OII Oceaneering International Inc - 10-K

Item 1A. Risk Factors.

We are subject to various risks and uncertainties in the course of our business. The following summarizes the risks and uncertainties that we consider to be material and that may materially and adversely affect our business, financial condition, results of operations or cash flows and the market value of our securities. Investors in our company should consider these matters, in addition to the other information we have provided in this report and the documents we incorporate by reference.

Business and Operational Risks

We derive most of our revenue from companies in the offshore oil and gas industry, a historically cyclical industry with levels of activity that are significantly affected by the levels and volatility of oil and gas prices.

We derive most of our revenue from customers in the offshore oil and gas exploration, development and production industry. The offshore oil and gas industry is a historically cyclical industry characterized by significant changes in the levels of exploration and development activities. Oil and gas prices, and market expectations of potential changes in those prices, significantly affect the levels of those activities. 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. Gulf, as a result of ongoing litigation in U.S. federal courts regarding the ability of the President to reverse a previous President’s withdrawal of acreage from future oil and gas leasing under the Outer Continental Shelf Lands Act, as amended (the “OCSLA”). As a result, the impact of Executive Order No. 14148, which attempted to reverse the Biden Administration’s withdrawal of acreage from oil and gas leasing pursuant to the OCSLA, remains to be seen. Any prolonged reduction in the overall level of offshore oil and gas exploration and development activities, whether resulting from changes in oil and gas prices, limitations on access to capital for such activities, governmental actions or regulatory developments or otherwise, could materially and adversely affect our financial condition and results of operations in our operating segments within our Energy business. 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 energy;

• 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 conflicts throughout the world where we and our customers operate; and

• extreme weather conditions, natural disasters, public health crises and pandemics or epidemics, such as COVID-19 and variants thereof.

Our operations could be adversely impacted by increased transition to renewable or other alternative energy sources as a result of climate change and climate-related business trends.

Increasing transition to renewable or other alternative energy sources has begun in recent years due to the scientific and regulatory concern regarding global warming and other climatic changes. 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

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cost of renewable energy generation technologies (and the increased demand thereof), 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.

Climate-related business trends could result in, among other things, decreased demand for goods or services that produce significant greenhouse gas emissions, such as our fleet of vessels, increased demand for goods that result in lower emissions than competing products and increased competition to develop innovative new products that result in lower emissions. As we strive to develop innovative new product offerings, we aim to address a myriad of challenges facing our customers and the industries that we serve, including, among many others, energy efficiency, labor shortages, safety and climate change. To meet these challenges, we strive to innovate products and services that, in addition to lowering greenhouse gas emissions for our customers, offer higher energy efficiency, fewer personnel requirements due to more automation and superior safety characteristics. While this creates opportunities for our business, we face the risk that we will be unable to execute on such innovation in a timely manner, or at all, which may materially and adversely affect our business, financial condition, results of operations or cash flows if our customers turn to other suppliers for these products. If we are unable to meet increased customer expectations around the energy efficiency and carbon emissions of our new products, our business or our reputation could be negatively impacted.

Further, increased demand for generation and transmission of energy from alternative energy sources could result in a decreased demand for goods or services that complement the hydrocarbon industry generally, even if those goods and services themselves do not produce significant greenhouse gas emissions, such as our remotely operated vehicles. Our business could be negatively impacted if we are unable to successfully market our products and services to customers who produce energy from alternative energy sources.

Beyond financial impacts, climate change poses potential physical risks. Scientific studies forecast that these risks include increases in sea levels, stresses on water supply, rising average temperatures and other changes in weather conditions, such as increases in precipitation and extreme weather events, such as floods, heat waves, hurricanes and other tropical storms and cyclones. The projected physical effects of climate change have the potential to directly affect the operations we conduct for customers and result in increased costs related to our operations. However, because the nature and timing of changes in extreme weather events (such as increased frequency, duration, and severity) are uncertain, it is not possible for us to estimate reliably the future financial risk to our operations caused by these potential physical risks.

Our international operations involve additional risks not associated with domestic operations.

A significant portion of our revenue is attributable to operations in foreign countries. These activities accounted for approximately 55% of our consolidated revenue in 2025 . Risks associated with our operations in foreign areas include risks of:

• regional and global economic downturns;

• 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 and potential impacts of legal challenges thereto;

• changing foreign and domestic monetary policies;

• 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; 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.

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Changes in U.S. foreign trade policies could lead to the imposition of additional trade barriers and tariffs on us. 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 if legal challenges to such policies will prevail), 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. 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. 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.

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.

Our exposure to the risks we described above varies from country to country. There is a risk that a continuation or worsening of these conditions could materially and adversely impact our future business, operations, financial condition and results of operations.

Our backlog is subject to unexpected adjustments and cancellations and is, therefore, an uncertain indicator of our future revenue and earnings.

There can be no assurance that the revenue included in our backlog will be realized or, if realized, will result in profits. Because of project cancellations or potential changes in the scope or schedule of our customers' projects, we cannot predict with certainty when or if backlog will be realized. Material delays, suspensions, cancellations or payment defaults could materially affect our financial condition, results of operations and cash flows. We may be at risk of delays, suspensions and cancellations in the current market environment.

Reductions in our backlog due to cancellation by a customer or for other reasons would adversely affect, potentially to a material extent, the revenue and earnings we actually receive from contracts included in our backlog. Many of our ROV contracts have 30-day notice termination clauses. Some of the contracts in our backlog provide for cancellation fees in the event customers cancel projects. These cancellation fees usually provide for reimbursement of our out-of-pocket costs, revenue for work performed prior to cancellation and a varying percentage of the profits we would have realized had the contract been completed. However, under limited circumstances, such as certain bankruptcy events, no cancellation fee would be owed to us. Further, even if a cancellation fee is owed to us, a customer may be unable or may refuse to pay the cancellation fee. We typically have no contractual right upon cancellation to the total contract revenue as reflected in our backlog. If we experience significant project terminations, suspensions or scope adjustments to contracts reflected in our backlog, our financial condition, results of operations and cash flows may be adversely impacted.

Our offshore oilfield operations involve a variety of operating hazards and risks that could cause losses.

Our offshore oilfield operations are subject to the hazards inherent in the offshore oilfield business. These include blowouts, explosions, fires, collisions, capsizings and severe weather conditions. These hazards could result in personal injury and loss of life, severe damage to or destruction of property and equipment, pollution or environmental damage and suspension of operations. We may incur substantial liabilities or losses as a result of these hazards. While we maintain insurance protection against some of these risks and seek to obtain indemnity agreements from our customers requiring the customers to hold us harmless from some of these risks, our insurance and contractual indemnity protection may not be sufficient or effective to protect us under all circumstances or against all risks. 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.

We may be adversely affected by changes in levels of U.S. government spending or acquisition priorities, as well as significant delays in U.S. government appropriations.

Our 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. Levels of U.S. defense and space exploration spending are difficult to predict and may be impacted by numerous factors such as

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the evolving nature of the national security threat environment, U.S. national security strategy, U.S. foreign policy, the domestic political environment, macroeconomic conditions and the ability of the U.S. government to enact relevant legislation such as authorization and appropriations bills. The government may also constrain discretionary spending by instituting enforceable spending caps. A reduction in overall U.S. spending, on an absolute or inflation-adjusted basis, because of shifting priorities, budget compromises or otherwise could adversely affect our business. Additionally, budget uncertainty, extended or repeated U.S. Government shutdowns, the use of continuing resolutions or the federal debt ceiling could adversely affect our industry and both the timing and quantum of funding for our programs or for the prime contractors for which we provide services.

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.

The legislative and regulatory responses to climate change and its effects have the potential to negatively affect our business in many ways, including increasing the costs to provide the services and products of our Energy business, reducing the demand for and consumption of certain of those services and products, and the economic health of the regions in which we operate, all of which can create financial risks.

Legislation to regulate greenhouse gas emissions has, from time to time, been introduced in the U.S. Congress and such legislation may be proposed or adopted in the future. It is not possible at this time to predict the timing and effect of climate change or to predict whether new greenhouse gas legislation, regulations or other measures will be adopted. 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.

Our business could also be impacted by governmental initiatives to incentivize the conservation of energy or the use of alternative energy sources. These initiatives to reduce energy consumption or incentivize a shift away from fossil fuels could reduce demand for hydrocarbons, thereby reducing demand for the goods and services of our Energy business, and adversely impact our business, financial condition, results of operations and cash flows.

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 carbon capture and storage (“CCS”) technologies) in operating facilities and (3) administer and manage greenhouse gas emissions programs. If we are unable to recover or pass through a significant level of our costs related to complying with climate change regulatory requirements imposed on us, they could have a material adverse effect on our results of operations and financial condition. Further, such legislation or regulation could prevent customer projects from going forward, thereby potentially reducing the need for our products and services. In addition, to the extent 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 insurance.

In addition, climate change legislation and regulation may subject us to increased competition to develop innovative new products that result in lower emissions. Please refer to the risk factor entitled “ Our operations could be adversely impacted by increased transition to renewable or other alternative energy sources as a result 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.

Concerns and negative public perception regarding us, our sustainability goals and our industry could adversely affect our business operations, which could result in reduced revenue and increased costs.

Businesses across all industries are facing increasing scrutiny from investors, governmental authorities, regulatory agencies and the public related to their practices and disclosures related to climate change, sustainability, diversity and inclusion initiatives and heightened governance standards. Failure, or a perceived failure, to adequately respond to or meet evolving expectations, concerns and standards may cause us to suffer reputational damage and materially and adversely affect our business or financial condition, or the trading price of our securities. 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. Alternatively, we may be accused of “greenhushing” for the failure to communicate certain climate-related initiatives, commitments and goals.

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Furthermore, negative public perception regarding us or the energy industry resulting from, among other things, concerns raised by advocacy groups about oil spills, greenhouse gas emissions, climate change and explosions of or leaks from pipelines carrying crude oil, refined petroleum products or natural gas, may lead to increased regulatory scrutiny, which may, in turn, lead to new safety and environmental laws, regulations, guidelines and enforcement interpretations. These actions may cause operational delays or restrictions, increased operating costs or capital expenditures, additional regulatory burdens and increased risk of litigation for us and our energy industry customers. Furthermore, governmental authorities exercise considerable discretion in the timing and scope of permit issuance required for the operations conducted by or for our energy industry customers and, in many cases, the public may engage in the permitting process. Negative public perception could cause such permits to be withheld, delayed, or burdened by requirements that restrict our ability to profitably conduct business for our energy industry customers. Ultimately, these risks could result in reduced demand for the services and products of our Energy business, which would adversely impact our revenues, and increased costs that may adversely affect our profitability and cash flows.

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.

Misconduct, fraud, non-compliance with applicable laws and regulations, or other improper activities by one or more of our employees, agents or partners could have a significant negative impact on our business and reputation. Such misconduct could include the failure to comply with the U.S. Foreign Corrupt Practices Act ("FCPA"), which prohibits companies and their intermediaries from making improper payments to non-U.S. officials, as well as the failure to comply with government procurement regulations, regulations on lobbying or similar activities, regulations pertaining to the internal controls over financial reporting and various other applicable laws or regulations, including the U.K. Bribery Act. We operate in some countries that international corruption monitoring groups have identified as having high levels of corruption. Our activities create the risk of unauthorized payments or offers of payments by one of our employees or agents that could be in violation of the FCPA or other applicable anti-corruption laws. The precautions we take to prevent and detect misconduct, fraud or non-compliance with applicable laws and regulations may not be effective, and we could face unknown risks or losses. In December 2024, the Chinese government placed restrictions on and sanctioned our parent 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. Furthermore, in September 2025, the Chinese government placed us on its “Unreliable Entity List” and, as a result, we are generally prohibited from engaging in import or export activities related to China or making new investments in the country. We will continue to follow U.S. Government guidance as it relates to sales to Taiwan and do not currently expect a material impact to our business from these actions. Our failure to comply with applicable laws or regulations or acts of misconduct could subject us to fines, penalties or other sanctions, which could have a material adverse effect on our business and our consolidated financial condition, results of operations and cash flows.

Laws and governmental regulations may add to our costs or adversely affect our operations.

Our business is affected by changes in public policy and by federal, state, local and foreign laws and regulations, including those relating specifically to the offshore oil and gas industry. Offshore oil and gas exploration and production operations are affected by tax, environmental, safety and other laws, by changes in those laws, application or interpretation of existing laws, and changes in related administrative regulations. 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.

Environmental laws and regulations can increase our costs, and our failure to comply with those laws and regulations can expose us to significant liabilities.

Risks of substantial costs and liabilities related to environmental compliance issues are inherent in our operations. Our operations are subject to extensive federal, state, local and foreign laws and regulations relating to the generation, storage, handling, emission, transportation and discharge of materials into the environment. Permits are required for the operation of various facilities, and those permits are subject to revocation, modification and renewal. Governmental authorities have the power to enforce compliance with their regulations, and violations are subject to fines, injunctions or both. In some cases, those governmental requirements can impose liability for the entire cost of cleanup on any responsible party without regard to negligence or fault and impose liability on us for the conduct of or conditions others have caused, or for our acts that complied with all applicable requirements when we performed them. It is possible that other developments, such as stricter environmental laws and regulations, and claims for

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damages to property or persons resulting from our operations, would result in substantial costs and liabilities. Our insurance policies and the contractual indemnity protection we seek to obtain from our customers may not be sufficient or effective to protect us under all circumstances or against all risks involving compliance with environmental laws and regulations.

We are currently subject to disputes, legal and regulatory claims, investigations and proceedings, some of which could be material.

We are currently subject to disputes, legal and regulatory claims, investigations and proceedings and could become subject to additional disputes, claims, investigations and proceedings in the future, some of which could be material. These proceedings may be brought by the government or private parties and may arise out of a number of matters, including contract disputes, environmental claims, property disputes, antitrust claims and personal injury claims. We are currently in a contract dispute with a customer. Even if we are ultimately successful, defense of these claims can be costly and time-consuming and may divert management's attention and resources. The outcome of any pending or future claims, investigations or proceedings is inherently unpredictable, but such outcomes could have a material adverse effect on our business and our consolidated financial condition, results of operations or cash flows.

Financial Risks

Foreign exchange risks and fluctuations may affect our profitability on certain projects.

We operate on a worldwide basis with substantial operations outside the United States that subject us to U.S. dollar translation and economic risks. In order to manage some of the risks associated with foreign currency exchange rates, we may enter into foreign currency derivative (hedging) instruments, especially when there is currency risk exposure that is not naturally mitigated via our contracts. However, these actions may not always eliminate all currency risk exposure, in particular for our long-term contracts. A disruption in the foreign currency markets, including disruptions that may occur from time to time as a result of economic policies of foreign governments or central banks, 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. We do not enter into derivative instruments for trading or other speculative purposes. Our operational cash flows and cash balances, though predominately held in U.S. dollars, may consist of different currencies at various points in time in order to execute our contracts globally. Non-U.S. asset and liability balances are subject to currency fluctuations when measured period to period for financial reporting purposes in U.S. dollars.

Maintaining adequate letter of credit and bonding capacity is necessary for us to successfully bid on and win various contracts.

In line with industry practice, we are often required to post standby letters of credit to customers or enter into surety bond arrangements in favor of customers. Those letters of credit and surety bond arrangements generally protect customers against our failure to perform our obligations under the applicable contracts. However, the terms of those letters of credit, including terms relating to the customer’s ability to draw upon the letter of credit and the amount of the letter of credit required, can vary significantly. If a letter of credit or surety bond is required for a particular project and we are unable to obtain it due to insufficient liquidity or other reasons, we may not be able to pursue that project. We have limited capacity for letters of credit, and we rely substantially on bilateral letters of credit from various issuing banks in a number of markets. Moreover, due to events that affect the credit markets generally, letters of credit may be more difficult to obtain in the future or may only be available at significant additional cost. Letters of credit, including through our bilateral arrangements (which are cancelable in the discretion of the issuing banks), may not continue to be available to us on reasonable terms. Our inability to obtain adequate letters of credit and surety bonds and, as a result, to bid on new work could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Significant inflation and higher interest rates could adversely affect our business and financial condition.

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. In addition, changing and future monetary policies and actions of the Federal Reserve that result from such adverse market and economic conditions (such as raises to the target federal funds rate) could adversely affect our ability to obtain financing and raise our (or our customers’) cost of capital. 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

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cost of capital, labor and materials could increase, which could have an adverse impact on our business and our financial condition.

Difficulty in obtaining sufficient capital could adversely impact our business and financial condition.

A financial crisis or economic recession could have an adverse impact on our business and our financial condition. 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. 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. If one or more of the lenders under our revolving credit facility were to become unable or unwilling to perform their obligations under that facility, our borrowing capacity could be reduced. Our inability to borrow under our revolving credit facility could limit our ability to fund our future operations and growth. Ultimately, we could be required to reduce our future capital expenditures substantially and such a reduction could have a material adverse effect on our business and our consolidated financial condition, results of operations and cash flows. A financial crisis or economic recession could also affect our suppliers and our customers, causing them to fail to meet their obligations to us, which could have a material adverse effect on our revenue, income from operations and cash flows.

In addition, we maintain our cash balances and short-term investments primarily in accounts held by major banks and financial institutions located principally in North America, Europe, Africa and Asia, and some of those accounts hold deposits that exceed available insurance. It is possible that one or more of the financial institutions in which we hold our cash and investments could become subject to bankruptcy, receivership or similar proceedings. 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. 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. We 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. 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;

• 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.

Future acquisitions may require us to obtain additional equity or debt financing, which may not be available on attractive terms. Moreover, to the extent an acquisition transaction financed by non-equity consideration results in goodwill, it will reduce our tangible net worth, which might have an adverse effect on credit availability.

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Additionally, an acquisition may bring us into businesses we have not previously conducted and expose us to additional business risks that are different from those we have previously experienced.

Our business strategy also includes development and commercialization of new technologies to support our growth. The development and commercialization of new technologies require capital investment and involve various risks and uncertainties.

Our future growth will depend on our ability to continue to innovate by developing and commercializing new service and product offerings. Investments in new technologies involve varying degrees of uncertainties and risk. Commercial success depends on many factors, including the levels of innovation, the development costs and the availability of capital resources to fund those costs, the levels of competition from others developing similar or other competing technologies, our ability to obtain or maintain government permits or certifications, the effectiveness of production, distribution and marketing efforts, and the costs to customers to deploy and provide support for the new technologies. 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.

The loss of the services of one or more of our key personnel, or our failure to attract, assimilate and retain trained personnel in the future, could disrupt our operations and result in loss of revenue.

Our success depends on the continued active participation of our executive officers and key operating personnel. The unexpected loss of the services of any one of these persons could adversely affect our operations.

Our operations require the services of employees having the technical training and experience necessary to obtain the proper operational results. As a result, if we should suffer any material loss of personnel to competitors or be unable to employ additional or replacement personnel with the requisite level of training and experience to adequately operate our equipment, our operations could be adversely affected. A significant increase in the wages paid by other employers could result in a reduction in our workforce, increases in wage rates, or both.

We may not be able to compete successfully against current and future competitors, particularly competitors that may have substantially greater financial, technical and personnel resources than we do.

Our businesses operate in highly competitive industry segments. Some of our competitors or potential competitors have greater financial, technical, personnel or other resources than we have. Our operations may be adversely affected if our current competitors or new market entrants introduce new products or services with better features, performance, prices or other characteristics than those of our services and products. Additionally, our competitors may have better access to financial and capital markets on more favorable terms than we are able to obtain due to their relative size or balance sheets. As a result, our cost of capital could increase substantially, and the availability of funds from the capital markets could diminish significantly, as compared to our competitors. These factors may be significant to our segments' operations, particularly in the operating segments within our Energy business, where capital investment is critical to our ability to compete.

Our aspirations, goals, commitment targets and initiatives related to sustainability, including emissions reduction and our public statements and disclosures regarding the same, expose us to numerous risks.

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. Our efforts to research, establish, accomplish and accurately report on these goals, targets and other objectives expose us to numerous operational, reputational, financial, legal and other risks. Our ability to achieve any stated goal, target or objective is subject to numerous factors and conditions, many of which are outside of our control, including the availability of alternative energy sources in the jurisdictions in which we operate, the capacity of electrical grids to support traditional and alternative energy sources, and the broader economic and legal circumstances affecting energy and electricity locally. We cannot predict the ultimate impact of achieving our 2030 emissions reduction targets, or the various implementation aspects, on our financial condition and results of operations.

Our business may face increased scrutiny from investors and other stakeholders related to our sustainability activities, including the goals, targets and other objectives that we announce, and our methodologies and timelines for pursuing them. If our sustainability assumptions or practices do not meet investor or other stakeholder

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expectations and standards, which continue to evolve, our reputation, our ability to attract or retain employees and our attractiveness as an investment or business partner could be negatively affected. Similarly, our failure or perceived failure to pursue or fulfill our sustainability focused goals, targets and objectives, to comply with ethical, environmental or other standards, regulations or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines we announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.

Risks Related to Intellectual Property, Information Technology and Data Privacy

We rely on intellectual property law and confidentiality agreements to protect our intellectual property. We also rely on intellectual property we license from third parties. Our failure to protect our intellectual property rights, or our inability to obtain or renew licenses to use intellectual property of third parties, could adversely affect our business.

We rely on a variety of intellectual property rights that we use in our services and products, and our success depends, in part, on our ability to protect our proprietary information and other intellectual property. Our intellectual property could be challenged, invalidated, circumvented or rendered unenforceable. 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. 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. 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. 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. 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.

Litigation to determine the scope of intellectual property rights, even if ultimately successful, could be costly and could divert management's attention away from other aspects of our business. In addition, our trade secrets may otherwise become known or be independently developed by competitors.

Our informational technology (“IT”) and operational technology (“OT”) systems are subject to interruption and cybersecurity risks that could adversely impact our operations.

Our operations (both onshore and offshore) are highly dependent on both IT and OT systems and personnel that implement and maintain such systems, including systems that collect, process, store or use personal information, confidential or proprietary information, and other sensitive information about our business and operations, as well as our customers, employees, suppliers and others. 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.

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. 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

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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. 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. 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. As a result, we may be required to incur additional costs to modify or enhance our IT or OT systems to prevent or remediate any such attacks. While we continue to evaluate potential replacements or upgrades of existing systems, the implementation of new systems or upgrades to existing systems subjects us to inherent costs and risks associated with replacing or changing these systems, including potential disruption of our internal control structure, substantial capital expenditures, demands on management time and other risks. In addition, potential upgrades or updates may not result in productivity improvements at the levels anticipated, or at all. Moreover, the implementation of new, updated, or upgraded systems may cause disruptions in our business operations. Any such disruption, and any other system disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on our operations.

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.

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. 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. These regulatory frameworks apply to activities related to the collection, use, disclosure, and transfer of personal data that may be conducted by us or directly or indirectly through our vendors or subcontractors.

Data privacy and security regulations may significantly impact our business activities and require substantial compliance costs that adversely affect our business, operating results, prospects and financial condition. Additionally, any failure by us to comply with these regulations, including as a result of a personal data breach, could result in significant penalties and liabilities for us. Interpretations and enforcement of these laws continue to evolve, and changes to these regulatory interpretations or enforcement of these laws could create a range of new compliance obligations, which could cause us to incur additional costs. Furthermore, foreign, federal, state and local government bodies or agencies have, in the past, adopted—and may in the future adopt—more laws and regulations affecting data privacy and security.

Although these privacy and security laws share similar concepts, each applicable jurisdiction may include important variations, such as differing standards or obligations. 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.

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. 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.

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.

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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.

Our certificate of incorporation authorizes us to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such preferences, powers and relative, participating, optional and other rights, including preferences over our common stock respecting dividends and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock.

Provisions in our corporate documents and Delaware law could delay or prevent a change in control of our company, even if that change would be beneficial to our shareholders.

The existence of some provisions in our corporate documents and Delaware law could delay or prevent a change in control of our company, even if that change would be beneficial to our shareholders. Our certificate of incorporation and bylaws contain provisions that may make acquiring control of our company difficult, including:

• provisions relating to the classification, nomination and removal of our directors;

• provisions regulating the ability of our shareholders to bring matters for action at annual meetings of our shareholders;

• provisions requiring the approval of the holders of at least 80% of our voting stock for a broad range of business combination transactions with related persons; and

• the authorization given to our board of directors to issue and set the terms of preferred stock.

In addition, the Delaware General Corporation Law imposes restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock.

General Risks

Our internal controls may not be sufficient to achieve all stated goals and objectives.

Our internal controls and procedures were developed through a process in which our management applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding the control objectives. The design of any system of internal controls and procedures is based, in part, on various assumptions about the likelihood of future events. We cannot assure that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

The use of estimates could result in future adjustments to our assets, liabilities and results of operations.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that our management make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following information should be read in conjunction with the information contained in “Part I. Item 1. Business,” “Part I. Item 1A. Risk Factors” and the audited consolidated financial statements and the notes thereto included under “Item 8. 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 2024 as compared to fiscal year 2023, please refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission ("SEC") on February 24, 2025 and March 4, 2025, respectively.

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 2026 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 2026;

• 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.

These forward-looking statements are subject to various risks, uncertainties and assumptions, including those we refer to under the headings “ Cautionary Statement Concerning Forward-Looking Statements” and “ Risk Factors” in Part I of this report. Although we believe that the expectations reflected in such forward-looking statements are reasonable, because of the inherent limitations in the forecasting process, as well as the relatively volatile nature of the industries in which we operate, we can give no assurance that those expectations will prove to have been correct. Accordingly, evaluation of our future prospects must be made with caution when relying on forward-looking information.

Our Engagement in the Energy Transition

Oceaneering currently generates a substantial majority of its revenue from the oil and gas sector. 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

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additional oil and gas exploration and development and inspection, maintenance and repair (“IMR”) activities will continue for decades to come. At the same time, due to increasing concerns about climate change, there is growing demand for cleaner hydrocarbon-based and renewable energy sources. 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. 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.

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. For example, we established our first Onshore Remote Operation Center (“OROC”) in Norway in 2015 and have since set up additional dedicated sites in the United States (“U.S.”), Brazil and United Kingdom (“U.K.”) OROCs enable customers to reduce their carbon footprint by relocating offshore workers to onshore control centers, thereby enhancing human health and safety, fostering greater collaboration and enabling faster responses to real-time events.

We are also committed to reducing our own energy consumption and the greenhouse gas emissions attributable to our operations. With the help of a third-party consultant over the past several years, we performed a global review of our assets and operations and identified our Scope 1 and Scope 2 emissions for our 2022 baseline in accordance with best practice greenhouse gas accounting methodologies, including the Greenhouse Gas Protocol. In 2023, we established and announced our 2030 greenhouse gas Scope 1 and Scope 2 emission reduction targets against a 2022 baseline. Our 2025 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, 2023 and 2024 Scope 1 and Scope 2 greenhouse gas emissions data. 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 income for 2025 and 2024.

Year Ended December 31,

(dollars in thousands)

Revenue

Operating Income (Loss)

Operating Income (Loss) %

Net Income (Loss)

We operate in five business segments. 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” or “ADTech”). Our four business segments within the Energy business are Subsea Robotics, Manufactured Products, Offshore Projects Group (“OPG”) and Integrity Management & Digital Solutions (“IMDS”). We report our ADTech business as one segment. Our Unallocated Expenses are expenses not associated with a specific business segment. These 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, including corporate administrative expenses.

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Our business primarily depends on the level of spending on offshore developments and related operating activities by our customers in the energy industry. Compared to 2024, our 2025 revenue increased 5% to $2.8 billion, with revenue growth in all of our operating segments, except IMDS. Consistent with the prior year, we generated a substantial majority of our revenue from services and products we provided to the energy industry in 2025. Consolidated operating income improved during 2025 as compared to 2024 with increases in all of our segments.

We had operating income of $305 million in 2025 and operating income of $246 million in 2024. In 2025, on a consolidated level, we had net income of $354 million, or diluted earnings of $3.49 per share, compared to net income of $147 million, or diluted earnings of $1.44 per share, in 2024. The increases in 2025 operating income as compared to 2024 were primarily due to higher revenue in all of our segments, except for IMDS, as a result of the realization of improved pricing in energy markets and growth in our energy businesses. The increase in net income and diluted earnings per shares in 2025 as compared to 2024, was due to increased operating income, along with an income tax benefit resulting primarily from the release of U.S. valuation allowances. All of our segments achieved improved sequential annual operating income, led by our Manufactured Products segment.

During the year ended December 31, 2025, our cash balance increased $191 million as compared to December 31, 2024. We generated $319 million from operating activities, along with a $14 million cash increase as a result of favorable movements in exchange rates, and the sale of a vessel in 2025 for $8.9 million. Partially offsetting these increases were $57 million maintenance capital expenditures, $54 million of growth capital expenditures and $40 million for repurchases of shares of our common stock.

We use our ROVs to provide drill support, vessel-based IMR, subsea hardware installation, construction, and pipeline inspection services to customers in the energy industry. Most of our ROVs have historically been used to provide drill support services. Therefore, the contracted number of floating drilling rigs is a leading market indicator for this business. The following table shows average floating rigs under contract and our ROV utilization.

Average number of floating rigs under contract

ROV days on hire (in thousands)

ROV utilization

Demand for floating rigs is a leading indicator of the strength of the deepwater market. According to comprehensive industry data compiled and published by a leading provider of financial data and market intelligence, excluding rigs under construction, at the end of 2025 there were 186 floating drilling rigs in operation or available for work throughout the world, with 136 of those rigs under contract. The average contracted offshore floating rig count in 2025 decreased by 6.2% to approximately 137 rigs.

Outlook

In 2026, we expect ADTech to be our primary growth engine, supported by our existing backlog and increased spending across defense and government markets. We anticipate results in our energy-focused businesses to be weighted towards the second half of the year as offshore activity improves.

For our energy-focused businesses, we expect 2026 financial results to reflect a global oil market that remains oversupplied through the early part of the year, with gradual tightening as the year progresses and as demand continues to rise. The number of subsea tree orders and installations is a leading indicator and is the primary demand driver for our Manufactured Products lines. According to data published by a world-leading analysis and consultancy company for the energy sector in December 2025, there are projected to be 306 tree awards and 370 subsea tree installations in 2026, compared to 190 tree awards and 343 installations in 2025 and 218 tree awards and 296 installations in 2024.

In our defense business, we expect another strong year supported by sustained U.S. prioritization of maritime security, unmanned systems, and industrial-base modernization. Domestically, we see steady activity across subsea critical infrastructure protection, unmanned maritime systems, and submarine sustainment. Internationally, rising geopolitical tensions and increased allied spending continue to expand opportunities for our autonomous underwater vehicles (“AUVs”), resident systems, and subsea monitoring solutions.

Based on our 2025 year-end backlog conversion, anticipated 2026 order intake and current market fundamentals, we project that our 2026 consolidated revenue will increase. For 2026, we project revenue growth in our ADTech. Subsea Robotics and IMDS segments, driven by our expectations for continued pricing progression and favorable

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year over year project mix. We forecast operating income growth for all of our segments, except for OPG. We will continue to prioritize safety and quality, while maintaining disciplined portfolio management and capital allocation.

For our Subsea Robotics segment, we expect slightly improved revenue and relatively flat operating income in 2026 based on stable pricing for ROVs, increased volume in Tooling and improved results in our Survey business.

We expect improvements in operating income on slightly lower revenue in our Manufactured Products segment in 2026, primarily due to the continued conversion of our existing backlog in energy products and benefits from cost reductions enacted in 2025 in our non-energy product lines. Our Manufactured Products backlog was $511 million as of December 31, 2025.

We expect revenue and operating income for our OPG segment to decrease significantly in 2026 due to lower activity levels in the U.S. Gulf and West Africa, partially offset by higher activity levels in the Caspian and Middle East regions and Brazil.

We anticipate our 2026 operating income for IMDS will improve significantly on higher revenue, with growth opportunities in digital and engineering services.

We project our ADTech 2026 operating income to increase on significantly higher revenue as compared to 2025, driven by growth in all three of our government-focused businesses.

For 2026, we anticipate Unallocated Expenses to average approximately $50 million per quarter, with the year-over year increase primarily due to higher costs associated with wage inflation, increased information technology costs, and foreign exchange impacts.

Results of Operations

Additional information on our business segments is shown in Note 10—“Operations by Business Segment and Geographic Area” in the Notes to Consolidated Financial Statements included in this report.

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 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. All days in this period are considered available days, including periods when an ROV is undergoing maintenance or repairs. Our ROVs do not have scheduled maintenance or repair that requires significant time when the ROVs are not available for utilization. “ROV utilization” percentage is defined as “ROV days utilized” divided by “ROV days available.”

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Year ended December 31,

(dollars in thousands)

Subsea Robotics

Revenue

Operating Income (Loss)

Operating Income (Loss)%

ROV Days Available

ROV Days Utilized

ROV Utilization %

Manufactured Products

Revenue

Operating Income (Loss)

Operating Income (Loss)%

Backlog at end of period

Offshore Projects Group

Revenue

Operating Income (Loss)

Operating Income (Loss)%

Integrity Management & Digital Solutions

Revenue

Operating Income (Loss)

Operating Income (Loss)%

Total Energy

Revenue

Operating Income (Loss)

Operating Income (Loss)%

Subsea Robotics. We believe we are the world's largest provider of work-class ROV services and this business segment is the largest contributor to our Energy business operating income. Our ROV business, within our Subsea Robotics segment, reflects the utilization percentages, fleet sizes and average pricing in the respective periods. Our ROV tooling provides an additional operational interface between an ROV and equipment located subsea. Our survey services business provides survey, positioning and geoscience services. The following table presents revenue from ROV services as a percentage of total Subsea Robotics revenue:

Year ended December 31,

ROV

Other

For the year ended December 31, 2025, our Subsea Robotics operating income increased as compared to 2024, on higher revenue, as a result of higher average revenue per day for our ROV business and increased pricing and volume for tooling on our existing ROV contracts. Partially offsetting these increases were decreased activity levels in our survey business primarily due to drydocking of our survey vessel in 2025. We had lower days on hire for the year ended December 31, 2025, as compared to 2024, that included a year-over-year decrease in drill support days in the first half of 2025 and relatively flat vessel support days.

Fleet utilization was 65% in the year ended December 31, 2025, as compared to 67% for the year ended December 31, 2024, resulting primarily from a decrease in ROV days utilized when compared to the corresponding period in the prior year, based on lower market activity. Our ROV fleet use during the year ended December 31, 2025, was 64% in drill support and 36% in vessel-based activity, as compared to 65% in drill support and 35% in vessel-based activity in the prior year. For each of the periods presented, we had a fleet of 250 work-class ROVs.

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Manufactured Products. For the year ended December 31, 2025, our Manufactured Products revenue and operating income increased, as compared to 2024, primarily due to increased activity in our energy-related businesses, execution on higher-margin backlog through our umbilical manufacturing plants and growth in our Grayloc business, partially offset by an inventory reserve of $13 million recorded in 2025 related to our theme park ride business.

Our Manufactured Products backlog was $511 million as of December 31, 2025, a $93 million, or 15%, decrease from December 31, 2024. Our book-to-bill ratio was 0.84 for the year ended December 31, 2025, as compared with a book-to-bill ratio of 0.97 for the year ended December 31, 2024.

Offshore Projects Group. Our OPG operating income for the year ended December 31, 2025 increased as compared to 2024, on higher revenue primarily due to an improved mix of well intervention and installation work in the U.S. Gulf, along with a reduction in drydock expense and the associated loss of vessel days that impacted the first quarter of 2024, partially offset by a reduction in international activity.

We have several deepwater vessels under a mix of short-term charters where we can see firm workload and spot charters as market opportunities arise. We have a total of five long-term charters as of December 31, 2025: one that began in 2024, two that began in 2023, and two that began in 2022. We signed extensions in the third quarter of 2025 for three of these long-term vessel charters that began in the first quarter of 2026. These charters have staggered maturity dates with none extending past the first quarter of 2029. Depending on 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.

Integrity Management & Digital Solutions. For the year ended December 31, 2025, compared to 2024, our IMDS operating income increased on lower revenue, primarily due to the absence of a one-time, non-cash charge associated with the divestiture of our Maritime Intelligence division in September 2024.

Aerospace and Defense Technologies. Revenue and operating income information for our ADTech segment are as follows:

Year ended December 31,

(dollars in thousands)

Revenue

Operating Income

Operating Income %

For the year ended December 31, 2025, compared to 2024, our ADTech segment operating income increased on higher revenue, primarily due to increased activity and margins in our Oceaneering Technologies (“OTECH”) and Marine Services Division, along with additional expenses and a reserve related to a contract dispute that were taken in 2024 and reversed in 2025 due to a subsequent change in estimate. Partially offsetting these increases were lower activity levels in our Oceaneering Space Systems businesses.

As previously disclosed, we are in discussions with an ADTech customer regarding a contract dispute. The dispute is not currently the subject of pending litigation, and the amount of any loss or other damages, if any, arising from the dispute will depend on multiple factors.

Unallocated 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.

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The following table sets forth our Unallocated Expenses for the periods indicated:

Year ended December 31,

(dollars in thousands)

Operating expenses

% of revenue

Our unallocated expenses for the year ended December 31, 2025 increased compared to 2024, primarily due to higher accruals in 2025 for incentive-based compensation, along with increased information technology costs.

Other. The following table sets forth our significant financial statement items below the operating income (loss) line:

Year ended December 31,

(dollars in thousands)

Interest income

Interest expense, net of amounts capitalized

Equity earnings (loss) of unconsolidated affiliates

Other income (expense), net

Provision (benefit) for income taxes

Interest income for the year ended December 31, 2025 as compared to 2024, increased primarily due to higher average interest-earning cash balances in 2025.

In addition to interest on borrowings, interest expense includes amortization of loan costs and debt discount, and fees for lender commitments under our senior secured revolving credit agreement and standby letters of credit and bank guarantees that banks issue on our behalf for performance bonds, bid bonds and self-insurance requirements. Interest expense was relatively flat in the year ended December 31, 2025 as compared to 2024. We recorded capitalized interest of $0.4 million 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. In the year ended December 31, 2025 and 2024, we incurred foreign currency transaction gains (losses) of $2.8 million and $0.9 million, respectively. These gains (losses) primarily resulted from foreign currency fluctuations in multiple countries. We could incur further foreign currency exchange gains (losses) in countries where we operate 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. Factors that affect our tax rate include our profitability levels in general and the geographical mix of our results. The effective tax rate for the twelve-month periods ended December 31, 2025 and 2024 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. 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.

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. Based on the available positive and negative evidence, including a trend of positive earnings, realization of deferred tax assets, projections of future taxable income in the U.S. and several non-U.S. jurisdictions, and the absence of objective negative evidence such as a three-year cumulative loss, we believe it is more likely than not that some of our deferred tax assets in the U.S. and several non-U.S. jurisdictions will be realized. Accordingly, during the twelve-month periods ended December 31, 2025 and 2024, we 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 $154 million in 2025 and $23 million in 2024. The 2025 decrease in valuation allowance was primarily related to US federal and state valuation allowance release of $140 million and $10 million, respectively. The 2024 decrease in valuation allowance was primarily related to valuation release in several non-US jurisdictions.

As of December 31, 2025, we continue to recognize a valuation allowance on certain identified deferred tax assets in the U.S. and non-U.S. jurisdictions where we believe that it is not more-likely-than-not that we would be able to realize the benefits of those specific deferred tax assets. In the U.S., a valuation allowance of $35 million was maintained against the deferred tax assets for U.S. federal foreign tax credit carryovers with a limited carryforward

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period. In several non-US jurisdictions, a valuation allowance of $451 million was maintained against deferred tax assets that the Company continues to believe are not more-likely-than-not to be realized. We will continue to monitor the need for a valuation allowance against its deferred tax assets and record adjustments as appropriate in future periods.

Our income tax payments for the full year of 2026 are estimated to be in the range of $95 million to $105 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.

Liquidity and Capital Resources

We consider our liquidity and capital resources adequate to support our operations, capital commitments and strategic growth initiatives as well as any opportunistic returns of capital to shareholders. Our material cash commitments consist primarily of obligations for long-term debt, purchase obligations as part of normal operations, and operating leases for land, buildings, vessels and equipment for the support and operation of our business. Our purchase obligations include agreements to purchase goods and services as well as commitments for capital assets used in the normal operations of our business. We are committed to maintaining strong liquidity and believe that our cash position, undrawn Revolving Credit Agreement (as defined below), and long-term debt maturity profile provide us with ample resources and time to address our liquidity needs, including potential future growth opportunities and working capital needs.

As of December 31, 2025, we had net working capital of $751 million, including cash and cash equivalents of $689 million. Additionally, as of December 31, 2025, we had $215 million of unused commitments through our Revolving Credit Agreement, which is further described below and in Note 8—“Debt” in the Notes to Consolidated Financial Statements included in this report. 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. 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). As of December 31, 2025, we had $411 million of purchase obligations including $383 million payable within the next twelve months and $28 million thereafter. For more on our operating leases for land, buildings, vessels and equipment for the operation of our business and their scheduled maturities, see Note 4—”Leases” in the Notes to Consolidated Financial Statements included in this report.

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. See “—Financing Activities” and Note 8—“Debt” in the Notes to Consolidated Financial Statements included in this report for additional information. We can provide no assurances as to the timing of any future repurchases or whether we will complete any repurchases at all.

Changes impacting our cash and cash equivalents for the years ended December 31, 2025 and 2024 are summarized as follows:

Year ended December 31,

(in thousands)

Changes in Cash:

Net Cash Provided by Operating Activities

Net Cash Used in Investing Activities

Net Cash Used in Financing Activities

Effect of exchange rates on cash

Net Increase (Decrease) in Cash and Cash Equivalents

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Operating activities. Our primary sources and uses of cash from operating activities for the years ended December 31, 2025 and 2024 are as follows:

Year ended December 31,

(in thousands)

Cash Flows from Operating Activities:

Net income (loss)

Noncash adjustments:

Depreciation and amortization

Deferred income tax provision (benefit)

Inventory write-downs

Other noncash

Total noncash adjustments

Accounts receivable and contract assets

Inventory

Current liabilities

Other changes

Net Cash Provided by Operating Activities

Net cash provided by operating activities for the years ended December 31, 2025 and 2024 of $319 million and $203 million, respectively, was affected by the following:

• Accounts receivable and contract assets - The increase (decrease) in cash related to accounts receivable and contract assets in 2025 and 2024 reflects the timing of project milestones and customer payments.

• Inventory - The increase (decrease) in cash related to inventory in 2025 and 2024 corresponds with a decrease in our Manufactured Products backlog in 2025 and an increase in our Manufactured Products backlog in 2024.

• Current liabilities - The decrease in cash related to current liabilities in 2025 reflects the timing of vendor payments and decreased contract liabilities due to a decrease in deferred customer prepayments. The increase in cash related to current liabilities in 2024 reflects the timing of vendor payments and increased contract liabilities due to an increase in deferred customer prepayments.

Investing activities. In 2025, we used $96 million in net investing activities, primarily for capital expenditures of $111 million that included increased spending in our Subsea Robotics and OPG segments to add capabilities and maintain current operations, partially offset by $8.9 million in proceeds from disposition of property and equipment. In 2024, we used $124 million in net investing activities, primarily for capital expenditures of $107 million that included increased spending in our OPG segment to add capabilities and maintain current operations. An additional $27 million was incurred for the acquisition of Global Design Innovation Ltd. (“GDi”), a U.K.-based provider of digital and software services, and $7.0 million was incurred for purchase of Angolan bonds, partially offset by $12 million in proceeds from sale of equity investments.

Our capital expenditures during 2025 and 2024 included $65 million and $64 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. In 2025, we retired sixteen of our conventional work-class ROV systems and replaced them with sixteen upgraded conventional work-class ROV systems. Our ROV fleet size was 250 as of December 31, 2025 and 2024.

In 2026, we expect our organic capital expenditures to total between $105 million and $115 million, exclusive of business acquisitions, as compared to $111 million of organic capital expenditures in 2025. We expect to fund the 2026 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.

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Financing activities. In 2025 we used $46 million of cash in financing activities primarily due to the repurchase of 1.8 million shares of our common stock for approximately $40 million, along with $5.3 million for payment of tax withholding related to vesting of stock awards.

In 2024 we used $27 million of cash in financing activities primarily due to the repurchase of 0.8 million shares of our common stock for approximately $20 million, along with $6.9 million for payment of tax withholding related to vesting of stock awards.

2028 Senior Notes. In February 2018, we completed the public offering of $300 million aggregate principal amount of 6.000% Senior Notes due 2028 (the “Existing 2028 Senior Notes”) and on October 2, 2023, we completed a private placement of $200 million aggregate principal amount of additional 2028 Senior Notes (the “New 2028 Senior Notes” and, together with the Existing 2028 Senior Notes, the “2028 Senior Notes”). 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. 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, 2025, there was $500 million of the 2028 Senior Notes outstanding.

On October 2, 2023, we used the net proceeds from the offering discussed above, together with cash on hand, to fund our offer to purchase (the “Tender Offer”) for cash any and all of the $400 million principal amount outstanding of the 4.650% Senior Notes due 2024 (the “2024 Senior Notes”). 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 redeemed all of the remaining $88 million principal amount outstanding of the 2024 Senior Notes at par on November 2, 2023, the (“Redemption Date”), and financed the redemption with cash on hand.

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. 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. Our obligations under the Revolving Credit Agreement are guaranteed by certain of our wholly owned subsidiaries and are secured by first priority liens on certain of our assets and those of the guarantors, including, among other things, intellectual property, inventory, accounts receivable, equipment and equity interests in subsidiaries. As of December 31, 2025, we had no borrowings outstanding under the Revolving Credit Facility and no letters of credit outstanding under the Revolving Credit Agreement.

We may borrow under the Revolving Credit Facility at either (1) a base rate, determined as the greatest of (A) the prime rate of Wells Fargo Bank, National Association, (B) the federal funds effective rate plus 1 ⁄ 2 of 1% and (C) Adjusted Term Secured Overnight Financing Rate (“SOFR”) (as defined in the Revolving Credit Agreement for a one-month tenor plus 1%, in each case plus the applicable margin, which varies from 1.25% to 2.25% depending on our Consolidated Net Leverage Ratio (as defined in the Revolving Credit Agreement), or (2) Adjusted Term SOFR plus the applicable margin, which varies from 2.25% to 3.25% depending on our Consolidated Net Leverage Ratio. We will also pay a facility fee based on the amount of the underlying commitment that is being utilized, which fee varies from 0.300% to 0.375%, with the higher rate owed when we use the Revolving Credit Facility less.

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. As of December 31, 2025 and 2024, 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. 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. 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, 2025, the full $215 million was available to borrow under the

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Revolving Credit Facility. In addition, the Revolving Credit Agreement contains various covenants that we believe are customary for agreements of this nature, including, but not limited to, restrictions on our ability and the ability of each of our subsidiaries to incur debt, grant liens, make certain investments, make distributions, merge or consolidate, sell assets and enter into certain restrictive agreements. As of December 31, 2025, we were in compliance with all of 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. 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.

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. These costs, net of accumulated amortization, are included as a reduction of long-term debt in our consolidated balance sheets, as they pertain to the 2028 Senior Notes, and in other noncurrent assets as they pertain to the Revolving Credit Agreement. 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 for the years ended December 31, 2025 and 2024.

We recorded a discount of $20 million related to the 2028 Senior Notes issued in October 2023. This cost, net of accumulated amortization, is included as a reduction of long-term debt in our consolidated balance sheets and is being amortized to interest expense through the maturity date of the 2028 Senior Notes using the straight-line method, which approximates the effective interest rate method. In the years ended December 31, 2025 and 2024, we amortized $4.3 million and $4.0 million, respectively, to interest expense.

We have not guaranteed any debt not reflected on our consolidated balance sheets as of December 31, 2025 and 2024, and we do not have any off-balance sheet arrangements, as such term is defined by the SEC rules.

Share Repurchase Program. In December 2014, our Board of Directors approved a share repurchase program under which we may repurchase up to 10 million shares of our common stock on a discretionary basis. The program calls for any repurchases to be made in the open market, or in privately negotiated transactions from time to time, in compliance with applicable laws, rules and regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended, subject to market and business conditions, levels of available liquidity, cash requirements for other purposes, applicable legal requirements and other relevant factors. Under this program, which has no expiration date, we repurchased 2.0 shares of our common stock for approximately $100 million in 2015. We did not repurchase any shares from January 2016 through August 2024. In the year ended December 31, 2024, we repurchased 0.8 million shares for approximately $20 million. In the year ended December 31, 2025, we repurchased 1.8 million shares for approximately $40 million. From the inception of this program through December 31, 2025, we have repurchased approximately 4.6 million shares of our common stock for a total cost of approximately $161 million. As of December 31, 2025, we retained 11 million of the shares we had repurchased through this and a prior repurchase program. We account for the shares we hold in treasury under the cost method, at average cost. The timing and amount of any future repurchases will be determined by our management. We expect that any additional shares repurchased under the plan will be held as treasury stock for possible future use. The plan does not obligate us to repurchase any particular number of shares.

Foreign Currency Adjustments. Because of our significant foreign operations, we are exposed to currency fluctuations and exchange rate risks. A stronger U.S. dollar against any of the foreign currencies where we conduct business could result in lower operating income. 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, 2025 relate primarily to our net investments in, including long-term loans to, our foreign subsidiaries. See Item 7A—“Quantitative and Qualitative Disclosures About Market Risk.”

Critical Accounting Policies and Estimates

We have based the following discussion and analysis of our financial condition and results of operations on our consolidated financial statements, which we have prepared in conformity with accounting principles generally accepted in the United States. These principles require us to make various estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the periods we present. We base our estimates on historical experience, available information and other assumptions we believe to be reasonable under the circumstances. On an ongoing

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basis, we evaluate our estimates; however, our actual results may differ from these estimates under different assumptions or conditions. The following discussion summarizes the accounting policies we believe (1) require our management's most difficult, subjective or complex judgments and (2) are the most critical to our reporting of results of operations and financial position. 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. We account for significant fixed-price contracts, mainly relating to our Manufactured Products segment, and to a lesser extent in our OPG and ADTech segments, by recognizing revenue over time using the cost-to-cost input method to measure progress toward satisfaction of an overtime performance obligation. This commonly used method is based on the premise that costs incurred are proportionate to progress towards satisfaction of the performance obligation and is measured by comparing project costs-to-date to total estimated costs. The performance obligation is satisfied as we create a product on behalf of the customer over the life of the contract. We apply judgment in estimating project status and the costs necessary to complete projects. For the year ended December 31, 2025, we recognized approximately 17% of our revenue over time using the cost-to-cost input method.

While our contracts predominantly only contain one performance obligation and a limited number have variable consideration, we apply judgment, when applicable, in the determination and allocation of transaction price to performance obligations and the subsequent recognition of revenue, based on the facts and circumstances of each contract. We routinely review estimates related to our contracts and, where required, reflect revisions to profitability in earnings immediately. 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. We did not have any material adjustments during the years ended December 31, 2025 and 2024, 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 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. For long-lived assets to be held and used, we base our evaluation on impairment indicators such as the nature of the assets, the future economic benefits of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset may not be recoverable, we determine whether an impairment has occurred through the use of an undiscounted cash flows analysis of the asset at the lowest level for which identifiable cash flows exist. If an impairment has occurred, we recognize a loss for the difference between the carrying amount and the fair value of the asset.

Our estimates of fair values for our asset groups require us to use significant unobservable inputs, classified as Level 3 fair value measurements, including assumptions related to future performance, risk-adjusted discount rates, future commodity prices and demand for our services and estimates of expected realizable value. These assumptions incorporate inherent uncertainties, including estimates of projected supply and demand for our products and services and future market conditions, which are subjective and difficult to predict due to volatility in overall economic environments, among other things, and could result in impairment charges in future periods if actual results differ materially from the assumptions used in our forecasts. 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, 2025 or 2024.

Income Taxes. Our tax provisions are based on our expected taxable income, statutory rates and tax-planning opportunities available to us in the various jurisdictions in which we operate. The determination of taxable income in any jurisdiction requires the interpretation of the related tax laws. We are at risk that a taxing authority's final determination of our tax liabilities may differ from our interpretation.

We account for any applicable interest and penalties on uncertain tax positions as a component of our provision for income taxes on our financial statements. Current income tax expense represents either nonresident withholding taxes or the liabilities expected to be reflected on our income tax returns for the current year, while the net deferred

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income tax expense or benefit generally represents the change in the balance of deferred tax assets or liabilities, except for currency translation adjustments, as reported on our balance sheet.

We establish valuation allowances to reduce 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. Changes to valuation allowances based on available positive and negative evidence impact our income tax provision in the period in which such adjustments are identified and recorded.

Contractual Obligations

As of December 31, 2025, we had payments due under contractual obligations as follows:

(dollars in thousands)

Payments due by period

Total

After 2030

Long-term Debt

Purchase Obligations

Operating Lease Liabilities

Other Long-term Obligations reflected on our Balance Sheet under U.S. GAAP

TOTAL

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