##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 1-11953
 Willbros Group, Inc.
  Republic of Panama
    
    98-0160660(Jurisdiction of incorporation)
    
    (I.R.S. Employer Identification Number)
 Plaza 2000 Building
50th Street, 8th Floor
P.O. Box 0816-01098
Panama, Republic of Panama
Telephone No.: +50-7-213-0947
 NOT APPLICABLE
  þ o
  Large accelerated filer þ
    
    Accelerated filer o

    Non-accelerated filer o (Do not check if a smaller reporting company)

    Smaller reporting company o
 o þ




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##### 



WILLBROS GROUP, INC.
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 2008
 PagePART I  FINANCIAL INFORMATIONItem 1 - Financial StatementsCondensed Consolidated Balance Sheets as of March 31, 2008 (Unaudited) and
December 31, 2007
    
    
    3Condensed Consolidated Statements of Operations (Unaudited) for the three
months ended March 31, 2008 and 2007
    
    
    4Condensed Consolidated Statement of Stockholders Equity and Comprehensive
Income (Loss) (Unaudited) for the three months ended March 31, 2008
    
    
    5Condensed Consolidated Statements of Cash Flows (Unaudited) for the
three months ended March 31, 2008 and 2007
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    8Item 2 - Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    29Item 3 - Quantitative and Qualitative Disclosures About Market Risk
    
    
    40Item 4 - Controls and Procedures
    
    
    40PART II  OTHER INFORMATIONItem 1 - Legal Proceedings
    
    
    42Item 1A
- Risk Factors
    
    
    42Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    42Item 3 - Defaults upon Senior Securities
    
    
    42Item 4 - Submission of Matters to a Vote of Security Holders
    
    
    42Item 5 - Other Information
    
    
    42Item 6 - Exhibits
    
    
    42SIGNATURE
    
    
    43EXHIBIT INDEX
    
    
    44Amended and Restated Management Incentive Compensation ProgramCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 1350Certification of CFO Pursuant to Section 1350
  2




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##### Table of Contents



WILLBROS GROUP, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and per share amounts)
(Unaudited)
 
 PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 March 31,
    
    
    December 31,2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    115,609
    
    
    $
    92,886Accounts receivable, net of allowance of $696 and $1,108
    
    
    262,896
    
    
    
    251,746Contract cost and recognized income not yet billed
    
    
    85,384
    
    
    
    49,233Prepaid expenses
    
    
    20,852
    
    
    
    7,555Parts and supplies inventories
    
    
    2,948
    
    
    
    2,902Assets of discontinued operations
    
    
    6,395
    
    
    
    3,211Total current assets
    
    
    494,084
    
    
    
    407,533Property, plant and equipment, net of accumulated depreciation
of $103,254 and $97,268
    
    
    169,300
    
    
    
    159,766Goodwill
    
    
    142,758
    
    
    
    143,241Other intangible assets
    
    
    47,550
    
    
    
    50,206Deferred tax assets
    
    
    8,137
    
    
    
    7,769Other assets
    
    
    9,476
    
    
    
    10,898Total assets
    
    $
    871,305
    
    
    $
    779,413LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Notes payable and current portion of long-term debt
    
    $
    26,265
    
    
    $
    13,172Current portion of government obligations
    
    
    12,575
    
    
    
    8,075Accounts payable and accrued liabilities
    
    
    200,696
    
    
    
    156,342Contract billings in excess of cost and recognized income
    
    
    25,365
    
    
    
    22,868Accrued income taxes
    
    
    9,022
    
    
    
    4,750Liabilities of discontinued operations
    
    
    1,071
    
    
    
    978Total current liabilities
    
    
    274,994
    
    
    
    206,1852.75% convertible senior notes
    
    
    59,357
    
    
    
    68,0006.5% senior convertible notes
    
    
    32,050
    
    
    
    32,050Long-term debt
    
    
    48,418
    
    
    
    39,124Long-term portion of government obligations
    
    
    19,725
    
    
    
    24,225Long-term liability for unrecognized tax benefits
    
    
    6,622
    
    
    
    6,612Deferred tax liabilities
    
    
    6,442
    
    
    
    6,879Other liabilities
    
    
    237
    
    
    
    237Total liabilities
    
    
    447,845
    
    
    
    383,312Contingencies and commitments (Note 13)Stockholders equity:Class A preferred stock, par value $.01 per share, 1,000,000
shares authorized, none issued
    
    
    
    
    
    
    Common stock, par value $.05 per share, 70,000,000 shares
authorized; 39,132,166 shares issued (38,276,545 at
December 31, 2007)
    
    
    1,956
    
    
    
    1,913Capital in excess of par value
    
    
    567,338
    
    
    
    556,223Accumulated deficit
    
    
    (154,272
    )
    
    
    (175,936
    )Treasury stock at cost, 255,733 shares (222,839 at
December 31, 2007)
    
    
    (4,416
    )
    
    
    (3,298
    )Accumulated other comprehensive income
    
    
    12,854
    
    
    
    17,199Total stockholders equity
    
    
    423,460
    
    
    
    396,101Total liabilities and stockholders equity
    
    $
    871,305
    
    
    $
    779,413
  3




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##### Table of Contents



WILLBROS GROUP, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except share and per share amounts)
(Unaudited)
 Three Months EndedMarch 31,2008
    
    
    2007Contract revenue
    
    $
    491,634
    
    
    $
    206,709Operating expenses:Contract
    
    
    425,733
    
    
    
    196,917Amortization of intangibles
    
    
    2,656
    
    
    
    General and administrative
    
    
    28,367
    
    
    
    11,796456,756
    
    
    
    208,713Operating income (loss)
    
    
    34,878
    
    
    
    (2,004
    )Other income (expense):Interest income
    
    
    1,006
    
    
    
    1,564Interest expense
    
    
    (2,535
    )
    
    
    (2,454
    )Other, net
    
    
    (427
    )
    
    
    (190
    )(1,956
    )
    
    
    (1,080
    )Income (loss) from continuing operations before income taxes
    
    
    32,922
    
    
    
    (3,084
    )Provision for income taxes
    
    
    13,817
    
    
    
    255Net income (loss) from continuing operations
    
    
    19,105
    
    
    
    (3,339
    )Income (loss) from discontinued operations net of provision for
income taxes
    
    
    2,559
    
    
    
    (8,508
    )Net income (loss)
    
    $
    21,664
    
    
    $
    (11,847
    )Basic income (loss) per common share:Income (loss) from continuing operations
    
    $
    0.50
    
    
    $
    (0.13
    )Income (loss) from discontinued operations
    
    
    0.07
    
    
    
    (0.33
    )Net income (loss)
    
    $
    0.57
    
    
    $
    (0.46
    )Diluted income (loss) per common share:Income (loss) from continuing operations
    
    $
    0.46
    
    
    $
    (0.13
    )Income (loss) from discontinued operations
    
    
    0.06
    
    
    
    (0.33
    )Net income (loss)
    
    $
    0.52
    
    
    $
    (0.46
    )Weighted average number of common shares outstanding:Basic
    
    
    38,017,280
    
    
    
    25,503,652Diluted
    
    
    43,915,654
    
    
    
    25,503,652
  4




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##### Table of Contents



WILLBROS GROUP, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 (In thousands, except share and per share amounts)
(Unaudited)
 AccumulatedOtherCapital in
    
    
    
    
    
    
    
    
    
    
    Comprehen-
    
    
    TotalCommon Stock
    
    
    Excess of
    
    
    Accumulated
    
    
    Treasury
    
    
    sive Income
    
    
    StockholdersShares
    
    Par Value
    
    
    Par Value
    
    
    Deficit
    
    
    Stock
    
    
    (Loss)
    
    
    EquityBalance, December 31, 2007
    
    
    38,276,545
    
    
    $
    1,913
    
    
    $
    556,223
    
    
    $
    (175,936
    )
    
    $
    (3,298
    )
    
    $
    17,199
    
    
    $
    396,101Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,664
    
    
    
    
    
    
    
    
    
    
    
    21,664Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,345
    )
    
    
    (4,345
    )Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,319Deferred compensation
    
    
    
    
    
    
    
    
    
    
    2,449
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,449Restricted stock grants
    
    
    363,439
    
    
    
    18
    
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vesting of restricted
stock rights
    
    
    20,269
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additions to treasury stock,
vesting and
forfeitures of restricted stock
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    (1,118
    )
    
    
    
    
    
    
    (1,134
    )Exercise of stock options
    
    
    28,000
    
    
    
    2
    
    
    
    331
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    333Additional costs of public offering
    
    
    
    
    
    
    
    
    
    
    (251
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (251
    )Stock issued on conversion
of 2.75% convertible senior notes
    
    
    443,913
    
    
    
    22
    
    
    
    8,621
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,643Balance, March 31, 2008
    
    
    39,132,166
    
    
    $
    1,956
    
    
    $
    567,338
    
    
    $
    (154,272
    )
    
    $
    (4,416
    )
    
    $
    12,854
    
    
    $
    423,460
  5




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##### Table of Contents



WILLBROS GROUP, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except share and per share amounts)
(Unaudited)
 Three MonthsEnded March 31,2008
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    21,664
    
    
    $
    (11,847
    )Reconciliation of net income (loss) to net cash provided by
(used in) operating activities:(Income)
loss  from discontinued operations
    
    
    (2,559
    )
    
    
    8,508Depreciation and amortization
    
    
    10,704
    
    
    
    3,456Amortization of debt issue costs
    
    
    286
    
    
    
    519Amortization of deferred compensation, net
    
    
    2,433
    
    
    
    987Loss (gain) on sales of property, plant and equipment
    
    
    (23
    )
    
    
    82Provision for bad debts
    
    
    266
    
    
    
    142Deferred income tax provision
    
    
    578
    
    
    
    (2,344
    )Equity in joint ventures
    
    
    67
    
    
    
    Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (13,425
    )
    
    
    13,076Contract cost and recognized income not yet billed
    
    
    (37,840
    )
    
    
    (3,108
    )Prepaid expenses
    
    
    (584
    )
    
    
    (1,110
    )Parts and supplies inventories
    
    
    (65
    )
    
    
    (195
    )Other assets
    
    
    (318
    )
    
    
    (1,116
    )Accounts payable and accrued liabilities
    
    
    46,393
    
    
    
    (5,866
    )Accrued income taxes
    
    
    4,262
    
    
    
    (140
    )Contract billings in excess of cost and recognized income
    
    
    2,543
    
    
    
    (8,384
    )Cash provided by (used in) operating activities of continuing
operations
    
    
    34,382
    
    
    
    (7,340
    )Cash provided by (used in) operating activities of
discontinued operations
    
    
    (263
    )
    
    
    (9,650
    )Cash provided by (used in) operating activities
    
    
    34,119
    
    
    
    (16,990
    )Cash flows from investing activities:Proceeds from the sale of discontinued operations, net
    
    
    
    
    
    
    130,568Proceeds from sales of property, plant and equipment
    
    
    36
    
    
    
    46Rebates from purchases of property, plant and equipment
    
    
    916
    
    
    
    Purchases of property, plant and equipment
    
    
    (3,556
    )
    
    
    (1,826
    )Acquisition of subsidiaries
    
    
    19
    
    
    
    Cash provided by (used in) investing activities of continuing
operations
    
    
    (2,585
    )
    
    
    128,788Cash used in investing activities of discontinued operations
    
    
    
    
    
    
    Cash provided by (used in) investing activities
    
    
    (2,585
    )
    
    
    128,788Cash flows from financing activities:Payments on capital leases
    
    
    (3,624
    )
    
    
    (676
    )Repayment of notes payable
    
    
    (2,725
    )
    
    
    (3,261
    )Acquisition of treasury stock
    
    
    (1,118
    )
    
    
    (493
    )Proceeds from exercise of stock options
    
    
    333
    
    
    
    510Additional costs of public offering of common stock
    
    
    (251
    )
    
    
    Costs of debt issues
    
    
    (49
    )
    
    
    (265
    )Cash used in financing activities of continuing operations
    
    
    (7,434
    )
    
    
    (4,185
    )Cash provided by financing activities of discontinued operations
    
    
    
    
    
    
    Cash used in financing activities
    
    
    (7,434
    )
    
    
    (4,185
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (1,377
    )
    
    
    183Cash provided by all activities
    
    
    22,723
    
    
    
    107,796Cash and cash equivalents, beginning of period
    
    
    92,886
    
    
    
    37,643Cash and cash equivalents, end of period
    
    $
    115,609
    
    
    $
    145,439
 6




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##### Table of Contents



WILLBROS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except share and per share amounts)
(Unaudited)
 Three MonthsEnded March 31,2008
    
    
    2007Supplemental disclosures of cash flow information:Cash paid for interest
    
    $
    2,196
    
    
    $
    1,229Cash paid for income taxes (including discontinued operations)
    
    $
    8,893
    
    
    $
    2,557Supplemental non-cash investing and financing transactions:Equipment and property obtained by capital leases
    
    $
    17,874
    
    
    $
    2,233Prepaid insurance obtained by note payable
    
    $
    12,754
    
    
    $
    10,051Common stock issued for conversion of 2.75% convertible senior notes
    
    $
    8,643
    
    
    $
    Receivable obtained by sale of discontinued operations
    
    $
    
    
    
    $
    2,625
  7




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##### Table of Contents



WILLBROS GROUP, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 1. The Company and Basis of Presentation
         2. New Accounting Pronouncements
 SFAS No. 157
   8




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 2. New Accounting Pronouncements (continued)
  SFAS No. 159
  SFAS No. 141-R
  SFAS No. 160
  3. Acquisitions
  Integrated Service Company LLC
  9




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 3. Acquisitions (continued)
 Midwest Management (1987) Ltd.
  4. Contracts in Progress
   March 31,
    
    
    December 31,2008
    
    
    2007Cost incurred on contracts in progress
    
    $
    998,960
    
    
    $
    720,799Recognized income
    
    
    108,869
    
    
    
    74,2281,107,829
    
    
    
    795,027Progress billings and advance payments
    
    
    (1,047,810
    )
    
    
    (768,662
    )$
    60,019
    
    
    $
    26,365Contract cost and recognized income not yet billed
    
    $
    85,384
    
    
    $
    49,233Contract billings in excess of cost and recognized income
    
    
    (25,365
    )
    
    
    (22,868
    )$
    60,019
    
    
    $
    26,365
  5. Goodwill and Other Intangible Assets
  Upstream
    
    
    DownstreamO&G
    
    
    O&G
    
    
    ConsolidatedBalance as of December 31, 2007
    
    $
    12,818
    
    
    $
    130,423
    
    
    $
    143,241Purchase price adjustments
    
    
    (1,370
    )
    
    
    866
    
    
    
    (504
    )Translation adjustments and other
    
    
    21
    
    
    
    
    
    
    
    21Balance as of March 31, 2008
    
    $
    11,469
    
    
    $
    131,289
    
    
    $
    142,758
  10




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 5. Goodwill and Other Intangible Assets (continued)
  Weighted-AverageGross
    
    
    
    
    
    
    
    
    
    
    RemainingCarrying
    
    
    Accumulated
    
    
    Net Carrying
    
    
    AmortizationAmount
    
    
    Amortization
    
    
    Amount
    
    
    PeriodCustomer relationships
    
    $
    40,500
    
    
    $
    1,117
    
    
    $
    39,383
    
    
    11.8 yrsBacklog
    
    
    10,500
    
    
    
    2,333
    
    
    
    8,167
    
    
    1.2 yrsTotal amortizable intangible assets
    
    $
    51,000
    
    
    $
    3,450
    
    
    $
    47,550
   Fiscal year:2008
    
    $
    7,7642009
    
    
    6,2682010
    
    
    3,3522011
    
    
    3,3522012
    
    
    3,3522013
    
    
    3,352Thereafter
    
    
    20,110Total amortization
    
    $
    47,550
 6. Government Obligations
     11




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 7. Long-term Debt
  March 31,
    
    
    December 31,2008
    
    
    2007Capital lease obligations
    
    $
    70,372
    
    
    $
    51,2222.75% convertible senior notes
    
    
    59,357
    
    
    
    68,0006.5% senior convertible notes
    
    
    32,050
    
    
    
    32,050Other obligations
    
    
    80
    
    
    
    992007 Credit Facility
    
    
    
    
    
    
    Total long-term debt
    
    
    161,859
    
    
    
    151,371Less: current portion
    
    
    (16,221
    )
    
    
    (12,197
    )Long-term debt, net
    
    $
    145,638
    
    
    $
    139,174
 2007 Credit Facility
     
    
    A minimum net worth in an amount of not less than the sum of $328,037 plus 50 percent of
consolidated net income earned in each fiscal quarter ended after March 31, 2008 plus
adjustments for certain equity transactions;
 
    
    A maximum leverage ratio of 2.50 to 1.00 for the fiscal quarters ending March 31, 2008,
a maximum leverage ratio of 2.25 to 1.00 for the fiscal quarter ending June 30, 2008 and
two fiscal quarters thereafter and a maximum leverage ratio of 2.00 to 1.00 for each fiscal
quarter ending after December 31, 2008;
 12




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 7. Long-term Debt (continued)
 
    
    A minimum fixed charge coverage ratio of not less than
3.00 to 1.00, for the fiscal
quarter ending March 31, 2008, a fixed charge coverage ratio of not less than 3.25 to 1.00
for the fiscal quarter ending June 30, 2008 and two fiscal quarters thereafter and a fixed
charge ratio of not less than 3.50 to 1.00 for each fiscal quarter thereafter;
    
    If the Companys liquidity during any fiscal quarter
falls
below $35,000, a maximum capital expenditure ratio of 1.50 to 1.00 (cost of assets added through
purchase or capital lease) for such fiscal quarter and for each of the three quarters
thereafter if our liquidity falls below $35,000.
   6.5% Senior Convertible Notes
       13




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 7. Long-term Debt (continued)
     2.75% Convertible Senior Notes
    14




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 7. Long-term Debt (continued)
     Capital Leases
   March 31,
    
    
    December 31,2008
    
    
    2007Construction equipment
    
    $
    72,885
    
    
    $
    56,171Autos, trucks and trailers
    
    
    4,177
    
    
    
    4,282Furniture and office equipment
    
    
    
    
    
    
    535Total assets held under capital lease
    
    
    77,062
    
    
    
    60,988Less: accumulated depreciation
    
    
    (11,984
    )
    
    
    (9,251
    )Net assets under capital lease
    
    $
    65,078
    
    
    $
    51,737
 8. Income (Loss) Per Share
  15




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 8. Income (Loss) Per Share (continued)
  Three MonthsEnded March 31,2008
    
    
    2007Net income
(loss) from continuing operations (numerator for basic
calculation)
    
    $
    19,105
    
    
    $
    (3,339
    )Add: Interest and debt issuance costs associated with convertible notes
    
    
    1,205
    
    
    
    Net income
(loss) from continuing operations applicable to common shares
(numerator for diluted calculation)
    
    $
    20,310
    
    
    $
    (3,339
    )Weighted average number of commonWeighted average number of common shares outstanding for basic
income (loss) share
    
    
    38,017,280
    
    
    
    25,503,652Weighted average number of potentially dilutive common shares outstanding
    
    
    5,898,374
    
    
    
    Weighted average number of common shares outstanding for diluted
income (loss) share
    
    
    43,915,654
    
    
    
    25,503,652Income (loss) per common share from continuing operations:Basic
    
    $
    0.50
    
    
    $
    (0.13
    )Diluted
    
    $
    0.46
    
    
    $
    (0.13
    )
  Three MonthsEnded March 31,2008
    
    
    20072.75% Convertible senior notes
    
    
    
    
    
    
    3,595,2776.5% Senior convertible notes
    
    
    
    
    
    
    4,813,171Stock options
    
    
    
    
    
    
    771,000Warrants to purchase common stock
    
    
    
    
    
    
    558,354Restricted stock and restricted stock rights
    
    
    
    
    
    
    520,127
    
    
    
    10,257,929
  9. Segment Information
 Upstream
O&G, Downstream O&G Engineering.
 16




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 9. Segment Information (continued)
   Upstream
    
    
    DownstreamO&G
    
    
    O&G
    
    
    Engineering
    
    
    ConsolidatedRevenue
    
    $
    344,423
    
    
    $
    80,610
    
    
    $
    66,601
    
    
    $
    491,634Operating expenses
    
    
    321,257
    
    
    
    77,663
    
    
    
    57,836
    
    
    
    456,756Operating income
    
    $
    23,166
    
    
    $
    2,947
    
    
    $
    8,765
    
    
    
    34,878Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,956
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,817Net income from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,105Income from discontinued operations net
of provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,559Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    21,664
  Upstream
    
    
    DownstreamO&G
    
    
    O&G
    
    
    Engineering
    
    
    ConsolidatedRevenue
    
    $
    171,585
    
    
    $
    
    
    
    $
    35,124
    
    
    $
    206,709Operating expenses
    
    
    178,085
    
    
    
    
    
    
    
    30,628
    
    
    
    208,713Operating income (loss)
    
    $
    (6,500
    )
    
    $
    
    
    
    $
    4,496
    
    
    
    (2,004
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,080
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    255Net loss from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,339
    )Loss from discontinued operations net of
provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,508
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (11,847
    )
  March 31,
    
    
    December 31,2008
    
    
    2007Upstream O&G
    
    $
    426,052
    
    
    $
    369,255Downstream O&G
    
    
    140,678
    
    
    
    123,707Engineering
    
    
    70,291
    
    
    
    50,286Corporate
    
    
    227,889
    
    
    
    232,954Total segment assets
    
    $
    864,910
    
    
    $
    776,202
 10. Stockholders Equity
  Stockholder Rights Plan
    17




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 10. Stockholders Equity (continued)
   Stock Ownership Plans
      WeightedNumber of
    
    
    AverageOptions
    
    
    Exercise PriceOutstanding at January 1, 2008
    
    
    418,750
    
    
    $
    14.96Granted
    
    
    
    
    
    
    Exercised
    
    
    28,000
    
    
    
    11.88Forfeited
    
    
    
    
    
    
    Outstanding at March 31, 2008
    
    
    390,750
    
    
    $
    15.19Exercisable at March 31, 2008
    
    
    259,916
    
    
    $
    13.59
   18




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 10. Stockholders Equity (continued)
  WeightedAverage Grant-Shares
    
    
    Date Fair ValueNonvested, January 1, 2008
    
    
    130,834
    
    
    $
    6.86Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    Nonvested, March 31, 2008
    
    
    130,834
    
    
    $
    6.86
  WeightedNumber of
    
    
    Average Grant-RSUs
    
    
    Date Fair ValueOutstanding at January 1, 2008
    
    
    548,688
    
    
    $
    20.89Granted
    
    
    446,594
    
    
    
    35.69Vested
    
    
    131,340
    
    
    
    19.64Forfeited
    
    
    1,500
    
    
    
    18.72Outstanding March 31, 2008
    
    
    862,442
    
    
    $
    28.75
   Warrants to Purchase Common Stock
  11. Income Taxes
   FIN 48
  19




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 11. Income Taxes (continued)
    Beginning
FIN 48 reserve at December 31, 2007
    
    $
    6,612Change in measurement of existing tax positions
    
    
    3Additions based on tax positions related to the current year
    
    
    7Newly identified tax positions
    
    
    Balance at March 31, 2008
    
    $
    6,622
  12. Foreign Exchange Risk
  13. Contingencies, Commitments and Other Circumstances
 Contingencies
 Resolution of criminal and regulatory matters
   
    
    A six-count criminal information will be filed against WGI and WII as part of the execution of the DPAs between the DOJ and each of WGI and WII. The six counts include substantive violations of the anti-bribery provisions of the FCPA, and violations of the FCPAs books-and-records provisions. All six counts relate to operations in Nigeria, Ecuador and Bolivia during the period from 1996 to 2005.
    
    Provided that WGI and WII fully comply with the DPAs for a period of approximately three years, the DOJ will agree not to continue the criminal prosecution and, at the conclusion of that time, will move to dismiss the criminal information.
    
    The DPAs will require, for each of their three year terms, among other things, full cooperation with the government; compliance with all federal criminal law, including but not limited to the FCPA; and a three- year monitor for WGI and its subsidiary companies, primarily focused on international operations outside of North America, the costs of which are payable by WGI.
 20




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 13. Contingencies, Commitments and Other Circumstances (continued)
 
    
    The Company will be subject to $22,000 in fines related to FCPA violations. The fines
are now expected to be payable as follows: an initial payment of
$10,000 on signing followed by three equal installments of $4,000 annually for
approximately three years thereafter, with no interest payable on the unpaid amounts.
  
    
    The Company will consent to the filing in federal district court of a complaint by the
SEC (the Complaint), without admitting or denying the allegations in the Complaint, and
to the imposition by the court of a final judgment of permanent injunction against us. The
Complaint will allege civil violations of the antifraud provisions of the Securities Act
and the Securities Exchange Act, the FCPAs anti-bribery provisions, and the reporting,
books-and-records and internal controls provisions of the Securities Exchange Act. The
final judgment will not take effect until it is confirmed by the court, and will
permanently enjoin us from future violations of those provisions.
    
    The final judgment will order the Company to pay $10,300, consisting of $8,900 for
disgorgement of profits and approximately $1,400 of pre-judgment interest. The disgorgement
and pre-judgment interest is payable in four equal installments of $2,575, first on
signing, and annually for approximately three years thereafter. Post-judgment interest will
be payable on the outstanding balance. In January 2008, the Company submitted a signed
Consent Decree and Agreed Final Judgment to the SEC and, as required by the SEC, deposited
the first installment payment of $2,575 into an escrow account.
      21




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WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 13. Contingencies, Commitments and Other Circumstances (continued)
 Other
  Commitments
      22




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WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 13. Contingencies, Commitments and Other Circumstances (continued)
  Other Circumstances
     14. Discontinuance of Operations, Asset Disposals, and Transition Services Agreement
 Strategic Decisions
  Nigeria Assets and Nigeria-Based Operations
 Share Purchase Agreement
  23




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WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 14. Discontinuance of Operations, Asset Disposals, and Transition Services Agreement (continued)
     Global Settlement Agreement (GSA)
  
    
    A reduction to the purchase price of $25,000;
    
    Ascot agreed to provide supplemental backstop letters of credit in the amount of $20,322
issued by a non-Nigerian bank approved by the Company;
    
    Ascot provided specific indemnities related to two ongoing projects that Ascot acquired
as part of the Agreement;
 24




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 14. Discontinuance of Operations, Asset Disposals, and Transition Services Agreement (continued)
 
    
    Ascot and the Company agreed that all working capital adjustments as provided for in the
Agreement were resolved; and
    
    Except as provided in the GSA, Ascot and the Company waived all of their respective
rights and obligations relating to indemnifications provided in the February 7, 2007 Share
Purchase Agreement concerning any breach of a covenant or any representation or warranty.
  Letters of Credit
   Transition Services Agreement
   Residual Equipment in Nigeria
  25




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 14. Discontinuance of Operations, Asset Disposals, and Transition Services Agreement (continued)
 Venezuela
 Business Disposal
  TXP-4 Plant
 Asset Disposal
   Profit Disgorgement
  Insurance Recovery
  26




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 14. Discontinuance of Operations, Asset Disposals, and Transition Services Agreement (continued)
 Results of Discontinued Operations
  Three Months Ended March 31, 2008DiscontinuedNigeria
    
    
    Nigeria TSA
    
    
    OperationsContract revenue
    
    $
    
    
    
    $
    1,230
    
    
    $
    1,230Operating expenses:Contract
    
    
    
    
    
    
    1,458
    
    
    
    1,458General and administrative
    
    
    
    
    
    
    20
    
    
    
    20Operating loss
    
    
    
    
    
    
    (248
    )
    
    
    (248
    )Other income (expense)
    
    
    3,004
    
    
    
    (189
    )
    
    
    2,815Income (loss) before income taxes
    
    
    3,004
    
    
    
    (437
    )
    
    
    2,567Provision for income taxes
    
    
    
    
    
    
    8
    
    
    
    8Net income (loss)
    
    $
    3,004
    
    
    $
    (445
    )
    
    $
    2,559
 Three Months Ended March 31, 2007DiscontinuedNigeria
    
    
    Nigeria TSA
    
    
    OperationsContract revenue
    
    $
    30,046
    
    
    $
    6,362
    
    
    $
    36,408Operating expenses:Contract
    
    
    34,360
    
    
    
    5,864
    
    
    
    40,224General and administrative
    
    
    3,472
    
    
    
    95
    
    
    
    3,567Operating income (loss)
    
    
    (7,786
    )
    
    
    403
    
    
    
    (7,383
    )Other income
    
    
    216
    
    
    
    
    
    
    
    216Income (loss) before income taxes
    
    
    (7,570
    )
    
    
    403
    
    
    
    (7,167
    )Provision for income taxes
    
    
    1,092
    
    
    
    249
    
    
    
    1,341Net income (loss)
    
    $
    (8,662
    )
    
    $
    154
    
    
    $
    (8,508
    )
 27




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WILLBROS GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
(Unaudited)
 14. Discontinuance of Operations, Asset Disposals, and Transition Services Agreement (continued)
 Financial Position of Discontinued Operations
  March 31, 2008DiscontinuedNigeria
    
    
    Nigeria TSA
    
    
    OperationsCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    307
    
    
    $
    307Accounts receivable, net
    
    
    
    
    
    
    1,904
    
    
    
    1,904Prepaid expenses
    
    
    
    
    
    
    286
    
    
    
    286Total current assets
    
    
    
    
    
    
    2,497
    
    
    
    2,497Property, plant and equipment, net
    
    
    
    
    
    
    1,094
    
    
    
    1,094Other assets
    
    
    
    
    
    
    2,804
    
    
    
    2,804Total assets
    
    
    
    
    
    
    6,395
    
    
    
    6,395Current liabilities
    
    
    
    
    
    
    1,071
    
    
    
    1,071Total current liabilities
    
    
    
    
    
    
    1,071
    
    
    
    1,071Net assets of discontinued operations
    
    $
    
    
    
    $
    5,324
    
    
    $
    5,324
 December 31, 2007DiscontinuedNigeria
    
    
    Nigeria TSA
    
    
    OperationsCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    211
    
    
    $
    211Accounts receivable, net
    
    
    
    
    
    
    296
    
    
    
    296Prepaid expenses
    
    
    
    
    
    
    879
    
    
    
    879Total current assets
    
    
    
    
    
    
    1,386
    
    
    
    1,386Property, plant and equipment, net
    
    
    
    
    
    
    1,205
    
    
    
    1,205Other assets
    
    
    
    
    
    
    620
    
    
    
    620Total assets
    
    
    
    
    
    
    3,211
    
    
    
    3,211Current liabilities
    
    
    
    
    
    
    978
    
    
    
    978Total current liabilities
    
    
    
    
    
    
    978
    
    
    
    978Net assets of discontinued operations
    
    $
    
    
    
    $
    2,233
    
    
    $
    2,233
 28




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (In
thousands, except share and per share amounts or unless otherwise noted)
  Our Business
   Our Segments
 Upstream O&G
 Upstream O&G
 Downstream O&G
 Downstream O&G
 Engineering
 Engineering
 Our Strategy
  29




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##### Table of Contents



Focus on managing risk
  
    
    Focus resources in markets with the highest risk-adjusted return.  We believe North
America currently offers us the highest risk-adjusted returns and the majority of our
resources are focused on this region. For the first quarter of 2008 we earned 95.8 percent
of our revenue in North America. However, we continue to seek international opportunities
which can provide superior risk-adjusted returns and believe our extensive international
experience is a competitive advantage. We believe that markets in North Africa and the
Middle East, where we also have substantial experience, may offer attractive opportunities
for us in the future given mid and long-term industry trends.
    
    Maintain a conservative contract portfolio.  Our current contract portfolio is composed
of 75.7 percent cost-reimbursable work which provides for a more equitable allocation of
risk between us and our customers. While strong current market conditions have been
beneficial in transitioning our backlog away from higher-risk, fixed-price contracts, we
intend to maintain a balanced risk-to-reward portfolio. The shift to a cost
reimbursable/fixed fee contract structure has protected us from significant cost increases
that could have adversely impacted our income. One project had significant cost
reimbursements in excess of the original contract value. We have passed this cost
escalation to the client, while putting none of our fee at risk. We have also negotiated
significant incentive opportunities with this client that if recognized, will favorably
impact our income and final margin on this project.
    
    Ethical business practices.  We demand that all of our employees and representatives
conduct our business in accordance with the highest ethical standardsin compliance with
applicable laws, rules and regulations, with honesty and integrity, and in a manner which
demonstrates respect for others.
 Leverage core capabilities and industry reputation into a broader service offering.
   Establish and maintain financial flexibility.
  Leverage core service expertise into additional full EPC contracts.
  30




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##### Table of Contents



Significant Business Developments
  
    
    We completed our first major Canadian pipeline construction project, a result of last
years acquisition in Canada. This project was a significant
success and contributed to our fully diluted earnings per share.
    
    We delivered our third consecutive quarter of net income from continuing operations. We
believe this is the result of new processes and vision for the Company and the steps that
are being taken to achieve this vision.
 Financial Summary
 Results and Financial Position
   
    
    Commencement of work on new engineering and pipeline construction projects in the United
States in addition to the carryover of existing projects commencing late in 2007;
    
    Revenue of $80,610 in 2008 from the Downstream segment derived from our acquisition of
InServ in November 2007; and
    
    The completion of our first large cross-country
pipeline construction project in Canada, since the acquisition of our
new pipeline division.
       31




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##### Table of Contents



Other Financial Measures
 Backlog
     March 31, 2008
    
    
    December 31, 2007Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentUpstream O&G
    
    $
    808,027
    
    
    
    69.6
    %
    
    $
    941,301
    
    
    
    72.1
    %Downstream O&G
    
    
    233,920
    
    
    
    20.1
    %
    
    
    199,646
    
    
    
    15.3
    %Engineering
    
    
    119,548
    
    
    
    10.3
    %
    
    
    164,494
    
    
    
    12.6
    %Total, continuing operations
    
    
    1,161,495
    
    
    
    100.0
    %
    
    
    1,305,441
    
    
    
    100.0
    %Discontinued operations
    
    
    
    
    
    
    
    
    
    
    Total backlog
    
    $
    1,161,495
    
    
    
    
    
    
    $
    1,305,441
 EBITDA from Continuing Operations
   Three Months EndedMarch 31,2008
    
    
    2007Net income (loss) from continuing operations
    
    $
    19,105
    
    
    $
    (3,339
    )Interest, net
    
    
    1,529
    
    
    
    890Provision for income taxes
    
    
    13,817
    
    
    
    255Depreciation and amortization
    
    
    10,704
    
    
    
    3,456EBITDA
    
    $
    45,155
    
    
    $
    1,262
 Discontinued Operations
  32




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##### Table of Contents



Transition Services Agreement
   Global Settlement Agreement (GSA)
  
    
    A reduction to the purchase price of $25,000, in resolution of all working capital
adjustments as provided for in the Agreement;
    
    Ascot agreed to provide supplemental backstop letters of credit in the amount of
$20,322 issued by a non-Nigerian bank approved by the Company;
    
    Ascot provided specific indemnities related to two ongoing projects that they
acquired as part of the Agreement; and
    
    Except as provided in the GSA, Ascot and the Company waived
all of their respective
rights and obligations relating to indemnifications provided in the Agreement
concerning any breach of a covenant or representation or warranty.
    33




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##### Table of Contents



CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   RESULTS OF OPERATIONS
   Three Months Ended March 31, 2008 Compared to Three Months ended March 31, 2007
 Contract Revenue
  Three months ended March 31,Percent2008
    
    
    2007
    
    
    Increase
    
    
    ChangeUpstream O&G
    
    $
    344,423
    
    
    $
    171,585
    
    
    $
    172,838
    
    
    
    100.7
    %Downstream O&G
    
    
    80,610
    
    
    
    N/A
    
    
    
    80,610
    
    
    
    100.0
    %Engineering
    
    
    66,601
    
    
    
    35,124
    
    
    
    31,477
    
    
    
    89.6
    %Total
    
    $
    491,634
    
    
    $
    206,709
    
    
    $
    284,925
    
    
    
    137.8
    %
 Upstream O&G
 34




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##### Table of Contents



Downstream
O&G
 Engineering Engineering
 Operating Income
  Three months ended March 31,Operating
    
    
    
    
    
    
    Operating
    
    
    
    
    
    
    Percent2008
    
    
    Margin %
    
    
    2007
    
    
    Margin %
    
    
    Increase
    
    
    ChangeUpstream O&G
    
    $
    23,166
    
    
    
    6.7
    %
    
    $
    (6,500
    )
    
    
    (3.8
    )%
    
    $
    29,666
    
    
    
    456.4
    %Downstream O&G
    
    
    2,947
    
    
    
    3.7
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    2,947
    
    
    
    100.0
    %Engineering
    
    
    8,765
    
    
    
    13.2
    %
    
    
    4,496
    
    
    
    12.8
    %
    
    
    4,269
    
    
    
    95.0
    %Total
    
    $
    34,878
    
    
    
    7.1
    %
    
    $
    (2,004
    )
    
    
    (1.0
    )%
    
    $
    36,882
    
    
    
    1,840.4
    %
 Upstream O&G
 Downstream O&G
 Engineering
 Non-Operating Items
 Interest, net .
 Provision for income taxes
 35




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##### Table of Contents



Income (loss) from Discontinued Operations, Net of Taxes
 Income (loss) from discontinued operations, net of taxes
 LIQUIDITY AND CAPITAL RESOURCES
  Additional Source of Capital
 2007 Credit Facility
  Cash Flows
  2008
    
    2007Operating activities
    
    $
    34,382
    
    
    $
    (7,340
    )Investing activities
    
    
    (2,585
    )
    
    
    128,788Financing activities
    
    
    (7,434
    )
    
    
    (4,185
    )
  Operating Activities
  
    
    an increase in results of operations to net income from continuing operations of $19,105
in the three months ended March 31, 2008, as compared to a loss from continuing operations
of $3,339 in the same period in 2007;
    
    an increase in cash flow from the change in working capital
accounts of $7,809,
primarily attributable to the increase in accrued income taxes and contract billings in
excess of costs and recognized income. The increase in these working capital accounts is
directly related to the increased revenue and project activity in 2007 and 2008; and
    
    an increase in the non-cash charges of $11,469, primarily attributable to the increased
depreciation associated with the increased investments made in capital equipment,
amortization of other intangible assets acquired in our acquisition of InServ in 2007,
increased amortization of stock-based compensation, and the net change in our deferred tax
position.
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Investing Activities
  
    
    disposition of discontinued operations in the three months ended March 31, 2007, which
provided $130,568 of cash as compared to no dispositions in the same period in 2008; and
    
    purchases of property, plant, and equipment in the three months ended March 31, 2008
used $3,556 of cash compared to $1,826 during the same period in 2007. These purchases
consisted primarily of construction equipment to support our increased backlog.
 Financing Activities
  Capital Requirements
  
    
    providing working capital for projects in process and those scheduled to begin;
    
    the procurement of additional construction equipment in light of our capital budget for
2008 of approximately $63,000;
    
    pursuing additional acquisitions that will allow us to expand our service offering; and
    
    installment payments due to the government related to fines and profit disgorgement.
  Contractual Obligations
   NEW ACCOUNTING PRONOUNCEMENTS
  37




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FORWARD-LOOKING STATEMENTS
 This Form 10-Q includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21 E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical facts, included or incorporated by
reference in this Form 10-Q that address activities, events or developments which we expect or
anticipate will or may occur in the future, including such things as future capital expenditures
(including the amount and nature thereof), oil, gas, gas liquids and power prices, demand for our
services, the amount and nature of future investments by governments, expansion and other
development trends of the energy industry, business strategy, expansion and growth of our business
and operations, the outcome of government investigations and legal proceedings and other such
matters are forward-looking statements. These forward-looking statements are based on assumptions
and analyses we made in light of our experience and our perception of historical trends, current
conditions and expected future developments as well as other factors we believe are appropriate
under the circumstances. However, whether actual results and developments will conform to our
expectations and predictions is subject to a number of risks and uncertainties. As a result, actual
results could differ materially from our expectations. Factors that could cause actual results to
differ from those contemplated by our forward-looking statements include, but are not limited to,
the following:
 
    
    difficulties we may encounter in connection with the previous sale and disposition of
our Nigeria assets and Nigeria based operations, including without limitation, obtaining
indemnification for any losses we may experience if claims are made against any parent
company guarantees we provided and which remained in place subsequent to the closing;
    
    the consequences we may encounter if our settlements in principle with the DOJ and the
SEC are not finalized, including the imposition of civil or criminal fines, penalties,
disgorgement of profits, monitoring arrangements, or other sanctions that might be imposed
as a result of government investigations;
    
    the consequences we may encounter if our settlements in principle with the DOJ and the
SEC are not finalized, including the loss of eligibility to bid for and obtain U.S.
government contracts, and other civil and criminal sanctions which may exceed the current
amount we have estimated and reserved in connection with the settlements in principle;
    
    the commencement by foreign governmental authorities of investigations into the actions
of our current and former employees, and the determination that such actions constituted
violations of foreign law;
    
    the dishonesty of employees and/or other representatives or their refusal to abide by
applicable laws and our established policies and rules;
    
    adverse weather conditions not anticipated in bids and estimates;
    
    project cost overruns, unforeseen schedule delays, and the application of liquidated
damages;
    
    cancellation of projects, in whole or in part;
    
    failing to realize cost recoveries from projects completed or in progress within a
reasonable period after completion of the relevant project;
    
    inability to hire and retain sufficient skilled labor to execute our current work, our
work in backlog and
future work we have not yet been awarded;
    
    inability to execute cost-reimbursable projects within the target cost, thus eroding
contract margin but not contract income on the project;
    
    curtailment of capital expenditures in the oil, gas, power, refining and petrochemical
industries;
    
    political or social circumstances impeding the progress of our work and increasing the
cost of performance;
    
    failure to obtain the timely award of one or more projects;
    
    inability to identify and acquire suitable acquisition targets on reasonable terms;
    
    inability to obtain adequate financing;
    
    inability to obtain sufficient surety bonds or letters of credit;
    
    loss of the services of key management personnel;
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##### Table of Contents




    
    the demand for energy moderating or diminishing;
    
    downturns in general economic, market or business conditions in our target markets;
    
    changes in the effective tax rate in countries where our work will be performed;
    
    changes in applicable laws or regulations, or changed interpretations thereof;
    
    changes in the scope of our expected insurance coverage;
    
    inability to manage insurable risk at an affordable cost;
    
    the occurrence of the risk included on our reports and filings with the SEC; and
    
    other factors, most of which are beyond our control.
 Consequently, all of the forward-looking statements made in the this Form 10-Q are qualified
by these cautionary statements and there can be no assurance that the actual results or
developments we anticipate will be realized or, even if substantially realized, that they will have
the consequences for, or effects on, our business or operations that we anticipate today. We assume
no obligation to update publicly any such forward-looking statements, whether as a result of new
information, future events or otherwise. For a more complete description of the circumstances
surrounding the actions of our current and former employees, see the Risk Factors included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2007.
 Unless the context otherwise requires, all references in this Form 10-Q to Willbros, the
Company, we, us and our refer to Willbros Group, Inc., its consolidated subsidiaries and
their predecessors.
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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
 ITEM 4. CONTROLS AND PROCEDURES
 (a) Disclosure Controls and Procedures.
      (b) Remediation of Material Weaknesses
  
    
    Hiring an additional project controller;
    
    Enhance the management review process; and
    
    Introduce system upgrades to automate certain processes, which management believes will
prevent the omission of previously identified costs, such as those described above.
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##### Table of Contents




    
    Developing additional documented control procedures to ensure the workers compensation
insurance rate master file is accurately updated in a timely manner; and the workers
compensation insurance cost calculations are performed accurately using the updated master
file data.
  (c) Changes in Internal Control Over Financial Reporting
  41




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  MaximumNumber (orTotal Number
    
    
    Approximateof Shares
    
    
    Dollar Value) ofPurchased as
    
    
    Shares ThatPart of
    
    
    May Yet BeAverage
    
    
    Publicly
    
    
    PurchasedTotal Number
    
    
    Price Paid
    
    
    Announced
    
    
    Under theof Shares
    
    
    Per Share
    
    
    Plans or
    
    
    Plans orPurchased (1)
    
    
    (2)
    
    
    Programs
    
    
    ProgramsJanuary 1, 2008  January 31, 2008
    
    
    18,233
    
    
    $
    36.58
    
    
    
    
    
    
    
    February 1, 2008  February 29, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    March 1, 2008  March 31, 2008
    
    
    13,161
    
    
    
    34.26
    
    
    
    
    
    
    
    Total
    
    
    31,394
    
    
    $
    35.61
    
    
    
    
    
    
    
    
 
 (1)
    
    Shares of common stock acquired from certain of our officers and key employees
under the share withholding provisions of our 1996 Stock Plan for the payment of taxes associated
with the vesting of shares of restricted stock granted under such plan.(2)
    
    The price paid per common share represents the closing sales price of a share of our
common stock, as reported in the New York Stock Exchange composite transactions, on the day that
the stock was acquired by us. 
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  10
    
    Amended and Restated Management Incentive Compensation Program (Effective February 26,
2008)31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 1 3a-1 4(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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##### Table of Contents



SIGNATURE
  WILLBROS GROUP, INC.Date: May 7, 2008
    By:
    /s/ Van A. WelchVan A. WelchSenior Vice President and Chief Financial Officer (Principal Financial Officer and
Principal
Accounting Officer) 43




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber
    
    Description10
    
    Amended and Restated Management Incentive Compensation Program
(Effective February 26, 2008)31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 1 3a-1 4(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 44