Company Quick10K Filing
Quick10K
Oceaneering
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$19.02 99 $1,880
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-07-24 Earnings, Exhibits
8-K 2019-05-13 Regulation FD
8-K 2019-05-08 Officers, Shareholder Vote, Exhibits
8-K 2019-04-29 Earnings, Exhibits
8-K 2019-03-19 Regulation FD
8-K 2019-02-13 Earnings, Exhibits
8-K 2019-01-07 Regulation FD
8-K 2018-10-24 Earnings, Exhibits
8-K 2018-08-27 Regulation FD
8-K 2018-07-25 Earnings, Exhibits
8-K 2018-05-16 Regulation FD
8-K 2018-05-04 Shareholder Vote
8-K 2018-04-25 Earnings, Exhibits
8-K 2018-03-26 Regulation FD
8-K 2018-03-01 Officers, Exhibits
8-K 2018-02-22 Earnings, Exhibits
8-K 2018-02-21 Officers, Exhibits
8-K 2018-02-16 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-02-01 Enter Agreement, Off-BS Arrangement, Exhibits
PAC Pacific Airport Group 5,430
SHLX Shell Midstream Partners 4,470
UBA Urstadt Biddle Properties 914
CSWC Capital Southwest 384
CELP Cypress Energy Partners 85
BMRA Biomerica 22
NAO Nordic American Offshore 0
MPAY Mobetize 0
EOMN Ethos Media Network 0
MSOF Multi Soft II 0
OII 2019-06-30
Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 6. Exhibits
EX-10.1 oiiexhibit1001063020191.htm
EX-10.2 oiiexhibit100206302019.htm
EX-10.3 oiiexhibit100306302019.htm
EX-10.4 oiiexhibit100406302019.htm
EX-10.5 oiiexhibit100506302019.htm
EX-31.01 oiiexhibit310106302019.htm
EX-31.02 oiiexhibit310206302019.htm
EX-32.01 oiiexhibit320106302019.htm
EX-32.02 oiiexhibit320206302019.htm

Oceaneering Earnings 2019-06-30

OII 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
false--12-31Q220190000073756OCEANEERING INTERNATIONAL INC13000000711600056760000.250.253600000003600000001108340881108340880.060.04650.060.04650.06P5Y20000000020000000010000000P3YP1Y1229487311904585 0000073756 2019-01-01 2019-06-30 0000073756 2019-07-26 0000073756 2019-06-30 0000073756 2018-12-31 0000073756 2018-01-01 2018-06-30 0000073756 2019-04-01 2019-06-30 0000073756 2018-04-01 2018-06-30 0000073756 2018-06-30 0000073756 2017-12-31 0000073756 us-gaap:SeniorNotesMember 2018-06-30 0000073756 us-gaap:CommonStockMember 2018-12-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:TreasuryStockMember 2018-04-01 2018-06-30 0000073756 us-gaap:TreasuryStockMember 2018-06-30 0000073756 2019-03-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-03-31 0000073756 us-gaap:ParentMember 2018-03-31 0000073756 us-gaap:CommonStockMember 2018-03-31 0000073756 2019-01-01 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember 2018-04-01 2018-06-30 0000073756 us-gaap:RestrictedStockMember us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000073756 us-gaap:ParentMember 2018-01-01 0000073756 2018-01-01 0000073756 us-gaap:TreasuryStockMember 2017-12-31 0000073756 2018-01-01 2018-03-31 0000073756 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0000073756 us-gaap:AccumulatedTranslationAdjustmentMember 2019-04-01 2019-06-30 0000073756 us-gaap:TreasuryStockMember 2018-03-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:ParentMember 2018-01-01 2018-03-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:TreasuryStockMember 2019-01-01 2019-03-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:TreasuryStockMember 2018-01-01 2018-03-31 0000073756 us-gaap:RetainedEarningsMember 2019-03-31 0000073756 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-06-30 0000073756 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000073756 us-gaap:CommonStockMember 2019-03-31 0000073756 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000073756 us-gaap:ParentMember 2019-01-01 0000073756 us-gaap:RestrictedStockMember us-gaap:TreasuryStockMember 2018-01-01 2018-03-31 0000073756 us-gaap:CommonStockMember 2017-12-31 0000073756 us-gaap:RestrictedStockMember 2018-01-01 2018-03-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:TreasuryStockMember 2019-04-01 2019-06-30 0000073756 us-gaap:ParentMember 2019-03-31 0000073756 us-gaap:AccumulatedTranslationAdjustmentMember 2018-01-01 2018-03-31 0000073756 us-gaap:RetainedEarningsMember 2018-01-01 0000073756 us-gaap:AccumulatedTranslationAdjustmentMember 2019-01-01 2019-03-31 0000073756 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0000073756 us-gaap:AccumulatedTranslationAdjustmentMember 2018-03-31 0000073756 us-gaap:RetainedEarningsMember 2018-06-30 0000073756 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0000073756 us-gaap:ParentMember 2018-01-01 2018-03-31 0000073756 us-gaap:TreasuryStockMember 2019-03-31 0000073756 us-gaap:AccumulatedTranslationAdjustmentMember 2019-03-31 0000073756 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0000073756 us-gaap:RestrictedStockMember us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0000073756 us-gaap:RetainedEarningsMember 2017-12-31 0000073756 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000073756 us-gaap:NoncontrollingInterestMember 2018-03-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:ParentMember 2018-04-01 2018-06-30 0000073756 us-gaap:NoncontrollingInterestMember 2018-12-31 0000073756 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-06-30 0000073756 us-gaap:CommonStockMember 2019-06-30 0000073756 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0000073756 us-gaap:NoncontrollingInterestMember 2017-12-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-03-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:ParentMember 2019-04-01 2019-06-30 0000073756 us-gaap:NoncontrollingInterestMember 2019-03-31 0000073756 2019-01-01 2019-03-31 0000073756 2018-03-31 0000073756 us-gaap:ParentMember 2019-01-01 2019-03-31 0000073756 us-gaap:RestrictedStockMember 2019-01-01 2019-03-31 0000073756 us-gaap:CommonStockMember 2018-06-30 0000073756 us-gaap:ParentMember 2017-12-31 0000073756 us-gaap:NoncontrollingInterestMember 2018-06-30 0000073756 us-gaap:AccumulatedTranslationAdjustmentMember 2018-04-01 2018-06-30 0000073756 us-gaap:AccumulatedTranslationAdjustmentMember 2019-06-30 0000073756 us-gaap:RestrictedStockUnitsRSUMember us-gaap:ParentMember 2019-01-01 2019-03-31 0000073756 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-12-31 0000073756 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2017-12-31 0000073756 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-03-31 0000073756 us-gaap:ParentMember 2018-12-31 0000073756 us-gaap:AccumulatedTranslationAdjustmentMember 2018-06-30 0000073756 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-03-31 0000073756 us-gaap:TreasuryStockMember 2018-12-31 0000073756 us-gaap:RetainedEarningsMember 2019-06-30 0000073756 us-gaap:ParentMember 2018-06-30 0000073756 us-gaap:RetainedEarningsMember 2018-12-31 0000073756 us-gaap:AccumulatedTranslationAdjustmentMember 2017-12-31 0000073756 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000073756 us-gaap:AccumulatedTranslationAdjustmentMember 2018-12-31 0000073756 us-gaap:RetainedEarningsMember 2019-01-01 0000073756 us-gaap:NoncontrollingInterestMember 2019-06-30 0000073756 us-gaap:ParentMember 2019-06-30 0000073756 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0000073756 us-gaap:RetainedEarningsMember 2018-03-31 0000073756 us-gaap:RestrictedStockMember us-gaap:TreasuryStockMember 2019-01-01 2019-03-31 0000073756 us-gaap:TreasuryStockMember 2019-06-30 0000073756 srt:MinimumMember 2019-06-30 0000073756 2018-01-01 2018-12-31 0000073756 2018-10-01 2018-12-31 0000073756 us-gaap:AccountingStandardsUpdate201409Member us-gaap:RetainedEarningsMember 2018-01-01 0000073756 srt:MaximumMember 2019-06-30 0000073756 us-gaap:AccountingStandardsUpdate201602Member us-gaap:RetainedEarningsMember 2019-01-01 0000073756 oii:RovsMember 2019-01-01 2019-06-30 0000073756 us-gaap:OilAndGasMember 2018-04-01 2018-06-30 0000073756 oii:AssetIntegrityMember 2018-01-01 2018-06-30 0000073756 oii:SubseaProjectsMember 2019-04-01 2019-06-30 0000073756 oii:SubseaProductsMember 2019-04-01 2019-06-30 0000073756 oii:RovsMember 2018-01-01 2018-06-30 0000073756 us-gaap:OilAndGasMember 2019-01-01 2019-06-30 0000073756 oii:SubseaProductsMember 2018-01-01 2018-06-30 0000073756 oii:AssetIntegrityMember 2019-01-01 2019-06-30 0000073756 oii:RovsMember 2018-04-01 2018-06-30 0000073756 oii:AdvancedTechnologiesMember 2018-04-01 2018-06-30 0000073756 oii:AssetIntegrityMember 2019-01-01 2019-03-31 0000073756 oii:AdvancedTechnologiesMember 2019-04-01 2019-06-30 0000073756 oii:SubseaProjectsMember 2019-01-01 2019-06-30 0000073756 us-gaap:OilAndGasMember 2019-01-01 2019-03-31 0000073756 us-gaap:OilAndGasMember 2018-01-01 2018-06-30 0000073756 oii:AssetIntegrityMember 2019-04-01 2019-06-30 0000073756 oii:SubseaProductsMember 2018-04-01 2018-06-30 0000073756 oii:AdvancedTechnologiesMember 2018-01-01 2018-06-30 0000073756 oii:RovsMember 2019-04-01 2019-06-30 0000073756 oii:AdvancedTechnologiesMember 2019-01-01 2019-06-30 0000073756 oii:SubseaProductsMember 2019-01-01 2019-06-30 0000073756 us-gaap:OilAndGasMember 2019-04-01 2019-06-30 0000073756 oii:SubseaProductsMember 2019-01-01 2019-03-31 0000073756 oii:AdvancedTechnologiesMember 2019-01-01 2019-03-31 0000073756 oii:SubseaProjectsMember 2018-04-01 2018-06-30 0000073756 oii:AssetIntegrityMember 2018-04-01 2018-06-30 0000073756 oii:SubseaProjectsMember 2018-01-01 2018-06-30 0000073756 oii:RovsMember 2019-01-01 2019-03-31 0000073756 oii:SubseaProjectsMember 2019-01-01 2019-03-31 0000073756 srt:AfricaMember 2018-01-01 2018-06-30 0000073756 us-gaap:NonUsMember 2018-01-01 2018-06-30 0000073756 country:GB 2018-01-01 2018-06-30 0000073756 srt:AsiaPacificMember 2019-01-01 2019-06-30 0000073756 country:US 2018-01-01 2018-06-30 0000073756 country:US 2019-01-01 2019-03-31 0000073756 country:BR 2019-04-01 2019-06-30 0000073756 srt:AfricaMember 2019-01-01 2019-03-31 0000073756 srt:AfricaMember 2018-04-01 2018-06-30 0000073756 oii:OtherGeographicalMember 2018-01-01 2018-06-30 0000073756 srt:AfricaMember 2019-04-01 2019-06-30 0000073756 country:NO 2018-01-01 2018-06-30 0000073756 oii:OtherGeographicalMember 2019-04-01 2019-06-30 0000073756 country:BR 2019-01-01 2019-06-30 0000073756 country:GB 2018-04-01 2018-06-30 0000073756 country:GB 2019-01-01 2019-03-31 0000073756 oii:OtherGeographicalMember 2019-01-01 2019-06-30 0000073756 srt:AsiaPacificMember 2019-01-01 2019-03-31 0000073756 country:NO 2019-04-01 2019-06-30 0000073756 country:NO 2019-01-01 2019-03-31 0000073756 country:GB 2019-01-01 2019-06-30 0000073756 country:NO 2018-04-01 2018-06-30 0000073756 country:US 2019-01-01 2019-06-30 0000073756 country:BR 2019-01-01 2019-03-31 0000073756 srt:AfricaMember 2019-01-01 2019-06-30 0000073756 us-gaap:NonUsMember 2019-04-01 2019-06-30 0000073756 oii:OtherGeographicalMember 2018-04-01 2018-06-30 0000073756 us-gaap:NonUsMember 2018-04-01 2018-06-30 0000073756 country:NO 2019-01-01 2019-06-30 0000073756 us-gaap:NonUsMember 2019-01-01 2019-06-30 0000073756 oii:OtherGeographicalMember 2019-01-01 2019-03-31 0000073756 us-gaap:NonUsMember 2019-01-01 2019-03-31 0000073756 country:BR 2018-01-01 2018-06-30 0000073756 country:US 2018-04-01 2018-06-30 0000073756 country:US 2019-04-01 2019-06-30 0000073756 srt:AsiaPacificMember 2018-04-01 2018-06-30 0000073756 country:GB 2019-04-01 2019-06-30 0000073756 srt:AsiaPacificMember 2019-04-01 2019-06-30 0000073756 country:BR 2018-04-01 2018-06-30 0000073756 srt:AsiaPacificMember 2018-01-01 2018-06-30 0000073756 oii:SeniorNotesdue2024Member 2018-12-31 0000073756 oii:SeniorNotesdue2028Member 2018-12-31 0000073756 oii:SeniorNotesdue2028Member 2019-06-30 0000073756 oii:SeniorNotesdue2024Member 2019-06-30 0000073756 oii:SeniorNotesdue2028Member 2014-10-01 2014-12-31 0000073756 us-gaap:LineOfCreditMember 2018-02-28 0000073756 oii:SeniorNotesdue2024Member 2014-11-30 0000073756 oii:SeniorNotesdue2024Member 2014-10-01 2014-12-31 0000073756 srt:MaximumMember 2019-01-01 2019-06-30 0000073756 oii:AdjustedBaseRateAdvancesMember oii:FederalFundsRateMember oii:AdjustedBaseRateMember srt:MinimumMember oii:CreditAgreementMember 2019-06-30 0000073756 us-gaap:LineOfCreditMember 2014-10-31 0000073756 oii:AdjustedBaseRateAdvancesMember oii:ApplicableMarginMember srt:MaximumMember oii:CreditAgreementMember 2019-06-30 0000073756 oii:AdjustedBaseRateAdvancesMember oii:ApplicableMarginMember srt:MinimumMember oii:CreditAgreementMember 2019-06-30 0000073756 us-gaap:LineOfCreditMember us-gaap:DebtInstrumentRedemptionPeriodTwoMember 2018-02-28 0000073756 oii:SeniorNotesdue2028Member 2018-02-28 0000073756 us-gaap:LineOfCreditMember us-gaap:DebtInstrumentRedemptionPeriodOneMember 2018-02-28 0000073756 oii:EurodollarAdvancesMember oii:ApplicableMarginMember srt:MinimumMember oii:CreditAgreementMember 2019-06-30 0000073756 2014-10-01 2014-12-31 0000073756 oii:AdjustedBaseRateAdvancesMember oii:EurodollarRateMember oii:AdjustedBaseRateMember srt:MinimumMember oii:CreditAgreementMember 2019-06-30 0000073756 srt:MinimumMember 2019-01-01 2019-06-30 0000073756 oii:EurodollarAdvancesMember oii:ApplicableMarginMember srt:MaximumMember oii:CreditAgreementMember 2019-06-30 0000073756 us-gaap:LineOfCreditMember 2014-10-01 2014-10-31 0000073756 currency:AOA 2019-06-30 0000073756 us-gaap:OtherIncomeMember 2019-01-01 2019-06-30 0000073756 us-gaap:OtherIncomeMember 2019-04-01 2019-06-30 0000073756 srt:MaximumMember oii:SeniorNotesdue2024Member us-gaap:LondonInterbankOfferedRateLIBORMember 2019-06-30 0000073756 currency:AOA 2018-12-31 0000073756 srt:MinimumMember oii:SeniorNotesdue2024Member us-gaap:LondonInterbankOfferedRateLIBORMember 2019-06-30 0000073756 us-gaap:OtherIncomeMember 2018-04-01 2018-06-30 0000073756 us-gaap:OtherIncomeMember 2018-01-01 2018-06-30 0000073756 us-gaap:FairValueInputsLevel2Member 2019-06-30 0000073756 us-gaap:FairValueInputsLevel2Member 2018-12-31 0000073756 2014-12-31 0000073756 2015-12-31 0000073756 us-gaap:RestrictedStockUnitsRSUMember 2019-06-30 0000073756 srt:MinimumMember us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0000073756 srt:MaximumMember us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0000073756 oii:AngolaMember 2019-01-01 2019-06-30 0000073756 oii:AustraliaMember 2019-01-01 2019-06-30 0000073756 oii:BrazilMember 2019-01-01 2019-06-30 0000073756 us-gaap:DomesticCountryMember 2019-01-01 2019-06-30 0000073756 oii:UnitedKingdomMember 2019-01-01 2019-06-30 0000073756 oii:NorwayMember 2019-01-01 2019-06-30 0000073756 oii:UnallocatedExpensesMember 2019-01-01 2019-06-30 0000073756 oii:UnallocatedExpensesMember 2019-04-01 2019-06-30 0000073756 oii:UnallocatedExpensesMember 2018-04-01 2018-06-30 0000073756 oii:UnallocatedExpensesMember 2018-01-01 2018-06-30 0000073756 oii:UnallocatedExpensesMember 2019-01-01 2019-03-31 iso4217:USD xbrli:shares xbrli:shares oii:derivative_instrument iso4217:USD xbrli:pure
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended
June 30, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                      to       
Commission File Number: 1-10945
____________________________________________
OCEANEERING INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
oceaneeringlogo2q2017a08.jpg
Delaware
95-2628227
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
 
 
 
11911 FM 529
 
Houston,
Texas
77041
(Address of principal executive offices)
(Zip Code)
(713329-4500
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed from last report)
____________________________________________
Title of each class
Trading Symbol(s)
Name of exchange on which registered
Common stock, par value $0.25 per share
OII
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   þ Yes   ¨  No
Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    þ  Yes   ¨  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes     No
Number of shares of Common Stock outstanding as of July 26, 2019: 98,929,503 



Oceaneering International, Inc.
Form 10-Q
Table of Contents
 
Part I
  
 
 
 
 
Item 1.
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
  
Item 3.
  
Item 4.
  
 
 
 
 
Part II
 
 
 
 
 
Item 1.
  
Item 6.
  
 
 
 
 
 


1

Table of Contents

PART I – FINANCIAL INFORMATION
 
Item 1.
Financial Statements

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
 
 
Jun 30, 2019
 
Dec 31, 2018
(in thousands, except share data)
 
 
 
 
(unaudited)
 
 
ASSETS
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
355,838

 
$
354,259

Accounts receivable, net of allowances for doubtful accounts of $5,676 and $7,116
 
374,173

 
368,885

Contract assets
 
197,001

 
256,201

Inventory, net
 
206,671

 
194,507

Other current assets
 
61,510

 
71,037

Total Current Assets
 
1,195,193

 
1,244,889

Property and equipment, at cost
 
2,879,197

 
2,837,587

Less accumulated depreciation
 
1,931,410

 
1,872,917

Net property and equipment
 
947,787

 
964,670

Other Assets:
 
 
 
 
Goodwill
 
422,312

 
413,121

Other noncurrent assets
 
192,698

 
202,318

Right-of-use operating lease assets
 
180,645

 

Total other assets
 
795,655

 
615,439

Total Assets
 
$
2,938,635

 
$
2,824,998

LIABILITIES AND EQUITY
 
 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
 
$
105,171

 
$
102,636

Accrued liabilities
 
312,347

 
306,933

Contract liabilities
 
73,526

 
85,172

Total current liabilities
 
491,044

 
494,741

Long-term debt
 
795,639

 
786,580

Long-term operating lease liabilities
 
172,090

 

Other long-term liabilities
 
120,829

 
128,379

Commitments and contingencies
 


 


Equity:
 
 
 
 
Common stock, par value $0.25 per share; 360,000,000 shares authorized; 110,834,088 shares issued
 
27,709

 
27,709

Additional paid-in capital
 
201,227

 
220,421

Treasury stock; 11,904,585 and 12,294,873 shares, at cost
 
(681,717
)
 
(704,066
)
Retained earnings
 
2,138,679

 
2,204,548

Accumulated other comprehensive loss
 
(332,928
)
 
(339,377
)
Oceaneering shareholders' equity
 
1,352,970

 
1,409,235

       Noncontrolling interest
 
6,063

 
6,063

               Total equity
 
1,359,033

 
1,415,298

Total Liabilities and Equity
 
$
2,938,635

 
$
2,824,998

The accompanying Notes are an integral part of these Consolidated Financial Statements.

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands, except per share data)
 
2019
 
2018
 
2019
 
2018
Revenue
 
$
495,781

 
$
478,674

 
$
989,667

 
$
895,087

Cost of services and products
 
453,798

 
448,946

 
920,097

 
846,531

 
Gross margin
 
41,983

 
29,728

 
69,570

 
48,556

Selling, general and administrative expense
 
51,618

 
49,365

 
100,919

 
95,342

 
Income (loss) from operations
 
(9,635
)
 
(19,637
)
 
(31,349
)
 
(46,786
)
Interest income
 
1,848

 
2,950

 
4,452

 
5,542

Interest expense, net of amounts capitalized
 
(10,199
)
 
(8,802
)
 
(19,623
)
 
(18,173
)
Equity in income (losses) of unconsolidated affiliates
 

 
(737
)
 
(164
)
 
(1,580
)
Other income (expense), net
 
7

 
(3,556
)
 
726

 
(12,030
)
 
Income (loss) before income taxes
 
(17,979
)
 
(29,782
)
 
(45,958
)
 
(73,027
)
Provision (benefit) for income taxes
 
17,203

 
3,294

 
14,051

 
9,182

 
Net Income (Loss)
 
$
(35,182
)
 
(33,076
)
 
$
(60,009
)
 
$
(82,209
)
 
 
 
 
 
 
 
 
 
Weighted-average shares outstanding
 
 
 
 
 
 
 
 
    Basic
 
98,929

 
98,531

 
98,822

 
98,457

    Diluted
 
98,929

 
98,531

 
98,822

 
98,457

Earnings (loss) per share
 
 
 
 
 
 
 
 
    Basic
 
$
(0.36
)
 
$
(0.34
)
 
$
(0.61
)
 
$
(0.83
)
    Diluted
 
$
(0.36
)
 
$
(0.34
)
 
$
(0.61
)
 
$
(0.83
)
The accompanying Notes are an integral part of these Consolidated Financial Statements.



2

Table of Contents


OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands)
 
2019
 
2018
 
2019
 
2018
Net income (loss)
 
$
(35,182
)
 
$
(33,076
)
 
$
(60,009
)
 
$
(82,209
)
Other Comprehensive Income (Loss):
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
203

 
(37,806
)
 
6,449

 
(15,630
)
Total other comprehensive income (loss)
 
203

 
(37,806
)
 
6,449

 
(15,630
)
 
Comprehensive income (loss)
 
$
(34,979
)
 
$
(70,882
)
 
$
(53,560
)
 
$
(97,839
)

The accompanying Notes are an integral part of these Consolidated Financial Statements.


3

Table of Contents

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 
 
 
Six Months Ended June 30,
(in thousands)
 
2019
 
2018
Cash Flows from Operating Activities:
 
 
 
 
Net income (loss)
 
$
(60,009
)
 
$
(82,209
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
102,790

 
113,971

Deferred income tax provision (benefit)
 
(3,686
)
 
(23,034
)
Net loss (gain) on sales of property and equipment
 
(1,592
)
 
860

Noncash compensation
 
5,835

 
5,985

Excluding the effects of acquisitions, increase (decrease) in cash from:
 
 
 
 
Accounts receivable and contract assets
 
53,913

 
(12,161
)
Inventory
 
(18,687
)
 
(3,901
)
Other operating assets
 
11,868

 
473

Currency translation effect on working capital, excluding cash
 
2,005

 
(2,771
)
Current liabilities
 
(18,669
)
 
3,941

Other operating liabilities
 
(1,059
)
 
14,531

Total adjustments to net income (loss)
 
132,718

 
97,894

Net Cash Provided by Operating Activities
 
72,709

 
15,685

Cash Flows from Investing Activities:
 
 
 
 
Purchases of property and equipment
 
(70,862
)
 
(53,530
)
Business acquisitions, net of cash acquired
 

 
(68,398
)
Proceeds from redemption of investments
 

 
33,405

Other investing activities
 

 
(10,025
)
Distributions of capital from unconsolidated affiliates
 
1,064

 
2,372

Dispositions of property and equipment
 
1,679

 
1,403

Net Cash Used in Investing Activities
 
(68,119
)
 
(94,773
)
Cash Flows from Financing Activities:
 
 
 

Net proceeds from issuance of 6.000% Senior Notes, net of issuance costs
 

 
295,816

Repayment of term loan facility
 

 
(300,000
)
Other financing activities
 
(2,682
)
 
(1,594
)
Net Cash Used in Financing Activities
 
(2,682
)
 
(5,778
)
Effect of exchange rates on cash
 
(329
)
 
(5,909
)
Net Increase (Decrease) in Cash and Cash Equivalents
 
1,579

 
(90,775
)
Cash and Cash Equivalents—Beginning of Period
 
354,259

 
430,316

Cash and Cash Equivalents—End of Period
 
$
355,838

 
$
339,541

The accompanying Notes are an integral part of these Consolidated Financial Statements.



4

Table of Contents

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)

 
 
 
 
 
 
 
 
 
 
Accumulated Other Comprehensive Income
(Loss)
 
 
 
 
 
 
 
 
Common Stock
 
Additional
Paid-in
Capital
Treasury
Stock
 
Retained
Earnings
 
Currency
Translation
Adjustments
 
 
 
Oceaneering Shareholders' Equity
 
Non-controlling Interest
 
Total Equity
(in thousands)
 
 
 
Pension
 
 
 
Balance, December 31, 2018
 
$
27,709

 
$
220,421

 
$
(704,066
)
 
$
2,204,548

 
$
(339,377
)
 
$

 
$
1,409,235

 
$
6,063

 
$
1,415,298

Cumulative effect of ASC 842 adoption
 

 

 

 
(5,860
)
 

 

 
(5,860
)
 

 
(5,860
)
Net income (loss)
 

 

 

 
(24,827
)
 

 

 
(24,827
)
 

 
(24,827
)
Other comprehensive income (loss)
 

 

 

 

 
6,246

 

 
6,246

 

 
6,246

Restricted stock unit activity
 

 
(16,494
)
 
17,137

 

 

 

 
643

 

 
643

Restricted stock activity
 

 
(5,143
)
 
5,143

 

 

 

 

 

 

Balance, March 31, 2019
 
27,709

 
198,784

 
(681,786
)
 
2,173,861

 
(333,131
)
 

 
1,385,437

 
6,063

 
1,391,500

Net income (loss)
 

 

 

 
(35,182
)
 

 

 
(35,182
)
 

 
(35,182
)
Other comprehensive income (loss)
 

 

 

 

 
203

 

 
203

 

 
203

Restricted stock unit activity
 

 
2,443

 
69

 

 

 

 
2,512

 

 
2,512

Restricted stock activity
 

 

 

 

 

 

 

 

 

Noncontrolling interest
 

 

 

 
 
 

 

 

 

 

Balance, June 30, 2019
 
$
27,709

 
$
201,227

 
$
(681,717
)
 
$
2,138,679

 
$
(332,928
)
 
$

 
$
1,352,970

 
$
6,063

 
$
1,359,033

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2017
 
$
27,709

 
$
225,125

 
$
(718,946
)
 
$
2,417,412

 
$
(292,351
)
 
$
215

 
$
1,659,164

 
$
5,354

 
$
1,664,518

Cumulative effect of ASC 606 adoption
 

 

 

 
(537
)
 

 

 
(537
)
 

 
(537
)
Net income (loss)
 

 

 

 
(49,133
)
 

 

 
(49,133
)
 

 
(49,133
)
Other comprehensive income (loss)
 

 

 

 

 
22,176

 

 
22,176

 

 
22,176

Restricted stock unit activity
 

 
(9,186
)
 
10,365

 

 

 

 
1,179

 

 
1,179

Restricted stock activity
 

 
(3,951
)
 
3,951

 

 

 

 

 

 

Balance, March 31, 2018
 
27,709

 
211,988

 
(704,630
)
 
2,367,742

 
(270,175
)
 
215

 
1,632,849

 
5,354

 
1,638,203

Net income (loss)
 

 

 

 
(33,076
)
 

 

 
(33,076
)
 

 
(33,076
)
Other comprehensive income (loss)
 

 

 

 

 
(37,806
)
 

 
(37,806
)
 

 
(37,806
)
Restricted stock unit activity
 

 
3,085

 
128

 

 

 

 
3,213

 

 
3,213

Balance, June 30, 2018
 
$
27,709

 
$
215,073

 
$
(704,502
)
 
$
2,334,666

 
$
(307,981
)
 
$
215

 
$
1,565,180

 
$
5,354

 
$
1,570,534


The accompanying Notes are an integral part of these Consolidated Financial Statements.


5

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    SUMMARY OF MAJOR ACCOUNTING POLICIES

Basis of Presentation. Oceaneering International, Inc. ("Oceaneering," "we" or "us") has prepared these unaudited consolidated financial statements pursuant to instructions for quarterly reports on Form 10-Q, which we are required to file with the United States Securities and Exchange Commission (the "SEC"). These financial statements do not include all information and footnotes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). These financial statements reflect all adjustments that we believe are necessary to present fairly our financial position as of June 30, 2019 and our results of operations and cash flows for the periods presented. Except as otherwise disclosed herein, all such adjustments are of a normal and recurring nature. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2018. The results for interim periods are not necessarily indicative of annual results.
Principles of Consolidation. The consolidated financial statements include the accounts of Oceaneering and our 50% or more owned and controlled subsidiaries. We also consolidate entities that are determined to be variable interest entities if we determine that we are the primary beneficiary; otherwise, we account for those entities using the equity method of accounting. We use the equity method to account for our investments in unconsolidated affiliated companies of which we own an equity interest of between 20% and 50% and as to which we have significant influence, but not control, over operations. We use the cost method for all other long-term investments. Investments in entities that we do not consolidate are reflected on our balance sheet in Other noncurrent assets. All significant intercompany accounts and transactions have been eliminated.
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires that our management make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents. Cash and cash equivalents include demand deposits and highly liquid investments with original maturities of three months or less from the date of investment.
Accounts Receivable – Allowances for Doubtful Accounts. We determine the need for allowances for doubtful accounts using the specific identification method. We generally do not require collateral from our customers.
Inventory. Inventory is valued at the lower of cost or net realizable value. We determine cost using the weighted-average method.
Property and Equipment and Long-Lived Intangible Assets. We provide for depreciation of assets included in property and equipment on the straight-line method over their estimated useful lives. We charge the costs of repair and maintenance of property and equipment to operations as incurred, while we capitalize the costs of improvements that extend asset lives or functionality. Upon the disposition of property and equipment, the related cost and accumulated depreciation accounts are relieved and any resulting gain or loss is included as an adjustment to cost of services and products.
Intangible assets, primarily acquired in connection with business combinations, include trade names, intellectual property and customer relationships and are being amortized over their estimated useful lives.
We capitalize interest on assets where the construction period is anticipated to be more than three months. We capitalized $1.4 million and $1.8 million of interest in the three-month periods ended June 30, 2019 and 2018, respectively, and $3.4 million and $3.4 million of interest in the in the six-month periods ended June 30, 2019 and 2018, respectively. We do not allocate general administrative costs to capital projects.
Our management periodically, and upon the occurrence of a triggering event, reviews the realizability of our property and equipment and long-lived intangible assets to determine whether any events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. For long-lived assets to be held and used, we base our evaluation on impairment indicators, such as the nature of the assets, the future economic benefits of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset may not be recoverable, we determine whether an impairment has occurred through the use of an undiscounted cash flows analysis of the asset at the lowest level for which

6

Table of Contents

identifiable cash flows exist. If an impairment has occurred, we recognize a loss for the difference between the carrying amount and the fair value of the asset. For assets held for sale or disposal, the fair value of the asset is measured using fair market value less estimated costs to sell. Assets are classified as held-for-sale when we have a plan for disposal of certain assets and those assets meet the held for sale criteria.

Business Acquisitions. We account for business combinations using the acquisition method of accounting, and, in each case, we allocate the acquisition price to the assets acquired and liabilities assumed based on their fair market values as of the date of acquisition.

In March 2018, we acquired Ecosse Subsea Limited (“Ecosse”) for $68 million in cash. Headquartered in Aberdeen, Scotland, Ecosse builds and operates tools for seabed preparation, route clearance and trenching for the installation of submarine cables and pipelines. These services are offered on an integrated basis that includes vessels, remotely operated vehicles ("ROVs") and survey services. We have accounted for this acquisition by allocating the purchase price to the assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. We have included Ecosse’s operations in our consolidated financial statements starting from the date of closing, and its operating results are reflected in our Subsea Projects segment.

Goodwill. Annually, we are required to evaluate our goodwill by performing a qualitative or quantitative impairment test. Under the qualitative approach and after assessing the totality of events or circumstances, if we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we are required to perform the quantitative analysis to determine the fair value for that reporting unit. We were required to perform a quantitative analysis for our Subsea Projects Segment and determined that the fair value was less than the carrying value and, as a result, we recorded a pre-tax goodwill impairment loss of $76 million in the Subsea Projects reporting unit. The impairment loss was recorded in our Consolidated Statement of Operation for the quarter ended December 31, 2018. For the remaining reporting units, qualitative assessments were performed; and we concluded that it was more likely than not the fair value of the reporting unit was more than the carrying value of the reporting unit and, therefore, no impairment was required.

In addition to our annual evaluation of goodwill for impairment, upon the occurrence of a triggering event, we review our goodwill to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

Foreign Currency Translation. The functional currency for several of our foreign subsidiaries is the applicable local currency. Results of operations for foreign subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using average exchange rates during the period. Assets and liabilities of these foreign subsidiaries are translated into U.S. dollars using the exchange rates in effect as of the balance sheet date, and the resulting translation adjustments are recognized in accumulated other comprehensive income (loss) as a component of shareholders' equity. All foreign currency transaction gains and losses are recognized currently in the Consolidated Statements of Operations.

Revenue Recognition. On January 1, 2018, we adopted Accounting Standard Update ("ASU") 2014-09, "Revenue from Contracts with Customers," which implemented Accounting Standards Codification Topic 606 ("ASC 606"). We applied the modified retrospective method to those contracts that were not completed as of January 1, 2018, and utilized the practical expedient to reflect the effect on contract modifications in the aggregate. The adoption of this ASU resulted in a cumulative effect adjustment of $537,000 recorded to retained earnings as of January 1, 2018.

All of our revenue is realized through contracts with customers. We recognize our revenue according to the contract type. On a daily basis, we recognize service revenue over time for contracts that provide for specific time, material and equipment charges, which we bill periodically, ranging from weekly to monthly. We use the input method to faithfully depict revenue recognition, because each day of service provided represents value to the customer. The performance obligations in these contracts are satisfied, and revenue is recognized, as the work is performed. We have used the expedient available to recognize revenue when the billing corresponds to the value realized by the customer where appropriate.

We account for significant fixed-price contracts, mainly relating to our Subsea Products segment, and to a lesser extent in our Subsea Projects and Advanced Technologies segments, by recognizing revenue over time using an input, cost-to-cost measurement percentage-of-completion method. We use the input cost-to-cost method to faithfully depict revenue recognition. This commonly used method allows appropriate calculation of progress on our

7

Table of Contents

contracts. A performance obligation is satisfied as we create a product on behalf of the customer over the life of the contract. The remainder of our revenue is recognized at the point in time when control transfers to the customer, thus satisfying the performance obligation.

We have elected to recognize the cost for freight and shipping as an expense when incurred. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, and that are collected by us from customers, are excluded from revenue.

In our service-based business lines, which principally charge on a day rate basis for services provided, there is no significant impact in the pattern of revenue and profit recognition as a result of implementation of ASC 606. In our product-based business lines, we have seen impacts on the pattern of our revenue and profit recognition in our contracts using the percentage-of-completion method, as a result of the requirement to exclude uninstalled materials and significant inefficiencies from the measure of progress. This occurs predominantly in our Subsea Products segment.

We apply judgment in the determination and allocation of transaction price to performance obligations, and the subsequent recognition of revenue, based on the facts and circumstances of each contract. We routinely review estimates related to our contracts and, where required, reflect revisions to profitability in earnings immediately. If an element of variable consideration has the potential for a significant future reversal of revenue, we will constrain that variable consideration to a level intended to remove the potential future reversal. If a current estimate of total contract cost indicates an ultimate loss on a contract, we recognize the projected loss in full when we determine it. In prior years, we recorded adjustments to earnings as a result of revisions to contract estimates; however, we did not have any material adjustments during the six months ended June 30, 2019. There could be significant adjustments to overall contract costs in the future, due to changes in facts and circumstances.

In general, our payment terms consist of those services billed regularly as provided and those products delivered at a point in time, which are invoiced after the performance obligation is satisfied. Our product and service contracts with milestone payments due at agreed progress points during the contract are invoiced when those milestones are reached, which may differ from the timing of revenue recognition. Our payment terms generally do not provide financing of contracts to customers, nor do we receive financing from customers as a result of these terms.

See Note 2—"Revenue" for more information on our revenue from contracts with customers.

On January 1, 2019 we adopted Accounting Standards Update ("ASU") 2018-11, an amendment to ASU 2016-02, "Leases" (collectively, the "New Leases Standard") that requires lessees to recognize right-of-use assets ("ROU assets") and lease liabilities for virtually all leases and updates previous accounting standards for lessors to align certain requirements of the New Leases Standard and the revenue recognition accounting standard. We elected to apply the transition method that allowed us to apply this standard at the adoption date and adopted the package of practical expedients that permitted us to retain the identification and classification of leases made under the previously applicable accounting standards. The adoption of the New Leases Standard as of January 1, 2019 resulted in a cumulative effect adjustment of $5.9 million recorded to retained earnings, with corresponding adjustments to increase ROU assets and lease liabilities by $185 million and $191 million, respectively. The adoption of this standard did not materially affect our net earnings and had no impact on cash flows. Comparative information with respect to prior periods has not been retrospectively restated and continues to be reported under the accounting standards in effect for those periods.
As a lessee, we utilize the expedients to not recognize leases with an initial lease term of 12 months or less on the balance sheet and to combine lease and non-lease components together and account for the combined component as a lease for all asset classes, except real estate.
As a lessor, we lease certain types of equipment along with the provision of services and utilize the expedient allowing us to combine the lease and non-lease components into a combined component that is accounted for under ASC 842 where the lease component is predominant and under ASC 606 where the service component is predominant. In general, wherever we have a service component, this is typically the predominant element and leads to accounting under ASC 606.
We determine whether a contract is or contains a lease at inception, whether as a lessee or a lessor. We take into consideration the elements of an identified asset, right to control and the receipt of economic benefit in making these determinations.

8

Table of Contents

As a lessee, we lease land, buildings, vessels and equipment for the operation of our business and to support some of our service line revenue streams. These generally carry lease terms that range from days for operational and support equipment to 20 years for land and buildings. These leases are negotiated on commercial terms at market rates and many carry standard options to extend or terminate at our discretion. When the exercise of those options is reasonably certain, we include them in the lease assessment. Our leases do not contain material restrictions or covenants that impact our accounting for them, nor do we provide residual value guarantees.
As a lessor, we lease certain types of equipment, often providing services at the same time. These leases can be priced on a day-rate or lump-sum basis for periods ranging from a few days to multi-year contracts. These leases are negotiated on commercial terms at market rates and many carry standard options to extend or terminate at our customers sole discretion. These leases generally do not contain options to purchase, material restrictions or covenants that impact our accounting for leases.
ROU operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate, based on the information available at commencement date in determining the present value of future payments. In determining the incremental borrowing rate, we considered our external credit ratings, bond yields for us and our identified peers, the risk-free rate in geographic regions where we operate and the impact associated with providing collateral over a similar term as the lease for an amount equal to the lease payments. Our ROU operating lease assets also include any lease prepayments made and exclude lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
See Note 5—"Leases"—for more information on our operating leases.

New Accounting Standards. In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-13, "Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments," as modified by subsequently issued ASU 2018-19, ASU 2019-04 and ASU 2019-05. The guidance introduces a new credit reserving model known as the Current Expected Credit Loss ("CECL") model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires estimating all expected credit losses for certain types of financial instruments, including trade receivables and contract assets, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. These ASUs affect an entity to varying degrees depending on the credit quality for the assets held by the entity, their duration and how the entity applies current U.S. GAAP. These ASUs will become effective for us beginning January 1, 2020. We have formed a project team to review these requirements and ensure that we meet the required implementation date. We are currently evaluating the impact of this guidance.

In August 2017, the FASB issued ASU No. 2017-12 "Derivatives and Hedging (Topic 815): Targeted improvements to Accounting for Hedging Activities," which simplified the application of hedge accounting guidance in current U.S. GAAP and improved the reporting of hedging relationships to better portray the economic results of our risk management activities in our consolidated financial statements. Our adoption of this ASU on January 1, 2019 did not have a material impact on our consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, "Income Statement – Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the December 2017 enactment of U.S. tax reform legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). However, because the amendments only relate to the reclassification of the income tax effects of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this update also require certain disclosures about stranded tax effects. The amendments in this update were effective for us beginning January 1, 2019. This ASU has not had a material effect on our consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, "Compensation – Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting."  This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees.  The amendments in this ASU become effective for us beginning January 1, 2019. This ASU has not had a material effect on our consolidated financial statements.    


9

Table of Contents

2.    REVENUE

Revenue by Category

We recognized revenue, disaggregated by business segment, geographical region, and timing of transfer of goods or services, as follows:
 
 
 
 
Three Months Ended
 
Six Months Ended
(in thousands)
 
Jun 30, 2019
 
Jun 30, 2018
 
Mar 31, 2019
 
Jun 30, 2019
 
Jun 30, 2018
Business Segment:
 
 
 
 
 
 
 
 
 
 
 
Energy Services and Products
 
 
 
 
 
 
 
 
 
 
 
 
Remotely Operated Vehicles
 
$
120,363

 
$
107,426

 
$
100,346

 
$
220,709

 
$
193,020

 
 
Subsea Products
 
138,910

 
121,704

 
128,844

 
267,754

 
248,392

 
 
Subsea Projects
 
75,104

 
78,036

 
89,728

 
164,832

 
134,896

 
 
Asset Integrity
 
61,156

 
67,422

 
60,689

 
121,845

 
128,710

 
Total Energy Services and Products
 
395,533

 
374,588

 
379,607

 
775,140

 
705,018

 
Advanced Technologies
 
100,248

 
104,086

 
114,279

 
214,527

 
190,069

 
 
Total
 
$
495,781

 
$
478,674

 
$
493,886

 
$
989,667

 
$
895,087


 
 
 
 
Three Months Ended
 
Six Months Ended
(in thousands)
 
Jun 30, 2019
 
Jun 30, 2018
 
Mar 31, 2019
 
Jun 30, 2019
 
Jun 30, 2018
Geographic Operating Areas:
 
 
 
 
 
Foreign:
 
 
 
 
 
 
 
 
 
 
 
 
Africa
 
$
61,390

 
$
61,966

 
$
87,106

 
$
148,496

 
$
117,053

 
 
United Kingdom
 
65,058

 
50,999

 
53,298

 
118,356

 
96,318

 
 
Norway
 
60,252

 
51,827

 
42,466

 
102,718

 
90,869

 
 
Asia and Australia
 
43,123

 
43,448

 
41,426

 
84,549

 
82,394

 
 
Brazil
 
23,658

 
13,461

 
17,763

 
41,421

 
32,289

 
 
Other
 
28,334

 
14,811

 
21,222

 
49,556

 
34,450

 
Total Foreign
 
281,815

 
236,512

 
263,281

 
545,096

 
453,373

 
United States
 
213,966

 
242,162

 
230,605

 
444,571

 
441,714

Total
 
$
495,781

 
$
478,674

 
$
493,886

 
$
989,667

 
$
895,087


Timing of Transfer of Goods or Services:
 
 
 
 
 
 
 
 
 
Revenue recognized over time
 
$
455,937

 
$
437,035

 
$
461,245

 
$
917,182

 
$
811,702

 
Revenue recognized at a point in time
 
39,844

 
41,639

 
32,641

 
72,485

 
83,385

Total
 
$
495,781

 
$
478,674

 
$
493,886

 
$
989,667

 
$
895,087



Contract Balances

Our contracts with milestone payments have, in the aggregate, a significant impact on the contract asset and the contract liability balances. Milestones are contractually agreed with customers and relate to significant events across the contract lives. Some milestones are achieved before revenue is recognized, resulting in a contract liability, other milestones are achieved after revenue is recognized resulting in a contract asset.

Our payment terms consist of those services billed regularly as provided and those products delivered at a point in time, which are invoiced after the performance obligation is satisfied. Our product and service contracts with milestone payments due at agreed progress points during the contract are invoiced when those milestones are reached, which may differ from the timing of revenue recognition.


10

Table of Contents

During the six months ended June 30, 2019, contract assets decreased by $59 million from its opening balance due to billings of approximately $1.0 billion, which exceeded revenue earned of $961 million. Contract liabilities decreased $12 million from its opening balance, due to revenue recognition of $29 million less deferrals of milestone payments that totaled $17 million. There were no cancellations, impairments or other significant impacts in the period that relate to other categories of explanation.

Performance Obligations

As of June 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $405 million. In arriving at this value, we have used two expedients available to us and are not disclosing amounts in relation to performance obligations: (1) that are part of contracts with an original expected duration of one year or less; or (2) on contracts where we recognize revenue in line with the billing. Of this amount, we expect to recognize revenue of $309 million over the next 12 months.

Due to the nature of our service contracts in our Remotely Operated Vehicle, Subsea Projects, Asset Integrity and Advanced Technologies segments, the majority of our contracts either have initial contract terms of one year or less or have customer option cancellation clauses that lead us to consider the original expected duration of one year or less.

In our Subsea Products and Advanced Technologies segments, we have long-term contracts that extend beyond one year, and these make up the majority of the balance reported. We also have shorter-term product contracts with an expected original duration of one year or less that have been excluded.

Where appropriate, we have made estimates within the transaction price of elements of variable consideration within the contracts and constrained those amounts to a level where we consider that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The amount of revenue recognized in the three- and six-month periods ended June 30, 2019, which was associated with performance obligations completed or partially completed in prior periods was not significant.

As of June 30, 2019, there was no outstanding liability balance for refunds or returns due to the nature of our contracts and the services and products we provide. Our warranties are limited to assurance warranties that are of a standard length and are not considered to be a material right. The majority of our contracts consist of a single performance obligation. When there are multiple obligations, we look for observable evidence of stand-alone selling prices on which to base the allocation. This involves judgment as to the appropriateness of the observable evidence relating to the facts and circumstances of the contract. If we do not have observable evidence, we estimate stand-alone selling prices by taking a cost plus margin approach, using typical margins from the type of product or service, customer and regional geography involved.

Costs to Obtain or Fulfill a Contract

In line with the available expedient, we capitalize costs to obtain a contract when those amounts are significant and the contract is expected at inception to exceed one year in duration; otherwise, the costs are expensed in the period when incurred. Costs to obtain a contract primarily consist of bid and proposal costs, which are incremental to our fixed costs. There were no balances or amortization of costs to obtain a contract in the current reporting periods.

Costs to fulfill a contract primarily consist of certain mobilization costs incurred to provide services or products to our customers. These costs are deferred and amortized over the period of contract performance. The closing balance of costs to fulfill a contract was $14 million and $13 million as of June 30, 2019 and December 31, 2018, respectively. For the three- and six-month periods ended June 30, 2019, $1.7 million and $4.3 million of amortization expense was recorded, respectively. For the three- and six-month periods ended June 30, 2018, we recorded amortization expense of $1.2 million and $2.5 million, respectively. No impairment costs were recognized.


3.    SELECTED BALANCE SHEET INFORMATION
The following is information regarding selected balance sheet accounts:
 
(in thousands)
 
Jun 30, 2019
 
Dec 31, 2018
Inventory:
 
 
 
 
 
Remotely operated vehicle parts and components
 
$
105,987

 
$
108,939

 
Other inventory, primarily raw materials
 
100,684

 
85,568

 
Total
 
$
206,671

 
$
194,507

 
 
 
 
 
 
Other Current Assets:
 
 
 
 
 
Prepaid expenses
 
$
51,331

 
$
60,858

 
Angolan bonds
 
10,179

 
10,179

 
Total
 
$
61,510


$
71,037

 
 
 
 
 
 
Accrued Liabilities:
 
 
 
Payroll and related costs
 
$
116,323

 
$
114,676

 
Accrued job costs
 
58,227

 
62,281

 
Income taxes payable
 
28,029

 
34,954

 
Current operating lease liability
 
19,733

 

 
Other
 
90,035

 
95,022

 
Total
 
$
312,347

 
$
306,933

 
 
 
 
 
 


4.    DEBT
Long-term debt consisted of the following: 
 
(in thousands)
 
Jun 30, 2019
 
Dec 31, 2018
 
 
 
 
 
4.650% Senior Notes due 2024
 
$
500,000

 
$
500,000

6.000% Senior Notes due 2028
 
300,000

 
300,000

Fair value of interest rate swaps on $200 million of principal
 
2,911

 
(5,600
)
Unamortized debt issuance costs
 
(7,272
)
 
(7,820
)
Revolving Credit Facility
 

 

Long-term debt
 
$
795,639

 
$
786,580



In November 2014, we completed the public offering of $500 million aggregate principal amount of 4.650% Senior Notes due 2024 (the "2024 Senior Notes"). We pay interest on the 2024 Senior Notes on May 15 and November 15 of each year. The 2024 Senior Notes are scheduled to mature on November 15, 2024.

In February 2018, we completed the public offering of $300 million aggregate principal amount of 6.000% Senior Notes due 2028 (the "2028 Senior Notes"). We pay interest on the 2028 Senior Notes on February 1 and August 1 of each year. The 2028 Senior Notes are scheduled to mature on February 1, 2028.

We may redeem some or all of the 2024 Senior Notes and the 2028 Senior Notes (collectively, the "Senior Notes") at specified redemption prices. We used the net proceeds from the 2028 Senior Notes to repay our term loan indebtedness described further below.


11

Table of Contents

In October 2014, we entered into a credit agreement (as amended, the "Credit Agreement") with a group of banks. The Credit Agreement initially provided for a $500 million five-year revolving credit facility (the "Revolving Credit Facility"). Subject to certain conditions, the aggregate commitments under the Revolving Credit Facility may be increased by up to $300 million at any time upon agreement between us and existing or additional lenders. Borrowings under the Revolving Credit Facility may be used for general corporate purposes. The Credit Agreement also provided for a $300 million term loan, which we repaid in full in February 2018, using net proceeds from the issuance of our 2028 Senior Notes referred to above, and cash on hand.

In February 2018, we entered into Agreement and Amendment No. 4 to the Credit Agreement ("Amendment No. 4"). Amendment No. 4 amended the Credit Agreement to, among other things, extend the maturity of the Revolving Credit Facility to January 25, 2023 with the extending lenders, which represent 90% of the existing commitments of the lenders, such that the total commitments for the Revolving Credit Facility will be $500 million until October 25, 2021, and thereafter $450 million until January 25, 2023.

Borrowings under the Revolving Credit Facility bear interest at an Adjusted Base Rate or the Eurodollar Rate (both as defined in the Credit Agreement), at our option, plus an applicable margin based on our Leverage Ratio (as defined in the Credit Agreement) and, at our election, based on the ratings of our senior unsecured debt by designated ratings services, thereafter to be based on such debt ratings. The applicable margin varies: (1) in the case of advances bearing interest at the Adjusted Base Rate, from 0.125% to 0.750%; and (2) in the case of advances bearing interest at the Eurodollar Rate, from 1.125% to 1.750%. The Adjusted Base Rate is the highest of (1) the per annum rate established by the administrative agent as its prime rate, (2) the federal funds rate plus 0.50% and (3) the daily one-month LIBOR plus 1%. We pay a commitment fee ranging from 0.125% to 0.300% on the unused portion of the Revolving Credit Facility, depending on our Leverage Ratio. The commitment fees are included as interest expense in our consolidated financial statements.

The Credit Agreement contains various covenants that we believe are customary for agreements of this nature, including, but not limited to, restrictions on our ability and the ability of each of our subsidiaries to incur debt, grant liens, make certain investments, make distributions, merge or consolidate, sell assets and enter into certain restrictive agreements. We are also subject to a maximum adjusted total Capitalization Ratio (as defined in the Credit Agreement) of 55%. The Credit Agreement includes customary events of default and associated remedies. As of June 30, 2019, we were in compliance with all the covenants set forth in the Credit Agreement.

We have two interest rate swaps in place on a total of $200 million of the 2024 Senior Notes for the period to November 2024. See Note 6—"Commitments and Contingencies" for more information on our interest rate swaps.

We incurred $6.9 million and $4.1 million of issuance costs related to the 2024 Senior Notes and the 2028 Senior Notes, respectively, and $2.6 million of loan costs, including costs of the amendments prior to Amendment No. 4, related to the Credit Agreement. The costs, net of accumulated amortization, are included as a reduction of long-term debt on our Consolidated Balance Sheets, as it pertains to the Senior Notes, and in other noncurrent assets, as it pertains to the Credit Agreement. We are amortizing these costs to Interest expense through the maturity date for the Senior Notes and to January 2023 for the Credit Agreement.

5.    LEASES
Supplemental information about our operating leases follows:
(in thousands)
 
Jun 30, 2019
 
Jan 1, 2019
Assets:
 
 
 
 
 
Right-of-Use Operating Lease Assets
 
$
180,645

 
$
184,648

 
 
 
 
 
 
 
Liabilities:
 
 
 
 
Operating
Current operating
 
$
19,733

 
$
20,318

Operating
Noncurrent operating
 
172,090

 
170,190

Lease Liabilities
 
$
191,823

 
$
190,508



12

Table of Contents

 
 
 
 
Three Months Ended
 
Six Months Ended
(in thousands)
 
Jun 30, 2019
 
Jun 30, 2019
Lease Cost:
 
 
 
 
Operating lease cost
Operating lease cost
 
$
11,331

 
$
18,334

Short-term lease cost
Short-term lease cost
 
23,840

 
42,929

Total Lease Cost
 
$
35,171

 
$
61,263

 
 
 
 
Jun 30, 2019
 
Jan 1, 2019
Lease Term and Discount Rate:
 
 
 
 
Weighted-average remaining lease terms (years)
Weighted-average remaining lease term (years)
 
11.0

 
11.0

 
 
 
 
 
 
 
Weighted-average discount rate
Weighted-average discount rate
 
6.9
%
 
7.1
%

Future maturities of lease liabilities under all of our operating leases are as follows:
(in thousands)
 
 
For the twelve months ended June 30,
 
 
2020
 
$
28,938

2021
 
29,862

2022
 
30,633

2023
 
26,277

2024
 
23,692

Thereafter
 
148,813

Total lease payments
 
288,215

Less: Interest
 
(96,392
)
Present Value of Lease Liabilities
 
$
191,823



6.    COMMITMENTS AND CONTINGENCIES

Litigation. In the ordinary course of business, we are, from time to time, involved in litigation or subject to disputes, governmental investigations or claims related to our business activities, including, among other things:

• performance- or warranty-related matters under our customer and supplier contracts and other business arrangements; and
• workers’ compensation claims, Jones Act claims, occupational hazard claims, premises liability claims and other claims.

Although we cannot predict the ultimate outcome of these matters, we believe that our ultimate liability, if any, that may result from these other actions and claims will not have a material adverse effect on our consolidated financial condition, results of operations or cash flows. However, because of the inherent uncertainty of litigation and other dispute resolution proceedings and, in some cases, the availability and amount of potentially available insurance, we can provide no assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material effect on our consolidated financial condition, results of operations or cash flows for the fiscal period in which that resolution occurs.

Financial Instruments and Risk Concentration. In the normal course of business, we manage risks associated with foreign exchange rates and interest rates through a variety of strategies, including the use of hedging transactions. As a matter of policy, we do not use derivative instruments unless we have an underlying exposure. Other financial instruments that potentially subject us to concentrations of credit risk are principally cash and cash equivalents and accounts receivable.

The carrying values of cash and cash equivalents approximate their fair values due to the short-term maturity of the underlying instruments. Accounts receivable are generated from a broad group of customers, primarily from within

13

Table of Contents

the energy industry, which is our major source of revenue. Due to their short-term nature, carrying values of our accounts receivable and accounts payable approximate fair market values.

We estimated the aggregate fair market value of the Senior Notes to be $792 million as of June 30, 2019, based on quoted prices. Since the market for the Senior Notes is not an active market, the fair value of the Senior Notes is classified within Level 2 in the fair value hierarchy under U.S. GAAP (inputs other than quoted prices in active markets for similar assets and liabilities that are observable or can be corroborated by observable market data for substantially the full terms for the assets or liabilities).

We have two interest rate swaps in place on a total of $200 million of the 2024 Senior Notes for the period to November 2024. The agreements swap the fixed interest rate of 4.650% on $100 million of the 2024 Senior Notes to the floating rate of one month LIBOR plus 2.426% and on another $100 million to one month LIBOR plus 2.823%. We estimate the combined fair value of the interest rate swaps to be a net asset of $2.9 million as of June 30, 2019, which is included on our balance sheet in other long-term assets. These values were arrived at based on a discounted cash flow model using Level 2 inputs.

Since the second quarter of 2015, the exchange rate for the Angolan kwanza relative to the U.S. dollar generally has been declining, with the exception that the exchange rate was relatively stable during 2017. As our functional currency in Angola is the U.S. dollar, we recorded foreign currency transaction gains (losses) related to the kwanza of $(0.6) million and $(4.8) million in the three-month periods ended June 30, 2019 and 2018, respectively, and $(0.6) million and $(12) million in the six-month periods ended June 30, 2019 and 2018, respectively, as a component of other income (expense), net in our Consolidated Statements of Operations for those respective periods. Our foreign currency transaction losses related primarily to the remeasurement of our Angolan kwanza cash balances to U.S. dollars. Any conversion of cash balances from kwanza to U.S. dollars is controlled by the central bank in Angola, and the central bank slowed this process from mid-2015 to 2017, causing our kwanza cash balances to increase during that period of time. However, beginning in 2018, the Angolan central bank has allowed us to repatriate cash from Angola. As of June 30, 2019 and December 31, 2018, we had the equivalent of approximately $7.1 million and $9.3 million, respectively, of kwanza cash balances in Angola reflected on our balance sheet.
To mitigate our currency exposure risk in Angola, we have used kwanza to purchase equivalent Angolan central bank (Banco Nacional de Angola) bonds. The bonds are denominated as U.S. dollar equivalents, so that, upon payment of semi-annual interest and principal upon maturity, payment is made in kwanza, equivalent to the respective U.S. dollars at the then-current exchange rate. During 2018, we received a total of $70 million proceeds from maturities and redemptions of Angolan bonds and reinvested $10 million of the proceeds in similar assets. As of June 30, 2019 and December 31, 2018, we have $10 million of Angolan bonds on our Consolidated Balance Sheets. Because we intend to sell the bonds if we are able to repatriate the proceeds, we classified these bonds as available-for-sale securities, and they are recorded as other current assets on our Consolidated Balance Sheets.

We estimated the fair market value of the bonds to be $10 million as of June 30, 2019 and December 31, 2018 using quoted prices. Since the market for the Angolan bonds is not an active market, the fair value of the Angolan bonds is classified within Level 2 in the fair value hierarchy under U.S. GAAP. As of June 30, 2019 and December 31, 2018, the difference between the fair market value and the carrying amount of the Angolan bonds was immaterial.

7.    EARNINGS (LOSS) PER SHARE, SHARE-BASED COMPENSATION AND SHARE REPURCHASE PLAN
Earnings (Loss) per Share. For each period presented, the only difference between our calculated weighted-average basic and diluted number of shares outstanding is the effect of outstanding restricted stock units. In periods where we have a net loss, the effect of our outstanding restricted stock units is anti-dilutive, and therefore does not increase our diluted shares outstanding.
For each period presented, our net income (loss) allocable to both common shareholders and diluted common shareholders is the same as our net income (loss) in our consolidated statements of operations.
Share-Based Compensation. We have no outstanding stock options and, therefore, no share-based compensation to be recognized pursuant to stock option grants.

14

Table of Contents

During 2017, 2018 and through June 30, 2019, we granted restricted units of our common stock to certain of our key executives and employees. During 2017, 2018 and 2019, our Board of Directors granted restricted common stock to our nonemployee directors. The restricted units granted to our key executives and key employees generally vest in full on the third anniversary of the award date, conditional on continued employment. The restricted stock unit grants can vest pro rata over three years, provided the individual meets certain age and years-of-service requirements. The shares of restricted stock we grant to our nonemployee directors vest in full on the first anniversary of the award date, conditional on continued service as a director. Each grantee of shares of restricted stock is deemed to be the record owner of those shares during the restriction period, with the right to vote and receive any dividends on those shares. The restricted stock units outstanding have no voting or dividend rights.
For each of the restricted stock units granted in 2017 through June 30, 2019, at the earlier of three years after grant or at termination of employment or service, the grantee will be issued one share of our common stock for each unit vested. As of June 30, 2019 and December 31, 2018, respective totals of 1,862,489 and 1,443,897 shares of restricted stock or restricted stock units were outstanding.
We estimate that share-based compensation cost not yet recognized related to shares of restricted stock or restricted stock units, based on their grant-date fair values, was $18 million as of June 30, 2019. This expense is being recognized on a graded-vesting basis over three years for awards attributable to individuals meeting certain age and years-of-service requirements, and on