Oceaneering International (OII) Risk Analysis
Risk Overview Q2, 2026
Source: the company's latest filing for the period ended Jun 30, 2026, filed Jul 23, 2026
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1Share Repurchase Program.
In December 2014, our Board of Directors approved a plan to repurchase up to 10 million shares of our common stock on a discretionary basis. Under this program, which has no expiration date, we repurchased 2.8 million shares of our common stock for $121 million through December 31, 2024. In the year ended December 31, 2025, we repurchased 1.8 million shares for $40 million. During the three- and six-month periods ended June 30, 2026, we repurchased 0.3 million shares for $10 million. As of June 30, 2026, we retained 11 million of the shares we repurchased through this and a prior repurchase program. We account for the shares we hold in treasury under the cost method, at average cost. The timing and amount of any future repurchases will be determined by our management. We expect that any additional shares repurchased under the plan will be held as treasury stock for possible future use. The plan does not obligate us to repurchase any particular number of shares. Off-Balance Sheet Arrangements We have not guaranteed any debt not reflected on our Consolidated Balance Sheets as of June 30, 2026, and we do not have any off-balance sheet arrangements, as defined by Securities and Exchange Commission's rules.
- Accounting & Financial Operations - Risk 2Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States. These principles require us to make various estimates, judgments and assumptions that affect the reported amounts in our financial statements and accompanying notes. We disclose our significant accounting policies in Notes to Consolidated Financial Statements-Note 1-"Summary of Significant Accounting Policies" in this quarterly report and in our annual report on Form 10-K for the year ended December 31, 2025, in Part II. Item 7. "Financial Statements and Supplementary Data-Note 1-Summary of Significant Accounting Policies." For information about our critical accounting policies and estimates, see Part II. Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" in our annual report on Form 10-K for the year ended December 31, 2025. As of June 30, 2026, there have been no material changes to the judgments, assumptions and estimates upon which our critical accounting policies and estimates are based. Item 3. Quantitative and Qualitative Disclosures About Market Risk We are exposed to certain market risks arising from transactions we enter into in the normal course of business. These risks relate to interest rate changes and fluctuations in foreign exchange rates. As of June 30, 2026, we do not believe these risks are material. However, with the expansion of our international operations, we could be exposed to additional market risks from fluctuations in foreign currency exchange rates in the future. We have not entered into any market risk-sensitive instruments for speculative or trading purposes. When we have a significant amount of borrowings, we typically manage our exposure to interest rate changes using a combination of fixed- and floating-rate debt. See Note 6-"Debt" in the Notes to Consolidated Financial Statements included in this quarterly report for a description of our revolving credit agreement and interest rates on our borrowings and see Note 10 -"Subsequent Events" in the Notes to Consolidated Financial Statements in this quarterly report for information on Amendment No. 2 to our Revolving Credit Facility. We believe significant interest rate changes would not have a material near-term impact on our future earnings or cash flow. Because we operate in various regions in the world, we conduct a portion of our business in currencies other than the United States ("U.S.") dollar. The functional currency for most of our international operations is the applicable local currency. A stronger or weaker U.S. dollar against the Brazilian real, Norwegian kroner and United Kingdom pound sterling could impact our operating income. We manage our exposure to changes in foreign exchange rates by primarily denominating our contracts and providing for collections from our customers in U.S. dollars or freely convertible currency and endeavoring to match our contract costs with the denominated contractual currency. We use the exchange rates in effect as of the balance sheet date to translate assets and liabilities when the functional currency is the local currency, resulting in translation adjustments that we reflect as accumulated other comprehensive income or loss in the equity section of our consolidated balance sheets. We recorded net adjustments to our equity accounts of $(2.9) million and $0.7 million, respectively, in the three- and six-month periods ended June 30, 2026, and $21 million and $41 million, respectively, in the three- and six-month periods ended June 30, 2025. Negative adjustments reflect the net impact of the strengthening of the U.S. dollar against various foreign currencies for locations where the functional currency is not the U.S. dollar. Conversely, positive adjustments reflect the effect of a weakening U.S. dollar. Foreign currency gains (losses) were $1.1 million and $1.8 million, respectively, in the three- and six-month periods ended June 30, 2026, and $5.4 million and $6.5 million, respectively, in the three- and six-month periods ended June 30, 2025. We recorded foreign currency transaction gains (losses) as a component of other income (expense), net in our consolidated statements of operations in those respective periods. Item 4. Controls and Procedures In accordance with Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2026 to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. There has been no change in our internal control over financial reporting that occurred during the three months ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. PART II – OTHER INFORMATION Item 1. Legal Proceedings For information regarding legal proceedings, see the discussion under the caption "Litigation" in Note 7-"Commitments and Contingencies" in the Notes to Consolidated Financial Statements included in this quarterly report, which discussion we incorporate by reference into this Item.
- Accounting & Financial Operations - Risk 3Overview of our Results
Our diluted earnings (loss) per share for the three- and six-month periods ended June 30, 2026 were $0.65 and $1.00, respectively, as compared to $0.54 and $1.03, respectively, for the corresponding periods of the prior year. Our operating results for the three months ended June 30, 2026, as compared to the corresponding period of the prior year, increased by 11% on a 10% increase in revenue. These positive results were largely driven by improvements from our Offshore Projects Group ("OPG"), where favorable project mix and operational execution drove better-than-expected revenue and profitability. More broadly, our results demonstrate continued strength across our portfolio. All of our segments generated increased revenue and operating income, except for Integrity Management and Digital Solutions ("IMDS"), which was partially impacted by the ongoing Middle East conflict. Our operating results for the six months ended June 30, 2026, as compared to the corresponding period of the prior year, decreased by 4% on a 6% increase in revenue, driven by lower results in our IMDS segment, which was impacted by the ongoing conflict in the Middle East, and the unusually strong first quarter of 2025 for our OPG segment, partially offset by improved results on increased activity in our Manufactured Products segment. Consistent with recent years, our cash balance declined during the six-month period ended June 30, 2026. We utilized approximately $25 million of cash for maintenance capital expenditures and approximately $16 million for growth capital expenditures in the first six months of 2026 along with $10 million for the repurchase of our common stock and $8.6 million for payment of tax withholding related to vesting of stock awards. These items were the largest contributors to our $59 million cash reduction during the first six months of 2026, as compared to a $63 million cash reduction during the first half of 2025. During the second quarter of 2026, we initiated a series of financing transactions designed to address the maturity of our 2028 senior notes. These transactions, completed during the third quarter of 2026, included the issuance of $500 million aggregate principal amount of 6.875% senior notes due 2034, the completion of a tender offer for the outstanding 2028 Senior Notes, and an amendment to the senior secured revolving credit facility. The amendment increased commitments from $215 million to $345 million and extended the facility's maturity to July 2031. Together, these actions extended our debt maturity profile while preserving substantial liquidity and financial flexibility.
- Accounting & Financial Operations - Risk 4Results of Operations
We operate in five business segments. Our segments are contained within two businesses-services and products provided primarily to the oil and gas industry, and to a lesser extent, the mobility solutions and offshore renewables industries, among others ("Energy"), and services and products provided to non-energy industries Aerospace and Defense Technologies "(ADTech"). Our four business segments within the Energy business are Subsea Robotics, Manufactured Products, OPG and IMDS. We report our ADTech business as one segment. Our Unallocated Expenses are those not directly associated with a specific business segment. These consist of expenses related to our incentive and deferred compensation plans, including restricted stock units, performance units, performance stock units, and bonuses, as well as other general expenses, including corporate administrative expenses. Consolidated revenue and profitability information are as follows: Three Months EndedSix Months Ended(dollars in thousands)Jun 30, 2026Jun 30, 2025Jun 30, 2026Jun 30, 2025Revenue$768,184 $698,161 $1,460,613 $1,372,684 Operating Income (Loss)88,237 79,189 146,025 152,661 Operating Income (Loss) %11 %11 %10 %11 % We generate a material amount of our consolidated revenue from contracts for services in the U.S. Gulf in our OPG segment, which is usually more active in the second and third quarters, as compared to the rest of the year. Similarly, revenue in our Subsea Robotics segment is subject to seasonal variations in demand, with our first quarter generally being the low quarter of the year. The level of our Subsea Robotics seasonality depends on the number of remotely operated vehicles ("ROVs") we have engaged in vessel-based subsea infrastructure inspection, maintenance, repair and installation, which is more seasonal than drill support. Revenue in each of our Manufactured Products, IMDS and ADTech segments generally has not been seasonal. Energy The primary focus of our Energy business is to continue driving the positive momentum associated with the operational efficiency programs that leverage our asset base and capabilities for providing services and products for offshore energy operations and subsea completions. These efforts continue to benefit us during the current upstream spending cycle that is consistent with the ongoing increase in global demand for energy. We are also focused on deploying our capabilities to grow our business in integrity management, survey services, mobile robotics, offshore wind installations, nuclear and other clean energy solutions. The table that follows sets out revenue and profitability for the business segments within our Energy business. In the Subsea Robotics section of the table that follows, "ROV days utilized" is the number of ROV days for which we earn revenue during a specified period. "ROV days available" includes all days from the first day that a ROV is placed into service until the ROV is retired. All days in this period are considered available days, including periods when a ROV is undergoing maintenance or repairs. Our ROVs do not have scheduled maintenance or repair that requires significant time during which the ROVs are not available for utilization. "ROV utilization" percentage is defined as "ROV days utilized" divided by "ROV days available." Three Months EndedSix Months Ended(dollars in thousands)Jun 30, 2026Jun 30, 2025Jun 30, 2026Jun 30, 2025Subsea RoboticsRevenue$232,016 $218,786 $446,289 $424,762 Operating Income (Loss)66,325 64,505 121,833 124,137 Operating Income (Loss) %29 %29 %27 %29 %ROV Days Available22,750 22,750 45,250 45,250 ROV Days Utilized14,930 15,289 28,604 30,382 ROV Utilization66 %67 %63 %67 % Manufactured ProductsRevenue149,030 145,134 292,678 280,171 Operating Income (Loss)21,935 18,772 48,020 27,439 Operating Income (Loss) %15 %13 %16 %10 %Backlog at End of Period445,000 516,000 445,000 516,000 Offshore Projects GroupRevenue182,843 149,281 318,219 314,222 Operating Income (Loss)30,019 21,663 48,363 57,329 Operating Income (Loss) %16 %15 %15 %18 %Integrity Management & Digital SolutionsRevenue70,844 75,367 138,728 146,785 Operating Income (Loss)100 4,647 (898)8,109 Operating Income (Loss) %- %6 %(1)%6 %Total EnergyRevenue$634,733 $588,568 $1,195,914 $1,165,940 Operating Income (Loss)118,379 109,587 217,318 217,014 Operating Income (Loss) %19 %19 %18 %19 %
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 37
- Share Price & Shareholder Rights - Risk 1AddedShare Repurchase Program.
In December 2014, our Board of Directors approved a plan to repurchase up to 10 million shares of our common stock on a discretionary basis. Under this program, which has no expiration date, we repurchased 2.8 million shares of our common stock for $121 million through December 31, 2024. In the year ended December 31, 2025, we repurchased 1.8 million shares for $40 million. During the three- and six-month periods ended June 30, 2026, we repurchased 0.3 million shares for $10 million. As of June 30, 2026, we retained 11 million of the shares we repurchased through this and a prior repurchase program. We account for the shares we hold in treasury under the cost method, at average cost. The timing and amount of any future repurchases will be determined by our management. We expect that any additional shares repurchased under the plan will be held as treasury stock for possible future use. The plan does not obligate us to repurchase any particular number of shares. Off-Balance Sheet Arrangements We have not guaranteed any debt not reflected on our Consolidated Balance Sheets as of June 30, 2026, and we do not have any off-balance sheet arrangements, as defined by Securities and Exchange Commission's rules.
- Share Price & Shareholder Rights - Risk 2We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.
Our certificate of incorporation authorizes us to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such preferences, powers and relative, participating, optional and other rights, including preferences over our common stock respecting dividends and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock.
- Share Price & Shareholder Rights - Risk 3Provisions in our corporate documents and Delaware law could delay or prevent a change in control of our company, even if that change would be beneficial to our shareholders.
The existence of some provisions in our corporate documents and Delaware law could delay or prevent a change in control of our company, even if that change would be beneficial to our shareholders. Our certificate of incorporation and bylaws contain provisions that may make acquiring control of our company difficult, including: - provisions relating to the classification, nomination and removal of our directors;- provisions regulating the ability of our shareholders to bring matters for action at annual meetings of our shareholders;- provisions requiring the approval of the holders of at least 80% of our voting stock for a broad range of business combination transactions with related persons; and - the authorization given to our board of directors to issue and set the terms of preferred stock. In addition, the Delaware General Corporation Law imposes restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock.
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