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RBC Capital Markets ConferenceJune 3, 2014
New York, NY
M. Kevin McEvoyPresident & CEOPresident & CEO
Oceaneering International, Inc.
Safe Harbor Statement
Statements we make in this presentation that express a belief, expectation, or intention are forward looking. Forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “plan,” “forecast,” “budget,” “goal,” or other words that convey the uncertainly of future events orother words that convey the uncertainly of future events or outcomes. These forward-looking statements are based on our current information and expectations that involve a number of risks, uncertainties, and assumptions. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are: industry conditions, prices of crude oil and natural gas, our ability to obtain and the timing of new projects and changesability to obtain and the timing of new projects, and changes in competitive factors. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, actual outcomes could vary materially from those indicated.
For additional information regarding these and other factors, g g ,see our periodic filings with the Securities and Exchange Commission, including our most recent Reports on Forms 10-K and 10-Q.
WHY OII?
• Leveraged to Deepwater and Subsea Completions• Leveraged to Deepwater and Subsea Completions
– Secular Growth
• Leading Market Positions
– Secular Growth
• Leading Market Positions• Leading Market Positions
– ROVs and Specialty Subsea Products
• Leading Market Positions
– ROVs and Specialty Subsea Products
• Good Project Execution• Good Project Execution
• Excellent Earnings, Liquidity and Cash Flow• Excellent Earnings, Liquidity and Cash Flow
Leveraged to Deepwater
• Projects Take Years to Develop• Projects Take Years to Develop
• Largely Oil Reservoirs• Largely Oil Reservoirs
– With High Production Flow Rates– With High Production Flow Rates
• Well Capitalized Customer Base• Well Capitalized Customer Base
• Investment Based on Long-Term Commodity Price• Investment Based on Long-Term Commodity Price
Leading Market PositionRemotely Operated VehiclesRemotely Operated Vehicles
Ownership Drill Support Market Share
OII - 304 OII – 16759%35% 59%
Worldwide Fleet877 Vehicles*
283 Floating Rigs Contracted**
Source: OII Estimates - * December 2013; IHS Petrodata -**March 2014
Leading Market PositionSpecialty Subsea ProductsSpecialty Subsea Products
Umbilicals
Tooling & Subsea Work Systems
Installation andWorkover Control
Systems
Subsea Hardware
Earnings Per Share Guidance2014 Estimate $3 90 - $4 10Earnings Per Share Guidance2014 Estimate $3 90 - $4 10
$4.50Actual Low Estimate High Estimate
2014 Estimate $3.90 $4.102014 Estimate $3.90 $4.10
$
$3.50
$4.00
$4.50
are
$2.00
$2.50
$3.00
ngs
per S
h
$0 50
$1.00
$1.50
Ear
ni
$0.00
$0.50
2008 2009 2010 2011 2012 2013 2014E
OII 2014 Guidance Range as of April 23, 2014
Combined EPS – OSX CompaniesExcluding OIICombined EPS – OSX CompaniesExcluding OII
$80Actual Consensus Estimate
Excluding OIIExcluding OII
$60
$80
are
$40
ngs
per S
h
$20Ear
ni
$02008 2009 2010 2011 2012 2013 2014E
Based on First Call Actuals and Mean Estimates as of April 30, 2014
Relative EPS PerformanceTo Recent 2008 OSX PeakRelative EPS PerformanceTo Recent 2008 OSX PeakTo Recent 2008 OSX PeakTo Recent 2008 OSX Peak
150%
OII OSX w/o OII
100%
150%
50%
0%
-50%2008 2009 2010 2011 2012 2013 2014E
Based on First Call Actuals and Mean Estimates as of April 30, 2014
EPS Guidance Oilfield Business Segment OutlookEPS Guidance Oilfield Business Segment OutlookOilfield Business Segment OutlookOilfield Business Segment Outlook
SEGMENT OPERATING INCOMESEGMENT OPERATING INCOME
2014 2014
ROV >2013
Subsea Products >2013
ROV >2013
Subsea Products >2013Subsea Products >2013
Subsea Projects >2013
Subsea Products >2013
Subsea Projects >2013
Asset Integrity >2013Asset Integrity >2013
Excellent Cash Flow & Liquidity
• EBITDA of $850 MM to $890 MM Expected in 2014• EBITDA of $850 MM to $890 MM Expected in 2014– $746 MM in 2013– $746 MM in 2013
• Ample Resources to Invest in GrowthAt March 31, 2014:
• Ample Resources to Invest in GrowthAt March 31, 2014:
– $106 MM Cash– $90 MM Debt– $106 MM Cash– $90 MM Debt– $2.1 B Equity– $2.1 B Equity
EBITDA Reconciliation to Net Income is in Supplemental Financial Information Slides
Long-Term Deepwater Outlook
• Major Source of Future Oil Supply
• Exploration Success Bodes Well for the Future• Exploration Success Bodes Well for the Future
• Drilling Intensity is Rising
Source: ExxonMobil and Deutsche Bank,
Worldwide Deepwater CapexForecast to More Than DoubleWorldwide Deepwater CapexForecast to More Than Double
$300
$ in billions DW Capex in Billions
Forecast to More Than DoubleForecast to More Than Double
$260
$
$250
$300
$150
$200
$113
$50
$100
$02009-2013 2014-2018
Source: Douglas-Westwood, January 2014
5-Year OII OutlookGlobal Demand Growth5-Year OII OutlookGlobal Demand Growth
• Deepwater Drilling
Global Demand Growth Global Demand Growth
• Field Development
• Inspection, Maintenance, and Repair (IMR)
Floating Rig Demand
400s
282
350
400
loat
ing
Rig
s
≈ 90% IncreaseIn Demand Since 2003
282
250
300
ontra
cted
Fl
150
200
ear-E
nd C
o
147
100
Ye
Source: IHS-Petrodata at December 31, 2013
at End of 2013: 314 Rigs in Fleet, 90% Fleet Utilization.
Floating Rig DemandWith 5-Year Projection Assuming 50 Rigs Retired
400s
Up > 45 17% Growth
With 5 Year Projection, Assuming 50 Rigs Retired
329
350
400
loat
ing
Rig
s 17% Growth
Assuming 10 Rigs Per Year are Retired and 90% Rig Fleet Utilization
282
329
250
300
ontra
cted
Fl
150
200
ear-E
nd C
o
100
Ye
Source: IHS-Petrodata at March 31, 2014
@ End of 2013: 314 Rigs in Fleet, 90% Fleet Utilization.
Floating Rig Demand5-Year Averages Assuming 50 Rigs Retired & 90% Utilization
400s
Up 75 30% Growth
5 Year Averages, Assuming 50 Rigs Retired & 90% Utilization
305350
400
loat
ing
Rig
s 30% Growth
325
250
300
ontra
cted
Fl
185
250
150
200
ear-E
nd C
o 185
100
Ye
Source: IHS-Petrodata at March 31, 2014
@ End of 2013: 314 Rigs in Fleet, 90% Fleet Utilization.
Outlook for ROV Demand on Vessels
3.5
3.0
3.5
atin
g R
ig
2 5
2.9
2 0
2.5
OV
s pe
r Flo
a 2.5
1.5
2.0
Glo
bal R
O
1.0
Source: Oceaneering Estimates and IHS-Petrodata
Year End
Subsea Hardware CapexForecast to Increase 80%Subsea Hardware CapexForecast to Increase 80%
$125
$ in billions
Forecast to Increase 80%Forecast to Increase 80%
$117$100
$125
$65$50
$75
$25
$50
$02009-2013 2014-2018
Source: Douglas-Westwood, May 2014
Deepwater Fields BacklogUndeveloped DiscoveriesDeepwater Fields BacklogUndeveloped Discoveries
600
Fields ≥600m
Undeveloped DiscoveriesUndeveloped Discoveries
500
600
300
400
100
200
02009 2010 2011 2012 2013
Source: IHS Petrodata
Offshore Construction BacklogSaipem Technip and Subsea 7
€30
in billions
Saipem, Technip, and Subsea 7
€25
€30
€15
€20
€5
€10
€02009 2010 2011 2012 2013
Source: Morgan Stanley Estimates and Company Filings
Subsea Tree OrdersForecast at Historically High Levels
800
Forecast at Historically High Levels
600
700
800
400
500
200
300
100
Source: Quest Offshore Resources – Mean Case Forecast, May 2014
Subsea Installations – Excluding BrazilForecast at Historically High LevelsSubsea Installations – Excluding BrazilForecast at Historically High LevelsForecast at Historically High LevelsForecast at Historically High Levels
600 ≈ 60% Growth
500
600
ns
≈ 60% Growth
365
300
400
Inst
alla
tion
265230
100
200
0
Source: Quest Offshore Resources – Mean Case Forecast, May 2014
Subsea Completions In Service, Excl BRZ vs Subsea Products Operating Income (SSP Op Inc)
$2505000
Annual SSP Op Incin millions
vs. Subsea Products Operating Income (SSP Op Inc)
$200
$250
4000
5000
$100
$150
2000
3000
$50
$100
1000
2000
$00
SS Completions SSP Op Inc
Source: Quest Offshore Resources & OII SEC Filings, May 2014
Subsea Completions In Service, Excl BRZ Forecast at Historically High Levels
5000
Forecast at Historically High Levels
Up ≈ 1000> 30% Growth
4000
5000
2000
3000
1000
2000
0
Source: Quest Offshore Resources & OII SEC Filings, May 2014
5-Year Deepwater OutlookWhat To Expect Along The WayWhat To Expect Along The Way
• Some Project Approvals May Continue Moving to the Rightto the Right
• Approved ProjectsApproved Projects
– Cost Overruns
– Production Start-Up Delays
– Technical Challenges
• Sheer Volume of Projects Will Still Drive Growth
OII Summary
• Diversified OFS Company• Diversified OFS Company
• Leading Market Positions in Technical Niches • Leading Market Positions in Technical Niches g
• Leveraged to Deepwater and Subsea Completions
g
• Leveraged to Deepwater and Subsea Completions• Leveraged to Deepwater and Subsea Completions• Leveraged to Deepwater and Subsea Completions
• Excellent Earnings, Liquidity and Cash Flow• Excellent Earnings, Liquidity and Cash Flow
®®
Supplemental Financial Information
EBITDA
$1,000in millions Actual Low Estimate High Estimate
$700
$800
$900
$1,000
$400
$500
$600
$700
$100
$200
$300
$400
$0
$100
2008 2009 2010 2011 2012 2013 2014E*
*2014 - $850MM - $890MMBased on OII EPS Guidance as of April 23, 2014See Next Slide For Non-GAAP Reconciliation to Net Income
EBITDA Reconciliation to Net IncomeEarnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measurement. Oceaneering’s management uses EBITDA because we believe that this measurement is a widely accepted financial indicator used by investors and analysts to analyze and compare companies on the basis of operating performance, and that this measurement may be used by some investors and others to make informed investment decisions. You should not consider EBITDA in isolation from or as a substitute for net income or cash flow measures prepared in
Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measurement. Oceaneering’s management uses EBITDA because we believe that this measurement is a widely accepted financial indicator used by investors and analysts to analyze and compare companies on the basis of operating performance, and that this measurement may be used by some investors and others to make informed investment decisions. You should not consider EBITDA in isolation from or as a substitute for net income or cash flow measures prepared inshould not consider EBITDA in isolation from or as a substitute for net income or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. EBITDA calculations by one company may not be comparable to EBITDA calculations made by another company. The following table provides a reconciliation between net income (a GAAP financial measure) and EBITDA (a non-GAAP financial measure) for Oceaneering’s historical and projected results on a consolidated basis for the periods indicated:
should not consider EBITDA in isolation from or as a substitute for net income or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. EBITDA calculations by one company may not be comparable to EBITDA calculations made by another company. The following table provides a reconciliation between net income (a GAAP financial measure) and EBITDA (a non-GAAP financial measure) for Oceaneering’s historical and projected results on a consolidated basis for the periods indicated:
Period Ended December 31, 2008 2009 2010 2011 2012 2013 2014E 2014E(in millions of $) LOW HIGH
Net Income 199.4 188.4 200.5 235.7 289.0 371.5 425 445
Depreciation & Amortization 115.0 122.9 153.7 151.2 176.5 202.2 230 240
Subtotal 314.4 311.3 354.2 386.9 465.5 573.7 655 685
Interest Expense/Income, Net 12.6 7.1 5.4 .2 2.3 1.6
Income Tax Expense 107.8 101.4 104.7 102.2 132.9 170.8 195 205
EBITDA 434.8 419.8 464.3 489.3 600.7 746.2 850 890
OII Balance Sheet(in millions)
D 31 D 31 D 31 D 31 D 31 M 31
( )
Dec 31, 2009
Dec 31, 2010
Dec 31, 2011
Dec 31, 2012
Dec 31, 2013
Mar 31, 2014
$ $ $ $ $ $Equity $1,224 $1,390 $1,558 $1,815 $2,043 $2,090
Debt 120 0 120 94 0 90Debt 120 0 120 94 0 90
Cash 162 245 106 121 91 106
Debt/Cap 9% 0% 7% 5% 0% 4%
Business Segments
7% 2%Revenue Operating Income
31%15%
7%
12%
8%
16%
46%
31%
16%
32%
ROVSubsea ProductsSubsea ProjectsA t I t itAsset IntegrityAdtech
YTD March 2014
Supplemental Market Information
Oilfield ROV FleetOwnership Profile - December 2013p
35%
OII - 304OII
Subsea 7
35%
Fugro
DOF Subsea
Saipem
C I tiC-Innovations
Helix
Technip
OtherOther
877 Vehicles
Source: OII Estimates
OII ROV FleetGeographic Profile – March 2014
34
g p
8533
34
GOM
Africa
35Norway
Brazil
7651
Asia/Pac
Other
314 Vehicles
OII ROV Fleet Size
314350 314
250
300
350
od E
nd
150
200
ount
at P
eri
125
50
100
Vehi
cle
Co
0
March 31, 2014
Oilfield ROV Drill Support MarketMarch 2014
OII
Subsea 7
59%
Subsea 7
Fugro
SonsubSonsub
Other
283 Contracted Floating Rigs
Source: IHS-Petrodata and OII Estimates
ROV Pricing and Fleet UtilizationROV Pricing and Fleet Utilization
100%$11,000Revenue / Day on Hire Fleet Utilization
90%$9,000
70%
80%
$5 000
$7,000
60%
70%
$3,000
$5,000
50%$1,000
*YTD March 2014
High-Spec, Non-PBR Brazil Rig Fleet
• 116 Existing Rigs Under Contract
OII ROV C t t 79%– OII ROV Contracts on 79%
• 72 Rigs On Order
– Visibility of Significant Rig Fleet Growth– Visibility of Significant Rig Fleet Growth– OII Expects to Continue as Dominant ROV Provider
• OII ROV Contracts on 17 of 19 AwardsOII ROV Contracts on 17 of 19 Awards• 53 Remaining ROV Contract Opportunities
• Only 5 rigs have drilling contracts
Source: IHS-Petrodata Data & OII Estimates, March 31, 2014
y g g
Subsea Products BacklogAt Period EndSubsea Products BacklogAt Period End
$1,000in millions
At Period EndAt Period End
$800
$1,000
$400
$600
$200
$400
$02009 2010 2011 2012 2013 2014
March 2014
Subsea Tree OrdersForecast at Historically High Levels
800
Forecast at Historically High Levels
Up 215≈ 55% Growth
600
700
800
610
400
500 430395
200
300
100
Source: Quest Offshore Resources – Mean Case Forecast, May 2014
Subsea Tree Orders – Excluding BRZForecast at Historically High LevelsSubsea Tree Orders – Excluding BRZForecast at Historically High LevelsForecast at Historically High LevelsForecast at Historically High Levels
500
75% Growth
465
400
500
ers
355
200
300
Tree
Ord
e
265
100
200
0
Source: Quest Offshore Resources – Mean Case Forecast, May 2014
Subsea InstallationsForecast at Historically High Levels
700
Forecast at Historically High Levels
Up 165≈ 55% Growth
600
700
4
400
500
305290
455
200
300290
100
Source: Quest Offshore Resources – Mean Case Forecast, May 2014
Subsea Completions In Service vs Subsea Products Operating Income (SSP Op Inc)
$2505000
Annual SSP Op Incin millions
vs. Subsea Products Operating Income (SSP Op Inc)
$200
$250
4000
5000
$100
$150
2000
3000
$50
$100
1000
2000
$00
SS Completions SSP Op Inc
Source: Quest Offshore Resources & OII SEC Filings, May 2014
Subsea Completions In Service Forecast at Historically High Levels
6000
Forecast at Historically High LevelsUp ≈1375
> 30% Growth
5000
6000
3000
4000
1000
2000
0
Source: Quest Offshore Resources & OII SEC Filings, May 2014
Umbilical Products
Steel Tube UmbilicalsSteel Tube UmbilicalsThermoplastic Hose UmbilicalsThermoplastic Hose Umbilicals
OIE Products
Tooling & Work Packages
Production Control Valves
g
Installation Workover & Control Systems Field Development HardwareConnectors & Repair Systems
Annual Price PerformanceOII vs OSXAnnual Price PerformanceOII vs OSX
125%OII OSX
OII vs. OSX OII vs. OSX 20142014
OII OII down 7%down 7%OSX OSX up 5%up 5%
75%
125%
25%
-25%
-75%
*Through April 30, 2014: Based on Previous Year-End Purchases
Cumulative Price PerformanceOII vs OSXCumulative Price PerformanceOII vs OSX
1000%OII OSX
OII vs. OSXOII vs. OSX20142014
OII OII down 7%down 7%OSX OSX up 5%up 5%
700%
850%
1000%
400%
550%
100%
250%
-50%
*Through April 30, 2014: Based on Previous Year-End Purchases
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