Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 26, 2019 | |
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 | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 98,928,299 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 341,763 | $ 354,259 |
Accounts receivable, net of allowances for doubtful accounts of $6,698 and $7,116 | 381,455 | 368,885 |
Contract assets | 221,451 | 256,201 |
Inventory, net | 203,010 | 194,507 |
Other current assets | 72,713 | 71,037 |
Total Current Assets | 1,220,392 | 1,244,889 |
Property and Equipment, at cost | 2,857,688 | 2,837,587 |
Property and Equipment, at cost | 1,901,949 | 1,872,917 |
Net Property and Equipment | 955,739 | 964,670 |
Other Assets: | ||
Goodwill | 421,572 | 413,121 |
Other non-current assets | 191,504 | 202,318 |
Right-of-Use Operating Lease asset | 182,311 | |
Total Other Assets | 795,387 | 615,439 |
Total Assets | 2,971,518 | 2,824,998 |
Current Liabilities: | ||
Accounts payable | 111,741 | 102,636 |
Accrued liabilities | 309,902 | 306,933 |
Contract liabilities | 78,668 | 85,172 |
Total Current Liabilities | 500,311 | 494,741 |
Long-term Debt | 790,969 | 786,580 |
Long-term Operating Lease Liabilities | 166,453 | |
Other Long-term Liabilities | 122,285 | 128,379 |
Commitments and Contingencies | ||
Equity: | ||
Common Stock, par value $0.25 per share; 360,000,000 shares authorized; 110,834,088 shares issued | 27,709 | 27,709 |
Additional paid-in capital | 198,784 | 220,421 |
Treasury stock; 11,905,789 and 12,294,873 shares, at cost | (681,786) | (704,066) |
Retained earnings | 2,173,861 | 2,204,548 |
Accumulated other comprehensive loss | (333,131) | (339,377) |
Oceaneering Shareholders' Equity | 1,385,437 | 1,409,235 |
Noncontrolling interest | 6,063 | 6,063 |
Total Equity | 1,391,500 | 1,415,298 |
Total Liabilities and Equity | $ 2,971,518 | $ 2,824,998 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances for doubtful accounts | $ 6,698 | $ 7,116 |
Common Stock, par value (in dollars per share) | $ 0.25 | $ 0.25 |
Common Stock, shares authorized (in shares) | 360,000,000 | 360,000,000 |
Common Stock, shares issued (in shares) | 110,834,088 | 110,834,088 |
Treasury stock, shares (in shares) | 11,905,789 | 12,294,873 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 493,886 | $ 416,413 |
Cost of services and products | 466,299 | 397,585 |
Gross Margin | 27,587 | 18,828 |
Selling, general and administrative expense | 49,301 | 45,977 |
Income (Loss) from Operations | (21,714) | (27,149) |
Interest income | 2,604 | 2,592 |
Interest expense, net of amounts capitalized | (9,424) | (9,371) |
Equity in income (losses) of unconsolidated affiliates | (164) | (843) |
Other income (expense), net | 719 | (8,474) |
Income (Loss) Before Income Taxes | (27,979) | (43,245) |
Provision (benefit) for income taxes | (3,152) | 5,888 |
Net Income (Loss) | $ (24,827) | $ (49,133) |
Weighted average shares outstanding | ||
Basic (in shares) | 98,714 | 98,383 |
Diluted (in shares) | 98,714 | 98,383 |
Earnings (loss) per share | ||
Basic (in dollars per share) | $ (0.25) | $ (0.50) |
Diluted (in dollars per share) | $ (0.25) | $ (0.50) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income (Loss) | $ (24,827) | $ (49,133) |
Other comprehensive income: | ||
Foreign Currency Translation Adjustments | 6,246 | 22,176 |
Total other comprehensive income | 6,246 | 22,176 |
Comprehensive Income (Loss) | $ (18,581) | $ (26,957) |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows from Operating Activities: | ||
Net Income (Loss) | $ (24,827) | $ (49,133) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 52,486 | 54,128 |
Deferred income tax provision (benefit) | (2,907) | 2,819 |
Net loss (gain) on sales of property and equipment | (11) | 37 |
Noncash compensation | 2,980 | 2,812 |
Excluding the effects of acquisitions, increase (decrease) in cash from: | ||
Accounts receivable and contract assets | 22,181 | 20,815 |
Inventory | (15,026) | (2,985) |
Other operating assets | 1,010 | 6,535 |
Currency translation effect on working capital, excluding cash | 371 | 5,559 |
Current liabilities | (15,058) | (41,194) |
Other operating liabilities | (2,075) | 6,225 |
Total adjustments to net income | 43,951 | 54,751 |
Net Cash Provided by Operating Activities | 19,124 | 5,618 |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (29,964) | (25,732) |
Business acquisitions, net of cash acquired | 0 | (68,398) |
Other investing activities | 0 | 202 |
Distributions of capital from unconsolidated affiliates | 0 | 1,579 |
Dispositions of property and equipment | 50 | 0 |
Net Cash Used in Investing Activities | (29,914) | (92,349) |
Cash Flows from Financing Activities: | ||
Net proceeds from issuance of 6.000% Senior Notes, net of issuance costs | 0 | 295,879 |
Repayment of term loan facility | 0 | (300,000) |
Other financing activities | (2,338) | (1,635) |
Net Cash Used in Financing Activities | (2,338) | (5,756) |
Effect of exchange rates on cash | 632 | (2,919) |
Net Increase (Decrease) in Cash and Cash Equivalents | (12,496) | (95,406) |
Cash and Cash Equivalents—Beginning of Period | 354,259 | 430,316 |
Cash and Cash Equivalents—End of Period | $ 341,763 | $ 334,910 |
Consolidated Statements Of Ca_2
Consolidated Statements Of Cash Flows (Parenthetical) | Mar. 31, 2018 |
Senior Notes | |
Interest rate, stated percentage | 6.00% |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Restricted Stock Units (RSUs) [Member] | Restricted Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Restricted Stock Units (RSUs) [Member] | Additional Paid-in Capital [Member]Restricted Stock [Member] | Treasury Stock [Member] | Treasury Stock [Member]Restricted Stock Units (RSUs) [Member] | Treasury Stock [Member]Restricted Stock [Member] | Retained Earnings [Member] | Currency Translation Adjustments [Member] | Pension [Member] | Oceaneering Shareholders' Equity [Member] | Oceaneering Shareholders' Equity [Member]Restricted Stock Units (RSUs) [Member] | Noncontrolling Interest [Member] |
Beginning balance at Dec. 31, 2017 | $ 1,664,518 | $ 27,709 | $ 225,125 | $ (718,946) | $ 2,417,412 | $ (292,351) | $ 215 | $ 1,659,164 | $ 5,354 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net loss | (49,133) | (49,133) | (49,133) | |||||||||||||
Other comprehensive income (loss) | 22,176 | 22,176 | 22,176 | |||||||||||||
Restricted stock and restricted stock unit activity | $ 1,179 | $ 0 | $ (9,186) | $ (3,951) | $ 10,365 | $ 3,951 | $ 1,179 | |||||||||
Non controlling interest | 0 | |||||||||||||||
Ending balance at Mar. 31, 2018 | 1,638,203 | 27,709 | 211,988 | (704,630) | 2,367,742 | (270,175) | 215 | 1,632,849 | 5,354 | |||||||
Beginning balance at Dec. 31, 2018 | 1,415,298 | 27,709 | 220,421 | (704,066) | 2,204,548 | (339,377) | 0 | 1,409,235 | 6,063 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Net loss | (24,827) | (24,827) | (24,827) | |||||||||||||
Other comprehensive income (loss) | 6,246 | 6,246 | 6,246 | |||||||||||||
Restricted stock and restricted stock unit activity | $ 643 | $ 0 | $ (16,494) | $ (5,143) | $ 17,137 | $ 5,143 | $ 643 | |||||||||
Non controlling interest | 0 | |||||||||||||||
Ending balance at Mar. 31, 2019 | $ 1,391,500 | $ 27,709 | $ 198,784 | $ (681,786) | $ 2,173,861 | $ (333,131) | $ 0 | $ 1,385,437 | $ 6,063 |
Summary Of Major Accounting Pol
Summary Of Major Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
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 March 31, 2019 and our results of operations and cash flows for the periods presented. Except as otherwise disclosed herein, all such adjustments are of a normal and recurring nature. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2018 . The results for interim periods are not necessarily indicative of annual results. Principles of Consolidation. The consolidated financial statements include the accounts of Oceaneering and our 50% or more owned and controlled subsidiaries. We also consolidate entities that are determined to be variable interest entities if we determine that we are the primary beneficiary; otherwise, we account for those entities using the equity method of accounting. We use the equity method to account for our investments in unconsolidated affiliated companies of which we own an equity interest of between 20% and 50% and as to which we have significant influence, but not control, over operations. We use the cost method for all other long-term investments. Investments in entities that we do not consolidate are reflected on our balance sheet in Other 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. Reclassifications. Certain amounts from prior periods have been reclassified to conform with the current period presentation. Cash and Cash Equivalents. Cash and cash equivalents include demand deposits and highly liquid investments with original maturities of three months or less from the date of investment. Accounts Receivable – Allowances for Doubtful Accounts. We determine the need for allowances for doubtful accounts using the specific identification method. We generally do not require collateral from our customers. Inventory . Inventory is valued at the lower of cost or net realizable value. We determine cost using the weighted-average method. Property and Equipment and Long-Lived Intangible Assets. We provide for depreciation of assets included in property and equipment on the straight-line method over their estimated useful lives. We charge the costs of repair and maintenance of property and equipment to operations as incurred, while we capitalize the costs of improvements that extend asset lives or functionality. Upon the disposition of property and equipment, the related cost and accumulated depreciation accounts are relieved and any resulting gain or loss is included as an adjustment to cost of services and products. Intangible assets, primarily acquired in connection with business combinations, include trade names, intellectual property and customer relationships and are being amortized over their estimated useful lives. We capitalize interest on assets where the construction period is anticipated to be more than three months. We capitalized $2.0 million and $1.6 million of interest in the three-month periods ended March 31, 2019 and 2018 , respectively. We do not allocate general administrative costs to capital projects. Our management periodically, and upon the occurrence of a triggering event, reviews the realizability of our property and equipment and long-lived intangible assets to determine whether any events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. For long-lived assets to be held and used, we base our evaluation on impairment indicators, such as the nature of the assets, the future economic benefits of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset may not be recoverable, we determine whether an impairment has occurred through the use of an undiscounted cash flows analysis of the asset at the lowest level for which identifiable cash flows exist. If an impairment has occurred, we recognize a loss for the difference between the carrying amount and the fair value of the asset. For assets held for sale or disposal, the fair value of the asset is measured using fair market value less estimated costs to sell. Assets are classified as held-for-sale when we have a plan for disposal of certain assets and those assets meet the held for sale criteria. Business Acquisitions . We account for business combinations using the acquisition method of accounting, and, in each case, we allocate the acquisition price to the assets acquired and liabilities assumed based on their fair market values as of the date of acquisition. In March, 2018, we acquired Ecosse Subsea Limited (“Ecosse”) for $68 million in cash. Headquartered in Aberdeen, Scotland, Ecosse builds and operates tools for seabed preparation, route clearance and trenching for the installation of submarine cables and pipelines. These services are offered on an integrated basis that includes vessels, ROVs and survey services. We have accounted for this acquisition by allocating the purchase price to the assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. We have included Ecosse’s operations in our consolidated financial statements starting from the date of closing and its operating results are reflected in our Subsea Projects segment. Goodwill. Annually, we are required to evaluate our goodwill by performing a qualitative or quantitative impairment test. Under the qualitative approach and after assessing the totality of events or circumstances, if we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we are required to perform the quantitative analysis to determine the fair value for that reporting unit. We were required to perform a quantitative analysis for our Subsea Projects Segment and determined that the fair value was less than the carrying value and, as a result, we recorded a pre-tax goodwill impairment loss of $76 million in the Subsea Projects reporting unit. The impairment loss was recorded in our Consolidated Statement of Operation for the quarter ended December 31, 2018. For the remaining reporting units, qualitative assessments were performed and we concluded that it was more likely than not the fair value of the reporting unit was more than the carrying value of the reporting unit and, therefore, no impairment was required. In addition to our annual evaluation of goodwill for impairment, upon the occurrence of a triggering event, we review our goodwill to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Foreign Currency Translation. The functional currency for several of our foreign subsidiaries is the applicable local currency. Results of operations for foreign subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using average exchange rates during the period. Assets and liabilities of these foreign subsidiaries are translated into U.S. dollars using the exchange rates in effect as of the balance sheet date, and the resulting translation adjustments are recognized in accumulated other comprehensive income (loss) as a component of shareholders' equity. All foreign currency transaction gains and losses are recognized currently in the Consolidated Statements of Operations. Revenue Recognition. On January 1, 2018, we adopted Accounting Standard Update ("ASU") 2014-09, " Revenue from Contracts with Customers, " which implemented Accounting Standards Codification Topic 606 ("ASC 606"). We have used the modified retrospective method applied to those contracts that 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 was recognized as an adjustment of $537,000 to retained earnings as of January 1, 2018. All of our revenue is realized through contracts with customers. We recognize our revenue according to the contract type. On a daily basis, we recognize service revenue over time for contracts that provide for specific time, material and equipment charges, which we bill periodically, ranging from weekly to monthly. We use the input method to faithfully depict revenue recognition, because each day of service provided represents value to the customer. The performance obligations in these contracts are satisfied, and revenue is recognized, as the work is performed. We have used the expedient available to recognize revenue when the billing corresponds to the value realized by the customer where appropriate. We account for significant fixed-price contracts, mainly relating to our Subsea Products segment, and to a lesser extent in our Subsea Projects and Advanced Technologies segments, by recognizing revenue over time using an input, cost-to-cost measurement percentage-of-completion method. We use the input cost-to-cost method to faithfully depict revenue recognition. This commonly used method allows appropriate calculation of progress on our contracts. A performance obligation is satisfied as we create a product on behalf of the customer over the life of the contract. The remainder of our revenue is recognized at the point in time when control transfers to the customer, thus satisfying the performance obligation. We have elected to recognize the cost for freight and shipping as an expense when incurred. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, and that are collected by us from customers, are excluded from revenue. In our service-based business lines, which principally charge on a day rate basis for services provided, there is no significant impact in the pattern of revenue and profit recognition as a result of implementation of ASC 606. In our product-based business lines, we 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 recorded adjustments to earnings as a result of revisions to contract estimates; however, we did not have any material adjustments during the quarter ended March 31, 2019. There could be significant adjustments to overall contract costs in the future, due to changes in facts and circumstances. In general, our payment terms consist of those services billed regularly as provided and those products delivered at a point in time, which are invoiced after the performance obligation is satisfied. Our product and service contracts with milestone payments due at agreed progress points during the contract are invoiced when those milestones are reached, which may differ from the timing of revenue recognition. Our payment terms generally do not provide financing of contracts to customers, nor do we receive financing from customers as a result of these terms. Please see Note 2 — "Revenue" — for more information on our revenue from contracts with customers. On January 1, 2019 we adopted Accounting Standards Update ("ASU") 2018-11, an amendment to ASU 2016-02, " Leases " (collectively, the "New Leases Standard") that: (1) requires lessees to recognize a Right-of-Use asset ("ROU assets") and lease liabilities for virtually all leases; and (2) updates previous accounting standards for lessors to align certain requirements of the New Leases Standard and the revenue recognition accounting standard. We have used the transition method allowing us to apply the new standard at the adoption date and have adopted the package of practical expedients permitting us to retain the identification and classification of leases made under the previously applicable accounting standards; we did not adopt the hindsight expedient. The cumulative effect of applying the New Leases Standard as of January 1, 2019 of $5.9 million was recognized as an adjustment to retained earnings, with corresponding adjustments to increase ROU assets and Lease liabilities by $185 million and $191 million , respectively. The standard did not materially affect our net earnings and had no impact on cash flows. 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. As a lessee, we utilize the expedients available to us not to recognize leases of 12 months or less on the balance sheet and to combine lease and non-lease components together and account for the combined component as a lease for all asset classes, except real estate. As a lessor, we lease certain types of equipment along with the provision of services and utilize the expedient allowing us to combine the lease and non-lease components into a combined component that is accounted for under ASC 842 where the lease component is predominant and under ASC 606 where the service component is predominant. We determine whether a contract is or contains a lease at inception, whether as a lessee or a lessor. We take into consideration the elements of an identified asset, right to control and the receipt of economic benefit in making these determinations. As a lessee, we lease land, buildings, vessels and equipment for the operation of our business and to support some of our service line revenue streams. These generally carry lease terms that range from days for operational and support equipment to 22 years f or land and buildings. These leases are negotiated on commercial terms at market rates and many carry standard options to extend or terminate at our discretion. When the exercise of those options is reasonably certain, we include them in the lease assessment. Our leases do not contain material restrictions or covenants that impact our accounting for them, nor do we provide residual value guarantees. As a lessor, we lease certain types of equipment, often providing services at the same time. These leases can be priced on a day-rate or lump-sum basis for periods ranging from a few days to multi-year contracts. These leases are negotiated on commercial terms at market rates and many carry standard options to extend or terminate at our customers sole discretion. These leases generally do not contain options to purchase, material restrictions or covenants that impact our accounting for leases. ROU operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate, based on the information available at commencement date in determining the present value of future payments. In determining the incremental borrowing rate, we took into account our external credit ratings, bond yields for us and our identified peers, geographic regions where we operate, credit default swap rates and the impact associated with providing collateral for an amount equal to the lease payments. Our ROU operating lease assets also include any lease prepayments made and exclude lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease, which we take into account when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We do not have any leases that have not yet commenced that create significant rights and obligations for us as a lessee nor do we have any material related party transactions. Please see Note 5 — "Leases" — for more information on our operating leases. New Accounting Standards . In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, as modified by subsequently issued ASU 2018-19. The guidance introduces a new credit reserving model know as the Current Expected Credit Loss ("CECL") model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires estimating all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. These ASUs affect an entity to varying degrees depending on the credit quality for the assets held by the entity, their duration and how the entity applies current U.S. GAAP. These ASUs will become effective for us beginning January 1, 2020. We are currently evaluating the impact of this guidance. In August 2017, the FASB issued ASU No. 2017-12 "Derivatives and Hedging (Topic 815): Targeted improvements to Accounting for Hedging Activities," which simplified the application of hedge accounting guidance in current GAAP and improved the reporting of hedging relationships to better portray the economic results of our risk management activities in our consolidated financial statements. We adopted this ASU on January 1, 2019 and the effects of this update have not had a material impact on our consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments — Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities." This update: • 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. 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 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 were effective for us beginning January 1, 2019. This ASU has not had a material effect on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, "Compensation – Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting." This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this ASU become effective for us beginning January 1, 2019. This ASU has not had a material effect on our consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Revenue By Category The following table presents Revenue disaggregated by business segment, geographical region, and timing of transfer of goods or services. Three Months Ended (in thousands) Mar 31, 2019 Mar 31, 2018 Dec 31, 2018 Business Segment: Energy Services and Products Remotely Operated Vehicles $ 100,346 $ 85,594 $ 96,736 Subsea Products 128,844 126,688 129,509 Subsea Projects 89,728 56,860 89,295 Asset Integrity 60,689 61,288 62,830 Total Energy Services and Products 379,607 330,430 378,370 Advanced Technologies 114,279 85,983 116,725 Total $ 493,886 $ 416,413 $ 495,095 (in thousands) Geographic Operating Areas: Three Months Ended Foreign: Mar 31, 2019 Mar 31, 2018 Dec 31, 2018 Africa $ 87,106 $ 55,087 $ 71,237 United Kingdom 53,298 45,319 50,304 Norway 42,466 39,042 42,731 Asia and Australia 41,426 38,946 41,685 Brazil 17,763 18,828 17,161 Other 21,222 19,639 23,200 Total Foreign 263,281 216,861 246,318 United States 230,605 199,552 248,777 Total $ 493,886 $ 416,413 $ 495,095 Timing of Transfer of Goods or Services: Revenue recognized over time $ 461,245 $ 374,667 $ 465,008 Revenue recognized at a point in time 32,641 41,746 30,087 Total $ 493,886 $ 416,413 $ 495,095 Contract Balances Our contracts with milestone payments have, in the aggregate, a significant impact on the Contract asset and the Contract liability balances. Milestones are contractually agreed with customers and relate to significant events across the contract lives. Some milestones are achieved before revenue is recognized, resulting in a Contract liability, other milestones are achieved after revenue is recognized resulting in a Contract asset. Our payment terms consist of those services billed regularly as provided and those products delivered at a point in time, which are invoiced after the performance obligation is satisfied. Our product and service contracts with milestone payments due at agreed progress points during the contract are invoiced when those milestones are reached, which may differ from the timing of revenue recognition. During the three months ended March 31, 2019 , Contract assets decreased by $35 million from its opening balance due to billings of $519 million , which exceeded accrued revenue of $484 million . Contract liabilities decreased $6.5 million from its opening balance, due to revenue recognition of $15 million less deferrals of milestone payments that totaled $8.2 million . There were no cancellations, impairments or other significant impacts in the period that relate to other categories of explanation. Performance Obligations As of March 31, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $364 million . We expect to recognize revenue for the remaining performance obligations of $272 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 March 31, 2019 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 three months ended March 31, 2019 , which was associated with performance obligations completed or partially completed in prior periods was not significant. As of March 31, 2019 , there was no outstanding liability balance for refunds or returns due to the nature of our contracts and the services and products we provide. Our warranties are limited to assurance warranties that are of a standard length and are not considered to be a material right . The majority of our contracts consist of a single performance obligation. When there are multiple obligations, we look for observable evidence of stand-alone selling prices on which to base the allocation. This involves judgment as to the appropriateness of the observable evidence relating to the facts and circumstances of the contract. If we do not have observable evidence, we estimate stand-alone selling prices by taking a cost plus margin approach, using typical margins from the type of product or service, customer and regional geography involved. Costs to Obtain or Fulfill a Contract In line with the available expedient, we capitalize costs to obtain a contract when those amounts are significant and the contract is expected at inception to exceed one year in duration; otherwise, the costs are expensed in the period when incurred. Costs to obtain a contract primarily consist of bid and proposal costs, which are incremental to our fixed costs. There 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 services or products to our customers. These costs are deferred and amortized over the period of contract performance. The closing balance of Costs to fulfill a contract was $13 million as of both March 31, 2019 and December 31, 2018. For the three-month periods ended March 31, 2019 and 2018 , $2.6 million and $1.3 million of amortization expense was recorded, respectively. No impairment costs were recognized. |
Selected Balance Sheet Informat
Selected Balance Sheet Information | 3 Months Ended |
Mar. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Selected Balance Sheet Information | SELECTED BALANCE SHEET INFORMATION The following is information regarding selected balance sheet accounts: (in thousands) Mar 31, 2019 Dec 31, 2018 Inventory: Remotely operated vehicle parts and components $ 114,059 $ 108,939 Other inventory, primarily raw materials 88,951 85,568 Total $ 203,010 $ 194,507 Other Current Assets: Prepaid expenses $ 62,534 $ 60,858 Angolan bonds 10,179 10,179 Total $ 72,713 $ 71,037 Accrued Liabilities: Payroll and related costs $ 96,257 $ 114,676 Accrued job costs 71,662 62,281 Income taxes payable 24,435 34,954 Current operating lease liability 20,001 — Other 97,547 95,022 Total $ 309,902 $ 306,933 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Long-term Debt consisted of the following: (in thousands) Mar 31, 2019 Dec 31, 2018 4.650% Senior Notes due 2024 $ 500,000 $ 500,000 6.000% Senior Notes due 2028 300,000 300,000 Fair value of interest rate swaps on $200 million of principal (1,483 ) (5,600 ) Unamortized debt issuance costs (7,548 ) (7,820 ) Revolving Credit Facility — — Long-term Debt $ 790,969 $ 786,580 In November 2014, we completed the public offering of $500 million aggregate principal amount of 4.650% Senior Notes due 2024 (the "2024 Senior Notes"). We pay interest on the 2024 Senior Notes on May 15 and November 15 of each year. The 2024 Senior Notes are scheduled to mature on November 15, 2024. In February 2018, we completed the public offering of $300 million aggregate principal amount of 6.000% Senior Notes due 2028 (the "2028 Senior Notes"). We pay interest on the 2028 Senior Notes on February 1 and August 1 of each year. The 2028 Senior Notes are scheduled to mature on February 1, 2028. We may redeem some or all of the 2024 Senior Notes and the 2028 Senior Notes (collectively, the "Senior Notes") at specified redemption prices. We used the net proceeds from the 2028 Senior Notes to repay our term loan indebtedness described further below. In October 2014, we entered into a credit agreement (as amended, the "Credit Agreement") with a group of banks. The Credit Agreement initially provided for a $500 million five -year revolving credit facility (the "Revolving Credit Facility"). Subject to certain conditions, the aggregate commitments under the Revolving Credit Facility may be increased by up to $300 million at any time upon agreement between us and existing or additional lenders. Borrowings under the Revolving Credit Facility may be used for general corporate purposes. The Credit Agreement also provided for a $300 million term loan, which we repaid in full in February 2018, using net proceeds from the issuance of our 2028 Senior Notes referred to above, and cash on hand. In February 2018, we entered into Agreement and Amendment No. 4 to the Credit Agreement ("Amendment No. 4"). Amendment No. 4 amended the Credit Agreement to, among other things, extend the maturity of the Revolving Credit Facility to January 25, 2023 with the extending Lenders, which represent 90% of the existing commitments of the Lenders, such that the total commitments for the Revolving Credit Facility will be $500 million until October 25, 2021, and thereafter $450 million until January 25, 2023. Borrowings under the Revolving Credit Facility bear interest at an Adjusted Base Rate or the Eurodollar Rate (both as defined in the Credit Agreement), at our option, plus an applicable margin based on our Leverage Ratio (as defined in the Credit Agreement) and, at our election, based on the ratings of our senior unsecured debt by designated ratings services, thereafter to be based on such debt ratings. The applicable margin varies: (1) in the case of advances bearing interest at the Adjusted Base Rate, from 0.125% to 0.750% ; and (2) in the case of advances bearing interest at the Eurodollar Rate, from 1.125% to 1.750% . The Adjusted Base Rate is the highest of (1) the per annum rate established by the administrative agent as its prime rate, (2) the federal funds rate plus 0.50% and (3) the daily one-month LIBOR plus 1% . We pay a commitment fee ranging from 0.125% to 0.300% on the unused portion of the Revolving Credit Facility, depending on our Leverage Ratio. The commitment fees are included as interest expense in our consolidated financial statements. The Credit Agreement contains various covenants that we believe are customary for agreements of this nature, including, but not limited to, restrictions on our ability and the ability of each of our subsidiaries to incur debt, grant liens, make certain investments, make distributions, merge or consolidate, sell assets and enter into certain restrictive agreements. We are also subject to a maximum adjusted total Capitalization Ratio (as defined in the Credit Agreement) of 55% . The Credit Agreement includes customary events of default and associated remedies. As of March 31, 2019 , we were in compliance with all the covenants set forth in the Credit Agreement. We have two interest rate swaps in place on a total of $200 million of the 2024 Senior Notes for the period to November 2024. Please refer to Note 6 — "Commitments and Contingencies" — for more information on our interest rate swaps. We incurred $6.9 million and $4.1 million of issuance costs related to the 2024 Senior Notes and the 2028 Senior Notes, respectively, and $2.6 million of loan costs, including costs of the amendments prior to Amendment No. 4, related to the Credit Agreement. The costs, net of accumulated amortization, are included as a reduction of Long-term Debt on our Consolidated Balance Sheets, as it pertains to the Senior Notes, and in Other 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. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | LEASES The following tables present information about operating leases. (in thousands) Mar 31, 2019 Jan 1, 2019 Assets: Operating lease assets $ 182,311 $ 184,648 Total lease assets $ 182,311 $ 184,648 Liabilities: Current Operating $ 20,001 $ 20,318 Noncurrent Operating 166,453 170,190 Total lease liabilities $ 186,454 $ 190,508 Three Months Ended (in thousands) Mar 31, 2019 Lease Cost: Operating lease cost $ 7,003 Short-term lease cost 19,089 Net lease cost $ 26,092 Mar 31, 2019 Jan 1, 2019 Lease Term and Discount Rate: Weighted-average remaining lease terms (years) 8.9 9.2 Weighted-average discount rate 6.9 % 6.9 % Future maturities of lease liabilities under all of our operating leases are as follows: 12 Months ended March 31, (in thousands) 2020 $ 29,116 2021 26,234 2022 26,540 2023 23,458 2024 20,885 Thereafter 156,653 Total lease payments 282,886 Less: Interest (96,432 ) Present value of lease liabilities $ 186,454 |
Leases | LEASES The following tables present information about operating leases. (in thousands) Mar 31, 2019 Jan 1, 2019 Assets: Operating lease assets $ 182,311 $ 184,648 Total lease assets $ 182,311 $ 184,648 Liabilities: Current Operating $ 20,001 $ 20,318 Noncurrent Operating 166,453 170,190 Total lease liabilities $ 186,454 $ 190,508 Three Months Ended (in thousands) Mar 31, 2019 Lease Cost: Operating lease cost $ 7,003 Short-term lease cost 19,089 Net lease cost $ 26,092 Mar 31, 2019 Jan 1, 2019 Lease Term and Discount Rate: Weighted-average remaining lease terms (years) 8.9 9.2 Weighted-average discount rate 6.9 % 6.9 % Future maturities of lease liabilities under all of our operating leases are as follows: 12 Months ended March 31, (in thousands) 2020 $ 29,116 2021 26,234 2022 26,540 2023 23,458 2024 20,885 Thereafter 156,653 Total lease payments 282,886 Less: Interest (96,432 ) Present value of lease liabilities $ 186,454 |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Litigation. In the ordinary course of business, we are, from time to time, involved in litigation or subject to disputes, governmental investigations or claims related to our business activities, including, among other things: • performance- or warranty-related matters under our customer and supplier contracts and other business arrangements; and • workers’ compensation claims, Jones Act claims, occupational hazard claims, premises liability claims and other claims. Although we cannot predict the ultimate outcome of these matters, we believe that our ultimate liability, if any, that may result from these other actions and claims will not have a material adverse effect on our consolidated financial condition, results of operations or cash flows. However, because of the inherent uncertainty of litigation and other dispute resolution proceedings and, in some cases, the availability and amount of potentially available insurance, we can provide no assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material effect on our consolidated financial condition, results of operations or cash flows for the fiscal period in which that resolution occurs. Financial Instruments and Risk Concentration. In the normal course of business, we manage risks associated with foreign exchange rates and interest rates through a variety of strategies, including the use of hedging transactions. As a matter of policy, we do not use derivative instruments unless we have an underlying exposure. Other financial instruments that potentially subject us to concentrations of credit risk are principally cash and cash equivalents and accounts receivable. The carrying values of cash and cash equivalents approximate their fair values due to the short-term maturity of the underlying instruments. Accounts receivable are generated from a broad group of customers, primarily from within 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 $749 million as of March 31, 2019 , based on quoted prices. Since the market for the Senior Notes is not an active market, the fair value of the Senior Notes is classified within Level 2 in the fair value hierarchy under U.S. GAAP (inputs other than quoted prices in active markets for similar assets and liabilities that are observable or can be corroborated by observable market data for substantially the full terms for the assets or liabilities). We have two interest rate swaps in place on a total of $200 million of the 2024 Senior Notes for the period to November 2024. The agreements swap the fixed interest rate of 4.650% on $100 million of the 2024 Senior Notes to the floating rate of one month LIBOR plus 2.426% and on another $100 million to one month LIBOR plus 2.823% . We estimate the combined fair value of the interest rate swaps to be a net liability of $1.5 million as of March 31, 2019 , 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, with the exception that the exchange rate was relatively stable during 2017. As our functional currency in Angola is the U.S. dollar, we recorded foreign currency transaction losses related to the kwanza of less than $0.1 million and $7.7 million in the three-month periods ended March 31, 2019 and 2018 , respectively, as a component of Other income (expense), net in our Consolidated Statements of Operations for those respective periods. Our foreign currency transaction losses related primarily to the remeasurement of our Angolan kwanza cash balances to U.S. dollars. Any conversion of cash balances from kwanza to U.S. dollars is controlled by the central bank in Angola, and the central bank slowed this process from mid-2015 to 2017, causing our kwanza cash balances to increase during that period of time. However, beginning in 2018, the Angolan central bank has allowed us to repatriate cash from Angola. As of March 31, 2019 and December 31, 2018, we had the equivalent of approximately $7.7 million and $9.3 million , respectively, of kwanza cash balances in Angola reflected on our balance sheet. To mitigate our currency exposure risk in Angola, we have used kwanza to purchase equivalent Angolan central bank (Banco Nacional de Angola) bonds. The bonds are denominated as U.S. dollar equivalents, so that, upon payment of semi-annual interest and principal upon maturity, payment is made in kwanza, equivalent to the respective U.S. dollars at the then-current exchange rate. During 2018, we received a total of $70 million proceeds from maturities and redemptions of Angolan bonds and reinvested $10 million of the proceeds in similar assets. As of March 31, 2019 and December 31, 2018, we have $10 million of Angolan bonds on our Consolidated Balance Sheets. Because we intend to sell the bonds if we are able to repatriate the proceeds, we classified these bonds as available-for-sale securities, and they are recorded as Other current assets on our Consolidated Balance Sheets. We estimated the fair market value of the bonds to be $10 million as of March 31, 2019 and December 31, 2018 using quoted prices. Since the market for the Angolan bonds is not an active market, the fair value of the Angolan bonds is classified within Level 2 in the fair value hierarchy under U.S. GAAP. As of March 31, 2019 and December 31, 2018, the difference between the fair market value and the carrying amount of the Angolan bonds was immaterial. |
Earnings (Loss) Per Share, Stoc
Earnings (Loss) Per Share, Stock-Based Compensation and Share Repurchase Plan | 3 Months Ended |
Mar. 31, 2019 | |
Shareholders' Equity, Earnings Per Share And Stock-Based Compensation [Abstract] | |
Earnings (Loss) per Share, Share-based Compensation and Share Repurchase Plan | EARNINGS (LOSS) PER SHARE, SHARE-BASED COMPENSATION AND SHARE REPURCHASE PLAN Earnings (Loss) per Share. For each period presented, the only difference between our calculated weighted average basic and diluted number of shares outstanding is the effect of outstanding restricted stock units. In periods where we have a net loss, the effect of our outstanding restricted stock units is anti-dilutive, and therefore does not increase our diluted shares outstanding. For each period presented, our net income (loss) allocable to both common shareholders and diluted common shareholders is the same as our net income (loss) in our consolidated statements of operations. Share-Based Compensation. We have no outstanding stock options and, therefore, no share-based compensation to be recognized pursuant to stock option grants. During 2017, 2018 and through March 31, 2019, we granted restricted units of our common stock to certain of our key executives and employees. During 2017, 2018 and 2019, our Board of Directors granted restricted common stock to our nonemployee directors. The restricted units granted to our key executives and key employees generally vest in full on the third anniversary of the award date, conditional on continued employment. The restricted stock unit grants can vest pro rata over three years, provided the individual meets certain age and years-of-service requirements. The shares of restricted stock we grant to our non-employee directors vest in full on the first anniversary of the award date, conditional on continued service as a director. Each grantee of shares of restricted stock is deemed to be the record owner of those shares during the restriction period, with the right to vote and receive any dividends on those shares. The restricted stock units outstanding have no voting or dividend rights. For each of the restricted stock units granted in 2017 through March 31, 2019 , at the earlier of three years after grant or at termination of employment or service, the grantee will be issued one share of our common stock for each unit vested. As of March 31, 2019 and December 31, 2018 , respective totals of 1,773,102 and 1,443,897 shares of restricted stock or restricted stock units were outstanding. We estimate that share-based compensation cost not yet recognized related to shares of restricted stock or restricted stock units, based on their grant-date fair values, was $19 million as of March 31, 2019 . 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, in 2015, we had repurchased 2.0 million shares of our common stock for $100 million . We did not repurchase any shares during 2016 through March 31, 2019 . We account for the shares we hold in treasury under the cost method, at average cost. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES 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 three-month period ended March 31, 2019 , we recognized additional tax expense of $1.4 million from discrete items, primarily related to share-based compensation and valuation allowances. In the three-month period ended March 31, 2018, we recognized additional tax expense of $2.4 million from discrete items, primarily related to a $1.8 million adjustment associated with share-based compensation. The effective tax rate for the three months ended March 31, 2019 and March 31, 2018 was different than 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. It is our intention to continue to indefinitely reinvest in certain of our international operations; therefore, we do not provide for withholding taxes on the possible distribution of these earnings. We do not believe the effective tax rate before discrete items is meaningful due to the ongoing shifting of geographic mix of our operating revenue and results. 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 expense or benefit for a tax position if it is more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax expense or benefit is then measured and recognized at the largest amount that we believe is greater than 50% likely of being realized upon ultimate settlement. We account for any applicable interest and penalties on uncertain tax positions as a component of our provision for income taxes on our financial statements. Including associated foreign tax credits, penalties and interest, we have accrued a net total of $19 million and $18 million in Other Long-term Liabilities on our balance sheet for unrecognized tax liabilities as of March 31, 2019 and December 31, 2018, respectively. Changes in management's judgment related 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: Jurisdiction Periods United States 2014 United Kingdom 2015 Norway 2015 Angola 2013 Brazil 2014 Australia 2013 In April 2019, negotiations with certain foreign tax authorities related to ongoing tax audits entered the settlement phase. The final settlement has not been completed; however, the expected settlement may have an impact on the uncertain tax position in the three months ended June 30, 2019. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
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 also provide survey, autonomous underwater vehicle and satellite-positioning services. For the renewable energy markets, we provide seabed preparation, route clearance and trenching services for submarine cables. 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 industries. 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, 2018 . The table that follows presents Revenue, Income (Loss) from Operations and Depreciation and Amortization by business segment for each of the periods indicated. Three Months Ended (in thousands) Mar 31, 2019 Mar 31, 2018 Dec 31, 2018 Revenue Energy Services and Products Remotely Operated Vehicles $ 100,346 $ 85,594 $ 96,736 Subsea Products 128,844 126,688 129,509 Subsea Projects 89,728 56,860 89,295 Asset Integrity 60,689 61,288 62,830 Total Energy Services and Products 379,607 330,430 378,370 Advanced Technologies 114,279 85,983 116,725 Total $ 493,886 $ 416,413 $ 495,095 Income (Loss) from Operations Energy Services and Products Remotely Operated Vehicles $ 1,418 $ (2,398 ) $ (1,275 ) Subsea Products (476 ) 1,755 (3,803 ) Subsea Projects 2,892 (2,359 ) (79,379 ) Asset Integrity (713 ) 1,679 1,349 Total Energy Services and Products 3,121 (1,323 ) (83,108 ) Advanced Technologies 9,599 1,668 15,406 Unallocated Expenses (34,434 ) (27,494 ) (29,442 ) Total $ (21,714 ) $ (27,149 ) $ (97,144 ) Depreciation and Amortization Energy Services and Products Remotely Operated Vehicles $ 27,990 $ 27,642 $ 27,972 Subsea Products 12,991 14,025 11,797 Subsea Projects 7,882 8,313 85,651 Asset Integrity 1,634 1,848 1,585 Total Energy Services and Products 50,497 51,828 127,005 Advanced Technologies 830 766 786 Unallocated Expenses 1,159 1,534 1,125 Total $ 52,486 $ 54,128 $ 128,916 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 P_2
Summary Of Major Accounting Policies (Policy) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and our results of operations and cash flows for the periods presented. Except as otherwise disclosed herein, all such adjustments are of a normal and recurring nature. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 2018 . The results for interim periods are not necessarily indicative of annual results. |
Principles of Consolidation | 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 | 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. 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 | 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 . Inventory is valued at the lower of cost or net realizable value. We determine cost using the weighted-average method. |
Property and Equipment | Property and Equipment and Long-Lived Intangible Assets. We provide for depreciation of assets included in property and equipment on the straight-line method over their estimated useful lives. We charge the costs of repair and maintenance of property and equipment to operations as incurred, while we capitalize the costs of improvements that extend asset lives or functionality. Upon the disposition of property and equipment, the related cost and accumulated depreciation accounts are relieved and any resulting gain or loss is included as an adjustment to cost of services and products. Intangible assets, primarily acquired in connection with business combinations, include trade names, intellectual property and customer relationships and are being amortized over their estimated useful lives. We capitalize interest on assets where the construction period is anticipated to be more than three months. We capitalized $2.0 million and $1.6 million of interest in the three-month periods ended March 31, 2019 and 2018 , respectively. We do not allocate general administrative costs to capital projects. Our management periodically, and upon the occurrence of a triggering event, reviews the realizability of our property and equipment and long-lived intangible assets to determine whether any events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. For long-lived assets to be held and used, we base our evaluation on impairment indicators, such as the nature of the assets, the future economic benefits of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset may not be recoverable, we determine whether an impairment has occurred through the use of an undiscounted cash flows analysis of the asset at the lowest level for which 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 | Business Acquisitions . We account for business combinations using the acquisition method of accounting, and, in each case, we allocate the acquisition price to the assets acquired and liabilities assumed based on their fair market values as of the date of acquisition. In March, 2018, we acquired Ecosse Subsea Limited (“Ecosse”) for $68 million in cash. Headquartered in Aberdeen, Scotland, Ecosse builds and operates tools for seabed preparation, route clearance and trenching for the installation of submarine cables and pipelines. These services are offered on an integrated basis that includes vessels, ROVs and survey services. We have accounted for this acquisition by allocating the purchase price to the assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. We have included Ecosse’s operations in our consolidated financial statements starting from the date of closing and its operating results are reflected in our Subsea Projects segment. |
Goodwill | Goodwill. Annually, we are required to evaluate our goodwill by performing a qualitative or quantitative impairment test. Under the qualitative approach and after assessing the totality of events or circumstances, if we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we are required to perform the quantitative analysis to determine the fair value for that reporting unit. We were required to perform a quantitative analysis for our Subsea Projects Segment and determined that the fair value was less than the carrying value and, as a result, we recorded a pre-tax goodwill impairment loss of $76 million in the Subsea Projects reporting unit. The impairment loss was recorded in our Consolidated Statement of Operation for the quarter ended December 31, 2018. For the remaining reporting units, qualitative assessments were performed and we concluded that it was more likely than not the fair value of the reporting unit was more than the carrying value of the reporting unit and, therefore, no impairment was required. In addition to our annual evaluation of goodwill for impairment, upon the occurrence of a triggering event, we review our goodwill to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. |
Foreign Currency Translations | Foreign Currency Translation. The functional currency for several of our foreign subsidiaries is the applicable local currency. Results of operations for foreign subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using average exchange rates during the period. Assets and liabilities of these foreign subsidiaries are translated into U.S. dollars using the exchange rates in effect as of the balance sheet date, and the resulting translation adjustments are recognized in accumulated other comprehensive income (loss) as a component of shareholders' equity. All foreign currency transaction gains and losses are recognized currently in the Consolidated Statements of Operations. |
Revenue Recognition | 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 that 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 was recognized as an adjustment of $537,000 to retained earnings as of January 1, 2018. All of our revenue is realized through contracts with customers. We recognize our revenue according to the contract type. On a daily basis, we recognize service revenue over time for contracts that provide for specific time, material and equipment charges, which we bill periodically, ranging from weekly to monthly. We use the input method to faithfully depict revenue recognition, because each day of service provided represents value to the customer. The performance obligations in these contracts are satisfied, and revenue is recognized, as the work is performed. We have used the expedient available to recognize revenue when the billing corresponds to the value realized by the customer where appropriate. We account for significant fixed-price contracts, mainly relating to our Subsea Products segment, and to a lesser extent in our Subsea Projects and Advanced Technologies segments, by recognizing revenue over time using an input, cost-to-cost measurement percentage-of-completion method. We use the input cost-to-cost method to faithfully depict revenue recognition. This commonly used method allows appropriate calculation of progress on our contracts. A performance obligation is satisfied as we create a product on behalf of the customer over the life of the contract. The remainder of our revenue is recognized at the point in time when control transfers to the customer, thus satisfying the performance obligation. We have elected to recognize the cost for freight and shipping as an expense when incurred. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, and that are collected by us from customers, are excluded from revenue. In our service-based business lines, which principally charge on a day rate basis for services provided, there is no significant impact in the pattern of revenue and profit recognition as a result of implementation of ASC 606. In our product-based business lines, we 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 recorded adjustments to earnings as a result of revisions to contract estimates; however, we did not have any material adjustments during the quarter ended March 31, 2019. There could be significant adjustments to overall contract costs in the future, due to changes in facts and circumstances. In general, our payment terms consist of those services billed regularly as provided and those products delivered at a point in time, which are invoiced after the performance obligation is satisfied. Our product and service contracts with milestone payments due at agreed progress points during the contract are invoiced when those milestones are reached, which may differ from the timing of revenue recognition. Our payment terms generally do not provide financing of contracts to customers, nor do we receive financing from customers as a result of these terms. Please see Note 2 — "Revenue" — for more information on our revenue from contracts with customers. |
Leases | On January 1, 2019 we adopted Accounting Standards Update ("ASU") 2018-11, an amendment to ASU 2016-02, " Leases " (collectively, the "New Leases Standard") that: (1) requires lessees to recognize a Right-of-Use asset ("ROU assets") and lease liabilities for virtually all leases; and (2) updates previous accounting standards for lessors to align certain requirements of the New Leases Standard and the revenue recognition accounting standard. We have used the transition method allowing us to apply the new standard at the adoption date and have adopted the package of practical expedients permitting us to retain the identification and classification of leases made under the previously applicable accounting standards; we did not adopt the hindsight expedient. The cumulative effect of applying the New Leases Standard as of January 1, 2019 of $5.9 million was recognized as an adjustment to retained earnings, with corresponding adjustments to increase ROU assets and Lease liabilities by $185 million and $191 million , respectively. The standard did not materially affect our net earnings and had no impact on cash flows. 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. As a lessee, we utilize the expedients available to us not to recognize leases of 12 months or less on the balance sheet and to combine lease and non-lease components together and account for the combined component as a lease for all asset classes, except real estate. As a lessor, we lease certain types of equipment along with the provision of services and utilize the expedient allowing us to combine the lease and non-lease components into a combined component that is accounted for under ASC 842 where the lease component is predominant and under ASC 606 where the service component is predominant. We determine whether a contract is or contains a lease at inception, whether as a lessee or a lessor. We take into consideration the elements of an identified asset, right to control and the receipt of economic benefit in making these determinations. As a lessee, we lease land, buildings, vessels and equipment for the operation of our business and to support some of our service line revenue streams. These generally carry lease terms that range from days for operational and support equipment to 22 years f or land and buildings. These leases are negotiated on commercial terms at market rates and many carry standard options to extend or terminate at our discretion. When the exercise of those options is reasonably certain, we include them in the lease assessment. Our leases do not contain material restrictions or covenants that impact our accounting for them, nor do we provide residual value guarantees. As a lessor, we lease certain types of equipment, often providing services at the same time. These leases can be priced on a day-rate or lump-sum basis for periods ranging from a few days to multi-year contracts. These leases are negotiated on commercial terms at market rates and many carry standard options to extend or terminate at our customers sole discretion. These leases generally do not contain options to purchase, material restrictions or covenants that impact our accounting for leases. ROU operating lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate, based on the information available at commencement date in determining the present value of future payments. In determining the incremental borrowing rate, we took into account our external credit ratings, bond yields for us and our identified peers, geographic regions where we operate, credit default swap rates and the impact associated with providing collateral for an amount equal to the lease payments. Our ROU operating lease assets also include any lease prepayments made and exclude lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease, which we take into account when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We do not have any leases that have not yet commenced that create significant rights and obligations for us as a lessee nor do we have any material related party transactions. |
New Accounting Standards | New Accounting Standards . In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, as modified by subsequently issued ASU 2018-19. The guidance introduces a new credit reserving model know as the Current Expected Credit Loss ("CECL") model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires estimating all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. These ASUs affect an entity to varying degrees depending on the credit quality for the assets held by the entity, their duration and how the entity applies current U.S. GAAP. These ASUs will become effective for us beginning January 1, 2020. We are currently evaluating the impact of this guidance. In August 2017, the FASB issued ASU No. 2017-12 "Derivatives and Hedging (Topic 815): Targeted improvements to Accounting for Hedging Activities," which simplified the application of hedge accounting guidance in current GAAP and improved the reporting of hedging relationships to better portray the economic results of our risk management activities in our consolidated financial statements. We adopted this ASU on January 1, 2019 and the effects of this update have not had a material impact on our consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments — Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities." This update: • 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. 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 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 were effective for us beginning January 1, 2019. This ASU has not had a material effect on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, "Compensation – Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting." This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this ASU become effective for us beginning January 1, 2019. This ASU has not had a material effect on our consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from External Customers by Products and Services | The following table presents Revenue disaggregated by business segment, geographical region, and timing of transfer of goods or services. Three Months Ended (in thousands) Mar 31, 2019 Mar 31, 2018 Dec 31, 2018 Business Segment: Energy Services and Products Remotely Operated Vehicles $ 100,346 $ 85,594 $ 96,736 Subsea Products 128,844 126,688 129,509 Subsea Projects 89,728 56,860 89,295 Asset Integrity 60,689 61,288 62,830 Total Energy Services and Products 379,607 330,430 378,370 Advanced Technologies 114,279 85,983 116,725 Total $ 493,886 $ 416,413 $ 495,095 |
Revenue from External Customers by Geographic Areas | (in thousands) Geographic Operating Areas: Three Months Ended Foreign: Mar 31, 2019 Mar 31, 2018 Dec 31, 2018 Africa $ 87,106 $ 55,087 $ 71,237 United Kingdom 53,298 45,319 50,304 Norway 42,466 39,042 42,731 Asia and Australia 41,426 38,946 41,685 Brazil 17,763 18,828 17,161 Other 21,222 19,639 23,200 Total Foreign 263,281 216,861 246,318 United States 230,605 199,552 248,777 Total $ 493,886 $ 416,413 $ 495,095 |
Revenue by Timing of Transfer of Goods or Services | Timing of Transfer of Goods or Services: Revenue recognized over time $ 461,245 $ 374,667 $ 465,008 Revenue recognized at a point in time 32,641 41,746 30,087 Total $ 493,886 $ 416,413 $ 495,095 |
Selected Balance Sheet Inform_2
Selected Balance Sheet Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Selected Balance Sheet Accounts | The following is information regarding selected balance sheet accounts: (in thousands) Mar 31, 2019 Dec 31, 2018 Inventory: Remotely operated vehicle parts and components $ 114,059 $ 108,939 Other inventory, primarily raw materials 88,951 85,568 Total $ 203,010 $ 194,507 Other Current Assets: Prepaid expenses $ 62,534 $ 60,858 Angolan bonds 10,179 10,179 Total $ 72,713 $ 71,037 Accrued Liabilities: Payroll and related costs $ 96,257 $ 114,676 Accrued job costs 71,662 62,281 Income taxes payable 24,435 34,954 Current operating lease liability 20,001 — Other 97,547 95,022 Total $ 309,902 $ 306,933 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term Debt consisted of the following: (in thousands) Mar 31, 2019 Dec 31, 2018 4.650% Senior Notes due 2024 $ 500,000 $ 500,000 6.000% Senior Notes due 2028 300,000 300,000 Fair value of interest rate swaps on $200 million of principal (1,483 ) (5,600 ) Unamortized debt issuance costs (7,548 ) (7,820 ) Revolving Credit Facility — — Long-term Debt $ 790,969 $ 786,580 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Assets And Liabilities, Lessee | The following tables present information about operating leases. (in thousands) Mar 31, 2019 Jan 1, 2019 Assets: Operating lease assets $ 182,311 $ 184,648 Total lease assets $ 182,311 $ 184,648 Liabilities: Current Operating $ 20,001 $ 20,318 Noncurrent Operating 166,453 170,190 Total lease liabilities $ 186,454 $ 190,508 |
Lease, Cost | Three Months Ended (in thousands) Mar 31, 2019 Lease Cost: Operating lease cost $ 7,003 Short-term lease cost 19,089 Net lease cost $ 26,092 Mar 31, 2019 Jan 1, 2019 Lease Term and Discount Rate: Weighted-average remaining lease terms (years) 8.9 9.2 Weighted-average discount rate 6.9 % 6.9 % |
Lessee, Operating Lease, Liability, Maturity | Future maturities of lease liabilities under all of our operating leases are as follows: 12 Months ended March 31, (in thousands) 2020 $ 29,116 2021 26,234 2022 26,540 2023 23,458 2024 20,885 Thereafter 156,653 Total lease payments 282,886 Less: Interest (96,432 ) Present value of lease liabilities $ 186,454 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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: Jurisdiction Periods United States 2014 United Kingdom 2015 Norway 2015 Angola 2013 Brazil 2014 Australia 2013 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting, Measurement Disclosures [Abstract] | |
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. Three Months Ended (in thousands) Mar 31, 2019 Mar 31, 2018 Dec 31, 2018 Revenue Energy Services and Products Remotely Operated Vehicles $ 100,346 $ 85,594 $ 96,736 Subsea Products 128,844 126,688 129,509 Subsea Projects 89,728 56,860 89,295 Asset Integrity 60,689 61,288 62,830 Total Energy Services and Products 379,607 330,430 378,370 Advanced Technologies 114,279 85,983 116,725 Total $ 493,886 $ 416,413 $ 495,095 Income (Loss) from Operations Energy Services and Products Remotely Operated Vehicles $ 1,418 $ (2,398 ) $ (1,275 ) Subsea Products (476 ) 1,755 (3,803 ) Subsea Projects 2,892 (2,359 ) (79,379 ) Asset Integrity (713 ) 1,679 1,349 Total Energy Services and Products 3,121 (1,323 ) (83,108 ) Advanced Technologies 9,599 1,668 15,406 Unallocated Expenses (34,434 ) (27,494 ) (29,442 ) Total $ (21,714 ) $ (27,149 ) $ (97,144 ) Depreciation and Amortization Energy Services and Products Remotely Operated Vehicles $ 27,990 $ 27,642 $ 27,972 Subsea Products 12,991 14,025 11,797 Subsea Projects 7,882 8,313 85,651 Asset Integrity 1,634 1,848 1,585 Total Energy Services and Products 50,497 51,828 127,005 Advanced Technologies 830 766 786 Unallocated Expenses 1,159 1,534 1,125 Total $ 52,486 $ 54,128 $ 128,916 |
Summary Of Major Accounting P_3
Summary Of Major Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jan. 01, 2019 | Jan. 01, 2018 | |
Property, Plant and Equipment [Line Items] | ||||||
Interest costs capitalized | $ 2,000 | $ 1,600 | ||||
Business acquisitions, net of cash acquired | $ 68,000 | 0 | $ 68,398 | |||
Goodwill, impairment loss | $ 76,000 | |||||
Cumulative effect of new accounting principle in period of adoption | $ (5,860) | $ (537) | ||||
Lease assets | 182,311 | 184,648 | ||||
Lease, liability | $ 186,454 | 190,508 | ||||
Lease, term of contract | 22 years | |||||
Minimum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Threshold for consolidation, percentage | 50.00% | |||||
Equity method investment, threshold for consolidation, percentage | 20.00% | |||||
Maximum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Equity method investment, threshold for consolidation, percentage | 50.00% | |||||
Retained Earnings [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Cumulative effect of new accounting principle in period of adoption | (5,860) | (537) | ||||
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Cumulative effect of new accounting principle in period of adoption | $ 537 | |||||
Accounting Standards Update 2016-02 [Member] | Retained Earnings [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Cumulative effect of new accounting principle in period of adoption | $ 5,900 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 493,886 | $ 495,095 | $ 416,413 | $ 495,095 |
Remotely Operated Vehicles [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 100,346 | 96,736 | 85,594 | |
Subsea Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 128,844 | 129,509 | 126,688 | |
Subsea Projects [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 89,728 | 89,295 | 56,860 | |
Asset Integrity [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 60,689 | 62,830 | 61,288 | |
Oil and Gas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 379,607 | 378,370 | 330,430 | |
Advanced Technologies [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 114,279 | $ 116,725 | $ 85,983 |
Revenue - Revenue by Geographic
Revenue - Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | |
Revenue by Geographic Area [Line Items] | ||||
Revenues | $ 493,886 | $ 495,095 | $ 416,413 | $ 495,095 |
Africa [Member] | ||||
Revenue by Geographic Area [Line Items] | ||||
Revenues | 87,106 | 71,237 | 55,087 | |
United Kingdom [Member] | ||||
Revenue by Geographic Area [Line Items] | ||||
Revenues | 53,298 | 50,304 | 45,319 | |
Norway [Member] | ||||
Revenue by Geographic Area [Line Items] | ||||
Revenues | 42,466 | 42,731 | 39,042 | |
Asia Pacific [Member] | ||||
Revenue by Geographic Area [Line Items] | ||||
Revenues | 41,426 | 41,685 | 38,946 | |
Brazil [Member] | ||||
Revenue by Geographic Area [Line Items] | ||||
Revenues | 17,763 | 17,161 | 18,828 | |
Other Geographical [Member] | ||||
Revenue by Geographic Area [Line Items] | ||||
Revenues | 21,222 | 23,200 | 19,639 | |
Non-US [Member] | ||||
Revenue by Geographic Area [Line Items] | ||||
Revenues | 263,281 | 246,318 | 216,861 | |
UNITED STATES | ||||
Revenue by Geographic Area [Line Items] | ||||
Revenues | $ 230,605 | $ 248,777 | $ 199,552 |
Revenue - Revenue by Timing of
Revenue - Revenue by Timing of Transfer of Goods or Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||||
Revenue recognized over time | $ 461,245 | $ 374,667 | $ 465,008 | |
Revenue recognized at a point in time | 32,641 | 41,746 | 30,087 | |
Total | $ 493,886 | $ 495,095 | $ 416,413 | $ 495,095 |
Revenue - Contract balances (De
Revenue - Contract balances (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Increase (decrease) in unbilled receivables | $ 35 |
Billing for the reporting period | 519 |
Revenue recognized but unbilled | 484 |
Increase or decrease in deferred revenue | 6.5 |
Revenue recognized | 15 |
Deferrals of customer payments | $ 8.2 |
Revenue - Performance obligatio
Revenue - Performance obligation (Details) $ in Millions | Mar. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Price allocated to remaining performance obligations | $ 364 |
Revenue recognition for remaining performance obligations | $ 272 |
Revenue - Costs to obtain or fu
Revenue - Costs to obtain or fulfill a contract (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Mar. 31, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Costs to fulfill a contract | $ 13 | $ 13 |
Amortization of deferred costs | $ 2.6 | $ 1.3 |
Selected Balance Sheet Inform_3
Selected Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Inventory: | |||
Remotely operated vehicle parts and components | $ 114,059 | $ 108,939 | |
Other inventory, primarily raw materials | 88,951 | 85,568 | |
Total | 203,010 | 194,507 | |
Other Current Assets: | |||
Prepaid expenses | 62,534 | 60,858 | |
Angolan bonds | 10,179 | 10,179 | |
Total | 72,713 | 71,037 | |
Accrued Liabilities: | |||
Payroll and related costs | 96,257 | 114,676 | |
Accrued job costs | 71,662 | 62,281 | |
Income taxes payable | 24,435 | 34,954 | |
Current operating lease liability | 20,001 | $ 20,318 | 0 |
Other | 97,547 | 95,022 | |
Total | $ 309,902 | $ 306,933 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Feb. 28, 2018 | Nov. 30, 2014 |
Debt Instrument [Line Items] | ||||
Fair value of interest rate swaps | $ (1,483,000) | |||
Fair value of interest rate swaps | $ (5,600,000) | |||
Interest rate swap principal | 200,000,000 | 200,000,000 | ||
Unamortized debt issuance costs | (7,548,000) | (7,820,000) | ||
Revolving Credit Facility | 0 | 0 | ||
Long-term Debt | $ 790,969,000 | $ 786,580,000 | ||
Senior Notes due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 4.65% | 4.65% | 4.65% | |
Senior notes | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | |
Interest rate swap principal | $ 200,000,000 | |||
Senior Notes due 2028 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 6.00% | 6.00% | 6.00% | |
Senior notes | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 |
Debt - Additional Information (
Debt - Additional Information (Details) | 1 Months Ended | 3 Months Ended | ||||
Oct. 31, 2014USD ($) | Mar. 31, 2019USD ($)derivative_instrument | Dec. 31, 2014USD ($) | Dec. 31, 2018USD ($) | Feb. 28, 2018USD ($) | Nov. 30, 2014USD ($) | |
Line of Credit Facility [Line Items] | ||||||
Maximum capitalization ratio | 55.00% | |||||
Number of instruments held | derivative_instrument | 2 | |||||
Interest rate swap principal | $ 200,000,000 | $ 200,000,000 | ||||
Payments of financing costs | $ 2,600,000 | |||||
Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee percentage | 0.125% | |||||
Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee percentage | 0.30% | |||||
Senior Notes due 2024 [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Senior notes | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | |||
Interest rate, stated percentage | 4.65% | 4.65% | 4.65% | |||
Interest rate swap principal | $ 200,000,000 | |||||
Payments of debt issuance costs | 6,900,000 | |||||
Senior Notes due 2028 [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Senior notes | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | |||
Interest rate, stated percentage | 6.00% | 6.00% | 6.00% | |||
Payments of debt issuance costs | $ 4,100,000 | |||||
Line of Credit [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 500,000,000 | |||||
Debt instrument, term | 5 years | |||||
Available additional borrowing capacity | $ 300,000,000 | |||||
Face amount | $ 300,000,000 | |||||
Percent of commitments affected by amendment | 90.00% | |||||
Line of Credit [Member] | October 25, 2021 [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 500,000,000 | |||||
Line of Credit [Member] | January 25, 2023 [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 450,000,000 | |||||
Credit Agreement [Member] | Applicable Margin [Member] | Minimum [Member] | Adjusted Base Rate Advances [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 0.125% | |||||
Credit Agreement [Member] | Applicable Margin [Member] | Minimum [Member] | Eurodollar Advances [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 1.125% | |||||
Credit Agreement [Member] | Applicable Margin [Member] | Maximum [Member] | Adjusted Base Rate Advances [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 0.75% | |||||
Credit Agreement [Member] | Applicable Margin [Member] | Maximum [Member] | Eurodollar Advances [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 1.75% | |||||
Credit Agreement [Member] | Adjusted Base Rate [Member] | Minimum [Member] | Adjusted Base Rate Advances [Member] | Federal Funds Rate [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 0.50% | |||||
Credit Agreement [Member] | Adjusted Base Rate [Member] | Minimum [Member] | Adjusted Base Rate Advances [Member] | Eurodollar Rate [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 1.00% |
Leases - Lessee Disclosure, Bal
Leases - Lessee Disclosure, Balance Sheet Disclosure (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets: | |||
Operating lease assets | $ 182,311 | $ 184,648 | |
Total lease assets | 182,311 | 184,648 | |
Current | |||
Operating | 20,001 | 20,318 | $ 0 |
Noncurrent | |||
Operating | 166,453 | 170,190 | |
Total lease liabilities | $ 186,454 | $ 190,508 |
Leases - Lessee Disclosure, Lea
Leases - Lessee Disclosure, Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease Cost: | |
Operating lease cost | $ 7,003 |
Short-term lease cost | 19,089 |
Net lease cost | $ 26,092 |
Leases - Lessee Disclosure, L_2
Leases - Lessee Disclosure, Lease Term and Discount Rate (Details) | Mar. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Weighted-average remaining lease terms (years) | 8 years 10 months 24 days | 9 years 2 months 12 days |
Weighted-average discount rate | 6.90% | 6.90% |
Leases - Lessee Disclosure, Mat
Leases - Lessee Disclosure, Maturity of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Leases | |
2020 | $ 29,116 |
2021 | 26,234 |
2022 | 26,540 |
2023 | 23,458 |
2024 | 20,885 |
Thereafter | 156,653 |
Total lease payments | 282,886 |
Less: Interest | (96,432) |
Present value of lease liabilities | $ 186,454 |
Commitments And Contingencies -
Commitments And Contingencies - Narrative (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)derivative_instrument | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Loss Contingencies [Line Items] | |||
Notes payable, fair value disclosure | $ 749,000,000 | ||
Number of instruments held | derivative_instrument | 2 | ||
Interest rate swap principal | $ 200,000,000 | $ 200,000,000 | |
Fair value of interest rate swaps | 1,483,000 | ||
Other income (expense), net | (719,000) | $ 8,474,000 | |
Proceeds from sale of debt securities | 70,000,000 | ||
Debt Securities, Available-for-sale | 10,000,000 | 10,000,000 | |
Fair Value, Inputs, Level 2 [Member] | |||
Loss Contingencies [Line Items] | |||
Investments, fair value disclosure | 10,000,000 | 10,000,000 | |
Angola, Kwanza [Member] | |||
Loss Contingencies [Line Items] | |||
Cash and cash equivalents | 7,700,000 | $ 9,300,000 | |
Other Income [Member] | |||
Loss Contingencies [Line Items] | |||
Other income (expense), net | 100,000 | $ 7,700,000 | |
Senior Notes due 2024 [Member] | |||
Loss Contingencies [Line Items] | |||
Interest rate swap principal | $ 200,000,000 | ||
Fixed interest rate | 4.65% | ||
Derivative, notional amount | $ 100,000,000 | ||
Senior Notes due 2024 [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |||
Loss Contingencies [Line Items] | |||
Derivative, variable interest rate | 2.426% | ||
Senior Notes due 2024 [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Derivative, variable interest rate | 2.823% |
Earnings (Loss) Per Share, St_2
Earnings (Loss) Per Share, Stock-Based Compensation and Share Repurchase Plan (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | Dec. 31, 2014 | |
Shareholders' Equity, Earnings Per Share And Stock-Based Compensation [Line Items] | ||||
Number outstanding (in shares) | 1,773,102 | 1,443,897 | ||
Number of shares authorized to be repurchased (in shares) | 10,000,000 | |||
Total number of shares repurchased to date (in shares) | 0 | 2,000,000 | ||
Total shares repurchased to date, amount | $ 100 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Shareholders' Equity, Earnings Per Share And Stock-Based Compensation [Line Items] | ||||
Compensation cost not yet recognized | $ 19 | |||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||
Shareholders' Equity, Earnings Per Share And Stock-Based Compensation [Line Items] | ||||
Award vesting period | 1 year | |||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||
Shareholders' Equity, Earnings Per Share And Stock-Based Compensation [Line Items] | ||||
Award vesting period | 3 years |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Tax expense from discrete items | $ 1.4 | $ 2.4 | |
Adjustment for share-based compensation | $ 1.8 | ||
Federal statutory tax rate | 21.00% | ||
Probability threshold | 50.00% | ||
Unrecognized tax benefits | $ 19 | $ 18 |
Income Taxes - Summary Of Earli
Income Taxes - Summary Of Earliest Tax Years Open To Examination (Details) | 3 Months Ended |
Mar. 31, 2019 | |
United States [Member] | |
Income Tax Examination [Line Items] | |
Earliest tax years open to examination by tax authorities | 2014 |
United Kingdom [Member] | |
Income Tax Examination [Line Items] | |
Earliest tax years open to examination by tax authorities | 2015 |
Norway [Member] | |
Income Tax Examination [Line Items] | |
Earliest tax years open to examination by tax authorities | 2015 |
Angola [Member] | |
Income Tax Examination [Line Items] | |
Earliest tax years open to examination by tax authorities | 2013 |
Brazil [Member] | |
Income Tax Examination [Line Items] | |
Earliest tax years open to examination by tax authorities | 2014 |
Australia [Member] | |
Income Tax Examination [Line Items] | |
Earliest tax years open to examination by tax authorities | 2013 |
Business Segment Information -
Business Segment Information - Financial Data By Business Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 493,886 | $ 495,095 | $ 416,413 | $ 495,095 |
Income (Loss) from Operations | (21,714) | (97,144) | (27,149) | |
Depreciation and amortization | 52,486 | 128,916 | 54,128 | |
Oil and Gas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 379,607 | 378,370 | 330,430 | |
Income (Loss) from Operations | 3,121 | (83,108) | (1,323) | |
Depreciation and amortization | 50,497 | 127,005 | 51,828 | |
Remotely Operated Vehicles [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 100,346 | 96,736 | 85,594 | |
Income (Loss) from Operations | 1,418 | (1,275) | (2,398) | |
Depreciation and amortization | 27,990 | 27,972 | 27,642 | |
Subsea Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 128,844 | 129,509 | 126,688 | |
Income (Loss) from Operations | (476) | (3,803) | 1,755 | |
Depreciation and amortization | 12,991 | 11,797 | 14,025 | |
Subsea Projects [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 89,728 | 89,295 | 56,860 | |
Income (Loss) from Operations | 2,892 | (79,379) | (2,359) | |
Depreciation and amortization | 7,882 | 85,651 | 8,313 | |
Asset Integrity [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 60,689 | 62,830 | 61,288 | |
Income (Loss) from Operations | (713) | 1,349 | 1,679 | |
Depreciation and amortization | 1,634 | 1,585 | 1,848 | |
Advanced Technologies [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 114,279 | 116,725 | 85,983 | |
Income (Loss) from Operations | 9,599 | 15,406 | 1,668 | |
Depreciation and amortization | 830 | 786 | 766 | |
Unallocated Expenses [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Income (Loss) from Operations | (34,434) | (29,442) | (27,494) | |
Depreciation and amortization | $ 1,159 | $ 1,125 | $ 1,534 |
Uncategorized Items - oii-20190
Label | Element | Value |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (537,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (5,860,000) |