SEEK LIMITED — Interim / Quarterly Report 2017

Feb 20, 2017

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Appendix 4D and Interim Financial Report For the half-year ended 31 December 2016

Lodged with the ASX under Listing Rule 4.2A SEEK Limited ABN 46 080 075 314

SEEK Limited ABN 46 080 075 314 Half-year ended 31 December 2016

(Previous corresponding period: Half-year ended 31 December 2015)

Results for Announcement to the Market

		Percentage		Amount
		Change		$m
Total sales revenue	Up	1%	To	487.9
Total revenue from ordinaryactivities	Up	1%	To	495.6
Prof t for theperiod after tax	Down	69%	To	92.7
Netprof t for theperiod attributable to the owners of SEEK Limited	Down	69%	To	84.1
		Amount	Franked amount
Dividends/distributions		per security		per security
2016 interim dividend paid		21.0 cents		21.0 cents
2016 f nal dividend paid		19.0 cents		19.0 cents
2017 interim dividend (declared after balance date)		23.0 cents		23.0 cents
Record date for determining entitlements to the dividend				29 March 2017
Dividend payable				19 April 2017

Other information required by Listing Rule 4.2A

Other information requiring disclosure to comply with Listing Rule 4.2A is contained in the following pages.

CONTENTS

Basis of preparation

Directors’ Report		2
Auditor’s Independence Declaration		8
Financial Statements
Consolidated Income Statement		9
Consolidated Statement of Comprehensive Income		10
Consolidated Balance Sheet		11
Consolidated Statement of Changes in Equity		12
Consolidated Statement of Cash Flows		13
Notes to the Financial Statements
	Performance
Note 1	Segment information	14
Note 2	Revenue	17
Note 3	Other income	17
Note 4	Earnings per share	17
Note 5	Income tax	18
	Assets and liabilities
Note 6	Other f nancial assets	19
Note 7	Intangible assets	20
Note 8	Net tangible assets per share	21
Note 9	Net debt	22
Note 10	Other f nancial liabilities	23
Note 11	Fair value measurement of f nancial	24
	instruments
	Equity
Note 12	Share capital	24
Note 13	Equity	25
Note 14	Dividends	25
	Group structure
Note 15	Interests in equity accounted investments	26
	Unrecognised items
Note 16	Events occuring after the balance sheet	27
	date

SEEK Limited is a for-profi t entity for the purpose of preparing the interim fi nancial statements. This condensed interim report for the halfyear period:

• is for the consolidated entity consisting of SEEK Limited and its controlled entities;

• is presented in Australian dollars, with all values rounded to the nearest hundred thousand dollars, or in certain cases, the nearest dollar, in accordance with the Australian Securities and Investment Commision Corporations Instrument 2016/191;

• has been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001;

• does not include all the notes of the type normally included in an annual fi nancial report. Accordingly, this report should be read in conjunction with the annual report for the year ended 30 June 2016 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 .

Accounting policies adopted are consistent with those of the previous fi nancial year and corresponding interim reporting period, unless otherwise stated.

Directors’ Declaration 28 Independent Auditor’s Report 29 Corporate Directory 31

SEEK Limited Interim Financial Report 1

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 2016.

Directors

The following persons were directors of the Company during the half-year and up to the date of this report:

Neil G Chatfi eld Chairman, Non-executive director Andrew R Bassat Managing Director and Chief Executive Offi cer Colin B Carter Non-executive director Denise I Bradley Non-executive director Graham B Goldsmith Non-executive director Julie A Fahey Non-executive director

Review of operations

A summary of consolidated results is set out below:

	31 Dec	31 Dec
	2016	2015
	$m	$m
Sales revenue	487.9	482.0
Segment EBITDA(1) (2)	170.3	193.3
Depreciation and amortisation	(25.9)	(25.1)
Net interest	(5.2)	(13.8)
Share-based payments and other LTI	(3.7)	(10.4)
Share of results of equity accounted
investments	3.8	9.2
Other items	(7.8)	270.2
Income tax expense	(38.8)	(127.5)
Non-controllinginterests	(8.6)	(20.8)
Prof t attributable to owners of SEEK
Limited	84.1	275.1
Add back signif cant items	18.6	(181.7)
Prof t attributable to owners of SEEK Limited(before signif cant items)	102.7	93.4
Add back EarlyStage Ventures	10.9	9.0
Prof t attributable to owners of SEEK Limited (before signif cant items & Early
Stage Ventures)	113.6	102.4

1. Segment EBITDA is earnings before interest, tax, depreciation and amortisation and excludes share of results of equity accounted investments, share-based payment expense, gains/losses on investing activities, and other non-operating gains/losses. .

2. Segment EBITDA includes ($13.5m) of signifi cant items.

In the half-year ended 31 December 2016 (H1 FY2017), SEEK achieved reported revenue growth of 1% whilst EBITDA declined 12% compared to the period ended 31 December 2015 (H1 FY2016).

The key drivers for revenue and earnings performance across the Group were:

• ANZ Employment: Revenue growth of 13% and EBITDA growth of 10% driven by growth in job ad volume, yield, prominence and other products

• Zhaopin: Revenue growth of 11% (23% local currency) and EBITDA growth of 8% (20% local currency) primarily driven by strong growth in unique hirers;

• Translation of offshore results to AUD were unfavourably impacted by the appreciating AUD exchange rate; and

• Cessation of SEEK Learning Vocational Education and Training (VET) operations from November 2016.

Profi t attributable to the owners of SEEK Limited was $84.1m (31 December 2015: $275.1m). H1 FY2017 and H1 FY2016 were impacted by the following signifi cant items:

• H1 FY2017: One-off costs associated with the cessation of SEEK Learning VET operations of A$15.9m, net one-off tax items of $1.1m comprising of a Zhaopin withholding tax provision ($10.5m) offset by a tax benefi t arising from the sale of the investment in JCBNext Berhad (“JCBNext”) ($9.4m) and other costs associated with the potential privatisation of Zhaopin of A$1.6m.

• H1 FY2016: Gain on sale of SEEK’s interest in IDP Education Pty Ltd (IDP) of $181.7m post-tax and net of transaction costs.

As an indication of underlying operating results, excluding signifi cant items and if early stage ventures were also excluded (H1 FY2017: loss of $10.9m, H1 FY2016: loss of $9.0m), the profi t attributable to the owners of SEEK Limited would have increased from $102.4m in H1 FY2016 to $113.6m in H1 FY2017, reflecting an increase of $11.2m or 11%.

2 SEEK Limited Interim Financial Report

Review of operations continued

Australia & New Zealand (ANZ) Employment

31 Dec 2016 31 Dec 2015 $m $m	Growth
	$m %
Sales revenue 171.3 151.8 EBITDA 97.2 88.6 EBITDA margin(%) 57% 58%	19.5 13% 8.6 10%

The ANZ Employment segment includes SEEK Australia, SEEK New Zealand and SEEK Business.

ANZ Employment’s revenue growth of 13% was driven by ad volumes, price increases, ad mix shift, prominence products and Premium Talent Search. The strong revenue result validates the on-going reinvestment strategy. EBITDA grew by less than revenue due to continued reinvestment across product development, sales and marketing.

International

International comprises leading online employment marketplaces that are exposed to favourable structural and long term macro-economic trends.

long term macro-economic trends.
31 Dec 2016 31 Dec 2015 $m $m	Growth
	$m %
Sales revenue 308.5 298.0 Zhaopin 183.9 166.3 SEEK Asia 67.8 70.1 Brasil Online 42.6 46.5 OCC 14.2 15.1	10.5 4% 17.6 11% (2.3) (3%) (3.9) (8%) (0.9) (6%)
EBITDA 97.5 100.6 Zhaopin 41.8 38.6 SEEK Asia 37.8 38.4 Brasil Online 16.8 18.4 OCC 3.2 5.3 Other costs (2.1) (0.1)	(3.1) (3%) 3.2 8% (0.6) (2%) (1.6) (9%) (2.1) (40%) (2.0)
EBITDA margin (%) 32% 34% Zhaopin 23% 23% SEEK Asia 56% 55% Brasil Online 39% 40% OCC 23% 35%

The international division includes results from Zhaopin, SEEK Asia, Brasil Online, OCC and costs of managing the international division.

International’s fi nancial contribution is a large and growing part of the Group, comprising 63% of Group sales revenue and 57% of EBITDA in H1 FY2017.

Key operating highlights:

• Continuing to be the market leader with 34% of placements which is a lead of approximately nine times over the nearest competitor;

• Continuing to grow the depth and breadth of SEEK’s Profi le database, which now includes approximately 9m total profi les (31 December 2015: 7m), representing growth of 28% compared to the prior half-year period; and

• SEEK’s Premium Talent Solutions platform has approximately 660 clients (31 December 2015: 345 clients) representing growth of 91% compared to the prior half-year period.

Revenue growth of 4% and EBITDA reduction of 3% compared to H1 FY2016 were driven by:

• Zhaopin: Strong organic growth primarily driven by growth in unique hirers;

• SEEK Asia: Impacted by weak macro-economic conditions in the mature markets of Hong Kong, Malaysia and Singapore (65% of revenue);

• Brasil Online: Performed in line with expectations given the backdrop of very depressed macro-economic conditions;

• OCC: Achieved solid revenue results alongside strong reinvestment in product & technology; and

• Reported results were adversely impacted by the appreciation of AUD against key currencies. On a constant currency basis, SEEK International would have achieved revenue growth of 11% and EBITDA growth of 2%.

Key operating highlights:

Zhaopin:

• In local currency, Zhaopin delivered strong revenue growth of 23% and EBITDA growth of 20%, whilst continuing to grow market leadership and reinvesting in sales, marketing and product & technology; and

• Capturing a large scale of data via candidate and hirer relationships which is underpinning the launch of new innovative products & services.

SEEK Asia:

• On a constant currency basis revenue increased 1% and EBITDA increased 3%. Results were impacted by weak macro-economic conditions;

• Clear market leadership across placements and key hirer/ candidate metrics; and

• Accelerating the roll-out of new products to improve hirer effi ciency and grow candidate engagement.

SEEK Limited Interim Financial Report 3

Directors’ Report

International continued

Brasil Online:

• In local currency, revenue declined 15% and EBITDA declined 16% due to depressed economic conditions evidenced by 10 consecutive quarters of negative GDP growth;

• Against this backdrop, the business is balancing shortterm effi ciencies with reinvestment in readiness for an eventual economic recovery; and

OCC:

• In local currency, revenue growth was solid at 14% despite uncertainties from US elections. EBITDA declined by 27% due to aggressive investment in product and technology capabilities; and

• Focused on scaling up new products recently launched and growing SME & regional penetration.

• Brasil Online is a key leader in global product collaboration initiatives particularly in Artifi cial Intelligence and search and matching effi ciency.

Education

The Education segment includes SEEK Learning and the share of net results from OES (50%).

share of net results from OES (50%).
31 Dec 2016 31 Dec 2015 $m $m	Growth
	$m %
Sales revenue 2.6 30.6 EBITDA (before signif cant items) (1.0) 8.2 Signif cant items (13.5) -	(28.0) (92%)
EBITDA (after signif cant items) (14.5) 8.2 EBITDA margin (%) n/a 27%	(22.7) (277%)
Share of results of equity accounted investments(1) 7.8 13.3	(5.5) (41%)

• 1 Share of results of equity accounted investments for the half-year period 31 December 2015 included $8.1m share of profi ts in IDP.

SEEK Learning

• SEEK Learning ceased its VET operations during H1 FY2017 due to regulatory reforms;

• Financial results reflect 4 months of VET enrolments (up to early November 2016 when the business ceased operation) as well as one-off costs associated with the closure (EBITDA impact of $13.5m) and NPAT impact of $15.9m; and

• Focus is now on “starting up” a new education business (to be included in the Early Stage Ventures segment).

Online Education Services (OES)

• OES had another strong fi nancial result with revenue growth of 17%, EBITDA growth of 21% and SEEK share of NPAT of $7.8m; and

• This result was underpinned by solid growth in student numbers and the business operating at scale.

4 SEEK Limited Interim Financial Report

Early Stage Ventures

SEEK is investing in early stage businesses to drive the next wave of earnings growth.

• Early Stage - Employment comprises a portfolio of small investments that provide products and services which sit in or ‘adjacent’ to core online employment marketplaces.

• Early Stage - International comprises investments in early stage businesses in high growth markets including India and Africa.

• Early Stage - Education comprises early stage international education operations in Brazil and Malaysia and costs associated with driving SEEK’s international education expansion. This segment now includes the new Education business in Australia from 1 November 2016.

31 Dec 2016 31 Dec 2015 $m $m	Growth
	$m %
Sales revenue 5.5 1.6 EBITDA (9.9) (4.1)	3.9 244% (5.8) 141%
Share of results of equity accounted investments (4.2) (4.3)	0.1 (2%)

• Refer to note 1(b) of the fi nancial statements for a reconciliation between EBITDA and the loss for the period ($10.9m, H1 FY2016: $9.0m).

• Each business is focused on achieving key strategic milestones ahead of future growth in its fi nancial performance. As a result of this deliberate strategic focus, SEEK’s share of NPAT losses across all Early Stage Ventures was $10.9m in H1 FY2017 compared to $9.0m in H1 FY2016.

Key operational highlights:

• SEEK’s adjacent technology asset Jora is making a signifi cant contribution to the SEEK platform (e.g. search improvements, validation);

• SEEK has invested in a number of startups to expand its opportunity in the wider Human Capital Management industry including Ximble and Sidekicker;

• One Africa Media and Babajob are focused on building leading positions across marketplaces in Africa and India;

• Catho Education (in Brazil) was launched in June 2015 and now has 25 Education partners, leading to enrolment growth of approximately four times compared to the prior half-year period. JobStreet Education (Malaysia) was launched in May 2016 and now has 9 Education partners; and

• SEEK is incubating a new education business in Australia that will address a large unmet need for independent education and career insights. The expectation is that this business will be rolled out internationally over the medium to long-term.

Analysis of other key items below EBITDA

31 Dec 2016 31 Dec 2015 $m $m	Movement
	$m %
Depreciation (6.7) (6.7) Amortisation (19.2) (18.4) Impairment loss (7.6) - Gain on step acquisitions 1.7 - Gain on disposal of equity accounted investment - 279.7 Transaction costs (1.9) (13.5) Other f nancing activities - 4.0 Share-based payments and other LTI (3.7) (10.4) Net interest expense (5.2) (13.8)	- 0% (0.8) 4% (7.6) n/a 1.7 n/a (279.7) n/a 11.6 (86%) (4.0) n/a 6.7 (64%) 8.6 (62%)

Key highlights:

• Depreciation and amortisation have remained constant year on year with lower PPA amortisation (primarily from the JobStreet transaction) offset by current and prior period reinvestment in product and technology;

• Share-based payments expense was lower than the prior period due primarily to non-vesting of incentive instruments across SEEK International;

• Net interest expense has decreased due to proceeds from sale of IDP (during FY2016) and high cash generation; and

• A one-off impairment loss of $7.6m was incurred during the period associated with the cessation of the SEEK Learning VET business.

SEEK Limited Interim Financial Report 5

Directors’ Report

Financial position

Financial position
	31 Dec	30 Jun
	2016	2016
	$m	$m
Cash and cash equivalents	526.1	504.9
Other current assets	215.4	232.1
Intangible assets	2,387.4	2,388.3
Equity-accounted investments	85.1	81.0
Other non-current assets	83.7	72.1
Total assets	3,297.7	3,278.4
Current borrowings	48.6	71.1
Non-current borrowings	841.6	751.6
Unearned income	229.4	226.5
Creditors and provisions	344.7	404.6
Shareholders equity	1,833.4	1,824.6
Total liabilities and equity	3,297.7	3,278.4

At 31 December 2016, SEEK had:

• total assets of $3,297.7m of which 72% related to long-life intangible assets (goodwill, brands and licences) arising from business combinations, with the remainder relating primarily to cash, equity accounted investments, and trade receivables; and

• total liabilities of $1,464.3m of which 61% related to borrowings, with the remainder relating to unearned income, tax, and trade and other payables.

At 31 December 2016, the Group’s current assets exceeded its current liabilities by $265.9m.

Key balance sheet movements

Other current assets: decreased by $16.7m primarily due to reclassifi cation of Zhaopin funds on deposit to noncurrent resulting from the roll over of loans to which these funds relate.

Borrowings : increased by $67.5m to $890.2m primarily due to drawdowns on the syndicated facility in SEEK Ltd.

Creditors and provisions: decreased by $59.9m to $344.7m largely due to payment of the tax liability on the gain resulting from the sale of IDP.

Net debt

Net debt at 31 December 2016 was $234.1m ($230.5m net of capitalised borrowing costs) and is further discussed in

SEEK’s borrowings now comprise a combination of facilities across SEEK Limited, Zhaopin Limited and SEEKAsia Limited:

• SEEK Limited has an unsecured syndicated facility comprising two tranches of A$518.0m and US$273.0m respectively;

• Zhaopin Limited has entrusted loan facilities with a limit of US$30.0m; and

• SEEKAsia Limited has a syndicated multi-currency debt facility, comprising SG$120m and HK$438m.

At 31 December 2016, $893.8m of the total available facilities were drawn down, with $237.5m available in undrawn capacity.

Cash flow

The table below summarises cash flow movements for the half-year period, before foreign exchange movements.

	31 Dec	31 Dec
	2016	2015
	$m	$m
Cash generated from operations	198.1	203.0
Transaction costs	(0.8)	(13.5)
Finance costs and taxespaid	(127.3)	(43.0)
Net cash from operatingactivities	70.0	146.5
Disposal of equity accounted investment	-	331.6
Acquisition of subsidiaries (net of acquired
cash)	(15.7)	-
Dividends received	6.0	29.0
Capital expenditure (intangible assets and
plant and equipment)	(35.1)	(28.0)
Acquisition of interests in associates	(5.6)	(12.5)
Proceeds from disposal of f nancial asset	10.2	-
Net cash from/(to)investingactivities	(40.2)	320.1
Net change in borrowings	56.2	(301.1)
Dividends paid to shareholders of SEEK
Limited	(66.1)	(58.6)
Dividends paid to non-controlling interests	-	(9.2)
Other f nancingactivities	7.7	(47.3)
Net cash from/(to)f nancingactivities	(2.2)	(416.2)
Net increase in cash and cash equivalents 27.6		50.4

Cash generated from operations decreased 2.4% to $198.1m and represented an EBITDA conversion ratio of 116%.

Key cash flow movements

Net cash from operating activities : inflow of $70.0m which has decreased 52.5%, primarily due to tax paid in relation to the disposal of IDP.

Net cash used in investing activities : outflow of $40.2m primarily due to intangibles additions of $27.6m.

Net cash from fi nancing activities: outflow of $2.2m is mainly due to net proceeds from borrowings of $56.2m, as well as dividends paid of $66.1m.

6 SEEK Limited Interim Financial Report

Signifi cant changes in the state of affairs

SEEK Learning cessation of VET operations

Recent regulatory reforms have resulted in SEEK Learning ceasing operations in VET. As a result, SEEK announced its intention to create a new education business to address a signifi cant need in the marketplace. SEEK had already committed to this new business ahead of the regulatory changes.The new business has a new value proposition and will offer two main services: online “adviser” for education courses and phone-based career advisory services.

Events occuring after the balance sheet date

Zhaopin Limited

SEEK has formed a consortium with leading private equity fi rms Hillhouse Capital Group and FountainVest Partners (“consortium”), for the purpose of a potential privatisation of Zhaopin Limited. The consortium is in advanced discussions with a Special Committee of the Board of Zhaopin Limited in relation to the potential transaction for a purchase price of US$18 per American Depositary Share (ADS).

The consortium intends to fund part of the consideration for the potential transaction through available cash in Zhaopin, which may be in the form of a cash dividend from Zhaopin to holders of shares (with a corresponding reduction in the per ADS purchase price).If the proposed transaction is completed, it is expected that SEEK will retain a similar controlling equity interest in the privatised company. SEEK will update the market as appropriate.

Given Zhaopin’s continued strong business performance and net cash position, as well as progress in privatisation discussions as described above, a withholding tax expense of $17.1m ($10.5m after non-controlling interests) has been recognised during the period in relation to undistributed earnings within Zhaopin’s main operating subsidiary in China.

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 8.

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

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Chairman

Melbourne 21 February 2017

SEEK Limited Interim Financial Report 7

Auditor’s Independence Declaration

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Auditor’s Independence Declaration

As lead auditor for the review of SEEK Limited for the half-year ended 31 December 2016, 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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Chris Dodd Partner PricewaterhouseCoopers

Melbourne 21 February 2017

2 Riverside Quay, 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

8 SEEK Limited Interim Financial Report

Consolidated income statement for the half-year ended 31 December 2016

		31 Dec 2016	31 Dec 2015
	Notes	$m	$m
Revenue	2	495.6	488.7
Other income	3	1.7	279.7
Operating expenses
Direct cost of services		(24.3)	(18.9)
Sales and marketing		(166.5)	(161.2)
Business development		(49.3)	(41.4)
Operations and administration		(108.8)	(107.1)
Finance costs		(13.1)	(25.6)
Total operatingexpenses		(362.0)	(354.2)
Impairment loss	7(a)	(7.6)	-
Share of results of equityaccounted investments	15(b)	3.8	9.2
Prof t before income tax expense		131.5	423.4
Income tax expense	5	(38.8)	(127.5)
Prof t for the half-year		92.7	295.9
Prof t is attributable to:
Owners of SEEK Limited		84.1	275.1
Non-controllinginterests		8.6	20.8
		92.7	295.9
Earningsper share attributable to the owners of SEEK Limited:		Cents	Cents
Basic earnings per share	4	24.2	79.9
Diluted earningsper share	4	23.8	78.7

The above consolidated income statement should be read in conjunction with the accompanying notes.

SEEK Limited Interim Financial Report 9

Consolidated statement of comprehensive income for the half-year ended 31 December 2016

		31 Dec 2016	31 Dec 2015
	Notes	$m	$m
Prof t for the half-year		92.7	295.9
Other comprehensive income
Items that may be reclassif ed subsequently to prof t or loss:
Exchange differences on translation of foreign operations
Exchange differences on translation of foreign controlled entities		(27.9)	(52.2)
Exchange differences on translation of foreign associates		3.5	(3.9)
Net investment hedge of foreign controlled entities	13(b)	(12.9)	(23.3)
Income tax recognised in other comprehensive income		(0.4)	(4.3)
Reserves recycled on disposal of equity accounted investment		-	1.0
Cash flow hedges
Gains/(losses) on hedge contracts of controlled entities		6.9	(3.1)
Losses on hedge contracts of associates (net of tax)		-	(0.5)
Reserves recycled on disposal of equity accounted investment		-	(1.0)
Income tax recognised in other comprehensive income		(1.9)	2.6
Items that will never be reclassif ed to prof t or loss:
Investment in equity instruments
Change in fair value of f nancial assets	6	(5.8)	(1.5)
Tax associated with sale of f nancial asset		1.3	-
Other comprehensive income for the half-year		(37.2)	(86.2)
Total comprehensive income for the half-year for SEEK Limited		55.5	209.7
Total comprehensive income for the half-year attributable to:
Owners of SEEK Limited		52.0	214.5
Non-controllinginterests		3.5	(4.8)
		55.5	209.7

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

10 SEEK Limited Interim Financial Report

Consolidated balance sheet as at 31 December 2016

		31 Dec 2016	30 Jun 2016
	Notes	$m	$m
Current assets
Cash and cash equivalents	9	526.1	504.9
Trade and other receivables		99.9	98.5
Other current f nancial assets	6	115.5	133.6
Total current assets		741.5	737.0
Non-current assets
Investments accounted for using the equity method	15(b)	85.1	81.0
Plant and equipment		28.0	28.1
Intangible assets	7	2,387.4	2,388.3
Other non-current f nancial assets	6	30.2	19.2
Deferred tax assets		25.5	24.8
Total non-current assets		2,556.2	2,541.4
Total assets		3,297.7	3,278.4
Current liabilities
Trade and other payables		127.4	118.3
Current borrowings	9(b)	48.6	71.1
Unearned income		229.4	226.5
Other f nancial liabilities	10	23.2	15.8
Current tax liabilities		16.9	113.8
Currentprovisions		30.1	29.5
Total current liabilities		475.6	575.0
Non-current liabilities
Non-current borrowings	9(b)	841.6	751.6
Deferred tax liabilities		118.6	100.5
Non-currentprovisions		28.5	26.7
Total non-current liabilities		988.7	878.8
Total liabilities		1,464.3	1,453.8
Net assets		1,833.4	1,824.6
Equity
Share capital	12	240.7	222.9
Foreign currency translation reserve		120.8	140.5
Hedging reserve	13(b)	(107.3)	(99.4)
Other reserves	13(a)	46.5	66.3
Retained prof ts		1,045.4	1,024.9
Non-controllinginterests		487.3	469.4
Total equity		1,833.4	1,824.6

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

SEEK Limited Interim Financial Report 11

Consolidated statement of changes in equity for the half-year ended 31 December 2016

Notes	Attributable to equity holders of the parent	Non- controlling interests Total equity
	Share capital Foreign currency translation reserve Hedging reserve Other reserves Retained prof ts Total $m $m $m $m $m $m
		$m $m
Balance at 1 July 2015 Prof t for the half-year Exchange differences on translation of foreign operations Losses on hedge contracts Change in fair value of f nancial assets Income tax recognised in other comprehensive income Reserves recycled on disposal of equityaccounted investment	222.9 210.3 (75.5) (19.9) 796.5 1,134.3 666.6 1,800.9 - - - - 275.1 275.1 20.8 295.9 - (30.5) - - - (30.5) (25.6) (56.1) - - (26.9) - - (26.9) - (26.9) - - - (1.5) - (1.5) - (1.5) - (4.3) 2.6 - - (1.7) - (1.7) - 1.0 (1.0) - - - - -
Total comprehensive income for the half-year	- (33.8) (25.3) (1.5) 275.1 214.5 (4.8) 209.7
Transactions with owners: Dividends provided for or paid 14 Employee share options scheme Tax associated with employee share schemes Exercise of share options in subsidiary Share of reserve movement of associates 15(b)	- - - - (58.6) (58.6) (9.2) (67.8) - - - 7.5 - 7.5 0.8 8.3 - - - 1.7 (0.2) 1.5 - 1.5 - (2.3) - (0.5) 0.1 (2.7) 7.8 5.1 - - - 0.3 - 0.3 - 0.3
Balance at 31 December 2015	222.9 174.2 (100.8) (12.4) 1,012.9 1,296.8 661.2 1,958.0
Balance at 1 July 2016 Prof t for the half-year Exchange differences on translation of foreign operations Losses on hedge contracts Change in fair value of f nancial assets 6(iv) Tax associated with sale of f nancial asset Income tax recognised in other comprehensive income	222.9 140.5 (99.4) 66.3 1,024.9 1,355.2 469.4 1,824.6 - - - - 84.1 84.1 8.6 92.7 - (19.3) - - - (19.3) (5.1) (24.4) - - (6.0) - - (6.0) - (6.0) - - - (5.8) - (5.8) - (5.8) - - - - 1.3 1.3 - 1.3 - (0.4) (1.9) - - (2.3) - (2.3)
Total comprehensive income for the half-year	- (19.7) (7.9) (5.8) 85.4 52.0 3.5 55.5
Transactions with owners: Contributions of equity, net of transaction costs and tax 12 Dividends provided for or paid 14 Employee share options scheme Tax associated with employee share schemes Exercise of share options in subsidiary Share of reserve movement of associates 15(b) Put option to acquire additional interest in subsidiary 13(a) Non-controlling interest at fair value arising on acqusition Transfer between reserves	17.8 - - - - 17.8 - 17.8 - - - - (66.1) (66.1) - (66.1) - - - 6.4 - 6.4 0.4 6.8 - - - (4.7) 4.5 (0.2) - (0.2) - - - (1.0) - (1.0) 2.5 1.5 - - - 0.3 - 0.3 - 0.3 - - - (18.3) - (18.3) - (18.3) - - - - - - 11.5 11.5 - - - 3.3 (3.3) - - -
Balance at 31 December 2016	240.7 120.8 (107.3) 46.5 1,045.4 1,346.1 487.3 1,833.4

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

12 SEEK Limited Interim Financial Report

Consolidated statement of cash flows for the half-year ended 31 December 2016

		31 Dec 2016	31 Dec 2015
	Notes	$m	$m
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)		533.5	535.0
Payments to suppliers and employees(inclusive ofgoods and services tax)		(335.4)	(332.0)
		198.1	203.0
Interest received		7.6	6.0
Interest paid		(13.7)	(16.8)
Transaction costs		(0.8)	(13.5)
Income taxespaid		(121.2)	(32.2)
Net cash inflow from operatingactivities		70.0	146.5
Cash flows from investing activities
Proceeds from disposal of equity accounted investment		-	331.6
Proceeds from disposal of f nancial asset	6(iv)	10.2	-
Payments for acquisition of subsidiary, net of cash acquired		(15.7)	-
Dividends and distributions received from equity accounted investments	15(b)	6.0	28.9
Dividends received from f nancial assets		-	0.1
Payment for additional interest in equity accounted investments	15(b)	(5.6)	(7.7)
Payment for investment in equity accounted investments		-	(4.8)
Payments for intangible assets		(27.6)	(19.2)
Payments forplant and equipment		(7.5)	(8.8)
Net cash(outflow)/inflow from investingactivities		(40.2)	320.1
Cash flows from f nancing activities
Proceeds from borrowings		130.0	30.0
Repayment of borrowings		(73.8)	(331.1)
Transaction costs on establishment of debt facilities		(1.1)	(1.6)
Cash released from deposits to support entrusted loan facilities		-	19.2
Cash placed on deposit in short term investment		(68.9)	(80.7)
Cash released from short term investments		67.4	-
Proceeds from share options	12	17.8	-
Proceeds from share options in subsidiaries		1.7	7.0
Dividends paid to members of the parent	14	(66.1)	(58.6)
Dividends paid to non-controlling interests		-	(9.2)
(Payments)/proceeds for other f nancingarrangements		(9.2)	8.8
Net cash(outflow)from f nancingactivities		(2.2)	(416.2)
Net increase in cash and cash equivalents		27.6	50.4
Cash and cash equivalents at the beginning of the half-year		504.9	449.6
Effect of exchange rate changes on cash and cash equivalents		(6.4)	(0.4)
Cash and cash equivalents at the end of the half-year		526.1	499.6

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

SEEK Limited Interim Financial Report 13

Notes to the Financial Statements for the half-year ended 31 December 2016

1. Segment information

(a) Description of segments

A change was made to SEEK’s operating segments for FY2016 as described in the FY2016 Annual Report. This was to align with Executive responsibilities and analysis of results as provided to the Chief Operating Decision Maker (CODM).

The operating segments are as described below. Comparative information for HY2016 has been restated.

		SEEK Group	SEEK Group
		International
		ANZ Employment Zhaopin Brasil Online			Education			Early Stage Ventures
		SEEK Asia	OCC
							Early Stage
							Employment
							Early Stage
							International
							Early Stage
								Education
					Primary source		of
Operating segment		Nature of operations			revenue			Geographical location
ANZ Employment		Online employment marketplace services			Job and banner			Australia and New
					advertising			Zealand
Zhaopin		Online employment marketplace services			Job and banner			People’s Republic of
					advertising			China
SEEK Asia		Online employment marketplace services			Job and banner			Seven countries across
					advertising			South East		Asia
Brasil Online		Online employment marketplace services			CV online			Brazil
OCC		Online employment marketplace services			Job and banner			Mexico
					advertising
Education		Marketing, sale and distribution of education courses 1 November 2016)and share ofprof ts from OES		(until Commission				Australia and New Zealand
Early Stage Ventures		A portfolio of Australian and international	investments		Various			Various
		that either sit adjacent to the core online employment and
		education marketplaces or provide similar products or
		services in newgeographical regions

As a result of recent regulatory changes to the VET sector, SEEK Learning has ceased the majority of its existing operations and has adopted a new business model that shifts from being a broker of limited education partners to a marketplace of comprehensive education options. This model includes: an education directory, career advisory services and the continuation of enrolment in higher education and short courses. This new education business which commenced operating on 1 November 2016 and comprises online and phone-based career advisory services now forms part of Early Stage Ventures.

14 SEEK Limited Interim Financial Report

ANZ Employment International Education Early Stage Ventures Total Zhaopin SEEK Asia Brasil Online OCC Int'l Other Total Half-year ended 31 Dec 2016 Notes $m $m $m $m $m $m $m $m $m $m	487.9	170.3 (6.7) (19.2) (7.6) (5.2) (3.7) 3.8 1.7 (1.9)	131.5	(38.8)	92.7	(8.6)	84.1	. 1. Segment EBITDA is earnings before interest, tax, depreciation and amortisation and excludes share of results of equity accounted investments, share-based payment expense, gains/losses on investing activities, and other non-operating gains/losses.
	5.5	(9.9) (0.4) (1.7) - (0.1) 0.1 (4.2) 1.7 -	(14.5)	3.2	(11.3)	0.4	(10.9)
	2.6	(14.5) - (0.5) (7.6) - (0.1) 7.8 - -	(14.9)	6.0	(8.9)	-	(8.9)
	308.5	97.5 (4.9) (7.7) - 4.0 0.8 0.2 - (1.9)	88.0	(27.7)	60.3	(9.0)	51.3
	Sales revenue 2 171.3 183.9 67.8 42.6 14.2 -	41.8 37.8 16.8 3.2 (2.1) (2.5) (1.2) (0.7) (0.5) - (1.9) (3.8) (1.2) (0.7) (0.1) - - - - - 3.9 (2.7) 2.1 0.3 0.4 (0.6) (0.6) 3.1 (0.2) (0.9) - - - - 0.2 - - - - - (1.9) - - - -	38.8 29.5 20.1 2.1 (2.5)	(23.9) (8.5) (4.8) (0.6) 10.1	14.9 21.0 15.3 1.5 7.6	(6.1) (2.9) - - -	8.8 18.1 15.3 1.5 7.6
		97.2 (1.4) (9.3) - (9.1) (4.5) - - -	72.9	(20.3)	52.6	-	52.6
		Segment EBITDA(1) Depreciation Amortisation 7 Impairment loss 7(a) Net interest (expense)/income Share-based payments and other LTI Share of results of equity accounted investments 15(b) Gain on step acquisition 3 Transaction costs from investing activities	Prof t before income tax expense	Income tax expense 5	Prof t for the half-year	Non-controlling interest	Prof t attributable to owners of SEEK Limited

SEEK Limited Interim Financial Report 15

Notes to the Financial Statements for the half-year ended 31 December 2016

ANZ Employment International Education Early Stage Ventures Total Zhaopin SEEK Asia Brasil Online OCC Int'l Other Total Half-year ended 31 Dec 2015 (restated) Notes $m $m $m $m $m $m $m $m $m $m	Sales revenue 2 151.8 166.3 70.1 46.5 15.1 - 298.0 30.6 1.6 482.0	Segment EBITDA(1) 88.6 38.6 38.4 18.4 5.3 (0.1) 100.6 8.2 (4.1) 193.3 Depreciation (1.4) (2.7) (1.3) (0.6) (0.3) - (4.9) (0.4) - (6.7) Amortisation 7 (8.0) (1.9) (4.8) (0.7) (1.0) - (8.4) (0.5) (1.5) (18.4) Net interest (expense)/income (14.5) 2.9 (3.4) 1.6 0.2 (0.6) 0.7 - - (13.8) Share-based payments and other LTI (4.3) (1.6) (0.9) (0.4) (1.2) (1.2) (5.3) - (0.8) (10.4) Share of results of equity accounted investments 15(b) - - - - - 0.2 0.2 13.3 (4.3) 9.2 Gain on disposal of equity accounted investment 3 - - - - - - - 279.7 - 279.7 Transaction costs from investing activities - - - - - - - (13.5) - (13.5) Other f nancing activities/borrowing costs written off 8.8 - (4.9) - - - (4.9) - - 3.9 Dividend income 2 - - - - - 0.1 0.1 - - 0.1	Prof t before income tax expense 69.2 35.3 23.1 18.3 3.0 (1.6) 78.1 286.8 (10.7) 423.4	Income tax expense 5 (19.8) (6.7) (6.3) (3.5) (1.3) 0.4 (17.4) (92.0) 1.7 (127.5)	Prof t for the half-year 49.4 28.6 16.8 14.8 1.7 (1.2) 60.7 194.8 (9.0) 295.9	Non-controlling interest - (10.6) (3.1) (7.3) 0.2 - (20.8) - - (20.8)	Prof t attributable to owners of SEEK Limited 49.4 18.0 13.7 7.5 1.9 (1.2) 39.9 194.8 (9.0) 275.1

16 SEEK Limited Interim Financial Report

2. Revenue

2. Revenue
	31 Dec 2016	31 Dec 2015
	$m	$m
Sales revenue	487.9	482.0
Dividend income	-	0.1
Interest income	7.7	6.6
Total revenue	495.6	488.7

3. Other income

3. Other income
	31 Dec 2016	31 Dec 2015
	$m	$m
Fair value gain on step acquisition	1.7	-
Gain on disposal of equityaccounted investment(1)	-	279.7
Total other income	1.7	279.7

1. 31 December 2015 gain on disposal of equity accounted investment relates to the disposal of SEEK’s interest in IDP.

4. Earnings per share

(a) Reconciliation of earnings used in calculating earnings per share (EPS)

	31 Dec 2016	31 Dec 2015
	$m	$m
Prof t attributable to owners of SEEK Limited (for basic EPS)	84.1	275.1
Potential dilutive adjustment for subsidiaryoptionplans	(0.9)	(1.9)
Adjustedprof t attributable to owners of SEEK Limited(for diluted EPS)	83.2	273.2

(b) Weighted average number of shares used as the denominator

(b) Weighted average number of shares used as the denominator
	31 Dec 2016	31 Dec 2015
	number	number
Weighted average number of shares used as denominator in calculating basic EPS	347,104,252	344,405,914
Weighted average of potential dilutive ordinary shares:
- LTI options	1,436,196	1,947,445
- LTI rights	757,685	229,908
-performance rights	445,855	440,246
Weighted average number of shares used as the denominator in calculatingdiluted EPS	349,743,988	347,023,513

The weighted average of potential dilutive ordinary shares excludes 790,095 LTI options (31 Dec 2015: 1,130,430) which have an exercise price that is higher than the average share price for the period. If these LTI Options were to be exercised the Company could hypothetically use the proceeds to buy back more shares than it issues, resulting in a net positive impact to shareholders.

SEEK Limited Interim Financial Report 17

Notes to the Financial Statements for the half-year ended 31 December 2016

5. Income tax

Numerical reconciliation of income tax expense to prima facie tax payable

Explanation of key items

31 Dec 2016 31 Dec 2015 $m $m Prof t before income tax expense 131.5 423.4 Income tax calculated @ 30% (2015: 30%) 39.5 127.0 Tax effect of amounts that are not deductible/(taxable) in calculating income tax: Net taxable gain on disposal of equity accounted investment (a) - 4.6 Taxable unfranked dividend (b) - 5.4 Financing, transaction and legal costs (c) 8.9 3.0 Post tax associate earnings (d) (1.1) (2.8) Research and development claim (e) (3.5) (3.2) Overseas tax rate differential (f) (6.1) (6.6) Over provision in prior year (0.8) - Other 1.9 0.1 Income tax expense in the consolidated income statement 38.8 127.5		Explanation of key items a. The difference between the accounting and tax gain on SEEK’s disposal of its interest in IDP. b. The unfranked portion of dividends received from IDP during the period is taxable to SEEK. c. This includes the Zhaopin withholding tax provision of $17.1m offset by a tax benef t of $9.4m arising from the sale of the investment in JCBNext. d. SEEK’s share of associates’ prof t is taken up net of associates’ tax expense. e. Research and development incentives utilised throughout the SEEK Group. f. SEEK Group’s international prof ts are taxed at local statutory or preferential rates varying from the Australian statutory tax rate (as shown below). Local statutory tax rates Country (Business) H1 FY2017 H1 FY2016
		Australia (SEEK Australia) 30.0% 30.0% New Zealand (SEEK NZ) 28.0% 28.0% China (Zhaopin excluding Beijing Wangpin) 25.0% 25.0% China (Beijing Wangpin) 15.0% 15.0% South East Asia (SEEK Asia) 16.5%-30.0% 16.5%-30.0% Brazil (Brasil Online) 34.0% 34.0% Mexico(OCC) 30.0% 30.0%

18 SEEK Limited Interim Financial Report

6. Other f nancial assets
Notes	Current	Non-current
	31 Dec 2016 30 Jun 2016 $m $m	31 Dec 2016 30 Jun 2016 $m $m
Hedge assets (i) 11 Short-term investments (ii) Funds on deposit for entrusted loan facilities (iii) Non-current prepayments Investments in equityinstruments(iv)	8.8 1.1 89.9 88.9 16.8 43.6 - - - -	- - - - 26.9 - 1.0 0.9 2.3 18.3
Total other f nancial assets	115.5 133.6	30.2 19.2

(i) Hedge assets

The Group has taken out forward contracts, options and swaps to protect against exchange rate and interest rate risk.

(ii) Short-term investments

Short term investments comprise cash in fi xed interest term deposits and money market funds in China with maturities ranging from 11 days to 8 months.

(iii) Funds on deposit for entrusted loan facilities

Zhaopin entrusted loan facilities are supported by funds on deposit of RMB 218m (A$43.7m).

(iv) Investment in equity instruments

At 30 June 2016 this balance comprised an investment in JCBNext Berhad (“JCBNext” formerly Jobstreet Corporation Berhad) and other small investments. SEEK disposed of the investment in JCBNext during the half-year.

SEEK elected at initial recognition to record gains and losses on the investment in JCBNext in other comprehensive income. The loss on disposal of the investment of $3.9m was transferred directly from the fi nancial asset revaluation reserve to retained earnings, in accordance with this accounting policy .

retained earnings, in accordance with this accounting policy .
	31 Dec 2016	30 Jun 2016
Shares in JCB	$m	$m
Fair value as at 1 July	16.0	19.0
Change in fair value	(5.8)	(3.0)
Disposal	(10.2)	-
Fair value as at 31 December	-	16.0

SEEK Limited Interim Financial Report 19

Notes to the Financial Statements for the half-year ended 31 December 2016

7. Intangible assets

7. Intangible assets
					Computer
					software
			Brands and	Customer	and website	Work in
		Goodwill	licences	relationships	development	progress	Total
	Notes	$m	$m	$m	$m	$m	$m
2015
Cost
Opening balance at 1 July 2015		1,945.2	372.7	66.5	121.9	5.0	2,511.3
Additions		-	-	-	1.6	19.8	21.4
Exchange differences		(39.9)	(9.6)	0.6	(0.2)	(0.2)	(49.3)
Transfers		-	0.1	-	15.8	(15.9)	-
Closingbalance at 31 December 2015		1,905.3	363.2	67.1	139.1	8.7	2,483.4
Amortisation
Opening balance at 1 July 2015		-	-	(49.8)	(53.8)	-	(103.6)
Amortisation charge(1)		-	(0.2)	(5.3)	(12.9)	-	(18.4)
Exchange differences		-	-	(0.9)	(0.2)	-	(1.1)
Closingbalance at 31 December 2015		-	(0.2)	(56.0)	(66.9)	-	(123.1)
Carryingvalue at 31 December 2015		1,905.3	363.0	11.1	72.2	8.7	2,360.3
2016
Cost
Opening balance at 1 July 2016		1,931.2	366.4	65.9	163.9	3.6	2,531.0
Additions		-	0.9	-	2.5	24.4	27.8
Exchange differences		(25.2)	(4.7)	(1.8)	(0.4)	0.3	(31.8)
Impairment loss	a(i)	(3.7)	-	-	(6.4)	(0.9)	(11.0)
Acquisition of subsidiaries		16.5	5.0	0.7	5.9	-	28.1
Transfers		-	-	-	17.2	(17.2)	-
Closingbalance at 31 December 2016		1,918.8	367.6	64.8	182.7	10.2	2,544.1
Amortisation
Opening balance at 1 July 2016		-	(1.0)	(59.8)	(81.9)	-	(142.7)
Amortisation charge(1)		-	-	(3.8)	(15.4)	-	(19.2)
Impairment loss	a(i)	-	-	-	3.7	-	3.7
Exchange differences		-	-	0.7	0.8	-	1.5
Closingbalance at 31 December 2016		-	(1.0)	(62.9)	(92.8)	-	(156.7)
Carryingvalue at 31 December 2016		1,918.8	366.6	1.9	89.9	10.2	2,387.4

1. Amortisation charges have been included within 'operations and administration' expenses in the consolidated income statement.

(a) Impairment

In accordance with the Group’s accounting policies and procedures, the Group assesses whether there is an indicator that goodwill and other intangible assets have suffered any impairment at each reporting date.

(i) SEEK Learning

In October 2016, the Australian Federal Government proposed a series of legislative changes to the VET FEE HELP program, the most signifi cant of which was the ban on approved providers from using brokers to place students into VET FEE HELP funded courses after 31 December 2016. These legislative changes which were passed by the Senate in December 2016, signifi cantly impacting the future earnings and cash flows of the Group’s existing SEEK Learning business. As a result, during the half-year, the Group determined that the carrying amount of the SEEK Learning CGU could no longer be supported by its recoverable amount, resulting in an impairment loss of $7.6m:

	31 Dec 2016
Asset class	$m
Goodwill Software Other intangibles	3.7 2.7 0.9
Impairment loss - intangibles	7.3
Impairment loss - other assets	0.3
Total impairment loss	7.6

20 SEEK Limited Interim Financial Report

7. Intangible assets continued

(a) Impairment continued

(ii) Brasil Online

As part of management’s impairment review for the period ended 31 December 2016, the carrying value of the goodwill and other indefi nite life intangible assets in Brasil Online was compared with a fair value less costs of disposal (FVLCD) discounted cash flow (DCF) model. The value indicated by the FVLCD DCF model exceeded the carrying value of the CGU by $10m at 31 December 2016. As such, no impairment charge has been recognised.

Key assumptions to which the valuation outcome of the FVLCD DCF model is most sensitive relate to the underlying dynamics of the current Brazilian economic situation which impacts the DCF valuation in 2 main ways:

1. The timing of the recovery of the Brazilian economy, which has a signifi cant impact on Brasil Online’s revenue growth profi le; and

2. The current macro-economic environment (specifi cally key inputs such as market risk premium, inflation/interest rates) which have an impact on the discount rate.

For the purposes of the DCF modelling exercise, management has assumed the following:

1. Revenue growth profi le: Based on recent reports issued by a number of independent investment banks, the economy is expected to return to positive GDP growth in calendar year 2017. Management has adopted a more cautious assumption with the economy with Brasil Online’s revenue returning to positive growth in fi nancial year 2018;

2. Discount rate: A pre-tax discount rate of 24.3%.

Management consider a reasonably possible change in each of these assumptions to be as follows:

1. Revenue growth profi le: Brazil’s economic recovery is delayed by an additional year, and therefore Brasil Online does not return to positive revenue growth until FY2019;

2. Discount rate: An increase of 1% in the pre-tax discount rate to 25.3%.

Should either of these possible changes occur, the valuation indicated by the FVLCD DCF model would be approximately equal to the carrying value of the CGU.

Management note that the carrying value of the investment in BOL reflects the purchase price at the time SEEK moved to control in May 2012, at which point the intangible assets were recognised on a 100% basis in the Group balance sheet. SEEK acquired the remaining 49% of BOL in June 2016 at a discount to the FVLCD DCF model noted above. This lower valuation reflects specifi c circumstances of the recent transaction, including a non-controlling interest adjustment, and accordingly management has not made any adjustments to the current carrying values.

8. Net tangible assets per share

8. Net tangible assets per share
	31 Dec 2016	30 Jun 2016
	cents per	cents per
	share	share
Net tangible assetsper share	(159.82)	(163.83)
Net assetsper share	528.83	530.18

A large proportion of the Group’s assets are intangible in nature, including goodwill and identifi able intangible assets relating to businesses acquired. These assets are excluded from the calculation of net tangible assets per share, which results in the negative outcome.

SEEK Limited Interim Financial Report 21

Notes to the Financial Statements for the half-year ended 31 December 2016

9. Net debt

9. Net debt
	31 Dec 2016	30 Jun 2016
	Facility limit Borrowings Cash Net cash/ (debt) $m $m $m	Facility limit Borrowings Cash Net debt/ (cash) $m $m $m
SEEK Limited SEEK Limited	A$518m (298.0) US$273m (378.5)	A$518m (218.0) US$273m (366.4)
SEEK Australia	(676.5) 23.3 (653.2)	(584.4) 40.2 (544.2)
SEEK Asia SEEK Asia	HK$438m (72.7) SG$120m (108.6)	HK$480.7m (80.6) SG$130.8m (127.1)
SEEK Asia Zhaopin(1) Brasil Online OCC Int'l Other	(181.3) 76.3 (105.0)	(207.7) 81.0 (126.7) US$30m (34.8) 462.7 427.9 - 31.3 31.3 - 21.2 21.2 - 1.0 1.0
	US$30m (36.0) 511.9 475.9
	- - 41.0 41.0
	- - 6.0 6.0
	- - 1.2 1.2
SEEK International	(217.3) 636.4 419.1	(242.5) 597.2 354.7
Total	A$1,131.3m (893.8) 659.7 (234.1)	A$1,138.0m (826.9) 637.4 (189.5)
Add/(less): Unamortised borrowing costs Funds on deposit(1) Short-term investments(1)	3.6 (43.7) (89.9)	4.2 (43.6) (88.9)
Per balance sheet	(890.2) 526.1	(822.7) 504.9
Net interest cover(3): EBITDA(2)/ net interest 27.1 Net leverage ratio(3): net debt / EBITDA(2) 0.7		17.2 0.5

1. Cash in Zhaopin of $511.9m (30 Jun 2016 $462.7) includes cash on deposit of $43.7m (30 Jun 2016: $43.6m) held as security by Zhaopin lenders and $89.9m (30 Jun 2016: $88.9m) cash invested in short term deposits which are recognised in other fi nancial assets in note 6.

2. EBITDA is defi ned and reconciled to consolidated profi t before income tax expense in note 1.

3. These ratios are calculated on the basis of 12 month trailing EBITDA and net interest.

(a) Cash and cash equivalents

Cash and short-term deposits held in Asian countries (including China) are subject to local exchange control regulations. These regulations provide for restrictions on exporting capital from those countries, other than through normal dividends. Cash and bank balances at 31 December 2016 includes RMB 37.7m (A$7.5m) held by some subsidiaries in the People’s Republic of China, which is not freely convertible into other currencies for transfer around the Group (30 Jun 2016: A$8.0m).

At 31 December 2016, cash and cash equivalents include $39.5m (30 Jun 2016: $30.6m) of short-term deposits and debentures mainly held by Brasil Online. These highly liquid deposits and investments are readily convertible into known cash amounts and are subject to insignifi cant risk of changes of value.

(b) Borrowings

	Currrent	Non-current
	31 Dec 2016 30 Jun 2016 $m $m	31 Dec 2016 30 Jun 2016 $m $m
Bank borrowings - principal (i) Entrusted loan facilities (ii) Loan facility - SEEK Asia (iii) Less: transaction costs capitalised	- - 11.1 34.8 37.5 36.3 - -	676.5 584.4 24.9 - 143.8 171.4 (3.6) (4.2)
Total borrowings	48.6 71.1	841.6 751.6

The Group had access to $237.5m undrawn facilities at 31 December 2016 (30 Jun 2016: $311.1m).

22 SEEK Limited Interim Financial Report

9. Net debt continued

(b) Borrowings continued

(i) Syndicated facility (unsecured) - SEEK Limited

The key features of this revolving, unsecured, syndicated senior debt facility are as follows:

Facility Expiry date	Total facility Drawn down 31 Dec 2016
Tranche A July 2017 Tranche B July 2018 Tranche C July2019	A$183m - A$335m A$298m
	A$518m
	US$273m US$273m

(ii) Entrusted loan facilities - Zhaopin Limited

Zhaopin utilises entrusted loan facilities. At 31 December 2016, US$26.0m (A$36.0m) was drawn down on these facilities. The facilities are supported by funds on deposit of RMB218.8m (A$43.7m) within the Zhaopin Group and are non-recourse to the SEEK Limited wholly-owned group.

(iii) Loan facility – SEEK Asia

As at 31 December 2016, A$181.3m principal was drawn down against the debt facility, comprising SG$114m and HK$407m.

Borrowings drawn down at the date of this report

• Syndicated facility (unsecured) - SEEK Limited: A$653.7m, comprising A$298.0m and US$273.0m

• Entrusted loan facilities - Zhaopin Limited: A$33.9m, comprising US$26.0m

• Loan facility – SEEK Asia: A$162.7m, comprising SG$111.5m and HK$358.5m

10. Other f nancial liabilities
	31 Dec 2016	30 Jun 2016
	$m	$m
Hedge liabilities (i)	4.8	15.8
Put option(ii)	18.4	-
Total other f nancial liabilities	23.2	15.8

(i) Hedge liabilities

The Group has taken out forward contracts, options and swaps to protect against exchange rate and interest rate risk.

(ii) Put option

On 1 September 2016, the Group acquired a controlling 60% interest in JobAdder, an application tracking and client relationship tool. As part of this transaction, a put option has been recognised in relation to the remaining shares held by a non-controlling interest in JobAdder. Movements in the estimated exercise value of this put option are recognised in the income statement.

SEEK Limited Interim Financial Report 23

Notes to the Financial Statements for the half-year ended 31 December 2016

SEEK Limited discloses fair value measurements by level of the following fair value measurement hierarchy:

• a. Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

• b. Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2); and

• c. Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

At 31 December 2016 the Group held at fair value the following fi nancial instruments:

		31 Dec 2016	30 Jun 2016
	Level	$m	$m
Assets
Investment in equity instruments	1	-	16.0
Derivative f nancial assets	2	8.8	1.1
		8.8	17.1
Liabilities
Derivative f nancial liabilities	2	4.8	15.8
Put option	3	18.4	-
		23.2	15.8

Level 1

This balance represented shares held in JCBNext which is listed on the Main Board of Bursa Malaysia exchange. These were disposed of on 25 November 2016 (note 6).

Level 2

The Group is party to derivative fi nancial instruments in the normal course of business in order to hedge exposure to fluctuations in interest and foreign exchange rates in accordance with the Group’s treasury policies.

Level 3

This relates to a put option over shares held by a non-controlling interest in JobAdder (note 10).

12. Share capital

12. Share capital
	Number of
Details	Shares	$m
Opening balance at 1 July 2016	345,455,882	222.9
Issue of shares to satisfy future option exercises	2,350,000	-
Exercise of options -proceeds received	-	17.8
Closing balance at 31 December 2016 (including treasury shares)	347,805,882	240.7
Less: Treasury shares
- allocated	(479,960)	-
- unallocated	(626,662)	-
Closingbalance at 31 December 2016(excludingtreasuryshares)	346,699,260	240.7

In the half-year period to 31 December 2016, the Group issued an additional 2,350,000 shares to be held in the Employee Share Trust for the purpose of satisfying awards to participants under the Performance Rights and Options Plan. During that period, 2,574,129 treasury shares were released or allocated to employees.

As at 31 December 2016, 626,662 shares remain as unallocated treasury shares and 479,960 are allocated treasury shares resulting in total treasury shares of 1,106,622.

24 SEEK Limited Interim Financial Report

13. Equity

(a) Other reserves

Other reserves comprises the following reserves:

Other reserves comprises the following reserves:
	31 Dec 2016	30 Jun 2016
	$m	$m
Share-based payments reserve	65.3	63.4
Put option reserve (i)	(18.3)	-
Financial asset revaluation reserve	-	1.9
Transactions with non-controlling interests	0.6	2.1
Transfers under common control	(1.1)	(1.1)
Total other reserves	46.5	66.3

(i) Put option reserve

This relates to a put option over shares held by a non-controlling interest in JobAdder. The group has recognised a fi nancial liability for the estimated exercise value of that option (note 10).

(b) Hedging reserve

	31 Dec 2016	30 Jun 2016
	$m	$m
Cash flow hedge reserve	3.2	(1.8)
Net investment hedge reserve(i)	(110.5)	(97.6)
Total hedgingreserve	(107.3)	(99.4)

(i) Net investment hedge reserve

The movement of $12.9m in the net investment hedge reserve for the half-year was due to the appreciation of the US dollar against the Australian dollar and its impact on USD borrowings designated as a net investment hedge held by the Group.

14. Dividends

14. Dividends
			Franked
	Payment	Amount per	amount per
	date	share	share	Total dividend
Financial Year 2016
2015 f nal dividend	16 October 2015	17.0 cents	17.0 cents	$58.6m
2016 interim dividend	27 April 2016	21.0 cents	21.0 cents	$72.3m
Total dividendspaid for theyear ended 30 June 2016				$130.9m
Financial Year 2017
2016 f nal dividend	14 October 2016	19.0 cents	19.0 cents	$66.1m

Dividends paid or declared by the Company after the half-year (to be paid out of retained profi ts at 31 December 2016):

2017 interim dividend 19 April 2017 23.0 cents 23.0 cents $80.0m

SEEK Limited Interim Financial Report 25

Notes to the Financial Statements for the half-year ended 31 December 2016

15. Interests in equity accounted investments

(a) Material interests in associates and joint ventures

Set out below are the associates and joint arrangements of the Group as at 31 December 2016 which, in the opinion of the directors, are material to the Group.

	Country of	Ownership interest %	Ownership interest %
Joint Ventures	Incorporation	31 Dec 2016 30 Jun 2016		Principal activities
Online Education Services Ltd (OES)	Australia	50.0	50.0	A joint venture entity between SEEK and Swinburne
				University of Technology to deliver online learning to
				students.
One Africa Media (Pty) Ltd (OAM)	South Africa	34.6	34.6	Owns, operates and invests in a portfolio of African
				market leading online marketplaces in the segments of
				jobs, cars, real estate and travel.
Babajob Services Private Ltd	India	46.0(1)	46.2	Provider of online and mobile employment
(Babajob)				marketplaces across India.

1. Babajob issued new shares during the half-year period which resulted in a dilution of SEEK’s ownership interest.

(b) Summarised fi nancial information

	Associates IDP Other immaterial associates(1) $m $m	Joint ventures OES OAM Babajob Total $m $m $m $m
Carrying amount as at 30 June 2015 Dividends received Share of net prof ts/(losses) Share of other comprehensive income Share of movement in other reserves Acquisition of additional interest Disposal of interest	68.3 15.1 (24.0) - 8.1 (0.7) (0.5) 0.6 - - - 5.7 (51.9) -	12.9 23.1 13.0 132.4 (4.9) - - (28.9) 5.2 (1.3) (2.1) 9.2 (0.1) (4.6) 0.2 (4.4) - 0.1 0.2 0.3 - 6.8 - 12.5 - - - (51.9)
Carryingamount as at 31 December 2015	- 20.7	13.1 24.1 11.3 69.2
Carrying amount as at 30 June 2016 Dividends received Share of net prof ts/(losses) Share of other comprehensive income Share of movement in other reserves Acquisition of additional interest Acquisition of controllinginterest(1)
	- 25.7	20.6 26.1 8.6 81.0
	- -	(6.0) - - (6.0)
	- (1.3)	7.8 (1.8) (0.9) 3.8
	- 0.7	- 2.6 0.2 3.5
	- -	- 0.1 0.2 0.3
	- 5.6	- - - 5.6
	- (3.1)	- - - (3.1)
Carryingamount as at 31 December 2016	- 27.6	22.4 27.0 8.1 85.1

1. JobAdder was equity accounted until 31 August 2016, when SEEK acquired a controlling interest. Its results have been consolidated from 1 September 2016.

26 SEEK Limited Interim Financial Report

16. Events occuring after the balance sheet date

Zhaopin Limited

SEEK has formed a consortium with leading private equity fi rms Hillhouse Capital Group and FountainVest Partners (“consortium”), for the purpose of a potential privatisation of Zhaopin Limited. The consortium is in advanced discussions with a Special Committee of the Board of Zhaopin Limited in relation to the potential transaction for a purchase price of US$18 per American Depositary Share (ADS).

The consortium intends to fund part of the consideration for the potential transaction through available cash in Zhaopin, which may be in the form of a cash dividend from Zhaopin to holders of shares (with a corresponding reduction in the per ADS purchase price).If the proposed transaction is completed it is expected that SEEK will retain a similar controlling equity interest in the privatised company. SEEK will update the market as appropriate.

Given Zhaopin’s continued strong business performance and net cash position, as well as progress in privatisation discussions as described above, a withholding tax expense of $17.1m ($10.5m after non-controlling interests) has been recognised during the period in relation to undistributed earnings within Zhaopin’s main operating subsidiary in China.

SEEK Limited Interim Financial Report 27

Directors’ Declaration

In the directors’ opinion:

• a. the fi nancial statements and notes set out on pages 9 to 27 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 fi nancial position as at 31 December 2016 and of its performance for the half-year ended on that date; and

• 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.

The directors have been given the declarations by the Chief Executive Offi cer and Chief Financial Offi cer required by section 295A of the Corporations Act 2001 .

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

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Neil Chatfi eld Chairman

Melbourne 21 February 2017

28 SEEK Limited Interim Financial Report

Independent Auditor’s Report

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Independent auditor's review report to the shareholders of SEEK Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of SEEK Limited (the Company), which comprises: the consolidated income statement for the half-year then ended, the consolidated statement of comprehensive income for the half-year then ended, the consolidated balance sheet as at 31 December 2016; the consolidated statement of changes in equity for the half-year then ended, the consolidated statement of cash flows for the half-year then ended, the notes to the financial statements, and the directors' declaration for SEEK Limited (the consolidated entity).

The consolidated entity comprises 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 and the Corporations Act 2001 and for such internal 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 Australian 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 half-year 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 2016 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.

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:

PricewaterhouseCoopers, ABN 52 780 433 757

2 Riverside Quay, 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.

SEEK Limited Interim Financial Report 29

Independent Auditor’s Report

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1. giving a true and fair view of the consolidated entity’s financial position as at 31 December 2016 and of its performance for the half-year ended on that date;

2. complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

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PricewaterhouseCoopers

==> picture [76 x 42] intentionally omitted <==

Chris Dodd Partner

Melbourne 21 February 2017

30 SEEK Limited Interim Financial Report

Corporate Directory

Directors

Neil G Chatfi eld Chairman

Andrew R Bassat Managing Director and Chief Executive Offi cer

Colin B Carter Denise I Bradley Graham B Goldsmith Julie A Fahey

Principal registered offi ce in Australia

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

Share register

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

Secretary

Lynne Jensen

Auditor

PricewaterhouseCoopers 2 Riverside Quay SOUTHBANK VIC 3006

Stock exchange listing

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

Zhaopin Limited American Depositary Shares are listed on the New York Stock Exchange (Listing code: ZPIN)

Website

www.seek.com.au

ABN

46 080 075 314

SEEK Limited Interim Financial Report 31

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