8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 20, 2008

OCEANEERING INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 1-10945
(Commission
File Number) 95-2628227
(IRS Employer
Identification No.)

11911 FM 529
Houston, TX
(Address of principal executive offices) 77041
(Zip Code)

Registrant’s telephone number, including area code: (713) 329-4500

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On February 20, 2008, we issued a press release announcing our earnings for the fourth quarter and the full year of 2007. A copy of that press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 9.01. Financial Statements and Exhibits.

The following is being furnished as an exhibit to this report.

Exhibit 99.1 Press Release of Oceaneering International, Inc., dated February 20, 2008

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

OCEANEERING INTERNATIONAL, INC.
By:	/s/ MARVIN J. MIGURA
	Marvin J. Migura
	Senior Vice President and Chief Financial Officer (Principal Financial Officer)

Date: February 20, 2008

Exhibit Index

Exhibit No.		Description
	99.1	Press Release issued by Oceaneering International, Inc. on February 20, 2008.

EX-99.1

Exhibit 99.1

Oceaneering Reports Record Fourth Quarter and Annual Earnings

— Year-Over-Year Quarterly Earnings Increase Over 50%
— Annual Earnings Increase 45%
— Annual Earnings Rise for the Fourth Consecutive Year

February 20, 2008 – Houston, Texas – Oceaneering International, Inc. (NYSE:OII) today reported record fourth quarter and annual earnings for the periods ended December 31, 2007. Annual earnings increased for the fourth consecutive year.

During the fourth quarter of 2007, on revenue of $481.6 million, Oceaneering generated net income of $45.5 million, or $0.81 per share. During the corresponding period in 2006, Oceaneering reported revenue of $342.4 million and net income of $29.8 million, or $0.54 per share. For the year 2007, Oceaneering reported net income of $180.4 million, or $3.24 per share, on revenue of $1.7 billion. Net income for 2006 was $124.5 million, or $2.26 per share, on revenue of $1.3 billion.

Summary of Results
(in thousands, except per share amounts)

	Three Months Ended						Year Ended
	December 31,				Sept. 30,		December 31,
	2007		2006		2007		2007		2006
Revenue	$	481,611	$	342,363	$	485,424	$	1,743,080	$	1,280,198
Gross Margin		110,160		75,622		117,513		413,285		296,121
Operating Income		74,184		47,882		85,605		289,623		194,336
Net Income		45,482		29,844		53,853		180,374		124,494
Diluted Earnings Per Share	$	0.81	$	0.54	$	0.96	$	3.24	$	2.26
Weighted Average Number of Diluted Shares		55,934		55,349		55,821		55,755		54,991

Quarterly net income increased $15.6 million year-over-year and annual net income rose $55.9 million largely as a result of higher operating income performances from Remotely Operated Vehicles (ROV), Subsea Products, Subsea Projects, and Inspection.

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T. Jay Collins, President and Chief Executive Officer, stated, “Results for the fourth quarter and the year were outstanding. We achieved record earnings for the fourth consecutive year. Our earnings growth was driven by our strategic focus on providing services and products to support deepwater and subsea completion activity. Additionally, we benefited from performing Gulf of Mexico hurricane damage projects.

“Four of our oilfield businesses achieved record annual operating income performances. These accomplishments were attributable to demand growth within our offshore oilfield service and product markets, the business expansion strategy we have in place, and exceptional operational execution. The market environment was such that we were able to achieve strong utilization of our assets at favorable prices.

“ROVs achieved record annual results as our average revenue per day-on-hire surpassed the $8,750 mark. Operating income rose 30%. Compared to 2006, our average ROV pricing was up 16% and the number of ROV days on hire grew by 12% as we increased our fleet size and utilization rate.

“Subsea Products operating income rose over 70% in 2007 on increased sales of our specialty subsea products and umbilicals. Operating margin increased from 15% to a record high 18%. We improved OIE product pricing and manufacturing execution through our continuous improvement initiatives. We also benefited from increased throughput and the resolution of 2006 startup problems at our U.S. umbilical manufacturing plant. At year-end our backlog was $338 million.

“Subsea Projects operating income increased more than 55% on the strength of our increased participation in hurricane damage projects in the GOM. We continued to benefit from excellent pricing and utilization for our vessel and diving assets. Additionally, during the year we profited from adding a second saturation diving system, upgrading one of our deepwater vessels, and chartering two dynamically positioned vessels and a barge.

“Inspection achieved record financial results due to increased demand in all of the geographic markets we serve and our success in selling more value-added services and improving pricing. Operating income grew by over 50%.

“During the year we invested approximately $234 million, including $122 million to upgrade and increase the size of our ROV fleet and $66 million to expand our Subsea Products manufacturing and rental service capabilities. These capital investments position Oceaneering for increased profitability in the years ahead. At year-end our debt-to-capitalization was 18% and we remain committed to using our resources to continue our growth strategy.

“Our fourth quarter performance included anomalies reported in two of our business segments. Subsea Products operating income margin declined to 14% from the 21% achieved in the third quarter as we had to re-manufacture an umbilical in the U.K., which initially failed to meet specifications. Additionally, margin was eroded by an umbilical job in Brazil, awarded in 2005 but delayed by the customer until 2007. The contract for this job did not contain adequate protection against escalation in raw material costs and the devaluation of the dollar over the longer-than-anticipated contract period. Variation orders to increase the sales price for these jobs have been submitted; however, there can be no assurance that these requests will be approved by the customers. Mobile Offshore Production Systems reported an operating loss as we incurred $2.8 million of costs to mobilize the Ocean Pensador from the

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U.S. to Southeast Asia. We moved the tanker to better position it in the market place. It is now closer to several shipyards capable of modifying it, either for us or another company should we choose to sell it.

“During 2008 we expect to benefit from our 2006 and 2007 Subsea Products investments, which increased our manufacturing capacity and rental service capabilities. For ROVs, we anticipate continued pricing improvement and expansion of our fleet to meet rising customer demand. Subsea Projects operating income is projected to decline as we foresee decreasing demand for our shallow-water vessel and diving services as hurricane damage projects near completion. Additionally, four of our six company-owned vessels will be temporarily out of service during the year undergoing mandatory regulatory drydock inspections.

“We continue to project record EPS for 2008 in the range of $3.50 to $3.80. We anticipate the 2008 growth in EPS will be led by operating income improvements in Subsea Products and ROVs. For the first quarter of 2008, we are forecasting EPS of $0.65 to $0.75. This is consistent with our historical quarterly earnings percentage distribution, as our first quarter EPS performance has been the lowest quarter in each of the past six years and usually lower than the fourth quarter of the previous year.

“Looking beyond 2008, we anticipate demand for our deepwater services and products will continue to rise and, consequently, believe our business prospects for the next several years are excellent.”

Statements in this press release that express a belief, expectation or intention, as well as those that are not historical fact, are forward looking. The forward-looking statements in this press release include the statements concerning Oceaneering’s: assessment that its 2007 capital investments position Oceaneering for increased profitability in the years ahead; expectation of achieving the estimated record EPS range in 2008; anticipation that 2008 earnings growth will be led by operating income improvements in Subsea Products and ROVs and the factors expected to result in those improvements; projection that Subsea Projects operating income in 2008 will decline and the factors expected to cause the decline; forecasted first quarter and full-year 2008 EPS ranges; and anticipation that demand for its deepwater services and products will continue to rise and belief that its business prospects for the next several years are excellent. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on current information and expectations of Oceaneering that involve a number of risks, uncertainties, and assumptions. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to: industry conditions; prices of crude oil and natural gas; Oceaneering’s ability to obtain and the timing of new projects; and changes in competitive factors. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, actual outcomes could vary materially from those indicated. These and other risks are more fully described in Oceaneering’s latest annual report on Form 10-K and its other periodic filings with the Securities and Exchange Commission.

Oceaneering is a global oilfield provider of engineered services and products primarily to the offshore oil and gas industry, with a focus on deepwater applications. Through the use of its applied technology expertise, Oceaneering also serves the defense and aerospace industries.

For further information, please contact Jack Jurkoshek, Director Investor Relations, Oceaneering International, Inc., 11911 FM 529, Houston, Texas 77041; Telephone 713-329-4670; Fax 713-329-4653; www.oceaneering.com. A live webcast of the Company’s earnings release conference call, scheduled for February 21, 2007 at 10:00 a.m. Central Time, can be heard at www.companyboardroom.com (enter ticker OII).

PR 996

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OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	Dec. 31, 2007		Dec. 31, 2006
	(in thousands)
ASSETS
Current Assets (including cash and cash equivalents of $27,110 and $26,228)	$	670,569	$	523,645
Net Property and Equipment		638,107		523,707
Other Assets		222,764		194,670
TOTAL ASSETS	$	1,531,440	$	1,242,022
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities	$	338,975	$	279,706
Long-term Debt		200,000		194,000
Other Long-term Liabilities		77,155		71,552
Shareholders’ Equity		915,310		696,764
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,531,440	$	1,242,022

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	For the Three Months Ended									For the Year Ended
	Dec. 31,			Dec. 31,			Sept. 30,			December 31,
	2007			2006			2007			2007			2006
	(in thousands, except per share amounts)
Revenue	$	481,611		$	342,363		$	485,424		$	1,743,080		$	1,280,198
Cost of Services and Products		371,451			266,741			367,911			1,329,795			984,077
Gross Margin		110,160			75,622			117,513			413,285			296,121
Selling, General and Administrative Expense		35,976			27,740			31,908			123,662			101,785
Income from Operations		74,184			47,882			85,605			289,623			194,336
Interest Income		630			470			316			1,198			730
Interest Expense		(3,831	)		(3,470	)		(4,400	)		(15,333	)		(12,920	)
Equity earnings of unconsolidated affiliates, net		767			1,336			1,022			4,030			12,051
Other Income (Expense), net		(1,778	)		(902	)		(69	)		(2,020	)		(3,302	)
Income before income taxes		69,972			45,316			82,474			277,498			190,895
Provision for Income Taxes		24,490			15,472			28,621			97,124			66,401
Net Income	$	45,482		$	29,844		$	53,853		$	180,374		$	124,494
Diluted Earnings per Share	$	0.81		$	0.54		$	0.96		$	3.24		$	2.26
Weighted average number of common shares and equivalents		55,934			55,349			55,821			55,755			54,991

The above Condensed Consolidated Balance Sheets and Consolidated Statements of Income should be read in conjunction with the Company’s latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

SEGMENT INFORMATION

		For the Three Months Ended									For the Year Ended
		Dec. 31,			Dec. 31,			Sept. 30,			Dec. 31,			Dec. 31,
		2007			2006			2007			2007			2006
		($ in thousands)
Remotely Operated Vehicles
	Revenue	$	145,945		$	113,867		$	141,887		$	531,381		$	410,256
	Gross margin	$	47,563		$	36,265		$	45,712		$	168,322		$	129,929
	Operating income	$	40,259		$	31,387		$	39,815		$	144,242		$	111,022
	Operating margin %		28	%		28	%		28	%		27	%		27	%
	Days available		19,024			16,995			18,779			72,880			66,155
	Utilization		87	%		86	%		88	%		87	%		85	%
Subsea Products
	Revenue	$	154,569		$	99,184		$	145,186		$	521,937		$	364,510
	Gross margin	$	33,568		$	22,663		$	40,172		$	133,285		$	81,380
	Operating income	$	21,421		$	15,255		$	29,786		$	92,804		$	53,645
	Operating margin %		14	%		15	%		21	%		18	%		15	%
	Backlog	$	338,000		$	359,000		$	344,000		$	338,000		$	359,000
Subsea Projects
	Revenue	$	73,088		$	32,527		$	82,989		$	257,752		$	155,046
	Gross margin	$	28,362		$	11,477		$	31,118		$	100,577		$	65,119
	Operating income	$	26,253		$	10,057		$	28,954		$	92,841		$	59,585
	Operating margin %		36	%		31	%		35	%		36	%		38	%
Inspection
	Revenue	$	58,667		$	47,520		$	58,182		$	219,686		$	169,014
	Gross margin	$	8,886		$	6,781		$	10,483		$	37,195		$	28,501
	Operating income	$	5,000		$	3,149		$	6,752		$	22,749		$	14,946
	Operating margin %		9	%		7	%		12	%		10	%		9	%
Mobile Offshore Production Systems
	Revenue	$	11,260		$	14,477		$	13,366		$	50,103		$	52,931
	Gross margin	$	(31	)	$	5,380		$	3,049		$	12,443		$	17,136
	Operating income (loss)	$	(315	)	$	5,030		$	2,657		$	11,048		$	16,001
	Operating margin %		-3	%		35	%		20	%		22	%		30	%
Advanced Technologies
	Revenue	$	38,082		$	34,788		$	43,814		$	162,221		$	128,441
	Gross margin	$	5,016		$	6,062		$	7,425		$	25,561		$	19,862
	Operating income	$	1,365		$	3,786		$	4,139		$	14,458		$	11,585
	Operating margin %		4	%		11	%		9	%		9	%		9	%
Unallocated Expenses
	Gross margin	$	(13,204	)	$	(13,006	)	$	(20,446	)	$	(64,098	)	$	(45,806	)
	Operating income	$	(19,799	)	$	(20,782	)	$	(26,498	)	$	(88,519	)	$	(72,448	)
TOTAL
	Revenue	$	481,611		$	342,363		$	485,424		$	1,743,080		$	1,280,198
	Gross margin	$	110,160		$	75,622		$	117,513		$	413,285		$	296,121
	Operating income	$	74,184		$	47,882		$	85,605		$	289,623		$	194,336
	Operating margin %		15	%		14	%		18	%		17	%		15	%
SELECTED CASH FLOW INFORMATION
Capital expenditures, including acquisitions		$	55,778		$	59,496		$	66,504		$	233,795		$	193,842
Depreciation and amortization		$	25,110		$	21,517		$	24,534		$	93,776		$	80,456