JOHN WOOD GROUP PLC. (a public company incorporated with limited liability in Scotland with registered number )

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1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. This Prospectus, which comprises a prospectus relating to JWG and the New JWG Shares, has been prepared in accordance with the Prospectus Rules made under section 73A of FSMA. This Prospectus has been approved by the FCA in accordance with section 87A of FSMA and has been filed with the FCA and made available to the public in accordance with PR 3.2.1R. This Prospectus has been prepared in order to provide details of the New JWG Shares to be issued and allotted pursuant to the Combination. The release, publication or distribution of this Prospectus, in whole or in part, in, into or from jurisdictions other than the UK may be restricted by the laws of those jurisdictions and, therefore, persons into whose possession this Prospectus comes should inform themselves about and observe any applicable requirements. Any failure to comply with these restrictions may constitute a violation of the securities laws of one or more of such jurisdictions. In particular, this Prospectus should not be released, published, distributed, forwarded or transmitted, in whole or in part, in, into or from the United States or any other Restricted Jurisdiction. INVESTORS SHOULD READ THE WHOLE OF THIS PROSPECTUS (INCLUDING ALL THE INFORMATION INCORPORATED INTO IT BY REFERENCE) CAREFULLY AND IN ITS ENTIRETY. IN PARTICULAR, INVESTORS SHOULD TAKE ACCOUNT OF PART II (RISK FACTORS) WHICH CONTAINS A DISCUSSION OF THE RISKS WHICH MAY MATERIALLY AFFECT THE VALUE OF AN INVESTMENT IN JWG, THE COMBINED GROUP AND/OR THE NEW JWG SHARES. INVESTORS SHOULD NOT RELY SOLELY ON THE INFORMATION SUMMARISED IN PART I (SUMMARY). JOHN WOOD GROUP PLC (a public company incorporated with limited liability in Scotland with registered number ) Proposed issue of up to 296,541,894 New JWG Shares in connection with the recommended share offer by JWG for Amec Foster Wheeler and application for admission of such New JWG Shares to the premium listing segment of the Official List and to trading on the London Stock Exchange s main market for listed securities The JWG Shares are listed on the premium listing segment of the Official List and traded on the London Stock Exchange s main market for listed securities. Applications will be made to: (i) the FCA for the New JWG Shares to be admitted to the premium listing segment of the Official List; and (ii) the London Stock Exchange for the New JWG Shares to be admitted to trading on its main market for listed securities. It is expected that, subject to the satisfaction or waiver (if capable of waiver) of certain Conditions (including the sanction of the Scheme by the Court but not including those Conditions which relate to Admission), the New JWG Shares will be admitted to listing on the premium segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange and that dealings in the New JWG Shares will commence by 8.00 a.m. on the day of Completion. No application has been made or is currently intended to be made by JWG for the New JWG Shares to be admitted to listing or trading on any other exchange. The New JWG Shares will be issued credited as fully paid and will rank pari passu in all respects with the JWG Shares in issue at the time the New JWG Shares are issued, including, subject as outlined below, in relation to the right to receive notice of, and to attend and vote at, general meetings of JWG, and the right to receive and retain any dividends and other distributions declared, made or paid by reference to a record date falling after the Effective Date and to participate in the assets of JWG upon a winding-up of JWG. Irrespective of the date on which the Effective Date falls, Amec Foster Wheeler Shareholders who receive New JWG Shares pursuant to the Scheme shall not be entitled to receive any interim dividend declared or paid by JWG on those shares in respect of the period ending 30 June 2017.

2 Prospective investors should only rely on the information contained in this Prospectus. No person has been authorised to give any information or make any representation other than those contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been so authorised by JWG, the JWG Directors, the Wood Group, J.P. Morgan Cazenove, Credit Suisse or any other person involved in the Combination. In particular, the contents of JWG s website ( and Amec Foster Wheeler s website ( the contents of any website accessible from hyperlinks on such websites or any other website referred to in this Prospectus do not form part of this Prospectus and prospective investors should not rely on them. Without prejudice to any legal or regulatory obligation on JWG to publish a supplementary prospectus pursuant to section 87G of FSMA and PR 3.4, neither the delivery of this Prospectus nor Admission shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Wood Group, the Amec Foster Wheeler Group and/or the Combined Group, each taken as a whole since the date of this Prospectus or that the information in it is correct as of any time after the date of this Prospectus. JWG will comply with its obligation to publish supplementary prospectuses containing further updated information as required by law or by a regulatory authority and, in particular, its obligations under the Prospectus Rules, the Listing Rules and the Disclosure and Transparency Rules (as appropriate) but assumes no further obligation to publish additional information. J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove ( J.P. Morgan Cazenove ), is authorised and regulated in the United Kingdom by the FCA. J.P. Morgan Cazenove is acting exclusively for JWG as sponsor and financial adviser and no one else in connection with the Combination and the matters set out in this Prospectus. Except for the responsibilities and liabilities, if any, which may be imposed on J.P. Morgan Cazenove by FSMA or the regulatory regime established thereunder, J.P. Morgan Cazenove will not be responsible to anyone other than JWG for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to the Combination or any other matters referred to in this Prospectus. Credit Suisse International ( Credit Suisse ), which is authorised by the PRA and regulated by the FCA and PRA in the United Kingdom, is acting exclusively for JWG as sponsor and financial adviser and no one else in connection with the Combination and the matters set out in this Prospectus. Except for the responsibilities and liabilities, if any, which may be imposed on Credit Suisse by FSMA or the regulatory regime established thereunder, Credit Suisse will not be responsible to anyone other than JWG for providing the protections afforded to clients of Credit Suisse or its affiliates, nor for providing advice in relation to the Combination, or any other matters referred to in this Prospectus. Persons accessing this Prospectus are authorised solely to use it for the purpose of considering the terms of the Combination and are prohibited from reproducing or distributing this Prospectus, in whole or in part, disclosing any of its contents or using any information herein for any purpose other than considering the terms of the Combination and an investment in the New JWG Shares. Neither the contents of this Prospectus nor any subsequent communication from JWG, the JWG Directors, the Wood Group, J.P. Morgan Cazenove, Credit Suisse, any other person involved in the Combination or any of their respective affiliates, officers, directors, employees or agents are to be construed as legal, financial or tax advice. If you are in any doubt about the contents of this Prospectus or the action you should take, it is recommended that you seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser (who is, if you are resident in the UK, duly authorised under FSMA or, if you are not resident in the UK, an appropriately authorised independent financial adviser). NOTICE TO OVERSEAS SHAREHOLDERS General The release, publication or distribution of this Prospectus in jurisdictions other than the United Kingdom and the ability of Amec Foster Wheeler Shareholders who are not resident in the United Kingdom to participate in the Combination may be restricted by laws and/or regulations of those jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Amec Foster Wheeler Shares with respect to the Scheme at the Court Meeting, or to execute and deliver forms of proxy appointing another to vote at the Court Meeting on their behalf, may be i

3 affected by the laws of the relevant jurisdictions in which they are located. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and should observe, any applicable requirements. Any failure to comply with these requirements may constitute a violation of the securities laws of any such jurisdiction. Unless otherwise determined by JWG or required by the City Code, and permitted by applicable law and regulation, the Combination will not be implemented and documentation relating to the Combination or the Consideration shall not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws of that jurisdiction and no person may vote in favour of the Combination by any use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Prospectus are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction and persons with access to this Prospectus and any documents relating to the Combination (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction. The availability of New JWG Shares under the Combination to Amec Foster Wheeler Shareholders who are not resident in the UK may be affected by the laws of the relevant jurisdictions in which they are resident. This Prospectus has been prepared for the purpose of complying with English law and applicable regulations and the information disclosed may not be the same as that which would have been disclosed if this Prospectus had been prepared in accordance with the laws of jurisdictions outside of England. This Prospectus does not constitute an offer to sell or issue or the solicitation of an offer to buy, acquire or subscribe for shares in the capital of JWG in any Restricted Jurisdiction or to any person to whom it is unlawful to make such offer or solicitation. None of the securities referred to in this Prospectus shall be sold, issued or transferred in any jurisdiction in contravention of applicable law and/or regulation. It is the responsibility of each person into whose possession this Prospectus comes to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdiction in connection with the distribution of this Prospectus, the receipt of the New JWG Shares and the implementation of the Combination and to obtain any governmental, exchange control or other consents which may be required, comply with other formalities which are required to be observed and pay any issue, transfer or other taxes due in such jurisdiction. To the fullest extent permitted by applicable law, JWG, the current JWG Directors, the JWG Proposed Directors, the Wood Group, J.P. Morgan Cazenove, Credit Suisse and all other persons involved in the Combination disclaim any responsibility or liability for the failure to satisfy any such laws, regulations or requirements by any person. Further details relevant for Amec Foster Wheeler Shareholders in overseas jurisdictions are contained in the Scheme Document. NOTICE TO AMEC FOSTER WHEELER US SHAREHOLDERS AND AMEC FOSTER WHEELER US ADR HOLDERS This Prospectus shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. None of the securities referred to in this Prospectus have been approved or disapproved by the SEC, any state securities commission in the US or any other US regulatory authority, nor have such authorities passed upon or determined the fairness or merits of such securities or upon the adequacy or accuracy of the information contained in this Prospectus. Any representation to the contrary is a criminal offence in the US. The Combination is to be implemented by a scheme of arrangement provided for under English company law. As such, the New JWG Shares have not been and will not be registered under the US Securities Act and the New JWG Shares are to be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by section 3(a)(10) thereof and exemptions from registration and qualification under applicable state securities laws and also would not be subject to the proxy solicitation or tender offer rules under the US Exchange Act. Amec Foster Wheeler Shareholders (whether or not US persons (as defined in the US Securities Act)) who are or ii

4 will be affiliates of JWG or Amec Foster Wheeler prior to, or of JWG after, the Combination becomes effective will be subject to certain US transfer restrictions relating to the New JWG Shares received pursuant to the Combination. For the purpose of qualifying for the exemption provided by Section 3(a)(10) of the US Securities Act, Amec Foster Wheeler will advise the Court that its sanctioning of the Scheme will be relied on by JWG as an approval of the Scheme following a hearing on its fairness to Amec Foster Wheeler Shareholders, at which Court hearing all Amec Foster Wheeler Shareholders are entitled to attend in person or through counsel to support or oppose the sanctioning of the Scheme and with respect to which notification will be given to all such holders. The Combination may, in the circumstances provided for in the Co-operation Agreement, be implemented by way of a takeover offer under English law. If so, any securities to be issued under the Combination may be registered under the US Securities Act or issued in reliance upon an exemption thereunder, if available. If the Combination is implemented by way an Offer, it will be done in compliance with the applicable rules under the US Exchange Act, including any applicable exemptions provided thereunder. The Combination and this Prospectus are subject to UK procedural and disclosure requirements that are different from those of the US. Any financial statements or other financial information included in this Prospectus may have been prepared in accordance with non-us accounting standards that may not be comparable to the financial statements of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. It may be difficult for holders of JWG Shares and JWG ADSs located in the US to enforce their rights and any claims they may have arising under the US federal securities laws in connection with the Combination since JWG is located in a country other than the US and some or all of its officers and directors may be residents of countries other than the US. Holders of JWG Shares located in the US may not be able to sue JWG or its directors or officers in a non-us court for violations of US securities laws. Further, it may be difficult to compel JWG and its respective affiliates to subject itself to the jurisdiction or judgment of a US court. Investors should be aware that JWG may purchase or arrange to purchase Amec Foster Wheeler Shares or Amec Foster Wheeler ADRs otherwise than under any takeover offer or scheme of arrangement related to the Combination, such as in open market or privately negotiated purchases. Amec Foster Wheeler Shareholders and Amec Foster Wheeler ADR Holders are urged to read any documents related to the Combination filed, furnished or to be filed or furnished by JWG with the SEC because they will contain important information regarding the Combination and any related offer of securities. Such documents will be available free of charge at the SEC s website at Nothing in this Prospectus shall be deemed as an acknowledgement that any SEC filing is required or that an offer requiring registration under the US Securities Act may ever occur in connection with the Combination. Certain terms used in this Prospectus have the meaning ascribed to them in Part XVII (Definitions). The date of this Prospectus is 23 May iii

5 TABLE OF CONTENTS PART I SUMMARY PART II RISK FACTORS PART III PRESENTATION OF INFORMATION PART IV PART V DIRECTORS, COMPANY SECRETARY, REGISTERED AND HEAD OFFICES AND ADVISERS EXPECTED TIMETABLE OF PRINCIPAL EVENTS AND INDICATIVE STATISTICS PART VI INFORMATION ABOUT THE COMBINATION PART VII INFORMATION ABOUT THE WOOD GROUP PART VIII INFORMATION ABOUT THE AMEC FOSTER WHEELER GROUP PART IX FINANCIAL INFORMATION IN RELATION TO JWG AND THE WOOD GROUP 80 PART X OPERATING AND FINANCIAL REVIEW OF THE WOOD GROUP PART XI PART XII FINANCIAL INFORMATION IN RELATION TO AMEC FOSTER WHEELER AND THE AMEC FOSTER WHEELER GROUP OPERATING AND FINANCIAL REVIEW OF THE AMEC FOSTER WHEELER GROUP PART XIII UNAUDITED PRO FORMA FINANCIAL INFORMATION PART XIV TAXATION PART XV DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE. 123 PART XVI ADDITIONAL INFORMATION PART XVII DEFINITIONS Page iv

6 PART I SUMMARY Summaries are made up of disclosure requirements known as Elements. These Elements are numbered in Section A to Section E (A.1 to E.7). This summary contains all the Elements required to be included in a summary for this type of security and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of security and issuer, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the summary with the mention of not applicable. Element Section A Introduction and warnings A.1 Introduction and warning to investors A.2 Resale or final placement of securities through financial intermediaries This summary should be read as an introduction to this Prospectus. Any decision to invest in the New JWG Shares should be based on consideration of this Prospectus as a whole by the investor. Where a claim relating to the information contained in this Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the member states of the EEA, have to bear the costs of translating this Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary, including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus or it does not provide, when read together with the other parts of this Prospectus, key information in order to aid investors when considering whether to invest in the New JWG Shares. Not applicable. No consent has been given by JWG or any person responsible for drawing up this Prospectus to use this Prospectus for subsequent resale or final placement of the New JWG Shares by financial intermediaries. Section B Issuer Element B.1 Legal and commercial name B.2 Domicile/legal form/ legislation under which the issuer operates/country of incorporation John Wood Group PLC JWG is a public limited company incorporated under the laws of Scotland with registered number and is domiciled in the United Kingdom. JWG operates principally under the CA 2006 and the regulations made thereunder. 1

7 Section B Issuer B.3 Current operations and principal activities and markets JWG is a global provider of technical services predominantly to the oil and gas sector. JWG is registered and headquartered in Scotland and has operating locations in over 40 countries. JWG has a large number of wholly owned subsidiaries as well as investments in a number of joint ventures. B.4a Significant recent trends of the company and its industry JWG JWG has been impacted by the low commodity prices that endured during 2015 and 2016 in oil and gas markets. This has had a direct impact on customer spending in oil and gas markets resulting in reduced activity across the services sector and accordingly a reduction in JWG s revenues. Lower commodity prices have also resulted in customers seeking to reduce supply chain costs which has impacted contract volumes and margins on renewed contracts and is likely to continue to impact near term results. In response to low commodity prices JWG has focused on management of utilisation and structural reduction in its overhead cost base. Amec Foster Wheeler Spending in the oil, gas and chemicals market, and capex in particular has had a significant effect on Amec Foster Wheeler s markets. In mining, forecasts from the major mining firms suggest that expansionary capex around the world has reached the low point in the cycle for some commodities. There is robust demand for power infrastructure spend, which is forecast at more than US$500 billion over the next decade in the United States alone. The environment and infrastructure markets have shown steady growth in recent years and this is forecast to continue. B.5 Group structure JWG is currently the ultimate holding company of the Wood Group. If the Combination completes, JWG will be the ultimate holding company of the Combined Group. B.6 Major shareholders As at the Latest Practicable Date, JWG had been notified in accordance with DTR 5 of the direct and/or indirect interests of the following underlying investors in 3 per cent. or more of the 2

8 Section B Issuer issued ordinary share capital of JWG (being the threshold of notification under the Disclosure and Transparency Rules): MAJOR SHAREHOLDERS (AS AT THE LATEST PRACTICABLE DATE) Name Number of JWG Shares % of JWG Shares per cent. of JWG Shares immediately following Admission FMR LLC ,915, BlackRock Group ,888, Threadneedle AM ,485, Aberdeen AM Plc ,427, APG AM N.V ,400, Baillie Gifford & Co... 17,788, Dimensional Fund Advisors Ltd ,017, Mondrian Investment Partners Limited ,727, M&G Investment Management ,501, None of JWG s major shareholders have different voting rights attached to the JWG Shares that they hold. JWG is not aware of any persons who, as at the Latest Practicable Date, directly or indirectly, jointly or severally, exercise or could exercise control over JWG. B.7 Selected historical key financial information Financial information in relation to the Wood Group Selected historical financial information which summarises the results of operations and financial condition of the Wood Group for the three financial years ended 31 December 2016, 31 December 2015 and 31 December 2014, prepared in accordance with IFRS as issued by the IASB and as adopted by the EU, is set out in the following tables. Information provided for the financial years ended 2016, 2015 and 2014 is audited and has, except as otherwise stated, been extracted without material adjustment from the JWG 2016 Annual Report and Accounts, the JWG 2015 Annual Report and Accounts and the JWG 2014 Annual Report and Accounts, respectively. 3

9 Section B Issuer CONSOLIDATED INCOME STATEMENT Year ended 31 December (US$ million) Revenue from continuing operations ,121 5,001 6,574 Profit before income tax from continuing operations Income tax (32) (62) (113) Profit for the year from continuing operations Profit for the year from discontinued operations, net of tax )0 13 (26) Profit for the year CONDENSED CONSOLIDATED BALANCE SHEET Year ended 31 December * 2014* (US$ million) Non-current assets ,450 2,657 2,740 Current assets ,580 2,057 2,198 Total assets ,030 4,714 4,938 Current liabilities ,071 1,496 1,645 Non-current liabilities Total liabilities ,822 2,293 2,379 Net Assets ,208 2,421 2,559 Total equity attributable to equity holders of the parent ,195 2,398 2,546 Non-controlling interests Total equity ,208 2,421 2,559 * Following the issue of a decision in 2016 by the IFRS Interpretations Committee regarding offsetting and cash pooling arrangements the Wood Group has restated its comparative figures for cash and cash equivalents and short term borrowings at 31 December 2014 and 31 December The restatement increases both current assets and current liabilities by US$550.8m and US$646.8m in 2014 and 2015 respectively. CONDENSED CONSOLIDATED CASH FLOW STATEMENT Year ended 31 December (US$ million) Net cash from operating activities Net cash used in investing activities (72) (296) (387) Net cash used in financing activities (380) (39) (67) Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year

10 Section B Issuer The following significant changes to the financial condition and results of operations of the Wood Group occurred during these periods: Reduction in commodity prices in oil and gas markets starting in the second half of the year ended 31 December 2014 and continuing through the years ended 31 December 2015 and 31 December This impacted on both revenue and margin, due to reduced activity levels and customer pricing pressure as a result of a customer focus on reducing supply chain costs. A gain of US$58m in the year ended 31 December 2014 as a result of a settlement agreement finalised in respect of a contract taken over by the Venezuelan national oil company, PDVSA, in Reductions in overhead costs of US$148m in the year ended 31 December 2015 and US$96m in the year ended 31 December 2016, combined with careful management of utilisation. Impairment in and restructuring of JWG s investment in its joint venture, EthosEnergy of US$159m in the year ended 31 December 2015 and a further impairment of US$89m in the year ended 31 December Restructuring costs incurred as a result of reorganisation, restructuring, delayering and back office rationalisation of US$37m in 2015 and US$66m in There has been no significant change in the financial condition or operating results of the Wood Group since 31 December 2016, the date to which the Wood Group s last audited financial statements were published. Financial information in relation to the Amec Foster Wheeler Group Selected historical financial information which summarises the results of operations and financial condition of the Amec Foster Wheeler Group for the three financial years ended 2016, 2015 and 2014, prepared in accordance with IFRS as adopted by the EU, is set out in the following tables. As applied to the Amec Foster Wheeler Group in the consolidated financial statements below, there are no material differences from IFRS as issued by the IASB; therefore, the consolidated financial statements of the Amec Foster Wheeler Group below have been prepared in accordance with IFRS as issued by the IASB. Information provided for the financial years ended 2016, 2015 and 2014 is audited and has been extracted without material adjustment from the Amec Foster Wheeler 2016 Annual Report and Accounts, the Amec Foster Wheeler 2015 Annual Report and Accounts and the Amec Foster Wheeler 2014 Annual Report and Accounts, respectively. 5

11 Section B Issuer CONSOLIDATED INCOME STATEMENT Year ended 31 December ( m) Revenue from continuing operations ,440 5,455 3,993 (Loss)/profit before income tax... (542) (235) 155 Income tax (18) (49) (Loss)/profit for the year from continuing operations (526) (253) 106 Profit/(loss) for the year from discontinued operations (4) (27) (Loss)/profit for the year (514) (257) 79 SELECTED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Year ended 31 December ( m) Non-current assets ,107 3,700 4,042 Current assets ,166 1,872 2,023 Total assets ,273 5,572 6,065 Current liabilities ,880 2,261 2,292 Non-current liabilities ,368 1,703 1,777 Total liabilities ,248 3,964 4,069 Net Assets ,025 1,608 1,996 Total equity attributable to equity holders of the parent ,014 1,599 1,974 Non-controlling interests Total equity ,025 1,608 1,996 SELECTED CONSOLIDATED CASH FLOW STATEMENT Year ended 31 December ( m) Net cash flow from/(used in) operating activities Net cash flow from/(used in) investing activities (828) Net cash flow from financing activities (177) (319) 960 Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year Revenue for the years ended 31 December 2016, 2015 and 2014 were 5,440 million, 5,455 million and 3,993 million, respectively, with the increase from 2014 to 2015 being primarily attributable to the acquisition of Foster Wheeler. Amec Foster Wheeler had a loss from continuing operations of 526 million for the year ended 31 December 2016 compared to a loss from continuing operations of 253 million for the ended 31 December 2015 and a profit from continuing operations of 106 million for the year ended 31 December Intangible 6

12 Section B Issuer amortisation and impairment, mainly the result of an impairment in goodwill for GPG and the full year amortisation of intangible assets recognised in the acquisition of Foster Wheeler, contributed to the loss in UNAUDITED RECONCILIATION OF THE AMEC FOSTER WHEELER GROUP S CONSOLIDATED PROFIT The table below sets out the unaudited reconciliation of the Amec Foster Wheeler Group s consolidated profit for the three years ended 31 December 2016, 31 December 2015 and 31 December Year ended 31 December m m m Consolidated (loss)/profit for the year attributable to the Amec Foster Wheeler Group as reported by the Amec Foster Wheeler Group.... (518.0) (256.0) 82.0 Adjusted for differences with the Wood Group accounting policies: Profit recognition on lump sum contracts (6.5) (1.9) Taxation impact on profit recognition. (1.3) Consolidated (loss)/profit for the year attributable to the Amec Foster Wheeler Group under the Wood Group s accounting policies (513.4) (261.1) (80.5) Notes 1. The consolidated (loss)/profit for the years ended 31 December 2016, 31 December 2015 and 31 December 2014 has been extracted from the Amec Foster Wheeler Group audited financial statements for those years. The profit for the year represents profit attributable to the shareholders of Amec Foster Wheeler excluding non-controlling interests of: 4 million (year ended 31 December 2016), (1) million (year ended 31 December 2015) and (3) million (year ended 31 December 2014). 2. The accounting policy adjustment reflects an alignment of the Amec Foster Wheeler Group s policy of recognising profit derived from fixed price contracts to that of the Wood Group. Fixed price contract profit is recognised by the Amec Foster Wheeler Group using the percentageof-completion method, measured by reference to physical completion or the ratio of costs incurred to total estimated contract costs. The alignment to the Wood Group s accounting reflects the following two considerations: (i) if the outcome of a contract can be estimated reliably, profit is recognised by the Amec Foster Wheeler Group regardless of the stage of completion. The Wood Group, however, applies an initial threshold of 20 per cent. in relation to the estimated stage of completion before any profit can be recognised; and (ii) once the initial recognition criteria have been fulfilled, profit at the Amec Foster Wheeler Group is recognised on a straight line basis reflecting the percentage-of-completion method. The Wood Group recognises profit on an adjusted percentage of completion methodology which results in less profit being recognised in the early stages of completion, a proportion of which increases through the life of the contract. 3. Tax has been recorded on the revenue recognition adjustments at the Amec Foster Wheeler Group s effective tax rate of 22 per cent. 7

13 Section B Issuer UNAUDITED RECONCILIATION OF THE AMEC FOSTER WHEELER GROUP S CONSOLIDATED EQUITY The table below sets out the unaudited reconciliation of the Amec Foster Wheeler Group s consolidated equity for the three years ended 31 December 2016, 31 December 2015 and 31 December As at 31 December m m m Consolidated total equity as reported by the Amec Foster Wheeler Group , , ,996.0 Adjusted for differences with the Wood Group accounting policies: Current assets Trade and other receivables... (14.8) (13.4) (12.2) Current liabilities Trade and other payables..... (25.0) (26.7) (20.2) Taxation Consolidated total equity of the Amec Foster Wheeler Group under the Wood Group accounting policies , ,970.7 Notes 1. The consolidated total equity at 31 December 2016, 31 December 2015 and 31 December 2014 has been extracted from the Amec Foster Wheeler Group s audited financial statements for those years. 2. The accounting policy adjustment reflects an alignment of the Amec Foster Wheeler Group s policy of recognising profit derived from fixed price contracts to that of the Wood Group. Fixed price contract profit is recognised by the Amec Foster Wheeler Group using the percentageof-completion method, measured by reference to physical completion or the ratio of costs incurred to total estimated contract costs. The alignment to the Wood Group s accounting reflects the following two considerations: (i) if the outcome of a contract can be estimated reliably, profit is recognised by the Amec Foster Wheeler Group regardless of the stage of completion. The Wood Group, however, applies an initial threshold of 20 per cent. in relation to the estimated stage of completion before any profit can be recognised; and (ii) once the initial recognition criteria have been fulfilled, profit at the Amec Foster Wheeler Group is recognised on a straight line basis reflecting the percentage-of-completion method. The Wood Group recognises profit on an adjusted percentage of completion methodology which results in less profit being recognised in the early stages of completion, a proportion of which increases through the life of the contract. The adjustment through the income statement represents the timing of long term contracts. Under the Wood Group policy for profit recognition less profit is recognised in the early stage of the contracts with a greater amount recognised in the latter stage of the contract. 3. Tax has been recorded on the revenue recognition adjustments at the Amec Foster Wheeler Group s effective tax rate of 22 per cent. 8

14 Section B Issuer Financial information in relation to Foster Wheeler Group Selected historical financial information for the Foster Wheeler Group which summaries the financial condition for the Foster Wheeler Group as at 30 September 2014 and for the nine months ended 30 September 2014 and 30 September Please note that the below financial information was prepared in accordance with U.S. GAAP and is therefore not directly comparable to the other financial information set out in this section B.7 which were prepared in accordance with IFRS as issued by the IASB. As at 30 September 2014 (unaudited) ($ thousands) Balance Sheet Data Current assets ,469,136 Current liabilities ,034,238 Working capital ,898 Land, buildings and equipment, net ,537 Total assets ,520,915 Long-term debt (including current instalments).. 112,346 Total temporary equity ,072 Total Foster Wheeler Shareholders equity ,567 Other Data Backlog, measured in terms of future revenues, end of period ,119,600 New orders for the nine-month period, measured in terms of future revenues ,860,900 Nine months ended 30 September (unaudited) Statement of Operations Data: Operating revenues ,455,377 2,445,187 Income from continuing operations before income taxes (1) , ,103 Provision for income taxes ,273 31,826 Income from continuing operations , ,277 Net incme/(loss) attributable to non-controlling interests ,823 (824) Income from continuing operations attributable to Foster Wheeler , ,101 Earnings per share from continuing operations Basic Diluted Shares outstanding: Basic weighted-average number of shares outstanding ,830,719 99,691,325 Effect of dilutive securities ,874 1,255,861 Diluted weighted-average number of shares outstanding ,326, ,947,186 9

15 Section B Issuer Note (1) Income from continuing operations before income taxes includes the following: Nine months ended 30 September (unaudited) ($ thousands) Net asbestos-related (gain)/provision (9,750) 5,173 Charges for severance-related post-employment benefits ,400 3,500 License settlement in the Global Power Group. 0)0 32,500 Litigation settlement in the E&C Group )0 3,000 Reversal of previously accrued penalties on unrecognised tax benefits in the C&F Group 0)0 8,100 Save for the non-core disposals announced by Amec Foster Wheeler on 2 March 2017 as described in the paragraph below, there has been no significant change in the financial condition or operating results of the Amec Foster Wheeler Group since 31 December 2016 being the end of the period for which the Amec Foster Wheeler Group s last audited consolidated financial statements were published. On 2 March 2017, Amec Foster Wheeler announced the following non-core disposals: (i) the disposal of the major part of the Global Power Group, the circulating fluidised bed or CFB boiler business to Sumitomo Heavy Industries, Ltd for 137 million, which is expected to close during the second quarter of 2017; (ii) the sale of Aquenta Consulting Pty Ltd, a specialist consultancy business based in Australia, to Jacobs Group (Australia) Pty Ltd for 21 million, which closed in January 2017; and (iii) the sale of Amec Foster Wheeler Power S.r.l., which operates two wind farms in Italy, to Enel Green Power S.p.A. for 18 million, which is expected to close in May B.8 Selected key pro forma financial information The unaudited consolidated pro forma income statement and net assets statement for the Combined Group have been prepared in accordance with Annex II to the PD Regulation on a consistent basis with the accounting policies and presentation adopted in the JWG 2016 Annual Report and Accounts. The unaudited pro forma income statement of the Combined Group has been prepared to illustrate the effect on the Wood Group s income statement as if the Combination had taken place as at 1 January The unaudited pro forma statement of net assets of the Combined Group has been prepared to illustrate the effect on the Wood Group s net assets as if the Combination had taken place as at 31 December Due to its nature, the unaudited pro forma income statement and net assets statement address a hypothetical situation. They do not represent the Wood Group s actual results of operations or financial condition or what the Combined Group s actual results of operations or financial condition would have been if the Combination had been completed on the dates indicated. The unaudited consolidated pro forma loss before tax for the year ended 31 December 2016 is US$765.2m. 10

16 Section B Issuer The unaudited consolidated pro forma net assets as at 31 December 2016 is US$5,073.2m. B.9 Profit forecast and estimates B.10 Qualifications in the audit reports B.11 Working capital qualifications Not applicable. Not applicable. There are no qualifications included in any audit report on the historical financial information included in this Prospectus. Not applicable. In the opinion of JWG, the working capital available to the Wood Group is sufficient for its present requirements, that is for at least the next 12 months following the date of this Prospectus. Section C Securities Element C.1 Type and class of securities When admitted to trading, the New JWG Shares will consist of up to 296,541,894 shares of 4 2 / 7 pence each in the capital of JWG. The New JWG Shares will be registered with ISIN number GB00B5N0P849, Sedol number B5N0P84, and will be traded on London Stock Exchange under the ticker symbol WG. The New JWG Shares will, on Admission, together with the JWG Shares, comprise the entire issued share capital of the Combined Group in issue at the time the New JWG Shares are issued pursuant to the Combination Group. C.2 Currency of issue The currency of the New JWG Shares will be Pounds Sterling. C.3 Shares issued and par value C.4 Description of the rights attaching to the securities C.5 Restrictions on free transferability of the securities As at the Latest Practicable Date, the total issued ordinary share capital of JWG is 16,421,802 divided into 383,175,384 ordinary shares of 4 2 / 7 pence each, which are all issued fully paid. No existing JWG Shares are held in treasury. The New JWG Shares will be issued credited as fully paid and will rank pari passu in all respects with the JWG Shares in issue at the time the New JWG Shares are issued pursuant to the Combination, including, subject as outlined below, the right to receive notice of, and to attend and vote at, general meetings of JWG, and the right to receive and retain any dividends and other distributions declared, made or paid by reference to a record date falling after the Effective Date. Irrespective of the date on which the Effective Date falls, Amec Foster Wheeler Shareholders who receive New JWG Shares pursuant to the Scheme shall not be entitled to receive any interim dividend declared or paid by JWG on those shares in respect of the period ending 30 June Not applicable. The New JWG Shares will be freely transferable and there are no restrictions on transfer in the UK. 11

17 Section C Securities C.6 Admission/regulated markets where the securities are traded Applications will be made to: (i) the FCA for the New JWG Shares to be admitted to the premium listing segment of the Official List; and (ii) the London Stock Exchange for the New JWG Shares to be admitted to trading on the Main Market. No application has been made or is currently intended to be made by JWG for the New JWG Shares to be admitted to listing or trading on any other exchange. C.7 Dividend policy After Completion, the board of the Combined Group intends to continue to pursue JWG s progressive dividend policy, taking into account cash flows and earnings, following on from the total distribution for 2016 of 33.3 cents per JWG Share. Entitlement to Amec Foster Wheeler dividend Amec Foster Wheeler announced on 13 March 2017 that the Amec Foster Wheeler Board has suspended dividend payments (including the final dividend for 2016) until Amec Foster Wheeler is generating sustainable free cash flow. JWG reserves the right (without prejudice to any right JWG may have to invoke Condition 19(C) in Part (A) of Part III of the Scheme Document) to reduce the Consideration by the value implied under the terms of the Combination for the Amec Foster Wheeler Shares by an amount up to the amount of any dividend, other distribution or return of value by Amec Foster Wheeler. Entitlement to JWG dividend The New JWG Shares will be issued credited as fully paid and will rank pari passu in all respects with the JWG Shares in issue at the time the New JWG Shares are issued pursuant to the Combination, including, subject as outlined below, the right to receive notice of, and to attend and vote at, general meetings of JWG, the right to receive and retain any dividends and other distributions declared, made or paid by reference to a record date falling after the Effective Date. Irrespective of the date on which the Effective Date falls, Amec Foster Wheeler Shareholders who receive New JWG Shares pursuant to the Scheme shall not be entitled to receive the interim dividend declared or paid by JWG on those shares in respect of the period ending 30 June Element Section D Risks D.1 Key information on key risks that are specific to the company or its industry Demand for the majority of the oil and gas and powerrelated services and products of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group is substantially dependent on the level of expenditure by the oil and gas and power industries. A substantial or extended decline in oil and gas or power prices could result in lower expenditures by the 12

18 Section D Risks oil and gas and power industries and reduce the revenues of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. The Wood Group and the Amec Foster Wheeler Group enter into, and, if the Combination completes, the Combined Group will enter into, fixed-price or lump sum contracts, and contracts which contain a fixed-price element, where the Wood Group, the Amec Foster Wheeler Group, or the Combined Group (as applicable) may assume responsibility for certain cost overruns. Long term contracts may be subject to early termination, variation or non-renewal provisions. Failure to meet customer expectations on project delivery could result in damage to reputation and/or loss of repeat business, and potentially lead to disputes. The future business performance of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, will depend on the award of new contracts, which depends on factors not entirely within the control of the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group. The business of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may be adversely affected by deterioration in the creditworthiness of, or defaults and/or delayed payments by, third parties with which they conduct business. The Wood Group and the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may be unable to attract and retain senior management, sufficiently skilled engineers and other technical and management personnel to continue to operate profitably and to enhance and expand its operations. The Wood Group, the Amec Foster Wheeler Group, and if the Combination completes, the Combined Group, are subject to risks associated with acquisitions, integration of acquisitions and divestments. Litigation, threatened litigation or enforcement action relating to breaches of environmental laws and regulations could materially adversely affect the business or financial condition of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, and affect its reputation or their reputations. The Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may be liable to claims for damages as a result of asbestos exposure. The nature of the Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s, operations exposes the communities in 13

19 Section D Risks which they work and them to a wide range of health, safety, security and environmental ( HSSE ) risks. The Amec Foster Wheeler Group is and, if the Combination completes, the Combined Group will be exposed to funding risks in relation to defined benefit pension schemes. The Wood Group and the Amec Foster Wheeler Group rely, and if the Combination completes, the Combined Group will rely heavily on IT systems for their operations. Violations of laws and/or regulations (including in relation to bribery, corruption and money laundering) carry fines and may expose the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, to criminal sanctions, debarment and civil suits. Adverse changes in macroeconomic, market and other conditions could result in the impairment of the goodwill and other intangible assets of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group and may affect the distributable reserves of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. D.3 Key information on key risks relating to the securities Completion is subject to a number of Conditions which may not be satisfied subject to conditions imposed by regulatory bodies or other third parties and may result in Completion being delayed, the Combination not completing or the Wood Group or the Amec Foster Wheeler Group being required to divest assets to satisfy and such conditions so imposed. The Combined Group s success will be dependent upon its ability to integrate the Wood Group and the Amec Foster Wheeler Group and deliver the value of the combined underlying businesses; the financial benefits and synergies expected from the Combination may not be fully achieved. The uncertainties about the effects of the Combination could have a materially adverse effect on the Wood Group, the Amec Foster Wheeler Group, and, if the Combination completes, the Combined Group. The value of the New JWG Shares may fluctuate significantly. JWG Shareholders may not receive a return on their investment or may receive a negative return and lose some or all of the capital invested. 14

20 Section E Offer Element E.1 Total net proceeds and estimated total expenses There are no net proceeds receivable by JWG. The total costs and expenses relating to the issue of this Prospectus, the Circular and to the negotiation, preparation and implementation of the Combination payable by JWG are estimated to be approximately US$33m (including regulatory fees, the listing fees, professional fees and expenses and the costs of printing and distribution of documents, but excluding VAT and stamp duty). In addition, stamp duty of US$14.9 million will be paid on the Combination. The amount has been calculated based on the market capitalisation of Amec Foster Wheeler as at close of business on the Latest Practicable Date. E.2a Reasons for the offer, use of proceeds, estimated net amount of the proceeds The proposed issue of the New JWG Shares to which this Prospectus relates is being made in connection with the Combination. There are no proceeds (and, therefore, no estimated net amount of the proceeds) receivable by JWG as a result of the issue of the New JWG Shares. The Combination is intended to be effected by way of a courtsanctioned scheme of arrangement of Amec Foster Wheeler under Part 26 of the CA The JWG Board believes the Combination represents a compelling opportunity to create a global leader in project, engineering and technical services delivery across a diverse range of industrial sectors including power and process, environment and infrastructure and mining and primarily focused on oil and gas. The Combined Group will retain its measured risk appetite. Revenue will principally be derived from reimbursable work. The Combined Group will be commercially versatile and seek contracts across various end markets and encompassing a range of services, which will include performance based or fixed price elements where returns commensurate with the risk profile can be realised. The JWG Board considers that the Combination will result in the following benefits: Creation of a stronger, complementary life cycle service offering in oil and gas with a better balance of exposure across upstream, midstream and downstream markets and a balanced portfolio of customers Broadening of end market exposures across alternative energy and industrial markets resulting in reduced earnings volatility through oil and gas cycles Delivery of significant shareholder value through a mix of operating efficiencies and enhanced commercial opportunities Delivery of cost synergies of at least 165m per annum resulting in a leaner and more competitive combined group 15

21 Section E Offer Enhanced shareholder returns through a mix of operating efficiencies and enhanced commercial opportunities E.3 Terms and conditions of the offer It is intended that the Combination will be effected by a courtsanctioned scheme of arrangement between Amec Foster Wheeler and the Scheme Shareholders under Part 26 of the CA The purpose of the Scheme will be to provide for JWG to become the holder of the entire issued and to be issued ordinary share capital of Amec Foster Wheeler. On 13 March 2017, the JWG Board and the Amec Foster Wheeler Board announced that they had agreed the terms of the Combination, which will provide each Amec Foster Wheeler Shareholder with 0.75 New JWG Shares for each Amec Foster Wheeler Share. The Scheme is subject to the Conditions and further terms and conditions set out in the Scheme Document. These Conditions include, among other things: the receipt of the relevant clearances from competition authorities in Australia, Canada, Kazakhstan, Turkey, the United Kingdom and the United States, in addition to certain foreign investment and other regulatory clearances, including under the CFIUS regime in the US. As at the Latest Practicable Date, relevant clearances have been received from the competition authorities in Canada, Turkey and the United States and therefore these conditions have been satisfied; no concerns being raised and/or the transaction being permitted to close if the Combination becomes subject to national security review in Canada or the United Kingdom (whether by the Secretary of State for Defence, the Secretary of State for Business, Energy & Industrial Strategy or otherwise); approval of the Scheme by a majority in number of Amec Foster Wheeler Shareholders representing not less than 75 per cent. in value of Amec Foster Wheeler Shareholders who are on the register of members of Amec Foster Wheeler at the Voting Record Time, present and voting, whether in person or by proxy, at the Court Meeting; all resolutions required to approve and implement the Scheme and to approve certain related matters being duly passed by the requisite majority of Amec Foster Wheeler Shareholders at the Amec Foster Wheeler General Meeting; the approval of the Scheme by the Court within specified timeframes (with or without modification but subject to any modification being on terms acceptable to Amec Foster Wheeler and JWG) and, following such approval, the delivery of a copy of the Scheme Court Order to the Registrar of Companies by no later than the Longstop Date; all resolutions required to approve and implement the Scheme and acquisition of the Amec Foster Wheeler 16

22 Section E Offer Shares and to approve certain related matters being duly passed by the requisite majority of JWG Shareholders at the JWG General Meeting; and Admission becoming effective. E.4 Material interests Immediately following Admission, the following persons will be interested directly or indirectly in 3 per cent. or more of the voting rights in respect of the issued ordinary share capital of JWG and based on the assumptions that the holdings of such persons in JWG or Amec Foster Wheeler (as relevant) as at the Latest Practicable Date do not change, that up to 296,541,894 New JWG Shares are issued in connection with the Combination, and that no other issues of JWG Shares occur between the date of this document and Completion: Number of JWG Shares immediately following Admission Percentage of JWG Shares immediately following Admission FMR LLC ,059, BlackRock Group ,172, Threadneedle AM ,605, Mondrian Investment Partners Limited ,285, Franklin Resources Inc ,273, Artisan Partners Limited ,623, Aberdeen AM Plc ,389, Dimensional Fund Advisors Ltd.. 22,187, There are no conflicting interests that are material to the Combination. E.5 Selling shareholders and lock-up arrangements The New JWG Shares will be newly issued in connection with the Combination; there will be no selling shareholders. There are no lock-up arrangements. E.6 Dilution The issue of the New JWG Shares will result in JWG s issued ordinary share capital increasing by approximately 77.4 per cent. Immediately following Admission, former Amec Foster Wheeler Shareholders will hold approximately 44 per cent. of the Combined Group s issued ordinary share capital. E.7 Estimated expenses charged to investor Not applicable. There are no commissions, fees or expenses to be charged to investors by JWG in relation to the issue of the New JWG Shares. 17

23 PART II RISK FACTORS Any investment in, or holding of, the New JWG Shares is subject to a number of risks. Prospective investors in the New JWG Shares should consider the factors and the risks associated with any investment in the New JWG Shares, the business of the Wood Group, the business of the Amec Foster Wheeler Group and the Combined Group and the industry in which they operate or, in the case of the Combined Group, will operate, together with all other information contained in this Prospectus including, in particular, the risk factors described below. Due to the fact that a significant part of the Wood Group s and the Amec Foster Wheeler Group s operations are similar in nature, some of the risks set out below (not including those specific to the Combination) will not be new risks which arise only on Completion but will be existing material risks the potential impact of which may be increased as a result of the Combination. Therefore, although this Part II describes discretely material risk factors affecting the Wood Group and the Amec Foster Wheeler Group, the risks described will, following Completion, be equally relevant to, and will be material risks for, the Combined Group. Prospective investors should note that the risks summarised in Part I (Summary) are the risks that the JWG Directors believe to be the most essential to an assessment by a prospective investor of whether to invest in the New JWG Shares. However, as the risks which the Wood Group and the Amec Foster Wheeler Group face and, if the Combination completes, the Combined Group will face relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on the key risks summarised in Part I (Summary) but also, among other things, the risks and uncertainties described below. The following is not an exhaustive list or explanation of all the risks which may affect the New JWG Shares, the Wood Group, the Amec Foster Wheeler Group and/or the Combined Group. Additional risks and uncertainties relating to the New JWG Shares, the Wood Group, the Amec Foster Wheeler Group and the Combined Group, that are not currently known to the JWG Directors or that the JWG Directors currently deem immaterial may, individually or cumulatively, also have a material adverse effect on the business, results of operations or financial condition and prospects of the Wood Group, the Amec Foster Wheeler Group and the Combined Group and, if any such risk should materialise, the price of the New JWG Shares may decline and investors could lose all or part of their investment. The order in which the following risk factors are presented does not necessarily reflect the likelihood of their occurrence or the relative magnitude of their potential material adverse effect on the Wood Group s, the Amec Foster Wheeler Group s and/or the Combined Group s business, results of operations, financial condition and/or prospects or the market price of the New JWG Shares. Prospective investors should carefully consider whether an investment in the New JWG Shares is suitable for them in the light of the information in this Prospectus and their personal circumstances. 18

24 PART A: RISK FACTORS RELATING TO THE WOOD GROUP AND/OR THE AMEC FOSTER WHEELER GROUP, AND, IF THE COMBINATION COMPLETES, THE COMBINED GROUP 1. Demand for the majority of the oil and gas and power-related services and products of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group is substantially dependent on the level of expenditure by the oil and gas and power industries. A substantial or extended decline in oil and gas or power prices could result in lower expenditures by the oil and gas and power industries and reduce the revenues of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. Demand for the majority of the oil and gas-related and power-related services and products of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group is substantially dependent on the level of expenditures by the oil and gas and power industries (including expenditure on industry infrastructure). Worldwide activity in the oil and gas field service sector is sensitive to fluctuations in oil and gas prices and is generally dependent on the oil and gas industry s view of future oil and gas prices, which have historically been characterised by significant volatility. Oil and gas and power prices are affected by many factors, including but not limited to: worldwide demand for oil and gas and power, which is in turn affected by factors including worldwide population growth and economic conditions; fluctuations in regional economic production impacting power consumption; national government political requirements and the ability of OPEC to set and maintain production levels for oil; the level of worldwide oil and gas exploration and production activity; the cost of exploring for, developing, producing, transporting and delivering oil and gas; political and social attitudes and policies towards decreasing consumption of hydrocarbons and decreasing carbon footprint (e.g. incentives or subsidies for renewable forms of energy, including solar); technological advances affecting energy consumption; the cost of competing energy sources to oil and gas; and global oil and gas inventory levels. A substantial or an extended decline in oil, gas or power prices would be likely to cause a significant decline in the demand for the oil and gas-related and/or power-related services and products of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. If oil, gas or power prices rise, this could reduce demand for services and products and/or result in higher costs, each of which might result in lower profitability. In each case, if changes in the oil, gas or power prices are not appropriately forecast, the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group could be materially adversely affected. In addition, fluctuations in prices related to the metals, mining and minerals industries have adversely impacted the business of the Amec Foster Wheeler Group (and could therefore, adversely impact the business of the Combined Group, if the Combination completes) since they have adversely affected customer spending in these industries. 2. The Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s liability to customers under a range of contract structures and performance guarantees where it accepts the primary liability for overall contract performance, but is only one of a number of providers of goods or services to the customer, may materially adversely affect its financial performance. The Wood Group and the Amec Foster Wheeler Group provide and, if the Combination completes, the Combined Group will provide warranties and indemnities in relation to the proper operation and 19

25 conformance to specifications of their services, products or the products they service, including in certain circumstances taking responsibility for the overall performance of a contract which involves performance by sub-contractors or co-obligors. Failure of these services, products or equipment to operate properly or to meet specifications may increase the costs of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group by requiring additional engineering resources and services, replacement of parts and equipment or monetary reimbursement to a customer. Furthermore, these failures may cause significant and costly damage to third parties and/or to the equipment and/or lead to litigation and the incurrence of associated legal fees. To the extent that the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group incurs substantial liability, warranty and/or indemnity claims in any period, its reputation, its ability to obtain future business and its operating profit could be materially adversely affected. In the event that any of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group is not able to recover a share of a co-obligor s liability or a contribution from a sub-contractor, its liability may be increased. 3. The Wood Group and the Amec Foster Wheeler Group enter into, and, if the Combination completes, the Combined Group will enter into, framework agreements that only guarantee work if customers engage in the activity covered by such agreements. Certain of the Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s contracts obligate customers to use their services and products only to the extent that they engage in specified activities; if customers elect not to engage in those activities, the Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s business, financial condition and results of operations could be materially adversely affected and their resources allocated to such activities will be underemployed, subject to active management of utilisation. 4. The Wood Group and the Amec Foster Wheeler Group enter into, and, if the Combination completes, the Combined Group will enter into, fixed-price or lump sum contracts, and contracts which contain a fixed-price element, where the Wood Group, the Amec Foster Wheeler Group, or the Combined Group (as applicable) may assume responsibility for certain cost overruns. On fixed-price or lump-sum contracts the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group would expect to be responsible for certain cost overruns. The costs and any gross profit realised on fixed-price or lump sum contracts will often vary from the estimated amounts on which these contracts were originally based. This may occur for various reasons, including errors or changes in cost, design or time estimates, changes in the availability and cost of labour and materials, and penalties for performance factors. If the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group cannot obtain a variation of the relevant existing contract, this may result in reduced profitability and/or losses. Depending on the size of a contract, variations from estimated contract performance could have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 5. Long term contracts may be subject to early termination, variation or non-renewal provisions. The Wood Group and the Amec Foster Wheeler Group enter and, if the Combination completes, the Combined Group will enter into long term contracts with customers, which are performed over a period of several years. Such contracts may be terminated earlier than expected, either within the relevant notice periods or upon default or non-performance by the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group which may result in additional costs if adequate compensation is not received. It may be difficult to win a re-tender of an existing contract or to replace any lost contract with a new equally attractive contract, a new but less attractive contract, or at all. There will also be costs associated with the replacement or re-tender process. The Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s contracts may be subject to variation by renegotiation or by requiring a different level of service to be provided. In some reimbursable contracts, customers may disagree with the statement showing the costs which have been incurred on a project. Such costs may be disallowed and so may not be recoverable. To the extent that any of the Wood Group, the Amec Foster Wheeler Group or, if the 20

26 Combination completes, the Combined Group experiences any of the foregoing risks, it may experience reduced profitability or losses. As a result, this could have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 6. Failure to meet customer expectations on project delivery could result in damage to reputation and/or loss of repeat business, and potentially lead to disputes. The contracts that the Wood Group and the Amec Foster Wheeler Group enter into and, if the Combination completes, the Combined Group will enter into with its customers may contain liquidated damages clauses relating to on time delivery and/or liquidated damages relating to performance and/or liability in respect of liquidated damages. A number of factors, including failure to follow best practice guidelines, could mean that projects are not delivered to time, cost, quality or appropriate health, safety and environmental standards and therefore do not meet customer expectations or the expectations of the relevant third party. Any failure to deliver in accordance with customer expectations could subject the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group to damages and/or reduce its margins on these contracts. Failure to meet customer expectations may also result in cancelled contracts, additional costs incurred in excess of current contract provisions, or back-charges for alleged breaches of warranty and other contract commitments. In addition, the Wood Group and the Amec Foster Wheeler Group have been and the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may in the future be, subject to disputes and litigation in relation to such failures (and significant legal fees associated with any such disputes or litigation). Damage to the reputation of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group or loss of repeat business as a result of a failure to meet customers expectations could negatively impact their ability to win contracts in the future. The occurrence of any of these events could have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 7. Certain of the Wood Group s and Amec Foster Wheeler Group s projects and operations are and, if the Combination completes, those of the Combined Group will be conducted in joint ventures, alliances, licences or other arrangements. The financial performance of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may be materially adversely affected by risks relating to their reliance on joint ventures, alliances, licences or other arrangements. The operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group include a number of overseas operations, some of which are subject to domestic laws, regulations or practices requiring or promoting the participation of local parties in the joint venture, alliance or licensing arrangement in that jurisdiction. If the local parties decide not to enter into, renew or extend the joint ventures, alliances or licences, the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may need to withdraw from certain jurisdictions and this could have a material adverse effect on their business, financial condition and results of operations. In cases where any of the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group is not able to exercise control, they will have limited influence over, and control of, the behaviour, performance and costs of operation of their joint ventures or alliances. Despite not having control, they could still be exposed to the risks associated with these arrangements, including reputational, litigation (where joint and several liability may apply) and government sanction risks, which may have a material adverse effect on their business, results of operations and financial condition. For example, their partners or members of a joint arrangement or an associate (particularly local partners in developing countries) may not be able to meet their financial or other obligations to the projects, threatening the viability of a given project. Whether or not any of the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group is able to exercise control of a joint arrangement, associate or alliance generally, the other partner(s) or members may still be able to veto or block certain decisions, which may be to the overall detriment of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 21

27 8. The Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s, investment in new products and services or territories may fail to generate an adequate return. Investment by the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group in seeking to extend their products and services and broaden its international presence may fail to generate an adequate return or may have a materially adverse impact on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 9. The Wood Group and the Amec Foster Wheeler Group rely and, if the Combination completes, the Combined Group will rely to a significant extent on their customers outsourcing services and a decline in outsourcing would materially adversely affect their business, financial condition and results of operations. The Wood Group and the Amec Foster Wheeler Group generate and, if the Combination completes, the Combined Group will generate a significant portion of their revenue from operations outsourced by customers. If outsourcing across the oil and gas or power industries declined, demand for the services and products could decline and have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 10. The ability of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group to achieve strategic objectives depends or, in the case of the Combined Group, will depend, on how they react to competitive forces. The businesses of the Wood Group and the Amec Foster Wheeler Group face and, if the Combination completes, those of the Combined Group will face competition. While they seek to differentiate their services and products, many of their services and products are competing in commodity type markets. If they do not manage their expenditure adequately, their profitability could deteriorate. If they are late in making adjustments to their business models, they may lose their ability to compete effectively in certain markets, particularly in those markets where competitors are smaller and have more flexibility to adapt quickly to changes in market conditions. All of this could erode their overall competitive position, resulting in a material adverse effect on their business, results of operations and financial condition. Contracts for the services and products of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group are generally awarded on a competitive basis and competition is intense. Some of the major competitors of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group are diversified multinational companies with greater financial resources, larger operating staffs and greater budgets for research and development. They may be better able to compete in providing services more cheaply or making equipment available faster and more efficiently, meeting delivery schedules or reducing prices. In addition, these companies may be more successful in adjusting to downturns in the oil and gas industry. The occurrence of any of the above could adversely affect demand for the services and products of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group and materially adversely affect their business, financial condition and results of operations. 11. The future business performance of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, will depend on the award of new contracts, which depends on factors not entirely within the control of the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group. A substantial portion of the operating revenues of the Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be derived from new contract awards or projects. It is generally difficult to predict whether and when contracts will be awarded due to the reliance of the commencement of the tendering process on customer budgets and the lengthy and complex bidding and selection process. This process is affected by a number of factors, such as market conditions, a bidder s reputation and experience both in the market and with the customer, financing arrangements, governmental approvals and environmental authorisations. The Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may 22

28 experience a loss of new business, and therefore a loss of market share, if they are unable to accurately assess these factors as part of a bid. The Wood Group and the Amec Foster Wheeler Group competes and, if the Combination completes, the Combined Group will compete with international, national and local engineering, project management and consultancy firms in relation to tenders for new contracts on price and/or based on the greater perceived financial strength, resources, experience or technological advantages of its competitors. The Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may have to agree to lower prices or less favourable contract terms for contracts under bid or risk losing a bid, or may decide not to pursue a contract if the expected profit margins are below minimum acceptable margins based on an assessment of the project or if the contract terms are unacceptable, all of which could negatively impact the order book and future business performance of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. The bidding costs associated with tendering for new contracts can be significant and may not necessarily result in the award of a new contract. These costs are not usually recoverable, even if the tender is won. Furthermore, if new contract awards are not received, if awards are delayed or there are modifications regarding the scope of the contract, the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may incur additional costs reallocating staff in a timely manner or may be required to terminate excess staff. In addition, preparation of bids can divert significant management and operating resources away from other activities key to the running of the business. Any of the above factors could impact the ability of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group to win new contracts and the failure to do so could have a material adverse effect on their business, financial condition and results of operations. 12. The Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, are exposed to the risk of advances in technology and processes amongst customers and/or competitors. The Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group are vulnerable to the use of new technologies and processes by both their customers and/or competitors which could result in a loss of customers, revenue and profitability for the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. Consequently, any failure to keep up with the pace of technological change and to adapt accordingly could have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 13. The reduction in the number of customers for the services and products of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, whether through consolidation or other changes, could adversely affect demand for their services and products and reduce their revenues. Oil and gas operators have undergone substantial consolidation and additional consolidation is possible. Consolidation results in fewer customers for the services and products of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group and could negatively affect development and production activity, as these consolidated companies attempt to increase efficiency and reduce costs. The loss of one or more of its customers or a reduction in overall capital or operating expenditure budgets as a result of industry consolidation or other reasons could materially adversely affect demand for the services and products of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group and reduce revenues. 14. It can be difficult or expensive to obtain insurance coverage and there can be no assurance that sufficient coverage will be secured or maintained. The Wood Group and the Amec Foster Wheeler Group maintain and, if the Combination completes, the Combined Group will maintain commercial insurance in amounts that are believed by the respective entities to be appropriate against risks commonly insured against by similar businesses. However, there can be no assurance that the Wood Group, the Amec Foster Wheeler Group or the 23

29 Combined Group (as applicable) will be able to obtain similar levels of cover on acceptable terms going forward. In addition, even with such insurance in place, the risk remains that the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may incur liabilities to clients and other third parties which exceed the limits of such insurance cover or are not covered by it. If any of the Wood Group s, the Amec Foster Wheeler Group s or, if the Combination completes, the Combined Group s insurers fail, refuse to renew or revoke coverage or otherwise cannot satisfy their insurance requirements to the Wood Group, the Amec Foster Wheeler Group or the Combined Group (as applicable), then the overall risk exposure and operational expenses of the Wood Group, the Amec Foster Wheeler Group or the Combined Group (as applicable) could increase and the business operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group could be disrupted, which would have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 15. The business of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may be adversely affected by deterioration in the creditworthiness of, or defaults and/or delayed payments by, third parties with which they conduct business. In common with all businesses, the Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be exposed to the credit risk of third parties with which they conduct business, including customers, who may default on the amounts that they owe or not make scheduled payments on time to the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group due to bankruptcy, insolvency, lack of liquidity, adverse economic conditions, operational failure, fraud or other reasons. A series of defaults or delayed payments could have a material adverse effect on the level of debt of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group and consequently could have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 16. The Wood Group and the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may be unable to attract and retain senior management, sufficiently skilled engineers and other technical and management personnel to continue to operate profitably and to enhance and expand its operations. The future success of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group is dependent on their ability to attract and retain key management (including directors). The future success of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group is also dependent on their ability to attract and retain suitably qualified people to execute its projects, such as qualified engineering managers and lead engineers, project managers and other highly skilled personnel for their new and ongoing businesses and projects. In some of the markets in which the Wood Group and/or the Amec Foster Wheeler Group operate, there is a scarcity of human resources for key positions as well as ongoing competition for suitably qualified and experienced personnel from other companies and organisations. While the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may have appropriately qualified and experienced personnel, they may find it difficult to move them between projects and regions and this could impact their ability to meet obligations under their contracts. In addition, in certain jurisdictions, there may be a requirement to meet employment or ownership targets for local and/or historically disadvantaged populations. In addition, the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may be unable to provide compensation to such individuals at the same level as their competitors, which may put them at a competitive disadvantage. Key management (including directors) and other skilled people of the Wood Group and the Amec Foster Wheeler Group have contributed to the ability of the Wood Group and the Amec Foster Wheeler Group to obtain, generate, manage and develop customer and revenue opportunities. There can be no assurances that such individuals will remain following Completion and will make the same contributions to or for the Combined Group. 24

30 Prolonged absences by or shortages of key personnel and difficulties in relocating personnel could adversely affect the ability of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group to implement their strategy and manage their operations efficiently, which could have a material adverse effect on their business, financial condition and results of operations. 17. The Wood Group, the Amec Foster Wheeler Group, and if the Combination completes, the Combined Group, are subject to risks associated with acquisitions, integration of acquisitions and divestments. A number of risks, if they materialise, may impact the success of acquisitions and divestments. Acquisitions may not succeed due to reasons such as difficulties in integrating activities and realising synergies, outcomes varying from key assumptions, host governments reacting or responding in a different manner from that envisaged or liabilities and costs being underestimated. Any of these would reduce the ability to realise the expected benefits and could have a material adverse effect on the business, results of operations and financial condition of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. The process of integrating an acquired business may be prolonged due to unforeseen difficulties or may require a disproportionate amount of resources and/or management s attention. Furthermore, once integrated, acquisition may not achieve comparable levels of revenue, profitability or productivity as the existing business or may perform otherwise than expected. Any of these could have a material adverse effect on the business, results of operations and financial condition of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. Divestment of assets may not be possible at acceptable prices or may fail to complete, resulting in increased pressure on the cash position of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. In the case of divestments, the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may be held liable for past acts, failures to act or liabilities that are different from those foreseen, or they may incur significant separation costs. The Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may also face liabilities if a purchaser fails to honour all of its commitments, resulting in financial loss. 18. Litigation, threatened litigation or enforcement action relating to breaches of environmental laws and regulations could materially adversely affect the business or financial condition of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, and affect its reputation or their reputations. The Wood Group and the Amec Foster Wheeler Group is and, if the Combination completes, the Combined Group will be subject to stringent laws and regulations relating to environmental protection across a range of countries, including laws and regulations governing air emissions, water discharges and waste management. Environmental incidents could lead to action by governmental authorities that require the Wood Group and the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group to undertake remediation, as well as litigation or the threat of litigation by governmental authorities and other third parties relating to such incidents. Non-compliance, or alleged non-compliance, with environmental laws and regulations could damage the reputation of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, including their standing with customers and suppliers, materially adversely affecting their business. In addition, new laws and regulations or the imposition of new or increased requirements (including, in respect of the United States, increased scrutiny and enhanced regulation and requirements in respect of safety as a result of the Macondo well incident in the Gulf of Mexico) could materially adversely affect the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. In addition, the Wood Group and the Amec Foster Wheeler Group provides, and, if the Combination completes, the Combined Group will provide products and services to customers in the oil and gas and power sectors, and an incident at one of these customers operations may result in litigation or the threat of litigation by such customers against the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. Furthermore, the Wood Group, the Amec Foster 25

31 Wheeler Group and, if the Combination completes, the Combined Group may suffer reputational damage through its association with any such incident. If any of these circumstances arise, they could materially adversely affect the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 19. The Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may be liable to claims for damages as a result of asbestos exposure. Certain of Amec Foster Wheeler s subsidiaries in the United States and the United Kingdom are defendants in numerous asbestos-related lawsuits and out-of-court informal claims pending in the United States and the United Kingdom. Plaintiffs claim damages for personal injury alleged to have arisen from exposure to asbestos primarily in connection with equipment allegedly manufactured by certain of Amec Foster Wheeler s subsidiaries during the 1970s or earlier. These claims and any further asbestos-related claims brought in the future against the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group could, if such claims exceed the relevant provisions for such claims in the relevant accounts, have a material adverse effect on the business, financial condition and results of operations of the Amec Foster Wheeler Group, and if the Combination completes, the Combined Group. Over the last several years, certain of Amec Foster Wheeler s subsidiaries have entered into settlement agreements calling for insurers to make lump sum payments, as well as payments over time, for use by members of the Amec Foster Wheeler Group to fund asbestos-related indemnity and defence costs, and, in certain cases, for reimbursement for portions of out-of-pocket costs incurred. The Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s actual insurance recoveries may be limited by future insolvencies among its insurers. 20. The nature of the Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s operations exposes the communities in which they work and them to a wide range of health, safety, security and environmental ( HSSE ) risks. The HSSE risks to which the Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be potentially exposed cover a wide spectrum, given the geographic range, operational diversity and technical complexity of their operations and their use of technology, which, despite the safety measures taken, carry the risk of unknown or unforeseeable harm. In addition, the projects of the Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, those of the Combined Group will be complex and place employees and others near large equipment, dangerous processes and/or highly regulated materials. The Wood Group and the Amec Foster Wheeler Group are exposed and, if the Combination completes, the Combined Group will be exposed and the communities in which they work are/will be exposed to the risk of, among other things, major process safety incidents, the effects of natural disasters, earth tremors, social unrest, personal health and safety lapses and crime. If a major HSSE risk materialises, such as an explosion or hydrocarbon spill, this could result in injuries, loss of life, environmental harm, disruption to business activities and, depending on its cause and severity, material damage to reputation and this could materially adversely affect the business, results of operations and financial condition of the Wood Group, the Amec Foster Wheeler Group, and if the Combination completes, the Combined Group. The insurance policies and contractual limitations on liability of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may not provide adequate protection against liability for such events, including events involving environmental harm, or against losses resulting from business interruption. Moreover, the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may not be able to maintain insurance at levels of risk coverage or policy limits that they deem adequate or guarantee that every contract contains and has properly incorporated adequate limitations on liabilities. Any claims made under the relevant insurance policies are likely to cause the insurance premiums of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group (as applicable) to increase. Any future damage caused by the products or services of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group that are not covered by insurance, are in excess of policy limits, are subject to substantial deductibles or are not limited by the 26

32 incorporation of adequate or effective contractual limitations of liability could adversely impact financial performance or condition and reduce cash available for operations. In certain circumstances, liability could be imposed without regard to fault in the matter. Requirements governing HSSE matters often change and are likely to become more stringent over time. Significant additional costs could be incurred in the future due to compliance with such requirements or as a result of violations of, or liabilities under, HSSE laws and regulations, such as fines, penalties, clean-up costs and third party claims. Therefore, HSSE risks, should they materialise, have the potential to materially adversely affect the business, results of operations, financial condition and reputation of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. The Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be responsible for the safety and security of their employees travelling on company business and while working at project sites, and of third party personnel while working at project sites under the supervision of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, and, accordingly, must implement safety procedures. Failure to comply with such procedures may cause the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group to be subject to losses and liability under client contracts or statutory regulations. 21. The Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group may be adversely impacted by changing regional, national and/or global requirements in respect of emissions reductions. International agreements, national laws, state laws and various regulatory schemes that limit or otherwise regulate emissions, air pollutants and greenhouse gases are under consideration by different governments and governmental entities. Increasingly stringent regulatory requirements in the area of air pollution control and greenhouse gases may be imposed in the future. For example, in 2015, the United Nations Climate Change Conference in Paris ( COP21 ) established a new framework for achieving reduced emissions levels, which in turn means lower fossil fuel consumption. Such regulations may negatively impact client investments in capital projects in the Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s markets. For example, it is anticipated that, following COP21, the oil and gas industry will be negatively impacted in a number of ways. In particular, exploration may decline which would in turn lead to a significant reduction in capital expenditure by the Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s customers. Furthermore, involvement in markets which are perceived as being high in carbon emissions may negatively impact the Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s ability to grow their business and market their services in the renewables and low carbon markets. The occurrence of any of these events could have a materially adverse effect on the Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s business, financial condition and results of operations. 22. The Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be exposed to the risk of changes in tax legislation and its interpretation, as well as to changes in the rate of corporate and other taxes, levies, duties or charges in the jurisdiction in which it operates or they operate. The activities of the Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the activities of the Combined Group will be subject to tax at various rates in the jurisdictions in which they operate, computed in accordance with local legislation, policy and practice. Action by governments to change tax rates or to impose additional taxes, levies, duties or charges or remove incentives (especially in respect of the relevant businesses) and, in particular any action taken by the new US administration in these areas, could reduce the profitability of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. Withdrawal of, or amendment to, clearances (or indicated clearances) from tax authorities, revisions to tax legislation or to its interpretation or changes in any applied policy or practice, including where such changes apply retrospectively, could also materially affect the business, financial condition or results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 27

33 In addition, action by governments and/or tax authorities to change tax rates or to impose additional taxes, levies, duties or charges or remove incentives on customers of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group could affect the level of expenditure on the services and products of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group and, consequently, could reduce the profitability of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 23. The Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be exposed to treasury and trading risks, including liquidity risk, interest rate risk, foreign exchange rate risk, commodity price risk and credit risk and are affected by the global macro-economic environment as well as financial and commodity market conditions. The Wood Group s and the Amec Foster Wheeler Group s subsidiaries, joint ventures and alliances are and, if the Combination completes, those of the Combined Group will be subject to differing economic and financial market conditions throughout the world. Political or economic instability affects such markets. If the associated risks set out below materialise, they could have a material adverse effect on the business, results of operations and financial condition of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. Both the Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be exposed to changes in currency values and to exchange controls as a result of their substantial international operations. The Wood Group s reporting currency is and, if the Combination completes, the Combined Group s reporting currency will be US Dollars and the Amec Foster Wheeler Group s reporting currency is Pounds Sterling. However, the Wood Group and the Amec Foster Wheeler Group, to a material extent, hold assets and are exposed to liabilities in other currencies (and that will also be the case, if the Combination completes, for the Combined Group). For the Wood Group, these currencies include Pounds Sterling, the Australian Dollar and the Canadian Dollar, and for the Amec Foster Wheeler Group these include the Euro, the Australian Dollar, the Canadian Dollar and the US Dollar. While the Wood Group and the Amec Foster Wheeler Group undertake some foreign exchange hedging, they do not do so for all of their activities. Furthermore, even where hedging is in place, it may not function as expected. The Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be also exposed to interest rates on their floating rate debt. Fluctuation in interest rates affect the interest expense on existing debt and the cost of new financings. Whilst the Wood Group and the Amec Foster Wheeler Group attempt and, if the Combination completes, the Combined Group will attempt to manage interest rate risks, the Wood Group s, the Amec Foster Wheeler Group s or, if the Combination completes, the Combined Group s cost of borrowing would be materially adversely affected by an increase in interest rates. The Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s financing costs may also be affected by interest rate fluctuations or any credit standing deterioration. The Wood Group and the Amec Foster Wheeler Group are exposed to credit risk; their counterparties may fail or may be unable to meet their payment and/or performance obligations under commercial arrangements. Although the Wood Group and the Amec Foster Wheeler Group do not have significant direct exposure to sovereign debt, it is possible that their partners and customers may have exposure which could impair their ability to meet their obligations, thereby materially adversely affecting the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. The pension funds of the Wood Group and the Amec Foster Wheeler Group may invest in government bonds. The Amec Foster Wheeler Group is and, if the Combination completes, the Combined Group will be also exposed to political and economic risk events that may contribute to non-payment of financial obligations to the Amec Foster Wheeler Group and, if the Combination completes, to the Combined Group by government or government-owned entities, or otherwise impact successful project delivery and implementation. Therefore, a sovereign debt downgrade or other default could have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 28

34 24. Scottish independence and the United Kingdom s exit from the European Union. On 23 June 2016, the United Kingdom held a referendum in which voters were asked to decide whether the United Kingdom should remain a member of the European Union or leave the European Union. The outcome of the referendum was a vote to leave the European Union. On 29 March 2017, the government of the United Kingdom invoked Article 50 of the Lisbon Treaty ( Article 50 ), meaning that the United Kingdom shall cease to be a member of the European Union on 30 March 2019 unless the European Council, in agreement with the United Kingdom, unanimously decides to extend the prescribed two year negotiation period. The result of the EU Referendum and the subsequent invocation of Article 50, have revived political uncertainty regarding Scottish independence highlighted by the vote of the Scottish parliament on 28 March 2017 demanding a second independence referendum. Such uncertainty may also be increased by the results of the forthcoming United Kingdom general election. Such uncertainty might potentially result in additional risks to the Wood Group (which is incorporated in Scotland) and the Amec Foster Wheeler Group, each of which has operations in Scotland and, if the Combination completes, the Combined Group. There is also uncertainty as to the impact of the vote to leave the European Union and the invocation of Article 50 on general economic conditions in the United Kingdom and the United Kingdom s future relationship with the European Union. Therefore, no assurance can be given as to the impact of invocation of Article 50 on the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. The invocation of Article 50 may have a material adverse impact on the Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s business, financial condition and results of operations. For example, during the intervening period before an agreement is reached with the European Union in respect of the United Kingdom s withdrawal, the uncertainty surrounding the withdrawal process may result in a reduction in oil and gas or power prices. The period of uncertainty may extend for several years beyond the United Kingdom s formal withdrawal from the European Union as the United Kingdom s new trading and other relationships with the European Union and the rest of the world are defined (as well as the implications these relationships might have for immigration and parliamentary sovereignty). 25. The Amec Foster Wheeler Group is and, if the Combination completes, the Combined Group will be exposed to funding risks in relation to defined benefit pension schemes. The Amec Foster Wheeler Group operates a number of defined benefit pension schemes. The most significant schemes (other than the Canadian scheme) are now closed to future accrual. The most recent actuarial valuation of the most significant pension scheme will be carried out as at 31 March 2017, although the outcome is not expected to be known until late However, based on current market conditions and the pension trustees current assumptions, it is expected that there will be a deficit on this scheme. As at 31 December 2016, the net deficit on Amec Foster Wheeler s defined benefit schemes, on the valuation basis specified in IAS 19 Employee Benefits, was 137 million before tax, as compared to a net surplus as at 31 December 2015 of 63 million. A prolonged period of lower than expected asset returns, fluctuations in bond rates and/or unexpected increases in longevity could create or worsen a funding shortfall in one or more of the schemes, in which circumstances the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group may agree, or be required, to make additional cash contributions to the schemes to eliminate the funding shortfall. If significant, such additional contributions may constrain the Amec Foster Wheeler Group s or, if the Combination completes, the Combined Group s ability to invest in acquisitions or capital expenditure, thereby adversely impacting growth and profitability. In addition, in certain limited circumstances, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group may be required to contribute significant additional amounts to its UK pension schemes, either as a result of actions by the Pensions Regulator in the United Kingdom to impose financial support directions or contribution notices, or if, following negotiation with the trustees of the defined benefit schemes, the trustees take a more prudent approach to deficit recovery payments or the trustees were to determine that a portion of any proceeds from a disposal or capital raising should be used to support the pension scheme, which could thereby also have a material adverse effect on the Amec Foster Wheeler Group s or, if the Combination completes, the Combined Group s business, financial condition and results of operations. 29

35 26. The Wood Group and the Amec Foster Wheeler Group operate, and if the Combination completes, the Combined Group will operate, in many jurisdictions that have differing degrees of political, legal and fiscal stability. This exposes them or, in the case of the Combined Group, will expose it to a wide range of political developments that could result in changes to contractual terms, laws and regulations. In addition, the Wood Group and the Amec Foster Wheeler Group face and if the Combination completes, the Combined Group will face, the risk of litigation and disputes worldwide. Developments in politics, laws and regulations can and do affect the Wood Group s and the Amec Foster Wheeler Group s and will, if the Combination completes, affect the Combined Group s operations. Potential developments include forced divestment of assets, expropriation of property, cancellation or forced renegotiation of contract rights, additional taxes (including windfall taxes) restrictions on deductions, retroactive tax claims, trade controls, local content requirements, foreign exchange controls, changing environmental regulations and onerous operational and disclosure requirements. A prolonged period of lower oil and gas prices may impact the financial, fiscal, political, social and legal stability of countries that rely significantly on oil and gas revenue streams. This, in turn, may have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. From time to time, cultural and political factors play a role in unprecedented and unanticipated judicial outcomes that could have a material adverse effect on the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. Noncompliance with policies and regulations may result in regulatory investigations, litigation and ultimately sanctions. Certain governments and regulatory bodies may utilise their constitutional powers to unilaterally amend or cancel existing agreements or arrangements, fail to honour existing contractual commitments, or seek to adjudicate disputes between private litigants. Additionally, certain governments have adopted laws and regulations that could potentially force the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group to violate other countries laws and regulations, thus potentially subjecting them to both criminal and civil sanctions. Moreover, instability and changes in the global political environment may lead to international sanctions being imposed against countries in which the Wood Group and the Amec Foster Wheeler Group operate and, if the Combination completes, the Combined Group will operate. Such developments and outcomes may have a material adverse effect on the business, results of operations and financial condition of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 27. The Wood Group s and the Amec Foster Wheeler Group s operations expose them and, if the Combination completes, the Combined Group s operations will expose it to social instability, civil unrest, terrorism, piracy, acts of war and pandemic diseases that could have a material adverse effect on their business, results of operations and financial condition. As seen in recent years in North Africa and the Middle East in particular, social and civil unrest, both in the countries in which the Wood Group and the Amec Foster Wheeler Group operate and elsewhere, can and do affect the Wood Group and the Amec Foster Wheeler Group and the same will, if the Combination completes, affect the Combined Group. Such potential developments that could have a material adverse effect on their business, results of operations and financial condition include acts of political or economic terrorism, acts of maritime piracy, conflicts including war, civil unrest (including disruptions by non-governmental and political organisations), and local security concerns that threaten the safe provision of their services and products. Pandemic diseases, such as Ebola, can impact operations directly and indirectly. If such risks materialise, they could result in injuries, loss of life, environmental harm and disruption to business activities, each of which could have a material adverse effect on the business, results of operations and financial condition of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 28. The Wood Group and the Amec Foster Wheeler Group rely, and if the Combination completes, the Combined Group will rely heavily on IT systems for their operations. The Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be dependent on the secure and continued effective operation of their IT systems (including back-up measures) and their use of internal and client data. Such systems, 30

36 including those provided by third party service providers, may fail and/or sensitive data held by them may be lost. Information and communication systems by their nature are susceptible to internal and external security breaches, including computer hacker and cyber-terrorist breaches, wilful breaches by employees and employees succumbing to criminal scamming from external sources, and can fail or become unavailable for a significant period of time. A significant failure of the Wood Group s, the Amec Foster Wheeler Group s or, if the Combination completes, the Combined Group s IT systems and existing controls could lead to loss of control over critical business, project information and/or systems, resulting in an adverse impact on the ability to operate effectively or to fulfil contractual obligations. Such failure may, in turn, lead to a loss of customers, revenue and profitability, the incurring of significant remedial costs and reputational harm. The Wood Group and the Amec Foster Wheeler Group seek and, if the Combination completes, the Combined Group will seek to detect and investigate all such security incidents, aiming to prevent their recurrence. The operations of the Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be dependent on the use of internal data and customer data. The Wood Group and the Amec Foster Wheeler Group has incurred and, if the Combination completes, the Combined Group will incur expenses to comply with mandatory privacy and security standards and protocols imposed by law, regulation, industry standards or contractual obligations relating to the collection, use and security of personal information data. Failure to comply with such data privacy laws and regulations may result in fines, penalties, claims and reputational damage. Additionally, if data security controls fail, there is a risk that protected, sensitive or personal data, including important intellectual property, may be unintentionally disclosed which could lead to the violation of client confidentiality agreements, reputational harm and the loss of critical data, and which in turn could lead to fines and/or claims. Any of the foregoing could have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 29. Violations of laws and/or regulations (including in relation to bribery, corruption and money laundering) carry fines and may expose the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, to criminal sanctions, debarment and civil suits. The Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be subject to a significant number and growing range of laws and regulations including, amongst others, those relating to business ethics and employment practices. In addition, the Amec Foster Wheeler Group carries out and, if the Combination completes, the Combined Group will carry out operations in the nuclear sector (subject to the proposed sale described in paragraph 5 of Part VIII (Information about the Amec Foster Wheeler Group)), which is subject to extensive governmental regulations. Due to the nature of their activities, including their use of commercial intermediaries, and spheres of operation, the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group carry a significant risk of non-compliance and any violations of legal and regulatory requirements could have a material adverse effect on the business, results of operations and financial condition of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, resulting from the imposition of substantial penalties, exposure to regulatory investigations, debarment from tendering, injunction, litigation from third parties, asset seizures, termination of existing contracts, revocation or restrictions of licences, reputational damage, imposition of a monitor and, in the case of individuals, imprisonment. As multinational companies conducting their business across a number of jurisdictions and, to a material extent, through joint ventures and alliances in which they do not exercise control, the Wood Group and the Amec Foster Wheeler Group are and, if the Combination completes, the Combined Group will be exposed to increased risks of bribery, fraud and corruption (in particular, in relation to tender and contract bid processes). Due to the scale of the Wood Group s, the Amec Foster Wheeler Group s and, if the Combination completes, the Combined Group s operations, bribery, fraud and corruption both internally and externally may be more difficult to detect and any violations of the US Foreign Corrupt Practices Act of 1977 (as amended), the UK Bribery Act 2010 (as amended) or other relevant anti-bribery, anti-corruption or anti-money laundering legislation may have a material adverse effect as described above. Further, penalties imposed on their partners in a joint venture or alliance for 31

37 violations unrelated to the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group could materially impact the ability of such partners or members to fulfil their contractual commitments, and thereby result in a material adverse effect on, the business, results of operations and financial condition of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. The Serious Fraud Office ( SFO ) announced on 19 July 2016 that it is conducting a criminal investigation into the activities of Unaoil, a Monaco-based company, and its officers, employees and agents in connection with suspected offences of bribery, corruption and money laundering, and the SFO made a general request for information in relation to its investigation into the activities of Unaoil. Since that announcement, the SFO has announced that it has also opened investigations, related to its ongoing investigation into the activities of Unaoil, in relation to various other parties (and their officers, employees and agents) for suspected offences of bribery, corruption and/or money laundering. As described in paragraph 10 of Part XVI (Additional information) under Amec Foster Wheeler Investigations, the SFO has required Amec Foster Wheeler to produce information in connection with the SFO s investigation into Unaoil. As also described in paragraph 10 of Part XVI (Additional Information), the same information has been provided to the SEC and DOJ. The SEC and DOJ already have ongoing investigations into Amec Foster Wheeler in connection with these matters and Amec Foster Wheeler considers that these matters may well develop into an investigation of Amec Foster Wheeler by the SFO. Independently, JWG has been conducting an internal investigation into the Wood Group s historical engagement of Unaoil, reviewing information available to the Wood Group in this context. This internal investigation has confirmed that a Wood Group joint venture engaged Unaoil and that the joint venture made payments to Unaoil under agency agreements. From the information reviewed to date, the internal investigation has not confirmed that the payments made by the joint venture to Unaoil were used by Unaoil in ways that would amount to bribery, corruption or money laundering offences, or that there was any involvement in or knowledge of bribery, corruption or money laundering offences on the part of Wood Group companies, the joint venture or their personnel. The internal investigation is continuing and is expected to conclude in the coming months. JWG has informed the Crown Office and Procurator Fiscal Service, the relevant authority in Scotland, that it is currently undertaking the internal investigation. Any violation of legal and regulatory requirements identified during the course of these investigations could have a material adverse effect on the business, results of operations and financial condition of the Wood Group and, if the Combination completes, the Combined Group. The Wood Group and the Amec Foster Wheeler Group have procedures, systems and controls in place to monitor internal and external compliance with relevant laws and regulations and use of commercial intermediaries, but there can be no assurance that the Wood Group s or the Amec Foster Wheeler Group s policies and procedures will be followed at all times or will effectively detect and/or prevent violations of the applicable laws or other fraudulent activity by one or more of their employees, consultants, subcontractors, commercial intermediaries or partners. In addition, the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group may also be deemed to be responsible for or face civil or criminal liability (including penalties or other fines) as a result of historical matters related to previously acquired companies. 30. Adverse changes in macroeconomic, market and other conditions could result in the impairment of the goodwill and other intangible assets of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group and may affect the distributable reserves of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. Goodwill is tested for impairment annually, or more often if an event or circumstance indicates that it may be impaired. Other intangible assets are tested for impairment whenever there is an indication of impairment. An impairment test is an assessment of whether the carrying amount of an asset can be supported by the net present value of the future cash flows that are expected to be delivered from it, either by the relevant company in its business or from sale. An impairment test requires management to make certain critical assumptions, including future sales volumes, profit margins and long-term growth rates and to determine an appropriate discount rate to apply to the estimated cash flows. Other factors that may affect revenue and profitability (for example, intensifying competition, pricing pressures, regulatory changes and other industry developments) are also considered. Discount rates are based on current yields on government bonds, the level of which may change substantially from period to period and which may be affected by political and economic developments which are beyond 32

38 the control of the Wood Group, Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. An impairment loss is recognised if the carrying value of the asset is not supported by the net present value of the cash flows expected to be derived from it. Whilst an impairment loss does not in itself affect cash flows, it may be an indication that future cash flows are expected to decline. Moreover, any significant impairment in the carrying value of goodwill may indicate an associated impairment in the related investment held by the parent company. No assurance can be given that any such future impairment loss would not affect the distributable reserves of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group and, therefore, their ability to pay dividends to their shareholders. 31. The Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, are exposed to the risk of critical business interruption. The operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group are vulnerable to damage or interruption from a number of sources, including fire, flood, tsunami, hurricane, monsoon, sandstorm, earthquake, telecommunications failure, physical and electronic break-ins, other breaches of IT security and similar events. There can be no assurance that the occurrence of one of the events described above would not cause significant disruption to the business of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. Any such disruption would impact the ability of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group to perform against their contracts and could have a material adverse effect on the business, financial condition and results of operations of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. 33

39 PART B RISKS RELATING TO THE COMBINATION 1. Completion is subject to a number of Conditions which may not be satisfied or waived or which may be satisfied subject to conditions imposed by regulatory bodies or other third parties and may result in the Combination s completion being delayed, the Combination not completing, or the Wood Group or the Amec Foster Wheeler Group being required to divest assets in order to satisfy any such conditions so imposed. The Scheme is subject to the Conditions and further terms and conditions set out in the Scheme Document. These Conditions include, among other things: the receipt of the relevant clearances from competition authorities in Australia, Canada, Kazakhstan, Turkey, the United Kingdom and the United States, in addition to certain foreign investment and other regulatory clearances including under the CFIUS regime in the US. As at the Latest Practicable Date, relevant clearances have been received from the competition authorities in Canada, Turkey and the United States and therefore these conditions have been satisfied; no concerns being raised and/or the transaction being permitted to close if the Combination becomes subject to national security review in Canada or the United Kingdom (whether by the Secretary of State for Defence, the Secretary of State for Business, Energy & Industrial Strategy or otherwise); approval of the Scheme by a majority in number of Amec Foster Wheeler Shareholders representing not less than 75 per cent. in value of Amec Foster Wheeler Shareholders who are on the register of members of Amec Foster Wheeler at the Voting Record Time, present and voting, whether in person or by proxy, at the Court Meeting; all resolutions required to approve and implement the Scheme and to approve certain related matters being duly passed by the requisite majority of Amec Foster Wheeler Shareholders at the Amec Foster Wheeler General Meeting; the approval of the Scheme by the Court within specified timeframes (with or without modification but subject to any modification being on terms acceptable to Amec Foster Wheeler and JWG) and, following such approval, the delivery of a copy of the Scheme Court Order to the Registrar of Companies by no later than the Longstop Date; all resolutions required to approve and implement the Scheme and acquisition of the Amec Foster Wheeler Shares and to approve certain related matters being duly passed by the requisite majority of JWG Shareholders at the JWG General Meeting; and Admission becoming effective. There is no guarantee that the Conditions will be satisfied in the necessary time frame (or waived, if applicable) and the Combination may, therefore, be delayed or not complete. Delay in completing the Combination will prolong the period of uncertainty for the Wood Group and the Amec Foster Wheeler Group and both delay and failure to complete may result in the accrual of additional costs to their businesses (for example, there may be an increase in costs in relation to the preparation and issue of documentation or other elements of the planning and implementation of the Combination) without any of the potential benefits of the Combination having been achieved. In addition, JWG s and Amec Foster Wheeler s management would have spent time in connection with the Combination, which could otherwise have been spent more productively in connection with the other activities of the Wood Group and the Amec Foster Wheeler Group, as applicable. Therefore, the aggregate consequences of a material delay in completing or failure to complete the Combination may have a material adverse effect on the business, results of operations and financial condition of the Wood Group, the Amec Foster Wheeler Group and, in the case of a delay only, the Combined Group. JWG may also, to the extent that a Break Fee Trigger occurs, be liable to pay a break fee of 25,000,000 (exclusive of VAT) to Amec Foster Wheeler. JWG s ability to invoke a Condition (other than certain antitrust clearances and Scheme-related conditions) to the Combination to either lapse the Combination or to delay the Combination beyond the Longstop Date is subject to the Panel s consent. The Panel will need to be satisfied that the underlying circumstances are of material significance to JWG in the context of the Combination and 34

40 this is a high threshold to fulfil. Consequently, there is a significant risk that JWG may be required to complete the Combination even where certain Conditions have not been satisfied or where a material adverse change has occurred to the Amec Foster Wheeler Group. It may also be the case that certain Conditions may only be satisfied subject to conditions or undertakings. It is anticipated that, in order to obtain clearance from the CMA, JWG and Amec Foster Wheeler may have to provide certain undertakings (for example, as to divestments) to the CMA. As at the Latest Practicable Date, JWG has made a proposal to the CMA of a remedy commitment in respect of assets and operations of Amec Foster Wheeler that represent the majority of Amec Foster Wheeler s upstream oil and gas business located in the UK and serving UK customers (excluding its commissioning business, qedi). These assets and operations delivered approximately 740m in revenue and 42m of EBITA in 2016, including a significant contribution from major projects which are expected to complete over the next two years. The Current JWG Directors believe that this proposed remedy commitment would be sufficient to obtain clearance from the CMA. The terms of any disposal will be subject to approval from the CMA, and any disposal will only be completed provided the Combination is implemented. The implementation of this proposal, whether in full or in part, may result in additional costs and/or the delay or the failure (partial or otherwise) to realise the financial benefits and synergies relating to the Combination identified by the parties or may otherwise impact the Combined Group s strategy and operations. JWG recognises that it may need to offer or commit to additional remedies in order to obtain the relevant clearances from the relevant competition authorities (including the CMA) but it does not currently anticipate having to do so. Such additional remedies could include (but not be limited to) commitments by JWG to divest (following Completion) or not to acquire in the first place, part of the business or certain assets of the Amec Foster Wheeler Group. The implementation of any such additional remedies may result in additional costs and/or delay or the failure (partial or otherwise) to realise the financial benefits and synergies relating to the Combination identified by the parties or may otherwise impact the Combined Group's strategy and options. The JWG Board would only offer or commit to any such additional remedies where, in the context of securing the relevant clearance to enable the Combination to close, either (a) it is required to do so under its divestment undertakings to Amec Foster Wheeler (which are not material incrementally to the remedy proposed to the CMA as described above), or (b) it considered such measures to be in the best interests of JWG Shareholders as a whole and where it believed such measures would not have a material adverse effect on the operational and financial performance of the Combined Group. If any of the events described above were to occur, they may result in additional costs and/or the delay or the failure (partial or otherwise) to realise the financial benefits and synergies relating to the Combination identified by the parties or may otherwise impact the Combined Group s strategy and operations. Proceeding to complete the Combination without particular clearances and consents from third parties, which may include governments, regulators, associates and commercial counterparties, may impact the Combined Group s future strategy and operations, may result in the imposition of penalties, fines and other criminal and civil sanctions, the termination or variation of contracts and, potentially, the loss of assets and may cause damage to the Combined Group s reputation and business relationships with governments, regulators and counterparties. If these events were to occur, there may be a material adverse effect on the business, results of operations and financial condition of the Combined Group and the market price of the JWG Shares. 2. The Combined Group s success will be dependent upon its ability to integrate the Wood Group and the Amec Foster Wheeler Group and deliver the value of the combined underlying businesses; the financial benefits and synergies expected from the Combination may not be fully achieved. The Combined Group s future prospects will, in part, be dependent upon the Combined Group s ability to integrate the Wood Group and the Amec Foster Wheeler Group successfully and completely, without disruption to the existing business. While the JWG Directors believe that the financial benefits and synergies of the Combination have been reasonably estimated, unanticipated events, liabilities, tax impacts or unknown pre-existing issues may arise or become apparent which could result in the costs of integration being higher and 35

41 the realisable benefits/synergies being lower than expected, resulting in a material adverse effect on the business, financial condition and results of operations of the Combined Group. No assurance can be given that the integration process will deliver all or substantially all of the expected benefits within the assumed time frame. The Combined Group will face numerous challenges when integrating the business, including, among others, retaining key contracts, harmonising ways of working, realising synergies, standardising policies and procedures, processes and systems, aligning shared values and retaining key employees of the Combined Group and the corporate memory of the Amec Foster Wheeler Group. If the Combined Group does not properly manage these challenges, they may affect the effective running of the business in the ordinary course and the efficient allocation, including redeployment, of resources in the Combined Group. Further, during the integration period, the Combined Group may not be in a position to acquire other companies or businesses that it might otherwise have sought to acquire. In view of the demands that the integration process may have on management time, it may also cause a delay in other projects currently contemplated by the Wood Group and/or the Amec Foster Wheeler Group. 3. The uncertainties about the effects of the Combination could have a materially adverse effect on the Wood Group, the Amec Foster Wheeler Group, and, if the Combination completes, the Combined Group. Uncertainty about the effects of the Combination, including effects on employees, host governments, partners, contractors, regulators, suppliers and customers, may have a material adverse effect on the business, results of operations and financial condition of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group. These uncertainties could cause parties that have business or other relationships with the Wood Group or the Amec Foster Wheeler Group to defer the consummation of other transactions or other decisions concerning the business of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group or to seek to change their existing business or other relationships with the Wood Group or the Amec Foster Wheeler Group. In addition, following Completion, there is also a risk that some current and prospective employees may experience uncertainty about their future roles within the Combined Group, which may adversely affect the Combined Group s ability to retain or recruit key managers and other employees. The Combined Group will need to take action to prevent or minimise any detrimental impact of the Combination and the integration process on its relationships with employees, host governments, partners, contractors, regulators, suppliers and customers of the Wood Group and the Amec Foster Wheeler Group, to avoid such a material adverse effect. 4. Restrictions and covenants in the documentation governing the principal debt facilities of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, the Combined Group, limit the ability of the Wood Group, the Amec Foster Wheeler Group and, if the Combination completes, will limit the ability of the Combined Group to take certain actions and to perform certain corporate functions. The principal debt facilities of the Wood Group comprise bilateral revolving credit facilities of US$950 million to February 2021 and US$375 million of unsecured senior loan notes (with a mix of 7, 10 and 12 year maturities) issued in the US private placement market during The principal debt facilities of the Amec Foster Wheeler Group provided by a syndicate of lenders comprise two term loan facilities of 591 million and 650 million each to March 2019 and March 2021 respectively and a committed revolving credit facility of 400 million to March In connection with the Combination, the Wood Group has put in place US$2,750 million of committed syndicated term and revolving credit facilities (comprising a US$1,000 million term loan facility and a US$1,750 million revolving credit facility (the New Wood Group Facilities )). The New Wood Group Facilities are available to be drawn down at, or shortly following, Completion to refinance in full and replace each of the Wood Group s existing bilateral revolving credit facilities and the Amec Foster Wheeler Group s existing syndicated term and revolving credit facilities. Whether or not Completion occurs, Wood Group s unsecured senior loan notes are expected to remain outstanding. 36

42 The documentation governing the credit facilities and unsecured senior loan notes described above contains a number of significant covenants, undertakings and other obligations, including: restrictions on the ability of the Wood Group and the Amec Foster Wheeler Group to raise additional borrowings, other than in specified circumstances; restrictions on the ability of the Wood Group and the Amec Foster Wheeler Group to acquire, or dispose of, businesses or assets, other than in certain circumstances; a net debt financial covenant that imposes a cap on the maximum amount of net borrowings of the Wood Group and the Amec Foster Wheeler Group, respectively, as a proportion of EBITDA (adjusted, in each case, to take account of certain actions such as acquisitions and disposals during a relevant test period); and an interest cover financial covenant that requires EBITDA of the Wood Group and the Amec Foster Wheeler Group, respectively (adjusted, in each case, to take account of certain actions such as acquisitions and disposals during a relevant test period), to exceed the total amount of their respective interest charges by a stated multiple. If the Combination completes, the covenants, undertakings and other obligations in the documentation governing the New Wood Group Facilities will also apply to the Combined Group. If the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group wish to undertake transactions which would otherwise be restricted under the documentation governing their relevant debt facilities, the consent of all, or (in certain cases) a majority of, the lenders in respect of those debt facilities may be required. If such consent is not sought, or is sought but not granted, the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group may be restricted from implementing their respective strategic objectives which may, in turn, limit their respective ability to take opportunities for further growth and expansion. 5. Current JWG Shareholders and former Amec Foster Wheeler Shareholders will own a smaller percentage of JWG, if the Combination completes, than they currently own of JWG and Amec Foster Wheeler respectively. If the Combination completes, the existing JWG Shareholders and the former Amec Foster Wheeler Shareholders will own a smaller percentage of JWG than they currently own of JWG and Amec Foster Wheeler, respectively. Assuming there are no other issues of JWG Shares or Amec Foster Wheeler Shares between the Latest Practicable Date and the date of Admission and that 296,541,894 New JWG Shares are issued, the existing JWG Shareholders and former Amec Foster Wheeler Shareholders will own approximately 56 per cent. and 44 per cent. respectively of the outstanding JWG Shares (1). As a consequence, the proportion of voting rights which can be exercised and the influence which may be exerted by them in respect of the Combined Group will be reduced. (1) Please see paragraph 17 of Part XVI (Additional information) for details of how these dilution estimates were calculated. 37

43 PART C RISKS RELATING TO THE JWG SHARES 1. The value of the New JWG Shares may fluctuate significantly. Following Completion, the JWG Shares will continue to be publicly traded and, as a result of a number of factors and events, including, but not limited to, those referred to in this Part, their market price may be volatile. Some of these events, for example, market conditions, geopolitical developments or the action of competitors, will be outside the control of the Combined Group. 2. Future issues of JWG Shares or the sale of a substantial number of JWG Shares could affect the market price of the New JWG Shares and further dilute the interests of the JWG Shareholders. The future issue or the sale or transfer of JWG Shares, or the perception that this is likely to occur, may cause the market price of the JWG Shares to fluctuate or decline and dilute the interests of JWG Shareholders, including, if the Combination completes, the holders of the New JWG Shares. 3. JWG Shareholders may not receive a return on their investment or may receive a negative return and lose some or all of the capital invested. JWG s results of operations and financial condition will, following Completion, be dependent on the trading performance of the members of the Combined Group. There can be no assurance that JWG will pay dividends in the future. Any decision to declare and pay dividends in the future will be made at the discretion of the JWG Directors and will depend on, inter alia, applicable law, regulation, restrictions, JWG s and the Combined Group s financial performance and position (including the availability of distributable profits and reserves and cash available for this purpose), regulatory capital requirements, working capital requirements, finance costs, general economic conditions and other factors the JWG Directors deem significant from time to time. JWG s ability to pay dividends will also depend on the level of dividends and other distributions, if any, received from its operating subsidiaries and companies in which it has an investment. The payment of dividends or return of cash by other means to JWG by its subsidiaries is, in turn, subject to restrictions, including the existence of sufficient distributable reserves and cash in those subsidiaries as well as certain restrictions in JWG s debt financing arrangements. These restrictions could limit or prohibit the payment of dividends to JWG by its subsidiaries, which could restrict JWG s ability to pay dividends to JWG Shareholders and this could have a material adverse effect on the market price of the JWG Shares. There is, therefore, no guarantee that JWG Shareholders will receive a return on their investment and they may receive a negative return and lose some or all of the capital invested. 4. Holders of JWG Shares will be exposed to exchange rate risk. Cash dividends on JWG Shares are announced in US Dollars and paid, by default, in Pounds Sterling, although JWG Shareholders are able to elect to receive dividends in US Dollars. As a consequence, JWG Shareholders residing in a jurisdiction whose principal currency is not the US Dollar will be exposed to the exchange rate between the US Dollar and the principal currency of their jurisdiction. Also, JWG Shareholders residing in a jurisdiction whose principal currency is not the currency in which they receive dividends will be exposed to the exchange rate between the currency in which they receive dividends and the principal currency of their jurisdiction. 5. Holders of JWG Shares outside the UK may not be able to exercise pre-emption rights or participate in future equity issues. The securities laws of certain jurisdictions outside the UK may restrict the participation by, or JWG s ability to allow participation of, certain shareholders in such jurisdictions in any future issues carried out by JWG of JWG Shares or of other securities. In the case of a future allotment of new JWG Shares for cash, the then existing JWG Shareholders have certain statutory pre-emption rights unless those rights are disapplied by a special resolution of the JWG Shareholders at a general meeting. An issue of new JWG Shares not for cash or when pre-emption rights have been disapplied could dilute the interests of the then-existing JWG Shareholders. 38

44 6. The taxation of an investment in JWG shares and New JWG shares depends on a holder s individual position, and investors should accordingly take their own advice. The taxation of an investment in JWG Shares and New JWG Shares depends on the individual circumstances of JWG Shareholders or investors in New JWG Shares and the summary of the UK and US taxation treatment of an investment in the JWG Shares, including the New JWG Shares, set out in Part XIV of this document is intended as a general guide only. It does not address the specific tax position of every investor and only deals with rules of UK and US taxation of general application. Therefore, any investors who are in any doubt as to their tax position regarding the JWG Shares, including the New JWG Shares and any investors subject to tax in a jurisdiction other than the UK and US should consult their own independent tax advisers. 7. It may not be possible to effect service of process upon the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group or the directors or enforce court judgments against the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group or the directors. A significant amount of the assets of the Wood Group and the Amec Foster Wheeler Group are located in the United Kingdom. In addition, the majority of the JWG Directors, Amec Foster Wheeler Directors, the JWG Senior Management and Amec Foster Wheeler Senior Managers are located in the United Kingdom. As a result, it may not be possible for investors outside the United Kingdom to effect service of process against the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group or the JWG Directors or the Amec Foster Wheeler Directors or to enforce the judgment of a court outside the United Kingdom against the Wood Group, the Amec Foster Wheeler Group or, if the Combination completes, the Combined Group or the JWG Directors or the Amec Foster Wheeler Directors. 39

45 1. GENERAL PART III PRESENTATION OF INFORMATION Prospective investors should only rely on the information contained in this Prospectus (for the avoidance of doubt, neither the Announcement nor the Scheme Document has been incorporated by reference into this Prospectus). No person has been authorised to give any information or make any representations other than those contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been so authorised by JWG, the JWG Directors, the Wood Group, J.P. Morgan Cazenove, Credit Suisse or any other person involved in the Combination. No representation or warranty, express or implied, is made by JWG, the JWG Directors, the Wood Group, J.P. Morgan Cazenove, Credit Suisse or any other person involved in the Combination as to the accuracy or completeness of such information or representation. Without prejudice to any legal or regulatory obligation on JWG to publish a supplementary prospectus pursuant to section 87G of FSMA and PR 3.4, neither the delivery of this Prospectus nor Admission shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Wood Group or the Amec Foster Wheeler Group taken as a whole since the date of this Prospectus or that the information in it is correct as of any time after the date of this Prospectus. JWG will comply with its obligation to publish supplementary prospectuses containing further updated information as required by law or by a regulatory authority and, in particular, its obligations under the Prospectus Rules, the Listing Rules and the Disclosure and Transparency Rules (as appropriate) but assumes no further obligation to publish additional information. The contents of this Prospectus or any subsequent communications from JWG, the Wood Group or J.P. Morgan Cazenove, Credit Suisse or any of their respective affiliates, officers, directors, employees or agents are not to be construed as legal, financial or tax advice. If you are in any doubt about the contents of this Prospectus or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser (who is, if you are resident in the UK, duly authorised under FSMA or, if not, from another appropriately authorised independent financial adviser). Each prospective investor should consult with such advisers as needed to make any decision in relation the Combination and the New JWG Shares and to determine whether it is legally permitted to hold shares under applicable legal investment requirements or similar laws or regulations. Prospective investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. Investing in and holding the New JWG Shares involves financial risk. Prior to investing in the New JWG Shares, investors should carefully consider all of the information contained in this Prospectus, paying particular attention to Part II (Risk factors). Investors should consider carefully whether an investment in the New JWG Shares is suitable for them in light of the information contained in this Prospectus and their personal circumstances. Each investor acknowledges that it has not relied on J.P. Morgan Cazenove, Credit Suisse or any person affiliated with either of them in connection with any investigation of the accuracy of any information contained in this Prospectus or any decision in relation the Combination and the New JWG Shares. Nothing contained in this Prospectus is, or shall be relied upon as, a promise or representation by J.P. Morgan Cazenove or Credit Suisse as to the past, present or future. J.P. Morgan Cazenove and Credit Suisse and their affiliates may have engaged in transactions with, and provided various investment banking, financial advisory and other services to JWG, for which they would have received customary fees. J.P. Morgan Cazenove and Credit Suisse and their affiliates may provide such services to JWG and any of its affiliates in the future. 2. WEBSITE AND MEDIA INFORMATION The contents of JWG s website ( and Amec Foster Wheeler s website ( the contents of any website accessible from hyperlinks on such websites or any other website referred to in this Prospectus do not form part of this Prospectus and prospective investors should not rely on them. Furthermore, JWG does not accept any responsibility for the accuracy or completeness of any information reported by the press or other media, or the fairness or appropriateness of any forecasts, views or opinions expressed by the press or other media regarding the Combination, the Wood Group, 40

46 the Amec Foster Wheeler Group and/or the Combined Group. JWG, the JWG Directors, the Wood Group, J.P. Morgan Cazenove and Credit Suisse and other persons involved in the Combination make no representation as to the appropriateness, accuracy, completeness or reliability of any such information or publication. 3. FORWARD LOOKING STATEMENTS This Prospectus contains certain forward looking statements with respect to the financial condition, results of operations and businesses of the Wood Group, the Amec Foster Wheeler Group and the Combined Group, and certain plans and objectives of JWG with respect to the Combined Group, including those in Part I (Summary), Part II (Risk factors), Part VI (Information about the Combination), Part VII (Information about the Wood Group) and Part VIII (Information about the Amec Foster Wheeler Group). All statements other than statements of historical fact are, or may be deemed to be, forward looking statements. Forward looking statements are statements of future expectations that are based on management s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward looking statements include, among other things, statements concerning the potential exposure of the Wood Group, the Amec Foster Wheeler Group and the Combined Group to market risks, statements as to accretion and statements expressing management s expectations, beliefs, estimates, forecasts, projections and assumptions, including as to future potential cost savings, synergies, earnings, return on average capital employed, production and prospects. These forward looking statements are identified by their use of terms and phrases such as anticipate, aims, believe, could, estimate, expect, goals, hopes, intend, may, objectives, outlook, plan, probably, project, risks, seek, should, target, will, would and similar terms and phrases. There are a number of factors that could affect the future operations of the Wood Group, the Amec Foster Wheeler Group and the Combined Group and that could cause results to differ materially from those expressed in the forward looking statements included in this Prospectus, including (without limitation): (i) changes in demand for the Wood Group s, the Amec Foster Wheeler Group s and/or the Combined Group s respective services and/or products; (ii) inability to attract and/or retain senior management and other technical personnel (iii) demand for oil and gas and power-related services and products; (iv) performance of and liabilities under contracts; (v) currency fluctuations; (vi) loss of market share and industry competition; (vii) environmental and physical risks; (viii) risks associated with acquisitions, integration, and disposals; (ix) the risk of doing business in developing countries and countries subject to international sanctions; (x) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (xi) economic and financial market conditions in various countries and regions; (xii) political risks; and (xiii) changes in trading conditions. All forward looking statements contained in this Prospectus are expressly qualified in their entirety by the cautionary statements contained or referred to in this Part. Readers should not place undue reliance on forward looking statements. Readers should specifically consider the factors identified in this Prospectus that could cause actual results to differ before taking any action in respect of the Combination. All of the forward looking statements made in this Prospectus are qualified by these cautionary statements. Specific reference is made to Part I (Summary), Part II (Risk factors), Part VI (Information about the Combination), Part VII (Information about the Wood Group) and Part VIII (Information about the Amec Foster Wheeler Group). Each forward looking statement speaks only as of the date it was made. None of JWG, the Wood Group, Amec Foster Wheeler or the Amec Foster Wheeler Group undertakes any obligation to publicly update or revise any forward looking statement as a result of new information, future events or otherwise except to the extent legally required, and, in particular, JWG will comply with its obligation to publish supplementary prospectuses containing further updated information as required by law or by a regulatory authority and, in particular, its obligations under the Prospectus Rules, the Listing Rules and the Disclosure Guidance and Transparency Rules (as appropriate). In light of these risks, results could differ materially from those stated, implied or inferred from the forward looking statements contained in this Prospectus. 41

47 The statements above relating to forward looking statements should not be construed as a qualification on the opinion as to working capital set out in paragraph 12 of Part XVI (Additional information). 4. NO FORECASTS OR ESTIMATES No statement in this Prospectus (including any statement of estimated synergies) is intended as a profit forecast or estimate for any period. Accretion statements or statements as to the effect of the combination on return of average capital employed should not be construed as profit forecasts and are, therefore, not subject to the requirements of Rule 28 of the City Code. No statement in this Prospectus should be interpreted to mean that earnings, earnings per share or income, cash flow from operations or free cash flow for the Wood Group, the Amec Foster Wheeler Group and/or the Combined Group, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings, earnings per share or income, cash flow from operations or free cash flow for the Wood Group or the Amec Foster Wheeler Group, as appropriate. 5. HISTORICAL FINANCIAL INFORMATION RELATING TO THE WOOD GROUP AND THE AMEC FOSTER WHEELER GROUP All financial information relating to the Wood Group and the Amec Foster Wheeler Group contained in this Prospectus, unless otherwise stated, has been extracted or derived, without material adjustment, from their audited consolidated financial statements as of, and for, the financial years ended 31 December 2016, 31 December 2015 and 31 December 2014 and, in the case of the Amec Foster Wheeler Group, the unaudited consolidated financial statements of Foster Wheeler and subsidiaries for the nine months ended 30 September PRO FORMA FINANCIAL INFORMATION RELATING TO THE COMBINED GROUP In this Prospectus, any reference to pro forma financial information is to information which has been extracted without material adjustment from the unaudited pro forma financial information contained in Part XIII (Unaudited pro forma financial information). The unaudited pro forma information consists of a pro forma income statement for the financial year ended 31 December 2016 and net assets statement as at 31 December 2016 relating to the Combined Group. These have been prepared in accordance with Annex II to the PD Regulation and in a manner consistent with the accounting policies and presentation adopted by the Wood Group in the JWG 2016 Annual Report and Accounts. The unaudited pro forma financial information has been prepared for illustrative purposes only to illustrate the effect on the Wood Group s income statement and net asset statement of its acquisition of the Amec Foster Wheeler Group as if it had taken place on 1 January 2016, in the case of the income statement, and on 31 December 2016, in the case of the net assets statement. Due to its nature, the unaudited pro forma income statement and net assets statement address a hypothetical situation. They do not represent the Wood Group s actual financial position or results, or what the Combined Group s actual financial position or results would have been if the Combination had been completed on the dates indicated. 7. OTHER INFORMATION RELATING TO THE AMEC FOSTER WHEELER GROUP This Prospectus contains information regarding the Amec Foster Wheeler Group which has been incorporated by reference or accurately reproduced from the information provided to JWG by Amec Foster Wheeler for inclusion in this Prospectus or the Circular, the Amec Foster Wheeler 2014 Annual Report and Accounts, the Amec Foster Wheeler 2015 Annual Report and Accounts the Amec Foster Wheeler 2016 Annual Report and Accounts and/or the Amec Foster Wheeler 2014 Supplementary Prospectus. As far as JWG is aware and is able to ascertain from information published by Amec Foster Wheeler or, otherwise, provided to JWG by Amec Foster Wheeler, no facts have been omitted that would render the reproduced information inaccurate or misleading. 42

48 8. SYNERGIES The estimated pre-tax cost synergies referred to in this Prospectus are unaudited and are based on analysis by JWG s management and on JWG s internal records and certain of Amec Foster Wheeler s internal records. Further information underlying the Quantified Financial Benefits Statement is contained in paragraph 6 of Part VI (Information about the Combination) and paragraph 14 of Part XVI (Additional information). 9. SOURCES OF FINANCIAL INFORMATION In this Prospectus unless otherwise stated: (A) (B) (C) financial information relating to JWG has been extracted unless otherwise stated, without material adjustment, from the audited historical financial information referred to in Part IX (Financial information in relation to JWG and the Wood Group) of this Prospectus for the financial years ended 31 December 2016, 31 December 2015 and 31 December 2014 prepared in accordance with IFRS; financial information relating to Amec Foster Wheeler has been extracted without material adjustment, from the audited and unaudited historical financial information referred to in Part XI (Financial information in relation to Amec Foster Wheeler and the Amec Foster Wheeler Group) of this Prospectus for the financial years ended 31 December 2016, 31 December 2015 and 31 December 2014 prepared in accordance with IFRS; and where information has been sourced from a third party, JWG confirms that the information has been accurately reproduced and, as far as JWG is aware and able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. Where third party information has been used, the source of such information has been identified wherever it appears in this document. 10. DEFINED TERMS The meanings of defined terms used in this Prospectus are set out in Part XVII (Definitions). 43

49 PART IV DIRECTORS, COMPANY SECRETARY, REGISTERED AND HEAD OFFICES AND ADVISERS JWG Directors Ian Marchant (Chairman) Robin Watson (Chief Executive) David Kemp (Chief Financial Officer) Jann Brown (Non-executive Director and Senior Independent Director) Thomas Botts (Non-executive Director) Jacqui Ferguson (Non-executive Director) Richard Howson (Non-executive Director) Mary Shafer-Malicki (Non-executive Director) Jeremy Wilson (Non-executive Director) JWG Proposed Directors..... Company Secretary The business address of each of the JWG Directors is at 15 Justice Mill Lane, Aberdeen, AB11 6EQ, United Kingdom Roy Franklin (Deputy Chairman and Senior Independent Director) Linda Adamany (Non-executive Director) Ian McHoul (Non-executive Director) William Setter Registered office Justice Mill Lane, Aberdeen, AB11 6EQ, United Kingdom Head office Justice Mill Lane, Aberdeen, AB11 6EQ, United Kingdom Sponsors, financial advisers and corporate brokers J.P. Morgan Cazenove 25 Bank Street Canary Wharf, London E14 5JP United Kingdom Credit Suisse International One Cabot Square London E14 4QJ United Kingdom Legal adviser as to English law Slaughter and May One Bunhill Row London EC1Y 8YY United Kingdom Legal adviser as to US law... Cravath, Swaine & Moore LLP Worldwide Plaza 825 Eighth Avenue New York NY United States of America Reporting accountants PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH United Kingdom 44

50 Auditor PricewaterhouseCoopers LLP Registrar Equiniti Limited Aspect House Spencer Road Lancing, West Sussex BN99 6DA United Kingdom 45

51 PART V EXPECTED TIMETABLE OF PRINCIPAL EVENTS AND INDICATIVE STATISTICS PART A EXPECTED TIMETABLE OF PRINCIPAL EVENTS PRINCIPAL EVENTS TIME AND/OR DATE (1) Publication of this Prospectus, the Circular and the Scheme Document May 2017 Latest time for receipt by the Amec Foster Wheeler ADR Depositary of voting instructions for the Amec Foster Wheeler Meetings a.m. (New York City time) on 7 June 2017 (2) Latest time for receipt of JWG Form of Proxy/CREST proxy instructions for the JWG General Meeting a.m. on 13 June 2017 Latest time for receipt of forms of proxy/crest proxy instructions for the Court Meeting a.m. on 13 June 2017 (3) Latest time for receipt of forms of proxy/crest proxy instructions for the Amec Foster Wheeler General Meetings a.m. on 13 June 2017 (4) Voting record time for the JWG General Meeting p.m. on 13 June 2017 (2) Voting record time for the Amec Foster Wheeler Meetings p.m. on 13 June 2017 (6) JWG General Meeting a.m. on 15 June 2017 Court Meeting a.m. on 15 June 2017 Amec Foster Wheeler General Meeting a.m. on 15 June 2017 (7) Scheme Court Hearing Last day for dealings in, and for registration of transfers of, and disablement in CREST of, Amec Foster Wheeler Shares D + 1 Last day for dealings in, and for registration of transfers of, Amec Foster Wheeler ADRs D + 1 Suspension of listing of, and dealings in, Amec Foster Wheeler Shares p.m. on D + 1 a date expected to be in the fourth quarter of 2017 subject to regulatory clearances ( D ) Suspension of dealings in Amec Foster Wheeler ADRs p.m. (New York City time) on D + 1 Scheme Record Time p.m. on D + 1 Effective Date D + 1 (8) Admission and commencement of dealings in New JWG Shares on the London Stock Exchange by 8.00 a.m. on D + 2 Date of issue of New JWG Shares and crediting of New JWG Shares to CREST accounts by 8.00 a.m. on D + 2 Delisting of Amec Foster Wheeler Shares D + 2 Latest date for (a) CRESTaccounts to be credited in respect of New JWG Shares and cash due for fractional entitlements and (b) dispatch of share certificates or nominee entitlement statements in respect of the New JWG Shares (in each case, where applicable) within 14 days of the Effective Date Longstop Date February 2018 (9) (1) The dates and times given are indicative only and are based on current expectations and may be subject to change (including as a result of changes to the regulatory timetable). References to times are to London time unless otherwise stated. If any of the times and/or dates above change, the revised times and/or dates will be announced via a Regulatory Information Service. 46

52 (2) Only those Amec Foster Wheeler ADR Holders who hold Amec Foster Wheeler ADRs at a.m. (New York City time) on 22 May 2017 will be entitled to instruct the Amec Foster Wheeler ADR Depositary to exercise the voting rights in respect of the Amec Foster Wheeler Shares represented by their Amec Foster Wheeler ADRs at the Amec Foster Wheeler Meetings. (3) The BLUE form of proxy for the Court Meeting, if not lodged by the time stated above, may be handed to a representative of Capita Asset Services or the Chairman of the Court Meeting before the start of the Court Meeting (or any adjournment thereof). However, if possible, Amec Foster Wheeler Shareholders are requested to lodge the BLUE form of proxy at least 48 hours before the time appointed for the Court Meeting. (4) The YELLOW form of proxy for the Amec Foster Wheeler General Meeting must be lodged with Capita Asset Services no later than a.m. on 13 June 2017 in order to be valid, or, if the Amec Foster Wheeler General Meeting is adjourned, 48 hours before the time fixed for the Amec Foster Wheeler General Meeting. If the YELLOW form of proxy is not returned by such time, it will be invalid. (5) To be entitled to attend and vote at the JWG General Meeting (and for the purpose of the determination by JWG of the votes they may cast), members must be registered in the register of members of JWG at 6.00 p.m. on 13 June 2017 (or in the event of any adjournment, at 6.00 p.m. on the date which is two days before the time for the adjourned meeting). Changes to JWG s register of members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the JWG General Meeting. (6) If either Amec Foster Wheeler Meeting is adjourned, the Voting Record Time for the adjourned Amec Foster Wheeler Meeting will be 6.00 p.m. on the date which is two days before the date set for the adjourned Amec Foster Wheeler Meeting. (7) To commence at the time fixed or, if later, immediately after the conclusion or adjournment of the Court Meeting. (8) The court order approving the Scheme is expected to be delivered to Companies House on the Effective Date following the suspension of listing of, and dealings in, Amec Foster Wheeler Shares, the suspension of dealings in Amec Foster Wheeler ADRs and the Scheme Record Time on D+1, which date will then become the Effective Date. The events which are stated as occurring on subsequent dates are conditional on the Effective Date and operate by reference to this time. (9) This is the latest date by which the Scheme may become effective. However, such date may be extended (with the prior written consent of JWG) to 31 March 2018, or such later date as may be agreed in writing by JWG and Amec Foster Wheeler (with the Panel s consent and Court approval (if required)). * All dates by references to D+1 and D+2 will be to the Business Day falling immediately after the date indicated. 47

53 PART B INDICATIVE COMBINATION STATISTICS Indicative statistics (2) Number of JWG Shares in issue as at the Latest Practicable Date (with no JWG Shares held in treasury) ,175,384 Number of New JWG Shares to be issued in connection with the Combination up to 296,541,894 Number of JWG Shares in issue immediately following Admission (with no JWG Shares held in treasury) up to 679,717,278 New JWG Shares as a percentage of the JWG Shares in issue immediately following Admission (with no JWG Shares held in treasury) Share identification numbers ISIN approximately 44 per cent. JWG Shares GB00B5N0P849 SEDOL B5N0P84 (2) Please see paragraph 17 of Part XVI (Additional information) for details of how these statistics are calculated. 48

54 1. INTRODUCTION PART VI INFORMATION ABOUT THE COMBINATION On 13 March 2017, the JWG board and the Amec Foster Wheeler Board jointly announced that they had reached agreement on the terms of a recommended all-share offer by JWG for the entire issued and to be issued ordinary share capital of Amec Foster Wheeler to form the Combined Group. Under the terms of the Combination, Amec Foster Wheeler Shareholders will be entitled to receive 0.75 New JWG Shares for each Amec Foster Wheeler Share. It is intended that the Combination will be implemented by means of a court-sanctioned scheme of arrangement of Amec Foster Wheeler under Part 26 of the CA The Scheme is subject to a number of Conditions which are summarised in paragraph 14 of this Part. The full terms and conditions of the Scheme are set out in the Scheme Document. Subject to the satisfaction or, where applicable, waiver of the Conditions (other than those Conditions which relate to Admission and to approval of the Combination by JWG Shareholders), it is expected that the Scheme will become effective in the fourth quarter of 2017, with the New JWG Shares admitted to listing on the premium segment of the Official List and to trading on the Main Market by 8.00 a.m. on the first Business Day after the Effective Date. 2. JWG SHAREHOLDER APPROVAL OF THE COMBINATION Due to its size, the Combination constitutes a class 1 transaction for JWG for the purposes of the Listing Rules and, therefore, requires the approval of JWG Shareholders. Accordingly, the JWG General Meeting has been convened for a.m. on 15 June JWG Shareholders will be asked to vote in favour of the JWG Resolution to approve the Combination and the issue and allotment of the New JWG Shares. The JWG board considers the Combination and the JWG Resolution to be in the best interests of JWG and the JWG Shareholders as a whole and unanimously recommends that JWG Shareholders vote in favour of the JWG Resolution, as the Current JWG Directors intend to do in relation to their own individual beneficial holdings which amount in total to 208,531 JWG Shares, representing approximately 0.05 per cent. of JWG s total issued ordinary share capital as at the Latest Practicable Date. The Combination has also been unanimously recommended by the Amec Foster Wheeler Board, with the Amec Foster Wheeler Directors holding Amec Foster Wheeler Shares having irrevocably undertaken to vote in favour of the Scheme in respect of their own beneficial holdings which amount in total to 543,175 Amec Foster Wheeler Shares, representing approximately 0.14 per cent. of Amec Foster Wheeler s issued ordinary share capital as at the Latest Practicable Date, and their recommendation and the background and reasons for it are set out in full in the Scheme Document. 3. SUMMARY OF THE TERMS OF THE COMBINATION Under the terms of the Combination, Amec Foster Wheeler Shareholders who are holders of the Scheme Shares at the Scheme Record Time will be entitled to receive: for each Amec Foster Wheeler Share: 0.75 New JWG Shares Based on the Closing Price of 7.79 per JWG Share on the Latest Practicable Date, the terms of the Combination represent a value of approximately: 5.84 per Amec Foster Wheeler Share; and 2.3 billion for Amec Foster Wheeler s entire issued and to be issued share capital. Based on the Closing Price of 7.52 per JWG Share on 10 March 2017 (being the last Business Day before the date of the Announcement), the terms of the Combination represent: a value of approximately 5.64 per Amec Foster Wheeler Share; and a premium of approximately: 28.7 per cent. to the prior 30 trading day volume weighted average price of 4.53 per Amec Foster Wheeler Share as at 10 March 2017, based on a prior 30 trading day volume 49

55 weighted average price of 7.77 per JWG Share as at 10 March 2017 (being the last Business Day before the date of the Announcement); and 15.3 per cent. to the Closing Price of 4.89 per Amec Foster Wheeler Share on 10 March 2017 (being the last Business Day before the date of the Announcement). The Combination will result in former Amec Foster Wheeler Shareholders owning approximately 44 per cent. of the share capital of the Combined Group (based on the existing ordinary issued share capital of JWG and the fully diluted share capital of Amec Foster Wheeler) and sharing in the benefits accruing to the Combined Group via the realisation of significant cost and revenue synergies. (3) The structure of the Scheme and the Conditions relating to the Combination are summarised at paragraph 14 of this Part. Further details of the New JWG Shares are provided at paragraph 17 of this Part. 4. BACKGROUND TO AND REASONS FOR THE COMBINATION The JWG Board believes the Combination represents a compelling opportunity to create a global leader in project, engineering and technical services delivery across a diverse range of industrial sectors including power and process, environment and infrastructure and mining and primarily focussed on oil and gas. The Combination will accelerate delivery of JWG s strategic objectives to improve its service offering in project delivery, to enhance capability across the value chain in core oil and gas markets, and to broaden and deepen end market and customer exposure. The JWG Board believes that the Combined Group would represent one of the largest players in the global engineering and construction market and would have a leading position in oil and gas project, engineering and services delivery. The JWG Board considers the potential for substantial cost synergies and incremental revenue synergies in a less cyclically volatile business which retains a predominantly reimbursable, asset light model, to be a compelling prospect for shareholders. Looking further ahead, the JWG Board further believes the Combined Group will be well positioned for growth and to benefit from longer term trends in the global energy and industrial sectors. JWG has a long and successful track record of acquisition-led growth since its IPO. The JWG board and JWG Executive Leadership Team periodically consider the strategic merits of potential acquisitions. During 2016, Amec Foster Wheeler stood out as a potential acquisition that could accelerate JWG s strategy and was aligned with JWG s asset light, flexible, predominately reimbursable business model. The JWG board, recognising some of the recent challenges that culminated in Amec Foster Wheeler preparing to launch a rights issue of approximately 500 million on 21 March 2017, identified an opportunity to combine JWG with a business which has strong underlying operational capability, a leading service offering and broad sector exposure, at an appropriate premium. The JWG Board considers the following to be the key considerations in respect of the proposed Combination: Creating a stronger, complementary life-cycle service offering in oil and gas The Combined Group s principal focus and end market exposure will remain oil and gas. The Combined Group will have pro-forma revenues of US$6.7 billion in oil and gas (approximately 55 per cent. of total combined revenues). Amec Foster Wheeler provides full life cycle services across the upstream, LNG, midstream, downstream, refining and chemicals sectors. JWG recognises a differentiated strength in Amec Foster Wheeler s project management and delivery and engineering, procurement and construction capability in these areas, particularly in the downstream oil and gas sector. This complements JWG s relative strength in engineering and operations and maintenance activities, predominantly in the upstream oil and gas sector. The JWG Board believes that the Combination will result in a stronger, larger oil and gas business with a better balance of exposure across the upstream, midstream and downstream markets. The (3) Please see paragraph 17 of Part XVI (Additional information) for details of how the dilution statistics are calculated. 50

56 Combination will also result in a balanced portfolio of blue chip customers including IOCs, NOCs and independents. Through the acquisition of Amec Foster Wheeler, the Combined Group will be able to broaden relationships with new customers, especially NOCs, and deepen existing customer relationships. Broadening end market exposure across alternative energy and industrial markets Sector broadening has been a key part of JWG s recent strategy and has resulted in increased exposure to unconventional, midstream and downstream oil and gas and sector agnostic service offerings, including automation. The proportion of JWG s revenue derived from oil and gas activities has reduced to approximately 75 per cent. since 2014 and this has contributed to the Wood Group s relatively resilient performance during the current oil and gas downturn. The Combination will provide JWG with full service consulting, project management and delivery capability across new and broader end markets. Amec Foster Wheeler s environment and infrastructure business has a consulting, engineering, project and construction management capability in the water, transportation, government, oil and gas, mining, power, industrial and pharmaceutical sectors. This predominantly North American service line is expected to benefit from anticipated growth in infrastructure spending in the short to medium term. In addition, Amec Foster Wheeler s mining exposure will provide the Combined Group with strong project delivery, specialist niche consultancy and material handling equipment supply capability across a broad range of base metals, precious metals and minerals. It is expected that the broader industrial end market exposure of the Combined Group will result in reduced earnings volatility through oil and gas cycles. Enduring investment case: measured risk appetite in a flexible asset light model The core market of the Combined Group will be oil and gas and the Combined Group will remain positioned across the life cycle of its customers assets giving exposure to both operating and capital expenditure. The Combined Group will retain its measured risk appetite. Revenue will principally be derived from reimbursable work. The Combined Group will be commercially versatile and seek contracts across various end markets and encompassing a range of services, which include performance-based or fixed price elements where returns commensurate with the risk profile can be realised. Both JWG and Amec Foster Wheeler s historical successes have been built on complementary asset light, flexible business models, relying on the expertise and capabilities of their people. In such an asset light model, the active management of utilisation will continue to be key to longer term success. The Combined Group will continue to adopt JWG s well established approach to capital structure. Pro forma net debt at Completion of 2.3x EBITDA is expected to reduce to a level within JWG s preferred range of 0.5x to 1.5x approximately 18 months after Completion. Further detail on the financial impact of the Combination is included in paragraph 5 of this Part and Part XIII (Unaudited Pro-Forma Financial Information). 51

57 Based on revenues to 31 December 2016, an analysis of the Combined Group in the context of JWG s enduring investment case is set out below. All figures quoted are approximate and the Wood Group revenue is total revenue, which includes the proportionate share of non-controlled joint ventures. The Combined Group s focus will remain oil and gas with approximately 55 per cent. of revenues derived from end markets in oil and gas. The JWG Board believes that the Combined Group s service offering in these markets will be enhanced through the combination of the complementary strengths of JWG and Amec Foster Wheeler. The Combined Group will also have exposure to broader industrial end markets including power and process, environment and infrastructure and, to a limited extent, mining, which when also considering the greater midstream and downstream exposure will result in reduced earnings volatility through oil and gas cycles. Both JWG and Amec Foster Wheeler are positioned across the full asset life cycle. As a result, the revenue of each company is derived from both operating and capital expenditure. 52

58 Amec Foster Wheeler derives a significant share of its revenues from capital projects in each of its oil and gas, mining, power and process and environment and infrastructure businesses. The Combined Group will therefore have a broader exposure to both sources of revenue across a diversified range of projects. JWG s risk appetite is for a measured approach to contractual risk such that a majority of revenues are derived from reimbursable or cost plus contracts. The Combined Group will deliver a portfolio of predominantly reimbursable contracts and fixed price contracts (including those with performance-based elements) within a range that is consistent with JWG s risk appetite. The nature of activities within fixed price contracts includes engineering, procurement, construction, construction management and performance-based operations activity. Operational platform enables successful integration and synergies delivery JWG has extensive experience in acquiring companies and a strong track record of successful integration of people businesses, including the US$1 billion acquisition of PSN in In 2016, JWG s leadership reorganised and repositioned JWG as a service-defined and regionally deployed organisation, with a rationalised back office across four areas of functional support. This change was delivered in-house by a dedicated team in less than 18 months. The more efficient operational platform is well suited to facilitate the integration of Amec Foster Wheeler with only minor amendments. JWG took early and decisive action on cost savings and operational efficiency at the start of the current downturn in the oil and gas sector in late JWG s principal focus during the downturn has been to control what it can by managing utilisation and ensuring delivery of significant and sustainable overhead cost savings. Sustainable overhead cost savings of US$244m were achieved in the two years ended 31 December The JWG Board is confident this experience and the efficient service-defined operational platform will enable delivery of cost synergies resulting in a leaner and more competitive combination. Proven JWG leadership and strengthened operational management The Combined Group will be led by the proven team of Robin Watson as Chief Executive and David Kemp as CFO. This leadership team has successfully navigated JWG through the recent challenges in core oil and gas markets, delivering sector-leading performance in the three years ended 31 December Amec Foster Wheeler s operational leadership has a strong reputation and a best of both approach will be adopted in considering the composition of the broader management team which will ultimately be determined by operational breadth, mix and structure. Superior returns from the delivery of significant synergies The JWG Board believes the Combination will deliver significant value to its shareholders through a mix of operating efficiencies and enhanced commercial opportunities, which will in turn support deleveraging to within JWG s preferred range of 0.5x to 1.5x approximately 18 months after Completion and a progressive dividend policy taking into account cash flows and earnings. 53

59 Please refer to paragraph 6 of this Part VI for further detail on the synergy potential of the Combination. 5. FINANCIAL EFFECTS OF THE COMBINATION The unaudited pro forma net assets statement and income statement of the Combined Group illustrating the effect of the Combination on the Wood Group s net assets as at 31 December 2016 as if the Combination had taken place on that date, and the effect on the Wood Group s income statement for the 12 months ended 31 December 2016 as if the Combination had taken place on 1 January 2016, are set out in Part XIII (Unaudited Pro Forma Financial Information) of this Prospectus. This information is unaudited and has been prepared for illustrative purposes only. It shows, among other things, that the impact of the Combination generated revenues of approximately US$11.5 billion for the 12 month period ended 31 December Taking into account the cost synergies as detailed in paragraph 6 of this Part VI, the JWG Board believes that the Combination has the potential for significant value creation for both the JWG Shareholders and the Amec Foster Wheeler Shareholders and expects: the Combination to be accretive to adjusted earnings per share for JWG Shareholders and Amec Foster Wheeler Shareholders from 2017; the return on invested capital in relation to the Combination to exceed JWG s weighted average cost of capital in the third full financial year after Completion; and net debt / EBITDA to reduce to within JWG s preferred range of 0.5x to 1.5x approximately 18 months after Completion. As set out in the Announcement, Amec Foster Wheeler has suspended dividend payments (including the final dividend for 2016) until it is generating sustainable free cash flow. The Combined Group intends to continue to maintain a progressive, dividend policy going forward taking into account cash flows and earnings. None of the statements in this paragraph 5 is intended as a profit forecast and should not be interpreted as such. 6. SYNERGY POTENTIAL OF THE COMBINATION The JWG Directors are confident that, as a direct result of the Combination, the Combined Group could generate attractive synergies and create additional shareholder value. The Announcement included statements of estimated pre-tax cost synergies expected to arise from the Combination of at least 110m per annum, by the end of the third year following Completion. On 5 April 2017, the JWG directors updated this estimate of the pre-tax cost synergies expected to arise from the Combination from at least 110m per annum to at least 150m per annum by the end of the third year following Completion. The JWG Directors have now further increased their estimate of pre-tax cost synergies to at least 165m per annum, by the end of the third year following Completion. In US$, the pre-tax cost synergies have increased from approximately US$134m per annum to approximately US$200m per annum, using the same US dollar:sterling exchange rate of :1 as set out in the Announcement. The JWG Directors believe that these pre-tax cost synergies further enhance the attractiveness of the Combination. The increase in the expected level of pre-tax cost synergies is attributable to a more developed assessment of the synergy opportunity carried out since the Announcement, which has enabled a refinement of the synergy initiatives and the related risk adjustments incorporated in the underlying calculations. The expected sources of quantified cost synergies, which are in addition to synergies previously targeted and already underway by JWG and Amec Foster Wheeler separately, comprise: operating efficiencies: approximately 50 per cent. of the identified cost synergies are expected to be generated from economies of scale in addressable operating cost, efficiencies in operational procurement spend and the reduction of duplicate costs across country and regional leadership; 54

60 corporate efficiencies: approximately 20 per cent. of the identified cost synergies are expected to be generated from the reduction of duplicate costs across board and executive leadership teams, in addition to other corporate and group functional costs; and administration efficiencies: approximately 30 per cent. of the identified cost synergies are expected to be generated from the consolidation of overlapping office locations, the elimination of duplicated IT systems and the reduction of duplicate costs across central support functions. Approximately 30 per cent. of the identified cost synergies are expected to be realised by the end of the first year following Completion, rising to 70 per cent. by the end of the second year following Completion and to 100 per cent. by the end of the third year following Completion. These anticipated cost synergies, which are reported under the City Code as set out in Parts B and C of Appendix 1 of the Scheme Document, reflect both the beneficial elements and the costs, and will accrue as a direct result of the Combination, and would not be achieved on a standalone basis. JWG estimates that realisation of these cost synergies would give rise to one-off costs of approximately 190 million (US$231 million) incurred in the first three years post-completion. Aside from the one-off costs referred to above, the JWG Directors do not expect any material dissynergies to arise in connection with the Combination. Paragraph 14.2 of this Part describes the proposal of a remedy commitment that JWG has made to the CMA. Should such proposed remedy commitment be agreed with the CMA and implemented, it is anticipated that approximately 25m per annum of the pre-tax cost synergies would not be achieved. Furthermore, approximately 25m of the one-off costs to realise the cost synergies would not be incurred. In US$, the reduction in cost synergies would be approximately US$30m per annum and the reduction in one-off costs approximately US$30m, using the same US dollar:sterling exchange rate of :1 as set out in the Announcement. References in this Prospectus to the Quantified Financial Benefits Statement should be read in conjunction with paragraph 14 of Part XVI (Additional information). Over the longer term, the JWG Board believes that the Combined Group would also have the potential to realise additional revenue synergies that are not included in the Quantified Financial Benefits Statement, from the delivery of an expanded range of services to an enlarged customer base, a broader offering in the core oil and gas market, cross selling, pull through opportunities and insourcing by the Combined Group of currently outsourced activity. None of the statements contained in this paragraph 6 is intended as a profit forecast or should be interpreted as such. 7. INTEGRATION PLANNING The JWG Board is confident that the integration of the Wood Group and the Amec Foster Wheeler Group can be achieved without undue disruption to the underlying operations of either business and with modest modification to the Wood Group s organisational design. JWG has established an integration team, bringing together the relevant capabilities of both businesses, to ensure that the synergies of the Combination are maximised. The integration team will consist of a central integration team that will have oversight of regional integration teams in key geographic locations. The team will be led by an existing member of JWG Senior Management with extensive experience, reporting directly to the Chief Executive. JWG has developed an initial integration plan that consists of the stages set out below. The first two phases are already underway. Discovery and protocols defining the integration planning process, governance, initial engagement and sharing and defining the integration planning protocols. Senior management of both JWG and Amec Foster Wheeler have been engaged in this early phase. Pre-planning identification of the long term objectives for integration (the integration blueprint), development of a workstream structure and mapping key milestones and decisions. Development and planning development of change plans and organisational structure, Day 1 business plans and a synergies delivery plan as well as the finalisation of the integration blueprint. 55

61 At the end of this process, JWG s aim is to have a detailed integration plan in place to enable implementation, as well as engagement with appropriate stakeholders (including, if applicable, consultation with employee representative bodies), to commence following Completion. 8. MANAGEMENT, EMPLOYEES AND OFFICE LOCATIONS JWG attaches great importance to the skills and experience of the existing management and employees of Amec Foster Wheeler and believes that they will be a key factor in maximising the opportunities that the Combination will present. Management and employees of both Amec Foster Wheeler and JWG will have the potential to benefit from new opportunities within the Combined Group following Completion. The JWG management team will lead the Combined Group. Robin Watson and David Kemp will continue as Chief Executive and CFO, respectively. Ian Marchant will continue as Chair of the JWG Board. On Completion, three members of the Amec Foster Wheeler Board will join the board of the Combined Group as non-executive directors including Roy Franklin as Deputy Chair and Senior Independent Director. These appointments will ensure an appropriate balance of representation and governance. Following Completion, the board of the Combined Group will aim to retain the best talent of Amec Foster Wheeler and JWG. The JWG Board recognises that, in order to achieve the expected benefits of the Combination, some operational, corporate and administrative restructuring will be required following Completion. The synergy work carried out to date has confirmed the potential to generate cost savings for the Combined Group through operational, corporate and administration efficiencies. However, as at the date of this Prospectus, proposals remain in development as to how and where such headcount reductions will be implemented. Further detailed analysis will need to be undertaken by the integration planning team. Finalisation of the integration plans will be subject to engagement and (if applicable) consultation with relevant stakeholders (including employee representative bodies). Until the integration planning and organisational design is complete and JWG has engaged with the appropriate stakeholders (including, if applicable, having consulted with employee representative bodies), the detailed steps and outcomes of corporate, operational and administrative integration will not be certain and the impact they will have on the employment and places of business of the Combined Group is not yet known. However, as at the date of this Prospectus: the Amec Foster Wheeler business is envisaged to be integrated into JWG s business; JWG s current intentions contemplate consolidation of overlapping office locations where practical in various locations and regions around the world; there are anticipated headcount reductions associated with duplicate costs across Board, executive leadership teams, business unit leadership teams and regional leadership teams; there are further expected reductions in duplicate costs across central, business unit and regional support and operational functions; and JWG has no intentions, other than the consolidation of overlapping office locations, to redeploy material fixed assets of the Amec Foster Wheeler Group. Based on current integration planning JWG expects an overall potential reduction of approximately 2 per cent. of roles globally across the Combined Group and the total Combined Group workforce. Any headcount reductions will be inclusive of natural attrition. The proportion of cost savings expected to come from reducing headcount is approximately 60 per cent. The existing contractual and employment rights of the employees of the Amec Foster Wheeler Group including accrued pension rights under applicable laws, will be safeguarded upon and following Completion. JWG intends that, following Completion, Amec Foster Wheeler will continue to meet its existing pension obligations, including commitments to make previously agreed deficit contributions and contractually required employer contributions. 9. INFORMATION ON THE WOOD GROUP JWG is a global provider of technical services predominantly to the oil and gas sector, headquartered in Aberdeen, Scotland. JWG designs, modifies, constructs and operates industrial facilities mainly in 56

62 the oil and gas sector. JWG, which operates in over 40 countries and has around 30,000 employees globally, provides services across the entire asset life cycle and enhances these with a wide range of specialist technical solutions. JWG employs an asset light, delivery focused business model and is differentiated by its range of services, track record of delivery and its people, culture and values. JWG organises its business into three segments: Asset Life Cycle Solutions Eastern Region and Asset Life Cycle Solutions Western Region ( ALCS ) and Specialist Technical Solutions ( STS ). Please see paragraph 3 of Part VII (Information about the Wood Group) for further information. 10. INFORMATION ON THE AMEC FOSTER WHEELER GROUP Amec Foster Wheeler serves major corporations and government bodies in the oil, gas and chemicals, mining, power and process and environment and infrastructure markets, offering consultancy, engineering, project management, operations and construction services, project delivery and specialised power equipment services to its customers worldwide. Amec Foster Wheeler assists customers in maximising the value of their assets, by reducing the capital cost of construction and lifetime cost of operation and maintenance through concept studies and design work, value engineering, consistent project delivery, the development of innovative solutions and the adoption of technology to enhance efficiency. The Amec Foster Wheeler Group operates in over 55 countries with over 350 offices worldwide, and has a workforce of around 35,000 people throughout its global operations. On 1 January 2017 Amec Foster Wheeler put into effect a new organisational structure with four market-facing business lines: (i) Oil, Gas & Chemicals ( OG&C ); (ii) Mining; (iii) Power & Process; and (iv) Environment & Infrastructure, to ensure closer alignment with customers and their needs. Please see paragraph 5 of Part VIII (Information about the Amec Foster Wheeler Group) for further information. 11. STRATEGY OF THE COMBINED GROUP The Combination will enable the Combined Group to improve its service offering in project delivery, to enhance capability across the value chain in core oil and gas markets, and to broaden its exposure to non-oil and gas markets. The Combination will both deepen relationships with existing customers and give the Combined Group broader blue-chip customer relationships. The Combined Group s strategy will be to remain asset light with a flexible cost base, predominantly contracting on a reimbursable basis and will retain its principal focus on oil and gas markets. The key strategic priorities, in addition to the strategy of delivering the synergies identified in paragraph 6 of this Part VI, of the Combined Group will be: Developing a stronger, larger oil and gas business with a better balance of exposure across the upstream, midstream and downstream markets To achieve this, the Combined Group will focus on combining (i) Amec Foster Wheeler s strength in project management and delivery, engineering, procurement and construction capability in upstream, LNG, midstream, downstream, refining and chemicals sectors with (ii) JWG s relative strength in engineering and operations and maintenance activities, predominantly in the upstream oil and gas sector. These complementary attributes will result in a stronger, larger oil and gas business with a better balance of exposure across oil and gas markets. The Combined Group s revenue to 31 December 2016 split by sector and by revenue derived from opex and capex is set out in paragraph 4 of this Part. Broadening relationships with new customers and deepening existing customer relationships The Combination will result in a more balanced portfolio of blue-chip customers including IOCs, NOCs and independents. The Combined Group will be able to broaden relationships with new customers, especially NOCs, and deepen existing customer relationships through having a wider range of services and capabilities to offer to customers. 57

63 Broadening end market exposure across alternative energy and industrial markets, reducing earnings volatility The Combination will provide the Combined Group with full service consulting, project management and delivery capability in alternative energy markets. Exposure to industrial markets will be increased through, in part, the addition of Amec Foster Wheeler s environment and infrastructure business which has a strong consulting, project and construction management capability in the water, transportation and infrastructure, government services and industrial and commercial sectors, as well as its mining business, which has a project delivery and niche consultancy offering in base metals, gold and potash markets. The broader industrial end market exposure of the Combined Group should result in reduced earnings volatility through oil and gas cycles. Maintenance of a measured risk appetite in a flexible asset light model The complementary asset light, flexible and balanced business models of JWG and Amec Foster Wheeler will be retained. In oil and gas, the core market of the Combined Group, the Combined Group will remain positioned across the life cycle of its customers assets giving exposure to both operating and capital expenditure. Contracting will be done on a substantially reimbursable basis. The Combined Group will also be commercially versatile and willing to seek contracts with performance-based or fixed price elements where returns commensurate with the risk profile can be realised. 12. CURRENT TRADING AND PROSPECTS JWG The oil and gas market has continued to present challenges and, as expected, year to date performance is down on Improved activity levels in offshore greenfield project engineering and commissioning in the Western region have been more than offset by weaker activity elsewhere, including further reductions in North Sea projects and modifications work in the Eastern region. JWG s Industrial Services business has performed robustly and automation activity has increased. Overall, year to date performance has been weaker than anticipated. However, recent awards and renewals demonstrate good customer support and we are seeing the enduring benefit of structural cost reductions achieved in We anticipate stronger performance in the second half of the year and as a result, management s expectations of full year trading performance are broadly unchanged. Amec Foster Wheeler In 2017, Amec Foster Wheeler continues to expect another year of oil and gas decline and for solar activity to reduce significantly from the record levels in It is also expected that there will be a better performance from Environment and Infrastructure and a further significant contribution from standalone overhead cost savings. 13. DIVIDENDS AND DIVIDEND POLICY 13.1 Combined Group After Completion, the board of the Combined Group intends to continue to pursue JWG s progressive dividend policy taking into account cash flows and earnings, following on from the total distribution for 2016 of 33.3 cents per JWG Share Current Amec Foster Wheeler dividend policy Amec Foster Wheeler announced on 13 March 2017 that the Amec Foster Wheeler Board had suspended dividend payments (including the final dividend for 2016) until Amec Foster Wheeler is generating sustainable free cash flow. JWG reserves the right (without prejudice to any right JWG may have to invoke Condition 19(C) in Part A of Part III of the Scheme Document) to reduce the Consideration by the value implied under the terms of the Combination for the Amec Foster Wheeler Shares by an amount up to the amount of any 58

64 dividend, other distribution or return of value by Amec Foster Wheeler which is declared, made or paid or becomes payable in respect of Amec Foster Wheeler Shares prior to the Effective Date Entitlement to JWG dividends The New JWG Shares will be issued credited as fully paid and will rank pari passu in all respects with the JWG Shares in issue at the time the New JWG Shares are issued pursuant to the Scheme, including, subject as outlined below, the right to receive notice of, and to attend and vote at, general meetings of JWG and the right to receive and retain any dividends and other distributions declared, made or paid by reference to a record date falling after the Effective Date and to participate in the assets of JWG on a winding-up of JWG. Irrespective of the date on which the Effective Date falls, Amec Foster Wheeler Shareholders who receive New JWG Shares pursuant to the Scheme shall not be entitled to receive any interim dividend declared or paid by JWG on those shares in respect of the period ending 30 June 2017 (the JWG Dividend ) JWG dividends JWG declares its dividends in US dollars. As JWG Shareholders are based mainly in the UK, declared dividends are converted into Pounds Sterling and paid in that currency by default, although holders of existing JWG Shares are able to elect to receive dividends in US dollars. This arrangement is expected to continue in respect of the New JWG Shares to be issued pursuant to the Combination. Set out in the table below are the amounts of the dividends per JWG Share declared and paid for the financial years ended 31 December 2016, 31 December 2015 and 31 December JWG Shares (US cents per share) Year ended 31 December 2016 Final dividend Interim dividend Total Year ended 31 December 2015 Final dividend Interim dividend Total Year ended 31 December 2014 Final dividend Interim dividend Total STRUCTURE OF THE COMBINATION 14.1 Scheme of arrangement It is intended that the Combination will be effected by a court-sanctioned scheme of arrangement between Amec Foster Wheeler and the Scheme Shareholders under Part 26 of the CA The purpose of the Scheme is to provide for JWG to become owner of the whole of the issued and to be issued share capital of Amec Foster Wheeler. Under the Scheme, the Combination is to be achieved by the transfer of the Scheme Shares held by Scheme Shareholders to JWG in consideration for which Scheme Shareholders will receive the Consideration. The procedure involves, amongst other things, an application by Amec Foster Wheeler to the Court to sanction the Scheme. Pursuant to the terms of the Co-operation Agreement, JWG has reserved the right, with the consent of the Panel, to implement the Combination by way of an Offer rather than the Scheme, whether before or after the posting of the Scheme Document, if: (a) Amec Foster Wheeler provides its prior written consent; (b) a third party announces a firm intention to make an offer for the issued and to be issued ordinary share capital of Amec Foster Wheeler (whether including or excluding any Amec Foster Wheeler Shares held in treasury) which is recommended in whole or in part by the Amec Foster Wheeler Board; or (c) the Amec Foster Wheeler Board: (i) does not include the Amec Foster Wheeler Board Recommendation in the Scheme Document (or, if different, the document convening the Amec Foster Wheeler General Meeting or the Court Meeting); (ii) withdraws, qualifies or adversely modifies the Amec Foster Wheeler Board Recommendation; or (iii) prior to the publication of the Scheme Document (and/or the document convening the Amec Foster Wheeler General Meeting or the Court Meeting, if different), withdraws, qualifies or adversely modifies its intention to give the Amec Foster 59

65 Wheeler Board Recommendation in any such document, including making any public statement to such effect, or fails to publicly reaffirm or re-issue a statement of its intention to make the Amec Foster Wheeler Board Recommendation on an unmodified and unqualified basis before 5.30 p.m. on the tenth Business Day following JWG s reasonable request to do so Conditions The Scheme is subject to the Conditions and further terms and conditions set out in the Scheme Document. These Conditions include, among other things: (A) (B) (C) (D) (E) (F) (G) the receipt of the relevant clearances from competition authorities in Australia, Canada, Kazakhstan, Turkey, the United Kingdom and the United States, in addition to certain foreign investment and other regulatory clearances including under the CFIUS regime in the US. As at the Latest Practicable Date, relevant clearances have been received from the competition authorities in Canada, Turkey and the United States and therefore these conditions have been satisfied; no concerns being raised and/or the transaction being permitted to close if the Combination becomes subject to national security review in Canada or the United Kingdom (whether by the Secretary of State for Defence, the Secretary of State for Business, Energy & Industrial Strategy or otherwise); approval of the Scheme by a majority in number of Amec Foster Wheeler Shareholders representing not less than 75 per cent. in value of Amec Foster Wheeler Shareholders who are on the register of members of Amec Foster Wheeler at the Voting Record Time, present and voting, whether in person or by proxy, at the Court Meeting; all resolutions required to approve and implement the Scheme and to approve certain related matters being duly passed by the requisite majority of Amec Foster Wheeler Shareholders at the Amec Foster Wheeler General Meeting; the approval of the Scheme by the Court within specified timeframes (with or without modification but subject to any modification being on terms acceptable to Amec Foster Wheeler and JWG) and, following such approval, the delivery of a copy of the Scheme Court Order to the Registrar of Companies by no later than the Longstop Date; all resolutions required to approve and implement the Scheme and acquisition of the Amec Foster Wheeler Shares and to approve certain related matters being duly passed by the requisite majority of JWG Shareholders at the JWG General Meeting; and Admission becoming effective. The Conditions relating to the approval of the Scheme by the Amec Foster Wheeler Shareholders at the Court Meeting, the passing of the Amec Foster Wheeler Resolutions at the Amec Foster Wheeler General Meeting, the sanction of the Scheme by the Court, the delivery of the Court order with the Registrar of Companies, the passing of the JWG Resolution at the JWG General Meeting and the approval by the UK Listing Authority of the application for admission to listing, are not capable of being waived in whole or in part. The Conditions are set out in full in the Scheme Document. Under the terms of the Co-operation Agreement: (A) (B) (C) JWG has agreed to use its reasonable endeavours to ensure the satisfaction of the merger control and regulatory conditions to the Combination as soon as possible and in any event in sufficient time so as to enable the Effective Date to occur by the Longstop Date; JWG has agreed to use its reasonable endeavours to procure that no relevant competition authority seeks to issue, or issues any measure that prevents, or purports to prevent, Completion; and JWG and Amec Foster Wheeler have agreed to use reasonable endeavours to provide each other with all necessary information in relation to the relevant merger control and regulatory clearances and authorisations. JWG has also undertaken to divest, if necessary, certain business of Amec Foster Wheeler in order to secure the satisfaction of certain outstanding merger control conditions. 60

66 It is anticipated that, in order to obtain clearance from the CMA, JWG and Amec Foster Wheeler may have to provide certain undertakings (for example, as to divestments) to the CMA. As at the Latest Practicable Date, JWG has made a proposal to the CMA of a remedy commitment in respect of assets and operations of Amec Foster Wheeler that represent the majority of Amec Foster Wheeler s upstream oil and gas business located in the UK and serving UK customers (excluding its commissioning business, qedi). These assets and operations delivered approximately 740m in revenue and 42m of EBITA in 2016, including a significant contribution from major projects which are expected to complete over the next two years. The Current JWG Directors believe that this proposed remedy commitment would be sufficient to obtain clearance from the CMA. The terms of any disposal will be subject to approval from the CMA, and any disposal will only be completed provided the Combination is implemented. The implementation of this proposal, whether in full or in part, may result in additional costs and/or the delay or the failure (partial or otherwise) to realise the financial benefits and synergies relating to the Combination identified by the parties or may otherwise impact the Combined Group s strategy and operations. Paragraph 6 of this Part describes the amount of pre-tax cost synergies that would not be achieved and one-off costs to realise the cost synergies that would not be incurred should such proposed remedy commitment be agreed with the CMA and implemented. JWG recognises that it may need to offer or commit to additional remedies in order to obtain the relevant clearances from the relevant competition authorities (including the CMA) but it does not currently anticipate having to do so. Such additional remedies could include (but not be limited to) commitments by JWG to divest (following Completion) or not to acquire in the first place, part of the business or certain assets of the Amec Foster Wheeler Group. The implementation of any such additional remedies may result in additional costs and/or the delay or the failure (partial or otherwise) to realise the financial benefits and synergies relating to the Combination identified by the parties or may otherwise impact the Combined Group s strategy and operations. The JWG Board would only offer or commit to any such additional remedies where, in the context of securing the relevant clearance to enable the Combination to close, either (a) it is required to do so under its divestment undertakings to Amec Foster Wheeler (which are not material incrementally to the remedy proposed to the CMA as described above), or (b) it considered such measures to be in the best interests of JWG Shareholders as a whole and where it believed such measures would not have a material adverse effect on the operational and financial performance of the Combined Group Procedure Before the Court is asked to sanction the Scheme, the Scheme will require the approval of Scheme Shareholders at the Court Meeting and the passing of the Amec Foster Wheeler Resolutions at the Amec Foster Wheeler General Meeting. Court Meeting The Court Meeting, which has been convened for a.m. on 15 June 2017, is being held at the direction of the Court to seek the approval of Scheme Shareholders for the Scheme. At the Court Meeting, voting will be by way of poll and each Scheme Shareholder present (in person or by proxy) will be entitled to one vote for each Scheme Share held. In order for the resolution to be passed, it must be approved by a majority in number of those Scheme Shareholders who are present and voting (and entitled to vote), either in person or by proxy, and who represent 75 per cent. or more in value of all the Scheme Shares held by such Scheme Shareholders. The Amec Foster Wheeler General Meeting The Amec Foster Wheeler General Meeting has been convened for a.m. on 15 June 2017, or as soon thereafter as the Court Meeting has concluded or been adjourned, to consider and, if thought fit, pass the Amec Foster Wheeler Resolutions to: (A) (B) authorise the Amec Foster Wheeler Directors to effect the Scheme; and approve certain amendments to the Amec Foster Wheeler Articles (as described below). It is proposed that the Amec Foster Wheeler Articles be amended to: (A) ensure that any Amec Foster Wheeler Shares which are issued after the Articles are amended and before the Scheme Record Time (other than to JWG and/or its nominees) will be issued 61

67 (B) subject to the terms of the Scheme and the holders of such shares will be bound by the terms of the Scheme; and ensure that, subject to the Scheme becoming effective, any Amec Foster Wheeler Shares issued on or after the Effective Date (other than to JWG and/or its nominees) will be compulsorily acquired by JWG, in consideration of (subject to certain terms and conditions) the issue of New JWG Shares on the same basis as under the Scheme. The proposed amendments to the Amec Foster Wheeler Articles referred to above are set out in full in the Scheme Document. At the Amec Foster Wheeler General Meeting, voting will be by way of poll and each Scheme Shareholder present (in person or by proxy) will be entitled to one vote for each Scheme Share held. In order for the Amec Foster Wheeler Resolutions to be passed, it must be approved by votes in favour representing at least 75 per cent. of the votes cast either in person or by proxy. Scheme Sanction The Scheme also requires the sanction of the Court. Amec Foster Wheeler will give adequate notice of the date and time of the Scheme Court Hearing, once known, by issuing an announcement through a Regulatory Information Service. The Scheme Court Hearing, in accordance with the Co-operation Agreement, is to be held on a date to be agreed in writing between Amec Foster Wheeler and JWG (acting reasonably) or otherwise set for a date no earlier than the earlier in time to occur of (i) the date on which all the Conditions (other than the Scheme Conditions) have been satisfied: and (ii) the date that is 10 Business Days prior to the Longstop Date. The Scheme will become effective on delivery of a copy of the Scheme Court Order to the Registrar of Companies. Upon the Scheme becoming effective: (i) it will be binding on all Amec Foster Wheeler Shareholders, irrespective of whether or not they attended or voted at either or both of the Amec Foster Wheeler Meetings (and if they attended and voted, whether or not they voted in favour); and (ii) share certificates in respect of Amec Foster Wheeler Shares will cease to be valid and every Amec Foster Wheeler Shareholder shall be bound at the request of Amec Foster Wheeler to deliver up their share certificate(s) to Amec Foster Wheeler (or any person appointed by Amec Foster Wheeler to receive the same) or to destroy the same; and (iii) entitlements to Amec Foster Wheeler Shares held within the CREST system will be cancelled. The Amec Foster Wheeler Shares will be acquired fully paid and free from all liens, charges, equitable interests, encumbrances and rights of pre-emption and any other interests of any nature whatsoever and together with all rights attaching thereto. If the Scheme does not become effective on or before the Longstop Date, it will lapse and the Combination will not proceed (unless the Panel otherwise consents). The Scheme will be governed by English law and will be subject to the jurisdiction of the courts of England and Wales. The Scheme will be subject to the applicable requirements of the City Code, the Panel, the London Stock Exchange and the UK Listing Authority. Modifications to the Scheme The Scheme contains a provision for Amec Foster Wheeler and JWG to consent jointly on behalf of all persons concerned, to any modification of, or addition to, the Scheme or to any condition approved or imposed by the Court. The Court would be unlikely to approve any modification of, or addition to, or impose a condition on, the Scheme which might be material to the interests of Amec Foster Wheeler Shareholders unless Amec Foster Wheeler Shareholders were informed of such modification, addition or condition and given the opportunity to vote on that basis. It would be a matter for the Court to decide, in its discretion, whether or not a further meeting of Amec Foster Wheeler Shareholders should be held in these circumstances. Fractional entitlements Fractions of the New JWG Shares will not be allotted to Amec Foster Wheeler Shareholders pursuant to the Combination but will be aggregated and sold in the market as soon as practicable after the Scheme becomes effective. The net proceeds of such sale will then be paid in cash to the relevant Amec Foster Wheeler Shareholders entitled to them in accordance with their fractional entitlements 62

68 (rounded down to the nearest penny). However, individual fractional entitlements to amounts (net of expenses) not exceeding 3 will not be paid to the relevant Amec Foster Wheeler Shareholders who would otherwise be entitled to them under the Combination, but will be retained for the benefit of the Combined Group. 15. FINANCING On 22 May 2017, JWG entered into a new committed syndicated facilities agreement under which BNP Paribas, HSBC, J.P. Morgan, Lloyds and RBS (the Underwriters ) have agreed to underwrite a total of US$2,750 million multi-currency borrowing facilities, comprising a US$1,000 million three year term loan facility, and a US$1,750 million five year revolving credit facility (the JWG Facilities Agreement ). JWG and Wood Group US Holdings, Inc are the borrowers under the JWG Facilities Agreement and the obligations under the JWG Facilities Agreement are guaranteed by JWG, Wood Group US Holdings, Inc, JWGUSA Holdings Limited, Wood Group Gas Turbine Services Holdings Limited, Wood Group Investments Limited, Wood Group Holdings (International) Limited and WGPSN (Holdings) Limited. As at the date of this Prospectus, it is expected that Amec Foster Wheeler will accede to the JWG Facilities Agreement as a guarantor within 90 days of the Effective Date. It is expected that the Underwriters commitments will be syndicated to a wider group of lenders following the date of this Prospectus, including existing lenders to the Wood Group and the Amec Foster Wheeler Group and new lenders. The new facilities are expected to be available to be drawn down upon, or shortly following, the Effective Date to refinance in full and replace JWG s seven existing bilateral revolving credit facilities (totalling US$950 million) and the Amec Foster Wheeler Group s existing syndicated term and revolving credit facilities (totalling 1,641 million). Thereafter, the new revolving credit facility is expected to be used for the Combined Group s general corporate purposes. The Wood Group s existing US$375 million unsecured senior loan notes, issued in the US private placement market during 2014, are expected to remain outstanding whether or not the Combination completes. The total commitments under the new JWG Facilities Agreement are less than the aggregate total commitments under Wood Group s existing bilateral facilities and the Amec Foster Wheeler Group s existing syndicated facilities, as the JWG Directors believe that the new facilities will be sufficient to meet the projected working capital needs of the Combined Group going forward. The pricing of the new facilities should result in a reduction in the total cost of the Combined Group s financing compared with the aggregate cost of Wood Group s financing and the Amec Foster Wheeler Group s financing prior to Completion. 16. EMPLOYEE SHARE SCHEMES Participants in the Amec Foster Wheeler Share Plans will be written to separately to inform them of the effect of the Combination on their rights under the Amec Foster Wheeler Share Plans, including detail of any appropriate proposals being made. The Combination will extend to any Amec Foster Wheeler Shares which are unconditionally allotted, issued or transferred to satisfy the exercise of options or vesting of awards under the Amec Foster Wheeler Share Plans prior to the Scheme Record Time. Outstanding options and awards under the following JWG Share Plans will not vest as a result of the Combination: the LTP; the LTRP; the LTIP; the 2002 ESOS No 1; the 2002 ESOS No 2; the 2012 ESOS No 1; the 2012 ESOS No 2; the ESP; and the ABP. The awards under the aforementioned plans will continue on the same terms as prior to the Combination. 17. THE NEW JWG SHARES The New JWG Shares will be issued in registered form and will be capable of being held in certificated and uncertificated form. The New JWG Shares will be issued credited as fully paid and will rank pari passu in all respects with the JWG Shares in issue at the time the New JWG Shares are issued pursuant to the Scheme, including, subject as outlined below, the right to receive notice of, and to attend and vote at, general meetings of JWG and subject as outlined below, in relation to the right to receive and retain any dividends and other distributions declared, made or paid by reference to a record date falling after the Effective Date and to participate in the assets of JWG upon a winding-up of JWG. Irrespective of the 63

69 date on which the Effective Date falls, Amec Foster Wheeler Shareholders who receive New JWG Shares pursuant to the Scheme shall not be entitled to receive any interim dividend declared or paid by JWG on those shares in respect of the period ending 30 June As with the JWG Shares in issue as at the Effective Date, the New JWG Shares will not be subject to any redemption provisions. 18. IRREVOCABLE UNDERTAKINGS Those Amec Foster Wheeler Directors who hold Amec Foster Wheeler Shares have irrevocably undertaken to vote in favour of the Scheme at the Amec Foster Wheeler Meetings in respect of their own beneficial holdings totalling 543,175 Amec Foster Wheeler Shares in aggregate representing approximately 0.14 per cent. of Amec Foster Wheeler s issued share capital as at the Latest Practicable Date. These irrevocable undertakings remain binding if a higher competing offer is made but cease to be binding if the Combination lapses or is withdrawn or otherwise becomes incapable of ever becoming effective. Those JWG Directors who hold JWG Shares have irrevocably undertaken to vote in favour of the JWG Resolution at the JWG General Meeting, in respect of their entire beneficial holdings of, in aggregate, 208,531 JWG Shares, representing approximately 0.05 per cent. of JWG s issued share capital as at the Latest Practicable Date. 19. OFFER-RELATED ARRANGEMENTS Confidentiality Agreement JWG and Amec Foster Wheeler have entered into a Confidentiality Agreement dated 3 March 2017 pursuant to which each of JWG and Amec Foster Wheeler has undertaken, amongst other things, to: (i) keep confidential information relating to the other party and not to disclose it to third parties (other than certain permitted parties) unless required by law or regulation; and (ii) use the confidential information for the sole purpose of considering, evaluating, advising on or furthering the Combination. These obligations shall (subject to certain exceptions) remain in force until Completion. The agreement also contains certain provisions pursuant to which each party has agreed not to solicit certain employees of the other party, subject to customary carve-outs, for a period of 12 months. Confidentiality and Joint Defence Agreement JWG and Amec Foster Wheeler have also entered into a Confidentiality and Joint Defence Agreement dated 6 March 2017, the purpose of which is to ensure that the exchange and disclosure of certain materials relating to the parties and between their respective legal counsel for the purposes of the anti-trust work stream is ring-fenced and preserves the confidentiality of such materials and does not result in a waiver of any privilege, right or immunity that might otherwise be available. Clean Team Non-Disclosure Agreement In addition, JWG and Amec Foster Wheeler have entered into a Clean Team Non-Disclosure Agreement dated 5 March 2017 which sets out how any confidential information that is competitively sensitive can be disclosed, used, or shared for the purposes of due diligence, synergies, evaluation, planning transition and regulatory clearance. Co-operation Agreement JWG and Amec Foster Wheeler have entered into a Co-operation Agreement, pursuant to which JWG has agreed to use its reasonable endeavours to ensure the satisfaction of the merger control and regulatory conditions to the Combination. JWG and Amec Foster Wheeler have agreed to use reasonable endeavours to provide each other with all necessary information in relation to the relevant merger control and regulatory clearances and authorisations. JWG and Amec Foster Wheeler have also agreed to provide each other with reasonable information, assistance and access for the preparation of the key shareholder documentation. JWG has the right to terminate the Co-operation Agreement where: (A) the Amec Foster Wheeler Directors have withdrawn, qualified, adversely modified or failed to provide, or they have failed to reaffirm (when requested by JWG to do so) their unanimous and unconditional recommendation that the Amec Foster Wheeler Shareholders vote in favour of the Scheme (including prior to the publication of the Scheme Document, their intention to do so); 64

70 (B) (C) (D) (E) (F) (G) (H) the Scheme Document is not posted within 10 weeks of the date of the Announcement; the Amec Foster Wheeler General Meeting or the Court Meeting is not held on or before the later of (a) the 22nd day after the expected date of such meetings and (b) 15 June 2017 (or such other date as may be agreed in writing between JWG and Amec Foster Wheeler); the Scheme Court Hearing is not held on or before the later of (a) the 22nd day after the expected date of such hearing and (b) 30 days after all the Conditions (other than the Scheme Conditions) have been satisfied or waived; JWG has notified Amec Foster Wheeler of a Condition which is incapable of satisfaction or waiver by the Longstop Date (where its invocation is permitted by the Panel); the Scheme is not approved at the Court Meeting, the relevant resolutions are not passed at the Amec Foster Wheeler General Meeting, or the Court refuses to sanction the Scheme; if a Condition is incapable of satisfaction, in circumstances where invocation of the relevant Condition is permitted by the Panel; or a competing transaction becomes effective or is recommended by the Amec Foster Wheeler Directors. Either JWG or Amec Foster Wheeler may terminate the Co-operation Agreement on the occurrence of any of the Break Fee Triggers (described below). JWG and Amec Foster Wheeler may also terminate the Co-operation Agreement by mutual consent. The Co-operation Agreement will also terminate if: (A) (B) the Combination is withdrawn or lapses before the Longstop Date, other than where: (i) JWG has exercised its right to implement the Combination as an Offer or (ii) such lapse or withdrawal is followed within five Business Days by an announcement by JWG or any person acting in concert with JWG of a firm intention to make an offer on substantially the same or improved terms; or the Scheme (or Offer, as the case may be) has not become effective by the Longstop Date. Under the terms of the Co-operation Agreement by way of compensation for any loss or damage that may be suffered by Amec Foster Wheeler in connection with the Combination, JWG has agreed to pay, or procure the payment of, a break fee of 25,000,000 (exclusive of VAT) if: (A) (B) (C) (D) (E) the JWG Resolution is not passed at the JWG General Meeting; as at 5:00 p.m. on 15 June 2017 (or such other date as may be agreed in writing between JWG and Amec Foster Wheeler), no vote has been held on the JWG Resolution; the unanimous and unconditional recommendation of the JWG directors to JWG Shareholders to vote in favour of the Combination in the Circular is withdrawn, qualified or modified in any adverse manner or is not reaffirmed (following a request by Amec Foster Wheeler to do so); on or before the Longstop Date, JWG invokes (with the permission of the Panel) any of the Conditions set out in paragraphs 2 to 15 (in the case of paragraphs 12 to 15, the relevant Third Party being a regulatory authority) of Part A of Appendix 1 to the Announcement or such conditions have not been satisfied or waived by the end of the Longstop Date and as a result, in each case, the Combination lapses or terminates; or the CMA refers the Combination to a second phase review with the effect that the Combination lapses or terminates in accordance with Rule 12 of the City Code, each of (A) to (E) above being a Break Fee Trigger. No break fee will be payable if: (i) (ii) (iii) certain termination events have already occurred prior to the relevant Break Fee Trigger; the relevant Break Fee Trigger was caused to a material extent by Amec Foster Wheeler s breach of its co-operation and assistance obligations in connection with merger control and regulatory clearances and authorisations or key shareholder documentation; JWG has exercised its right to implement the Combination as an Offer in accordance with the Co-operation Agreement in circumstances where a third party s firm intention to make an offer for 65

71 (iv) (v) Amec Foster Wheeler has been recommended by the Amec Foster Wheeler Directors or the Amec Foster Wheeler Directors have withdrawn their recommendation of the Scheme; prior to the relevant Break Fee Trigger, the Amec Foster Wheeler Directors have withdrawn, qualified or adversely modified, or they have failed to reaffirm (when requested by JWG to do so), their unanimous and unconditional recommendation that the Amec Foster Wheeler Shareholders vote in favour of the Scheme; or following the Break Fee Trigger in paragraph (B) or (C) above but prior to any lapse or termination of the Scheme, the JWG Resolution is passed at the JWG General Meeting. The Co-operation Agreement also contains provisions that will apply in respect of the Amec Foster Wheeler Share Plans and certain other employee incentive arrangements. Integration Planning Clean Team Agreement JWG and Amec Foster Wheeler have entered into an Integration Planning Clean Team Agreement dated 27 April 2017 which sets out how any confidential information that is competitively sensitive can be disclosed, used, or shared for the purposes of evaluating synergies and planning the transaction and integration process. 20. DELISTING OF AMEC FOSTER WHEELER SHARES AND RE-REGISTRATION OF AMEC FOSTER WHEELER Prior to the Combination completing, applications will be made: (i) to the UKLA for the cancellation of the premium listing of the Amec Foster Wheeler Shares on the Official List; and (ii) to the London Stock Exchange for the cancellation of trading of the Amec Foster Wheeler Shares on the Main Market. It is expected that Amec Foster Wheeler Shares will be suspended at 5.00 p.m. on the first Business Day following the Scheme Court Hearing. No transfers of Amec Foster Wheeler Shares will be registered after that date. It is expected that cancellation will take effect at, or shortly after, 8.00 a.m. on the first Business Day after the Effective Date. On the Effective Date, Amec Foster Wheeler will become a wholly-owned subsidiary of JWG and share certificates in respect of Amec Foster Wheeler Shares will cease to be valid in accordance with the provisions of the Deposit Agreement and entitlements to Amec Foster Wheeler Shares held within the CREST system will be cancelled. Following the Effective Date, JWG intends to terminate Amec Foster Wheeler s ADR programme. As soon as possible after the Effective Date, it is intended that Amec Foster Wheeler will be re-registered as a private limited company. If the Scheme is sanctioned by the Court, Amec Foster Wheeler Shares held in treasury will be cancelled prior to the Scheme Record Time. 21. AMEC FOSTER WHEELER ADRS Each outstanding Amec Foster Wheeler ADS represents one Amec Foster Wheeler Share deposited with the Amec Foster Wheeler ADR Depositary pursuant to the Deposit Agreement. Prior to the Amec Foster Wheeler Meetings, the Amec Foster Wheeler ADR Depositary shall fix a record date in respect of each meeting. Thereafter, the Amec Foster Wheeler ADR Depositary shall mail to Amec Foster Wheeler ADR Holders (a) such notice of meeting or solicitation of consent or proxy; and (b) a statement that the Amec Foster Wheeler ADR Holders at the close of business on the record date(s) set by the Amec Foster Wheeler ADR Depositary will be entitled, subject to any applicable law, the provisions of the Deposit Agreement and Amec Foster Wheeler s constitutional documents, to instruct the Amec Foster Wheeler ADR Depositary as to the exercise of the voting rights pertaining to the Amec Foster Wheeler Shares represented by such Amec Foster Wheeler ADSs. Upon the timely receipt of voting instructions of a registered Amec Foster Wheeler ADR Holder in the manner specified by the Amec Foster Wheeler ADR Depositary, the Amec Foster Wheeler ADR Depositary shall endeavour, insofar as practicable and permitted under applicable law, the provisions of the Deposit Agreement and Amec Foster Wheeler s constitutional documents, to vote or cause the custodian for the Amec Foster Wheeler ADR Depositary to vote the Amec Foster Wheeler Shares (in person or by proxy) represented by such Amec Foster Wheeler ADR Holder s Amec Foster Wheeler ADSs at the Court Meeting and the Amec Foster Wheeler General Meeting in accordance with such voting instructions. Amec Foster Wheeler ADR Holders are strongly urged to read, and understand, the 66

72 penultimate paragraph of this section before providing any voting instructions to the Amec Foster Wheeler ADR Depositary. If Amec Foster Wheeler ADR Holders wish to attend and vote at the Amec Foster Wheeler Meetings as an Amec Foster Wheeler Shareholder or receive New JWG Shares, they must surrender their Amec Foster Wheeler ADSs (including any Amec Foster Wheeler ADRs evidencing such Amec Foster Wheeler ADSs) to the Amec Foster Wheeler ADR Depositary for cancellation and withdraw the Amec Foster Wheeler Shares underlying the Amec Foster Wheeler ADSs in advance of (i) the Voting Record Time, in the case of voting at the Amec Foster Wheeler Meetings or (ii) the Scheme Record Time, in the case of receiving New JWG Shares, to ensure there is sufficient time to enter such Amec Foster Wheeler ADR Holder in the Amec Foster Wheeler register. However, any withdrawal of Amec Foster Wheeler Shares underlying the Amec Foster Wheeler ADSs will result in the incurrence of (i) the charges specified in the Deposit Agreement for the surrender of Amec Foster Wheeler ADRs and (ii) any applicable taxes and/or governmental charges. Amec Foster Wheeler ADR Holders will have no entitlement to receive New JWG Shares from the Amec Foster Wheeler ADR Depositary following the exchange. On the Effective Date, the Amec Foster Wheeler ADR Depositary will receive 0.75 New JWG Shares for each Amec Foster Wheeler Share deposited under the Deposit Agreement as of the Scheme Record Time and will sell all of the New JWG Shares that it receives pursuant to the Scheme on account of Amec Foster Wheeler Shares held under the Deposit Agreement at public or private sale, at such place or places and upon such terms as it may deem proper and, after conversion of the net proceeds of such sales into US Dollars, will allocate the net proceeds of such sales (net of (a) fees and charges of, and expenses incurred by, the Amec Foster Wheeler ADR Depositary and (b) taxes and/or governmental charges) for the account of the Amec Foster Wheeler ADR Holders otherwise entitled to such securities in proportion to the number of Amec Foster Wheeler ADSs held by them, which allocation may be made upon an averaged or other practicable basis without regard to any distinctions among such Amec Foster Wheeler ADR Holders. Holders of Amec Foster Wheeler ADSs will be required to surrender their Amec Foster Wheeler ADSs to the Amec Foster Wheeler ADR Depositary in order to receive the amounts to which they may be entitled. The Amec Foster Wheeler ADR Depositary shall distribute only such amount, however, as can be distributed without attributing to any Amec Foster Wheeler ADR Holder a fraction of one U.S. cent. Any such fractional amounts shall be rounded down to the nearest whole U.S. cent. If Amec Foster Wheeler or the Amec Foster Wheeler ADR Depositary is required to withhold and does withhold from any distribution of net proceeds from the sale of New JWG Shares an amount on account of taxes, duties or other governmental charges, the amount distributed to Amec Foster Wheeler ADR Holders will be reduced accordingly. It is intended that, shortly before the Scheme becomes effective in accordance with its terms, arrangements will be made by Amec Foster Wheeler to file a Form 25 to delist the Amec Foster Wheeler ADSs from the NYSE. Upon filing of the Form 25, the NYSE will suspend trading in the Amec Foster Wheeler ADRs, and thereafter the Amec Foster Wheeler ADRs will be delisted from the NYSE. The ADR programme will also be terminated in accordance with the provisions of the Deposit Agreement. 22. LISTING, DEALINGS AND SETTLEMENT OF THE NEW JWG SHARES Prior to the Combination completing, applications will be made to: (i) the UKLA for the New JWG Shares to be admitted to the premium listing segment of the Official List; and (ii) the London Stock Exchange for the New JWG Shares to be admitted to trading on the Main Market. It is expected that the New JWG Shares will be admitted to trading on the London Stock Exchange by 8.00 a.m. on the first Business Day following the Effective Date and dealings for normal settlement in the New JWG Shares will commence at or shortly after that time. No application has been made or is currently intended to be made by JWG for the New JWG Shares to be admitted to listing or trading on any other exchange. 67

73 23. DILUTION The issue of the New JWG Shares will result in JWG s issued ordinary share capital increasing by 77.4 per cent. Immediately following admission of the New JWG Shares to trading on the LSE, former Amec Foster Wheeler Shareholders will hold approximately 44 per cent. of issued ordinary share capital of the Combined Group (based on the existing ordinary issued share capital of JWG and the fully diluted share capital of Amec Foster Wheeler). (4) (4) Please see paragraph 17 of Part XVI (Additional information) for details of how the dilution statistics are calculated. 68

74 PART VII INFORMATION ABOUT THE WOOD GROUP The selected historical financial information and other historical financial information in relation to JWG referred to in this Part VII (Information about the Wood Group) has, unless otherwise stated, been extracted without material adjustment from the JWG 2016 Annual Report and Accounts, the JWG 2015 Annual Report and Accounts and the JWG 2014 Annual Report and Accounts, which are incorporated by reference into this Prospectus as set out in paragraph 19 of Part XVI (Additional Information). Investors should read the whole of this document and the documents incorporated herein by reference and should not rely solely on the financial information set out in this Part VII. 1. INTRODUCTION JWG is a global provider of technical services predominantly to the oil and gas sector, headquartered in Aberdeen, Scotland. JWG designs, modifies, constructs and operates industrial facilities mainly in the oil and gas sector. JWG, which operates in over 40 countries and has around 30,000 employees globally, provides services across the entire asset life cycle and enhances these with a wide range of specialist technical solutions. JWG employs an asset light, delivery focused business model and is differentiated by its range of services, track record of delivery and its people, culture and values. JWG s registered office is at 15 Justice Mill Lane, Aberdeen AB11 6EQ. The telephone number for JWG s registered office is JWG organises its business into three segments: Asset Life Cycle Solutions Eastern Region and Asset Life Cycle Solutions Western Region (together ALCS ) and Specialist Technical Solutions ( STS ). 2. HISTORY OF THE WOOD GROUP JWG was founded as a ship repair and marine engineering firm in 1912 and subsequently incorporated in Scotland (registration number ) on 17 March With the discovery of oil in the North Sea, JWG expanded its engineering capability from fishing vessel repair into oilfield services and in 1981 the oilfield services and fishing businesses were separated. During the 1990s and early 2000s JWG expanded rapidly both organically and through acquisitions into new markets such as turbine repair and overhauls and well services and into new geographies including USA, Asia Pacific, Africa and Latin America. Notable events during that period include: Formation of a joint venture (RWG) with Rolls Royce plc to extend turbine repairs and overhauls capability. In 2014, Rolls Royce transferred its shareholding in RWG to Siemens Acquisition of J P Kenny to enhance subsea engineering and life-of-field capability Acquisition of Mustang and Alliance Engineering in the US to add market-leading engineering services for deepwater facilities and lightweight topsides in the Gulf of Mexico Admission to the main market of the London Stock Exchange on 5 June In 2011, JWG acquired PSN, a leading global brownfield production services provider for a consideration of US$1 billion, whilst disposing of its Well Support division for a consideration of US$2.8 billion. In the period following the acquisition of PSN to date, JWG has continued to expand geographically and to broaden into new markets as an asset light service provider principally as a result of the following key events: Establishment of a presence in Saudi Arabia through the acquisitions of Dar E&C and Pi Consult in Expansion into the US onshore shale market in 2012 and 2013 through the acquisition of Elkhorn Holdings Inc., Mitchells and Duval. Acquisition in 2013 of Pyeroy, a provider of coatings, access, fabric maintenance and industrial services. Strengthening of Norwegian offshore engineering with the acquisition of Agility Projects AS. Establishment of a cross sector civil construction capability in US through the acquisition of Swaggart. 69

75 Expansion of process automation capabilities into the UK and Europe and move into the automotive sector through the acquisition of Automated Technology Group, an independent provider of control and power solutions for industrial automation in Securing a strong position in US downstream and petro-chemical maintenance and construction through the acquisition of Infinity in BUSINESS OVERVIEW The Wood Group designs, modifies, constructs and operates industrial facilities mainly in the oil and gas sector and provides services across the entire asset life cycle and enhances these with a wide range of specialist technical solutions. In 2016, the Wood Group reorganised and repositioned the business across Asset Life Cycle Solutions and Specialist Technical Solutions. This resulted in a move from an organisation defined by brand to one defined by service provision with the intention of enabling efficiency gains, as a simpler business with less internal complexity and increasing JWG s effectiveness by enabling easier customer engagement. Asset Life Cycle Solutions ( ALCS ) forms the largest part of the Wood Group, accounting for around 90 per cent. of revenues in ALCS provides services across the full life cycle of an industrial facility. It is engaged in the provision of expertise in designing and delivering projects, extending asset life and improving performance. ALCS reports in two separate divisions, Western region and Eastern region, with activity comprising: Operations and Maintenance (65-70 per cent. of ALCS revenue) Activity levels are predominantly driven by customers operating expenditure. The largest services lines are operations and maintenance in support of existing production from assets. This covers asset and facilities management, operations support, duty holder services in the North Sea, maintenance management and support, training, logistics and labour provision. Other services include industrial services (including fabric maintenance) pipeline services and decommissioning. JWG also has turbine joint ventures providing maintenance and overhaul capabilities. Projects and Modifications (30-35 per cent. of ALCS revenue) Activity levels are predominantly driven by customers capital expenditure. Services support greenfield and brownfield projects through the provision of engineering design and project management and include FEED, detailed engineering, procurement, construction and hook-up. Specialist Technical Solutions ( STS ) is a smaller but discrete global business accounting for around 10 per cent. of revenues in STS pulls together specialist and niche offerings comprising: Subsea and Technology (circa 55 per cent. of STS revenue) Subsea and Technology provides subsea engineering and support activities together with asset integrity solutions, clean energy, digital solutions and early stage studies. Automation and Control (circa 45 per cent. of STS revenue) Automation and Control provides independent engineering, design and commissioning services which optimise control systems in the process and manufacturing industries. 4. PRINCIPAL MARKETS JWG operates principally in oil and gas markets, including in the upstream, midstream and downstream sectors but also operates in other sectors such as turbines, automotive, pharmaceutical, transport and utilities. In 2016, ALCS Western region, which predominantly has operations in the United States and Canada, contributed US$2.1bn of revenue (43 per cent. of total revenue). ALCS Eastern region covers all other global locations and contributed US$2.3bn of revenue in 2016 (47 per cent. of total revenue). The remaining 10 per cent. of revenue (US$0.5bn) was generated by STS. All references to revenue in this paragraph and the table below include the contribution from joint ventures on a proportionally consolidated basis. 70

76 In 2016, total reported revenue was US$4.9bn, which was split by sector as follows: per cent. Upstream oil and gas Midstream/downstream oil and gas Turbines Other sectors (including automotive, pharmaceuticals, transport, utilities) JWGs primary segment reporting is by service line rather than geographic markets. The table below shows a geographic analysis of revenues as disclosed in the financial statements for 2014, 2015 and The figures in the table below are prepared on an equity accounting basis and therefore exclude the share of joint venture revenue US$m US$m US$m UK ,441 1,980 US ,848 1,940 2,397 Rest of world ,406 1,620 2,197 Total ,121 5,001 6, STRATEGY & PRIORITIES JWG s strategy is to deliver through cycle growth and be recognised as the best technical services company to work with, work for and invest in, with a relentless focus on excellence. The JWG Directors consider the key elements to delivery of this strategy to be: operating as a seamless and inter-connected group; building on core oil and gas markets through selective sector broadening; evolving and expanding the Wood Group s global footprint across high growth regions; offering more flexible and commercial solutions to customers; focusing on delivery-based solutions underpinned by service excellence; creating competitive advantage through service-enabling technology and know-how; maintaining an asset light, balanced, flexible commercial model; using its human and financial capital with discipline; and using the cash generated from operations to fund dividends to shareholders, organic investment and acquisitions. 6. KEY STRENGTHS The JWG Directors believe the key strengths of JWG are its: asset light, balanced, flexible and low risk commercial model; talented, flexible and motivated workforce; technical capability and excellence; highly experienced management team; and enduring, long term, blue-chip customer relationships. Asset light, balanced, flexible and low risk commercial model JWG s asset light model provides it with a significant degree of flexibility, allowing it to react more quickly to changes in the nature and level of customer demand. It also allows the cost base to be adjusted in accordance with activity levels. JWG maintains a low risk, balanced commercial model with a low proportion of revenues derived from contracts with performance-based or fixed price elements. In addition, being positioned across the life cycle of its customers assets gives JWG a range of exposure to both operating and capital 71

77 expenditure whilst also enabling JWG to develop a strong breadth and depth of customer relationships. Talented, flexible and motivated workforce JWG s main asset is its people. JWG has a workforce of approximately 30,000 employees operating in more than 40 countries. Many employees are highly skilled and well-qualified individuals, who have expertise that is transferable across different sectors. JWG is committed to attracting, retaining, developing and mobilising the best talent and promoting strong engagement with its people. The business strategy is intrinsically linked with the people strategy to ensure appropriate utilisation and mobilisation of the workforce with the aim to achieve competitive advantage. Technical capability and experience JWG has a strong track record of delivering technical solutions to the world s largest oil and gas companies on some of the most technically demanding global oil and gas projects over the last 30 years. This strong track record of delivery is evidenced by JWG s long standing relationships with a number of customers. Highly experienced management team JWG has a highly experienced management team. The JWG Executive Directors have held management and leadership positions at various oil and gas services companies. JWG Executive Directors are supported by an executive leadership team with many years experience working for JWG. JWG s executive directors have proved their capability by successfully managing the business through the current prolonged downturn, positioning the Wood Group to mitigate the effects of low commodity prices in oil and gas markets by focusing on utilisation and cost efficiency. As part of this strategy, the management team successfully delivered a reorganisation programme, delivered in-house within 18 months, to refine the operating structure of the Wood Group to enhance customer delivery, reduce internal complexity and better position the Wood Group to develop smart solutions. JWG has a long track record of organic and acquisition led growth and has completed over 50 acquisitions since its IPO in 2002, including the US$1bn acquisition and subsequent integration of PSN in MANAGEMENT TEAM The JWG Board is comprised as follows: Ian Marchant, Chair Robin Watson, Chief Executive David Kemp, Chief Financial Officer Jann Brown, Non-executive Director and Senior Independent Director Jeremy Wilson, Non-executive Director Thomas Botts, Non-executive Director Mary Shafer-Malicki, Non-executive Director Richard Howson, Non-executive Director Jacqui Ferguson, Non-executive Director The JWG Board is supported by the JWG Executive Leadership Team comprising the CEO of each the three business units (Asset Life Cycle Solutions Western Region, Asset Life Cycle Solutions Eastern Region and Specialist Technical Solutions) together with the Executive President of People and Organisation, Executive President of Health, Safety, Security, Ethics and Assurance, Executive President of Strategy and Development and Executive President of Integration. 72

78 8. PRINCIPAL INVESTMENTS A description of the Wood Group s principal investments for 2016 is set out at Notes 9, 10 and 27 of the notes to the audited consolidated financial statements for the year ended 31 December In addition, Note 8 to the audited consolidated financial statements for the year ended 31 December 2016 contains details of JWG s investment in intangible assets, such as software and development costs, including implementation of ERP systems across the Wood Group. These notes can be found at pages 91 to 95 and 110 to 111 of the JWG 2016 Annual Report and Accounts, which are incorporated by reference into this document as set out in paragraph 19 of Part XVI (Additional Information). A description of the Wood Group s principal investments for 2015 is set out at Notes 9, 10 and 27 of the notes to the audited consolidated financial statements for the year ended 31 December In addition, Note 8 to the audited consolidated financial statements for the year ended 31 December 2015 contains details of the Wood Group s investment in intangible assets, such as software and development costs, including implementation of ERP systems across the Wood Group. These notes can be found at pages 71 to 75 and 89 to 90 of the JWG 2015 Annual Report and Accounts, which are incorporated by reference into this document as set out in pararaph 19 of Part XVI (Additional Information). A description of the Wood Group s principal investments for 2014 is set out at Notes 9, 10 and 27 of the notes to the audited consolidated financial statements for the year ended 31 December In addition, Note 8 to the audited consolidated financial statements for the year ended 31 December 2014 includes details of JWG s investment in intangible assets, such as software and development costs, including implementation of ERP systems across the Wood Group. These notes can be found at pages 69 to 73 and 87 to 88 of the JWG 2014 Annual Report and Accounts, which are incorporated by reference into this document as set out in paragraph 19 of Part XVI (Additional Information). In May 2017, the JWG Board approved in principle the acquisition of the entire share capital of a US based provider of industrial automation services to the automotive sectors. The acquisition is expected to be completed by the end of May 2017 for initial consideration of US$45m and deferred consideration of US$15m spread over three years post completion. Save for the above, there are no investments in progress and there are no future investments on which JWG Directors have already made firm commitments. 9. INFORMATION TECHNOLOGY JWG s Information Technology function operates as a business partner to deliver an appropriate and effective IT service to support the Wood Group s growth and strategy. The function manages a secure, robust and scalable environment globally with a focus on adding value to the business, simplifying services and controlling costs. This is achieved by leading and managing an outsourced model in partnership with key suppliers supporting all infrastructure and application requirements other than ERP and engineering applications. 10. REGULATORY AND ENVIRONMENTAL MATTERS JWG is required to operate in accordance with all applicable environmental laws and regulations in the countries in which it operates. JWG manages its environmental risks through its environmental management systems, which are aligned to the ISO14001 standard and in compliance with such regulatory requirements. In addition, JWG participates in the voluntary Carbon Disclosure Project ( CDP ). The CDP is an independent not-for-profit organisation. In 2016, JWG submitted to CDP Climate Change and CDP Water. CDP Water disclosure uses critical water-related data to provide valuable insight into the strategies deployed by companies to manage water resources and helps drive investment towards sustainable water use. JWG s global greenhouse gas emissions data for the year ended 31 December 2016 was 22,334 tonnes of CO2e. The JWG 2016 Annual Report and Accounts contains relevant information about JWG s management of environmental risks can be found at page 23 of the JWG 2016 Annual Report and Accounts, which are incorporated by reference into this document as set out in paragraph 19 of Part XVI (Additional Information). 73

79 11. LICENCES AND OPERATING AGREEMENTS JWG holds various regulatory consents, approvals and licences to operate to enable it to conduct its businesses in the jurisdictions in which it operates. JWG does not believe that its business or profitability is dependent on any single regulatory consent, approval or licence. There are no patents, licences, industrial or commercial contracts which are material to the business or profitability of the Wood Group taken as a whole. There are no financial contracts other than those set out in paragraph 9 of Part XVI (Additional Information), which are material to the business or profitability of the Wood Group taken as a whole. 12. EMPLOYEES JWG had approximately 29,000 employees as at 31 December This figure includes employees, contractors and the proportional headcount for material joint ventures. The average monthly number of employees by geography is shown in the table below. These figures exclude non-executive directors, contractors and employees of joint venture companies UK ,169 8,907 9,512 US ,736 10,082 12,409 Rest of world ,626 9,186 10,019 Total ,531 28,175 31,940 74

80 PART VIII INFORMATION ABOUT THE AMEC FOSTER WHEELER GROUP The selected historical financial information and other historical financial information in relation to Amec Foster Wheeler referred to in this Part VIII has, unless otherwise stated, been extracted without material adjustment from the Amec Foster Wheeler 2016 Annual Report and Accounts and the Amec Foster Wheeler 2015 Annual Report and Accounts. Investors should read the whole of this document and the documents incorporated herein by reference and should not rely solely on the financial information set out in this Part VIII. 1. INTRODUCTION Amec Foster Wheeler serves major corporations and government bodies in the oil, gas and chemicals, mining, power and process and environment and infrastructure markets. Amec Foster Wheeler assists customers in maximising the value of their assets, by reducing the capital cost of construction and lifetime cost of operation and maintenance through concept studies and design work, value engineering, consistent project delivery, the development of innovative solutions and the adoption of technology to enhance efficiency. It operates in over 55 countries and its registered office is at Booths Park, Chelford Road, Knutsford, Cheshire, United Kingdom. 2. HISTORY Amec Foster Wheeler s origins date back to 1848, when Matthew Hall opened a leadwork business in the United Kingdom. Amec Foster Wheeler was incorporated and registered in England and Wales on 2 November 1982, when Fairclough Construction merged with William Press. The Matthew Hall Group of Companies was incorporated into the Amec Foster Wheeler Group in In recent years, Amec Foster Wheeler has transformed its operations from a civil construction company to a consultancy, engineering and project management company through a combination of organic growth, acquisitions and divestment of non-core activities. Since 2000, acquisitions have focused on expanding its geographic footprint as well as enhancing its capabilities in key markets in existing regions (for example, the acquisition of MACTEC, which enhanced Amec Foster Wheeler s remediation capabilities and extended its footprint in the southeastern United States). In 2015, Amec Foster Wheeler completed the acquisition of Foster Wheeler in a share and cash offer of approximately US$3.3 billion, which enhanced its market position in the midstream and downstream oil and gas value chain, complementing its existing strength in upstream oil and gas and added the Global Power Group to the portfolio of services. Amec Foster Wheeler Shares are listed on the Official List of the UKLA. They were admitted to trading on the main market of the London Stock Exchange on 2 December 1982 and are currently traded under the symbol AMFW. Amec Foster Wheeler ADRs have been listed on the NYSE since 13 November 2014 under the symbol AMFW and are traded in US dollars. 3. BUSINESS OVERVIEW Amec Foster Wheeler provides support for its customers assets throughout their life cycle by: consulting with its customers to determine what they require from their assets; conceptualising and designing their capital projects; overseeing the construction and commissioning of these assets; providing services and consultancy to operate, maintain and enhance assets; and helping customers to decommission these assets at the end of their economic use. Amec Foster Wheeler provides similar services in each of its markets and many of its capabilities are transferable across markets. Since 1 January 2017, Amec Foster Wheeler has been organised on the basis of four market-facing business lines (Oil, Gas & Chemicals (OG&C), Mining, Power & Process and Environment & Infrastructure) to ensure closer alignment with customers and their needs. Amec Foster Wheeler works with a wide range of customers ranging from blue-chip companies to national and local governments. 75

81 4. KEY STRENGTHS A low risk capital light model The breadth of Amec Foster Wheeler s market and customer exposure gives Amec Foster Wheeler access to more opportunities and reduces the impact of lower levels of activity in any one market. This diversity of Amec Foster Wheeler s business reduces risk. The footprint established by one business line also provides a platform for Amec Foster Wheeler s other business lines in that country or region. Amec Foster Wheeler s breadth means its work is spread across a large customer base, through more than 10,000 contacts each year. Amec Foster Wheeler s top ten customers accounted for 34 per cent. of revenue in Amec Foster Wheeler also has a diversified service offering which partially offsets the cyclical nature of Amec Foster Wheeler s customers capital expenditure plans and reduces Amec Foster Wheeler s dependence on any one part of the energy mix. Amec Foster Wheeler s services can be provided through long-term contracts, giving Amec Foster Wheeler the opportunity to provide critical services in partnership with Amec Foster Wheeler s customers. As a result, Amec Foster Wheeler s order book is balanced between capex and opexrelated work. The majority of contracts reimburse Amec Foster Wheeler for its people s time and materials. Amec Foster Wheeler often also receives additional payments by achieving performance targets. In certain circumstances where Amec Foster Wheeler is confident of the project requirements, it takes on fixed price work. Amec Foster Wheeler has a capital light model. Amec Foster Wheeler is a people-based business and does not own significant amounts of equipment. Amec Foster Wheeler s profit margin and trading cash conversion reflect the quality of its project delivery. Amec Foster Wheeler s competitive advantages Amec Foster Wheeler believes it has a number of important competitive advantages, in particular: the strength of Amec Foster Wheeler s brand and the reputation of Amec Foster Wheeler s people, which help Amec Foster Wheeler to deliver excellent work and attract new customers; Amec Foster Wheeler s long-term customer relationships, which help Amec Foster Wheeler to position for new projects and win a high proportion of repeat business; Amec Foster Wheeler s Environment & Infrastructure business, which is involved in the earliest stage of projects and helps to identify opportunities for Amec Foster Wheeler s other business lines; Amec Foster Wheeler s ability to create innovative solutions and commercial models, which differentiate Amec Foster Wheeler s propositions; and the diversity of Amec Foster Wheeler s business, as a broad market exposure and service offering reduces risk and opens up more opportunities. 5. ORGANISATIONAL STRUCTURE Amec Foster Wheeler operates globally in four end markets OG&C, Mining, Power & Process and Environment & Infrastructure, and provides similar services to its customers in each market. In particular there is a significant overlap of environment and infrastructure services in the OG&C, Mining and Power markets. The Environment & Infrastructure market includes providing services to customers in the government, water, transportation, industrial, and pharmaceuticals sectors, in addition to Oil & Gas, Mining and Power & Process. Amec Foster Wheeler has positioned itself across these markets to ensure that it benefits proportionately regardless of the relative weighting of future growth in the industry. Each market in which Amec Foster Wheeler operates is also, at least in part, cyclical and Amec Foster Wheeler s diversification ensures that it is not dependent on any one sector. On 2 March 2017, Amec Foster Wheeler announced its intention to dispose of its global nuclear operations in the civil and defence sectors, which contributed revenue of 275 million and adjusted EBITDA of 17 million in Bids have been received and the sale process is ongoing. 76

82 Since 1 January 2017, Amec Foster Wheeler has been organised on the basis of four market-facing business lines, which management believes will: (i) better align employees and the wider business to meet customer needs globally; (ii) drive higher levels of efficiency and effectiveness; (iii) reduce organisational complexity; and (iv) ensure global consistency in the provision of solutions and the delivery of projects. The following table presents Amec Foster Wheeler s revenue attributable to each market. Year ended 31 December ( million) ( million) ( million) Revenue by market OG&C ,261 2,911 3,258 Mining Power & Process , Environment & Infrastructure GPG Centre/eliminations/adjustments (73) Total ,440 5,455 5,800 OG&C Amec Foster Wheeler operates in every part of the project delivery phase except early cycle exploration and drilling. In 2016, approximately 51 per cent. of OG&C revenue was derived from upstream, 46 per cent. from downstream and 3 per cent. from midstream. Amec Foster Wheeler offers a variety of services to a broad range of customers, including IOCs and NOCs and independent operators in Europe, the Americas, the Middle East, Africa, the Caspian, Southeast Asia and China, although the majority of its projects have historically been located in North America and the UK North Sea. In 2016, 47 per cent. of Amec Foster Wheeler s OG&C revenues came from IOCs, compared to 17 per cent. and 36 per cent. from NOCs and independent operators, respectively. Mining Amec Foster Wheeler provides mining consultancy (including ore resource estimation, mine planning and feasibility studies), design and project and construction management services to a range of mining companies, primarily in the Americas and Africa. Customers are predominantly mid-tier companies, defined as those with a market capitalisation between US$5 billion and US$40 billion, and equivalent sized private and state-owned companies. In 2016, mid-tier customers accounted for approximately 67 per cent. of Amec Foster Wheeler s mining revenue and major mining companies, defined as those with a market capitalisation over US$40 billion, and equivalent sized private or stateowned companies, accounted for approximately 18 per cent. of Amec Foster Wheeler s mining revenue. The remaining 15 per cent. comprised small public, private and state-owned mining companies. Terra Nova Technologies ( TNT ) is a project group within Mining that is focused on designing and building material handling solutions, such as high speed conveyor belts and crushing plants, for new and existing mines. TNT is also responsible for the development of super-portable conveyors (i.e. articulated conveyor belts which can easily be moved and reconfigured), which have the potential to substitute mine trucks in large volume mines, thereby saving significant operating costs in those mines. Power & Process Amec Foster Wheeler provides engineering, construction and EPC project delivery to utilities and process industries primarily in North America. Recent growth has been driven primarily by the solar market, but Amec Foster Wheeler also provides similar services to the wind, gas, US nuclear, industrial and process markets. 72 per cent. of Amec Foster Wheeler s Power & Process revenues for the year ended 31 December 2016 came from renewable energy. 77

83 Environment & Infrastructure Amec Foster Wheeler provides environmental consulting and related engineering services to all the markets it serves. It also provides engineering and construction services specifically to the following sectors: government services, water, industrial, transportation, infrastructure and pharmaceuticals. Environment & Infrastructure (other than in relation to the pharmaceuticals and government services sectors) operates predominantly in the United States, Canada and the United Kingdom. However, it aims to provide a common offering within subsectors across jurisdictions. 6. BUSINESS DEVELOPMENT AND CONTRACTS Amec Foster Wheeler seeks to adopt a low risk contracting model, which has improved the predictability of its results. While the basic terms and conditions of the contracts that Amec Foster Wheeler performs may vary, Amec Foster Wheeler typically enters into two basic types of contracts: reimbursable contracts, which may also include target price contracts, or lump sum contracts. Amec Foster Wheeler will enter into lump sum contracts selectively, for instance where it knows the customer and the project well and risks are judged commensurate with rewards. For the year ended 31 December 2016, reimbursable and lump sum contracts constituted approximately 60 per cent. and 40 per cent. of Amec Foster Wheeler s revenue, respectively. Between 2014 and 2016, the proportion of reimbursable revenue relative to lump sum revenue has decreased due to the addition of the Global Power Group business following the acquisition of Foster Wheeler, a change in procurement practices by some of Amec Foster Wheeler s clients and a shift in business mix. 7. PRINCIPAL INVESTMENTS A description of Amec Foster Wheeler s principal investments for the year ended 31 December 2016 is set out at Notes 13 and 25 to the audited consolidated financial statements, which can be found at pages 135 to 137 and 160 to 163 of the Amec Foster Wheeler 2016 Annual Report and Accounts, which are incorporated by reference into this Prospectus as set out in paragraph 19 of Part XVI (Additional Information) and available for inspection as set out in paragraph 18 of Part XVI (Additional Information). A description of Amec Foster Wheeler s principal investments for the year ended 31 December 2015 is set out at Notes 13 and 24 to the audited consolidated financial statements, which can be found at pages 126 to 127 and 150 to 153 of the Amec Foster Wheeler 2015 Annual Report and Accounts, which are incorporated by reference into this Prospectus as set out in paragraph 19 of Part XVI (Additional Information) and available for inspection as set out in paragraph 18 of Part XVI (Additional Information). A description of AMEC s principal investments for the year ended 31 December 2014 is set out at Notes 13 and 24 to the audited consolidated financial statements, which can be found at pages 125 and 148 to 151 of the Amec Foster Wheeler 2014 Annual Report and Accounts, which are incorporated by reference into this Prospectus as set out in paragraph 19 of Part XVI (Additional Information) and available for inspection as set out in paragraph 18 of Part XVI (Additional Information). Amec Foster Wheeler has no investments in progress and there are no future investments on which the Amec Foster Wheeler Board has already made firm commitments. 8. EMPLOYEES Amec Foster Wheeler employed an average of 30,900 workers worldwide for the year ended 31 December 2016 (and of these an average of 5,400 were temporary workers). Amec Foster Wheeler s workforce includes these employed workers (full or part time or temporary workers with a direct employment relationship with Amec Foster Wheeler), along with joint venture employees (which are included in Amec Foster Wheeler s headcount if the joint venture is the employing entity and Amec Foster Wheeler has control of the joint venture), and also non-employed workers (full or part 78

84 time workers provided by an agency). The average number of employees for the years ended 31 December 2016, 31 December 2015 and 31 December 2014 is set out in the table below: Year ended 31 December Average number of employees Americas ,670 15,040 12,365 Northern Europe and CIS ,572 9,232 7,898 Asia, Middle East, Africa and Southern Europe ,139 7,086 3,376 Global Power Group ,099 2, Investment Services/Centre Total (5) ,900 34,013 24, REGULATORY AND ENVIRONMENT Amec Foster Wheeler s mandatory health, safety, security and environment management framework has been developed to comply with the elements of the ISO standard. The environmental management systems are designed to identify and manage environmental aspects, in addition to legal requirements, at the project level. This includes identifying, applying, implementing and monitoring all environmental permissions, permits and licences necessary for Amec Foster Wheeler to undertake work for its clients. Minimum environmental standards have been introduced across Amec Foster Wheeler s business lines. These standards detail the minimum environmental management requirements to be adopted by all operations where Amec Foster Wheeler is responsible for environmental management. Amec Foster Wheeler s operations are required to submit environmental key performance indicator information as part of the Amec Foster Wheeler Group s environmental monitoring and assurance programme. These indicators are monitored on a monthly and quarterly basis and include environmental incident tracking, regulatory action, legal compliance, spill volumes, carbon emissions and energy consumption. In 2016, Amec Foster Wheeler had 81 reported environmental incidents, none of which were considered significant, only one rated as moderate with potential for localised environmental impact and the rest being minor pollution incidents. 10. MATERIAL PROPERTIES The Amec Foster Wheeler Group leases properties in the majority of the countries in which it operates. These leases are for varying periods and are on differing terms. The Amec Foster Wheeler Group has a network of over 350 offices worldwide, which range from regional hubs to smaller offices with more local focus. (5) The average number of employees as stated above excludes non-employed workers. 79

85 PART IX FINANCIAL INFORMATION IN RELATION TO JWG AND THE WOOD GROUP PART A Selected historical financial information relating to the Wood Group 1. SELECTED HISTORICAL FINANCIAL INFORMATION The selected financial information for the Wood Group set out below has, except as otherwise stated, been extracted without material adjustment from the historical financial information incorporated by reference as set out in Part B of this Part IX below. Investors should read the whole of this Prospectus before making an investment decision and should not rely solely on the summarised information in this Part IX. 1.1 Consolidated income statement The table below sets out certain consolidated income statement information of the Wood Group for the three years ended 31 December 2016, 31 December 2015 and 31 December 2014, prepared in accordance with IFRS as issued by the IASB and as adopted by the EU. CONSOLIDATED INCOME STATEMENT Year ended 31 December (US$ million) Revenue from continuing operations , , ,574.1 Profit before income tax from continuing operations Income tax (31.6) (62.0) (112.9) Profit for the year from continuing operations Profit for the year from discontinued operations, net of tax (25.9) Profit for the year Condensed consolidated balance sheet The table below sets out certain consolidated balance sheet information of the Wood Group for the three years ended 31 December 2016, 31 December 2015 and 31 December 2014 prepared in accordance with IFRS as issued by the IASB and as adopted by the EU. CONDENSED CONSOLIDATED BALANCE SHEET Year ended 31 December * 2014* (US$ million) Non-current assets , , ,739.6 Current assets , , ,198.1 Total assets , , ,937.7 Current liabilities , , ,644.7 Non-current liabilities Total liabilities , , ,378.4 Net Assets , , ,559.3 Total equity attributable to equity holders of the parent , , ,546.2 Non-controlling interests Total equity , , ,559.3 * Following the issue of a decision in 2016 by the IFRS Interpretations Committee regarding offsetting and cash pooling arrangements, the Wood Group has restated its comparative figures for cash and cash equivalents and short term borrowings at 31 December 2014 and 31 December The restatement increases both current assets and current liabilities by US$550.8m and US$646.8m in 2014 and 2015 respectively. 80

86 1.3 Condensed consolidated statement of cash flows The table below sets out certain consolidated cash flow information of the Wood Group for the three years ended 31 December 2016, 31 December 2015 and 31 December 2014, prepared in accordance with IFRS as issued by the IASB and as adopted by the EU. CONDENSED CONSOLIDATED CASH FLOW STATEMENT Year ended 31 December (US$ million) Net cash from operating activities Net cash used in investing activities (72.2) (295.7) (386.5) Net cash used in financing activities (380.2) (38.7) (67.1) Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year

87 PART B Historical financial information relating to the Wood Group The audited consolidated financial statements of JWG included in: (A) (B) (C) the JWG 2014 Annual Report and Accounts; the JWG 2015 Annual Report and Accounts; and the JWG 2016 Annual Report and Accounts, together with the audit opinions thereon and notes thereto, are incorporated by reference into this Prospectus as set out in paragraph 19 of Part XVI (Additional information) and available for inspection as set out in paragraph 18 of Part XVI (Additional information). Each of these consolidated financial statements was prepared in accordance with IFRS as issued by the IASB and as adopted by the EU. Each of the consolidated financial statements was audited by PwC and the audit report for each such financial year was unqualified. PwC is a firm of chartered accountants registered with the Institute of Chartered Accounts in England and Wales. 82

88 PART C Capitalisation and indebtedness The tables below set out the Wood Group s capitalisation as at 31 March 2017 and 31 December 2016, its indebtedness as at 31 March 2017 and its net financial indebtedness as at 31 March The Wood Group s statement of indebtedness and statement of net financial indebtedness have been prepared under IFRS using policies which are consistent with those used in preparing the Wood Group s audited financial information for the year ended 31 December INDEBTEDNESS The table below sets out the Wood Group s indebtedness as at 31 March As at 31 March Unaudited 2017 US$m Total current debt Guaranteed Secured Unguaranteed / unsecured Total current debt Total non-current debt Guaranteed Secured Unguaranteed / unsecured Total non-current debt Total indebtedness CAPITALISATION The table below sets out the Wood Group s capitalisation as at 31 March 2017 and 31 December As at 31 March 2017 As at 31 December 2016 unaudited US $m US $m Share capital Other reserves Total Capitalisation Shareholders equity does not include profit and loss reserve. Since 31 December 2016 other reserves have increased due to foreign exchange movements to $95.2m. 83

89 3. NET FINANCIAL INDEBTEDNESS The table below sets out the Wood Group s net financial indebtedness as at 31 March As at 31 March Unaudited 2017 US$m Cash Cash Equivalents (1) Trading Securities Liquidity Current bank debt Current portion of non current debt Other current financial debt Current Financial Debt Net current financial indebtedness (135.2) Non-current bank loans US PP debt (2) Other non current loans Non current financial indebtedness Net financial indebtedness (1) Cash equivalents is made up of restricted cash of US$26.5m (2015: US$26.5m) and is cash that is subject to an attachment order. The Wood Group cannot access this cash until it receives a release letter from the Court. (2) The Wood Group has US$375.0m of unsecured senior loan notes issued in the US private placement market. The notes have seven, 10 and 12 year maturities and interest is payable at an average fixed rate of 3.74 per cent. The non-current bank loans and senior loan notes are all US$ denominated. As at 31 March 2017 the Wood Group had no indirect or contingent indebtedness. 84

90 PART X OPERATING AND FINANCIAL REVIEW OF THE WOOD GROUP The operating and financial review of the Wood Group should be read in conjunction with Part II (Risk factors) and the Wood Group s audited historical consolidated financial information for the years ended 31 December 2016, 2015 and 2014 and the notes related thereto. This historical consolidated financial information is incorporated into this Prospectus by reference as explained in Part B of Part IX (Financial information in relation to JWG and the Wood Group) and paragraph 19 of Part XVI (Additional information) and is available for inspection in accordance with paragraph 18 of Part XVI (Additional information). 1. OVERVIEW OF THE WOOD GROUP John Wood Group Plc ( JWG ) is a global provider of technical services predominantly to the oil and gas sector, headquartered in Aberdeen, Scotland. JWG designs, modifies, constructs and operates industrial facilities mainly in the oil and gas sector. The Wood Group, which operates in over 40 countries and has approximately 29,000 employees globally, provides services across the entire asset life cycle and enhances these with a wide range of specialist technical solutions. JWG employs an asset light, delivery focused business model and is differentiated by its range of services, track record of delivery and its people, culture and values. JWG organises its business into three segments: Asset Life Cycle Solutions Eastern Region and Asset Life Cycle Solutions Western Region ( ALCS ) and Specialist Technical Solutions ( STS ). JWG has a large number of wholly owned subsidiaries as well as investments in a number of joint ventures. 2. PRINCIPAL FACTORS AFFECTING RESULTS OF OPERATIONS OF THE WOOD GROUP The following have had and are likely to continue to have a material impact on JWG s results: Oil and gas prices and impact on customer behaviour Low commodity prices endured during 2015 and This has had a direct impact on customer spending on exploration and production resulting in reduced activity across the services sector and accordingly a reduction in JWG s revenues. Lower commodity prices have also resulted in customers seeking to reduce supply chain costs which has impacted margins on renewed contracts and is likely to impact near term results. Focus on utilisation, efficiency and cost reductions In response to low commodity prices and in order to position the Wood Group for a lower-for-longer environment, JWG has carefully managed utilisation in response to customer demand and has structurally reduced its overhead costs base. In the two years ended 31 December 2016, the Wood Group reduced overhead costs by a total of US$244m. These reductions are expected to be sustainable into 2017, and considered to be largely sustainable thereafter. Exceptional costs In 2014 JWG finalised a settlement agreement in respect of a contract taken over by the Venezuelan national oil company, PDVSA, in A gain of US$58.4m was recorded as an exceptional item in the year. Also in 2014 JWG entered into a joint venture with Siemens to create EthosEnergy and exceptional items included US$23m of transactional costs related to the creation of the EthosEnergy joint venture. JWG carried out an impairment review of its investment in the EthosEnergy joint venture in An impairment charge of US$137.2m was booked as an exceptional cost together with an impairment of US$9.3m in receivable balances due to JWG by EthosEnergy and a charge of US$12.6m recorded by EthosEnergy relating to operations which it intended to divest or close during In 2016, a further impairment charge of US$56.7m was recorded and JWG further impaired its receivables by US$2.4m in relation to a balance due by EthosEnergy and a provision of US$29.9m was recorded by EthosEnergy relating to redundancy costs and the closure of certain operations. 85

91 In 2015 and 2016, JWG took action to reduce its cost base, including the reorganisation of its business units to improve operational efficiency, de-layering and back office rationalisation. In addition, a review of the Wood Group s property portfolio was carried out to identify onerous property leases in certain locations. As a result, exceptional costs of US$24.1m relating to redundancy costs and US$12.5m of onerous least costs were recognised in A further US$27.5m of redundancy costs and US$38.4m of onerous lease provisions were recorded as exceptional costs in Acquisitions and disposals Results of operations in 2014 benefitted from the US shale activities of Elkhorn which was acquired in December 2013 and provided growth in the year following acquisition. Pyeroy, now Wood Group Industrial Services, a UK provider of industrial services, was also acquired in In 2014, JWG invested US$217.3m in respect of various acquisitions, most notably in Agility Projects AS in Norway (for consideration of US$164m) and Swaggart, in the US (for initial consideration of US$36.3m). JWG also entered into a joint venture with Siemens, called EthosEnergy. Total cash expenditure on new acquisitions in 2015 was US$234m. This included the acquisitions of Automated Technology Group (ATG) and Beta Machinery Analysis. In addition, in December 2015, JWG acquired Infinity for consideration of US$155m, creating a brownfield service offering to the US petrochemical market, and Kelchner, enhancing JWG s US onshore footprint by adding exposure to the Marcellus gas basin as well as to the midstream and industrial markets. Opportunities for M&A were fewer than anticipated in 2016 (with only the relatively small acquisitions of Ingenious Inc. and SVT Engineering Consultants being completed) as JWG remained disciplined with regard to potential acquisition targets, continuing to focus on opportunities that may better consolidate the Wood Group s offering or accelerate delivery against strategic objectives, including broadening end market exposure. Financing In 2014, JWG issued US$375m of unsecured notes in the US private placement market, which further diversified the Wood Group s funding and extended its maturity profile. Following the issue of these notes, most of the Wood Group s floating rate debt was repaid, increasing the proportion of the Wood Group s bank borrowings at fixed rates after taking account of interest rate swaps, and reducing exposure to fluctuations in interest rates. In early 2015, JWG extended its US$950m bilateral borrowing facilities to 2020 and achieved a material improvement in pricing. During 2016, the Wood Group extended these bank facilities for a further year to February Taxation JWG operates in over 40 countries and as such, tax is calculated at the rates prevailing in the respective jurisdictions of operations. JWG calculates the expected tax rate for each year based on a weighted average taking into account the Wood Group s profits in each of the relevant jurisdictions. JWG then performs a reconciliation from profits at this expected rate to the actual tax charge calculated in accordance with the tax legislation practices in each country. The tax charge in 2014 and 2015 was lower than the expected rate due to tax credits recognised in respect of changes to share based charges, research and development allowances and changes in unrecognised tax attributes. In 2016, the Wood Group recognised credits in respect of share based charges and research and development allowances. However these were offset by the impact of tax losses which were not recognised and this resulted in the overall tax charge being higher than the expected rate. The Wood Group s effective tax rate is likely to reflect a degree of volatility in the near term, principally due to potential changes in the US tax regime. A significant proportion of the Wood Group s income is earned in the US, but the Wood Group also has material deferred tax assets in the US that would need to be revalued should there be a change in the US tax rate. The impact of any change in US rate is therefore difficult to predict at this stage. 86

92 3. RECENT DEVELOPMENTS JWG recently secured or commenced activity on the following contracts since the last balance sheet date (31 December 2016): 10 January 2017 five year framework agreement secured with Saudi Aramco for the continuing provision of engineering and project management services in Saudi Arabia; 31 January 2017 five year contract secured with Hess Exploration & Production Malaysia BV for operations and maintenance services to its fixed and floating offshore facilities in Malaysia; 13 February 2017 awarded a global agreement with BP for conceptual engineering services, pre-front end engineering design (pre-feed) and FEED engineering services; 2 March 2017 commenced detailed engineering work on Noble Energy s Leviathan platform in the Eastern Mediterranean Sea; 14 March 2017 awarded two separate contracts by Samsung Heavy Industries to provide engineering services to BP s Mad Dog 2 project; 27 March 2017 contract with Premier Oil for topside operations and maintenance in the North Sea renewed and extended; 10 April 2017 new contact secured with Premier Oil to deliver front end engineering design to the Tolmount offshore field in the UK; 10 May 2017 awarded a framework agreement to provide study engineering for NCOC s offshore and onshore asset portfolio in Kazakhstan; 16 May 2017 awarded a contract to support Shell in the decommissioning of their Brent Bravo platform in the North Sea; and 17 May 2017 signed a 10 year master services agreement with Chevron and awarded contracts to provide topsides conceptual and pre-front and engineering design for two of Chevron's semisubmersible platforms on the Tigris and Anchor developments in the Gulf of Mexico under this agreement. 4. BASIS OF PREPARATION OF THE FINANCIAL INFORMATION AND EXPLANATION OF LINE ITEMS The principal accounting policies and other principles applied in the preparation of the financial information are set out in the pages of the financial statements incorporated by reference in paragraph 19 of Part XVI (Additional information). JWG s financial statements for the year ended 31 December 2016, 31 December 2015 and 31 December The financial information has been prepared in accordance with IFRS and IFRIC interpretations adopted by the European Union and with those parts of the CA 2006 applicable to companies reporting under IFRS. The financial information is also in compliance with IFRS as issued by the IASB. Explanation of line items in the trading performance summary for JWG (A) Total revenue Total revenue is revenue from operations including the contribution from joint ventures on a proportionally consolidated basis. (B) (C) Total EBITA Total EBITA represents operating profit before the deduction of amortisation and exceptional items, including the contribution from joint ventures on a proportionally consolidated basis. Operating profit is revenue after the deduction of cost of sales and administrative expenses. EBITA margin EBITA margin is the total EBITA divided by total revenue. This demonstrates the Wood Group s ability to convert revenue into profit. 87

93 (D) (E) (F) (G) Amortisation Amortisation consists of charges relating to intangible assets arising from acquisitions of businesses and in respect of software and development costs. Software and development amortisation largely relates to engineering software and ERP system development. The amortisation charges include amounts recognised by joint ventures. Net finance expense Net finance expense is finance costs net of finance income. Finance costs are interest on bank debt, arrangement fees, non-utilisation charges and interest on US private placement debt. Finance income is interest received or receivable on short term deposits. Net finance expense includes net finance charges of joint ventures. Taxation before exceptional items Taxation represents the corporation tax charge or credit for the period, excluding tax on exceptional items. It includes the corporation tax charge or credit of joint ventures on a proportionally consolidated basis. Exceptional items Exceptional items are those significant items which are separately disclosed by virtue of their size or incidence to enable a full understanding of JWG s financial performance. These are disclosed net of tax. Material transactions which may give rise to exceptional items include gains and losses on divestment of businesses, write downs or impairments of assets including goodwill, restructuring costs or provisions, litigation settlements, provisions for onerous contracts and acquisition and divestment costs. 5. RESULTS OF OPERATIONS 5.1 Set out below is a review of the Wood Group s results for the financial years ended 2016, 2015 and Trading performance US$m US$m US$m Total Revenue ,934 5,852 7,616 Total EBITA EBITA margin per cent % 8.0% 7.2% Amortisation software and system development (54) (55) (40) Amortisation intangible assets from acquisitions (50) (54) (61) EBIT Net finance expense (26) (23) (24) Profit before tax and exceptional items Taxation before exceptional items (59) (89) (115) Profit before exceptional items Exceptional items, net of tax (140) (159) 27 Profit for the period Results of operations for the year ended 31 December 2016 against the year ended 31 December 2015 Revenue reduced from US$5,852m in 2015 to US$4,934m in 2016, largely reflecting reduced activity in oil and gas markets and pricing pressure. This was also reflected in the reduction in EBITA from US$470m in 2015 to US$363m in EBITA margin reduced from 8.0 per cent. in 2015 to 7.4 per cent. in EBITA margin was impacted by lower volumes and pricing pressure in oil and gas activities. However, the impact was offset by the careful management of utilisation, a reduction in overhead costs of US$96m and gains related to commercial close out on contracts of US$29m. 88

94 Exceptional costs net of tax reduced in 2016 to US$140m compared to US$159m in Exceptional costs in 2016 and 2015 included impairment charges and restructuring costs in respect of JWG s investment in its joint venture, EthosEnergy (2016: US$89m, 2015: US$159m) and restructuring costs as a result of reorganisation, restructuring, de-layering and back office rationalisation (2016: US$66m, 2015: US$37m). In 2015, exceptional income was recorded in respect of the release of onerous contract provisions (US$14m) and a gain on divestment of the Well Support division (US$11m). The tax credit on exceptional items was US$15m in 2016 and US$12m in JWG also assesses its financial performance against certain other measures. These are set out below together with a description of performance for the year ended 31 December 2016 against the year ended 31 December (A) (B) (C) (D) (E) Adjusted diluted earnings per JWG Share (AEPS) Adjusted diluted EPS represents earnings before exceptional items and amortisation, net of tax, divided by the weighted average number of shares during the year. AEPS reduced by 23.7 per cent. in 2016, from 84.0 cents in 2015 to 64.1 cents in This was due to reduced earnings as a result of the factors described above. Dividend per JWG Share Dividend per JWG Share is the amount of AEPS distributed to shareholders. The dividend per JWG Share increased by 10 per cent., from 30.3 cents in 2015 to 33.3 cents in 2016 in line with the Wood Group s previously stated intention for 2016 of double digit growth. Net debt to EBITDA ratio The net debt to EBITDA ratio measures the Wood Group s ability to service its debt. JWG s preferred range for this ratio is 0.5 to 1.5 times. EBITDA is defined as earnings before interest, tax, depreciation and amortisation. The net debt to EBITDA ratio increased in 2016 to 0.8 times, from 0.5 times in This was principally due to a reduction in cash generated from operations as a results of reduced activities levels combined with a working capital outflow which was contributed to by an increase in the time customers took to pay in Return on capital employed (ROCE) ROCE is calculated as EBITA divided by average capital employed and measures JWG s ability to generate profits relative to the capital required to support its business. ROCE reduced from 16.3 per cent. in 2015 to 13.0 per cent. in 2016 reflecting the lower EBITA for Cash conversion The cash conversion ratio is calculated as post working capital cash flow divided by EBITDA. Cash conversion reduced to 68 per cent. in 2016 from 119 per cent. in 2015 due to the increase in working capital outflow, referred to in (C) above, combined with the impact of a net release of provisions on contract close-outs. 5.3 Results of operations for the year ended 31 December 2015 against the year ended 31 December 2014 Revenue reduced from US$7,616m in 2014 to US$5,852m in 2015, reflecting the reduction in oil prices during the year of around 30 per cent. and fall in global exploration and production expenditure by approximately 20 per cent. EBITA was also impacted by these factors reducing from US$549m in 2014 to US$470m in The impact of these factors on EBITA margin was offset by the careful management of utilisation, overhead cost savings of US$148m and successful completion of lump sum projects in downstream 89

95 and industrial markets. As a result EBITA margin increased from 7.2 per cent. in 2014 to 8.0 per cent. in Exceptional items increased in 2015 to US$159m (expense) from US$27m (income) in 2014 due to the recognition of an impairment in JWG s investment in its joint venture, EthosEnergy and costs incurred on restructuring and integration in The exceptional income in 2014 related to proceeds received from a settlement agreement in respect of a contract taken over by the Venezuelan national oil company, PDVSA, in 2009, offset by the costs of setting up the EthosEnergy joint venture. Performance against the further metrics described in paragraph 5.2 of this Part X above for the year ended 31 December 2015 against the year ended 31 December 2014 was as follows. (A) (B) (C) (D) (E) Adjusted diluted Earnings per JWG Share (AEPS) AEPS reduced by 16 per cent. in 2015, from 99.6 cents in 2014 to 84.0 cents in This was due to reduced earnings as a result of the reduction in oil prices and fall in global exploration and production expenditure in the year. Dividend per JWG Share JWG s stated intention for 2015 was double digit growth in the dividend per ordinary share. This was delivered with an increase of 10 per cent., from 27.5 cents in 2014 to 30.3 cents in Net debt to EBITDA ratio The net debt to EBITDA ratio remained static from 2014 to 2015 at 0.5 times. Cash generated from operations reduced from the prior year due to the reduction in activity. However, this was offset by the working capital inflow (2014:outflow) as a result of reduced activity and also receipt of the final settlement on a large contract. Return on capital employed (ROCE) ROCE is calculated as EBITA divided by average capital employed and measures JWG s ability to generate profits relative to the capital required to support its business. ROCE reduced from 17.7 per cent. in 2014 to 16.3 per cent. in 2015 reflecting the lower EBITA for Cash conversion Cash conversion increased to 119 per cent. in 2015 from 98 per cent. in 2014 reflecting the lower EBITDA for the year and working capital inflow. 6. SEGMENTAL ANALYSIS A summary of the Wood Group s results by segment is set out below. In 2016, JWG reorganised and repositioned the business across ALCS Western Region, ALCS Eastern Region and Specialist Technical Solutions. The rationale for the reorganisation was to move from an organisation defined by brand to one defined by service provision with the intention of enabling efficiency gains, as a simpler business with less internal complexity and increasing JWG s effectiveness by enabling easier customer engagement. The operating results for 2016 are split over reporting segments reflecting the reorganised business. In 2014 and 2015, the operating results were reported under the previous reporting segments, JWG Engineering, Production Services and Turbine Activities. 6.1 Segmental analysis 2014 Trading performance Engineering Production Services Turbine Activities Central costs Total Total Revenue (US$m) ,130 4, ,616 Total EBITA (US$m) (57) 550 EBITA margin % 7.4% 3.9% 7.2% 90

96 Engineering In Wood Group Engineering ( Engineering ) revenue increased by 7.3 per cent. in However, EBITA decreased by 5.7 per cent. and EBITA margin fell by 1.5pts to 10.9 per cent., reflecting lower margins in the upstream business which impacted on overall margin performance. The upstream business accounted for around 40 per cent. of Engineering revenue. Following the substantial completion of the scope of certain projects in 2013 and the deferral of a number of projects as clients reassessed larger developments, Engineering experienced slower pace in the award of significant replacement detailed offshore engineering contracts in Notwithstanding this, the division benefitted from onshore work in the US and saw a greater volume of early stage project work than in previous years. Subsea and pipelines represented around 40 per cent. of Engineering revenue. Performance in the subsea business was led by good activity from the UK business, supporting projects in Africa, the Middle East and the Caspian. This included activity with BP on Shah Deniz and Tullow on the TEN project in Ghana where services included engineering and project management support. In Australia, there was a move to a higher proportion of brownfield activity as current greenfield projects, such as Gorgon, completed. The onshore pipelines business benefitted from US shale related pipeline work. Downstream, process and industrial activities accounted for around 20 per cent. of revenue. In 2014 this business saw some benefit of brownfield and greenfield work in refining and chemicals markets, in part due to the continued benefit of lower gas prices in the US. Production Services Production Services delivered strong growth in 2014, with revenue up 16.0 per cent. and EBITA up 30.4 per cent. This increase was primarily attributable to performance in the Americas, led by higher margin US shale related activity, including the benefit of Elkhorn acquired in December 2013, and growth in the North Sea business. In 2014, the Americas accounted for around 40 per cent. of Production Services revenue. US onshore activities, which were predominantly shale related, grew significantly, contributing over US$1bn in revenue and were the largest contributor to Production Services EBITA. Shale activities included well site preparation, infrastructure development and production related operations and maintenance and around per cent. were operating expenditure (opex) related. The division s service offering was strengthened in 2014 with the acquisition in December of Swaggart, a civil construction and fabrication services business. The opex focused North Sea business accounted for 40 per cent. of revenue and remained robust in 2014, benefitting from growth in Pyeroy (now Wood Group Industrial Services), acquired in Contract renewals were secured worth in excess of US$1.5bn which helped maintain Production Services leading position, including multi-year contracts with Talisman-Sinopec, BP and EnQuest for the provision of engineering, procurement, construction and maintenance services. There was a continued focus by customers on their costs in the North Sea and JWG responded by delivering a number of solutions including implementing two cuts to contractor rates, which together reduced these costs to customers by around 20 per cent. Internationally, Production Services secured and commenced work on a number of important contracts. These included EPCM services for Woodside in Australia and ExxonMobil in Malaysia, and brownfield engineering and procurement support work for ExxonMobil in Papua New Guinea. Production Services in the Middle East expanded in Iraq with BP and TAQA. Turbine Activities Turbine Activities comprised the two joint ventures with Siemens, EthosEnergy (Ethos) and RWG, and JWG s joint venture with TransCanada, Transcanada Turbines Ltd (TCT) (together Turbine JVs ). In 2014, revenue fell 8.7 per cent. and EBITA fell 38.0 per cent., largely due to performance in Ethos, which was adversely impacted by lower EPC project work, and in the other Turbine JVs overall which were impacted by lower volumes in certain engine types. 91

97 6.2 Segmental analysis 2015 Trading performance Engineering Wood Group PSN Turbine Activities Central costs Total Revenue (US$m) ,728 3, ,852 Total EBITA (US$m) (47) 470 EBITA margin % 7.5% 6.5% 8.0% Engineering In Engineering, revenue decreased by 19 per cent. in 2015, with significant falls in activity in the upstream and subsea businesses due project deferrals and cancellations. This was partly offset by growth in the downstream, process and industrial businesses and robust performance in onshore pipelines. EBITA decreased by 7.5 per cent., however EBITA margin increased by 1.5 per cent. to 12.4 per cent. This reflected JWG s focus on utilisation, overhead cost reduction initiatives, margin improvement in the onshore pipelines and downstream businesses and the successful completion of lump sum projects in the downstream, process and industrial businesses. The upstream business accounted for around 35 per cent. of Engineering revenue. Throughout the year, activities continued on the Det Norske Ivar Aasen and Hess Stampede projects. A number of longer-term contracts were secured in the year including a six year Offshore Maintain Potential Programme contract with Saudi Aramco and a six year c. US$400m maintenance and modifications contract with Statoil in Norway. The market for new awards, particularly detailed design scopes, was subdued in 2015 as customers limited their capital expenditure. The subsea and pipelines business represented around 40 per cent. of Engineering revenue. Activity continued in the year on larger projects such as BP Shah Deniz and Quad 204, Tullow TEN and Chevron Gorgon, and FEED work was won with Woodside and Shell on Browse, and Talisman in Vietnam. JWG continued to benefit from long-term customer relationships, securing a five year contract with BP in October 2015 covering Norway, Gulf of Mexico and Azerbaijan and progressing to detailed design on the Greater Western Flank II for Woodside in Australia after the successful completion of the FEED work. The US onshore pipelines business performed robustly as customers looked to improve transportation to downstream facilities. The acquisition of Beta Machinery in June 2015 further strengthened the breadth services in Engineering, specifically integrity management capabilities which were reinforced by the expansion of Beta into the UK. Downstream, process and industrial activities accounted for around 25 per cent. of revenue in Following the successful completion of the front-end design of the Flint Hills refinery modification, JWG progressed with the detailed engineering work. In September 2015, JWG acquired UK-based Automated Technology Group, an independent provider of control and power solutions for industrial automation. The acquisition of Automated Technology Group was complementary to JWG s process automation capabilities which were centred in the US, and expansion of these capabilities was started with the opening of an operation in Slovakia in December Production Services In Production Services, revenue decreased by 26 per cent. and EBITA decreased by 25 per cent. in This decrease in turnover predominantly reflected lower activity in the North Sea and the Americas. Activity in other international markets remained relatively robust. EBITA margin was steady year-on-year, as utilisation management, significant overhead cost savings and the release of deferred consideration provisions helped to offset pricing pressure from customers and foreign exchange headwinds. The Americas accounted for around 40 per cent. of Production Services 2015 revenue. Following a strong performance in 2014, the US onshore business was impacted by significant pressure on volumes and pricing in The pressure was most pronounced in well site activities which were highly correlated to the decline in the rig count, the infrastructure development and production related operations and maintenance activities were less affected. The acquisition of Kelchner, a provider of midstream and upstream construction and energy field services, in December 2015, provided the Wood Group with greater access to the Marcellus and Utica basins. This broadened the Wood Group s exposure for the longer-term opportunity in US shale. The acquisition of Infinity Group for an initial consideration of US$155m was completed in December 2015, further broadening the US service offering. Infinity Group is an industrial construction and maintenance provider to the petrochemical, Total 92

98 refining and gas processing sectors based in the US Gulf Coast. This acquisition established a strong brownfield service offering in the petrochemical market which management considered would offer attractive growth opportunities. The North Sea business represented just below 40 per cent. of 2015 revenue, with volumes under longer-term contracts impacted by the reduction in project and nonessential maintenance work and efficiency initiatives, including updates to processes and changes in offshore rotation patterns. JWG continued to secure contracts with its long standing customer base including Total, EnQuest and Chevron. The industrial services business, established with the acquisition of Pyeroy (now Wood Group Industrial Services) in 2013, performed well and benefitted from several new contracts with existing and new customers in In December 2015, work commenced on a new duty holder contract with Antin Infrastructure Partners operating the CATS pipeline and terminal. JWG remained fully aligned with customers as they looked to improve efficiency. Performance in the international business was robust, with increased activity in the Middle East offsetting lower performance in Africa. JWG secured and commenced work on a number of important contracts over a wide geographical spread and continued to increase its presence in the Middle East with the award of a three year contract in Iraq and moved further into the Caspian region with a 3 year contract for North Caspian Operating Company ( NCOC ) in Kazakhstan. Contracts in Australia and Papua New Guinea progressed well during the year and, in December 2015, JWG was awarded a brownfield engineering contract with ConocoPhillips in Australia, including work on the Darwin LNG plant. Developing relationships built in the US and North Sea, work progressed for Shell on the five year Gabon contract which was awarded in August and, in Brazil, work commenced with Statoil in the Peregrino field. Turbine Activities In Turbine JVs, revenue fell 17 per cent. and EBITA fell 1.3 per cent. in Poor performance in EthosEnergy, which saw a reduction in major maintenance and low equipment sales, was offset by improved performance in RWG and TCT. 6.3 Segmental analysis 2016 Trading performance ALCS Western Region ALCS Eastern Region Specialist Technical Solutions Central costs Total Revenue (US$m) ,115 2, ,934 Total EBITA (US$m) (35) 363 EBITA margin % 6.1% 16.2% 7.4% ALCS Western Region Revenue in 2016 was broadly flat with 2015 due to the contribution from businesses acquired in late 2015 offsetting underlying revenues that fell by over 15 per cent. Despite significant pricing pressure, EBITA margin fell by only 1.6 per cent., due to robust and decisive management of utilisation and cost. Operations and maintenance work accounted for around 70 per cent. of revenue and was up on 2015 due to the contribution of Infinity Group and Kelchner acquired in The US onshore business was significantly impacted by the tough market but remained the largest contributor to this service line in the West. There was a good contribution from work in the Gulf coast petrochemical market following the acquisition of Infinity Group. Performance in East Canada improved significantly. Work continued on the hook up and commissioning scope on the Hebron topsides and JWG secured a five year contract on the Hibernia platform. Projects and modifications accounted for around 30 per cent. of revenue and was down on US onshore work was the largest contributor to revenue and included the ETC Dakota access pipeline, the Flint Hills refinery project and activity on process plants and transmission pipelines more generally. Activity in greenfield offshore remained in line with 2015 and included the detailed design on Stampede for Hess and Peregrino 2 for Statoil, completion of the FEED and commencement of the detailed engineering for Noble Energy s Leviathan and ongoing FEED activity for Anadarko s Shenandoah. Detailed engineering also commenced for Kiewit on the BP South Pass Platform expansion project in the Gulf of Mexico. Total 93

99 ALCS Eastern Region Revenue in 2016 fell 26 per cent., principally due to a significant reduction in brownfield modifications work in a very subdued North Sea market. EBITA fell 34 per cent. reflecting lower activity, the tougher pricing environment and foreign exchange headwinds, despite the offsetting impact of commercial contract close out on significant and legacy projects of around US$15m and further reductions in overhead costs. Operations and maintenance accounted for around 60 per cent. of Eastern Region revenues. JWG faced a tough market in the North Sea, which was down on The Wood Group s leading position was maintained, having renewed a majority of contracts over the last 18 months that secure access to work as activity levels recover in the longer term. JWG s duty holder scopes operating both the CATS gas plant and pipeline for Antin Infrastructure and the SAGE gas plant and pipeline for Ancala Midstream demonstrated its strong capability to partner with new entrants to the basin. Elsewhere, activity levels increased on the Exxon contracts in Papua New Guinea, and in Australia the contract with Melbourne Water was renewed. The Wood Group also secured a five year managed services scope from Hess Malaysia for their offshore facilities in the North Malay basin. Turbine related operations and maintenance activity was down on There was weaker than expected performance in the EthosEnergy joint venture with reductions in major maintenance and equipment sales. Projects and modifications accounted for around 40 per cent. of revenues. JWG completed the later stage follow-on engineering and construction support scope on Det Norske s Ivar Aasen project. In the UK North Sea, the Wood Group experienced a significant fall in brownfield modifications and upgrade activity under existing contracts. Activity on the Saudi Aramco contracts grew and the General Engineering Services Plus framework agreement was renewed in the second half of the year. Work with Exxon in Iraq and BP in Azerbaijan continued, although the pace of activity was slower than anticipated. In Kazakhstan, there was strong activity on work with NCOC. Specialist Technical Solutions Financial performance in Specialist Technical Solutions in 2016 reflected a significant reduction in subsea activity, partially offset by robust activity in the automation business and the contribution of Automated Technology Group acquired in September Despite a tough pricing environment, commercial contract close out on significant and legacy projects of around US$14m, the release of deferred consideration provisions for acquisitions in the second half of the year and the impact of cost reduction initiatives resulted in an increase in EBITA margins. There was significantly reduced subsea services activity in During 2016, JWG was working on a number of early stage, tie back and verification scopes, but there were minimal large projects coming to market. Relationships with JWG s customers remained positive, evidenced by a number of master service agreements secured with Statoil, Apache, BP and Chevron, albeit at lower EBITA margins. Within the technology offering, there was growth in the smart asset integrity and clean energy services. Following JWG s engagement on early stage engineering, it was formally awarded the US$700m main automation contractor scope for Chevron s Tengiz expansion project in 2016, and this was followed up with a US$40m award from ExxonMobil Chemical to provide main automation contractor services for a Texas polyethylene plant following completion of the FEED work. 7. CAPITAL RESOURCES AND LIQUIDITY 7.1 Cash flow JWG s primary sources of liquidity are cash flows from operations. As an asset light people business, cash flow is principally impacted by the timing of receipts from customers and these are monitored by 94

100 the business according to days sales outstanding. The following is a summary of the cash flow position for the years ended 31 December 2016, 31 December 2015 and 31 December US$m US$m US$m Opening net debt (excluding JVs) (294) (327) (325) Cash generated from operations pre working capital (excluding JVs) Working capital movements (excluding JVs) (80) 59 (106) Cash generated from operations Acquisitions (36) (238) (263) Capex and intangibles (87) (83) (110) Tax paid (56) (97) (85) Interest, dividends and other (95) (113) (88) (Increase)/decrease in net debt (29) 33 (1) Closing net debt (excluding JVs) (322) (294) (327) JV net (debt)/cash (9) 4 31 Closing net debt (including JVs) (331) (290) (296) Comparison of the year ended 31 December 2016 against the year ended 31 December 2015 Cash generated from operations pre-working capital decreased by US$179m to US$325m in 2016 and post-working capital decreased by US$318m to US$245m in The reduction in cash generated from operations was due to the following factors: The total level of receivables reduced in the year in line with the reduction in activity, however this was more than offset by a reduction in payables and the impact of the increase in Days Sales Outstanding ( DSO ), resulting in a net working capital outflow of US$80m; and DSO increased from 63 to 74 days due to administrative and billing issues with certain of JWG s larger customers and a general increase in the time customers are taking to pay, however there was no significant change to the level of bad debts experienced. Expenditure on acquisitions was US$36m in 2016, compared to US$238m in 2015 due to the lack of high quality opportunities for M&A activity. Payments for capex and intangible assets of US$87m were broadly in line with such payments in 2015 (US$83m) as investment in software development and ERP systems continued across the Wood Group at the same level as in Comparison of the year ended 31 December 2015 against the year ended 31 December 2014 Cash generated from operations pre-working capital decreased by US$147m to US$504m in 2015 and post-working capital increased by US$18m to US$563m in The working capital inflow of US$59m in 2015 was attributable to the reduction in activity in the year and the final settlement of a significant fixed price contract. Expenditure on acquisitions of US$238m in 2015 was at a similar level to 2014 and included the acquisitions of Beta, Automated Technology Group, Infinity Group and Kelchner. Payments for capex and intangible assets were lower at US$83m (2014: US$110m) due in part to a planned reduction in capital expenditure in response to a challenging market. Expenditure included plant and infrastructure, design software and development expenditure on ERP systems across the Wood Group. 95

101 7.2 Balance Sheet US$m US$m US$m Assets Non-current assets Goodwill and other intangible assets ,895 2,005 1,944 Property plant and equipment Investment in joint ventures Long term receivables Retirement benefit scheme surplus )0 5 0)0 Deferred tax assets ,450 2,657 2,740 Current assets Inventories Trade and other receivables ,176 1,444 Income tax receivable Cash and cash equivalents ,580 2,057 2,198 Liabilities Current liabilities Borrowings Trade and other payables Income tax liabilities ,071 1,496 1,645 Net current assets Non-current liabilities Borrowings Deferred tax liabilities Retirement benefit scheme deficit )0 27 Other non-current liabilities Provisions Net assets ,208 2,421 2,559 Equity attributable to owners of the parent Share capital Share premium Retained earnings ,098 2,162 2,143 Other reserves ,195 2,398 2,546 Non-controlling interests Total equity ,208 2,421 2,559 Below is a summary of the movements in selected line items from the Wood Group s balance sheets as at 31 December 2016, 2015 and Investments in joint ventures reduced from US$460m in 2014 to US$300m in 2015 primarily due to an impairment in JWG s investment in the EthosEnergy joint venture due to lower than expected activity levels in the joint venture. A further impairment of US$89m to the investment in EthosEnergy was recognised in 2016, contributing to the reduction in investments in joint ventures in 2016 to US$206m. Trade and other receivables reduced from US$1,444m in 2014 to US$1,176m in 2015 and then to US$978m in This is reflective of lower activity levels due to prevailing conditions in oil and gas markets. Cash and cash equivalents reduced from US$851m in 2015 to US$580m in 2016 and this was principally due to the factors set out in paragraph 7.1 of this Part X (Operating and financial review of the Wood Group). 96

102 8. OFF-BALANCE SHEET ARRANGEMENTS JWG does not have any off-balance sheet arrangements. 9. QUALIATIVE AND QUANTITATIVE DISCLOSURE OF MARKET RISK 9.1 Credit risk JWG s credit risk primarily relates to its trade receivables. Responsibility for managing credit risk lies within the businesses, with support being provided by the Wood Group and divisional management where appropriate. A new Wood Group credit risk policy was introduced during 2016 in order to enhance and improve existing controls. There remains significant management focus on customers that are classified as high risk. An assessment of credit risk is carried out for all material customers. Appropriate trade finance instruments such as letters of credit, bonds, guarantees and credit insurance are used to manage credit risk where appropriate. JWG s major customers are typically large companies which have strong credit ratings assigned by international credit rating agencies. Where a customer does not have sufficiently strong credit ratings, alternative forms of security such as the trade finance instruments referred to above may be obtained. Management review trade receivables across the Wood Group based on receivable days calculations to assess performance. 9.2 Interest rate risk JWG finances its operations through a mixture of retained profits and debt. JWG borrows in the desired currencies at a mixture of fixed and floating rates of interest and then uses interest rate swaps to generate the desired interest profile and to manage the Wood Group s exposure to interest rate fluctuations. JWG is also exposed to interest rate risk on cash held on deposit. JWG s policy is to maximise the return on cash deposits and where possible, deposit cash with a financial institution with a credit rating of A or better. If average interest rates had been 1 per cent. higher or lower during 2016 (2015: 1 per cent.), post-tax profit for the year would have been US$0.7m lower or higher respectively (2015: US$0.2m). 1 per cent. has been used in this calculation as it represents a reasonable possible change in interest rates. 9.3 Foreign currency risk JWG is exposed to foreign exchange risk arising from various currencies. JWG has subsidiary companies whose revenue and expenses are denominated in currencies other than the US dollar. Where possible, JWG s policy is to eliminate all significant currency exposures by using financial instruments such as forward currency contracts. Changes in the forward contract fair values are booked through the income statement, except where hedge accounting is used in which case the change in fair value is recorded in equity. The Wood Group does not have any financial instruments in place to hedge foreign currency movements in its balance sheet. However, strategies such as payment of intercompany dividends are used to minimise the amount of net assets exposed to foreign currency revaluation. JWG carefully monitors the economic and political situation in the countries in which it operates to ensure appropriate action is taken to minimise any foreign currency exposure. JWG s largest foreign exchange risk relates to movements in the Pound Sterling/US dollar exchange rate. Movements in the Pound Sterling/US dollar rate impact the translation of Pound Sterling profit earned in the UK and the translation of Pound Sterling denominated net assets. As the Wood Group reports in US dollars, a weakening of Pound Sterling has a negative impact on translation of the profits and net assets of the companies within the Wood Group whose revenue, expenses and net assets are denominated in Pound Sterling. 9.4 Liquidity risk JWG s main priority regarding liquidity risk is to ensure continuity of funding. At 31 December 2016, 100 per cent. of the Wood Group s long term borrowings (including senior loan notes) were due to mature in more than one year. Based on the current outlook the Wood Group has sufficient funding in place to meet its future obligations. The Wood Group has US$375m of unsecured senior loan notes issued in the US private placement market. The notes have a mix of 7, 10 and 12 year maturities. During 2016, the Wood Group extended its US$950m bilateral bank facilities for a further year to February

103 9.5 Capital risk JWG seeks to maintain an optimal capital structure. JWG monitors its capital structure on the basis of its gearing ratio, interest cover and when applicable, the ratio of net debt to EBITDA. These ratios are calculated using the proportionally consolidated figures used for management reporting. Gearing is calculated by dividing net debt by equity attributable to JWG Shareholders. Gearing at 31 December 2016 was 15.1 per cent. (2015: 12.1 per cent.). Interest cover is calculated by dividing total EBITA by net finance expense. Interest cover for the year to 31 December 2016 was 14.1 times (2015: 20.3 times). The ratio of net debt to total EBITDA at 31 December 2016 was 0.79 (2015: 0.55). 10. JWG S DEBT The table below is a summary of JWG s borrowings and undrawn facilities for the years ended 31 December 2014, 31 December 2015 and 31 December 2016: US$m US$m US$m Bank loans and overdrafts due within one year or on demand Non-current bank loans Unsecured Senior loan notes Unsecured Total non-current borrowings Undrawn borrowing facilities Expiring within one year Expiring between two and five years Total undrawn borrowing facilities Bank overdrafts are denominated in a number of currencies and bear interest based on LIBOR or the relevant foreign currency equivalent. The Wood Group has US$375m of unsecured senior loan notes issued in the US private placement market in The notes have 7, 10 and 12 year maturities and interest is payable at an average fixed rate of 3.74 per cent. The non-current bank loans and senior loan notes are all US$ denominated. All undrawn borrowing facilities are floating rate facilities. The facilities expiring within one year as at 31 December 2016 are annual facilities subject to review at various dates during The Wood Group was in compliance with its bank covenants throughout the year. During 2016, the Wood Group extended its US$950m bilateral bank facilities for a further year to February On 22 May 2017, JWG entered into the JWG Facilities Agreement. JWG and Wood Group US Holdings, Inc are the borrowers under the JWG Facilities Agreement and the obligations under the JWG Facilities Agreement are guaranteed by JWG, Wood Group US Holdings, Inc, JWGUSA Holdings Limited, Wood Group Gas Turbine Services Holdings Limited, Wood Group Investments Limited, Wood Group Holdings (International) Limited and WGPSN (Holdings) Limited. As at the date of this Prospectus, it is expected that Amec Foster Wheeler will accede to the JWG Facilities Agreement as a guarantor within 90 days of the Effective Date. It is expected that the Underwriters commitments will be syndicated to a wider group of lenders following the date of this Prospectus, including existing lenders to the Wood Group and the Amec Foster Wheeler Group and new lenders. The new facilities are expected to be available to be drawn down upon, or shortly following, the Effective Date to refinance in full and replace JWG s seven existing bilateral revolving credit facilities (totalling US$950 million) and the Amec Foster Wheeler Group s existing syndicated term and revolving credit facilities (totalling 1,641 million). Thereafter, the new revolving credit facility is expected to be used for the Combined Group s general corporate purposes. The Wood Group s existing US$375 million unsecured senior loan notes, issued in the US private placement market during 2014, are expected to remain outstanding whether or not the Combination completes. Please see paragraph 15 of Part VI (Information about the Combination) for further information on the JWG Facilities Agreement. 98

104 11. CONTINGENT LIABILITIES At each balance sheet date for 2014, 2015 and 2016, JWG had cross guarantees without limit extended to its principal bankers in respect of sums advanced to subsidiaries. From time to time, the Wood Group is notified of claims in respect of work carried out. Where management believes we are in a strong position to defend these claims no provision is made. To the extent that a provision is required it is recorded on the face of the balance sheet. As at the balance sheet date in 2016, the Wood Group was aware of challenges to historic employment practices which may have an impact on the Wood Group, including the application of National Insurance contributions to workers in the UK Continental Shelf. In addition, court cases in 2016 challenged the UK s historic interpretation of EU legislation relating to holiday pay and this may have an impact on all companies who have employees in the UK, including JWG. At this point, we do not believe that it is probable that a liability, if any, will arise from any of these claims and therefore no provision was held as at 31 December DIVIDEND POLICY JWG has stated that its intention is to pursue a progressive dividend policy going forward, taking into account cash flows and earnings. Following the Combination, it is JWG s intention to continue to pursue a progressive dividend policy taking into account cash flows and earnings. 13. CRITICAL ACCOUNTING POLICIES JWG s critical accounting policies are set out on pages of the JWG 2016 Annual Report and Accounts, incorporated by reference in accordance with paragraph 19 of Part XVI (Additional information) below. 14. CONTRACTUAL OBLIGATIONS AND COMMITMENTS 14.1 Finance lease obligations JWG has no material finance lease obligations Operating lease obligations Details of JWG s operating lease commitments are shown at note 30 to the 2016 financial statements in the JWG 2016 Annual Report and Accounts incorporated by reference in accordance with paragraph 19 of Part XVI (Additional information) below. 99

105 PART XI FINANCIAL INFORMATION IN RELATION TO AMEC FOSTER WHEELER AND THE AMEC FOSTER WHEELER GROUP PART A Selected historical financial information relating to the Amec Foster Wheeler Group The selected financial information for the Amec Foster Wheeler Group set out in this Part A has been extracted without material adjustment from the historical financial information set out in Part B of this Part XI. Investors should read the whole of this Prospectus before making an investment decision and not rely solely on the summarised information in this Part XI. 1. CONSOLIDATED INCOME STATEMENT The table below sets out certain consolidated income statement information relating to the Amec Foster Wheeler Group for the three years ended 31 December 2016, 31 December 2015 and 31 December 2014 (which is audited) and prepared in accordance with IFRS as adopted by the EU. CONSOLIDATED INCOME STATEMENT Year ended 31 December Revenue from continuing operations ,440 5,455 3,993 (Loss)/profit before income tax from continuing operations (542) (235) 155 Income tax (18) (49) (Loss)/profit for the year from continuing operations (526) (253) 106 Profit/(loss) for the year from discontinued operations, net of tax (4) (27) (Loss)/profit for the year (514) (257) m 2015 m 2014 m 2. CONSOLIDATED BALANCE SHEET The table below sets out certain consolidated balance sheet information relating to the Amec Foster Wheeler Group for the three years ended 31 December 2016, prepared in accordance with IFRS as adopted by the EU. CONDENSED CONSOLIDATED BALANCE SHEET Selected Consolidated Statement of Financial Position Year ended 31 December 2016 m 2015 m 2014 (restated) m Non-current assets ,107 3,700 4,042 Current assets ,166 1,872 2,023 Total assets ,273 5,572 6,065 Current liabilities (1,880) (2,261) (2,292) Non-current liabilities (2,368) (1,703) (1,777) Total liabilities (4,248) (3,964) (4,069) Net Assets ,025 1,608 1,996 Total equity attributable to equity holders of the parent ,014 1,599 1,974 Non-controlling interests Total equity ,025 1,608 1,

106 3. CONSOLIDATED STATEMENT OF CASH FLOWS The table below sets out certain consolidated cash flow information relating to the Amec Foster Wheeler Group for the three years ended 31 December 2016, prepared in accordance with IFRS as adopted by the EU. CONDENSED CONSOLIDATED CASH FLOW STATEMENT Selected Consolidated Cash Flows Year ended 31 December Net cash flow from operating activities Net cash flow/(used in) from investing activities (828) Net cash flow/(used in) from financing activities (177) (319) 960 Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year m 2015 m 2014 m 101

107 PART B Historical financial information relating to the Amec Foster Wheeler Group The audited consolidated financial statements of Amec Foster Wheeler included in: (A) (B) (C) the Amec Foster Wheeler 2014 Annual Report and Accounts; the Amec Foster Wheeler 2015 Annual Report and Accounts; and the Amec Foster Wheeler 2016 Annual Report and Accounts, together with the audit opinions thereon and notes thereto, are incorporated by reference into this Prospectus as set out in paragraph 19 of Part XVI (Additional information) and available for inspection as set out in paragraph 18 of Part XVI (Additional information)). Each of these consolidated financial statements was prepared in accordance with IFRS as adopted by the EU. As applied to the Amec Foster Wheeler Group in these consolidated financial statements, there are no material differences from IFRS as issued by the IASB; therefore, these consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB. Each of the consolidated financial statements was audited by Ernst & Young LLP and the audit report for each such financial year was unqualified. Ernst & Young LLP is a firm of chartered accountants registered with the Institute of Chartered Accounts in England and Wales. The unaudited consolidated financial statements of Foster Wheeler and subsidiaries for the nine months ended 30 September 2014, together with the notes thereto, included in the Amec Foster Wheeler 2014 Supplementary Prospectus are also incorporated by reference into this Prospectus as set out in paragraph 19 of Part XVI (Additional information) and available for inspection as set out in paragraph 18 of Part XVI (Additional information). Each of these consolidated statements was prepared in accordance with U.S. GAAP and is therefore not directly comparable to the other historical financial information set out in Part IX (Financial Information in relation to JWG and the Wood Group) and this Part XI (Financial Information in relation to Amec Foster Wheeler and the Amec Foster Wheeler Group), which were prepared in accordance with IFRS as issued by the IASB. 102

108 PART C Unaudited reconciliations of the Amec Foster Wheeler Group financial information to the Wood Group s accounting policies The following unaudited reconciliations summarise the material adjustments which reconcile the Amec Foster Wheeler Group s profit/(loss) for each of the three years ended 31 December 2016, 2015 and 2014, as well as the net assets/total equity as at 31 December for each of 2016, 2015 and 2014, as previously reported by the Amec Foster Wheeler Group to estimates of those that would have been reported had the Amec Foster Wheeler Group applied the accounting policies used by the Wood Group in the preparation of its financial statements for the year ended 31 December These differences relate to methods for recognition and measurement of the amounts shown in the consolidated financial statements. The reconciliation does not seek to reflect any changes to the judgements made by the directors of Amec Foster Wheeler in preparing the underlying Amec Foster Wheeler Group financial information and does not reflect any fair value adjustments which the JWG Board make as a result of the Combination or would have made had the Combination happened at any other date during the historical period shown. The following unaudited reconciliations present the effect of the material differences between the Amec Foster Wheeler Group s accounting policies and the Wood Group s accounting policies; the adjustment to net assets total equity is a cumulative adjustment whereas the net income adjustment represents the effect for the accounting period only and therefore does not correspond with the net assets adjustment amount for the corresponding accounting period. 1. UNAUDITED RECONCILIATION OF THE AMEC FOSTER WHEELER GROUP S CONSOLIDATED PROFIT The table below sets out the unaudited reconciliation of the Amec Foster Wheeler Group s consolidated profit for the three years ended 31 December 2016, 31 December 2015 and 31 December Year ended 31 December m m m Consolidated (loss)/profit for the year attributable to the Amec Foster Wheeler Group as reported by the Amec Foster Wheeler Group (518.0) (256.0) 82.0 Adjusted for differences with the Wood Group accounting policies: Profit recognition on lump sum contracts (2) (6.5) (1.9) Taxation impact on profit recognition (3) (1.3) Consolidated (loss)/profit for the year attributable to the Amec Foster Wheeler Group under the Wood Group accounting policies (513.4) (261.1) 80.5 Notes 1. The consolidated (loss)/profit for the years ended 31 December 2016, 31 December 2015 and 31 December 2014 has been extracted from the Amec Foster Wheeler Group audited financial statements for those years. The profit for the year represents profit attributable to the shareholders of Amec Foster Wheeler excluding non-controlling interests of 4 million (year ended 31 December 2016), (1) million (year ended 31 December 2015) and (3) million (year ended 31 December 2014). 2. The accounting policy adjustment reflects an alignment of the Amec Foster Wheeler Group s policy of recognising profit derived from fixed price contracts to that of the Wood Group. Fixed price contract profit is recognised by the Amec Foster Wheeler Group using the percentage-of-completion method, measured by reference to physical completion or the ratio of costs incurred to total estimated contract costs. The alignment to the Wood Group s accounting reflects the following two considerations: (i) if the outcome of a contract can be estimated reliably, profit is recognised by the Amec Foster Wheeler Group regardless of the stage of completion. The Wood Group, however, applies an initial threshold of 20 per cent. in relation to the estimated stage of completion before any profit can be recognised; and (ii) once the initial recognition criteria have been fulfilled, profit at the Amec Foster Wheeler Group is recognised on a straight line basis reflecting the percentage-of-completion method. The Wood Group recognises profit on an adjusted percentage of completion methodology which results in less profit being recognised in the early stages of completion, a proportion of which increases through the life of the contract. The adjustment through the income statement represents the timing of long term contracts. Under the Wood Group policy for profit recognition less profits is recognised in the early stage of the contracts with a greater amount recognised in the latter stage of the contract. 3. Tax has been recorded on the revenue recognition adjustments at the Amec Foster Wheeler Group s effective tax rate of 22 per cent. 103

109 2. UNAUDITED RECONCILIATION OF THE AMEC FOSTER WHEELER GROUP S CONSOLIDATED EQUITY The table below sets out the unaudited reconciliation of the Amec Foster Wheeler Group s consolidated equity for the three years ended 31 December 2016, 31 December 2015 and 31 December As at 31 December m m m Consolidated total equity as reported by the Amec Foster Wheeler Group , , ,996.0 Adjusted for differences with the Wood Group accounting policies: Current assets Trade and other receivables (2) (14.8) (13.4) (12.2) Current liabilities Trade and other payables (2) (25.0) (26.7) (20.2) Taxation (3) Consolidated total equity of the Amec Foster Wheeler Group under the Wood Group accounting policies , ,970.7 Notes 1. The consolidated total equity at 31 December 2016, 31 December 2015 and 31 December 2014 has been extracted from the Amec Foster Wheeler Group audited financial statements for those years. 2. The accounting policy adjustment reflects an alignment of the Amec Foster Wheeler Group s policy of recognising profit derived from fixed price contracts to that of the Wood Group. Fixed price contract profit is recognised by the Amec Foster Wheeler Group using the percentage-of-completion method, measured by reference to physical completion or the ratio of costs incurred to total estimated contract costs. The alignment to the Wood Group s accounting reflects the following two considerations: (i) if the outcome of a contract can be estimated reliably, profit is recognised by the Amec Foster Wheeler Group regardless of the stage of completion. The Wood Group, however, applies an initial threshold of 20 per cent. in relation to the estimated stage of completion before any profit can be recognised; and (ii) once the initial recognition criteria have been fulfilled, profit at the Amec Foster Wheeler Group is recognised on a straight line basis reflecting the percentage-of-completion method. The Wood Group recognises profit on an adjusted percentage of completion methodology which results in less profit being recognised in the early stages of completion, a proportion of which increases through the life of the contract. The adjustment through the income statement represents the timing of long term contracts. Under the Wood Group policy for profit recognition less profit is recognised in the early stage of the contracts with a greater amount recognised in the latter stage of the contract. 3. Tax has been recorded on the revenue recognition adjustments at the Amec Foster Wheeler Group s effective tax rate of 22 per cent. 104

110 3. UNAUDITED RECONCILIATION OF THE AMEC FOSTER WHEELER GROUP S CONSOLIDATED INCOME STATEMENT The table below sets out the unaudited reconciliation of the Amec Foster Wheeler Group s consolidated income statement for the year ended 31 December Income statement reported by the Amec Foster Wheeler Group Accounting presentation adjustments (note 2) Accounting policy adjustments (note 3) The Amec Foster Wheeler Group income statement under the Wood Group accounting policies m m m m Revenue , ,440.0 Cost of sales (4,852.0) 5.9 (4,846.1) Gross profit ) Administrative expenses (1,072.0) (5.4) (1,077.4) Profit on business disposals (Loss)/profit before net financing expense (482.0) (5.4) 5.9 (481.5) Finance income (4.3) 11.7 Finance expense (87.0) 3.0 (84.0) Share of results of joint ventures (Loss)/profit before tax (542.0) (6.7) 5.9 (542.8) Taxation (1.3) 21.4 (Loss)/profit from continuing operations (526.0) 4.6 (521.4) Profit from discontinued operations (Loss)/profit for the year (514.0) 0)0 4.6 (509.4) Attributable to: Owners of the parent (518.0) 4.6 (513.4) Non-controlling interests (514.0) 0)0 4.6 (509.4) Notes 1. The consolidated income statement has been extracted, without material adjustment from the Amec Foster Wheeler Group published financial information for the year ended 31 December 2016 which is incorporated by reference into this Prospectus as set out in Part C Historical Financial Information. 2. Accounting presentation adjustments reclassify a 6.7m credit from administrative expenses to taxation in respect of tax penalties and a net 1.3m from finance income/expense to administrative expenses in respect of FX gains. 3. The accounting policy adjustment reflects an alignment of the Amec Foster Wheeler Group policy of recognising profit derived from fixed price contracts to that of the Wood Group. Fixed price contract profit is recognised by the Amec Foster Wheeler Group using the percentage-of-completion method, measured by reference to physical completion or the ratio of costs incurred to total estimated contract costs. The alignment to the Wood Group accounting reflects the following two considerations: (i) if the outcome of a contract can be estimated reliably, profit is is recognised by the Amec Foster Wheeler Group regardless of the stage of completion. The Wood Group, however, apply an initial threshold of 20 per cent. in relation to the estimated stage of completion before any profit can be recognised; and (ii) once the initial recognition criteria have been fulfilled, profit at the Amec Foster Wheeler Group is recognised on a straight line basis reflecting the percentage-of-completion method. The Wood Group recognises profit on an adjusted percentage of completion methodology which results in less profit being recognised in the early stages of completion, a proportion of which increases through the life of the contract. The adjustment through the income statement represents the timing of long term contracts. Under the Wood Group policy for profit recognition less profit is recognised in the early stage of the contracts with a greater amount recognised in the latter stage of the contract. 4. Tax has been recorded on the accrued and deferred revenue adjustments of 5.9m at the Amec Foster Wheeler Group s effective tax rate of 22 per cent. 105

111 4. UNAUDITED RECONCILIATION OF THE AMEC FOSTER WHEELER GROUP S BALANCE SHEET The table below sets out the unaudited reconciliation of the Amec Foster Wheeler Group s consolidated balance sheet for the year ended 31 December Balance Sheet reported by the Amec Foster Wheeler Group Accounting policy adjustments (2) The Amec Foster Wheeler Group balance sheet under the Wood Group accounting policies m m m ASSETS Non-Current Assets Property, plant and equipment Intangible assets , ,675.0 Investment in joint ventures Derivative financial instruments Retirement benefit assets Other receivables Deferred tax assets Total non-current assets , )0 3,107.0 Current Assets Inventories Trade and other receivables ,418.0 (14.8) 1,403.2 Derivative financial instruments Current tax receivable Bank deposits (more than three months) Cash and cash equivalents (excluding bank overdrafts) Assets classified as held for sale Total current assets ,166.0 (14.8) 2,151.2 Total assets ,273.0 (14.8) 5,258.2 LIABILITIES Current Liabilities Interest bearing loans and borrowings Trade and other payables , ,437.0 Derivative financial instruments Current tax payable (8.8) Liabilities classified as held for sale Provisions Total current liabilities , ,896.2 Non-current liabilities Interest bearing loans and borrowings , ,317.0 Trade and other payables Derivative financial instruments Retirement benefit liabilities Deferred tax liabilities Provisions Total non-current liabilities , )0 2,368.0 Total liabilities , ,264.2 Net Assets ,025.0 (31.0) EQUITY Share capital Share premium Merger reserve Hedging and translation reserves Capital redemption reserve Retained earnings (31.0) Total equity attributable to equity holders of the parent... 1,014.0 (31.0) Non-controlling interests Total Equity ,025.0 (31.0) Notes 1. The consolidated balance sheet at 31 December 2014, 2015 and 2016 has been extracted from the Amec Foster Wheeler Group audited financial statements for those years. 2. The accounting policy adjustment reflects an alignment of the Amec Foster Wheeler Group s policy of recognising profit derived from fixed price contracts to that of the Wood Group. Fixed price contract profit is recognised by the 106

112 Amec Foster Wheeler Group using the percentage-of-completion method, measured by reference to physical completion or the ratio of costs incurred to total estimated contract costs. The alignment to the Wood Group s accounting reflects the following two considerations: (i) if the outcome of a contract can be estimated reliably, profit is recognised by the Amec Foster Wheeler Group regardless of the stage of completion. The Wood Group, however, applies an initial threshold of 20 per cent. in relation to the estimated stage of completion before any profit can be recognised; and (ii) once the initial recognition criteria have been fulfilled, profit at the Amec Foster Wheeler Group is recognised on a straight line basis reflecting the percentage-of-completion method. The Wood Group recognises profit on an adjusted percentage of completion methodology which results in less profit being recognised in the early stages of completion, a proportion of which increases through the life of the contract. The adjustment through the income statement represents the timing of long term contracts. Under the Wood Group s policy for profit recognition less profit is recognised in the early stage of the contracts with a greater amount recognised in the latter stage of the contract. The reduction to trade and other receivables of 14.8m represents a reduction in profit recognition within accrued revenue. The increase in trade and other payables of 25.0m represents an increase in deferred revenue due to a reduction in profit recognition. 3. Tax has been recorded on the revenue recognition adjustments at the Amec Foster Wheeler Group s effective tax rate of 22 per cent. 107

113 PART D Accountant s report on the unaudited reconciliations of the consolidated financial information of the Amec Foster Wheeler Group The Directors John Wood Group PLC 15 Justice Mill Lane Aberdeen AB11 6EQ J.P. Morgan Limited 25 Bank Street Canary Wharf London E14 5JP Credit Suisse International One Cabot Square London E14 4QJ 23 May 2017 Dear Sirs John Wood Group PLC (the Company ): Proposed acquisition of Amec Foster Wheeler plc (the Target ) We report on the unaudited reconciliations (the Reconciliations ) of the consolidated profit for the year for each of the years in the three-year period ended 31 December 2016, and of the consolidated equity as at 31 December 2016, 31 December 2015 and 31 December 2014, together the Financial Information, as previously reported in the financial statements of the Target prepared under IFRS as adopted by the EU, showing the adjustments necessary to restate it on the basis of the Company s accounting policies used in preparing the Company s last set of annual consolidated financial statements set out in Part IX of the Company s prospectus dated 23 May 2017 (the Prospectus ). This report is required by Listing Rule R(2)(a) of the United Kingdom Listing Authority and is given for the purpose of complying with that Listing Rule and for no other purpose. Responsibilities It is the responsibility of the directors of the Company (the Directors ) to prepare the Reconciliations in accordance with Listing Rule R(2)(a). It is our responsibility to form an opinion, as required by Listing Rule R(2)(a), as to whether: a) the Reconciliations have been properly compiled on the basis stated; and b) the adjustments are appropriate for the purpose of presenting the Financial Information (as adjusted) on a basis consistent in all material respects with the Company s accounting policies, and to report that opinion to you. 108

114 The Reconciliations are based on the audited consolidated balance sheets as at 31 December 2016, 31 December 2015 and 31 December 2014 and consolidated income statements for each of the years then ended of the Target which were the responsibility of the directors of the Target and the audited consolidated balance sheets and consolidated income statements were audited by Ernst & Young LLP. We do not accept any responsibility for any of the historical financial statements of the Target, nor do we express any opinion on those financial statements. Save for any responsibility which we may have to those persons to whom this report is expressly addressed and for any responsibility arising under item 5.5.3R(2)(f) of the Prospectus Rules to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item 23.1 of Annex I to the PD Regulation, consenting to its inclusion in the Prospectus. Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of checking whether the unadjusted Financial Information of the Target has been accurately extracted from an appropriate source, assessing whether all adjustments necessary for the purpose of presenting the Financial Information on a basis consistent in all material respects with the Company s accounting policies have been made, examination of evidence supporting the adjustments in the Reconciliations and checking the arithmetical accuracy of the calculations within the Reconciliations. We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Reconciliations have been properly compiled on the basis stated and that the adjustments are appropriate for the purpose of presenting the Financial Information (as adjusted) on a basis consistent in all material respects with the Company s accounting policies. Opinion In our opinion: a) the Reconciliations have been properly compiled on the basis stated; and b) the adjustments are appropriate for the purpose of presenting the Financial Information (as adjusted) on a basis consistent in all material respects with the Company s accounting policies. Declaration For the purposes of Prospectus Rule R(2)(f), we are responsible for this report as part of the Prospectus and we declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with item 1.2 of Annex I to the PD Regulation. Yours faithfully PricewaterhouseCoopers LLP Chartered Accountants PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Conduct Authority for designated investment business. 109

115 PART XII OPERATING AND FINANCIAL REVIEW OF THE AMEC FOSTER WHEELER GROUP 1. Information incorporated by reference The operating and financial reviews included in the following documents (as identified in paragraph 2 of this Part XII below) are incorporated by reference into this Prospectus: (A) (B) (C) the Amec Foster Wheeler 2014 Annual Report and Accounts; the Amec Foster Wheeler 2015 Annual Report and Accounts; and the Amec Foster Wheeler 2016 Annual Report and Accounts. The unaudited consolidated financial statements of Foster Wheeler and subsidiaries for the nine months ended 30 September 2014, together with the notes thereto, included in the Amec Foster Wheeler 2014 Supplementary Prospectus, are also incorporated by reference into this Prospectus. 2. Cross-reference list The following list is intended to enable investors to identify easily the items of information which have been incorporated by reference into this Prospectus: 2.1 Amec Foster Wheeler 2014 Annual Report and Accounts The page numbers below refer to the relevant pages of the Amec Foster Wheeler 2014 Annual Report and Accounts: Page Number(s) Section Delivering excellence Principal risks and uncertainties 24 Sustainability 25 Global market trends 26 Our markets Financial review Our business units Independent auditor s report (UK) 96 Consolidated income statement 97 Consolidated statement of comprehensive income 98 Consolidated balance sheet Consolidated statement of changes in equity 102 Consolidated cash flow statement Notes to the consolidated accounts 2.2 Amec Foster Wheeler 2015 Annual Report and Accounts The page numbers below refer to the relevant pages of the Amec Foster Wheeler 2015 Annual Report and Accounts: Page Number(s) Section Delivering excellence Principal risks and uncertainties 22 Sustainability 23 Global market trends Our markets Financial review Independent auditor s report to the members of Amec Foster Wheeler plc 96 Consolidated income statement 97 Consolidated statement of comprehensive income 110

116 98 Consolidated balance sheet Consolidated statement of changes in equity Consolidated cash flow statement Notes to the consolidated accounts 2.3 Amec Foster Wheeler 2016 Annual Report and Accounts The page numbers below refer to the relevant pages of the Amec Foster Wheeler 2016 Annual Report and Accounts: Page Number(s) Section 3-5 Our business lines Our markets People Principal risks and uncertainties 33 Sustainability Financial review Independent auditor s report (UK) 104 Consolidated income statement 105 Consolidated statement of comprehensive income 106 Consolidated balance sheet Consolidated statement of changes in equity Consolidated cash flow statement Notes to the consolidated accounts 2.4 Amec Foster Wheeler 2014 Supplementary Prospectus The page numbers below refer to the relevant pages of the Amec Foster Wheeler 2014 Supplementary Prospectus: Page number(s) Section 5-50 Foster Wheeler 3Q 2014 Results 111

117 PART XIII UNAUDITED PRO FORMA FINANCIAL INFORMATION PART A Unaudited pro forma financial information relating to the Combined Group The unaudited pro forma income statement of the Combined Group has been prepared based on the consolidated statement of income of the Wood Group for the year ended 31 December 2016 and the consolidated income statement of the Amec Foster Wheeler Group for the year ended 31 December 2016 to illustrate the effect on the income statement of the Wood Group of the Combination as if it had taken place as at 1 January The unaudited pro forma statement of net assets of the Combined Group has been prepared based on the consolidated balance sheet of the Wood Group as at 31 December 2016 and the consolidated balance sheet of the Amec Foster Wheeler Group as at 31 December 2016 as adjusted for the accounting policies of the Wood Group as set out in Part XI Part C Unaudited reconciliations of the Amec Foster Wheeler Group financial information to the Wood Group s accounting policies to illustrate the effect on the net assets of the Wood Group of the Combination as if it had taken place as at 31 December The unaudited pro forma income statement of the Combined Group and the unaudited pro forma statement of net assets of the Combined Group together form the unaudited pro forma financial information. The unaudited pro forma financial information set out in this Part has been prepared for illustrative purposes only and, by its nature, addresses a hypothetical situation. They do not represent the Wood Group s actual financial position or results, or what the Combined Group s actual financial position or results would have been if the Combination had been completed on the dates indicated, nor does it purport to represent the results of operations for any future period or financial position at any future date. It does not reflect the results of any purchase price allocation exercise as this will be conducted following the Combination. The unaudited pro forma financial information has been prepared on a consistent basis with the accounting policies and presentation adopted by the Wood Group in relation to the period ended 31 December 2016 on the basis of the notes set out below and in accordance with Annex II to the PD Regulation. Furthermore, the unaudited pro forma financial information set out in this Part XIII does not constitute financial statements within the meaning of section 434 of the CA Shareholders should read the whole of this Prospectus and not rely solely on the summarised financial information contained in this Part XIII. PwC s report on the Unaudited Pro Forma Financial Information is set out in Part B of this Part XIII In addition to the matters noted above, the unaudited pro forma financial information does not reflect the effect of anticipated synergies and efficiencies associated with the Combination. 112

118 1. UNAUDITED PRO FORMA INCOME STATEMENT RELATING TO THE COMBINED GROUP The table below sets out the unaudited pro forma income statement relating to the Combined Group. The Wood Group income statement for year ended 31 December 2016 (note 1) The Amec Foster Wheeler Group income statement for year ended 31 December 2016 (note 2) Adjustments Transaction costs (note 3) Finance costs (note 4) Pro-forma income statement of the Combined Group US$m US$m US$m US$m US$m Continuing operations Revenue , , ,485.3 Cost of sales (3,498.2) (6,560.7) (10,058.9) Gross profit )0 0)0 1,426.4 Administrative expenses (479.7) (1,458.6) (83.0) (2,021.3) Impairment of investment in joint ventures. (56.7) 0)0 (56.7) Profit on business disposals ) Share of results of joint ventures Profit/(loss) before interest and taxation 89.4 (637.0) (83.0) (630.6) Finance income Finance expense (25.6) (113.7) (35.9) (175.2) Profit/(loss) before tax (734.9) (83.0) (35.9) (787.8) Taxation (31.6) Profit/(loss) from continuing operations (705.9) (83.0) (26.9) (781.4) Profit from discontinued operations ) Profit/(loss) for the year (689.7) (83.0) (26.9) (765.2) Attributable to: Owners of the parent (695.1) (83.0) (26.9) (777.2) Non-controlling interests (689.7) (83.0) (26.9) (765.2) Notes 1. The Wood Group s financial information for the 12 months ended 31 December 2016 has been extracted, without material adjustment, from the Wood Group published financial information for the year ended 31 December 2016, which is incorporated by reference into the Prospectus as set out in Part B to Part IX (Financial information in relation to JWG and the Wood Group). 2. The Amec Foster Wheeler Group s financial information for the 12 months ended 31 December 2016 has been extracted, without material adjustment, from the Amec Foster Wheeler published financial information for the year ended 31 December 2016 restated under the accounting policies of the Wood Group, as set out in Part C of Part XI (Financial information in relation to Amec Foster Wheeler and the Amec Foster Wheeler Group) of this Prospectus, and translated using the average exchange rate at 31 December 2016 (GBP:USD ). 3. Transaction costs expected to be incurred as a result of the Combination include US$33m by the Wood Group and US$50m by the Amec Foster Wheeler Group. These costs will not have a continuing impact on the Combined Group. 4. Financing fees incurred consist of one-off underwriting and ticking fees of US$11.2m (US$5.5m in underwriting fees, US$5.7m in ticking fees) in respect of the new facilities which will be expensed in In addition, participation fees of US$5m will be amortised over the three year period of the US$1bn term loan and US$10.5m over the five year term of the US$1.75bn RCF facility. The underwriting and ticking fees will not have a continuing impact on the Combined Group. The amortisation of the participation fees will have a continuing impact on the Combined Group and one year of amortisation (US$3.8m) has been included in the pro-forma. Financing costs also include the write off of fees previously capitalised against long term loans totalling US$20.9m. The US$9.0m tax effect of this adjustment has been calculated by applying the Wood Group s effective tax rate of 25 per cent. 5. In preparing the unaudited pro forma income statement no account has been taken of the trading or transactions of the Wood Group or the Amec Foster Wheeler Group since 31 December In preparing the unaudited pro forma income statement no account has been taken of the impact of additional depreciation or amortisation costs that may arise, and have a continuing impact, following any purchase price allocation exercise, as this will be undertaken following the acquisition. 113

119 2. UNAUDITED PRO FORMA STATEMENT OF NET ASSETS RELATING TO THE COMBINED GROUP The table below sets out the unaudited pro forma statement of net assets relating to the Combined Group. Adjustments The Wood Group net assets at 31 December 2016 (Note 1) The Amec Foster Wheeler Group net assets at 31 December 2016 (Note 2) Combination adjustments (Note 3) Transaction costs (Note 4) Finance costs (Note 5) Pro-forma net assets of the Combined Group US$m US$m US$m US$m US$m US$m Non-Current Assets Goodwill and intangible assets. 1, , , ,961.3 Property, plant and equipment Investment in joint ventures Derivative financial instruments Long term receivables Pension scheme asset Deferred tax assets , , , ,050.6 Current Assets Inventories Trade and other receivables , ,712.2 Derivative financial instruments Income tax receivable Assets held for sale Cash and cash equivalents (97.7) (26.7) , ,658.0 (97.7) (26.7) 4,125.0 Current Liabilities Borrowings (11.7) Trade and other payables , ,364.5 Derivative financial instruments Liabilities held for sale Provisions Current tax liabilities (9.0) , ,343.1 (20.7) 3,392.9 Net current assets (97.7) (6.0) Non-current liabilities Borrowings , ,143.3 Deferred tax liabilities Derivative financial instruments Retirement benefit liability Other non-current liabilities Provisions , ,697.6 Net Assets , , ,761.3 (97.7) (26.9) 5,073.2 Notes 1. The Wood Group s financial information for the 12 months ended 31 December 2016 has been extracted, without material adjustment, from the Wood Group published financial information for the year ended 31 December 2016, which is incorporated by reference into the Prospectus as set out in Part B to Part IX (Financial information in relation to JWG and the Wood Group). 2. The Amec Foster Wheeler Group s financial information for the 12 months ended 31 December 2016 has been extracted, without material adjustment, from the Amec Foster Wheeler published financial information for the year ended 31 December 2016 restated under the accounting policies of the Wood Group, as set out in Part C of Part XI (Financial information in relation to Amec Foster Wheeler and the Amec Foster Wheeler Group), and translated using the closing exchange rate at 31 December 2016 (GBP:USD ). 3. The Combination adjustment reflects the expected accounting on Completion and is set out below US$m Equity consideration (i) 2,989.6 Net assets acquired (ii) 1,228.3 Goodwill and intangible assets recognised on Combination ,

120 (i) (ii) The equity consideration assumes the issue of 294.8m JWG shares at (being the Closing Price on the Latest Practicable Date) translated using the closing exchange rate at the Latest Practicable Date (GBP : USD ). The net assets acquired are stated as at 31 December The balance of US$1,761.3m represents the goodwill and intangibles assets recognised on the transaction. On Completion, an exercise will be undertaken to calculate the purchase price adjustment. This has not been considered for the unaudited pro forma financial information. The acquisition method of accounting has been used in preparing the pro forma statement of net assets. 4. Transaction costs expected to be incurred as a result of the Combination include US$33m by the Wood Group and US$50m by the Amec Foster Wheeler Group. Stamp duty of US$14.9m will be paid in relation to the transaction. This amount will be recorded against share premium in the consolidated balance sheet of the Combined Group. These costs will not have a continuing impact on the Combined Group. 5. Financing fees incurred consist of one-off underwriting and ticking fees of US$11.2m in respect of the new facilities. In addition, participation fees of US$5m will be spread over the three year period of the US$1bn term loan and US$10.5m over the five year term of the US$1.75bn RCF facility. Total refinancing fees of US$26.7m have been incurred (US$5.5m in underwriting fees, US$5.7m in ticking fees and US$15.5m in relation to participation fees for both the term loan and RCF) which is shown as an adjustment to cash and cash equivalents. Participation fees of US$5m in relation to the US$1bn term loan will be amortised over the loan s three year period and US$10.5m relating to the RCF will be amortised over its five year period. The resulting adjustment is a decrease to borrowings of US$11.7m. This adjustment also includes the write off of fees previously capitalised against borrowings totalling US$20.9m which have also been adjusted in the pro forma income statements. The US$9.0m adjustment to current tax liabilities is calculated by applying the Wood Group effective tax rate of 25 per cent. to the US$12.0m adjustment to current assets and the US$20.9m adjustment to borrowings. 6. In preparing the unaudited pro forma statement of net assets no account has been taken of the trading or transactions of the Wood Group or the Amec Foster Wheeler Group since 31 December

121 PART B Accountant s report on the unaudited pro forma financial information of the Combined Group The Directors John Wood Group PLC 15 Justice Mill Lane Aberdeen AB11 6EQ J.P. Morgan Limited 25 Bank Street Canary Wharf London E14 5JP Credit Suisse International One Cabot Square London E14 4QJ 23 May 2017 Dear Sirs John Wood Group PLC (the Company ) We report on the pro forma financial information (the Pro Forma Financial Information ) set out in Part B of Part XIII of the Company s prospectus dated 23 May 2017 (the Prospectus ) which has been prepared on the basis described in the notes to the Pro Forma Financial Information, for illustrative purposes only, to provide information about how the proposed acquisition of Amec Foster Wheeler Group plc might have affected the financial information presented on the basis of the accounting policies adopted by the Company in preparing the financial statements for the period ended 31 December This report is required by item 7 of Annex II to the PD Regulation and item 20.2 of Annex I to the PD Regulation and is given for the purpose of complying with that PD Regulation and for no other purpose. Responsibilities It is the responsibility of the directors of the Company to prepare the Pro Forma Financial Information in accordance with Annex II of the PD regulation and item 20.2 of Annex I to the PD Regulation. It is our responsibility to form an opinion, as required by item 7 of Annex II to the PD Regulation and item 20.2 of Annex I to the PD Regulation as to the proper compilation of the Pro Forma Financial Information and to report our opinion to you. 116