Oceaneering International, Inc. · NYSE:OII
Oceaneering International — Energize 2006
44 slides from Oceaneering International's conference presentation, Jan 11, 2006
Slide 1: Energize 2006: Reality and Opportunity
Energize 2006: Reality and Opportunity San Francisco – January 11, 2006 John R. Huff Chairman and CEO Oceaneering International, Inc.
Slide 2: Safe Harbor Statement
Energize 2006: Reality and Opportunity San Francisco - January 2006 Safe Harbor Statement Statements in this presentation that express a belief, expectation, or intention, as well as those that are not historical fact, are forward looking. These forward-looking statements are based on our current in
Slide 3: Business Segments Revenue
Business Segments Revenue 87% 87% Oilfield Oilfield Non Non Oilfield Oilfield September September YTD YTD2005 2005
Slide 4: Why OII? – Take a Deeper Look
WHY OII? – “Take a Deeper Look” • Leveraged to Deepwater and Subsea Completions • Leading Market Positions •• ROVs, ROVs, Specialty Specialty Products, Products, and and Inspection Inspection • Benefiting from Capital Expansion Initiatives • Strong Balance Sheet • Substantial Cash Flow • Share Price
Slide 5: Earnings Per Share Outlook
Earnings Per Share Outlook $3.00 $3.00 $2.50 $2.50 Share Per Share $2.00 $2.00 Earnings Per $1.50 $1.50 Earnings $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 2001 2001 2002 2002 2003 2003 2004 2004 2005* 2005* 2006* 2006* ** OII OII Guidance Guidance Range Range October October 2005 2005
Slide 6: 4th Quarter Performance
2005 Estimate 4thth Quarter Performance … • Increase in Subsea Products –– Multiflex Multiflex Performance Performance • Seasonal Declines in ROV and Inspection • Lower Medusa Spar Production
Slide 7: 2006 Estimate
2006 Estimate Depends on … • Significant Increase in Subsea Products Profits • Further Improvement in ROV Business • Escalation in Subsea Projects Results
Slide 8: OII Balance Sheet
OII Balance Sheet (in millions) Dec. 31, Dec. Dec. 31, 31, Sept. Sept. 30, 30, 2003 2004 2005 2005 Equity $359 $454 $517 Debt 122 142 175 Debt/Cap 25% 24% 25%
Slide 9: Cash Flow from Operations
Cash Flow from Operations $200 $200 $180 $180 $160 $160 $140 $140 millions) ($ millions) $120 $120 $100 $100 $80 ($ $80 $60 $60 $40 $40 $20 $20 $0 $0 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005* 2005* 2006* 2006* ••OII OII Guidance GuidanceRange RangeMid- Mid -Point October Mid-Point Octo
Slide 10: EBITDA
EBITDA $250 $250 $200 $200 millions) ($ millions) $150 $150 $100 ($ $100 $50 $50 $0 $0 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005* 2005* 2006* 2006* ••OII OII Guidance GuidanceRange RangeMid- Mid -Point October Mid-Point October 2005 2005 See SeeAppendix AppendixFor For Non- Non-GAAP Rec
Slide 11: Where We Are
Where We Are • Proven Performer • Existing Assets Can Earn More • Accretive Acquisitions • Organic Growth • Strong Cash Flow
Slide 12: Deepwater Discoveries
Deepwater Discoveries 75% to be Developed 400 400 357 350 350 300 300 Fields of Fields 250 250 247 247 Number of 200 200 Number 150 150 100 100 50 50 114 114 110 110 00 Production Production Eval. Eval. // Dev. Dev. Source: Source: ODS-Petrodata ODS-Petrodata –– September September 2005 2005 Deepwat
Slide 13: Subsea Completions - Worldwide
Subsea Completions - Worldwide Expected to More Than Triple Completed Estimated 4000 4000 Completions Subsea Completions Total Total == 3,494 3,494 3000 3000 2147 2147 of Subsea 2000 2000 1092 1092 Number of 1000 1000 Number 426 426 1347 1347 68 87 87 68 00 60s 60s 70s 70s 80s 80s 90s 90s 00s 00s So
Slide 14: Subsea Products: Multiflex - Umbilical Manufacturing
Subsea Products 22% 22% Revenue by Business Segment Multiflex - Umbilical Manufacturing • Required for Every Subsea ~40% ~40% Completion –– For For Well Well Control Control // Servicing Servicing • Highly Engineered Product OIE OIE Multiflex Multiflex • Thermoplastic & Steel Tubes • Worldwide Cover
Slide 15: Multiflex Products
Multiflex Products Steel Steel Tube Tube Umbilicals Umbilicals Thermoplastic Thermoplastic Hose Hose Umbilicals Umbilicals
Slide 16: Umbilical Market Overview
Umbilical Market Overview Forecasted at Historically High Levels Steel Steel Thermoplastic Thermoplastic 2,500 2,500 KM Orders -- KM 2,000 2,000 Umbilical Orders 1,500 1,500 Umbilical 1,000 1,000 500 500 00 2002 2002 2003 2003 2004 2004 2005F 2005F 2006F 2006F Source: Source: Quest Quest Offshore Of
Slide 17: Multiflex Umbilical Mfg Expansion
Multiflex Umbilical Mfg Expansion Steel Steel Tube Tube Cabling Cabling Machine Machine Plant Plant in in Panama Panama City, City, Florida Florida
Slide 18: Subsea Products: OIE – Specialty Subsea Hardware
Subsea Products 22% 22% Revenue by Business Segment OIE – Specialty Subsea Hardware • Product Categories –– ROV ROV Tooling Tooling and and Work Work Packages Packages ~60% ~60% –– Valves Valves –– Connectors Connectors & & Repair Repair Systems Systems –– IWOCS IWOCS OIE OIE Multiflex Multiflex ––
Slide 19: OIE Products
OIE Products Production Production Control Control Valves Valves ROV ROV Tooling Tooling & & Work Work Packages Packages Installation Installation Workover Workover & & Control Control Systems Systems Connectors Connectors & & Repair Repair Systems Systems Field Field Development Development Hardwar
Slide 20: Grayloc Acquisition
Grayloc Acquisition • Connectors and Repair Systems
Slide 21: Subsea Products Backlog
Subsea Products Backlog At Period End 200 200 180 180 160 160 140 140 120 120 Millions In Millions 100 100 181 181 80 80 60 $$ In 60 40 40 78 78 61 61 20 50 50 47 47 20 23 23 00 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005* 2005* *As *Asof ofSeptember September30, 30,2005 2005
Slide 22: 2006 Subsea Products Outlook
2006 Subsea Products Outlook • Recent and Expected Growth in Backlog • Increase in Umbilical Sales –– Adding Adding Steel Steel Tube Tube Manufacturing Manufacturing Capacity Capacity –– Plant Plant Expansion Expansion in in Scotland Scotland • Higher OIE Product Sales –– Full Full Year Year Contrib
Slide 23: Remotely Operated Vehicles
Remotely Operated Vehicles 32% 32% Revenue by Business Segment September SeptemberYTD YTD2005 2005
Slide 24: Floating Rig and OII ROV Demand
Floating Rig and OII ROV Demand 200 200 180 180 179 179 180 180 178 178 ROVs or ROVs 160 160 140 140 125 125 152 Rigs or 152 120 120 of Rigs 98 98 100 100 Average ## of 80 80 Average 60 60 40 40 20 20 00 0000 0000 0011 0011 0022 0022 0033 0033 0044 0044 0055 0055 11QQ 33QQ 11QQ 33QQ 11QQ 33QQ 11QQ 3
Slide 25: 2005 ROV Fleet Expansions
2005 ROV Fleet Expansions • 24 Work Class ROVs • $47 MM Capital Cost
Slide 26: 2006 ROV Outlook
2006 ROV Outlook • Increase in Average Fleet Size • Better Average Pricing • Higher Fleet Utilization
Slide 27: Subsea Projects
11% 11% Subsea Projects Revenue by Business Segment Deepwater IMR Diving September SeptemberYTD YTD2005 2005
Slide 28: Hurricane Path Comparison
Hurricane Path Comparison Gulf Shores Sept. 16, 2004 Plaquemines Parish Aug. 29, 2005 Sabine Pass Sept. 24, 2005
Slide 29: Hurricane Damage Comparison
Hurricane Damage Comparison* Structure Status Ivan Katrina Rita Pipelines Damaged 102 21 23 Platforms In Path 150 1,300 1,600 Destroyed 7 46 16 Damaged 24 20 32 Rigs Destroyed 1 4 4 Extensive 19 15 23 Damage Deepwater Damaged 5 3 0 Production Facilities Destroyed 0 0 1 **November November2005 2005
Slide 30: Vessels of Opportunity
Vessels of Opportunity • Botnica Charter • 60 days with 30 day option • Deepwater Infrastructure Repairs
Slide 31: 2006 Subsea Projects Outlook
2006 Subsea Projects Outlook • Increase in Demand for Deepwater IMR •• One-year One-year Term Term Contract Contract for for Ocean Ocean Intervention Intervention II • Higher Diving Contribution •• Hurricanes Hurricanes Katrina Katrina and and Rita Rita Repair Repair Work Work •• Addition Addition o
Slide 32: Relative Price Performance: OII vs. OSX
Relative Price Performance OII vs. OSX [Oilfield Service Index] 60 50 40 Annual % Change 30 20 10 OII 0 OSX -10 -20 -30 -40 2001 2002 2003 2004 2005* *Through December 30, 2005
Slide 33: OII Summary
OII Summary • Small-Cap Diversified OFS Company • Leading Market Positions in Technical Niches • Leveraged to Deepwater and Subsea Completions • Benefiting from Capital Expansion Initiatives • Significant Debt Capacity • Strong Cash Flow • Share Price has Upside Potential
Slide 34: Engineered Products & Services
Engineered Products & Services
Slide 35: Appendix
Appendix • CFFO Reconciliation to Net Income –– Slide Slide #9 #9 • EBITDA Reconciliation to Net Income –– Slide Slide #10 #10
Slide 36: Cash Flow from Operations Reconciliation to Net Income
Cash Flow from Operations Reconciliation to Net Income Cash Cash Flow Flow from from Operations Operations (CFFO), (CFFO), net net income income plus plus depreciation depreciation and and amortization amortization expense, expense, is is aa non-GAAP non-GAAP financial financial measurement. measure
Slide 37: EBITDA Reconciliation to Net Income
EBITDA Reconciliation to Net Income Earnings Earnings before before interest, interest, taxes, taxes, depreciation depreciation andand amortization amortization (EBITDA) (EBITDA) is is aa non-GAAP non-GAAP financial financial measurement. measurement. Oceaneering’s Oceaneering’s management managemen
Slide 38: Supplemental Information
Supplemental Information
Slide 39: Business Segments Revenue
Business Segments Revenue % of Oilfield ROV - 37% Products - 25% MOPS - 6% 87% 87% Projects - 13% Inspection - 19% Oilfield Oilfield Non Non Oilfield Oilfield September SeptemberYTD YTD2005 2005
Slide 40: Oilfield Work Class ROV Fleet
Oilfield Work Class ROV Fleet Ownership Profile – Year End 2004 OII OII Subsea Subsea 77 Sonsub Sonsub Stolt Stolt 38% Fugro Fugro OII Others Others 444 444 Vehicles Vehicles Source: Source: OII OII Estimates Estimates –– December December 2004 2004 444 444 Vehicles Total – OII 168 Vehicles Vehicles
Slide 41: OII Work Class ROV Fleet
OII Work Class ROV Fleet Geographical Profile – September 2005 North North Am Am 23 23 Africa Africa Norway Norway 13 Brazil Brazil 13 66 66 U.K. U.K. 99 Asia/Pac Asia/Pac 25 25 42 42 178 178 Vehicles Vehicles September September2005 2005
Slide 42: ROV Financial Results
ROV Financial Results (Average Dayrate Continues To Escalate) Revenue Revenue // Day Day on on Hire Hire Fleet Fleet Utilization Utilization $6,500 $6,500 88% 88% $6,000 $6,000 84% 84% $5,500 $5,500 80% 80% $5,000 $5,000 76% 76% $4,500 $4,500 72% 72% $4,000 $4,000 68% 68% $3,500 $3,500 64% 64% $3,00
Slide 43: Global Subsea Production Umbilicals
Global Subsea Production Umbilicals Market Share By Length Awarded – 2004 Nexans Nexans TKP TKP OII OII Kvaerner Kvaerner Other Other 21% Source: Source: Quest Quest Offshore Offshore Resources Resources –– March March 2005 2005
Slide 44: Umbilical Market Overview
Umbilical Market Overview 2005/2006 Market Forecasted at Historically High Levels Steel Steel Thermoplastic Thermoplastic Tree Tree Orders Orders 2,500 2,500 500 500 KM Orders -- KM 2,000 2,000 400 400 Orders Tree Orders Umbilical Orders 1,500 1,500 300 300 Subsea Tree Umbilical 1,000 1,000 200 200