Capital One Securities, Inc.

Transcription

1 Capital One Securities, Inc. 10 th Annual Energy Conference December 9, 2015 New Orleans, LA Alan R. Curtis SVP and Chief Financial Officer 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 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 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.

2 OII in the Offshore Oilfield Life Cycle PHASE EXPLORATION DEVELOPMENT PRODUCTION DECOMMISSIONING #1 Market Driver # of Operating Floating Drilling Rigs # Subsea Tree Installations # Subsea Trees In Service # of Field Abandonments Business Segment Product and Service Revenue Streams ROV Survey (SP) Tooling (SSP) ROV Survey (SP) Tooling (SSP) IWOCS Installation & Workover Control Systems (SSP) Subsea Hardware (SSP) Umbilicals (SSP) Vessel-based Installation Services (SP) Inspection Services (AI) ROV Tooling (SSP) IWOCS (SSP) Subsea Hardware (SSP) Vessel-based Inspection, Maintenance & Repair Services (SP) Inspection Services (AI) ROV Tooling (SSP) IWOCS (SSP) ROV = Remotely Operated Vehicles SSP = Subsea Products SP = Subsea Projects AI = Asset Integrity

3 OII Offshore Life Cycle Business Exposure Revenue Mix 5% 15% 25% 55% Exploration Development Production Decommissioning Source: OII Estimates

4 Earnings Per Share Guidance 2015 Estimate $2.60 to $2.66 $5.00 Actual Low Estimate High Estimate are ngs per Sh Earni $4.00 $3.00 $2.00 $1.00 $ E OII 2015 Guidance Range as of October 28, 2015

5 Relative EPS Performance To 2008 OSX Peak 150% 125% 100% 75% 50% 25% 0% -25% -50% -75% OII OSX w/o OII E Relative to: 2008 Up 55% 2014 Down 30% Relative to: 2008 Down 55% 2014 Down 40% Based on First Call Actual and Mean Estimates as of October 30, 2015

6 Cost-Cutting Initiatives Partnering with Customers and Suppliers to Find Cost Effective Solutions Right-Sizing Workforce Reducing Training Expenses Obtaining Supplier Price Concessions Reducing Incentive & Deferred Compensation Lowering Organic CAPEX

7 Segment Outlook Q SEGMENT OPERATING INCOME ROV Subsea Products Subsea Projects Asset Integrity Advanced Technologies Unallocated Expenses < Q3 ~ Q3 < Q3 < Q3 > Q3 > Q3

8 2015 Capital Sources & Allocations Current Sources Potential Allocations Cash at Sept 30, 2015 Organic Cap Ex $271 MM $200 MM to $250 MM Estimated 2015 EBITDA > $640 MM Bank Revolver $500 MM Undrawn Acquisitions $230 MM & More Cash Dividends $108 MM Share Repurchases $101 MM +TBD

9 Strong Free Cash Flow $ in millions 2015 YTD* Net Income for the Period $204 Cash Flows from Operating Activities $373 Purchases of Property and Equipment (139) Free Cash Flow $234 Free Cash Flow as % of Net Income 115% *Through September 30, 2015

10 2016 Earnings Outlook Less Than 2015 Projected Earnings Additional Customer Spending Cuts Reductions in Offshore Activities, including Fewer Contracted Floating Rigs

11 Long Term: Offshore is Essential Deepwater Remains Significant 90 Incremental Bbls Existing Fields Bbls Source of Additional ~29Mm B/D Crude Production Crude and Condensate e MM MB/D Ultra Deepwater Deepwater Shelf US Shale Conventional Land 4.74 Source: Morgan Stanley Research, Wood Mackenzie, Rystad Energy, and Company Data June 2015

12 Offshore Final Investment Decisions (FIDs) Expected Capital Expenditure Approvals $ in billions $400 $350 $300 $250 $200 $150 $100 $50 $ Approved Producing Approved Development Pending Approval Source: Rystad Energy, Morgan Stanley Research July 6, 2015

13 OII Summary Challenging Time Well Positioned for Inevitable Rebound Intend to Continue Investing for the Future & Returning Capital to Our Shareholders Deepwater Focus Remains Sound Long-Term Prospects Are Promising

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15 Supplemental Financial Information

16 EBITDA in millions Actual Low Estimate High Estimate $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 * $640 MM-$660 MM Based on OII EPS Guidance as of October 28, 2015 See Next Slide For Non-GAAP Reconciliation to Net Income

17 EBITDA Reconciliation to Net Income 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 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, E 2015E (in millions of $) LOW HIGH Net Income Depreciation & Amortization Subtotal Interest Expense/Income, Net Income Tax Expense EBITDA

18 Free Cash Flow Free Cash Flow (FCF) is a non-gaap financial measurement. FCF represents cash flow from operations less organic capital expenditures (i.e., capital expenditures excluding those for business acquisitions or other investments). Management believes that this is an important measure because it represents funds available to pursue opportunities that enhance shareholder value such as making acquisitions or other investments, and returning cash to owners through share repurchases and dividends, or to reduce debt.

19 Business Segments Revenue Operating Income 11% 4% 3% 12% 27% 19% 41% 20% 30% 33% September YTD 2015 ROV Subsea Products Subsea Projects Asset Integrity Adtech

20 Supplemental Market Information

21 Rig Fleet, Non-PBR Brazil at September 30, Rigs Under Contract OII on 65% OII on 75% of Drillships/6th Gen Rigs 47 Rigs On Order 8 Rigs Have Operator Contracts 7 ROV Contracts - OII 1 ROV Contract - Competitor 39 Rigs Do Not Have Operator Contracts Source: IHS-Petrodata Data & OII Estimates, September 30, 2015

22 Floating Rig Demand History Ye ear-end Co ontracted Fl loating Rigs Demand at Sept 30, Source: IHS-Petrodata

23 Leading Market Position Remotely Operated Vehicles Ownership Drill Support Market Share OII OII % 57% Worldwide Fleet 937 Vehicles* 222 Floating Rigs Contracted** Source: *OII Estimates - December 2014; **IHS Petrodata September 2015

24 Oilfield ROV Fleet Ownership Drill Support Market Share OII 336 OII % 57% Worldwide Fleet 937 Vehicles* OII Subsea 7 Fugro DOF Subsea Saipem C-Innovations Helix Technip TMT Other 222 Floating Rigs Contracted** Source: *OII Estimates - December 2014; **IHS Petrodata and OII Estimates September 30, 2015

25 OII ROV Fleet Geographic Profile September GOM Africa Norway Brazil Asia/Pac Other 337 Vehicles

26 OII ROVs on Vessels September 2015 Locations Customers GOM Africa Norway Asia Other Operators Contractors 97 Vehicles

27 OII ROV Pricing and Fleet Utilization $11,000 Revenue / Day on Hire Fleet Utilization 100% $9,000 90% $7,000 80% $5,000 70% $3,000 60% $1,000 50% * September YTD

28 Leading Market Position Specialty Subsea Products Umbilicals Tooling & Subsea Work Systems Installation and Workover Control Systems Subsea Hardware

29 Subsea Products Backlog At Period End in millions $1,000 $800 $600 $400 $200 $ * *September 2015