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Willbros Reports Third Quarter 2012 Results from Continuing Operations

    Willbros Reports Third Quarter 2012 Results from Continuing Operations

PR Newswire

HOUSTON, Nov. 8, 2012

HOUSTON, Nov. 8, 2012 /PRNewswire/ -- Willbros Group, Inc. (NYSE: WG)
announced today results from continuing operations for the third quarter of
2012. The Company recorded a net loss of $0.3 million, or ($0.01) per share,
on revenue of $588.9 million, compared to a net loss from continuing
operations in the second quarter of 2012 of $4.0 million, or ($0.08) per
share, on revenue of $499.2 million and net income from continuing operations,
before special items, in the third quarter of 2011 of $18.0 million, or $0.38
per share, on revenue of $444.0 million. Last year's third quarter results
included two non-cash items related to the Utility T&D segment: 1) an
estimated $143.5 million pre-tax goodwill impairment charge and 2) a $4.0
million reduction of the earnout contingency.

For the third quarter of 2012, the Company generated operating income of $7.5
million compared to operating income of $5.9 million in the second quarter of
2012 and operating income, before special items, of $13.2 million in the third
quarter of 2011. (Net income from continuing operations, before special items,
and operating income, before special items, are non-GAAP measures and
schedules for the GAAP to non-GAAP adjustment reconciliations in this press
release are provided in the accompanying schedule.)

Randy Harl, President and Chief Executive Officer, commented, "Our third
quarter results reflect additional losses incurred on the Red River Pipeline
project in Texas and the Woodland Hills Pump Station project in Canada. The
Red River Pipeline project is essentially completed and we do not currently
anticipate incurring any additional losses in the fourth quarter. The two
delayed projects we discussed on the last earnings call, one in south
Louisiana and one in Canada, are now underway, and the south Louisiana project
made a meaningful contribution to our third quarter results. We currently
anticipate margin contribution from both projects in the fourth quarter.
Additionally, a project in New England moved into a loss position in the third
quarter due to customer changes and delays. However, we have submitted a
comprehensive change order in accordance with our contract in order to return
this project back to profitability. The loss associated with these three lump
sum projects negatively impacted our operating results by $11.9 million.

"Despite the negative impact of these three projects, we were able to generate
sequential improvement in operating performance. Several business units,
including our Engineering units, EPC, Integrity, Utility T&D Texas electric
distribution business and new field services work in Canada performed as
planned, or better than expected. We continue to experience higher levels of
bid activity and we booked over $500 million of new work during the third
quarter with an emphasis on reducing our exposure to risk associated with lump
sum projects. We believe industry conditions are currently favorable for
higher utilization of resources and the potential for margin expansion."

Backlog^(3)
At September 30, 2012, Willbros backlog from continuing operations remained
relatively flat at $2.3 billion compared to $2.2 billion at December 31, 2011.
Twelve month backlog of $1.1 billion at September 30, 2012 increased 24
percentcompared to $865.1 million at December 31, 2011.

Segment Operating Results
Oil & Gas
For the third quarter of 2012, the Oil & Gas segment reported operating income
of $9.8 million on revenue of $369.6 million, despite the additional loss
incurred on the Red River Project. The Red River Project encountered
unforeseen equipment failures while completing the final directional drill
which resulted in an extension of the schedule and most of the additional
cost. This project is now mechanically complete. Positive performance from our
Engineering, EPC and integrity activities partially offset the negative impact
of the Red River Project. Our Oil& Gas segment, especially in our Regional
Delivery business, continues to benefit from the high level of investment in
the liquids rich resource plays. Additionally, low natural gas prices and new
domestic crude supplies have resulted in increased activity in our Upstream
and Downstream Engineering businesses, and pipeline integrity issues
nationwide are contributing to an increase in recurring services backlog.

Utility T&D
The Utility T&D segment reported an operating loss of $2.4 million on revenue
of $161.8 million. The loss related to low utilization of resources in our
Northeast transmission and distribution businesses; a project in New England
which moved into a loss position due to delays and changes attributable to
engineering, material and rights of way; and lower margins due to a ramp-up of
new transmission construction capacity in Texas. Positive performance from our
utility businesses in the Pittsburgh, Baltimore and Richmond markets, and the
continuing profitable performance of our Texas distribution business,
partially offset these negative factors.

Canada
The Canada segment reported operating income of $43 thousand on revenue of
$57.6 million. This result was attributable to new field services work which
enabled a sequential increase in revenue of $20.2 million, generating higher
margins and absorbing additional indirect and overhead costs. The tank project
which was delayed in the second quarter is now underway and is expected to
generate revenue and margin in the fourth quarter. Additional costs associated
with the Woodland Hills Pump Station project in Canada negatively impacted the
segment's results. This project is over 89 percent complete and the remaining
work will be provided to the customer on a time and material basis.

Credit Facility and Liquidity
At September 30, 2012, the Company had $15.9 million of cash and cash
equivalents. On November 8, 2012, we amended and restated our 2010 Credit
Agreement. This agreement provides for incremental term loans in an amount up
to $60 million. The incremental term loans were drawn in full on the effective
date of the amended and restated Credit Agreement. The agreement also provides
for increased cash draw capability on our revolver once specified conditions
are met.

Conference Call
In conjunction with this release, Willbros has scheduled a conference call,
which will be broadcast live over the Internet, on Friday, November 9, 2012 at
9:00 a.m. Eastern Time (8:00 a.m. Central).

What:  Willbros Third Quarter Earnings Conference Call
When:  Friday, November 9, 2012 - 9:00 a.m. Eastern Time
       Live via phone - By dialing 480-629-9869 or 888-561-1721 a few minutes
How:   prior to the start time and asking for the Willbros' call. Or live
       over the Internet by logging on to the web address below.
Where: http://www.willbros.com. The webcast can be accessed from the investor
       relations home page.

For those who cannot listen to the live call, a replay will be available
through November 16, 2012, and may be accessed by calling 303-590-3030 or
800-406-7325 using pass code 4574130 #. Also, an archive of the webcast will
be available shortly after the call on www.willbros.com for a period of 12
months.

Willbros Group, Inc. is an independent contractor serving the oil, gas, power,
refining and petrochemical industries, providing engineering, construction,
turnaround, maintenance, life-cycle extension services and facilities
development and operations services to industry and government entities
worldwide. For more information on Willbros, please visit our web site at
www.willbros.com.

This announcement contains forward-looking statements. All statements, other
than statements of historical facts, which address activities, events or
developments the Company expects or anticipates will or may occur in the
future, are forward-looking statements. A number of risks and uncertainties
could cause actual results to differ materially from these statements,
including the potential for additional investigations and lawsuits;
disruptions to the global credit markets; the untimely filing of financial
statements; the global economic downturn; fines and penalties by government
agencies; new legislation or regulations detrimental to the economic operation
of refining capacity in the United States; the identification of one or more
other issues that require restatement of one or more prior period financial
statements; contract and billing disputes; the integration and operation of
InfrastruX; the consequences the Company may encounter if it is unable to make
payments required of it pursuant to its settlement agreement of the West
African Gas Pipeline Company Limited lawsuit; the existence of material
weaknesses in internal control over financial reporting; availability of
quality management; availability and terms of capital; changes in, or the
failure to comply with, government regulations; ability to remain in
compliance with, or obtain waivers under, the Company's loan agreements and
indentures; the promulgation, application, and interpretation of environmental
laws and regulations; future E&P capital expenditures; oil, gas, gas liquids,
and power prices and demand; the amount and location of planned pipelines;
poor refinery crack spreads; delay of planned refinery outages and upgrades;
the effective tax rate of the different countries where the Company performs
work; development trends of the oil, gas, power, refining and petrochemical
industries; and changes in the political and economic environment of the
countries in which the Company has operations; as well as other risk factors
described from time to time in the Company's documents and reports filed with
the SEC. The Company assumes no obligation to update publicly such
forward-looking statements, whether as a result of new information, future
events or otherwise, except as may be required by law.

                                  CONTACT:
Michael W. Collier                Connie Dever
Vice President Investor Relations Director Investor Relations
Willbros                          Willbros
713-403-8038                      713-403-8035



TABLE TO FOLLOW





WILLBROS GROUP, INC.
(In thousands, except per share amounts)
                         Three Months Ended        Nine Months Ended
                         September 30,             September 30,
                         2012          2011          2012          2011
Income Statement
 Contract revenue
   Oil & Gas             $  369,573   $  252,642   $  906,883   $  669,661
   Utility T&D           161,820       149,167       471,654       428,823
   Canada                57,555        42,298        128,880       112,255
   Eliminations          (27)          (71)          (212)         (240)
                         588,921       444,036       1,507,205     1,210,499
 Operating expenses
   Oil & Gas             359,770       245,272       895,846       673,150
   Utility T&D           164,184       291,922       474,049       577,261
   Canada                57,512        37,276        134,798       109,062
   Changes in fair
   value of earn out     -             (4,000)       -             (10,000)
   liability
   Eliminations          (27)          (71)          (212)         (240)
                         581,439       570,399       1,504,481     1,349,233
 Operating income
 (loss)
   Oil & Gas             9,803         7,370         11,037        (3,489)
   Utility T&D           (2,364)       (142,755)     (2,395)       (148,438)
   Canada                43            5,022         (5,918)       3,193
   Changes in fair
   value of earn out     -             4,000         -             10,000
   liability
 Operating income        7,482         (126,363)     2,724         (138,734)
 (loss)
 Other expense
   Interest expense,     (6,482)       (11,029)      (21,500)      (36,275)
   net
   Loss on early
   extinguishment of     -             -             (3,405)       (4,124)
   debt
   Other, net            (42)          (264)         (283)         (284)
                         (6,524)       (11,293)      (25,188)      (40,683)
 Income (loss) from
 continuing operations   958           (137,656)     (22,464)      (179,417)
 before income taxes
 Provision (benefit)     1,012         (16,369)      3,937         (28,527)
 for income taxes
 Loss from continuing    (54)          (121,287)     (26,401)      (150,890)
 operations
 Income (loss) from
 discontinued
 operations net of       789           (10,716)      10,464        (27,882)
 provision for income
 taxes
 Net income (loss)    735           (132,003)     (15,937)      (178,772)
 Less: Income
 attributable to         (273)         (296)         (945)         (878)
 noncontrolling
 interest
 Net income (loss)       $                       $            $
 attributable to         462           $ (132,299)  (16,882)     (179,650)
 Willbros Group, Inc.
 Reconciliation of net
 income (loss)
 attributable to
 Willbros Group, Inc.
 Loss from continuing    $          $ (121,583)  $            $
 operations              (327)                      (27,346)     (151,768)
 Income (loss) from
 discontinued            789           (10,716)      10,464        (27,882)
 operations
 Net income (loss)       $                       $            $
 attributable to         462           $ (132,299)  (16,882)     (179,650)
 Willbros Group, Inc.
 Basic income (loss)
 per share attributable
 to Company
 shareholders:
   Continuing            $          $          $          $   
   operations            (0.01)        (2.56)        (0.57)        (3.20)
   Discontinued          0.02          (0.23)        0.22          (0.59)
   operations
                         $          $          $          $   
                         0.01         (2.79)        (0.35)        (3.79)
 Diluted income (loss)
 per share attributable
 to Company
 shareholders:
   Continuing            $          $          $          $   
   operations            (0.01)        (2.56)        (0.57)        (3.20)
   Discontinued          0.02          (0.23)        $         (0.59)
   operations                                        0.22
                         $          $          $          $   
                         0.01         (2.79)        (0.35)        (3.79)
Cash Flow Data
Continuing operations
 Cash provided by (used
 in)
   Operating activities  $            $           $            $  
                         (44,707)     (3,117)      (14,810)     39,800
   Investing activities  (1,776)       $   14,188  570           32,568
   Financing activities  28,371        $            (32,380)      (115,788)
                                       (25,486)
   Foreign exchange      (404)         $           (2,110)       (253)
   effects                             (1,944)
Discontinued operations  (4,057)       $            1,193         (23,224)
                                       (12,440)
Other Data (Continuing
Operations)
 Weighted average
 shares outstanding
   Basic                 48,120        47,534        47,965        47,429
   Diluted               48,120        47,534        47,965        47,429
 Adjusted EBITDA from                                              $  
 continuing              $   19,814  $   30,088  $   44,182  46,729
 operations^(2)
 Capital expenditures    3,499         2,898         11,015        9,241
Reconciliation of
Non-GAAP Financial
Measure
 Operating income
 (loss) from continuing
 operations before
 special items ^(1)
   Operating income      $   7,482  $ (126,363)  $   2,724  $
   (loss), as reported                                             (138,734)
   Goodwill impairment   -             143,543       -             143,543
   Changes in fair
   value of contingent   -             (4,000)       -             (10,000)
   earnout liability
   Operating income                                                $  
   (loss) before         $   7,482  $   13,180  $   2,724  (5,191)
   special items
 Net income (loss) from
 continuing operations
 before special items
 ^(1)
   Net income (loss)
   from continuing       $          $ (121,583)  $            $
   operations, as        (327)                      (27,346)     (151,768)
   reported
   Goodwill impairment   -             143,543       -             143,543
   Changes in fair
   value of contingent   -             (4,000)       -             (10,000)
   earnout liability
   Net income (loss)
   from continuing       $          $   17,960  $            $ 
   operations before     (327)                      (27,346)     (18,225)
   special items
 Basic income (loss)
 per share attributable
 to Company
 shareholders:
   Continuing            $          $          $          $   
   operations before     (0.01)        0.38         (0.57)        (0.38)
   special items ^(1)
                         Three Months Ended        Nine Months Ended
                         September 30,             September 30,
                         2012          2011          2012          2011
 Adjusted EBITDA from
 continuing operations
 ^(2)
   Net loss from
   continuing            $                        $            $
   operations            (327)        $ (121,583)  (27,346)     (151,768)
   attributable to
   Willbros Group, Inc.
   Interest expense,     6,482         11,029        21,500        36,275
   net
   Provision (benefit)   1,012         (16,369)      3,937         (28,527)
   for income taxes
   Depreciation and      11,738        13,901        37,838        46,565
   amortization
   Loss on early
   extinguishment of     -             -             3,405         4,124
   debt
   Changes in fair
   value of earn out     -             (4,000)       -             (10,000)
   liability
   Goodwill impairment   -             143,543       -             143,543
   DOJ monitor cost      2             463           1,588         3,066
   Stock based           1,848         3,635         5,773         7,103
   compensation
   Restructuring and     33            -             169           173
   reorganization costs
   Acquisition related   -             -             -             179
   costs
   (Gains) losses on     (1,247)       (827)         (3,627)       (4,882)
   sales of assets
   Noncontrolling        273           296           945           878
   interest
   Adjusted EBITDA from                                            $  
   continuing            $   19,814  $   30,088  $   44,182  46,729
   operations^(2)
Balance Sheet Data       9/30/2012     6/30/2012     3/31/2012     12/31/2011
 Cash and cash           $   15,908  $   38,481  $   48,939  $  
 equivalents                                                       58,686
 Working capital         154,253       61,344        133,626       172,470
 Total assets            975,187       868,801       857,644       861,771
 Total debt            257,205       227,947       238,124       268,794
 Stockholders' equity    218,906       216,404       211,804       231,578
Backlog Data ^(3)
 Total By Reporting
 Segment
   Oil & Gas             $  615,609   $  716,756   $  678,946   $  517,597
   Utility T&D           1,281,542     1,336,397     1,375,119     1,345,204
   Canada                358,581       362,933       293,061       309,416
 Total Backlog           $2,255,732    $2,416,086    $2,347,126    $2,172,217
 Total Backlog By
 Geographic Area
   United States         $1,745,120    $1,886,855    $1,872,478    $1,718,920
   Canada                358,581       362,933       293,061       309,416
   Middle East/North     145,368       160,060       174,747       135,698
   Africa
   Other International   6,663         6,238         6,840         8,183
 Total Backlog           $2,255,732    $2,416,086    $2,347,126    $2,172,217
 12 Month Backlog        $1,068,921    $1,177,607    $  980,792   $  865,124

    Operating income (loss), net income (loss) from continuing operations and
    basic income (loss) from continuing operations before special items are
    non-GAAP financial measures that exclude special items that management
(1) believes affect the comparison of results for the periods presented.
    Management also believes results excluding these items are more comparable
    to estimates provided by securities analysts and therefore are useful in
    evaluating operational trends of the Company and its performance relative
    to other engineering and construction companies.
    Adjusted EBITDA from continuing operations is defined as income (loss)
    from continuing operations before interest expense, income tax expense
    (benefit) and depreciation and amortization, adjusted for items broadly
    consisting of selected items which management does not consider
    representative of our ongoing operations and certain non-cash items of the
    Company. These adjustments are included in various performance metrics
    under our credit facilities and other financing arrangements. Management
    uses Adjusted EBITDA from continuing operations as a supplemental
    performance measure for comparing normalized operating results with
    corresponding historical periods and with the operational performance of
    other companies in our industry and for presentations made to analysts,
(2) investment banks and other members of the financial community who use this
    information in order to make investment decisions about us.

    Adjusted EBITDA from continuing operations is not a financial measurement
    recognized under U.S. generally accepted accounting principles, or U.S.
    GAAP. When analyzing our operating performance, investors should use
    Adjusted EBITDA from continuing operations in addition to, and not as an
    alternative for, net income, operating income, or any other performance
    measure derived in accordance with U.S. GAAP, or as an alternative to cash
    flow from operating activities as a measure of our liquidity. Because all
    companies do not use identical calculations, our presentation of Adjusted
    EBITDA from continuing operations may be different from similarly titled
    measures of other companies.
    Backlog is anticipated contract revenue from uncompleted portions of
    existing contracts and contracts whose award is reasonably assured.
(3) Master Service Agreement ("MSA") backlog is estimated for the remaining
    term of the contract. MSA backlog is determined based on historical
    trends inherent in the MSAs, factoring in seasonal demand and projecting
    customer needs based on ongoing communications.

SOURCE Willbros Group, Inc.

Website: http://www.willbros.com
 
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