Good morning. My Name is Andrea, and I will be your conference operator today. At this time I would like to welcome everyone to the Third Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be an question-and-answer session. [Operator Instructions] Thank you, Jack Jurkoshek, you may begin your conference call.

Good morning everybody. We'd like to thank you for joining in on our 2008 third quarter earnings conference call. As usual a webcast to this event has been made available through the StreetEvents Network Service by Thomson Reuters. Joining me this morning is Marvin Migura, our Chief Financial Officer who'll be leading the call and Bob Mingoia, our Treasurer, Jay Collins our President and Chief Executive Officer regrets that he could not be with us this morning as he is attending to a certain and urgent personal matter. This is a reminder of remarks we make during the course of this call regarding our earnings guidance, business strategy, plans for future operations and industry conditions are forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. And I'm now going turn the call over to Mark.

Good morning and thanks for joining the call. And even though Jay could not be here this morning to do his usual great job on his call, I'm inviting you to stay on the call a bit and hear what he wanted me to share with you. Again Jay seriously regrets not being able to talk to you about our results and outlook. I will do my best to stand in for him; it is a pleasure for me to be here with you today to talk about Oceaneering. We achieved record quarterly earnings of $55 million which demonstrates the healthy demand we are experiencing for our subsea services and products. We continue to expect two achieve a fifth consecutive year of record earnings per share in 2008 in the range of $3.53 to $3.61. At the midpoint our guidance is up slightly from what we indicated on our last call. This is based on our year-to-date earnings performance and improved fourth quarter business outlook for our subsea Products business to perform inspection and repair work in the after months of Hurricanes Gustav and Ike. We expect to report record fourth quarter earnings. During the third quarter we purchased approximately 1 million shares of our common stock at cost of about $55 million, this completed our outstanding Board authorized stock repurchase program. To enhance our future financial flexibility during the quarter we obtained a one year unsecured $85 million term loan to augment our existing $300 million revolving credit facility. We had 122 million of available credit on committed credit lines at the end of the quarter. As of September 30 we had $303 million of debt and $981 million of equity on our balance sheet. Our debt to capitalization percentage was 24%. As you have read, heard or written…

[Operator Instructions] Your first question comes from Neil Dingmann [ph], your line is open.

Good morning, guys, excellent quarter.

Thank you, Neil.

Say, I was wondering you'd mentioned on at least the cut back in the UK based on sort of what you thought is a I guess, overbuild on the build in the umbilical market. It seems that you think of built weak in that area, are there other areas that you think that are sort of making up for this? Or other particular regions that you think would be exceptionally strong?

I think we've been talking about our lower margins and Subsea products as we added capacity for an order flow rate that did not occur. And we're going through our entire Subsea products operations looking for manufacturing efficiencies. And I think the UK that I indicated where we will be reducing our workforce of up to 25%, it's kind of a leading indicator. We'll be looking at our other operations, but right now there is no current plans that we're prepared to announce.

Okay. And then, wondering, still looks like that ROV looks like demand still seems to be quite good although cut it back to slightly for next year. With that do you envision the operating income per days continuing to move up slightly?

Well, that's ... well with the uncertainty out there. And, but yes, I think even with the strong deepwater, I was just thinking about the new additional rig should be coming in and then adding to that. Yeah, I think the answer is we expect operating income per day to continue to improve.

Okay. I'd like to slip one last one in, just on share buybacks you're still considering increase in that or what is that do?

Well, right now, that is under consideration by our Board and I think it'll probably be discussed at the next meeting in November.

Alright guys, thanks a lot.

Thank you.

Thank you. And next question comes from Byron Pope. Your line is open. Byron Pope - Tudor Pickering & Co.: Good morning.

Yes. Bryon. Byron Pope - Tudor Pickering & Co.: Yes. I just wanted to within the Subsea Products segment, I wanted to get an update if we could on you mentioned the Subsea control systems and just where are we on those? Are we still expecting a delivery caught Q1 in next year, I mean what's the current status on those four and you mentioned kind of higher than expected development cost just wanted to status check on that one?

I think there is no new news on BOP controls, I think the higher manufacturing and engineering cost was a carry over and it's related to the first two systems and they should be delivered either at the end of this year or during the first quarter. Byron Pope - Tudor Pickering & Co.: Okay.

And we expect improved operations for the systems coming after that. Byron Pope - Tudor Pickering & Co.: Okay and then for Subsea Projects with the post Gustav, Ike and work is that, is there is a visibility there such that we should expect stronger activity levels for you guys in that segment extending well into '09, is there that much visibility and just wondering of you could help us quantify the opportunities subsequent to the Hurricanes?

Not at ... the visibility does not extend in to '09 at this time. I mean right now there has mostly been in inspection and emergency repair work. We're not looking for the kind of hurricane related work that Ivan, Katrina and Rita brought us. So I would say not at this time. We're expecting an improvement or I should say strong results from our Subsea Projects in 2009 based on the additional capabilities that the OI III and IV bring us and most of it to be in deep water IRM work. Byron Pope - Tudor Pickering & Co.: Okay. And than one last quick question if I could sneak it in, just your thoughts on maintenance CapEx if I think about it in the context of your '09 CapEx guidance, how much of your maintenance?

We debate that internally and so much of maintenance CapEx is really going to depend upon the market environment that we're in. To give you just a broad number as what I think it's going to be a part of that $175 million estimate I would have to say somewhat around $30 million. Byron Pope - Tudor Pickering & Co.: Okay thanks Marvin, I appreciate it.

Thank you.

The next question comes from Chris Weinstein [ph]. Your line is open.

Yeah thanks. Good morning.

Good morning.

Question regarding ROVs, assuming $65 to $70 a barrel next year, you think under that assumption, how does that change your outlook for ROVs and the operating income you can gone up per day?

Chris, we really haven't correlated our operating income results to a specific price per barrel of oil. I think what we started with was the assumption that it was going to be over 70 and that under the assumption of over 70 we could go ahead and do at least $4 per share. The assumption underlying assumption is at normal deepwater and Subsea completion activity will continue. If we ratchet down oil $5 a barrel I have no way of quantifying that. For ROVs though most of the work that we have is for vehicles under contract. Now will oil companies come to us and want a lower price because the price of oil is dropped I can't predict that. We really don't track ROV contract backlog our premise is that we are on ratings that are under the long-term contract. And if the rigs continue to work, we will continue to work.

Right. If you include the 30 that you expect to add next year, what percentage of the entire fleet is booked through '09?

Well, the answer to that is that the significant portion of our contracts are subject to only to 30 to 90 day cancellation process.

Right.

The stated terms in the contract really don't matter.

And that's what I tried to address that, but I don't see if the rig is continuing to work under interesting contract, the oil company is coming to say, I think an average day rate of 9600 for you is too high because we're spending $800,000 to $1 million a day and we would like to squeeze years by $500.

Right.

So, the likelihood of that we don't imagine as being ... really that being very high. And, I think that if the rigs continue to work, our ROV business segments will be very well. And we believe that the rigs will continue to work under the long term contracts. I mean the Transocean rig, I also read today that, I think it was a pride [ph] rig that got renewed to 1500 foot same line [ph]. So, I see no signs of weakening in deepwater demand for our ROV services.

Okay. Just one quick one, what are ... do you have any estimates in terms of what are your ... what are you thinking for industry wide ROV additions for '09, on top of this 30 that you're expecting to put in there?

We really don't have any good industry data. No one tracks that and ... but I will say that our primary competitors or I should say the other company that have the next largest ROV fleets are adding those vehicles predominantly to service their own internal needs.

Okay.

But I can't quantify how many vehicles they are adding to their fleets.

Okay. Well, thanks a lot. I appreciate it.

Thank you.

Your next question comes from Kevin Pollard. Your line is open.

Hey, Kevin.

Hi. Good morning, everyone. I have a question about your Subsea project's guidance and for to be relatively flat going forward in '09. I guess I was a little surprised by that given, there's probably some element of work to be done from these recent hurricanes. Plus you have the new vessel, the OI IV, plus you're not going to have the headwinds of all the dry docking of your deepwater vessels. I was wondering if you could sort of ... I know the BPE contracts you got to contribute next year. But I was wondering if you could clarify what's causing that defrag, given all the pluses there?

Well, first of all, I think you understand the moving pieces. Secondly, I think with the uptick in Gustav and Ike related work, we're not going to see the decline to the extent that we had earlier envisioned it from 2007. So, it's rising to a higher level. Our fourth quarter results are expected to be better than we had anticipated. So, staying flat is staying at a better level than what we would have envisioned a quarter ago. And lastly, when you look at what segment is more susceptible to a slowdown in activity and dependent upon independence where it is our Gulf of Mexico projects business. So, one of the reasons we are not giving detailed guidance, but Jack made me give the estimates on Subsea projects saying that it's going to be flat, is that there are a lot of variables and we have not been able to quantify yet.

Okay. All right that's fair enough. And then, with regard to the pro forma, moving to West Africa is that something you expect us to see more over where you may be moving additional vessels or perhaps even chartering new vessels to expand in operations internationally?

That is really going to depend upon the opportunities that come up. I mean, it's ... the answer is, we are prepared to look at that. I don't know we'll be moving any more over because demand in the Gulf of Mexico for our lead looks pretty strong but putting the pro forma on a one year contract at good rates was something that we seized that opportunity and we hope to do more other but that really is going to be on a contract by contract opportunity basis.

Okay. If I could squeeze a one last quick one with regard to your headcount reduction in the UK facility how soon will you start to see an improvement in margins from some of these efficiency initiatives. And in addition to the timing I was realizing those, do you think you can those margins back to the '07 levels as with the impact of these initiatives?

Well, it's really going to depend upon the market that we see in 2009. The answer to your first question is we're going to see some of those efficiencies start to flow into our operations in the first quarter of 2009, on a apples-to-apples basis. But whether or not that's going to translate to an improvement in margin ... I mean you got a lot of things that go into our margins. What we're seeing is we're squeezing cost out of our operations to be more competitive. And hopefully, that translates into us wining more work and being more profitable. I haven't taken a look at it in such detail I can tell you these is going to me some quantifiable impact on the operating income percentage line.

Okay. Thanks a lot I appreciate it.

Thank you.

The next question comes from Joe Gibney. Your line is open.

Hi Joe.

Yes, guys.

Good morning.

Most of my questions has been answered just want to follow-up on the mix side relative to ROV a good job on the operating income side. There's obviously a little modest degradation in the average revenue per unit, just curious higher drill support mix this quarter in the wake of the hurricane any change to that as we look into the fourth quarter a little bit higher work class mix or you are kind of still probably holding the 65%ish drill support range?

We knew that one day we were going to break our strength of consecutive quarter increases and average day rate per our average revenue per day on hire. We're real pleased to broken that strength when we set an improvement in our operating income from margins, so there is some correlation there that we were able to reduce our cost. Those snapshots that we give you at the end of or during the month of the quarter end are really that and I don't ... I think they're indicative of that quarter's activity and nothing more. As many rig opportunities there are we seem to be learning of as many vessel opportunities. So we have no crystal ball to tell us if that's going to move 1% either way or not and I don't think it had anything to do with the hurricane.

Right.

Just Joe, I mean ... right when we told you we intended to add 10 vehicles in service in the last quarter and only three of those according what we told you are going to on new rig.

Okay.

But 37 of others are going on lot of other things.

Sure. Absolute, you're right, I appreciate.

Butif we give you an answer to that in next quarter results may not turn out to exactly what we tell you now.

Sure, fair enough. Alright, I appreciate it.

[Operator Instructions]. The next question comes from Victor Marchon. Your line is open.

Good morning, guys, and thank you. Marvin just had a question I apologize if you had talked on this already. It's just on the ROVs on operating margins. It was a significant jump in the quarter and somewhat of a step change coming out of that mid to high 20% range of the last couple of years. And I just want to see if that was sort of the new run rate for that business going forward or was there something that was one time or an anomaly in the quarter that pushed it up a couple of 100 basis points?

There wasn't anything in the quarter that was an anomaly that pushed it up a couple of 100 basis points. However, I would not take one very good quarter and extrapolate it. I don't think there's a new shift to a higher plateau of operating income margins, I think costs are not daily, I mean, everything in our operations that those costs change and not a fixed daily amount is what I was trying to say. And I would not change my model based on one quarter operating income margin of 31%.

That's great. And then, another one I had was on The Producer. Are you guys going to be looking to sell that asset or are you going to be looking to a market that vessel?

I think at this time we would be looking to redeploy the producer and find another contract for it.

Okay.

But I think what our expectations are is that it would take some time to do that. And after being on location for 7 years without interruption, 7 plus years, it would take some maintenance CapEx to get it back into shape that it could stay on the next location for an extended period of time. And I haven't included that maintenance CapEx in my $30 million assumption. That will be based on a contract that we will be building towards.

Great, okay, I appreciate that. That's all I had, thank you.

Thank you.

The next questions come from Brad Hambler [ph], your line is open.

Thanks, good morning.

Good morning Brad [ph].

Couple of unrelated things I guess. Just first on the performer, a 1 year contract, can you speak to what you might see sort of longer term. Someone else I know, asked about other vessels, but you think for The Performer like this, might this yield sort of follow yearly contracts or something kind of be a longer term position do you think?

The answer is, yes, it could be. There is no indication now that it's for anything more than a one year period. So, I mean, I really don't know what the market's going to be like 365 days from now. But the answer I mean, if we stay there one year we could definitely extend it.

Okay, but the scope for work if you understand it for now is 1 year?

Yes sir, very much so.

There is no options being considers? There is nothing actively being considered?

Not at this early, it was in mid September not in not at this early in the game.

No, I didn't know that was sort of the basis under what you even started to talk to.

I appreciate your question. Yes, I understand but no, we have nothing to add that would indicate that it would be longer than that.

Okay, that's fair enough. On unrelated follow up then, in your comments and I understand there was lot of prudence brought to a number of things in these comments. But you mentioned I think something about acquisitions and maybe a different tone with respect to acquisitions. I'm hoping to draw you out a little bit on that in the sense that if things soften up as they might here. There is presumably a chance to pick up some companies in interesting businesses that you, I think have been targeting for some time any way. So, again some sort of an open ended question but maybe you could speak to philosophically how you might think about acquisitions now?

Philosophically, the first way we think of acquisitions in this environment is we've seen a serious compression in multiple is to Oceaneering stock. And if a potential seller have the same expectations as he may have had a year ago, we would not be interested at that price. One of the things that we are fortunate is our financial flexibility allows us to do what you just suggested and to be opportunistic should something come across the board, it says they are willing to sell at a reasonable price, and we want to be able to move on that. I don't know that's going to occur in 2009 or not in the space that we play. So, but, if that is, I mean, we definitely are going to stick to our tradition of being opportunistic in making acquisitions when that is the best use of our cash flow. But it is going to be on a much stricter criteria because I think the evaluations are out of lack right now, but as long as they are, we are not going to pay somebody a higher multiple than we are getting in the stock market.

Makes sense. And that spread if you will as why do not that in your comments this morning, you would suggest that there's probably very little that you will do. Again then being the prudent kind that they are because that's [indiscernible].

I think that's fair, and, I mean, that says that we have a very little in the queue. But if we do, pull the trigger on any of them, it will be because they represent to us growth opportunities and a better opportunity than buying back Oceaneering stock as treasury stock.

Okay sure. I appreciate the clarification. Thank, guys.

Thank you.

The next question comes from Thad Vayda, your line is open. Thaddeus Vayda - Stifel Nicolaus & Co.: Thank you. Two quick questions, both relating to umbilicals; first, with regard to the restructuring of your U.K manufacturing facility, what you think the report of magnitude cost is going to be, and when do you expect to incur that. And then the second question it relates to the excess manufacturing capacity umbilicals, could you remind me again approximately where that stands right now? And, in that context, have you seen more pricing pressure, more aggressive pricing than usual. Thanks.

Okay. We have not quantified, we have not identified the individuals and in UK law their tenure with the company is going to depend upon their redundancy cost as they call it, so I don't have an answer as to how much that cost is going to be, I can't tell you that we will incur that cost in the fourth quarter and we have included in our estimate for the fourth quarter in that range an amount that we think is prudent. Worldwide capacity for umbilicals has not changed nobody is added a new plant or we're not aware of any one adding a new plant. And with the order rate begin as lumpy as it has been and so many orders being delayed I can't quantify where we are on capacity. I mean, that's a pretty elusive thing depending upon steel too and thermoplastic mix. One thing that I do want to say is we are, we continue to remain optimistic that the next five years of umbilical orders will be substantially over much higher rate than the previous five years that we have incurred. But we just think these manufacturing efficiencies are going to serve us well and will not limit our ability to serve our customers. As far as pricing pressure, the umbilical market, because of the excess capacity, we've reported several times and over and over again, continues to be very competitive. Has pricing pressure increased I hope not I haven't seen any signs that its gotten any worse, but I haven't seen any signs that its getting any better reason. It all depends upon which contract and who has an empty spot in their plant that they need to fill and that's what's keeps margins from umbilicals at a lower level than what we would hope they would be. Thaddeus Vayda - Stifel Nicolaus & Co.: Great thank you.

Thank you.

Our last question comes from Waqar Syed. Your line is open.

Hi, Waqar.

Hi, good morning. Couple of questions here, first are you seeing any impact on the margins because of lowering of steel prices on our steel umbilical side?

Not yet, not at this time I mean that is one of the things that we are expecting is that commodity prices steel and copper should come down. And it all depends upon the level of order rate to see if that's going to translate into better margins. And we hope that it is but I have nothing to report at this time, there's just not been enough order flow since this economic crisis started for me to be able to have two data points that I could extrapolate.

And second, on some of you're small businesses inspection or ADTECH. What is the revenue relationship of these businesses to oil prices or global GDP or how should we thinking about those businesses over the next year? And then, also more specifically on the navy contract, anything recent on the contract with the space suits?

Okay. I don't think our add-tech revenues could be co-related to the price of oil. But I think the next administration whoever that may be, is going to have more impact on government budgets than the price of oil. And how the global economy impacts that is yet to be seen. We have no new news on the consolation space suit contract. I think that's being in the process as press has reported of being reevaluated. And we still remain confident that we will ultimately be selected or confirmed as the selective provider. I don't think that's going to have much impact on 2009 one way or the other. Regarding inspection, I really see that the inspection is so key to the existing infrastructure and integrity management of the existing energy infrastructure, refineries, power plants, offshore facilities that I don't see much impact in the global economy and our inspection prospects.

Okay. And then just on the M&A side what do you see, you mentioned a few words on potential acquisitions. How do you and the Board and everybody else feels about being on other side given that you're such an attractive business and could be at current valuation look pretty attractive. Are you hearing companies make movements talking to you or anything like that?

First of all, I guess, it's better to be attractive than to be otherwise. So, I'm glad you think that this price, because we do, we think it's a very attractive investment opportunity. Secondly, we pretty much focus on what we can influence or control. And I think somebody acquiring Oceaneering is outside of our influence or control. And lastly, I am not aware ... I know no one has called me, and I am not aware of any calls to anyone about such matters.

Thank you very much.

Thank you.

We have no further questions.

Alright thank you very much for your interest, and I hope you have a good day. Bye-bye.

This concludes today's conference. You may now disconnect. .