Oceaneering International, Inc. reported a net loss of $24.8 million, or $(0.25) per share, on revenue of $427 million for the three months ended June 30, 2020. Adjusted net loss was $14.2 million, or $(0.14) per share, reflecting the impact of $9.6 million of pre-tax adjustments associated with restructuring expenses and foreign exchange losses recognized during the quarter and $3.3 million of other discrete tax adjustments.
During the prior quarter ended March 31, 2020, Oceaneering reported a net loss of $368 million, or $(3.71) per share, on revenue of $537 million. Adjusted net income was $3.5 million, or $0.04 per share, reflecting the impact of $393 million of pre-tax adjustments, primarily $379 million associated with goodwill impairments, asset impairments and write-offs recognized during the quarter.
Adjusted operating income (loss), operating margins, net income (loss) and earnings (loss) per share, EBITDA and adjusted EBITDA (as well as EBITDA and adjusted EBITDA margins) and free cash flow are non-GAAP measures that exclude the impacts of certain identified items. Reconciliations to the corresponding GAAP measures are shown in the tables Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS), EBITDA and EBITDA Margins, Free Cash Flow, Adjusted Operating Income (Loss) and Margins by Segment, and EBITDA and Adjusted EBITDA and Margins by Segment. These tables are included below under the caption Reconciliations of Non-GAAP to GAAP Financial Information.
Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "Considering all of the uncertainties surrounding the crude oil markets and the COVID-19 pandemic, we were satisfied with our second quarter 2020 results. For the second quarter, we generated adjusted EBITDA of $40.5 million, exceeding consensus estimates, and we generated $26.9 million of free cash flow. These positive results were partially attributable to our actions to substantially reduce structural costs in light of an expected continuation of lower demand for our services and products. The positive effect of these cost reductions is reflected in our 9% consolidated adjusted EBITDA margin for the second quarter of 2020, which declined by only 14 basis points as compared to the first quarter of 2020, despite a 20% decrease in revenue.
"As expected, compared to the first quarter of 2020, the aggregate result of our energy segments declined during the second quarter of 2020. However, this decline was partially offset by improved performance in our non-energy segment, Advanced Technologies, and lower Unallocated Expenses. We did experience some operational disruptions and delays due to COVID-19 during the second quarter but the safety protocols we, and the industry, put into place in response to the pandemic limited impacts to our employees and customers.
"Sequentially, ROV adjusted operating performance declined as anticipated, primarily due to the lower number of working drilling rigs. This led to fewer days on hire for drill support services that were slightly offset by a marginal increase in days on hire for vessel-based services. Our fleet use during the quarter was 64% in drill support and 36% in vessel-based activity, compared to 68% and 32%, respectively, during the first quarter. Revenue declined 12%, primarily due to a 9% decrease in ROV days on hire. ROV adjusted EBITDA margin remained relatively unchanged at 31% during the second quarter of 2020 as compared to the adjusted EBITDA margin of 32% achieved during the first quarter of 2020.
"At the end of June 2020 our ROV fleet size was 250, unchanged from the first quarter. For the second quarter, utilization was 59%, down from 65% achieved for the quarter ended March 31, 2020. As of June 30, 2020, we had ROV contracts on 86 of the 139 floating rigs under contract, resulting in a drill support market share of 62%.
"Subsea Products adjusted operating results declined during the second quarter of 2020, as compared to the first quarter of 2020, on significantly lower revenue. Revenue in our manufactured products business was impacted by the delayed receipt of materials, customer-driven project delays, and reduced working hours due to COVID-19. Revenue in our service and rental business declined due to decreased activity, including the uncertainty of timing of our riserless light well intervention project in Angola. Persistent cost-reduction efforts helped us to achieve an adjusted operating margin consistent with the margin generated in the first quarter of 2020.
"Our Subsea Products backlog at June 30, 2020 was $486 million, compared to our March 31, 2020 backlog of $528 million. As expected, there were low levels of bookings during the second quarter, as many of our customers delayed investment decisions due to the uncertainties regarding oil prices and potential COVID-19-related operating risks. Revenue replacement during the quarter was 67% and our book-to-bill ratio for the trailing 12 months was 0.83.
"The second quarter 2020 Subsea Projects adjusted operating performance improved, as compared to the first quarter of 2020, on lower revenue. Revenue declined due to decreased customer activity, but we were pleased that adjusted operating results improved due to better project execution and ongoing cost-reduction activity. Asset Integrity's adjusted operating results declined sequentially on lower revenue and as a result of non-recurring costs on certain completed projects.
"For our non-energy segment, Advanced Technologies, second quarter 2020 adjusted operating results improved sequentially due to good performance from our government businesses. COVID-19 continues to adversely affect our commercial businesses. However cost reduction measures implemented during the first quarter of 2020 limited the financial impact on our second quarter 2020 results. Unallocated Expenses for the quarter were sequentially lower as the return on market-based assets held in a trust for the benefit of certain post-retirement obligations improved, as compared to a first quarter loss. Additionally, we had reduced information technology costs during the quarter.
"For the second quarter of 2020, our cash balance increased to $334 million, as we generated $26.9 million of free cash flow, largely driven by positive contributions from operations and working capital, and continued scrutiny of our capital expenditures.
"Although we are encouraged by our second quarter 2020 results, uncertainty remains for the rest of 2020. Many of the markets we serve will likely continue to be impacted by the effects of and associated responses to COVID-19, as well as potential reductions in customer spending as a consequence of the volatility in the macro drivers surrounding commodity prices. As a result, we are not providing segment financial guidance for the third quarter or second half of 2020. We affirm that Unallocated Expenses are forecast to be in the high-$20 million range per quarter. For the year, we affirm guidance for capital expenditures in the range of $45 million to $65 million, our cash tax payments in the range of $30 million to $35 million, and our expectation of CARES Act tax refunds in the range of $16 million to $34 million.
"In our first quarter 2020 earnings release, we outlined our plan for a targeted reduction of annualized expenses in the range of $125 million to $160 million by the end of 2020, inclusive of $35 million to $40 million of reduced depreciation expense. These cost reduction efforts are progressing well, and we estimate that, since launching those efforts, approximately $85 million of annualized cost reductions have been initiated, with additional savings expected to be achieved throughout the remainder of the year. We continue to expect the cash costs associated with these actions to approximate $15 million in 2020.
"Preserving our liquidity and balance sheet remains a high priority in the current environment. We expect to generate positive free cash flow for the full year of 2020 based on actions we are taking to achieve cost reductions, reduced capital spending, lower cash taxes, our expectation for CARES Act tax refunds, and cash expected to be generated from working capital for the remainder of the year."