##### 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) October 16, 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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TABLE OF CONTENTS  Item 8.01. Other EventsItem 9.01. Financial Statements and ExhibitsEXHIBIT INDEXConsent of GLO CPAs, LLPConsent of KPMG LLP    Table of Contents  
 Item 8.01. Other Events
 Construction Engineering, Engineering, Procurement and Construction EPC). US & Canada International
 Business Segments
 Construction, Engineering, EPC
 Construction
 Construction
 Engineering
 Engineering
 EPC
 EPC Engineering Construction EPC
  2




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
(In thousands, except share and per share amounts or unless otherwise noted)
  OVERVIEW
 2006 General
       3




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##### Table of Contents



Financing Transactions
    SIGNIFICANT BUSINESS DEVELOPMENTS
  
    
    Willbros Engineers, Inc. (WEI) executed an EPC contract with Guardian Pipeline,
L.L.C. to provide services for the Guardian Expansion and Extension Project. The Guardian
Expansion and Extension Project will involve constructing 106 miles of 30-inch and
20-inch natural gas pipeline from the terminus of the existing Guardian Pipeline near
Ixonia, Wisconsin, to the Green Bay area. Eight associated meter stations and two 39,000
horsepower compressor stations, one located in Dekalb County, Illinois, and the other in
Walworth County, Wisconsin, will also be constructed. WEIs scope of work currently
includes the pipeline and the meter stations.
    
    WEI was also awarded an EPC contract by Cheniere Sabine Pass Pipeline Company
(Cheniere), a wholly-owned subsidiary of Cheniere Energy, Inc. Under the EPC Agreement,
which is effective as of February 1, 2006, Willbros will provide Cheniere with services
for the management, engineering, material procurement, construction and construction
management of the 16-mile, 42-inch pipeline and related facilities to be constructed from
Chenieres liquefied natural gas terminal being constructed at Sabine Pass to a pipeline
interconnect at Johnsons Bayou, all located in Cameron Parish, Louisiana.
 4




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##### Table of Contents



WEI and
Cheniere are entering into the EPC agreement sufficiently in advance of commencement of
physical construction of the pipeline in order to perform detailed engineering and
procure materials. Construction is scheduled to commence in April 2007 and to be
completed in September 2007.
    
    Willbros RPI, Inc., was awarded a construction contract for the installation of 71
miles of 42-inch natural gas pipeline in North Louisiana from CenterPoint Energy. This
work consists of the eastern two loops of
CenterPoints planned 172-mile, 42-inch pipeline from Carthage, Texas to its Perryville Hub
in Northeast Louisiana. The project commenced in the fourth quarter of 2006 and completion
is scheduled for the second quarter of 2007.
    
    The Oman Construction Company (TOCO), received a construction contract to perform
additional maintenance activities and small capital projects for Occidental of Oman Inc.
The duration of the assignment is expected to span the next 3 to 5 years, with an option
to renew for an additional 1 to 2 years.
    
    Willbros RPI, Inc., in February 2007 was awarded a construction contract with
Southeast Supply Header, LLC (SESH), a joint venture between subsidiaries of Spectra
Energy Corp and CenterPoint Energy Inc. (NYSE: CNP), to construct approximately 190 miles
of the SESH project, consisting of 42-inch and 36-inch diameter pipeline. SESH will begin
near the Perryville Hub in northeast Louisiana and will interconnect with the Gulfstream
Natural Gas System, L.L.C. pipeline in Mobile County, Alabama. Construction of the
project is anticipated to begin in the fourth quarter of 2007 and to be completed in the
summer of 2008.
 Financial Summary
   
    
    Commencement of work on new engineering and pipeline construction projects in the
United States; and
    
    Expansion of work relating to maintenance and fabrication contracts in the Canadian oil
sands.
      5




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##### Table of Contents



Discontinued Operations
       CRITICAL ACCOUNTING POLICIES AND ESTIMATES
 Revenue
   6




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##### Table of Contents



Income Taxes
  OTHER FINANCIAL MEASURES
 Backlog
   7




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##### Table of Contents



2006
    
    
    2005Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentBacklogConstruction
    
    $
    320,461
    
    
    
    53.2
    %
    
    $
    233,085
    
    
    
    97.0
    %Engineering
    
    
    92,956
    
    
    
    15.4
    
    
    
    90
    
    
    
    0.0EPC
    
    
    188,855
    
    
    
    31.4
    
    
    
    7,198
    
    
    
    3.0Total, continuing operations
    
    
    602,272
    
    
    
    100.0
    %
    
    
    240,373
    
    
    
    100.0
    %Discontinued operations
    
    
    406,780
    
    
    
    
    
    
    
    575,982Total backlog
    
    $
    1,009,052
    
    
    
    
    
    
    $
    816,355
 EBITDA from Continuing Operations
   RESULTS OF OPERATIONS
   Fiscal Year Ended December 31, 2006 Compared to Fiscal Year Ended December 31, 2005
 Contract Revenue
 Construction
 Year Ended December 31,Increase /
    
    
    Percent2006
    
    
    2005
    
    
    (Decrease)
    
    
    ChangeConstruction
    
    $
    421,270
    
    
    $
    214,020
    
    
    $
    207,250
    
    
    
    96.8
    %Engineering
    
    
    75,833
    
    
    
    43,194
    
    
    
    32,639
    
    
    
    75.6
    %EPC
    
    
    46,156
    
    
    
    37,265
    
    
    
    8,891
    
    
    
    23.9
    %Total contract revenue
    
    $
    543,259
    
    
    $
    294,479
    
    
    $
    248,780
    
    
    
    84.5
    %
 Construction
 8




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##### Table of Contents



Construction Construction
 Engineering
 EPC EPC
 Contract Income
  Year Ended December 31,% of
    
    
    
    
    
    
    % of
    
    
    Increase /
    
    
    Percent2006
    
    
    Revenue
    
    
    2005
    
    
    Revenue
    
    
    (Decrease)
    
    
    ChangeConstruction
    
    $
    35,081
    
    
    
    8.3
    %
    
    $
    14,869
    
    
    
    6.9
    %
    
    $
    20,212
    
    
    
    135.9
    %Engineering
    
    
    13,848
    
    
    
    18.3
    %
    
    
    3,602
    
    
    
    8.3
    %
    
    
    10,246
    
    
    
    284.5
    %EPC
    
    
    4,836
    
    
    
    10.5
    %
    
    
    9,936
    
    
    
    26.7
    %
    
    
    (5,100
    )
    
    
    (51.3
    )%Total contract income
    
    $
    53,765
    
    
    
    9.9
    %
    
    $
    28,407
    
    
    
    9.6
    %
    
    $
    25,358
    
    
    
    89.3
    %
 Construction
 Engineering
 EPC
 Other Operating Expenses
 Depreciation and amortization Construction Engineering EPC
 General and Administrative
 Non-Operating Items
 Interest
 Foreign Exchange Other net
 9




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##### Table of Contents



Income tax
 Loss from Discontinued Operations, Net of Taxes
  Fiscal Year Ended December 31, 2005 Compared to Fiscal Year Ended December 31, 2004
 Contract Revenue
  Year Ended December 31,Increase /
    
    
    Percent2005
    
    
    2004
    
    
    (Decrease)
    
    
    ChangeConstruction
    
    $
    214,020
    
    
    $
    226,662
    
    
    $
    (12,642
    )
    
    
    (5.6
    )%Engineering
    
    
    43,194
    
    
    
    30,993
    
    
    
    12,201
    
    
    
    39.4
    %EPC
    
    
    37,265
    
    
    
    15,139
    
    
    
    22,126
    
    
    
    146.2
    %Total contract revenue
    
    $
    294,479
    
    
    $
    272,794
    
    
    $
    21,685
    
    
    
    7.9
    %
 Construction
 Engineering
 EPC
 Contract Income
  Year Ended December 31,% of
    
    
    
    
    
    
    % of
    
    
    Increase /
    
    
    Percent2005
    
    
    Revenue
    
    
    2004
    
    
    Revenue
    
    
    (Decrease)
    
    
    ChangeConstruction
    
    $
    14,869
    
    
    
    6.9
    %
    
    $
    47,038
    
    
    
    20.8
    %
    
    $
    (32,169
    )
    
    
    (68.4
    )%Engineering
    
    
    3,602
    
    
    
    8.3
    %
    
    
    914
    
    
    
    2.9
    %
    
    
    2,688
    
    
    
    294.1
    %EPC
    
    
    9,936
    
    
    
    26.7
    %
    
    
    2,485
    
    
    
    16.4
    %
    
    
    7,451
    
    
    
    299.8
    %Total contract income
    
    $
    28,407
    
    
    
    9.6
    %
    
    $
    50,437
    
    
    
    18.5
    %
    
    $
    (22,030
    )
    
    
    (43.7
    )%
 Construction
 10




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Engineering
 EPC
 Other Operating Expense
 Construction Engineering EPC
  Non-Operating Items
   Loss from Discontinued Operations, Net of Taxes
  LIQUIDITY AND CAPITAL RESOURCES
 Liquidity
  Capital Requirements
  11




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Working Capital
   2006 Financing Activities
 2006 Credit Facility
  Private Placement
  6.5% Senior Convertible Notes
  12




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##### Table of Contents



2.75% Convertible Senior Notes
   2004 Credit Facility
    13




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##### Table of Contents



Contractual Obligations
 Payments Due By PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    5 yearsConvertible notes
    
    $
    154,500
    
    
    $
    
    
    
    $
    
    
    
    $
    70,000
    
    
    $
    84,500Capital lease obligations
    
    
    13,144
    
    
    
    5,480
    
    
    
    7,664
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    17,650
    
    
    
    7,755
    
    
    
    7,971
    
    
    
    1,924
    
    
    
    Total
    
    $
    185,294
    
    
    $
    13,235
    
    
    $
    15,635
    
    
    $
    71,924
    
    
    $
    84,500
     Off-Balance Sheet Arrangements and Commercial Commitments
   Expiration Per PeriodTotal
    
    
    Less Than
    
    
    
    
    
    
    More ThanCommitment
    
    
    1 Year
    
    
    1-2 Years
    
    
    2 YearsLetters of credit:USperformance
    
    $
    33,250
    
    
    $
    33,250
    
    
    $
    
    
    
    $
    Canadaperformance
    
    
    8,569
    
    
    
    8,569
    
    
    
    
    
    
    
    Otherperformance and retention
    
    
    5,282
    
    
    
    1,602
    
    
    
    3,680
    
    
    
    Nigeria projectsperformance
    
    
    22,625
    
    
    
    2,743
    
    
    
    19,759
    
    
    
    123Total letters of credit
    
    
    69,726
    
    
    
    46,164
    
    
    
    23,439
    
    
    
    123U.S. Insurance bondsprimarily performance
    
    
    99,050
    
    
    
    35,936
    
    
    
    53,700
    
    
    
    9,414Total commercial commitments
    
    $
    168,776
    
    
    $
    82,100
    
    
    $
    77,139
    
    
    
    9,537
 14




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##### Table of Contents



NEW ACCOUNTING PRONOUNCEMENTS
 FIN No. 48
 SFAS No. 157
 FASB Staff Position (FSP) No. AUG AIR-1
 EFFECTS OF INFLATION AND CHANGING PRICES
  15




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 Index to Consolidated Financial Statements
 PageConsolidated Financial Statements of Willbros Group, Inc. and SubsidiariesReports of Independent Registered Public Accounting Firms
    
    
    17Consolidated Balance Sheets as of December 31, 2006 and 2005
    
    
    21Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004
    
    
    22Consolidated Statements of Stockholders Equity and Comprehensive Income (Loss) for the years ended
December 31, 2006, 2005 and 2004
    
    
    23Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004
    
    
    24Notes to Consolidated Financial Statements for the years ended December 31, 2006, 2005 and 2004
    
    
    26
 16




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Report of Independent Registered Public Accounting Firm
 
    Internal
ControlIntegrated Framework
    
 17




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
      
 18




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 Internal ControlIntegrated Framework
     Nigeria Accounting
 Nigeria Project Controls  Estimate to Complete
  19




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Internal ControlIntegrated Framework Internal ControlIntegrated
Framework
  
 20




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WILLBROS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
 December 31,2006
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    37,643
    
    
    $
    55,933Accounts receivable, net
    
    
    137,104
    
    
    
    84,003Contract cost and recognized income not yet billed
    
    
    11,027
    
    
    
    7,619Prepaid expenses
    
    
    17,299
    
    
    
    11,871Parts and supplies inventories
    
    
    2,069
    
    
    
    2,509Assets of discontinued operations
    
    
    294,192
    
    
    
    261,099Total current assets
    
    
    499,334
    
    
    
    423,034Deferred tax assets
    
    
    5,064
    
    
    
    4,134Property, plant and equipment, net
    
    
    65,347
    
    
    
    59,706Goodwill
    
    
    6,683
    
    
    
    6,687Other assets
    
    
    11,826
    
    
    
    5,324Total assets
    
    $
    588,254
    
    
    $
    498,885LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Notes payable and current portion of long-term debt
    
    $
    5,562
    
    
    $
    2,680Accounts payable and accrued liabilities
    
    
    122,352
    
    
    
    67,599Contract billings in excess of cost and recognized income
    
    
    14,947
    
    
    
    1,342Accrued income taxes
    
    
    3,556
    
    
    
    2,368Liabilities of discontinued operations
    
    
    182,092
    
    
    
    144,085Total current liabilities
    
    
    328,509
    
    
    
    218,0742.75% convertible senior notes
    
    
    70,000
    
    
    
    70,0006.5% senior convertible notes
    
    
    84,500
    
    
    
    65,000Long-term debt
    
    
    7,077
    
    
    
    340Other liabilities
    
    
    237
    
    
    
    237Total liabilities
    
    
    490,323
    
    
    
    353,651Commitments and contingencies (see 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
(35,000,000 at December 31, 2005) and 25,848,596 shares issued at
December 31, 2006 (21,649,475 at December 31, 2005)
    
    
    1,292
    
    
    
    1,082Capital in excess of par value
    
    
    217,036
    
    
    
    161,596Accumulated deficit
    
    
    (120,603
    )
    
    
    (15,166
    )Treasury stock at cost, 167,844 shares at December 31, 2006 (98,863 at
December 31, 2005)
    
    
    (2,154
    )
    
    
    (1,163
    )Deferred compensation
    
    
    
    
    
    
    (3,720
    )Note receivable for stock purchases
    
    
    
    
    
    
    (231
    )Accumulated other comprehensive income
    
    
    2,360
    
    
    
    2,836Total stockholders equity
    
    
    97,931
    
    
    
    145,234Total liabilities and stockholders equity
    
    $
    588,254
    
    
    $
    498,885
  21




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WILLBROS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
 Year Ended December 31,2006
    
    
    2005
    
    
    2004Contract revenue
    
    $
    543,259
    
    
    $
    294,479
    
    
    $
    272,794Operating expense:Contract
    
    
    489,494
    
    
    
    266,072
    
    
    
    222,357Depreciation and amortization
    
    
    12,430
    
    
    
    11,688
    
    
    
    9,776General and administrative
    
    
    53,366
    
    
    
    42,350
    
    
    
    32,525555,290
    
    
    
    320,110
    
    
    
    264,658Operating income (loss)
    
    
    (12,031
    )
    
    
    (25,631
    )
    
    
    8,136Other income (expense):Interest income
    
    
    1,803
    
    
    
    1,577
    
    
    
    868Interest expense
    
    
    (10,068
    )
    
    
    (5,481
    )
    
    
    (3,348
    )Foreign exchange gain (loss)
    
    
    (150
    )
    
    
    14
    
    
    
    (85
    )Other, net
    
    
    719
    
    
    
    728
    
    
    
    (302
    )(7,696
    )
    
    
    (3,162
    )
    
    
    (2,867
    )Income (loss) from continuing operations
before income taxes
    
    
    (19,727
    )
    
    
    (28,793
    )
    
    
    5,269Provision (benefit) for income taxes
    
    
    2,308
    
    
    
    1,668
    
    
    
    (1,027
    )Net income (loss) from continuing operations
    
    
    (22,035
    )
    
    
    (30,461
    )
    
    
    6,296Loss from discontinued operations net of provision for income taxes
    
    
    (83,402
    )
    
    
    (8,319
    )
    
    
    (27,111
    )Net loss
    
    $
    (105,437
    )
    
    $
    (38,780
    )
    
    $
    (20,815
    )Basic income (loss) per common share:Income (loss) from continuing operations
    
    $
    (0.98
    )
    
    $
    (1.43
    )
    
    $
    0.30Loss from discontinued operations
    
    
    (3.72
    )
    
    
    (0.39
    )
    
    
    (1.29
    )Net loss
    
    $
    (4.70
    )
    
    $
    (1.82
    )
    
    $
    (0.99
    )Diluted income (loss) per common share:Income (loss) from continuing operations
    
    $
    (0.98
    )
    
    $
    (1.43
    )
    
    $
    0.30Loss from discontinued operations
    
    
    (3.72
    )
    
    
    (0.39
    )
    
    
    (1.29
    )Net loss
    
    $
    (4.70
    )
    
    $
    (1.82
    )
    
    $
    (0.99
    )Weighted average number of common shares outstanding:Basic
    
    
    22,440,742
    
    
    
    21,258,211
    
    
    
    20,922,002Diluted
    
    
    22,440,742
    
    
    
    21,258,211
    
    
    
    20,922,002
  22




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WILLBROS GROUP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND
COMPREHENSIVE INCOME (LOSS)
(In thousands, except share amounts)
 Capital in
    
    
    Retained
    
    
    
    
    
    
    
    
    
    
    Notes
    
    
    Accumulated
    
    
    TotalCommon Stock
    
    
    Excess
    
    
    Earnings
    
    
    
    
    
    
    
    
    
    
    Receivable
    
    
    Other
    
    
    Stock-Par
    
    
    of Par
    
    
    (Accumulated
    
    
    Treasury
    
    
    Deferred
    
    
    Stock
    
    
    Comprehensive
    
    
    holdersShares
    
    
    Value
    
    
    Value
    
    
    Deficit)
    
    
    Stock
    
    
    Compensation
    
    
    Purchases
    
    
    Income(Loss)
    
    
    EquityBalance, December 31, 2003
    
    
    20,748,498
    
    
    $
    1,037
    
    
    $
    149,373
    
    
    $
    44,429
    
    
    $
    (345
    )
    
    $
    
    
    
    $
    (982
    )
    
    $
    1,015
    
    
    $
    194,527Comprehensive income (loss):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,815
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,815
    )Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    579
    
    
    
    579Total compre-hensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,236
    )Payment of notes receivable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    990
    
    
    
    
    
    
    
    990Amortization of note discount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (224
    )
    
    
    
    
    
    
    (224
    )Restricted stock grants
    
    
    183,000
    
    
    
    9
    
    
    
    2,312
    
    
    
    
    
    
    
    
    
    
    
    (2,321
    )
    
    
    
    
    
    
    
    
    
    
    Forfeitures of restricted stock grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (210
    )
    
    
    210
    
    
    
    
    
    
    
    
    
    
    
    Deferred compensation
    
    
    
    
    
    
    
    
    
    
    134
    
    
    
    
    
    
    
    
    
    
    
    472
    
    
    
    
    
    
    
    
    
    
    
    606Issuance of common stock under
employee benefit plan
    
    
    15,603
    
    
    
    1
    
    
    
    220
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221Exercise of stock options
    
    
    478,879
    
    
    
    24
    
    
    
    4,136
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,160Balance, December 31, 2004
    
    
    21,425,980
    
    
    
    1,071
    
    
    
    156,175
    
    
    
    23,614
    
    
    
    (555
    )
    
    
    (1,639
    )
    
    
    (216
    )
    
    
    1,594
    
    
    
    180,044Comprehensive income (loss):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,780
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,780
    )Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,242
    
    
    
    1,242Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37,538
    )Amortization of note discount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15
    )
    
    
    
    
    
    
    (15
    )Restricted stock grants
    
    
    175,000
    
    
    
    9
    
    
    
    3,822
    
    
    
    
    
    
    
    
    
    
    
    (3,831
    )
    
    
    
    
    
    
    
    
    
    
    Vesting restricted stock rights
    
    
    10,875
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeiture of restricted stock grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (357
    )
    
    
    357
    
    
    
    
    
    
    
    
    
    
    
    Additions to treasury stock, vesting
restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (251
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (251
    )Deferred compensation
    
    
    
    
    
    
    
    
    
    
    1,165
    
    
    
    
    
    
    
    
    
    
    
    1,393
    
    
    
    
    
    
    
    
    
    
    
    2,558Issuance of common stock under
employee benefit plan
    
    
    3,870
    
    
    
    
    
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80Exercise of stock options
    
    
    33,750
    
    
    
    1
    
    
    
    355
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    356Balance, December 31, 2005
    
    
    21,649,475
    
    
    
    1,082
    
    
    
    161,596
    
    
    
    (15,166
    )
    
    
    (1,163
    )
    
    
    (3,720
    )
    
    
    (231
    )
    
    
    2,836
    
    
    
    145,234Comprehensive income (loss):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105,437
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105,437
    )Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (476
    )
    
    
    (476
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105,913
    )Deferred compensation
    
    
    
    
    
    
    
    
    
    
    3,520
    
    
    
    
    
    
    
    
    
    
    
    3,720
    
    
    
    
    
    
    
    
    
    
    
    7,240Amortization of note discount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    
    
    
    
    
    (12
    )Stock received for note
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (243
    )
    
    
    
    
    
    
    243
    
    
    
    
    
    
    
    Restricted stock grants
    
    
    168,116
    
    
    
    8
    
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vesting of restricted stock rights
    
    
    12,125
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additions to treasury stock, vesting
restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (748
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (748
    )Exercise of stock options
    
    
    296,520
    
    
    
    15
    
    
    
    3,367
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,382Private placement of common stock
    
    
    3,722,360
    
    
    
    186
    
    
    
    45,139
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,325Issuance of common stock warrants
    
    
    
    
    
    
    
    
    
    
    3,423
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,423Balance, December 31, 2006
    
    
    25,848,596
    
    
    $
    1,292
    
    
    $
    217,036
    
    
    $
    (120,603
    )
    
    $
    (2,154
    )
    
    $
    
    
    
    $
    
    
    
    $
    2,360
    
    
    $
    97,931
 23




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##### Table of Contents



WILLBROS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except share amounts)
 Year Ended December 31,2006
    
    
    2005
    
    
    2004Cash flows from operating activities:Net loss
    
    $
    (105,437
    )
    
    $
    (38,780
    )
    
    $
    (20,815
    )Reconciliation of net loss to cash provided by (used in) operating activities:Loss from discontinued operations
    
    
    83,402
    
    
    
    8,319
    
    
    
    27,111Depreciation and amortization
    
    
    12,430
    
    
    
    11,688
    
    
    
    9,776Amortization of debt issue costs
    
    
    2,319
    
    
    
    2,920
    
    
    
    1,846Non-cash compensation expense
    
    
    7,240
    
    
    
    2,558
    
    
    
    606Deferred income tax expense (benefit)
    
    
    (895
    )
    
    
    1,730
    
    
    
    1,281Loss (gain) on sales and retirements of property, plant and equipment
    
    
    (3,914
    )
    
    
    (910
    )
    
    
    378Equity in joint ventures
    
    
    
    
    
    
    16
    
    
    
    10,314Amortization of notes receivable discount
    
    
    (12
    )
    
    
    (15
    )
    
    
    (224
    )Provision (credit) for bad debts
    
    
    517
    
    
    
    586
    
    
    
    (262
    )Provision for inventory obsolescence
    
    
    
    
    
    
    600
    
    
    
    1,400Changes in operating assets and liabilities:Accounts receivable, net
    
    
    (54,101
    )
    
    
    (27,443
    )
    
    
    (8,587
    )Contract cost and recognized income not yet billed
    
    
    (3,439
    )
    
    
    (6,668
    )
    
    
    5,972Prepaid expenses
    
    
    5,052
    
    
    
    4,411
    
    
    
    (186
    )Parts and supplies inventories
    
    
    603
    
    
    
    (8,882
    )
    
    
    (1,693
    )Other assets
    
    
    (3,123
    )
    
    
    (373
    )
    
    
    (194
    )Accounts payable and accrued liabilities
    
    
    39,117
    
    
    
    18,961
    
    
    
    7,215Contract billings in excess of cost and recognized income
    
    
    13,602
    
    
    
    (2,290
    )
    
    
    (2,705
    )Accrued income taxes
    
    
    1,210
    
    
    
    (1,059
    )
    
    
    7,443Cash provided by (used in) operating activities of continuing operations
    
    
    (5,429
    )
    
    
    (34,631
    )
    
    
    38,676Net cash flows used in operating activities of discontinued operations
    
    
    (97,923
    )
    
    
    (2,486
    )
    
    
    (1,266
    )Cash provided by (used in) operating activities
    
    
    (103,352
    )
    
    
    (37,117
    )
    
    
    37,410Cash flows from investing activities:Proceeds from sales of property and equipment
    
    
    3,663
    
    
    
    1,740
    
    
    
    1,274Proceeds from sales of discontinued operations
    
    
    48,514
    
    
    
    
    
    
    
    Purchases of property, plant and equipment
    
    
    (11,373
    )
    
    
    (18,706
    )
    
    
    (15,733
    )Cash provided by (used in) investing activities of continuing operations
    
    
    40,804
    
    
    
    (16,966
    )
    
    
    (14,459
    )Net cash flows used in investing activities of discontinued operations
    
    
    (7,431
    )
    
    
    (19,998
    )
    
    
    (22,292
    )Cash provided by (used in) investing activities
    
    
    33,373
    
    
    
    (36,964
    )
    
    
    (36,751
    )Cash flows from financing activities:Proceeds from private placement of equity
    
    
    48,748
    
    
    
    
    
    
    
    Proceeds from exercise of stock options
    
    
    3,382
    
    
    
    436
    
    
    
    4,381Proceeds from issuance of 6.5% senior convertible notes
    
    
    19,500
    
    
    
    65,000
    
    
    
    Proceeds from issuance of 2.75% convertible senior notes
    
    
    
    
    
    
    
    
    
    
    70,000Proceeds from long-term debt
    
    
    
    
    
    
    15,000
    
    
    
    Proceeds from notes payable to banks
    
    
    
    
    
    
    3,924
    
    
    
    2,490Repayment of notes payable to banks
    
    
    (12,135
    )
    
    
    (4,400
    )
    
    
    (3,323
    )Costs of debt issuance
    
    
    (6,306
    )
    
    
    (1,474
    )
    
    
    (6,176
    )Payment of capital leases
    
    
    (891
    )
    
    
    (6,405
    )
    
    
    Acquisition of treasury stock
    
    
    (748
    )
    
    
    (251
    )
    
    
    Repayment of long-term debt
    
    
    
    
    
    
    (15,000
    )
    
    
    (14,000
    )Collection of notes receivable for stock purchases
    
    
    
    
    
    
    
    
    
    
    990Cash provided by financing activities of continuing operations
    
    
    51,550
    
    
    
    56,830
    
    
    
    54,362Net cash flows provided by financing activities of discontinued operations
    
    
    
    
    
    
    
    
    
    
    Cash provided by financing activities
    
    
    51,550
    
    
    
    56,830
    
    
    
    54,362Effect of exchange rate changes on cash and cash equivalents
    
    
    139
    
    
    
    17
    
    
    
    (829
    )
 25




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##### Table of Contents



WILLBROS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, except share amounts)
 Year Ended December 31,2006
    
    
    2005
    
    
    2004Increase (decrease) in cash and cash equivalents
    
    
    (18,290
    )
    
    
    (17,234
    )
    
    
    54,192Cash and cash equivalents, beginning of year
    
    
    55,933
    
    
    
    73,167
    
    
    
    18,975Cash and cash equivalents, end of year
    
    $
    37,643
    
    
    $
    55,933
    
    
    $
    73,167Supplemental cash flow information:Cash paid for interest (including discontinued operations)
    
    $
    7,590
    
    
    $
    2,421
    
    
    $
    1,514Cash paid for income taxes (including discontinued operations)
    
    $
    11,782
    
    
    $
    15,887
    
    
    $
    2,393Non-cash investing and financing transactions:Property and equipment obtained by capital lease
    
    $
    12,108
    
    
    $
    
    
    
    $
    Prepaid insurance obtained by note payable
    
    $
    10,620
    
    
    $
    
    
    
    $
    Treasury stock acquired for forfeited restricted stock grants
    
    $
    
    
    
    $
    357
    
    
    $
    210Settlement of officer note receivable for stock
    
    $
    243
    
    
    $
    
    
    
    $
    Distribution of property by joint ventures
    
    $
    
    
    
    $
    
    
    
    $
    737Receivable obtained by sale of discontinued operations
    
    $
    3,300
    
    
    $
    
    
    
    $
    
  26




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 1. Summary of Significant Accounting Policies
 Company
 Basis of Presentation of Discontinuance of Operations and Asset Disposal 
 Principles of Consolidation
 Restatement of Consolidated Financial Statements 
  Use of Estimates
 27




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 1. Summary of Significant Accounting Policies (continued)
 Commitments and Contingencies
 Accounts Receivable
 Inventories
 Other Operating Expense
 Property, Plant and Equipment
 Construction equipment
    
    4-6 yearsMarine equipment
    
    10 yearsTransportation equipment
    
    3-4 yearsBuildings
    
    20 yearsFurniture and equipment
    
    3-10 years
  Goodwill
 28




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 1. Summary of Significant Accounting Policies (continued)
 Revenue
     Income Taxes
 Retirement Plans and Benefits
 Stock-Based Compensation
 29




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 1. Summary of Significant Accounting Policies (continued)
  Foreign Currency Translation
 Concentration of Credit Risk
 Fair Value of Financial Instruments
 Capitalized Interest
 Income (Loss) per Common Share
 Derivative Financial Instruments
 Cash Equivalents
 Cash flows from investing activities
 Recently Issued Accounting Standards FIN No. 48
 SFAS No. 157
 30




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 1. Summary of Significant Accounting Policies (continued)
  FASB Staff Position (FSP)
No. AUG AIR-1 Audits of Airlines,
 Reclassification
 2. Discontinuance of Operations and Asset Disposal
 Strategic Decisions
   Nigeria
  International
  Pipe coating joint venture
  31




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 2. Discontinuance of Operations and Asset Disposal (continued)
 Venezuela
 International
   TXP-4 Plant
 US & Canada
  32




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 2. Discontinuance of Operations and Asset Disposal (continued)
 Results of Discontinued Operations
  Year Ended December 31, 2006DiscontinuedNigeria
    
    
    Venezuela
    
    
    Opal TXP-4
    
    
    OperationsContract revenue
    
    $
    447,757
    
    
    $
    270
    
    
    $
    
    
    
    $
    448,027Operating expense:Contract
    
    
    473,479
    
    
    
    562
    
    
    
    
    
    
    
    474,041Depreciation and amortization
    
    
    3,569
    
    
    
    378
    
    
    
    
    
    
    
    3,947General and administrative
    
    
    31,620
    
    
    
    322
    
    
    
    
    
    
    
    31,942508,668
    
    
    
    1,262
    
    
    
    
    
    
    
    509,930Operating loss
    
    
    (60,911
    )
    
    
    (992
    )
    
    
    
    
    
    
    (61,903
    )Other income (expense)
    
    
    (11,579
    )
    
    
    164
    
    
    
    2,033
    
    
    
    (9,382
    )Income (loss) before income taxes
    
    
    (72,490
    )
    
    
    (828
    )
    
    
    2,033
    
    
    
    (71,285
    )Provision for income taxes
    
    
    11,283
    
    
    
    143
    
    
    
    691
    
    
    
    12,117Net income (loss)
    
    $
    (83,773
    )
    
    $
    (971
    )
    
    $
    1,342
    
    
    $
    (83,402
    )
 Year Ended December 31, 2005DiscontinuedNigeria
    
    
    Venezuela
    
    
    Opal TXP-4
    
    
    OperationsContract revenue
    
    $
    386,723
    
    
    $
    565
    
    
    $
    24,755
    
    
    $
    412,043Operating expense:Contract
    
    
    337,234
    
    
    
    1,492
    
    
    
    19,758
    
    
    
    358,484Depreciation and amortization
    
    
    8,270
    
    
    
    590
    
    
    
    1,038
    
    
    
    9,898General and administrative
    
    
    32,552
    
    
    
    528
    
    
    
    
    
    
    
    33,080Other operating expense
    
    
    1,084
    
    
    
    
    
    
    
    
    
    
    
    1,084379,140
    
    
    
    2,610
    
    
    
    20,796
    
    
    
    402,546Operating income (loss)
    
    
    7,583
    
    
    
    (2,045
    )
    
    
    3,959
    
    
    
    9,497Other income (expense)
    
    
    (1,408
    )
    
    
    232
    
    
    
    
    
    
    
    (1,176
    )Income (loss) before income taxes
    
    
    6,175
    
    
    
    (1,813
    )
    
    
    3,959
    
    
    
    8,321Provision (benefit) for income taxes
    
    
    15,296
    
    
    
    (2
    )
    
    
    1,346
    
    
    
    16,640Net income (loss)
    
    $
    (9,121
    )
    
    $
    (1,811
    )
    
    $
    2,613
    
    
    $
    (8,319
    )
 33




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 2. Discontinuance of Operations and Asset Disposal (continued)
 Year Ended December 31, 2004DiscontinuedNigeria
    
    
    Venezuela
    
    
    Opal TXP-4
    
    
    OperationsContract revenue
    
    $
    171,558
    
    
    $
    17,750
    
    
    $
    21,216
    
    
    $
    210,524Operating expense:Contract
    
    
    166,933
    
    
    
    12,629
    
    
    
    15,752
    
    
    
    195,314Depreciation and amortization
    
    
    5,473
    
    
    
    797
    
    
    
    701
    
    
    
    6,971General and administrative
    
    
    13,468
    
    
    
    621
    
    
    
    
    
    
    
    14,089Other operating expense
    
    
    3,571
    
    
    
    
    
    
    
    
    
    
    
    3,571189,445
    
    
    
    14,047
    
    
    
    16,453
    
    
    
    219,945Operating income (loss)
    
    
    (17,887
    )
    
    
    3,703
    
    
    
    4,763
    
    
    
    (9,421
    )Other income (expense)
    
    
    (6,929
    )
    
    
    330
    
    
    
    
    
    
    
    (6,599
    )Income (loss) before income taxes
    
    
    (24,816
    )
    
    
    4,033
    
    
    
    4,763
    
    
    
    (16,020
    )Provision for income taxes
    
    
    8,483
    
    
    
    989
    
    
    
    1,619
    
    
    
    11,091Net income (loss)
    
    $
    (33,299
    )
    
    $
    3,044
    
    
    $
    3,144
    
    
    $
    (27,111
    )
 Nigeria Income Taxes
  Nigeria Federal Tax Audit
  Nigeria National Labor Contract
  34




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 2. Discontinuance of Operations and Asset Disposal (continued)
  Balance Sheets of Discontinued Operations
  December 31, 2006Opal
    
    
    DiscontinuedNigeria
    
    
    Venezuela
    
    
    TXP-4
    
    
    OperationsCurrent assets:Cash and cash equivalents
    
    $
    12,964
    
    
    $
    
    
    
    $
    
    
    
    $
    12,964Restricted cash
    
    
    36,683
    
    
    
    
    
    
    
    
    
    
    
    36,683Accounts receivable, net
    
    
    76,673
    
    
    
    
    
    
    
    
    
    
    
    76,673Contract cost and recognized income not yet billed
    
    
    79,364
    
    
    
    
    
    
    
    
    
    
    
    79,364Prepaid expenses
    
    
    16,017
    
    
    
    
    
    
    
    
    
    
    
    16,017Parts and supplies inventories
    
    
    21,645
    
    
    
    
    
    
    
    
    
    
    
    21,645Total current assets
    
    
    243,346
    
    
    
    
    
    
    
    
    
    
    
    243,346Property, plant and equipment, net
    
    
    50,723
    
    
    
    
    
    
    
    
    
    
    
    50,723Other assets
    
    
    123
    
    
    
    
    
    
    
    
    
    
    
    123Total assets
    
    
    294,192
    
    
    
    
    
    
    
    
    
    
    
    294,192Current liabilities
    
    
    148,135
    
    
    
    
    
    
    
    
    
    
    
    148,135Loss provision on contracts
    
    
    33,957
    
    
    
    
    
    
    
    
    
    
    
    33,957Total current liabilities
    
    
    182,092
    
    
    
    
    
    
    
    
    
    
    
    182,092Net assets of discontinued operations
    
    $
    112,100
    
    
    $
    
    
    
    $
    
    
    
    $
    112,100
 December 31, 2005Opal
    
    
    DiscontinuedNigeria
    
    
    Venezuela
    
    
    TXP-4
    
    
    OperationsCurrent assets:Cash and cash equivalents
    
    $
    9,514
    
    
    $
    134
    
    
    $
    
    
    
    $
    9,648Accounts receivable, net
    
    
    93,667
    
    
    
    
    
    
    
    
    
    
    
    93,667Contract cost and recognized income not yet
billed
    
    
    36,392
    
    
    
    32
    
    
    
    
    
    
    
    36,424Prepaid expenses
    
    
    14,716
    
    
    
    163
    
    
    
    
    
    
    
    14,879Parts and supplies inventories
    
    
    16,818
    
    
    
    
    
    
    
    
    
    
    
    16,818Total current assets
    
    
    171,107
    
    
    
    329
    
    
    
    
    
    
    
    171,436Property, plant and equipment, net
    
    
    52,200
    
    
    
    4,354
    
    
    
    
    
    
    
    56,554Asset held for sale
    
    
    
    
    
    
    
    
    
    
    23,049
    
    
    
    23,049Investments in joint ventures
    
    
    
    
    
    
    3,961
    
    
    
    
    
    
    
    3,961Deferred tax assets
    
    
    
    
    
    
    693
    
    
    
    
    
    
    
    693Other assets
    
    
    5,256
    
    
    
    150
    
    
    
    
    
    
    
    5,406Total assets
    
    
    228,563
    
    
    
    9,487
    
    
    
    23,049
    
    
    
    261,099Current liabilities
    
    
    142,171
    
    
    
    498
    
    
    
    
    
    
    
    142,669Other liabilities
    
    
    
    
    
    
    536
    
    
    
    880
    
    
    
    1,416Total liabilities
    
    
    142,171
    
    
    
    1,034
    
    
    
    880
    
    
    
    144,085Net assets of discontinued operations
    
    $
    86,392
    
    
    $
    8,453
    
    
    $
    22,169
    
    
    $
    117,014
 35




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 2. Discontinuance of Operations and Asset Disposal (continued)
 Cash
  Inventory
  Loss provision on contracts
  Contingencies, Commitments and Other Circumstances
   3. Accounts Receivable
  2006
    
    
    2005Trade
    
    $
    109,880
    
    
    $
    58,683Contract retention
    
    
    14,637
    
    
    
    6,063Unbilled revenue
    
    
    12,598
    
    
    
    14,766Other receivables
    
    
    587
    
    
    
    5,007Total accounts receivable
    
    
    137,702
    
    
    
    84,519LessAllowance for doubtful accounts
    
    
    (598
    )
    
    
    (516
    )Total accounts receivable, net
    
    $
    137,104
    
    
    $
    84,003
  36




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 4. Contracts in Progress
   2006
    
    
    2005Costs incurred on contracts in progress
    
    $
    188,030
    
    
    $
    122,935Recognized income
    
    
    12,039
    
    
    
    6,818200,069
    
    
    
    129,753Progress billings and advance payments
    
    
    (203,989
    )
    
    
    (123,476
    )$
    (3,920
    )
    
    $
    6,277Contract cost and recognized income not yet billed
    
    $
    11,027
    
    
    $
    7,619Contract billings in excess of cost and recognized income
    
    
    (14,947
    )
    
    
    (1,342
    )$
    (3,920
    )
    
    $
    6,277
  5. Property, Plant and Equipment
  2006

    
        2005Construction equipment
    
    $
    53,932
    
    
    $
    47,773Furniture and equipment
    
    
    28,378
    
    
    
    27,931Land and buildings
    
    
    26,047
    
    
    
    25,018Transportation equipment
    
    
    20,874
    
    
    
    21,612Leasehold improvements
    
    
    14,956
    
    
    
    13,768Marine equipment
    
    
    101
    
    
    
    190144,288
    
    
    
    136,292Less accumulated depreciation and amortization
    
    
    (78,941
    )
    
    
    (76,586
    )$
    65,347
    
    
    $
    59,706
  37




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 6. Accounts Payable and Accrued Liabilities
  2006
    
    
    2005Trade accounts payable
    
    $
    81,823
    
    
    $
    49,745Payroll and payroll liabilities
    
    
    18,312
    
    
    
    12,703Advances
    
    
    16,566
    
    
    
    983Minority interest
    
    
    791
    
    
    
    487Provision for loss contracts costs
    
    
    494
    
    
    
    619Other accrued liabilities
    
    
    4,366
    
    
    
    3,062$
    122,352
    
    
    $
    67,599
  7. Long-term Debt
  2006
    
    
    20056.5% senior convertible notes
    
    $
    84,500
    
    
    $
    65,0002.75% convertible senior notes
    
    
    70,000
    
    
    
    70,000Capital lease obligations
    
    
    11,601
    
    
    
    384Other obligations
    
    
    51
    
    
    
    2,6362006 Credit Facility
    
    
    
    
    
    
    Total debt
    
    
    166,152
    
    
    
    138,020Less current portion
    
    
    (4,575
    )
    
    
    (2,680
    )Long-term debt
    
    $
    161,577
    
    
    $
    135,340
 2006 Credit Facility
   38




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 7. Long-term Debt (continued)
   6.5% Senior Convertible Notes
       39




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 7. Long-term Debt (continued)
  2.75% Convertible Senior Notes
    40




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 7. Long-term Debt (continued)
 2004 Credit Facility
   2004 Credit Facility Waivers
      41




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 7. Long-term Debt (continued)
  Capital Leases
  December 31,2006
    
    
    2005Construction equipment
    
    $
    10,662
    
    
    $
    Land and buildings
    
    
    1,446
    
    
    
    Furniture and equipment
    
    
    535
    
    
    
    535Total assets held under capital lease
    
    
    12,643
    
    
    
    535Less accumulated amortization
    
    
    (1,572
    )
    
    
    (312
    )Net assets under capital lease
    
    $
    11,071
    
    
    $
    223
  Fiscal year:2007
    
    $
    5,4802008
    
    
    4,1982009
    
    
    3,4662010
    
    
    2011
    
    
    Thereafter
    
    
    Total minimum lease payments under capital leases
    
    
    13,144Less: interest expense
    
    
    (1,543
    )Net minimum lease payments under capital leases
    
    
    11,601Less: current portion of net minimum lease payments
    
    
    (4,524
    )Long-term net minimum lease payments
    
    $
    7,077
 Other Obligations
   42




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 8. Retirement Benefits
  9. Income Taxes
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Income (loss) before income taxes:Other countries
    
    $
    (15,468
    )
    
    $
    (27,977
    )
    
    $
    16,100United States
    
    
    (4,259
    )
    
    
    (816
    )
    
    
    (10,831
    )$
    (19,727
    )
    
    $
    (28,793
    )
    
    $
    5,269
 Year Ended December 31,2006
    
    
    2005
    
    
    2004Provision (benefit) for income taxes:Current provision (benefit):Other countries
    
    $
    901
    
    
    $
    305
    
    
    $
    564United States:Federal
    
    
    368
    
    
    
    (1,214
    )
    
    
    (3,369
    )State
    
    
    737
    
    
    
    931
    
    
    
    3232,006
    
    
    
    22
    
    
    
    (2,482
    )Deferred tax expense (benefit):Other countries
    
    
    1,644
    
    
    
    (1,317
    )
    
    
    2,087United States
    
    
    (1,342
    )
    
    
    2,963
    
    
    
    (632
    )302
    
    
    
    1,646
    
    
    
    (1,455
    )Total provision (benefit) for income taxes
    
    $
    2,308
    
    
    $
    1,668
    
    
    $
    (1,027
    )
     43




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 9. Income Taxes (continued)
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Income tax provision at statutory rate (Panama)
    
    $
    
    
    
    $
    
    
    
    $
    Taxes on foreign earnings at greater than Panama rate
    
    
    2,230
    
    
    
    (2,063
    )
    
    
    4,246Taxes on U.S. earnings at greater than Panama rate
    
    
    (1,785
    )
    
    
    108
    
    
    
    (3,537
    )U.S. state taxes
    
    
    527
    
    
    
    1,201
    
    
    
    (142
    )U.S. and Canadian permanent tax adjustments
    
    
    1,336
    
    
    
    1,132
    
    
    
    U.S. alternative minimum tax
    
    
    
    
    
    
    239
    
    
    
    Change in valuation allowance
    
    
    
    
    
    
    1,051
    
    
    
    (1,594
    )$
    2,308
    
    
    $
    1,668
    
    
    $
    (1,027
    )
   December 31,2006
    
    
    2005Deferred tax assets:Self insured medical accrual
    
    $
    304
    
    
    $
    211Accrued vacation
    
    
    594
    
    
    
    637Non-U.S. tax net operating loss carry forwards
    
    
    12,410
    
    
    
    15,404U.S. tax net operating loss carry forwards
    
    
    2,570
    
    
    
    449Alternative minimum tax
    
    
    
    
    
    
    239Deferred compensation
    
    
    2,284
    
    
    
    753Debt issue cost amortization
    
    
    
    
    
    
    297Estimated loss
    
    
    897
    
    
    
    Other
    
    
    143
    
    
    
    469Gross deferred tax assets
    
    
    19,202
    
    
    
    18,459Valuation allowance
    
    
    (12,410
    )
    
    
    (14,212
    )Deferred tax assets, net of valuation allowance
    
    
    6,792
    
    
    
    4,247Deferred tax liabilities:Property, plant and equipment
    
    
    (786
    )
    
    
    (113
    )Prepaid expenses
    
    
    (941
    )
    
    
    Other
    
    
    (1
    )
    
    
    Deferred tax liabilities
    
    
    (1,728
    )
    
    
    (113
    )Net deferred tax assets
    
    $
    5,064
    
    
    $
    4,134
 44




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 9. Income Taxes (continued)
  December 31,2006
    
    
    2005United States
    
    $
    5,144
    
    
    $
    2,669Other countries
    
    
    (80
    )
    
    
    1,465Net deferred tax assets
    
    $
    5,064
    
    
    $
    4,134
     United Kingdom
    
    $
    31,783
    
    
    (16,167 Pounds)Bolivia
    
    
    11,281
    
    
    (93,602 Bolivianos)Pakistan
    
    
    90
    
    
    (5,485 Rupees)Total
    
    $
    43,154
 10. Stockholders Equity
 Private Sale of Equity
  45




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 10. Stockholders Equity (continued)
  Stockholder Rights Plan
     Stock Ownership Plans
     46




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 10. Stockholders Equity (continued)
     Year EndedDecember 31,2005
    
    
    2004Net loss as reported
    
    $
    (38,780
    )
    
    $
    (20,815
    )Add stock-based employee compensation included in net income
    
    
    2,558
    
    
    
    606Less stock-based employee compensation determined under fair value method
    
    
    (3,098
    )
    
    
    (1,431
    )Pro forma net loss
    
    $
    (39,320
    )
    
    $
    (21,640
    )Loss per share:Basic, as reported
    
    $
    (1.82
    )
    
    $
    (0.99
    )Basic, pro forma
    
    $
    (1.85
    )
    
    $
    (1.03
    )Diluted, as reported
    
    $
    (1.82
    )
    
    $
    (0.99
    )Diluted, pro forma
    
    $
    (1.85
    )
    
    $
    (1.03
    )
  Year Ended December 31,2006
    
    2005
    
    2004Weighted average grant date fair value
    
    $
    6.36
    
    
    $
    6.75
    
    
    $
    4.02Weighted average assumptions used:Expected option life in years
    
    
    3.50
    
    
    
    3.00
    
    
    
    3.00Risk-free interest rate
    
    
    4.56
    %
    
    
    2.28
    %
    
    
    0.97
    %Dividend yield
    
    
    
    
    
    
    
    
    
    
    Volatility
    
    
    44.05
    %
    
    
    43.61
    %
    
    
    45.41
    %
 47




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 10. Stockholders Equity (continued)
   Year Ended December 31,2006
    
    
    2005
    
    
    2004Weighted-
    
    
    
    
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageShares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise PriceOutstanding, beginning of year
    
    
    887,270
    
    
    $
    11.76
    
    
    
    954,020
    
    
    $
    11.57
    
    
    
    1,447,399
    
    
    $
    10.68Granted
    
    
    250,000
    
    
    
    17.06
    
    
    
    30,000
    
    
    
    21.19
    
    
    
    45,000
    
    
    
    12.73Exercised
    
    
    296,520
    
    
    
    11.41
    
    
    
    33,750
    
    
    
    10.09
    
    
    
    478,879
    
    
    
    8.69Forfeited
    
    
    34,000
    
    
    
    13.68
    
    
    
    63,000
    
    
    
    13.47
    
    
    
    59,500
    
    
    
    13.67Outstanding, end of year
    
    
    806,750
    
    
    $
    13.46
    
    
    
    887,270
    
    
    $
    11.76
    
    
    
    954,020
    
    
    $
    11.57Exercisable at end of year
    
    
    604,250
    
    
    $
    12.20
    
    
    
    864,020
    
    
    $
    11.83
    
    
    
    926,520
    
    
    $
    11.59
    Weighted-AverageGrant-DateShares
    
    Fair ValueNonvested, beginning of year
    
    
    23,250
    
    
    
    3.79Granted
    
    
    250,000
    
    
    
    6.36Vested
    
    
    67,000
    
    
    
    5.33Forfeited or expired
    
    
    3,750
    
    
    
    6.67Nonvested, end of year
    
    
    202,500
    
    
    
    6.40
 48




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 10. Stockholders Equity (continued)
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Weighted-
    
    
    
    
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageGrant-Date
    
    
    
    
    
    
    Grant-Date
    
    
    
    
    
    
    Grant-DateShares
    
    
    Fair Value
    
    
    Shares
    
    
    Fair Value
    
    
    Shares
    
    
    Fair ValueOutstanding, beginning of year
    
    
    441,375
    
    
    $
    19.61
    
    
    
    209,500
    
    
    $
    2.64
    
    
    
    
    
    
    $
    0.00Granted
    
    
    278,116
    
    
    
    17.86
    
    
    
    343,000
    
    
    
    22.31
    
    
    
    226,500
    
    
    
    12.62Vested, shares released
    
    
    402,250
    
    
    
    19.76
    
    
    
    48,375
    
    
    
    12.88
    
    
    
    
    
    
    
    0.00Forfeited
    
    
    17,125
    
    
    
    17.59
    
    
    
    62,750
    
    
    
    16.32
    
    
    
    17,000
    
    
    
    12.38Outstanding, end of year
    
    
    300,116
    
    
    $
    17.85
    
    
    
    441,375
    
    
    $
    19.61
    
    
    
    209,500
    
    
    $
    12.64
    11. Income (Loss) Per Common Share
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Income (loss) from continuing operations applicable to
common shares
    
    $
    (22,035
    )
    
    $
    (30,461
    )
    
    $
    6,296Weighted average number of common shares outstanding for
basic income per share
    
    
    22,440,742
    
    
    
    21,258,211
    
    
    
    20,922,002Weighted average number of dilutive potential common
shares outstanding
    
    
    
    
    
    
    
    
    
    
    Weighted average number of common shares outstanding for
diluted income per share
    
    
    22,440,742
    
    
    
    21,258,211
    
    
    
    20,922,002Income (loss) from continuing operations per common share:Basic
    
    $
    (0.98
    )
    
    $
    (1.43
    )
    
    $
    0.30Diluted
    
    $
    (0.98
    )
    
    $
    (1.43
    )
    
    $
    0.30
 49




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 11. Income (Loss) Per Common Share (continued)
  Year Ended December 31,2006
    
    2005
    
    20042.75% Convertible Senior Notes
    
    
    3,595,277
    
    
    
    3,595,277
    
    
    
    3,595,2776.5% Senior Convertible Notes
    
    
    4,813,171
    
    
    
    3,702,439
    
    
    
    Stock options
    
    
    806,750
    
    
    
    887,270
    
    
    
    954,020Warrants to purchase common stock
    
    
    558,354
    
    
    
    
    
    
    
    Restricted stock
    
    
    274,241
    
    
    
    275,000
    
    
    
    166,00010,047,793
    
    
    
    8,459,986
    
    
    
    4,715,297
  12. Segment Information
 Construction Engineering, Engineering, Procurement and
Construction EPC). US & Canada International
  Year Ended December 31, 2006Construction
    
    
    Engineering
    
    
    EPC*
    
    
    ConsolidatedContract revenue
    
    $
    421,270
    
    
    $
    75,833
    
    
    $
    46,156
    
    
    $
    543,259Operating expenses:Contract
    
    
    386,189
    
    
    
    61,985
    
    
    
    41,320
    
    
    
    489,494Depreciation and amortization
    
    
    8,935
    
    
    
    827
    
    
    
    2,668
    
    
    
    12,430General and administrative
    
    
    41,397
    
    
    
    8,612
    
    
    
    3,357
    
    
    
    53,366436,521
    
    
    
    71,424
    
    
    
    47,345
    
    
    
    555,290Operating income (loss):
    
    $
    (15,251
    )
    
    $
    4,409
    
    
    $
    (1,189
    )
    
    $
    (12,031
    )
 50




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 12. Segment Information (continued)
 Year Ended December 31, 2005Construction
    
    
    Engineering
    
    
    EPC*
    
    
    ConsolidatedContract revenue
    
    $
    214,020
    
    
    $
    43,194
    
    
    $
    37,265
    
    
    $
    294,479Operating expenses:Contract
    
    
    199,151
    
    
    
    39,592
    
    
    
    27,329
    
    
    
    266,072Depreciation and amortization
    
    
    8,389
    
    
    
    1,065
    
    
    
    2,234
    
    
    
    11,688General and administrative
    
    
    32,959
    
    
    
    6,123
    
    
    
    3,268
    
    
    
    42,350240,499
    
    
    
    46,780
    
    
    
    32,831
    
    
    
    320,110Operating income (loss):
    
    $
    (26,479
    )
    
    $
    (3,586
    )
    
    $
    4,434
    
    
    $
    (25,631
    )
 Year Ended December 31, 2004Construction
    
    
    Engineering
    
    
    EPC*
    
    
    ConsolidatedContract revenue
    
    $
    226,662
    
    
    $
    30,993
    
    
    $
    15,139
    
    
    $
    272,794Operating expenses:Contract
    
    
    179,624
    
    
    
    30,079
    
    
    
    12,654
    
    
    
    222,357Depreciation and amortization
    
    
    7,541
    
    
    
    878
    
    
    
    1,357
    
    
    
    9,776General and administrative
    
    
    27,175
    
    
    
    3,980
    
    
    
    1,370
    
    
    
    32,525214,340
    
    
    
    34,937
    
    
    
    15,381
    
    
    
    264,658Operating income (loss):
    
    $
    12,322
    
    
    $
    (3,944
    )
    
    $
    (242
    )
    
    $
    8,136
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Construction
    
    $
    9,396
    
    
    $
    16,096
    
    
    $
    6,057Engineering
    
    
    47
    
    
    
    
    
    
    
    45EPC
    
    
    989
    
    
    
    3,673
    
    
    
    941Corporate
    
    
    1,832
    
    
    
    5,342
    
    
    
    8,690Total
    
    $
    12,264
    
    
    $
    25,111
    
    
    $
    15,733
  December 31,2006
    
    
    2005Construction
    
    $
    196,166
    
    
    $
    99,985Engineering
    
    
    15,346
    
    
    
    11,270EPC
    
    
    15,170
    
    
    
    14,448Corporate
    
    
    67,380
    
    
    
    112,083Total assets, continuing operations
    
    $
    294,062
    
    
    $
    237,786
  51




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 12. Segment Information (continued)
  Year Ended December 31,2006
    
    2006
    
    
    2004Customer A
    
    
    13
    %
    
    
    
    %
    
    
    
    %Customer B
    
    
    11
    
    
    
    
    
    
    
    Customer C
    
    
    
    
    
    
    18
    
    
    
    20Customer D
    
    
    
    
    
    
    
    
    
    
    1024
    %
    
    
    18
    %
    
    
    30
    %
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Contract revenue:United States
    
    $
    312,121
    
    
    $
    214,252
    
    
    $
    138,054Canada
    
    
    161,924
    
    
    
    54,754
    
    
    
    33,524Oman
    
    
    69,214
    
    
    
    25,294
    
    
    
    36,846Ecuador
    
    
    
    
    
    
    179
    
    
    
    3,222Iraq
    
    
    
    
    
    
    
    
    
    
    54,029Bolivia
    
    
    
    
    
    
    
    
    
    
    6,368Cameroon
    
    
    
    
    
    
    
    
    
    
    336Australia
    
    
    
    
    
    
    
    
    
    
    415$
    543,259
    
    
    $
    294,479
    
    
    $
    272,794
 December 31,2006
    
    
    2005Long-lived assets:United States
    
    $
    33,115
    
    
    $
    29,956Canada
    
    
    21,666
    
    
    
    20,567Oman
    
    
    7,858
    
    
    
    4,040Bolivia
    
    
    551
    
    
    
    1,011Other
    
    
    2,157
    
    
    
    4,132$
    65,347
    
    
    $
    59,706
 52




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 13. Contingencies, Commitments and Other Circumstances
    Legion Partners, LLP v. Willbros
Group, Inc. et al.,
  53




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 13. Contingencies, Commitments and Other Circumstances (continued)
       st
 54




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 13. Contingencies, Commitments and Other Circumstances (continued)
     December 31,2006
    
    
    2005Current assets
    
    $
    123
    
    
    $
    351Non-current assets
    
    
    
    
    
    
    Total assets
    
    $
    123
    
    
    $
    351Current liabilities
    
    $
    123
    
    
    $
    351Equity
    
    
    
    
    
    
    Total liabilities and equity
    
    $
    123
    
    
    $
    351
 55




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 14. Quarterly Financial Data (Unaudited)
  September 30,
    
    
    December 31,Year 2006 Quarter Ended
    

March
31, 2006
    
    

June
30, 2006
    
    
    2006
    
    
    2006
    
    
    Total 2006Contract revenue
    
    $
    107,586
    
    
    $
    119,128
    
    
    $
    125,466
    
    
    $
    191,079
    
    
    $
    543,259Contract margin
    
    
    6,126
    
    
    
    13,381
    
    
    
    12,048
    
    
    
    22,210
    
    
    
    53,765Pre-tax loss
    
    
    (8,796
    )
    
    
    (3,418
    )
    
    
    (4,586
    )
    
    
    (2,927
    )
    
    
    (19,727
    )Loss from continuing operations
    
    
    (8,541
    )
    
    
    (5,104
    )
    
    
    (4,965
    )
    
    
    (3,425
    )
    
    
    (22,035
    )Income (loss) from discontinued
operations
    
    
    3,948
    
    
    
    (33,048
    )
    
    
    (17,136
    )
    
    
    (37,166
    )
    
    
    (83,402
    )Net loss
    
    $
    (4,593
    )
    
    $
    (38,152
    )
    
    $
    (22,101
    )
    
    $
    (40,591
    )
    
    $
    (105,437
    )Basic income (loss) per share:Continuing operations
    
    $
    (0.40
    )
    
    $
    (0.24
    )
    
    $
    (0.23
    )
    
    $
    (0.14
    )
    
    $
    (0.98
    )Discontinued operations
    
    
    0.18
    
    
    
    (1.53
    )
    
    
    (0.80
    )
    
    
    (1.47
    )
    
    
    (3.72
    )Net loss
    
    $
    (0.22
    )
    
    $
    (1.77
    )
    
    $
    (1.03
    )
    
    $
    (1.61
    )
    
    $
    (4.70
    )Diluted income (loss) per share:Continuing operations
    
    $
    (0.40
    )
    
    $
    (0.24
    )
    
    $
    (0.23
    )
    
    $
    (0.14
    )
    
    $
    (0.98
    )Discontinued operations
    
    
    0.18
    
    
    
    (1.53
    )
    
    
    (0.80
    )
    
    
    (1.47
    )
    
    
    (3.72
    )Net loss
    
    $
    (0.22
    )
    
    $
    (1.77
    )
    
    $
    (1.03
    )
    
    $
    (1.61
    )
    
    $
    (4.70
    )
 September 30,
    
    
    December 31,Year 2005 Quarter Ended
    

March
31, 2005
    
    

June
30, 2005
    
    
    2005
    
    
    2005
    
    
    Total 2005Contract revenue
    
    $
    43,443
    
    
    $
    68,050
    
    
    $
    65,034
    
    
    $
    117,952
    
    
    $
    294,479Contract margin
    
    
    1,752
    
    
    
    7,798
    
    
    
    5,604
    
    
    
    13,253
    
    
    
    28,407Pre-tax loss
    
    
    (10,594
    )
    
    
    (5,165
    )
    
    
    (10,044
    )
    
    
    (2,990
    )
    
    
    (28,793
    )Loss from continuing operations
    
    
    (8,732
    )
    
    
    (6,153
    )
    
    
    (8,950
    )
    
    
    (6,626
    )
    
    
    (30,461
    )Income (loss) from discontinued
operations
    
    
    (1,166
    )
    
    
    (3,766
    )
    
    
    (8,603
    )
    
    
    5,216
    
    
    
    (8,319
    )Net loss
    
    $
    (9,898
    )
    
    $
    (9,919
    )
    
    $
    (17,553
    )
    
    $
    (1,410
    )
    
    $
    (38,780
    )Basic income (loss) per share:Continuing operations
    
    $
    (0.41
    )
    
    $
    (0.29
    )
    
    $
    (0.42
    )
    
    $
    (0.32
    )
    
    $
    (1.43
    )Discontinued operations
    
    
    (0.06
    )
    
    
    (0.18
    )
    
    
    (0.41
    )
    
    
    0.25
    
    
    
    (0.39
    )Net loss
    
    $
    (0.47
    )
    
    $
    (0.47
    )
    
    $
    (0.83
    )
    
    $
    (0.07
    )
    
    $
    (1.82
    )Diluted income (loss) per share:Continuing operations
    
    $
    (0.41
    )
    
    $
    (0.29
    )
    
    $
    (0.42
    )
    
    $
    (0.32
    )
    
    $
    (1.43
    )Discontinued operations
    
    
    (0.06
    )
    
    
    (0.18
    )
    
    
    (0.41
    )
    
    
    0.25
    
    
    
    (0.39
    )Net loss
    
    $
    (0.47
    )
    
    $
    (0.47
    )
    
    $
    (0.83
    )
    
    $
    (0.07
    )
    
    $
    (1.82
    )
 Additional Notes:
 
    
    The decision to sell the business operations and assets in Nigeria and Venezuela, and
the TXP-4 Plant in Opal, Wyoming, in 2006 resulted in their reclassification to
discontinued operations in all periods presented.
    
    The quarters ended 2005 and March 31, 2006 were restated to reflect this
reclassification in Form 8-K filed on December 8, 2006. See Note 2Discontinuance of
Operations and Asset Disposal of the consolidated financial statements for further
discussion of discontinued operations.
    
    The income from discontinued operations in the quarter ended
March 31, 2006 includes a
gain on
 56




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WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 14. Quarterly Financial Data (Unaudited) (continued)
 sale of the TXP-4 Plant in Opal, Wyoming, of $1,342 net of tax.
 
    
    On November 28, 2006, the Company completed the sale of its operations and assets in
Venezuela, recognizing no gain.
    
    In the fourth quarter of 2006 the Company recognized a loss provision on a Nigeria
project of $26,657, which contributed to the 2006 loss from Discontinued Operations.
  15. Parent, Guarantor, Non-Guarantor Condensed Consolidating Financial Statements
   57




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WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 15. Parent, Guarantor, Non-Guarantor Condensed Consolidating Financial Statements (continued)
 Condensed Consolidating Balance Sheets
 December 31, 2006WUSAI
    
    
    Non-Parent
    
    
    (Guarantor)
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    24,776
    
    
    $
    4,895
    
    
    $
    7,972
    
    
    $
    
    
    
    $
    37,643Accounts receivable, net
    
    
    32
    
    
    
    81,004
    
    
    
    56,068
    
    
    
    
    
    
    
    137,104Contract cost and recognized income not yet
billed
    
    
    
    
    
    
    2,225
    
    
    
    8,802
    
    
    
    
    
    
    
    11,027Prepaid expenses
    
    
    3
    
    
    
    16,092
    
    
    
    1,204
    
    
    
    
    
    
    
    17,299Parts and supplies inventories
    
    
    
    
    
    
    560
    
    
    
    1,509
    
    
    
    
    
    
    
    2,069Assets of discontinued operations
    
    
    
    
    
    
    
    
    
    
    294,192
    
    
    
    
    
    
    
    294,192Receivables from affiliated companies
    
    
    280,853
    
    
    
    
    
    
    
    
    
    
    
    (280,853
    )
    
    
    Total current assets
    
    
    305,664
    
    
    
    104,776
    
    
    
    369,747
    
    
    
    (280,853
    )
    
    
    499,334Deferred tax assets
    
    
    
    
    
    
    5,144
    
    
    
    (80
    )
    
    
    
    
    
    
    5,064Property, plant and equipment, net
    
    
    
    
    
    
    33,115
    
    
    
    32,232
    
    
    
    
    
    
    
    65,347Investment in subsidiaries
    
    
    (42,228
    )
    
    
    
    
    
    
    
    
    
    
    42,228
    
    
    
    Other assets
    
    
    6,344
    
    
    
    5,007
    
    
    
    7,158
    
    
    
    
    
    
    
    18,509Total assets
    
    $
    269,780
    
    
    $
    148,042
    
    
    $
    409,057
    
    
    $
    (238,625
    )
    
    $
    588,254LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Notes payable and current portion of long- term
debt
    
    $
    
    
    
    $
    4,382
    
    
    $
    1,180
    
    
    $
    
    
    
    $
    5,562Accounts payable and accrued liabilities
    
    
    17,349
    
    
    
    63,120
    
    
    
    41,883
    
    
    
    
    
    
    
    122,352Contract billings in excess of cost and
recognized income
    
    
    
    
    
    
    14,779
    
    
    
    168
    
    
    
    
    
    
    
    14,947Accrued income tax
    
    
    
    
    
    
    1,657
    
    
    
    1,899
    
    
    
    
    
    
    
    3,556Liabilities of discontinued operations
    
    
    
    
    
    
    
    
    
    
    353,980
    
    
    
    (171,888
    )
    
    
    182,092Payables to affiliated companies
    
    
    
    
    
    
    22,923
    
    
    
    86,042
    
    
    
    (108,965
    )
    
    
    Total current liabilities
    
    
    17,349
    
    
    
    106,861
    
    
    
    485,152
    
    
    
    (280,853
    )
    
    
    328,509Long-term debt
    
    
    154,500
    
    
    
    7,077
    
    
    
    
    
    
    
    
    
    
    
    161,577Other liabilities
    
    
    
    
    
    
    
    
    
    
    237
    
    
    
    
    
    
    
    237Total liabilities
    
    
    171,849
    
    
    
    113,938
    
    
    
    485,389
    
    
    
    (280,853
    )
    
    
    490,323Stockholders equity:Common stock
    
    
    1,292
    
    
    
    8
    
    
    
    32
    
    
    
    (40
    )
    
    
    1,292Capital in excess of par value
    
    
    217,036
    
    
    
    89,156
    
    
    
    8,526
    
    
    
    (97,682
    )
    
    
    217,036Retained earnings (deficit)
    
    
    (120,603
    )
    
    
    (55,060
    )
    
    
    (84,177
    )
    
    
    139,237
    
    
    
    (120,603
    )Other stockholders equity components
    
    
    206
    
    
    
    
    
    
    
    (713
    )
    
    
    713
    
    
    
    206Total stockholders equity
    
    
    97,931
    
    
    
    34,104
    
    
    
    (76,332
    )
    
    
    42,228
    
    
    
    97,931Total liabilities and stockholders equity
    
    $
    269,780
    
    
    $
    148,042
    
    
    $
    409,057
    
    
    $
    (238,625
    )
    
    $
    588,254
 58




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 15. Parent, Guarantor, Non-Guarantor Condensed Consolidating Financial Statements (continued)
 December 31, 2005WUSAI
    
    
    Non-Parent
    
    
    (Guarantor)
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    58,794
    
    
    $
    (5,240
    )
    
    $
    2,379
    
    
    $
    
    
    
    $
    55,933Accounts receivable, net
    
    
    
    
    
    
    61,807
    
    
    
    22,000
    
    
    
    
    
    
    
    84,003Contract cost and recognized income not yet
billed
    
    
    
    
    
    
    5,839
    
    
    
    1,780
    
    
    
    
    
    
    
    7,619Prepaid expenses
    
    
    
    
    
    
    10,300
    
    
    
    1,571
    
    
    
    
    
    
    
    11,871Parts and supplies inventories
    
    
    
    
    
    
    701
    
    
    
    1,808
    
    
    
    
    
    
    
    2,509Assets of discontinued operations
    
    
    
    
    
    
    23,049
    
    
    
    238,050
    
    
    
    
    
    
    
    261,099Receivables from affiliated companies
    
    
    173,080
    
    
    
    
    
    
    
    
    
    
    
    (173,080
    )
    
    
    Total current assets
    
    
    232,070
    
    
    
    96,456
    
    
    
    267,588
    
    
    
    (173,080
    )
    
    
    423,034Deferred tax assets
    
    
    
    
    
    
    2,669
    
    
    
    1,465
    
    
    
    
    
    
    
    4,134Property, plant and equipment, net
    
    
    
    
    
    
    29,956
    
    
    
    29,750
    
    
    
    
    
    
    
    59,706Investment in subsidiaries
    
    
    46,158
    
    
    
    
    
    
    
    
    
    
    
    (46,158
    )
    
    
    Other assets
    
    
    3,412
    
    
    
    3,301
    
    
    
    5,298
    
    
    
    
    
    
    
    12,011Total assets
    
    $
    281,640
    
    
    $
    132,382
    
    
    $
    304,101
    
    
    $
    (219,238
    )
    
    $
    498,885LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Notes payable and current portion of long-term debt
    
    $
    
    
    
    $
    2,671
    
    
    $
    9
    
    
    $
    
    
    
    $
    2,680Accounts payable and accrued liabilities
    
    
    1,406
    
    
    
    45,631
    
    
    
    20,562
    
    
    
    
    
    
    
    67,599Contract billings in excess of cost and
recognized income
    
    
    
    
    
    
    1,123
    
    
    
    219
    
    
    
    
    
    
    
    1,342Accrued income tax
    
    
    
    
    
    
    1,308
    
    
    
    1,060
    
    
    
    
    
    
    
    2,368Liabilities of discontinued operations
    
    
    
    
    
    
    880
    
    
    
    156,876
    
    
    
    (13,671
    )
    
    
    144,085Payables to affiliated companies
    
    
    
    
    
    
    44,183
    
    
    
    115,226
    
    
    
    (159,409
    )
    
    
    Total current liabilities
    
    
    1,406
    
    
    
    95,796
    
    
    
    293,952
    
    
    
    (173,080
    )
    
    
    218,074Long-term debt
    
    
    135,000
    
    
    
    334
    
    
    
    6
    
    
    
    
    
    
    
    135,340Other liabilities
    
    
    
    
    
    
    
    
    
    
    237
    
    
    
    
    
    
    
    237Total liabilities
    
    
    136,406
    
    
    
    96,130
    
    
    
    294,195
    
    
    
    (173,080
    )
    
    
    353,651Stockholders equity:Common stock
    
    
    1,082
    
    
    
    8
    
    
    
    32
    
    
    
    (40
    )
    
    
    1,082Capital in excess of par value
    
    
    161,596
    
    
    
    89,156
    
    
    
    8,526
    
    
    
    (97,682
    )
    
    
    161,596Retained earnings (deficit)
    
    
    (15,166
    )
    
    
    (52,912
    )
    
    
    1,585
    
    
    
    51,327
    
    
    
    (15,166
    )Other stockholders equity components
    
    
    (2,278
    )
    
    
    
    
    
    
    (237
    )
    
    
    237
    
    
    
    (2,278
    )Total stockholders equity
    
    
    145,234
    
    
    
    36,252
    
    
    
    9,906
    
    
    
    (46,158
    )
    
    
    145,234Total liabilities and stockholders equity
    
    $
    281,640
    
    
    $
    132,382
    
    
    $
    304,101
    
    
    $
    (219,238
    )
    
    $
    498,885
  59




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 15. Parent, Guarantor, Non-Guarantor Condensed Consolidating Financial Statements (continued)
 Condensed Consolidating Statements of Operations
 Year Ended December 31, 2006WUSAI
    
    
    Non-Parent
    
    
    (Guarantor)
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedContract revenue
    
    $
    
    
    
    $
    338,459
    
    
    $
    226,095
    
    
    $
    (21,295
    )
    
    $
    543,259Operating expenses:Contract costs
    
    
    
    
    
    
    290,290
    
    
    
    199,204
    
    
    
    
    
    
    
    489,494Depreciation and amortization
    
    
    
    
    
    
    8,490
    
    
    
    3,940
    
    
    
    
    
    
    
    12,430General and administrative
    
    
    10,617
    
    
    
    43,462
    
    
    
    20,582
    
    
    
    (21,995
    )
    
    
    53,366Operating income (loss)
    
    
    (10,617
    )
    
    
    (3,783
    )
    
    
    2,369
    
    
    
    
    
    
    
    (12,031
    )Other income (expense):Equity in loss of consolidated subsidiaries
    
    
    (87,910
    )
    
    
    
    
    
    
    
    
    
    
    87,910
    
    
    
    Interest  net
    
    
    (6,909
    )
    
    
    (865
    )
    
    
    (491
    )
    
    
    
    
    
    
    (8,265
    )Other  net
    
    
    (1
    )
    
    
    389
    
    
    
    181
    
    
    
    
    
    
    
    569Income (loss) from continuing operations
before income taxes
    
    
    (105,437
    )
    
    
    (4,259
    )
    
    
    2,059
    
    
    
    87,910
    
    
    
    (19,727
    )Provision (benefit) for income taxes
    
    
    
    
    
    
    (236
    )
    
    
    2,544
    
    
    
    
    
    
    
    2,308Income (loss) from continuing operations
    
    
    (105,437
    )
    
    
    (4,023
    )
    
    
    (485
    )
    
    
    87,910
    
    
    
    (22,035
    )Income (loss) from discontinued operations net of
provision for income taxes
    
    
    
    
    
    
    1,875
    
    
    
    (85,277
    )
    
    
    
    
    
    
    (83,402
    )Net loss
    
    $
    (105,437
    )
    
    $
    (2,148
    )
    
    $
    (85,762
    )
    
    $
    87,910
    
    
    $
    (105,437
    )
 Year Ended December 31, 2005WUSAI
    
    
    Non-Parent
    
    
    (Guarantor)
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedContract revenue
    
    $
    
    
    
    $
    230,464
    
    
    $
    80,225
    
    
    $
    (16,210
    )
    
    $
    294,479Operating expenses:Contract costs
    
    
    2
    
    
    
    192,194
    
    
    
    73,876
    
    
    
    
    
    
    
    266,072Depreciation and amortization
    
    
    
    
    
    
    7,242
    
    
    
    4,446
    
    
    
    
    
    
    
    11,688General and administrative
    
    
    6,035
    
    
    
    30,055
    
    
    
    22,470
    
    
    
    (16,210
    )
    
    
    42,350Operating income (loss)
    
    
    (6,037
    )
    
    
    973
    
    
    
    (20,567
    )
    
    
    
    
    
    
    (25,631
    )Other income (expense):Equity in loss of consolidated subsidiaries
    
    
    (31,096
    )
    
    
    
    
    
    
    
    
    
    
    31,096
    
    
    
    Interest  net
    
    
    (1,861
    )
    
    
    (1,151
    )
    
    
    (892
    )
    
    
    
    
    
    
    (3,904
    )Other  net
    
    
    (241
    )
    
    
    493
    
    
    
    490
    
    
    
    
    
    
    
    742Income (loss) from continuing operations
before income taxes
    
    
    (39,235
    )
    
    
    315
    
    
    
    (20,969
    )
    
    
    31,096
    
    
    
    (28,793
    )Provision (benefit) for income taxes
    
    
    (455
    )
    
    
    3,134
    
    
    
    (1,011
    )
    
    
    
    
    
    
    1,668Income (loss) from continuing operations
    
    
    (38,780
    )
    
    
    (2,819
    )
    
    
    (19,958
    )
    
    
    31,096
    
    
    
    (30,461
    )Income (loss) from discontinued operations net of
provision for income taxes
    
    
    
    
    
    
    2,613
    
    
    
    (10,932
    )
    
    
    
    
    
    
    (8,319
    )Net loss
    
    $
    (38,780
    )
    
    $
    (206
    )
    
    $
    (30,890
    )
    
    $
    31,096
    
    
    $
    (38,780
    )
 60




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 15. Parent, Guarantor, Non-Guarantor Condensed Consolidating Financial Statements (continued)
 Year Ended December 31, 2004WUSAI
    
    
    Non-Parent
    
    
    (Guarantor)
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedContract revenue
    
    $
    
    
    
    $
    144,931
    
    
    $
    134,739
    
    
    $
    (6,876
    )
    
    $
    272,794Operating expenses:Contract costs
    
    
    (3
    )
    
    
    125,364
    
    
    
    96,996
    
    
    
    
    
    
    
    222,357Depreciation and amortization
    
    
    
    
    
    
    5,188
    
    
    
    4,588
    
    
    
    
    
    
    
    9,776General and administrative
    
    
    4,271
    
    
    
    24,678
    
    
    
    10,452
    
    
    
    (6,876
    )
    
    
    32,525Operating income (loss)
    
    
    (4,268
    )
    
    
    (10,299
    )
    
    
    22,703
    
    
    
    
    
    
    
    8,136Other income (expense):Equity in loss of consolidated subsidiaries
    
    
    (14,571
    )
    
    
    
    
    
    
    
    
    
    
    14,571
    
    
    
    Interest  net
    
    
    (1,521
    )
    
    
    (423
    )
    
    
    (536
    )
    
    
    
    
    
    
    (2,480
    )Other  net
    
    
    
    
    
    
    (174
    )
    
    
    (213
    )
    
    
    
    
    
    
    (387
    )Income (loss) from continuing operations
before income taxes
    
    
    (20,360
    )
    
    
    (10,896
    )
    
    
    21,954
    
    
    
    14,571
    
    
    
    5,269Provision (benefit) for income taxes
    
    
    455
    
    
    
    (4,012
    )
    
    
    2,530
    
    
    
    
    
    
    
    (1,027
    )Income (loss) from continuing operations
    
    
    (20,815
    )
    
    
    (6,884
    )
    
    
    19,424
    
    
    
    14,571
    
    
    
    6,296Income (loss) from discontinued operations net of
provision for income taxes
    
    
    
    
    
    
    3,144
    
    
    
    (30,255
    )
    
    
    
    
    
    
    (27,111
    )Net loss
    
    $
    (20,815
    )
    
    $
    (3,740
    )
    
    $
    (10,831
    )
    
    $
    14,571
    
    
    $
    (20,815
    )
 61




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 15. Parent, Guarantor, Non-Guarantor Condensed Consolidating Financial Statements (continued)
 Condensed Consolidating Statements of Cash Flows
 Year Ended December 31, 2006WUSAI
    
    
    Non-
    
    
    
    
    
    
    ConsolidatedParent
    
    
    (Guarantor)
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsCash flows from operating activities:Net cash flows provided by (used in) operating
activities of continuing operations
    
    $
    (9,563
    )
    
    $
    21,252
    
    
    $
    (17,118
    )
    
    $
    
    
    
    $
    (5,429
    )Net cash flows provided by (used in) operating
activities of discontinued operations
    
    
    
    
    
    
    995
    
    
    
    (98,918
    )
    
    
    
    
    
    
    (97,923
    )Cash provided by (used in) operating activities
    
    
    (9,563
    )
    
    
    22,247
    
    
    
    (116,036
    )
    
    
    
    
    
    
    (103,352
    )Cash flows from investing activities:Proceeds from sale of property, plant and
equipment
    
    
    
    
    
    
    3,131
    
    
    
    532
    
    
    
    
    
    
    
    3,663Proceeds from sale of discontinued
operations
    
    
    16,532
    
    
    
    25,082
    
    
    
    6,900
    
    
    
    
    
    
    
    48,514Purchases of property, plant and equipment
    
    
    
    
    
    
    (3,926
    )
    
    
    (7,447
    )
    
    
    
    
    
    
    (11,373
    )Cash provided by (used in) investing activities
of continuing operations
    
    
    16,532
    
    
    
    24,287
    
    
    
    (15
    )
    
    
    
    
    
    
    40,804Net cash flows used in investing activities of
discontinued operations
    
    
    
    
    
    
    
    
    
    
    (7,431
    )
    
    
    
    
    
    
    (7,431
    )Cash provided by (used in) investing activities
    
    
    16,532
    
    
    
    24,287
    
    
    
    (7,446
    )
    
    
    
    
    
    
    33,373Cash flows from financing activities:Proceeds from issuance of common stock
    
    
    52,130
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,130Proceeds from issuance of 6.5% Notes
    
    
    19,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,500Advances from (repayments to)
parent/affiliates
    
    
    (107,773
    )
    
    
    (21,425
    )
    
    
    129,198
    
    
    
    
    
    
    
    Repayment of bank and other debt
    
    
    
    
    
    
    (12,135
    )
    
    
    
    
    
    
    
    
    
    
    (12,135
    )Payment of capital lease
    
    
    
    
    
    
    (683
    )
    
    
    (208
    )
    
    
    
    
    
    
    (891
    )Costs of debt issuance and other
    
    
    (4,844
    )
    
    
    (2,156
    )
    
    
    (54
    )
    
    
    
    
    
    
    (7,054
    )Cash provided by (used in) financing activities
of continuing operations
    
    
    (40,987
    )
    
    
    (36,399
    )
    
    
    128,936
    
    
    
    
    
    
    
    51,550Net cash flows provided by financing activities
of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash provided by (used in) financing activities
    
    
    (40,987
    )
    
    
    (36,399
    )
    
    
    128,936
    
    
    
    
    
    
    
    51,550Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    139
    
    
    
    
    
    
    
    139Cash provided by (used in) all activities
    
    $
    (34,018
    )
    
    $
    10,135
    
    
    $
    5,593
    
    
    $
    
    
    
    $
    (18,290
    )
 62




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 15. Parent, Guarantor, Non-Guarantor Condensed Consolidating Financial Statements (continued)
 Year Ended December 31, 2005WUSAI
    
    
    Non-
    
    
    
    
    
    
    ConsolidatedParent
    
    
    (Guarantor)
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsCash flows from operating activities:Net cash flows used in operating activities of
continuing operations
    
    $
    (4,445
    )
    
    $
    (12,601
    )
    
    $
    (17,585
    )
    
    $
    
    
    
    $
    (34,631
    )Net cash flows provided by (used in) operating
activities of discontinued operations
    
    
    
    
    
    
    3,693
    
    
    
    (6,179
    )
    
    
    
    
    
    
    (2,486
    )Cash used in operating activities
    
    
    (4,445
    )
    
    
    (8,908
    )
    
    
    (23,764
    )
    
    
    
    
    
    
    (37,117
    )Cash flows from investing activities:Proceeds from sale of property, plant and
equipment
    
    
    
    
    
    
    
    
    
    
    1,740
    
    
    
    
    
    
    
    1,740Purchases of property, plant and equipment
    
    
    
    
    
    
    (576
    )
    
    
    (18,130
    )
    
    
    
    
    
    
    (18,706
    )Cash used in investing activities of continuing
operations
    
    
    
    
    
    
    (576
    )
    
    
    (16,390
    )
    
    
    
    
    
    
    (16,966
    )Net cash flows used in investing activities of
discontinued operations
    
    
    
    
    
    
    (2,690
    )
    
    
    (17,308
    )
    
    
    
    
    
    
    (19,998
    )Cash used in investing activities
    
    
    
    
    
    
    (3,266
    )
    
    
    (33,698
    )
    
    
    
    
    
    
    (36,964
    )Cash flows from financing activities:Proceeds from issuance of 6.5% Notes
    
    
    65,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65,000Proceeds from issuance of bank and other
debt
    
    
    15,000
    
    
    
    (447
    )
    
    
    4,371
    
    
    
    
    
    
    
    18,924Advances from (repayments to)
parent/affiliates
    
    
    (57,124
    )
    
    
    (182
    )
    
    
    57,306
    
    
    
    
    
    
    
    Repayment of bank and other debt
    
    
    (15,000
    )
    
    
    (4,400
    )
    
    
    
    
    
    
    
    
    
    
    (19,400
    )Payment of capital lease
    
    
    
    
    
    
    
    
    
    
    (6,405
    )
    
    
    
    
    
    
    (6,405
    )Costs of debt issuance and other
    
    
    (791
    )
    
    
    
    
    
    
    (498
    )
    
    
    
    
    
    
    (1,289
    )Cash provided by (used in) financing activities
of continuing operations
    
    
    7,085
    
    
    
    (5,029
    )
    
    
    54,774
    
    
    
    
    
    
    
    56,830Net cash flows provided by financing activities
of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash provided by (used in) financing activities
    
    
    7,085
    
    
    
    (5,029
    )
    
    
    54,774
    
    
    
    
    
    
    
    56,830Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    17Cash provided by (used in) all activities
    
    $
    2,640
    
    
    $
    (17,203
    )
    
    $
    (2,671
    )
    
    $
    
    
    
    $
    (17,234
    )
 63




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 15. Parent, Guarantor, Non-Guarantor Condensed Consolidating Financial Statements (continued)
 Year Ended December 31, 2004WUSAI
    
    
    Other
    
    
    Consolidating
    
    
    ConsolidatedParent
    
    
    (Guarantor)
    
    
    Subsidiaries
    
    
    Entries
    
    
    TotalsCash flows from operating activities:Net cash flows provided by (used in) operating
activities of continuing operations
    
    $
    (4,728
    )
    
    $
    (1,691
    )
    
    $
    45,095
    
    
    $
    
    
    
    $
    38,676Net cash flows provided by (used in) operating
activities of discontinued operations
    
    
    
    
    
    
    3,845
    
    
    
    (5,111
    )
    
    
    
    
    
    
    (1,266
    )Cash provided by (used in) operating activities
    
    
    (4,728
    )
    
    
    2,154
    
    
    
    39,984
    
    
    
    
    
    
    
    37,410Cash flows from investing activities:Proceeds from sale of property, plant and
equipment
    
    
    
    
    
    
    678
    
    
    
    596
    
    
    
    
    
    
    
    1,274Purchases of property, plant and equipment
    
    
    
    
    
    
    (10,653
    )
    
    
    (5,080
    )
    
    
    
    
    
    
    (15,733
    )Cash used in investing activities of continuing
operations
    
    
    
    
    
    
    (9,975
    )
    
    
    (4,484
    )
    
    
    
    
    
    
    (14,459
    )Net cash flow used in investing activities of
discontinued operations
    
    
    
    
    
    
    (4,713
    )
    
    
    (17,579
    )
    
    
    
    
    
    
    (22,292
    )Cash used in investing activities
    
    
    
    
    
    
    (14,688
    )
    
    
    (22,063
    )
    
    
    
    
    
    
    (36,751
    )Cash flows from financing activities:Proceeds from issuance of 2.75% Notes
    
    
    70,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,000Proceeds from issuance of bank and other
debt
    
    
    
    
    
    
    535
    
    
    
    1,955
    
    
    
    
    
    
    
    2,490Proceeds from issuance of common stock
    
    
    4,381
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,381Advances from (repayments to)
parent/affiliates
    
    
    (2,600
    )
    
    
    20,153
    
    
    
    (17,553
    )
    
    
    
    
    
    
    Repayment of bank and other debt
    
    
    (14,000
    )
    
    
    (1,323
    )
    
    
    (2,000
    )
    
    
    
    
    
    
    (17,323
    )Costs of debt issuance and other
    
    
    (2,311
    )
    
    
    (1,434
    )
    
    
    (1,441
    )
    
    
    
    
    
    
    (5,186
    )Cash provided by (used in) financing activities
of continuing operations
    
    
    55,470
    
    
    
    17,931
    
    
    
    (19,039
    )
    
    
    
    
    
    
    54,362Net cash flows provided by financing activities
of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash provided by (used in) financing activities
    
    
    55,470
    
    
    
    17,931
    
    
    
    (19,039
    )
    
    
    
    
    
    
    54,362Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    (829
    )
    
    
    
    
    
    
    (829
    )Cash provided by (used in) all activities
    
    $
    50,742
    
    
    $
    5,397
    
    
    $
    (1,947
    )
    
    $
    
    
    
    $
    54,192
 64




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 16. Related Party Transactions
     Year
Ended December 31,2006
    
    
    2005
    
    
    2004
    
    
    TotalFusion Petroleum Services Ltd.
    
    $
    
    
    
    $
    
    
    
    $
    871
    
    
    $
    871Hydrodive International, Ltd.
    
    
    
    
    
    
    5,599
    
    
    
    5,705
    
    
    
    11,304Hydrodive Nigeria, Ltd.
    
    
    
    
    
    
    44
    
    
    
    210
    
    
    
    254Kaplan and Associates
    
    
    
    
    
    
    
    
    
    
    524
    
    
    
    524Oco Industrial Services Ltd.
    
    
    
    
    
    
    51
    
    
    
    63
    
    
    
    114Windfall Energy Services Ltd.
    
    
    
    
    
    
    1,519
    
    
    
    922
    
    
    
    2,441Symoil Petroleum Ltd.
    
    
    
    
    
    
    
    
    
    
    1,121
    
    
    
    1,121Total
    
    $
    
    
    
    $
    7,213
    
    
    $
    9,416
    
    
    $
    16,629
  December 31,2006
    
    
    2005Oco Industrial Services Ltd.
    
    $
    
    
    
    $
    9Hydrodive Nigeria, Ltd.
    
    
    
    
    
    
    (5
    )Total
    
    $
    
    
    
    $
    4
 65




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 17. Subsequent Events
       66




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##### Table of Contents



WILLBROS GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)
 17. Subsequent Events (continued)
  67




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##### Table of Contents



Item 9.01. Financial Statements and Exhibits
   23.1
    
    Consent of GLO CPAs, LLP.23.2
    
    Consent of KPMG LLP.
 68




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##### Table of Contents



SIGNATURES
  WILLBROS GROUP, INC.Date: October 16, 2007
    /s/ Van A. WelchVan A. WelchChief Financial Officer 69




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber
    
    Description23.1
    
    Consent of GLO CPAs, LLP.23.2
    
    Consent of KPMG LLP.
 70