SEC Company Response from RPC INC (RES) (CIK 0000742278) (RES) — Oct 5, 2006
RPC INC (RES) (CIK 0000742278)
Date: Oct. 5, 2006 · CIK: 0000742278 · Accession: 0000914062-06-000545
AI Filing Summary & Sentiment
File numbers found in text: 001-08726
Referenced dates: September 21, 2006
Letter
VIA EDGAR Division of Corporation Finance United States Securities and Exchange Commission Form 10-K for the Fiscal Year ended December 31, 2005 Filed March 13, 2006 File No. 001-08726 Your comment letter dated September 21, 2006
Dear Ms. Sifford:
Below is our response to your comments raised in the above referenced letter.
Form 10-K for the year ended December 31, 2005
Management’s Discussion and Analysis ……, page 16
Results of operations, page 18
1.
We note that you did not report your gains on disposition of assets within your reportable segments. Please expand your discussion and analysis and your financial statements footnotes to explain why you have not allocated the gains on disposition of assets, net, to your business segments. Refer to SFAS 131 paragraph 31.
RESPONSE
The gains or losses on disposition of assets are considered non-recurring and do not exhibit the same patterns or variances as other factors affecting segment results. Therefore, our chief decision maker reviews segment results primarily without the effect of disposition activities and considers the gains or losses on disposition of assets on a consolidated basis instead of at the segment level.
In future filings beginning with the quarterly report for the third quarter of 2006, we will include, where appropriate, the disclosure that the net gains or losses on disposition of assets are reviewed by our chief decision maker on a consolidated basis. We will also more clearly identify, as appropriate, the segment affected by the gains or losses on disposition of assets in the “Results of Operations” portion of Management’s Discussion and Analysis.
l Page 2 October 5, 2006
Consolidated Financial Statements
Note 1: Significant Accounting Policies, page 34
Revenues, page 34
2.
Please expand your revenue recognition policy footnote to more fully describe when and how you recognize service revenue. In this regard, describe whether you recognize service revenue upon completion of service or over a service period. If you recognize revenue over a service period, then disclose how you measure revenue during a period (e.g., progress toward completion, proportional performance, or separate milestones). Disclose whether your contracts have multiple elements, and if so, explain how you allocate revenue among the elements, as appropriate. Refer to Section II.F.3. of our “Current Accounting and Disclosure Issues in the Division of Corporation Finance,” which may be found at http://www.sec.gov/divisions/corpfin/acctdis120105.pdf for additional guidance.
RESPONSE
Our equipment rental and service revenues are recognized daily based on pre-determined rates and therefore do not require allocation among multiple elements for revenue recognition purposes. In future filings beginning with the quarterly report for the third quarter of 2006, we will expand our revenue recognition policy footnote to read as follows, in accordance with Section II.F.3 of the Commission’s “Current Accounting and Disclosure Issues in the Division of Corporation Finance” referenced in your letter.
“Revenues
RPC’s revenues are generated from product sales, equipment rentals and services. Revenues from product sales, equipment rentals and services are based on fixed or determinable priced purchase orders or contracts with the customer and do not include the right of return. The Company recognizes revenue from product sales when title passes to the customer, the customer assumes risks and rewards of ownership, and collectibility is reasonably assured. Equipment rental and service revenues are recognized when the services are rendered and collectibility is reasonably assured. Rates for rentals and services are priced on a per day, per unit of measure, per man hour or similar basis.”
3.
We note that you sold certain assets of your hammer, casing, laydown and casing torque-turn service lines that were previously reported in the Technical Services segment and were closely integrated with the operations of other service lines. Please clarify whether you have transactions between reportable segments, and if so, disclose the basis of accounting for any such transactions and any inter-segment revenues that you have recorded.
RESPONSE
The inter-segment revenues are generally recorded in segment operating results at prices that management believes approximate arm’s length transactions and are not material to operating results. In future filings starting with the quarterly report for the third quarter of 2006, we will include the following disclosure regarding inter-segment revenues:
“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.”
l Page 3 October 5, 2006
Certifications, Exhibit 31
4.
Please conform the language in your certification to that found in Item 601(B)(31) of Regulation S-K. In this regard, remove the titles from the first line.
RESPONSE
We note that Item 601(b)(31) of Regulation S-K instructs registrants to complete the space in question of the Section 302 certification to “identify the certifying individual.” We believe that the inclusion of the title of the certifying individual in addition to the name of the certifying individual is responsive to the instructions. In addition, deletion of the title does not constitute a material modification of the filing. In future filings beginning with quarterly report for the third quarter of 2006, we will revise the language in our certification to remove the titles from the first line.
The Company acknowledges the following:
·
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
·
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
·
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
I trust that we have responded in sufficient detail to all of your comments. Please do not hesitate to contact me at (404) 321 2149 if you need further information.
Sincerely,
/s/
Ben
M. Palmer
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CORRESP
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filename1.htm
Response Letter
RPC
Incorporated, 2170 Piedmont Road NE., Atlanta, GA
30324 Telephone: (404)
321-2140 Facsimile: (404)
321-5483
VIA
EDGAR
October
5, 2006
Ms.
April
Sifford
Branch
Chief
Division
of Corporation Finance
United
States Securities and Exchange Commission
100
F
Street, N.E.
Washington,
DC 20549-7010
RE:
RPC,
Inc.
Form
10-K for the Fiscal Year ended December 31, 2005
Filed
March 13, 2006
File
No. 001-08726
Your
comment letter dated September 21, 2006
Dear
Ms.
Sifford:
Below
is our
response to your comments raised in the above referenced letter.
Form
10-K for the year ended December 31, 2005
Management’s
Discussion and Analysis ……, page 16
Results
of operations, page 18
1.
We
note that you did not report your gains on disposition of assets
within
your reportable segments. Please expand your discussion and analysis
and
your financial statements footnotes to explain why you have not allocated
the gains on disposition of assets, net, to your business segments.
Refer
to SFAS 131 paragraph 31.
RESPONSE
The
gains
or losses on disposition of assets are considered non-recurring and do not
exhibit the same patterns or variances as other factors affecting segment
results. Therefore, our chief decision maker reviews segment results primarily
without the effect of disposition activities and considers the gains or losses
on disposition of assets on a consolidated basis instead of at the segment
level.
In
future
filings beginning with the quarterly report for the third quarter of 2006,
we
will include, where appropriate, the disclosure that the net gains or losses
on
disposition of assets are reviewed by our chief decision maker on a consolidated
basis. We will also more clearly identify, as appropriate, the segment affected
by the gains or losses on disposition of assets in the “Results of Operations”
portion of Management’s Discussion and Analysis.
l
Page 2 October
5, 2006
Consolidated
Financial Statements
Note
1: Significant Accounting Policies, page 34
Revenues,
page 34
2.
Please
expand your revenue recognition policy footnote to more fully describe
when and how you recognize service revenue. In this regard, describe
whether you recognize service revenue upon completion of service
or over a
service period. If you recognize revenue over a service period, then
disclose how you measure revenue during a period (e.g., progress
toward
completion, proportional performance, or separate milestones). Disclose
whether your contracts have multiple elements, and if so, explain
how you
allocate revenue among the elements, as appropriate. Refer to Section
II.F.3. of our “Current Accounting and Disclosure Issues in the Division
of Corporation Finance,” which may be found at http://www.sec.gov/divisions/corpfin/acctdis120105.pdf
for
additional guidance.
RESPONSE
Our
equipment rental and service revenues are recognized daily based on
pre-determined rates and therefore do not require allocation among multiple
elements for revenue recognition purposes. In future filings beginning with
the
quarterly report for the third quarter of 2006, we will expand our revenue
recognition policy footnote to read as follows, in accordance with Section
II.F.3 of the Commission’s “Current Accounting and Disclosure Issues in the
Division of Corporation Finance” referenced in your letter.
“Revenues
RPC’s
revenues are generated from product sales, equipment rentals and services.
Revenues from product sales, equipment rentals and services are based on fixed
or determinable priced purchase orders or contracts with the customer and do
not
include the right of return. The Company recognizes revenue from product sales
when title passes to the customer, the customer assumes risks and rewards of
ownership, and collectibility is reasonably assured. Equipment rental and
service revenues are recognized when the services are rendered and
collectibility is reasonably assured. Rates for rentals and services are priced
on a per day, per unit of measure, per man hour or similar
basis.”
3.
We
note that you sold certain assets of your hammer, casing, laydown
and
casing torque-turn service lines that were previously reported in
the
Technical Services segment and were closely integrated with the operations
of other service lines. Please clarify whether you have transactions
between reportable segments, and if so, disclose the basis of accounting
for any such transactions and any inter-segment revenues that you
have
recorded.
RESPONSE
The
inter-segment revenues are generally recorded in segment operating results
at
prices that management believes approximate arm’s length transactions and are
not material to operating results. In future filings starting with the quarterly
report for the third quarter of 2006, we will include the following disclosure
regarding inter-segment revenues:
“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.”
l
Page 3 October
5, 2006
Certifications,
Exhibit 31
4.
Please
conform the language in your certification to that found in Item
601(B)(31) of Regulation S-K. In this regard, remove the titles from
the
first line.
RESPONSE
We
note
that Item 601(b)(31) of Regulation S-K instructs registrants to complete the
space in question of the Section 302 certification to “identify the certifying
individual.” We believe that the inclusion of the title of the certifying
individual in addition to the name of the certifying individual is responsive
to
the instructions. In addition, deletion of the title does not constitute a
material modification of the filing. In
future
filings beginning with quarterly
report for the
third
quarter of 2006, we will
revise
the
language in our certification to remove
the titles from the first line.
The
Company acknowledges the following:
·
the
company is responsible for the adequacy and accuracy of the disclosure
in
the filing;
·
staff
comments or changes to disclosure in response to staff comments do
not
foreclose the Commission from taking any action with respect to the
filing; and
·
the
company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
I
trust
that we have responded in sufficient detail to all of your comments. Please
do
not hesitate to contact me at (404) 321 2149 if you need further
information.
Sincerely,
/s/
Ben
M. Palmer
Ben
M.
Palmer
Vice
President and Chief Financial Officer
cc:
Mr. Ryan Milne