Final Results

Good 2013 results after strong H2 Results for the Full Year ended 31 December 2013 * Revenues from continuing operations(1) up 3.2% to £793.9m; organic revenue growth of 3.7% * Adjusted operating profit* from continuing operations(1) up 6.3% to £ 186.3m; margin of 23.5% * Continuing fully diluted adjusted EPS up 12.8% to 53.6p * Total China revenues up 21% to £174.8m from £144.5m with strong annual and biennial event performance * Events organic revenue growth of 6.3%; operating profit, up to £148.9m, margin of 32.2% * Marketing Services restructured to align with Events and focus on key communities * PR Newswire 1.9% underlying growth and 22.6% margin * £22.7m exceptional charges reflect Marketing Services restructuring and the implementation of new UBM-wide finance and reporting system * Final dividend of 20.5p proposed; total 2013 dividend of 27.2p (2012: 26.7p), up 1.9% * Leverage improved to 2.2x Net Debt/ EBITDA (2012: 2.5x) David Levin, UBM's Chief Executive Officer, commented: "2013 was a year of strategic progress and operational achievement for UBMagainst a difficult economic backdrop; the company can look forward to 2014with confidence. 2013's good revenue and profit growth was bolstered by a strong performancefrom our biennial events in the second half of the year. PR Newswire had asolid year in its core business and maintained its strong profitability. Wedisposed of our Data Services business and substantially restructured ourMarketing Services activities to focus on the professional communities ourevents serve. We end the year with significantly higher quality earnings andwith the business better positioned for structural growth. Our strategy to develop UBM as an events-led marketing services andcommunications business is proving successful. The growing strength of ourEvents business -- focused particularly on large events, and our strongpresence in China and other growth markets -- continues to affirm our strategicchoices and to demonstrate live media is an increasingly significant componentof business to business marketing programmes. PR Newswire has retained itsleading, premium position in the online news and content distribution market,and is well placed to prosper in the emerging world of digital contentmarketing. As I step down after almost nine years as UBM's CEO, I would like to thank mycolleagues from across UBM -- and also past and present members of the Board -for their kind support and wise advice as we have built the business together." Financial Summary 2013(1) 2012(1) Change Change Underlying £m £m % at CC % Change % Revenue (Continuing) 793.9 769.4 3.2 2.1 3.7 Adjusted operating profit* 186.3 175.3 6.3 5.1 -(Continuing) Adjusted operating profit 23.5% 22.8% 0.7%pt - -margin* (Continuing) EBITDA (Continuing) 199.5 187.5 6.4 - - Adjusted PBT* (Continuing) 160.6 146.1 9.9 - - Diluted adjusted EPS* (pence) 53.6p 47.5p 12.8 - -(Continuing) Diluted adjusted EPS* (pence) 54.4p 56.9p (4.4) - -(Total) Dividend per share (pence) 27.2p 26.7p 1.9% - - Cash generated from operations 165.8 189.8 - -(Total) Net Debt - - IFRS Statutory Results 2013(1) 2012(1) Change £m £m % Revenue (Continuing) 793.9 769.4 3.2 Operating profit (Continuing) 130.9 148.2 (11.7) Profit after tax (Continuing) 98.6 116.1 (15.1) Attributable profit 107.5 (57.8) Nm Basic EPS (pence) (Continuing) 36.4p 43.3p (15.9) Basic EPS (pence) (Total) 43.9p (23.6)p Nm Weighted av. no. of shares (millions) 244.9 244.4 Segmental Summary 2013(1) 2012(1) Change Change Underlying £m £m % at CC % Change % Revenue Events 462.7 427.2 8.3 7.2 6.3 Other Marketing Services 129.4 145.8 -11.2 -12.2 -1.7 PR Newswire 201.8 196.4 2.7 1.9 1.9 Continuing Revenue 793.9 769.4 3.2 2.1 3.7 Adjusted Operating Profit* Events 148.9 141.7 5.1 3.5 Other Marketing Services 10.2 7.2 41.7 44.4 PR Newswire 45.6 43.5 4.8 3.9 Net Corporate Costs (18.4) (17.1) 7.6 5.2 Continuing Adjusted Operating 186.3 175.3 6.3 5.1Profit Adjusted Operating ProfitMargin* Events 32.2% 33.2% -1.0pt -1.2pt Other Marketing Services 7.9% 4.9% 3.0pt 3.1pt PR Newswire 22.6% 22.1% 0.5pt 0.4pt Continuing Adjusted Operating 23.5% 22.8%(2) 0.7pt 0.7ptProfit Margin 1. Figures throughout reflect continuing operations unless otherwise stated. For more detail on discontinued products see discussion in Note 2 on page 28. 2. Reported operating profit margin reported in 2012 was 22.2%. * UBM uses a range of business performance indicators to help measure itsdevelopment against strategic and financial objectives. All non- IFRS measures are noted with a * and additional information on these measuresis set out on page 18. Outlook 2014 has opened with our businesses performing in line with our expectations.We expect underlying growth in constant currency terms to be in line with lastyear for our Events and PR Newswire segments. Overall, we expect that UBM'sadjusted operating margin will be better than reported 2012, the previousbiennial `down' year - reflecting in part margin improvement from thediscontinuation of less profitable businesses. We anticipate the Events segment will continue to grow well in 2014, withunderlying growth in line with 2013. Growth in China - our largest eventsmarket - will continue to contribute importantly to this result. Expansion inChina and other markets will offset continued cyclical pressure on our showsserving the UK Built Environment, and venue space constraints at a number ofour largest events. We note that 2014 is a "down year" in our biennial cycle.In addition reported results for the first quarter will reflect phasingdifferences caused by a number of events with approximately £10m of revenuewhich ran in the first quarter of 2013 running in the second quarter this year. We will further expand Events through new launches and geo-adapted shows,continue to invest in exhibitor and visitor experience, and improve health andsafety. Venue constraints will limit physical growth at four of our Top 20events so our growth becomes more weighted towards smaller shows in newmarkets, reducing the average overall margin. Additionally our `even' yearbiennials are smaller and less profitable than their `odd' year counterparts.Our overall Events margin for 2014 is therefore expected to be around 30%. We expect growth trends for PR Newswire to continue in line with thoseexperienced in 2013. Growth in US distribution will reflect continued slowgrowth in the US premium press release market, and we expect to increase theshare of releases incorporating multimedia elements, and to grow revenue fromnew products. We project continued growth for Vintage, CNW and in Europe. Weexpect continued stability in margins. We enter 2014 with our Other Marketing Services businesses aligned to supportour event franchises. We expect to generate revenues for 2014 of approximately£100m and to achieve margin of 10% across the segment. We generate over 90% of our revenue in currencies other than Sterling, and ourreported results are sensitive to shifts in currency exchange rates. We haveentered 2014 with a notably strong foreign exchange headwind relative to 2013average rates. If exchange rates on 23rd February had prevailed during 2013,reported revenue, adjusted operating profit, and diluted adjusted EPS (pence)(Continuing), would have been reduced by £43.8m, £11.7m and 3.9p respectively. - Ends - Contacts Media Peter Director of [email protected] +44(0) 207 921 5961Bancroft Communications Chris Barrie Citigate Dewe [email protected] +44(0) 207 282 2943 Rogerson Investor Relations Chantal IR Manager [email protected] +44(0) 207 921 5943Bradford UBM will host a presentation at 11am at the London Stock Exchange, 10Paternoster Square, EC4M 7LS. A live webcast of the results presentation willbe made available from UBM's website. To access the webcast please go towww.ubm.com. A recording of the webcast will also be available on demand fromUBM's website after 4pm. Notes to Editors 1. About UBM plc UBM plc is a leading global events-led marketing services and communicationscompany. We help businesses do business, bringing the world's buyers andsellers together at events, online and in print. Our 5,000 staff in more than20 countries are organised into specialist teams which serve commercial andprofessional communities, helping them to do business and their markets to workeffectively and efficiently. For more information, go to www.ubm.com; for UBM corporate news, follow us onTwitter at @UBM_plc and go to http://media.ubm.com/social for more UBM socialmedia options. 2. Investor Visits UBM will host investor visits to the following events: IFSEC International 17th June 2014 Excel Centre, LondonJune Hong Kong Jewellery & Gem 20th June 2014 Hong Kong Convention & ExhibitionCentre There are a limited number of places so if you would like to attend pleaseemail [email protected] EVENTS Continuing 2013(3) 2012(1) Change Change Underlying £m £m % at CC % Change(4) % Revenue Annual Events Revenue 424.6 402.1 5.6 4.2 6.3 Biennial Events Revenue 38.1 25.1 51.8 55.7 25.4 Total Events Revenue 462.7 427.2 8.3 7.2 Adjusted Operating Profit 148.9 141.7 5.1 Total Adjusted Operating Profit 32.2% 33.2% -1.0%ptMargin 3. Reflects biennial events now run as annual 4. Biennial underlying growth Continuing Events revenue rose 8.3% to £462.7m (2012: £427.2m). Biennial event revenues grew 25.4% over previous editions in 2011, driven bystrong growth at second half shows, particularly at Food Ingredients Europe inFrankfurt and Marintec China in Shanghai. Both these shows would feature withinour "Top 10" shows if they were run annually. We hosted a total of 31 biennialevents during 2013 which contributed £38.1m of revenue (2012: 35 events, £25.1m). Annual event revenues were up 5.6% to £424.6m (2012: £402.1m); on an underlyingbasis growth was 6.3%. Unadjusted for product discontinuations, underlyingrevenue growth was 4.2%. The slow underlying revenue growth of 1.2% in thefirst half reflected declines in certain UK Built Environment and Europeanshows but this weakness was more than offset by a strong second half, driven byevents in Emerging Markets, particularly the Children-Baby-Maternity-Expo inChina and the September Hong Kong Jewellery & Gem show as well as the continuedstrength of the Black Hat event in the USA. Annual stand revenues were up 7.5% to £313.1m (2012: £291.2m); sponsorship andother revenues improved 1.5% to £72.5m (2012: £71.4m); and attendee revenuesfell 1.0% to £39.0m (2012: £39.4m). The number of square metres of exhibitionspace at our annual portfolio of shows increased 7.1% to 1.5m (2012: 1.4m)while visitor numbers increased by 18.8% to 1.9m (2012: 1.6m). Our Top 20 shows continue to be a key driver of the Events segment's overallperformance. Revenues from the 2012 Top 20 shows accounted for 51% of annualrevenues and 69% of profit in 2013. The 2012 Top 20 events revenue grew by 5.9%in 2013 on an underlying basis. Almost half of these shows grew at double digitgrowth rates but there were notable contractions at Ecobuild and Interiors,reflecting cyclical conditions in the UK Built Environment, and the significantdecline in our European Air Traffic. As at 31 January 2014, forward bookingsfor the 2013 Top 20 events were up 12.7%, reflecting both their underlyingstrength and improved business confidence driving early bookings, as well aspositive effects of phasing of rebooking for some shows. Large events remain the key focus of our Events portfolio. In 2013 we organised91 annual events which each generated revenue of more than £1m and contributed83% of our total annual Events revenue (2012: 89 events(1) with revenues ofmore than £1m accounting for 82%). In line with our strategy we launchedgeo-adapted shows to expand in a number of geographies, launching 22 shows in12 countries including Turkey, Indonesia, Russia and Myanmar. We alsodiscontinued a number of events which generated revenues of £25.3m in 2012. We invested £12.1m (including £2.4m of contingent and deferred consideration)in buying majority interests in five new events businesses in Turkey, China andIndonesia, as well as increasing our stakes in our existing Turkish andMalaysian joint ventures (for more details see page 36). Continuing 2013(3) 2012 Change Change Underlying £m £m % at CC % Change % Annual Events Revenue Emerging Markets 200.7 177.7 12.9 11.4 12.9 N. America 113.8 110.0 3.5 1.4 3.5 UK 48.2 54.7 -11.9 -12.2 -8.0 Europe 50.6 46.4 9.1 4.5 5.0 RoW 11.3 13.3 -15.0 -4.3 -0.8 Annual Events Revenue 424.6 402.1 5.6 4.2 6.3 We continued to shift the geographic mix of our events portfolio towardsEmerging Markets. Emerging Markets generated 47.3% of annual event revenues(China and Hong Kong contributing 19.5% and 15.5%, respectively). With 12.9%underlying revenue growth, our Emerging Markets events continue to make a majorcontribution to the overall performance of the Events segment. Within theEmerging Markets, Mainland China and Hong Kong grew by 13.9% and 8.0%respectively on an underlying basis. Chinese shows outside our 2012 Top 20 alsoperformed well, including Hotelex Shanghai and P-MEC China. North America saw solid growth from Game Developer Conference, Black Hat andWorld Routes, a peripatetic show which ran in Las Vegas in 2013 (2012 - AbuDhabi ). Our larger advanced manufacturing events grew well but a number ofsmaller and mid-sized technology shows, particularly those serving theelectronics community, had lower growth, a reflection of slow growth in themarkets the events serve. In the UK, good growth in Q2, from shows such as theFacilities Show failed to offset a weak performance during the first quarter inthe Built Environment events. Revenues in the rest of Europe rose 5.0% on anunderlying basis with good growth at CPhI Worldwide and ICSE in Q4 more thancompensating for tough competitive conditions, particularly at ATC Global, ourhistorically Europe-based air traffic control management event. ATC Global hasbeen re-launched in Beijing for its 2014 edition, taking advantage of shifts inthe geography of growth in the ATC industry. Industry response has beenencouraging. Adjusted operating profit rose to £148.9m (2012: £141.7m); operating margin was32.2% (2012: 33.2%). The decline in margin was driven principally by the weakerprofitability experienced during Q1. This was coupled with our ongoinginvestment to improve the overall quality of our events portfolio, particularlyin terms of health and safety, and some wage inflation in a number of ourfast-growing core markets. OTHER MARKETING SERVICES Continuing 2013 2012 Change Change Underlying £m £m % at CC % Change % Other Marketing Services - 94.9 100.1 -5.2 -6.7 -0.4Online Other Marketing Services - Print 34.5 45.7 -24.5 -24.7 -5.3 Total Other Marketing Services 129.4 145.8 -11.2 -12.2 -1.7Revenue Adjusted Operating Profit 10.2 7.2 41.7 Total Adjusted Operating Profit 7.9% 4.9% 3.0%ptMargin In 2013 we undertook a substantial restructuring program of our Other MarketingServices activities. This programme aimed to align the businesses more closelyto our events, leverage our high quality content and audience reach, and toimprove their profitability. We ceased printing a number of titles,particularly those serving US technology communities. For example, we migratedour flagship technology publication Information Week to a web-based communityplatform model late in the year and it is no longer published as a printpublication. From 2014 substantially all print activities will support eventscommunities. As part of this restructuring programme, UBM Channel and the Property Week andTTG titles were classified as "held for sale" at the half year, and were soldby year end. Additionally, Pyramid Research and Light Reading, which togetheraccounted for revenues of £9.5m and losses of £0.2m, were sold in January 2014.Consideration for all of these disposals totalled £8.0m in 2013 and £9.2m in2014. For more detail please see Note 6.2 on page 39. Other Marketing Services revenue fell 11.2% to £129.4m (2012: £145.8m). Ofthese reported figures, about £83.1m of Online and £30.1m of Print willcontinue into 2014. After adjusting for the £16.6m of revenues generated bysold or discontinued activities, the underlying revenue decline was 1.7%.Online revenues declined 0.4% on an underlying basis. This reflects moreconservative marketing spend from our electronics and software clients, coupledwith closure of a number of unprofitable online products. Adjusting for therationalisation of the print portfolio, Print revenues were £30.1m, down 5.3%on an underlying basis. Adjusted operating profit was £10.2m (2012: £7.2m) representing a 7.9% margin(2012: 4.9%). This excludes the exceptional costs associated with thereorganisation and restructuring of marketing services, principally affectingour UBM Tech and UK Built Environment Marketing Services businesses. (See thenote on page 29 for details.) PR NEWSWIRE Continuing 2013 2012 Change Change Underlying £m £m % at CC % Change % Revenue PR Newswire US Distribution 96.2 94.9 1.4 0.3 0.3 PR Newswire US Other 19.9 19.7 1.0 -1.1 -1.1 PR Newswire US Vintage 23.7 20.8 13.9 7.2 7.2 CNW 30.3 30.7 -1.3 2.8 2.8 PR Newswire Europe 21.0 19.2 9.4 8.9 8.9 PR Newswire Asia & LatAm 10.7 11.1 -3.6 -4.7 -4.7 Total PR Newswire Revenue 201.8 196.4 2.7 1.9 1.9 Adjusted Operating Profit 45.6 43.5 4.8 Total Adjusted Operating Profit 22.6% 22.1% 0.5%ptMargin PR Newswire revenue grew 2.7% in 2013 to £201.8m (2012: £196.4m). Revenues wereup 1.9% on an underlying basis. US Distribution underlying revenue growth was 0.3%. PR Newswire US pressrelease volume was up 2.4%, with the increase in volume driven by growth in"non-premium" (iReach) releases. Volume growth was largely offset by a decrease in yield per release. On onehand, our strategy to drive take-up of multimedia releases has been successful.Multimedia news releases increased from 12.1% to 14.2% of total by volume,reflecting the introduction of lower-priced multimedia news releases which areaccessible to a broader range of customers. This success has been tempered bysome weakness in high price point products which we believe is related toconstrained PR budgets. However, the increase in yield from broader multimediauptake was more than offset by the effect of the increased share of iReachdistribution and increased inbound volume from PR Newswire's non-US affiliates(principally Europe) for which revenue is not recorded in the US. We have continued to make good progress in migrating customers to long-termcontracts, especially in CNW which has been integrated during 2013. 28.0% ofNorth American distribution revenue was generated under contract, up from 23.5%the previous year. We continue to invest in expanding our distribution networkand now distribute to 10,700 syndicated websites worldwide. (2012: 9,600). Earning releases continue to decline in importance to the business, withrevenue from such releases totalling just £9.3m (4.6% of PR Newswire totalrevenue), down from £9.4m (4.8%) the previous year. US Other revenues declined by 1.1% on an underlying basis. Some growth inMultiVu Broadcast services and Media, IR and CSR Rooms was more than offset bythe loss of MediaAtlas revenues following the end of the Vocus relationship inthe first half of 2012. US Vintage organic revenue growth was 7.2%. Through July this growth was drivenby continued take up of our XBRL services as companies complied for the firsttime with a new regulatory obligation to XBRL-tag detailed footnotes. FromAugust year-on-year growth has reflected tougher comparatives. We expect growthto moderate going forward. CNW showed 2.8% organic revenue growth. Although the number of releases CNWdistributed was slightly reduced, growth was driven by converting largercustomers to long-term contracts, a push to increase pay-as-you-go volumes overthe latter part of the year and by increased purchase of multimedia newsreleases. Almost a quarter of CNW distribution revenues are now under contract.The integration of the CNW business into PR Newswire is progressing well and weare now seeing both revenue and cost synergies. Outside North America, the Europe business continued to show good growth, withprogress in France, Germany, the Nordics, Israel and the Middle East beingoffset by some softness in the UK. PR Newswire Asia was affected by the trendof Chinese companies to de-list from the US stock exchanges in the first halfof the year. Growth was driven in the second half through focusing on theChinese domestic PR market. In Latin America we continue to see softness inmonitoring revenues. Adjusted operating profit was £45.6m (2012: £43.5m), representing a 22.6%margin (2012: 22.1%). This includes £0.6m restructuring cost charged to the P&Land not taken as exceptional. Chief Financial Officer's Review The financial results for 2013 reflect a good year for UBM, both strategicallyand operationally. We have generated good underlying growth in our key Eventsand PR Newswire segments while making significant progress in repositioning ourportfolio through disposals, organic development, and acquisitions. The most notable divestiture was of our Data Services businesses (Delta), asignificant strategic step for UBM as it tightens our focus on core businesses,and improves the quality and growth profile of the Group's earnings. The Groupalso performed a review of the Marketing Services segment during the year whichresulted in restructuring charges of £16.6m and the sale of the UBM Channelbusiness and certain UBM Built Environment Marketing Services activities (BuiltMS). The Delta, UBM Channel and Built MS operations have been treated asdiscontinued in the financial statements. Continuing revenues in 2013 were £793.9m, 3.2% higher than in 2012 (2012: £769.4m) driven by strong underlying performance of the Events and PR Newswiresegments. Continuing adjusted operating profit* for 2013 was 6.3% higher at £186.3m (2012: £175.3m). Continuing margins* rose by 0.7ppts to 23.5% (2012:22.8%) reflecting the biennial cycle in Events partially offset by higher netcorporate costs. As at 31 December 2013 net debt was £443.4m, representing 2.2 times 2013 EBITDA*. The decrease from net debt of £553.4m (2.5 times 2012 EBITDA) at the end of2012 reflects the consideration received from the Delta disposal of £146.5m(detailed in the Discontinued operations section below) comprised of £109.5m incash and a £37m vendor loan note. During 2013, we continued to invest in the implementation of CORE - our newGlobal ERP system and outsourced finance processes - with £22.7m of capitalexpenditure to date (£12.5m in 2013) and restructuring charges of £8.6m. Thisproject has been focused on our Events-led businesses, and will result inimproved management information including the benchmarking and best practiceinitiatives showcased in GEM. Routine finance processes for much of the Groupwill be outsourced to CapGemini. CORE was deployed for our UK and Europe-basedoperations in February 2014, and we expect to roll the system out across theremainder of the Group's Events and Other Marketing Services through 2014. The lease on UBM's principal UK office space at 245 Blackfriars Road in Londonexpires in March 2015. We will consolidate our London-based workforce(approximately 700 people) into new premises. We expect to incur fit out andrelocation costs of approximately £17m (net of the landlord's contribution)over the course of 2014. In December 2013, PA Group, the parent company of the Press Association, inwhich UBM holds a 17% stake, announced the sale of its weather forecastingbusiness, MeteoGroup. UBM expects to record an exceptional gain on disposal ofaround £21m in 2014. We anticipate a proportion of the proceeds will bedistributed to UBM by the PA Group through dividends after completion, althoughthe amount and timing of any distribution is yet to be determined. Summary of Income Statement IFRS Measures As adjusted(b) Continuing £m FY Restated % FY Restated % 2013 FY 2012 Change 2013 FY 2012 Change Revenue 793.9 769.4 3.2 793.9 769.4 3.2 Operating expenses (excluding (a) (594.4) (581.9) (594.4) (581.9)line items below) Share of tax on profit in JV & (0.9) (1.1) (b) (b)associates (a) Exceptional operating items (a) (22.8) (0.2) (b) (b) Impairment charges (a) (10.4) (1.0) (b) (b) EBITDA 199.5 187.5 6.4 Depreciation (a) (13.2) (12.2) (13.2) (12.2) EBITA 186.3 175.3 6.3 Amortisation - intangible assets (21.3) (24.8) (b) (b)arising on acquisition (a) Operating profit 130.9 148.2 -11.7 186.3 175.3 6.3 Net interest expense and pension (25.7) (29.2) (25.7) (29.2)finance expense Exceptional finance income 4.1 3.1 (b) (b) Financing income/expense - other 0.2 0.1 (b) (b) PBT 109.5 122.2 -10.4 160.6 146.1 9.9 Taxation (10.9) (6.1) (18.4) (17.4) PAT from continuing operations 98.6 116.1 -15.1 142.2 128.7 10.5 Discontinued operations adjusted 2.1 23.5 2.1 23.5PAT Profit/(loss) on disposal/assets 16.3 (186.9) (b) (b)held for sale and adjusting items Profit for the year 117.0 (47.3) 144.3 152.2 Non-controlling interest (9.5) (10.5) (9.5) (10.5) Attributable profit 107.5 (57.8) 134.8 141.7 (a) Expenses not included within Operating expenses figure. (b) All non-IFRS measures and business performance measures have been notatedwith a * and additional information on these measures has been provided at theend of this section. Weighted average no. of shares 244.9 244.4 244.9 244.4(million) Fully diluted weighted average no. 247.8 249.0 247.8 249.0of shares (million) Earnings per share (pence) Continuing operations - basic 36.4 43.3 -15.9 54.2 48.4 12.0 Continuing operations - diluted 36.0 42.4 -15.1 53.6 47.5 12.8 Profit for the year - basic 43.9 (23.6) nm 55.1 58.0 -5.0 Profit for the year - diluted 43.4 (23.6) nm 54.4 56.9 -4.4 Dividend per share (pence) 27.2 26.7 1.9 Discontinued operations Discontinued operations are the disposed Delta businesses (which weredesignated as held for sale at 31 December 2012, and have not been consolidatedin the 2013 financial statements under IFRS10), and the UBM Channel and BuiltMS businesses. Delta UBM Total Delta UBM Total 2013 Channel 2013 2012 Channel 2012 £m and £m £m and £m Built MS Built 2013 MS 2012 £m £m PAT from discontinued n/a 2.1 2.1 16.5 1.5 18.0operations Loss on assets held for sale n/a n/a n/a (181.4) n/a (181.4) Profit on disposal 20.5 (4.2) 16.3 n/a n/a n/a Total discontinued operations 20.5 (2.1) 18.4 (164.9) 1.5 (163.4) The Delta disposal substantially completed on 8 April 2013, with the exceptionof certain businesses in China, India and the UK. The divestiture of the Chinabusiness completed on 16 August 2013. We expect to obtain the requiredregulatory approvals for the transfer of the India business in the next sixmonths; accordingly it remains held for sale at 31 December 2013. In the UK,Chemist and Druggist (C+D), which provides online publications and dataservices to the UK pharmaceutical industry, was included in the Delta perimeterbut completion was subject to a condition precedent which has not beensatisfied. C+D will be retained by the Group and has been restored tocontinuing operations in the financial statements. Its activities will beincluded within Other Marketing Services. C+D revenues and operating incomewere £5.3m and £1.7m, respectively, for the year ended 31 December 2013 and £5.3m and £1.8m for the prior year. UBM has retained a number of data services products which are closely relatedto retained businesses. The revenues from these retained products have beenreclassified to Other Marketing Services and Events for 2012 to facilitatecomparison. The reallocation is disclosed in the table in Section 2 on page 28. A £20.5m profit on disposal of Delta has been recognised in 2013, including again of £26.0m from recycling foreign exchange gains previously reported inother comprehensive income. Cash inflow from the Delta disposal was £99.7m netof working capital adjustments. The sale of UBM Channel completed on 16 September 2013 and resulted in a lossof £6.7m on disposal. The majority of the Built MS disposal group was disposedon 31 October 2013 with a gain on disposal of £2.5m. Exceptional operating items - continuing operations Total charges of £22.8m were incurred in the year in relation to: * the restructuring of the UBM Tech business (£7.7m) and other marketing services operations (£2.8m) reflecting decisions taken in the Group's strategic review; * vacant property provisions in US and UK locations (£2.4m) that has arisen as a result of the reduced headcounts from restructuring and disposals; * contracts with the ExCel London Exhibition and Convention Centre (£3.7m). These contracts entail minimum commitments for space rentals in excess of those foreseen to be necessary which exceed the economic benefits expected to be received and which have therefore been designated as onerous contracts; * one-off transition and redundancy charges for CORE (£8.6m); * an exceptional credit of £2.5m from prior year disposal provisions no longer required; and * acquisition costs of £0.8m and aborted acquisition costs of £1.2m, offset by an exceptional credit of £1.9m relating to revised contingent consideration estimates for prior year acquisitions. Impairment charges We have reviewed the carrying value of goodwill and intangible assets in lightof current trading conditions and future outlook. As a result of this review,impairment charges of £5.3m relating to goodwill and intangible assets, £1.0mof leasehold assets, £1.5m in respect of the Group's investment in ActuaMedicaNV and £2.6m in respect of the loan note with Janus SAS have been recognised. Corporate costs Net corporate costs for 2013 were £18.4m (2012 restated: £17.1m). This includesan additional pension expense from the adoption of IAS19 (revised) of £0.8m(2012: £1.4m) offset by a curtailment gain of £1.9m from the Delta disposal.Corporate costs are partially offset by internal cost recoveries from UBM'soperating businesses, results from joint ventures and associates and sundryincome which is not attributable to any reporting segment. Our share of posttax results from joint ventures and associates was £2.5m (2012: £2.3m) andsundry income was nil (2012: £3.7m). Interest Net interest expense represents interest payments on UBM's bonds and bankloans, net of interest receipts on cash holdings and vendor loan notes. Netinterest expense in 2013 was £24.0m, compared with £27.9m in 2012. Furtherinformation is set out in the Capital structure section on page 12. Financing expense includes an IAS 19 pension interest charge of £1.7m (2012restated: £1.3m); the impact of IAS 19 (revised) is detailed in the Pensionsection below. Income tax UBM's effective rate of taxation* for the year was 11.5% (2012 restated:11.9%). Movements in our tax creditor balance during 2013 were as follows: £m Current tax liability at 1 January 2013 52.7 Current tax charge 17.5 Tax paid (25.4) Currency translation and other movements 0.6 Current tax liability at 31 December 45.42013 Overall our current tax liability decreased from £52.7m as at 31 December 2012to £45.4m as at 31 December 2013. The tax creditor includes provisions for taxsettlements in various jurisdictions in which UBM operates. We have necessarily made judgments as to the outcome of tax matters notconcluded. This creditor has been consistently classified as a short termliability in accordance with our accounting policy although we do not expectthe tax cash outflow in 2014 in respect of the year end balance sheet creditorto exceed £10.0m. The total cash paid in respect of income taxes was £25.4m in2013. As part of our focus on improved transparency in relation to taxation, the UBMplc board has formally adopted the CBI's Statement of Principles forresponsible tax management. Our aim is to explain the amount of tax we pay andwhere we pay it in a clear and transparent manner. At 31 December 2013 the Group had unrecognised deferred tax assets relating totax losses carried forward in the UK £43.8m and the US £82.9.m that areavailable to offset against future taxable profits. Current tax liability analysed: By Geography: % By Year % United States and Canada 32.6 Up to 2009 10.4 Europe 37.7 2010 11.9 China 21.0 2011 18.5 Other Emerging Markets 8.2 2012 20.2 Rest of World 0.5 2013 39.0 Total 100.0 Total 100.0 We pay the bulk of our tax in Emerging Markets. Of the total £25.4m paid, £14.4m was in Emerging Markets. A further breakdown is provided in Note 3.6 tothe financial statements. Foreign currency exposure We do not generally hedge our income statement currency exposure, though we doarrange debt in our major trading currencies (principally the US Dollar, theEuro and the Canadian Dollar). This debt is designated as a hedge againstbalance sheet exposure, and interest expense provides a modest hedge againstoperating earnings generated in those currencies. The following table outlinesthe currency profile of our revenues and adjusted operating profits for 2013continuing operations: Adjusted operating Average exchange rate Revenue % profit* % 2013 2012 US Dollar 45.1 32.4 1.5657 1.5872 Hong Kong Dollar 12.1 21.7 12.1453 12.3120 Euro 11.4 18.8 1.1770 1.2316 Renminbi 9.2 11.7 9.6217 10.0087 UK Pound Sterling 9.1 3.7 1.000 1.000 Canadian Dollar 3.9 4.6 1.6191 1.5883 Japanese Yen 1.9 1.9 153.9662 127.7777 Indian Rupee 1.8 0.9 92.1418 84.8526 Brazilian Real 1.7 1.8 3.3923 3.1033 Other 3.8 2.5 - - Total 100.0 100.0 Our income statement exposure to foreign exchange risk is shown for our mostimportant foreign currency exposures in the sensitivity analysis below, basedon 2013 continuing operations: Average Currency Effect on Effect on adjusted exchange value rises/ revenue operating profit* rate in 2013 falls by + / - £m + / - £m US dollar 1.5657 1 % 4.5 1.1 Euro 1.1770 1 % 0.8 0.5 The Group closely monitors its exposure to foreign currencies, and seeks tomatch revenues and costs when possible. The revolving credit facility may bedrawn in currencies other than the Pound; we also hold cash and cashequivalents in Pounds Sterling, US Dollar, the Renminbi and other currenciesclosely linked to the US Dollar. Given our large and diverse customer base,there are no significant concentrations of credit risk. Capital structure Balance sheet UBM's consolidated net debt at 31 December 2013 stood at £443.4m, down from £553.4m at the end of 2012. During 2013, cash generated from operations fell to£165.8m (2012: £189.8m). UBM received £107.9m on disposal of Delta, UBMChannel, Built MS and other small businesses, paid £19.4m for acquisitions (netof cash acquired), earn out payments in relation to acquisitions made in prioryears and increases in stakes in subsidiaries, together with £65.2m ofdividends to shareholders (excluding dividends paid to non-controllinginterests). Pensions UBM has operated a number of defined benefit and defined contribution schemes,based primarily in the UK. On 30 December 2013, the three main UK schemes (theUnited Pension Plan, the United Magazines Final Salary Scheme and the definedbenefit section of the United Group Pension Scheme) were merged into the newUBM Pension Scheme. These schemes are closed to new members, further detailsare provided in Note 7.2 to the financial statements. The most recent actuarial funding valuations for the majority of the UK schemeswere carried out in 2011, and updated to 31 December 2013 using the projectedunit credit method. At 31 December 2013, the aggregate deficit under IAS 19 was£25.9m, a decrease of £24.3m compared to the deficit of £50.2m at the previousyear end, due to improved asset returns and changes in actuarial assumptions. The adoption of IAS 19 (revised) from 1 January 2013 has reduced the return onplan assets included in pension scheme finance income and reduced the actuarialgains and losses recognised in other comprehensive income by the same amount.The effect of this revision has resulted in a pension interest expense of £1.7mreported for 2013 compared to an interest credit under the previous standard of£2.7m in 2012. Pension schemes operating cost has increased to £1.2m in 2013(2012 under the previous standard: £0.7m) although this was offset in theperiod by a curtailment credit of £1.9m in connection with the Delta disposal.Administration expenses are now reported within operating costs rather than inother comprehensive income. The 2012 figures in the financial statements havebeen restated to reflect IAS 19 (revised). Debt and liquidity Our funding strategy is to maintain a balance between continuity of funding andflexibility through the use of capital markets, bank loans and overdrafts. Tofacilitate access to these sources of funds we seek to maintain long-terminvestment grade credit ratings on our long-term debt from Moody's (currentrating Baa3 - negative outlook) and Standard & Poor's (current rating BBB -stable outlook). Our debt facilities include £250m of 6.5% Sterling bonds maturing November2016; $350m of 5.75% US bonds maturing November 2020; and a £300m syndicatedbank loan facility. Our hedging arrangements and policies are detailed in Note5.5 to the financial statements. At 31 December 2013, UBM had drawn £61.4m fromthe syndicated bank facility and all conditions precedent were met leaving theunutilised commitment of £238.6m available. The Group maintains a strong liquidity position. In addition to the unutilisedcommitment of £238.6m, we had cash on hand of £74.0m at 31 December 2013. TheGroup's treasury policy does not allow significant exposures to counterpartiesthat are rated less than A by Standard & Poor's, Moody's or Fitch and weconsistently monitor the concentration of risk. £m Facility Drawn Undrawn Maturity Margin % Fair value hedges Syndicated 300.0 61.4 238.6 May-16 LIBOR +bank 1.0facility £250m fixed 250.0 250.0 - Nov-16 6.5% Floating rate swaprate fixed for £150msterling US$ LIBOR + 3.14%bond $350m fixed 211.3 211.3 - Nov-20 5.75% Floating rate swaprate dollar fixed for $100mbond US$ LIBOR + 2.63% Total 761.3 522.7 238.6 The following table summarises our estimated payment profile for contractualobligations, provisions and contingent consideration as of 31 December 2013: £m 2014 2015 2016 2017 Thereafter Long-term debt - - 311.4 - 211.3 Interest payable1 29.5 29.6 28.9 12.1 36.3 Derivative financial liabilities - (0.2) 1.4 - - Operating lease payments 29.7 13.7 7.6 4.7 12.7 Pension contributions 3.5 3.5 3.5 3.5 3.5 Trade and other payables 345.2 2.6 - - - Provisions 16.7 3.2 1.8 0.5 6.1 Contingent and deferred 4.0 - - - -consideration Put options over non-controlling 5.0 1.0 1.9 3.9 3.8interests Total 433.6 53.4 356.5 24.7 273.7 1 Interest payable based on current year rates. Capital management Our policy is to maintain prudent debt capital ratios to assure continualaccess to capital on attractive terms and conditions. Cash proceeds fromdisposals of £107.9m, together with robust operating cash flow, enabled us toreduce borrowings. At 31 December 2013, the ratio of net debt to earningsbefore interest, taxation, depreciation and amortisation was 2.2 times as shownbelow: £m 2013 2012 Financial liabilities 531.8 666.8 Financial assets (88.4) (113.4) Net debt* 443.4 553.4 Adjusted earnings before interest, taxation, depreciation 199.5 218.7and amortisation* Net debt to EBITDA ratio* 2.2 2.5 times times We target investment grade ratings from each of Moody's and Standard & Poor's.In assessing the leverage ratios of net debt to adjusted earnings beforeinterest, taxation, depreciation and amortisation, both Moody's and Standard &Poor's take account of a number of other factors, including future operatinglease obligations and pension deficit. Cash flow Cash generated from operations was £165.8m (2012: £189.8m), reflecting thedisposal of Delta, UBM Channel and Built MS, partially offset by negativeworking capital movements in a strong biennial year. Cash generated fromcontinuing operations was £164.4m (2012: £169.5m). Cash conversion* was 97.0%of adjusted operating profit* (2012: 97.9%) impacted by the additional capitalexpenditure on CORE. Free cash flow* prior to cash invested in acquisitions was£97.7m (2012: £102.9m). A reconciliation of net cash inflow from operatingactivities to free cash flow is shown below: £m 2013 2012 Adjusted cash generated from operating 185.9 206.0activities* Restructuring payments (12.9) (11.9) Other adjustments (7.2) (4.3) Cash generated from operations (IFRS) 165.8 189.8 Dividends from JVs and associates 3.7 1.1 Net interest paid (24.3) (30.2) Taxation paid (25.4) (29.7) Capital expenditure (22.1) (28.1) Free cash flow* 97.7 102.9 Acquisitions (19.8) (88.3) Proceeds from disposals 107.9 10.1 Advances to JVs, associates and minority (0.2) (3.3)partners Free cash flow after investment activities 185.6 21.4 Net share issues 1.4 2.5 Dividends (74.5) (74.8) Purchase of ESOP shares (6.0) (8.1) Net debt* as at 31 December (443.4) (553.4) Net debt/EBITDA* as at 31 December (times) 2.2 2.5 Capital expenditure for the year was £22.1m (2012: £28.1m), mainly due to COREmentioned earlier. The other significant capital investments were to enhance PRNewswire's existing products and to upgrade IT infrastructure. We expect to continue to generate significant free cash flow in 2014 because ofour business model and believe that our cash on hand, cash from our operationsand available credit facilities will be sufficient to fund our cash dividends,debt service and acquisitions in the normal course of business. Acquisitions and disposals We invested £12.1m (including £2.4m of expected contingent and deferredconsideration) in acquiring five new events businesses. These acquisitions wereclosely aligned to our strategic priorities, increasing our exposure toattractive communities and geographies. We also invested cash of £0.3m in thepurchase of non-controlling interests and made payments for contingent anddeferred consideration for acquisitions made in the current and prior yearstotalling £11.1m. The 2013 acquisitions contributed adjusted operating profit of £0.3m sinceacquisition and achieved a pre-tax return on investment* of 13.5% on a proforma basis. The following table shows the performance of our acquisitionssince 2011 relative to our target pre-tax cost of capital threshold of 10%: Consideration2 Return on Investment* £m 2011 2012 2013 2011 acquisitions 68.8 8.3% 11.5% 6.2% 2012 acquisitions 28.7 - 16.2% 8.6% 2013 acquisitions3 12.1 - - 13.5% Total 109.6 7.6%4 2Net of cash acquired and includes the latest estimate of expected contingentconsideration. 3 2013 Return on investment calculated on a full year pro forma basis. 4 2013 Return on 3 year initial (cash) consideration is 9.6%. Return on average capital employed The return on average capital employed* for 2013 including discontinuedoperations was 17.9% (2012: 15.5%). The table below shows our performance overtime: £m 2009 2010 2011 2012 2013 Operating profit before exceptional 143.7 143.2 163.7 166.9 165.9items5 (£m) Average capital employed (£m) 910.6 971.1 1,124.10 1,074.5 928.1 Return on average capital employed* 15.8 14.7 14.6 15.5 17.9(ROACE) (%) 5 Including discontinued operations Dividends Our progressive dividend policy targeting two times cover through economic andbiennial cycles remains unchanged. In line with this policy the Board isrecommending a final dividend of 20.5p (2012: 20.0p). This brings the totaldividend for the year to 27.2p (2012: 26.7p), representing an increase of 1.9%in the full year dividend. Subject to shareholder approval, the final dividendon ordinary shares will be paid on 27 May 2014 to shareholders on the registeron 2 May 2014. Going concern After making enquiries, the Directors have a reasonable expectation that UBMhas adequate resources to continue in operational existence for the foreseeablefuture. Accordingly, they continue to adopt the going concern basis inpreparing the financial statements. In reaching this conclusion, the directorshave had due regard to the following: * After taking account of available cash resources and committed bank facilities, none of UBM's borrowings fall due within the next two years that require refinancing from resources not already available. Further information is provided in Note 5.3. * The cash generated from operations, committed facilities and UBM's ability to access debt capital markets, taken together, provide confidence that UBM will be able to meet its obligations as they fall due. * Further information on the financial position of UBM, its cash flows, financial risk management policies and available debt facilities are described in the my review on the preceding pages. UBM's business activities, together with the factors likely to impact its future growth and operating performance are set out in the Strategic Report. Conclusion During 2013, great strategic progress has been made to position UBM as anEvents-led marketing services and communications business. The disposals ofDelta, UBM Channel and Built MS and continuing bolt-on events acquisitionscontinue to accelerate the shift to our attractive core businesses. Simultaneously we have made significant advances in CORE which will beimplemented through 2014. CORE has required considerable effort from bothfinance and project teams across the Group during a year of substantialstrategic and organisational change and I thank them immensely for theircontributions to the success of the project. I look forward to the efficienciesthat the new system will enable in the future. We end the year with a strong balance sheet and a profitable, diversified,cash-generative business well positioned for future growth. Robert Gray Chief Financial Officer Statement of Directors' responsibility UBM's annual report and accounts for the year end, to be published in duecourse, will contain a responsibility statement as required under Disclosureand Transparency Rule 4.1.12, regarding responsibility for the financialstatements and the annual report. This responsibility statement is repeatedhere (below) solely for the purposes of complying with Disclosure andTransparency Rule 6.3.5. It is not connected to the extracted and unauditedinformation presented in this results announcement. Each of the Directors confirm that, to the best of their knowledge: * the Group financial statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB) and IFRIC interpretations, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and * the management report includes a fair review of the development and performance of the business and the position of the Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face. The Directors of UBM plc will be listed in the annual report and are listed onthe UBM plc's corporate website: ubm.com. This press release contains statements which are not based on current orhistorical fact and which are forward looking in nature. These forward lookingstatements reflect knowledge and information available at the date ofpreparation of this press release and the Company undertakes no obligation toupdate these forward looking statements. Such forward looking statements aresubject to known and unknown risks and uncertainties facing the Groupincluding, without limitation, those risks described in this press release, andother unknown future events and circumstances which can cause results anddevelopments to differ materially from those anticipated. Nothing in this pressrelease should be construed as a profit forecast Summary of major risks * Macro-economic slowdown and/or exchange rate fluctuations * + A slowdown in the macro environment could adversely impact revenue, as advertising, attendee, sponsorship and other discretionary revenue tends to be cyclical. A downturn may also result in slower debt collections, thereby affecting cash flow. + Foreign exchange rate fluctuations could adversely affect our reported earnings and the strength of our balance sheet. * Specific country risk and emerging market exposure * + Our business operates in many geographies, particularly Emerging Markets, which may present logistical and management challenges due to different business cultures, languages, anti-bribery laws, health and safety standards or unfavourable changes in applicable law or compliance requirements. + Expansion through joint ventures reduces logistical and management issues but can create governance challenges or affect our ability to extract rewards from our investment. * Inability to stage an event or inability of customers to travel to an event * + A disaster or natural catastrophe, terrorism, political instability or disease could affect people's willingness to attend our events, which could have an adverse effect on our revenues. + Similarly the business model relies on the availability of venues for hosting events. * Changes in our business environment * + We cannot predict all the changes which may affect the competitiveness of the business, such as changes in customer behaviour or technological innovations which would increase competition or make some products or services less relevant. Social media platforms, search engines and other online technologies could all pose a competitive threat to our businesses. + Similarly, additional venue capacity could introduce competition as well as enhance opportunities for growth. * Technological risk: security or execution * + System failure could have a significant impact on our business. Unauthorised access to our systems by external parties could lead to reputational damage and legal action. The collapse of the Cloud on which various products and systems are hosted could have negative consequences for our reputation. + UBM may need to carry out new projects or deliver new services which involve significant capital investment. Failure to deliver these efficiently could lead to increased costs, delays or erosion of UBM's competitive position. * Reduced access to capital and ability to pursue portfolio management element of strategy * + Changes in the availability or cost of financing, the availability of suitable acquisitions, the ability to obtain regulatory approval, integration issues or the failure to realise operating benefits or synergies may affect our acquisition strategy. Explanation of UBM's business measures Financial Measure How we define it Why we use it Underlying revenue and Underlying measures are We believe that underlyingunderlying operating adjusted for the estimated growth rates provideprofit effects of acquisitions, insight into the organic disposals discontinued growth of the business, products, foreign exchange without distortion from and biennial events. the effect of acquisitions, discontinued products, biennial events and foreign currency movements during the period. Adjusted operating profit Operating profit excluding Commonly used by amortisation of intangible shareholders to measureMargin assets arising on our performance, acquisitions, exceptional individually and relative items and share of to other companies. taxation on joint ventures and associates. Margin relates to our adjusted operating margin. It is adjusted operating profit expressed as a percentage of revenues EBITDA Earnings before interest, Assists investors in their tax, depreciation, assessment and amortisation and understanding of our exceptional items earnings and cash generative capacity. Adjusted profit before Before amortisation of Assists investors in theirtax and adjusted EPS intangible assets on assessment and acquisitions, exceptional understanding of our items, share of taxation earnings and is also a on profit from joint measure commonly used by ventures and associates shareholders to measure and net financing expense our performance, adjustments. individually and relative Adjusted EPS includes to other companies. share of taxation on profit from joint ventures and associates but excludes deferred tax on the amortisation of intangible assets. Diluted adjusted EPS includes the impact of share options. Net debt Net debt is current and Provides a measure of non-current borrowings and indebtedness in excess of derivatives associated the current cash available with debt instruments, to pay down debt. less cash and cash equivalents. Net debt to EBITDA Net debt divided by Provides a measure of EBITDA. financial leverage.Net debt to LTM EBITDA EBITDA adjusted to include a full year of pro forma operating profit from acquisitions made during 2012. Free cash flow Net cash provided by Helps assess our ability, operating activities after over the long-term, to meeting obligations for create value for our interest, tax, dividends shareholders as it paid to non controlling represents cash available interests, capital to repay debt, pay expenditures and other dividends and fund future investing activities. acquisitions. Adjusted operating cash Adjusted to exclude The Group believesflow non-operating movements in adjusted operating cash working-capital, such as flow assists investors inCash conversion expenditure against their assessment and reorganisation and understanding of our restructuring provisions. operating cash flows. Cash conversion is the ratio of adjusted cash generated from operations to adjusted operating profit. Pre-tax return on Attributable adjusted Helps us assess theinvestment operating profit divided performance of our by the cost of acquisitions relative to acquisitions. Calculated our target pre-tax cost of on a pro forma basis, as capital threshold of 10%. if the acquired business were owned throughout the year. Estimated total Estimated total Provides a measure ofconsideration consideration includes total consideration for initial consideration (net businesses acquired. of cash acquired), the latest estimate of expected contingent consideration and deferred consideration. Return on average capital ROACE is operating profit Provides a measure of theemployed (ROACE) before exceptional items efficiency of divided by average capital profitability of our employed. Average capital capital investment. employed is the average of opening and closing total assets less current liabilities for each period. Effective tax rate The effective tax rate on Provides a more comparable adjusted profit before tax basis to analyse our tax reflects the tax rate rate. excluding movements on deferred tax balances on the amortisation of intangible assets. Consolidated income statement for the year ended 31 December 2013 Restated Before before Restated exceptional Exceptional exceptional exceptional Restated items items Total items items total 2013 2013 2013 2012 2012 2012Notes £m £m £m £m £m £m Continuing operations 2 Revenue 793.9 - 793.9 769.4 - 769.4 Other operating income 6.5 - 6.5 7.9 - 7.9 Operating expenses (618.0) - (618.0) (610.3) - (610.3) 3.1 Exceptional operating - (33.2) (33.2) - (1.2) (1.2) items Amortisation of (21.3) - (21.3) (24.8) - (24.8) intangible assets arising on acquisitions Share of results from 3.0 - 3.0 7.2 - 7.2 joint ventures and associates (after tax) Group operating profit 164.1 (33.2) 130.9 149.4 (1.2) 148.2 from continuing operations 5.2 Financing income 6.6 4.1 10.7 2.8 - 2.8 5.2 Financing expense (32.1) - (32.1) (31.9) 3.1 (28.8) 5.2 Net financing expense (25.5) 4.1 (21.4) (29.1) 3.1 (26.0) Profit before tax from 138.6 (29.1) 109.5 120.3 1.9 122.2 continuing operations 3.2 Tax (10.9) - (10.9) (6.1) - (6.1) Profit for the year from 127.7 (29.1) 98.6 114.2 1.9 116.1 continuing operations Discontinued operations 6.3 Profit/(loss) for the 1.8 16.6 18.4 15.9 (179.3) (163.4) year from discontinued operations Profit/(loss) for the 129.5 (12.5) 117.0 130.1 (177.4) (47.3) year Attributable to: Owners of the parent 107.5 (57.8) entity Non-controlling 9.5 10.5 interests 117.0 (47.3) Earnings per share (pence) 3.3 Continuing operations - 36.4p 43.3p basic 3.3 Continuing operations - 36.0p 42.4p diluted 3.3 Profit for the year - 43.9p (23.6)p basic 3.3 Profit for the year - 43.4p (23.6)p diluted £m £m Group operating profit 130.9 148.2 from continuing operations 3.1 Exceptional operating 33.2 1.2 items Amortisation of 21.3 24.8 intangible assets arising on acquisitions Share of tax on profit 0.9 1.1 in joint ventures and associates 6.3 Adjusted operating 2.1 27.0 profit from discontinued operations Adjusted Group operating 188.4 202.3 profit* £m £m Dividends 5.3 Interim dividend of 6.7p 16.4 16.4 (6.7p) 5.3 Proposed final dividend 50.3 48.8 of 20.5p (20.0p) * Adjusted Group operating profit represents Group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional itemsand share of tax on profit in joint ventures and associates. Consolidated statement of comprehensive income for the year ended 31 December 2013 Restated 2013 2012Notes £m £m Profit/(loss) for the year 117.0 (47.3) Other comprehensive (loss)/income Other comprehensive income to be reclassified to profit or loss in subsequent periods 5.3 Currency translation differences on foreign (22.3) 15.6 operations - Group 5.3 Net investment hedge 6.9 (28.2) Currency translation differences on foreign (0.4) (0.2) operations - joint ventures and associates 6.2 Reclassification adjustment for foreign operations (26.0) - disposed of in the year 3.2 Income tax relating to components of other - - comprehensive income (41.8) (12.8) Other comprehensive income not to be reclassified to profit or loss in subsequent periods Remeasurement of defined benefit obligation 18.1 (23.4) Irrecoverable element of pension surplus 0.4 3.8 Remeasurement of defined benefit obligation of (0.4) (0.4) associates 3.2 Income tax relating to components of other - - comprehensive income 18.1 (20.0) Other comprehensive loss for the year, net of tax (23.7) (32.8) Total comprehensive income/(loss) for the year net of 93.3 (80.1) tax Attributable to: Owners of the parent entity 86.6 (88.4) Non-controlling interests 6.7 8.3 93.3 (80.1) Consolidated statement of financial position at 31 December 2013 Restated 31 31 December DecemberNotes 2013 2012 £m £m Assets Non-current assets 4.1 Goodwill 776.7 791.4 Intangible assets 111.4 112.0 Property, plant and equipment 21.3 28.4 Investments in joint ventures and associates 20.4 23.1 Other fixed asset investments 1.7 - Vendor loan note 38.6 - Derivative financial instruments 14.4 26.5 Retirement benefit surplus 3.4 4.2 3.2 Deferred tax asset 3.7 3.0 991.6 988.6 Current assets Trade and other receivables 200.7 237.6 Cash and cash equivalents 74.0 78.5 6.3 Assets of disposal group classified as held for sale 0.9 207.4 275.6 523.5 Total assets 1,267.2 1,512.1 Liabilities Current liabilities 3.2 Current tax liabilities 45.4 52.7 Trade and other payables 349.2 370.3 Provisions 16.7 10.5 Borrowings - 0.2 Derivative financial instruments 5.1 3.4 6.3 Liabilities associated with assets of disposal group 0.4 69.2 classified as held for sale 416.8 506.3 Non-current liabilities 3.2 Deferred tax liabilities 22.1 27.6 Trade and other payables 2.6 6.0 Provisions 11.6 11.4 Borrowings 530.5 661.1 Derivative financial instruments 11.9 15.9 Retirement benefit obligation 29.3 54.4 608.0 776.4 Total liabilities 1,024.8 1,282.7 Equity attributable to owners of the parent entity 5.3 Share capital 24.6 24.5 Share premium 7.9 6.6 5.3 Other reserves (652.1) (618.5) Retained earnings 854.7 802.6 Put options over non-controlling interests (19.4) (13.0) Total equity attributable to owners of the parent 215.7 202.2 entity Non-controlling interests 26.7 27.2 Total equity 242.4 229.4 Total equity and liabilities 1,267.2 1,512.1 These financial statements were approved by the Board of Directors and weresigned on its behalf on 28 February 2014 by: Robert A. Gray Director Consolidated statement of changes in equity for the year ended 31 December 2013 Total Put equity options attributable over non- to owners Non- Share Share Other Retained controlling of parent controlling Total capital premium reserves earnings interests entity interests equityNotes £m £m £m £m £m £m £m £m At 1 January 2013 24.5 6.6 (618.5) 802.6 (13.0) 202.2 27.2 229.4 Profit for the year - - - 107.5 - 107.5 9.5 117.0 Other comprehensive - - (39.0) 18.1 - (20.9) (2.8) (23.7) (loss)/income Total comprehensive - - (39.0) 125.6 - 86.6 6.7 93.3 (loss)/income for the year 5.3 Equity dividends - - - (65.2) - (65.2) - (65.2) Non-controlling - - - - - - (9.3) (9.3) interest dividends 6.1 Non-controlling - - - - (7.8) (7.8) 3.0 (4.8) interest arising on business combinations Acquisition of - - - (0.6) 1.4 0.8 (0.9) (0.1) non-controlling interests Issued in respect of 0.1 1.3 - - - 1.4 - 1.4 share option schemes and other entitlements Share-based payments - - - 3.7 - 3.7 - 3.7 5.3 Shares awarded by ESOP - - 25.5 (25.5) - - - - 5.3 Own shares purchased - - (20.1) 14.1 - (6.0) - (6.0) by the Company At 31 December 2013 24.6 7.9 (652.1) 854.7 (19.4) 215.7 26.7 242.4 At 1 January 2012 24.5 4.1 (605.1) 973.9 (12.4) 385.0 27.0 412.0 (Loss)/profit for the - - - (57.8) - (57.8) 10.5 (47.3) year (restated) Other comprehensive - - (10.6) (20.0) - (30.6) (2.2) (32.8) loss (restated) Total comprehensive - - (10.6) (77.8) - (88.4) 8.3 (80.1) (loss)/income for the year (restated) 5.3 Equity dividends - - - (65.3) - (65.3) - (65.3) Non-controlling - - - - - - (9.5) (9.5) interest dividends Non-controlling - - - - (0.6) (0.6) 5.0 4.4 interest arising on business combinations Acquisition of - - - (28.4) - (28.4) (3.6) (32.0) non-controlling interests Issued in respect of - 2.5 - - - 2.5 - 2.5 share option schemes and other entitlements Share-based payments - - - 5.5 - 5.5 - 5.5 5.3 Shares awarded by ESOP - - 15.5 (15.5) - - - - 5.3 Own shares purchased - - (18.3) 10.2 - (8.1) - (8.1) by the Company At 31 December 2012 24.5 6.6 (618.5) 802.6 (13.0) 202.2 27.2 229.4 Consolidated statement of cash flows for the year ended 31 December 2013 Restated 2013 2012Notes £m £m Cash flows from operating activities Profit for the year from continuing operations 98.6 116.1 6.3 Profit/(loss) for the year from discontinued 18.4 (163.4) operations Profit/(loss) for the year 117.0 (47.3) Add back: Exceptional items (excluding fair value adjustments 14.7 180.3 below) 6.1 Fair value adjustments of contingent consideration (2.2) (2.9) 3.2 Tax 10.9 6.3 Amortisation of intangible assets 21.6 35.7 Amortisation of website development costs 5.0 3.9 Depreciation 8.4 12.6 Share of results from joint ventures and associates (3.0) (7.9) (after tax) 5.2 Financing income (6.6) (2.8) 5.2 Financing expense 32.1 31.9 Other non-cash items 3.8 6.1 201.7 215.9 Payments against provisions (12.9) (11.9) Pension deficit contributions (3.5) (3.2) Decrease in inventories - 0.2 Decrease/(increase) in trade and other receivables 15.1 (22.6) (Decrease)/increase in trade and other payables (34.6) 11.4 Cash generated from operations 165.8 189.8 Cash generated from operations - continuing 164.4 169.5 Cash generated from operations - discontinued 1.4 20.3 Interest and finance income received 1.4 1.0 Interest and finance costs paid (25.7) (31.2) 3.2 Tax paid (25.4) (29.7) Dividends received from joint ventures and associates 3.7 1.1 Net cash flows from operating activities 119.8 131.0 Net cash flows from operating activities - continuing 118.4 113.8 Net cash flows from operating activities - 1.4 17.2 discontinued Cash flows from investing activities 6.1 Acquisition of interests in subsidiaries, net of cash (19.0) (57.6) acquired Investment in joint ventures (0.1) - Purchase of investments (0.4) - Purchase of property, plant and equipment (5.8) (11.6) Expenditure on intangible assets (16.3) (16.5) 6.2 Proceeds from sale of businesses, net of cash 107.9 10.1 disposed Advances to joint ventures and associates (0.2) (0.4) Advances to non-controlling interest partners - (2.9) Net cash flows from investing activities 66.1 (78.9) Net cash flows from investing activities - continuing 78.3 (72.1) Net cash flows from investing activities - (12.2) (6.8) discontinued Cash flows from financing activities Proceeds from issuance of ordinary share capital 1.4 2.5 Acquisition of non-controlling interests (0.3) (30.7) Dividends paid to shareholders (65.2) (65.3) Dividends paid to non-controlling interests (9.3) (9.5) Investment in own shares - ESOP (6.0) (8.1) (Decrease)/increase in borrowings (117.8) 94.9 Repayment of €53.1m floating rate reset loans - (52.7) Net cash flows from financing activities (197.2) (68.9) Net cash flows from financing activities - continuing (196.0) (54.5) Net cash flows from financing activities - (1.2) (14.4) discontinued Net decrease in cash and cash equivalents (11.3) (16.8) Net foreign exchange difference (1.4) (3.1) Cash and cash equivalents at 1 January 86.7 106.6 Cash and cash equivalents at 31 December 74.0 86.7 Notes to the consolidated financial statements at 31 December 2013 1. Basis of preparation UBM plc is a public limited company incorporated in Jersey under the Companies(Jersey) Law 1991. The registered office is Ogier House, The Esplanade, St.Helier, JE4 9WG, Jersey. UBM plc was tax resident in the Republic of Irelanduntil 30 November 2012 when it returned to the United Kingdom. The principalactivities of the Group are described in Note 2. The preliminary announcement was approved by the Board of Directors on 28February 2014. The figures and financial information for the year ended 31 December 2013 donot constitute the statutory financial statements for that year. Thosefinancial statements have not yet been delivered to the Jersey Registrar ofCompanies, but include the auditor's report which was unqualified. The figuresand financial information for the year ended 31 December 2012 included in thepreliminary announcement do not constitute the statutory financial statementsfor that year. Those financial statements have been delivered to the Registrarand included the auditor's report which was unqualified. The financial statements are prepared in accordance with InternationalFinancial Reporting Standards (IFRS) as issued by the International AccountingStandards Board (IASB). The consolidated financial statements comply with theCompanies (Jersey) Law 1991 and are prepared under the historical cost basisexcept for derivative financial instruments and hedged items which are measuredat fair value. The consolidated financial statements are presented in pounds sterling, whichis the functional currency of the parent company, UBM plc. All amounts arerounded to the nearest £0.1m unless otherwise indicated. The accounting policies adopted in the preparation of the consolidatedfinancial statements are consistent with those used for the previous financialyear, except for the adoption of the following new and amended IFRSs. Accounting Requirements Impact on financialstandard statements IFRS 10 Establishes a single control model for None; accounting policy`Consolidated deciding whether entities should be has been amended toFinancial consolidated by a parent. IFRS 10 reflect the newStatements' changes the definition of control such standard. that an investor controls an investee when it is exposed, or has the rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Adopted retrospectively from 1 January 2013. IFRS 11 `Joint Distinguishes between joint ventures None; accounting policyArrangements' and joint operations and requires the has been amended to(and related use of the equity method for interests reflect the newamendments to in joint ventures. Adopted standard.IAS 28 retrospectively from 1 January 2013.`Investments inAssociates') IFRS 12 Requires additional disclosures about Additional disclosures`Disclosures of an entity's interests in subsidiaries, provided in theInterests in joint arrangements and associates. financial statements.Other Entities' Adopted from 1 January 2013. IFRS 13 `Fair Establishes a single source of None; additionalValue guidance for all fair value disclosures provided inMeasurement' measurements and requires including the financial additional disclosures about fair statements. value measurements. IFRS 13 does not change when an entity is required to use fair value, but provides guidance on how to measure fair value under IFRS when it is required or permitted. Adopted prospectively from 1 January 2013. IAS 1 Requires separate presentation of Revised presentation`Presentation other comprehensive income items that (see consolidatedof Financial could be reclassified in future to statement ofStatements' profit or loss and those which will comprehensive income).(amended) never be reclassified. Adopted The amendment has had no retrospectively from 1 January 2013. impact on the Group's financial position or performance. IAS 19 Requires: Reduction in return on`Employee plan assets included inBenefits' * all remeasurements of defined profit or loss which, as(revised 2011) benefit obligations and plan the Group's schemes are assets to be included in other currently in deficit, comprehensive income. will result in a net financing expense being * pension scheme net finance expense recognised, rather than to be measured using the discount the previous net rate applied in measuring the financing income. The defined benefit obligation. cost of administering the plan will be * unvested past service costs to be reported through the recognised in profit or loss at profit and loss. The the earlier of when the amendment impact on the occurs or when the related consolidated financial restructuring or termination costs statements for 2013 is a are recognised. net decrease in continuing profit for * quantitative sensitivity the year of £7.7m (2012: disclosures. £5.4m). There is no material impact on the Adopted retrospectively from 1 January statement of financial 2013. position or statement of cash flows. IAS 36 Removes certain disclosures of the None; disclosures not`Impairment recoverable amount of cash-generating required prior to IFRS units which were unintentionally 13.of Assets' included in IAS 36 following the issue of IFRS 13. Early adopted from 1 January 2013. The following amendments to accounting standards have also been adopted butthey do not impact the consolidated financial statements of the Group: * IFRS 1 `First-time Adoption of International Financial Reporting Standards' * IFRS 7 `Financial Instruments: Disclosures' * IAS 27 `Separate Financial Statements' * Annual improvements 2009-2011: * + IFRS 1 `First-time Adoption of International Financial Reporting Standards' + IAS 1 `Presentation of Financial Statements' + IAS 16 `Property, Plant and Equipment' + IAS 32 `Financial Instruments: Presentation' + IAS 34 `Interim Financial Reporting' Discontinued operations During the year, the Board of directors approved a plan as part of a strategicreview of Marketing Services activities to dispose of the UBM Channel businessand certain UBM Built Environment Marketing Services activities (Built MS). Thesale of UBM Channel completed on 16 September 2013 and Built MS was disposed on31 October 2013. In accordance with IFRS 5 `Non-current assets held for saleand discontinued operations' the net results for the year are presented withindiscontinued operations in the income statement. The Group classified a disposal group (Delta) as held for sale at 31 December2012. The sale of Delta was completed on 8 April 2013, with the exception ofcertain businesses in China, India and the UK. The sale of the China businessescompleted on 16 August 2013. The India businesses still require regulatoryapprovals and are reported as held for sale at 31 December 2013. Completion isexpected in the next six months. The UK business will be retained by the Groupand is no longer classified as discontinued operations or held for sale. Under the terms of the sale agreement, Electra Partners LLP received thereturns of Delta from 1 January 2013. Consolidation of the Delta entitiestherefore ceased on this date in accordance with the requirements of IFRS 10`Consolidated Financial Statements'. Comparative information The comparative information in the income statement and associated notes hasbeen restated for the impact of the UBM Channel and Built MS discontinuedoperations. In line with the requirements of IFRS 5, the statement of financialposition has not been restated. The Delta UK business which was classified asdiscontinuing operations and held for sale at 31 December 2012 has beenrestated as continuing in the comparative periods. The comparative information for the year ended 31 December 2012 has also beenrestated for the finalisation of acquisition accounting for Insight MediaLimited, in accordance with IFRS 3 `Business Combinations'. The impact of thisrestatement is to increase goodwill and deferred revenue by £0.8m and £0.7mrespectively, and to reduce other receivables by £0.1m. Trade receivables anddeferred revenue have been increased by £36.5m to reclassify certain balancesthat were previously reported on a net basis. Going concern After making enquiries, the directors have a reasonable expectation that theGroup has adequate resources to continue in operational existence for theforeseeable future (see the Chief Financial Officer's Review). The consolidatedfinancial statements are therefore prepared on the going concern basis. 2. Segment information Operating segments The Group considers that operating segments presented on a products andservices basis are the most appropriate way to demonstrate the performance ofthe Group. This is consistent with the internal reporting provided to the GroupChief Executive Officer and the Group Chief Financial Officer, together thechief operating decision maker (CODM), and reflects the way in which resourcesare allocated. On 8 April 2013, the Group sold the majority of the Delta businesses. Productsthat were classified as Data Services prior to 31 December 2012 that were notpart of Delta have been reclassified to Marketing Services and Events giventheir natures. In addition, the Group sold UBM Channel on 16 September 2013 andBuilt MS on 31 October 2013. Accordingly, these operations have been treated asdiscontinued as detailed in Note 1 and Note 6.3. The segment results do not include amounts for discontinued operations. TheCODM now considers there to be four operating segments: * Events which provide face to face interaction in the form of exhibitions, trade shows, conferences and other live events; * Marketing Services - Online which provide website sponsorships and banner advertising as well as online directory and data products; * Marketing Services - Print which publishes magazines and trade press to specialist markets; and * PR Newswire which provides communications products and services to professionals working in marketing, public relations, corporate communications or investor relations roles - distributing messages, identifying target audiences and monitoring the impact. Marketing Services - Online and Marketing Services - Print have been aggregatedto form one reportable segment `Other Marketing Services'. The two operatingsegments have similar economic characteristics and meet the aggregationcriteria defined in IFRS 8 `Operating segments'. Segment measures The CODM assesses the performance of the operating segments and the allocationof resources using revenue and adjusted operating profit. Adjusted operatingprofit is IFRS operating profit excluding amortisation of intangible assetsarising on acquisitions, exceptional items and share of tax on results of jointventures and associates. Finance income/expense and tax are not allocated to operating segments and arereported to the CODM only in aggregate. Segment assets and liabilities are not reported to the CODM. Transactions between segments are measured on the basis of prices that wouldapply to third-party transactions. Year ended 31 December 2013 Other Dis- Marketing PR Corporate Continuing continued Events Services Newswire costs total operations Total £m £m £m £m £m £m £m Revenue Total segment 463.6 129.4 202.6 - 795.6 24.3 819.9revenue Intersegment (0.9) - (0.8) - (1.7) - (1.7)revenue External revenue 462.7 129.4 201.8 - 793.9 24.3 818.2 Result Depreciation (4.6) (1.3) (6.6) (0.7) (13.2) (0.2) (13.4)(includingamortisation ofwebsite developmentcosts) Share of pre-tax 1.0 - 0.4 2.5 3.9 - 3.9results from jointventures andassociates Segment adjusted 148.9 10.2 45.6 (18.4) 186.3 2.1 188.4operating profit Amortisation of intangible (21.3) (0.3) (21.6)assets arising on acquisitions Exceptional operating items (33.2) 0.3 (32.9) Exceptional discontinued items - 16.3 16.3 Share of tax on (0.9) - (0.9)profit in jointventures andassociates Group operating profit 130.9 18.4 149.3 Financing income 6.6 - 6.6 Financing expense (32.1) - (32.1) Exceptional items relating to 4.1 - 4.1net financing expense Profit before tax 109.5 18.4 127.9 Tax (10.9) - (10.9) Profit for the year 98.6 18.4 117.0 Total corporate costs for 2013 are net of internal cost recoveries and sundryincome of nil (2012: £3.7m) and share of pre-tax results from joint venturesand associates of £2.5m (2012: £2.3m). The internal cost recoveries from theGroup's operating businesses and sundry income are not attributable to any ofthe Group's reported segments. Year ended 31 December 2012 (restated) Other Dis- Marketing PR Corporate Continuing continued Events Services Newswire costs total operations Total £m £m £m £m £m £m £m Revenue Total segment 427.8 145.8 197.3 - 770.9 207.7 978.6revenue Intersegment (0.6) - (0.9) - (1.5) - (1.5)revenue External revenue 427.2 145.8 196.4 - 769.4 207.7 977.1 Result Depreciation (3.7) (1.2) (7.1) (0.3) (12.3) (4.2) (16.5)(includingamortisation ofwebsite developmentcosts) Share of pre-tax 1.3 0.2 0.7 2.3 4.5 0.7 5.2results from jointventures andassociates Segment adjusted 141.7 7.2 43.5 (17.1) 175.3 27.0 202.3operating profit Amortisation of intangible (24.8) (10.9) (35.7)assets arising on acquisitions Exceptional (1.2) 2.1 0.9operating items Loss on assets held for sale - (181.4) (181.4) Share of tax on profit in (1.1) - (1.1)joint ventures and associates Group operating 148.2 (163.2) (15.0)loss Financing income 2.8 - 2.8 Financing expense (31.9) - (31.9) Exceptional items relating to 3.1 - 3.1net financing expense Loss before tax 122.2 (163.2) (41.0) Tax (6.1) (0.2) (6.3) Loss for the year 116.1 (163.4) (47.3) In October 2012 the Group acquired the remaining 50% share of Canada Newswirefrom its associate, PA Group Limited. The Group recognised a one-off share ofjoint venture and associates result in respect of PA Group's gain on disposalof Canada Newswire totalling £3.8m. Geographic information Revenue is allocated to countries based on the location where the products andservices are provided. Non-current assets are allocated to countries based onthe location of the businesses to which the assets relate. Restated Year year ended ended 31 31 December December 2013 2012Continuing revenue £m £m United Kingdom 83.6 95.6 Foreign countries United States and Canada 376.9 382.1 Europe 80.7 67.0 China 174.8 144.5 Emerging markets1 62.3 60.4 Rest of the world 15.6 19.8 710.3 673.8 External revenue 793.9 769.4 1 Emerging markets comprise the non-G10 countries - most notably for the Group:Brazil, India, Indonesia, Malaysia, Mexico, Saudi Arabia, Singapore, Thailandand Turkey. There are no revenues derived from a single external customer which aresignificant. Non-current assets Restated 2013 2012 £m £m United Kingdom 295.7 270.9 Foreign countries United States and Canada 480.7 529.6 Europe 22.2 17.2 China 32.8 31.4 Emerging markets1 94.3 99.8 Rest of the world 5.8 6.0 635.8 684.0 Total non-current assets 931.5 954.9 Non-current assets consist of goodwill, intangible assets, property, plant andequipment, investments in joint ventures and associates and other investments. Discontinued operations and reclassification of retained Data Services products The tables below show the discontinuation of revenue and adjusted operatingprofit associated with the disposals of UBM Channel, Built MS and Delta; thereclassification of Data Services products retained by the Group; and theimpact of IAS19 (revised) for restated comparative periods. As the Deltabusinesses are not consolidated by the Group from 1 January 2013, there are noDelta discontinued operations for the year ended 31 December 2013. Year ended 31 December 2013 UBM Channel and UBM Channel and Built MS Adjusted Built MS Revenue operating profit £m £m Events 8.0 1.4 Other Marketing 16.3 0.7Services Total 24.3 2.1 Year ended 31 December 2012 UBM Channel and IAS 19 TotalRevenue Total Built MS Delta Reclassified (revised) continuing £m £m £m £m £m £m Events 449.9 (10.7) (13.0) 1.0 - 427.2 Other Marketing 168.6 (23.0) (25.5) 25.7 - 145.8Services PR Newswire 196.4 - - - - 196.4 Data Services 162.2 - (135.5) (26.7) - - Total 977.1 (33.7) (174.0) - - 769.4 UBM ChannelAdjusted operating and IAS 19 Totalprofit Total Built MS Delta Reclassified (revised) continuing £m £m £m £m £m £m Events 145.4 (0.8) (2.4) (0.5) - 141.7 Other Marketing 7.8 (1.3) (2.4) 3.1 - 7.2Services PR Newswire 43.5 - - - - 43.5 Data Services 22.7 - (20.1) (2.6) - - Corporate costs (15.7) - - - (1.4) (17.1) Total 203.7 (2.1) (24.9) - (1.4) 175.3 3. Operating profit and tax 3.1 Exceptional operating items Certain items are recognised as exceptional items since, due to their nature orinfrequency, such presentation is relevant to an understanding of the Group'sfinancial statements. These items are not part of the Group's normal ongoingoperations. Restated 2013 2012(Charged)/credited to continuing operating profit £m £m Acquisition costs on continuing business combinations (0.8) (1.0) Aborted acquisition costs (1.2) - Changes in estimates of contingent consideration 1.9 0.8 Exceptional items relating to acquisitions (0.1) (0.2) Restructuring and business reorganisation (16.6) - Global ERP and process outsourcing implementation cost (8.6) - Other restructuring items 2.5 - Exceptional items relating to reorganisation and (22.7) -restructuring Impairment of goodwill and intangible assets (5.3) (1.0) Impairment of assets (1.0) - Impairment of joint ventures and associates (1.5) - Impairment of joint venture loan note (2.6) - Impairment charge (10.4) (1.0) Total charged to continuing operating profit (33.2) (1.2) Acquisition exceptional items Acquisition costs of £0.8m and aborted acquisition costs of £1.2m have beenexpensed as exceptional items. An exceptional credit of £1.9m was recognisedrelating to revised contingent consideration estimates for prior yearacquisitions. Reorganisation and restructuring Restructuring and business reorganisation charges comprise: * £7.7m in relation to the restructuring of the UBM Tech business and £2.8m in other marketing services operations reflecting decisions taken in the Group's strategic review; * £2.4m in connection with vacant property provisions in US and UK locations that has arisen as a result of the reduced headcounts from restructuring and disposals; and * £3.7m in connection with contracts with the ExCel London Exhibition and Convention Centre. These contracts entail minimum commitments for space rentals in excess of those foreseen to be necessary which exceed the economic benefits expected to be received and which have therefore been designated as onerous contracts. `Project CORE', the global Oracle ERP and business process outsourcingarrangement commenced for Europe at the start of 2014. The one-offnon-operating expenditure incurred during the year in the transition orprovided as at 31 December 2013 in respect of redundancy payments are reportedas an exceptional item. Other restructuring items represent an exceptional credit of £2.5m from prioryear disposal provisions no longer required. Impairment The Group has reviewed the carrying value of goodwill and intangible assets(other than within assets held for sale) in light of current trading conditionsand future outlook. As a result of this review, impairment charges of £5.3mrelating to goodwill and intangible assets, £1.0m of leasehold assets, £1.5m inrespect of the Group's investment in ActuaMedica NV and £2.6m in respect of theloan note with Janus SAS have been recognised. The taxation effect of the exceptional items reported above on the amountscharged to the income statement is nil. 3.2 Tax Income statement 2013 2012 £m £m Continuing Current tax expense (17.5) (15.6) Deferred tax credit 6.6 9.5 Income tax expense (10.9) (6.1)Reconciliation of total tax expense to the accounting profit: Restated 2013 2012 £m £m Profit before tax from continuing operations 109.5 122.2 Profit/(loss) before tax from discontinued operations 18.4 (163.4) Profit/(loss) before tax 127.9 (41.2) Profit/(loss) before tax multiplied by UK rate of 29.7 (10.1)corporation tax of 23.25% (2012: 24.5%) Effect of: Expenses not deductible for tax purposes 12.5 54.1 Origination and reversal of temporary differences not (7.1) (17.5)recognised Different tax rates on overseas earnings 4.5 11.8 Share of results from associates and joint ventures (after (0.7) (2.1)tax) Tax effect of items not recognised in consolidated financial (16.3) (24.8)statements Non-taxable income (11.7) (5.1) Total tax expense 10.9 6.3 Tax expense reported in the consolidated income statement 10.9 6.1for continuing operations Tax attributable to discontinued operations - 0.2 10.9 6.3 The Group has assessed the impact of changes in tax rates in variousjurisdictions in which it operates and has determined that the changes do nothave a significant impact on the current or future tax charges. Other comprehensive income No current or deferred tax relates to items reported in other comprehensiveincome (2012: nil). Statement of financial position: current tax 2013 2012 £m £m Current tax liability at 1 January 52.7 65.9 Current tax expense 17.5 19.1 Tax paid (25.4) (29.7) Classified as held for sale - (2.0) Currency translation and other movements 0.6 (0.6) Current tax liability at 31 December 45.4 52.7 The Group does not expect the cash outflow in respect of this current taxliability in 2014 to exceed £10.0m. During the year, tax has been paid in the following jurisdictions: 2013 £m China 11.4 Netherlands 3.7 Other emerging markets 3.0 Canada 2.7 Japan 2.3 Other 2.3 Total 25.4 Statement of financial position: deferred tax Deferred tax liabilities/(assets) Consolidated Consolidated income statement of statement financial position 2013 2012 2013 2012 £m £m £m £m Intangibles 44.1 54.8 (6.2) (2.9) Accelerated capital allowances 1.9 2.7 (0.8) 0.1 Tax losses (17.1) (25.4) 3.7 (7.0) Other temporary differences (10.5) (7.5) (3.3) 0.3 18.4 24.6 (6.6) (9.5) The movement in deferred tax balance during the year is: 2013 2012 £m £m Net deferred tax liability at 1 January 24.6 44.9 Acquisition of subsidiaries (Note 6.1) 0.7 3.2 Amounts credited to net profit (6.6) (12.8) Classified as held for sale - (8.7) Currency translation (0.3) (2.0) Net deferred tax liability at 31 December 18.4 24.6 Analysed in the statement of financial position, afteroffset of balances within countries, as: Deferred tax assets (3.7) (3.0) Deferred tax liabilities 22.1 27.6 18.4 24.6 The deferred tax asset of £3.7m (2012: £3.0m) relates to tax losses and othertemporary differences. These have been recognised as the Group expects togenerate taxable profits against which these will be used. The Group has the following unrecognised deferred tax assets relating to unusedtax losses: * £43.8m (2012: £45.4m) in respect of UK subsidiaries which are available to offset against future UK corporate tax liabilities; * £82.9m (2012: £94.8m) in respect of US subsidiaries which are available to offset against future US federal tax liabilities. Of these £82.2m expire between 2019 and 2033 (2012: £93.6m between 2019 and 2032); * £46.4m (2012: £56.4m) in respect of UK capital losses which are only available for offset against future capital gains; * £2,082m (2012: £2,036m) that have arisen in Luxembourg holding companies as a result of revaluations of those companies' investments for local GAAP purposes; * £0.1m (2012: nil) in respect of companies in other countries. No deferred tax asset has been recognised in respect of any of these amounts asit is uncertain that these losses will be utilised. In addition the Group has unrecognised deferred tax assets in relation to otherdeductible temporary differences of £35.1m (£28.5m in relation to the US, £5.5min relation to the UK and £1.1m in relation to other countries) (2012: £50.3m(£40.5m, £8.0m and £1.8m respectively). No deferred tax asset has beenrecognised in respect these assets as it is uncertain that they will beutilised. At 31 December 2013, there was no deferred tax liability recognised for taxesthat would be payable on the unremitted earnings of the Group's subsidiaries asthe Group has determined that profits of subsidiaries will not be distributedin the foreseeable future. The temporary differences associated with investments in subsidiaries for whicha deferred tax liability has not been recognised amount in aggregate to £4.2bn(2012: £4.2bn). 3.3 Earnings per share Basic earnings per share is calculated by dividing net profit for the yearattributable to owners of the parent entity by the weighted average number ofordinary shares outstanding during the year. Adjusted basic earnings per share excludes amortisation of intangible assetsarising on acquisitions, deferred tax on amortisation of intangible assets,exceptional items and net financing expense adjustments (detailed in Note 5.2). Diluted earnings per share is calculated by dividing net profit for the yearattributable to owners of the parent entity by the weighted average number ofordinary shares outstanding during the year plus the weighted average number ofordinary shares that would be issued on conversion of all the dilutivepotential ordinary shares into ordinary shares. The impact of dilutivesecurities in 2013 would be to increase weighted average shares by 2.9 millionshares (2012: 4.6 million shares). The weighted average number of shares excludes ordinary shares held by theEmployee Share Ownership Plan (the ESOP). Weighted Weighted average average Restated no. Earnings no. earnings of per Restated of per Earnings shares share earnings shares share 2013 2013 2013 2012 2012 2012Continuing operations £m million pence £m million pence Adjusted Group operating 186.3 175.3profit Net interest expense (24.0) (27.9) Pension schemes finance (1.7) (1.3)expense Adjusted profit before tax 160.6 146.1 Tax (18.4) (17.4) Non-controlling interests (9.5) (10.5) Adjusted earnings per share 132.7 244.9 54.2 118.2 244.4 48.4 Adjustments Amortisation of intangible (21.3) (8.6) (24.8) (10.1)assets arising onacquisitions Deferred tax on amortisation 6.6 2.7 10.2 4.2of intangible assets Exceptional items (33.2) (13.6) 1.9 0.8 Net financing income - other 4.3 1.7 0.1 - Basic earnings per share 89.1 244.9 36.4 105.6 244.4 43.3 Dilution Options - 2.9 (0.4) - 4.6 (0.9) Diluted earnings per share 89.1 247.8 36.0 105.6 249.0 42.4 Adjusted earnings per share 132.7 244.9 54.2 118.2 244.4 48.4(as above) Options - 2.9 (0.6) - 4.6 (0.9) Diluted adjusted earnings 132.7 247.8 53.6 118.2 249.0 47.5per share Weighted Weighted average average Restated no. Earnings no. earnings of per Restated of per Earnings shares share earnings shares share 2013 2013 2013 2012 2012 2012Total Group £m million pence £m million pence Adjusted Group operating 188.4 202.3profit Net interest expense (24.0) (27.9) Pension schemes finance (1.7) (1.3)expense Adjusted profit before tax 162.7 173.1 Tax (18.4) (20.9) Non-controlling interests (9.5) (10.5) Adjusted earnings per share 134.8 244.9 55.1 141.7 244.4 58.0 Adjustments Amortisation of intangible (21.6) (8.8) (35.7) (14.6)assets arising onacquisitions Deferred tax on amortisation 6.6 2.7 13.5 5.6of intangible assets Exceptional items (16.6) (6.8) (177.4) (72.6) Net financing income - other 4.3 1.7 0.1 - Basic earnings per share 107.5 244.9 43.9 (57.8) 244.4 (23.6) Dilution Options - 2.9 (0.5) - 4.6 - Diluted earnings per share 107.5 247.8 43.4 (57.8) 249.0 (23.6) Adjusted earnings per share 134.8 244.9 55.1 141.7 244.4 58.0(as above) Options - 2.9 (0.7) - 4.6 (1.1) Diluted adjusted earnings 134.8 247.8 54.4 147.7 249.0 56.9per share 4. Statement of financial position 4.1 Goodwill Goodwill is allocated and monitored by management at a CGU level, consisting ofthe five business units operating across the Group's operating segments. Notall business units are active in all segments; there are 11 CGUs at 31 December2013 (2012: 29 CGUs). The reduction in CGUs in 2013 is due to the Delta sale(12 CGUs), the UBM Channel sale (three CGUs), the merger of UBM Techweb and UBMElectronics (three CGUs) and the merger of UBM Live and UBM Built Environment(one CGU). For reporting purposes, the CGUs have been aggregated into thereportable segments, as shown in the tables below. The CGUs are individuallytested for impairment each year. 31 December 2013 Other Marketing PR Events Services Newswire Total £m £m £m £m Cost At 1 January 2013 642.1 110.8 85.2 838.1(restated) Acquisitions (Note 9.3 - - 9.36.1) Disposals (Note 6.2) - (10.7) - (10.7) Currency translation (7.1) (1.6) (1.7) (10.4) At 31 December 2013 644.3 98.5 83.5 826.3 Impairment At 1 January 2013 1.0 45.7 - 46.7 Charge for the year 3.1 0.7 - 3.8 Currency translation - (0.9) - (0.9) At 31 December 2013 4.1 45.5 - 49.6 Carrying amount At 1 January 2013 641.1 65.1 85.2 791.4 At 31 December 2013 640.2 53.0 83.5 776.7 5. Capital Structure and financial policy 5.1 Movements in net debt Net debt reflects the Group's cash and cash equivalents, borrowings andderivatives associated with debt instruments. This definition facilitates anaccurate reflection of the estimated settlement at maturity and is consistentwith reporting by other companies. 31 1 January Non-cash Cash Currency December 2013 items flow translation 2013 £m £m £m £m £m Cash and cash equivalents 86.9 - (11.5) (1.4) 74.0(including held for sale) Bank overdrafts (0.2) - 0.2 - - Net cash 86.7 - (11.3) (1.4) 74.0 Bank loans due in more than (178.3) - 117.8 (0.9) (61.4)one year Bonds due in more than one (482.8) 9.7 - 4.0 (469.1)year Borrowings (661.1) 9.7 117.8 3.1 (530.5) Derivative assets associated 26.5 (12.1) - - 14.4with borrowings Derivative liabilities (5.5) 1.5 2.7 - (1.3)associated with borrowings Net debt (553.4) (0.9) 109.2 1.7 (443.4) 31 1 January Non-cash Cash Currency December 2012 items flow translation 2012 £m £m £m £m £m Cash and cash equivalents 106.7 - (16.7) (3.1) 86.9(including held for sale) Bank overdrafts (0.1) - (0.1) - (0.2) Net cash 106.6 - (16.8) (3.1) 86.7 Bank loans due in less than (52.9) - 52.7 0.2 -one year Bank loans due in more than (87.8) - (94.9) 4.4 (178.3)one year Bonds due in more than one (492.3) (0.9) - 10.4 (482.8)year Borrowings (633.0) (0.9) (42.2) 15.0 (661.1) Derivative assets associated 23.3 3.2 - - 26.5with borrowings Derivative liabilities (22.2) 15.0 1.7 - (5.5)associated with borrowings Net debt (525.3) 17.3 (57.3) 11.9 (553.4) 5.2 Net financing expense Restated Before before Exceptional Exceptional exceptional Exceptional Restated Items items Total items items total 2013 2013 2013 2012 2012 2012 £m £m £m £m £m £m Financing expense Borrowings and loans (26.5) - (26.5) (28.3) - (28.3) Other (0.4) - (0.4) (0.6) - (0.6) Total interest expense (26.9) - (26.9) (28.9) - (28.9)for financialliabilities notclassified at fairvalue through profitor loss Pension schemes net (1.7) - (1.7) (1.3) - (1.3)finance expense Fair value movement on (6.4) - (6.4) 1.0 - 1.0interest rate swaps Fair value movement on 5.8 - 5.8 (1.1) - (1.1)£250m bond Ineffectiveness on (0.6) - (0.6) (0.1) - (0.1)fair value hedges Fair value movement on (5.3) - (5.3) 2.7 - 2.7interest rate swaps Fair value movement on 4.8 - 4.8 (2.9) 4.0 1.1$350m bond Ineffectiveness on (0.5) - (0.5) (0.2) 4.0 3.8fair value hedges Fair value movement on - - - - (0.9) (0.9)put options overnon-controllinginterests Foreign exchange loss - - - (1.2) - (1.2)on forward contracts Other fair value (2.4) - (2.4) (0.2) - (0.2)movements (32.1) - (32.1) (31.9) 3.1 (28.8) Financing income Cash and cash 1.3 - 1.3 1.0 - 1.0equivalents Vendor Loan Note 1.6 - 1.6 - - - Total interest income 2.9 - 2.9 1.0 - 1.0 Foreign exchange gain 0.8 - 0.8 1.7 - 1.7 Fair value movement on - 4.1 4.1 - - -put options overnon-controllinginterests Foreign exchange gain 1.0 - 1.0 - - -on forward contracts Other fair value 1.9 - 1.9 0.1 - 0.1movements 6.6 4.1 10.7 2.8 - 2.8 Net financing expense (25.5) 4.1 (21.4) (29.1) 3.1 (26.0) The ineffectiveness on fair value hedges represents the difference between thefair value movement of the interest rate swaps designated as hedge instrumentsand the fair value movement of the hedged portions of the £250m 6.5% sterlingbonds due 2016 and the $350m 5.75% dollar bonds due 2020. The exceptional financing items comprise: * £4.1m gain relating to the fair value movement on put options over non-controlling interests (2012: £0.9m loss); and * In 2012, a £4.0m gain from the cessation of fair value hedge accounting for a $50m portion of the $350m bond. This $50m portion of the bond is subsequently accounted for at amortised cost. 5.3 Equity and dividends Share capital 2013 2012Authorised £m £m 1,217,124,740 (2012: 1,217,124,740) ordinary shares of 10 121.7 121.7pence each Ordinary Ordinary shares SharesIssued and fully paid Number £m At 1 January 2012 244,779,035 24.5 Issued in respect of share option schemes and other 688,094 -entitlements At 31 December 2012 245,467,129 24.5 Issued in respect of share option schemes and other 293,458 0.1entitlements At 31 December 2013 245,760,587 24.6 The ESOP Trust owns 0.17% (2012: 0.48%) of the issued share capital of theCompany in trust for the benefit of employees of the Group and theirdependents. The voting rights in relation to these shares are exercised by theTrustees. Dividends 2013 2012 £m £m Declared and paid during the year Equity dividends on ordinary shares Final dividend for 2012 of 20.0p (2011: 20.0p) 48.8 48.9 Interim dividend for 2013 of 6.7p (2012: 6.7p) 16.4 16.4 65.2 65.3 Proposed (not recognised as a liability at 31 December) Equity dividends on ordinary shares Final dividend for 2013 of 20.5p (2012: 20.0p) 50.3 48.9 Prior to the return of the Company to the UK on 30 November 2013, the DividendAccess Plan (DAP) arrangements put in place as part of the Scheme ofArrangement allowed shareholders in the Company to elect to receive theirdividends from a UK source (the DAP election). Shareholders who held 50,000 orfewer shares (i) on the date of admission of the Company's shares to the LondonStock Exchange and (ii) in the case of shareholders who did not own the sharesat that time, on the first dividend record date after they become shareholdersin the Company, unless they elect otherwise, were deemed to have elected toreceive their dividends under the DAP arrangements. Shareholders who held morethan 50,000 shares and who wished to receive their dividends from a UK sourcewere required to make a DAP election. All elections remained in forceindefinitely unless revoked. Unless shareholders made a DAP election, or weredeemed to have made a DAP election, dividends were received from an Irishsource and were taxed accordingly. After 30 November 2012 the DAP is no longerused. There are no income tax consequences to the Group arising from the payment ofdividends by the Company to its shareholders. Other reserves Foreign currency Total Merger translation ESOP Other other reserve reserve reserve reserve reserves £m £m £m £m £m Balance at 1 January 2012 (732.2) 7.3 (5.5) 125.3 (605.1) Total comprehensive income for - (10.6) - - (10.6)the year1 Shares awarded by ESOP - - 15.5 - 15.5 Own shares purchased by the - - (18.3) - (18.3)Company Balance at 31 December 2012 (732.2) (3.3) (8.3) 125.3 (618.5) Total comprehensive income for - (39.0) - - (39.0)the year2 Shares awarded by ESOP - - 25.5 - 25.5 Own shares purchased by the - - (20.1) - (20.1)Company Balance at 31 December 2013 (732.2) (42.3) (2.9) 125.3 (652.1) 1 The amount included in the foreign currency translation reserve for 2012represents the currency translation difference on foreign operations on Groupsubsidiaries of £17.8m (excluding £(2.2)m relating to non-controllinginterests), on net investment hedges of £(28.2)m and on joint ventures andassociates of £(0.2)m. 2 The amount included in the foreign currency translation reserve for 2013represents the currency translation difference on foreign operations on Groupsubsidiaries of £(19.5)m (excluding £(2.8)m relating to non-controllinginterests), on the reclassification adjustment for foreign operations disposed£(26.0)m on net investment hedges of £6.9m and on joint ventures and associatesof £(0.4)m. Merger reserve The merger reserve is used to record entries in relation to certainreorganisations that took place in previous accounting periods. The majority ofthe balance on the reserve relates to the capital reorganisation that tookplace in 2008 which created a new holding company which is UK-listed,incorporated in Jersey and with its tax residence in the Republic of Ireland.The return of the Company's tax residency to the United Kingdom has had noimpact on these balances. Foreign currency translation reserve The foreign currency translation reserve is used to record exchange differencesarising from the translation of the financial statements of foreignsubsidiaries. It is also used to record the effect of hedging net investmentsof foreign operations. ESOP reserve The ESOP reserve records ordinary shares held by the ESOP to satisfy futureshare awards. The shares are recorded at the cost of purchasing shares in theopen market. During the year ended 31 December 2013, 2,855,000 shares werepurchased by the ESOP (2012: 2,675,000 shares). 6. Acquisitions and disposals 6.1 Acquisitions The Group completed five acquisitions in 2013 none of which were individuallysignificant (2012: ten acquisitions none of which were individuallysignificant). Details of acquisitions have been provided in aggregate in thetable below. Acquisitions The fair value of the identifiable assets and liabilities acquired in respectof acquisitions (excluding equity transactions) made in 2013 and 2012 was: Restated All all acquisitions acquisitions 2013 2012 £m £m Intangible assets 4.7 14.4 Property, plant and equipment 0.2 - Trade and other receivables 1.6 3.2 Cash and cash equivalents 1.8 0.2 Total assets 8.3 17.8 Trade and other payables (1.8) (6.7) Deferred tax liability (0.7) (3.2) Total liabilities (2.5) (9.9) Identifiable net assets acquired 5.8 7.9 Goodwill arising on acquisition 9.3 28.5 Contingent consideration adjustments on pre 1 January - (1.0)2010 acquisitions Non-controlling interests (3.0) (5.0) 12.1 30.4 Trade and other receivables acquired have been measured at fair value which isthe gross contractual amounts receivable. All amounts recognised are expectedto be collected. The intangible assets acquired as part of the acquisitions were: All All acquisitions acquisitions 2013 2012 £m £m Brands 2.3 7.5 Order backlog - 0.6 Customer relationships 1.8 5.5 Customer contracts and relationships 1.8 6.1 Databases 0.6 0.8 Total 4.7 14.4 The total consideration transferred on acquisitions (excluding equitytransactions) is as follows: All All acquisitions acquisitions 2013 2012 £m £m Cash and cash equivalents 9.7 24.8 Fair value of contingent consideration 0.4 4.7 Deferred consideration 2.0 1.9 Contingent consideration adjustments on pre 1 January - (1.0)2010 acquisitions Total consideration transferred 12.1 30.4 Acquisition costs of £0.8m (2012: £1.0m) have been recognised as an exceptionaloperating item in the income statement (Note 3.1) and are included in operatingcash flows in the statement of cash flows. Cash flow effect of acquisitions The aggregate cash flow effect of acquisitions was as follows: 2013 2012 £m £m Net cash acquired with the subsidiaries (1.8) (0.2) Cash paid to acquire subsidiaries 9.7 24.8 Contingent consideration paid: 2007 acquisitions - 0.9 2008 acquisitions - 3.3 2009 acquisitions - 1.4 2010 acquisitions 2.2 9.0 2011 acquisitions 1.4 14.4 2012 acquisitions 1.8 2.1 2013 acquisitions 0.2 - Deferred consideration paid: 2010 acquisitions - 0.1 2011 acquisitions 3.9 1.6 2012 acquisitions 1.6 0.2 Net cash outflow on acquisitions 19.0 57.6 The Group paid £5.4m of contingent consideration during 2013 in relation 2010acquisitions of SharedVue, Corporate 360 and The Route Development Group, the2011 acquisitions of Rotaforte International Trade Fairs & Media andInternational Business Events Limited, the 2012 acquisitions of Shanghai UBMShowStar Exhibition Co. Limited and RISI Inc. The Group also paid £5.5m ofdeferred consideration during 2013 in relation to the 2011 acquisitions of AMBExhibitions Sdn Bhd and AMB Exhibitions Events Sdn Bhd, International BusinessEvents Limited and Online Marketing Summit, the 2012 acquisition of ShanghaiUBM ShowStar Exhibition Co. Limited, Insight Media Limited, MalaysianInternational Furniture Fair, I.C.C. Fuarcilik ve Organizasyon Ticaret A.S andEco Exhibitions Sdn Bhd. 2013 acquisitions Each of the acquisitions add further industry-leading exhibitions to each ofthe Group's community portfolios and are in line with the Group's strategy toenhance and expand its international presence in geographic regions ofsignificant growth. The goodwill of £9.3m recognised relates to certainintangible assets that cannot be individually separated. These include itemssuch as customer loyalty, market share, skilled workforce and synergiesexpected to arise after the acquisition completion. Of the goodwill arising, anamount of £0.7m is expected to be deductible for tax purposes. The Group has acquired 100% of the voting rights in all cases whereacquisitions involved the purchase of companies unless otherwise stated below.All 2013 and 2012 acquisitions where less than 100% of the voting rights of acompany were purchased have been accounted for using the full goodwill method. Initial and 2013 deferred Maximum acquisition consideration contingentAcquisition date Activity Segment £m consideration JV Novomania 18 March Urban/street Events 0.3 £2.0m payableLimited fashion event over the next(JVNML), 60% three years PT Pameran 15 April Events operator Events 0.2 -Niaga Indonesia(PTPNI), 51% China 2 August Starch and starch Events 0.7 £0.2m payable(Shanghai) derivatives over the nextInternational exhibition three yearsStarch & StarchDerivativesExhibition(Epica) NTSR Fuar ve 29 November Maritime, Events 8.4 -Gösteri infrastructure,Hizmetleri A.Ş agriculture,(NTSR) 75% lighting and leisure boating exhibitions Shanghai 16 December Vending machine Events 2.1 £2.3m payableTiansheng and digital over the nextExhibition signage three yearsService Co., exhibitionsLtd (Tiansheng) 11.7 £4.5m Acquisition performance From their respective dates of acquisition to 31 December 2013, theacquisitions completed in 2013 contributed £0.3m to operating profit and £2.2mto revenue of the Group. If the acquisitions had taken place at the beginningof 2013, the acquisitions would have contributed £1.6m of operating profit and£6.5m to revenue of the Group. Put and call options During the year, the Group has recognised the following put and call options.These reflect new transactions and options which have also been recognised thisyear following evaluation in the context of the new consolidation standards.Put options are reported within derivative financial instruments. The fairvalue of call options are not material to the Group. 31 December 2013 Put option 2013 Option price Option exercise date £m JV Novomania Limited 40% Fair value of the 18 March 2018 -put and call options shares as agreed by the parties capped at RMB 80.0m (£ 8.6m) PT Pameran Niaga Indonesia Rp1,470.0m (£0.1m) At any time -49% call option China (Shanghai) Fair value of the 2 August 2016 -International Starch & shares as agreed byStarch Derivatives the partiesExhibition (Epica) 10%call option I.C.C. Fuarcilik ve Fair value of the Put: 15% after 0.6Organizasyon Ticaret A.S. shares as agreed by finalisation of 201530% put and call options the parties capped accounts; further 15% at $10.0m (£6.0m) after finalisation of 2017 accounts Call: finalisation of 2022 accounts Intermodal Organizacao de 5.5x EBITDA capped 30 day period after 2.2Eventos S.A. 25% put and at $20.0m (£12.0m) 31 December 2015 andcall options each subsequent 31 December UBM Mexico Exposiciones, 5.0x EBITA capped Put: 31 December 2020 0.7S.A.P.I. De C.V. 20% put at MXP200.0m (£ to 31 December 2023and call options 10.1m) Call: after 31 December 2020 UBMMG Holdings Sdn Bhd 25% 6.0x EBITA capped Put: 31 December 1.1put and call options at $30.0m (£18.1m) 2013, 2015 or 2017 or any date after 31 December 2019 Call: after 31 December 2022 NTSR Fuar ve Gösteri 7x EBITA plus Between 1 Jan 2020 1.3Hizmetleri A.Ş (NTSR) 25% 6x new/organic and 31 March 2022put and call options branded and non-branded EBITA capped at €50m (£ 41.7m) UBM Istanbul - 25%'s put 11.2 x EBITA plus Between 1 Jan 2020 0.7and call options 6-11.2x new/organic and 31 March 2022 branded and non-branded EBITA capped at €50m (£ 41.7m) PT Dyandra UBM 5x EBITA for 21 Feb 2018 1.2International (Dyandra) previous year capped at $20.0m (£ 12.0m) Contingent and deferred consideration The potential undiscounted amount for all future payments that the Group couldbe required to make under the contingent consideration arrangements for 2013acquisitions are between nil and the maximum amounts disclosed by acquisitionon the previous pages; £4.5m in aggregate (maximum remaining at 31 December2013 for 2013, 2012 and 2011 acquisitions: £4.2m, £1.5m and £1.5mrespectively). The contingent consideration for each acquisition made duringthe year is based on the terms set out in the relevant purchase agreements. Theamounts recognised in the consideration tables as the fair values of contingentconsiderations have been determined by reference to the projected financialperformance in relation to the specific contingent consideration criteria foreach acquisition. The movement in the contingent and deferred consideration payable during theyear was: Contingent Deferred Total Contingent Deferred Total 2013 2013 2013 2012 2012 2012 £m £m £m £m £m £m At 1 January 7.5 5.6 13.1 37.3 5.7 43.0 Acquisitions and equity 2.3 2.0 4.3 6.0 1.9 7.9transactions Consideration paid (5.6) (5.5) (11.1) (31.1) (1.9) (33.0) Changes in estimates - - - (1.0) - (1.0)(goodwill) Changes in estimates (2.2) - (2.2) (2.9) - (2.9)(income statement) Classified as held for - - - (0.1) - (0.1)sale Currency translation 0.1 (0.2) (0.1) (0.7) (0.1) (0.8) At 31 December 2.1 1.9 4.0 7.5 5.6 13.1 Current 2.1 1.9 4.0 4.9 5.6 10.5 Non-current - - - 2.6 - 2.6 At 31 December 2.1 1.9 4.0 7.5 5.6 13.1 Income statement changes are reported within `Exceptional operating items'. 6.2 Disposals 2013 disposals Gain/ Initial and (loss) 2013 deferred on disposal consideration disposalDisposal date Activity Segment £m £m Asian Awards 4 April Annual Asian Events - 0.1Limited awards event Delta1 8 April Data services Data 146.5 20.5 Services European Hotel 26 July Hotel awards Events 0.2 0.2Design eventAwards UBM Channel1,2 16 IT channel Marketing 4.5 (6.7)70% September business Services - Online International 20 Exhibition Events 0.1 (0.3)Confex and Live September supporting theExperience meetings and events industry UBM Built 31 Property and Marketing 3.5 2.5Environment October travel magazine Services -Marketing business PrintServices (BuiltMS)1 154.8 16.3 1 Discontinued operations as disclosed in Note 6.3 2 The Group accounts for the remaining 30% interest as a fixed assetinvestment, valued at £1.7m. The aggregate effect of the disposals on the Group's assets and liabilitieswere as follows: UBM Channel and Built Other Delta MS disposals Total Total 2013 2013 2013 2013 2012 £m £m £m £m £m Goodwill (117.7) (10.7) - (128.4) (10.3) Intangible assets (24.8) (1.8) - (26.6) - Property, plant and equipment (7.9) (0.4) - (8.3) (0.1) Investments in joint ventures and (3.1) - - (3.1) -associates Trade and other receivables (38.0) (6.4) - (44.4) (1.6) Inventories (5.6) - - (5.6) - Cash and cash equivalents (9.8) - - (9.8) (1.8) Total assets (206.9) (19.3) - (226.2) (13.8) Trade and other payables 57.2 5.9 0.2 63.3 4.4 Deferred tax liability 8.7 - - 8.7 - Total liabilities 65.9 5.9 0.2 72.0 4.4 Identifiable net assets (141.0) (13.4) 0.2 (154.2) (9.4) Costs associated with disposal (11.0) (0.5) (0.5) (12.0) (2.2) Cumulative exchange gain 26.0 - - 26.0 -reclassified to profit and loss ondisposal Fair value of retained interest2 - 1.7 - 1.7 1.3 (Profit)/loss on disposal (20.5) 4.2 - (16.3) (1.6) Consideration received 146.5 8.0 0.3 154.8 11.9 Vendor loan note (37.0) (0.1) - (37.1) - Less cash disposed and deferred (9.8) - - (9.8) (1.8)consideration Net cash inflow 99.7 7.9 0.3 107.9 10.1 The Delta vendor loan note is repayable in April 2019 and accrues an annualinterest coupon of 6%. 6.3 Discontinued operations and assets held for sale Discontinued operations As disclosed in Note 1, the Group has classified the UBM Channel business,certain Built MS activities and the Delta businesses as discontinuedoperations. Delta was classified as held for sale at 31 December 2012. Detailsof the disposed assets and liabilities and the calculation of profit or loss ondisposal are disclosed in Note 6.2. The results of the discontinued operations which have been included in theconsolidated income statement and consolidated statement of cash flows are asfollows: Year ended 31 December 2013 UBM Channel and Built Delta MS Total £m £m £m Revenue - 24.3 24.3 Operating expenses - (22.2) (22.2) Adjusted operating profit from discontinued - 2.1 2.1operations Amortisation of intangible assets arising on - (0.3) (0.3)acquisitions Exceptional operating items - 0.3 0.3 Operating profit from discontinued operations - 2.1 2.1 Financing income - - - Financing expense - - - Profit before tax attributable to discontinued - 2.1 2.1operations Attributable tax - - - Profit after tax from discontinued operations - 2.1 2.1 Profit/(loss) on disposal (Note 6.2) 20.5 (4.2) 16.3 Attributable tax - - - Profit for the period from discontinued 20.5 (2.1) 18.4operations Earnings per share for discontinued operations Basic 7.5p Diluted 7.4p Net cash flows attributable to discontinuedoperations Net cash from operating activities 1.4 Net cash from investing activities (12.2) Net cash from financing activities (1.2) Net cash flows attributable to discontinued (12.0)operations Year ended 31 December 2012 UBM Channel and Built Delta MS Total £m £m £m Revenue 174.0 33.7 207.7 Operating expenses (149.8) (31.6) (181.4) Share of results from joint ventures and 0.7 - 0.7associates (after tax) Adjusted operating profit from discontinued 24.9 2.1 27.0operations Amortisation of intangible assets arising on (10.0) (0.9) (10.9)acquisitions Exceptional operating items 1.8 0.3 2.1 Operating profit from discontinued operations 16.7 1.5 18.2 Financing income - - - Financing expense - - - Profit before tax attributable to discontinued 16.7 1.5 18.2operations Attributable tax (0.2) - (0.2) Profit after tax from discontinued operations 16.5 1.5 18.0 Loss on assets held for sale (181.4) - (181.4) Attributable tax - - - Loss for the year from discontinued operations (164.9) 1.5 (163.4) Earnings per share for discontinued operations Basic (67.0)p Diluted (67.0)p Net cash flows attributable to discontinuedoperations Net cash from operating activities 17.2 Net cash from investing activities (6.8) Net cash from financing activities (14.4) Net cash flows attributable to discontinued (4.0)operations The Delta loss on assets held for sale includes an impairment charge of £159.6mand costs incurred in relation to the disposal of £21.8m. The classification asheld for sale requires assets and liabilities to be measured at the lower oftheir carrying amounts and fair value less costs to sell. Costs of sale includeprofessional fees of £8.5m, disposal and separation costs of £9.2m and £4.1m ofcosts incurred in preparing the business for sale for the year ended 31December 2012. Further costs incurred on disposal are detailed in Note 6.2. Assets held for sale measured at the lower of their carrying amounts and fairvalue less costs to sell Delta Delta 2013 2012 £m £m Goodwill - 117.7 Intangible assets - 24.8 Property, plant and equipment 0.1 8.0 Investments in joint ventures and - 3.1associates Inventories - 5.6 Trade and other receivables 0.8 39.8 Cash and cash equivalents - 8.4 Assets classified as held for sale 0.9 207.4 Trade and other payables (0.4) (58.5) Current tax liability - (2.0) Deferred tax liability - (8.7) Liabilities associated with assets (0.4) (69.2)classified as held for sale Net assets classified as held for sale 0.5 138.2 7. Events after the reporting period On 1 January 2014, the Group disposed of the International Customer ManagementInstitute (ICMI) business for initial cash consideration of £1.1m, subject toworking capital and performance adjustments. On 1 January 2014, the Group disposed of its telecoms research business,Pyramid Research, for initial cash consideration of £2.0m, subject to workingcapital adjustments. On 31 January 2014, the Group disposed of 66% of its interest in the LightReading business for initial cash consideration of £7.2m including a £5.4mvendor loan note, subject to working capital adjustments.