M. Kevin McEvoy

COWEN
December 3, 2013
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,
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.
g
g these and other factors,,
For additional information regarding
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
– Secular Growth
• 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
OII – 289
36%
Worldwide Fleet
803 Vehicles*
Source: OII Estimates - * December 2012, ** September 2013
Drill Support Market Share
OII – 163
59%
278 Floating Rigs Contracted**
Leading Market Position
Specialty Subsea Products
Umbilicals
Tooling &
Subsea Work Systems
Installation and
Workover Control
Systems
Subsea Hardware
Earnings Per Share Guidance
2013 Estimate $3
$3.35
35 - $3.40;
$3 40; 2014 Estimate $3
$3.90
90 - $4.10
$4 10
Actual
Low Estimate
High Estimate
$4.50
Earnings per Share
$4.00
$3.50
$
$3.00
$2.50
$2.00
$1.50
$1.00
$0 50
$0.50
$0.00
2008
2009
2010
OII 2013 Guidance Range as of October 28, 2013
2011
2012
2013E
2014E
Combined EPS – OSX Companies
Excluding OII
Actual
Consensus Estimate
Earnings per Share
$80
$60
$40
$20
$0
2008
2009
2010
2011
Based on First Call Actuals and Mean Estimates as of October 31, 2013
2012
2013E
2014E
Relative EPS Performance
To Recent 2008 OSX Peak
OII
OSX w/o OII
150%
100%
50%
0%
-50%
2008
2009
2010
2011
Based on First Call Actuals and Mean Estimates as of October 31, 2013
2012
2013E
2014E
EPS Guidance
Oilfield Business Segment Outlook
SEGMENT OPERATING INCOME
2013
2014
ROV
>2012
>2013
Subsea Products
>2012
>2013
Subsea Projects
>2012
>2013
Asset Integrity
>2012
>2013
Excellent Cash Flow & Liquidity
• EBITDA of $735 MM to $745 MM Expected in 2013
– $601 MM in 2012
• EBITDA off $845
$
MM to $
$880 MM Expected in 2014
• Ample Resources to Invest in Growth
At September 30, 2013:
– $102 MM Cash
– $40 MM Debt
– $2.0 B Equity
EBITDA Reconciliation to Net Income is in Supplemental Financial Information Slides
Long-Term Deepwater Outlook
• Largest Source of Future Oil Supply Growth
• Exploration Success Bodes Well for the Future
• Drilling Intensity is Rising
Source: ExxonMobil, Deutsche Bank, and Morgan Stanley and Rystad Energy
Worldwide Deepwater Capex
Forecast to Double
$ in billions
DW Capex in Billions
$250
$223
$200
$150
$100
$112
$50
$0
2008-2012
Source: Douglas-Westwood, February 2013
2013-2017
5-Year OII Outlook
Global Demand Growth
• Deepwater Drilling
• Field Development
• Inspection,
I
ti
Maintenance,
M i t
and
dR
Repair
i (IMR)
Ye
ear-End Co
ontracted Flloating Rigs
s
Floating Rig Demand
300
271
≈ 85% Increase
In Demand Since 2003
250
200
150
147
100
@ End of 2012: 301 Rigs in Fleet, 90% Fleet Utilization.
Source: IHS-Petrodata at December 31, 2012
Floating Rig Demand
Ye
ear-End Co
ontracted Flloating Rigss
With 5-Year
5 Year Projection,
Projection Assuming 90% Rig Fleet Utilization
Up
p ~90
33% Growth
400
350
360
300
250
200
150
100
Source: IHS-Petrodata and OII Estimates at September 30, 2013
271
Floating Rig Demand
Ye
ear-End Co
ontracted Flloating Rigss
5-Year
5
Year Averages
Up 95
40% Growth
400
330
350
300
235
250
175
200
150
100
Source: IHS-Petrodata and OII Estimates at September 30, 2013
Outlook for ROV Demand on Vessels
Global RO
OVs per Floa
ating Rig
3.5
3.0
30
3.0
2.5
2.4
2.0
1.5
1.0
0.5
0.0
Year End
Source: Oceaneering Estimates and IHS-Petrodata
Outlook for Global ROV Demand
To Meet Visible Requirements
• Total Demand ≈ 270 Additional Vehicles
– More than 35% Growth
• OII Expects ≈ 95 – 100 Vehicles of Total Demand
– 55 to 60 to Support Drilling by the End of 2017
Source: Oceaneering Estimates at October 28, 2013
Subsea Hardware Capex Forecast
SS Hardware Capex
$ in billions
$150
$125
$124
$
$100
$75
$62
$50
$25
$0
2008-2012
Source: Douglas-Westwood April 2013
2013-2017
Deepwater Fields Backlog
Undeveloped Discoveries
Fields ≥600m fsw
600
500
400
300
200
100
0
Source: IHS Petrodata
Offshore Construction Backlog
Saipem Technip,
Saipem,
Technip and Subsea 7
in billions
€30
€25
€20
€15
€10
€5
€0
Source: Morgan Stanley and Company Filings, June 2013
Subsea Tree Orders
Forecast at Historically High Levels
800
700
600
500
400
300
200
100
Source: Quest Offshore Resources – Mean Case Forecast, November 2013
Subsea Tree Orders
5-Year
5
Year Averages
Up 235
≈ 65% Growth
800
700
600
500
605
390
370
400
300
200
100
Source: Quest Offshore Resources – Mean Case Forecast, November 2013
Subsea Tree Installations
5-Year
5
Year Averages
700
Up 150
≈ 50% Growth
600
450
500
400
300
300
300
200
100
Source: Quest Offshore Resources – Mean Case Forecast, November 2013
Subsea Completions In Service
vs Subsea Products Operating Income (SSP Op Inc)
vs.
Annual SSP Op Inc
$ in millions
5000
$200
4000
$150
3000
$100
2000
$50
1000
0
$0
SS Completions
Source: Quest Offshore Resources & OII SEC Filings
SSP Op Inc
Subsea Completions In Service
Forecast at Historically High Levels
Up 1400
≈ 35% Growth
6000
5000
4000
3000
2000
1000
0
Source: Quest Offshore Resources – Mean Case Forecast, November 2013
5-Year Deepwater Outlook
What To Expect Along The Way
• Some Project Approvals May Continue Moving
to the Right
• Approved Projects
– Cost Overruns
– Production Start-Up Delays
– Technical Challenges
• Sheer Volume of Projects Will Still Drive Growth
OII Summary
• Diversified OFS Company
• Leading
g Market Positions in Technical Niches
• Leveraged to Deepwater and Subsea Completions
• Excellent Earnings, Liquidity and Cash Flow
®
Supplemental Financial Information
EBITDA
Actual
in millions
Low Estimate
High Estimate
$1,000
$900
$800
$700
$600
$500
$400
$300
$200
$100
$0
2008
2009
2010
*2013 - $735MM - $745MM; *2014 - $845MM - $880MM
Based on OII 2013 EPS Guidance as of October 28, 2013
See Next Slide For Non-GAAP Reconciliation to Net Income
2011
2012
2013E* 2014E*
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,
(in millions of $)
2008 2009 2010 2011 2012 2013E 2013E
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
2014E 2014E
LOW HIGH
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))
Equity
Dec 31
D
31,
2008
Dec 31
D
31, Dec
D 31
31, Dec
D 31
31, Dec
D 31
31, Sep
S 30,
30
2009
2010
2011
2012
2013
$
$968
$
$1,224
$
$1,390
$
$1,558
$
$1,815
$
$1,978
Debt
229
120
0
120
94
40
Cash
11
162
245
106
121
102
19%
9%
0%
7%
5%
2%
Debt/Cap
Business Segments
Revenue
Operating Income
5%
9%
9%
41%
30%
15%
13%
15%
31%
ROV
Subsea Products
Subsea Projects
A
Asset
t Integrity
I t it
Adtech
YTD September 2013
32%
Supplemental Market Information
Oilfield ROV Fleet
Ownership
p Profile - December 2012
36%
OII
289
OII
Subsea 7
Sonsub
Fugro
Canyon
Technip
C-Innovations
DOF Subsea
Other
803 Vehicles
Source: OII Estimates
OII ROV Fleet
Geographic
g p
Profile - September
p
2013
40
76
33
GOM
Africa
Norway
Brazil
35
64
54
302 Vehicles
Asia/Pac
Other
Oilfield ROV Drill Support Market
September
p
2013
OII
Subsea 7
59%
Fugro
Sonsub
Other
278 Contracted Floating Rigs
Source: IHS-Petrodata and OII Estimates
OII ROVs on Vessels
Locations
19
GOM
22
Africa
Norway
17
15
73 Vehicles
September 2013
Other
OII ROVs on Vessels
Customers
Operators
36
37
73 Vehicles
September 2013
Contractors
OII ROV Fleet Size
302
Vehicle Co
ount at Period End
325
260
195
130
125
65
0
September 30, 2013
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%
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 Backlog
At Period End
in millions
$1,000
$800
$600
$400
$200
$0
2008
September 2013
2009
2010
2011
2012
2013
Umbilical Products
Thermoplastic Hose Umbilicals
Steel Tube Umbilicals
OIE Products
Production
Control
Valves
Tooling
g
& Work Packages
Installation Workover & Control Systems
Connectors & Repair Systems
Field Development Hardware
Annual Price Performance
OII vs.
vs OSX (Oilfield Service Index)
125%
OII
OSX
75%
25%
-25%
-75%
*Through October 31, 2013: Based on Previous Year-End Purchases
2013
OII up 60%
OSX up 29%
Cumulative Price Performance
OII vs.
vs OSX (Oilfield Service Index)
1300%
OII
OSX
1150%
1000%
850%
700%
550%
400%
250%
100%
-50%
*Through October 31, 2013: Based on Previous Year-end Purchases
2013
OII up 60%
OSX up 29%