OCEANEERING INTERNATIONAL, INC.
Certain statements we make in this quarterly report on Form 10-Q are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements include,
without limitation, statements regarding our expectations about:
•the impacts of the coronavirus ("COVID-19") pandemic on the U.S. and the global
economy, as well as on our business;
•our third quarter 2021 operating results and the contributions from our
segments to those results, as well as the amount of Unallocated Expenses for the
third quarter;
•tax refunds under the U.S. Coronavirus Aid, Relief, and Economic Security Act
(the "CARES Act") and other tax refunds;
•our cash tax payments and projected capital expenditures for 2021;
•free cash flow, which we define as net cash provided by operating activities
less cash paid for purchases of property and equipment, in 2021 and in future
periods;
•future demand, order intake and business activity levels;
•the backlog of our Manufactured Products segment, to the extent backlog may be
an indicator of future revenue or productivity;
•the adequacy of our liquidity, cash flows and capital resources;
•the condition of debt markets and our possible future debt repurchases;
•shares to be repurchased under our share repurchase plan;
•the implementation of new accounting standards and related policies, procedures
and controls;
•seasonality; and
•industry conditions.
These forward-looking statements are subject to various risks, uncertainties and
assumptions, including those we have referred to under the headings "Risk
Factors" and "Cautionary Statement Concerning Forward-Looking Statements" in
Part I of our annual report on Form 10-K for the year ended December 31, 2020 .
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.
The following discussion should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in our annual report on Form 10-K for the year ended
Realignment of Reportable Segments
As described in Note 10-"Business Segment Information" in the Notes to Consolidated Financial Statements included in this report, in the third quarter of 2020, we changed our organizational structure as part of the transformation to realign our businesses to achieve greater cost efficiencies and to bring together business units that frequently work together and promote increased synergies in bidding, project management and the use of offshore technicians. As a result, information that our chief operating decision maker regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, for the three- and six-month periods endedJune 30, 2021 , we are reporting our financial results consistent with our newly realigned operating segments and have recast certain prior period amounts to conform to the way we internally manage our businesses and monitor segment performance. Our new structure aligns our company around five reportable segments: (1)Subsea Robotics; (2) Manufactured Products; (3)Offshore Projects Group ("OPG"); (4) Integrity Management & Digital Solutions ("IMDS"); and (5) Aerospace and Defense Technologies ("ADTech").
Overview of our Results and Guidance
Our diluted earnings (loss) per share for the three- and six-month periods endedJune 30, 2021 were$0.06 and$(0.03) , respectively, as compared to$(0.25) and$(3.96) for the corresponding periods of the prior year. These 23 -------------------------------------------------------------------------------- Table of Contents operating results met our expectations, and each of our operating segments in the three- and six-month periods endedJune 30, 2021 contributed operating income. Our continued operating results improvement in the second quarter of 2021, as compared to the first quarter of 2021, was primarily attributable to a seasonally influenced growth in revenue in our energy businesses complemented by continued operating discipline and incremental efficiency gains. As expected, compared to the first quarter of 2021, our energy segments increased revenue, with double-digit growth, and improved operating results in the second quarter. Our ADTech segment delivered sequential double-digit revenue growth and solid operating results. During the first half of 2021, our cash increased$4.1 million , primarily from the$49 million of cash generated from operating activities as a result of good operating performance. We repurchased$31 million in aggregate principal amount of our 2024 Senior Notes (as defined below in Liquidity and Capital Resources) through open market repurchases and$23 million for maintenance and growth capital expenditures. We believe that our cash balance of$456 million atJune 30, 2021 coupled with improved debt markets and our expected cash flows from operations in 2021 will provide us with improved flexibility to address our 2024 debt maturity while we continue to leverage our technologies and core competencies into energy-transition opportunities. Looking forward, we believe our consolidated third quarter 2021 results will decline on moderately lower revenue, as compared to our second quarter 2021 results. We expect commodity prices to support good activity levels in our energy segments, particularly for short-cycle work. We anticipate relatively flat activity and operating profitability in our Subsea Robotics, Manufactured Products and IMDS segments, lower activity levels and relatively flat operating profitability in our OPG segment, and lower activity levels and lower operating profitability in our ADTech segment. Unallocated Expenses are expected to be in the mid-$30 million range, due primarily to increased information technology infrastructure costs and normalized accruals for incentive-based compensation. OnMarch 27, 2020 , the CARES Act was signed into law inthe United States . In accordance with the recently established rules and procedures under the CARES Act, we filed a 2014 refund claim to carry back ourU.S. net operating loss generated in 2019 and filed an amended 2013 income tax return that was impacted by the net operating loss carryback. Prior to the enactment of the CARES Act, such net operating losses could only be carried forward. As a result, we expect to receive combined refunds of approximately$33 million , of which we have received$5.6 million as ofJune 30, 2021 . The remaining refunds are classified as accounts receivable, net, in our consolidated balance sheet as ofJune 30, 2021 . Our cash tax payments for the full year of 2021 are estimated to be in the range of$40 million to$45 million , primarily due to taxes incurred in countries that impose tax on the basis of in-country revenue, without regard to the profitability of such operations. These cash tax payments do not include the impact of approximately$28 million of CARES Act tax refunds expected to be received in 2021 or 2022. We affirm our guidance range of$50 million to$70 million for capital expenditures for the full year of 2021. We remain committed to maintaining strong liquidity for the full year of 2021 and believe that our cash position, undrawn revolving credit facility, and debt maturity profile should provide us ample resources and time to address potential opportunities to improve our returns.
Results of Operations
We operate in five business segments. The segments are contained within two
businesses - services and products provided primarily to the oil and gas
industry, and to a lesser extent, the offshore renewables and mobility solutions
industries ("Energy Services and Products") and services and products provided
to non-energy industries ("Aerospace and Defense Technologies"). Our Unallocated
Expenses are those not associated with a specific business segment.
24
--------------------------------------------------------------------------------
Table of Contents
Consolidated revenue and profitability information are as follows:
Three Months Ended Six Months Ended
(dollars in thousands) Jun 30, 2021 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020
Revenue $ 498,199 $ 427,216 $ 437,553 $ 935,752 $ 963,884
Gross Margin 68,397 42,537 56,657 125,054 89,289
Gross Margin % 14 % 10 % 13 % 13 % 9 %
Operating Income (Loss) 22,819 (5,182) 13,783 36,602 (385,939)
Operating Income (Loss) % 5 % (1) % 3 % 4 % (40) %
We generate a material amount of our consolidated revenue from contracts for
services in the U.S. Gulf of Mexico in our OPG segment, which is usually more
active in the second and third quarters, as compared to the rest of the year.
The European operations of our IMDS segment are also seasonally more active in
the second and third quarters. Revenue in our Subsea Robotics segment is subject
to seasonal variations in demand, with our first quarter generally being the low
quarter of the year. The level of our Subsea Robotics seasonality depends on the
number of Remotely Operated Vehicles ("ROVs") we have engaged in vessel-based
subsea infrastructure inspection, maintenance, repair and installation, which is
more seasonal than drilling support. Revenue in each of our Manufactured
Products and ADTech segments generally has not been seasonal.
We had operating income of $23 million , $14 million and $37 million in the
three-month periods ended June 30, 2021 and March 31, 2021 , and the six-month
period ended June 30, 2021 , respectively. We had operating losses of $5.2
million and $386 million in the three- and six-month periods ended June 30,
2020 , respectively. Included in our operating income and loss for the three
months ended June 30, 2021 , June 30, 2020 and March 31, 2021 were certain
charges of $1.4 million , $5.7 million and $1.3 million , respectively. Included
in our operating income and loss for the six months ended June 30, 2021 and
2020, were certain charges of $2.7 million and $391 million , respectively. These
charges were primarily due to market conditions requiring impairment of certain
of our assets along with other costs we recognized as we adapted our geographic
footprint and staffing levels to the conditions of the markets we serve and are
summarized as follows:
For the three months ended June 30, 2021
Integrity
Management & Aerospace and
Subsea Manufactured Offshore Projects Digital Defense Unallocated
(in thousands) Robotics Products Group Solutions Technologies Expenses Total
Charges for the effects of:
Loss on sale of asset $ - $ - $ - $ - $ - $ 1,415 $ 1,415
Total charges $ - $ - $ - $ - $ - $ 1,415 $ 1,415
For the three months ended June 30, 2020 *
Offshore Integrity Aerospace and
Subsea Manufactured Projects Management & Defense Unallocated
(in thousands) Robotics Products Group Digital Solutions Technologies Expenses TotalCharges for the effects of:
Other $ 1,380 $ 1,212 $ 1,405 $ 1,536 $ - $ 175 5,708
Total charges $ 1,380 $ 1,212 $ 1,405 $ 1,536 $ - $ 175 $ 5,708 * Recast to reflect segment changes.
For the three months ended March 31, 2021
Integrity
Management & Aerospace and
Subsea Manufactured Offshore Digital Defense Unallocated
(in thousands) Robotics Products Projects Group Solutions Technologies Expenses TotalCharges for the effects of:
Other $ 395 $ 537 $ 149 $ 217 $ 10 $ - 1,308
Total charges $ 395 $ 537 $ 149 $ 217 $ 10 $ - $ 1,308
25--------------------------------------------------------------------------------
Table of Contents
For the six months ended June 30, 2021
Integrity
Management & Aerospace and
Manufactured Offshore Digital Defense Unallocated
(in thousands) Subsea Robotics Products Projects Group Solutions Technologies Expenses Total
Charges for the effects of:
Loss on sale of asset $ - $ - $ - $ - $ - $ 1,415 $ 1,415
Other 395 537 149 217 10 - 1,308
Total charges $ 395 $ 537 $ 149 $ 217 $ 10 $ 1,415 $ 2,723
For the six months ended June 30, 2020 *
Integrity
Offshore Management & Aerospace and
Subsea Manufactured Projects Digital Defense Unallocated
(in thousands) Robotics Products Group Solutions Technologies Expenses Total
Charges for the effects of:
Long-lived assets impairments $ - $ 61,074 $ 7,522 $ 167 $ - $ - $ 68,763
Long-lived assets write-offs 7,328 - - - - - 7,328
Goodwill impairment 102,118 11,388 66,285 123,214 - - 303,005
Other $ 2,299 $ 3,196 $ 2,621 $ 3,767 $ - $ 455 12,338
Total charges $ 111,745 $ 75,658 $ 76,428 $ 127,148 $ - $ 455 $ 391,434 * Recast to reflect segment changes.
Energy Services and Products
The primary focus of our Energy Services and Products business over the last several years has been toward leveraging our asset base and capabilities for providing services and products predominantly for offshore energy operations and subsea completions, inclusive of our customers' operating expenses and the offshore renewable energy market. The table that follows sets out the revenue and profitability for the business segments within our Energy Services and Products business. In theSubsea Robotics section of the table that follows, "ROV days available" includes all days from the first day that an ROV is placed into 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. 26
--------------------------------------------------------------------------------
Table of Contents
Three Months Ended Six Months Ended
(dollars in thousands) Jun 30, 2021 Jun 30, 2020 * Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 *
Subsea Robotics
Revenue $ 141,371 $ 119,234 $ 119,119 $ 260,490 $ 259,004
Gross Margin 31,767 21,324 24,078 55,845 40,797
Operating Income
(Loss) 21,710 11,662 14,619 36,329 (82,421)
Operating Income
(Loss) % 15 % 10 % 12 % 14 % (32) %
ROV Days Available 22,750 22,750 22,469 45,219 45,500
ROV Days Utilized 14,005 13,501 11,887 25,892 28,354
ROV Utilization 62 % 59 % 53 % 57 % 62 %
Manufactured Products
Revenue 79,127 100,570 86,825 165,952 267,104
Gross Margin 8,391 13,679 10,004 18,395 31,628
Operating Income
(Loss) 790 3,865 2,753 3,543 (62,273)
Operating Income
(Loss) % 1 % 4 % 3 % 2 % (23) %
Backlog at End of
Period 315,000 380,000 248,000 315,000 380,000
Offshore Projects Group
Revenue 107,951 73,840 89,234 197,185 148,094
Gross Margin 14,566 3,170 15,111 29,677 5,265
Operating Income
(Loss) 7,996 (4,135) 8,813 16,809 (83,458)
Operating Income
(Loss) % 7 % (6) % 10 % 9 % (56) %
Integrity Management & Digital
Solutions
Revenue 64,070 53,969 54,048 118,118 118,698
Gross Margin 10,462 5,455 8,209 18,671 15,247
Operating Income
(Loss) 4,721 (1,825) 2,474 7,195 (123,360)
Operating Income
(Loss) % 7 % (3) % 5 % 6 % (104) %
Total Energy Services and Products
Revenue $ 392,519 $ 347,613 $ 349,226 $ 741,745 $ 792,900
Gross Margin 65,186 43,628 57,402 122,588 92,937
Operating Income
(Loss) 35,217 9,567 28,659 63,876 (351,512)
Operating Income
(Loss) % 9 % 3 % 8 % 9 % (44) %
* Recast to reflect segment changes.
In general, our Energy Services and Products business focuses on supplying
services and products to the oil and gas industry, and to a lesser extent, the
offshore renewables and mobility solutions industries. The adverse impacts of
the COVID-19 pandemic and the associated supply and demand imbalance have
resulted in lower levels of activity and profitability. As we expect a recovery
will continue to take time to restore profitability and generate satisfactory
returns, we have taken action and implemented cost improvement initiatives.
Subsea Robotics. We believe we are the world's largest provider of ROV services
and, generally, this business segment has been the largest contributor to our
Energy Services and Products business operating income. Our Subsea Robotics
segment revenue reflects the utilization percentages, fleet sizes and average
pricing in the respective periods. Our survey services business provides survey
and positioning, and geoscience services. The following table presents revenue
from ROV as a percentage of total Subsea Robotics revenue:
27--------------------------------------------------------------------------------
Table of Contents
Three Months Ended Six Months Ended
Jun 30, 2020 Jun 30, 2020
Jun 30, 2021 * Mar 31, 2021 Jun 30, 2021 *
ROV 80 % 83 % 78 % 79 % 81 %
Other 20 % 17 % 22 % 21 % 19 %
* Recast to reflect segment changes.
During the second quarter of 2021, Subsea Robotics operating income increased as compared to the immediately preceding quarter, primarily due to higher seasonal activity for ROV, survey, and tooling services on stable pricing across our business lines. Subsea Robotics operating income for the second quarter of 2021 increased, as compared to the corresponding period of the prior year, as a result of increased days on hire and higher average revenue per day on hire. Subsea Robotics operating income for the six-month period endedJune 30, 2021 increased as compared to the corresponding period of the prior year due to charges of$112 million in the six-month period endedJune 30, 2020 for goodwill impairment, write-offs of certain equipment, and other expenses. Exclusive of those charges, Subsea Robotics operating income for the six-month period endedJune 30, 2021 increased on higher revenue, as compared to the corresponding period of the prior year as a result of higher average revenue per day in the first half of 2021. Fleet utilization was 62% for the three months endedJune 30, 2021 as compared to 59% for the corresponding period of the prior year. Fleet utilization decreased to 57% from 62% for the six-month periods endedJune 30, 2021 andJune 30, 2020 , respectively. During the six months endedJune 30, 2021 , we retired eight of our conventional workclass ROV systems and replaced them with five upgraded conventional workclass ROV systems and three IsurusTM workclass ROV systems (which are capable of operating in severe conditions and are ideal for renewables projects and high-speed surveys) that are currently engaged in renewables work, resulting in a total of 250 ROVs in our ROV fleet as of bothJune 30, 2021 andJune 30, 2020 . Manufactured Products. Our Manufactured Products segment provides distribution systems such as production control umbilicals and connection systems made up of specialty subsea hardware, and provides turnkey solutions that include program management, engineering design, fabrication/assembly and installation to the commercial theme park industry and mobile robotics solutions, including automated guided vehicle ("AGV") technology to a variety of industries. Our Manufactured Products operating results in the second quarter of 2021 decreased when compared to the immediately preceding quarter, as lower revenue decreased the ability to leverage our cost base. Our Manufactured Products operating results decreased in the second quarter of 2021, as compared to the corresponding period of the prior year, primarily as a result of increased activity in subsea umbilical and hardware throughput in the second quarter of 2020 that did not occur in the second quarter of 2021. Manufactured Products operating results were higher for the six-month period endedJune 30, 2021 , when compared to the corresponding period of the prior year, as a result of$76 million in charges in the six-month period endedJune 30, 2020 for goodwill and asset impairments and other expenses. Exclusive of charges, operating results decreased as compared to the corresponding period of the prior year as a result of increased activity in subsea umbilical and hardware throughput in the first half of 2020 that did not occur in the first half of 2021. Our Manufactured Products backlog was$315 million as ofJune 30, 2021 , compared to$266 million as ofDecember 31, 2020 . The backlog increase was primarily attributable to increased levels of bookings in 2021 in our energy-related operations. Recent award activity has been encouraging in our energy products businesses; however, activity has continued to lag in our mobility solutions businesses. Many of our non-energy-related customers have delayed investment decisions due to uncertainties regarding COVID-19 and the related potential operating risks. Our book-to-bill ratio was 0.8 for the trailing 12 months, as compared with a book-to-bill ratio of 0.4 for the year endedDecember 31, 2020 .
28
--------------------------------------------------------------------------------
Table of Contents
Our OPG operating results were lower in the second quarter of 2021, as compared
to the immediately preceding quarter, on higher revenue. Our OPG revenue was
higher in the second quarter of 2021, as compared to the immediately preceding
quarter, primarily due to benefits from ongoing field activities on several
projects in Angola and a seasonal increase in intervention, maintenance and
repair ("IMR") work in the Gulf of Mexico . OPG operating results were lower in
the second quarter of 2021, as compared to the immediately preceding quarter,
primarily due to unplanned downtime and related costs associated with the Angola
riserless light well intervention project, which was partially offset by higher
IMR activity levels in the Gulf of Mexico . Our OPG operating results increased
in the three months ended June 30, 2021 , compared to the corresponding period of
the prior year, on higher revenue, primarily due to the start-up of field
activities on the riserless light well intervention project in Angola with no
comparable activity in the second quarter of 2020. Our OPG operating results
improved in the six months ended June 30, 2021 compared to the corresponding
period of the prior year, due to charges of $76 million recorded in the first
six months of 2020 for goodwill and asset impairments and other expenses.
Exclusive of those charges, our OPG operating results were higher in the
six-month period ended June 30, 2021 as compared to the corresponding period of
the prior year, primarily due to the year-over-year contribution from our Angola
riserless light well intervention campaign discussed above and higher vessel
utilization.
Integrity Management & Digital Solutions. Through our IMDS segment we provide
asset integrity management, corrosion management, inspection and nondestructive
testing services, principally to customers in the oil and gas, power generation,
and petrochemical industries. We perform these services on both onshore and
offshore facilities, both topside and subsea. We also provide software, digital
and connectivity solutions for the energy industry and software and analytical
solutions for the bulk cargo maritime industry.
Our IMDS operating results for the second quarter of 2021 improved as compared
to the immediately preceding quarter, on higher revenue, primarily due to higher
seasonal activity and the start-up of several new multi-year projects combined
with continuing efficiency improvements. IMDS operating results for the
three-month period ended June 30, 2021 , as compared to the corresponding period
of the prior year, were higher due to nonrecurring costs on certain completed
projects, other expenses of $1.5 million and lower activity levels in the second
quarter of 2020. IMDS operating results for the six-month period ended June 30,
2021 , as compared to the corresponding period of the prior year, improved due to
charges of $127 million recorded in the first six months of 2020. Exclusive of
those charges, operating results for the six-month period ended June 30, 2021
were higher, as compared to the corresponding period of the prior year, due to
the start-up of several new customer contracts and realization of cost
improvements in 2021, and nonrecurring costs on certain projects completed in
the first six months of 2020 and lower activity levels in the first six months
of 2020.
Aerospace and Defense Technologies. Our ADTech segment provides government
services and products, including engineering and related manufacturing in
defense and space exploration activities, principally to
Revenue, gross margin and operating income (loss) information for our ADTech
segment are as follows:
Three Months Ended Six Months Ended
(dollars in thousands) Jun 30, 2021 Jun 30, 2020 * Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 * Revenue$ 105,680 $ 79,603 $ 88,327 $ 194,007 $ 170,984 Gross Margin 24,603 17,313 22,110 46,713 34,798 Operating Income (Loss) 19,340 13,430 16,839 36,179 26,401 Operating Income (Loss) % 18 % 17 % 19 % 19 % 15 % * Recast to reflect segment changes. Our ADTech segment operating results for the second quarter of 2021 were higher, as compared to the immediately preceding quarter, on higher revenue due to project mix and favorable rate-based adjustments. Our ADTech segment operating results for the three-month period endedJune 30, 2021 were higher, when compared to the corresponding period of the prior year, on higher revenue due to increased activity in defense subsea technologies. Our ADTech operating results for the six-month period endedJune 30, 2021 increased on higher levels of revenue, when compared to the corresponding period of the prior year, due to increased activity in both defense subsea technologies and space systems. 29 -------------------------------------------------------------------------------- Table of Contents Unallocated Expenses Our Unallocated Expenses (i.e., those not associated with a specific business segment) within gross margin consist of expenses related to our incentive and deferred compensation plans, including restricted stock units, performance units and bonuses, as well as other general expenses. Our Unallocated Expenses within operating expense consist of those expenses within gross margin plus general and administrative expenses related to corporate functions.
Unallocated Expenses information is as follows:
Three Months Ended Six Months Ended
(dollars in thousands) Jun 30, 2021 Jun 30, 2020 $ (21,392) $ (18,404)
(22,855)
4 % 4 % 5 % 5 % 4 %
Operating expenses (31,738) (28,179) (31,715) (63,453) (60,828)
Operating expenses % of revenue 6 % 7 % 7 % 7 % 6 %
Our Unallocated Expenses for the second quarter of 2021 were flat, as compared
to the immediately preceding quarter. Our Unallocated Expenses for the three-
and six-month periods ended June 30, 2021 were higher, as compared to the
corresponding periods of the prior year, primarily as a result of increased
accruals for incentive-based compensation.
Other
The following table sets forth our significant financial statement items below the income (loss) from operations line.
Three Months Ended Six Months Ended
(in thousands) Jun 30, 2021 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020
Interest income $ 683 $ 511 $ 519 $ 1,202 $ 1,788
Interest expense,
net of amounts
capitalized (9,729) (11,611) (10,407) (20,136) (24,073)
Equity in income
(losses) of
unconsolidated
affiliates 378 674 534 912 1,871
Other income
(expense), net (1,955) (3,660) (1,453) (3,408) (10,788)
Provision (benefit)
for income taxes 5,955 5,520 12,341 18,296 (24,755)
In addition to interest on borrowings, interest expense, net of amounts
capitalized, includes amortization of loan costs and interest rate swap gains,
fees for lender commitments under our revolving credit agreement and fees for
standby letters of credit and bank guarantees that banks issue on our behalf for
performance bonds, bid bonds and self-insurance requirements.
Foreign currency transaction gains and losses are the principal component of
other income (expense), net. In the three- and six-month periods ended June 30,
2021 , we incurred foreign currency transaction gains (losses) of $(1.8) million
and $(3.7) million , respectively. In the three- and six-month periods ended
June 30, 2020 , we incurred foreign currency transaction gains of $(3.9) million
and $(11) million , respectively. The currency losses in 2021 were primarily
related to declining exchange rates for the Angolan kwanza relative to the U.S.
dollar. The currency losses in the 2020 periods were primarily related to
declining exchange rates for the Angolan kwanza and the Brazilian real relative
to the U.S. dollar. We could incur further foreign currency exchange losses in
Angola and Brazil if further currency devaluations occur.
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 six-month
periods ended June 30, 2021 and 2020 was different than the federal statutory
rate of 21%, primarily due to the geographical mix of operating revenue and
results, changes in valuation allowances and uncertain tax positions, and other
discrete items; therefore, we do not believe a discussion of the annual
effective tax rate is meaningful. We continue to make an assertion to
indefinitely reinvest the unrepatriated earnings of any foreign subsidiary that
would incur incremental tax consequences upon the distribution of such earnings.
30--------------------------------------------------------------------------------
Table of Contents
OnMarch 27, 2020 , the CARES Act was signed into law inthe United States . In accordance with the recently established rules and procedures under the CARES Act, we filed a 2014 refund claim to carry back ourU.S. net operating loss generated in 2019 and amended our 2012 and 2013 federal income tax returns impacted by the net operating loss carryback. Prior to enactment of the CARES Act, such net operating losses could only be carried forward. As a result, we expect to receive combined refunds of approximately$33 million , of which we have received$5.6 million as ofJune 30, 2021 . The remaining refunds are classified as accounts receivable, net, in our consolidated balance sheet as ofJune 30, 2021 .
Liquidity and Capital Resources
We consider our liquidity, cash flows and capital resources adequate to support our operations, capital commitments and growth initiatives. As ofJune 30, 2021 , we had working capital of$749 million , including$456 million of cash and cash equivalents. Additionally, we had$500 million available through our revolving credit facility under a credit agreement further described below. Amendment No. 4 to the Credit Agreement (as defined below) provides for a$500 million revolving credit facility untilOctober 25, 2021 and thereafter$450 million untilJanuary 25, 2023 with a group of banks. Our revolving credit facility provided under the Credit Agreement was undrawn as ofJune 30, 2021 , and remains undrawn as of the date of this report, and our nearest maturity of indebtedness is our$470 million of our 4.650% Senior Notes due inNovember 2024 (the "2024 Senior Notes"). We may, from time to time, complete additional, limited repurchases of our 2024 Senior Notes, via open-market or privately negotiated repurchase transactions or otherwise, prior to their maturity date. We can provide no assurances as to the timing of any such repurchases or whether we will complete any such repurchases at all. We do not intend to disclose further information regarding any such repurchase transactions, except to the extent required in our subsequent periodic filings on Forms 10-K or 10-Q, or unless otherwise required by applicable law. Cash flows for the six months endedJune 30, 2021 and 2020 are summarized as follows: Six Months Ended (in thousands) Jun 30, 2021 Jun 30, 2020
Changes in Cash:
Net Cash Provided by Operating Activities $ 48,823 $ 5,368
Net Cash Used in Investing Activities (12,157) (35,317)
Net Cash Used in Financing Activities (32,284) (1,947)
Effect of exchange rates on cash (311) (8,250)
Net Increase (Decrease) in Cash and Cash Equivalents $ 4,071 $ (40,146)
Operating activities
Our primary sources and uses of cash flows from operating activities for the six
months ended
© Edgar Online, source
