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 onthe United States and the global economy, as well as on our business; •our fourth-quarter 2021 operating results and the contributions from our segments to those results, as well as the amount of Unallocated Expenses for the fourth quarter; •tax refunds under theU.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 collectability of accounts receivable and realizability of contract assets at the amounts reflected on our most-recent balance sheet; •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 endedDecember 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
Overview of our Results and Guidance
Our diluted earnings (loss) per share for the three- and nine-month periods endedSeptember 30, 2021 were$(0.07) and$(0.11) , respectively, as compared to$(0.80) and$(4.76) for the corresponding periods of the prior year. These operating results met our expectations, and each of our operating segments in the three- and nine-month periods endedSeptember 30, 2021 contributed operating income. Our planning and preparation were instrumental in our team's ability to navigate through the challenges presented during the third quarter, which included hurricanes, inflation, a tightening labor market, and a constrained global supply chain. As expected, our operating results declined in the third quarter of 2021, as compared to the second quarter of 2021. Offshore work in our energy-focused businesses remained seasonally active during the third quarter. However, our operations in theGulf of Mexico were impacted by Hurricane Ida and high loop currents. During the first nine months of 2021, our cash decreased$4.3 million , primarily from the repurchase of$63 million in aggregate principal amount of our 2024 Senior Notes (as defined below in Liquidity and Capital Resources) through open market repurchases and$36 million for maintenance and growth capital expenditures, partially offset by the 23 -------------------------------------------------------------------------------- Table of Contents$85 million of cash generated from operating activities. As ofSeptember 30, 2021 , with our cash balance of$448 million and an outstanding balance of$437 million on our 4.650% Senior Notes, we are well positioned to deal with this pending debt maturity. While we will continue to be prudent with our capital spending, we are focused on developing and delivering technologies to grow our businesses in the keys areas of energy transition, digital asset management, aerospace and defense, and mobile robotics, while also continuing to deploy technologies that help our customers produce hydrocarbons in the cleanest and safest manner. We believe that the technologies we deliver today, and are focused on developing in the future, will provide us with ample opportunities to grow and transform our business over the coming years. Looking forward, we believe our consolidated fourth-quarter 2021 results will be similar to our third-quarter 2021 results on slightly higher revenue. We expect significantly higher revenue and operating profitability in our Manufactured Products segment, relatively flat activity and operating profitability in our Subsea Robotics and Integrity Management & Digital Solutions ("IMDS") segments, relatively flat revenue with lower operating profitability in our Aerospace and Defense Technologies ("ADTech") segment, and substantially lower seasonal activity and operating profitability in ourOffshore Projects Group ("OPG") segment. Unallocated Expenses are expected to be in the mid-$30 million range, due primarily to increased information technology infrastructure costs. OnMarch 27, 2020 , the CARES Act was signed into law inthe United States . In accordance with the 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 expected to receive combined refunds of approximately$33 million , of which we have received$10 million as ofSeptember 30, 2021 . The remaining refunds are classified as accounts receivable, net, in our consolidated balance sheet as ofSeptember 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$4.7 million of the CARES Act tax refunds received during the third quarter of 2021 and the remaining$23 million of the CARES Act tax refunds expected to be received in 2021 or 2022. We are narrowing our guidance for capital expenditure to be in the range of$45 million to$55 million for the full year of 2021. We remain committed to maintaining strong liquidity for the full year of 2021 and believe that our cash position, undrawn revolving credit facility, and debt maturity profile should provide us ample resources and time to address potential opportunities to improve our returns. For 2022, we expect our capital expenditures will be higher than 2021, as we intend to refocus our efforts on growth.
Results of Operations
We operate in five business segments. The segments are contained within two businesses - services and products provided primarily to the oil and gas industry, and to a lesser extent, the offshore renewables and mobility solutions industries ("Energy Services and Products") and services and products provided to non-energy industries ("Aerospace and Defense Technologies"). Our Unallocated Expenses are those not associated with a specific business segment.
Consolidated revenue and profitability information are as follows:
Three Months Ended Nine Months Ended (dollars in thousands) Sep 30, 2021 Sep 30, 2020 Jun 30, 2021 Sep 30, 2021 Sep 30, 2020 Revenue$ 466,814 $ 439,743 $ 498,199 $ 1,402,566 $ 1,403,627 Gross Margin 59,848 29,651 68,397 184,902 118,940 Gross Margin % 13 % 7 % 14 % 13 % 8 % Operating Income (Loss) 15,769 (60,620) 22,819 52,371 (446,559) Operating Income (Loss) % 3 % (14) % 5 % 4 % (32) % 24
-------------------------------------------------------------------------------- Table of Contents We generate a material amount of our consolidated revenue from contracts for services in theU.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$16 million ,$23 million and$52 million in the three-month periods endedSeptember 30, 2021 andJune 30, 2021 , and the nine-month period endedSeptember 30, 2021 , respectively. We had operating losses of$61 million and$447 million in the three- and nine-month periods endedSeptember 30, 2020 , respectively. We did not have significant certain changes included in our operating income and loss for the three months endedSeptember 30, 2021 . Included in our operating income and loss for the three months endedSeptember 30, 2020 andJune 30, 2021 were certain charges of$66 million and$1.4 million , respectively. Included in our operating income and loss for the nine months endedSeptember 30, 2021 and 2020, were certain charges of$2.7 million and$458 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 September 30, 2020 Integrity Offshore Management & Manufactured Projects Digital Aerospace and Unallocated (in thousands) Subsea Robotics Products Group Solutions Defense Technologies Expenses Total
Charges for the effects of:
Long-lived assets write-offs $ - $ -$ 7,243 $ - $ - $ -$ 7,243 Inventory write-downs 7,038 - - - - - 7,038Goodwill impairment - 40,875 - - - - 40,875 Other 2,535 2,559 5,326 83 545 - 11,048 Total charges $ 9,573$ 43,434 $ 12,569 $ 83 $ 545 $ -$ 66,204 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 nine months ended September 30, 2021 Integrity Management & Aerospace and Manufactured Offshore Digital Defense Unallocated (in thousands) Subsea Robotics ProductsProjects 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 25
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Table of Contents For the nine months ended September 30, 2020 Integrity Offshore Management & Subsea Manufactured Projects Digital Aerospace and Unallocated (in thousands) Robotics Products Group Solutions Defense 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 - 7,243 - - - 14,571 Inventory write-downs 7,038 - - - - - 7,038Goodwill impairment 102,118 52,263 66,285 123,214 - - 343,880 Other 4,834 5,755 7,947 3,850 545 455 23,386 Total charges$ 121,318 $ 119,092 $ 88,997 $ 127,231 $ 545 $ 455$ 457,638 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
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Three Months Ended Nine Months Ended (dollars in thousands) Sep 30, 2021 Sep 30, 2020
Revenue$ 143,710 $ 119,617 $ 141,371 $ 404,200 $ 378,621 Gross Margin 28,918 13,378 31,767 84,763 54,175 Operating Income (Loss) 19,533 2,127 21,710 55,862 (80,294) Operating Income (Loss) % 14 % 2 % 15 % 14 % (21) % ROV Days Available 23,002 23,000 22,750 68,221 68,500 ROV Days Utilized 14,474 13,601 14,005 40,366 41,955 ROV Utilization 63 % 59 % 62 % 59 % 61 %
Manufactured Products
Revenue 75,359 110,416 79,127 241,311 377,520 Gross Margin 8,544 11,242 8,391 26,939 42,870 Operating Income (Loss) 809 (38,198) 790 4,352 (100,471) Operating Income (Loss) % 1 % (35) % 1 % 2 % (27) % Backlog at End of Period 334,000 318,000 315,000 334,000 318,000
Revenue 95,580 73,212 107,951 292,765 221,306 Gross Margin 13,815 (1,633) 14,566 43,492 3,632 Operating Income (Loss) 7,634 (12,282) 7,996 24,443 (95,740) Operating Income (Loss) % 8 % (17) % 7 % 8 % (43) % Integrity Management & Digital Solutions Revenue 62,806 53,933 64,070 180,924 172,631 Gross Margin 11,330 7,129 10,462 30,001 22,376 Operating Income (Loss) 5,362 793 4,721 12,557 (122,567) Operating Income (Loss) % 9 % 1 % 7 % 7 % (71) %
Total Energy Services and Products
Revenue$ 377,455 $ 357,178 $ 392,519 $ 1,119,200 $ 1,150,078 Gross Margin 62,607 30,116 65,186 185,195 123,053 Operating Income (Loss) 33,338 (47,560) 35,217 97,214 (399,072) Operating Income (Loss) % 9 % (13) % 9 % 9 % (35) % 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 periods of lower levels of activity and profitability. In response, we continue to take action and implement cost efficiency initiatives. Additionally, we believe our energy businesses are positioned to benefit from improved global markets for our services and products. 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
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Table of Contents Three Months Ended Nine Months Ended Sep 30, 2021 Sep 30, 2020 Jun 30, 2021 Sep 30, 2021 Sep 30, 2020 ROV 79 % 83 % 80 % 79 % 82 % Other 21 % 17 % 20 % 21 % 18 % During the third quarter of 2021, Subsea Robotics revenue increased slightly as compared to the immediately preceding quarter, primarily due to favorable offshore activity levels as compared with the second quarter of 2021. Operating income for the third quarter of 2021 decreased as compared to the immediately preceding quarter, primarily due to lower margins for ROV services attributed to changes in geographic mix and a special bonus that recognized technicians for enduring extended work rotations throughout 2021 due to COVID-19 challenges. Our Subsea Robotics operating income increased as compared to the corresponding period of the prior year, primarily due to charges of$9.6 million in the three-month period endedSeptember 30, 2020 for write-downs of inventory and other expenses. Exclusive of those charges, Subsea Robotics operating income for the third 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 nine-month period endedSeptember 30, 2021 increased as compared to the corresponding period of the prior year due to charges of$121 million in the nine-month period endedSeptember 30, 2020 for goodwill impairment, write-downs and write-offs of certain intangibles and inventory, and other expenses. Exclusive of those charges, Subsea Robotics operating income for the nine-month period endedSeptember 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 nine months of 2021. Fleet utilization was 63% for the three months endedSeptember 30, 2021 as compared to 59% for the corresponding period of the prior year. Fleet utilization decreased to 59% from 61% for the nine-month periods endedSeptember 30, 2021 andSeptember 30, 2020 , respectively. During the nine months endedSeptember 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 ofSeptember 30, 2021 andSeptember 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 third quarter of 2021 were essentially flat when compared to the immediately preceding quarter, as marginally lower revenue continued to challenge our ability to leverage the cost base of this business. Our Manufactured Products operating results in the third quarter of 2021 were higher than those of the corresponding period of the prior year, primarily due to charges of$43 million in the three-month period endedSeptember 30, 2020 for goodwill impairment and other expenses. Exclusive of those charges, Manufactured Products operating results decreased in the third quarter of 2021, as compared to the corresponding period of the prior year, primarily as a result of decreased activity in subsea umbilical and hardware throughput in the third quarter of 2021 as compared to the third quarter of 2021. Manufactured Products operating results were higher for the nine-month period endedSeptember 30, 2021 , when compared to the corresponding period of the prior year, as a result of$119 million in charges in the nine-month period endedSeptember 30, 2020 for asset and goodwill impairments and other expenses. Exclusive of those charges, operating results decreased as compared to the corresponding period of the prior year as a result of decreased activity in subsea umbilical, connection systems and the commercial theme park entertainment systems businesses in the first nine months of 2021. Our Manufactured Products backlog was$334 million as ofSeptember 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. Due to the financial deterioration of one of our customers in our Manufactured Products segment that is a subsidiary of aChina -based company that has been and remains subject to well-published financial challenges, certain projects that were in process for that customer have been delayed. As ofSeptember 30, 2021 28 -------------------------------------------------------------------------------- Table of Contents andDecember 31, 2020 , we had contract assets of$38 million and$40 million , respectively for those projects. We continue to closely monitor the contract along with the related contract assets, while working with our customer to complete these projects. The recoverability of these amounts could be materially impacted by possible future events such as our customer's project modifications, cancellations or bankruptcy. Our book-to-bill ratio was 1.0 for the trailing 12 months, as compared with a book-to-bill ratio of 0.4 for the year endedDecember 31, 2020 .
Our OPG operating results were relatively flat in the third quarter of 2021, as compared to the immediately preceding quarter, on lower revenue. Our OPG revenue in the third quarter of 2021 benefited from ongoing seasonal activity in inspection, maintenance and repair ("IMR") work in theGulf of Mexico , despite some work delays caused by Hurricane Ida and high loop currents; however, the conclusion of field activities on several projects inAngola was the primary driver for lower revenue in the third quarter of 2021 as compared to the immediately preceding quarter. Our OPG operating results were higher in the three months endedSeptember 30, 2021 , compared to the corresponding period of the prior year, primarily due to charges of$13 million for asset write-offs and other expenses. Exclusive of those charges, our OPG operating results improved in the third quarter of 2021 on higher revenue, primarily due to activity on the riserless light well intervention project inAngola with no comparable activity in the third quarter of 2020. Our OPG operating results were higher in the nine months endedSeptember 30, 2021 compared to the corresponding period of the prior year, due to charges of$89 million recorded in the first nine months of 2020 for asset impairments and write-offs, goodwill impairment and other charges. Exclusive of those charges, our OPG operating results were higher in the nine-month period endedSeptember 30, 2021 as compared to the corresponding period of the prior year, primarily due to the year-over-year contribution from ourAngola 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 revenue and operating results for the third quarter of 2021 were higher as compared to the immediately preceding quarter on relatively flat revenue, primarily due to incremental benefits from ongoing efficiency improvements. IMDS operating results for the three-month period endedSeptember 30, 2021 , as compared to the corresponding period of the prior year, were higher due to nonrecurring costs on certain completed projects and lower activity levels in the third quarter of 2020. IMDS operating results for the nine-month period endedSeptember 30, 2021 , as compared to the corresponding period of the prior year, improved due to charges of$127 million recorded in the first nine months of 2020. Exclusive of those charges, operating results for the nine-month period endedSeptember 30, 2021 were higher, as compared to the corresponding period of the prior year, due to the start-up of several new customer contracts and realization of cost improvements in 2021, and nonrecurring costs on certain projects completed in the first nine months of 2020 and lower activity levels in the first nine months of 2020.
Aerospace and Defense Technologies. Our ADTech segment provides government
services and products, including engineering and related manufacturing in
defense and space exploration activities, principally to
Revenue, gross margin and operating income (loss) information for our ADTech segment are as follows:
Three Months Ended Nine Months Ended (dollars in thousands) Sep 30, 2021 Sep 30, 2020 Jun 30, 2021 Sep 30, 2021 Sep 30, 2020 Revenue$ 89,359 $ 82,565 $ 105,680 $ 283,366 $ 253,549 Gross Margin 20,019 16,668 24,603 66,732 51,466 Operating Income (Loss) 14,251 13,097 19,340 50,430 39,498 Operating Income (Loss) % 16 % 16 % 18 % 18 % 16 % 29
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Our ADTech segment operating results for the third quarter of 2021 were lower, as compared to the immediately preceding quarter, on lower revenue due to a higher component of lower margin manpower activities. Our ADTech segment operating results for the three-month period endedSeptember 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 nine-month period endedSeptember 30, 2021 increased on higher levels of revenue, when compared to the corresponding period of the prior year, due to increased activity in defense subsea technologies. 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 Nine Months Ended (dollars in thousands) Sep 30, 2021 Sep 30, 2020 Jun 30, 2021 Sep 30, 2021 Sep 30, 2020 Gross margin expenses$ (22,778) $ (17,133) $ (21,392) $ (67,025) $ (55,579) % of revenue 5 % 4 % 4 % 5 % 4 % Operating expenses (31,820) (26,157) (31,738) (95,273) (86,985) Operating expenses % of revenue 7 % 6 % 6 % 7 % 6 % Our Unallocated Expenses for the third quarter of 2021 were slightly higher, as compared to the immediately preceding quarter. Our Unallocated Expenses for the three- and nine-month periods endedSeptember 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 Nine Months Ended (in thousands) Sep 30, 2021 Sep 30, 2020 Jun 30, 2021 Sep 30, 2021 Sep 30, 2020 Interest income$ 662 $ 414 $ 683$ 1,864 $ 2,202 Interest expense, net of amounts capitalized (9,616) (9,250) (9,729) (29,752) (33,323) Equity in income (losses) of unconsolidated affiliates 189 131 378 1,101 2,002 Other income (expense), net (814) (2,836) (1,955) (4,222) (13,624) Provision (benefit) for income taxes 13,560 7,204 5,955 31,856 (17,551) 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 generally the principal component of other income (expense), net. In the three- and nine-month periods endedSeptember 30, 2021 , we incurred foreign currency transaction gains (losses) of$(0.3) million and$(4.0) million , respectively. In the three- and nine-month periods endedSeptember 30, 2020 , we incurred foreign currency transaction gains (losses) of$(2.5) million and$(13) million , respectively. Foreign currency gains (losses) in the first nine months of 2021 were primarily related to declining exchange rates for multiple currencies, none that were significant, relative to theU.S. dollar. Foreign currency gain (losses) in the first nine months of 2020 were primarily related to declining exchange rate for the Angolan kwanza 30
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and the Brazilian real relative to the
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 nine-month periods endedSeptember 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 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. OnMarch 27, 2020 , the CARES Act was signed into law inthe United States . In accordance with the 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 2013 federal income tax return 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 expected to receive combined refunds of approximately$33 million , of which we have received$10 million as ofSeptember 30, 2021 . The remaining refunds are classified as accounts receivable, net, in our consolidated balance sheet as ofSeptember 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 ofSeptember 30, 2021 , we had working capital of$734 million , including$448 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 ofSeptember 30, 2021 , and remains undrawn as of the date of this report, and our nearest maturity of indebtedness is our$437 million of our 4.650% Senior Notes due inNovember 2024 (the "2024 Senior Notes"). We may, from time to time, complete additional, limited repurchases of our 2024 Senior Notes, via open-market or privately negotiated repurchase transactions or otherwise, prior to their maturity date. We can provide no assurances as to the timing of any such repurchases or whether we will complete any such repurchases at all. We do not intend to disclose further information regarding any such repurchase transactions, except to the extent required in our subsequent periodic filings on Forms 10-K or 10-Q, or unless otherwise required by applicable law. Cash flows for the nine months endedSeptember 30, 2021 and 2020 are summarized as follows: Nine Months Ended (in thousands) Sep 30, 2021 Sep 30, 2020
Changes in Cash:
Net Cash Provided by Operating Activities$ 85,319 $ 32,363 Net Cash Used in Investing Activities (22,936) (38,714) Net Cash Used in Financing Activities (64,737) (1,725) Effect of exchange rates on cash (1,937) (6,802) Net Increase (Decrease) in Cash and Cash Equivalents$ (4,291) $ (14,878) 31
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Operating activities
Our primary sources and uses of cash flows from operating activities for the
nine months ended
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