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Goldman Sachs Global Energy ConferenceJanuary 8, 2014
Miami, FL
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 – 28936%
OII – 16359%36% 59%
Worldwide Fleet803 Vehicles*
278 Floating Rigs Contracted**
Source: OII Estimates - * December 2012, ** September 2013
Leading Market PositionSpecialty Subsea ProductsSpecialty Subsea Products
Umbilicals
Tooling & Subsea Work Systems
Installation andWorkover Control
Systems
Subsea Hardware
Earnings Per Share Guidance2013 Estimate $3 35 - $3 40; 2014 Estimate $3 90 - $4 10Earnings Per Share Guidance2013 Estimate $3 35 - $3 40; 2014 Estimate $3 90 - $4 10
$4.50Actual Low Estimate High Estimate
2013 Estimate $3.35 $3.40; 2014 Estimate $3.90 $4.102013 Estimate $3.35 $3.40; 2014 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 2013E 2014E
OII 2013 Guidance Range as of October 28, 2013
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 2013E 2014E
Based on First Call Actuals and Mean Estimates as of November 30, 2013
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 2013E 2014E
Based on First Call Actuals and Mean Estimates as of November 30, 2013
EPS Guidance Oilfield Business Segment OutlookEPS Guidance Oilfield Business Segment OutlookOilfield Business Segment OutlookOilfield Business Segment Outlook
SEGMENT OPERATING INCOMESEGMENT OPERATING INCOME
2013 20142013 2014
ROV >2012 >2013
Subsea Products >2012 >2013
ROV >2012 >2013
Subsea Products >2012 >2013Subsea Products >2012 >2013
Subsea Projects >2012 >2013
Subsea Products >2012 >2013
Subsea Projects >2012 >2013
Asset Integrity >2012 >2013Asset Integrity >2012 >2013
Excellent Cash Flow & Liquidity
• EBITDA of $735 MM to $745 MM Expected in 2013• EBITDA of $735 MM to $745 MM Expected in 2013– $601 MM in 2012
f $ $
– $601 MM in 2012
f $ $• EBITDA of $845 MM to $880 MM Expected in 2014• EBITDA of $845 MM to $880 MM Expected in 2014
• Ample Resources to Invest in GrowthAt September 30, 2013:
• Ample Resources to Invest in GrowthAt September 30, 2013:
– $102 MM Cash– $40 MM Debt– $102 MM Cash– $40 MM Debt
EBITDA Reconciliation to Net Income is in Supplemental Financial Information Slides
– $2.0 B Equity– $2.0 B Equity
Long-Term Deepwater Outlook
• Largest Source of Future Oil Supply Growth
• Exploration Success Bodes Well for the FutureExploration Success Bodes Well for the Future
• Drilling Intensity is Rising
Source: ExxonMobil, Deutsche Bank, and Morgan Stanley and Rystad Energy
Worldwide Deepwater CapexForecast to DoubleWorldwide Deepwater CapexForecast to Double
$250
$ in billions DW Capex in Billions
Forecast to DoubleForecast to Double
$223$200
$250
$112$100
$150
$112
$50
$100
$02008-2012 2013-2017
Source: Douglas-Westwood, February 2013
5-Year OII OutlookGlobal Demand Growth5-Year OII OutlookGlobal Demand Growth
• Deepwater Drilling
Global Demand Growth Global Demand Growth
• Deepwater Drilling
• Field Development• Field Development
I ti M i t d R i (IMR)• Inspection, Maintenance, and Repair (IMR)
Floating Rig Demand
300s
250
300
loat
ing
Rig
s
271
≈ 85% IncreaseIn Demand Since 2003
200
ontra
cted
Fl In Demand Since 2003
150
ear-E
nd C
o
147
100
Ye
Source: IHS-Petrodata at December 31, 2012
@ End of 2012: 301 Rigs in Fleet, 90% Fleet Utilization.
Floating Rig DemandWith 5-Year Projection Assuming 90% Rig Fleet Utilization
400sWith 5 Year Projection, Assuming 90% Rig Fleet Utilization
Up ~90
350
400
loat
ing
Rig
s
360
p33% Growth
271250
300
ontra
cted
Fl
150
200
ear-E
nd C
o
100
Ye
Source: IHS-Petrodata and OII Estimates at September 30, 2013
Floating Rig Demand5-Year Averages
400s5 Year Averages
Up 9540% Growth
350
400
loat
ing
Rig
s
330
250
300
ontra
cted
Fl
175
235
150
200
ear-E
nd C
o 175
100
Ye
Source: IHS-Petrodata and OII Estimates at September 30, 2013
Outlook for ROV Demand on Vessels
3.5 3 0
2.5
3.0
3.5
atin
g R
ig
2.4
3.0
1.5
2.0
OV
s pe
r Flo
a
0.5
1.0
Glo
bal R
O
0.0
Source: Oceaneering Estimates and IHS-Petrodata
Year End
Outlook for Global ROV DemandTo Meet Visible RequirementsTo Meet Visible Requirements
Total Demand ≈ 270 Additional VehiclesTotal Demand ≈ 270 Additional Vehicles• Total Demand ≈ 270 Additional Vehicles
– More than 35% Growth
• Total Demand ≈ 270 Additional Vehicles
– More than 35% Growth
• OII Expects ≈ 95 – 100 Vehicles of Total Demand • OII Expects ≈ 95 – 100 Vehicles of Total Demand
– 55 to 60 to Support Drilling by the End of 2017– 55 to 60 to Support Drilling by the End of 2017
Source: Oceaneering Estimates at October 28, 2013
Subsea Hardware Capex ForecastSubsea Hardware Capex Forecast
$150
$ in billions SS Hardware Capex
$124$
$125
$150
$75
$100
$62
$25
$50
$02008-2012 2013-2017
Source: Douglas-Westwood April 2013
Deepwater Fields BacklogUndeveloped DiscoveriesDeepwater Fields BacklogUndeveloped Discoveries
600
Fields ≥600m fsw
Undeveloped DiscoveriesUndeveloped Discoveries
500
600
300
400
100
200
0
Source: IHS Petrodata
Offshore Construction BacklogSaipem Technip and Subsea 7
€30
in billions
Saipem, Technip, and Subsea 7
€25
€30
€15
€20
€5
€10
€0
Source: Morgan Stanley and Company Filings, September 2013
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, November 2013
Subsea Tree Orders5-Year Averages
800
5 Year Averages
Up 235≈ 65% Growth
600
700
800
605
400
500390 370
200
300
100
Source: Quest Offshore Resources – Mean Case Forecast, November 2013
Subsea Tree Installations5-Year Averages
700
5 Year Averages
Up 150
600
700
450
Up 150≈ 50% Growth
400
500
300 300
450
200
300 300 300
100
Source: Quest Offshore Resources – Mean Case Forecast, November 2013
Subsea Completions In Service vs Subsea Products Operating Income (SSP Op Inc)
$2005000
Annual SSP Op Incin millions
vs. Subsea Products Operating Income (SSP Op Inc)
$150
$200
4000
5000
$1002000
3000
$501000
2000
$00
SS Completions SSP Op Inc
Source: Quest Offshore Resources & OII SEC Filings
Subsea Completions In Service Forecast at Historically High Levels
6000
Forecast at Historically High LevelsUp 1400
≈ 35% Growth
5000
6000
3000
4000
1000
2000
0
Source: Quest Offshore Resources – Mean Case Forecast, November 2013
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 2013E* 2014E*
*2013 - $735MM - $745MM; *2014 - $845MM - $880MMBased on OII EPS Guidance as of October 28, 2013See 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 2013E 2013E 2014E 2014E(in millions of $) LOW HIGH LOW HIGH
Net Income 199.4 188.4 200.5 235.7 289.0 365 370 425 445
Depreciation & Amortization 115.0 122.9 153.7 151.2 176.5 200 205 225 230
Subtotal 314.4 311.3 354.2 386.9 465.5 565 575 650 675
Interest Expense/Income, Net 12.6 7.1 5.4 .2 2.3
Income Tax Expense 107.8 101.4 104.7 102.2 132.9 170 170 195 205
EBITDA 434.8 419.8 464.3 489.3 600.7 735 745 845 880
OII Balance Sheet(in millions)
D 31 D 31 D 31 D 31 D 31 S 30
( )
Dec 31, 2008
Dec 31, 2009
Dec 31, 2010
Dec 31, 2011
Dec 31, 2012
Sep 30, 2013
$ $ $ $ $ $Equity $968 $1,224 $1,390 $1,558 $1,815 $1,978
Debt 229 120 0 120 94 40Debt 229 120 0 120 94 40
Cash 11 162 245 106 121 102
Debt/Cap 19% 9% 0% 7% 5% 2%
Business Segments
9% 5%
Revenue Operating Income
30%15%
9%
41%9%
15%
13%
31%
15%
32%ROVSubsea ProductsSubsea ProjectsA t I t itAsset IntegrityAdtech
YTD September 2013
Supplemental Market Information
Oilfield ROV FleetOwnership Profile - December 2012p
36%
OII289
OIISubsea 7
36%
SonsubFugroCanyonTechnipC-InnovationsDOF SubseaOther
803 Vehicles
Source: OII Estimates
OII ROV FleetGeographic Profile - September 2013
40
g p p
76
33
40
GOM
Africa
35
33 Africa
Norway
Brazil
64
54
35 Brazil
Asia/Pac
Other54
302 Vehicles
Oilfield ROV Drill Support MarketSeptember 2013p
OII
Subsea 7
59%
Subsea 7
Fugro
SonsubSonsub
Other
278 Contracted Floating Rigs
Source: IHS-Petrodata and OII Estimates
OII ROVs on VesselsLocations
1922
GOM
AfricaAfrica
Norway
Other17
15
Other
73 Vehicles
September 2013
OII ROVs on VesselsCustomers
Operators
3637
Contractors
73 Vehicles
September 2013
OII ROV Fleet Size
302325
260
325
od E
nd
130
195
ount
at P
eri
125
65
130
Vehi
cle
Co
0
September 30, 2013
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 September 2013
High-Spec, Non-PBR Brazil Rig Fleet
• 103 Existing Rigs Under Contract
– OII ROV Contracts on 80%
• 72 Rigs On Order
– Visibility of Significant Rig Fleet Growth– OII Expects to Continue as Dominant ROV Provider
• OII ROV Contracts on 23 of 26 Awards• 46 Remaining ROV Contract Opportunities
Source: IHS-Petrodata Data & OII Estimates, September 30, 2013
Subsea Products BacklogAt Period EndSubsea Products BacklogAt Period End
$1,000in millions
At Period EndAt Period End
$800
$1,000
$400
$600
$200
$400
$02008 2009 2010 2011 2012 2013
September 2013
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 OSX (Oilfield Service Index)Annual Price PerformanceOII vs OSX (Oilfield Service Index)
125%OII OSX
OII vs. OSX (Oilfield Service Index)OII vs. OSX (Oilfield Service Index)20132013
OII OII up 44% up 44% OSX OSX up 26%up 26%
75%
25%
-25%
-75%
*Through November 30, 2013: Based on Previous Year-End Purchases
Cumulative Price PerformanceOII vs OSX (Oilfield Service Index)Cumulative Price PerformanceOII vs OSX (Oilfield Service Index)
1150%OII OSX
OII vs. OSX (Oilfield Service Index)OII vs. OSX (Oilfield Service Index)20132013
OII OII up 44% up 44% OSX OSX up 26%up 26%
850%
1000%
1150%
550%
700%
100%
250%
400%
-50%
100%
*Through November 30, 2013: Based on Previous Year-end Purchases
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