þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2018 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
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) |
Large accelerated filer | þ | Accelerated filer | ¨ |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Part I | |||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Part II | |||
Item 1. | |||
Item 6. | |||
Item 1. | Financial Statements. |
Jun 30, 2018 | Dec 31, 2017 | |||||||
(in thousands, except share data) | ||||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 339,541 | $ | 430,316 | ||||
Accounts receivable, net of allowances for doubtful accounts of $6,782 and $6,217 | 504,322 | 476,903 | ||||||
Inventory, net | 185,926 | 215,282 | ||||||
Other current assets | 84,456 | 64,901 | ||||||
Total Current Assets | 1,114,245 | 1,187,402 | ||||||
Property and Equipment, at cost | 2,812,374 | 2,815,579 | ||||||
Less accumulated depreciation | 1,798,370 | 1,751,375 | ||||||
Net Property and Equipment | 1,014,004 | 1,064,204 | ||||||
Other Assets: | ||||||||
Goodwill | 501,348 | 455,599 | ||||||
Other non-current assets | 273,151 | 316,745 | ||||||
Total Other Assets | 774,499 | 772,344 | ||||||
Total Assets | $ | 2,902,748 | $ | 3,023,950 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 91,150 | $ | 85,539 | ||||
Accrued liabilities | 336,226 | 350,258 | ||||||
Total Current Liabilities | 427,376 | 435,797 | ||||||
Long-term Debt | 782,228 | 792,312 | ||||||
Other Long-term Liabilities | 122,610 | 131,323 | ||||||
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 | 215,073 | 225,125 | ||||||
Treasury stock; 12,302,481 and 12,554,714 shares, at cost | (704,502 | ) | (718,946 | ) | ||||
Retained earnings | 2,334,666 | 2,417,412 | ||||||
Accumulated other comprehensive loss | (307,766 | ) | (292,136 | ) | ||||
Oceaneering Shareholders' Equity | 1,565,180 | 1,659,164 | ||||||
Noncontrolling interest | 5,354 | 5,354 | ||||||
Total Equity | 1,570,534 | 1,664,518 | ||||||
Total Liabilities and Equity | $ | 2,902,748 | $ | 3,023,950 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
(in thousands, except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenue | $ | 478,674 | $ | 515,036 | $ | 895,087 | $ | 961,212 | |||||||||
Cost of services and products | 448,946 | 461,465 | 846,531 | 862,786 | |||||||||||||
Gross Margin | 29,728 | 53,571 | 48,556 | 98,426 | |||||||||||||
Selling, general and administrative expense | 49,365 | 44,181 | 95,342 | 89,186 | |||||||||||||
Income (Loss) from Operations | (19,637 | ) | 9,390 | (46,786 | ) | 9,240 | |||||||||||
Interest income | 2,950 | 2,045 | 5,542 | 3,382 | |||||||||||||
Interest expense, net of amounts capitalized | (8,802 | ) | (7,599 | ) | (18,173 | ) | (13,867 | ) | |||||||||
Equity in income (losses) of unconsolidated affiliates | (737 | ) | (394 | ) | (1,580 | ) | (1,374 | ) | |||||||||
Other income (expense), net | (3,556 | ) | (58 | ) | (12,030 | ) | (2,614 | ) | |||||||||
Income (Loss) Before Income Taxes | (29,782 | ) | 3,384 | (73,027 | ) | (5,233 | ) | ||||||||||
Provision (benefit) for income taxes | 3,294 | 1,252 | 9,182 | 169 | |||||||||||||
Net Income (Loss) | $ | (33,076 | ) | 2,132 | $ | (82,209 | ) | $ | (5,402 | ) | |||||||
Weighted average shares outstanding | |||||||||||||||||
Basic | 98,531 | 98,263 | 98,457 | 98,201 | |||||||||||||
Diluted | 98,531 | 98,751 | 98,457 | 98,201 | |||||||||||||
Earnings (loss) per share | |||||||||||||||||
Basic | $ | (0.34 | ) | $ | 0.02 | $ | (0.83 | ) | $ | (0.06 | ) | ||||||
Diluted | $ | (0.34 | ) | $ | 0.02 | $ | (0.83 | ) | $ | (0.06 | ) | ||||||
Cash dividends declared per share | $ | — | $ | 0.15 | $ | — | $ | 0.30 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Net Income (Loss) | $ | (33,076 | ) | $ | 2,132 | $ | (82,209 | ) | $ | (5,402 | ) | ||||||
Other comprehensive income (loss): | |||||||||||||||||
Foreign Currency Translation Adjustments | (37,806 | ) | 10,783 | (15,630 | ) | 3,722 | |||||||||||
Total other comprehensive income (loss) | (37,806 | ) | 10,783 | (15,630 | ) | 3,722 | |||||||||||
Comprehensive Income (Loss) | (70,882 | ) | 12,915 | $ | (97,839 | ) | $ | (1,680 | ) |
Six Months Ended June 30, | ||||||||
(in thousands) | 2018 | 2017 | ||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | (82,209 | ) | $ | (5,402 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 113,971 | 106,967 | ||||||
Deferred income tax provision (benefit) | (23,034 | ) | (23,771 | ) | ||||
Net loss on sales of property and equipment | 860 | 320 | ||||||
Noncash compensation | 5,985 | 7,710 | ||||||
Excluding the effects of acquisitions, increase (decrease) in cash from: | ||||||||
Accounts receivable | (12,161 | ) | 23,293 | |||||
Inventory | (3,901 | ) | 13,494 | |||||
Other operating assets | 473 | (10,855 | ) | |||||
Currency translation effect on working capital, excluding cash | (2,771 | ) | (5,961 | ) | ||||
Current liabilities | 3,941 | (25,258 | ) | |||||
Other operating liabilities | 14,531 | 22,067 | ||||||
Total adjustments to net income | 97,894 | 108,006 | ||||||
Net Cash Provided by Operating Activities | 15,685 | 102,604 | ||||||
Cash Flows from Investing Activities: | ||||||||
Purchases of property and equipment | (53,530 | ) | (41,300 | ) | ||||
Business acquisitions, net of cash acquired | (68,398 | ) | — | |||||
Proceeds from redemption of investments | 33,405 | — | ||||||
Other investing activities | (10,025 | ) | (1,014 | ) | ||||
Distributions of capital from unconsolidated affiliates | 2,372 | 1,424 | ||||||
Dispositions of property and equipment | 1,403 | 630 | ||||||
Net Cash Used in Investing Activities | (94,773 | ) | (40,260 | ) | ||||
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 | ) | — | |||||
Cash dividends | — | (29,479 | ) | |||||
Other financing activities | (1,594 | ) | (2,049 | ) | ||||
Net Cash Used in Financing Activities | (5,778 | ) | (31,528 | ) | ||||
Effect of exchange rates on cash | (5,909 | ) | 1,330 | |||||
Net Increase (Decrease) in Cash and Cash Equivalents | (90,775 | ) | 32,146 | |||||
Cash and Cash Equivalents—Beginning of Period | 430,316 | 450,193 | ||||||
Cash and Cash Equivalents—End of Period | $ | 339,541 | $ | 482,339 |
(in thousands) | Dec 31, 2017 | Adjustments Due to ASC 606 | Jan 1, 2018 Under ASC 606 | ||||||||||
Assets | |||||||||||||
Accounts receivable | $ | 476,903 | $ | (163,963 | ) | $ | 312,940 | ||||||
Contract assets | — | 171,956 | 171,956 | ||||||||||
Total accounts receivable | 476,903 | 7,993 | 484,896 | ||||||||||
Inventory | 215,282 | (34,187 | ) | 181,095 | |||||||||
Liabilities | |||||||||||||
Accrued liabilities | 350,258 | (63,045 | ) | 287,213 | |||||||||
Contract liabilities | — | 37,590 | 37,590 | ||||||||||
Total accrued liabilities | 350,258 | (25,455 | ) | 324,803 | |||||||||
Other long-term liabilities | 131,323 | (202 | ) | 131,121 | |||||||||
Equity | |||||||||||||
Retained earnings | 2,417,412 | (537 | ) | 2,416,875 |
Six Months Ended June 30, 2018 | |||||||||||||
(in thousands) | As Reported Under ASC 606 | Effect of Change | Balances Without Adoption of ASC 606 | ||||||||||
Revenue | $ | 895,087 | $ | (10,729 | ) | $ | 884,358 | ||||||
Cost of services and products | 846,531 | (764 | ) | 845,767 | |||||||||
Provision (benefit) for income taxes | 9,182 | (1,970 | ) | 7,212 | |||||||||
Net income (loss) | (82,209 | ) | (7,995 | ) | (90,204 | ) | |||||||
Jun 30, 2018 | |||||||||||||
(in thousands) | As Reported Under ASC 606 | Effect of Change | Balances Without Adoption of ASC 606 | ||||||||||
Assets | |||||||||||||
Accounts receivable | $ | 335,858 | $ | — | $ | 335,858 | |||||||
Unbilled accounts receivable | — | 144,579 | 144,579 | ||||||||||
Contract assets | 168,464 | (168,464 | ) | — | |||||||||
Total accounts receivable | 504,322 | (23,885 | ) | 480,437 | |||||||||
Inventory | 185,926 | 19,814 | 205,740 | ||||||||||
Liabilities | |||||||||||||
Accrued liabilities | 306,089 | (164 | ) | 305,925 | |||||||||
Contract liabilities | 30,137 | 5,316 | 35,453 | ||||||||||
Total accrued liabilities | 336,226 | 5,152 | 341,378 | ||||||||||
Other long-term liabilities | 122,610 | (1,768 | ) | 120,842 | |||||||||
Equity | |||||||||||||
Retained earnings | 2,334,666 | (7,458 | ) | 2,327,208 |
• | requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value, with changes in fair value recognized in net income; and |
• | provides an expedient for the valuation and impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify value and impairment — when a qualitative assessment indicates that an impairment exists, an entity is required to measure the investment at fair value. |
Three Months Ended | Six Months Ended | |||||||||||||||||||||
(in thousands) | June 30, 2018 | June 30, 2017 | March 31, 2018 | June 30, 2018 | June 30, 2017 | |||||||||||||||||
Business Segment: | ||||||||||||||||||||||
Energy Services and Products | ||||||||||||||||||||||
Remotely Operated Vehicles | $ | 107,426 | $ | 103,432 | $ | 85,594 | $ | 193,020 | $ | 197,454 | ||||||||||||
Subsea Products | 121,704 | 174,893 | 126,688 | 248,392 | 325,532 | |||||||||||||||||
Subsea Projects | 78,036 | 75,545 | 56,860 | 134,896 | 138,501 | |||||||||||||||||
Asset Integrity | 67,422 | 58,192 | 61,288 | 128,710 | 110,850 | |||||||||||||||||
Total Energy Services and Products | 374,588 | 412,062 | 330,430 | 705,018 | 772,337 | |||||||||||||||||
Advanced Technologies | 104,086 | 102,974 | 85,983 | 190,069 | 188,875 | |||||||||||||||||
Total | $ | 478,674 | $ | 515,036 | $ | 416,413 | $ | 895,087 | $ | 961,212 |
Geographic Operating Areas: | ||||||||||||||||||||||
Foreign: | ||||||||||||||||||||||
Africa | $ | 61,966 | $ | 74,759 | $ | 55,087 | $ | 117,053 | $ | 155,271 | ||||||||||||
United Kingdom | 50,999 | 74,714 | 45,319 | 96,318 | 141,460 | |||||||||||||||||
Norway | 51,827 | 44,753 | 39,042 | 90,869 | 74,553 | |||||||||||||||||
Asia and Australia | 43,448 | 51,281 | 38,946 | 82,394 | 97,148 | |||||||||||||||||
Brazil | 13,461 | 7,253 | 18,828 | 32,289 | 17,945 | |||||||||||||||||
Other | 14,811 | 16,744 | 19,639 | 34,450 | 31,348 | |||||||||||||||||
Total Foreign | 236,512 | 269,504 | 216,861 | 453,373 | 517,725 | |||||||||||||||||
United States | 242,162 | 245,532 | 199,552 | 441,714 | 443,487 | |||||||||||||||||
Total | $ | 478,674 | $ | 515,036 | $ | 416,413 | $ | 895,087 | $ | 961,212 |
June 30, 2018 | |||||||
Timing of Transfer of Goods or Services: | |||||||
Revenue recognized over time | $ | 811,702 | |||||
Revenue recognized at a point in time | 83,385 | ||||||
Total | $ | 895,087 |
(in thousands) | Jun 30, 2018 | Jan 1, 2018 | |||||||
Contract assets | $ | 168,464 | $ | 171,956 | |||||
Contract liabilities | 30,137 | 37,590 |
(in thousands) | Jun 30, 2018 | Dec 31, 2017 | |||||||
Inventory, net: | |||||||||
Remotely operated vehicle parts and components | $ | 104,134 | $ | 97,313 | |||||
Other inventory, primarily raw materials | 81,792 | 117,969 | |||||||
Total | $ | 185,926 | $ | 215,282 |
(in thousands) | Jun 30, 2018 | Dec 31, 2017 | |||||||
4.650% Senior Notes due 2024 | $ | 500,000 | $ | 500,000 | |||||
6.000% Senior Notes due 2028 | 300,000 | — | |||||||
Term Loan Facility | — | 300,000 | |||||||
Fair value of interest rate swaps on $200 million of principal | (9,405 | ) | (2,990 | ) | |||||
Unamortized debt issuance costs | (8,367 | ) | (4,698 | ) | |||||
Revolving Credit Facility | — | — | |||||||
Long-term Debt | $ | 782,228 | $ | 792,312 |
Jurisdiction | Periods | |
United States | 2014 | |
United Kingdom | 2015 | |
Norway | 2015 | |
Angola | 2013 | |
Brazil | 2013 | |
Australia | 2013 |
Three Months Ended | Six Months Ended | |||||||||||||||||||
(in thousands) | Jun 30, 2018 | Jun 30, 2017 | Mar 31, 2018 | Jun 30, 2018 | Jun 30, 2017 | |||||||||||||||
Revenue | ||||||||||||||||||||
Energy Services and Products | ||||||||||||||||||||
Remotely Operated Vehicles | $ | 107,426 | $ | 103,432 | $ | 85,594 | $ | 193,020 | $ | 197,454 | ||||||||||
Subsea Products | 121,704 | 174,893 | 126,688 | 248,392 | 325,532 | |||||||||||||||
Subsea Projects | 78,036 | 75,545 | 56,860 | 134,896 | 138,501 | |||||||||||||||
Asset Integrity | 67,422 | 58,192 | 61,288 | 128,710 | 110,850 | |||||||||||||||
Total Energy Services and Products | 374,588 | 412,062 | 330,430 | 705,018 | 772,337 | |||||||||||||||
Advanced Technologies | 104,086 | 102,974 | 85,983 | 190,069 | 188,875 | |||||||||||||||
Total | $ | 478,674 | $ | 515,036 | $ | 416,413 | $ | 895,087 | $ | 961,212 | ||||||||||
Income (Loss) from Operations | ||||||||||||||||||||
Energy Services and Products | ||||||||||||||||||||
Remotely Operated Vehicles | $ | 4,542 | $ | 10,376 | $ | (2,398 | ) | $ | 2,144 | $ | 16,301 | |||||||||
Subsea Products | 2,295 | 10,552 | 1,755 | 4,050 | 22,035 | |||||||||||||||
Subsea Projects | (10,358 | ) | 3,000 | (2,359 | ) | (12,717 | ) | 3,187 | ||||||||||||
Asset Integrity | 3,357 | 3,755 | 1,679 | 5,036 | 6,022 | |||||||||||||||
Total Energy Services and Products | (164 | ) | 27,683 | (1,323 | ) | (1,487 | ) | 47,545 | ||||||||||||
Advanced Technologies | 7,886 | 7,632 | 1,668 | 9,554 | 12,658 | |||||||||||||||
Unallocated Expenses | (27,359 | ) | (25,925 | ) | (27,494 | ) | (54,853 | ) | (50,963 | ) | ||||||||||
Total | $ | (19,637 | ) | $ | 9,390 | $ | (27,149 | ) | $ | (46,786 | ) | $ | 9,240 | |||||||
Depreciation and Amortization | ||||||||||||||||||||
Energy Services and Products | ||||||||||||||||||||
Remotely Operated Vehicles | $ | 28,269 | $ | 29,036 | $ | 27,642 | $ | 55,911 | $ | 58,265 | ||||||||||
Subsea Products | 14,914 | 12,785 | 14,025 | 28,939 | 25,784 | |||||||||||||||
Subsea Projects | 13,053 | 7,781 | 8,313 | 21,366 | 15,861 | |||||||||||||||
Asset Integrity | 1,836 | 1,780 | 1,848 | 3,684 | 3,240 | |||||||||||||||
Total Energy Services and Products | 58,072 | 51,382 | 51,828 | 109,900 | 103,150 | |||||||||||||||
Advanced Technologies | 737 | 784 | 766 | 1,503 | 1,581 | |||||||||||||||
Unallocated Expenses | 1,034 | 1,138 | 1,534 | 2,568 | 2,236 | |||||||||||||||
Total | $ | 59,843 | $ | 53,304 | $ | 54,128 | $ | 113,971 | $ | 106,967 |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations. |
• | third quarter and the full year of 2018 operating results and the contributions from our segments to those results (including the expected benefits from a recent business acquisition, anticipated revenue, operating income or loss, and utilization information), as well as the items below the operating income (loss) line; |
• | our cash flows and earnings before interest, taxes and depreciation and amortization (EBITDA) in 2018; |
• | future demand, business activity levels, industry conditions and contract awards during the second half of 2018; |
• | our plans for future operations (including planned additions to and retirements from our remotely operated vehicle ("ROV") fleet, our intent regarding the new multiservice subsea support vessel scheduled for delivery at the end of 2018 and expected to be placed into service during the first quarter of 2019 and other capital expenditures); |
• | our future dividends; |
• | the adequacy of our liquidity, cash flows and capital resources; |
• | our ability and intent to redeem Angolan bonds and repatriate cash; |
• | shares to be repurchased under our share repurchase plan; |
• | our estimated effective tax rate; |
• | the implementation of new accounting standards and related policies, procedures and controls; and |
• | seasonality. |
• | increased interest expense from higher overall interest rates, which affect our floating rate debt and our swaps to floating rates on $200 million of fixed-rate debt; and |
• | a loss on our equity investment in Medusa Spar LLC, as volume continues to be low in current producing zones. |
• | $(12) million and $23 million, respectively, from changes in accounts receivable; and |
• | $4 million and $(25) million, respectively, from changes in current liabilities. |
Three Months Ended | Six Months Ended | ||||||||||||||||||||
(dollars in thousands) | Jun 30, 2018 | Jun 30, 2017 | Mar 31, 2018 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
Revenue | $ | 478,674 | $ | 515,036 | $ | 416,413 | $ | 895,087 | $ | 961,212 | |||||||||||
Gross Margin | 29,728 | 53,571 | 18,828 | 48,556 | 98,426 | ||||||||||||||||
Gross Margin % | 6 | % | 10 | % | 5 | % | 5 | % | 10 | % | |||||||||||
Operating Income (Loss) | (19,637 | ) | 9,390 | (27,149 | ) | (46,786 | ) | 9,240 | |||||||||||||
Operating Income % | (4 | )% | 2 | % | (7 | )% | (5 | )% | 1 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||
(dollars in thousands) | Jun 30, 2018 | Jun 30, 2017 | Mar 31, 2018 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
Remotely Operated Vehicles | |||||||||||||||||||||
Revenue | $ | 107,426 | $ | 103,432 | $ | 85,594 | $ | 193,020 | $ | 197,454 | |||||||||||
Gross Margin | 12,176 | 16,659 | 4,955 | 17,131 | 29,681 | ||||||||||||||||
Operating Income (Loss) | 4,542 | 10,376 | (2,398 | ) | 2,144 | 16,301 | |||||||||||||||
Operating Income (Loss) % | 4 | % | 10 | % | (3 | )% | 1 | % | 8 | % | |||||||||||
Days available | 25,386 | 25,300 | 25,138 | 50,524 | 50,519 | ||||||||||||||||
Days utilized | 13,654 | 12,267 | 11,034 | 24,688 | 23,755 | ||||||||||||||||
Utilization | 54 | % | 48 | % | 44 | % | 49 | % | 47 | % | |||||||||||
Subsea Products | |||||||||||||||||||||
Revenue | 121,704 | 174,893 | 126,688 | 248,392 | 325,532 | ||||||||||||||||
Gross Margin | 16,075 | 22,762 | 15,005 | 31,080 | 47,753 | ||||||||||||||||
Operating Income | 2,295 | 10,552 | 1,755 | 4,050 | 22,035 | ||||||||||||||||
Operating Income % | 2 | % | 6 | % | 1 | % | 2 | % | 7 | % | |||||||||||
Backlog at end of period | 245,000 | 328,000 | 240,000 | 245,000 | 328,000 | ||||||||||||||||
Subsea Projects | |||||||||||||||||||||
Revenue | 78,036 | 75,545 | 56,860 | 134,896 | 138,501 | ||||||||||||||||
Gross Margin | (5,145 | ) | 6,462 | 1,117 | (4,028 | ) | 10,486 | ||||||||||||||
Operating Income (Loss) | (10,358 | ) | 3,000 | (2,359 | ) | (12,717 | ) | 3,187 | |||||||||||||
Operating Income (Loss) % | (13 | )% | 4 | % | (4 | )% | (9 | )% | 2 | % | |||||||||||
Asset Integrity | |||||||||||||||||||||
Revenue | 67,422 | 58,192 | 61,288 | 128,710 | 110,850 | ||||||||||||||||
Gross Margin | 9,461 | 10,004 | 8,018 | 17,479 | 18,385 | ||||||||||||||||
Operating Income | 3,357 | 3,755 | 1,679 | 5,036 | 6,022 | ||||||||||||||||
Operating Income % | 5 | % | 6 | % | 3 | % | 4 | % | 5 | % | |||||||||||
Total Energy Services and Products | |||||||||||||||||||||
Revenue | $ | 374,588 | $ | 412,062 | $ | 330,430 | $ | 705,018 | $ | 772,337 | |||||||||||
Gross Margin | 32,567 | 55,887 | 29,095 | 61,662 | 106,305 | ||||||||||||||||
Operating Income (Loss) | (164 | ) | 27,683 | (1,323 | ) | (1,487 | ) | 47,545 | |||||||||||||
Operating Income (Loss) % | — | % | 7 | % | — | % | — | % | 6 | % |
Three Months Ended | Six Months Ended | |||||||||||||||
Jun 30, 2018 | Jun 30, 2017 | Mar 31, 2018 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||
Manufactured products | 50 | % | 70 | % | 59 | % | 55 | % | 71 | % | ||||||
Service and rental | 50 | % | 30 | % | 41 | % | 45 | % | 29 | % | ||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
(dollars in thousands) | Jun 30, 2018 | Jun 30, 2017 | Mar 31, 2018 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
Revenue | $ | 104,086 | $ | 102,974 | $ | 85,983 | 190,069 | 188,875 | |||||||||||||
Gross Margin | $ | 13,999 | $ | 14,133 | $ | 7,822 | $ | 21,821 | $ | 24,205 | |||||||||||
Operating Income | 7,886 | 7,632 | 1,668 | 9,554 | 12,658 | ||||||||||||||||
Operating Income % | 8 | % | 7 | % | 2 | % | 5 | % | 7 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||
(dollars in thousands) | Jun 30, 2018 | Jun 30, 2017 | Mar 31, 2018 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||
Gross margin | $ | 16,838 | $ | 16,449 | $ | 18,089 | 34,927 | 32,084 | |||||||||||
Operating income | 27,359 | 25,925 | 27,494 | 54,853 | 50,963 | ||||||||||||||
Operating income % of revenue | 6 | % | 5 | % | 7 | % | 6 | % | 5 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||
(in thousands) | Jun 30, 2018 | Jun 30, 2017 | Mar 31, 2018 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||
Interest income | $ | 2,950 | $ | 2,045 | $ | 2,592 | 5,542 | 3,382 | |||||||||||
Interest expense, net of amounts capitalized | (8,802 | ) | (7,599 | ) | (9,371 | ) | (18,173 | ) | (13,867 | ) | |||||||||
Equity in income (losses) of unconsolidated affiliates | (737 | ) | (394 | ) | (843 | ) | (1,580 | ) | (1,374 | ) | |||||||||
Other income (expense), net | (3,556 | ) | (58 | ) | (8,474 | ) | (12,030 | ) | (2,614 | ) | |||||||||
Provision (benefit) for income taxes | 3,294 | 1,252 | 5,888 | 9,182 | 169 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Item 1. | Legal Proceedings. |
Index to Exhibits | |||||||||||||
Registration or File Number | Form of Report | Report Date | Exhibit Number | ||||||||||
* | 3.01 | 1-10945 | 10-K | Dec. 2000 | 3.01 | ||||||||
* | 3.02 | 1-10945 | 8-K | May 2008 | 3.1 | ||||||||
* | 3.03 | 1-10945 | 8-K | May 2014 | 3.1 | ||||||||
* | 3.04 | 1-10945 | 8-K | Aug. 2015 | 3.1 | ||||||||
* | 4.01 | 1-10945 | 8-K | Feb. 2018 | 4.1 | ||||||||
* | 4.02 | 1-10945 | 8-K | Feb. 2018 | 4.2 | ||||||||
12.01 | |||||||||||||
31.01 | |||||||||||||
31.02 | |||||||||||||
32.01 | |||||||||||||
32.02 | |||||||||||||
101.INS | XBRL Instance Document | ||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | ||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||||||||||||
+ | Management contract or compensatory plan or arrangement. | ||||||||||||
* | Exhibit previously filed with the Securities and Exchange Commission, as indicated, and incorporated herein by reference. |
August 1, 2018 | /S/ RODERICK A. LARSON | |
Date | Roderick A. Larson | |
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
August 1, 2018 | /S/ ALAN R. CURTIS | |
Date | Alan R. Curtis | |
Senior Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
August 1, 2018 | /S/ W. CARDON GERNER | |
Date | W. Cardon Gerner | |
Senior Vice President and Chief Accounting Officer | ||
(Principal Accounting Officer) | ||
Exhibit 12.01 | ||||||||||||||||||||||||||||
Oceaneering International, Inc. | ||||||||||||||||||||||||||||
Computation of Ratio of Earnings to Fixed Charges | ||||||||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||||||
Six Months Ended | Year Ended December 31, | |||||||||||||||||||||||||||
Jun 30, 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||
Fixed Charges: | ||||||||||||||||||||||||||||
Interest expensed and capitalized | $ | 21,582 | $ | 32,385 | $ | 29,058 | $ | 27,475 | $ | 5,420 | $ | 2,194 | ||||||||||||||||
(1 | ) | Amortized premiums, discounts and capital expenses related to indebtedness | — | — | — | — | 395 | 261 | ||||||||||||||||||||
Estimate of interest within rental expense | 12,912 | 32,426 | 68,396 | 76,381 | 85,632 | 63,735 | ||||||||||||||||||||||
Preference security dividend requirements of consolidated subsidiaries | — | — | — | — | ||||||||||||||||||||||||
$ | 34,494 | $ | 64,811 | $ | 97,454 | $ | 103,856 | $ | 91,447 | $ | 66,190 | |||||||||||||||||
Earnings: | ||||||||||||||||||||||||||||
Added Items: | ||||||||||||||||||||||||||||
Pretax income from continuing operations before minority interests and income (loss) from equity investees | $ | (71,447 | ) | $ | (15,861 | ) | $ | 43,102 | $ | 334,031 | $ | 623,528 | $ | 542,203 | ||||||||||||||
Fixed charges | 34,494 | 64,811 | 97,454 | 103,856 | 91,447 | 66,190 | ||||||||||||||||||||||
Amortization of capitalized interest | 81 | 168 | 189 | 189 | 237 | 438 | ||||||||||||||||||||||
Distributed income of equity investees | 2,372 | 2,556 | 6,470 | 5,963 | 4,772 | 5,290 | ||||||||||||||||||||||
Share of pretax losses of equity investees for which charges arising from guarantees are included in fixed charges | — | — | — | — | — | — | ||||||||||||||||||||||
Total added items | (34,500 | ) | 51,674 | 147,215 | 444,039 | 719,984 | 614,121 | |||||||||||||||||||||
Subtracted Items: | ||||||||||||||||||||||||||||
Interest capitalized | 3,409 | 4,568 | 3,740 | 2,425 | 712 | — | ||||||||||||||||||||||
Preference security dividend requirements of consolidated subsidiaries | — | — | — | — | — | — | ||||||||||||||||||||||
Minority interest in pretax income of subsidiaries that have not incurred fixed charges | — | — | — | — | — | — | ||||||||||||||||||||||
Total subtracted items | 3,409 | 4,568 | 3,740 | 2,425 | 712 | — | ||||||||||||||||||||||
Earnings as defined | $ | (37,909 | ) | $ | 47,106 | $ | 143,475 | $ | 441,614 | $ | 719,272 | $ | 614,121 | |||||||||||||||
Ratio of earnings to fixed charges | (1.10 | )x | 0.73 | x | 1.47 | x | 4.25 | x | 7.87 | x | 9.28 | x | ||||||||||||||||
1. | I have reviewed this Quarterly Report on Form 10-Q of Oceaneering International, Inc. for the quarter ended June 30, 2018; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
August 1, 2018 | /S/ RODERICK A. LARSON | |
Date | Roderick A. Larson | |
President and Chief Executive Officer | ||
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Oceaneering International, Inc. for the quarter ended June 30, 2018; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
August 1, 2018 | /S/ ALAN R. CURTIS | |
Date | Alan R. Curtis | |
Senior Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Oceaneering. |
August 1, 2018 | /S/ RODERICK A. LARSON | |
Date | Roderick A. Larson | |
President and Chief Executive Officer | ||
(Principal Executive Officer) |
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Oceaneering. |
August 1, 2018 | /S/ ALAN R. CURTIS | |
Date | Alan R. Curtis | |
Senior Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |
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Document and Entity Information Document - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 27, 2018 |
|
Document Information [Line Items] | ||
Entity Registrant Name | OCEANEERING INTERNATIONAL INC | |
Entity Central Index Key | 0000073756 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 98,532,769 |
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Accounts receivable, allowances for doubtful accounts | $ 6,782 | $ 6,217 |
Common Stock, par value | $ 0.25 | $ 0.25 |
Common Stock, shares authorized | 360,000,000 | 360,000,000 |
Common Stock, shares issued | 110,834,088 | 110,834,088 |
Treasury stock, shares | 12,304,723 | 12,554,714 |
Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenue | $ 478,674 | $ 515,036 | $ 895,087 | $ 961,212 |
Cost of services and products | 448,946 | 461,465 | 846,531 | 862,786 |
Gross Margin | 29,728 | 53,571 | 48,556 | 98,426 |
Selling, general and administrative expense | 49,365 | 44,181 | 95,342 | 89,186 |
Income from Operations | (19,637) | 9,390 | (46,786) | 9,240 |
Interest income | 2,950 | 2,045 | 5,542 | 3,382 |
Interest expense | (8,802) | (7,599) | (18,173) | (13,867) |
Equity earnings (losses) of unconsolidated affiliates | (737) | (394) | (1,580) | (1,374) |
Other income (expense), net | (3,556) | (58) | (12,030) | (2,614) |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | (29,782) | 3,384 | (73,027) | (5,233) |
Provision for income taxes | 3,294 | 1,252 | 9,182 | 169 |
Net Income | $ (33,076) | $ 2,132 | $ (82,209) | $ (5,402) |
Cash Dividends declared per Share | $ 0.00 | $ 0.15 | $ 0.00 | $ 0.30 |
Basic Earnings per Share | $ (0.34) | $ 0.02 | $ (0.83) | $ (0.06) |
Weighted Average Number of Shares Outstanding, Basic | 98,531 | 98,263 | 98,457 | 98,201 |
Diluted Earnings per Share | $ (0.34) | $ 0.02 | $ (0.83) | $ (0.06) |
Weighted Average Number of Shares Outstanding, Diluted | 98,531 | 98,751 | 98,457 | 98,201 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Net Income | $ (33,076) | $ 2,132 | $ (82,209) | $ (5,402) |
Other comprehensive income, net of tax: | ||||
Foreign currency translation adjustments | (37,806) | 10,783 | (15,630) | 3,722 |
Total other comprehensive income | (37,806) | 10,783 | (15,630) | 3,722 |
Total Comprehensive Income | $ (70,882) | $ 12,915 | $ (97,839) | $ (1,680) |
Summary Of Major Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Summary Of Major Accounting Policies | 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 U.S. 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, 2018 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, 2017. 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 non-current 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 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 $1.8 million and $1.2 million of interest in the three-month periods ended June 30, 2018 and 2017, respectively, and $3.4 million and $2.2 million of interest in the six-month periods ended June 30, 2018 and 2017, 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 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 seabed preparation, route clearance and trenching tools for submarine cables and pipelines on an integrated basis that includes vessels, 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. This purchase price allocation is preliminary and is subject to change upon completion of our valuation procedures. 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, we determine that it is more likely than not 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. We tested the goodwill attributable to each of our reporting units for impairment as of December 31, 2017 and concluded that there was no impairment. 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 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 have used the modified retrospective method applied to those contracts which were not completed as of January 1, 2018, and have utilized the practical expedient to reflect the effect on contract modifications in the aggregate. The cumulative effect of applying ASC 606 has been recognized as an adjustment to retained earnings as of January 1, 2018. The 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. The cumulative effect of the changes made to our Consolidated Balance Sheet as of January 1, 2018 for the adoption of ASC 606 was as follows:
In accordance with the ASC 606 requirements, the impact of adoption on carryover contracts on our Consolidated Statement of Operations and Consolidated Balance Sheet was as follows: Consolidated Statement of Operations
Consolidated Balance Sheet
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 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, that are collected by us from a customer, 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 expect 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 is most likely to occur 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 have recorded adjustments to earnings as a result of revisions to contract estimates. We always strive to estimate our contract costs and profitability accurately. However, 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. Please see Note 2 — "Revenue" — for more information on our revenue from contracts with customers. New Accounting Standards. In January 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-01, "Financial Instruments — Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities." This update:
ASU No. 2016-01 was effective for us beginning on January 1, 2018, and we have utilized the expedient for valuing equity investments without readily determinable fair values. This update has not had a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases." This update requires reporting entities to separate the lease components from the non-lease components in a contract and recognize lease assets and lease liabilities on the balance sheet for substantially all lease arrangements. ASU No. 2016-02 will become effective for us beginning January 1, 2019. We have formed a project team, which has completed its planning work and has an initial view of the work required relevant to the standard. This plan is expected to enable us to complete all of the required work to assess our position, create the necessary policy, procedures and controls and calculate the effect of applying ASU 2016-02 as of the date of initial application in line with the timeline and requirements of the ASU. We expect to be able to provide a qualitative assessment of the effects of the impacts of ASU 2016-02 on our existing contracts later this year. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory." Previously, U.S. GAAP generally prohibited the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset was sold to an outside party. The amendments in this update eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included within the scope of this update are intellectual property and property, plant and equipment. The exception for an intra-entity transfer of inventory will remain in place. The amendments in this update were effective for us beginning January 1, 2018. This ASU has not had a material effect 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 will become effective for us beginning January 1, 2019, and early adoption is permitted. We do not anticipate that this ASU will have 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 will become effective for us beginning January 1, 2019, and early adoption is permitted. We do not anticipate that this ASU will have a material effect on our consolidated financial statements. |
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Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue recognition [Text Block] | 2. Revenue Revenue By Category The following table presents Revenue disaggregated by business segment, geographical region, and timing of transfer of goods or services.
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. The following table provides information about contract assets, and contract liabilities from contracts with customers.
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. During the six months ended June 30, 2018, Contract assets decreased by $3.5 million from its opening balance due to billings of $877 million, which exceeded accrued revenue of $874 million. Contract liabilities decreased $7.5 million from its opening balance, due to revenue recognition of $21.9 million (from the opening balance) less deferrals of milestone payments that totaled $14.4 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, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was $295 million. We expect to recognize revenue for the remaining performance obligations of $247 million over the next twelve months. The aggregate amount of transaction price allocated to remaining performance obligations that were unsatisfied (or partially unsatisfied) as of June 30, 2018 are noted above. 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. 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 six months ended June 30, 2018, which was associated with performance obligations completed or partially completed in prior periods was not significant. As of June 30, 2018, there was no outstanding liability balance for refunds or returns due to the nature of our contracts and the goods and services 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 was no balance or amortization of Costs to obtain a contract in the current reporting period. Costs to fulfill a contract primarily consist of certain mobilization costs incurred to provide products or services to our customers. These costs are deferred and amortized over the period of contract performance. The closing balance of Costs to fulfill a contract as of June 30, 2018 was $14.3 million, with $1.2 million and $2.5 million of amortization for the three- and six-month periods ended June 30, 2018, respectively. No impairment costs were recognized. |
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Inventory | INVENTORY The following is information regarding our inventory:
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Long-term Debt consisted of the following:
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 will pay interest on the 2028 Senior Notes on February 1 and August 1 of each year, beginning on August 1, 2018. 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. In October 2014, we entered into a credit agreement (as amended, the "Credit Agreement") with a group of banks. The Credit Agreement 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 (the "Term Loan Facility"), 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 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% for borrowings under the Revolving Credit Facility; 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, 2018, 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. Please refer to Note 5 — "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 in our Consolidated Balance Sheet, as it pertains to the Senior Notes, and in Other non-current 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. |
Commitments And Contingencies |
6 Months Ended |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Litigation. In the ordinary course of business, we are subject to actions for damages alleging personal injury under the general maritime laws of the United States, including the Jones Act, for alleged negligence. We report actions for personal injury to our insurance carriers and believe that the settlement or disposition of those claims will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. Various other actions and claims are pending against us, most of which are covered by insurance. 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 materially affect our results of operations, cash flows or financial position. 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 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 $783 million as of June 30, 2018, 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 liability of $9.4 million as of June 30, 2018, which is included on our balance sheet in our Other Long-term Liabilities. 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, although the exchange rate was relatively stable during 2017. As our functional currency in Angola is the U.S. dollar, we recorded foreign currency transaction losses related to the kwanza of $4.8 million and $12.4 million in the three- and six-month periods ended June 30, 2018, respectively, as a component of Other income (expense), net in our Consolidated Statements of Operations for those respective periods. Our foreign currency transaction gains or losses related primarily to the remeasurement of our Angolan kwanza cash balances to U.S. dollars. Conversion of cash balances from kwanza to U.S. dollars is controlled by the central bank in Angola, and the central bank has slowed this process since mid-2015, causing our kwanza cash balances to subsequently increase. As of June 30, 2018 and December 31, 2017, we had the equivalent of approximately $12 million and $27 million of kwanza cash balances, respectively, 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. Our intention was to hold the bonds to maturity, and to reinvest funds from maturing bonds in similar long-term assets. We previously believed the chance of selling the bonds before maturity and repatriating cash out of Angola was remote. However, in the second quarter of 2018, $10 million of bonds matured which we reinvested in similar long-term assets. Additionally, we sold $23 million of bonds prior to their maturity date. As a result, we have changed our accounting for these bonds from held-to-maturity securities to available-for-sale securities, as we intend to sell the bonds if we are able to repatriate the proceeds. As of June 30, 2018, we have classified $31 million of bonds due to mature in the next twelve months as Other current assets and $15 million of bonds due to mature after twelve months as Other non-current assets on our Consolidated Balance Sheet, with $5 million maturing in 2020 and $10 million maturing in 2023. During the second quarter of 2018, we were able to repatriate $31 million of cash from Angola. We estimated the fair market value of the Angolan bonds to be approximately $46 million as of June 30, 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, 2018, we have not recorded the difference between the fair market value and carrying amount of the outstanding bonds through the Consolidated Statement of Comprehensive Income (Loss) due to the insignificance of the difference between the fair market value and the carrying amount of the bonds. |
Earnings Per Share, Stock-Based Compensation and Share Repurchase Plan |
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Jun. 30, 2018 | |
Shareholders' Equity, Earnings Per Share And Stock-Based Compensation [Abstract] | |
Shareholders' Equity, Earnings Per Share And Stock-Based Compensation | Earnings 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. Dividends. From the second quarter of 2014 through the third quarter of 2016, we paid a quarterly dividend to our common shareholders of $0.27 per share. Starting in the fourth quarter of 2016 through the third quarter 2017, we paid a dividend of $0.15 per share. Our last quarterly dividend was $0.15 per share and was declared in July 2017 and was paid in September 2017. Share-Based Compensation. We have no outstanding stock options and, therefore, no share-based compensation to be recognized pursuant to stock option grants. During 2016, 2017 and through June 30, 2018, we granted restricted units of our common stock to certain of our key executives and employees. During 2016 through 2018, 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 common stock we grant to our non-employee directors vest in full on the first anniversary of the award date, conditional upon 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 2016 through June 30, 2018, 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, 2018 and December 31, 2017, respective totals of 1,489,893 and 1,181,805 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 $16 million as of June 30, 2018. This expense is being recognized on a staged-vesting basis over three years for awards attributable to individuals meeting certain age and years-of-service requirements, and on a straight-line basis over the applicable vesting period of one or three years for the other awards. Share Repurchase Plan. In December 2014, our Board of Directors approved a plan to repurchase up to 10 million shares of our common stock. Under this plan, we had repurchased 2.0 million shares of our common stock for $100 million through December 31, 2017. We did not repurchase any shares under the plan during the six-month period ended June 30, 2018. We account for the shares we hold in treasury under the cost method, at average cost. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES In December 2017, the United States enacted the Tax Act, which included a number of changes to existing U.S. tax laws that have an impact on our income tax provision, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017, and the creation of a territorial tax system with a one-time mandatory tax on applicable previously deferred earnings of foreign subsidiaries. We recognized the income tax effects of the Tax Act in our financial statements for the year ended December 31, 2017 in accordance with Staff Accounting Bulletin No. 118 (“SAB 118”), which provided SEC staff guidance for the application of accounting standards for income taxes in the reporting period in which the Tax Act was enacted. As such, our financial results reflected provisional amounts for those specific income tax effects of the Tax Act for which the accounting was incomplete but a reasonable estimate could be determined. The final determination is expected to be completed and reflected in our financial statements issued for subsequent reporting periods that fall within the measurement period contemplated by SAB 118. During the second quarter of 2018, the United States Internal Revenue Service issued Notice 2018-26, announcing its intent to issue regulations related to the application of the Section 965 one-time mandatory tax on applicable previously deferred earnings of foreign subsidiaries and potential anti-avoidance measures. Although the notice was not legally binding, we are currently reviewing whether future regulations contemplated by the notice could have any effect on the provisional amounts recorded as of December 31, 2017. Subsequently, on August 1, 2018, the United States Internal Revenue Service issued Proposed Regulations providing guidance regarding Section 965 of the Internal Revenue Code as amended by the Tax Act. We are currently reviewing the proposed regulations and will evaluate any impact on our estimated provisional tax during the third quarter of 2018. During interim periods, we provide for income taxes based on our current estimated annual effective tax rate using assumptions as to (1) earnings and other factors that would affect the tax provision for the remainder of the year and (2) the operations of foreign branches and subsidiaries that are subject to local income and withholding taxes. In the six-month period ended June 30, 2018, we recognized additional tax expense of $3.6 million from discrete items, primarily related to $1.8 million of excess tax deficiencies on share-based compensation awards and $1.3 million of additional uncertain tax position. The effective tax rate for the six months ended June 30, 2018 was different from the federal statutory rate of 21.0%, primarily due to the geographic mix of operating revenue and results that generated taxes in certain jurisdictions that exceeded the tax benefit from losses and credits in other jurisdictions, which could not be realized in the quarter due to valuation allowances being provided, and discrete items discussed above. Given the currently challenging operating environment, we continue to evaluate the realizability of recorded deferred tax assets. It is our intention to continue to indefinitely reinvest in certain of our international operations; therefore, we do not provide withholding taxes on the possible distribution of these earnings. We do not believe the effective tax rate before discrete items is meaningful, as current conditions do not allow for relevant guidance in this regard. The effective tax rate for the six months ended June 30, 2017 was lower than the federal statutory rate of 35.0%, primarily due to our intention to indefinitely reinvest in certain of our international operations, partially offset by a discrete tax item associated with share-based compensation. In 2017, we did not provide for U.S. taxes on the portion of our foreign earnings that we deemed indefinitely reinvested. 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. 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 do not believe that the total of unrecognized tax benefits will increase or decrease significantly in the next twelve months. 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. Including associated foreign tax credits and penalties and interest, we have accrued a net total of $6.8 million in Other Long-term Liabilities on our balance sheet for unrecognized tax benefits as of June 30, 2018. All additions or reductions to those liabilities would affect our effective income tax rate in the periods of change. 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:
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Business Segment Information |
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Segment Reporting, Measurement Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Information | BUSINESS SEGMENT INFORMATION We are a global provider of engineered services and products, primarily to the offshore energy industry. Through the use of our applied technology expertise, we also serve the defense, aerospace and commercial theme park industries. Our Energy Services and Products business consists of Remotely Operated Vehicles ("ROVs"), Subsea Products, Subsea Projects and Asset Integrity. Our ROV segment provides submersible vehicles operated from the surface to support offshore energy exploration, development and production activities. Our Subsea Products segment supplies a variety of specialty subsea hardware and related services. Our Subsea Projects segment provides multiservice subsea support vessels and offshore diving and support vessel operations, primarily for inspection, maintenance and repair and installation activities. We have also provided survey, autonomous underwater vehicle and satellite-positioning services. Our Asset Integrity segment provides asset integrity management and assessment services, nondestructive testing and inspection. Our Advanced Technologies business provides project management, engineering services and equipment for applications in non-energy markets. Unallocated Expenses are those not associated with a specific business segment. These consist of expenses related to our incentive and deferred compensation plans, including restricted stock and bonuses, as well as other general expenses, including corporate administrative expenses. There are no differences in the basis of segmentation or in the basis of measurement of segment profit or loss from those used in our consolidated financial statements for the year ended December 31, 2017. The table that follows presents Revenue, Income (Loss) from Operations and Depreciation and Amortization by business segment for each of the periods indicated.
We determine Income (Loss) from Operations for each business segment before interest income or expense, Other income (expense) and Provision for income taxes. We do not consider an allocation of these items to be practical. Our Equity in earnings (losses) of unconsolidated affiliates is part of our Subsea Projects segment. |
Summary Of Major Accounting Policies (Policy) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | 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 U.S. 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, 2018 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, 2017. The results for interim periods are not necessarily indicative of annual results. |
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Principles of Consolidation | 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 non-current assets. All significant intercompany accounts and transactions have been eliminated. |
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Use Of Estimates | 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. |
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Reclassification | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | 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. |
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Accounts Receivable | 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. |
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Inventory | Inventory. Inventory is valued at the lower of cost or net realizable value. We determine cost using the weighted-average method. |
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Property and Equipment | Property and Equipment and Long-Lived Intangible Assets. We provide for depreciation of 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 $1.8 million and $1.2 million of interest in the three-month periods ended June 30, 2018 and 2017, respectively, and $3.4 million and $2.2 million of interest in the six-month periods ended June 30, 2018 and 2017, 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 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. |
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Business Acquisitions | 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 seabed preparation, route clearance and trenching tools for submarine cables and pipelines on an integrated basis that includes vessels, 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. This purchase price allocation is preliminary and is subject to change upon completion of our valuation procedures. 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. |
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Goodwill and Intangible Assets | 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, we determine that it is more likely than not 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. We tested the goodwill attributable to each of our reporting units for impairment as of December 31, 2017 and concluded that there was no impairment. 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. |
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Foreign Currency Transactions and Translations Policy [Policy Text Block] | 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 as a component of shareholders' equity. All foreign currency transaction gains and losses are recognized currently in the Consolidated Statements of Operations. |
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Revenue Recognition, Policy [Policy Text Block] | 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 have used the modified retrospective method applied to those contracts which were not completed as of January 1, 2018, and have utilized the practical expedient to reflect the effect on contract modifications in the aggregate. The cumulative effect of applying ASC 606 has been recognized as an adjustment to retained earnings as of January 1, 2018. The 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. The cumulative effect of the changes made to our Consolidated Balance Sheet as of January 1, 2018 for the adoption of ASC 606 was as follows:
In accordance with the ASC 606 requirements, the impact of adoption on carryover contracts on our Consolidated Statement of Operations and Consolidated Balance Sheet was as follows: Consolidated Statement of Operations
Consolidated Balance Sheet
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 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, that are collected by us from a customer, 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 expect 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 is most likely to occur 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 have recorded adjustments to earnings as a result of revisions to contract estimates. We always strive to estimate our contract costs and profitability accurately. However, 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. Please see Note 2 — "Revenue" — for more information on our revenue from contracts with customers. |
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New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Standards. In January 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-01, "Financial Instruments — Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities." This update:
ASU No. 2016-01 was effective for us beginning on January 1, 2018, and we have utilized the expedient for valuing equity investments without readily determinable fair values. This update has not had a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases." This update requires reporting entities to separate the lease components from the non-lease components in a contract and recognize lease assets and lease liabilities on the balance sheet for substantially all lease arrangements. ASU No. 2016-02 will become effective for us beginning January 1, 2019. We have formed a project team, which has completed its planning work and has an initial view of the work required relevant to the standard. This plan is expected to enable us to complete all of the required work to assess our position, create the necessary policy, procedures and controls and calculate the effect of applying ASU 2016-02 as of the date of initial application in line with the timeline and requirements of the ASU. We expect to be able to provide a qualitative assessment of the effects of the impacts of ASU 2016-02 on our existing contracts later this year. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other than Inventory." Previously, U.S. GAAP generally prohibited the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset was sold to an outside party. The amendments in this update eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included within the scope of this update are intellectual property and property, plant and equipment. The exception for an intra-entity transfer of inventory will remain in place. The amendments in this update were effective for us beginning January 1, 2018. This ASU has not had a material effect 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 will become effective for us beginning January 1, 2019, and early adoption is permitted. We do not anticipate that this ASU will have 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 will become effective for us beginning January 1, 2019, and early adoption is permitted. We do not anticipate that this ASU will have a material effect on our consolidated financial statements. |
Summary Of Major Accounting Policies Summary of Major Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prospective Adoption of New Accounting Pronouncements [Table Text Block] | The cumulative effect of the changes made to our Consolidated Balance Sheet as of January 1, 2018 for the adoption of ASC 606 was as follows:
In accordance with the ASC 606 requirements, the impact of adoption on carryover contracts on our Consolidated Statement of Operations and Consolidated Balance Sheet was as follows: Consolidated Statement of Operations
Consolidated Balance Sheet
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Revenue (Tables) |
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Revenue [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Geographic Areas [Table Text Block] |
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Revenue by Timing of Transfer of Goods or Services [Table Text Block] |
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Revenue from External Customers by Products and Services [Table Text Block] | The following table presents Revenue disaggregated by business segment, geographical region, and timing of transfer of goods or services.
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Inventory (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory [Table Text Block] |
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Debt (Tables) |
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Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt [Table Text Block] | Long-term Debt consisted of the following:
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Income Taxes (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Summary of Income Tax Examinations | The following lists the earliest tax years open to examination by tax authorities where we have significant operations:
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Business Segment Information (Tables) |
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Financial Data By Business Segment | The table that follows presents Revenue, Income (Loss) from Operations and Depreciation and Amortization by business segment for each of the periods indicated.
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Summary Of Major Accounting Policies - Principles of Consolidation And Repurchases (Details) |
Jun. 30, 2018 |
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Minimum [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Percentage | 50.00% |
Equity Method Investment, Ownership Interest Threshold For Consolidation, Percentage | 20.00% |
Maximum [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Interest Threshold For Consolidation, Percentage | 50.00% |
Summary Of Major Accounting Policies - Property, Plant and Equipment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Accounting Policies [Abstract] | ||||
Interest Costs, Capitalized During Period | $ 1,831 | $ 1,200 | $ 3,409 | $ 2,155 |
Summary Of Major Accounting Policies Business Combination Disclosure (Details) - USD ($) $ in Thousands |
6 Months Ended | |
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Jun. 30, 2018 |
Jun. 30, 2017 |
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Business Acquisition [Line Items] | ||
Payments to Acquire Businesses, Net of Cash Acquired | $ 68,398 | $ 0 |
Revenue Revenue by Timing of Transfer of Goods or Services (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
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Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Revenue Recognition [Abstract] | |||||
Revenue over time | $ 811,702 | ||||
Revenue at a point in time | 83,385 | ||||
Revenues | $ 478,674 | $ 416,413 | $ 515,036 | $ 895,087 | $ 961,212 |
Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
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Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Segment Reporting Information [Line Items] | |||||
Revenues | $ 478,674 | $ 416,413 | $ 515,036 | $ 895,087 | $ 961,212 |
Rovs Member | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 107,426 | 85,594 | 103,432 | 193,020 | 197,454 |
Subsea Products Member | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 121,704 | 126,688 | 174,893 | 248,392 | 325,532 |
Subsea Projects Member | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 78,036 | 56,860 | 75,545 | 134,896 | 138,501 |
Asset Integrity [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 67,422 | 61,288 | 58,192 | 128,710 | 110,850 |
Oil And Gas [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 374,588 | 330,430 | 412,062 | 705,018 | 772,337 |
Advanced Technologies Member | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 104,086 | $ 85,983 | $ 102,974 | $ 190,069 | $ 188,875 |
Revenue Contract balances (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
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Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jan. 01, 2018 |
Dec. 31, 2017 |
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Revenue Recognition [Abstract] | |||||||
Contract assets, current | $ (3,500) | ||||||
Unbilled Receivables, Current | $ 0 | 0 | $ 171,956 | $ 0 | |||
Deferred Revenue | 30,137 | 30,137 | $ 37,590 | $ 0 | |||
Billing for the reporting period | (877,000) | ||||||
Revenue recognized but unbilled | 874,000 | ||||||
Revenue Recognition, Milestone Method, Revenue Recognized | (21,900) | ||||||
Revenues | $ 478,674 | $ 416,413 | $ 515,036 | 895,087 | $ 961,212 | ||
Deferrals of customer payments | 14,400 | ||||||
increase or decrease in contract liability balance, current | $ (7,500) |
Revenue Performance obligation (Details) $ in Millions |
Jun. 30, 2018
USD ($)
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Revenue Recognition [Abstract] | |
Revenue Recognition for Remaining Performance Obligations | $ 247 |
Price Allocated to Remaining Performance Obligations | $ 295 |
Revenue Costs to obtain or fulfill a contract (Details) $ in Millions |
3 Months Ended | 6 Months Ended |
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Jun. 30, 2018
USD ($)
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Jun. 30, 2018
USD ($)
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Revenue Recognition [Abstract] | ||
Costs to fulfill a contract | $ 14.3 | $ 14.3 |
Amortization of costs to fulfill a contract | $ 1.2 | $ 2.5 |
Inventory (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Inventory Disclosure [Abstract] | ||
Inventory for remotely operated vehicles | $ 104,134 | $ 97,313 |
Other inventory, primarily raw materials | 81,792 | 117,969 |
Total | $ 185,926 | $ 215,282 |
Debt - Long-Term Debt (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
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Dec. 31, 2014 |
Jun. 30, 2018 |
Dec. 31, 2017 |
Nov. 21, 2014 |
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Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.65% | |||
Payments of Debt Issuance Costs | $ 6,900 | |||
Notes Payable, Fair Value Disclosure | $ 783,000 | |||
4.650% Senior Notes due 2024 | 500,000 | $ 500,000 | $ 500,000 | |
Senior Notes 2028 | 300,000 | 0 | ||
Unamortized Debt Issuance Expense | (8,367) | (4,698) | ||
Fair Value Hedge Liabilities | (9,405) | (2,990) | ||
Loans Payable to Bank | 0 | 300,000 | ||
Revolving credit facility | 0 | 0 | ||
Long-term Debt | $ 782,228 | $ 792,312 |
Income Taxes - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | |
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Jun. 30, 2018 |
Jun. 30, 2017 |
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Operating Loss Carryforwards [Line Items] | ||
Tax Adjustments, Settlements, and Unusual Provisions | $ 3.6 | |
Discrete item 1 | 1.3 | |
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ 1.8 | |
Unrecognized Tax Benefits, Probability Threshold of Realizing for Tax Benefits Recognition, Minimum Percentage | 50.00% | |
Unrecognized Tax Benefits, Including Foreign Tax Credits and Penalties and Interest | $ 6.8 | |
Federal statutory tax rate | 21.00% | 35.00% |
Business Segment Information - Financial Data By Business Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
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Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Segment Reporting Information [Line Items] | |||||
Revenue | $ 478,674 | $ 416,413 | $ 515,036 | $ 895,087 | $ 961,212 |
Income from Operations | (19,637) | (27,149) | 9,390 | (46,786) | 9,240 |
Depreciation and amortization | 59,843 | 54,128 | 53,304 | 113,971 | 106,967 |
Oil And Gas [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 374,588 | 330,430 | 412,062 | 705,018 | 772,337 |
Income from Operations | (164) | (1,323) | 27,683 | (1,487) | 47,545 |
Depreciation and amortization | 58,072 | 51,828 | 51,382 | 109,900 | 103,150 |
ROVs [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 107,426 | 85,594 | 103,432 | 193,020 | 197,454 |
Income from Operations | 4,542 | (2,398) | 10,376 | 2,144 | 16,301 |
Depreciation and amortization | 28,269 | 27,642 | 29,036 | 55,911 | 58,265 |
Subsea Products Member | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 121,704 | 126,688 | 174,893 | 248,392 | 325,532 |
Income from Operations | 2,295 | 1,755 | 10,552 | 4,050 | 22,035 |
Depreciation and amortization | 14,914 | 14,025 | 12,785 | 28,939 | 25,784 |
Subsea Projects [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 78,036 | 56,860 | 75,545 | 134,896 | 138,501 |
Income from Operations | (10,358) | (2,359) | 3,000 | (12,717) | 3,187 |
Depreciation and amortization | 13,053 | 8,313 | 7,781 | 21,366 | 15,861 |
Asset Integrity [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 67,422 | 61,288 | 58,192 | 128,710 | 110,850 |
Income from Operations | 3,357 | 1,679 | 3,755 | 5,036 | 6,022 |
Depreciation and amortization | 1,836 | 1,848 | 1,780 | 3,684 | 3,240 |
Advanced Technologies [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 104,086 | 85,983 | 102,974 | 190,069 | 188,875 |
Income from Operations | 7,886 | 1,668 | 7,632 | 9,554 | 12,658 |
Depreciation and amortization | 737 | 766 | 784 | 1,503 | 1,581 |
Unallocated Expenses [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Income from Operations | (27,359) | (27,494) | (25,925) | (54,853) | (50,963) |
Depreciation and amortization | $ 1,034 | $ 1,534 | $ 1,138 | $ 2,568 | $ 2,236 |
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