Delaware (State or other jurisdiction of incorporation) | 1-10945 (Commission File Number) | 95-2628227 (IRS Employer Identification No.) |
11911 FM 529 Houston, TX (Address of principal executive offices) | 77041 (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
• | Our belief that our strong balance sheet sets us apart from many companies in today's oilfield; |
• | Our belief that our market leadership in the services and products we provide, combined with our cash flow generating capabilities, allow us to maintain or grow our market positions and, potentially, continue to return cash to our shareholders; |
• | Our organic Capex estimate range for this year from $150 million to $200 million, including $75 million of maintenance capital, and some uncompleted project Capex carried over from 2015, relating mainly to the construction of our Jones Act vessel, the Ocean Evolution; several ROVs for which we have firm contracts; and additional equipment for our IWOCS service fleet; |
• | Our intent at this time to continue to pay a quarterly cash dividend, currently $0.27 per quarter, with an annual cash outlay of $106 million; |
• | The possibilities that other uses of capital may include investments that augment our service and product offerings and share repurchases; |
• | Our intent to continue our practice of announcing share repurchases, if any, on a quarterly basis; |
• | Our belief that our financial strength and cash flow generation provide us options to enhance our market position and create further shareholder value -- through the cycle; |
• | Our free cash flow illustration that at earnings of $1.00 per share, we would generate about $100 million of net income after $240 million of depreciation and amortization and, before considering any changes in working capital or other sources of cash, our cash provided by operating activities would be $340 million; |
• | Our belief that it is fair to assume that, for every $0.10 of EPS above (or below) the $1.00 EPS used in a cash flow illustration, the impact on free cash flow would be approximately $10 million; |
• | Our anticipation that the current and expected low oil price environment will result in lower global demand across a very broad spectrum, including, but not limited to, deepwater drilling, field development, and inspection, maintenance and repair activities; and |
• | Our projection that all of our oilfield segments will have lower operating income in 2016 than in 2015, most notably: |
◦ | ROVs on lower service demand to support drilling and vessel-based projects and reduced revenue per day; |
◦ | Subsea Products on lower demand to support field development projects; and |
◦ | Subsea Projects on lower deepwater vessel demand and diving activity offshore Angola. |
• | worldwide demand for oil and gas; |
• | general economic and business conditions and industry trends; |
• | delays in deliveries of deepwater drilling rigs; |
• | delays in or cancellations of deepwater development activities; |
• | the ability of the Organization of Petroleum Exporting Countries, or OPEC, to set and maintain production levels; |
• | the level of production by non-OPEC countries; |
• | the ability of oil and gas companies to generate funds for capital expenditures; |
• | contract modifications or cancellations; |
• | domestic and foreign tax policy; |
• | laws and governmental regulations that restrict exploration and development of oil and gas in various offshore jurisdictions; |
• | technological changes; |
• | the political environment of oil-producing regions; |
• | the price and availability of alternative fuels; and |
• | overall economic conditions. |
OCEANEERING INTERNATIONAL, INC. | |||
Date: | February 23, 2016 | By: | /S/ ROBERT P. MINGOIA |
Robert P. Mingoia | |||
Vice President and Treasurer |