Oceaneering International, Inc. · NYSE:OII
Oceaneering International — Capital One Securities 10th Annual Energy Conference 2015
29 slides from Oceaneering International's conference presentation, Dec 9, 2015
Slide 1: 10th Annual Energy Conference, Capital One Securities
10th Annual Energy Conference Capital One Securities, Inc. 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 lookin
Slide 2: OII in the Offshore Oilfield Life Cycle
OII in the Offshore Oilfield Life Cycle PHASE EXPLORATION DEVELOPMENT PRODUCTION DECOMMISSIONING #1 Market # of Operating # Subsea Tree # Subsea Trees # of Field Driver Floating Drilling Rigs Installations In Service Abandonments Business Segment P d t Product and Service Revenue • ROV • ROV • ROV •
Slide 3: OII Offshore Life Cycle Business Exposure
OII Offshore Life Cycle Business Exposure Revenue Mix 5% 15% 25% 55% Exploration Development Production Decommissioning Source: OII Estimates
Slide 4: Earnings Per Share Guidance
Earnings Per Share Guidance 2015 Estimate $2 $2.60 60 to $2 $2.66 66 Actual Low Estimate High Estimate $5.00 $4.00 Earnings per Share $3.00 $2 00 $2.00 $1.00 $0.00 2008 2009 2010 2011 2012 2013 2014 2015E OII 2015 Guidance Range as of October 28, 2015
Slide 5: Relative EPS Performance
Relative EPS Performance To 2008 OSX Peak OII OSX w/o OII 150% 125% Relative to: 100% 2008 Up ≈ 55% 2014 Down ≈ 30% 75% 50% 25% 0% Relative to: -25% 2008 Down ≈ 55% 2014 Down ≈ 40% -50% -75% 2008 2009 2010 2011 2012 2013 2014 2015E Based on First Call Actual and Mean Estimates as of October 30, 2015
Slide 6: Cost-Cutting Initiatives
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
Slide 7: Segment Outlook
Segment Outlook Q4 2015 SEGMENT OPERATING INCOME ROV < Q3 Subsea Products ~ Q3 Subsea Projects < Q3 Asset Integrity < Q3 Advanced Technologies > Q3 Unallocated Expenses > Q3
Slide 8: 2015 Capital Sources & Allocations
2015 Capital Sources & Allocations Current Sources Potential Allocations • Cash C h att Sept S t 30, 30 2015 • Organic O i Cap C EEx – $271 MM – $200 MM to $250 MM • Estimated 2015 EBITDA • Acquisitions – > $640 MM – ≈ $230 MM & More • Bank Revolver • Cash Dividends – $500 MM Undrawn – ≈ $108 MM • S
Slide 9: Strong Free Cash Flow
Strong Free Cash Flow $ in millions 2015 YTD* YTD Net Income for the Period $204 Cash Flows from Operating Activities $373 P h Purchases off Property P t and d Equipment E i t (139) Free Cash Flow $234 Free Cash Flow as % of Net Income 115% *Through September 30, 2015
Slide 10: 2016 Earnings Outlook
2016 Earnings Outlook • Less Than 2015 Projected Earnings – Additional Customer Spending Cuts • Reductions in Offshore Activities, including Fewer Contracted Floating Rigs
Slide 11: Long Term: Offshore is Essential
Long Term: Offshore is Essential Deepwater Remains Significant Incremental Bbls Existing Fields Bbls Source of 90 Additional ~29Mm B/D Crude Production 80 4.31 d Condensate e 9 35 9.35 70 4.74 MB/D MM 60 Crude and 3.3 7.29 50 Ultra Deepwater D Deepwater t Shelf 40 US Shale Conventional Land Source:
Slide 12: Offshore Final Investment Decisions (FIDs)
Offshore Final Investment Decisions (FIDs) Expected Capital Expenditure Approvals $ in billions $400 $350 $300 $250 $200 $150 $100 $50 $ $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Approved Producing Approved Development Pending Approval Source: Rystad Energy, Morgan Stanley Research –
Slide 13: OII Summary
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
Slide 14: Engineered Products & Services
-Realizin ing —;O through @ practical UUONS Engineered Products & Services
Slide 15: Supplemental Financial Information
Supplemental Financial Information
Slide 16: EBITDA
EBITDA in millions Actual Low Estimate High Estimate $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 * 2015 - $640 MM-$660 MM Based on OII EPS Guidance as of October 28, 2015 See Next Slide For Non-GAAP Reconciliation to Net Income
Slide 17: EBITDA 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 an
Slide 18: Free Cash Flow
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 bec
Slide 19: Business Segments
Business Segments Revenue Operating Income 11% 4% 3% 27% 12% 19% 41% 20% 30% 33% ROV Subsea Products Subsea Projects Asset Integrity Adtech September YTD 2015
Slide 20: Supplemental Market Information
Supplemental Market Information
Slide 21: Rig Fleet, Non-PBR Brazil
Rig Fleet, Non-PBR Brazil at September 30, 30 2015 • 173 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 D
Slide 22: Floating Rig Demand History
Floating Rig Demand History 300 ontracted Flloating Rigss 275 250 200 ear-End Co Demand at Sept 30, 2015 - 222 150 Ye 100 Source: IHS-Petrodata
Slide 23: Leading Market Position
Leading Market Position Remotely Operated Vehicles Ownership Drill Support Market Share OII - 336 OII – 127 36% 57% Worldwide Fleet 222 Floating Rigs Contracted** 937 Vehicles* Source: *OII Estimates - December 2014; **IHS Petrodata – September 2015
Slide 24: Oilfield ROV Fleet
Oilfield ROV Fleet Ownership Drill Support Market Share OII – 336 OII – 127 36% 57% OII Subsea 7 Fugro DOF Subsea Saipem C-Innovations Helix Technip Worldwide Fleet TMT 222 Floating Rigs Contracted** 937 Vehicles Vehicles* Other Source: *OII Estimates - December 2014; **IHS Petrodata and OII Estimat
Slide 25: OII ROV Fleet
OII ROV Fleet Geographic g p Profile – September p 2015 35 34 107 28 56 77 GOM Africa Norway Brazil Asia/Pac Other 337 Vehicles
Slide 26: OII ROVs on Vessels
OII ROVs on Vessels September p 2015 Locations Customers 10 8 31 48 49 24 24 GOM Africa Norway Asia Other Operators Contractors 97 Vehicles
Slide 27: OII ROV Pricing and Fleet Utilization
OII ROV Pricing and Fleet Utilization Revenue / Day on Hire Fleet Utilization $11,000 100% $9,000 90% $7,000 80% $5 000 $5,000 70% $3,000 60% $1,000 50% * September YTD
Slide 28: Leading Market Position
Leading Market Position Specialty Subsea Products Umbilicals Tooling & Subsea Work Systems Installation and Workover Control Systems Subsea Hardware
Slide 29: Subsea Products Backlog
Subsea Products Backlog At Period End in millions $1,000 $800 $600 $400 $200 $0 2009 2010 2011 2012 2013 2014 2015* *September 2015
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