During the immediately preceding quarter, Oceaneering reported net income of $2.1 million, or $0.02 per share, on revenue of $515 million.

Adjusted operating income, operating margin, net income (loss) and earnings (loss) per share, EBITDA and adjusted EBITDA (as well as EBITDA and adjusted EBITDA margins) and free cash flow are non-GAAP measures which exclude the impacts of certain identified items.  Reconciliations to the corresponding GAAP measures are shown in the tables Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS), EBITDA and EBITDA Margins, Free Cash Flow, Adjusted Operating Income and Margins by Segment, and EBITDA and Adjusted EBITDA and Margins by Segment.  These tables are included below under the caption Reconciliations of Non-GAAP to GAAP Financial Information.

Summary of Results

(in thousands, except per share amounts)

Three Months Ended

Nine Months Ended

Sep 30,

Jun 30,

Sep 30,

2017

2016

2017

2017

2016

Revenue

$

476,120

$

549,275

$

515,036

$

1,437,332

$

1,783,158

Gross Margin

54,885

35,443

53,571

153,311

228,156

Income (Loss) from Operations

10,531

(11,856)

9,390

19,771

74,623

Net Income (Loss)

(1,768)

(11,798)

2,132

(7,170)

35,614

Diluted Earnings (Loss) Per Share (EPS)

$

(0.02)

$

(0.12)

$

0.02

$

(0.07)

$

0.36

Sequentially, adjusted operating income improved 28% due mainly to increased profit contributions from Subsea Projects and Subsea Products, and reduced Unallocated Expenses, offset primarily by lower profits being realized by ROVs.

Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, “Our third quarter adjusted operating results were in line with our expectations, with the exception of ROVs.  Furthermore, each of our operating segments remained profitable and generated substantial EBITDA.  On a consolidated basis, for the first nine months of 2017, we have generated $179 million of adjusted EBITDA and $84 million of free cash flow.  These results are commendable in light of an offshore oilfield services and products market landscape that remains extremely challenging due to continued pricing degradation and the sluggish rate of subsea project approval and progression.  Our tax provision, as adjusted, was higher than the statutory percentage of pre-tax income due to the geographic mix of tax jurisdictions in which we generated our earnings and losses.

“Compared to the second quarter, third quarter ROV adjusted operating income declined more than expected due to lower average revenue per day on hire and an increase in average daily operating costs.  Consequently, ROV adjusted EBITDA margin declined to 33%, from 38% for the second quarter.

“Additionally, average ROV revenue per day on hire decreased 3% due primarily to an unfavorable change in geographic mix, as we experienced disproportionately fewer work days in higher day rate operating areas, notably Angola.  Days on hire increased 4% as our fleet utilization improved to 50% from 48%.  At the end of September 2017, our fleet size remained at 279 vehicles.  Our fleet use mix during the quarter was unchanged from the prior quarter at 61% in drill support and 39% vessel-based activity.  At the end of September, we had ROVs on 83, or 55% of the 151 floating rigs under contract.  This compares to having ROVs on 53% of the rigs contracted at the end of June and the end of March 2017.

“Compared to the second quarter, Subsea Products third quarter operating income improved as expected on an 18% decline in quarterly revenues.  Operating margin improved due to a higher percentage of segment revenue being generated by our service and rental business unit and excellent execution by our umbilical business unit.  Our Subsea Products backlog at September 30, 2017 was $284 million, compared to our June 30, 2017 backlog of $328 million.  The backlog decline was largely attributable to low umbilical order intake and production associated with Shell Appomattox.  Our book-to-bill ratio year-to-date was 0.69 and the past twelve months has been 0.72, no change from the prior quarter.

“Sequentially, Subsea Projects revenue and operating income increased, principally driven by seasonal improvements in U.S. Gulf of Mexico deepwater vessel work.  Asset Integrity operating income was down slightly as projected.  Advanced Technologies revenue and operating income declined as expected, primarily due to lower levels of work for the U.S. Navy.  Unallocated Expenses were lower.

“Looking forward, we believe our fourth quarter results will be considerably lower than our adjusted third quarter results due to seasonality and a reduced level of activity.  Most of the decline is expected to be in our ROV and Subsea Projects segments, with modestly lower operating income from our other oilfield segments as we foresee very few near-term catalysts to support an improvement in our oilfield markets.  For our non-oilfield segment, Advanced Technologies, we are projecting a modest quarterly improvement, and slightly higher Unallocated Expenses.

“While our fourth quarter outlook has been revised downward, we continue to believe that we will be marginally profitable at the operating income line on a consolidated basis for all of 2017.

“Based on the current number of floating rigs working and expectations for further reductions in oil and gas industry capital and operating expenditures as offshore activities get pushed into 2019, we believe our 2018 earnings will be significantly lower than 2017.  However, during 2018, we expect each of our operating segments will contribute positive EBITDA, and, on a consolidated basis, we will generate sufficient cash flows to service our debt and fund our anticipated maintenance and organic growth capital expenditures.  While we are anticipating an increase in offshore activity levels during the second half of 2018, we do not expect this shift in momentum to be adequate to offset the near-term market weakness or to present an opportunity to meaningfully improve pricing.

“Beyond 2018, we believe that the oil and gas industry will continue its investment in deepwater projects, and foresee improving demand for our services and products.  Meanwhile, we continue to look for opportunities that may emerge to grow our company, with more focus on our customers’ operating expenditures in the production phase of the offshore oilfield life cycle.”

This release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected business, financial performance and prospects of Oceaneering. More specifically, the forward-looking statements in this press release include the statements concerning Oceaneering’s: outlook for the fourth quarter of 2017, and expected contributions of its segments to the fourth quarter results, as well as expected fourth quarter Unallocated Expenses; expectation for the full year of 2017 to be marginally profitable at the operating income line on a consolidated basis; outlook for 2018 earnings relative to 2017, and expected contribution of its segments to the 2018 results; beliefs about deepwater investment and improving demand for its services and products; and intention to look for opportunities that may emerge to grow the company, with more focus on its customers’ operating expenditures in the production phase of the offshore oilfield life cycle. The forward-looking statements included in this release are based on our current expectations and are subject to certain risks, assumptions, trends and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. Among the factors that could cause actual results to differ materially include: factors affecting the level of activity in the oil and gas industry; supply and demand of drilling rigs; oil and natural gas demand and production growth; oil and natural gas prices; fluctuations in currency markets worldwide; future global economic conditions; the loss of major contracts or alliances; future performance under our customer contracts; and the effects of competition. For a more complete discussion of these and other risk factors, please see Oceaneering’s latest annual report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission.

Oceaneering is a global provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deepwater applications.  Through the use of its applied technology expertise, Oceaneering also serves the defense, entertainment, and aerospace industries.

For more information on Oceaneering, please visit www.oceaneering.com.

Contact:
Suzanne Spera
Director, Investor Relations
Oceaneering International, Inc.
713-329-4707
[email protected]

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Sep 30, 2017

Dec 31, 2016

(in thousands)

ASSETS

Current Assets (including cash and cash equivalents of $472,381 and $450,193)

$

1,232,775

$

1,262,595

Net Property and Equipment

1,083,353

1,153,258

Other Assets

828,555

714,462

TOTAL ASSETS

$

3,144,683

$

3,130,315

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities

$

461,456

$

508,364

Long-term Debt

795,805

793,058

Other Long-term Liabilities

387,464

312,250

Shareholders’ Equity

1,499,958

1,516,643

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

3,144,683

$

3,130,315

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

For the Nine Months Ended

Sep 30, 2017

Sep 30, 2016

Jun 30, 2017

Sep 30, 2017

Sep 30, 2016

(in thousands, except per share amounts)

Revenue

$

476,120

$

549,275

$

515,036

$

1,437,332

$

1,783,158

Cost of services and products

421,235

513,832

461,465

1,284,021

1,555,002

Gross Margin

54,885

35,443

53,571

153,311

228,156

Selling, general and administrative expense

44,354

47,299

44,181

133,540

153,533

Income (loss) from Operations

10,531

(11,856)

9,390

19,771

74,623

Interest income

1,997

684

2,045

5,379

2,421

Interest expense

(8,650)

(6,325)

(7,599)

(22,517)

(18,924)

Equity earnings (losses) of unconsolidated affiliates

(424)

(246)

(394)

(1,798)

543

Other income (expense), net

(1,287)

570

(58)

(3,901)

(6,823)

Income before Income Taxes

2,167

(17,173)

3,384

(3,066)

51,840

Provision for income taxes (benefit)

3,935

(5,375)

1,252

4,104

16,226

Net Income (loss)

$

(1,768)

$

(11,798)

$

2,132

$

(7,170)

$

35,614

Weighted average diluted shares outstanding

98,270

98,061

98,751

98,224

98,384

Diluted Earnings (Loss) per Share

$

(0.02)

$

(0.12)

$

0.02

$

(0.07)

$

0.36

The above Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations should be read in conjunction with the Company’s latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

SEGMENT INFORMATION

For the Three Months Ended

For the Nine Months Ended

Sep 30, 2017

Sep 30, 2016

Jun 30, 2017

Sep 30, 2017

Sep 30, 2016

($ in thousands)

Remotely Operated Vehicles

Revenue

$

104,617

$

126,507

$

103,432

$

302,071

$

413,769

Gross Margin

$

12,102

$

(16,288)

$

16,659

$

41,783

$

45,959

Operating Income (Loss)

$

5,009

$

(23,845)

$

10,376

$

21,310

$

21,162

Operating Income (Loss)%

5

%

(19)%

10

%

7

%

5

%

Days available

25,695

29,126

25,300

76,214

86,904

Days utilized

12,742

15,156

12,267

36,497

47,218

Utilization

50

%

52

%

48

%

48

%

54

%

Subsea Products

Revenue

$

143,583

$

157,269

$

174,893

$

469,115

$

542,978

Gross Margin

$

24,949

$

20,423

$

22,762

$

72,702

$

119,287

Operating Income

$

12,383

$

6,109

$

10,552

$

34,418

$

71,870

Operating Income %

9

%

4

%

6

%

7

%

13

%

Backlog at end of period

$

284,000

$

457,000

$

328,000

$

284,000

$

457,000

Subsea Projects

Revenue

$

80,116

$

110,799

$

75,545

$

218,617

$

378,883

Gross Margin

$

10,187

$

19,321

$

6,462

$

20,673

$

45,147

Operating Income

$

6,512

$

15,029

$

3,000

$

9,699

$

32,055

Operating Income %

8

%

14

%

4

%

4

%

8

%

Asset Integrity

Revenue

$

61,098

$

71,995

$

58,192

$

171,948

$

215,459

Gross Margin

$

9,754

$

11,591

$

10,004

$

28,139

$

29,030

Operating Income

$

3,050

$

4,725

$

3,755

$

9,072

$

4,354

Operating Income %

5

%

7

%

6

%

5

%

2

%

Advanced Technologies

Revenue

$

86,706

$

82,705

$

102,974

$

275,581

$

232,069

Gross Margin

$

11,833

$

9,665

$

14,133

$

36,038

$

26,092

Operating Income

$

6,602

$

4,357

$

7,632

$

19,260

$

10,478

Operating Income %

8

%

5

%

7

%

7

%

5

%

Unallocated
Expenses

Gross Margin

$

(13,940)

$

(9,269)

$

(16,449)

$

(46,024)

$

(37,359)

Operating Income

$

(23,025)

$

(18,231)

$

(25,925)

$

(73,988)

$

(65,296)

TOTAL

Revenue

$

476,120

$

549,275

$

515,036

$

1,437,332

$

1,783,158

Gross Margin

$

54,885

$

35,443

$

53,571

$

153,311

$

228,156

Operating Income (Loss)

$

10,531

$

(11,856)

$

9,390

$

19,771

$

74,623

Operating Income (Loss) %

2

%

(2)

%

2

%

1

%

4

%

SELECTED CASH FLOW INFORMATION

For the Three Months Ended

For the Nine Months Ended

Sep 30, 2017

Sep 30, 2016

Jun 30, 2017

Sep 30, 2017

Sep 30, 2016

(in thousands)

Capital expenditures, including acquisitions

$

29,878

$

32,945

$

23,493

$

71,178

$

85,889

Depreciation and Amortization:

Oilfield

Remotely Operated Vehicles

$

28,269

$

43,705

$

29,036

$

86,534

$

111,415

Subsea Products

13,340

14,205

12,785

39,124

39,964

Subsea Projects

7,881

8,575

7,781

23,742

25,447

Asset Integrity

2,139

5,980

1,780

5,379

11,736

Total Oilfield

51,629

72,465

51,382

154,779

188,562

Advanced Technologies

796

789

784

2,377

2,329

Unallocated Expenses

1,088

946

1,138

3,324

3,069

Total depreciation and amortization

$

53,513

$

74,200

$

53,304

$

160,480

$

193,960

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION

In addition to financial results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), this Press Release also includes non-GAAP financial measures (as defined under SEC Regulation G).  We have included Adjusted Net Income and Diluted Earnings per Share, each of which excludes the effects of certain specified items, as set forth in the tables that follow.  As a result, these amounts are non-GAAP financial measures.  We believe these are useful measures for investors to review because they provide consistent measures of the underlying results of our ongoing business.  Furthermore, our management uses these measures as measures of the performance of our operations.  We have also included disclosures of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), EBITDA Margins and Free Cash Flow, as well as the following by segment:  Adjusted Operating Income and Margins, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margins.  We define EBITDA margin as EBITDA divided by revenue.  Adjusted EBITDA and Adjusted EBITDA Margins as well as Adjusted Operating Income and Margin and related information by segment exclude the effects of certain specified items, as set forth in the tables that follow.  EBITDA and EBITDA margins, Adjusted EBITDA and Adjusted EBITDA margins, and Adjusted Operating Income and Margin and related information by segment are each non-GAAP financial measures.  We define Free Cash Flow as cash flow provided by operating activities less organic capital expenditures (i.e., purchases of property and equipment other than those in business acquisitions).  We have included these disclosures in this press release because EBITDA,  EBITDA margins and Free Cash Flow are widely used by investors for valuation and comparing our financial performance with the performance of other companies in our industry, and the adjusted amounts thereof (as well as Adjusted Operating Income and Margin by Segment) provide more consistent measures than the unadjusted amounts.  Furthermore, our management uses these measures for purposes of evaluating our financial performance.  Our presentation of EBITDA, EBITDA margins and Free Cash Flow (and the Adjusted amounts thereof) may not be comparable to similarly titled measures other companies report.  Non-GAAP financial measures should be viewed in addition to and not as substitutes for our reported operating results, cash flows or any other measure prepared and reported in accordance with GAAP.   The tables that follow provide reconciliations of the non-GAAP measures used in this press release to the most directly comparable GAAP measures.

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION

Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS)

For the Three Months Ended

Sep 30, 2017

Sep 30, 2016

Jun 30, 2017

Net Income

Diluted EPS

Net Income

Diluted EPS

Net Income

Diluted EPS

(in thousands, except per share amounts)

Net Income (Loss) and Diluted EPS as reported in accordance with GAAP

$

(1,768)

$

(0.02)

$

(11,798)

$

(0.12)

$

2,132

$

0.02

Pre tax adjustments for the effects of:

Inventory write-downs

30,490

Fixed asset write-offs

13,790

Charge related to prior year non-income related taxes

1,500

Foreign currency (gains) losses

1,273

(643)

(20)

Total pre tax adjustments

2,773

43,637

(20)

Tax effect on pre tax adjustments at the 35% statutory rate

(971)

(15,273)

7

Discrete tax items

2,413

Total of adjustments

4,215

28,364

(13)

Adjusted net income

$

2,447

$

0.02

$

16,566

$

0.17

$

2,119

$

0.02

For Nine Months Ended

Sep 30, 2017

Sep 30, 2016

Net Income

Diluted EPS

Net Income

Diluted EPS

(in thousands, except per share amounts)

Net Income (Loss) and Diluted EPS as reported in accordance with GAAP

$

(7,170)

$

(0.07)

$

35,614

$

0.36

Pre tax adjustments for the effects of:

Inventory write-downs

30,490

Allowance for bad debts

5,569

Fixed asset write-offs

13,790

Charge related to prior year non-income related taxes

1,500

Foreign currency losses

3,406

6,459

Total pre tax adjustments

4,906

56,308

Tax effect on pre tax adjustments at the 35% statutory rate

(1,718)

(19,708)

Discrete tax items

4,519

Total of adjustments

7,707

36,600

Adjusted net income

$

537

$

0.01

$

72,214

$

0.73

Notes:

The $2.4 million discrete tax provision during the three months ended September 30, 2017 included a $1.4 million tax reserve for uncertain income tax positions related to foreign entity tax filings of prior years.  The $4.7 million discrete tax provision for the nine months ended September 30, 2017 included the $2.9 million provision made during the three months ended March 31, 2017 related to tax amounts associated with share based compensation required to be implemented effective January 1, 2017.

Weighted average number of diluted shares in each period presented is the same for each adjusting item as used in accordance with GAAP for that period, except for the three-month and nine-month periods ended September 30, 2017, and the three-month ended September 30, 2016, where we used 98,796,533, 98,734,516 and 98,443,914 respectively, instead of 98,270,168, 98,224,129 and 98,061,214 respectively, share amounts used in reporting EPS in accordance with GAAP, as our share equivalents became dilutive based on the amount of adjusted net income.

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION

EBITDA and EBITDA Margins

For the Three Months Ended

For the Nine Months Ended

Sep 30, 2017

Sep 30, 2016

Jun 30, 2017

Sep 30, 2017

Sep 30, 2016

($ in thousands)

Net Income (Loss)

$

(1,768)

$

(11,798)

$

2,132

$

(7,170)

$

35,614

Depreciation and Amortization

53,513

74,200

53,304

160,480

193,960

Subtotal

51,745

62,402

55,436

153,310

229,574

Interest Expense, net of Interest Income

6,653

5,641

5,554

17,138

16,503

Amortization included in Interest Expense

(283)

(287)

(283)

(849)

(860)

Provision for Income Taxes (Benefit)

3,935

(5,375)

1,252

4,104

16,226

EBITDA

$

62,050

$

62,381

$

61,959

$

173,703

$

261,443

Revenue

$

476,120

$

549,275

$

515,036

$

1,437,332

$

1,783,158

EBITDA margin %

13

%

11

%

12

%

12

%

15

%

Free Cash Flow

For the Nine Months Ended

Sep 30, 2017

Sep 30, 2016

(in thousands)

Net Income

$

(7,170)

$

35,614

Depreciation and amortization

160,480

193,960

Other increases (decreases) in cash from operating activities

(9,296)

32,099

Cash flow provided by operating activities

144,014

261,673

Purchases of property and equipment

(59,900)

(83,389)

Free Cash Flow

$

84,114

$

178,284

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION

Adjusted Operating Income and Margins by Segment

For the Three Months Ended September 30, 2017

Remotely
Operated
Vehicles

Subsea
Products

Subsea
Projects

Asset
Integrity

Advanced
Tech.

Unalloc.
Expenses

Total

($ in thousands)

Operating income as reported in accordance with GAAP

$

5,009

$

12,383

$

6,512

$

3,050

$

6,602

$

(23,025)

$

10,531

Adjustments for the effects of:

Charge related to prior year non-income related taxes

1,275

225

1,500

Total of adjustments

1,275

225

1,500

Adjusted operating income

$

6,284

$

12,608

$

6,512

$

3,050

$

6,602

$

(23,025)

$

12,031

Revenue

$

104,617

$

143,583

$

80,116

$

61,098

$

86,706

$

476,120

Operating income % as reported in accordance with GAAP

5

%

9

%

8

%

5

%

8

%

2

%

Operating income % using adjusted amounts

6

%

9

%

8

%

5

%

8

%

3

%

For the Three Months Ended September 30, 2016

Remotely
Operated
Vehicles

Subsea
Products

Subsea
Projects

Asset
Integrity

Advanced
Tech.

Unalloc.
Expenses

Total

($ in thousands)

Operating income (loss) as reported in accordance with GAAP

$

(23,845)

$

6,109

$

15,029

$

4,725

$

4,357

$

(18,231)

$

(11,856)

Adjustments for the effects of:

Inventory write-downs

25,200

5,290

30,490

Fixed asset write-offs

10,840

2,950

13,790

Total of adjustments

36,040

8,240

44,280

Adjusted operating income

$

12,195

$

14,349

$

15,029

$

4,725

$

4,357

$

(18,231)

$

32,424

Revenue

$

126,507

$

157,269

$

110,799

$

71,995

$

82,705

$

549,275

Operating income (loss) % as reported in accordance with GAAP

(19)

%

4

%

14

%

7

%

5

%

(2)

%

Operating income % using adjusted amounts

10

%

9

%

14

%

7

%

5

%

6

%

For the Three Months Ended June 30, 2017

Remotely
Operated
Vehicles

Subsea
Products

Subsea
Projects

Asset
Integrity

Advanced
Tech.

Unalloc.
Expenses

Total

($ in thousands)

Operating income as reported in accordance with GAAP

$

10,376

$

10,552

$

3,000

$

3,755

$

7,632

$

(25,925)

$

9,390

Adjusted operating income

$

10,376

$

10,552

$

3,000

$

3,755

$

7,632

$

(25,925)

$

9,390

Revenue

$

103,432

$

174,893

$

75,545

$

58,192

$

102,974

$

515,036

Operating income % as reported in accordance with GAAP

10

%

6

%

4

%

6

%

7

%

2

%

Operating income % using adjusted amounts

10

%

6

%

4

%

6

%

7

%

2

%

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION

Adjusted Operating Income and Margins by Segment

For the Nine Months Ended September 30, 2017

Remotely
Operated
Vehicles

Subsea
Products

Subsea
Projects

Asset
Integrity

Advanced
Tech.

Unalloc.
Expenses

Total

($ in thousands)

Operating income as reported in accordance with GAAP

$

21,310

$

34,418

$

9,699

$

9,072

$

19,260

$

(73,988)

$

19,771

Adjustments for the effects of:

Charge related to prior year non-income related taxes

1,275

225

1,500

Total of adjustments

1,275

225

1,500

Adjusted operating income

$

22,585

$

34,643

$

9,699

$

9,072

$

19,260

$

(73,988)

$

21,271

Revenue

$

302,071

$

469,115

$

218,617

$

171,948

$

275,581

$

1,437,332

Operating income % as reported in accordance with GAAP

7

%

7

%

4

%

5

%

7

%

1

%

Operating income % using adjusted amounts

7

%

7

%

4

%

5

%

7

%

1

%

For the Nine Months Ended September 30, 2016

Remotely
Operated
Vehicles

Subsea
Products

Subsea
Projects

Asset
Integrity

Advanced
Tech.

Unalloc. Expenses

Total

($ in thousands)

Operating income as reported in accordance with GAAP

$

21,162

$

71,870

$

32,055

$

4,354

$

10,478

$

(65,296)

$

74,623

Adjustments for the effects of:

Inventory write-downs

25,200

5,290

30,490

Allowance for bad debts

340

1,770

127

3,332

5,569

Fixed asset write-offs

10,840

2,950

13,790

Total of adjustments

36,380

10,010

127

3,332

49,849

Adjusted operating income

$

57,542

$

81,880

$

32,182

$

7,686

$

10,478

$

(65,296)

$

124,472

Revenue

$

413,769

$

542,978

$

378,883

$

215,459

$

232,069

$

1,783,158

Operating income % as reported in accordance with GAAP

5

%

13

%

8

%

2

%

5

%

4

%

Operating income % using adjusted amounts

14

%

15

%

8

%

4

%

5

%

7

%

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION

EBITDA and Adjusted EBITDA and Margins by Segment

For the Three Months Ended September 30, 2017

Remotely
Operated
Vehicles

Subsea
Products

Subsea
Projects

Asset
Integrity

Advanced
Tech.

Unalloc.
Expenses
and other

Total

($ in thousands)

Operating income as reported in accordance with GAAP

$

5,009

$

12,383

$

6,512

$

3,050

$

6,602

$

(23,025)

$

10,531

Adjustments for the effects of:

Depreciation and amortization

28,269

13,340

7,881

2,139

796

1,088

53,513

Other pre-tax

(1,994)

(1,994)

EBITDA

33,278

25,723

14,393

5,189

7,398

(23,931)

62,050

Adjustments for the effects of:

Charge related to prior year non-income related taxes

1,275

225

1,500

Foreign currency (gains) losses

1,273

1,273

Total of adjustments

1,275

225

1,273

2,773

Adjusted EBITDA

$

34,553

$

25,948

$

14,393

$

5,189

$

7,398

$

(22,658)

$

64,823

Revenue

$

104,617

$

143,583

$

80,116

$

61,098

$

86,706

$

476,120

Operating income % as reported in accordance with GAAP

5

%

9

%

8

%

5

%

8

%

2

%

EBITDA Margin

32

%

18

%

18

%

8

%

9

%

13

%

Adjusted EBITDA Margin

33

%

18

%

18

%

8

%

9

%

14

%

For the Three Months Ended September 30, 2016

Remotely
Operated
Vehicles

Subsea
Products

Subsea
Projects

Asset
Integrity

Advanced
Tech.

Unalloc.
Expenses
and other

Total

($ in thousands)

Operating income (loss) as reported in accordance with GAAP

$

(23,845)

$

6,109

$

15,029

$

4,725

$

4,357

$

(18,231)

$

(11,856)

Adjustments for the effects of:

Depreciation and amortization

43,705

14,205

8,575

5,980

789

946

74,200

Other pre-tax

37

37

EBITDA

19,860

20,314

23,604

10,705

5,146

(17,248)

62,381

Adjustments for the effects of:

Inventory write-downs

25,200

5,290

30,490

Total of adjustments

25,200

5,290

30,490

Adjusted EBITDA

$

45,060

$

25,604

$

23,604

$

10,705

$

5,146

$

(17,248)

$

92,871

Revenue

$

126,507

$

157,269

$

110,799

$

71,995

$

82,705

$

549,275

Operating income (loss) % as reported in accordance with GAAP

(19)

%

4

%

14

%

7

%

5

%

(2)

%

EBITDA Margin

16

%

13

%

21

%

15

%

6

%

11

%

Adjusted EBITDA Margin

36

%

16

%

21

%

15

%

6

%

17

%

For the Three Months Ended June 30, 2017

Remotely
Operated
Vehicles

Subsea
Products

Subsea
Projects

Asset
Integrity

Advanced
Tech.

Unalloc.
Expenses and other

Total

($ in thousands)

Operating income as reported in accordance with GAAP

$

10,376

$

10,552

$

3,000

$

3,755

$

7,632

$

(25,925)

$

9,390

Adjustments for the effects of:

Depreciation and amortization

29,036

12,785

7,781

1,780

784

1,138

53,304

Other pre-tax

(735)

(735)

EBITDA

39,412

23,337

10,781

5,535

8,416

(25,522)

61,959

Adjustments for the effects of:

Foreign currency (gains) losses

(20)

(20)

Adjusted EBITDA

$

39,412

$

23,337

$

10,781

$

5,535

$

8,416

$

(25,542)

$

61,939

Revenue

$

103,432

$

174,893

$

75,545

$

58,192

$

102,974

$

515,036

Operating income % as reported in accordance with GAAP

10

%

6

%

4

%

6

%

7

%

2

%

EBITDA Margin

38

%

13

%

14

%

10

%

8

%

12

%

Adjusted EBITDA Margin

38

%

13

%

14

%

10

%

8

%

12

%

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION

EBITDA and Adjusted EBITDA and Margins by Segment

For the Nine Months Ended September 30, 2017

Remotely
Operated
Vehicles

Subsea
Products

Subsea
Projects

Asset
Integrity

Advanced

Tech.

Unalloc.
Expenses
and other

Total

($ in thousands)

Operating income as reported in accordance with GAAP

$

21,310

$

34,418

$

9,699

$

9,072

$

19,260

$

(73,988)

$

19,771

Adjustments for the effects of:

Depreciation and amortization

86,534

39,124

23,742

5,379

2,377

3,324

160,480

Other pre-tax

(6,548)

(6,548)

EBITDA

107,844

73,542

33,441

14,451

21,637

(77,212)

173,703

Adjustments for the effects of:

Charge related to prior year non-income related taxes

1,275

225

1,500

Foreign currency (gains) losses

3,406

3,406

Total of adjustments

1,275

225

3,406

4,906

Adjusted EBITDA

$

109,119

$

73,767

$

33,441

$

14,451

$

21,637

$

(73,806)

$

178,609

Revenue

$

302,071

$

469,115

$

218,617

$

171,948

$

275,581

$

1,437,332

Operating income % as reported in accordance with GAAP

7

%

7

%

4

%

5

%

7

%

1

%

EBITDA Margin

36

%

16

%

15

%

8

%

8

%

12

%

Adjusted EBITDA Margin

36

%

16

%

15

%

8

%

8

%

12

%

For the Nine Months Ended September 30, 2016

Remotely
Operated
Vehicles

Subsea
Products

Subsea
Projects

Asset
Integrity

Advanced
Tech.

Unalloc.
Expenses
and other

Total

($ in thousands)

Operating income as reported in accordance with GAAP

$

21,162

$

71,870

$

32,055

$

4,354

$

10,478

$

(65,296)

$

74,623

Adjustments for the effects of:

Depreciation and amortization

111,415

39,964

25,447

11,736

2,329

3,069

193,960

Other pre-tax

(7,140)

(7,140)

EBITDA

132,577

111,834

57,502

16,090

12,807

(69,367)

261,443

Adjustments for the effects of:

Inventory write-downs

25,200

5,290

30,490

Allowance for bad debts

340

1,770

127

3,332

5,569

Total of adjustments

25,540

7,060

127

3,332

36,059

Adjusted EBITDA

$

158,117

$

118,894

$

57,629

$

19,422

$

12,807

$

(69,367)

$

297,502

Revenue

$

413,769

$

542,978

$

378,883

$

215,459

$

232,069

$

1,783,158

Operating income % as reported in accordance with GAAP

5

%

13

%

8

%

2

%

5

%

4

%

EBITDA Margin

32

%

21

%

15

%

7

%

6

%

15

%

Adjusted EBITDA Margin

38

%

22

%

15

%

9

%

6

%

17

%

SOURCE Oceaneering International, Inc.

Related Links

http://www.oceaneering.com

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