Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

We believe it is more likely than not that all our deferred tax assets are realizable. Reconciliations between the actual provision for income taxes on continuing operations and that computed by applying the United States statutory rate to income before income taxes were as follows:



	Year Ended December 31,
	2014		2013		2012
United States statutory rate	35.0	%	35.0	%	35.0	%
State and local taxes	0.1		0.2		0.1
Foreign tax rate differential	(2.6	)	(3.7	)	(2.9	)
Other items, net	(1.2	)	—		(0.7	)
Total effective tax rate	31.3	%	31.5	%	31.5	%

We consider $573 million of unremitted earnings of our foreign subsidiaries is indefinitely reinvested. It is not practical for us to compute the amount of additional U.S. tax that would be due on this amount. We have provided deferred income taxes on the foreign earnings not considered indefinitely reinvested.

Schedule of Components of Income Tax Expense (Benefit)

Our provisions for income taxes and our cash taxes paid are as follows:



	Year Ended December 31,
(in thousands)	2014			2013			2012
Current:
Domestic	$	17,856		$	45,468		$	4,039
Foreign	106,575			73,568			108,212
Total current	124,431			119,036			112,251
Deferred:
Domestic	73,520			56,115			26,170
Foreign	(2,803		)	(4,315		)	(5,516		)
Total deferred	70,717			51,800			20,654
Total provision for income taxes	$	195,148		$	170,836		$	132,905
Cash taxes paid	$	139,724		$	113,760		$	92,422

Schedule of Income before Income Tax, Domestic and Foreign

The components of income before income taxes are as follows:



	Year Ended December 31,
(in thousands)	2014		2013		2012
Domestic	$	110,800	$	68,066	$	53,240
Foreign	512,677		474,270		368,682
Income before income taxes	$	623,477	$	542,336	$	421,922

Schedule of Deferred Tax Assets and Liabilities

As of December 31, 2014 and 2013, our worldwide deferred tax assets, liabilities and net deferred tax liabilities were as follows:



	December 31,
(in thousands)	2014		2013
Deferred tax assets:
Deferred compensation	$	50,829	$	48,401
Deferred income	16,305		30,101
Accrued expenses	9,235		8,441
Other	27,808		11,921
Gross deferred tax assets	104,177		98,864
Valuation allowance	—		—
Total deferred tax assets	$	104,177	$	98,864
Deferred tax liabilities:
Property and equipment	$	128,958	$	129,441
Unremitted foreign earnings not considered indefinitely reinvested	238,133		157,091
Basis difference in equity investments	8,947		10,843
Other	1,088		707
Total deferred tax liabilities	$	377,126	$	298,082
Net deferred income tax liability	$	272,949	$	199,218

Our net deferred tax liability is reflected within our balance sheet as follows:



	December 31,
(in thousands)	2014			2013
Deferred tax liabilities	$	322,758		$	260,807
Current deferred tax assets	(49,809		)	(61,589		)
Net deferred income tax liability	$	272,949		$	199,218

Schedule of Unrecognized Tax Benefits Roll Forward

We recognize the benefit for a tax position if the benefit is more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that we believe is greater than 50% likely of being realized upon ultimate settlement.

We account for any applicable interest and penalties on uncertain tax positions as a component of our provision for income taxes on our financial statements. We increased/(decreased) income tax expense by $(0.4) million, $1.7 million and $(2.7) million in 2014, 2013 and 2012, respectively, for penalties and interest on uncertain tax positions, which brought our total liabilities for penalties and interest on uncertain tax positions to $2.9 million and $3.3 million on our balance sheets at December 31, 2014 and 2013, respectively. All additions or reductions to those liabilities would affect our effective income tax rate in the periods of change.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, not including associated foreign tax credits and penalties and interest, is as follows:



	Year Ended December 31,
(in thousands)	2014			2013			2012
Beginning of year	$	7,168		$	5,140		$	10,104
Additions based on tax positions related to the current year	432			100			244
Reductions for expiration of statutes of limitations	(1,572		)	(1,225		)	(225		)
Additions based on tax positions related to prior years	254			3,490			3,335
Reductions based on tax positions related to prior years	(707		)	(337		)	(8,193		)
Settlements	—			—			(125		)
Balance at end of year	$	5,575		$	7,168		$	5,140

We do not believe that the total of unrecognized tax benefits will significantly increase or decrease in the next 12 months.

Summary of Income Tax Examinations

We file a consolidated U.S. federal income tax return for Oceaneering International, Inc. and our domestic subsidiaries. We conduct our international operations in a number of locations that have varying laws and regulations with regard to income and other taxes, some of which are subject to interpretation. Our management believes that adequate provisions have been made for all taxes that will ultimately be payable, although final determination of tax liabilities may differ from our estimates.

Our tax returns are subject to audit by taxing authorities in multiple jurisdictions. These audits often take years to complete and settle. The following lists the earliest tax years open to examination by tax authorities where we have significant operations:



Jurisdiction		Periods
United States		2011
United Kingdom		2011
Norway		2004
Angola		2009
Brazil		2009
Australia		2010