December 2, 2014 New York, NY M. Kevin McEvoy President & 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 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 ti 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, see our periodic filings with the Securities and Exchange Commission, including our most recent Reports on Forms 10-K and 10-Q.
OII Participation in Offshore 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 Tooling (SSP) ROV 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
Offshore Life Cycle Business Exposure Revenue Mix 5% 15% 25% 55% Exploration Development Production Decommissioning Source: OII Estimates
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 35% OII 168 60% Worldwide Fleet 877 Vehicles* 281 Floating Rigs Contracted** Source: *OII Estimates - December 2013; **IHS Petrodata September 2014
Leading Market Position Specialty Subsea Products Umbilicals Tooling & Subsea Work Systems Installation ti and Workover Control Systems Subsea Hardware
Earnings Per Share Guidance 2014 Estimate $3.95 - $4.00; 2015 Estimate $4.10 - $4.50 $5.00 Actual Low Estimate High Estimate er Share Earnings p $4.00 $3.00 $2.00 $1.00 $0.00 2008 2009 2010 2011 2012 2013 2014E 2015E OII 2014 and 2015 Guidance Ranges as of October 29, 2014
2015 EPS Guidance Growth Compared to 2014 ROV Drilling and vessel-based projects Subsea Products Tooling and installation and workover control system services Subsea Projects Deepwater intervention service activity in the GOM Diving in the GOM and offshore Angola Asset Integrity Refinery and offshore production platform services Subsea infrastructure projects
Floating Rig Demand 5-Year Projection ted Floatin ng Rigs 400 350 300 282 Up 30 ~10% Growth 312 Year-End Contrac 250 200 150 Assuming 85% Rig Fleet Utilization and 50 Rigs are Retired or Cold Stacked by 2018 year end. 100 @ End of 2013: 314 Rigs in Fleet, 90% Fleet Utilization. Source: IHS-Petrodata at September 30, 2014 and OII Estimates
Floating Rig Demand 5-Year Projection with 5-Year Averages ted Floatin ng Rigs Year-End Contrac 400 350 300 250 200 150 100 250 Up 50 20% Growth 300 185 Assuming 85% Rig Fleet Utilization and 50 Rigs are Retired or Cold Stacked by 2018 year end. @ End of 2013: 314 Rigs in Fleet, 90% Fleet Utilization. Source: IHS-Petrodata at September 30, 2014 and OII Estimates
Floating Rig Demand Development Drilling 5-Year Projections with 5-Year Averages Average Annual % 70% 60% 58% 50% 46% 46% 40% Increased to a High of 55% in 13 vs. 44% in 12 30% 20% Source: IHS-Petrodata, October 9, 2014
Deepwater Fields Backlog Undeveloped Discoveries Fields 600m 600 500 400 300 200 100 0 2009 2010 2011 2012 2013 Source: IHS Petrodata
Subsea Tree Orders Excl BRZ Forecast at Historically High Levels els 600 Up 175 > 65% Growth 500 440 Tree e Orders 400 300 355 265 200 100 Source: Quest Offshore Resources Mean Case Forecast, November 2014
Subsea Installations Excl BRZ Forecast at Historically High Levels, 5-Year Averages 600 500 Up 100 >40% Growth Installat tions 400 300 265 230 330 200 100 Source: Quest Offshore Resources Mean Case Forecast, November 2014
Subsea Completions In Service - Excl BRZ Forecast at Historically High Levels, 5-Year Averages 5000 Up 720 25% Growth Com mpletions 4000 3000 2,040 3,000 3,720 2000 1000 Source: Quest Offshore Resources Mean Case Forecast, November 2014
Excellent Cash Flow EBITDA >$845 MM Expected in 2014 $746 MM in 2013 EBITDA >$880 MM Expected in 2015 EBITDA Reconciliation to Net Income is in Supplemental Financial Information Slides
Bank & Public Debt Financing Bank Facilities $500 MM 5-Year, Revolver $300 MM 3-Year Year, Delayed-Draw Draw Term Loan Senior Notes $500 MM, 4.650%, due 2024 Investment Grade Rated Moody s Baa2 Standard & Poor s BBB
Capital Allocation Priority Organic Capital a Expenditures es Acquisitions Cash Dividends Share Repurchases 5.4 MM Remaining Shares Authorized @ 9/30/14
Capital Allocation 2014 YTD Through September Organic Capital a Expenditures es $301 MM Acquisitions $40 MM Cash Dividends $89 MM Share Repurchases $237 MM 3.5 MM Shares
Capital Structure Targets Maintain a Investment e Grade Debt Ratings Net Debt to TTM EBITDA Ratio Between 1.0 X and 1.5 X
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 *2014 - $845MM - $855MM; ** 2015 - $880MM-$945MM Based on OII EPS Guidance as of October 29, 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 t this measurement may be used by some investors and others to make informed investment t decisions. i 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, 2010 2011 2012 2013 2014E 2014E 2015E 2015E (in millions of $) LOW HIGH LOW HIGH Net Income 200.5 235.7 289.0 371.5 425 430 435 475 Depreciation & Amortization 153.7 151.2 176.5 202.2 225 230 240 250 Subtotal 354.2 386.9 465.55 573.77 650 660 675 725 Interest Expense/Income, Net 5.4.2 2.3 1.6 5 5 Income Tax Expense 104.7 102.22 132.9 170.8 195 195 200 215 EBITDA 464.3 489.3 600.7 746.2 845 855 880 945
Business Segments Revenue Operating Income 7% 8% 1% 14% 29% 13% 41% 16% 34% 37% ROV Subsea Products Subsea Projects Asset Integrity Adtech YTD September 2014
Supplemental Market Information
Oilfield ROV Fleet Ownership Drill Support Market Share OII 304 35% OII 168 60% Worldwide Fleet 877 Vehicles* OII Subsea 7 Fugro DOF Subsea Saipem C-Innovations Helix Technip Other 281 Floating Rigs Contracted** Source: * OII Estimates - December 2013; **IHS Petrodata September 2014
OII ROV Fleet Geographic Profile September 2014 34 34 94 32 58 80 GOM Africa Norway Brazil Asia/Pac Other 332 Vehicles
OII ROVs on Vessels September 2014 Locations Customers 14 23 39 49 24 27 GOM Africa Norway Other Operators Contractors 88 Vehicles
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% *YTD September 2014
Rig Fleet, Non-PBR Brazil 221 Rigs Under Contract OII ROV Contracts on 67% OII ROV Contracts on 79% of Drillships/6th Gen Rigs 64 Rigs On Order OII Has 14 of 17 ROV Contracts 47 Rigs Have ROV Contract Opportunities Remaining 5 of these Rigs Have Drilling Contracts OII Expects to Remain Dominant ROV Provider Source: IHS-Petrodata Data & OII Estimates, September 30, 2014
Subsea Products Backlog At Period End in millions $1,000 $800 $600 $400 $200 $0 2009 2010 2011 2012 2013 2014 September 2014
Subsea Tree Orders - Global Forecast at Historically High Levels, 5-Year Averages 700 600 Up 170 40% Growth 565 Tree e Orders 500 400 430 395 300 200 100 Source: Quest Offshore Resources Mean Case Forecast, November 2014
Subsea Installations - Global Forecast at Historically High Levels, 5-Year Averages 700 Up 100 >30% Growth 600 Inst tallations 500 400 305 310 410 300 200 100 Source: Quest Offshore Resources Mean Case Forecast, November 2014
Subsea Completions In Service - Global Forecast at Historically High Levels, 5-Year Averages 7000 Up 970 25% Growth Com mpletions 6000 5000 4000 3000 2,720 3,960 4,930 2000 1000 Source: Quest Offshore Resources, November 2014
5-Year Deepwater Outlook What To Expect Along The Way Some Project Approvals May Continue to be Delayed Approved Projects Cost Overruns Production Start-Up Delays Technical Challenges Sheer Volume of Projects Will Still Drive Growth
Umbilical Products Thermoplastic Hose Umbilicals Steel Tube Umbilicals
OIE Products Tooling & Subsea Work Systems Production Control Valves Installation Workover & Control Systems Connectors & Repair Systems Field Development Hardware