Courtesy of Joseph A. Smith Jr.
At year-end 2016, Carillion Plc (Carillion or the company) was, in the words of its annual report, “one of the UK’s leading integrated support services companies, with a substantial portfolio of Public Private Partnership projects, extensive construction capabilities and a sector-leading ability to deliver sustainable solutions.”  The company had projects ongoing in the UK, Canada and the Middle East with revenues of £5.2 billion, net assets of £729 million and a market capitalization of just over £2 billion. In 2017, the company ran into substantial difficulties and ultimately failed. This note will review public reports by and about Carillion from a variety of sources to try to understand the reasons for the company’s decline and fall and what Carillion’s directors could have done differently to prevent such an outcome. Although the failure of Carillion occurred under the governance structures of UK law, regulation and custom, it highlights many issues that are relevant to US directors and senior executives as well.
Carillion became an independent public company in 1999, when Tarmac Group demerged into a building materials company (Tarmac) and a company focused on support services and construction services (Carillion). The two activities had previously been conducted under the same corporate structure and it was thought that separating the two would make the profitability of each operation more transparent and increase the focus and value of each of the demerged companies.
From the point of view of the building materials business, which continued to operate as Tarmac, the spin-off addressed a concern that it was subsidizing the construction business. Given the fact that publicly-held building materials companies at the time of the spin-off traded at a higher multiple of earnings (12X) than did construction companies (7X), it was thought that the spin-off would enhance the value of Tarmac. In addition, the spin-off made it easier for Tarmac to deal with construction companies than before, as it was no longer a competitor as well as a supplier. 
The spin-off was also intended to give Carillion what one spokesman called “a clearly defined separate identity” and to emphasize its strengths and potential in activities beyond construction management. In fact, the company’s new name was “a corruption of the word carillon which means a peal of bells, seeking apparently to emphasize this new clarity.” The spin-off and change of name was also meant to “distance” the company from a perceived exclusive focus on the construction business and to emphasize “its service sector strengths, particularly its Private Finance Initiative projects.” As the company said at the time of the spin-off, “Carillion has a big involvement in facilities management, in PFI and in rail maintenance. It’s not just a construction business anymore”.
Carillion did not have an easy birth. The shareholder meeting at which the spin-off was considered had considerable controversy over alleged breaches of acceptable corporate governance practices. A number of institutional shareholders of Tarmac protested the inclusion of the approval of the “demerger” with increases of executive compensation in one resolution rather than in two separate resolutions. The proposed compensation packages included £1.37 million in cash and pension adjustments for Sir Neville Simms, Chairman of Tarmac, who became chairman of Carillion.
There were also protests relating to the transfer of the pension rights of some Tarmac employees and retirees from the well-funded Tarmac pension plan to an allegedly comparable Carillion plan without consultation with, or disclosure to, such employees and retirees. At the meeting of shareholders voting on the spin-off, Sam Pickstock, a former Tarmac director and representatives of company pension recipients charged that Tarmac was “stealing pensioners’ peace of mind” by taking them out of a well-funded plan. Referring to the spin-off, Mr. Pickstock went on to say, ”It will be the pensioners, their widows and dependents wo will pay the price …Every penny piece that will be legally creamed off will be used to top up profits and executive perks.” 
Despite the uproar, Tarmac and Carillion managements prevailed and the spin-off was approved, although with the supporting vote of only 53% of outstanding shares. Carillion started its separate corporate existence with no debt (Tarmac retained all of the combined predecessor’s corporate debt), 14,000 employees, turnover of £1.8 billion and an estimated market capitalization of £200 million. It also started operations without a CEO or finance director.
Having obtained its independence, Carillion grew quickly in both size and scope, in substantial part through acquisitions. The most significant of these acquisitions were as follows:
- In February 2006, Carillion acquired Mowlem plc (Mowlem), a construction company that, according to the company’s 2006 annual report, had “strengths in construction, particularly in the regional building and civil engineering markets.” The total acquisition cost of Mowlem was £350 million, comprised of £117 million in cash, 2 million shares of Carillion common stock, and the assumption of £122.5 million of Mowlem debt. The transaction added £512 million of goodwill to the company’s balance sheet.
- On February 12, 2008, Carillion acquired Alfred McAlpine, which had operations in facilities management infrastructure services, civil engineering and construction. The acquisition price was £554.5 million, comprised of £381.5 million, £171.7 million in cash, assumption of and £1.3 million in loan notes. It also involved recognition of £615 million of goodwill. The company’s net debt at year end 2008 was £226.7 million, up from £44.9 million at year-end 2007, with acquisitions named as the primary cause of the increase.
- In 2011, Carillion acquired Eaga plc (Eaga), a provider of energy efficiency solutions, for an aggregate purchase price of £4 million, comprised of £117.7 million of company common stock and £180.7 million of cash. The transaction also involved recognition of goodwill by Carillion of £329.1 million.
As noted above, the Carillion acquisition campaign resulted in material increases in the company’s intangible assets as the result of the goodwill (excess of purchase price over asset value) and its indebtedness. The acquisition campaign was frustrated in 2014 when Balfour Beatty, the only UK construction firm larger than Carillion, rebuffed a merger offer from the company, dismissing “Carillion’s claims that the merger would generate cost savings of £175 million in ‘synergies’”.
During this period of growth and expansion, there were changes in Carillion’s executive management team. At the time of the Molem acquisition, Philip Rogerson was Chairman of Carillion, having replaced Sir Neville Sims in May 2005; John McDonough was Chief Executive and Chris Girling was Finance Director. Mr. Girling retired in April 2007, after having served as Finance Director since 1999. He was replaced by Richard Adam. Messrs. Rogerson, McDonough and Adam were Chairman, Chief Executive and Finance Director at the times of the Alfred McAlpine and Eaga acquisitions. John McDonough retired as Carillion Chief Executive on December 31, 2011, and was succeeded by Richard Howson. Philip Green had been elected Senior Non-Executive Director of the company in June of 2011. Mr. Green became chairman of the company in May 2014.
Questions for Directors
Imagine that you have been asked to serve as a director of Carillion between the time of the spin-off and year-end 2016.
- Would you have accepted the invitation?
- If the answer to # 1 is yes, what due diligence should you have done prior to acceptance?
- If after 2014, would the Balfour Beatty rejection of Carillion’s merger offer have been a factor in your decision? Should it have been of material importance to the company’s directors in the performance of their oversight roles?
- As a director, to what stakeholders are you accountable?
- Shareholders only?
- Employees / Pensioners?
- Counterparties – particularly governments?
- What questions should the Carillion directors have asked during the acquisition campaign following the spin-off?
- What metrics would you use to judge management performance?
Carillion at Year-End 2016
Carillon’s Annual Report and Accounts for 2016 (2016 Annual Report) described a company that had grown substantially since its spin-off from Tarmac, generating £5.2 billion in total revenue that year. Carillion’s revenues were generated by three lines of business:
- Support Services, which the company describes as “the provision of maintenance, facilities management and energy services for major buildings and large property estates, for both public and private sector customers, infrastructure services for roads, railways and utility networks, notably telecommunications and power transmission and distribution, and remote site accommodation services.”
- Project ﬁnance, which “includes arranging the funding for Public Private Partnership projects, to deliver public sector buildings and infrastructure, in which we invest equity and for which we win construction and long-term support services contracts.”
- Construction services, which “includes the delivery of a wide range of buildings and infrastructure, focused on large contracts for long-term public and private sector customers.”
Support services contributed £2.7 billion in total revenues for Carillion in 2016; public-private partnership projects contributed £313 million; Middle East construction £668 million; and construction services from outside the Middle East £1.5 billion. As the previous sentence suggests, Carillion had also expanded its operations geographically since the spin-off, with the UK accounting for £3.8 billion of total revenue, Canada for £596 million and the Middle East and North Africa for £787 million.
Carillion’s Board and Senior Management
The 2016 Annual Report’s section on Corporate Governance begins with a statement from the Chairman:
Your Board remains strongly committed to ensuring that Carillion maintains and continuously improves the structures and processes required to underpin the effective delivery of its growth strategy. We believe that good governance is an essential part of the way we undertake our business on a day-to-day basis, while maintaining effective risk management, control and accountability.
In furtherance of that goal, Carillion had a diverse and predominantly independent board, whose members were:
|Phillip Green, CBE||
5 years, 9 months
Group Chief Executive
7 years, 3 months
Group Finance Director
Senior Independent Non-Executive Director
1 year, 8 months
5 years, 5 months
3 years, 3 months
2 years, 11 months
The Carillion Board was also diverse in experience and external commitments, as outlined in the chart below:
|Name||Past Roles||External Appointments|
|Philip Green, CBE||
|Keith Cochrane CBE||
The 2016 Annual Report disclosed two changes in the composition of the Carillion board:
- Richard Adam, who joined the board as Group Finance Director in April 2007, retired on December 31, 2016. Carillion Chairman Philip Green wrote that “Richard made a major contribution to Carillion’s development and success though his outstanding financial leadership and he retired with the Board’s grateful thanks and best wishes for the future.”
- Ceri Powell declined nomination for re-election as a Non-Executive Director of Carillion “due to relocation to take up an appointment as Managing Director of Brunei Shell Petroleum Oil.” Chairman Green lauded Ms. Powell’s “significant contribution” to Carillion.
Richard Adam was succeeded as Group Finance Director by Zafar Khan. No successor to Ms. Powell was named in the 2016 Annual Report.
The Corporate Governance Report contained in the 2016 Annual Report defines the role of the Board as, “ownership of effective leadership and the long-term success of the Company.” The management and governance framework to implement this role includes: (i) board committees led by Non-Executive Directors on (A) Nominations, (B) Business Integrity, (C) Sustainability, (D) Audit, and (E) Remuneration; and (ii) the following committees or groups led by the Group Chief Executive: (A) Major Projects Committee, (B) Chief Executive’s Leadership Team, (C) Pensions Subcommittee, and (D) Group Health and Safety Subcommittee.
Matters reserved for the Board included:
- Review of governance arrangements
- Appointments to and removals from the Board
- Terms of reference for and membership of the Board
- Strategy and Direction
- Approval of strategy and annual budgets
- Authorization of acquisitions and disposal activity
- Affirmation of risk management strategies and risk appetite
- Risk management, accountability and control
- Approval of financial statements, other updates to the market and recommendations on dividends
- Approval of authority levels, financial and treasury policies
- Review of internal control and risk management
- Approval of health and safety policy
The Carillion governance infrastructure operated under a Vision Statement that read as follows:
To be the trusted partner for providing services, delivering infrastructure and creating places that bring lasting benefits to our customers and the communities in which we live and work.
It was also subject to the following statement of values;
We respect each other and we do things safely and sustainably. It’s good for our people, our business and our local communities.
We achieve together.
We value the contribution of each individual and we work together to build strong, open and trusting partnerships.
We listen, learn and adapt our ideas and experience into better solutions and services for our customers.
We set ourselves stretching goals, taking pride in doing a great job and helping our customers and partners to succeed.
Attendance at all board and committee meetings by directors was required and the Corporate Governance Report and the reports of the Committees named above confirm perfect attendance by all directors.
A summary of the non-stock compensation and stock ownership of members of the Carillion Board at December 31, 2016 and for the year then ended, is set forth below. Share ownership of Executive Directors includes amounts reported with respect to such Directors’ interests in the Company’s Leadership Equity Reward Plan (LEAP) and Deferred Bonus Plan (DBP).
Questions for Directors
- Under the caption Board Diversity, the 2016 Annual Report states that “The Board continues to ensure it has the right balance of skills, knowledge and experience, independence and diversity to lead the business.”
- Do you agree or disagree with this statement? Why?
- Do the Past Roles and External Appointments of the Directors enhance their ability to oversee Carillion? Do any detract from this ability?
- Is the Board’s definition of its role well stated? If not, where does it fall short?
- Do the statements of Vision and Values strike you as being important to the Company? In your experience, what is the value of such statements?
- Are the cash compensation and stockholdings of the Directors appropriate? Do they enhance potential performance? Is the fact that two Directors, one of whom is the Senior Non-Executive Director, do not own any Carillion stock a good thing, bad thing or nothing?
- If you were asked to replace Ceri Powell as a Non-Executive Director of Carillion, would you accept? What due diligence would you do before deciding whether to accept?
Carillion’s Results of Operations and Financial Position
The 2016 Annual Report discloses Carillion’s financial performance on both a traditional basis and through the use of Alternative Performance Metrics (APMs) “to supplement reported results by providing greater clarity on the Group’s underlying performance and to present additional information that reflects how the Directors measure the progress of the Group” (emphasis added). In general, the APMs were derived by adding back to traditionally stated amounts a number of items such as (i) non-recurring charges, (ii) recognition of partnership income, (iii) change in fair value of financial instruments (derivatives); (iv) currency adjustments, and (v) amortization of intangibles.
With regard to the last of the adjustments just mentioned, it should be noted that intangibles were a material component of the financial position of Carillion. On December 31, 2016, the company’s intangible assets were valued at £1.67 billion, accounting for approximately 38% of total assets of £4.4 billion. In addition to a determination of the amount of such assets to be amortized over each accounting period, the Carillion board had the further responsibility of determining whether and to what extent such assets had been impaired, such that they should be written down or written off. The Audit Committee of the board made a detailed review of the portion of Intangible Assets accounted for by goodwill (£1.57 billion) and, after a review of the impairment analysis of management and the company’s external auditor (KPMG), “agreed with management that no impairment to goodwill was necessary.”
In presenting the company’s performance for 2016, the Annual Report emphasized the following results:
- Total revenue of £2 billion, up 14% from £4.6 billion in 2015.
- Underlying profit before taxation (an APM) of £178 million, up 1% from £5 million in 2015.
- Profit before taxation, a traditional measure from which underlying profit before taxation was derived, of £7 million, down 5% from £155.1 million in 2015.
- Underlying earnings per share of 35.3 p (an APM), up 1% over 2015, compared to basic earnings per share of 28.9 p, down 6% from 2015.
- Proposed full year dividend of 18.45p, up 1% from 2015.
- Net borrowings of £9 million, up 29% from 2015
- Two measures that appear to measure work in progress, “order book” and “pipeline,” were down or only up marginally compared to 2015.
Even using the APMs noted above, the results were not particularly inspiring. The two performance measures that showed some growth were total revenue and net debt. While the debt figure was factually determinable, the total revenue figure was based on recognition of revenues and margins from the company’s extensive portfolio of contracts. Such recognition was, in turn, based on management’s estimates of revenues and expenses from such contracts, estimates that were reviewed by the Audit Committee of the board. After such review, the Audit Committee had determined that management’s estimates were reasonable.
The 2016 Annual Report also presents 14 “key performance indicators” related to the company’s operations, some of which have been discussed above. These factors are:
- Total revenue growth.
- Underlying operating margin, an APM that declined from 5.3% in 2015 to 4.9% in 2016.
- Underlying earnings per share (an APM that adds back to earnings per share intangible amortization, non-recurring items, and non-operating items and deducts fair value movements in derivatives and “changes in contingent consideration relating to acquisitions”).
- Cash conversion: underlying cash flow from operations divided by underlying earnings from operations (117% up from 104% in 2015).
- Work won and secured and probable orders.
- Book to bill ratio: work “won” divided by work booked as revenue (0.9%).
- Net Debt to EBITDA (0.8% in 2016, up from 0.6% in 2015).
- Net Promoter Score: a measure of customer satisfaction.
- Employee Engagement Score.
- Lost time incident frequency ratio.
- Gender balance (38% female, up from 37% in 2015).
- Contribution to profit from sustainability.
- Percentage of employees volunteering.
- Reduction in carbon footprint.
The 2016 Annual Report states that “Rigorous risk management is critical to achievement of our strategic objectives and it continues to remain a key part of our business model.” It goes on to describe in detail the internal operational risk management infrastructure and to present and discuss ten “principal risks.” These risks are:
- Failure to win and retain contracts
- Ineffective operational, commercial and financial management of contracts
- Management of pension scheme to ensure liabilities “are within a range appropriate to our capital base.”
- Ability to attract, develop and retain excellent people
- Effective management of risks associated with operating in overseas markets, and offering new services
- Ethics and compliance
- Systems and cyber security
- Health and Safety
- Human Rights
Included in Carillion’s risk management infrastructure was the outsourcing of its internal audit function to Deloitte LLP and retention of KPMG as its external auditor. The Audit Committee reviewed the performance of each of these firms and determined that they should be retained to continue in their respective functions in 2017. In the case of KPMG, continued retention was approved notwithstanding that KPMG had been Carillion’s outside auditor since the spin-off in 1999, and that there was outstanding guidance from relevant regulatory authorities suggesting the need for regular re-bidding of the function and for auditor rotation.
Questions for Directors
- Do you think the financial and performance measures summarized above give a fair and complete picture of Carillion? What do you want to know about the company at year-end 2016 that is not included?
- Do you think the use of APMs is appropriate in the case of Carillion? Is their use generally appropriate? Does the fact that these measures reflect “how the Directors measure the progress of the Group” tell you anything significant about the Board?
- Do you think it is necessary and appropriate to include measures of gender balance, employees volunteering and reduction of carbon footprint in the key performance indicators?
- Is the continued retention of KPMG appropriate? What factors would you apply in deciding whether to retain this firm and not to have a full-scale bid process or mandatory rotation?
Decline and Fall
Based on the performance just summarized, the Carillion board, among other things:
- Declared a year-end dividend of £55 million that was paid on June 9, 2017.
- Paid out incentive compensation to executives, including Richard Adam, who was retiring as Finance Director.
- Affirmed, as required by the UK Corporate Governance Code, that “On the basis of both reasonably probable and more extreme downside scenarios, the Directors believe that they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the three-year period of their assessment.”
In April 2017, Emma Mercer returned to the UK, after working for three years in the company’s Canadian operations, to become Finance Director of Construction Services. Ms. Mercer spotted “an anomaly in the way the company was classifying receivables balances on construction contracts, calling it ‘sloppy accounting.’”Ms. Mercer was not the first to notice financial issues with Carillion. According to one account:
Over-reach at Carillion, which tried and failed to cap its run of acquisitions by buying Balfour Beatty, Britain’s biggest construction company … was detected by hedge funds as early as 2013. After noting that Carillion took 120 days to pay its subcontractors, short sellers decided the company was built on fragile financial foundations.
Ms. Mercer’s expression of concern led to a review of the issue by the board and KPMG that resulted in a conclusion “that although Carillion had misclassified assets, it had not misstated revenue. That review did, however, act as the trigger for a wider contract review.
As the result of the reviews just mentioned, on July 10, 2017, just over four months after publication of the 2016 Annual Report, Carillion published a document entitled “H1 2017 Trading Update.” (Trading Update) This document is notable for a number of reasons:
- Richard Howson, the Group Chief Executive of Carillion, whose strategic overview was prominent in the 2016 Annual Report, had been replaced by Keith Cochrane, formerly Senior Independent Non-Executive Director, who is described as “Interim Group Chief Executive.”
- Disclosure of a Strategic and Operational Review, which was described as, “A thorough review of the business and its capital structure with all options being given appropriate consideration,” that led to the following decisions:
- Exiting all public private partnerships
- Exiting Egypt, Saudi Arabia and Qatar construction
- Sale of 50% of Oman business
- Bid only on lower risk procurement routs on construction contracts
- Determination of impairments of contracts
- Three UK PPP construction contracts: £375 million
- Exits from overseas engagements: £470 million
- Total impairments of £845 million are said to have a net negative cash impact of only £150 million. That said, the aggregate impairments exceed the company’s year-end 2016 Equity of £730 million.
While the Trading Update may have shown Carillion to be balance sheet insolvent, the company’s board stood by its determination that it was a going concern and took steps to address its problems. EY was retained to support the strategic review mentioned above with a focus on cost reductions and cash collections; both bank and capital markets financing were sought; and Zafar Khan was “sacked” as Finance Director, to be replaced by the redoubtable Emma Mercer.
On September 29, 2017, Carillion announced its first half results of operations. The most significant items in the report were:
- Increase of impairment charge to £1,045 million
- Pre-tax loss for the period of £1,153 million
- Negative equity of £405 million.
Following the issuance of the first half results of operations, Carillion’s management and board continued on their program to save the company. This program continued through year-end and included (i) consultant’s report; (ii) attempt at a secondary offering of stock; and (iii) appeals to the UK government for aid (based on the company’s significance as a government contractor). These efforts did not lead to additional funding or support for Carillion.
On January 15, 2018, the company found itself with no choice but to apply to the UK High Court of Justice for compulsory liquidation. The High court appointed PwC as Special Managers to act on behalf of the Official Receiver. According to the joint parliamentary report discussed below, Carillion “went into liquidation … with liabilities of nearly £7 billion and just £29 million in cash.”
Carillion’s insolvency remains a major scandal in the UK. In addition to wiping out its shareholders, the company’s demise left in its wake: (i) unfunded pension liabilities of just under £2.6 billion, with respect to 27,000 recipients and potential recipients, the largest hit ever to the UK’s equivalent of the Pension Benefit Guaranty Corporation; (ii) 30,000 unpaid subcontractors who are owed £2 billion; and (iii) uncertainty with regard to 450 service contracts between Carillion and various UK governments, with an initial estimated cost of just under £150 million to ensure continuity of services.
In May 2018, the Work and Pensions Committee and the Business, Energy and Industrial Strategy Work and Pensions Committee of the UK Parliament published a report resulting from a joint inquiry into the demise of Carillion. The report, which was instituted in furtherance of the committees’ responsibility for the health of pensions in the UK, was scathing. Its opening passage graphically summarizes what is to follow:
Carillion’s rise and spectacular fall was a story of recklessness, hubris and greed. Its business model was a relentless dash for cash, driven by acquisitions, rising debt, expansion into new markets and exploitation of suppliers. It presented accounts that misrepresented the reality of the business, and increased its dividend every year, come what may. Long term obligations, such as adequately funding its pension schemes, were treated with contempt. Even as the company very publicly began to unravel, the board was concerned with increasing and protecting generous executive bonuses. Carillion was unsustainable. The mystery is not that it collapsed, but that it lasted so long.
The Parliamentary Report, which is well done and well worth reading in its entirety, then goes on to review a catalogue of ill-advised or bad conduct by Carillion, much of which has been discussed above.
The Parliamentary Report discusses the oversight failures of a number of stakeholders in Carillion, including governmental entities responsible for pension funding and public contracts, its accountants and major shareholders. It is unstintingly and particularly critical of Carillion’s board, concluding that, “Carillion’s board are both responsible and culpable for the company’s failure.” Among the Parliamentary Report’s specific findings (quoted below) are that:
- Carillion’s management lacked basic financial information to do their job. A January 2018 review by FTI Consulting for Carillion’s lenders found the “presentation and availability of robust historical financial information”, such as cash flows and profitability, to be “extremely weak.” … This accorded with a presentation by Keith Cochrane to the board on 22 August 2017 which identified “continued challenges in quality, accessibility and integrity of data, particularly profitability at contract level.” For a major contracting company, these are damning failings.
- Such problems were not restricted to financial information. When it collapsed in January 2018, the total group structure consisted of 326 companies, 199 based in the UK, 186 of which are now in compulsory liquidation. Sarah Albon, Chief Executive of the Insolvency Service, told [the Committees] that the company’s “incredibly poor standards” made it difficult to identify information that should have been “absolutely, straightforwardly available”, such as a list of directors. Responsibility for ensuring the company is run professionally lies with the board. Stephen Haddrill, Chief Executive of the Financial Reporting Council (FRC), said “there must be enormous cause for concern about how the company was governed.”
The Parliamentary Report makes detailed and explicit findings regarding the shortcomings of Carillion executive management and Board leadership. Non-executive directors are not spared; the report finds at its outset, “The company’s non-executive directors failed to scrutinize or challenge reckless executives.”
In summing up its view of the board’s performance, the Parliamentary Report is eerily reminiscent of the Federal Reserve’s assessment of the Wells Fargo board, to wit:
We recommend that the Insolvency Service, in its investigation into the conduct of former directors of Carillion, includes careful consideration of potential breaches of duties under the Companies Act, as part of their assessment of whether to take action for those breaches or to recommend to the Secretary of State action for disqualification as a director.
The Carillion insolvency is the result, among other things, of a profound failure of corporate governance. Like the Wells Fargo case from the US, referred to above, it raises disturbing, and difficult questions about how competent and well-meaning directors can go so wrong in the discharge of their duties. Determining when and how an independent director should seek to influence the affairs of a corporation and how to do so effectively is not an easy question and should be approached carefully and with humility. But failing to ask the right questions or vocalize concerns can allow problems to metastasize, in some cases (Carillion’s), to the point where there is no cure.
 Carillion, Plc. Annual Report and Accounts for 2016, p.1. Available at: https://carillionplc-uploads-shared.s3-eu-west-1.amazonaws.com/wp-content/uploads/2017/03/0930AQ-carillion-annual-report-2016-original.pdf (2016 Annual Report).
 Ibid, pp. 2,3,46,83,92; Gill Plemmer, “The Collapse of an over-stretch Carillion,” Financial Times, January 14, 2018, available at: https://www.ft.com/content/0e29ec10-f925-11e7-9b32-d7d59aace167 .
 “The Investment Column: Tarmac’s Construction Arm Spin-Off Sets Bid Bells Ringing,” The Independent, July 16, 1999. Avilble at https://www.independent.co.uk/news/business/the-investment-column-tarmacs-construction-arm-spin-off-sets-bid-bells-ringing-1100476.html .
 Lisa Buckingham, “Tarmac weathers demerger storm,” The Guardian, July 8, 1999. Available at https://www.theguardian.com/business/1999/jul/09/13.
 Anna Minton, “Tarmac spins off construction arm as Carillion,” The Independent, June 19, 1999. Available at: https://www.independent.co.uk/news/business/tarmac-spins-off-construction-arm-as-carillion-1100147.html .
 Ibid. In the US, PFI projects may be loosely equated with what we call “public-private partnerships.” It refers to private financing and management of public infrastructure and facilities.
 Lisa Buckingham, “Tarmac Investors Threaten Revolt,” The Guardian, July 1, 1999. Available at https://www.theguardian.com/business/1999/jul/02/12 .
 This is Money, “Tarmac and Carillion Results,” October 4, 1999. Available at: http://www.thisismoney.co.uk/money/news/article-1576100/Tarmac-and-Carillion-results.html .
 Roger Crowe, “Tarmac Pensioners join pay rebels,” The Guardian, July 5, 1999. Available at: https://www.theguardian.com/business/1999/jul/06/6
 Lisa Buckingham, “Tarmac Weathers Demerger Storm,” The Guardian, July 8, 1999. Available at: https://www.theguardian.com/business/1999/jul/09/13
 Minton, op cit., note 16.
 The Investment Column, op cit. note 12.
 House of Commons Business, Energy and Industrial Strategy and Work and Pensions Committees: Carillion, Second Joint report from the Business, Energy and Industrial Strategy and Work and Pensions Committees of Session 2017–19, Tenth Report of the Business, Energy and Industrial Strategy Committee of Session 2017–19,
Twelfth Report of the Work and Pensions Committee of Session 2017–19 Report, together with formal minutes relating to the report, May 16,2018 (Parliamentary Report) pp. 8, 13. Available at: https://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/inquiries/parliament-2017/carillion-inquiry-17-19/
 Carillion 2006 Annual Report and Accounts, pp. 7, 18. Available at: http://www.annualreports.co.uk/Hosted Data/Annual Report Archive/ LSE_CLNN_2006.pdf. (2006 Report)
 Ibid, p. 18.
 Ibid, pp. 18, 19.
 Carillion 2008 Annual Report and Accounts, p. 101. Available at: : http://www.annualreports.co.uk/Hosted Data/Annual Report Archive/ LSE_CLNN_2008.pdf. (2008 Report)
 Ibid, p. 15.
 Carillion 2011 Annual Report and Accounts, p. 93. Available at: http://www.annualreports.co.uk/Hosted Data/Annual Report Archive/ LSE_CLNN_2011.pdf. (2011 Report)
 Ibid, p. 92.
 Parliamentary Report, op cit. note 20, pp. 13. 14
 Ibid, p. 13.
 2008 Report, op cit. note 21.
 2008 Report, op cit. note 24; 2011 Report, op cit. note 27.
 2011 Report, op cit. note 27,, p. 15.
 Parliamentary Report, op cit. note 20, p. 8.
 2016 Annual Report, op cit. note 1, p. 1.
 Ibid, p. 2.
 Ibid, p. 3.
 Ibid, p. 49.
 Ibid, pp. 50-51
 Ibid, p. 7.
 Ibid, p. 53.
 Ibid, p.52.
 Ibid, p. 53.
 Ibid, pp. 53, 54,58, 59, 60, 61.
 Ibid, pp. 66, 71.
 Ibid, pp. 51, 140.
 Ibid, p. 1, note 1. Italics added.
 Ibid, pp. 140-143.
 Ibid, p. 62.
 Ibid, p. 1.
 Ibid, p. 62.
 Ibid, pp. 62, 132.
 Ibid, pp. 18-19.
 Ibid, p. 141.
 Ibid, p. 31.
Ibid, p.p. 31-37.
 Ibid, pp. 61-63.
 Parliamentary Report, op cit., note 20, p. 9.
 2016 Annual Report, op cit., note 1, p. 65.
 Ibid, p. 31.
 Parliamentary Report, op cit., note 20, pp. 9, 45.
 Ibid, p. 45.
 Plemmons, op cit. note 2.
 Parliamentary Report, op cit. note 20, p.45.
 Parliamentary Report, op cit., note 20, p. 9.
 Parliamentary Report, op cit. note 20, p.10.
 Ibid, p.3.
 See, e.g, FT Collections: Carillion’s collapse: risk and failure at: https://www.ft.com/content/2cab2ac2-fb83-11e7-9b32-d7d59aace167
 Parliamentary Report, op cit. n.20 , p.3.
 Ibid, p. 3.
 To come.
 Ibid, p.27..
 Ibid, p. 4.
 Ibid, p. 4.