# LETTER TO SHAREHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/energy-oil-gas-equipment-services/NYSE_OII_2018/NYSE_OII_2018.mmd` · pages 2-8_

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LETTER TO SHAREHOLDERS

In 2018 we adopted a new mission statement.

It was developed through discussions with our employees around the globe. "We Solve the Unsolvable." I feel this statement is especially appropriate, as we continue to find new ways of working to make Oceaneering, our customers, and our shareholders successful in a dynamic and challenging energy market. A few examples of what this can-do spirit achieved in 2018 are:

- We achieved record operating performance in our Advanced Technologies segment, due largely to significant growth in our entertainment business;

- We entered into our first E-ROV contract to provide a resident, battery-powered remotely operated vehicle to support subsea inspection, maintenance and repair activities;

- We secured meaningful contracts in our Subsea Products segment, allowing us to reach a book-to-bill ratio of 1.1 for the year;

- We expanded our service offerings in Brazil by securing a contract to supply and operate three drill pipe riser systems for intervention and completion operations;

- We acquired Ecosse Subsea, allowing us to leverage our existing ROV and Survey businesses and increase our participation in the offshore renewables market;

- We continued to develop new robotics and automation solutions, as highlighted by our ROV advances and enhanced entertainment offerings; and

- We refinanced our $300 million term loan, extending our nearest debt maturity to late 2024, and extended our revolving credit facility, with $500 million now available until November 2021 and $450 million available until January 2023.

As we look to 2019, a number of macro data points are forecasting increased offshore activity. A market research group \( ^{1} \)  is projecting that as many as 25 major projects in water depths greater than 400 meters will reach a final investment decision in 2019; up from fewer than 10 in 2018. Also, many industry analysts are expecting increases in offshore spending, the floating rig count, and tree awards in 2019, based on expectations of stabilized Brent crude pricing in the range of 55 to 65 per barrel.

These improving market trends support our expectation that our 2019 financial results will improve year over year with growing activity across all of our segments. Overall, we anticipate our energy segments to generate improved yearly results, led by our Subsea Products segment. We also anticipate growth in our non-energy segment, with improved results expected from both our government and commercial businesses.

While we are encouraged by improving market dynamics, it is imperative that we preserve and improve our financial position, so that we are ready to support increased activity as the time comes. We are committed to safely managing our business with the expectation of generating positive free cash flow in 2019 and strengthening our liquidity position. We will be focused on further controlling our costs, driving enhanced levels of efficiency and performance, and closely scrutinizing maintenance and growth capital expenditures. As a result, we expect to have ample resources and flexibility to address future opportunities to improve our returns.

I am proud to be leading Oceaneering during these exciting times, and I am confident that our proven ability to solve the unsolvable will allow us to remain well positioned to prosper in the evolving markets we serve. Of course, success along this journey is not possible without the dedication of our employees and management, so I thank these individuals who have worked tirelessly to adapt and reshape our company over the last four years.

Finally, I thank our shareholders for their continued support of Oceaneering.

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Roderick A. Larson

President and Chief Executive Officer

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