September 30, 2014 New Orleans, LA Marvin J. Migura Executive Vice President 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.
WHY OII? Leveraged to Deepwater and Subsea Completions Leading Market Positions ROVs and Specialty Subsea Products Good Project Execution Excellent Earnings, Liquidity and Cash Flow
Leveraged to Deepwater Projects Take Years to Develop Largely Oil Reservoirs With High Production Flow Rates Well Capitalized Customer Base Investment Based on Long-Term Commodity Price
Leading Market Position Remotely Operated Vehicles Ownership Drill Support Market Share OII - 304 OII 170 35% 60% Worldwide Fleet 877 Vehicles* 284 Floating Rigs Contracted** Source: * OII Estimates - December 2013; **IHS Petrodata -June 2014
High-Spec, Non-PBR Brazil Rig Fleet 120 Existing Rigs Under Contract OII ROV Contracts t on 80% 68 Rigs On Order OII Expects to Continue as Dominant ROV Provider OII ROV Contracts on 19 of 21 Awards 47 ROV Contract Opportunities Remaining Only 5 rigs have drilling contracts Source: IHS-Petrodata Data & OII Estimates, June 30, 2014
Leading Market Position Specialty Subsea Products Umbilicals Tooling & Subsea Work Systems Installation and Workover Control Systems Subsea Hardware
Earnings Per Share Guidance 2014 Estimate $3.95 - $4.05 are ngs per Sh Earni $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Actual Low Estimate High Estimate 2008 2009 2010 2011 2012 2013 2014E OII 2014 Guidance Range as of July 23, 2014
EPS Guidance Oilfield Business Segment Outlook SEGMENT OPERATING INCOME 2014 ROV >2013 Subsea Products >2013 Subsea Projects >2013 Asset Integrity >2013
Excellent Cash Flow & Liquidity EBITDA of $855 MM to $875 MM Expected in 2014 $746 MM in 2013 Ample Resources to Invest in Growth At June 30, 2014: $103 MM Cash $80 MM Debt $2.2 B Equity EBITDA Reconciliation to Net Income is in Supplemental Financial Information Slides
Capital Allocation Q3 Interim Update As of September 26, 2014 3.0 million Treasury Shares Acquired for $201 MM in Q3 3.5 million Treasury Shares Acquired for $237 MM YTD
Bank Financing Q3 Interim Update As of September 26, 2014 Bank Revolving Credit Facility Increased by $100 MM $400 MM Committed, up from $300 MM $280 MM Drawn Efforts Underway Further Increase Committed Bank Facilities to Provide Incremental Financial Flexibility
Long-Term Deepwater Outlook Major Source of Future Oil Supply Exploration Success Bodes Well for the Future Drilling Intensity is Rising Source: ExxonMobil and Deutsche Bank
Worldwide Deepwater Capex Forecast to More Than Double $ in billions $300 $250 $260 $200 $150 $100 $113 $50 $0 2009-2013 2014-2018 Source: Douglas-Westwood, January 2014
5-Year OII Outlook Global Demand Growth Deepwater Drilling Field Development Inspection, Maintenance, and Repair (IMR)
Floating Rig Demand Ye ear-end Co ontracted Fl loating Rigs 400 350 300 250 200 150 147 90% Increase In Demand Since 2003 282 100 at End of 2013: 314 Rigs in Fleet, 90% Fleet Utilization. Source: IHS-Petrodata at December 31, 2013
2014 Floating Rig Market As of June 30 284 Rigs Under Contract Up Two Year To Date 10 Rigs Added to Fleet in First Half All Contracted Fleet Utilization was 88% 90% at the end of 2013 19 Rigs Scheduled d to be Added d in Second Half 12 Contracted Source: IHS-Petrodata Data - June 30, 2014
Floating Rig Demand 5-Year Projection Ye ear-end Co ontracted Fl loating Rigs 400 350 300 250 200 150 Assuming 10 Rigs Per Year are Retired or Cold Stacked and 85% Rig Fleet Utilization 282 Up ~ 30 10% Growth 311 100 @ End of 2013: 314 Rigs in Fleet, 90% Fleet Utilization. Source: IHS-Petrodata at June 30, 2014
Floating Rig Demand 5-Year Projection with 5-Year Averages Ye ear-end Co ontracted Fl loating Rigs 400 350 300 250 200 150 100 185 250 Assuming 10 Rigs Per Year are Retired or Cold Stacked and 85% Rig Fleet Utilization Up 55 >20% Growth 305 @ End of 2013: 314 Rigs in Fleet, 90% Fleet Utilization. Source: IHS-Petrodata at June 30, 2014
Subsea Hardware CAPEX Forecast to Increase 80% $ in billions $125 $100 $117 $75 $50 $65 $25 $0 2009-2013 2014-2018 Source: Douglas-Westwood, May 2014
Deepwater Fields Backlog Undeveloped Discoveries Fields 600m 600 500 400 300 200 100 0 2009 2010 2011 2012 2013 Source: IHS Petrodata
5-Year Deepwater Outlook What To Expect Along The Way Some Project Approvals May Continue to be Delayeded Approved Projects Cost Overruns Production Start-Up Delays Technical Challenges Sheer Volume of Projects Will Still Drive Growth
Offshore Construction Backlog Saipem, Technip, and Subsea 7 in billions 40 35 30 25 20 15 10 5 0 2009 2010 2011 2012 2013 2014* * June 2014 Source: Morgan Stanley Estimates and Company Filings
Subsea Tree Orders - Global Forecast at Historically High Levels 800 700 600 500 400 300 200 100 Source: Quest Offshore Resources Mean Case Forecast, August 2014
Subsea Tree Orders Excluding BRZ Forecast at Historically High Levels 600 500 Tree Orde ers 400 300 200 100 0 Source: Quest Offshore Resources Mean Case Forecast, August 2014
Subsea Installations Excluding BRZ Forecast at Historically High Levels 500 50% Growth Installation ns 400 300 200 265 230 340 100 0 Source: Quest Offshore Resources Mean Case Forecast, August 2014
Subsea Completions In Service, Excl BRZ vs. Subsea Products Operating Income (SSP Op Inc) 5000 Annual SSP Op Inc in millions $250 4000 $200 3000 $150 2000 $100 1000 $50 0 $0 SS Completions SSP Op Inc Source: OII SEC Filings and Quest Offshore Resources, 2014
Subsea Completions In Service, Excl BRZ Forecast at Historically High Levels 5000 Up 900 > 25% Growth 4000 3000 2000 1000 0 Source: Quest Offshore Resources & OII SEC Filings, August 2014
OII Summary Diversified OFS Company Leading Market Positions in Technical Niches Leveraged to Deepwater and Subsea Completions Excellent Earnings, Liquidity and Cash Flow
Supplemental Financial Information
EBITDA in millions Actual Low Estimate High Estimate $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 2008 2009 2010 2011 2012 2013 2014E* *2014 - $855MM - $875MM Based on OII EPS Guidance as of July 23, 2014 See Next Slide For Non-GAAP Reconciliation to Net Income
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, 2008 2009 2010 2011 2012 2013 2014E 2014E (in millions of $) LOW HIGH Net Income 199.4 188.4 200.5 235.7 289.0 371.5 430 440 Depreciation & Amortization 115.0 122.9 153.7 151.2 176.5 202.2 230 235 Subtotal 314.4 311.3 354.2 386.9 465.5 573.7 660 675 Interest Expense/Income, Net 12.6 7.1 5.4.2 2.3 1.6 Income Tax Expense 107.8 101.4 104.7 102.2 132.9 170.8 195 200 EBITDA 434.8 419.8 464.3 489.3 600.7 746.2 855 875
Business Segments Revenue Operating Income 14% 7% 1% 8% 13% 30% 42% 16% YTD June 2014 33% ROV Subsea Products Subsea Projects Asset Integrity Adtech 36%
Supplemental Market Information
Oilfield ROV Fleet Ownership Profile - December 2013 35% OII - 304 OII Subsea 7 Fugro DOF Subsea Saipem C-Innovations Helix Technip Other 877 Vehicles Source: OII Estimates
OII ROV Fleet Geographic Profile June 2014 34 33 32 91 GOM Africa Norway Brazil Asia/Pac 55 78 Other 323 Vehicles
OII ROV Fleet Size 350 323 od End Vehicle Co ount at Peri 300 250 200 150 100 50 0 June 30, 2014
Oilfield ROV Drill Support Market June 2014 OII Subsea 7 60% Fugro Sonsub Other 284 Contracted Floating Rigs Source: IHS-Petrodata and OII Estimates
OII ROVs on Vessels Locations June 2014 17 24 GOM Africa Norway 19 Other 25 85 Vehicles
OII ROVs on Vessels Customers June 2014 Operators 41 44 Contractors 85 Vehicles
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% *YTD June 2014
Subsea Products Backlog At Period End in millions $1,000 $800 $600 $400 $200 $0 2009 2010 2011 2012 2013 2014 June 2014
Subsea Tree Orders - Global Forecast at Historically High Levels 800 700 Up 200 50% Growth 595 600 500 400 300 200 100 430 395 Source: Quest Offshore Resources Mean Case Forecast, August 2014
Subsea Tree Orders Excluding BRZ Forecast at Historically High Levels 800 Up 190 >70% Growth 700 600 500 400 300 200 100 355 265 455 Source: Quest Offshore Resources Mean Case Forecast, August 2014
Subsea Installations - Global Forecast at Historically High Levels 700 Up 115 35% Growth 600 500 425 400 300 305 310 200 100 Source: Quest Offshore Resources Mean Case Forecast, August 2014
Subsea Completions In Service - Global vs. Subsea Products Operating Income (SSP Op Inc) 5000 Annual SSP Op Inc in millions $250 4000 $200 3000 $150 2000 $100 1000 $50 0 $0 SS Completions SSP Op Inc Source: OII SEC Filings and Quest Offshore Resources, 2014
Subsea Completions In Service - Global Forecast at Historically High Levels 6000 5000 Up 1200 > 25% Growth 4000 3000 2000 1000 0 Source: Quest Offshore Resources, August 2014
Umbilical Products Thermoplastic Hose Umbilicals Steel Tube Umbilicals
OIE Products Tooling & Work Packages Production Control Valves Installation Workover & Control Systems Connectors & Repair Systems Field Development Hardware