IMPLEMENTATION OF IFRS 15 - Petrofac · IFRS15 Enhanced Disclosure: Pro-Forma Balance sheet reclassifications and nomenclature alignment Balance Sheet as at 31 December 2017 Advances

1

IMPLEMENTATION OF IFRS 15

AUGUST 2018

2

Important Notice

• The information in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company, directors, employees or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document, or its contents, or otherwise arising in connection with this document

• This document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares of the Company

• Certain statements in this presentation are forward looking statements. Words such as "expect", "believe", "plan", "will", "could", "may" and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward looking statements. These risks, uncertainties or assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Statements contained in this presentation regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. You should not place undue reliance on forward looking statements, which only speak as of the date of this presentation.

• The Company is under no obligation to update or keep current the information contained in this presentation, including any forward looking statements, or to correct any inaccuracies which may become apparent and any opinions expressed in it are subject to change without notice

3

Contents

1 Executive Summary

2 Recap of Commercial Models

3 Key Differences: IAS 11 vs IFRS 15

4 IFRS 15 Enhanced disclosure

5 IFRS 15 Impact

Appendix IFRS 15 Worked Example

4

Executive Summary

• IFRS 15 ‘Revenue from Contracts with Customers’ replaces IAS 11 ‘Construction Contracts’ and IAS 18 ‘Revenue’ from 1 January 2018

• Introduction of IFRS 15 has no material impact on Engineering & Production Services (EPS) or Integrated Energy Services (IES) revenue recognition

• Recognition of Engineering & Construction (E&C) project revenue changed from output (stage of completion) method to input (cost to cost) method

– Transition adjustment of US$40 million (post-tax), recognised as a reduction to opening equity reserves at 1 January 2018

• IFRS 15 also impacts recognition of variable consideration such as

liquidated damages and variation orders

– Best estimate replaced by expected value approach

– Transition adjustment of US$21 million (post-tax), recognised as a reduction to opening equity reserves at 1 January 2018

• IFRS 15 requires some balance sheet reclassification, additional disclosure and changes to nomenclature

1

5

Our Commercial ModelsFlexible delivery models aligned to our clients’ needs

Example:

Al Taweelah refinery, UAE

Fixed price and

schedule from

project outset.

Petrofac assumes

full risk and control.

Services provided

using a variety of

commercial models

including typical

EP+Cm as well as

reimbursable +KPIs.

Client assumes full

risk and control.

Petrofac provides a

man-hour rate and

works under

direction.

Services

(Fully reimbursable)

Lump-sum turnkey

(Fixed price)EPCm

Reimbursable E&P

convertible to

lump-sum

E&P reimbursable

contract which

converts to lump-

sum EPC at agreed

stages of the model

review.

Examples:

RHIP, Yibal Khuff, Sakhalin

& Marmul Polymer Phase 3

Examples:

BP Khazzan CPF &

Turkstream

Examples:

Duqm Refinery, RAPID,

Sohar, KNPC Clean Fuels,

Lowers Fars,UZ750

2

6

Item Lump-sum Turnkey Reimbursable Services

Revenue • Fixed price

• Schedule of rates, including mark-up for

overheads and profit (cost-plus)

• Performance fee / incentive income often

included in duty holder contracts

Costs

• Engineering & project support (in house, 10-15%

of contract value (CV))

• Procurement (vendors, 50-60% CV)

• Construction (subcontractors, 25-40% CV)

• Large proportion of input costs are personnel

costs

Duration • Typically 3-4 years• Contract duration typically 3-5 years, but can be

shorter or open-ended

Payment

terms• Generally in arrears (30-45 day terms) • Generally in arrears (0-30 day terms)

Working

capital

• Client billing based on a combination of physical

progress & milestones (contractual)

• Often receive cash advance

• Cash inflows & outflows broadly matched

• Personnel costs paid in month work performed

Commercial

terms

• Assessed variation orders (AVOs) raised for

additional works or changes to contract

• Contract includes liquidated damages (LDs)

linked to time delays and performance

• LDs can be mitigated by extension of time (EOT)

claims for delays not caused by Petrofac

• Limited commercial exposure through contractual

and insurance provisions

2 Commercial Models ComparedLump-sum turnkey versus reimbursable services

7

Item IAS 11 IFRS 15

Measuring

Contract

Progress

• Output method based on client certified physical

survey

• Risk adjusted percentage of completion (RAPOC)

based on overall project progress agreed with

customer

• Input method (cost-to-cost) represents the value

of goods and services transferred to customer

based on progress certified by the customer

• Percentage progress calculated based on

Engineering, Procurement, Construction,

Commissioning activities etc. multiplied by total

estimate at completion cost for each activity

Contract costs

and accrued

contract

expenses

• RAPOC multiplied by the forecast cost-at

completion

• Costs accrued where actual invoiced costs are

lower than expensed RAPOC based costs

(accrued contract expense)

• Costs deferred (capitalised) where actual

invoiced costs are higher than expensed

RAPOC based costs

• Costs recorded on a typical accrual basis

• Achieved by estimating costs on a

disaggregated basis. Each cost type has a

methodology; e.g. customer certified progress of

a specific activity

• Costs are accrued where value of work done

exceeds actual invoiced costs (accrued contract

expense)

Variable

consideration:

AVOs and LDs

• AVOs are recognised as revenue when

‘probable’ – typically interpreted as a greater

than 50% likelihood

• Similarly, LDs are initially recorded when it is

considered the likelihood of payment is probable

• Variable consideration – both AVOs and LDs –

will be assessed/re-assessed at contract

inception and each reporting date using

expected value approach

• May only be recorded if highly probable that

significant reversal in revenue will not occur in

future when uncertainty resolved - possible that

AVOs will be recorded later than under IAS 11

3 Key Differences: IAS 11 vs IFRS 15Changes affecting Petrofac’s revenue recognition

8

Item IAS 11 IFRS 15

Work in progress • Reclassified to contract assets

Billings in excess

of cost and

estimated earnings

• Reclassified to contract liabilities

Advances from

customers• Recognised in trade and other payables

• Offset against contract assets (on individual

contract basis)

• Amounts (on individual contract basis) that do

not fully offset contract assets reclassified from

trade and other payables to contract liabilities

Retentions • Recognised in trade and other receivables

• Reclassified as contract assets (a retention is

normally released on project closure therefore

it is dependent upon performance obligation)

Assessed variation

orders (AVOs)

• Amount of AVOs, adjusted for POC,

recognised in contract assets and disclosed in

the notes to the consolidated financial

statements

Accrued income

• Accrued income reclassified from trade

receivables to contract assets if right to

payment is conditional

Accrued contract

expenses• Separately recognised in current liabilities

• Estimation accruals continue to be reported as

accrued contract expenses

Backlog • Unaudited

• Unfulfilled portion of contracts (backlog) and

ageing disclosed in notes to accounts (at full

year only)

3 Key Differences: IAS 11 vs IFRS 15Balance sheet reclassifications and nomenclature

9

IFRS 15 Enhanced DisclosureDisaggregation of revenue 1,2

E&C EPS IES Total

Geographical segment

Kuwait 783 1 - 783

Saudi Arabia 536 - - 536

Oman 171 164 - 335

United Kingdom - 257 26 283

United Arab Emirates 136 54 - 190

Germany 134 - - 134

Algeria 128 - - 128

Iraq - 108 - 108

Turkey - 89 - 89

Mexico - 2 45 47

Malaysia 35 7 3 45

Australia - 1 28 29

Tunisia - 2 15 17

Others 18 23 19 60

Total 1,941 708 136 2,785

4

1. Six months ended 30 June 2018 (unaudited)

2. See note 3 of 2018 Interim Condensed Consolidated Financial Statements

10

IFRS 15 Enhanced DisclosureDisaggregation of revenue 1,2

E&C EPS IES Total

Type of goods or service

Lump-sum 1,941 107 - 2,048

Reimbursable - 601 30 631

Sale of crude oil and gas - - 106 106

Total 1,941 708 136 2,785

Customer type

Government 1,586 225 45 1,856

Non-government 355 483 91 929

Total 1,941 708 136 2,785

Timing of revenue recognition

Services transferred over

time1,941 708 30 2,679

Goods transferred at a

point in time- - 106 106

Total 1,941 708 136 2,785

4

1. Six months ended 30 June 2018 (unaudited)

2. See note 3 of 2018 Interim Condensed Consolidated Financial Statements

11

IFRS 15 Enhanced DisclosureContract assets & contract liabilities – reconciliation at full year only

Work in

progress

Retention

receivableAdvances

Billings in

excess of cost

and estimated

earnings

Opening balance XXX XXX XXX XXX

Progress achieved for which billings milestones not yet

achievedXXX

Billed to customer upon achieving billing milestones XXX

Amounts retained during the period XXX

Retentions released during the period XXX

Expected credit losses booked/(reversed) XXX XXX

Advances received during the period XXX

Unwinding of advances received XXX

Revenue recognised relating to prior periods due to change in

transaction price (AVOs and LDs)XXX

Revenue recognised relating to prior periods due to change in

progress measure (in case of change to POC)*XXX

Revenue recognised that was included as liability at the

beginning of the periodXXX XXX

Others XXX XXX XXX XXX

Closing balance XXX XXX XXX XXX

4

12

IFRS15 Enhanced Disclosure: Pro-FormaBalance sheet reclassifications and nomenclature alignment

Balance

Sheet as at

31 December

2017

Advances

from

customers5

Retentions3Accrued

income4

Advances

from

customers6

Balance

Sheet pro-

forma

Balance

sheet at 30

June 2018

Current Assets

Inventories 8 8 4

Trade and other receivables 2,020 (379) (163) 1,478 1,566

Contract assets1 2,223 (351) 379 163 2,414 2,245

Other financial assets 146 146 227

Income tax receivable 9 9 10

Cash and short-term deposits 967 967 712

Subtotal 5,374 5,023 4,765

Assets Held for Sale 217 217 117

Total 5,591 5,240 4,882

Current Liabilities

Trade and other payables 1,675 (351) (185) 1,139 1,090

Contract liabilities2 198 185 383 420

Interest-bearing loans and

borrowings725 725 802

Other financial liabilities 151 151 146

Income tax payable 251 251 223

Accrued contract expenses 1,956 1,956 1,597

Provisions 26 26 44

Subtotal 4,982 4,631 4,322

Liabilities Held for Sale - - 29

Total 4,982 4,631 4,351

4

Notes:

1 Contract assets comprise work in progress (including AVOs), retentions receivables and accrued income

2 Contract liabilities comprise billings in excess of costs & estimated earnings and advances from customers

3 Retention receivables of US$379m reclassified from trade and other receivables to contract assets

4 Accrued income of US$163m reclassified from trade and other receivables to contract assets

5 Advances from customers of US$351m reclassified from trade and other payables for individual customer contracts that offset against contract assets

6 Advances from customers of US$185m that do not fully offset against contract assets reclassified from trade and other payables to contract liabilities

13

IFRS 15 Impact1 January 2018 backlog / reserves

• EPS & IES: no material IFRS 15 adjustment

• E&C: all E&C contracts deemed to have single performance obligation

• Opening E&C adjustment does not apply to:

– Projects where substantial performance obligations under contract have been

delivered to customer at time of initial application of IFRS 15 (1 January 2018)

– Early stage projects where margin recognition threshold was not achieved by 1

January 2018 (and therefore revenue = cost)

• Adjustment calculation therefore based on 14 E&C projects:

– Output method (IAS 11) - Risk-Adjusted Percentage of Completion (RAPOC) as

certified by client - replaced by:

– Input method (cost-to-cost): represents value of goods and services transferred

based on progress from Progress Measurement System (PMS) certified by client

5

14

IFRS 15 Impact1 January 2018 backlog / reserves

• On average, IFRS 15 resulted in modest deceleration of cumulative

revenue recognition

– Backlog on 1 January 2018 increased by US$62 million

– Transition adjustment of US$42 million (post-tax) relating to change to input

method recognised as reduction to 1 January 2018 reserves

• IFRS 15 also impacts recognition of variable consideration such as

liquidated damages and variation orders; ‘best estimate’ replaced by

‘expected value’ approach:

– Transition adjustment of US$20 million (post-tax) recognised as reduction to 1

January 2018 reserves

• Potential for modest acceleration of revenue recognition in E&C going

forward

5

15

Start 6 Months 12 Months 18 Months 24 Months 30 Months 36 Months 42 Months 48 Months 54 Months

1 Jan X0 30 June X0 31 Dec X0 30 June X1 31 Dec X1 30 June X2 31 Dec X2 30 June X3 31 Dec X3 30 June X4

ACWP EAC ACWP EAC ACWP EAC ACWP EAC ACWP EAC ACWP EAC ACWP EAC ACWP EAC ACWP EAC ACWP EAC

Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150

Gross Profit Margin 10% 10% 10% 10% 10% 10% 10% 10% 14% 14% 14% 14% 14% 14% 14% 14% 14% 14%

POC 12% 25% 38% 50% 65% 79% 90% 100% 100%

Milestone billing POC 25% 25% 60% 60% 60% 80% 100% 100% 100%

Debits (D) & Credits (C) D C D C D C D C D C D C D C D C D C D C

Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets

Contracts assets 8 142 150 130 120 215 410 154 121 209 110 231

Retentions 3 8 11

Trade & other receivables 150 150 410 410 209 242 209 242

Cash & Short-term

Deposits100 147 225 225 402 168 209 105 242 228

Current Liabilities

Trade & other payables 108 117 225 117 108 225 168 168 133 105 105 95 228

Contract liabilities 100 100

Accrued contract

expenses

Retained Earnings 25 13 12 48 21 17 15

*ACWP = Actual Cost of Work Performed EAC = Estimate at Completion

Appendix: IFRS 15 Worked Example Periodic debits & credits

Cash received at inception

of project (10% contract

value advance payment),

offset by contract liability

16




Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets


Retentions 3 8 11


Cash & Short-term

Deposits100 147 225 225 402 168 209 105 242 228

Current Liabilities



Accrued contract

expenses




Revenues recognised equal

to costs when POC is less

than Milestone billing POC

17




Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets


Retentions 3 8 11


Cash & Short-term

Deposits100 147 225 225 402 168 209 105 242 228

Current Liabilities



Accrued contract

expenses




Gross margin is recognised

only when POC milestone is

reached

18




Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets


Retentions 3 8 11


Cash & Short-term

Deposits100 147 225 225 402 168 209 105 242 228

Current Liabilities



Accrued contract

expenses




Retentions of 2% of

Contract Value for

performance insurance

19




Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets


Retentions 3 8 11


Cash & Short-term

Deposits100 147 225 225 402 168 209 105 242 228

Current Liabilities



Accrued contract

expenses




Work-in-progress increases

until you reach POC for

milestone billing

20




Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets


Retentions 3 8 11


Cash & Short-term

Deposits100 147 225 225 402 168 209 105 242 228

Current Liabilities



Accrued contract

expenses




AVOs can impact the

overall contract value

at any point

21




Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets


Retentions 3 8 11


Cash & Short-term

Deposits100 147 225 225 402 168 209 105 242 228

Current Liabilities



Accrued contract

expenses




Cash collection often

occurs after project

completion

22

Appendix: IFRS 15 Worked Example Cumulative balance sheet




Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets

Contracts assets 8 130 250 55 209 121

Retentions 3 3 3 11 11

Trade & other receivables 150 410 209 242

Cash & Short-term

Deposits100 100 100 22 22 203 31 31 136 150

Current Liabilities

Trade & other payables 108 225 117 225 168 133 238 228

Contract liabilities 100

Accrued contract

expenses

Retained Earnings 25 38 50 98 119 135 150 150


Cash received at inception

of project (10% contract

value advance payment),

offset by contract liability

23





Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets




Cash & Short-term

Deposits100 100 100 22 22 203 31 31 136 150

Current Liabilities



Accrued contract

expenses



Revenues recognised equal

to costs when POC is less

than Milestone billing POC

24





Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets




Cash & Short-term

Deposits100 100 100 22 22 203 31 31 136 150

Current Liabilities



Accrued contract

expenses



Gross margin is recognised

only when POC milestone is

reached

25





Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets




Cash & Short-term

Deposits100 100 100 22 22 203 31 31 136 150

Current Liabilities



Accrued contract

expenses



Retentions of 2% of

Contract Value for

performance insurance

26





Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets




Cash & Short-term

Deposits100 100 100 22 22 203 31 31 136 150

Current Liabilities



Accrued contract

expenses



Work-in-progress increases

until you reach POC for

milestone billing

27





Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets




Cash & Short-term

Deposits100 100 100 22 22 203 31 31 136 150

Current Liabilities



Accrued contract

expenses



AVOs can impact the

overall contract value

at any point

28





Revenue 120 1000 250 1000 380 1000 500 1000 715 1100 869 1100 990 1100 1100 1100 1100 1100

Costs 108 900 225 900 342 900 450 900 617.5 950 750.5 950 855 950 950 950 950 950

Gross Profit 12 100 25 100 38 100 50 100 97.5 150 118.5 150 135 150 150 150 150 150


POC 12% 25% 38% 50% 65% 79% 90% 100% 100%



Income Statement

Revenue 108 142 130 120 215 154 121 110

Cost of Sales 108 117 117 108 168 133 105 95

Profit 25 13 12 47 21 16 15

Current Assets




Cash & Short-term

Deposits100 100 100 22 22 203 31 31 136 150

Current Liabilities



Accrued contract

expenses



Cash collection often

occurs after project

completion

29

For further details, please contact

Jonathan Low

Head of Investor Relations

[email protected]

+44 20 7811 4930

Documents

IMPLEMENTATION OF IFRS 15 - Petrofac · IFRS15 Enhanced Disclosure: Pro-Forma Balance sheet reclassifications and nomenclature alignment Balance Sheet as at 31 December 2017 Advances