##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 
 FORM 8-K
 
 CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Date
of report (Date of earliest event reported) November 2, 2007
 
 WILLBROS GROUP, INC.
 (Exact Name of Registrant as Specified in Its Charter)
 
 Republic of Panama
(State or Other Jurisdiction of Incorporation)
 1-11953
    
    98-0160660(Commission File Number)
    
    (IRS Employer Identification No.)
 Plaza 2000 Building, 50th Street, 8th Floor, P.O. Box 0816-01098, Panama, Republic of Panama
(Address of Principal Executive Offices) (Zip Code)
 +50-7-213-0947
(Registrants Telephone Number, Including Area Code)
 Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
 see
 o
    
    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)o
    
    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)o
    
    Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))o
    
    Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))




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##### 



Item 8.01. Other Events.
   INTEGRATED SERVICE COMPANY, LLC
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageAudited Consolidated Financial StatementsReport of Independent Certified Public Accountants
    
    
    3Consolidated Balance Sheets as of December 31, 2006 and 2005
    
    
    4Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004
    
    
    5Consolidated Statements of Members Equity for the years ended December 31, 2006, 2005 and 2004
    
    
    6Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004
    
    
    7Notes to Consolidated Financial Statements
    
    
    8Unaudited Consolidated Financial StatementsCondensed Consolidated Balance Sheet as of September 30, 2007
    
    
    14Condensed Consolidated Statements of Operations for the nine months ended September 30, 2007 and 2006
    
    
    15Condensed
Consolidated Statement of Members Equity for the nine months ended September 30, 2007
    
    
    16Condensed Consolidated Statements of Cash Flow for the nine months ended September 30, 2007 and 2006
    
    
    17Notes to
Condensed Consolidated Financial Statements
    
    
    18
  WILLBROS GROUP, INC.
INDEX TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
 PageUnaudited Pro Forma Condensed Combined Financial Statements  Introductory Paragraph
    
    
    20Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2007
    
    
      21Unaudited Pro Forma Condensed Combined Statement of Operations for the Nine Months Ended September 30, 2007
    
    
    22Unaudited Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2006
    
    
    23Notes to Unaudited Pro Forma Condensed Combined Financial Statements
    
    
    24
 2




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Report of Independent Certified Public Accountants
 
     
 3




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##### Table of Contents



Integrated Service Company, LLC (DBA InServ) and Subsidiary
Consolidated Balance Sheets
December 31, 2006 and 2005
 2006
    
    
    2005ASSETSCURRENT ASSETS:Cash
    
    $
    112,532
    
    
    $
    107,208Accounts receivable
    
    
    28,411,117
    
    
    
    22,348,875Costs and estimated earnings of uncompleted contracts
in excess of billings
    
    
    14,509,921
    
    
    
    7,929,367Prepaids and other assets
    
    
    530,945
    
    
    
    585,669Total current assets
    
    
    43,564,515
    
    
    
    30,971,119PROPERTY, PLANT AND EQUIPMENT:Land and building
    
    
    5,971,202
    
    
    
    5,893,739Field equipment
    
    
    10,806,562
    
    
    
    9,505,661Furniture, fixtures, office and computer equipment
    
    
    1,517,545
    
    
    
    1,322,91318,295,309
    
    
    
    16,722,313Less:  accumulated depreciation
    
    
    (9,244,073
    )
    
    
    (8,170,463
    )Property,
plant and equipment, net
    
    
    9,051,236
    
    
    
    8,551,850OTHER ASSETS
    
    
    440,735
    
    
    
    198,161Total assets
    
    $
    53,056,486
    
    
    $
    39,721,130LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    11,024,608
    
    
    $
    6,674,774Billings of uncompleted contracts in excess of costs and
estimated earnings
    
    
    7,527,835
    
    
    
    3,292,882Current maturities of long-term debt
    
    
    1,351,844
    
    
    
    967,893Accrued wages, payroll taxes and employee benefits
    
    
    2,867,217
    
    
    
    1,879,808Other accrued liabilities
    
    
    1,385,584
    
    
    
    993,049Total current liabilities
    
    
    24,157,088
    
    
    
    13,808,406LONG-TERM DEBT, less current portion
    
    
    3,826,191
    
    
    
    3,223,243CONTINGENCIESMEMBERS EQUITY:Members equity
    
    
    26,528,647
    
    
    
    22,754,439Less: members notes receivable
    
    
    (1,455,440
    )
    
    
    (64,958
    )Total members equity
    
    
    25,073,207
    
    
    
    22,689,481Total liabilities and members equity
    
    $
    53,056,486
    
    
    $
    39,721,130
  4




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Consolidated Statements of Operations
For the years ended December 31, 2006, 2005 and 2004
 2006
    
    
    2005
    
    
    2004CONTRACT REVENUES EARNED
    
    $
    200,482,659
    
    
    $
    147,348,728
    
    
    $
    114,019,620COST OF REVENUES EARNED
    
    
    166,056,301
    
    
    
    123,207,915
    
    
    
    93,418,020GROSS PROFIT
    
    
    34,426,358
    
    
    
    24,140,813
    
    
    
    20,601,600SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
    
    
    16,634,534
    
    
    
    11,623,505
    
    
    
    10,636,893OPERATING INCOME
    
    
    17,791,824
    
    
    
    12,517,308
    
    
    
    9,964,707OTHER INCOME (EXPENSE):Interest expense
    
    
    (756,196
    )
    
    
    (404,907
    )
    
    
    (287,913
    )Miscellaneous income
    
    
    81,266
    
    
    
    239,998
    
    
    
    644,094NET INCOME
    
    $
    17,116,894
    
    
    $
    12,352,399
    
    
    $
    10,320,888
  5




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Consolidated Statements of Members Equity
For the years ended December 31, 2006, 2005 and 2004
 Members notesMembers equity
    
    
    receivable
    
    
    TotalBalance, December 31, 2003
    
    $
    9,418,764
    
    
    $
    (129,914
    )
    
    $
    9,288,850Net income
    
    
    10,320,888
    
    
    
    
    
    
    
    10,320,888Compensation expense for option agreement
    
    
    84,734
    
    
    
    
    
    
    
    84,734Member distributions
    
    
    (2,986,269
    )
    
    
    
    
    
    
    (2,986,269
    )Payment on members note receivable
    
    
    6,496
    
    
    
    32,478
    
    
    
    38,974Purchase of member interest
    
    
    60,150
    
    
    
    
    
    
    
    60,150Balance, December 31, 2004
    
    
    16,904,763
    
    
    
    (97,436
    )
    
    
    16,807,327Net income
    
    
    12,352,399
    
    
    
    
    
    
    
    12,352,399Compensation expense for option agreement
    
    
    150,175
    
    
    
    
    
    
    
    150,175Member distributions
    
    
    (5,152,542
    )
    
    
    
    
    
    
    (5,152,542
    )Payment on members note receivable
    
    
    6,027
    
    
    
    32,478
    
    
    
    38,505Purchase of member interest
    
    
    (1,506,383
    )
    
    
    
    
    
    
    (1,506,383
    )Balance, December 31, 2005
    
    
    22,754,439
    
    
    
    (64,958
    )
    
    
    22,689,481Net income
    
    
    17,116,894
    
    
    
    
    
    
    
    17,116,894Compensation expense for option agreement
    
    
    122,304
    
    
    
    
    
    
    
    122,304Member distributions
    
    
    (8,681,386
    )
    
    
    
    
    
    
    (8,681,386
    )Payment on members notes receivable
    
    
    
    
    
    
    32,478
    
    
    
    32,478Purchase of member interest
    
    
    (6,799,956
    )
    
    
    
    
    
    
    (6,799,956
    )Notes receivable on options exercised
    
    
    1,914,220
    
    
    
    (1,422,960
    )
    
    
    491,260Interest received from notes receivable
    
    
    102,132
    
    
    
    
    
    
    
    102,132Balance, December 31, 2006
    
    $
    26,528,647
    
    
    $
    (1,455,440
    )
    
    $
    25,073,207
  6




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Consolidated Statements of Cash Flows
For the years ended December 31, 2006, 2005 and 2004
 2006
    
    
    2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    17,116,894
    
    
    $
    12,352,399
    
    
    $
    10,320,888Adjustments to reconcile net income to net cash
provided by (used in) operating activities-
Depreciation
    
    
    1,174,711
    
    
    
    1,329,059
    
    
    
    1,165,127(Gain) loss on disposal of equipment
    
    
    (2,226
    )
    
    
    
    
    
    
    30,222Compensation expense for option agreement
    
    
    122,304
    
    
    
    150,175
    
    
    
    84,734Provision for doubtful accounts
    
    
    
    
    
    
    
    
    
    
    41,791Changes in assets and liabilities-Accounts receivable
    
    
    (6,062,242
    )
    
    
    (7,646,747
    )
    
    
    (478,000
    )Costs and estimated earnings of uncompleted
contracts in excess of billings
    
    
    (6,580,554
    )
    
    
    (4,278,174
    )
    
    
    1,760,013Prepaids and other assets
    
    
    (187,850
    )
    
    
    (70,249
    )
    
    
    (40,720
    )Accounts payable
    
    
    4,349,834
    
    
    
    2,839,307
    
    
    
    (427,279
    )Billings of uncompleted contracts in excess of costs
and estimated earnings
    
    
    4,234,953
    
    
    
    1,304,670
    
    
    
    768,845Accrued liabilities
    
    
    1,379,944
    
    
    
    715,748
    
    
    
    (1,074,338
    )Total adjustments
    
    
    (1,571,126
    )
    
    
    (5,656,211
    )
    
    
    1,830,395Net cash provided by operating activities
    
    
    15,545,768
    
    
    
    6,696,188
    
    
    
    12,151,283CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (1,678,237
    )
    
    
    (2,037,030
    )
    
    
    (1,871,234
    )Proceeds from sale of equipment
    
    
    6,366
    
    
    
    
    
    
    
    219,029Net cash used in investing activities
    
    
    (1,671,871
    )
    
    
    (2,037,030
    )
    
    
    (1,652,205
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from short-term borrowings
    
    
    56,686,835
    
    
    
    50,248,148
    
    
    
    26,503,502Payments of short-term borrowings
    
    
    (56,686,835
    )
    
    
    (50,248,148
    )
    
    
    (27,304,668
    )Proceeds from long-term borrowings
    
    
    9,400,000
    
    
    
    
    
    
    
    Payments of long-term debt
    
    
    (8,413,101
    )
    
    
    (967,891
    )
    
    
    (3,805,710
    )Repayment on members notes receivable
    
    
    32,478
    
    
    
    32,478
    
    
    
    32,478Purchase of member interest
    
    
    (6,799,956
    )
    
    
    (1,506,383
    )
    
    
    Member tax distributions
    
    
    (8,681,386
    )
    
    
    (5,152,542
    )
    
    
    (2,986,269
    )Payments received for units
    
    
    491,260
    
    
    
    
    
    
    
    Interest received for members notes receivable
    
    
    102,132
    
    
    
    
    
    
    
    Net cash used in financing activities
    
    
    (13,868,573
    )
    
    
    (7,594,338
    )
    
    
    (7,560,667
    )NET INCREASE (DECREASE) IN CASH
    
    
    5,324
    
    
    
    (2,935,180
    )
    
    
    2,938,411CASH, beginning of year
    
    
    107,208
    
    
    
    3,042,388
    
    
    
    103,977CASH, end of year
    
    $
    112,532
    
    
    $
    107,208
    
    
    $
    3,042,388SUPPLEMENTAL INFORMATION:Cash paid for interest
    
    $
    754,714
    
    
    $
    404,907
    
    
    $
    376,377Cash paid for income taxes
    
    $
    711,798
    
    
    $
    323,542
    
    
    $
    330,258NONCASH FINANCING ACTIVITIES:Notes receivable from members
    
    $
    (1,422,960
    )
    
    $
    
    
    
    $
    60,150
  7




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
 A  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
 1. Business
   2. Basis of Presentation
  3. Revenue and Cost Recognition
   4. Accounts Receivable
  5. Costs and Estimated Earnings of Uncompleted Contracts in Excess of Billings
  8




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
 A  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
  2006
    
    
    2005Costs and estimated earnings
    
    $
    215,306,327
    
    
    $
    162,842,944Billings
    
    
    208,324,241
    
    
    
    158,206,459$
    6,982,086
    
    
    $
    4,636,485
  2006
    
    
    2005Costs and estimated earnings of uncompleted contracts in
excess of billings
    
    $
    14,509,921
    
    
    $
    7,929,367Billings of uncompleted contracts in excess of costs and
estimated earnings
    
    
    7,527,835
    
    
    
    3,292,882$
    6,982,086
    
    
    $
    4,636,485
 6. Property, Plant and Equipment
  YearsBuildings
    
    39-40Field equipment
    
    5-8Furniture, fixtures, office and computer equipment
    
    3-7Leasehold improvements
    
    Remaining life of lease
 7. Repairs and Maintenance Costs
  8. Income Taxes
  9




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##### Table of Contents



Integrated Service Company, LLC (DBA InServ) and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
 A  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
 9. Use of Estimates in the Preparation of the Consolidated Financial Statements
  10. Reclassifications
  11. Recently Issued Accounting Standards
 Fair Value Measurements
 Share-Based Payment fair value
 B  LINE OF CREDIT
  10




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
 C  LONG-TERM DEBT
  2006
    
    
    2005Note payable to BOK due April 30, 2008; monthly principal
payments of $80,357 plus interest, with the remaining principal
balance due at maturity; interest at LIBOR plus 2.00% (5.94%
at December 31, 2005). Secured by equipment and real estate
and guaranteed by a member of the Company.
    
    $
    
    
    
    $
    4,178,576Note payable to BOK due January 31, 2013; monthly principal
payments of $111,905 plus interest, with the remaining principal
balance due at maturity; interest at LIBOR plus 2.00% (7.225%
at December 31, 2006). Secured by equipment and real estate
and guaranteed by a member of the Company.
    
    
    5,169,048
    
    
    
    Other
    
    
    8,987
    
    
    
    12,5605,178,035
    
    
    
    4,191,136Less-current maturities
    
    
    1,351,844
    
    
    
    967,893$
    3,826,191
    
    
    $
    3,223,243
  2007
    
    $
    1,351,8442008
    
    
    1,342,8572009
    
    
    1,342,8572010
    
    
    1,140,4772011
    
    
    Thereafter
    
    
    $
    5,178,035
  D  CONTINGENCIES
  11




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
 E  MEMBERS EQUITY
  F  STOCK OPTION AND APPRECIATION RIGHT PLANS
     12




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Notes to Consolidated Financial Statements
December 31, 2006 and 2005
 F  STOCK OPTION AND APPRECIATION RIGHT PLANS (continued)
  Options/RightsOutstandingShares under/options:Granted
    
    
    11,630Canceled
    
    
    (750
    )Vested
    
    
    (3,627
    )Balance at December 31, 2006
    
    
    7,253
   G  BENEFIT PLANS
  H  CONCENTRATIONS OF CREDIT RISK
   13




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Condensed Consolidated Balance Sheet
As of September 30, 2007
(Unaudited)
 ASSETSCurrent Assets:Accounts receivable
    
    $
    49,016,994Costs and estimated earnings of uncompleted contracts
in excess of billings
    
    
    18,884,725Cash and
other current assets
    
    
    4,090,854Total current assets
    
    
    71,992,573Property, plant and equipment, net
    
    
    11,681,902Other assets
    
    
    175,035Total assets
    
    $
    83,849,510LIABILITIES AND MEMBERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    19,194,066Accrued
liabilities and debt
    
    
    11,975,199Billings of uncompleted contracts in excess of costs and
estimated earnings
    
    
    9,235,282Other current liabilities
    
    
    5,926,021Total current liabilities
    
    
    46,330,568Members equity
    
    
    37,518,942Total liabilities and members equity
    
    $
    83,849,510
  14




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##### Table of Contents



Integrated
Service Company, LLC (DBA InServ) and SubsidiaryCondensed Consolidated Statements of
OperationsFor the nine months ended(Unaudited)
  September 30,
    
    
    September 30,2007
    
    
    2006Contract revenues earned
    
    $
    253,767,477
    
    
    $
    134,013,136Cost of revenues earned
    
    
    214,839,851
    
    
    
    111,397,270Gross profit
    
    
    38,927,626
    
    
    
    22,615,866Selling, general and administrative expenses
    
    
    16,597,789
    
    
    
    11,399,856Operating income
    
    
    22,329,837
    
    
    
    11,216,010Other expense
    
    
    (312,387
    )
    
    
    (584,154
    )Net income
    
    $
    22,017,450
    
    
    $
    10,631,856
  15




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Condensed Consolidated Statement of Members Equity
For the nine months ended September 30, 2007
 Members notesMembers equity
    
    
    receivable
    
    
    TotalBalance, December 31, 2006 (audited)
    
    $
    26,528,647
    
    
    $
    (1,455,440
    )
    
    $
    25,073,207Net income
    
    
    22,017,450
    
    
    
    
    
    
    
    22,017,450Compensation expense for option agreement
    
    
    91,728
    
    
    
    
    
    
    
    91,728Member distributions
    
    
    (9,822,944
    )
    
    
    
    
    
    
    (9,822,944
    )Payment on members note receivable
    
    
    
    
    
    
    33,697
    
    
    
    33,697Options exercised
    
    
    125,840
    
    
    
    
    
    
    
    125,840Interest received from notes receivable
    
    
    76,480
    
    
    
    (76,516
    )
    
    
    (36
    )Balance, September 30, 2007 (unaudited)
    
    $
    39,017,201
    
    
    $
    (1,498,259
    )
    
    $
    37,518,942
  16




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Integrated Service Company, LLC (DBA InServ) and Subsidiary
Condensed Consolidated Statements of Cash Flow
For the nine months ended(Unaudited)
 
 September 30,
    
    
    September 30,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    22,017,450
    
    
    $
    10,631,856Adjustments to reconcile net income to net cash provided by operating activities Depreciation
    
    
    958,608
    
    
    
    873,561Gain on disposal of equipment
    
    
    (3,354
    )
    
    
    (1,140
    )Non-cash compensation expense for option agreement
    
    
    91,728
    
    
    
    Changes in
assets and liabilities Accounts receivable
    
    
    (20,605,877
    )
    
    
    (4,649,913
    )Costs and estimated earnings of uncompleted
contracts in excess of billings
    
    
    (4,374,804
    )
    
    
    1,463,685Prepaids and other assets
    
    
    (403,168
    )
    
    
    (165,198
    )Accounts payable
    
    
    8,169,459
    
    
    
    871,546Billings of uncompleted contracts in excess of costs
and estimated earnings
    
    
    1,707,447
    
    
    
    3,429,052Accrued liabilities
    
    
    7,722,398
    
    
    
    4,004,445Total adjustments
    
    
    (6,737,563
    )
    
    
    5,826,038Net cash provided by operating activities
    
    
    15,279,887
    
    
    
    16,457,894CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (3,596,022
    )
    
    
    (1,228,925
    )Proceeds from sale of equipment
    
    
    10,102
    
    
    
    5,466Net cash used in investing activities
    
    
    (3,585,920
    )
    
    
    (1,223,459
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from short-term borrowings
    
    
    83,928,176
    
    
    
    46,568,065Payments of short-term borrowings
    
    
    (78,008,022
    )
    
    
    (46,568,065
    )Proceeds from long-term borrowings
    
    
    
    
    
    
    9,400,000Payments of long-term debt
    
    
    (5,172,167
    )
    
    
    (5,076,717
    )Repayment on members notes receivable
    
    
    32,478
    
    
    
    32,478Purchase of member interest
    
    
    
    
    
    
    (6,799,956
    )Member tax distributions
    
    
    (9,822,944
    )
    
    
    (8,350,960
    )Payments received for units
    
    
    125,840
    
    
    
    491,260Interest received for members notes receivable
    
    
    1,183
    
    
    
    2,153Net cash used in financing activities
    
    
    (8,915,456
    )
    
    
    (10,301,742
    )NET INCREASE IN CASH
    
    
    2,778,511
    
    
    
    4,932,693CASH,
beginning of period
    
    
    112,532
    
    
    
    107,208CASH, end of
period
    
    $
    2,891,043
    
    
    $
    5,039,901
  17




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##### Table of Contents



Integrated Service Company, LLC (DBA InServ) and Subsidiary
 
 Notes to Condensed Consolidated Financial Statements
 (Unaudited)
 1. Business
   2. Basis of Presentation
   3. Costs and Estimated Earnings of Uncompleted
Contracts in Excess of Billings
   Costs and estimated earnings
    
    $
    427,137,747Billings
    
    
    417,488,304$
    9,649,443  Costs and estimated earnings of uncompleted contracts in excess
    of billings
    
    $
    18,884,725Billings of uncompleted contracts in excess of costs and
    estimated earnings
    
    
    9,235,282$
    9,649,443 18




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##### Table of Contents



Integrated Service Company, LLC (DBA InServ) and
Subsidiary
 Notes to Condensed Consolidated Financial Statements
 (Unaudited)
 4. Property, Plant and Equipment
  September 30,2007Land and building
    
    $
    6,480,557Field equipment
    
    
    11,499,585Furniture, fixtures, office and computer equipment
    
    
    1,694,467Construction in-process
    
    
    2,055,83921,730,448Less - accumulated depreciation
    
    
    (10,048,546
    )Net property, plant and equipment
    
    $
    11,681,902  5. Debt
  6. Use of Estimates in the Preparation of the Condensed
Consolidated Financial Statements
  7. Subsequent Event
  19




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##### Table of Contents



WILLBROS GROUP, INC.
(in thousands, except share and per share amounts)
     · Net assets acquired
    
    $
    37,519· Fixed asset write-up to fair market value
    
    
    4,927· Identifiable intangible assets
    
    
    20,000· Estimated transaction costs
    
    
    1,200$
    63,646
  20




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##### Table of Contents



WILLBROS GROUP, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(in thousands, except share and per share amounts)
 September 30, 2007HistoricalIntegratedServiceWillbros
    
    
    Company,
    
    
    Pro Forma
    
    
    Pro FormaGroup, Inc.
    
    
    LLC
    
    
    Adjustments
    
    
    CombinedASSETSCurrent Assets:Cash and Cash Equivalents
    
    $
    58,709
    
    
    $
    2,891
    
    
    $
    (1,200
    )(C)
    
    $
    60,400Accounts Receivable, net
    
    
    181,733
    
    
    
    49,017
    
    
    
    
    
    
    
    230,750Cost in excess of billing
    
    
    29,029
    
    
    
    18,884
    
    
    
    
    
    
    
    47,913Other current assets
    
    
    23,753
    
    
    
    1,200
    
    
    
    
    
    
    
    24,953Total Current Assets
    
    
    293,224
    
    
    
    71,992
    
    
    
    (1,200
    )
    
    
    364,016Property, plant and equipment, net
    
    
    120,393
    
    
    
    11,682
    
    
    
    4,927
    (A)
    
    
    137,002Goodwill
    
    
    13,184
    
    
    
    
    
    
    
    (4,927
    )(A)
    
    
    167,294157,837
    (B)1,200
    (C)Intangible
assets
    
    
    
    
    
    
    
    
    
    
    20,000
(G)
    
    
    20,000Other noncurrent assets
    
    
    17,053
    
    
    
    175
    
    
    
    
    
    
    
    17,228Total Assets
    
    $
    443,854
    
    
    $
    83,849
    
    
    $
    177,837
    
    
    $
    705,540LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Notes payable and current portion of long-term debt
    
    $
    11,237
    
    
    $
    5,926
    
    
    $
    
    
    
    $
    17,163Accounts payable and accrued liabilities
    
    
    134,425
    
    
    
    31,169
    
    
    
    
    
    
    
    165,594Billings in excess of cost
    
    
    7,891
    
    
    
    9,235
    
    
    
    
    
    
    
    17,126Other current liabilities
    
    
    17,385
    
    
    
    
    
    
    
    
    
    
    
    17,385Total current liabilities
    
    
    170,938
    
    
    
    46,330
    
    
    
    
    
    
    
    217,2682.75% convertible senior notes
    
    
    70,000
    
    
    
    
    
    
    
    
    
    
    
    70,0006.5% senior convertible notes
    
    
    32,050
    
    
    
    
    
    
    
    
    
    
    
    32,050Long-term debt
    
    
    26,085
    
    
    
    
    
    
    
    
    
    
    
    26,085Other noncurrent liabilities
    
    
    38,323
    
    
    
    
    
    
    
    
    
    
    
    38,323Total liabilities
    
    
    337,396
    
    
    
    46,330
    
    
    
    
    
    
    
    383,726Contingencies and commitmentsStockholders equity:Members equity
    
    
    
    
    
    
    37,519
    
    
    
    (37,519
    )(B)
    
    
    Common stock
    
    
    1,467
    
    
    
    
    
    
    
    313
    (B)
    
    
    1,780Capital in excess of par value
    
    
    273,840
    
    
    
    
    
    
    
    215,043
    (B)
    
    
    488,883Accumulated deficit
    
    
    (181,912
    )
    
    
    
    
    
    
    
    
    
    
    (181,912
    )Treasury stock
    
    
    (2,667
    )
    
    
    
    
    
    
    
    
    
    
    (2,667
    )Accumulated other comprehensive income
    
    
    15,730
    
    
    
    
    
    
    
    
    
    
    
    15,730Total stockholders equity
    
    
    106,458
    
    
    
    37,519
    
    
    
    177,837
    
    
    
    321,814Total liabilities and stockholders equity
    
    $
    443,854
    
    
    $
    83,849
    
    
    $
    177,837
    
    
    $
    705,540
  21




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##### Table of Contents



WILLBROS GROUP, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
 Nine Months Ended September 30, 2007HistoricalIntegratedServiceWillbros
    
    
    Company,
    
    
    Pro Forma
    
    
    Pro FormaGroup, Inc.
    
    
    LLC
    
    
    Adjustments
    
    
    CombinedContract Revenues
    
    $
    610,168
    
    
    $
    253,767
    
    
    $
    
    
    
    $
    863,935Operating Expenses:Contract
    
    
    538,790
    
    
    
    214,036
    
    
    
    
    
    
    
    752,826Depreciations and amortization
    
    
    13,223
    
    
    
    804
    
    
    
    3,251
    (D)
    
    
    17,278General and administrative
    
    
    42,295
    
    
    
    16,598
    
    
    
    
    
    
    
    58,893Government fines
    
    
    22,000
    
    
    
    
    
    
    
    
    
    
    
    22,000616,308
    
    
    
    231,438
    
    
    
    3,251
    
    
    
    850,997Operating income (loss)
    
    
    (6,140
    )
    
    
    22,329
    
    
    
    (3,251
    )
    
    
    12,938Other income (expense):Interest income
    
    
    4,433
    
    
    
    17
    
    
    
    
    
    
    
    4,450Interest expense
    
    
    (6,552
    )
    
    
    (378
    )
    
    
    
    
    
    
    (6,930
    )Other  net
    
    
    (2,019
    )
    
    
    49
    
    
    
    
    
    
    
    (1,970
    )Loss on early extinguishment of debt
    
    
    (15,375
    )
    
    
    
    
    
    
    
    
    
    
    (15,375
    )(19,513
    )
    
    
    (312
    )
    
    
    
    
    
    
    (19,825
    )Income (loss) before income taxes
    
    
    (25,653
    )
    
    
    22,017
    
    
    
    (3,251
    )
    
    
    (6,887
    )Provision for income taxes
    
    
    7,793
    
    
    
    
    (F)
    
    
    7,506
    (E)
    
    
    15,299Net income (loss)
    
    $
    (33,446
    )
    
    $
    22,017
    
    
    $
    (10,757
    )
    
    $
    (22,186
    )Net income (loss) per common share:Basic
    
    $
    (1.22
    )
    
    $
    
    
    
    $
    
    
    
    $
    (0.66
    )Diluted
    
    $
    (1.22
    )
    
    $
    
    
    
    $
    
    
    
    $
    (0.66
    )Weighted average number of common shared outstanding:Basic
    
    
    27,421,927
    
    
    
    
    
    
    
    6,264,826
    
    
    
    33,686,753Diluted
    
    
    27,421,927
    
    
    
    
    
    
    
    6,264,826
    
    
    
    33,686,753
  22




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##### Table of Contents



WILLBROS GROUP, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
 Year Ended December 31, 2006HistoricalIntegratedServiceWillbros
    
    
    Company,
    
    
    Pro Forma
    
    
    Pro FormaGroup, Inc.
    
    
    LLC
    
    
    Adjustments
    
    
    CombinedContract Revenues
    
    $
    543,259
    
    
    $
    200,483
    
    
    $
    
    
    
    $
    743,742Operating Expenses:Contract
    
    
    489,494
    
    
    
    164,881
    
    
    
    
    
    
    
    654,375Depreciations and amortization
    
    
    12,430
    
    
    
    1,175
    
    
    
    4,335
    (D)
    
    
    17,940General and administrative
    
    
    53,366
    
    
    
    16,635
    
    
    
    
    
    
    
    70,001Government fines
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    555,290
    
    
    
    182,691
    
    
    
    4,335
    
    
    
    742,316Operating income (loss)
    
    
    (12,031
    )
    
    
    17,792
    
    
    
    (4,335
    )
    
    
    1,426Other income (expense):Interest income
    
    
    1,803
    
    
    
    
    
    
    
    
    
    
    
    1,803Interest expense
    
    
    (10,068
    )
    
    
    (756
    )
    
    
    
    
    
    
    (10,824
    )Other  net
    
    
    569
    
    
    
    81
    
    
    
    
    
    
    
    650Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,696
    )
    
    
    (675
    )
    
    
    
    
    
    
    (8,371
    )Income (loss) before income taxes
    
    
    (19,727
    )
    
    
    17,117
    
    
    
    (4,335
    )
    
    
    (6,945
    )Provision for income taxes
    
    
    2,308
    
    
    
    
    (F)
    
    
    5,113
    (E)
    
    
    7,421Net income (loss)
    
    $
    (22,035
    )
    
    $
    17,117
    
    
    $
    (9,448
    )
    
    $
    (14,366
    )Net income (loss)Basic
    
    $
    (0.98
    )
    
    $
    
    
    
    $
    
    
    
    $
    (0.50
    )Diluted
    
    $
    (0.98
    )
    
    $
    
    
    
    $
    
    
    
    $
    (0.50
    )Weighted average number of common shares outstanding:Basic
    
    
    22,440,742
    
    
    
    
    
    
    
    6,264,756
    
    
    
    28,705,498Diluted
    
    
    22,440,742
    
    
    
    
    
    
    
    6,264,756
    
    
    
    28,705,498
  23




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##### Table of Contents



NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
 (A)
    
    Based upon preliminary estimates, the transaction is assumed to result in a write-up
of InServs fixed assets of $4,927.(B)
    
    To record the issuance of 5,627,281 shares of Willbros Group, Inc. common stock, at
an assumed market price of $38.27 less certain fees and costs of the transactions.
The remaining 637,475 shares of common stock will be
issued to the sellers as restricted stock.(C)
    
    To record the estimated initial transaction costs of $1,200, representing one-time
professional and advisory fees. The one-time costs are not reflected in the Unaudited Pro
Forma Condensed Combined Statements of Operations since the charges are non-recurring in
nature.(D)
    
    To record the increased depreciation expense associated with the write up of fixed
assets and the amortization associated with the value of existing
customer backlog. Expected useful lives for building and equipment is 20 years and 5 years,
respectively. The estimated useful life of existing customer backlog
is 5 years. The Companys backlog is primarily under master service agreements with lives ranging up
to 20 years.(E)
    
    To record an estimated income tax provision on InServs pre-tax income, net of the
tax benefit for the increased depreciation expense.(F)
    
    InServ was taxed as a partnership with no income tax provision.(G)
    
    To record the estimated value of existing customer backlog value of $20,000 which will be
amortized over an estimated useful life of five years. Willbros Group, Inc. is in the process of
obtaining a third party valuation of intangible assets. The actual value and estimated useful life
assigned to the customer backlog will be subject to future refinement. Because a full valuation of
the asset and useful life has not yet been finalized, the final allocation of the purchase price
may differ from the allocation presented herein.
 24




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##### Table of Contents



Item
9.01.  Financial Statements and Exhibits.
    SIGNATURES
  WILLBROS GROUP, INC.Date: November 2, 2007
    
    By:
    
    /s/ Van A. WelchVan A. WelchSenior Vice President and Chief FinancialOfficer
 25




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description23.1
    
    Consent of Grant Thornton LLP.
 26