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What changed in OCEANEERING INTERNATIONAL INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of OCEANEERING INTERNATIONAL INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+309 added−306 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-23)

Top changes in OCEANEERING INTERNATIONAL INC's 2024 10-K

309 paragraphs added · 306 removed · 250 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

83 edited+24 added−21 removed63 unchanged
Biggest changeREGULATION Our operations are affected from time to time and in varying degrees by foreign and domestic political developments and foreign, federal and local laws and regulations, including those relating to: • operating from and around offshore drilling, production and marine facilities; • national preference for local equipment and personnel; • marine vessel safety; • protection of the environment, including pollution, GHG emissions and climate change; • workplace health and safety; • data privacy; • taxation; • license requirements for importation and exportation of our equipment and technology; and • currency conversion and repatriation. 8 Table of Contents / In addition, our Energy business primarily depends on the demand for our services and products from the oil and gas industry and, therefore, is affected by changing taxes, price controls and other laws and regulations relating to the oil and gas industry generally.
Biggest changeREGULATION Our operations are affected from time to time and in varying degrees by foreign and domestic political developments and foreign, federal and local laws and regulations, including those relating to: • operating from and around offshore drilling, production and marine facilities; • national preference for local equipment and personnel; • marine vessel safety; • protection of the environment, including pollution, GHG emissions and climate change; • workplace health and safety; • data privacy; • taxation (including tariffs and retaliatory tariffs); • license requirements for importation and exportation of our equipment and technology; and 8 Tab le of Contents / • currency conversion and repatriation.
Our Aerospace and Defense Technologies (“ADTech”) segment provides government services and products, including engineering and related manufacturing in defense and space exploration activities, principally to U.S. government agencies and their prime contractors.
Our Aerospace and Defense Technologies (“ADTech”) segment provides services and products, including engineering and related manufacturing in defense and space exploration activities, principally to U.S. government agencies and their prime contractors.
Offshore well operators use subsea umbilicals and production control equipment to control subsea wellhead hydrocarbon flow, monitor downhole and wellhead conditions and perform chemical injection. They are also used to provide power and fluids to other subsea processing hardware, including pumps and gas/oil separation equipment.
Offshore well operators use subsea umbilicals and production control equipment to control subsea wellhead hydrocarbon flow, monitor downhole and wellhead conditions and perform chemical injection. They are also used to provide power and fluids to other subsea processing hardware, including pumps and gas and oil separation equipment.
Department of Defense, National Aeronautics and Space Administration (“NASA”) and major government contractors. We work with our customers to understand their specialized requirements, identify and mitigate risks, and provide them value-added, maintainable, safe and certified solutions. The segment's largest customer is the U.S. Government with the U.S. Navy and NASA being the primary agencies supported. For the U.S.
Department of Defense, National Aeronautics and Space Administration (“NASA”) and major government contractors. We work with our customers to understand their specialized requirements, identify and mitigate risks, and provide them with value-added, maintainable, safe and certified solutions. The segment's largest customer is the U.S. Government with the U.S. Navy and NASA being the primary agencies supported. For the U.S.
We do not know of any arrangement or understanding between any of the above persons and any other person or persons pursuant to which they were selected or appointed as an officer. Business Experience. The following summarizes the business experience of our executive officers.
We do not know of any arrangement or understanding between any of the above persons and any other person or persons pursuant to which they were selected or appointed as an officer. The following summarizes the business experience of our executive officers.
Our four business segments within the Energy business are Subsea Robotics, Manufactured Products, Offshore Projects Group and Integrity Management & Digital Solutions. We report our Aerospace and Defense Technologies business as one segment. Unallocated Expenses are expenses not associated with a specific business segment.
Our four segments within the Energy business are Subsea Robotics, Manufactured Products, Offshore Projects Group and Integrity Management & Digital Solutions. We report our non-energy business, Aerospace and Defense Technologies, as one segment. Unallocated Expenses are expenses not associated with a specific business segment.
Our business 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”).
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”).
Government; • factors affecting the level of activity in our entertainment businesses, including decisions on capital expenditure decisions by entertainment business customers, such as theme park operators; • factors affecting our ability to achieve our growth expectations for our mobile robotics technology products; • general economic and business conditions and industry trends, including the ongoing transition to alternative sources of energy to reduce worldwide emissions of carbon dioxide and other “greenhouse gases,” the effects of inflation and future monetary policies and actions of the Federal Reserve; • the strength of the industry segments in which we are involved; • cancellations of contracts, change orders and other contractual modifications and the resulting adjustments to our backlog; • collections from our customers; • the availability and increased costs of chartered vessels; • our future financial performance, including as a result of the availability, terms and deployment of capital; • the consequences of significant changes in currency exchange rates; • the volatility and uncertainties of credit markets; 11 Table of Contents / • our ability to comply with covenants in our credit agreements and other debt instruments and the availability, terms and deployment of capital; • changes in tax laws, regulations and interpretation by taxing authorities; • changes in, or our ability to comply with, other laws and governmental regulations, including those relating to the environment (including pollution and climate change); • the continued availability of qualified personnel and our ability to attract and retain those qualified personnel; • our ability to obtain raw materials and parts on a timely basis and, in some cases, from limited sources; • increases in material costs on long-term projects at prices higher than originally forecast; • operating risks normally incident to offshore exploration, development and production operations; • hurricanes and other adverse weather and sea conditions; • cost and time associated with drydocking of our vessels; • the highly competitive nature of our businesses; • adverse outcomes from legal or regulatory proceedings; • the risks associated with integrating businesses we acquire; • the risks associated with the use of complex information technology systems, including cybersecurity risks and the risks associated with failures to protect data privacy in accordance with applicable legal requirements and contractual provisions binding upon us; • rapid technological changes; and • social, political, military and economic situations in foreign countries where we do business and the possibilities of civil disturbances, war, other armed conflicts or terrorist attacks.
Government; • factors affecting the level of activity in our entertainment business, including decisions on capital expenditure decisions by entertainment business customers; • factors affecting our ability to achieve our growth expectations for our mobile robotics technology products; • general economic and business conditions and industry trends, including the ongoing transition to alternative sources of energy to reduce worldwide emissions of carbon dioxide and other “greenhouse gases,” the effects of inflation and future monetary policies and actions of the Federal Reserve; • the strength of the industry segments in which we are involved; • cancellations of contracts, change orders and other contractual modifications and the resulting adjustments to our backlog; • collections from our customers; • the availability and increased costs of chartered vessels; • our future financial performance, including as a result of the availability, terms and deployment of capital; • the consequences of significant changes in currency exchange rates; • the volatility and uncertainties of credit markets; • our ability to comply with covenants in our credit agreements and other debt instruments and the availability, terms and deployment of capital; 11 Tab le of Contents / • changes in tax laws, regulations and interpretation by taxing authorities; • changes in, or our ability to comply with, other laws and governmental regulations, including those relating to the environment (including pollution and climate change); • the continued availability of qualified personnel and our ability to attract and retain those qualified personnel; • our ability to obtain raw materials and parts on a timely basis and, in some cases, from limited sources; • increases in material costs on long-term projects at prices higher than originally forecast; • operating risks normally incident to offshore exploration, development and production operations; • hurricanes and other adverse weather and sea conditions; • cost and time associated with drydocking of our vessels; • the highly competitive nature of our businesses; • adverse outcomes from legal or regulatory proceedings; • the risks associated with integrating businesses we acquire; • the risks associated with the use of complex information technology systems, including cybersecurity risks and the risks associated with failures to protect data privacy in accordance with applicable legal requirements and contractual provisions binding upon us; • rapid technological changes; and • social, political, military and economic situations in countries where we do business and the possibilities of civil disturbances, war, other armed conflicts or terrorist attacks.
Work-class ROVs are outfitted with manipulators, sonar and video cameras, and can operate specialized tooling packages and other equipment or features to facilitate the performance of specific underwater tasks. As of December 31, 2023, we owned 250 work-class ROVs. We believe we own and operate the largest fleet of work-class ROVs in the world.
Work-class ROVs are outfitted with manipulators, sonar and video cameras, and can operate specialized tooling packages and other equipment or features to facilitate the performance of specific underwater tasks. As of December 31, 2024, we owned 250 work-class ROVs. We believe we own and operate the largest fleet of work-class ROVs in the world.
We provide various types of subsea umbilicals through our Umbilical Solutions division from plants in the United States, Scotland and Brazil. Offshore operators use umbilicals to control subsea wellhead hydrocarbon flow rates, monitor downhole and wellhead conditions and perform chemical injection.
We provide various types of subsea umbilicals through our Umbilical Solutions division from facilities in the United States, Scotland and Brazil. Offshore operators use umbilicals to control subsea wellhead hydrocarbon flow rates, monitor downhole and wellhead conditions and perform chemical injection.
While no Code of Conduct can cover every circumstance that may relate to business 10 Table of Contents / ethics, our Code of Conduct provides guidance and instructions related to conflicts of interest, anti-bribery and corruption (including management of third-party representatives), fair competition, trade controls, record-keeping, data privacy, protection of confidential and proprietary information, insider trading, respectful workplace, human rights, and more.
While no Code of Conduct can cover every circumstance that may relate to business ethics, our Code of Conduct provides guidance and instructions related to conflicts of interest, anti-bribery and corruption (including management of third-party representatives), fair competition, trade controls, record-keeping, 10 Tab le of Contents / data privacy, protection of confidential and proprietary information, insider trading, respectful workplace, human rights, and more.
Our Manufactured Products segment provides distribution systems, such as production control umbilicals and connection systems made up of specialty subsea hardware, along with clamp connectors and subsea and topside control valves. We also provide turnkey solutions that include project management, engineering design, fabrication/assembly and installation of autonomous mobile robotic technology to industrial, manufacturing, healthcare, warehousing and commercial theme park markets.
Our Manufactured Products segment provides distribution systems, such as production control umbilicals and connection systems made up of specialty subsea hardware, along with clamp connectors and subsea and topside control valves. We also provide turnkey solutions that include project management, engineering design, fabrication, assembly and installation of autonomous mobile robotic technology to industrial, manufacturing, healthcare and warehousing markets.
We also provide services and products as a subcontractor to other oilfield service companies operating as prime contractors. In addition, we market our Manufactured Products mobile robotic solutions to domestic and international industrial, manufacturing, healthcare, warehousing and commercial theme park industries. Customers for our energy services and products typically award contracts on a competitive-bid basis.
We also provide services and products as a subcontractor to other oilfield service companies operating as prime contractors. In addition, we market our Manufactured Products mobile robotic solutions to domestic and international industrial, manufacturing, healthcare and warehousing industries. Customers for our energy services and products typically award contracts on a competitive-bid basis.
Kriendler served in human resources leadership positions from 2006 to 2016 at affiliates of Tyco International Ltd. and successor entities, including most recently as Vice President, Human Resources for The ADT Corporation from 2011. Ms. Kriendler has more than 25 years of experience in human resources management. 13 Table of Contents / Benjamin M.
Kriendler served in human resources leadership positions from 2006 to 2016 at affiliates of Tyco International Ltd. and successor entities, including most recently as Vice President, Human Resources for The ADT Corporation from 2011. Ms. Kriendler has more than 25 years of experience in human resources management. Benjamin M.
We market our engineered products and services primarily to U.S. government agencies and their prime contractors in defense and space exploration activities, as well as commercial space companies. Major Customers. Our top five customers in 2023, 2022 and 2021 accounted for 36%, 37% and 36%, respectively, of our consolidated revenue.
We market our engineered products and services primarily to U.S. government agencies and their prime contractors in defense and space exploration activities, as well as commercial space companies. Major Customers. Our top five customers in 2024, 2023 and 2022 accounted for 31%, 36% and 37%, respectively, of our consolidated revenue.
We perform these services on both onshore and offshore facilities, both topside and subsea. We also provide software, digital and connectivity solutions for the energy industry and software and analytical solutions for the maritime industry. Aerospace and Defense Technologies.
We perform these services on both onshore and offshore facilities, both topside and subsea. We also provide software, digital and connectivity solutions for the energy industry. Aerospace and Defense Technologies.
We compete in specialized areas in which we can combine our extensive knowledge of operating in harsh environments, program management 7 Table of Contents / experience, mechanical engineering expertise and the capability to continue the development of conceptual project designs into the manufacture of custom equipment for customers.
We compete in specialized areas in which we can combine our extensive knowledge of operating in harsh environments, program management experience, mechanical engineering expertise and the capability to continue the development of conceptual project designs into the manufacture of custom equipment for customers.
This system does not require a dedicated vessel to be on standby during ROV operations and reduces the need for ROV and other vessel-based personnel to be transported to and from marine vessels and offshore platforms, making the system more cost-efficient and safer for customer personnel.
This system does not require a dedicated vessel to be on standby during ROV operations and reduces the need for ROV and other vessel-based personnel to be transported to and from marine vessels and offshore platforms, making the system more cost-efficient and safer for our customers.
We perform subsea intervention and hardware installation services, principally in the U.S. Gulf of Mexico and offshore Angola, from multiservice deepwater vessels. We are one of many companies that offer these services. In general, our competitors can move their vessels to where we operate from other locations with relative ease.
We perform subsea intervention and hardware installation services, principally in the U.S. Gulf of Mexico and West Africa, from multiservice deepwater vessels. We are one of many companies that offer these services. In general, our competitors can move their vessels to where we operate from other locations with relative ease.
Our work-class ROV fleet size was 250 as of December 31, 2023, 2022 and 2021 and included six Isurus TM work-class ROV systems (which are capable of operating in high-current conditions and are ideal for renewables projects and high-speed surveys) and our battery-operated Liberty electric ROV (“E-ROV”) system, which we developed to address customer objectives regarding cost efficiencies, safety, personnel shortages and environmental considerations.
Our work-class ROV fleet size was 250 as of December 31, 2024, 2023 and 2022 and included six Isurus TM work-class ROV systems (which are capable of operating in high-current conditions and are ideal for renewables projects and high-speed surveys) and our battery-operated Liberty electric ROV (“E-ROV”) system, which we developed to 2 Tab le of Contents / address customer objectives regarding cost efficiencies, safety, personnel shortages and environmental considerations.
We design, build, retrofit and upgrade our new and existing ROVs at in-house facilities, the largest of which is in Morgan City, Louisiana. In 2023, we retired eleven of our conventional work-class ROV systems and replaced them with eleven upgraded conventional work-class ROV systems.
We design, build, retrofit and upgrade our new and existing ROVs at in-house facilities, the largest of which is in Morgan City, Louisiana. In 2024, we retired eight of our conventional work-class ROV systems and replaced them with eight upgraded conventional work-class ROV systems.
As of December 31, 2023, we had approximately 10,100 employees, of whom approximately 38% were employed in the United States and approximately 62% were employed outside of the United States. Our workforce varies seasonally and typically peaks during the second and third quarter of each year.
As of December 31, 2024, we had approximately 10,400 employees, of whom approximately 38% were employed in the United States and approximately 62% were employed outside of the United States. Our workforce varies seasonally and typically peaks during the second and third quarter of each year.
Information contained on or accessible from our website or any other website is not incorporated by reference into this Annual Report and should not be considered part of this report. 12 Table of Contents / INFORMATION ABOUT OUR EXECUTIVE OFFICERS Executive Officers.
Information contained on or accessible from our website or any other website is not incorporated by reference into this Annual Report and should not be considered part of this report. 12 Tab le of Contents / INFORMATION ABOUT OUR EXECUTIVE OFFICERS AND DIRECTORS Executive Officers.
These include: • various types of subsea umbilicals utilizing steel tubes, thermoplastic hoses, and power and communication cables, along with termination assemblies; • production control equipment; • clamp connectors; • pipeline connector and repair systems; • subsea and topside control valves; • subsea chemical injection valves; and • autonomous mobile robotic technology, including entertainment systems for theme parks.
These include: • various types of subsea umbilicals utilizing steel tubes, thermoplastic hoses, and power and communication cables, along with termination assemblies; • production control equipment; • clamp connectors; • pipeline connector and repair systems; • subsea and topside control valves; • subsea chemical injection valves; and • autonomous mobile robotic technology.
In addition, global market conditions can trigger constraints in the supply of certain raw materials, and our procurement personnel are always seeking ways to ensure the availability and manage the cost of raw materials.
In addition, global market conditions can trigger constraints in the supply of certain raw materials, and our procurement personnel are always seeking ways to ensure the availability and manage the cost 6 Tab le of Contents / of raw materials.
Subsea Robotics revenue: Amount Percent of Total Revenue (in thousands) 2023 $ 752,521 31 % 2022 621,921 30 % 2021 538,515 29 % ROV tooling provides an additional operational interface between an ROV and equipment located subsea. We also provide survey services, including hydrographic survey and positioning services and autonomous underwater vehicles for geoscience. Manufactured Products.
Subsea Robotics revenue: Amount Percent of Total Revenue (in thousands) 2024 $ 829,822 31 % 2023 752,521 31 % 2022 621,921 30 % ROV tooling provides an additional operational interface between an ROV and equipment located subsea. We also provide survey services, including hydrographic survey and positioning services and autonomous underwater vehicles for geoscience. Manufactured Products.
The following information relates to our executive officers as of February 16, 2024: NAME AGE POSITION EXECUTIVE OFFICER SINCE EMPLOYEE SINCE Roderick A. Larson 57 President and Chief Executive Officer and Director 2012 2012 Earl F. Childress 58 Senior Vice President and Chief Commercial Officer 2020 2020 Alan R.
The following information relates to our executive officers as of February 14, 2025: NAME AGE POSITION EXECUTIVE OFFICER SINCE EMPLOYEE SINCE Roderick A. Larson 58 President and Chief Executive Officer and Director 2012 2012 Earl F. Childress 59 Senior Vice President and Chief Commercial Officer 2020 2020 Alan R.
We believe the recent closures or reductions in capacity by some of our competitors, coupled with an increase in demand, should help with balancing a historically over-supplied market. Within our mobility solutions and entertainment businesses, there are many niche competitors offering specialized services and products, both on a regional and a global basis. Offshore Projects Group.
We believe the reduction in capacity by some of our competitors over the last few years, coupled with an increase in demand, should help with balancing a historically over-supplied market. Within our mobility solutions and entertainment businesses, there are many niche competitors offering specialized services and products, both on a regional and a global basis. Offshore Projects Group.
We also believe we are the industry leader in providing ROV services for offshore drill support, with an estimated 61% market share of the contracted floating drilling rigs at the end of 2023.
We also believe we are the industry leader in providing ROV services for offshore drill support, with an estimated 59% market share of the 142 contracted floating drilling rigs at the end of 2024.
Kriendler, Senior Vice President and Chief Human Resources Officer, joined Oceaneering in October 2016 as Vice President, Human Resources and was appointed as its Chief Human Resources Officer in 2018 and to her current position in March 2020, with responsibility for Oceaneering’s human resources, global mobility and operations training functions. Prior to joining Oceaneering, Ms.
Kriendler was appointed as Senior Vice President and Chief Human Resources Officer in 2020, with responsibility for Oceaneering’s human resources, global mobility and operations training functions. She joined Oceaneering in 2016 as Vice President, Human Resources and was appointed as its Chief Human Resources Officer in 2018. Prior to joining Oceaneering, Ms.
We provide advanced technology product development, manufacturing and project management to industrial, manufacturing, healthcare, warehousing and commercial theme park markets.
We provide advanced technology product development, manufacturing and project management to industrial, manufacturing, healthcare and warehousing markets.
The adoption of laws and regulations curtailing offshore exploration and development drilling for oil and gas for economic and other policy reasons (such as addressing concerns about climate change) would adversely affect our operations by limiting demand for our services.
The adoption of laws and regulations curtailing offshore exploration and development drilling for oil and gas for economic and other policy reasons (such as addressing concerns about climate change or banning offshore exploration and production in certain geographic areas) would adversely affect our operations by limiting demand for our services.
Prior to that time, he served as Vice President, Offshore Projects Group–Americas from February 2022 and Director, Offshore Projects Group–Americas from May 2020. Prior to our segment realignment, he served within our Service and Rental business unit as: Director, Intervention from April 2019; Global Service Line Manager from June 2018; and Service Line Manager from February 2016. Leonardo P.
Prior to that time, he served as Vice President, Offshore Projects Group–Americas and Director, Offshore Projects Group–Americas from 2020 to 2022. Prior to our segment realignment, he served within our Service and Rental business unit as: Director, Intervention from 2019; Global Service Line Manager from 2018; and Service Line Manager from 2016. Mr.
Additionally, our newest development is Freedom , a hybrid autonomous underwater vehicle (“AUV”) and ROV that can complete surveys, commissioning, inspections, maintenance, and repairs without the need for a pilot to monitor and control the entire operation.
Additionally, we offer Freedom , a hybrid autonomous underwater vehicle (“AUV”) and ROV that can complete surveys, commissioning, inspections, maintenance, and repairs without the need for a pilot to monitor and control the entire operation.
In 2023, we worked in approximately 52 countries across six continents and employed people representing over 114 different nationalities. Business Ethics Our Code of Conduct applies to all of our directors, officers and employees.
In 2024, we worked in approximately 50 countries across six continents and employed people representing over 115 different nationalities. Business Ethics Our Code of Conduct applies to all of our directors, officers and employees.
With our manufactured products business, we are one of several companies that compete on a worldwide basis for the provision of steel tube and thermoplastic control umbilicals, and, compared to current and forecasted market demand, coupled with competitors reducing supply capacity, we are beginning to see slight improvement in the umbilical manufacturing market.
With our manufactured products business, we are one of several companies that compete on a worldwide basis for the provision of steel tube and thermoplastic control umbilicals. Compared to current and forecasted market demand, coupled with competitors reducing supply capacity, we have seen improvements in the umbilical manufacturing and energy markets.
In addition to raw materials, we also use the products and services of a number of other providers, such as forge companies, casting foundries, metal fabricators, machine shops and logistics providers, in order to produce and deliver products to our customers.
In addition to raw materials, we also use the products and services of a number of other providers, such as forge companies, casting foundries, metal fabricators, machine shops and logistics providers, in order to produce and deliver products to our customers. Most of these materials and services are generally available from multiple sources.
We support local, regional and global initiatives to address community needs, and we offer two paid volunteer days annually to all employees to enable them to participate in community outreach activities throughout the year. • Continual Improvement of Employee Experience .
Oceaneers value addressing the needs of the communities in which they live and work. We support local, regional and global initiatives to address community needs, and we offer two paid volunteer days annually to all employees to enable them to participate in community outreach activities throughout the year. • Continual Improvement of Employee Experience .
Shaun R. Roedel, Senior Vice President, Manufactured Products, joined Oceaneering in 2009 as Assistant General Manager/Group Project Manager of the umbilical plant in Panama City, Florida, and became Vice President, Subsea Products in 2017. He was appointed to his current position in March 2020. Prior to joining Oceaneering, Mr.
Roedel became Senior Vice President, Manufactured Products in 2020 and Vice President Subsea Manufactured Products in 2017. He joined Oceaneering in 2009 as Assistant General Manager/Group Project Manager of the umbilical plant in Panama City, Florida. Prior to joining Oceaneering, Mr.
We also provide mobile robotics solutions, including autonomous mobile robot technology, and turnkey solutions that include program management, engineering design, fabrication/assembly and installation utilizing our autonomous mobile robotic technology, to a variety of industries. 4 Table of Contents / Manufactured Products revenue: Amount Percent of Total Revenue (in thousands) 2023 $ 493,692 20 % 2022 382,361 19 % 2021 344,251 18 % Offshore Projects Group.
We also provide mobile robotics solutions, including autonomous mobile robot technology, and turnkey solutions that include project management, engineering design, fabrication/assembly and installation utilizing our autonomous mobile robotic technology, to a variety of industries. 4 Tab le of Contents / Manufactured Products revenue: Amount Percent of Total Revenue (in thousands) 2024 $ 555,500 21 % 2023 493,692 20 % 2022 382,361 19 % Offshore Projects Group.
These regulations may adversely affect our ability to compete. Subsea Robotics. We believe we are the world's largest owner/operator of work-class ROVs employed in energy-related operations. As of December 31, 2023, we owned 250 work-class ROVs. We compete with several major companies on a worldwide basis and with numerous others operating locally in various areas.
We believe we are the world's largest owner and operator of work-class ROVs employed in energy-related operations. As of December 31, 2024, we owned 250 work-class ROVs. We compete with several major companies on a worldwide basis and with numerous others operating locally in various areas.
McDonald 60 Senior Vice President, Subsea Robotics 2015 1989 Shaun R. Roedel 56 Senior Vice President, Manufactured Products 2020 2009 Each executive officer serves at the discretion of our Board of Directors and is subject to reelection or reappointment each year after the annual meeting of our shareholders.
McDonald 61 Senior Vice President, Subsea Robotics 2015 1989 Shaun R. Roedel 57 Senior Vice President, Manufactured Products 2020 2009 Catherine E. Dunn 47 Vice President and Chief Accounting Officer 2023 2002 Each executive officer serves at the discretion of our Board of Directors and is subject to reelection or reappointment each year after the annual meeting of our shareholders.
We intend to continue to expand our remote service offerings in this segment given the potentially significant savings both financially and in CO₂ emissions available from the Liberty and the Isurus TM systems and other E-ROV and hybrid systems we are developing. 2 Table of Contents / Manufactured Products.
We intend to continue to expand our remote service offerings in this segment given the potentially significant savings both financially and in CO₂ emissions available from Freedom , Liberty and Isurus TM systems. Manufactured Products.
Navy, we perform engineering services, prototype design building services and repair and maintenance services on submarines and surface ships. We support space exploration and technology development by providing our products and services to NASA, aerospace contractors and commercial space companies. Our U.S.
Navy, we 5 Tab le of Contents / perform engineering services, prototype design building services and repair and maintenance services on submarines and surface ships. We support space exploration and technology development by providing our products and services to NASA, aerospace contractors and commercial space companies. Our U.S. Navy and NASA-related activities substantially depend on continued government funding.
We believe that our broad geographic sales and operational coverage, long history of operations, technical and safety reputation, application of various inspection technologies and accreditation to international quality standards enable us to compete effectively in our selected asset integrity and inspection services market segments.
We believe that our broad geographic sales and operational coverage, long history of operations, technical and safety reputation, application of various inspection technologies and accreditation to international quality standards enable us to compete effectively in our selected asset integrity and inspection services market segments. 7 Tab le of Contents / Aerospace and Defense Technologies Engineering services is a very broad market with a large number of competitors.
With this optimism comes our firm commitment to maintain our financial and capital discipline. We continue to focus on generating significant free cash flow and spending capital prudently to leverage our core competencies in new and existing markets.
We continue to focus on generating significant free cash flow and spending capital prudently to leverage our core competencies in new and existing markets.
Curtis 58 Senior Vice President and Chief Financial Officer 2015 1995 Holly D. Kriendler 59 Senior Vice President and Chief Human Resources Officer 2020 2016 Benjamin M. Laura 45 Senior Vice President and Chief Innovation Officer 2020 2014 Jennifer F. Simons 47 Senior Vice President, Chief Legal Officer and Secretary 2023 2023 Catherine E.
Curtis 59 Senior Vice President and Chief Financial Officer 2015 1995 Holly D. Kriendler 60 Senior Vice President and Chief Human Resources Officer 2020 2016 Benjamin M. Laura 46 Senior Vice President and Chief Operating Officer 2020 2014 Jennifer F. Simons 48 Senior Vice President, Chief Legal Officer and Secretary 2023 2023 Philip G.
Our foreign operations, principally in Africa, Asia and Australia, United Kingdom, Brazil, and Norway accounted for approximately 58% of our revenue, or $1.4 billion, for the year ended December 31, 2023.
Our foreign operations, principally in Africa, United Kingdom (“U.K.”), Norway, Brazil and Asia and Australia accounted for approximately 58% of our revenue, or $1.5 billion, for the year ended December 31, 2024. We operate in five business segments.
Except where we otherwise indicate, each of these persons has held his or her current position with Oceaneering for at least the past five years. Roderick A.
Except where we otherwise indicate, each of these persons has held his or her current position with Oceaneering for at least the past five years. Roderick A. Larson has served as President and Chief Executive Officer of Oceaneering since 2017 and as President since 2015. Mr.
We will continue to develop and deliver technologies to help our customers produce hydrocarbons in a cleaner, safer and more cost-effective manner while increasing our investments into new markets including energy transition, mobility solutions, digital asset management, and aerospace and defense solutions. 3 Table of Contents / DESCRIPTION OF BUSINESS Energy Our Energy business consists of the Subsea Robotics, Manufactured Products, Offshore Projects Group and Integrity Management & Digital Solutions segments.
We will continue to develop and deliver technologies to help our customers produce hydrocarbons in a cleaner, safer and more cost-effective manner while increasing our investments into new markets including energy transition, mobility solutions, digital asset management, and aerospace and defense solutions. Energy.
The amounts of backlog orders we believed to be firm as of 2023 and 2022 were as follows (in millions): As of December 31, 2023 As of December 31, 2022 Total 1+ yr (1) Total 1+ yr (1) Energy Subsea Robotics $ 782 $ 303 $ 771 $ 313 Manufactured Products 622 194 467 186 Offshore Projects Group 355 121 239 — Integrity Management & Digital Solutions 332 148 281 126 Total Energy 2,091 766 1,758 625 Aerospace and Defense Technologies 236 23 189 16 Total $ 2,327 $ 789 $ 1,947 $ 641 (1) Represents amounts that were not expected to be performed within one year.
The amounts of backlog orders we believed to be firm as of 2024 and 2023 were as follows (in millions): As of December 31, 2024 As of December 31, 2023 Total 1+ yr (1) Total 1+ yr (1) Energy Subsea Robotics $ 876 $ 355 $ 782 $ 303 Manufactured Products 604 165 622 194 Offshore Projects Group 416 155 355 121 Integrity Management & Digital Solutions 291 120 332 148 Total Energy 2,187 795 2,091 766 Aerospace and Defense Technologies 252 42 236 23 Total $ 2,439 $ 837 $ 2,327 $ 789 (1) Represents amounts that were not expected to be performed within one year.
In 2023, 2022 and 2021, four of our top five customers were oil and gas exploration and production companies served by our Energy business segments, with the other one being the U.S. Government, which is served by our ADTech segment. During 2023, 2022 and 2021, revenue from one customer, the U.S.
In 2024, 2023 and 2022, four of our top five customers were oil and gas exploration and production companies served by our Energy business segments, with the other one being the U.S. Government, which is served primarily by our ADTech segment. For the year ended December 31, 2024, no individual customer accounted for more than 10% of our consolidated revenue.
Roedel was the head of project management for Siemens Dematic from 1997 to 2004 and the head of project management and construction for Vanderlande Industries from 2004 to 2009. Mr. Roedel served in the U.S. Navy from 1990 to 1997. 14 Table of Contents /
Roedel was the head of project management for Siemens Dematic from 1997 to 2004 and the head of project management and construction for Vanderlande Industries from 2004 to 2009. Mr. Roedel served in the U.S. Navy from 1990 to 1997. Catherine E. Dunn became Vice President and Chief Accounting Officer in 2023.
Philip G. Beierl, Senior Vice President, Aerospace and Defense Technologies, joined Oceaneering in 2005 and held leadership positions in the Oceaneering Technologies business unit, most recently as its Vice President and General Manager from 2014. Mr. Beierl was appointed as Oceaneering's Senior Vice President, Advanced Technologies in 2018 and to his current position in August 2020.
Beierl, became Senior Vice President, Aerospace and Defense Technologies in 2020 and Senior Vice President, Advanced Technologies in 2018. Prior to that time, Mr. Beierl served as Vice President, Advanced Technologies from 2018 and held leadership positions in the Oceaneering Technologies unit, most recently as its Vice President and General Manager from 2014.
The level of our Subsea Robotics seasonality depends on the number of ROVs we have engaged in vessel-based subsea infrastructure IMR and installation, which is more seasonal than drill support. Revenue in each of our Manufactured Products and ADTech segments generally has not been seasonal.
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 ROVs we have engaged in vessel-based subsea infrastructure IMR and installation, which is more seasonal than drill support.
Many of the services and products utilized in ADTech are applied technologies based on our core competencies and knowledge derived from decades of working in the offshore markets and solving complex problems in harsh environments. General.
Many of the services and products utilized in ADTech are applied technologies based on our core competencies and knowledge derived from decades of working in the offshore markets and solving complex problems in harsh environments. 3 Tab le of Contents / DESCRIPTION OF BUSINESS Energy Our Energy business consists of the Subsea Robotics, Manufactured Products, Offshore Projects Group and Integrity Management & Digital Solutions segments.
Government, accounted for 10%, 11% and 12%, respectively, of our total consolidated annual revenue, and no other customer accounted for more than 10% of our total consolidated revenue.
For the years ended December 31, 2023 and 2022, revenue from one customer, the U.S. Government, accounted for 10% and 11%, respectively, of our total consolidated annual revenue, and no other customer accounted for more than 10% of our total consolidated revenue.
We compete for contracts with companies that have worldwide operations, as well as numerous others operating locally in various areas. We believe that our ability to safely provide a wide range of underwater services and products on a worldwide basis enables us to compete effectively in multiple phases of the offshore oilfield life cycle.
We believe that our ability to safely provide a wide range of underwater services and products on a worldwide basis enables us to compete effectively in multiple phases of the offshore oilfield life cycle. In some cases involving projects that require less sophisticated equipment, small companies have been able to bid for contracts at prices uneconomical to us.
Dunn, Vice President and Chief Accounting Officer, joined Oceaneering in June 2002 and served as Corporate Controller from January 2012 until she was appointed to her current position in December 2023. Prior to joining Oceaneering, Mrs. Dunn was with Arthur Anderson. Mrs. Dunn holds a Bachelor’s degree in Accounting from Louisiana State University and is a Certified Public Accountant.
She joined Oceaneering in 2002 and has served as Corporate Controller since 2012. Prior to joining Oceaneering, Mrs. Dunn was with Arthur Andersen. Mrs. Dunn holds a Bachelor’s degree in Accounting from Louisiana State University and is a Certified Public Accountant. 14 Tab le of Contents / Directors.
The worldwide asset integrity and inspection markets consist of a wide range of inspection and certification requirements in many industries. We currently compete in only selected portions of this market. We are expanding our integrity management services into adjacent markets and are developing our digitization services.
Within our service and rental businesses, there are many competitors offering specialized services and products both on a regional and a global basis. Integrity Management & Digital Solutions. The worldwide asset integrity and inspection markets consist of a wide range of inspection and certification requirements in many industries. We currently compete in only selected portions of this market.
Dunn 46 Vice President and Chief Accounting Officer 2023 2002 Philip G. Beierl 65 Senior Vice President, Aerospace and Defense Technologies 2018 2005 Christopher J. Dyer 44 Senior Vice President, Offshore Projects Group 2022 2004 Leonardo P. Granato 50 Senior Vice President, Integrity Management and Digital Solutions 2022 2016 Martin J.
Beierl 66 Senior Vice President, Aerospace and Defense Technologies 2018 2005 William R. Merz 61 Senior Vice President, Aerospace and Defense Technologies 2025 2024 Christopher J. Dyer 45 Senior Vice President, Offshore Projects Group 2022 2004 Leonardo P. Granato 51 Senior Vice President, Integrity Management and Digital Solutions 2022 2016 Martin J.
We provide these services principally to customers in the oil and gas, petrochemical and power generation industries. In the United Kingdom (“ U.K.”), we provide Independent Inspection Authority services for the oil and gas industry, which include first-pass integrity evaluation and assessment and nondestructive testing services. We use a variety of technologies to perform pipeline inspections, both onshore and offshore.
We also provide third-party inspections to satisfy contractual structural specifications, internal safety standards or regulatory requirements. We provide these services principally to customers in the oil and gas, power generation and petrochemical industries. In the U.K., we provide Independent Inspection Authority services for the oil and gas industry, which include first-pass integrity evaluation and assessment and nondestructive testing services.
Prior to that time, he served as Brazil Country Manager since December 2019 and also as Business Development – Managing Director Brazil since July 2018. Prior to joining Oceaneering, Mr. Granato served in roles of increasing responsibility with Baker Hughes Incorporated and Baker Hughes do Brasil, including most recently as Latin America HSE Director from March 2014 to January 2016.
Granato joined Oceaneering as Director of Service Excellence for the Service and Rental business unit in 2016. Prior to joining Oceaneering, Mr. Granato served in roles of increasing responsibility with Baker Hughes Incorporated and Baker Hughes do Brasil, including most recently as Latin America HSE Director from 2014 to 2016. Martin J.
We believe our future success largely depends on our continued ability to attract and retain highly skilled employees. Our attraction and retention efforts include: • Business Ethics . As described more fully below, we foster a culture that encourages Oceaneering employees (“Oceaneers”) to act with integrity and insist upon business ethics. • Compensation and Benefits .
Our attraction and retention efforts include: • Business Ethics . As described more fully below, we foster a culture that encourages Oceaneering employees (“Oceaneers”) to act with integrity and insist upon business ethics. • Compensation and Benefits . We aim to offer competitive compensation packages, including benefit packages tailored to local markets of operation. • Career Development .
Navy and NASA-related activities substantially depend on continued government funding. 5 Table of Contents / ADTech revenue: Amount Percent of Total Revenue (in thousands) 2023 $ 376,845 16 % 2022 342,601 16 % 2021 366,995 20 % MARKETING Energy. Energy exploration and development expenditures fluctuate from year to year.
ADTech revenue: Amount Percent of Total Revenue (in thousands) 2024 $ 392,936 15 % 2023 376,845 16 % 2022 342,601 16 % MARKETING Energy. Energy exploration and development expenditures fluctuate from year to year.
Most of these materials and services are generally available from multiple sources. 6 Table of Contents / COMPETITION Our businesses operate in highly competitive industry segments. Energy We are one of several companies that provide underwater services and specialty subsea hardware on a worldwide basis.
COMPETITION Our businesses operate in highly competitive industry segments. Energy We are one of several companies that provide underwater services and specialty subsea hardware on a worldwide basis. We compete for contracts with companies that have worldwide operations, as well as numerous others operating locally in various areas.
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. Energy.
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. We intend to continue our strategy of acquiring, as opportunities arise, additional assets or businesses, to improve our market position or expand into related service and product lines.
Curtis, Senior Vice President and Chief Financial Officer, joined Oceaneering in 1995 as the Financial and Operations Controller for our Subsea Products segment, and became Vice President and Controller of Subsea Products in 2013 and Senior Vice President, Operations Support in 2014. He was appointed to his current position in August 2015. Holly D.
Curtis became Senior Vice President and Chief Financial Officer in 2015. Prior to that time, Mr. Curtis served as Senior Vice President, Operations Support from 2014. Mr. Curtis joined Oceaneering as Financial Controller in 1995. Holly D.
We start by measuring leading indicators that provide opportunities to avoid HSSE events before they happen, and we keep HSSE at the forefront of our decisions. We expect full commitment to HSSE from all Oceaneers and from all of our business partners. • Diversity. Our success is rooted in the diversity of our workforce.
We take a proactive, preventative, and people-first approach to health, safety, security and environmental (“HSSE”) risks in our business. We start by measuring leading indicators that provide opportunities to avoid HSSE events before they happen, and we keep HSSE at the forefront of our decisions.
In our global business, we develop talent and offer career advancement within local communities while offering exciting opportunities to deepen international business and cultural experiences for Oceaneers with such aspirations. We offer accelerated career paths for technicians into senior and supervisory roles as well as leadership development for personnel on professional career tracks.
We value continued learning and growth for all Oceaneers, regardless of their location, career path or background. In our global business, we develop talent and offer career advancement within local communities while offering exciting opportunities to deepen international business and cultural experiences for Oceaneers with such aspirations.
In some cases involving projects that require less sophisticated equipment, small companies have been able to bid for contracts at prices uneconomical to us. Additionally, in some jurisdictions we are subject to foreign governmental regulations favoring or requiring the awarding of contracts to local contractors or requiring foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction.
Additionally, in some jurisdictions we are subject to foreign governmental regulations favoring or requiring the awarding of contracts to local contractors or requiring foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. These regulations may adversely affect our ability to compete. Subsea Robotics.
ISO 9001 is an internationally recognized system for quality management established by the International Standards Organization, and the 2015 edition emphasizes customer satisfaction, risk assessment and continual improvement. 9 Table of Contents / HUMAN CAPITAL RESOURCES Human Capital Programs and Metrics We use a variety of human capital measures, including compensation and benefits program design, workforce composition and diversity metrics, health and safety metrics, talent attraction techniques, and development and management programs.
ISO 9001 is an internationally recognized system for quality management established by the International Standards Organization, and the 2015 edition emphasizes customer satisfaction, risk assessment and continual improvement. 9 Tab le of Contents / HUMAN CAPITAL RESOURCES Human Capital Programs and Metrics We believe our future success largely depends on our continued ability to attract and retain highly skilled employees.
Earl F. Childress, Senior Vice President and Chief Commercial Officer, joined Oceaneering in March 2020 as Senior Vice President, Business Development and assumed his current role in May 2020. From 2015 to 2020, he served as Executive Vice President of Strategy and Business Development for Teledyne Marine, and as General Manager of Teledyne Seismic and Teledyne RD Instruments.
From 2015 to 2020, he served as Executive Vice President of Strategy and Business Development for Teledyne Marine, and as General Manager of Teledyne Seismic and Teledyne RD Instruments. Prior to 2015, Mr. Childress served in sales, marketing and strategy roles for Teledyne, including mergers and acquisitions in marine instrumentation markets. Alan R.
Prior to that time, he served as Vice President of Service, Technology & Rentals from 2015, as Senior Vice President, Service and Rental from March 2020 and as Senior Vice President, Offshore Projects Group from May 2020. Prior to joining Oceaneering, Mr. Laura worked for Baker Hughes as the Vice-President and Managing Director for Baker Hughes do Brasil. Jennifer F.
Prior to that time, from 2014 to 2022 he served in the positions of Senior Vice President and Chief Innovation Officer, Senior 13 Tab le of Contents / Vice President, Offshore Projects Group, Senior Vice President, Service and Rental, Vice President, Service, Technology & Rentals, and Director, Subsea Services in 2014, when he joined Oceaneering. Prior to joining Oceaneering, Mr.
We supply diving services from offshore facilities and chartered vessels. OPG revenue: Amount Percent of Total Revenue (in thousands) 2023 $ 546,366 22 % 2022 489,317 24 % 2021 378,121 20 % Integrity Management & Digital Solutions.
OPG revenue: Amount Percent of Total Revenue (in thousands) 2024 $ 591,037 22 % 2023 546,366 22 % 2022 489,317 24 % Integrity Management & Digital Solutions. We offer a wide range of asset integrity services to customers worldwide to help ensure the safety of their facilities onshore and offshore, while reducing their unplanned maintenance and repair costs.
Larson, President and Chief Executive Officer, joined Oceaneering in 2012 as Senior Vice President and Chief Operating Officer, became President in February 2015 and became President and Chief Executive Officer in May 2017, when he joined our Board of Directors. Mr.
Larson previously served as Senior Vice President and Chief Operating Officer from 2012 to 2015. Prior to joining Oceaneering in 2012, Mr.
In our digital services, we focus on maritime and energy software offerings and forming key partnerships to expand our capabilities and market reach. IMDS revenue: Amount Percent of Total Revenue (in thousands) 2023 $ 255,282 11 % 2022 229,884 11 % 2021 241,393 13 % Aerospace and Defense Technologies. We provide engineering services and manufacturing to the U.S.
GDi’s suite of solutions, including its Vision software, complements Oceaneering’s portfolio by supporting enhanced safety, data quality and integrity, and cost efficiency for customers worldwide. IMDS revenue: Amount Percent of Total Revenue (in thousands) 2024 $ 291,866 11 % 2023 255,282 11 % 2022 229,884 11 % Aerospace and Defense Technologies. We provide engineering services and manufacturing to the U.S.
We regularly review our leadership bench strength and demonstrate a strong history of internal promotion. • Health, Safety, Security & Environment . We take a proactive, preventative, and people-first approach to health, safety, security and environmental (“HSSE”) risks in our business.
We offer accelerated career paths for technicians into senior and supervisory roles as well as leadership development for personnel on professional career tracks. We regularly review our leadership bench strength and demonstrate a strong history of internal promotion. • Health, Safety, Security & Environment .
He held a variety of domestic and international positions of increasing responsibility in our Remotely Operated Vehicles segment and most recently served as Vice President and General Manager for our ROV operations in the Eastern Hemisphere from 2006 until being appointed Senior Vice President, Remotely Operated Vehicles in 2016. He was appointed to his current position in May 2020.
McDonald became Senior Vice President, Subsea Robotics in 2020 and Senior Vice President, Remotely Operated Vehicles in 2016, after 27 years with Oceaneering. Previously, he served as Vice President of Oceaneering’s ROV operations in the eastern hemisphere from 2008, and General Manager of those operations from 2006. Shaun R.
The continuing increase in global demand for energy is resulting in improved offshore activity, which in turn leads to more demand for our Energy business services. Subsea Robotics. ROVs are tethered submersible vehicles remotely operated from the surface.
We also are focused on deploying our capabilities to grow business in mobile robotics, offshore wind installations, nuclear, and other clean energy solutions. Subsea Robotics. ROVs are tethered submersible vehicles remotely operated from the surface.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may pursue growth through the acquisition of businesses or assets that will enable us to broaden our service and product offerings and expand into new markets. We may be unable to implement this element of our growth strategy if we cannot identify suitable businesses or assets, reach agreement on potential strategic acquisitions on acceptable terms or for other reasons.
Biggest changeWe may be unable to implement this element of our growth strategy or our long-term strategy if we cannot identify suitable businesses or assets, reach agreement on potential strategic acquisitions on acceptable terms or for other reasons, or obtain the fair value of the assets or businesses we may sell.
The United States experienced inflationary pricing and increasing construction and labor costs in 2022 and 2023. While the pace of inflation has reduced since 2022, future changes in inflation could have an adverse impact on our business and our financial condition by increasing our costs of materials and labor.
The United States experienced inflationary pricing and increasing construction and labor costs in 2023 and 2022. While the pace of inflation has reduced since 2022, future changes in inflation could have an adverse impact on our business and our financial condition by increasing our costs of materials and labor.
Finally, if we acquire an entity that has violated or is not in compliance with applicable data privacy, security and protection laws or regulations (or contractual provisions), we may experience similar adverse consequences. Risks Related to our Organization and Structure We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.
Finally, if we acquire an entity that has violated or is not in compliance with applicable data privacy and, security laws or regulations (or contractual provisions), we may experience similar adverse consequences. Risks Related to our Organization and Structure We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.
The adoption of additional climate change laws or regulations in the future could result in increased costs for our Energy business customers and us to (1) operate and maintain operating facilities, (2) install new emission controls or abatement technologies (such as CCS technologies) on operating facilities and (3) administer and manage greenhouse gas emissions programs.
The adoption of additional climate change laws or regulations in the future could result in increased costs for our Energy business customers and us to (1) operate and maintain operating facilities, (2) install new emission controls or abatement technologies (such as CCS technologies) in operating facilities and (3) administer and manage greenhouse gas emissions programs.
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; 24 Table of Contents / • 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.
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.
Risks associated with these threats include disruptions of certain systems on our vessels or systems utilized to operate our ROVs; other impairments of our ability to conduct our operations; interruption of internal critical services; interruption of external critical services to customers; interruption of ability to bill or collect payment from customers; loss of or damage to intellectual property, proprietary information or employee or customer data; disruption of our customers’ operations; loss or damage to our employee or customer data delivery systems; damage to our reputation or customer or other business relationships; inability to comply with our contractual or regulatory obligations in a timely manner which could result in civil litigation, regulatory investigations or other enforcement actions by governmental authorities and associated costs, fines or penalties; and increased costs to prevent, respond to or mitigate cybersecurity incidents.
Risks associated with these threats include disruptions of certain systems on our vessels or systems utilized to operate our ROVs; other impairments of our ability to conduct our operations; interruption of internal critical services; interruption of external critical services to customers; interruption of our ability to bill or collect payment from customers; loss of or damage to intellectual property, proprietary information or employee or customer data; disruption of our customers’ operations; loss or damage to our employee or customer data delivery systems; damage to our reputation or customer or other business relationships; inability to comply with our contractual or regulatory obligations in a timely manner which could result in civil litigation, regulatory investigations or other enforcement actions by governmental authorities and associated costs, fines or penalties; increased costs to prevent, respond to or mitigate cybersecurity incidents; and diversion of management or work force attention.
A disruption in the foreign currency markets, including the markets with respect to any particular currencies, could adversely affect our hedging instruments and subject us to additional currency risk exposure. Based on fluctuations in currency, the U.S. dollar value of our 19 Table of Contents / backlog may from time to time increase or decrease significantly.
A disruption in the foreign currency markets, including the markets with respect to any particular currencies, could adversely affect our hedging instruments and subject us to additional currency risk exposure. Based on fluctuations in currency, the U.S. dollar value of our backlog may from time to time increase or decrease significantly.
Although it is not possible at this time to predict the timing and effect of climate-related business trends, any such developments, including the declining cost of renewable energy generation technologies, continued government subsidies, and the continuing electrification of various technologies that previously used hydrocarbons, could impact the long-term demand for oil and natural gas and, ultimately, the demand for the services and products of our Energy business.
Although it 16 Tab le of Contents / is not possible at this time to predict the timing and effect of climate-related business trends, any such developments, including the declining cost of renewable energy generation technologies, continued government subsidies, and the continuing electrification of various technologies that previously used hydrocarbons, could impact the long-term demand for oil and natural gas and, ultimately, the demand for the services and products of our Energy business.
We may not achieve significant revenue from new service and product investments for a number of 21 Table of Contents / years, if at all. Moreover, new services and products may not be profitable, and, even if they are profitable, our operating margins from new services and products may not be as high as the margins we have experienced historically.
We may not achieve significant revenue from new service and product investments for a number of years, if at all. Moreover, new services and products may not be profitable, and, even if they are profitable, our operating margins from new services and products may not be as high as the margins we have experienced historically.
In a highly inflationary environment, we may be unable to raise pricing for our energy services and products at or above the rate of inflation, which could reduce our profit margins and our cost of capital, labor and materials could increase, which could have an adverse impact on our business and our financial condition.
In a highly inflationary environment, we may be unable to raise pricing for our energy services and products at or above the rate of inflation, which could reduce our profit margins and our 21 Tab le of Contents / cost of capital, labor and materials could increase, which could have an adverse impact on our business and our financial condition.
Those variations may increase our compliance costs and place increased demand on our resources by creating complex monitoring, control and compliance challenges. Any failure by us to comply with these laws and regulations, including as a result of a personal data breach, could result in significant penalties and liabilities for us.
Those variations may increase our compliance costs and place increased demand on our resources by creating complex monitoring, control and compliance challenges. Any 25 Tab le of Contents / failure by us to comply with these laws and regulations, including as a result of a personal data breach, could result in significant penalties and liabilities for us.
A significant portion of our revenue is attributable to operations in foreign countries. These activities accounted for approximately 58% of our consolidated revenue in 2023.
A significant portion of our revenue is attributable to operations in foreign countries. These activities accounted for approximately 58% of our consolidated revenue in 2024.
It is possible that such new laws and regulations, or changes to the application or interpretation of existing laws and regulations, may in the future add significantly to our operating costs or those of our customers or otherwise directly or indirectly affect our operations. On August 16, 2022, President Biden signed the IRA into law.
It is possible that such new laws and regulations, or changes to the application or interpretation of existing laws and regulations, may significantly increase our operating costs and those of our customers, or otherwise directly or indirectly affect our operations. On August 16, 2022, President Biden signed the IRA into law.
Moreover, acquisitions involve various risks, including: • difficulties relating to the assimilation of personnel, services and systems of an acquired business and the assimilation of marketing and other operational capabilities; • challenges resulting from unanticipated changes in customer and other third-party relationships subsequent to acquisition; • additional financial and accounting challenges and complexities in areas such as tax planning, treasury management, financial reporting and internal controls; • assumption of liabilities of an acquired business, including liabilities that were unknown at the time the acquisition transaction was negotiated; • possible liabilities under the FCPA and other anti-corruption laws; • diversion of management's attention from day-to-day operations; • failure to realize anticipated benefits, such as cost savings and revenue enhancements; • potentially substantial transaction costs associated with acquisitions; and • potential impairment resulting from the overpayment for an acquisition.
Moreover, acquisitions and dispositions involve various risks, including: • difficulties relating to the assimilation of personnel, services and systems of an acquired business and the assimilation of marketing and other operational capabilities; • challenges resulting from unanticipated changes in customer and other third-party relationships subsequent to acquisition; 22 Tab le of Contents / • additional financial and accounting challenges and complexities in areas such as tax planning, treasury management, financial reporting and internal controls; • assumption of liabilities of an acquired business, including liabilities that were unknown at the time the acquisition transaction was negotiated; • future realizability of noncash consideration; • possible liabilities under the FCPA and other anti-corruption laws; • diversion of management's attention from day-to-day operations; • failure to realize anticipated benefits, such as cost savings and revenue enhancements; • potentially substantial transaction costs associated with acquisitions; and • potential impairment resulting from the overpayment for an acquisition.
Some of these systems are managed or provided by third-party service providers, including certain cloud platform or cloud software providers. As a result, our business operations could be negatively impacted by a breach or interruption of systems that originates from, or compromises, third-party networks or devices outside of our control.
Some of these systems are managed or provided by third-party service providers, including certain cloud platform or cloud software providers. As a result, our business operations 24 Tab le of Contents / could be negatively impacted by a breach or interruption of systems that originates from, or compromises, third-party networks or devices outside of our control.
In particular, the cost of capital could increase substantially and the availability of funds from the capital markets could diminish significantly. Since the global recession in 2008, credit and capital markets have, from time to time, experienced volatility. Our ability to access the capital markets in the future could be restricted or available on terms we do not consider favorable.
In particular, the cost of capital could increase substantially and the availability of funds from the capital markets could diminish significantly. Credit and capital markets have, from time to time, experienced volatility. Our ability to access the capital markets in the future could be restricted or available on terms we do not consider favorable.
Finally, laws and regulations we may be subject to governing cybersecurity, such as obligations under the Cyber Incident Reporting for Critical Infrastructure, pose increasingly complex compliance challenges, and failure to 23 Table of Contents / comply with these laws and regulations could result in fines, penalties, legal liability and damage to our reputation and customer or other business relationships.
Finally, laws and regulations we may be subject to governing cybersecurity, such as obligations under the Cyber Incident Reporting for Critical Infrastructure Act, pose increasingly complex compliance challenges, and failure to comply with these laws and regulations could result in fines, penalties, legal liability and damage to our reputation and customer or other business relationships.
However, more aggressive efforts by governments and non-governmental organizations to reduce greenhouse gas emissions appear likely and any such future laws and regulations could result in increased compliance costs or additional operating restrictions applicable to our Energy business customers and/or us.
However, more aggressive efforts by governments and non-governmental organizations to reduce greenhouse gas emissions may occur and any such future laws and regulations could result in increased compliance costs or additional operating restrictions applicable to our Energy business customers and/or us.
If such a cyber incident were to occur, it could have a material adverse effect on our business and our consolidated financial condition, results of operations and cash flows. In addition, certain cyberattacks and related incidents, such as reconnaissance or surveillance by threat actors, may remain undetected for an extended period notwithstanding our monitoring and detection efforts.
Such a cyber incident could have a material adverse effect on our business and our consolidated financial condition, results of operations and cash flows. In addition, certain cyberattacks and related incidents, such as reconnaissance or surveillance by threat actors, may remain undetected for an extended period notwithstanding our monitoring and detection efforts.
Limited access to the capital markets could adversely impact our ability to take advantage of business opportunities or react to changing economic and business conditions and could adversely 20 Table of Contents / impact our ability to continue our growth strategy.
Limited access to the capital markets could adversely impact our ability to take advantage of business opportunities or react to changing economic and business conditions and could adversely impact our ability to continue our growth strategy.
Some factors that have affected and are likely to continue affecting oil and gas prices and the level of demand for our services and products include the following: • worldwide demand for oil and gas; • general economic and business conditions and industry trends; • the ability of 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; • the ongoing ability to access external financing from financial institutions or the capital markets; • the cost of exploring for, developing and producing oil and gas as compared to alternative energy sources; • domestic and foreign tax policy; • laws and governmental regulations that restrict exploration and development of oil and gas in various offshore jurisdictions; • technological changes that could lead to competition from new market entrances; • the political environment of oil-producing regions; • the changing environmental and social landscape; • the price and availability of alternative energy; • war, sabotage, terrorism and civil unrest, including the conflict between Russia and Ukraine and conflict in the Middle East; and • extreme weather conditions, natural disasters, public health crises and pandemics or epidemics, such as COVID-19 and variants thereof. 15 Table of Contents / Our operations could be adversely impacted by the indirect consequences of climate change and climate-related business trends.
Some factors that have affected and are likely to continue affecting oil and gas prices and the level of demand for our services and products include the following: • worldwide demand for oil and gas; • general economic and business conditions and industry trends; • the ability of 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; • the ongoing ability to access external financing from financial institutions or the capital markets; • the cost of exploring for, developing and producing oil and gas as compared to alternative energy sources; • domestic and foreign tax policy; • laws and governmental regulations that restrict exploration and development of oil and gas in various offshore jurisdictions; • technological changes that could lead to competition from new market entrances; • technological advances that impact the demand for energy, as well as the production of oil and gas; • the political environment of oil-producing regions; • the changing environmental and social landscape; • the price and availability of alternative energy; • war, sabotage, terrorism and civil unrest, including the conflict between Russia and Ukraine and conflict in the Middle East; and • extreme weather conditions, natural disasters, public health crises and pandemics or epidemics, such as COVID-19 and variants thereof.
We have developed, and we will continue to develop, goals, targets and other objectives related to sustainability matters, including our 2030 emission reduction targets. Statements related to these goals, targets and objectives are made using various underlying assumptions and reflect our current intentions, and do not constitute a guarantee that they will be achieved.
We have developed, and we will continue to develop, goals, targets and other objectives related to sustainability matters, including our 2030 emission reduction targets. Statements related to these goals, targets and objectives are made using various underlying assumptions and reflect our current intentions, and do not constitute a guarantee 23 Tab le of Contents / that they will be achieved.
We continue to analyze the potential impact of the IRA on our consolidated financial statements and to monitor guidance to be issued by the U.S. Department of the Treasury. Environmental laws and regulations can increase our costs, and our failure to comply with those laws and regulations can expose us to significant liabilities.
We continue to analyze the potential impact of the IRA on our consolidated financial statements and to monitor guidance issued by the U.S. Department of the Treasury. 20 Tab le of Contents / Environmental laws and regulations can increase our costs, and our failure to comply with those laws and regulations can expose us to significant liabilities.
Worldwide political, economic and military events have contributed to oil and gas price volatility and are likely to continue to do so in the future. In addition, there is ongoing uncertainty regarding the long-term outlook for the U.S.
Worldwide political, economic and military events have contributed to oil and gas price volatility and are likely to continue to do so in the future. In addition, there is ongoing uncertainty regarding the long-term outlook for offshore drilling in the United States, including the U.S.
Changes in data privacy and security laws, regulations and standards may adversely impact our business. Data privacy and security have become significant regulatory issues and the subject of rapidly evolving laws globally and in the United States.
Changes in data privacy and security laws, regulations and standards, and emerging laws, regulations and standards surrounding artificial intelligence (“AI”), may adversely impact our business. Data privacy and security have become significant regulatory issues and the subject of rapidly evolving laws globally and in the United States.
In addition, to the extent financial markets and insurance carriers view climate change and the greenhouse gas emissions of our Energy business customer base as a financial risk, this could negatively impact our cost of and access to capital and insurance. Climate change also subjects us to the risk of increased negative publicity.
In addition, to the extent financial markets and insurance carriers view climate change and the greenhouse gas emissions of our Energy business customer base as a financial risk, this could negatively impact our cost of and access to capital and insurance.
In addition, the Environmental Protection Agency (“EPA”) has adopted regulations addressing greenhouse gas emissions, including the EPA’s final methane rules, which 17 Table of Contents / impose several new methane emission requirements on the oil and gas industry, announced on December 2, 2023, during the United Nations Climate Change Conference in the United Arab Emirates (“COP28”).
In addition, the Environmental Protection Agency (“EPA”) has adopted regulations addressing greenhouse gas emissions, including the EPA’s final methane rules, which impose several new methane emission requirements on the oil and gas industry, announced on December 2, 2023, during the United Nations Climate Change Conference in the United Arab Emirates (“COP28”) and published on March 8, 2024.
Risks associated with our operations in foreign areas include risks of: • regional and global economic downturns; • public health crises, such as COVID-19, Severe Acute Respiratory Syndrome, severe influenza and other highly communicable viruses or diseases, that could limit our access to customers', vendors' or our facilities or offices, impose travel restrictions on our personnel or otherwise adversely affect our operations or demand for our services; • expropriation, confiscation or nationalization of assets; • renegotiation or nullification of existing contracts; • foreign exchange restrictions; • foreign currency fluctuations, particularly in countries highly dependent on oil revenue; • foreign taxation, including the application and interpretation of tax laws; • the inability to repatriate earnings or capital; 16 Table of Contents / • changing political conditions; • changing foreign and domestic monetary policies; and • social, political, military and economic situations in foreign areas where we do business and the possibilities of civil disturbances, war, other armed conflict, terrorist attacks or acts of piracy.
Risks associated with our operations in foreign areas include risks of: • regional and global economic downturns; • public health crises, such as COVID-19, Severe Acute Respiratory Syndrome, severe influenza and other highly communicable viruses or diseases, that could limit our access to customers', vendors' or our facilities or offices, impose travel restrictions on our personnel or otherwise adversely affect our operations or demand for our services; • expropriation, confiscation or nationalization of assets; • renegotiation or nullification of existing contracts; • foreign exchange restrictions; • foreign currency fluctuations, particularly in countries highly dependent on oil revenue; • foreign taxation, including the application and interpretation of tax laws; • the inability to repatriate earnings or capital; • changing political conditions; • changing foreign trade policies and tariffs; • changing foreign and domestic monetary policies; and • social, political, military and economic situations in foreign areas where we do business and the possibilities of civil disturbances, war, other armed conflict, terrorist attacks or acts of piracy. 17 Tab le of Contents / Changes in U.S. foreign trade policies, including as a result of the new presidential administration, could lead to the imposition of additional trade barriers and tariffs on us.
As a result, we may be subject to a growing patchwork of privacy regulation imposed by jurisdictions where we operate, including under the European Union’s and U.K.’s General Data Protection Regulation, Brazil’s General Data Protection Law and in the United States under various state privacy frameworks, such as the California Consumer Privacy Act.
As a result, we are subject to a growing patchwork of privacy regulations imposed by jurisdictions where we operate, including under the European Union’s and U.K.’s General Data Protection Regulation, Brazil’s General Data Protection Law and in the United States under various state privacy frameworks, such as the California Consumer Privacy Act, the Texas Data Privacy and Security Act, and many more.
As a result, we could be at risk of not being able to access material amounts of our cash, which could result in a temporary liquidity crisis that could impede our ability to fund operations. Strategic Risks Related to our Business Our business strategy contemplates future acquisitions. Acquisitions of other businesses or assets present various risks and uncertainties.
As a result, we could be at risk of not being able to access material amounts of our cash, which could result in a temporary liquidity crisis that could impede our ability to fund operations. Strategic Risks Related to our Business Our business strategy contemplates future acquisitions or dispositions.
Our business and operations could become subject to future legislation, regulation, enforcement strategies and regulatory or judicial interpretations beyond those currently proposed, adopted or contemplated in the U.S. and abroad.
Our business and operations could become subject to future legislation, regulation, enforcement strategies and regulatory or judicial interpretations beyond those currently proposed, adopted or contemplated in the U.S. and abroad. Emerging regulatory trends, particularly regarding AI, present new challenges.
Additionally, if a license or non-infringing technology were not available, we might not be able to continue providing a particular service or product, which could materially and adversely affect our financial condition, results of operations and cash flows.
Royalty payments under licenses from third parties, if available, or developing non-infringing technologies could materially increase our costs. Additionally, if a license or non-infringing technology were not available, we might not be able to continue providing a particular service or product, which could materially and adversely affect our financial condition, results of operations and cash flows.
Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to our business may limit the use and adoption of, and reduce the overall demand for, our solutions.
Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies, such as audits and data transfer restrictions that could be applicable to our business, may limit the use and adoption of, and reduce the overall demand for, our solutions.
Scientific studies have suggested that emissions of certain gases, commonly referred to as “greenhouse gases,” including carbon dioxide and methane, are contributing to warming of the earth’s atmosphere and other climatic changes.
Our operations could be adversely impacted by the indirect consequences of climate change and climate-related business trends. Scientific studies have suggested that emissions of certain gases, commonly referred to as “greenhouse gases,” including carbon dioxide and methane, are contributing to warming of the earth’s atmosphere and other climatic changes.
In addition, effective intellectual property protection may be limited or unavailable in some foreign countries where we operate. 22 Table of Contents / Our failure to protect our intellectual property rights may result in the loss of valuable technologies or adversely affect our competitive business position.
In addition, effective intellectual property protection may be limited or unavailable in some foreign countries where we operate. Our failure to protect our intellectual property rights may result in the loss of valuable technologies or adversely affect our competitive business position. We rely significantly on proprietary technology, information, processes and know-how that are not subject to patent or copyright protection.
Please refer to the risk factor entitled “ Our operations could be adversely impacted by the indirect consequences of climate change and climate-related business trends ” for a discussion of the impact of other climate-related consequences on our business, financial condition, results of operations and cash flows. 18 Table of Contents / Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could weaken our ability to win contracts, which could result in reduced revenue and profits.
Please refer to the risk factor entitled “ Our operations could be adversely impacted by the indirect consequences of climate change and climate-related business trends ” for a discussion of the impact of other climate-related consequences on our business, financial condition, results of operations and cash flows.
In some instances, we have augmented our technology base by licensing the proprietary intellectual property of third parties. However, it is possible that the tools, techniques, methodologies, programs and components we use to provide our services or products may infringe on the intellectual property rights of others.
However, it is possible that the tools, techniques, methodologies, programs and components we use to provide our services or products may infringe on the intellectual property rights of others. In the future, we may not be able to obtain necessary licenses on commercially reasonable terms.
These agreements and security measures may be inadequate to deter or prevent misappropriation of our confidential information. In the event of an infringement of our intellectual property rights, a breach of a confidentiality agreement or divulgence of proprietary information, we may not have adequate legal remedies to protect our intellectual property.
In the event of an infringement of our intellectual property rights, a breach of a confidentiality agreement or divulgence of proprietary information, we may not have adequate legal remedies to protect our intellectual property. In some instances, we have augmented our technology base by licensing the proprietary intellectual property of third parties.
The occurrence of a significant event not fully insured or indemnified against or the failure of a customer to meet its indemnification obligations to us could materially and adversely affect our results of operations and financial condition.
The occurrence of a significant event not fully insured or indemnified against or the failure of a customer to meet its indemnification obligations to us could materially and adversely affect our results of operations and financial condition. 18 Tab le of Contents / Legal and Regulatory Risks Legislative and regulatory responses to climate change and the ongoing “energy transition” could result in increased operating costs and capital expenditures and changes in demand for the services and products of our Energy business.
We rely significantly on proprietary technology, information, processes and know-how that are not subject to patent or copyright protection. We seek to protect this information through trade secret or confidentiality agreements with our employees, consultants, subcontractors or other parties, as well as through other security measures.
We seek to protect this information through trade secret or confidentiality agreements with our employees, consultants, subcontractors or other parties, as well as through other security measures. These agreements and security measures may be inadequate to deter or prevent misappropriation of our confidential information.
Threats to our IT and OT systems associated with cybersecurity risks, cyber incidents and cyberattacks continue to grow.
We have experienced cyber incidents in the past and, although none have been material, we may experience cybersecurity incidents and security breaches in the future. Threats to our IT and OT systems associated with cybersecurity risks, cyber incidents and cyberattacks continue to grow in sophistication and scale.
Removed
Gulf of Mexico, as a result of a prior temporary ban on leasing of U.S. federal lands imposed by the current presidential administration.
Added
Gulf of Mexico, as a result of a ban by the previous presidential administration pursuant to the Outer Continental Shelf Lands Act on future oil and gas leasing on the entire U.S. East coast, the eastern Gulf of Mexico, the Pacific off the coasts of Washington, Oregon, and California, and additional portions of the Northern Bering Sea in Alaska.
Removed
While the temporary ban has been lifted, the Biden administration resumed selling leases to drill for oil and gas on federal lands in April 2022, but with an 80% reduction in the number of acres offered and an increase in the royalties companies must pay to drill. In July 2023, the U.S.
Added
We cannot predict what changes to trade policy will be made by the current or a future presidential administration or Congress, including whether existing tariff policies will be maintained or modified or whether the entry into new bilateral or multilateral trade agreements will occur, nor can we predict the effects that any such changes would have on our business.
Removed
Department of the Interior (“DOI”) proposed updates to its onshore oil and gas leasing regulations which could further restrict oil and gas exploration and production on federal lands. DOI expects to issue a final rule in the spring of 2024.
Added
Changes in U.S. trade policy have resulted and could again result in reactions from U.S. trading partners, including adopting responsive trade policies making it more difficult or costly for us to export our products to countries where we currently sell products.
Removed
In August 2023, DOI proposed a scaled back offshore lease sale for certain areas in the Gulf of Mexico due to concerns related to an endangered whale population in the area. The exclusion of certain lease blocks from the sale was successfully challenged in court and DOI was ordered to hold the lease sale at its original scale.
Added
Such changes in U.S. trade policy or in laws and policies governing foreign trade, and any resulting negative sentiments towards the United States as a result of such changes, could materially and adversely affect our business, operations, financial condition and results of operations.
Removed
This decision was upheld by the U.S. Court of Appeals for the Fifth Circuit on November 14, 2023, and the sale was held on December 20, 2023.
Added
The EPA’s final methane rule was published on March 8, 2024. In November 2024, at the Conference of the Parties to the United Nations Framework Convention on Climate Change in Baku, Azerbaijan, the EPA announced its final rule implementing the waste emissions charge pursuant to the IRA.
Removed
Legal and Regulatory Risks Legislative and regulatory responses to climate change and the ongoing “energy transition” could result in increased operating costs and capital expenditures and changes in demand for the services and products of our Energy business.
Added
Additionally, laws or regulations requiring the collection, measurement and reporting of information and metrics related to climate-related matters (including greenhouse gas emissions) could increase our operating costs and as a result adversely impact our business, financial condition, results of operations and cash flows.
Removed
In the future, we may not be able to obtain necessary licenses on commercially reasonable terms. Royalty payments under licenses from third parties, if available, or developing non-infringing technologies could materially increase our costs.
Added
We may also communicate certain climate-related initiatives, commitments and goals in our SEC filings or in other disclosures, which subjects us to additional risks, including the risk of being accused of greenwashing.
Removed
Actual results could differ from those estimates. Item 1B. Unresolved Staff Comments. None.
Added
Alternatively, we may be accused of “greenhushing” for the failure to communicate certain climate-related initiatives, commitments and goals. 19 Tab le of Contents / Climate change also subjects us to the risk of increased negative publicity.
Added
Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could weaken our ability to win contracts, which could result in reduced revenue and profits.
Added
In December 2024, the Chinese government placed restrictions on and sanctioned our company and certain executives in response to recent U.S. announcements of military sales and aid to Taiwan and in response to the recent approval of the U.S. government’s annual defense spending. We will continue to follow U.S.
Added
Government guidance as it relates to sales to Taiwan and do not currently expect a material impact to our business from these actions.
Added
Acquisitions of other businesses or assets and dispositions of our current businesses or assets present various risks and uncertainties. We may pursue growth through the acquisition of businesses or assets that will enable us to broaden our service and product offerings and expand into new markets, and, from time to time, we may also consider dispositions of non-strategic assets.
Added
The increased use of artificial intelligence by threat actors has amplified risks, as AI-driven cyberattacks can automate the discovery of vulnerabilities, generate highly convincing phishing attempts, and evade traditional detection methods. These capabilities may enable attackers to mount more effective and persistent campaigns against our infrastructure.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+1 added−0 removed11 unchanged
Biggest changeOur Director of IT Security has almost 25 years of experience managing global information technology security and has served as Oceaneering’s CISO since 2018.
Biggest changeOur CITO has 20 years of experience as an information technology executive, and earned a Bachelor’s 27 Tab le of Contents / and Master’s degrees in Management Information Systems. Our Director of IT Security has 25 years of experience managing global information technology security and has served as Oceaneering’s CISO since 2018.
Monitor Cybersecurity Incidents Our CITO and Director of IT Security are continually informed and updated about the latest developments in cybersecurity, including emerging threats and innovative risk management techniques. They implement and oversee processes for the regular monitoring of our information systems. This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities.
Monitor Cybersecurity Incidents Our CITO and the Director of IT Security are continually informed and updated about the latest developments in cybersecurity, including emerging threats and innovative risk management techniques. They implement and oversee processes for the regular monitoring of our information systems. This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities.
Our Chief Information Technology Officer (“CITO”) and Chief Information Security Officer (“CISO”) work closely with our Enterprise Risk Committee, which oversees—in part—cybersecurity, to continuously evaluate and address cyber risks in alignment with business objectives, operational needs and industry-accepted standards, such as the National Institute of Standards and Technology (“NIST”) and the Cybersecurity Maturity Model Certification (“CMMC”) frameworks.
Our Chief Information Technology Officer (“CITO”) and Chief Information Security Officer (“CISO”) work closely with our Enterprise Risk Committee to continuously evaluate and address cyber risks in alignment with business objectives, operational needs and industry-accepted standards, such as the National Institute of Standards and Technology (“NIST”) and the Cybersecurity Maturity Model Certification (“CMMC”) frameworks.
The Company’s collaboration with these third parties includes audits, threat and 25 Table of Contents / vulnerability assessments, incident response plan testing, company-wide monitoring of cybersecurity risks and consultation on security enhancements.
The Company’s collaboration with these third parties includes audits, threat and vulnerability assessments, incident response plan testing, company-wide monitoring of cybersecurity risks and consultation on security enhancements.
Kevin McEvoy, has earned a National Association of Corporate Directors (“NACD”) Cybersecurity Oversight certification and a Computer Early Response Team (“CERT”) Cybersecurity Oversight Certification from Software Engineering Institute, and our Board is composed of directors with diverse qualifications, skills and expertise, including risk management, technology and finance, that we believe equip them to oversee cybersecurity risks effectively. 26 Table of Contents /
Reema Poddar, member of the Board, have each earned a National Association of Corporate Directors (“NACD”) Cybersecurity Oversight certification and a Computer Early Response Team (“CERT”) Cybersecurity Oversight Certification from Software Engineering Institute, and our Board is composed of directors with diverse qualifications, skills and expertise, including risk management, technology and finance, that we believe equip them to oversee cybersecurity risks effectively.
The CITO and the Director of IT Security play key roles in assessing, monitoring and managing the Company’s cybersecurity risks with support of the Enterprise Risk Committee, as well as dedicated information technology and security personnel. Our CITO has over 18 years of experience as an information technology executive, and earned a Bachelor’s and Master’s degrees in Management Information Systems.
The CITO and the Director of IT Security play key roles in assessing, monitoring and managing the Company’s cybersecurity risks with support of the Enterprise Risk Committee, as well as dedicated information technology and security personnel.
Added
In addition, our Board receives regular presentations from management about cyber risks and controls and has received formal cyber risk training from external advisors. Our Chairman of the Board, Mr. M. Kevin McEvoy, and Ms.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−1 removed5 unchanged
Biggest changeWe have operational support offices in the following locations: • Chesapeake, Virginia; • Houston, Texas; and • Charleston, South Carolina. 27 Table of Contents / We also have facilities to support our services for the U.S. Navy in these locations: San Diego, California; Bremerton, Washington; and Pearl Harbor, Hawaii.
Biggest changeWe also have facilities to support our services for the U.S. Navy in these locations: San Diego, California; Bremerton, Washington; and Pearl Harbor, Hawaii.
We have additional regional and operational support offices for our North Sea, Africa, Brazil and Southeast Asia operations in the following locations: • Aberdeen, U.K.; • Stavanger and Bergen, Norway; • Abu Dhabi, United Arab Emirates; • Rio de Janeiro and Macaé, Brazil; • Luanda, Angola; • Chandigarh, India; • Perth, Australia; • Kuala Lumpur, Malaysia; • Baku, Azerbaijan; • Newfoundland, Canada; and • Loyang, Singapore.
We have additional regional and operational support offices for our North Sea, Africa, Brazil and Southeast Asia operations in the following locations: • Aberdeen, U.K.; • Stavanger and Bergen, Norway; • Abu Dhabi, United Arab Emirates; • Rio de Janeiro and Macaé, Brazil; • Luanda, Angola; 28 Tab le of Contents / • Chandigarh, India; • Perth, Australia; • Selangor, Malaysia; • Baku, Azerbaijan; • Newfoundland, Canada; and • Loyang, Singapore.
Our principal manufacturing and assembly facilities for our Manufactured Products segment are located in or near the following locations: • Houston, Texas; • Port Fourchon and Lafayette, Louisiana; • Orlando and Panama City, Florida; • Aberdeen and Rosyth, Scotland; • Nodeland and Stavanger, Norway; • Luanda, Angola; • Utrecht, Netherlands; • Kuala Lumpur, Malaysia; • Niterói, Brazil; and • Stuttgart, Germany.
Our principal manufacturing and assembly facilities are located in or near the following locations: • Houston, Texas; • Port Fourchon and Lafayette, Louisiana; • Orlando and Panama City, Florida; • Aberdeen and Rosyth, Scotland; • Nodeland and Stavanger, Norway; • Luanda, Angola; • Utrecht, Netherlands; • Selangor, Malaysia; • Niterói, Brazil; and • Stuttgart, Germany.
“Business” under the heading “ GENERAL DEVELOPMENT OF BUSINESS —Energy— Offshore Projects Group .” Aerospace and Defense Technologies. Our primary facilities for our ADTech segment are offices and workshops in Hanover, Maryland.
“Business” under the heading “ GENERAL DEVELOPMENT OF BUSINESS —Energy— Offshore Projects Group .” Aerospace and Defense Technologies. Our primary facilities for our ADTech segment are offices and workshops in Hanover, Maryland. We have operational support offices in the following locations: • Chesapeake, Virginia; • Houston, Texas; and • Charleston, South Carolina.
Removed
We use workshop and office space in Houston, Texas in our Manufactured Products, OPG and IMDS business segments.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−0 removed4 unchanged
Biggest changeWe have not repurchased any shares under the program since December 2015. 29 Table of Contents / PERFORMANCE GRAPH The following graph compares our total shareholder return to the Standard & Poor's 500 Stock Index (“S&P 500”) and the PHLX Oil Service Sector Index from December 31, 2018 through December 31, 2023.
Biggest changeUnder the program, which has no expiration date, we had repurchased 2,000,000 shares for $100 million through December 31, 2015 and 422,229 shares for $10 million in the third quarter of 2024. 30 Tab le of Contents / PERFORMANCE GRAPH The following graph compares our total shareholder return to the Standard & Poor's 500 Stock Index (“S&P 500”) and the PHLX Oil Service Sector Index from December 31, 2019 through December 31, 2024.
The PHLX Oil Service Sector Index is designed to track the performance of a set of companies involved in the oil services sector. It is assumed in the graph that: (1) $100 was invested in Oceaneering Common Stock, the S&P 500 and the PHLX Oil Service Sector Index on December 31, 2018; and (2) any Oceaneering dividends are reinvested.
The PHLX Oil Service Sector Index is designed to track the performance of a set of companies involved in the oil services sector. It is assumed in the graph that: (1) $100 was invested in Oceaneering Common Stock, the S&P 500 and the PHLX Oil Service Sector Index on December 31, 2019; and (2) any Oceaneering dividends are reinvested.
On that date, the closing sales price, as quoted on the New York Stock Exchange, was $22.05. Although our Board has not declared quarterly dividends since 2017, we review our dividend position on a quarterly basis .
On that date, the closing sales price, as quoted on the New York Stock Exchange, was $25.48. Although our Board has not declared quarterly dividends since 2017, we review our dividend position on a quarterly basis .
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the New York Stock Exchange under the symbol OII. Our company website address is www.oceaneering.com. On February 16, 2024, there were approximately 322 holders of record of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the New York Stock Exchange under the symbol OII. Our company website address is www.oceaneering.com. On February 14, 2025, there were approximately 271 holders of record of our common stock.
Under the program, we had repurchased 2.0 million shares of our common stock for $100 million through December 31, 2015.
Under the program, we had repurchased 2.0 million shares of our common stock for $100 million through December 31, 2015. We did not repurchase any shares from January 2016 through August 2024. In 2024, we repurchased 0.8 million shares of our common stock for $20 million.
The shareholder return shown is not necessarily indicative of future performance. December 31, 2018 2019 2020 2021 2022 2023 Oceaneering International, Inc. 100.00 123.22 65.70 93.47 144.55 175.87 S&P 500 Index 100.00 131.49 155.68 200.37 164.08 207.21 PHLX Oil Service Sector Index 100.00 99.45 57.60 69.55 112.31 114.47 30 Table of Contents /
The shareholder return shown is not necessarily indicative of future performance. December 31, 2019 2020 2021 2022 2023 2024 Oceaneering International, Inc. 100.00 53.32 75.86 117.30 142.72 174.92 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 PHLX Oil Service Sector Index 100.00 57.92 69.94 112.94 115.10 101.68 31 Tab le of Contents /
Added
From the inception of this program through December 31, 2024, we have repurchased approximately 2.8 million shares of our common stock for a total cost of approximately $120 million. As of December 31, 2024, we had 7.2 million shares remaining for repurchase under the December 2014 authorization.
Added
Repurchases of Equity Securities Share repurchase activity during the three-month period ending December 31, 2024, was as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2024 200,000 $24.78 200,000 7,377,771 November 1 - 30, 2024 108,500 $24.99 108,500 7,269,271 December 1 - 31, 2024 94,698 $25.22 94,698 7,174,573 403,198 403,198 (1) All purchases during the covered periods were made under the share repurchase program, which was approved by our Board of Directors in December 2014 and which authorized the repurchase of up to 10 million shares of our common stock on a discretionary basis.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

102 edited+18 added−21 removed49 unchanged
Biggest changeYear ended December 31, (dollars in thousands) 2023 2022 Subsea Robotics Revenue $ 752,521 $ 621,921 Gross Margin 221,965 160,527 Gross Margin % 29 % 26 % Operating Income (Loss) 174,293 118,248 Operating Income (Loss)% 23 % 19 % ROV Days Available 91,250 91,250 ROV Days Utilized 61,874 56,231 ROV Utilization % 68 % 62 % Manufactured Products Revenue 493,692 382,361 Gross Margin 69,613 45,834 Gross Margin % 14 % 12 % Operating Income (Loss) 35,551 11,692 Operating Income (Loss)% 7 % 3 % Backlog at end of period 622,000 467,000 Offshore Projects Group Revenue 546,366 489,317 Gross Margin 96,940 78,373 Gross Margin % 18 % 16 % Operating Income (Loss) 64,546 49,256 Operating Income (Loss)% 12 % 10 % Integrity Management & Digital Solutions Revenue 255,282 229,884 Gross Margin 38,988 36,724 Gross Margin % 15 % 16 % Operating Income (Loss) 13,373 14,901 Operating Income (Loss)% 5 % 6 % Total Energy Revenue $ 2,047,861 $ 1,723,483 Gross Margin 427,506 321,458 Gross Margin % 21 % 19 % Operating Income (Loss) 287,763 194,097 Operating Income (Loss)% 14 % 11 % Subsea Robotics.
Biggest change“ROV utilization” percentage is defined as “ROV days utilized” divided by “ROV days available.” 36 Tab le of Contents / Year ended December 31, (dollars in thousands) 2024 2023 Subsea Robotics Revenue $ 829,822 $ 752,521 Operating Income (Loss) 235,211 174,293 Operating Income (Loss)% 28 % 23 % ROV Days Available 91,500 91,250 ROV Days Utilized 61,382 61,874 ROV Utilization % 67 % 68 % Manufactured Products Revenue 555,500 493,692 Operating Income (Loss) 43,000 35,551 Operating Income (Loss)% 8 % 7 % Backlog at end of period 604,000 622,000 Offshore Projects Group Revenue 591,037 546,366 Operating Income (Loss) 73,699 64,546 Operating Income (Loss)% 12 % 12 % Integrity Management & Digital Solutions Revenue 291,866 255,282 Operating Income (Loss) 9,827 13,373 Operating Income (Loss)% 3 % 5 % Total Energy Revenue $ 2,268,225 $ 2,047,861 Operating Income (Loss) 361,737 287,763 Operating Income (Loss)% 16 % 14 % Subsea Robotics.
Today, the impacts of climate-related risks and opportunities and balancing energy security with energy transition are influencing our strategy in the following ways: • we are continuing to support our customers in producing oil and natural gas to meet global demand for energy, while developing methods to minimize their carbon footprint through increased efficiency and technological innovation; • we are deploying our competencies and capabilities to serve the energy-transition markets, including those utilizing offshore wind installations (fixed and floating), nuclear, hydrogen, carbon-capture-and-sequestration and tidal energy technologies; and • we are diversifying our businesses outside the energy industry into new strategic growth areas, such as mobility solutions and digital asset management, as well as increasing our participation in the aerospace and defense sectors.
Today, the impacts of climate-related risks and opportunities and balancing energy security with energy transition are influencing our strategy in the following ways: • we are continuing to support our customers in producing oil and natural gas to meet global demand for energy, while developing methods to minimize their carbon footprint through increased efficiency and technological innovation; • we are deploying our competencies and capabilities to serve the energy-transition markets, including those utilizing offshore wind installations (fixed and floating), nuclear, hydrogen, carbon capture and sequestration, and tidal energy technologies; and • we are diversifying our businesses outside the energy industry into new strategic growth areas, such as mobility solutions and digital asset management, as well as increasing our participation in the defense and aerospace sectors.
During the twelve-month period ended December 31, 2023, we received refunds of $23 million, under the U.S. Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), including interest of $1.7 million which was recorded as a tax benefit.
During the twelve-month period ended December 31, 2023, we received refunds of $23 million, including interest of $1.7 million, which was recorded as a tax benefit under the U.S. Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
Investing activities. In 2023, we used $86 million in net investing activities, primarily for capital expenditures of $101 million that included increased spending in our Subsea Robotics segment for ROV upgrades and replacements.
In 2023, we used $86 million in net investing activities, primarily for capital expenditures of $101 million that included increased spending in our Subsea Robotics segment for ROV upgrades and replacements.
Our 2023 Task Force on Climate-Related Financial Disclosures Report (the “TCFD Report,” which is not incorporated by reference in this Annual Report) outlines our continued commitment to managing the risks and opportunities from climate change and contains our emissions reduction targets as well as our 2022 Scope 1 and Scope 2 greenhouse gas emissions data.
Our 2024 Task Force on Climate-Related Financial Disclosures Report (the “TCFD Report,” which is not incorporated by reference in this Annual Report) outlines our continued commitment to managing the risks and opportunities from climate change and contains our emissions reduction targets as well as our 2022 and 2023 Scope 1 and Scope 2 greenhouse gas emissions data.
We have not guaranteed any debt not reflected on our Consolidated Balance Sheets as of December 31, 2023 and 2022 and we do not have any off-balance sheet arrangements, as defined by SEC rules. 2024 Senior Notes. In November 2014, we completed the public offering of $500 million aggregate principal amount of 4.650% Senior Notes due 2024.
We have not guaranteed any debt not reflected on our consolidated balance sheets as of December 31, 2024 and 2023, and we do not have any off-balance sheet arrangements, as defined by SEC rules. 2024 Senior Notes. In November 2014, we completed the public offering of $500 million aggregate principal amount of 4.650% Senior Notes due 2024.
We amortized $4.4 million to interest expense, including $2.7 million for the pro-rata write-off of interest rate swap settlement gains associated with the 2024 Senior Notes repurchases discussed above, for the year ended December 31, 2023. We amortized $2.2 million to interest expense for the year ended December 31, 2022.
We amortized $4.4 million to interest expense, including $2.7 million for the pro-rata write-off of interest rate swap settlement gains associated with the 2024 Senior Notes repurchases discussed above, for the year ended December 31, 2023.
Also, if market conditions deteriorate significantly, we could be required to record additional impairments, which could have a material adverse impact on our operating results. We did not identify any triggering events and, accordingly, no impairments of long-lived assets were recorded in the years ended December 31, 2023 or 2022. Income Taxes.
Also, if market conditions deteriorate significantly, we could be required to record additional impairments, which could have a material adverse impact on our operating results. We did not identify any triggering events and, accordingly, no impairments of long-lived assets were recorded in the years ended December 31, 2024 or 2023. Income Taxes.
We did not have any material adjustments during the years ended December 31, 2023 and 2022, however, should our judgments and estimates regarding the elements of revenue recognition change, it could have a material effect on our results of operations for the periods involved. Impairment of Property and Equipment, Long-lived Intangible Assets and Right-of-Use Operating Lease Assets.
We did not have any material adjustments during the years ended December 31, 2024 and 2023, however, should our judgments and estimates regarding the elements of revenue recognition change, it could have a material effect on our results of operations for the periods involved. Impairment of Property and Equipment, Long-lived Intangible Assets and Right-of-Use Operating Lease Assets.
The indentures governing the 2028 Senior Notes, generally limit our ability to incur secured debt for borrowed money (such as borrowings under the Revolving Credit Facility) to 15% of our Consolidated Net Tangible Assets (as defined in such indentures). As of December 31, 2023, the full $215 million was available to borrow under the Revolving Credit Facility.
The indentures governing the 2028 Senior Notes generally limit our ability to incur secured debt for borrowed money (such as borrowings under the Revolving Credit Facility) to 15% of our Consolidated Net Tangible Assets (as defined in such indentures). As of December 31, 2024, the full $215 million was available to borrow under the Revolving Credit Facility.
We incurred $7.0 million of issuance costs related to the 2028 Senior Notes and $4.0 million of loan costs related to the Revolving Credit Agreement.
We incurred $7.1 million of issuance costs related to the 2028 Senior Notes and $4.0 million of loan costs related to the Revolving Credit Agreement.
We may redeem some or all of the New 2028 Senior Notes at specified redemption prices. We received net proceeds from the offering of the New 2028 Senior Notes of $178 million, after deducting the initial purchasers’ discounts and offering expenses. As of December 31, 2023, there was $500 million of the 2028 Senior Notes outstanding.
We may redeem some or all of the 2028 Senior Notes at specified redemption prices. We received net proceeds from the offering of the New 2028 Senior Notes of $178 million, after deducting the initial purchasers’ discounts and offering expenses. As of December 31, 2024, there was $500 million of the 2028 Senior Notes outstanding.
We generally minimize these risks primarily through matching, to the extent possible, revenue and expense in the various currencies in which we operate. Cumulative translation adjustments as of December 31, 2023 relate primarily to our net investments in, including long-term loans to, our foreign subsidiaries.
We generally minimize these risks primarily through matching, to the extent possible, revenue and expense in the various currencies in which we operate. Cumulative translation adjustments as of December 31, 2024 relate primarily to our net investments in, including long-term loans to, our foreign subsidiaries.
Financial Statements and Supplementary Data” elsewhere in this annual report on Form 10-K. For management's discussion and analysis of our financial condition and results of operations for fiscal year 2022 as compared to fiscal year 2021, please refer to Part II, Item 7.
Financial Statements and Supplementary Data” elsewhere in this annual report on Form 10-K. For management's discussion and analysis of our financial condition and results of operations for fiscal year 2023 as compared to fiscal year 2022, please refer to Part II, Item 7.
Availability under the $215 million revolving credit facility (the “Revolving Credit Facility”) may be limited by certain financial covenants and the requirement that any borrowing under the Revolving Credit Facility not require the granting of any liens to secure any senior notes issued by us (“Senior Notes”).
Availability under the $215 million revolving credit facility (the “Revolving Credit Facility”) may be limited by certain financial covenants and the requirement that any borrowing under the Revolving Credit Facility not require the granting of any liens to secure any senior notes issued by us.
We apply judgment in estimating project status and the costs necessary to complete projects. For the year ended December 31, 2023, we recognized approximately 19% of our revenue over time using the cost-to-cost input method.
We apply judgment in estimating project status and the costs necessary to complete projects. For the year ended December 31, 2024, we recognized approximately 19% of our revenue over time using the cost-to-cost input method.
The increases in 2023 operating income and net income as compared to 2022 were primarily due to higher revenue in all of our segments as a result of increased activity in energy markets and related growth in our energy businesses.
The increases in 2024 operating income and net income as compared to 2023 were primarily due to higher revenue in all of our segments as a result of increased activity in energy markets and related growth in our energy businesses.
Availability under the Revolving Credit Facility may be limited by these financial covenants and the requirement that any borrowing under the Revolving Credit Facility not require the granting of any liens to secure any senior notes issued by us (“Senior Notes”).
Availability under the Revolving Credit Facility may be limited by these financial covenants and the requirement that any borrowing under the Revolving Credit Facility not require the granting of any liens to secure any senior notes issued by us.
Our capital investments and expenses required to achieve our goals cannot be estimated at this time. Overview of Our Results The table that follows sets out our revenue and operating results for 2023 and 2022.
Our capital investments and expenses required to achieve our goals cannot be estimated at this time. Overview of Our Results The table that follows sets out our revenue and operating results for 2024 and 2023.
If the current market dynamics are sustained and absent any additional objective negative evidence, we may have sufficient positive evidence in the next twelve months to adjust our valuation allowance position for certain jurisdictions. The exact timing and amount of the 44 Table of Contents / adjustment to the valuation allowance is not certain at this time.
If the current market dynamics are sustained and absent any additional objective negative evidence, we may have sufficient positive evidence in the next twelve months to adjust our valuation allowance position for certain jurisdictions. The exact timing and amount of the adjustment to the valuation allowance is not certain at this time.
Due to the continuing development of economies in developing countries, substantial projected population growth (particularly in developing countries), and the shortage of other sources of affordable, reliable, scalable and efficient energy, as well as rising worldwide demand for a myriad of products made with petrochemicals, we expect that the need for additional oil and gas exploration and development and inspection, maintenance and repair (“IMR”) activities will continue for decades to come.
Due to the continuing development of economies in developing countries, substantial projected population growth (particularly in developing countries), and the shortage of other sources of affordable, reliable, scalable and efficient energy, as well as rising worldwide demand for a myriad of products made with petrochemicals, we expect that the need for additional oil and gas exploration and development and inspection, maintenance and repair (“IMR”) activities will 33 Tab le of Contents / continue for decades to come.
See “—Financing Activities” and Note 8—“Debt” in the Notes to Consolidated Financial Statements included in this report for additional information on the Tender Offer (as defined below), the 39 Table of Contents / redemption of the 2024 Senior Notes and the scheduled maturities of our long-term debt.
See “—Financing Activities” and Note 8—“Debt” in the Notes to Consolidated Financial Statements included in this report for additional information on the Tender Offer (as defined below), the redemption of the 2024 Senior Notes and the scheduled maturities of our long-term debt.
Certain statements in this annual report on Form 10-K, including, without limitation, statements regarding the following matters, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995: • our business strategy; • industry conditions and commodity pricing; • seasonality; • our expectations about 2024 results of operations, items below the income from operations (“operating income”) line and segment operating results, and the factors underlying those expectations, including our expectations about demand and pricing for our energy services and products as a result of the factors we specify in “ Overview of our Results” and “ Results of Operations” below; • our expectations about the balance between energy transition and energy security; • our emissions reduction targets; • our backlog, to the extent backlog may be an indicator of future revenue or productivity; • projections relating to floating rig demand and subsea tree installations; • our expectations about our ROV fleet utilization in the future; • the adequacy of our sources of liquidity, cash flows and capital resources to support our operations and internally generated growth initiatives; • the collectability of accounts receivable and realizability of contract assets at the amounts reflected on our most-recent balance sheet; • our future working capital needs and our projected capital expenditures for 2024; • transactions we may engage in to manage our outstanding debt prior or maturity; • our plans for future operations (including planned additions to and retirements from our remotely operated vehicle (“ROV”) fleet; • our ability and intent to repatriate cash from Angola and other foreign countries where we have operations; • our expectations regarding shares that may be repurchased under our share repurchase plan; and • our expectations regarding the implementation of new accounting standards and related policies, procedures and controls.
Certain statements in this annual report on Form 10-K, including, without limitation, statements regarding the following matters, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995: • our business strategy; • industry conditions and commodity pricing; • seasonality; • our expectations about 2025 revenue and results of operations, including items below the income from operations (“operating income”) line and segment operating results, and the factors underlying those expectations, including our expectations about demand and pricing for our energy services and products as a result of the factors we specify in “ Overview of our Results” and “ Results of Operations” below; • our ability to successfully manage the integration of acquisitions, including the realization of synergies and opportunities for growth and innovation, and the challenges of divestitures; • our expectations about the balance between energy transition and energy security; • our emissions reduction targets; • our backlog, to the extent backlog may be an indicator of future revenue or productivity; • projections relating to floating rig demand and subsea tree installations; • our expectations about our ROV fleet utilization, pricing and margins in the future; • the adequacy of our sources of liquidity, cash flows and capital resources to support our operations and internally generated growth initiatives; • the collectability of accounts receivable and realizability of contract assets at the amounts reflected on our most recent balance sheet; • our future working capital needs and our projected capital expenditures for 2025; • transactions we may engage in to manage our outstanding debt prior or maturity; • our plans for future operations (including planned additions to and retirements from our remotely operated vehicle (“ROV”) fleet); • our ability and intent to repatriate cash from foreign countries where we have operations; • our expectations regarding shares that may be repurchased under our share repurchase plan; and • our expectations regarding the implementation of new accounting standards and related policies, procedures and controls.
Additionally, as of December 31, 2023, we had $215 million of unused commitments through our senior secured revolving credit agreement that we entered into in April 2022 (as amended by an Agreement and Amendment No. 1 to Credit Agreement, dated September 20, 2023, the “Revolving Credit Agreement”), which is further described below and in Note 8—“Debt” in the Notes to Consolidated Financial Statements included in this report.
Additionally, as of December 31, 2024, we had $215 million of unused commitments through our senior secured revolving credit agreement that we entered into in April 2022 (as amended by an Agreement and Amendment No. 1 to Credit Agreement, dated September 20, 2023, the “Revolving Credit Agreement”), which is further described below and in Note 8—“Debt” in the Notes to Consolidated Financial Statements included in this 39 Tab le of Contents / report.
Additionally, during the second quarter of 2023, we entered into three new long-term charters for deepwater vessels, two of which began in the third and fourth quarters of 2023 and the other that will begin in the first quarter of 2024. Additionally, we have four long-term charters that began in 2022.
During the second quarter of 2023, we entered into three new long-term charters for deepwater vessels, two of which began in the third and fourth quarters of 2023 and the other that began in the first quarter of 2024. Additionally, we have three long-term charters that began in 2022.
We periodically, and upon the occurrence of a triggering event, review the realizability of our property and equipment, long-lived intangible assets and right-of-use operating lease assets to determine whether any events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
We periodically, and upon the occurrence of a triggering event, review the realizability of our property and 44 Tab le of Contents / equipment, long-lived intangible assets and right-of-use operating lease assets to determine whether any events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
All of our segments, except for IMDS, achieved improved sequential annual operating results, led by our Subsea Robotics and Manufactured Products segments. We use our ROVs to provide drill support, vessel-based inspection, maintenance and repair, subsea hardware installation, construction, and pipeline inspection services to customers in the energy industry.
All of our segments, except for IMDS and ADTech, achieved improved sequential annual operating results, led by our Subsea Robotics segment. We use our ROVs to provide drill support, vessel-based inspection, maintenance and repair, subsea hardware installation, construction, and pipeline inspection services to customers in the energy industry.
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. Our business primarily depends on the level of spending on offshore developments and related operating activities by our customers in the energy industry.
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. 34 Tab le of Contents / Our business primarily depends on the level of spending on offshore developments and related operating activities by our customers in the energy industry.
The effective tax rate for the twelve-month periods ended December 31, 2023 and 2022 was different than the federal statutory rate of 21%, primarily due to the geographical mix of revenue and earnings, changes in valuation allowances and uncertain tax positions, and other discrete items.
The effective tax rate for the twelve-month periods ended December 31, 2024 and 2023 was different than the U.S. federal statutory rate of 21%, primarily due to the geographical mix of revenue and earnings, changes in valuation allowances and uncertain tax positions, and other discrete items.
As of December 31, 2023, the maximum permitted Consolidated Net Leverage Ratio was 3.25 to 1.00 and will not change during the remaining term of the Revolving Credit Facility. The minimum Consolidated Interest 42 Table of Contents / Coverage Ratio (as defined in the Revolving Credit Agreement) is 3.00 to 1.00 throughout the term of the Revolving Credit Facility.
As of December 31, 2024 and 2023, the maximum permitted Consolidated Net Leverage Ratio was 3.25 to 1.00 and will not change during the remaining term of the Revolving Credit Facility. The minimum Consolidated Interest Coverage Ratio (as defined in the Revolving Credit Agreement) is 3.00 to 1.00 throughout the term of the Revolving Credit Facility.
Our capital expenditures during 2023 and 2022 included $67 million and $56 million, respectively, in our Subsea Robotics segment, principally for upgrades to our ROV fleet and to replace certain units we retired. We currently plan to add new ROVs only to meet contractual commitments.
Our capital expenditures during 2024 and 2023 included $64 million and $67 million, respectively, in our Subsea Robotics segment, principally for upgrades to our ROV fleet and to replace certain units we retired. We currently plan to add new ROVs only to meet contractual commitments.
As of December 31, 2023, we had no borrowings outstanding under the Revolving Credit Facility and no letters of credit outstanding under the Revolving Credit Agreement.
As of December 31, 2024, we had no borrowings outstanding under the Revolving Credit Facility and no letters of credit outstanding under the Revolving Credit Agreement.
We do not believe a comparison of the effective tax rate for the twelve-month periods ended December 31, 2023 and 2022, is meaningful. We continue to make an assertion to 38 Table of Contents / indefinitely reinvest the unrepatriated earnings of any foreign subsidiary that would incur material tax consequences upon the distribution of such earnings.
We do not believe a comparison of the effective tax rate for the twelve-month periods ended December 31, 2024 and 2023, is meaningful. We continue to make an assertion to indefinitely reinvest the unrepatriated earnings of any foreign subsidiary that would incur material tax consequences upon the distribution of such earnings.
In addition to interest on borrowings, interest expense includes amortization of loan costs and interest rate swap settlements, fees for lender commitments under our senior secured revolving credit agreement and fees for standby letters of credit and bank guarantees that banks issue on our behalf for performance bonds, bid bonds and self-insurance requirements.
In addition to interest on borrowings, interest expense includes amortization of loan costs and debt discount, benefit from the interest rate swap settlements, and fees for lender commitments under our senior secured revolving credit agreement and fees for standby letters of credit and bank guarantees that banks issue on our behalf for performance bonds, bid bonds and self-insurance requirements.
The Revolving Credit Agreement includes a $215 million revolving credit facility, the Revolving Credit Facility, with a $100 million sublimit for the issuance of letters of credit.
The Revolving Credit Agreement includes a $215 million revolving credit facility (the “Revolving Credit Facility”), with a $100 million sublimit for the issuance of letters of credit.
See Note 1—“Summary of Significant Accounting Policies” in the Notes To Consolidated Financial Statements included in this report for discussion of our significant accounting policies. 43 Table of Contents / Revenue Recognition.
See Note 1—“Summary of Significant Accounting Policies” in the Notes To Consolidated Financial Statements included in this report for discussion of our significant accounting policies. Revenue Recognition.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission ("SEC") on February 24, 2023.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission ("SEC") on February 23, 2024.
The New 2028 Senior Notes constitute an additional issuance of the Existing 2028 Senior Notes and form a single series with such notes. We will pay interest on the New 2028 Senior Notes on February 1 and August 1 of each year, commencing on February 1, 2024. The New 2028 Senior Notes are scheduled to mature on February 1, 2028.
The New 2028 Senior Notes constituted an additional issuance of the Existing 2028 Senior Notes and form a single series with such 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.
The Revolving Credit Agreement includes financial covenants that are tested on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter. The maximum permitted Consolidated Net Leverage Ratio is initially 4.00 to 1.00 and will decrease to 3.25 to 1.00 during the term of the Revolving Credit Facility.
The Revolving Credit Agreement includes financial covenants that are tested on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter. The maximum permitted Consolidated Net Leverage Ratio is initially 4.00 to 1.00 and subsequently decreased to 3.25 to 1.00.
The indenture governing the 2028 Senior Notes (defined below) generally limits our ability to incur secured debt for borrowed money (such as borrowings under the Revolving Credit Facility) to 15% of our Consolidated Net Tangible Assets (as defined in such indentures). Our nearest maturity of indebtedness is $500 million of our 2028 Senior Notes (defined below).
The indenture governing the 2028 Senior Notes (defined below) generally limits our ability to incur secured debt for borrowed money (such as borrowings under the Revolving Credit Facility) to 15% of our Consolidated Net Tangible Assets (as defined in such indentures).
Our income tax payments for the full year of 2024 are estimated to be in the range of $80 million to $90 million, which includes taxes incurred in countries that impose tax on the basis of in-country revenue, without regard to the profitability of such operations.
Our income tax payments for the full year of 2025 are estimated to be in the range of $110 million to $120 million, which includes taxes incurred in countries that impose tax on the basis of in-country revenue, without regard to the profitability of such operations.
From time to time, we may engage in certain transactions in order to manage our outstanding debt prior to maturity, including by engaging in repurchases via open-market or privately negotiated transactions or otherwise, redemptions, exchanges, tender offers or otherwise. For instance, in 2021, we repurchased $100 million in aggregate principal amount of our 2024 Senior Notes in open-market transactions.
From time to time, we may engage in certain transactions in order to manage our outstanding debt prior to maturity, including repurchases via open-market or privately negotiated transactions, redemptions, exchanges, tender offers or otherwise. For instance, in 2021, we repurchased $100 million in aggregate principal amount of our 4.650% Senior Notes due 2024 (the “2024 Senior Notes”) in open-market transactions.
We are amortizing these costs to interest expense through the respective maturity dates for the Senior Notes and the Revolving Credit Agreement using the straight-line method, which approximates the effective interest rate method. As a result, we amortized $1.6 million and $1.4 million for the years ended December 31, 2023 and 2022, respectively. Share Repurchase Program.
We are amortizing these costs to interest expense through the respective maturity dates for the 2028 Senior Notes and the Revolving Credit Agreement using the straight-line method, which approximates the effective interest rate method. As a result, we amortized $2.1 million and $1.6 million for the years ended December 31, 2024 and 2023, respectively.
Accordingly, during the twelve-month period ended December 31, 2023, we partially released valuation allowances for the deferred tax assets that we believe are more likely than not to be realized. In accordance with applicable accounting standards, the valuation allowance decreased by $21 million in 2023 and increased by $6.0 million in 2022.
Accordingly, during the twelve-month periods ended December 31, 2024, we partially released valuation allowances for the deferred tax assets that we believe are more likely than not to be realized. In accordance with applicable accounting standards, the valuation allowance decreased by $23 million in 2024 and $21 million in 2023.
The following table shows average floating rigs under contract and our ROV utilization. 2023 2022 Average number of floating rigs under contract 147 137 ROV days on hire (in thousands) 62 56 ROV utilization 68 % 62 % Demand for floating rigs is a leading indicator of the strength of the deepwater market.
The following table shows average floating rigs under contract and our ROV utilization. 2024 2023 Average number of floating rigs under contract 146 147 ROV days on hire (in thousands) 61 62 ROV utilization 67 % 68 % Demand for floating rigs is a leading indicator of the strength of the deepwater market.
Our unallocated expenses, ( i.e. , those not associated with a specific business segment), within gross margin consist of expenses related to our incentive and deferred compensation plans, including restricted stock units, performance units and bonuses, as well as other general expenses.
Our unallocated expenses, ( i.e. , those not associated with a specific business segment), within operating expenses consist of expenses related to our incentive and deferred compensation plans, including restricted stock units, performance units and bonuses, as well as other general expenses, plus general and administrative expenses related to corporate functions.
Additionally, our newest development is Freedom , a hybrid autonomous underwater vehicle (“AUV”) and ROV that can complete surveys, commissioning, inspections, maintenance, and repairs without the need for a pilot to monitor and control the entire operation.
Additionally, we offer the Freedom , a hybrid autonomous underwater vehicle (“AUV”) and ROV that can complete surveys, commissioning, inspections, maintenance, and repairs without the need for a pilot to monitor and control the entire operation.
In the year ended December 31, 2023, we amortized $1.3 million to interest expense, including $0.7 million for the write-off of the debt issuance balance associated with the retirement of the 2024 Senior Notes discussed above. In the year ended December 31, 2022, we amortized $0.7 million to interest expense.
We were amortizing these costs to interest expense through the maturity date. In the year ended December 31, 2023, we amortized $1.3 million to interest expense, including $0.7 million, for the write-off of the debt issuance costs balance associated with the retirement of the 2024 Senior Notes discussed above.
On April 8, 2022, we entered into a new senior secured revolving credit agreement with a group of banks (as amended by an Agreement and Amendment No. 1 to Credit Agreement, dated September 20, 2023, the Revolving Credit Agreement.
Revolving Credit Agreement. On April 8, 2022, we entered into a new senior secured revolving credit agreement with a group of banks (as amended by an Agreement and Amendment No. 1 to Credit Agreement, dated September 20, 2023, the “Revolving Credit Agreement”). The commitments under the Revolving Credit Agreement are scheduled to mature on April 8, 2027.
We remain committed to maintaining strong liquidity and believe that our cash position, undrawn revolving credit facility, and debt maturity profile should provide us ample resources and time to address potential future growth opportunities and to improve our returns. Financing activities.
We expect to fund the 2025 capital expenditures using our available cash. We remain committed to maintaining strong liquidity and believe that our cash position, undrawn revolving credit facility, and debt maturity profile should provide us with ample resources and time to address potential future growth opportunities and to improve our returns. Financing activities.
In 2023, on a consolidated level, we had a net income of $97 million, or diluted earnings of $0.95 per share, compared to net income of $26 million, or diluted earnings of $0.26 per share, in 2022.
In 2024, on a consolidated level, we had net income of $147 million, or diluted earnings of $1.44 per share, compared to net income of $97 million, or diluted earnings of $0.95 per share, in 2023.
Our OPG operating results for the year ended December 31, 2023 increased as compared to 2022, on higher revenue, primarily due to increased activity levels in the Europe, Middle East and Africa region, partially offset by reduced vessel work in the Gulf of Mexico. Integrity Management & Digital Solutions.
Our OPG operating results for the year ended December 31, 2024 increased as compared to 2023, on higher revenue primarily due to increased activity levels in West Africa and Gulf of Mexico regions partially offset by reduced volume in the Middle East and Asia-Pacific regions. Integrity Management & Digital Solutions.
The following table presents revenue from ROV services as a percentage of total Subsea Robotics revenue: Year ended December 31, 2023 2022 ROV 77 % 77 % Other 23 % 23 % For the year ended December 31, 2023, our Subsea Robotics operating income increased as compared to 2022, on higher revenue, as a result of higher levels of activity for ROV, survey and tooling and higher average revenue per day in 2023.
The following table presents revenue from ROV services as a percentage of total Subsea Robotics revenue: Year ended December 31, 2024 2023 ROV 78 % 77 % Other 22 % 23 % For the year ended December 31, 2024, our Subsea Robotics operating income increased as compared to 2023, on higher revenue, as a result of higher average revenue per day for our ROV business and increased activity for tooling that more than offset lower activity levels.
We are committed to the research and development of products and services intended to help our Energy business (defined below) customers to produce energy safely and securely, with decreased risk to humans and sea life and reduced environmental impacts.
We are committed to the research and development of products and services designed to assist our Energy business (defined below) customers in producing energy safely and securely, with decreased risk to humans and marine life, and reduced environmental impacts.
Consolidated operating income improved during 2023 as compared to 2022, with a slight decline in our IMDS segment being more than offset by increases in all other segments. We had operating income of $181 million in 2023 and operating income of $111 million in 2022.
Consolidated operating income improved during 2024 as compared to 2023 with declines in our IMDS and ADTech segments being more than offset by increases in all other segments. We had operating income of $246 million in 2024 and operating income of $181 million in 2023.
We strive to meet the growing need for 32 Table of Contents / lower-carbon energy by assisting customers to reduce their carbon emissions in exploring for, developing and producing oil and natural gas, while also diversifying our business into new strategic growth areas in emerging energy and non-energy markets.
We strive to meet the growing need for lower-carbon energy by assisting customers to reduce their carbon emissions in exploring for, developing and producing oil and natural gas, while also diversifying our business into new strategic growth areas in emerging energy and non-energy markets. We believe this measured approach ensures our resilience in an ever-changing market.
According to data published by a world-leading analysis and consultancy company for the energy sector in December 2023, there are projected to be 288 tree awards and 339 subsea tree installations in 2024, compared to 285 tree awards and 370 installations in 2023 and 260 tree awards and 256 installations in 2022.
According to data published by a world-leading analysis and consultancy company for the energy sector in December 2024, there are projected to be 285 tree awards and 349 subsea tree installations in 2025, compared to 216 tree awards and 330 installations in 2024 and 239 tree awards and 291 installations in 2023.
Year Ended December 31, (dollars in thousands) 2023 2022 Revenue $ 2,424,706 $ 2,066,084 Gross Margin 398,971 307,377 Gross Margin % 16 % 15 % Operating Income (Loss) 181,328 110,863 Operating Income (Loss) % 7 % 5 % Net Income (Loss) 97,403 25,941 Our business segments are contained within two businesses—services and products provided primarily to the oil and gas industry and, to a lesser extent, the offshore renewables and mobility solutions industry, among others (“Energy”) and services and products provided to non-energy industries (“Aerospace and Defense Technologies” or “ADTech”).
Year Ended December 31, (dollars in thousands) 2024 2023 Revenue $ 2,661,161 $ 2,424,706 Operating Income (Loss) 246,270 181,328 Operating Income (Loss) % 9 % 7 % Net Income (Loss) 147,468 97,403 Our business segments are contained within two businesses—services and products provided primarily to the oil and gas industry and, to a lesser extent, the offshore renewables and mobility solutions industry, among others (“Energy”) and services and products provided to non-energy industries (“Aerospace and Defense Technologies” or “ADTech”).
Our primary sources and uses of cash from operating activities for the years ended December 31, 2023 and 2022 are as follows: Year ended December 31, (in thousands) 2023 2022 Cash Flows from Operating Activities: Net income (loss) $ 97,403 $ 25,941 Noncash adjustments: Depreciation and amortization 104,960 120,969 Deferred income tax provision (benefit) (26,785) 829 Other noncash 13,415 7,713 Total noncash adjustments 91,590 129,511 Accounts receivable and contract assets (83,075) (50,732) Inventory (25,423) (30,692) Current liabilities 125,695 67,253 Other changes 3,765 (20,398) Net Cash Provided by Operating Activities $ 209,955 $ 120,883 Net cash provided by operating activities for the years ended December 31, 2023 and 2022 of $210 million and $121 million, respectively, was affected by the following: • Accounts receivable and contract assets - The decrease in cash related to accounts receivable and contract assets in 2023 and 2022 reflects the increase in accounts receivable corresponding with the increase in revenue as compared to the prior year, along with the timing of project milestones and customer payments. • Inventory - The decrease in cash related to inventory in 2023 and 2022 corresponds with an increase in our backlog along with the impact of higher inflation in 2023 and 2022. • Current liabilities - The increase in cash related to current liabilities in 2023 and 2022 reflects the timing of vendor payments and increased contract liabilities due to an increase in deferred customer prepayments.
Our primary sources and uses of cash from operating activities for the years ended December 31, 2024 and 2023 are as follows: Year ended December 31, (in thousands) 2024 2023 Cash Flows from Operating Activities: Net income (loss) $ 147,468 $ 97,403 Noncash adjustments: Depreciation and amortization 103,443 104,960 Deferred income tax provision (benefit) (11,293) (26,785) Other noncash 14,584 13,415 Total noncash adjustments 106,734 91,590 Accounts receivable and contract assets (8,000) (83,075) Inventory (13,092) (25,423) Current liabilities 8,663 125,695 Other changes (38,559) 3,765 Net Cash Provided by Operating Activities $ 203,214 $ 209,955 Net cash provided by operating activities for the years ended December 31, 2024 and 2023 of $203 million and $210 million, respectively, was affected by the following: • Accounts receivable and contract assets - The decrease in cash related to accounts receivable and contract assets in 2024 and 2023 reflects the timing of project milestones and customer payments. • Inventory - The decrease in cash related to inventory in 2024 and 2023 corresponds with an increase in our backlog along with the impact of higher inflation in 2023 as compared to 2024. • Current liabilities - The increase in cash related to current liabilities in 2024 and 2023 reflects the timing of vendor payments and increased contract liabilities due to an increase in deferred customer prepayments.
As of December 31, 2023, we had $476 million of purchase obligations including $463 million payable within the next twelve months and $13 million thereafter.
As of December 31, 2024, we had $508 million of purchase obligations including $391 million payable within the next twelve months and $117 million thereafter.
Compared to 2022, our 2023 revenue increased 17% to $2.4 billion, with 33 Table of Contents / revenue growth in all of our operating segments. During 2023, we generated a substantial majority of our revenue from services and products we provided to the energy industry.
Compared to 2024, our 2023 revenue increased 10% to $2.7 billion, with revenue growth in all of our operating segments. Consistent with the prior year, we generated a substantial majority of our revenue from services and products we provided to the energy industry in 2024.
As of December 31, 2023, we were in compliance with all the covenants set forth in the Revolving Credit Agreement. Debt Issuance Costs. We incurred $6.9 million of issuance costs related to the 2024 Senior Notes.
As of December 31, 2024, we were in compliance with all the financial covenants set forth in the Revolving Credit Agreement. Debt Issuance Costs. Discounts and Interest. We incurred $6.9 million of issuance costs related to the 2024 Senior Notes. These costs were included as a reduction of long-term debt in our consolidated balance sheet.
As of December 31, 2023, we had working capital of $573 million, including cash and cash equivalents of $462 million.
As of December 31, 2024, we had net working capital of $591 million, including cash and cash equivalents of $498 million.
With the current market conditions, we may add additional chartered vessels throughout the year to align with our strategy that balances vessel cost, availability and capability to capture work. We expect to do this through the continued utilization of a mix of short-term, spot and long-term charters.
With the current market conditions, we may add additional chartered vessels throughout the year to align with our strategy that balances vessel cost, availability and capability to capture work.
Our Manufactured Products backlog was $622 million as of December 31, 2023, a $155 million, or 33%, increase over December 31, 2022. Our book-to-bill ratio was 1.31 for the year ended December 31, 2023, as compared with a book-to-bill ratio of 1.39 for the year ended December 31, 2022. Offshore Projects Group.
Our Manufactured Products backlog was $604 million as of December 31, 2024, a $18 million, or 3%, decrease from December 31, 2023. Our book-to-bill ratio was 0.97 for the year ended December 31, 2024, as compared with a book-to-bill ratio of 1.31 for the year ended December 31, 2023. Offshore Projects Group.
We are expecting sequential improvement in our 2024 operating results as compared to 2023 based on our expectations for continued improvement in pricing and margins in our energy-focused businesses and stable pricing and margins in our government-focused businesses.
We are expecting sequential improvement in our 2025 operating results as compared to 2024 based on our expectations for continued improvement in pricing and margins in our energy-focused businesses and improved margins in our government-focused businesses. We expect improved results in our Subsea Robotics segment in 2025 based on continued pricing momentum and similar activity levels in our ROV business.
Changes impacting our cash and cash equivalents for the years ended December 31, 2023 and 2022 are summarized as follows: Year ended December 31, (in thousands) 2023 2022 Changes in Cash: Net Cash Provided by Operating Activities $ 209,955 $ 120,883 Net Cash Used in Investing Activities (86,353) (76,865) Net Cash Used in Financing Activities (227,297) (1,862) Effect of exchange rates on cash (3,484) (11,525) Net Increase (Decrease) in Cash and Cash Equivalents $ (107,179) $ 30,631 Operating activities.
Changes impacting our cash and cash equivalents for the years ended December 31, 2024 and 2023 are summarized as follows: Year ended December 31, (in thousands) 2024 2023 Changes in Cash: Net Cash Provided by Operating Activities $ 203,214 $ 209,955 Net Cash Used in Investing Activities (124,171) (86,353) Net Cash Used in Financing Activities (27,042) (227,297) Effect of exchange rates on cash (16,051) (3,484) Net Increase (Decrease) in Cash and Cash Equivalents $ 35,950 $ (107,179) 40 Tab le of Contents / Operating activities.
The outstanding refund of $20 million was classified as other noncurrent assets, in our consolidated balance sheet as of December 31, 2022. We establish valuation allowances for deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized in the future.
We establish valuation allowances for deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized in the future.
We had a 10% increase in days on hire and a year-over-year increase in both drill support and vessel support days. Manufactured Products. For the year ended December 31, 2023, our Manufactured Products operating results increased, as compared to 2022, on higher revenue primarily due to strong order intake in 2022 leading to increased utilization in 2023.
We had a slight decrease in days on hire that included a year-over-year increase in drill support days offset by a decrease in vessel support days. Manufactured Products. For the year ended December 31, 2024, our Manufactured Products revenue and operating results increased, as compared to 2023.
We have not capitalized interest since 2019 and do not anticipate capitalizing interest on any long-lived assets in 2024. Foreign currency transaction gains and losses are the principal component of other income (expense), net for the year ended December 31, 2023.
We have not capitalized interest since 2019; however, we do anticipate capitalizing interest beginning in 2025 related to the planned implementation of our new ERP system. Foreign currency transaction gains and losses are a component of other income (expense), net for the year ended December 31, 2024.
The following table sets forth our Unallocated Expenses for the periods indicated: Year ended December 31, (dollars in thousands) 2023 2022 Gross margin expenses $ (98,955) $ (82,528) % of revenue 4 % 4 % Operating expenses (151,438) (127,402) % of revenue 6 % 6 % Our unallocated expenses for the year ended December 31, 2023 increased compared to 2022, primarily due to higher accruals in 2023 for incentive-based compensation along with increased information technology costs.
The following table sets forth our Unallocated Expenses for the periods indicated: Year ended December 31, (dollars in thousands) 2024 2023 Operating expenses (157,668) (151,438) % of revenue 6 % 6 % Our unallocated expenses for the year ended December 31, 2024 increased compared to 2023, primarily due to higher information technology costs including increased cybersecurity protection costs. Other.
Under this program, in 2015, we repurchased 2.0 million shares of our common stock for $100 million. We have not repurchased any shares under the program since December 2015. As of December 31, 2023, we retained 10 million of the shares we had repurchased through this and a prior repurchase program.
From the inception of this program through December 31, 2024, we have repurchased approximately 2.8 million shares of our common stock for a total cost of approximately $120 million. As of December 31, 2024, we retained 10 million of the shares we had repurchased through this and a prior repurchase program.
Energy. 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 Available” includes all days from the first day that an ROV is placed in service until the ROV is retired.
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 an ROV is placed in service until the ROV is retired.
We could incur further foreign currency exchange gains (losses) in Angola and in other countries due to foreign currency exchange fluctuations. Our tax provision is based on (1) our earnings for the period and other factors affecting the tax provision and (2) the operations of foreign branches and subsidiaries that are subject to local income and withholding taxes.
Our tax provision is based on (1) our earnings for the period and other factors affecting the tax provision and (2) the operations of foreign branches and subsidiaries that are subject to local income and withholding taxes. Factors that affect our tax rate include our profitability levels in general and the geographical mix of our results.
We repurchased $312 million principal amount of the 2024 Senior Notes at par plus accrued and unpaid interest of $5.5 million for approximately $318 million. The consummation of the Tender Offer was contingent upon the completion of the offering discussed above, which was satisfied on October 2, 2023.
We repurchased $312 million principal amount of the 2024 Senior Notes at par plus accrued and unpaid interest of $5.5 million for approximately $318 million.
As of December 31, 2023, we had long-term debt in the principal amount of $500 million outstanding and $215 million of unused commitments under our Revolving Credit Agreement. On September 20, 2023, we entered into an Agreement and Amendment No. 1 to the Revolving Credit Agreement which extended the maturity of the commitments thereunder to April 8, 2027.
On September 20, 2023, we entered into an Agreement and Amendment No. 1 to the Revolving Credit Agreement which extended the maturity of the commitments thereunder to April 8, 2027. As of December 31, 2024, we were in compliance with all the covenants set forth in the credit agreement governing the Revolving Credit Agreement.
We redeemed all of the remaining $88 million principal amount outstanding of the 2024 Senior Notes at par on the Redemption Date, November 2, 2023, and financed with cash on hand. Revolving Credit Agreement.
The consummation of the Tender Offer was contingent upon the completion of the offering discussed above, which was satisfied on October 2, 2023. 42 Tab le of Contents / We redeemed all of the remaining $88 million principal amount outstanding of the 2024 Senior Notes at par on the Redemption Date, November 2, 2023, and financed the redemption with cash on hand.
In 2023, we retired eleven of our conventional work- 40 Table of Contents / class ROV systems and replaced them with eleven upgraded conventional work-class ROV systems.
During the year ended December 31, 2024, we retired eight of our conventional work-class ROV systems and replaced them with eight upgraded conventional work-class ROV systems. During the year ended December 31, 2023, we retired eleven of our conventional work-class ROV systems and replaced them with eleven upgraded conventional work-class ROV systems.
The following table sets forth our significant financial statement items below the income (loss) from operations line: Year ended December 31, (dollars in thousands) 2023 2022 Interest income $ 15,425 $ 5,708 Interest expense (36,523) (38,215) Equity earnings (loss) of unconsolidated affiliates 2,061 1,707 Other income (expense), net (1,236) (1,011) Provision (benefit) for income taxes 63,652 53,111 Interest income for the year ended December 31, 2023 as compared to 2022, increased primarily due to higher interest rates and increased average amounts of cash invested.
The following table sets forth our significant financial statement items below the operating income (loss) line: Year ended December 31, (dollars in thousands) 2024 2023 Interest income $ 12,124 $ 15,425 Interest expense (37,917) (36,523) Equity earnings (loss) of unconsolidated affiliates 929 2,061 Other income (expense), net 3,510 (1,236) Provision (benefit) for income taxes 77,448 63,652 38 Tab le of Contents / Interest income for the year ended December 31, 2024 as compared to 2023, decreased primarily due to a lower average cash balance in 2024, along with a different geographic mix for our cash balances.
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.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−5 removed6 unchanged
Biggest changeAs of December 31, 2022, we had $6.2 million of U.S. dollar equivalent Angolan bonds. These bonds were classified as available-for-sale securities; accordingly, they were recorded at fair market value in other current assets on our Consolidated Balance Sheets as of December 31, 2022.
Biggest changeThese bonds were classified as available-for-sale securities and recorded at fair market value in other current assets on our consolidated balance sheets. These bonds matured on September 1, 2023, and we received cash proceeds of kwanza equivalent to $6.2 million in U.S. dollars.
Item 7A. 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 December 31, 2023, except for our exposure in Angola, we do not believe these risks are material.
Item 7A. 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 December 31, 2024, we do not believe these risks are material to our earnings.
We recorded net adjustments to our equity accounts of $3.9 million, $(19.6) million and $(7.3) million in 2023, 2022 and 2021, respectively. 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.
We recorded net adjustments to our equity accounts of $(47) million, $3.9 million and $(20) million in 2024, 2023 and 2022, respectively. 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.
We did not sell any of our remaining Angolan bonds in the year ended December 31, 2022. We estimated the fair market value of the Angolan bonds to be $6.4 million as of December 31, 2022, using quoted market prices.
We did not sell any of our Angolan bonds in the year ended December 31, 2024. We estimated the fair market value of the Angolan bonds to be $7.0 million as of December 31, 2024, using quoted market prices.
Conversely, positive adjustments reflect the effect of a weakening U.S. dollar. Foreign currency gains (losses) in the year ended December 31, 2023 of $(1.4) million were primarily related to gains (losses) for the Angolan kwanza. Foreign currency gains (losses) in the year ended December 31, 2022 were less than $(0.1) million.
Conversely, positive adjustments reflect the effect of a weakening U.S. dollar. Foreign currency gains (losses) in the year ended December 31, 2024, 2023 and 2022 were $0.9 million, $(1.4) million and less than $(0.1) million, respectively.
Since the market for the Angolan bonds was not an active market, the fair value of the Angolan bonds was classified within Level 2 in the fair value hierarchy under United States Generally Accepted Accounting Principles (“U.S. GAAP”).
Since the market for the Angolan bonds was not an active market, the fair value of the Angolan bonds was classified within Level 2 in the fair value hierarchy under accounting principles generally accepted in the United States. As of December 31, 2022, we had $6.2 million of U.S. dollar equivalent Angolan bonds.
The bonds were denominated as U.S. dollar equivalents, so that, upon payment of semi-annual interest and principal upon maturity, payment was made in kwanza, equivalent to the respective U.S. dollars at the then-current exchange rate. Our remaining Angolan bonds matured on September 1, 2023, and we received cash proceeds of $6.2 million.
The bonds are denominated as U.S. dollar equivalents, so that, upon payment of semi-annual interest and principal upon maturity, payment will be settled and made in kwanza, equivalent to the respective U.S. dollars at the then-current exchange rate. In the third quarter of 2024, we purchased $7.0 million of U.S. dollar equivalent Angolan bonds. These bonds mature in February 2031.
We recorded foreign currency transaction gains (losses) related to the Angolan kwanza as a component of other income (expense), net in our Consolidated Statements of Operations in those respective periods. The Angola kwanza devalued in 2023 by 40%, strengthened in value in 2022 by 10%, and devalued in 2021 by 13%.
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. To mitigate our currency exposure risk in Angola, we have used kwanza to purchase equivalent Angolan central bank (Banco Nacional de Angola) bonds.
Removed
Foreign currency gains (losses) of $(8.4) million in the year ended December 31, 2021 were primarily related to gains (losses) for the Angolan kwanza of $(4.5) million due to declining exchange rates for the Angolan kwanza relative to the U.S. dollar.
Added
Because we intend to sell the bonds if we are able to repatriate the proceeds, we have classified these bonds as available-for-sale securities, and they are recorded at fair market value in other current assets in our consolidated balance sheet as of December 31, 2024.
Removed
Foreign currency transaction losses related to the Angolan kwanza in the years ended December 31, 2023 and 2021 were primarily due to the remeasurement of our Angolan kwanza cash balances to U.S. dollars.
Removed
Any conversion of cash balances in Angola from kwanza to U.S. dollars is controlled by the central bank in Angola. During 2023, we repatriated $4.6 million of cash from Angola. During 2022, we did not repatriate any cash from Angola.
Removed
As of December 31, 2023 and 2022, we had the equivalent of approximately $8.1 million and $5.6 million, respectively, of kwanza cash balances in Angola, reflected on our Consolidated Balance Sheets. To mitigate our currency exposure risk in Angola, we used kwanza to purchase equivalent Angolan central bank (Banco Nacional de Angola) bonds.
Removed
As of December 31, 2022, we had $0.1 million in unrealized gains, net of tax, related to these bonds as a component of accumulated other comprehensive loss in our Consolidated Balance Sheets. 46 Table of Contents /

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