Wood Group interim results six months ended 30 June 2014

Half year results for the six months ended 30 June 2014 Benefitting from strong US shale activity; overall growth outlook for 2014unchanged Wood Group is an international energy services company with over $7bn sales.The Group is built on our Core Values and has two reporting segments - WoodGroup Engineering and Wood Group PSN - providing a range of engineering,production support and turbine services to the oil & gas, and power sectors. Financial Summary * Total revenue1 of $3,801.2m up 10% and Total EBITA in line with H1 2013 at $243.9m * Continue to anticipate full year Total EBITA to be in line with expectations and up on 2013 * Revenue from continuing operations on an equity accounting basis up 16% at $3,224.4m (2013: $2,788.7m) * Profit from continuing operations on an equity accounting basis before tax and exceptional items up 15% at $182.4m (2013: $159.0m) * Adjusted diluted EPS of 44.4 cents (2013: 44.5 cents) * Interim dividend of 8.9 cents (2013: 7.1 cents) up 25% Segmental Highlights Wood Group Engineering * EBITA down 9%, reflecting a lower contribution from Upstream partially offset by good performance in Subsea & Pipelines and Downstream * Increased engagement in early stage work; remain well positioned to influence and reduce overall project costs * Acquisition of Agility Projects for NOK 1,008m (c.$164m) in July 2014 positions us well in key Norwegian market Wood Group PSN Production Services * Strong EBITA growth of 47% driven by performance in US shale, including Elkhorn acquired in 2013 * Robust North Sea business benefitting from contract renewals and growth in Pyeroy acquired in 2013 * International position reinforced with recent multi-year award in Malaysia adding to work commenced in Papua New Guinea Turbine Activities * Breakeven at the EBITA level reflecting performance in Turbine JVs together with losses on the Dorad contract in the period * EthosEnergy JV with Siemens completed in May * Significant improvement expected in H2, including loss on Dorad to be largely recovered Bob Keiller, CEO commented: "We have seen strong performance in our PSN Production Services activities inthe US shale market, offset by an anticipated lower contribution from UpstreamEngineering and weaker than expected performance in our Turbine Activities.Overall, the outlook for the Group for the year remains unchanged from theposition outlined at our December 2013 trading update; we continue toanticipate full year EBITA to be in line with expectations and up on 2013, ledby growth in PSN Production Services." Enquiries: Wood Group Andrew Rose - Group Head of Investor Relations Carolyn Smith - External Affairs Manager 01224 851 000 Brunswick Patrick Handley 020 7404 5959 Nina Coad There will be an analyst and investor presentation at the Lincoln Centre, 18Lincoln's Inn Fields, WC2A 3ED at 09.00. Early registration is advised from08.30. A live webcast of the presentation will be available from www.woodgroup.com/investors. Replay facilities will be available later in the day. 1See detailed footnotes following Financial Review section of the half yearresults. Total Revenue and Total EBITA include the contribution from jointventures and activities classified as discontinued, which includes the resultsof the businesses that transferred to the EthosEnergy joint venture prior toits formation in May. Strategic Review H1 2014 Trading performance Interim Interim % Jun 2014 Jun 2013 Change $m $m Total Revenue 3,801.2 3,447.1 10.3% Total EBITA1 243.9 243.2 0.3% EBITA Margin 6.4% 7.1% (0.7pts) Revenue from continuing operations on an equity 3,224.4 2,788.7 15.6%accounting basis Profit from continuing operations before tax and 182.4 159.0 14.7%exceptionals on an equity accounting basis Basic EPS 38.5c 43.5c (11.5%) Adjusted diluted EPS2 44.4c 44.5c (0.2%) Note: The commentary below on trading performance is presented based onproportionally consolidated numbers, which is the basis used by management torun the business. Total Revenue and Total EBITA include the contribution fromjoint ventures and activities classified as discontinued, which includes theresults of the businesses that transferred to the EthosEnergy joint ventureprior to its formation in May. Against a market backdrop of increased focus on efficiency by oil & gasoperators generally and the consequential impact on investment in certainareas, whilst total revenue was up 10% at $3.8bn, both total EBITA and adjusteddiluted EPS were in line with the first half of 2013, at $243.9m and 44.4 centsrespectively. Total EBITA reflects a varied performance across the Group. In Wood GroupEngineering revenue increased by 4% however EBITA decreased by 9% and EBITAmargin fell by 1.5pts to 10.7%. Good performance in Subsea & Pipelines andDownstream was more than offset by a lower contribution from Upstream which sawgrowth in onshore activity but was impacted by a lower contribution fromoffshore projects and Canada. Wood Group PSN's core Production Servicesactivities delivered strong growth, with revenue up 22% and EBITA up 47%,primarily attributable to performance in the Americas led by US shale. TurbineActivities broke even at the EBITA level reflecting a disappointing performancein Turbine JVs, together with losses on the Dorad contract in the period. We continue to augment organic growth with acquisitions and have a strongpipeline of opportunities. In the first half we acquired Meesters, a specialistfabrication business in the Bakken shale region, Cape Software, a Texas basedtraining and process simulation company, and Sunstone, a Calgary based pipelineconsultancy. In July we announced the acquisition of Agility Projects AS("Agility") in Norway for NOK 1,008m (c.$164m), which adds offshore greenfieldand brownfield platform engineering capability in the Norwegian sector of theNorth Sea and positions us well for future projects in a significant Norwegianmarket. Completion is expected in Q3 2014. In February, we highlighted some of the actions being taken to addressunderperformance in the less differentiated parts of our Turbine Activities.Our JV with Siemens, EthosEnergy, completed on 6 May and is in the early stagesof integration. 2014 will be a more challenging period for EthosEnergy than wehad anticipated although we remain confident that the combination of the twobusinesses, led by a strong management team, will improve performance in ourless differentiated turbine activities over the longer term and that thepreviously indicated synergies of around $15m can be delivered. Our balance sheet remains strong. The working capital outflow for the firsthalf of the year partly reflects the typical seasonal movement and we expect asignificant improvement in the second half. In May, we reached agreement toissue $375m of unsecured senior notes in the US private placement market withdrawdown in August and November 2014. These will be at a mix of 7, 10 and 12year maturities at an average fixed rate of 3.74% which we consider to be avery competitive rate highlighting the strong level of demand in the marketgenerated by this placement. The issue will further diversify our sources offunding, extend the maturity profile of our debt and results in a greaterproportion of fixed rate debt finance at favourable rates. This issue does notchange our net debt to EBITDA ratio guidance of between 0.5x to 1.5x andtypically less than 1.0x. In February, we signaled our confidence in the longer term outlook for theGroup and committed to increasing the dividend in 2014 by around 25% and ourintention to increase the US dollar value of dividend per share from 2015onwards by a double digit percentage. We have declared an interim dividend of8.9 cents, an increase of 25%, which will be paid on 25 September 2014. Overall, the outlook for the Group for the year remains unchanged from theposition outlined at our December trading update. We continue to anticipatefull year EBITA to be in line with expectations and up on 2013, led by growthin our Production Services activities in Wood Group PSN. Wood Group Engineering We provide a wide range of market-leading engineering services to the upstream,subsea & pipelines, downstream & industrial and clean energy sectors. Theseinclude conceptual and front end engineering and design (FEED) studies,engineering, project & construction management (EPCM) and control systemupgrades. Interim Interim % Jun 2014 Jun 2013 Change $m $m Revenue 1,019.8 982.6 3.8% EBITA 108.8 119.8 (9.2%) EBITA margin 10.7% 12.2% (1.5pts) People3 10,500 10,500 - In Wood Group Engineering, revenue increased by 4% however EBITA decreased by9% and EBITA margin fell by 1.5pts to 10.7%. Good performance in Subsea &Pipelines and Downstream was more than offset by a lower contribution fromUpstream which saw growth in onshore activity but was impacted by a lowercontribution from offshore projects and Canada. The Upstream business represents around 40% of divisional revenue. Followingthe substantial completion of our scope on Mafumeira Sul and Ichthys in 2013,we have seen a slower pace in the award of significant detailed offshoreengineering contracts to replace these projects. We are active on detailedengineering for SMOE on Ivar Aasen in the North Sea working alongside AgilityProjects, Husky White Rose in Eastern Canada and Anadarko Heidelberg in theGulf of Mexico. We are currently engaged in more early stage projects than in2012 and 2013 including FEED work on Hess Stampede and study work on AnadarkoShenandoah. We believe our involvement during the early phases cansignificantly improve overall project costs and is an encouraging indicator ofcustomers turning to engineering solutions to improve capital efficiency. Subsea & Pipelines represents around 40% of divisional revenue. Good activityin Europe, the Middle East and the Caspian has contributed to profitability inour subsea business. In June, we were awarded the $60m contract for stage twoof Shah Deniz from BP in Azerbaijan, having provided engineering supportthroughout the earlier definition and appraisal phases. We have also recentlybooked awards from Tullow in Ghana and Southstream in Europe. Our onshorepipelines business continues to perform well, benefitting from US shale relatedpipeline work with customers including Shell and Dow. We see good prospects inSaudi Arabia and in Canada, where we added to our capability with theacquisition of Sunstone in Calgary. Downstream, process & industrial activities accounted for around 20% ofrevenue. We have seen some benefit of brownfield and greenfield work inrefining and chemicals markets, in part due to the continued impact of lowergas prices in the US. Outlook We continue to anticipate a reduction in Engineering EBITA in the full year2014. We remain well positioned to unlock value for clients and influenceoverall project costs through the delivery of high quality engineering, withour recent acquisition of Agility Projects adding to our capabilities in theNorwegian greenfield and brownfield market. We are still confident that theUpstream market will strengthen in the longer term, with current early stageprojects providing an encouraging indicator of future activity. Wood Group PSN Production Services We provide life of field support to producing assets through brownfieldengineering & modifications, production enhancement, operations andmaintenance, training, maintenance management and abandonment services. Interim Interim % Jun 2014 Jun 2013 Change $m $m Revenue 2,341.6 1,913.7 22.4% EBITA 163.0 111.1 46.7% EBITA margin 7.0% 5.8% 1.2pts People 30,000 26,300 14.1% Wood Group PSN's Production Services activities delivered strong growth, withrevenue up 22% and EBITA up 47%. This increase is primarily attributable toperformance in the Americas led by typically higher margin US shale activity,including the benefit of the Elkhorn business acquired in December 2013. The Americas is now the largest contributing region to Production ServicesEBITA. Our US onshore activities, which are predominantly shale related, havecontributed over $500m of revenue in the year to date. We now have over 5,000people across the US Shale regions engaged in site preparation, fabrication,installation, construction, commissioning, operations and maintenance. Elkhornis performing very strongly and is benefitting from infrastructure constructionwork in the core Permian basin. Our capabilities in US shale were furtherstrengthened in the first half of 2014 with the addition of Meesters, aspecialist fabrication business in the Bakken region and the establishment ofsafety and technical training facilities in the Eagle Ford. Our North Sea business has remained robust and is benefitting from growth inPyeroy, acquired in July 2013. In the first half, we secured a five yearrenewal of the Talisman Sinopec engineering and maintenance services contract,an extension to our operations and maintenance contract with Chevron North Seaand also a new contract with independent Iona Energy. The increased focus onoperator efficiency, with the UK oil and gas sector's costs rising an estimated15% last year, prompted us to cut contractor rates by 10% in May, reducing ouroverall cost to the customer and positioning us well for future opportunities. Internationally, our managed exit in Oman is progressing; the underlyingperformance is broadly breakeven and we expect to exit the contract fully byJuly 2015. In Papua New Guinea we have commenced brownfield engineering andprocurement support work for ExxonMobil's operations and expect activity inthis area to increase in the second half of the year. In July, we secured amulti-year award for EPCM services in Malaysia. Outlook For Wood Group PSN Production Services, strong growth in US shale including asignificant contribution from Elkhorn and robust performance in the matureNorth Sea, together with cessation of losses in Oman, is expected to lead togood growth overall in 2014. Turbine Activities We provide industrial gas turbine and rotating equipment services and solutionsfor clients in the oil & gas and power markets. Turbine Activities Interim Interim % Jun 2014 Jun 2013 Change $m $m Turbine JVs 422.3 440.9 (4.2%) Dorad/GWF 17.5 109.9 n/m Total Revenue 439.8 550.8 (20.2%) Turbine JVs 17.3 35.7 (51.5%) Dorad/GWF (17.2) 4.9 n/m Total EBITA 0.1 40.6 n/m Total EBITA Margin 0.0% 7.4% n/m People 2,700 3,200 (15.6%) Our Turbine Activities comprise: the joint venture with Siemens, EthosEnergy("Ethos"), Rolls Wood Group ("RWG") and TransCanada Turbines ("TCT") (together"Turbine JVs"); and for 2014 the Dorad EPC contract. Turbine JVs includes theproportionally consolidated results of: RWG and TCT from 1 January to 30 June,the former Wood Group GTS business now included in Ethos from 1 January to 5May, and Ethos from 6 May to 30 June. Dorad/GWF includes the results of Doradin 2014 and Dorad and GWF in 2013. In Turbine JVs, revenue fell 4% and EBITA fell 52%. This was due to performancein the Wood Group businesses now included in Ethos, primarily the impact oflower EPC activity. The outlook for Ethos in 2014 is more challenging thanpreviously anticipated, reflecting the impact of project delays in LatinAmerica, the Middle East and North Africa and significantly lower EPC backlog.We also saw a lower contribution from our other joint ventures including theimpact of deferrals, however current backlog largely supports our expectationof a recovery in the second half. Customer handover on the Dorad EPC contract was delayed to the second half ofMay which contributed to the recognition of increased costs and led to a yearto date loss, albeit the contract remains profitable overall. We are indiscussion with the customer around the agreement of change orders and continueto anticipate that the financial position will be largely recovered during theremainder of 2014. As part of the outcome of a review in 2013, the decisionwas taken to lower the risk profile of the Group and it is our intention not toundertake further fixed price EPC contracts of equivalent scale to Dorad. Outlook Performance in Turbine Activities is typically weighted to the second half andwe expect a significant improvement throughout the remainder of 2014 includingsubstantial recovery of the financial position on Dorad. In Ethos, we aretaking actions to reduce costs and expect to deliver net synergies of around$15m by the third year. Overall, we anticipate that Turbine Activities willdeliver lower EBITA in 2014 than in 2013. Financial Review Trading performance Trading performance is presented on a proportionally consolidated basis, whichis the basis used by management to run the business. Total Revenue and TotalEBITA include the contribution from Joint Ventures and activities classified asdiscontinued. A reconciliation to Operating Profit from EBIT is presentedbelow. A reconciliation to statutory measures of revenue and operating profitfrom continuing operations excluding joint ventures is included in note 2 tothe interim financial statements. Interim Interim Full Year Jun 2014 Jun 2013 Dec 2013 $m $m $m Total Revenue 3,801.2 3,447.1 7,064.2 Total EBITA 243.9 243.2 533.0 EBITA margin % 6.4% 7.1% 7.5% Amortisation - software and system (19.4) (20.5) (44.5)development Amortisation - intangible assets from (30.9) (28.3) (57.6)acquisitions EBIT 193.6 194.4 430.9 Net finance expense (9.5) (7.8) (18.6) Profit before tax and exceptional items 184.1 186.6 412.3 Taxation before exceptional items (50.5) (51.3) (113.4) Profit before exceptional items 133.6 135.3 298.9 Exceptional items, net of tax 16.3 26.6 1.6 Profit for the period 149.9 161.9 300.5 Basic EPS (cents) 38.5c 43.5c 81.4c Adjusted diluted EPS (cents) 44.4c 44.5c 98.6c The review of our trading performance is contained within the Strategic Review. Reconciliation to operating profit Interim Interim Jun 2014 Jun 2013 $m $m EBIT 193.6 194.4 Impact of JV profit included pre vs. post (6.5) (6.8)tax Impact of discontinued activities 4.3 (21.2)(pre-exceptionals) Operating Profit per Group Income Statement 191.4 166.4 Financial performance The financial performance of the Group, adjusting for acquisitions and on aconstant currency basis, is shown below. The 2013 results have been restated toinclude the results of acquisitions made in 2013 (Elkhorn, Pyeroy, Intetech) asif they had been acquired on 1 January 2013 and also to apply the averageexchange rates used to translate the 2014 results. The 2014 results have beenrestated to exclude the results of acquisitions made in 2014 (Meesters, Cape,Sunstone). Unaudited Interim Interim Interim Interim Jun 2014 Jun 2014 Jun 2013 Jun 2013 Total Total Total Total Revenue $m EBITA $m Revenue $m EBITA $m Wood Group Engineering 1,015.2 107.2 985.8 119.8 Wood Group PSN - Production Services 2,333.8 162.2 2,168.4 133.7 Wood Group PSN - Turbine Activities 439.8 0.1 556.1 41.4 Central costs - (27.9) - (29.1) Pro forma 3,788.8 241.6 3,710.3 265.8 Acquisitions 12.4 2.3 (228.0) (22.8) Constant Currency 0.0 0.0 (35.2) 0.2 Total Revenue and EBITA as reported 3,801.2 243.9 3,447.1 243.2 Amortisation The amortisation charge for the half year of $50.3m (2013: $48.8m) includes$30.9m (2013: $28.3m) of amortisation relating to intangible assets arisingfrom acquisitions. Of this amount $14.2m (2013: $19.6m) is in respect of thePSN acquisition and $10.7m relates to the acquisitions of Elkhorn andMitchells. Amortisation in respect of software and development costs was $19.4m(2013: $20.5m) and this largely relates to engineering software and ERP systemdevelopment. We currently anticipate that the amortisation charge for the fullyear will be around $104.0m (2013: $102.1m), of which $62.0m (2013: $57.6m)relates to intangibles arising from acquisitions. Included in the amortisation charge for the half year above is $0.9m (2013:$0.2m) in respect of joint ventures. Net finance expense Net finance expense is analysed further below. Interim Interim Full year Jun 2014 Jun 2013 Dec 2013 $m $m $m Interest on debt 4.9 4.2 8.5 Bank fees and charges 5.2 4.2 11.2 Total finance expense 10.1 8.4 19.7 Finance income (0.6) (0.6) (1.1) Net finance expense 9.5 7.8 18.6 Interest cover4 was 25.7 times (June 2013: 31.2 times). In May, we reachedagreement to issue $375m of unsecured senior notes in the US private placementmarket with drawdown in August and November 2014. These will be at a mix of 7,10 and 12 year maturities at an average fixed rate of 3.74%. Included in theabove are net finance charges of $0.5m (2013: $0.4m) in respect of jointventures. We currently anticipate the full year interest cost to be just under $25.0m,including the impact of the US private placement drawdown. Exceptional (income)/expense Interim Interim Full year Jun 2014 Jun 2013 Dec 2013 $m $m $m Venezuela settlement (58.4) - - Integration and restructuring charges 7.5 - 15.9 Lease termination income - (15.3) (15.1) Onerous contract - - 28.0 Bad debt recoveries - (2.0) (6.0) Transaction related costs 23.0 - 11.1 Gain on divestment of Well Support - (14.0) (34.4)division Total exceptional items pre-tax (27.9) (31.3) (0.5) Tax on exceptional items 11.6 4.7 (1.1) Total exceptional items net of tax (16.3) (26.6) (1.6) In January 2014, the Group finalised a settlement agreement in respect of acontract taken over by PDVSA in 2009. A gain of $58.4m has been recorded in theincome statement. $5.5m of the settlement relates to a minority shareholder. Further restructuring charges of $7.5m have been recorded in the period inrelation to the decision made in 2013 to exit certain markets in the Wood GroupPSN Production Services Americas business. Transaction related costs of $23.0m are in respect of Ethos in 2014 and arediscussed below. EthosEnergy Transaction On 6 May 2014, the Group's joint venture with Siemens, EthosEnergy ("Ethos")was formed. Whilst Wood Group has a 51% shareholding in the new entity,significant decision making requires unanimous consent from both shareholders.Wood Group does not have control and the business is therefore accounted for asa joint venture. The initial transaction was accounted for as follows: $m $m Book value of Wood Group net assets transferred to 541.8Ethos Cash received and receivable (157.4) Wood Group net assets disposed 384.4 Value of Wood Group's investment in Ethos (384.4) - Wood Group costs associated with the creation of Ethos Cumulative foreign exchange losses recycled through the 7.0income statement Transaction related costs 16.0 23.0 Net impact of transaction included in exceptional 23.0items The value of Wood Group's investment in Ethos represents the fair value of thenet assets disposed. In respect of cash received and receivable of $157.4m, under the joint ventureagreement Wood Group received a 51% ownership interest in Ethos, and Ethos wasrequired to pay Wood Group $70.0m, of which $21m was paid in May 2014. Inaddition, an estimated $87.4m will be paid by Ethos in respect of post closeadjustments for items including working capital and indebtedness at the date offormation. Foreign exchange losses of $7.0m which were recorded in the currencytranslation reserve in prior periods in relation to the businesses transferredinto Ethos have been recycled through the income statement as required by IAS21. Transaction costs include legal fees and other costs associated with the setupof the joint venture, accelerated share based charges and a provision forliabilities which the Group has retained as part of the joint ventureagreement. Taxation The effective tax rate on profit before tax and exceptional items includingjoint ventures and discontinued operations on a proportionally consolidatedbasis is set out below. Interim Interim Full year Jun 2014 Jun 2013 Dec 2013 $m $m $m Profit from continuing operations 184.1 186.6 412.3before tax (pre-exceptional items) Tax charge (pre-exceptional items) 50.5 51.3 113.4 Effective tax rate on continuing 27.4% 27.5% 27.5%operations (pre-exceptional items) The tax charge above includes $6.1m in relation to joint ventures (June 2013:$6.4m). Going forward we expect the effective tax rate, to remain around 27.5% in themedium term. The effective tax charge under equity accounting is 25.2%. The pre tax profitnumber used to compute this figure includes the post tax contribution fromjoint ventures and as such we do not consider this to be a meaningful measure. Earnings per share Adjusted diluted EPS for the six months to 30 June 2014 was 44.4 cents pershare (2013: 44.5 cents). The average number of fully diluted shares used inthe EPS calculation for the period was 374.6m (June 2013: 374.7m). Adjusted diluted EPS adds back all amortisation. If only the amortisationrelated to intangible assets arising on acquisition is adjusted and noadjustment is made for that relating to software and development costs, thefigure for June 2014 would be 40.6 cents per share (June 2013: 40.6 cents). Dividend In February, we signaled our confidence in the longer term outlook for theGroup and committed to increasing the dividend in 2014 by around 25%. In line with our policy, an interim dividend of 8.9 cents per share (2013: 7.1cents) has been declared which will be paid on 25 September 2014, representingan increase of 25%. The dividend is covered 5.0 times (June 2013: 6.3 times) byadjusted earnings per share. The Group continues to adopt a progressive dividend policy taking into accountits capital requirements, cash flows and earnings. Since IPO the Group hasincreased the dividend by an equivalent of 20% per annum compound. Cash flow and net debt The cash flow and net debt position below has been prepared using equityaccounting for joint ventures, and as such does not proportionally consolidatethe assets and liabilities of joint ventures. Our share of net cash in JointVentures is added at the bottom of the cash flow to show the total net debtincluding JVs. The gross and net debt figures including joint ventures aregiven below. Interim Interim Full year Jun 2014 Jun 2013 Dec 2013 $m $m $m Opening net debt (excluding JV's) (325.3) (145.5) (145.5) Cash generated from operations pre 330.1 268.7 573.8working capital (excluding JV's) Working capital movements (excluding (193.4) (159.3) (65.2)JV's) Cash generated from operations 136.7 109.4 508.6 Acquisitions, capex and intangibles (133.1) (78.0) (427.1) Tax paid (49.4) (48.5) (123.7) Interest, dividends and other (79.8) (59.7) (137.6) Increase in net debt (125.6) (76.8) (179.8) Closing net debt (excluding JV's) (450.9) (222.3) (325.3) JV net cash 23.5 4.6 15.8 Closing net debt (including JV's) (427.4) (217.7) (309.5) Throughout the period the Group debt levels (including JV cash and debt) areset out below. Interim Interim Full Year Jun 2014 Jun 2013 Dec 2013 $m $m $m Average net debt 390.3 221.6 258.4 Average gross debt 588.8 391.8 436.0 Closing net debt 427.4 217.7 309.5 Closing gross debt 637.4 372.7 493.0 Cash generated from operations pre-working capital increased by $61.4m to$330.1m and post-working capital increased by $27.3m to $136.7m. The majority of the higher working capital outflow of $193.4m in the first halfof 2014 was due to increased receivables. This was caused in part by higherlevels of activity in the first half of 2014 compared to the second half of2013 and also by the typical seasonality seen at the end of the year, not beingrepeated at 30 June 2014. Acquisitions, capex and intangibles include $60.8m in relation to acquisitions(2013: $16.6m). Of this amount, $23.4m relates to the acquisitions of Sunstone,Meesters and Cape. $37.4m relates to payments made in respect of companiesacquired in prior periods. Payments for capex and intangible assets increasedto $68.0m (2013: $60.1m). This included a significant investment in plant andinfrastructure related to our US shale expansion and ongoing ERP and systemrelated expenditure. Interest, dividends and other, increased due to the inclusion of amountsrelating to the Ethos transaction. Summary Balance Sheet The balance sheet below has been prepared using equity accounting for jointventures, and as such does not proportionally consolidate the joint venturesassets and liabilities. Interim Interim Full year Jun 2014 Jun 2013 Dec 2013 $m $m $m Non-current assets 2,682.6 2,158.4 2,276.3 Current assets 1,783.3 1,903.8 2,052.7 Current liabilities (1,070.5) (1,191.2) (1,267.4) Net current assets 712.8 712.6 785.3 Non-current liabilities (835.5) (601.9) (645.3) Net assets 2,559.9 2,269.1 2,416.3 Equity attributable to owners of 2,549.5 2,260.5 2,407.4the parent Non-controlling interests 10.4 8.6 8.9 Total equity 2,559.9 2,269.1 2,416.3 The increase in non-current assets since December 2013 is largely related tothe investment in Ethos, goodwill and other intangible assets in relation toacquisitions made and expenditure on property, plant and equipment. The reduction in net current assets since December 2013 is due to the move toequity accounting for joint ventures as required by IFRS 11, including theimpact of the new Ethos joint venture, offset by higher receivables as noted inthe commentary on the cash flow. Capital efficiency Net debt (including our share of JV net debt) to annualised Total EBITDA at 30June 2014 was 0.8 times (June 2013: 0.4 times). The Board would generallyexpect net debt to EBITDA on this basis to be in a range of around 0.5 to 1.5times going forward and to be typically below 1.0 times. The Group's Return on Capital Employed ("ROCE")5 reduced from 18.1% at 30 June2013 to 16.0% due to higher average working capital, combined with highergoodwill and other intangible assets recognised on acquisition, as well as thelower EBITA margin in the period. The Group's ratio of average Operating Capital Employed to Revenue (OCER)worsened from 15.2% to 16.0%, as average operating capital grew at a fasterrate than revenue. This was primarily due to higher average working capital inWood Group PSN. Principal risks and uncertainties The principal risks and uncertainties facing the Group in the second half of2014 that could lead to a significant loss of reputation or could impact on theperformance of the Group, along with our approach to managing, mitigating andmonitoring these risks, remain broadly unchanged from those described in theGroup's 2013 Annual Report. The key risks are in the following categories: * Safety & Assurance * Operational * Financial * Environmental * Commercial * Compliance * People * Strategic The mitigating factors are designed to reduce, but cannot be relied upon toeliminate, the risk areas identified. For further details on the management ofrisk and the principal risks and uncertainties see pages 21 to 23 of theGroup's 2013 Annual Report. *********************** Footnotes 1 Total EBITA represents operating profit including JVs on a proportional basisof $221.5m (2013: $225.7m) before the deduction of amortisation of $50.3m(2013: $48.8m) and exceptional income of $27.9m (2013: $31.3m) and is providedas it is a key unit of measurement used by the Group in the management of itsbusiness. 2 Adjusted diluted earnings per share ("AEPS") is calculated by dividingearnings before exceptional items and amortisation, net of tax, by the weightedaverage number of ordinary shares in issue during the period, excluding sharesheld by the Group's employee share ownership trusts and adjusted to assumeconversion of all potentially dilutive ordinary shares. 3 Number of people includes both employees and contractors at 30 June 2014 andincludes our proportional share of headcount in joint ventures. 4 Interest cover is EBITA divided by the net finance expense. 5 Return of Capital Employed ("ROCE") is EBITA divided by average capitalemployed. END John Wood Group PLC Interim Financial Statements 2014 page 16 John Wood Group PLC Group income statement for the six month period to 30 June 2014 Unaudited Interim June 2014 Unaudited Interim June Audited Full Year December 2013 2013 (restated) (restated) Exce- Exce- Pre- ptional Total Pre- Exceptional Total Pre- ptional Total exceptional items exceptional items exceptional items Note items (note 3) items (note 3) items (note 3) $m $m $m $m $m $m $m $m $m Revenue from 2 3,224.4 - 3,224.4 2,788.7 - 2,788.7 5,753.2 - 5,753.2continuingoperationsCost of sales (2,738.5) - (2,738.5) (2,342.6) - (2,342.6) (4,803.3) - (4,803.3)Gross profit 485.9 - 485.9 446.1 - 446.1 949.9 - 949.9Administrative (313.2) 50.9 (262.3) (288.5) 17.3 (271.2) (588.3) 1.1 (587.2)expensesShare of 18.7 - 18.7 8.8 - 8.8 29.9 (28.0) 1.9post-tax profitfrom jointventuresOperating profit 2 191.4 50.9 242.3 166.4 17.3 183.7 391.5 (26.9) 364.6Finance income 0.6 - 0.6 0.6 - 0.6 1.1 - 1.1Finance expense (9.6) - (9.6) (8.0) - (8.0) (18.9) - (18.9)Profitbefore tax 182.4 50.9 233.3 159.0 17.3 176.3 373.7 (26.9) 346.8from continuingoperationsTaxation 8 (45.9) (13.0) (58.9) (32.8) (4.7) (37.5) (83.1) 0.9 (82.2)Profit for the 136.5 37.9 174.4 126.2 12.6 138.8 290.6 (26.0) 264.6period fromcontinuingoperations(Loss)/profitfrom (2.9) (21.6) (24.5) 9.1 14.0 23.1 8.3 27.6 35.9discontinuedoperations netof taxProfit for the 133.6 16.3 149.9 135.3 26.6 161.9 298.9 1.6 300.5period Profitattributable to:Owners of the 129.7 10.8 140.5 131.5 26.6 158.1 294.3 1.6 295.9parentNon-controlling 3.9 5.5 9.4 3.8 - 3.8 4.6 - 4.6interests 133.6 16.3 149.9 135.3 26.6 161.9 298.9 1.6 300.5Earnings per share(expressed incents per share)Basic 7 35.5 3.0 38.5 36.2 7.3 43.5 81.0 0.4 81.4Diluted 7 34.6 2.9 37.5 35.1 7.1 42.2 78.8 0.4 79.2 The income statement for prior periods has been restated to show the resultsfrom joint ventures under equity accounting (proportional consolidation wasused previously). The June 2013 income statement has been restated to show theresults of the businesses that transferred to the EthosEnergy joint venture asdiscontinued. The 2014 losses of these businesses for the period prior to theformation of EthosEnergy are also shown as discontinued. The notes on pages 22 to 34 are an integral part of the interim financialstatements. page 17 John Wood Group PLC Group statement of comprehensive income for the six month period to 30 June 2014 Unaudited Unaudited Audited Interim Interim Full Year June June December 2014 2013 2013 $m $m $m Profit for the period 149.9 161.9 300.5 Other comprehensive income Items that will not be reclassified to profit orlossRemeasurement gains on retirement benefit - - 16.5obligationsMovement in deferred tax relating to retirement - - (3.8)benefit obligationsTotal items that will not be reclassified to - - 12.7profit or lossItems that may be reclassified subsequently toprofit or losCash flow hedges (0.4) 0.6 0.2Net exchange movements on retranslation of 39.1 (95.2) (37.6)foreign currency net assetsNet exchange movements on retranslation of 0.1 (0.6) (0.2)non-controlling interestsTotal items that may be reclassified subsequently 38.8 (95.2) (37.6)to profit or loss Other comprehensive income/(expense) for the 38.8 (95.2) (24.9)period, net of tax Total comprehensive income for the period 188.7 66.7 275.6 Total comprehensive income for the period isattributable to:Owners of the parent 179.2 63.5 271.2Non-controlling interests 9.5 3.2 4.4 188.7 66.7 275.6Total comprehensive income for the period isattributable to:Continuing operations 213.2 43.6 239.7Discontinued operations (24.5) 23.1 35.9 188.7 66.7 275.6 Exchange movements on the retranslation of foreign currency net assets wouldonly be subsequently reclassified through profit or loss in the event of thedisposal of a business. The notes on pages 22 to 34 are an integral part of the interim financialstatements. page 18 John Wood Group PLC Group balance sheet as at 30 June 2014 (Restated) (Restated) Unaudited Unaudited Audited Interim Interim Full Year June June December 2014 2013 2013 Note $m $m $mAssetsNon-current assetsGoodwill and other intangible assets 1,901.6 1,733.3 1,855.0Property plant and equipment 193.6 165.5 187.3Investment in joint ventures 474.4 158.0 137.8Long term receivables 78.3 62.0 68.0Deferred tax assets 34.7 39.6 28.2 2,682.6 2,158.4 2,276.3Current assetsInventories 9.5 339.4 11.4Trade and other receivables 1,587.2 1,404.6 1,242.8Income tax receivable 38.9 32.5 19.1Assets held for sale - - 634.4Cash and cash equivalents 12 147.7 127.3 145.0 1,783.3 1,903.8 2,052.7LiabilitiesCurrent liabilitiesBorrowings 12 12.7 27.2 74.1Trade and other payables 962.9 1,048.1 951.1Liabilities held for sale - - 183.0Income tax liabilities 94.9 115.9 59.2 1,070.5 1,191.2 1,267.4Net current assets 712.8 712.6 785.3 Non-current liabilitiesBorrowings 12 585.9 322.4 396.2Deferred tax liabilities - 5.9 -Retirement benefit obligations 9 36.6 52.3 41.2Other non-currentliabilities 127.0 136.4 141.7Provisions 86.0 84.9 66.2 835.5 601.9 645.3Net assets 2,559.9 2,269.1 2,416.3 Equity attributable to owners of theparentShare capital 23.6 23.5 23.6Share premium 56.0 54.3 56.0Retained earnings 1,960.0 1,768.7 1,856.6Other reserves 509.9 414.0 471.2 2,549.5 2,260.5 2,407.4 Non-controlling interests 10.4 8.6 8.9Total equity 2,559.9 2,269.1 2,416.3 The balance sheet for prior periods has been restated to show the share of netassets of joint ventures under equity accounting (proportional consolidationwas used previously). The notes on pages 22 to 34 are an integral part of the interim financialstatements. page 19 John Wood Group PLC Group statement of changes in equity for the six month period to 30 June 2014 Equity attributable Non-controlling Share Share Retained Other to owners of interests Total capital premium earnings reserves the parent equity Note $m $m $m $m $m $m $m At 1 January 2013 23.5 54.3 1,640.7 508.6 2,227.1 8.2 2,235.3 Profit for the period - - 158.1 - 158.1 3.8 161.9Other comprehensive income:Cash flow hedges - - - 0.6 0.6 - 0.6Net exchange movements on - - - (95.2) (95.2) (0.6) (95.8)retranslation of foreigncurrency net assetsTotal comprehensive income - - 158.1 (94.6) 63.5 3.2 66.7for the periodTransactions with owners:Dividends paid 4 - - (41.4) - (41.4) (2.8) (44.2)Credit relating to share 13 - - 11.4 - 11.4 - 11.4based chargesShares purchased by employee - - (12.7) - (12.7) - (12.7)share trustsShares disposed of by - - 5.7 - 5.7 - 5.7employee share trustsExchange movements in - - 7.7 - 7.7 - 7.7respect of shares heldby employee share trustsTransactions with non- - - (0.8) - (0.8) - (0.8)controlling interestsAt 30 June 2013 23.5 54.3 1,768.7 414.0 2,260.5 8.6 2,269.1 At 1 January 2014 23.6 56.0 1,856.6 471.2 2,407.4 8.9 2,416.3 Profit for the period - - 140.5 - 140.5 9.4 149.9Other comprehensive income:Cash flow hedges - - - (0.4) (0.4) - (0.4)Net exchange movements - - - 39.1 39.1 0.1 39.2on retranslation offoreign currency netassetsTotal comprehensive income - - 140.5 38.7 179.2 9.5 188.7for the periodTransactions with owners:Dividends paid 4 - - (54.5) - (54.5) (1.0) (55.5)Credit relating to share 13 - - 13.2 - 13.2 - 13.2based chargesShares disposed of by - - 9.1 - 9.1 - 9.1employee share trustsExchange movements in - - (4.9) - (4.9) - (4.9)respect of shares heldby employee share trustsTransactions with non- - - - - - (7.0) (7.0)controlling interestsAt 30 June 2014 23.6 56.0 1,960.0 509.9 2,549.5 10.4 2,559.9 The figures presented in the above tables are unaudited. Other reserves include the capital redemption reserve, capital reductionreserve, merger reserve, currency translation reserve and the hedging reserve. The notes on pages 22 to 34 are an integral part of the interim financialstatements. page 20 John Wood Group PLC Group cash flow statement for the six month period to 30 June 2014 (Restated) (Restated) Unaudited Unaudited Audited Interim Interim Full Year June 2014 June 2013 Dec 2013 Note $m $m $m Cash generated from operations 11 136.7 109.4 508.6Tax paid (49.4) (48.5) (123.7)Net cash from operating activities 87.3 60.9 384.9 Cash flows from investing activitiesAcquisition of subsidiaries (net of cash and 5 (60.8) (16.6) (287.3)borrowings acquired)Acquisitions of non-controlling interests (4.3) - (3.1)Proceeds from divestment of subsidiaries - - 0.3(net of cash and borrowings divested anddivestment costs)Payment received in relation to EthosEnergy 21.0 - -transactionPurchase of property plant and equipment (36.2) (34.6) (84.5)Proceeds from sale of property plant and 0.1 1.0 2.3equipmentPurchase of intangible assets (31.8) (25.5) (50.9)Interest received 0.6 0.6 1.1Loans to joint ventures (47.6) (0.6) (6.6)Investment in joint ventures - (1.3) (1.3)Net cash used in investing activities (159.0) (77.0) (430.0) Cash flows from financing activitiesProceeds from bank loans 124.9 59.4 166.7Purchase of shares by employee share trusts - (12.7) (47.8)Disposal of shares by employee share trusts 9.1 5.7 7.9Interest paid (5.6) (13.2) (18.0)Dividends paid to shareholders 4 (54.5) (41.4) (67.4)Dividends paid to non-controlling interests (1.0) (2.8) (3.1)Net cash from/(used in) financing activities 72.9 (5.0) 38.3Net increase/(decrease) in cash and cash 1.2 (21.1) (6.8)equivalentsEffect of exchange rate changes on cash and 1.5 (8.8) (5.4)cash equivalentsOpening cash and cash equivalents 145.0 157.2 157.2Closing cash and cash equivalents 147.7 127.3 145.0 The cash flow statement for prior periods has been restated to show the cashflows from joint ventures under equity accounting (proportional consolidationwas used previously). The notes on pages 22 to 34 are an integral part of the interim financialstatements. page 21 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 1.Basis of preparation The interim report and financial statements for the six monthsended 30 June 2014 have been prepared in accordance with the Disclosure andTransparency Rules of the Financial Conduct Authority and with IAS 34 `Interimfinancial reporting' as adopted by the European Union. The interim report andfinancial statements should be read in conjunction with the Group's 2013Annual Report and Accounts which have been prepared in accordance with IFRSsas adopted by the European Union. The interim report and financial statements have been prepared onthe basis of the accounting policies set out in the Group's 2013 Annual Reportand Accounts and those new standards discussed below which are applicable from1 January 2014. The interim report and financial statements do not comprisestatutory accounts within the meaning of section 434of the Companies Act 2006.The interim financial statements were approved by the Board of Directors on 18August 2014. The results for the six months to 30 June 2014 and thecomparative results for six months to 30 June 2013 are unaudited. Thecomparative figures for the year ended 31 December 2013 do not constitute thestatutory financial statements for that year. Those financial statements havebeen delivered to the Registrar of Companies and include the auditor's reportwhich was unqualified and did not contain any statement under Section 498 ofthe Companies Act 2006. As required by IFRS 11, the Group's interests in joint ventureshave been consolidated using equity accounting for the six months ended 30June 2014. In previous periods, the Group used proportional consolidation toaccount for its interests in joint ventures. The comparative figures for June2013 and December 2013 have been restated accordingly. After making enquiries, the directors have a reasonable expectationthat the Group has adequate resources to continue in operational existence forthe foreseeable future. The Group therefore continues to adopt the going concern basis inpreparing the consolidated interim financial statements. In preparing these interim financial statements, the significantjudgments made by management in applying the Group's accounting policies andthe key sources of estimation uncertainty were the same as those applied tothe consolidated financial statements for the year ended 31 December 2013, tothe extent that they now encompass an additional critical accounting estimate and judgment. Accounting for the EthosEnergy joint venture The Group has used equity accounting to record its investment in theEthosEnergy joint venture. The accounting for the joint venture required theexercise of management's judgment relating to the assessment of whetherEthosEnergy is controlled or jointly controlled. Based on management'sjudgment, control of the entities transferred to EthosEnergy was lost oncreation of the joint venture and that going forward EthosEnergy is jointlycontrolled. Accordingly the Group has equity accounted for the investment in accordance with IFRS 11. Onestablishment of the Group's investment in EthosEnergy, an assessment of theinitial carrying value of that investment was made, which required theapplication of management judgment. Future events could cause the assumptionsused by the Group to change which could have a significant impact on thecarrying value of the investment. Functional currency The Group's earnings stream is primarily US dollars and theprincipal functional currency is the US dollar, being the most representativecurrency of the Group. The Group's financial statements are therefore preparedin US dollars. The following exchange rates have been used in the preparation ofthese accounts: June 2014 June 2013Average rate £1 = $ 1.6706 1.5467Closing rate £1 = $ 1.7099 1.5167 Disclosure of impact of new and future accounting standards (a) Amended standards and interpretations The following revisions and amendments to standards andinterpretations are mandatory as of 1 January 2014: - IFRS 10 `Consolidated financial statements' - IFRS 11 `Joint arrangements' - IFRS 12 `Disclosure of interests in other entities' Up until 31 December 2013, the Group accounted for its interests in jointventures using proportional consolidation. As IFRS 11 does not permitproportional consolidation, from 1 January 2014, for all periods presented,the Group has accounted for its interests in joint ventures using equityaccounting. The use of equity accounting has no impact on Group profit for theyear or earnings per share, but does impact the presentation of the Group'sinterests in joint ventures in the income statement, the balance sheet and thecash flow statement. Comparative figures have been restated to reflect thechange to equity accounting. For further details see note 18 to the interimfinancial statements. (b) Standards, amendments and interpretations to existing standardsthat are not yet effective and have not been early adopted by the Group The following relevant standards and amendments and interpretationsto existing standards have been published and are mandatory for theGroup's accounting periods beginning on or after 1 January 2015, but the Grouphas not early adopted them: - IFRS 15 `Revenue from contracts with customers' was published in May 2014and is effective for accounting periods beginning on or after 1 January 2017.The Group is in the process of assessing the likely impact of this standard onthe financial statements. page 22 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 2. Segmental reporting The Group operates through two segments, Wood Group Engineering and Wood GroupPSN. Following the formation of the EthosEnergy joint venture in May 2014, allof the Group's predominantly opex related turbine activity is carried outthrough joint ventures and is now managed and reported as part of the WoodGroup PSN division. In order to provide visibility over the performance of theturbine activities, they are included on a separate line in the table below(Wood Group PSN - Turbine activities). This presentation is consistent withthe Group's internal management reporting. Under IFRS 11, the Group is now required to account for joint ventures usingequity accounting, however for management reporting the Group continues to useproportional consolidation hence the inclusion of the proportionalpresentation in this note. The segment information provided to the Chief Operating Decision Maker for thereportable operating segments for theperiod included the following: Reportable operating segments Revenue EBITDA (1) EBITA (1) Operating profit Un- Un- Un- Un- Un- Un- Un- Un- audited audited Audited audited audited Audited audited audited Audited audited audited Audited Interim Interim Full Interim Interim Full Interim Interim Full Interim Interim Full June June Year June June Year June June Year June June Year 2014 2013 2013 2014 2013 2013 2014 2013 2013 2014 2013 2013 $m $m $m $m $m $m $m $m $m $m $m $m Wood Group 1,019.8 982.6 1,985.4 116.3 126.7 260.3 108.8 119.8 246.0 95.3 121.8 228.0EngineeringWood Group 2,341.6 1,913.7 3,996.0 176.4 119.4 281.5 163.0 111.1 262.1 181.5 83.2 161.9PSN - ProductionServicesWood Group 439.8 550.8 1,082.8 6.5 48.4 95.1 0.1 40.6 80.8 (3.2) 36.1 65.0PSN - TurbineactivitiesWell Support - - - - - - - - - - - 14.0 34.4discontinuedCentralcosts (2) - - (25.7) (26.4) (52.0) (28.0) (28.3) (55.9) (52.1) (29.4) (57.9) Total 3,801.2 3,447.1 7,064.2 273.5 268.1 584.9 243.9 243.2 533.0 221.5 225.7 431.4 Remove (188.5) (356.4) (652.5) (0.7) (31.0) (45.8) 1.7 (25.5) (36.4) 27.3 (35.2) (55.2)discontinuedRemove share of (388.3) (302.0) (658.5) (32.0) (19.3) (48.9) (26.1) (15.8) (41.8) (25.2) (15.6) (13.5)joint ventures Total continuing 3,224.4 2,788.7 5,753.2 240.8 217.8 490.2 219.5 201.9 454.8 223.6 174.9 362.7operationsexcludingjoint ventures Share of 18.7 8.8 1.9post-taxprofit fromjointventuresOperating profit 242.3 183.7 364.6Finance income 0.6 0.6 1.1Finance expense (9.6) (8.0) (18.9)Profit before 233.3 176.3 346.8taxation fromcontinuingoperationsTax on continuing (58.9) (37.5) (82.2)operationsProfit for the 174.4 138.8 264.6period fromcontinuingoperations(Loss)/Profit from (24.5) 23.1 35.9discontinuedoperations, net of taxProfit for 149.9 161.9 300.5the period 1. Total EBITDA represents total operating profit of $221.5m (2013:$225.7m) before the charge for depreciation of property, plant and equipmentof $29.6m (2013: $24.9m), amortisation of $50.3m (2013: $48.8m) andexceptional credits of $27.9m (2013: $31.3m). The Total line includes theproportional share of all joint venture activity. EBITA represents EBITDA lessdepreciation. EBITA is the key unit of measurement used by the Group in themanagement of its business. 2. Central costs include the costs of certain management personnelin both the UK and the US, along with an element of Group infrastructurecosts. Operating profit for the period to June 2014 is stated after deducting$23.0m of costs relating to the EthosEnergy transaction (see note 3 to theinterim financial statements). 3. Revenue arising from sales between segments is not material. 4. Discontinued activities relate to the turbine businessestransferred to the EthosEnergy joint venture in May 2014. Comparative figureshave been restated accordingly. page 23 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 2. Segmental reporting (continued) Segment assets Unaudited Unaudited Audited Interim Interim Full Year June 2014 June 2013 December 2013 $m $m $mWood Group Engineering 976.1 937.2 880.0Wood Group PSN - Production Services 2,507.3 2,037.8 2,342.9Wood Group PSN - Turbine activities 610.1 975.1 967.8Unallocated 372.4 112.1 138.3 4,465.9 4,062.2 4,329.0 Unallocated segment assets include cash, income tax and deferred tax balancesand amounts receivable in relation to the formation of the EthosEnergy jointventure. 3. Exceptional items Unaudited Unaudited Audited Interim Interim Full Year June 2014 June 2013 December 2013 $m $m $mExceptional items included in continuing operationsVenezuelan settlement (58.4) - -Restructuring charges 7.5 - 15.9Lease termination income - (15.3) (15.1)Onerous contract - - 28.0Other - (2.0) (1.9) (50.9) (17.3) 26.9Taxation 13.0 4.7 (0.9)Continuing operations exceptional items, net of tax (37.9) (12.6) 26.0 Exceptional items included in discontinued operationsGain on divestment - Well Support - (14.0) (34.4)Costs relating to EthosEnergy transaction (see note 6) 23.0 - 7.0 23.0 (14.0) (27.4)Taxation (1.4) - (0.2)Discontinued operations exceptional items, net of tax 21.6 (14.0) (27.6)Total exceptional items, net of tax (16.3) (26.6) (1.6) In January 2014, the Group finalised a settlement agreement in respect of acontract taken over by PDVSA in 2009 and a gain of $58.4m has been recorded inthe income statement. $5.5m of the settlement is attributable to a minorityshareholder. Further restructuring charges of $7.5m have been recorded in the period inrelation to the decision made in 2013 to exit certain markets in Wood GroupPSN Production Services Americas business. For details of the EthosEnergy transaction see note 6. Full details of the 2013 exceptional items are included in the 2013 AnnualReport and Accounts. page 24 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 4. Dividends Unaudited Unaudited Audited Interim Interim Full Year June 2014 June 2013 December 2013 $m $m $mDividends on ordinary sharesFinal paid 54.5 41.4 41.4Interim paid - - 26.0Total dividends 54.5 41.4 67.4 After the balance sheet date, the directors declared an interimdividend of 8.9cents per share (2013: 7.1 cents) which will be paid on 25September 2014. The interim financial statements do not reflect the interimdividend, which will result in an estimated reduction of $32.7m in equityattributable to owners of the parent. This will be shown as an appropriationof retained earnings in the financial statements for the year ended 31December 2014. 5. Acquisitions In January 2014, the Group acquired the assets of Meesters, aspecialistfabrication business based in the Bakken shale region in North Dakota. In April2014, the Group acquired70% of the share capital of Cape Software Inc, a Texasbased provider of simulation software and services for industrial controlsystems used by the oil & gas and other process-based industries. Also in April2014, the Group acquired100% of the share capital of Calgary based SunstoneProjects Ltd, a pipeline consulting company providing engineering, procurementand construction management services to clients in the Canadian oil & gasindustry. Initial consideration (net of $4.4m cash acquired) for theseacquisitions was $23.4m and contingent consideration of $5.9m has beenprovided. Goodwill and intangible assets of $25.3m has been recorded on theacquisitions, the accounting for which will be finalised by 31 December 2014. Contingent consideration payments amounting to $37.4m were made during theperiod in relation to acquisitions completed in previous years. Estimatedcontingent consideration liabilities at 30 June 2014 amounted to $58.3m (2013:$85.7m) and are payable over the next three years. 6. Divestments On 6 May 2014, the Group's joint venture with Siemens, EthosEnergy was formed.Whilst Wood Group has a 51% shareholding in the new entity, all significantdecision making requires unanimous consent from both parties and thereforeWood Group do not have control and the new business is accounted for as a jointventure. The transaction was accounted for under IAS 28 as set out below. $m $mBook value of Wood Group net assets transferred to EthosEnergy 541.8Cash received and receivable (157.4)Wood Group net assets disposed 384.4Value of Wood Group's investment in EthosEnergy (384.4) -Wood Group costs associated with the creation of EthosEnergyCumulative foreign exchange losses recycled through the income statement 7.0Accelerated share based charges 4.8Legal and other costs 11.2 23.0Net impact of transaction included in exceptional items per note 3 23.0The value of Wood Group's investment in EthosEnergy represents thefair value of the net assets disposed. Under the joint venture agreement Wood Group received a 51% ownership interestin EthosEnergy and EthosEnergy was required to pay Wood Group $70.0m, of which$21.0m was paid in May 2014. In addition, an estimated $87.4m will be paid byEthosEnergy in respect of post close adjustments for items including workingcapital and indebtedness at the date of formation. Foreign exchange losses of $7.0m, which were recorded in thecurrency translation reserve in prior periods in relation to the businessestransferred to EthosEnergy, have been recycled through the income statement asrequired by IAS 21. Further details of the accelerated share based charges areprovided in note 13. page 25 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 7. Earnings per share Unaudited Interim Unaudited Interim Audited Full Year June 2014 June 2013 December 2013 Earnings Earnings Earnings attributable Number Earnings attributable attributable to equity of per to equity Number of Earnings to equity Number of Earnings shareholders shares share shareholders shares per share shareholders shares per share ($m) (millions) (cents) ($m) (millions) (cents) ($m) (millions) (cents) Basic pre- 129.7 364.8 35.5 131.5 363.6 36.2 294.3 363.3 81.0exceptionalExceptional items, 10.8 - 3.0 26.6 - 7.3 1.6 - 0.4net of tax andnon-controllinginterestsBasic 140.5 364.8 38.5 158.1 363.6 43.5 295.9 363.3 81.4Effect of dilutive - 9.8 (1.0) - 11.1 (1.3) - 10.2 (2.2)ordinary sharesDiluted 140.5 374.6 37.5 158.1 374.7 42.2 295.9 373.5 79.2Exceptional items, net (10.8) - (2.9) (26.6) - (7.1) (1.6) - (0.4)of tax and non-controllinginterestsoDiluted pre- 129.7 374.6 34.6 131.5 374.7 35.1 294.3 373.5 78.8exceptionalitemsAmortisation, 36.5 - 9.8 35.4 - 9.4 74.0 - 19.8net of taxAdjusted diluted 166.2 374.6 44.4 166.9 374.7 44.5 368.3 373.5 98.6Adjusted basic 166.2 364.8 45.6 166.9 363.6 45.9 368.3 363.3 101.4 Basic discontinued earnings per share for the period is (6.7) cents(2013: 6.4 cents) and diluted discontinued earnings per share is (6.5) cents(2013: 6.2 cents). The calculation of basic earnings per share (`EPS') is based on theearnings attributable to equity shareholders divided by the weighted averagenumber of ordinary shares in issue during the period, excluding shares held bythe Group's employee share trusts. For the calculation of diluted EPS, theweighted average number of ordinary shares in issue is adjusted to assumeconversion of all potentially dilutive ordinary shares. The Group's dilutiveordinary shares comprise share options granted to employees under EmployeeShare Option Schemes and the Long Term Retention Plan and shares and shareoptions awarded under the Group's Long Term Incentive Plan and Long Term Plan.Adjusted basic and adjusted diluted EPS are disclosed to show the resultsexcluding the impact of exceptional items and amortisation, net of tax. 8. Taxation The taxation charge, recognising the profits from joint ventures ona proportional basis, for the six months ended 30 June 2014is 27.4% which isthe anticipated effective rate on profit before taxation and exceptional itemsfor the year ending 31 December 2014 (June 2013: 27.5%). The table below showshow these rates reconcile to the amounts presented in the income statement. Unaudited Interim Unaudited Interim Audited Full Year June 2014 June 2013 December 2013 Profit Rate Profit Rate Profit Rate before Tax before Tax before Tax tax charge tax charge tax charge $m $m % $m $m % $m $m % Amounts reported in the income statement 233.3 58.9 25.2 176.3 37.5 21.3 346.8 82.2 23.7Adjust for joint ventures, discontinued (49.2) (8.4) 10.3 13.8 65.5 31.2operations and exceptional itemsAdjusted effective rate 184.1 50.5 27.4 186.6 51.3 27.5 412.3 113.4 27.5 9. Retirement benefit obligationsOn 30 June 2014, the Group closed its defined benefit scheme to futureaccrual. A past service gain of $6.7m arose as a result of the closure of thescheme and this amount has been credited to the income statement in theperiod. 10. Related party transactions The following transactions were carried out with the Group's jointventures in the six months to 30 June. These transactions comprise sales andpurchase of goods and services in the ordinary course of business. Thereceivables include loans to certain joint venture companies and amountsreceivable in relation to the formation of the EthosEnergy joint venture. Unaudited Unaudited Audited Interim Interim Full Year June 2014 June 2013 December 2013 $m $m $m Sales of goods and services to joint ventures 30.7 13.4 25.1Purchase of goods and services from joint ventures 3.0 4.0 11.7Receivables from joint ventures 219.8 73.8 87.0Payables to joint ventures 18.7 2.4 9.8 page 26 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 11. Cash generated from operations (Restated) (Restated) Unaudited Unaudited Audited Interim Interim Full Year June 2014 June 2013 December 2013 $m $m $mReconciliation of operating profit to cashgenerated from operations: Operating profit from continuing operations 242.3 183.7 364.6Less share of post-tax profit from joint (18.7) (8.8) (1.9)ventures 223.6 174.9 362.7 Operating (loss)/profit from discontinued (27.3) 35.2 55.2operations Adjustments (excluding share of joint ventures)Depreciation 23.7 21.4 44.8Loss on disposal of property plant and 2.1 0.7 1.6equipmentAmortisation of intangible assets 49.4 48.6 101.7Share based charges 17.4 14.2 22.4Increase /(decrease) in provisions 5.5 (10.7) (7.5)Dividends from joint ventures 10.3 6.1 24.7Exceptional items - non-cash impact 20.7 (14.0) (23.4) Changes in working capital (excluding effectof acquisition and divestment of subsidiaries)Increase in inventories (5.3) (20.7) (9.7)Increase in receivables (197.1) (198.1) (66.5)Increase in payables 9.0 59.5 11.0 Exchange movements 4.7 (7.7) (8.4)Cash generated from operations 136.7 109.4 508.6 12. Reconciliation of cash flow to movement in net debt At 1 January Exchange At 30 June 2014 Cash flow movements 2014 $m $m $m $mCash and cash equivalents 145.0 1.2 1.5 147.7Short term borrowings (74.1) 61.9 (0.5) (12.7)Long term borrowings (396.2) (186.8) (2.9) (585.9)Net debt (325.3) (123.7) (1.9) (450.9) At 30 June 2014, $26.5m of cash relating to the Dorad project was subject toan attachment order. 13. Share based charges Share based charges for the period of $12.6m (2013: $14.2m) relate to optionsgranted under the Group's executive share option schemes and awards under theLong Term Incentive Plan, the Long Term Plan and the Long Term Cash IncentivePlan (`LTCIP'). The charge is included in administrative expenses in the incomestatement.$11.9m of the charge is credited to equity and $0.7m in respect ofthe LTCIP is included in non-current liabilities. In addition, accelerated charges of $4.8m have been booked to exceptionalitems in the period relating to employees transferring to Ethos Energy. $1.3mof this amount is credited to equity and $3.5m, representing the cash amountpayable to former Wood Group employees in compensation for loss of theoptions, is credited to non-current liabilities. 14. Fair value of non-derivative financial assets and financialliabilities The fair value of short-term borrowings, trade and other payables,trade and other receivables, short-term deposits and cash at bank and in handapproximates to the carrying amount because of the short maturity of interestrates in respect of these instruments. Drawdowns under long-term bankfacilities are for periods of three months or less and as a result, book valueand fair value are considered to be the same. Details of derivative financial instruments are not disclosed inthe financial statements as they are not material. 15. Capital commitments At 30 June 2014 the Group had entered into contracts for futurecapital expenditure amounting to $2.2m. The capital expenditure relates toproperty plant and equipment and has not been provided in the financialstatements. page 27 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 16. Contingent liabilities From time to time, the Group is notified of claims in respect of work carriedout. Where management believes we are in a strong position to defend theseclaims no provision is made. In addition, the Group is currently cooperatingin an investigation into a facility where it previously provided services,however management do not believe that it is probable that any materialliability will arise from this matter. 17. Post balance sheet events In May 2014, the Group reached agreement to issue $375m ofunsecured senior notes in the US private placement market with drawdown inAugust and November 2014. These will be at a mix of 7, 10 and 12 yearmaturities at an average fixed rate of 3.74%. In July 2014, the Group reached agreement to acquire 100% of theshareholding of Agility Projects AS, a Norwegian engineering, procurement,construction management, installation and commissioning company for aconsideration of NOK 1,008m (approximately $164m). Based in Sandefjord, thecompany is focussed on the Norwegian Continental Shelf and employs 650personnel in various locations in Norway as well as having an engineeringoffice in Shanghai, China. The acquisition is expected to be completed duringthe third quarter of 2014, subject to regulatory approval. page 28 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 18. Reconciliation of primary financial statements as previously reported toadjust for change to equity accounting and to reclassify EthosEnergy activityas discontinued operations The financial statements for the 6 months ended 30 June 2013 and the yearended 31 December 2013 have been restated as a result of the introduction ofIFRS 11. Previously, the Group used proportional consolidation to account forits interests in joint ventures. Under IFRS 11, equity accounting must be usedto account for interests in joint ventures and therefore these periods havebeen restated accordingly. In addition, the income statement for the sixmonths to 30 June 2013 has been restated to show the results of the businessestransferred to EthosEnergy in May 2014 as discontinued operations. This notereconciles the figures as reported at June and December 2013with the restatedcomparative figures for those periods. Group income statement for 6 months to 30 June 2013 Reallocate Adjust companies for joint transferred ventures to As previously EthosEnergy previously proportionally as As reported consolidated discontinued restated $m $m $m $m Revenue from continuing operations 3,447.1 (302.0) (356.4) 2,788.7Cost of sales (2,896.1) 261.2 292.3 (2,342.6)Gross profit 551.0 (40.8) (64.1) 446.1Administrative expenses (339.3) 25.2 42.9 (271.2)Share of post-tax profit from joint ventures - 8.8 - 8.8Operating profit 211.7 (6.8) (21.2) 183.7Finance income 0.6 - - 0.6Finance expense (8.4) 0.4 - (8.0)Profit before tax from continuing operations 203.9 (6.4) (21.2) 176.3Taxation (56.0) 6.4 12.1 (37.5)Profit for the period from continuing operations 147.9 - (9.1) 138.8Profit from discontinued operations 14.0 - 9.1 23.1Profit for the period 161.9 - - 161.9The income statement has been restated to show the results from joint venturesunder equity accounting. In addition, the results of the businessestransferred to the EthosEnergy joint venture in May 2014 have beenreclassified as discontinued operations for comparative purposes. page 29 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 As Equity previously accountingGroup balance sheet as at 30 June 2013 reported adjustment As restated $m $m $mNon-current assetsGoodwill and other intangible assets 1,756.7 (23.4) 1,733.3Property plant and equipment 206.1 (40.6) 165.5Investment in joint ventures - 158.0 158.0Long term receivables 62.0 - 62.0Deferred tax assets 39.6 - 39.6 2,064.4 94.0 2,158.4Current assetsInventories 469.3 (129.9) 339.4Trade and other receivables 1,536.3 (131.7) 1,404.6Income tax receivable 34.3 (1.8) 32.5Cash and cash equivalents 155.0 (27.7) 127.3 2,194.9 (291.1) 1,903.8Current liabilitiesBorrowings 50.3 (23.1) 27.2Trade and other payables 1,210.7 (162.6) 1,048.1Income tax liabilities 120.2 (4.3) 115.9 1,381.2 (190.0) 1,191.2Net current assets 813.7 (101.1) 712.6Non-current liabilitiesBorrowings 322.4 - 322.4Deferred tax liabilities 6.4 (0.5) 5.9Retirement benefit obligations 52.3 - 52.3Other non-current liabilities 141.6 (5.2) 136.4Provisions 86.3 (1.4) 84.9 609.0 (7.1) 601.9Net assets 2,269.1 - 2,269.1 Equity attributable to owners of the parentShare capital 23.5 - 23.5Share premium 54.3 - 54.3Retained earnings 1,768.7 - 1,768.7Other reserves 414.0 - 414.0 2,260.5 - 2,260.5Non-controlling interests 8.6 - 8.6Total equity 2,269.1 - 2,269.1 There is no requirement to restate the June 2013 balance sheet to show theassets and liabilities of the businesses transferred to EthosEnergy in May2014 as assets and liabilities held for sale. page 30 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 As EquityGroup cash flow statement for 6 previously accounting Discontinuedmonths ended 30 June 2013 reported adjustment adjustment As restated $m $m $m $mReconciliation of operating profitto cash generated from operationsOperating profit from continuingoperations 211.7 (15.6) (21.2) 174.9Operating profit from discontinuedoperations - - 35.2 35.2Adjustments for:Depreciation 24.9 (3.5) - 21.4Loss on disposal of propertyplant and equipment 1.2 (0.5) - 0.7Amortisation of intangible assets 48.8 (0.2) - 48.6Share based charges 14.2 - - 14.2Decrease in provisions (11.0) 0.3 - (10.7)Dividends from joint ventures - 6.1 - 6.1Exceptional items - non-cash impact - - (14.0) (14.0) Changes in working capitalIncrease in inventories (35.1) 14.4 - (20.7)Increase in receivables (191.0) (7.1) - (198.1)Increase in payables 77.8 (18.3) - 59.5 Exchange movements (8.3) 0.6 - (7.7)Cash generated from operations 133.2 (23.8) - 109.4Tax paid (55.8) 7.3 - (48.5) Net cash from operating activities 77.4 (16.5) - 60.9 Cash flow from investing activitiesAcquisition of subsidiaries(net of cash acquired) (16.6) - - (16.6)Purchase of property, plantand equipment (38.9) 4.3 - (34.6)Proceeds from sale of property,plant and equipment 1.0 - - 1.0Purchase of intangible assets (26.0) 0.5 - (25.5)Interest received 0.6 - - 0.6Loans to joint ventures - (0.6) - (0.6)Investment in joint ventures - (1.3) - (1.3)Net cash used in investing activities (79.9) 2.9 - (77.0) Cash flows from financing activitiesProceeds from bank loans 59.0 0.4 - 59.4Purchase of shares by employeeshare trusts (12.7) - - (12.7)Disposal of shares by employeeshare trusts 5.7 - - 5.7Interest paid (13.6) 0.4 - (13.2)Dividends paid to shareholders (41.4) - - (41.4)Dividends paid to non-controlling interests (2.8) - (2.8)Net cash used in financing activities (5.8) 0.8 - (5.0) Net decrease in cash and cash equivalents (8.3) (12.8) - (21.1)Effect of exchange rate changeson cash and cash equivalents (9.0) 0.2 - (8.8)Opening cash and cash equivalents 172.3 (15.1) - 157.2 Closing cash and cash equivalents 155.0 (27.7) - 127.3 page 31 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 Group income statement for year ended 31 December 2013 Adjust for joint ventures As previously previously proportionally As reported consolidated restated $m $m $m Revenue from continuing operations 6,379.7 (626.5) 5,753.2Cost of sales (5,351.9) 548.6 (4,803.3)Gross profit 1,027.8 (77.9) 949.9Administrative expenses (662.2) 75.0 (587.2)Share of post-tax profit from joint ventures - 1.9 1.9Operating profit 365.6 (1.0) 364.6Finance income 1.1 - 1.1Finance expense (19.6) 0.7 (18.9)Profit before tax from continuing operations 347.1 (0.3) 346.8Taxation (92.6) 10.4 (82.2)Profit for the period from continuing operations 254.5 10.1 264.6Profit from discontinued operations 46.0 (10.1) 35.9Profit for the period 300.5 - 300.5 The income statement has been restated to show joint ventures under equityaccounting. The results of the businesses transferred to the EthosEnergy jointventure in May 2014, were already reclassified as discontinued in the December2013 accounts. page 32 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 Joint venture held for Equity As sale accounting AsGroup balance sheet as at 31 December 2013 reported adjustment adjustment restated $m $m $m $mNon-current assetsGoodwill and other intangible assets 1,875.5 3.8 (24.3) 1,855.0Property plant and equipment 221.3 2.4 (36.4) 187.3Investment in joint ventures - - 137.8 137.8Long term receivables 68.0 - - 68.0Deferred tax assets 27.2 - 1.0 28.2 2,192.0 6.2 78.1 2,276.3Current assetsInventories 101.1 35.1 (124.8) 11.4Trade and other receivables 1,365.1 9.9 (132.2) 1,242.8Income tax receivable 20.7 - (1.6) 19.1Assets held for sale 685.6 (51.2) - 634.4Cash and cash equivalents 183.5 - (38.5) 145.0 2,356.0 (6.2) (297.1) 2,052.7Current liabilitiesBorrowings 96.8 - (22.7) 74.1Trade and other payables 1,123.0 1.9 (173.8) 951.1Liabilities held for sale 185.4 (2.4) - 183.0Income tax liabilities 61.3 0.3 (2.4) 59.2 1,466.5 (0.2) (198.9) 1,267.4Net current assets 889.5 (6.0) (98.2) 785.3 Non-current liabilitiesBorrowings 396.2 - - 396.2Retirement benefit obligations 41.2 - - 41.2Other non-current liabilities 141.0 - 0.7 141.7Provisions 86.8 0.2 (20.8) 66.2 665.2 0.2 (20.1) 645.3Net assets 2,416.3 - - 2,416.3 Equity attributable to owners of the parentShare capital 23.6 - - 23.6Share premium 56.0 - - 56.0Retained earnings 1,856.6 - - 1,856.6Other reserves 471.2 - - 471.2 2,407.4 - - 2,407.4Non-controlling interests 8.9 - - 8.9Total equity 2,416.3 - - 2,416.3 page 33 John Wood Group PLC Notes to the interim financial statements for the six month period to 30 June 2014 Equity As accountingGroup cash flow statement for the year ended 31 December 2013 reported adjustment As restated $m $m $mCash generated from operationsOperating profit from continuing operations 365.6 (2.9) 362.7Operating profit from discontinued operations 65.8 (10.6) 55.2Adjustments for:Depreciation 51.9 (7.1) 44.8Loss on disposal of property plant and equipment 1.6 - 1.6Amortisation of intangible assets 102.1 (0.4) 101.7Share based charges 22.4 - 22.4Decrease in provisions (7.6) 0.1 (7.5)Dividends from joint ventures - 24.7 24.7Exceptional items - non-cash impact 4.6 (28.0) (23.4) Changes in working capitalIncrease in inventories (17.9) 8.2 (9.7)Increase in receivables (66.8) 0.3 (66.5)Increase in payables 23.2 (12.2) 11.0 Exchange movements (8.5) 0.1 (8.4)Cash generated from operations 536.4 (27.8) 508.6Tax paid (127.8) 4.1 (123.7) Net cash from operating activities 408.6 (23.7) 384.9 Cash flow from investing activitiesAcquisition of subsidiaries (net of cash acquired) (287.3) - (287.3)Acquisition of non-controlling interests (3.1) - (3.1)Disposal of subsidiaries (net of cash disposed) 0.3 - 0.3Purchase of property, plant and equipment (90.4) 5.9 (84.5)Proceeds from sale of property, plant and equipment 2.6 (0.3) 2.3Purchase of intangible assets (51.6) 0.7 (50.9)Interest received 1.1 - 1.1Loans to joint ventures - (6.6) (6.6)Investment in joint ventures - (1.3) (1.3)Net cash used in investing activities (428.4) (1.6) (430.0) Cash flows from financing activitiesProceeds from bank loans 165.4 1.3 166.7Purchase of shares by employee share trusts (47.8) - (47.8)Sale of shares by employee share trusts 7.9 - 7.9Interest paid (18.6) 0.6 (18.0)Dividends paid to shareholders (67.4) - (67.4)Dividends paid to minority interests (3.1) - (3.1)Net cash from financing activities 36.4 1.9 38.3 Net increase/(decrease) in cash and cash equivalents 16.6 (23.4) (6.8)Effect of exchange rate changes on cash (5.4) - (5.4)Opening cash and cash equivalents 172.3 (15.1) 157.2Closing cash and cash equivalents 183.5 (38.5) 145.0 page 34 Statement of directors' responsibilities for the six month period to 30 June 2014 The directors confirm that the interim financial statements havebeen prepared in accordance with IAS 34 `Interim Financial Reporting' asadopted by the European Union and that the interim management report includesa fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely: - an indication of important events that have occurred duringthe first six months and their impact on the financial statements and adescription of the principal risks and uncertainties for the remaining sixmonths of the financial year; and - material related party transactions in the first six monthsand any material changes in the related party transactions described in thelast annual report. The directors of John Wood Group PLC are listed in the Group's 2013 AnnualReport and Accounts. The following changes have occurred since the signing ofthe 2013 accounts: A G Langlands resigned as a director and as Chairman on 14May 2014 and J M Brown was appointed as a director on 15 May 2014. R KeillerChief Executive A G SempleChief Financial Officer 18 August 2014 page 35 Independent review reportto John Wood Group PLC for the six month period to 30 June 2014 Report on the consolidated interim financial statements Our conclusion We have reviewed the consolidated interim financial statements, defined below,in the half-yearly financial report of John Wood Group PLC for the six monthsended 30 June 2014.Based on our review, nothing has come to our attention thatcauses us to believe that the consolidated interim financial statements arenot prepared, in all material respects, in accordance with InternationalAccounting Standard 34 as adopted by the European Union and the Disclosure andTransparency Rules of the United Kingdom's Financial Conduct Authority. This conclusion is to be read in the context of what we say in the remainderof this report. What we have reviewed The consolidated interim financial statements, which are prepared by John WoodGroup PLC, comprise: the Group balance sheet as at 30 June 2014; the Group income statement for the period then ended; the Group statement of comprehensive income for the period then ended; the Group statement of changes in equity for the period then ended; the Group cash flow statement for the period then ended; and the notes to the interim financial statements. As disclosed in note 1, the financial reporting framework that has beenapplied in the preparation of the full annual financial statements of thegroup is applicable law and International Financial Reporting Standards(IFRSs) as adopted by the European Union. The consolidated interim financial statements included in the half-yearlyfinancial report have been prepared in accordance with InternationalAccounting Standard 34, `Interim Financial Reporting', as adopted by theEuropean Union and the Disclosure and Transparency Rules of the UnitedKingdom's Financial Conduct Authority. What a review of consolidated financial statements involves We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, `Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted in accordancewith International Standards on Auditing (UK and Ireland) and, consequently,does not enable us to obtain assurance that we would become aware of allsignificant matters that might be identified in an audit. Accordingly, we donot express an audit opinion. We have read the other information contained in the half-yearly financialreport and considered whether it contains any apparent misstatements ormaterial inconsistencies with the information in the consolidated interimfinancial statements. Responsibilities for the consolidated interim financial statements and the review Our responsibilities and those of the directors The half-yearly financial report, including the consolidated interim financialstatements, is the responsibility of, and has been approved by, the directors.The directors are responsible for preparing the half-yearly financial reportin accordance with the Disclosure and Transparency Rules of the UnitedKingdom's Financial Conduct Authority. Our responsibility is to express to the company a conclusion on theconsolidated interim financial statements in the half-yearly financial reportbased on our review. This report, including the conclusion, has been preparedfor and only for the company for the purpose of complying with the Disclosureand Transparency Rules of the Financial Conduct Authority and for no otherpurpose. We do not, in giving this conclusion, accept or assume responsibilityfor any other purpose or to any other person to whom this report is shown orinto whose hands it may come save where expressly agreed by our prior consentin writing. PricewaterhouseCoopers LLP Chartered Accountants 18 August 2014 Aberdeen page 36 John Wood Group PLC Shareholder information Payment of dividends The Company declares its dividends in US dollars. As a result ofthe shareholders being mainly UK based, dividends will be paid in sterling,but if you would like to receive your dividend in dollars please contact theRegistrars at the address below. All shareholders will receive dividends insterling unless requested. If you are a UK based shareholder, the Companyencourages you to have your dividends paid through the BACS (Banker'sAutomated Clearing Services) system. The benefit of the BACS payment method isthat the Registrars post the tax vouchers directly to the shareholders, whilstthe dividend is credited on the payment date to the shareholder's Bank orBuilding Society account. Shareholders who have not yet arranged for theirdividends to be paid direct to their Bank or Building Society account and wishto benefit from this service should contact the Registrars at the addressbelow. Sterling dividends will be translated at the closing mid-point spotrate on 29August 2014 as published in the Financial Times on 30 August 2014. Officers and advisers Secretary and Registered Office Registrars R M B Brown EquinitiJohn Wood Group PLC Aspect HouseJohn Wood House Spencer RoadGreenwell Road LancingAberdeen West SussexAB12 3AX BN99 6DA Tel: 01224 851000 Tel: 0871 384 2649 Stockbrokers Independent Auditor JPMorgan Cazenove Limited PricewaterhouseCoopers LLPCredit Suisse Chartered Accountants and Statutory Auditors 32 Albyn PlaceCompany solicitors AberdeenSlaughter and May AB10 1YL Financial calendar 6 months ended Year ending 31 December 30 June 2014 2014 Results announced 19 August 2014 Late February 2015Ex-dividend date 27 August2014 April 2015Dividend record 29August2014 April 2015dateDividend payment 25 May 2015date September2014Annual General May 2015Meeting The Group's Investor Relations website can be accessed at www.woodgroup.com.

page 37