Core Insights - Oceaneering International (OII) has secured a significant multi-year contract valued between $80 million and $90 million from Esso Exploration Angola, starting July 1, 2025, reinforcing its strong presence in Angola's offshore energy sector [1][2][8] Contract Details - The contract was awarded after a competitive tendering process and will span three years, enhancing Oceaneering's position as a leading provider of subsea robotics and integrated offshore solutions in West Africa [2][8] - The scope includes advanced remotely operated vehicles (ROVs), intervention workover control systems (IWOCS), satellite communication systems, hydrate remediation services, subsea inspection, and expert engineering support [2][8] Technical Capabilities - Oceaneering will deploy multiple work-class ROVs designed for deepwater operations, supported by modular tooling packages tailored to meet Esso's operational objectives [4][5] - The IWOCS provided by Oceaneering will facilitate efficient well commissioning, maintenance, and intervention activities, recognized for their modular design and rapid mobilization capabilities [6][7] Subsea Engineering and Inspection - Oceaneering's strengths in subsea inspection and engineering design are highlighted, utilizing proprietary technologies and data analytics for real-time integrity insights critical for asset lifecycle management [9][8] - The company offers proactive hydrate remediation solutions to prevent flow assurance challenges, ensuring optimal system performance in deepwater environments [9] Communication and Operational Efficiency - The integration of satellite communication systems into offshore workflows will enhance operational connectivity, allowing for remote monitoring and rapid decision-making [10][11] Local Engagement and Workforce Development - Oceaneering's operations in Angola are supported by local subsidiaries, focusing on workforce development and aligning with Angola's national content goals [12][13] - The contract supports Oceaneering's strategy to strengthen its presence in Africa while delivering value beyond the oilfield [13] Strategic Importance - Angola Block 15 is a prolific offshore block, and by securing this contract, Oceaneering aligns with Esso's operational requirements, ensuring high standards of safety and innovation [14][15] Industry Leadership - The contract win reinforces Oceaneering's position as a trusted partner in Angola's offshore energy sector, reflecting its capabilities in subsea robotics and intervention services [16] - As the energy industry evolves, Oceaneering is well-positioned to capture future opportunities in Angola and beyond, focusing on technological advancements and sustainable operations [17][18] Conclusion - The awarded contract underscores Oceaneering's commitment to technical excellence, operational reliability, and local engagement, setting new benchmarks for offshore services in Angola and globally [19]

Core Insights - Petrobras has signed an $84 million agreement with Solstad Offshore for the AHTS vessel Normand Turquesa, reinforcing its operational strength in Brazil's offshore environments from February 2026 to February 2030, with a nine-month extension prior to the new contract start [1][9][6] Group 1: Strategic Commitment - The contract signifies Petrobras' commitment to enhancing offshore logistics and support capabilities, with the Normand Turquesa designed for demanding offshore environments [2][8] - The vessel's UT 722 L design is known for its durable construction and excellent performance in dynamic marine conditions, essential for Petrobras' deepwater exploration and production activities [3][4] Group 2: Operational Efficiency - Normand Turquesa plays a crucial role in anchor handling, towing, and supply operations, particularly in pre-salt basins where precision and reliability are vital [3][5] - The vessel's capabilities include platform supply missions, ensuring the delivery of equipment and resources to offshore installations, which is critical for continuous production flow [5][11] Group 3: Long-Term Collaboration - The nine-month contract extension prior to the new deal ensures uninterrupted deployment of the vessel, showcasing Petrobras' trust in Solstad's operational excellence [6][7] - This multi-year deal provides financial stability for Solstad Offshore and reinforces its strategic commitment to Brazil's offshore sector, placing it at the heart of one of the most active exploration regions [10][13] Group 4: Market Growth and Infrastructure Investment - Brazil's offshore market is seen as a growth opportunity, with Petrobras leading the ongoing expansion and modernizing its offshore vessel fleet to meet production targets [8][11] - The agreement reflects Petrobras' reinvestment in critical maritime infrastructure, ensuring adherence to safety and environmental standards while managing complex offshore logistics [11][12] Group 5: Future Implications - The contract represents a strategic investment in the future of Brazil's offshore oil and gas sector, ensuring operational success and sustainable development [17][18] - As Petrobras expands exploration in ultra-deepwater regions, the reliance on versatile AHTS vessels like Normand Turquesa will become increasingly essential, solidifying Solstad's role as a premier operator in the global offshore market [18]

Core Insights - Oceaneering International, Inc. (OII) has secured a $33 million fixed-price IDIQ contract from the Naval Surface Warfare Center Philadelphia Division to provide support equipment for Virginia Class Submarines, reinforcing its position in the defense sector and showcasing its engineering capabilities in underwater technologies [1][10][19] Contract Overview - The IDIQ contract spans five years, with a total value of approximately $33 million if all options are exercised, starting in June 2025 [2][15] - The contract involves the production of specialized work platforms for maintenance operations on Virginia Class Submarines, crucial for repairs and inspections [2][12] Strategic Importance of Virginia Class Submarines - Virginia Class Submarines are vital to the U.S. Navy's attack submarine force, designed for various missions with advanced stealth and surveillance capabilities [4] - The maintenance of these submarines requires highly technical access, necessitating customized work platforms [5] OII's Aerospace and Defense Technologies Segment - OII's ADTech segment focuses on delivering engineered solutions for defense requirements, including unmanned systems and maritime support technologies [6][7] - The segment's expertise in subsea engineering allows OII to provide innovative and reliable solutions tailored to military specifications [7] Engineering and Manufacturing Excellence - OII will manufacture work platforms using high-grade materials and advanced processes, ensuring safety and structural integrity for personnel [8][9] - The company is recognized as a preferred vendor for precision-engineered military equipment, meeting U.S. Navy performance standards [9] Impact on OII's Strategic Growth - The $33 million contract enhances OII's defense portfolio, providing revenue visibility and potential for long-term contracts with the U.S. Department of Defense [15][16] - This deal aligns with OII's strategy to diversify revenue streams beyond traditional offshore energy services [16] Outlook and Industry Position - The contract positions OII to support next-generation military hardware, with increasing demand for modular and durable support systems [17] - Success in this contract may lead to further opportunities with other naval platforms, including Columbia Class submarines and aircraft carriers [18]

Core Insights - Oceaneering International, Inc. has signed a vessel services agreement to deploy the MPSV Harvey Deep Sea for subsea operations in the Gulf of Mexico, marking a strategic move to secure long-term revenues and enhance operational efficiency [1][2] Group 1: Vessel Services Agreement - The agreement with a major operator is a significant step for Oceaneering, reinforcing its position in the Gulf of Mexico's subsea market and supporting the expansion of its subsea service offerings [2][4] - The MPSV Harvey Deep Sea, built in 2013 and chartered through February 2027, is equipped with advanced technology, including Millennium work-class remotely operated vehicles, to perform complex subsea inspection, maintenance, repair, and installation tasks [3][9] Group 2: Financial Performance - In Q2 2025, Oceaneering's Offshore Projects Group segment accounted for approximately 24% of the company's revenues, reflecting a year-over-year increase of about 43.4% [4] - The segment's operating income surged to $35.7 million from $844,000 a year earlier, indicating a strong rebound and highlighting its strategic importance for the company's earnings [4] Group 3: Operational Efficiency - The vessel services agreement enhances regional vessel availability, optimizes equipment usage, and reduces project scheduling uncertainty, thereby reinforcing Oceaneering's ability to deliver safe and efficient project execution [5]

Core Insights - Oceaneering International, Inc. (OII) has secured a $33,134,365 firm-fixed-price IDIQ contract from the U.S. Navy for critical infrastructure and mission-specific equipment for Virginia-class submarines [1][2][18] - The contract reflects OII's engineering capabilities and its long-standing relationship with the Department of Defense, highlighting ongoing U.S. investment in naval modernization [2][19] Contract Details - The contract includes the production and delivery of specialized components such as sail racetracks, payload tube loading platforms, and AUR canister support equipment [3][4][12] - All production and logistics operations will occur in Chesapeake, VA, with completion scheduled by June 2030, ensuring a sustained collaboration with the U.S. Navy [5][6][18] Financial Aspects - Initial funding of $2,085,151 from Fiscal Year 2025 Other Procurement (Navy) funds has been allocated to initiate the project, ensuring financial stability throughout the multi-year production timeline [7][8] Competitive Procurement Process - The contract was awarded through a competitive procurement process, with OII emerging as the leading bidder among five competitors, reinforcing its status as a preferred partner of the Navy [9][10] Implications for Naval Capabilities - The Virginia-class submarine fleet represents advanced U.S. Navy undersea warfare capabilities, and the components supplied will enhance operational versatility and combat readiness [11][12][13] - The new support structures will improve logistics, handling safety, and maintenance turnaround time, maximizing mission availability [13] Economic Impact - The execution of this contract in Chesapeake is expected to drive economic growth, creating jobs in various disciplines and stimulating local suppliers and service providers [16][17]

Core Viewpoint - Oceaneering International (OII) shares have increased by approximately 6% over the past month, underperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1] Group 1: Earnings Report and Market Reaction - No earnings estimate revisions have been made by analysts in the last two months, indicating a period of stability in expectations [2] - The stock has an average Growth Score of C and a similar score for momentum, while achieving a B grade for value, placing it in the top 40% for this investment strategy [3] Group 2: Outlook and Ratings - Oceaneering International holds a Zacks Rank of 3 (Hold), suggesting an expectation of an in-line return from the stock in the upcoming months [4]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-10945 ____________________________________________ OCEANEERING INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) (S ...

Core Viewpoint - Oceaneering International, Inc. (OII) reported strong financial results for the first quarter of 2025, with adjusted profit and revenue exceeding expectations, driven by robust performance in several segments, particularly Subsea Robotics and Offshore Projects Group [1][2]. Financial Performance - Adjusted profit for Q1 2025 was 43 cents per share, surpassing the Zacks Consensus Estimate of 36 cents and significantly up from 14 cents in the same quarter last year [1]. - Total revenues reached $674.5 million, exceeding the Zacks Consensus Estimate of $664 million and reflecting a year-over-year increase of approximately 12.6% from $599.1 million [1]. Segment Performance - **Subsea Robotics**: Revenues totaled $206 million, up from $186.9 million year-over-year, but missed the estimate of $214.2 million. Operating income was $59.6 million, an increase from $44.2 million, but also below the estimate of $64.1 million [3][4]. - **Manufactured Products**: Revenues increased to $135 million from $129.5 million year-over-year, beating the estimate of $129.6 million. However, operating profit decreased to $8.7 million from $13.2 million, missing the estimate [4][5]. - **Offshore Projects Group**: Revenues surged by about 43.4% to $164.9 million from $115.1 million year-over-year, exceeding the estimate of $151.9 million. Operating income rose to $35.7 million from $0.8 million, also beating the estimate [6]. - **Integrity Management & Digital Solutions**: Revenues increased to $71.4 million from $69.7 million year-over-year, surpassing the estimate. Operating income slightly decreased to $3.5 million from $3.6 million, matching the projection [7]. - **Aerospace and Defense Technologies**: Revenues fell to $97.2 million from $98 million year-over-year, missing the estimate. Operating income dropped to $10.7 million from $12.8 million, also below the estimate [8]. Capital Expenditure and Balance Sheet - Capital expenditure for Q1 2025, including acquisitions, totaled $27.8 million. As of March 31, 2025, OII had cash and cash equivalents of $382 million and long-term debt of approximately $483.3 million, resulting in a debt-to-total capital ratio of 38.3% [9]. Outlook - OII expects full-year 2025 EBITDA to be in the range of $380 million to $430 million, with consolidated revenues projected to increase in Q2 2025 compared to Q2 2024. The company anticipates improvements in operating profitability across several segments [10][11][12].

Financial Data and Key Metrics Changes - For Q4 2024, the company reported net income of $56.1 million or $0.55 per share, a 26% year-over-year increase [11] - Consolidated revenue for Q4 2024 was $713 million, a 9% increase compared to the same period last year, with operating income rising 64% to $77.9 million [11][12] - Adjusted EBITDA for Q4 2024 reached $102 million, representing a 35% increase year-over-year [11][12] - For the full year 2024, consolidated revenue increased 10% to $2.7 billion, with operating income improving by 36% to $246 million [21][22] Business Segment Data and Key Metrics Changes - Subsea Robotics (SSR) operating income for Q4 2024 was $63.5 million, a 26% increase year-over-year, with an EBITDA margin improvement to 36% from 32% [13][14] - Manufactured Products segment revenue for Q4 2024 was $143 million, an 8% increase year-over-year, but operating income margin declined to 3% due to reserves taken on a project [15][16] - Offshore Projects Group (OPG) achieved record revenue and operating income in Q4 2024, with operating income improving to $39.3 million and revenue increasing 14% to $184 million [17][18] - Integrity Management and Digital Solutions (IMDS) saw a decrease in operating income despite a revenue increase, primarily due to acquisition-related costs [18][19] Market Data and Key Metrics Changes - The company ended 2024 with a cash balance of $498 million and a free cash flow of $94.5 million [12][13] - The year-end backlog was $604 million, a decrease of $17 million compared to the previous year [16] - The book-to-bill ratio for 2024 was 0.7, down from 1.31 in 2023, indicating a slowdown in order intake [16] Company Strategy and Development Direction - The company is focused on leveraging market dynamics in 2025, with expectations for mid to high single-digit revenue growth across all segments [28][29] - Continued pricing progression and favorable project mix are expected to drive revenue growth [29][30] - The company is actively pursuing M&A opportunities, particularly in disruptive technologies, and has seen an increase in potential targets [87][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of defense-related markets and the overall outlook for 2025, despite potential geopolitical risks [27][28] - The forecast for 2025 includes expectations for EBITDA in the range of $380 million to $430 million, representing a 17% increase over 2024 [30][31] - The company anticipates generating positive free cash flow of $110 million in 2025, with capital expenditures projected between $130 million and $140 million [31][32] Other Important Information - The company achieved a 56% reduction in high potential incidents, with a total recordable incident rate of 0.29% for the year [9][10] - The acquisition of Global Design Innovation Limited (GDI) is expected to enhance the company's digital and software capabilities [8][10] Q&A Session Summary Question: Pricing increase in ROVs - Management indicated that the pricing increase in ROVs has been driven by both drilling support and vessel-based work, with expectations for continued upward pricing progression despite flat activity levels [46][49] Question: Guidance on orders and book-to-bill - Management did not provide specific guidance on orders or book-to-bill but noted a healthy sales pipeline [50][52] Question: ROV utilization assumptions - Management expects rig activity to remain flattish, with a focus on higher quality assets and increased market share in Brazil [58][61] Question: Update on outsourced manufacturing - Management expressed confidence in the quality of outsourced manufacturing and noted ongoing discussions with customers for larger volume orders [62][64] Question: Margin improvement in manufactured products - Management highlighted that margin improvement is driven by better pricing in backlog and operational efficiencies [67][69] Question: Strength in offshore projects - Management discussed the growth in light well intervention and rework of infrastructure as key drivers for OPG's performance [78][80] Question: Visibility in the vessel class ROV market - Management noted strong utilization in the vessel class and ongoing demand for ROVs in various projects [82][85] Question: M&A opportunities - Management indicated an increase in M&A opportunities and expressed excitement about potential targets that align with the company's strategic goals [87][89]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section provides Oceaneering International, Inc.'s unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements of Oceaneering International, Inc., detailing balance sheets, operations, cash flows, equity, and notes on key accounting policies and segment performance [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This table presents the company's consolidated financial position, detailing assets, liabilities, and equity as of June 30, 2021, and December 31, 2020 | (in thousands) | Jun 30, 2021 | Dec 31, 2020 | Change | % Change | | :--------------------------- | :----------- | :----------- | :----- | :------- | | **ASSETS** | | | | | | Cash and cash equivalents | $456,087 | $452,016 | $4,071 | 0.90% | | Accounts receivable, net | 334,122 | 296,214 | 37,908 | 12.80% | | Contract assets, net | 247,162 | 221,997 | 25,165 | 11.34% | | Inventory, net | 129,133 | 141,241 | (12,108) | -8.57% | | Total Current Assets | 1,228,876 | 1,170,263 | 58,613 | 5.01% | | Net property and equipment | 537,909 | 591,107 | (53,198) | -9.00% | | Total Assets | $2,061,549 | $2,045,842 | $15,707 | 0.77% | | **LIABILITIES AND EQUITY** | | | | | | Accounts payable | $106,778 | $94,207 | $12,571 | 13.34% | | Accrued liabilities | 310,757 | 292,863 | 17,894 | 6.11% | | Contract liabilities | 61,988 | 50,046 | 11,942 | 23.86% | | Total current liabilities | 479,523 | 437,116 | 42,407 | 9.70% | | Long-term debt | 773,423 | 805,251 | (31,828) | -3.95% | | Total equity | 562,732 | 558,157 | 4,575 | 0.82% | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) This table summarizes the company's revenues, gross margins, operating income (loss), and net income (loss) for the three and six months ended June 30, 2021 and 2020 | (in thousands, except per share data) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change (YoY) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------- | :----------------------------- | :----------------------------- | :----------- | | Revenue | $498,199 | $427,216 | $70,983 | $935,752 | $963,884 | $(28,132) | | Gross margin | 68,397 | 42,537 | 25,860 | 125,054 | 89,289 | 35,765 | | Income (loss) from operations | 22,819 | (5,182) | 28,001 | 36,602 | (385,939) | 422,541 | | Net Income (Loss) | $6,241 | $(24,788) | $31,029 | $(3,124) | $(392,386) | $389,262 | | Basic Earnings (loss) per share | $0.06 | $(0.25) | $0.31 | $(0.03) | $(3.96) | $3.93 | | Diluted Earnings (loss) per share | $0.06 | $(0.25) | $0.31 | $(0.03) | $(3.96) | $3.93 | - The company reported a significant turnaround in profitability for the three months ended June 30, 2021, with **net income of $6.241 million** compared to a **net loss of $24.788 million** in the prior year period. For the six months ended June 30, 2021, the **net loss substantially narrowed to $3.124 million from $392.386 million** in the prior year, primarily due to the absence of large impairment charges seen in 2020[14](index=14&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This table presents the company's net income (loss) and other comprehensive income (loss) components for the three and six months ended June 30, 2021 and 2020 | (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change (YoY) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | | :----------------------------- | :------------------------------- | :------------------------------- | :----------- | :----------------------------- | :----------------------------- | :----------- | | Net income (loss) | $6,241 | $(24,788) | $31,029 | $(3,124) | $(392,386) | $389,262 | | Foreign currency translation adjustments | 6,468 | 10,629 | (4,161) | 3,612 | (59,696) | 63,308 | | Change in unrealized gains for available-for-sale debt securities | (369) | — | (369) | 685 | — | 685 | | Total other comprehensive income (loss) | 6,099 | 10,629 | (4,530) | 4,297 | (59,696) | 63,993 | | Comprehensive income (loss) | $12,340 | $(14,159) | $26,499 | $1,173 | $(452,082) | $453,255 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This table details the company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2021 and 2020 | (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------- | | Net Cash Provided by (Used in) Operating Activities | $48,823 | $5,368 | $43,455 | | Net Cash Provided by (Used in) Investing Activities | $(12,157) | $(35,317) | $23,160 | | Net Cash Provided by (Used in) Financing Activities | $(32,284) | $(1,947) | $(30,337) | | Net Increase (Decrease) in Cash and Cash Equivalents | $4,071 | $(40,146) | $44,217 | - **Net cash provided by operating activities significantly increased to $48.8 million** for the six months ended June 30, 2021, **from $5.4 million** in the prior year, reflecting improved operational performance. Cash used in financing activities increased due to the **repurchase of $30.5 million of 2024 Senior Notes**[19](index=19&type=chunk) [Consolidated Statements of Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Equity) This table outlines changes in the company's equity, including common stock, retained earnings, and accumulated other comprehensive income (loss), from December 31, 2020, to June 30, 2021 | (in thousands) | Balance, Dec 31, 2020 | Net Income (Loss) (Q1 2021) | Other Comprehensive Income (Loss) (Q1 2021) | Restricted Stock Unit Activity (Q1 2021) | Restricted Stock Activity (Q1 2021) | Balance, Mar 31, 2021 | Net Income (Loss) (Q2 2021) | Other Comprehensive Income (Loss) (Q2 2021) | Restricted Stock Unit Activity (Q2 2021) | Balance, Jun 30, 2021 | | :----------------------------- | :-------------------- | :-------------------------- | :------------------------------------------ | :--------------------------------------- | :----------------------------------- | :-------------------- | :-------------------------- | :------------------------------------------ | :--------------------------------------- | :-------------------- | | Common Stock | $27,709 | — | — | — | — | $27,709 | — | — | — | $27,709 | | Additional Paid-in Capital | $192,492 | — | — | $(13,642) | $(10,439) | $168,411 | — | — | $(409) | $168,002 | | Treasury Stock | $(660,021) | — | — | $14,997 | $10,439 | $(634,585) | — | — | $2,456 | $(632,129) | | Retained Earnings | $1,351,220 | $(9,365) | — | — | — | $1,341,855 | $6,241 | — | — | $1,348,096 | | Accumulated Other Comprehensive Income (Loss) | $(359,306) | — | $(1,802) | — | — | $(361,108) | — | $6,099 | — | $(355,009) | | Oceaneering Shareholders' Equity | $552,094 | $(9,365) | $(1,802) | $1,355 | — | $542,282 | $6,241 | $6,099 | $2,047 | $556,669 | | Noncontrolling Interest | $6,063 | — | — | — | — | $6,063 | — | — | — | $6,063 | | Total Equity | $558,157 | $(9,365) | $(1,802) | $1,355 | — | $548,345 | $6,241 | $6,099 | $2,047 | $562,732 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the consolidated financial statements, covering accounting policies, revenue, impairments, income taxes, debt, and business segment information [1. SUMMARY OF MAJOR ACCOUNTING POLICIES](index=9&type=section&id=1.%20SUMMARY%20OF%20MAJOR%20ACCOUNTING%20POLICIES) This note outlines key accounting policies, including financial statement presentation, consolidation, estimates, prior period recasting, cash, credit loss allowances, inventory, and long-lived asset accounting - The company recast certain prior period amounts to conform to a **new organizational structure implemented in Q3 2020**, which realigned operating segments for greater cost efficiencies and synergies[26](index=26&type=chunk)[120](index=120&type=chunk) - As of June 30, 2021, the **allowance for credit losses was $1.6 million** for accounts receivable and **$0.9 million for other receivables**, with **$0.7 million and $3.1 million in accounts receivable written off** during the three and six months ended June 30, 2021, respectively[31](index=31&type=chunk) - **No write-downs or write-offs of inventory were recorded** in the three- and six-month periods ended June 30, 2021 and 2020. **No impairment indicators were identified** for property and equipment, long-lived intangible assets, and right-of-use operating lease assets for the three- and six-month periods ended June 30, 2021 or the three-month period ended June 30, 2020[34](index=34&type=chunk)[37](index=37&type=chunk) [2. ACCOUNTING STANDARDS UPDATE](index=12&type=section&id=2.%20ACCOUNTING%20STANDARDS%20UPDATE) This note discusses the adoption of ASU 2019-12 and the evaluation of ASU 2020-04, neither of which had a material impact on the financial statements - The adoption of ASU 2019-12, "Simplifying the Accounting for Income Taxes," on January 1, 2021, **did not have a material impact** on the consolidated financial statements[55](index=55&type=chunk) - The company is evaluating ASU 2020-04, "Reference Rate Reform," which provides temporary expedients for the transition from LIBOR, and **does not expect it to have a material impact** on its consolidated financial statements[56](index=56&type=chunk) [3. REVENUE](index=13&type=section&id=3.%20REVENUE) This note disaggregates revenue by business segment, geographical region, and timing, detailing contract balances and remaining performance obligations Revenue by Business Segment (in thousands) | Business Segment | Three Months Ended Jun 30, 2021 | Three Months Ended Jun 30, 2020 | Six Months Ended Jun 30, 2021 | Six Months Ended Jun 30, 2020 | | :------------------------------------ | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Subsea Robotics | $141,371 | $119,234 | $260,490 | $259,004 | | Manufactured Products | 79,127 | 100,570 | 165,952 | 267,104 | | Offshore Projects Group | 107,951 | 73,840 | 197,185 | 148,094 | | Integrity Management & Digital Solutions | 64,070 | 53,969 | 118,118 | 118,698 | | Aerospace and Defense Technologies | 105,680 | 79,603 | 194,007 | 170,984 | | **Total Revenue** | **$498,199** | **$427,216** | **$935,752** | **$963,884** | Contract Balances (in thousands) | (in thousands) | Jun 30, 2021 | Jun 30, 2020 | | :----------------------------- | :----------- | :----------- | | Total contract assets, end of period | $247,162 | $223,405 | | Total contract liabilities, end of period | $61,988 | $51,763 | - As of June 30, 2021, the **aggregate amount of transaction price allocated to remaining performance obligations was $205 million**, with **$132 million expected to be recognized in the next 12 months and $73 million within the next 24 months**[63](index=63&type=chunk) - Costs to fulfill a contract (primarily mobilization costs) had a **closing balance of $8.6 million** as of June 30, 2021, with **amortization expense of $1.3 million for the three months and $2.3 million for the six months** ended June 30, 2021[70](index=70&type=chunk) [4. IMPAIRMENTS](index=15&type=section&id=4.%20IMPAIRMENTS) This note details goodwill and long-lived asset impairment assessments, noting no impairments in 2021 but significant charges in Q1 2020 due to market conditions - **No goodwill impairments were recorded** in the three- and six-month periods ended June 30, 2021, or the three-month period ended June 30, 2020[71](index=71&type=chunk) Goodwill Impairment (Three Months Ended March 31, 2020, as recast) | Segment/Reporting Unit | Goodwill Impairment (in thousands) | | :----------------------- | :--------------------------------- | | Subsea Robotics | $102,118 | | Manufactured Products | 11,388 | | Offshore Projects Group | 66,285 | | Integrity Management & Digital Solutions | 123,214 | | **Total goodwill impairment** | **$303,005** | - **No impairments of long-lived assets were recorded** in the three- and six-month periods ended June 30, 2021, or the three-month period ended June 30, 2020[76](index=76&type=chunk) Long-lived Asset Impairments (Three Months Ended March 31, 2020, as recast) | Segment/Reporting Unit | Long-lived Asset Impairments (in thousands) | | :----------------------- | :---------------------------------------- | | Manufactured Products | $61,074 | | Offshore Projects Group | 7,522 | | Integrity Management & Digital Solutions | 167 | | **Total long-lived asset impairments** | **$68,763** | [5. INCOME TAXES](index=17&type=section&id=5.%20INCOME%20TAXES) This note explains the income tax provision, effective tax rates, expected CARES Act refunds, and unrecognized tax liabilities, along with open tax years - The company expects to receive **approximately $33 million in combined tax refunds** under the CARES Act, of which **$5.6 million had been received** as of June 30, 2021. The remaining refunds are classified as accounts receivable[82](index=82&type=chunk)[139](index=139&type=chunk) - **Accrued net unrecognized tax liabilities were $12 million** as of June 30, 2021, a **decrease from $15 million** as of December 31, 2020[84](index=84&type=chunk) Earliest Tax Years Open to Examination by Tax Authorities | Jurisdiction | Periods | | :------------- | :------ | | United States | 2014 | | United Kingdom | 2019 | | Norway | 2016 | | Angola | 2013 | | Brazil | 2016 | | Australia | 2015 | [6. SELECTED BALANCE SHEET INFORMATION](index=18&type=section&id=6.%20SELECTED%20BALANCE%20SHEET%20INFORMATION) This note provides detailed breakdowns for inventory, other current assets, and accrued liabilities as of June 30, 2021, and December 31, 2020 | (in thousands) | Jun 30, 2021 | Dec 31, 2020 | | :----------------------------- | :----------- | :----------- | | **Inventory:** | | | | Remotely operated vehicle parts and components | $62,746 | $62,788 | | Other inventory, primarily raw materials | 66,387 | 78,453 | | Total Inventory | $129,133 | $141,241 | | **Other current assets:** | | | | Prepaid expenses | $55,458 | $48,616 | | Angolan bonds | 6,914 | 10,179 | | Total Other current assets | $62,372 | $58,795 | | **Accrued liabilities:** | | | | Payroll and related costs | $131,269 | $135,042 | | Accrued job costs | 59,893 | 47,721 | | Income taxes payable | 42,983 | 35,929 | | Current operating lease liability | 20,695 | 18,798 | | Other | 55,917 | 55,373 | | Total Accrued liabilities | $310,757 | $292,863 | [7. DEBT](index=18&type=section&id=7.%20DEBT) This note details long-term debt, including Senior Notes and the revolving credit facility, highlighting debt repurchases and covenant compliance Long-term Debt (in thousands) | (in thousands) | Jun 30, 2021 | Dec 31, 2020 | | :--------------------------- | :----------- | :----------- | | 4.650% Senior Notes due 2024 | $469,500 | $500,000 | | 6.000% Senior Notes due 2028 | 300,000 | 300,000 | | Interest rate swap settlements | 8,982 | 10,870 | | Unamortized debt issuance costs | (5,059) | (5,619) | | **Long-term debt** | **$773,423** | **$805,251** | - The company **repurchased approximately $31 million in aggregate principal amount of its 4.650% Senior Notes due 2024** in open market transactions during the three months ended June 30, 2021[92](index=92&type=chunk)[189](index=189&type=chunk) - **As of June 30, 2021, the $500 million revolving credit facility was undrawn**, and the company was **in compliance with all covenants**, including a **maximum adjusted total Capitalization Ratio of 55%**[94](index=94&type=chunk)[96](index=96&type=chunk)[186](index=186&type=chunk) [8. COMMITMENTS AND CONTINGENCIES](index=21&type=section&id=8.%20COMMITMENTS%20AND%20CONTINGENCIES) This note addresses legal proceedings, financial instruments, risk concentration, foreign currency transaction losses, and contract delays or suspensions - The company recorded **foreign currency transaction losses of $(1.8) million and $(3.7) million** for the three- and six-month periods ended June 30, 2021, respectively, primarily due to the declining exchange rates of the Angolan kwanza and Brazilian real against the U.S. dollar[105](index=105&type=chunk)[170](index=170&type=chunk) - To mitigate currency exposure in Angola, the company holds Angolan central bank bonds, **valued at $6.9 million** as of June 30, 2021. A portion of these bonds, **totaling $4.5 million, was sold** in the six-month period ended June 30, 2021, recognizing a **gain of $0.5 million**[107](index=107&type=chunk)[108](index=108&type=chunk)[198](index=198&type=chunk) - As of June 30, 2021, the company had **$51 million in outstanding accounts receivable and contract assets for delayed projects** and **$73 million in contract assets for a suspended contract** in its Manufactured Products segment, which are believed to be realizable[110](index=110&type=chunk)[111](index=111&type=chunk) [9. EARNINGS (LOSS) PER SHARE, SHARE-BASED COMPENSATION AND SHARE REPURCHASE PLAN](index=23&type=section&id=9.%20EARNINGS%20(LOSS)%20PER%20SHARE,%20SHARE-BASED%20COMPENSATION%20AND%20SHARE%20REPURCHASE%20PLAN) This note covers EPS calculations, share-based compensation, and the share repurchase plan, noting anti-dilutive effects and unrecognized compensation costs - For periods with a net loss, the effect of outstanding restricted stock units is **anti-dilutive**, resulting in basic and diluted weighted-average shares outstanding being the same[112](index=112&type=chunk) - As of June 30, 2021, 2,493,742 shares of restricted stock and restricted stock units were outstanding, with an **estimated $17 million in unrecognized share-based compensation cost**[115](index=115&type=chunk)[116](index=116&type=chunk) - The Board approved a share repurchase program for **up to 10 million shares** in December 2014, but **no shares have been repurchased under this plan since 2015**[117](index=117&type=chunk)[118](index=118&type=chunk)[190](index=190&type=chunk) [10. BUSINESS SEGMENT INFORMATION](index=24&type=section&id=10.%20BUSINESS%20SEGMENT%20INFORMATION) This note details the company's five reportable segments: Subsea Robotics, Manufactured Products, Offshore Projects Group (OPG), Integrity Management & Digital Solutions (IMDS), and Aerospace and Defense Technologies (ADTech), following a Q3 2020 organizational realignment. It provides revenue, operating income (loss), and depreciation and amortization for each segment, highlighting the significant improvement in operating income across most energy segments compared to the prior year, which included substantial impairment charges - The company's organizational structure was **realigned in Q3 2020 into five reportable segments**: Subsea Robotics, Manufactured Products, Offshore Projects Group (OPG), Integrity Management & Digital Solutions (IMDS), and Aerospace and Defense Technologies (ADTech)[120](index=120&type=chunk)[133](index=133&type=chunk) Revenue and Operating Income (Loss) by Business Segment (in thousands) | Segment | Q2 2021 Revenue | Q2 2020 Revenue | Q2 2021 Op. Income (Loss) | Q2 2020 Op. Income (Loss) | H1 2021 Revenue | H1 2020 Revenue | H1 2021 Op. Income (Loss) | H1 2020 Op. Income (Loss) | | :------------------------------------ | :-------------- | :-------------- | :------------------------ | :------------------------ | :-------------- | :-------------- | :------------------------ | :------------------------ | | Subsea Robotics | $141,371 | $119,234 | $21,710 | $11,662 | $260,490 | $259,004 | $36,329 | $(82,421) | | Manufactured Products | 79,127 | 100,570 | 790 | 3,865 | 165,952 | 267,104 | 3,543 | (62,273) | | Offshore Projects Group | 107,951 | 73,840 | 7,996 | (4,135) | 197,185 | 148,094 | 16,809 | (83,458) | | Integrity Management & Digital Solutions | 64,070 | 53,969 | 4,721 | (1,825) | 118,118 | 118,698 | 7,195 | (123,360) | | Total Energy Services and Products | 392,519 | 347,613 | 35,217 | 9,567 | 741,745 | 792,900 | 63,876 | (351,512) | | Aerospace and Defense Technologies | 105,680 | 79,603 | 19,340 | 13,430 | 194,007 | 170,984 | 36,179 | 26,401 | | Unallocated Expenses | — | — | (31,738) | (28,179) | — | — | (63,453) | (60,828) | | **Total** | **$498,199** | **$427,216** | **$22,819** | **$(5,182)** | **$935,752** | **$963,884** | **$36,602** | **$(385,939)** | Depreciation and Amortization, including Goodwill Impairment (in thousands) | Item | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Depreciation expense | $35,000 | $38,000 | $70,000 | $81,000 | | Amortization expense (intangible assets) | 800 | 800 | 2,100 | 3,400 | | Goodwill impairment expense | — | — | — | 303,000 | | Long-lived asset write-offs | — | — | — | 7,300 | | **Total** | **$35,225** | **$38,698** | **$71,696** | **$394,894** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, condition, and future outlook, including segment realignment, Q2 and H1 2021 results, guidance, liquidity, and critical accounting policies [Realignment of Reportable Segments](index=29&type=section&id=Realignment%20of%20Reportable%20Segments) This section explains the Q3 2020 organizational restructuring into five new reportable segments for improved cost efficiencies and synergies - In the third quarter of 2020, the company **changed its organizational structure to realign businesses for greater cost efficiencies and synergies, resulting in five new reportable segments**: Subsea Robotics, Manufactured Products, Offshore Projects Group (OPG), Integrity Management & Digital Solutions (IMDS), and Aerospace and Defense Technologies (ADTech)[133](index=133&type=chunk) [Overview of our Results and Guidance](index=29&type=section&id=Overview%20of%20our%20Results%20and%20Guidance) This section provides an overview of Q2 and H1 2021 operating results, cash flow, and guidance for Q3 2021 and full-year capital expenditures Diluted Earnings (Loss) Per Share | Period | 2021 | 2020 | Change | | :----------------------------- | :--- | :--- | :----- | | Three Months Ended June 30 | $0.06 | $(0.25) | $0.31 | | Six Months Ended June 30 | $(0.03) | $(3.96) | $3.93 | - **Operating results for Q2 2021 improved sequentially from Q1 2021**, driven by seasonal growth in energy businesses, operating discipline, and efficiency gains, with **all operating segments contributing operating income**[135](index=135&type=chunk)[136](index=136&type=chunk) - **Cash increased by $4.1 million** in the first half of 2021, primarily from **$49 million in operating cash flow**, despite **repurchasing $31 million of 2024 Senior Notes and $23 million in capital expenditures**[137](index=137&type=chunk) - For Q3 2021, **consolidated results are expected to decline on moderately lower revenue**, with flat activity/profitability in Subsea Robotics, Manufactured Products, and IMDS, lower activity/flat profitability in OPG, and lower activity/profitability in ADTech. **Unallocated Expenses are projected to be in the mid-$30 million range**[138](index=138&type=chunk) - **Full-year 2021 capital expenditures guidance is affirmed at $50 million to $70 million**, **comprising $35 million to $40 million for maintenance and $15 million to $30 million for growth**[141](index=141&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section analyzes the company's consolidated and segment-specific revenue and profitability for the three and six months ended June 30, 2021 and 2020 [Consolidated Revenue and Profitability](index=31&type=section&id=Consolidated%20Revenue%20and%20Profitability) This section analyzes the company's consolidated revenue, gross margin, and operating income (loss) for Q2 and H1 2021 compared to prior periods Consolidated Revenue and Profitability (in thousands) | (dollars in thousands) | Jun 30, 2021 (Q2) | Jun 30, 2020 (Q2) | Mar 31, 2021 (Q1) | Jun 30, 2021 (H1) | Jun 30, 2020 (H1) | | :--------------------- | :---------------- | :---------------- | :---------------- | :---------------- | :---------------- | | Revenue | $498,199 | $427,216 | $437,553 | $935,752 | $963,884 | | Gross Margin | 68,397 | 42,537 | 56,657 | 125,054 | 89,289 | | Gross Margin % | 14 % | 10 % | 13 % | 13 % | 9 % | | Operating Income (Loss) | 22,819 | (5,182) | 13,783 | 36,602 | (385,939) | | Operating Income (Loss) % | 5 % | (1)% | 3 % | 4 % | (40)% | - The company reported **operating income of $22.8 million** for Q2 2021, a significant improvement from an **operating loss of $5.2 million** in Q2 2020. For H1 2021, **operating income was $36.6 million**, a substantial recovery from an **operating loss of $385.9 million** in H1 2020, which **included $391.4 million in charges**[144](index=144&type=chunk)[146](index=146&type=chunk) [Energy Services and Products](index=32&type=section&id=Energy%20Services%20and%20Products) This section details the performance of the Subsea Robotics, Manufactured Products, Offshore Projects Group, and Integrity Management & Digital Solutions segments Energy Services and Products Segment Performance (in thousands) | Segment | Q2 2021 Revenue | Q2 2020 Revenue | Q2 2021 Op. Income (Loss) | Q2 2020 Op. Income (Loss) | H1 2021 Revenue | H1 2020 Revenue | H1 2021 Op. Income (Loss) | H1 2020 Op. Income (Loss) | | :------------------------------------ | :-------------- | :-------------- | :------------------------ | :------------------------ | :-------------- | :-------------- | :------------------------ | :------------------------ | | Subsea Robotics | $141,371 | $119,234 | $21,710 | $11,662 | $260,490 | $259,004 | $36,329 | $(82,421) | | Manufactured Products | 79,127 | 100,570 | 790 | 3,865 | 165,952 | 267,104 | 3,543 | (62,273) | | Offshore Projects Group | 107,951 | 73,840 | 7,996 | (4,135) | 197,185 | 148,094 | 16,809 | (83,458) | | Integrity Management & Digital Solutions | 64,070 | 53,969 | 4,721 | (1,825) | 118,118 | 118,698 | 7,195 | (123,360) | | **Total Energy Services and Products** | **$392,519** | **$347,613** | **$35,217** | **$9,567** | **$741,745** | **$792,900** | **$63,876** | **$(351,512)** | - Subsea Robotics operating income increased in Q2 2021 compared to Q1 2021 and Q2 2020, driven by higher seasonal activity, increased days on hire, and higher average revenue per day. **ROV utilization was 62% in Q2 2021, up from 59% in Q2 2020**[154](index=154&type=chunk) - **Manufactured Products backlog was $315 million as of June 30, 2021, up from $266 million** at December 31, 2020, primarily due to increased bookings in energy-related operations. The **book-to-bill ratio was 0.8** for the trailing 12 months[157](index=157&type=chunk) - Offshore Projects Group (OPG) **operating results improved significantly** in Q2 2021 and H1 2021 compared to the prior year periods, primarily due to the start-up of the Angola riserless light well intervention project and higher vessel utilization[159](index=159&type=chunk) - Integrity Management & Digital Solutions (IMDS) **operating results improved** in Q2 2021 and H1 2021, driven by higher seasonal activity, new multi-year projects, and efficiency improvements[161](index=161&type=chunk) [Aerospace and Defense Technologies](index=36&type=section&id=Aerospace%20and%20Defense%20Technologies) This section details the performance of the Aerospace and Defense Technologies (ADTech) segment, including revenue and operating income ADTech Segment Performance (in thousands) | (dollars in thousands) | Jun 30, 2021 (Q2) | Jun 30, 2020 (Q2) | Mar 31, 2021 (Q1) | Jun 30, 2021 (H1) | Jun 30, 2020 (H1) | | :--------------------- | :---------------- | :---------------- | :---------------- | :---------------- | :---------------- | | Revenue | $105,680 | $79,603 | $88,327 | $194,007 | $170,984 | | Gross Margin | 24,603 | 17,313 | 22,110 | 46,713 | 34,798 | | Operating Income (Loss) | 19,340 | 13,430 | 16,839 | 36,179 | 26,401 | | Operating Income (Loss) % | 18 % | 17 % | 19 % | 19 % | 15 % | - **ADTech segment operating results increased** in Q2 2021 compared to Q1 2021 and Q2 2020, driven by higher revenue from project mix, favorable rate-based adjustments, and increased activity in defense subsea technologies and space systems[165](index=165&type=chunk) [Unallocated Expenses](index=37&type=section&id=Unallocated%20Expenses) This section discusses unallocated corporate expenses, including gross margin and operating expenses, and their changes compared to prior periods Unallocated Expenses (in thousands) | (dollars in thousands) | Jun 30, 2021 (Q2) | Jun 30, 2020 (Q2) | Mar 31, 2021 (Q1) | Jun 30, 2021 (H1) | Jun 30, 2020 (H1) | | :--------------------- | :---------------- | :---------------- | :---------------- | :---------------- | :---------------- | | Gross margin expenses | $(21,392) | $(18,404) | $(22,855) | $(44,247) | $(38,446) | | Operating expenses | $(31,738) | $(28,179) | $(31,715) | $(63,453) | $(60,828) | - **Unallocated Expenses for the three- and six-month periods ended June 30, 2021, were higher** compared to the corresponding prior year periods, primarily due to increased accruals for incentive-based compensation[167](index=167&type=chunk) [Other (Financial Statement Items Below Operating Income)](index=37&type=section&id=Other%20(Financial%20Statement%20Items%20Below%20Operating%20Income)) This section details financial statement items below operating income, including interest income/expense, equity in affiliates, and foreign currency transaction impacts Other Financial Statement Items (in thousands) | (in thousands) | Jun 30, 2021 (Q2) | Jun 30, 2020 (Q2) | Mar 31, 2021 (Q1) | Jun 30, 2021 (H1) | Jun 30, 2020 (H1) | | :------------------------------------ | :---------------- | :---------------- | :---------------- | :---------------- | :---------------- | | Interest income | $683 | $511 | $519 | $1,202 | $1,788 | | Interest expense, net | (9,729) | (11,611) | (10,407) | (20,136) | (24,073) | | Equity in income (losses) of unconsolidated affiliates | 378 | 674 | 534 | 912 | 1,871 | | Other income (expense), net | (1,955) | (3,660) | (1,453) | (3,408) | (10,788) | | Provision (benefit) for income taxes | 5,955 | 5,520 | 12,341 | 18,296 | (24,755) | - Other income (expense), net, primarily consists of **foreign currency transaction gains and losses, which were $(1.8) million and $(3.7) million** for the three- and six-month periods ended June 30, 2021, respectively, mainly due to the Angolan kwanza and Brazilian real[170](index=170&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's liquidity, capital resources, and cash flow activities from operations, investing, and financing [Overview](index=38&type=section&id=Overview) This section provides an overview of the company's working capital, cash position, and available credit facility, indicating adequate liquidity - As of June 30, 2021, the company had **$749 million in working capital**, including **$456 million in cash and cash equivalents**, and **$500 million available under its undrawn revolving credit facility**, indicating **adequate liquidity**[173](index=173&type=chunk)[174](index=174&type=chunk) Changes in Cash (in thousands) | (in thousands) | Six Months Ended Jun 30, 2021 | Six Months Ended Jun 30, 2020 | | :------------------------------------ | :---------------------------- | :---------------------------- | | Net Cash Provided by Operating Activities | $48,823 | $5,368 | | Net Cash Used in Investing Activities | (12,157) | (35,317) | | Net Cash Used in Financing Activities | (32,284) | (1,947) | | Net Increase (Decrease) in Cash and Cash Equivalents | $4,071 | $(40,146) | [Operating activities](index=38&type=section&id=Operating%20activities) This section details the net cash provided by operating activities, highlighting improvements driven by operational performance and working capital management - **Net cash provided by operating activities increased to $48.8 million** for the six months ended June 30, 2021, **from $5.4 million** in the prior year, driven by improved operating performance and timing of vendor payments and customer prepayments[176](index=176&type=chunk)[177](index=177&type=chunk) [Investing activities](index=39&type=section&id=Investing%20activities) This section discusses cash flows from investing activities, primarily focusing on capital expenditures and their projected full-year guidance - **Capital expenditures decreased to $23 million** in the first six months of 2021 **from $38 million** in the prior year, reflecting cost reduction efforts. **Full-year 2021 capital expenditures are projected to be $50 million to $70 million**[178](index=178&type=chunk) [Financing activities](index=39&type=section&id=Financing%20activities) This section details cash flows from financing activities, including debt repurchases and the status of the revolving credit facility - **Cash used in financing activities increased to $32 million** for the six months ended June 30, 2021, primarily due to the **repurchase of $31 million of 2024 Senior Notes**[180](index=180&type=chunk) - As of June 30, 2021, **long-term debt outstanding was $770 million**, and the **$500 million revolving credit facility remained undrawn**, with maturity extended to January 25, 2023 (**reducing to $450 million after October 25, 2021**)[181](index=181&type=chunk)[183](index=183&type=chunk) [Off-Balance Sheet Arrangements](index=41&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any material off-balance sheet arrangements or guaranteed debt not reflected on the balance sheets - The company has not guaranteed any debt not reflected on its Consolidated Balance Sheets and **does not have any off-balance sheet arrangements** as of June 30, 2021[191](index=191&type=chunk) [Critical Accounting Policies and Estimates](index=41&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section states that there have been no material changes to the company's critical accounting policies and estimates since the last annual report - There have been **no material changes to the judgments, assumptions, and estimates underlying the company's critical accounting policies and estimates** as of June 30, 2021, compared to those disclosed in the annual report on Form 10-K for the year ended December 31, 2020[192](index=192&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily from interest rate changes and foreign exchange rate fluctuations, and mitigation strategies - The company is exposed to market risks from interest rate changes and foreign exchange rates, but these are **not considered material except for exposure in Angola**. **No market-risk-sensitive instruments are used for speculative purposes**[194](index=194&type=chunk) - **Foreign currency translation adjustments to equity were $6.5 million (positive) for Q2 2021 and $3.6 million (positive) for H1 2021**, reflecting a weakening U.S. dollar against various foreign currencies[195](index=195&type=chunk) - **Foreign currency transaction losses were $(1.8) million for Q2 2021 and $(3.7) million for H1 2021**, primarily due to the remeasurement of Angolan kwanza cash balances and Brazilian real-denominated liabilities[196](index=196&type=chunk) - To mitigate Angolan kwanza currency exposure, the company holds Angolan central bank bonds, with a **fair market value of $6.9 million** as of June 30, 2021. **Unrealized gains related to these bonds, net of tax, were $0.7 million**[198](index=198&type=chunk)[200](index=200&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that the company's disclosure controls and procedures were effective as of June 30, 2021, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely. No material changes to internal control over financial reporting occurred during the quarter - The principal executive officer and principal financial officer concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2021[201](index=201&type=chunk) - There has been **no material change in the company's internal control over financial reporting** during the three months ended June 30, 2021[202](index=202&type=chunk) [PART II – OTHER INFORMATION](index=45&type=section&id=Part%20II%20%E2%80%93%20OTHER%20INFORMATION) This section includes information on legal proceedings and a list of exhibits filed with the Form 10-Q [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 8, "Commitments and Contingencies," for information regarding legal proceedings. The company is involved in various litigation and claims in the ordinary course of business, but does not expect them to have a material adverse effect on its financial condition, results of operations, or cash flows - Information regarding legal proceedings is incorporated by reference from Note 8, "Commitments and Contingencies," which states that ultimate liability from these matters is **not expected to have a material adverse effect** on the company's consolidated financial condition, results of operations, or cash flows[101](index=101&type=chunk)[205](index=205&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed with the Form 10-Q, including organizational documents, certifications, and XBRL interactive data files - The exhibits include the Restated Certificate of Incorporation, Amended and Restated Bylaws, certifications from principal executive and financial officers (Rule 13a-14(a)/15d-14(a) and Section 1350), and Inline XBRL documents[206](index=206&type=chunk)