||||
Net income available for stockholders: | $ | 245,193 | $ | 166,895 | $ | 274,436 | ||||||
Less: Dividends paid | ||||||||||||
Common stock | (90,231 | ) | (86,282 | ) | (111,966 | ) | ||||||
Restricted shares of common stock | (1,377 | ) | (1,507 | ) | (2,103 | ) | ||||||
Undistributed earnings | $ | 153,585 | $ | 79,106 | $ | 160,367 | ||||||
Allocation of undistributed earnings: | ||||||||||||
Common stock | $ | 151,049 | $ | 77,620 | $ | 157,093 | ||||||
Restricted shares of common stock | 2,536 | 1,486 | 3,274 | |||||||||
Basic shares outstanding: | ||||||||||||
Common stock | 211,208 | 211,305 | 210,707 | |||||||||
Restricted shares of common stock | 3,632 | 4,199 | 4,534 | |||||||||
214,840 | 215,504 | 215,241 | ||||||||||
Diluted shares outstanding: | ||||||||||||
Common stock | 211,208 | 211,305 | 210,707 | |||||||||
Dilutive effect of stock-based awards | 1,049 | 1,229 | 1,555 | |||||||||
212,257 | 212,534 | 212,262 | ||||||||||
Restricted shares of common stock | 3,632 | 4,199 | 4,534 | |||||||||
215,889 | 216,733 | 216,796 | ||||||||||
Basic earnings per share: | ||||||||||||
Common stock: | ||||||||||||
Distributed earnings | $ | 0.43 | $ | 0.40 | $ | 0.53 | ||||||
Undistributed earnings | 0.71 | 0.37 | 0.75 | |||||||||
$ | 1.14 | $ | 0.77 | $ | 1.28 | |||||||
Restricted shares of common stock: | ||||||||||||
Distributed earnings | $ | 0.38 | $ | 0.36 | $ | 0.46 | ||||||
Undistributed earnings | 0.70 | 0.35 | 0.72 | |||||||||
$ | 1.08 | $ | 0.71 | $ | 1.18 | |||||||
Diluted earnings per share: | ||||||||||||
Common Stock: | ||||||||||||
Distributed earnings | $ | 0.43 | $ | 0.40 | $ | 0.53 | ||||||
Undistributed earnings | 0.71 | 0.37 | 0.74 | |||||||||
$ | 1.14 | $ | 0.77 | $ | 1.27 |
41 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
42 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
December 31, | 2014 | 2013 | ||||||
(in thousands) | ||||||||
Trade receivables: | ||||||||
Billed | $ | 521,693 | $ | 368,583 | ||||
Unbilled | 125,363 | 80,806 | ||||||
Other receivables | 3,025 | 1,240 | ||||||
Total | 650,081 | 450,629 | ||||||
Less: allowance for doubtful accounts | (15,351 | ) | (13,497 | ) | ||||
Accounts receivable, net | $ | 634,730 | $ | 437,132 |
Years Ended December 31, | 2014 | 2013 | ||||||
(in thousands) | ||||||||
Beginning balance | $ | 13,497 | $ | 9,110 | ||||
Bad debt expense | 2,280 | 8,815 | ||||||
Accounts written-off | (1,225 | ) | (5,421 | ) | ||||
Recoveries | 799 | 993 | ||||||
Ending balance | $ | 15,351 | $ | 13,497 |
December 31, | 2014 | 2013 | ||||||
(in thousands) | ||||||||
Land | $ | 18,563 | $ | 19,264 | ||||
Buildings and leasehold improvements | 134,994 | 130,072 | ||||||
Operating equipment | 1,425,846 | 1,231,504 | ||||||
Computer software | 19,005 | 17,121 | ||||||
Furniture and fixtures | 7,835 | 7,737 | ||||||
Vehicles | 479,628 | 387,854 | ||||||
Construction in progress | 2,675 | 2,076 | ||||||
Gross property, plant and equipment | 2,088,546 | 1,795,628 | ||||||
Less: accumulated depreciation | (1,239,163 | ) | (1,069,321 | ) | ||||
Net property, plant and equipment | $ | 849,383 | $ | 726,307 |
43 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
Years ended December 31, | 2014 | 2013 | 2012 | |||||||||
(in thousands) | ||||||||||||
Current provision: | ||||||||||||
Federal | $ | 119,074 | $ | 104,890 | $ | 147,580 | ||||||
State | 19,858 | 15,627 | 14,673 | |||||||||
Foreign | 2,907 | 1,918 | 1,109 | |||||||||
Deferred provision (benefit): | ||||||||||||
Federal | 11,514 | (12,025 | ) | 5,027 | ||||||||
State | 840 | (1,035 | ) | (206 | ) | |||||||
Total income tax provision | $ | 154,193 | $ | 109,375 | $ | 168,183 |
Years ended December 31, | 2014 | 2013 | 2012 | |||||||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income taxes, net of federal benefit | 3.3 | 3.8 | 3.2 | |||||||||
Tax credits | (0.7 | ) | (0.3 | ) | (0.3 | ) | ||||||
Non-deductible expenses | 0.4 | 0.5 | 0.5 | |||||||||
Other | 0.6 | 0.6 | (0.4 | ) | ||||||||
Effective tax rate | 38.6 | % | 39.6 | % | 38.0 | % |
December 31, | 2014 | 2013 | ||||||
(in thousands) | ||||||||
Deferred tax assets: | ||||||||
Self-insurance | $ | 7,675 | $ | 7,247 | ||||
Pension | 12,555 | 8,018 | ||||||
State net operating loss carryforwards | 451 | 484 | ||||||
Bad debts | 5,755 | 4,748 | ||||||
Accrued payroll | 2,833 | 2,019 | ||||||
Stock-based compensation | 5,583 | 5,183 | ||||||
Tangible property regulations 481(a) | — | 7,665 | ||||||
All others | 2,121 | 1,541 | ||||||
Valuation allowance | (2 | ) | (83 | ) | ||||
Gross deferred tax assets | 36,971 | 36,822 | ||||||
Deferred tax liabilities: | ||||||||
Depreciation | (172,813 | ) | (165,960 | ) | ||||
Goodwill amortization | (7,974 | ) | (7,094 | ) | ||||
All Others | (3,739 | ) | (2,759 | ) | ||||
Gross deferred tax liabilities | (184,526 | ) | (175,813 | ) | ||||
Net deferred tax liabilities | $ | (147,555 | ) | $ | (138,991 | ) |
44 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
2014 | 2013 | |||||||
Balance at January 1 | $ | 16,345,000 | $ | 38,000 | ||||
Additions based on tax positions related to the current year | 5,193,000 | 3,430,000 | ||||||
Additions for tax positions of prior years | 1,729,000 | 12,877,000 | ||||||
Balance at December 31 | $ | 23,267,000 | $ | 16,345,000 |
45 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
● | the Base Rate, which is the highest of Bank of America’s “prime rate” for the day of the borrowing, a fluctuating rate per annum equal to the Federal Funds Rate plus 0.50%, and a rate per annum equal to the one (1) month LIBOR rate plus 1.00%; in each case plus a margin that ranges from 0.125% to 1.125% based on a quarterly debt covenant calculation; or |
● | with respect to any Eurodollar borrowings, Adjusted LIBOR (which equals LIBOR as increased to account for the maximum reserve percentages established by the U.S. Federal Reserve) plus a margin ranging from 1.125% to 2.125%, based upon a quarterly debt covenant calculation. |
Years Ended December 31, | 2014 | 2013 | 2012 | |||||||||
(in thousands except interest rate data) | ||||||||||||
Interest incurred | $ | 2,295 | $ | 2,090 | $ | 2,936 | ||||||
Capitalized interest | $ | 563 | $ | 935 | $ | 1,026 | ||||||
Interest paid (net of capitalized interest) | $ | 1,314 | $ | 618 | $ | 1,498 | ||||||
Weighted average interest rate | 2.2 | % | 3.7 | % | 2.3 | % |
Pension Adjustment | Unrealized Gain (Loss) On Securities | Foreign Currency Translation | Total | |||||||||||||
Balance at December 31, 2012 | $ | (14,688 | ) | $ | 29 | $ | 413 | $ | (14,246 | ) | ||||||
Change during 2013: | ||||||||||||||||
Before-tax amount | 6,976 | (30 | ) | (778 | ) | 6,168 | ||||||||||
Tax (expense) benefit | (2,546 | ) | 11 | — | (2,535 | ) | ||||||||||
Reclassification adjustment, net of taxes: | ||||||||||||||||
Amortization of net loss (1) | 498 | — | — | 498 | ||||||||||||
Total activity in 2013 | 4,928 | (19 | ) | (778 | ) | 4,131 | ||||||||||
Balance at December 31, 2013 | $ | (9,760 | ) | $ | 10 | $ | (365 | ) | $ | (10,115 | ) | |||||
Change during 2014: | ||||||||||||||||
Before-tax amount | (10,745 | ) | (170 | ) | (1,124 | ) | (12,039 | ) | ||||||||
Tax benefit | 3,922 | 62 | — | 3,984 | ||||||||||||
Reclassification adjustment, net of taxes: | ||||||||||||||||
Amortization of net loss (1) | 337 | — | — | 337 | ||||||||||||
Total activity in 2014 | (6,486 | ) | (108 | ) | (1,124 | ) | (7,718 | ) | ||||||||
Balance at December 31, 2014 | $ | (16,246 | ) | $ | (98 | ) | $ | (1,489 | ) | $ | (17,833 | ) |
(1) | Reported as part of selling, general and administrative expenses. |
46 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
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. |
Fair Value Measurements at December 31, 2014 with: | ||||||||||||
(in thousands) | Quoted prices in active markets for identical assets | Significant other observable inputs | Significant unobservable inputs | |||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets: | ||||||||||||
Trading securities | $ | — | $ | 16,491 | $ | — | ||||||
Available-for-sale securities – equity securities | $ | 275 | $ | — | $ | — |
Fair Value Measurements at December 31, 2013 with: | ||||||||||||
(in thousands) | Quoted prices in active markets for identical assets | Significant other observable inputs | Significant unobservable inputs | |||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets: | ||||||||||||
Trading securities | $ | — | $ | 13,963 | $ | — | ||||||
Available-for-sale securities – equity securities | $ | 445 | $ | — | $ | — |
47 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
(in thousands) | ||||
2015 | $ | 8,857 | ||
2016 | 7,291 | |||
2017 | 5,379 | |||
2018 | 4,515 | |||
2019 | 3,887 | |||
Thereafter | 9,449 | |||
Total rental commitments | $ | 39,378 |
48 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
December 31, | 2014 | 2013 | ||||||
(in thousands) | ||||||||
Accumulated Benefit Obligation at end of year | $ | 47,410 | $ | 37,528 | ||||
CHANGE IN PROJECTED BENEFIT OBLIGATION: | ||||||||
Benefit obligation at beginning of year | $ | 37,528 | $ | 42,699 | ||||
Service cost | — | — | ||||||
Interest cost | 1,946 | 1,741 | ||||||
Amendments | — | — | ||||||
Actuarial loss (gain) | 9,725 | (5,199 | ) | |||||
Benefits paid | (1,789 | ) | (1,713 | ) | ||||
Projected benefit obligation at end of year | $ | 47,410 | $ | 37,528 | ||||
CHANGE IN PLAN ASSETS: | ||||||||
Fair value of plan assets at beginning of year | $ | 32,426 | $ | 29,519 | ||||
Actual return on plan assets | 1,220 | 3,820 | ||||||
Employer contribution | 765 | 800 | ||||||
Benefits paid | (1,789 | ) | (1,713 | ) | ||||
Fair value of plan assets at end of year | 32,622 | 32,426 | ||||||
Funded status at end of year | $ | (14,788 | ) | $ | (5,102 | ) |
December 31, | 2014 | 2013 | ||||||
(in thousands) | ||||||||
AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE SHEETS CONSIST OF: | ||||||||
Noncurrent assets | $ | — | $ | — | ||||
Current liabilities | — | — | ||||||
Noncurrent liabilities | (14,788 | ) | (5,102 | ) | ||||
$ | (14,788 | ) | $ | (5,102 | ) |
December 31, | 2014 | 2013 | ||||||
(in thousands) | ||||||||
AMOUNTS (PRE-TAX) RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) CONSIST OF: | ||||||||
Net loss (gain) | $ | 25,583 | $ | 15,369 | ||||
Prior service cost (credit) | — | — | ||||||
Net transition obligation (asset) | — | — | ||||||
$ | 25,583 | $ | 15,369 |
December 31, | 2014 | 2013 | ||||||
(in thousands) | ||||||||
Funded status | $ | (14,788 | ) | $ | (5,102 | ) | ||
SERP liability | (19,611 | ) | (16,864 | ) | ||||
Long-term pension liability | $ | (34,399 | ) | $ | (21,966 | ) |
49 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
Years ended December 31, | 2014 | 2013 | 2012 | |||||||||
(in thousands) | ||||||||||||
Service cost for benefits earned during the period | $ | — | $ | — | $ | — | ||||||
Interest cost on projected benefit obligation | 1,946 | 1,741 | 1,869 | |||||||||
Expected return on plan assets | (2,240 | ) | (2,043 | ) | (1,846 | ) | ||||||
Amortization of net loss | 531 | 784 | 667 | |||||||||
Net periodic benefit plan cost | $ | 237 | $ | 482 | $ | 690 |
(in thousands) | 2014 | 2013 | 2012 | |||||||||
Net loss (gain) | $ | 10,745 | $ | (6,976 | ) | $ | 3,355 | |||||
Amortization of net loss | (531 | ) | (784 | ) | (667 | ) | ||||||
Net transition obligation (asset) | — | — | — | |||||||||
Amount recognized in accumulated other comprehensive loss | $ | 10,214 | $ | (7,760 | ) | $ | 2,688 |
(in thousands) | 2015 | |||
Amortization of net loss | $ | 804 | ||
Prior service cost (credit) | — | |||
Net transition obligation (asset) | — | |||
Estimated net periodic benefit plan cost | $ | 804 |
December 31, | 2014 | 2013 | 2012 | |||||||||
Projected Benefit Obligation: | ||||||||||||
Discount rate | 4.15 | % | 5.20 | % | 4.16 | % | ||||||
Rate of compensation increase | N/A | N/A | N/A | |||||||||
Net Benefit Cost: | ||||||||||||
Discount rate | 5.20 | % | 4.16 | % | 5.00 | % | ||||||
Expected return on plan assets | 7.00 | % | 7.00 | % | 7.00 | % | ||||||
Rate of compensation increase | N/A | N/A | N/A |
50 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
Asset Category | Target Allocation for 2015 | Percentage of Plan Assets as of December 31, 2014 | Percentage of Plan Assets as of December 31, 2013 | |||||||
Cash and Cash Equivalents | 0% - 5 | % | 1.0 | % | 0.6 | % | ||||
Debt Securities – Core Fixed Income | 15% - 50 | % | 24.3 | % | 25.3 | % | ||||
Domestic Equity Securities | 0% - 40 | % | 37.0 | % | 26.6 | % | ||||
International Equity Securities | 0% - 30 | % | 22.8 | % | 31.4 | % | ||||
Real Estate | 0% - 20 | % | 10.5 | % | 8.3 | % | ||||
Real Return | 0% - 20 | % | 1.6 | % | 7.8 | % | ||||
Alternative/Opportunistic/Special funds | 0% - 20 | % | 2.8 | % | — | % | ||||
Total | 100 | % | 100.0 | % | 100.0 | % |
Investments (in thousands) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Cash and Cash Equivalents | (1 | ) | $ | 329 | $ | 329 | $ | — | $ | — | ||||||||||
Fixed Income Securities | (2 | ) | 7,915 | 3,194 | 4,721 | — | ||||||||||||||
Domestic Equity Securities | (3 | ) | 12,076 | 4,324 | 7,752 | — | ||||||||||||||
International Equity Securities | (4 | ) | 7,442 | — | 7,442 | — | ||||||||||||||
Real Estate | (5 | ) | 3,420 | — | — | 3,420 | ||||||||||||||
Real Return | (6 | ) | 515 | — | 515 | — | ||||||||||||||
Alternative/Opportunistic/Special funds | (7 | ) | 925 | — | — | 925 | ||||||||||||||
$ | 32,622 | $ | 7,847 | $ | 20,430 | $ | 4,345 |
51 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
Investments (in thousands) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Cash and Cash Equivalents | (1 | ) | $ | 210 | $ | 210 | $ | — | $ | — | ||||||||||
Fixed Income Securities | (2 | ) | 8,201 | — | 8,201 | — | ||||||||||||||
Domestic Equity Securities | (3 | ) | 8,590 | 8,590 | — | — | ||||||||||||||
International Equity Securities | (4 | ) | 10,192 | — | 10,192 | — | ||||||||||||||
Real Estate | (5 | ) | 2,705 | — | — | 2,705 | ||||||||||||||
Real Return | (6 | ) | 2,528 | — | 2,528 | — | ||||||||||||||
$ | 32,426 | $ | 8,800 | $ | 20,921 | $ | 2,705 |
(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. |
(5) | Real estate fund values are primarily reported by the fund manager and are based on valuation of the underlying investments, which include inputs such as cost, discounted future cash flows, independent appraisals and market based comparable data. |
(6) | Real return funds invest in global equities, commodities and inflation protected core bonds that are valued primarily using a market approach based on the quoted market prices of identical instruments in their respective markets. |
(7) | Alternative/Opportunistic/Special funds can invest across the capital structure in both liquid and illiquid securities that are valued using a market approach based on the quoted market prices of identical instruments, or if no market price is available, instruments will be held at their fair market value (which may be cost) as reasonably determined by the investment manager, independent dealers, or pricing services. |
Investments (in thousands) | Balance at December 31, 2013 | Net Realized and Unrealized Gains/(Losses) | Net Purchases, Issuances and Settlements | Net Transfers In to (Out of) Level 3 | Balance at December 31, 2014 | |||||||||||||||
Real Estate | $ | 2,705 | $ | 133 | $ | 582 | $ | — | $ | 3,420 | ||||||||||
Alternative/Opportunistic/Special funds | — | 21 | 904 | — | 925 | |||||||||||||||
$ | 2,705 | $ | 154 | $ | 1,486 | $ | — | $ | 4,345 |
Investments (in thousands) | Balance at December 31, 2012 | Net Realized and Unrealized Gains/(Losses) | Net Purchases, Issuances and Settlements | Net Transfers In to (Out of) Level 3 | Balance at December 31, 2013 | |||||||||||||||
Real Estate | $ | 2,730 | $ | 217 | $ | (242 | ) | $ | — | $ | 2,705 |
(in thousands) | |||||
2015 | $ | 2,074 | |||
2016 | 2,288 | ||||
2017 | 2,360 | ||||
2018 | 2,461 | ||||
2019 | 2,522 | ||||
2020-2024 | 13,669 |
52 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
53 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
Shares | Weighted Average Grant- Date Fair Value | |||||||
Non-vested shares at January 1, 2014 | 4,114,800 | $ | 9.67 | |||||
Granted | 657,375 | 18.84 | ||||||
Vested | (1,108,790 | ) | 7.20 | |||||
Forfeited | (88,235 | ) | 12.83 | |||||
Non-vested shares at December 31, 2014 | 3,575,150 | $ | 12.04 |
Shares | Weighted Average Grant- Date Fair Value | |||||||
Non-vested shares at January 1, 2013 | 4,494,191 | $ | 8.12 | |||||
Granted | 850,500 | 13.68 | ||||||
Vested | (1,078,534 | ) | 6.36 | |||||
Forfeited | (151,357 | ) | 9.72 | |||||
Non-vested shares at December 31, 2013 | 4,114,800 | $ | 9.67 |
54 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
55 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPC, Inc. and Subsidiaries
Years ended December 31, 2014, 2013 and 2012
(in thousands) | Technical Services | Support Services | Corporate | Loss on disposition of assets, net | Total | |||||||||||||||
2014 | ||||||||||||||||||||
Revenues | $ | 2,180,457 | $ | 156,956 | $ | — | $ | — | $ | 2,337,413 | ||||||||||
Operating profit (loss) | 390,004 | 42,510 | (17,072 | ) | (15,472 | ) | 399,970 | |||||||||||||
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 | ||||||||||||||||
2013 | ||||||||||||||||||||
Revenues | $ | 1,729,732 | $ | 131,757 | $ | — | $ | — | $ | 1,861,489 | ||||||||||
Operating profit (loss) | 276,246 | 26,223 | (17,685 | ) | (9,371 | ) | 275,413 | |||||||||||||
Capital expenditures | 167,586 | 32,250 | 1,845 | — | 201,681 | |||||||||||||||
Depreciation and amortization | 181,026 | 31,417 | 685 | — | 213,128 | |||||||||||||||
Identifiable assets | 1,113,877 | 202,243 | 67,740 | — | 1,383,860 | |||||||||||||||
2012 | ||||||||||||||||||||
Revenues | $ | 1,794,015 | $ | 151,008 | $ | — | $ | — | $ | 1,945,023 | ||||||||||
Operating profit (loss) | 420,231 | 45,912 | (17,654 | ) | (6,099 | ) | 442,390 | |||||||||||||
Capital expenditures | 277,686 | 46,053 | 5,197 | — | 328,936 | |||||||||||||||
Depreciation and amortization | 183,762 | 30,707 | 430 | — | 214,899 | |||||||||||||||
Identifiable assets | 1,128,124 | 175,611 | 63,428 | — | 1,367,163 |
Years ended December 31, | 2014 | 2013 | 2012 | |||||||||
(in thousands) | ||||||||||||
United States Revenues | $ | 2,249,260 | $ | 1,795,592 | $ | 1,870,815 | ||||||
International Revenues | 88,153 | 65,897 | 74,208 | |||||||||
$ | 2,337,413 | $ | 1,861,489 | $ | 1,945,023 |
56 |
57 |
Plan Category | (A) Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (B) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | (C) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A)) | |||||||||
Equity compensation plans approved by securityholders | — | $ | — | 8,000,000 | (1) | |||||||
Equity compensation plans not approved by securityholders | — | — | — | |||||||||
Total | — | $ | — | 8,000,000 |
(1) | All of the securities can be issued in the form of restricted stock or other stock awards. |
58 |
1. | Consolidated financial statements listed in the accompanying Index to Consolidated Financial Statements and Schedule are filed as part of this report. | ||
2. | The financial statement schedule listed in the accompanying Index to Consolidated Financial Statements and Schedule is filed as part of this report. | ||
3. | Exhibits listed in the accompanying Index to Exhibits are filed as part of this report. The following such exhibits are management contracts or compensatory plans or arrangements: | ||
10.1 | 2004 Stock Incentive Plan (incorporated herein by reference to Appendix B to the Registrant’s definitive Proxy Statement filed on March 24, 2004). | ||
10.6 | Form of Time Lapse Restricted Stock Grant Agreement (incorporated herein by reference to Exhibit 10.2 to Form 10-Q filed on November 2, 2004). | ||
10.7 | Form of Performance Restricted Stock Grant agreement (incorporated herein by reference to Exhibit 10.3 to Form 10-Q filed on November 2, 2004). | ||
10.8 | Supplemental Retirement Plan (incorporated herein by reference to Exhibit 10.11 to the Form 10-K filed on March 16, 2005). | ||
10.9 | First Amendment to 1994 Employee Stock Incentive Plan and 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.14 to the Form 10-K filed on March 2, 2007). | ||
10.10 | Performance-Based Incentive Cash Compensation Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K filed April 28, 2006). | ||
10.11 | Summary of Compensation Arrangements with Executive Officers (incorporated herein by reference to Exhibit 10.17 to the Form 10-K filed on March 3, 2010). | ||
10.14 | Form of Time Lapse Restricted Stock Agreement (incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed on May 2, 2012). | ||
10.15 | Summary of Compensation Arrangements with Non-Employee Directors. | ||
10.17 | 2014 Stock Incentive Plan (incorporated herein by reference to Appendix A to the Registrant’s definitive Proxy Statement filed on March 17, 2014). |
59 |
Exhibit Number | Description | |
3.1A | Restated certificate of incorporation of RPC, Inc. (incorporated herein by reference to exhibit 3.1 to the Annual Report on Form 10-K for the fiscal year ended December 31, 1999). | |
3.1B | Certificate of Amendment of Certificate of Incorporation of RPC, Inc. (incorporated by reference to Exhibit 3.1(B) to the Quarterly Report on Form 10-Q filed May 8, 2006). | |
3.1C | Certificate of Amendment of Certificate of Incorporation of RPC, Inc. (incorporated by reference to Exhibit 3.1(C) to the Quarterly Report on Form 10-Q filed August 2, 2011). | |
3.2 | Amended and Restated Bylaws of RPC, Inc. (incorporated herein by reference to Exhibit 3.2 to the Form 10-Q filed on November 3, 2014). | |
4 | Form of Stock Certificate (incorporated herein by reference to the Annual Report on Form 10-K for the fiscal year ended December 31, 1998). | |
10.1 | 2004 Stock Incentive Plan (incorporated herein by reference to Appendix B to the Registrant’s definitive Proxy Statement filed on March 24, 2004). | |
10.2 | Agreement Regarding Distribution and Plan of Reorganization, dated February 12, 2001, by and between RPC, Inc. and Marine Products Corporation (incorporated herein by reference to Exhibit 10.2 to the Form 10-K filed on February 13, 2001). | |
10.3 | Employee Benefits Agreement dated February 12, 2001, by and between RPC, Inc., Chaparral Boats, Inc. and Marine Products Corporation (incorporated herein by reference to Exhibit 10.3 to the Form 10-K filed on February 13, 2001). | |
10.4 | Transition Support Services Agreement dated February 12, 2001 by and between RPC, Inc. and Marine Products Corporation (incorporated herein by reference to Exhibit 10.4 to the Form 10-K filed on February 13, 2001). | |
10.5 | Tax Sharing Agreement dated February 12, 2001, by and between RPC, Inc. and Marine Products Corporation (incorporated herein by reference to Exhibit 10.5 to the Form 10-K filed on February 13, 2001). | |
10.6 | Form of time lapse restricted stock grant agreement (incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed on November 2, 2004). | |
10.7 | Form of performance restricted stock grant agreement (incorporated herein by reference to Exhibit 10.3 to the Form 10-Q filed on November 2, 2004). | |
10.8 | Supplemental Retirement Plan (incorporated herein by reference to Exhibit 10.11 to the Form 10-K filed on March 16, 2005). | |
10.9 | First Amendment to 1994 Employee Stock Incentive Plan and 2004 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.14 to the Form 10-K filed on March 2, 2007). | |
10.10 | Performance-Based Incentive Cash Compensation Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K filed April 28, 2006). | |
10.11 | Summary of Compensation Arrangements with Executive Officers (incorporated herein by reference to Exhibit 10.17 to the Form 10-K filed on March 3, 2010). | |
10.12 | Credit Agreement dated August 31, 2010 between the Company, Banc of America, N.A., SunTrust Bank, Regions Bank and certain other lenders party thereto (incorporated herein by reference to Exhibit 99.1 to the Form 8-K filed on September 7, 2010). | |
10.13 | Amendment No. 1 to Credit Agreement dated as of June 16, 2011 between the Company, the Subsidiary Loan Parties party thereto, Bank of America, N.A. and certain other lenders party thereto (incorporated herein by reference to Exhibit 10.16 to the Form 10-K filed on February 29, 2012). | |
10.14 | Form of Time Lapse Restricted Stock Agreement (incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed on May 2, 2012). | |
10.15 | Summary of Compensation Arrangements with Non-Employee Directors. | |
10.16 | Amendment No. 2 to Credit Agreement and Amendment No. 1 to Subsidiary Guaranty Agreement dated as of January 17, 2014 between RPC, Bank of America, N.A., certain other Lenders party thereto, and the Subsidiary Loan Parties party thereto (incorporated herein by reference to Exhibit 99.1 to the Company’s Form 8-K dated January 17, 2014). | |
10.17 | 2014 Stock Incentive Plan (incorporated herein by reference to Appendix A to the Registrant’s definitive Proxy Statement filed on March 17, 2014). | |
21 | Subsidiaries of RPC | |
23 | Consent of Grant Thornton LLP | |
24 | Powers of Attorney for Directors | |
31.1 | Section 302 certification for Chief Executive Officer | |
31.2 | Section 302 certification for Chief Financial Officer | |
32.1 | Section 906 certifications for Chief Executive Officer and Chief Financial Officer | |
95.1 | Mine Safety Disclosure | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
60 |
RPC, Inc. | |||
/s/ Richard A. Hubbell | |||
Richard A. Hubbell President and Chief Executive Officer (Principal Executive Officer) | |||
February 27, 2015 |
Name | Title | Date | |||||||
/s/ Richard A. Hubbell | |||||||||
Richard A. Hubbell | President and Chief Executive Officer (Principal Executive Officer) | February 27, 2015 | |||||||
/s/ Ben M. Palmer | |||||||||
Ben M. Palmer | Chief Financial Officer (Principal Financial and Accounting Officer) | February 27, 2015 |
R. Randall Rollins, Director | James A. Lane, Jr., Director |
Gary W. Rollins, Director | Linda H. Graham, Director |
Henry B. Tippie, Director | Bill J. Dismuke, Director |
James B. Williams, Director | Larry L. Prince, Director |
/s/ Richard A. Hubbell | |
Richard A. Hubbell | |
Director and as Attorney-in-fact | |
February 27, 2015 |
61 |
FINANCIAL STATEMENTS AND REPORTS | PAGE |
Management’s Report on Internal Control Over Financial Reporting | 30 |
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting | 31 |
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements | 32 |
Consolidated Balance Sheets as of December 31, 2014 and 2013 | 33 |
Consolidated Statements of Operations for the three years ended December 31, 2014 | 34 |
Consolidated Statements of Comprehensive Income for the three years ended December 31, 2014 | 35 |
Consolidated Statements of Stockholders’ Equity for the three years ended December 31, 2014 | 36 |
Consolidated Statements of Cash Flows for the three years ended December 31, 2014 | 37 |
Notes to Consolidated Financial Statements | 38 - 56 |
SCHEDULE | |
Schedule II — Valuation and Qualifying Accounts | 62 |
For the years ended December 31, 2014, 2013 and 2012 | |||||||||||||||||
(in thousands) | Balance at Beginning of Period | Charged to Costs and Expenses | Net (Deductions) Recoveries | Balance at End of Period | |||||||||||||
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 | |||||||
Year ended December 31, 2013 | |||||||||||||||||
Allowance for doubtful accounts | $ | 9,110 | $ | 8,815 | $ | (4,428 | ) | (1) | $ | 13,497 | |||||||
Deferred tax asset valuation allowance | $ | 1,003 | $ | — | $ | (920 | ) | (2) | $ | 83 | |||||||
Year ended December 31, 2012 | |||||||||||||||||
Allowance for doubtful accounts | $ | 8,093 | $ | 1,784 | $ | (767 | ) | (1) | $ | 9,110 | |||||||
Deferred tax asset valuation allowance | $ | 1,295 | $ | — | $ | (292 | ) | (2) | $ | 1,003 |
(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. |
62 |
Quarters ended | March 31 | June 30 | September 30 | December 31 | ||||||||||||
(in thousands except per share data) | ||||||||||||||||
2014 | ||||||||||||||||
Revenues | $ | 501,692 | $ | 582,831 | $ | 620,684 | $ | 632,206 | ||||||||
Operating profit | $ | 65,232 | $ | 103,031 | $ | 106,661 | $ | 125,046 | ||||||||
Net income | $ | 39,388 | $ | 63,283 | $ | 64,885 | $ | 77,637 | ||||||||
Net income per share — basic (a) | $ | 0.18 | $ | 0.29 | $ | 0.30 | $ | 0.36 | ||||||||
Net income per share — diluted (a) | $ | 0.18 | $ | 0.29 | $ | 0.30 | $ | 0.36 | ||||||||
2013 | ||||||||||||||||
Revenues | $ | 425,821 | $ | 457,566 | $ | 491,121 | $ | 486,981 | ||||||||
Operating profit | $ | 57,219 | $ | 67,853 | $ | 85,839 | $ | 64,502 | ||||||||
Net income | $ | 35,076 | $ | 40,416 | $ | 53,760 | $ | 37,643 | ||||||||
Net income per share — basic (a) | $ | 0.16 | $ | 0.19 | $ | 0.25 | $ | 0.18 | ||||||||
Net income per share — diluted (a) | $ | 0.16 | $ | 0.19 | $ | 0.25 | $ | 0.17 |
(a) | The sum of the income per share for the four quarters may differ from annual amounts due to the required method of computing the weighted average shares for the respective periods. |
63 |