SEEK LIMITED — Interim / Quarterly Report 2012

Feb 21, 2012

SEEK Limited Interim Financial Report

For the half-year ended 31 December 2011 ABN 46 080 075 314 Lodged with the ASX under Listing Rule 4.2A

This information should be read in conjunction with the 30 June 2011 Annual Report

Corporate Directory

Directors

Robert (Bob) C G Watson Chairman

Andrew R Bassat Managing Director and Chief Executive Officer

Colin B Carter Neil G Chatfield Denise I Bradley

Secretary Moana Weir

Principal registered office in Australia

Level 6 541 St Kilda Road MELBOURNE VIC 3004 Ph: +61 3 8517 4100

Share register

Computershare Investor Services Pty Ltd 452 Johnston Street ABBOTSFORD VIC 3067 Ph: +61 3 9415 4000

Auditor

PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard SOUTHBANK VIC 3006

Solicitors Arnold Bloch Leibler Level 21 333 Collins Street MELBOURNE VIC 3000

Bankers Westpac Banking Corporation

Stock exchange listing

SEEK Limited shares are listed on the Australian Stock Exchange (Listing code: SEK)

Website address www.seek.com.au

2

SEEK Limited

ABN 46 080 075 314

Half-year ended 31 December 2011

(Previous corresponding period: Half-year ended 31 December 2010)

Results for Announcement to the Market

				$’000
Revenuefrom ordinary activities	Up	31.2%	To	209,385
Profitfrom ordinary activities after tax	Up	31.7%	To	63,098
Net profitafter tax attributable to members of SEEK Limited	Up	26.5%	To	60,588

Dividends/distributions	Amount per security	Franked amount per security
2011 Interim dividend paid	6.8 cents	6.8 cents
2011 Final dividend paid	7.5 cents	7.5 cents
2012 Interim dividend (declared after balance date)	8.3 cents	8.3 cents

Record date for determining entitlements to the dividend

Dividend Payable

28 March 2012 18 April 2012

Other information required by Listing Rule 4.2A

The remainder of information requiring disclosure to comply with Listing Rule 4.2A is contained in the Interim Financial Report (which includes the Directors’ Report).

3

SEEK Limited ABN 46 080 075 314 Interim Financial Report to 31 December 2011

Contents Page
Directors’ Report ................................................................................................................................................................................. 5
Auditor’s Independence Declaration ................................................................................................................................................ 10
Consolidated Income Statement ...................................................................................................................................................... 11
Consolidated Statement of Comprehensive Income ........................................................................................................................ 12
Consolidated Balance Sheet.............................................................................................................................................................. 13
Consolidated Statement of Changes in Equity .................................................................................................................................. 14
Consolidated Statement of Cash Flows ............................................................................................................................................ 15
1. Summary of significant accounting policies .......................................................................................... 16
2. Segment information ............................................................................................................................. 17
3. Revenue ................................................................................................................................................. 20
4. Income tax ............................................................................................................................................. 20
5. Investments accounted for using the equity method ........................................................................... 21
6. Other financial assets ............................................................................................................................ 22
7. Borrowings ............................................................................................................................................. 22
8. Other financial liabilities ........................................................................................................................ 23
9. Equity securities issued.......................................................................................................................... 23
10. Dividends ............................................................................................................................................... 24
11. Earnings per share ................................................................................................................................. 24
12. Business combinations .......................................................................................................................... 25
13. Net tangible asset backing ..................................................................................................................... 25
14. Events occurring after balance date ...................................................................................................... 25
Directors’ Declaration ....................................................................................................................................................................... 26
Independent Auditor’s Review Report to the members of SEEK Limited ........................................................................................ 27

Page

This Interim Financial Report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2011 and any public announcements made by SEEK Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

4

Directors’ Report

Your directors present their report on the consolidated entity (referred to hereafter as the Group), consisting of SEEK Limited and the entities it controlled at the end of, or during, the half-year ended 31 December 2011.

Directors

The following persons were directors of the company during the half-year:

R C G Watson Chairman, non-executive director A R Bassat Managing Director and Chief Executive Officer (CEO) C B Carter Non-executive director N G Chatfield Non-executive director D I Bradley Non-executive director

Review of operations

A summary extracted from note 2 of the Interim Financial Report of consolidated revenues and results for the half-year is set out below:

		31 Dec 2011	31 Dec 2010
	Notes	$’000	$’000
Operating revenue	3	208,079	158,972
Interest revenue	3	1,306	560
Revenue from continuing operations		209,385	159,532
Adjusted EBITDA(1)		89,845	62,519
Depreciation		(4,066)	(2,748)
Amortisation		(5,728)	(2,627)
Amortisation of share-based payments and other long-term incentive schemes		(2,022)	(1,271)
Interest expense		(11,706)	(3,825)
Interest income		1,306	560
Share of net profits of associates and jointly controlled entities accounted for using the equity method	5	15,128	11,440
Profit from continuing operations before income tax		82,757	64,048
Income tax expense	4	(19,659)	(16,151)
Profit for the half-year		63,098	47,897
Non-controlling interests		(2,510)	-
Profit for the half-year attributable to owners of SEEK Limited		60,588	47,897

Note 1: Adjusted EBITDA is the principal measure of performance used in the business. Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation and excluding share of net profits of associates and jointly controlled entities accounted for using the equity method, dividend income and amortisation of share-based payments and other long-term incentive schemes.

5

Review of operations continued

Growth from diverse earnings streams underpinned a record half-year financial result with profit for the half-year (SEEK’s share) of $60,588,000 (2010: $47,897,000), up 26.5% on the prior period. The increase in profit was driven by growth in domestic employment, strong growth in Zhaopin and improvement in the performance of Education.

Further information on individual segment results is provided below.

SEEK Employment

	31 Dec 2011 31 Dec 2010	31 Dec 2011 31 Dec 2010	Growth
	$’000	$’000	$’000	%
Operating revenue	122,814	106,797	16,017	15%
Employment	122,814	106,829	15,985	15%
Inter-segment revenue	-	(32)
Adjusted EBITDA	75,202	62,753	12,449	20%
EBITDA(%)	61%	59%

SEEK’s Employment business achieved revenue growth of 15% on the prior period. Combined with strong cost control, this resulted in an EBITDA margin of 61%.

Key highlights:

• Strong earnings growth reflects SEEK’s dominant market leadership and favourable exposure to structural migration of print to online

• SEEK Employment continued to generate strong operating leverage leading to an EBITDA margin of 61% despite challenging macroeconomic conditions

• SEEK Employment continues to develop new products and services to further improve the “jobseeker and advertiser marketplace”

6

Review of operations continued

SEEK Education

SEEK’s Education segment includes SEEK Learning, Think and share of profits/(losses) from IDP (50%) and Swinburne Online (50%).

31	Dec 2011 31 Dec 2010	Dec 2011 31 Dec 2010	Growth
	$’000	$’000	$’000	%
Operating revenue	59,884	52,175	7,709	15%
SEEK Learning	20,982	20,236	746	4%
Think	40,378	33,138	7,240	22%
Inter-segment revenue	(1,476)	(1,199)
Adjusted EBITDA	5,456	(49)	5,505	n/a
SEEK Learning	5,156	4,506	650	14%
Think	300	(4,555)	4,855	n/a
EBITDA (%)	9%	n/a
SEEK Learning	25%	22%
Think	1%	(14%)
Share of profits/(losses) of associates and jointly controlled entities
IDP	4,163	4,180	(17)	0%
Swinburne Online	(840)	-	(840)	n/a

SEEK Education achieved a solid result for the half-year with EBITDA of $5,456,000 and each business executing against its key objectives. The focus at Think has been to improve operational effectiveness and efficiency and this strategy contributed to the 22% increase in revenue on the prior period.

Key highlights:

• SEEK Learning achieved solid earnings growth with EBITDA increasing 14% on the prior period and a robust margin of 25%. The focus in the half has been on improving efficiency levels across sales and marketing

• Think achieved a solid result and is executing well against its turn-around strategy with the focus on growing the online and campus student body as well as cost containment

• A solid result for IDP in light of current challenging conditions

• Swinburne Online is progressing in line with management expectations

SEEK received a dividend from IDP of $2,500,000 in the half-year to 31 December 2011 (2010: $2,500,000).

7

Review of operations continued

SEEK International

SEEK International owns interests in leading job boards that are exposed to favourable structural and macro trends. SEEK’s International segment includes JobsDB (consolidated from 5 May 2011), other operating costs incurred by SEEK and share of profits from International associates. Refer to note 12 for further details on the JobsDB transaction and ownership interests.

International – JobsDB and other operating costs

	31 Dec 2011 31 Dec 2010	31 Dec 2011 31 Dec 2010	Growth
	$’000	$’000	$’000	%
Operating revenue	25,381	-	25,381	n/a
Adjusted EBITDA	9,187	(185)	9,372	n/a
JobsDB	10,239	-	10,239	n/a
Other operating costs	(1,052)	(185)	(867)	n/a
EBITDA (%)	36%	n/a	n/a	n/a
JobsDB	40%	n/a	n/a	n/a

JobsDB achieved solid revenue and earnings growth with revenue growth strongest in Indonesia, Hong Kong and Thailand.

Key highlights:

• Integration activities are underway with strong and active engagement between senior management of JobsDB and SEEK with a focus on strategy, sales and marketing and product development

• The hire of a new CEO and CFO to support medium to long term growth strategy

During December 2011, JobsDB paid an interim dividend of $2,219,000 to SEEK Asia Limited.

Share of profits of International associates

Further details of SEEK’s investments in International associates are included in note 5 in the Interim Financial Report.

	31 Dec 2011 31 Dec 2010	31 Dec 2011 31 Dec 2010	Growth
	$’000	$’000	$’000	%
Zhaopin	7,500	3,653	3,847	105%
JobStreet	1,339	1,151	188	16%
Brasil Online	2,578	2,009	569	28%
OCC	388	447	(59)	(13%)
Share ofprofits of International associates	11,805	7,260	4,545	63%

A strong result was achieved by SEEK’s International associates with SEEK’s share of profit increasing by 63% on the prior year to $11,805,000.

Key highlights:

• Zhaopin achieved strong online revenue and earnings growth with online revenue growth of 43%

• JobStreet performing well in SE Asia

• Brasil Online achieved solid revenue growth and strong traction in advertiser paid products

• OCC performing well in fast growing market

Dividends of $1,624,000 were received from these investments during the half-year (JobStreet $720,000 and OCC $904,000). Including our share of the dividend received from IDP, total dividends received by the Group from associates during the half-year was $4,124,000 (2010: $3,133,000).

8

Review of operations continued

Analysis of key items below EBITDA

	31 Dec 2011 31 Dec 2010	31 Dec 2011 31 Dec 2010	Increase
Expense/(income)	$’000	$’000	$’000	%
Interest expense	11,706	3,825	7,881	206%
Interest income	(1,306)	(560)	(746)	133%
Depreciation	4,066	2,748	1,318	48%
Amortisation	5,728	2,627	3,101	118%
Amortisation of share-based payments and other
long-term incentive schemes	2,022	1,271	751	59%
	22,216	9,911	12,305	124%

Key highlights:

• The increase in net debt at 31 December 2011 due to the acquisition of JobsDB during the previous financial year was the key driver of the higher net interest expense

• The increase in depreciation is primarily driven by Think office and campus fit-outs and JobsDB (not consolidated in the prior period)

• The higher amortisation is mainly a result of Purchase Price amortisation of intangible assets recognised as part of the JobsDB acquisition ($2,753,000 before non-controlling interests)

• The increase in amortisation of share-based payments and other long-term incentive schemes reflects additional options and performance rights allocations during the period

Significant changes in the state of affairs

No significant changes in the state of affairs occurred during the financial period.

Matters subsequent to the end of the financial half-year

No matters or circumstances have arisen since 31 December 2011 that have affected, or may significantly affect:

• (a) the Group’s operations in future financial periods, or

• (b) the results of those operations in future financial years, or

• (c) the Group’s state of affairs in future financial years.

Auditor’s Independence Declaration

A copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 10.

Rounding of amounts

The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities & Investments Commission, relating to the “rounding off” of amounts in the Directors’ Report. Amounts in the Directors’ Report and financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

This report is made in accordance with a resolution of directors.

Bob Watson

Chairman

Melbourne 22 February 2012

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Auditor’s Independence Declaration

As lead auditor for the review of SEEK Limited for the half year ended 31 December 2011, I declare that to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• b) no contraventions of any applicable code of professional conduct in relation to the review .

This declaration is in respect of SEEK Limited and the entities it controlled during the period.

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John Yeoman Partner PricewaterhouseCoopers

Melbourne 22 February 2012

Liability limited by a scheme approved under Professional Standards Legislation.

PricewaterhouseCoopers, ABN 52 780 433 757 Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

10

SEEK Limited Consolidated Income Statement

For the half-year ended 31 December 2011

		31 Dec 2011	31 Dec 2010
	Notes	$’000	$’000
Revenue from continuing operations	3	209,385	159,532
Operating expenses
Direct cost of services		(16,945)	(15,019)
Sales and marketing		(66,668)	(51,713)
Business development		(11,053)	(10,272)
Operations and administration		(34,649)	(25,163)
Finance costs		(12,441)	(4,757)
Total operating expenses		(141,756)	(106,924)
Share of profits of associates and jointly controlled entities accounted for
using the equity method	5	15,128	11,440
Profit before income tax expense		82,757	64,048
Income tax expense	4	(19,659)	(16,151)
Profit for the half-year		63,098	47,897
Profit is attributable to:
Owners of SEEK Limited		60,588	47,897
Non-controlling interests		2,510	-
		63,098	47,897
Earnings per share for profit attributable to the ordinary equity holders of the Company:		Cents	Cents
Basic earnings per share	11	18.0	14.2
Diluted earnings per share	11	17.9	14.2

The above Consolidated Income Statement should be read in conjunction with the accompanying notes.

11

SEEK Limited

Consolidated Statement of Comprehensive Income For the half-year ended 31 December 2011

		31 Dec 2011	31 Dec 2010
	Notes	$’000	$’000
Profit for the half-year		63,098	47,897
Other comprehensive income
Exchange gains/(losses) on translation of foreign controlled operations		9,692	(394)
Exchange (losses) on translation of foreign associates	5	(11,818)	(29,937)
Gains/(losses) on hedge contracts of controlled entities		366	(3,308)
Gains/(losses) on hedge contracts of associates (net of tax)		222	(441)
Income tax recognised in other comprehensive income		(90)	851
Other comprehensive income for the half-year		(1,628)	(33,229)
Total comprehensive income for the half-year		61,470	14,668
Total comprehensive income for the half-year attributable to:
Owners of SEEK Limited		56,558	15,491
Non-controlling interests		4,912	(823)
		61,470	14,668

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

12

SEEK Limited Consolidated Balance Sheet As at 31 December 2011

	Notes	31 Dec 2011	30 Jun 2011
		$'000	$'000
Current assets
Cash and cash equivalents		92,111	98,291
Trade and other receivables		36,577	44,890
Other financial assets	6	301	17,379
Total current assets		128,989	160,560
Non-current assets
Investments accounted for using the equity method	5	315,338	315,930
Plant and equipment		20,375	19,201
Intangible assets		474,442	463,308
Deferred tax assets		11,675	11,397
Total non-current assets		821,830	809,836
Total assets		950,819	970,396
Current liabilities
Trade and other payables		43,451	43,606
Unearned income		31,530	38,366
Other financial liabilities	8	81,379	147,887
Current tax liabilities		7,476	5,385
Current provisions		4,537	1,923
Total current liabilities		168,373	237,167
Non-current liabilities
Borrowings	7	287,729	275,281
Deferred tax liabilities		17,487	19,087
Non-current provisions		4,626	4,781
Total non-current liabilities		309,842	299,149
Total liabilities		478,215	536,316
Net assets		472,604	434,080
Equity
Contributed equity	9	186,525	183,950
Reserves		(73,570)	(71,208)
Retained profits		233,755	198,474
Non-controlling interests		125,894	122,864
Total equity		472,604	434,080

The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.

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SEEK Limited

Consolidated Statement of Changes in Equity For the half-year ended 31 December 2011

		Contributed	Contributed	Reserves	Retained	Total	Non-	Total
		equity			profits		controlling	equity
							interests
	Notes	$’000		$’000	$’000	$’000	$’000	$’000
Balance at 1 July 2010		183,950		22,668	146,339	352,957	-	352,957
Profit for the half-year			-	-	47,897	47,897	-	47,897
Other comprehensive income			-	(32,406)	-	(32,406)	(823)	(33,229)
Total comprehensive income for the half-year			-	(32,406)	47,897	15,491	(823)	14,668
Transactions with owners in their capacity as owners:
Dividends provided for or paid	10		-	-	(22,550)	(22,550)	-	(22,550)
Employee share option scheme			-	1,663	-	1,663	-	1,663
Purchase of shares on-market for employee share option	scheme		-	(22)	(118)	(140)	-	(140)
Tax associated with employee share schemes			-	(35)	35	-	-	-
Transactions with non-controllinginterests			-	-	-	-	44,852	44,852
Balance at 31 December 2010		183,950		(8,132)	171,603	347,421	44,029	391,450
Balance at 1 July 2011		183,950		(71,208)	198,474	311,216	122,864	434,080
Profit for the half-year			-	-	60,588	60,588	2,510	63,098
Other comprehensive income			-	(4,030)	-	(4,030)	2,402	(1,628)
Total comprehensive income for the half-year			-	(4,030)	60,588	56,558	4,912	61,470
						-
Transactions with owners in their capacity as owners:						-
Contributions of equity, net of transaction costs and tax	9	2,575		-	-	2,575	-	2,575
Dividends provided for or paid	10		-	-	(25,277)	(25,277)	(1,882)	(27,159)
Employee share options scheme			-	2,198	-	2,198	-	2,198
Purchase of shares on-market for employee share option	scheme		-	(197)	(363)	(560)	-	(560)
Tax associated with employee share option schemes			-	(333)	333	-	-	-
Balance at 31 December 2011		186,525		(73,570)	233,755	346,710	125,894	472,604

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes .

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SEEK Limited Consolidated Statement of Cash Flows For the half-year ended 31 December 2011

		31 Dec 2011	31 Dec 2010
	Notes	$’000	$’000
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)		222,401	181,270
Payments to suppliers and employees (inclusive of goods and services tax)		(132,025)	(119,577)
		90,376	61,693
Interest received		1,306	523
Interest paid		(7,111)	(3,432)
Income taxes paid		(19,536)	(19,860)
Net cash inflow from operating activities		65,035	38,924
Cash flows from investing activities
Payments for acquisition of interest in associates and jointly controlled entities		-	(185,048)
Dividends received from associates	5	4,124	3,133
Payment for additional interest in subsidiary	8	(70,260)	-
Payments for plant and equipment		(4,689)	(3,048)
Payments for intangible assets		(2,190)	(1,646)
Net cash (outflow) from investing activities		(73,015)	(186,609)
Cash flows from financing activities
Proceeds from borrowings		49,783	360,355
Repayment of borrowings		(38,000)	(228,000)
Transaction costs on syndicated debt facility		-	(5,583)
Purchase of shares for employee share options plans		(560)	(140)
Proceeds from issues of shares	9	2,575	-
Dividends paid to members of the parent	10	(25,277)	(22,550)
Dividends paid to non-controlling interests		(1,882)	-
Contributions from non-controlling interests	6	16,980	44,852
Net cash inflow from financing activities		3,619	148,934
Net increase in cash and cash equivalents		(4,361)	1,249
Cash and cash equivalents at the beginning of the half-year		98,291	39,731
Effect of exchange rate changes on cash and cash equivalents		(1,819)	-
Cash and cash equivalents at the end of the half-year		92,111	40,980

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

15

SEEK Limited Notes to the financial statements 31 December 2011

1. Summary of significant accounting policies

Basis of preparation of half-year report

This condensed consolidated interim financial report for the half-year reporting period ended 31 December 2011 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 .

This condensed consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2011 and any public announcements made by SEEK Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

At 31 December 2011 the Group’s current liabilities exceed its current assets by $39,384,000. This financial report has been prepared on a going concern basis as this deficiency is principally due to the $79,442,000 put option in place under which the Group’s controlled entity, SEEK Asia Limited, may be required to purchase the remaining 20% of JobsDB. In addition, the Group has sufficient committed facilities in place to support the working capital needs of the business. For further details please refer to note 7 (Borrowings) and note 13 (Net tangible asset backing).

Impact of standards issued but not yet applied by the entity

Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2011 reporting periods. The Group has assessed the impact of these new standards and interpretations, and does not expect that initial application of the following Standards and Interpretations will affect any of the amounts recognised in the financial report, but may change disclosures presently made in relation to the Group:

AASB 9_Financial Instruments_, AASB 2009-11_Amendments to Australian_ Accounting Standards arising from AASB 9_and AASB 2010-7_Amendments to Australian Accounting Standards arising from AASB 9	Effective 1 January 2013
AASB 2011-9_Amendments to Australian Accounting Standards – Presentation of_ Other Comprehensive Income	Effective 1 July 2012
AASB 2011-4_Amendments to Australian Accounting Standards to Remove_ Individual Key Management Personnel Disclosure Requirements	Effective 1 July 2013
AASB 10_Consolidated Financial Statements_	Effective 1 January2013
AASB 11_Joint Arrangements_	Effective 1 January2013
AASB 12_Disclosure of Interests in Other Entities_	Effective 1 January2013
AASB 13_Fair Value Measurement_and AASB 2011-8_Amendments to Australian_ Accounting Standards arising from AASB 13	Effective 1 January 2013

Critical accounting estimates, assumptions and judgements

The Group makes estimates, assumptions and judgements concerning the future which may not equal the related actual results. The estimates, assumptions and judgements that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are consistent with those disclosed in the annual report for the year ended 30 June 2011.

16

SEEK Limited Notes to the financial statements 31 December 2011

2. Segment information

(a) Description of segments

Management have determined the operating segments based on the reports reviewed and relied upon by the CEO, the chief operating decision maker (CODM).

The Group operates in three core industries: online employment classified advertising (Employment); the provision and execution of training courses (Education) and overseas investments in online employment websites (International).

• The Employment business is considered as one reporting segment which provides online employment classified advertising services through the SEEK website. It sells these services in Australia, New Zealand and the United Kingdom, which have similar business characteristics and are managed as one business.

• The Education division comprises two segments: Learning and Think.

• The Learning business markets, sells and distributes (predominately through online channels) vocational training and education training courses in Australia. These courses are developed and delivered by outside providers (including Think). It also holds the Group’s investment in IDP.

• Think is a provider of vocational training and higher education courses, including classroom-based and distance learning courses and operates solely in Australia.

• The International segment consists of international investments in leading online employment websites across a number of fast growing economies and other international operating costs. SEEK now has a presence in China, South East Asia, Brazil and Mexico.

Adjusted EBITDA is the measure utilised by the CODM to measure the businesses’ profitability. Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation and excludes share of net profits from associates and jointly controlled entities accounted for using the equity method, dividend income and amortisation of share-based payments and long-term incentives. Interest income and expenditure are not allocated to segments, as this type of activity is driven and managed centrally by the Group.

Segment revenue, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, plant and equipment and goodwill and other intangible assets, net of related provisions. While most of these assets can be directly attributable to individual segments, the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates and usage.

Segment revenues, expenses and results include transfers between segments. Such transfers are carried out at arm’s-length and are eliminated on consolidation.

The amounts provided to the CODM with respect to total assets and total liabilities are measured in a manner consistent with that of the financial statements. Assets and liabilities are allocated based on the operations of the segment.

17

SEEK Limited Notes to the financial statements 31 December 2011

2. Segment information continued

(b) Segment information provided to the CODM

Half-year ended 31 December 2011		Employment	Education		**International **	Eliminations		Consolidated
			Learning	Think
	Notes	$’000	$’000	$’000	$’000	$’000		$’000
Revenue
Segment revenue from external customers		122,814	19,506	40,378	25,381		-	208,079
Inter-segment revenue		-	1,476	-	-	(1,476)		-
Total segment revenue		122,814	20,982	40,378	25,381	(1,476)		208,079
Interest revenue								1,306
Consolidated revenue	3							209,385
Adjusted EBITDA		75,202	5,156	300	9,187			89,845
Depreciation		**(931) **	**(500) (2,127) **		(508)		-	(4,066)
Amortisation		**(1,293) **	**(149) (1,533) **		(2,753)		-	(5,728)
Share of profits from associates and jointly controlled entities
accounted for using the equity method	5	-	3,323	-	11,805		-	15,128
Segment result		72,978	7,830 (3,360)		17,731		-	95,179
Amortisation of share-based payments and other long-term incentive schemes								(2,022)
Interest revenue	3							1,306
Interest expense								(11,706)
Profit before tax								82,757
Income tax expense							-	(19,659)
Profit for the half-year								63,098
Non-controlling interests								(2,510)
Profit for the half-year attributable to the owners of SEEK Limited								60,588

18

SEEK Limited Notes to the financial statements 31 December 2011

2. Segment information continued

(b) Segment information provided to the CODM (continued)

Half-year ended 31 December 2010		Employment	Education	Education	**International **	Eliminations		Consolidated
			Learning	Think
	Notes	$’000	$’000	$’000	$’000	$’000		$’000
Revenue
Segment revenue from external customers		106,797	19,037	33,138	-		-	158,972
Inter-segment revenue		32	1,199	-	-	(1,231)		-
Total segment revenue		106,829	20,236	33,138		(1,231)		158,972
Interest revenue								560
Consolidated revenue	3							159,532
Adjusted EBITDA		62,753	4,506	**(4,555) **	(185)		-	62,519
Depreciation		(987)	(191)	(1,570)	-		-	(2,748)
Amortisation		(1,259)	(87)	(1,281)	-		-	(2,627)
Share of profits from associates and jointly controlled entities
accounted for using the equity method	5	-	4,180	-	7,260		-	11,440
Segment result		60,507	8,408	(7,406)	7,075		-	68,584
Amortisation of share-based payments and other long-term incentive schemes								(1,271)
Interest revenue	3							560
Interest expense								(3,825)
Profit before tax								64,048
Income tax expense								(16,151)
Profit for the half-year								47,897
Non-controlling interests								-
Profit for the half-year attributable to the owners of SEEK Limited								47,897

(c) Total segment assets

		Employment	Education	Education	International	Unallocated	Consolidated
			Learning	Think
		$’000	$’000	$’000	$’000	$’000	$’000
31	December 2011	83,244	94,555	131,350	629,696	11,974	950,819
30	June 2011	99,437	96,844	124,250	638,468	11,397	970,396

19

SEEK Limited Notes to the financial statements 31 December 2011

3. Revenue

	31 Dec 2011	31 Dec 2011	31 Dec 2010
	$’000		$’000
Revenue from continuing operations
Operating revenue
Employment - job and banner advertising	122,814		106,797
Education - commission revenue	19,506		19,037
Education - classroom-based training	40,378		33,138
International - job and banner advertising	25,381		-
Total operating revenue	208,079		158,972
Other revenue
Interest income	1,306		560
Total revenue from continuing operations	209,385		159,532
4. Income tax
Numerical reconciliation of income tax expense toprima facie taxpayable
	31 Dec 2011	31	Dec 2010
	$’000		$’000
Profit from ordinary activities before income tax expense	82,757		64,048
Income tax calculated @ 30% (2010: 30%)	24,827		19,214
Tax effect of amounts that are not deductible/(taxable) in calculating income tax:
Research and development claim	(225)		(180)
Share of net profits of associates and jointly controlled entities	(4,539)		(3,433)
Non-deductible expenses:
Legal fees and acquisition costs	214		(140)
Borrowing costs	-		550
Share-based payments	335		199
Other non-deductible expenses	461		262
	21,074		16,472
Income tax adjusted for permanent differences:
Effect of different rates of tax on overseas income	(868)		(10)
Effect of change in tax rates	9		-
(Over) provision in previous years	(557)		(311)
Income tax expense attributable toprofit from ordinary activities	19,659		16,151

20

SEEK Limited Notes to the financial statements 31 December 2011

5. Investments accounted for using the equity method

(a) Details of associates and jointly controlled entities

		Ownership interest	Ownership interest
			%
	Country of	Dec	Jun
Associates	incorporation	2011	2011	Year end	Principal activities
IDP Education Pty Ltd	Australia	50.0	50.0	30 June	Provides services for international students
(IDP)					wishing to study in Australian educational
					institutions and also provides International
					English Language Testing (IELTS)
Zhaopin Ltd	The Cayman	56.1	56.1	31 December	Provides both online and print employment
(Zhaopin)	Islands				classified advertising services in China
Brasil Online Holdings	The	30.0	30.0	31 December	Owns Catho Online and Manager Online, two
Coöperatief U.A.	Netherlands				leading employment websites in the Brazilian
(Brasil Online)					market
JobStreet Corporation	Malaysia	22.0	22.0	31 December	Provider of online employment websites in
Berhad					South East Asia (listed in Malaysia)1
(JobStreet)
Online Career Center	Mexico	40.0	40.0	31 December	Leading provider of online employment
Mexico SA de CV					websites in Mexico
**(OCC) **
Jointly controlled entity
Online Education	Australia	50.0	50.0	30 June	A joint venture entity between SEEK and
Services Pty Ltd					Swinburne University of Technology to
**(Swinburne Online) **					deliver online learningto students

(b) Investments in associates and jointly controlled entities

		IDP	Zhaopin	Brasil Online	JobStreet1	OCC	Swinburne Online	Total
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Carrying amount as at 1 July 2011 71,175 56,644 101,028 43,685 40,944 2,454 315,930 (2,500) - - (720) (904) - (4,124) Share of profits/(losses) after income tax 4,163 7,500 2,578 1,339 388 (840) 15,128 173 4,983 (12,083) 98 (4,989) - (11,818) Movements in hedge reserve - cash flow 222 - - - - - 222 Movements in foreign currency translation reserve Dividends received or declared in the half-year
Carrying amount as at 31 December 2011 73,233 69,127 91,523 44,402 35,439 1,614 315,338

1. JobStreet is listed in Malaysia and releases its results quarterly. SEEK does not have access to any JobStreet internal information that is not otherwise publicly available. SEEK developed an internal estimate for JobStreet, using publicly available information, and did not receive any input or guidance from JobStreet in its development. As JobStreet is due to release its December quarter results on 21 February 2012, the JobStreet result for the half-year represented in the SEEK interim financial report comprises actual released results for the September 2011 quarter, and SEEK’s internal estimate for the December 2011 quarter.

(c) Contingent assets and liabilities of associates

As disclosed in the 30 June 2011 Annual Report, Brasil Online has a number of outstanding tax and legal cases which may take a number of years to come to conclusion and for which the difference between the settlement amounts and the amount provided for may be material.

During the period since 30 June 2011, the status on certain cases has changed and the net impact of these changes was to reduce management’s estimate of the probable outflow (and therefore the related provisioning) by BRL$9,222,000 (SEEK’s share $1,456,000) and to increase contingent liabilities by BRL$61,769,000 (SEEK’s share $9,755,000). In accordance with Australian Accounting Standards, provisions have only been recognised to the extent it is probable that an outflow of resources will be required to settle the obligation.

21

SEEK Limited Notes to the financial statements 31 December 2011

6. Other financial assets

6. Other financial assets
		31 Dec 2011 30 Jun 2011 $’000 $’000
Interest rate swap contracts 301 37 Amounts due from co-investors (i) - 17,342
Total financial assets 301 17,379

(i) Amounts due from co-investors

The amount receivable from co-investors at 30 June 2011 represented the outstanding cash consideration payable by the co-investors for the third stage of SEEK Asia’s investment in JobsDB. Refer to note 12 for details on the JobsDB transaction and relevant ownership interests. During July 2011 an amount of $16,980,000 (including foreign exchange translation differences) was received from co-investors.

7. Borrowings

7. Borrowings
	31 Dec 2011 30 Jun 2011 $’000 $’000
Bank borrowings - principal 290,487 278,704 Less: transaction costs capitalised (2,758) (3,423)
Total non-current borrowings 287,729 275,281

Syndicated loan agreements

The Group’s current debt facility of $340,000,000 was entered into in December 2010 and is structured as a three-year revolving unsecured senior debt facility, which is fully underwritten by a syndicate comprising the National Australia Bank, Westpac Banking Corporation, ANZ, Commonwealth Bank and HSBC.

At 31 December 2011, $290,487,000 (30 June 2011: $278,704,000) principal had been drawn down against this facility. Transaction costs of $4,108,000 were incurred to establish the facility and have been capitalised on the Consolidated Balance Sheet, of which $2,758,000 has not yet been amortised through the Consolidated Income Statement.

22

SEEK Limited Notes to the financial statements 31 December 2011

8. Other financial liabilities

8. Other financial liabilities
	31 Dec 2011 30 Jun 2011 $’000 $’000
Put option (i) 79,442 74,630 Foreign exchange contract - cash flow hedge - 299 Payment due to vendor on acquisition (ii) 670 71,760 Deferred consideration(iii) 1,267 1,198
Total financial liabilities 81,379 147,887

During the financial year ended 30 June 2011, SEEK Asia acquired a controlling interest in JobsDB. Refer to note 12 for further details of this transaction and ownership interests. These financial liabilities relate to this transaction and are discussed below.

(i) Put Option

In relation to the remaining ownership of JobsDB held by the vendor, between 23 June 2012 and 23 June 2014 the vendor has been granted the option to sell up to 20% of its remaining interest in JobsDB to SEEK Asia. The selling price is dependent on future earnings but capped at HK$640,000,000. At 31 December 2011 the SEEK Group has recognised a financial liability of $79,442,000, which represents the net present value of the expected cash consideration to be paid to the vendor should the option be exercised at current exchange rates.

In accordance with Australian accounting standards, SEEK has recognised an expense through ‘finance costs’ in the Consolidated Income Statement for the difference between the net present value of the option and the expected cash consideration. The charge in the current half-year is $506,000.

In line with their relevant ownership interests (refer to note 12), the co-investors have contractually agreed to fund their share should the put option be exercised, which based on the capped amount of HK$640,000,000 at current exchange rates would total approximately $25,000,000. In accordance with Australian accounting standards the Group has not recognised a financial asset for this contribution. Our estimate of the Group’s net cash outflow if the option is exercised at the full capped amount at current exchange rates is approximately $56,000,000.

(ii) Payment due to vendor on acquisition

The consideration for the third stage of the investment in JobsDB was HK$600,000,000 ($71,760,000 at 30 June 2011 exchange rates). An amount of $70,260,000 (including foreign exchange translation differences) was settled on 7 July 2011. The remaining liability of $670,000 (at current exchange rates) is to be paid to the vendors of JobsDB at a future date to be agreed with the vendor.

(iii) Deferred consideration

This balance represents amounts which are required to be paid to the vendors of JobsDB at a future date to be agreed with the vendor.

9. Equity securities issued

9. Equity securities issued
		Weighted average
	Shares	issueprice	$'000
Balance at 1 July 2010	336,584,488		183,950
Balance at 30 June 2011	336,584,488		183,950
Issues of ordinary shares during the half year:
Exercise of performance rights and options	516,819	$4.98	2,575
Balance at 31 December 2011	337,101,307		186,525

During the half-year 516,819 performance rights and options were exercised. The issue price varies depending on the conditions of the relevant performance rights and options plans. The weighted average issue price for the performance rights and options exercised during the half-year was $4.98.

23

SEEK Limited Notes to the financial statements 31 December 2011

10. Dividends

						Total dividend
		Payment date	Amount per share	Franked amount per share		'000
	Year 2011
	2010 final dividend	15 October 2010	6.7 cents	6.7 cents		$22,550
	2011 interim dividend	19 April 2011	6.8 cents	6.8 cents		$22,889
						$45,439
	Year 2012
	2011 final dividend	12 October 2011	7.5 cents	7.5 cents		$25,277
	Dividends declared by the Company after half-year end (to be paid out of retained profits at 31 December					2011):
	2012 interim dividend	18 April 2012	8.3 cents	8.3 cents		$27,979
11. Earnings per share
				31 Dec	2011	31 Dec 2010
				Cents		Cents
	Basic earnings per share				18.0	14.2
	Diluted earnings per share				17.9	14.2
	Weighted average number of shares used as the denominator
				31 Dec	2011	31 Dec 2010
				Number		Number
	Weighted average number of shares	used as the denominator	in calculating
	basic earnings per share			337,080,497		336,584,488
	Weighted average number of options and performance rights			848,289		388,918
	Weighted average number of shares	used as the denominator	in calculating
	diluted earnings per share			337,928,786		336,973,406
	Reconciliation of earnings used in calculating earnings per share
				31 Dec	2011	31 Dec 2010
				$’000		$’000
	Basic earnings per share
	Earnings used in calculating basic earnings per share			60,588		47,897
	Diluted earnings per share
	Earnings used in calculatingdiluted	earningsper share		60,588		47,897

24

SEEK Limited Notes to the financial statements 31 December 2011

12. Business combinations

Update on prior year acquisition of JobsDB

During the financial year ended 30 June 2011, SEEK Limited together with Consolidated Media Holdings Limited, Macquarie Capital and Tiger Global (together referred to as the “co-investors”) formed a new subsidiary, SEEK Asia Limited (SEEK Asia). SEEK Limited’s ownership interest in SEEK Asia is 68.96%, with the co-investors holding the remaining 31.04%.

SEEK Asia was established to acquire a controlling interest in JobsDB Inc (JobsDB). This transaction builds upon SEEK’s existing international footprint and increases its exposure to the high growth potential for online employment advertising in emerging regions.

Further details of the acquisition and purchase consideration are disclosed in the annual report for the year ended 30 June 2011.

Goodwill of $274,756,000 was recognised on acquisition. The final net asset valuation and allocation of the purchase price to acquired assets and fair values assigned to intangible assets are still preliminary and maybe subject to change. There have been no changes made to the amounts disclosed in the 30 June 2011 financial report. The final valuation will be completed by the end of this financial year.

Goodwill is not expected to be deductible for tax purposes.

Revenue and profit contribution

During the half-year ended 31 December 2011, JobsDB contributed revenues of $25,381,000 and net profit of $4,439,000 after non-controlling interests to the SEEK Group but before amortisation of purchased intangible assets.

Cash and cash equivalents

Cash and cash equivalents held by the Group as at 31 December 2011 total $92,111,000. Of this amount, $24,934,000 is held by JobsDB.

13. Net tangible asset backing

	31	Dec 2011	30 Jun 2011
		Cents	Cents
Net tangible asset backing per share (i)		-0.55	-8.68

• (i) At 31 December 2011 the Group had a net tangible asset deficiency of $1,838,000. The financial report has been prepared on a going concern basis as this deficiency is principally due to the $79,442,000 put option in place in which the Group’s controlled entity, SEEK Asia Limited, may be required to purchase the remaining 20% of JobsDB. Since the put option is exercisable at the discretion of the vendor from 23 June 2012, the liability has been classified as current in the SEEK Group balance sheet. In line with their relevant ownership interests (refer to note 12), the co-investors have contractually agreed to fund their share should the put option be exercised, which based on the capped amount of HK$640,000,000 at current exchange rates would total approximately $25,000,000. In accordance with Australian accounting standards the Group has not recognised a financial asset for this contribution.

If the contribution of $25,000,000 from the co-investors was included in this calculation, the net tangible asset backing per share would be positive 6.87 cents.

14. Events occurring after balance date

No matters or circumstances have arisen since 31 December 2011 that have affected, or may significantly affect:

• (i) the Group’s operations in future financial periods, or

• (ii) the results of those operations in future financial years, or

• (iii) the Group’s state of affairs in future financial years.

25

Directors’ Declaration

SEEK Limited

For the half-year ended 31 December 2011

In the directors’ opinion:

• a) The financial statements and notes set out on pages 11 to 25 are in accordance with the Corporations Act 2001 , including:

• i) Complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and

• ii) Giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and of its performance, as represented by the result of its operations, changes in equity and its cash flows for the half-year ended on that date.

• b) There are reasonable grounds to believe that SEEK Limited will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors.

Bob Watson

Chairman

Melbourne 22 February 2012

26

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Independent auditor’s review report to the members of SEEK Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of SEEK Limited, which comprises the balance sheet as at 31 December 2011, and the income statement, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, selected explanatory notes and the directors’ declaration for the SEEK Limited Group (the consolidated entity). The consolidated entity comprises both SEEK Limited (the company) and the entities it controlled during that half-year.

Directors’ responsibility for the half-year financial report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of SEEK Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

PricewaterhouseCoopers, ABN 52 780 433 757

27

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Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of SEEK Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

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PricewaterhouseCoopers

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John Yeoman Partner

Melbourne 22 February 2012

28