ex99_2.htm

Precision Drilling Trust
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
		June 30,			December 31,
(Stated in thousands of Canadian dollars)		2009			2008

ASSETS
Current assets:
Cash and cash equivalents		$	179,979		$	61,511
Accounts receivable			213,281			601,753
Income tax recoverable			11,863			13,313
Inventory			8,924			8,652
			414,047			685,229
Income tax recoverable	(note 4)		58,055			58,055
Property, plant and equipment, net of accumulated depreciation			3,231,628			3,243,213
Intangibles			4,421			5,676
Goodwill			813,279			841,529
		$	4,521,430		$	4,833,702

LIABILITIES AND UNITHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	122,887		$	270,122
Distributions payable			-			20,825
Current portion of long-term debt	(note 5)		37,497			48,953
			160,384			339,900
Long-term liabilities			24,836			30,951
Long-term debt	(note 5)		868,933			1,368,349
Future income taxes			729,196			770,623
			1,783,349			2,509,823
Contingencies	(note 9)
Unitholders’ equity:
Unitholders’ capital	(note 3)		2,771,159			2,355,590
Contributed surplus			2,023			998
Retained earnings (deficit)			60,416			(48,068	)
Accumulated other comprehensive income	(note 6)		(95,517	)		15,359
			2,738,081			2,323,879
		$	4,521,430		$	4,833,702
See accompanying notes to consolidated financial statements

20 C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Precision Drilling Trust

CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (DEFICIT) (UNAUDITED)

		Three months ended June 30,						Six months ended June 30,
(Stated in thousands of Canadian dollars, except per unit amounts)		2009			2008			2009			2008

Revenue		$	209,597		$	138,514		$	658,042		$	481,203
Expenses:
Operating			125,591			85,795			379,352			261,985
General and administrative			24,746			17,145			50,043			36,297
Depreciation and amortization			28,222			13,394			72,171			37,761
Foreign exchange			(74,060	)		133			(41,569	)		(1,125	)
Finance charges	(note 8)		44,881			2,087			83,551			4,283
Earnings before income taxes			60,217			19,960			114,494			142,002
Income taxes:	(note 4)
Current			(497	)		2,045			8,164			4,697
Future (reduction)			3,239			(3,824	)		(8,562	)		9,300
			2,742			(1,779	)		(398	)		13,997
Net earnings			57,475			21,739			114,892			128,005
Retained earnings (deficit), beginning of period			2,941			(68,890	)		(48,068	)		(126,110	)
Distributions declared			-			(49,045	)		(6,408	)		(98,091	)
Retained earnings (deficit), end of period		$	60,416		$	(96,196	)	$	60,416		$	(96,196	)
Earnings per unit:	(note 10)
Basic		$	0.23		$	0.16		$	0.51		$	0.95
Diluted		$	0.22		$	0.16		$	0.50		$	0.95

See accompanying notes to consolidated financial statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	Three months ended June 30,					Six months ended June 30,
(Stated in thousands of Canadian dollars)	2009			2008		2009			2008

Net earnings	$	57,475		$	21,739	$	114,892		$	128,005
Unrealized loss recorded on translation of assets and liabilities of self-sustaining operations denominated in foreign currency		(163,709	)		-		(110,876	)		-
Comprehensive income (loss)	$	(106,234	)	$	21,739	$	4,016		$	128,005

P R E C I S I O N D R I L L I N G T R U S T 21

Precision Drilling Trust
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
		Three months ended June 30,						Six months ended June 30,
(Stated in thousands of Canadian dollars)		2009			2008			2009			2008

Cash provided by (used in):
Operations:
Net earnings		$	57,475		$	21,739		$	114,892		$	128,005
Adjustments and other items not involving cash:
Long-term compensation plans			652			2,166			(1,872	)		1,697
Depreciation and amortization			28,222			13,394			72,171			37,761
Future income taxes			3,239			(3,824	)		(8,562	)		9,300
Amortization of debt issue costs			16,782			-			23,063			-
Foreign exchange on long-term monetary items			(85,680	)		5			(50,998	)		(17	)
Changes in non-cash working capital balances			191,864			166,978			265,456			81,019
			212,554			200,458			414,150			257,765
Investments:
Purchase of property, plant and equipment			(90,323	)		(31,344	)		(165,245	)		(54,812	)
Proceeds on sale of property, plant and equipment			1,887			2,143			7,829			3,446
Change in income tax recoverable	(note 4)		-			37			-			(55,148	)
Changes in non-cash working capital balances			(9,513	)		3,975			(21,888	)		3,071
			(97,949	)		(25,189	)		(179,304	)		(103,443	)
Financing:
Increase in long-term debt			267,272			-			408,893			93,681
Repayment of long-term debt			(518,499	)		(108,559	)		(881,038	)		(108,559	)
Financing costs on long-term debt			(6,201	)		-			(20,954	)		-
Distributions paid			-			(49,045	)		(27,233	)		(118,212	)
Issuance of trust units, net of issue costs			206,866			-			413,756			-
Change in non-cash working capital balances			(1,269	)		-			431			-
Change in bank indebtedness			-			(10,548	)		-			(14,115	)
			(51,831	)		(168,152	)		(106,145	)		(147,205	)
Effect of exchange rate changes on cash and cash equivalents			(12,628	)		-			(10,233	)		-
Increase in cash and cash equivalents			50,146			7,117			118,468			7,117
Cash and cash equivalents, beginning of period			129,833			-			61,511			-
Cash and cash equivalents, end of period		$	179,979		$	7,117		$	179,979		$	7,117

See accompanying notes to consolidated financial statements.

22 C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Precision Drilling Trust

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Tabular amounts are stated in thousands of Canadian dollars except unit numbers)

NOTE 1. BASIS OF PRESENTATION

These interim financial statements for Precision Drilling Trust (the “Trust”) were prepared using accounting policies and methods of their application consistent with those used in the preparation of the Trust's consolidated audited financial statements for the year ended December 31, 2008 except as noted below. These interim financial statements conform in all material respects to the requirements of generally accepted accounting principles in Canada for annual financial statements with the exception of certain note disclosures. As a result, these interim financial statements should be read in conjunction with the Trust's consolidated audited financial statements for the year ended December 31, 2008.

Effective January 1, 2009 the Trust adopted new Canadian accounting standards relating to goodwill and intangible assets (Section 3064). This new section establishes standards for the recognition, measurement, presentation and disclosure of goodwill and intangible assets. The new section did not have an impact on the consolidated financial statements.

Precision has a combination of equity based incentive compensation plans outstanding, some of which are settled in trust units and others that are settled in cash. Compensation cost associated with equity settled plans is recorded at fair value and expensed over the instruments vesting period. Under Precision's option plan the fair value of the option grant is calculated at the date of grant using the Black-Scholes option pricing model and that value is recorded as compensation expense over the grant's vesting period with an offsetting credit to contributed surplus. Forfeitures are estimated on the date of grant. Under the non-management director trust unit plan the fair value is based on the trading price of a Precision unit on the date of grant. Compensation cost associated with cash settled compensation plans is recorded at intrinsic value over the instruments vesting period. Intrinsic value is determined by the unit price at the period end applied to the units that have vested under the plan. The associated liability is included in accounts payable or long-term liabilities as appropriate.

NOTE 2. SEASONALITY OF OPERATIONS

The Trust has operations that are carried on in Canada which represent approximately 37% (2008 - 88%) of consolidated total assets as at June 30, 2009 and 43% (2008 - 87%) of consolidated revenue for the six months ended June 30, 2009. The ability to move heavy equipment in Canadian oil and natural gas fields is dependent on weather conditions. As warm weather returns in the spring, the winter's frost comes out of the ground rendering many secondary roads incapable of supporting the weight of heavy equipment until they have thoroughly dried out. The duration of this "spring break-up" has a direct impact on the Trust's activity levels. In addition, many exploration and production areas in northern Canada are accessible only in winter months when the ground is frozen hard enough to support equipment. The timing of freeze up and spring break-up affects the ability to move equipment in and out of these areas. As a result, late March through May is traditionally the Trust’s slowest time.

NOTE 3. UNITHOLDERS’ CAPITAL

(a)

Authorized

- unlimited number of voting Trust units

- unlimited number of voting exchangeable LP units

(b)

Units issued:

Trust units	Number		Amount

Balance, December 31, 2008		160,042,065	$	2,353,843
Issued on retraction of exchangeable LP units		32,021		369
Issued February 18, 2009		46,000,000		217,281
Issued pursuant to private placement		35,000,000		70,181
Issued upon the exercise of rights on June 4, 2009		34,441,950		103,326
Unit issue costs, net of related tax effect of $1.8 million		-		(10,038	)
		275,516,036	$	2,734,962
Warrants issued pursuant to private placement		-		34,819
Balance, June 30, 2009		275,516,036	$	2,769,781

P R E C I S I O N D R I L L I N G T R U S T 23

Exchangeable LP units	Number			Amount

Balance, December 31, 2008		151,583		$	1,747
Redeemed on retraction of exchangeable LP units		(32,021	)		(369	)
Balance, June 30, 2009		119,562		$	1,378


Summary	Number		Amount

Trust units		275,516,036	$	2,769,781
Exchangeable LP units		119,562		1,378
Unitholders’capital		275,635,598	$	2,771,159

On April 22, 2009 the Trust issued 15,000,000 purchase warrants pursuant to a private placement. Each warrant is exercisable into a unit of the Trust at a price of $3.22 per Trust unit for a period of five years from the date of issue.

NOTE 4. INCOME TAXES

Currently, the Trust incurs taxes to the extent that there are certain provincial capital taxes or state franchise taxes, as well as taxes on any taxable income, of its underlying subsidiaries. Future income taxes arise from the differences between the accounting and tax basis of the Trust's and its subsidiaries' assets and liabilities.

The provision for income taxes differs from that which would be expected by applying statutory Canadian income tax rates. A reconciliation of the difference at June 30 is as follows:

	Three months ended June 30,						Six months ended June 30,
	2009			2008			2009			2008

Earnings before income taxes	$	60,217		$	19,960		$	114,494		$	142,002
Federal and provincial statutory rates		29	%		30	%		29	%		30	%
Tax at statutory rates	$	17,463		$	5,988		$	33,203		$	42,601
Adjusted for the effect of:
Non-deductible expenses		(1,504	)		29			2,182			(197	)
Income taxed at lower rates		(12,605	)		–			(35,424	)		–
Income to be distributed to unitholders, not subject to tax in the Trust		(879	)		(8,685	)		(2,323	)		(31,569	)
Other		267			889			1,964			3,162
Income tax expense (reduction)	$	2,742		$	(1,779	)	$	(398	)	$	13,997
Effective income tax rate		5	%		(9	)%		–	%		10	%

The Trust received Notices of Reassessment in 2008 from a provincial taxing authority related to certain subsidiaries' taxation years ending in 2001 through 2004. As a result of the notices, the Trust was required to pay $37.7 million in taxes and $20.4 million in assessed interest. The reassessments relate to the treatment of interest in certain provincial tax filings. The Trust is in the process of challenging these reassessments. The Trust anticipates that the dispute will not be resolved within one year and has recorded the amount paid as a long-term receivable. No amounts related to the $58.1 million in reassessments have been expensed.

24 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

NOTE 5. LONG-TERM DEBT

	June 30,			December 31,
	2009			2008

Secured facility:
Term Loan A	$	357,038		$	489,215
Term Loan B		531,582			489,840
Revolving credit facility		-			107,981
Unsecured facility		-			168,352
Unsecured senior notes		175,000			-
Unsecured convertible notes:
3.75% notes (US $137.5 million)		-			168,413
Floating rate notes (US $124.8 million)		-			152,801
		1,063,620			1,576,602
Less net unamortized debt issue costs		(157,190	)		(159,300	)
		906,430			1,417,302
Less current portion		(37,497	)		(48,953	)
	$	868,933		$	1,368,349

As at June 30, 2009 Precision had borrowed $1,063.6 million comprised of US$745.5 million, under secured facilities and $175 million under an unsecured facility. Precision had available a further US$260.0 million under the secured revolving credit facility, of which none was drawn. Availability of the revolving credit facility was reduced by outstanding letters of credit of US$28.0 million.

During the second quarter Precision entered into an interest rate swap arrangement to fix the libor rate at 1.7% on US$250.0 million of the Term A-1 facility (with scheduled reductions in the balance through September 2013) and paid US$2.1 million for an interest rate cap of 3.25% on US$350.0 million of the Term B facilities (with scheduled reductions in the balance through December 2013). The net amount owing under the interest rate derivative contract is settled quarterly.

During the second quarter, Precision fully repaid and cancelled the outstanding balance of the unsecured facility and completed syndication of the Secured Facility.

On April 22, 2009, the Trust completed a private placement of $175.0 million principal amount of 10% senior unsecured notes (the "Senior Notes") which have an eight-year term, with one-third of the initial outstanding principal amount payable on each of the sixth, seventh and eighth anniversaries of the closing date of the private placement. The Senior Notes are unsecured and have been guaranteed by the Trust and each subsidiary of the Trust that guaranteed the Secured Facility. The terms of the Senior Notes requires Precision to maintain certain affirmative and negative covenants.

During the first quarter, holders of 3.75% Notes and Floating Rate Notes representing US$137.5 million and US$124.8 million, respectively accepted the purchase offer made pursuant to change in control provisions in the indenture agreements governing the notes. Precision was required to purchase these notes on March 24, 2009 at the principal balance plus accrued interest.

At June 30, 2009 principal repayments are as follows:

For the twelve month periods ended June 30,

2010	$	37,497
2011		65,794
2012		75,427
2013		85,061
2014		229,562
Thereafter		570,279

P R E C I S I O N D R I L L I N G T R U S T 25

NOTE 6. ACCUMULATED OTHER COMPREHENSIVE INCOME

Balance, December 31, 2008	$	15,359
Unrealized foreign currency translation gains		(110,876	)
Balance, June 30, 2009	$	(95,517	)

NOTE 7. UNIT BASED COMPENSATION PLANS

(a) Option plan

During the quarter the Trust implemented a unit option plan under which a combined total of 11,103,500 options to purchase units are reserved to be granted to employees. Of the amount reserved, 1,920,100 options have been granted. Under this plan, the exercise price of each option equals the fair market of the option at the date of grant determined by the weighted average trading price for the five days preceding the grant. The options vest over a period of three years from the date of grant as employees render continuous service to the Trust and have a term of seven years.

A summary of the status of the equity incentive plan as at June 30, 2009 is presented below:

Weighted

Options

Range of

average

Options

Outstanding

exercise price

exercisable

Outstanding as at December 31, 2008

–

Granted

1,920,100

5.80 – 5.85

5.83

–

Outstanding as at June 30, 2009

1,920,100

5.80 – 5.85

5.83

–

The per unit weighted average fair value of the unit options granted during the quarter ended June 30, 2009 was $2.54 based on the date of grant valuation using the Black-Scholes option pricing model with the following assumption: average risk-free interest rate 2%, average expected life of four years and expected volatility of 56%. Unit based compensation of $0.2 million was expensed during the three and six months ended June 30, 2009.

(b) Officers and employees

During the quarter Precision introduced two new unit based incentive plans to replace the Performance Saving Plan and the Long-Term Incentive Plan. Under the Restricted Trust Unit incentive plan units granted to eligible employees vest annually over a three year term. Vested units are automatically paid out in cash in the first quarter of the year following vesting at a value determined by the fair market value of the units as at December 31 of the vesting year. Under the Performance Trust Unit incentive plan units granted to eligible employees vest at the end of a three year term. Vested units are automatically paid out in cash in first quarter following the vested term based on the number of performance units held multiplied by a performance factor that ranges from zero to two times. The performance factor is based on Precision’s returns compared to a peer group. Included in net earnings for the three and six months ended June 30, 2009 is an expense of $0.3 million (2008 - $nil) and $2.4 million (2008 - $nil), respectively.

Certain liabilities under the Performance Savings Plan continue to exist as eligible participants were able to elect to receive a portion of their annual performance bonus in the form of deferred trust units ("DTUs"). These notional units are redeemable in cash and are adjusted for each distribution to unitholders by issuing additional DTUs based on the weighted average trading price on the Toronto Stock Exchange for the five days immediately following the ex-distribution date. All DTUs must be redeemed within 60 days of ceasing to be an employee of Precision or by the end of the second full calendar year after receipt of the DTUs. A summary of the DTUs outstanding under this unit based incentive plan is presented below:

Deferred Trust Units	Outstanding

Balance, December 31, 2008		83,435
Issued, including as a result of distributions		211,156
Redeemed on employee resignations and withdrawals		(4,395	)
Balance, June 30, 2009		290,196

26 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

As at June 30, 2009 $1.6 million is included in accounts payable and accrued liabilities for outstanding DTUs. Included in net earnings for the three and six months ended June 30, 2009 is an expense of $ 0.7 million (2008 - $0.5 million) and $0.3 million (2008 - $1.1 million), respectively.

The Trust has a Unit Appreciation Rights ("UAR") plan. Under the plan eligible participants were granted UAR's that entitle the rights holder to receive cash payments calculated as the excess of the market price over the exercise price per unit on the exercise date. The exercise price of the UAR is reduced by the aggregate unit distributions paid or payable on Trust units from the grant date to the exercise date. The UAR's vest over a period of five years and expire 10 years from the date of grant. No amounts relating to the UAR plan have been recorded as compensation expense or accrued liability as at June 30, 2009 as the intrinsic value of the awards was nil.

In 2007 the Trust instituted a Deferred Signing Bonus Unit Plan for its Chief Executive Officer. Under the plan 178,336 notional DTUs were granted on September 1, 2007. The units are redeemable one-third annually beginning September 1, 2008 and are settled for cash based on the Trust unit trading price on redemption. The number of notional DTUs is adjusted for each distribution to unitholders by issuing additional notional DTUs based on the weighted average trading price on the Toronto Stock Exchange for the five days immediately following the ex-distribution date. As at June 30, 2009 $0.4 million is included in accounts payable and accrued liabilities and $0.4 million in long-term incentive plan payable for the 136,500 outstanding DTUs. Included in net earnings for the three and six months ended June 30, 2009 is an expense of $0.3 million (2008 - $0.8 million) and a recovery of $0.6 million (2008 - $2.5 million expense), respectively.

(d) Non-management directors

In 2007 a deferred trust unit plan was established for non-management directors. Under the plan fully vested deferred trust units are granted quarterly based upon an election by the non-management director to receive all or a portion of their compensation in deferred trust units. Distributions to unitholders declared by the Trust prior to redemption are reinvested into additional deferred trust units on the date of distribution. These deferred trust units are redeemable into an equal number of Trust units any time after the director's retirement. A summary of deferred trust units outstanding under this unit based incentive plan is presented below:

	Number
	Outstanding

Balance, December 31, 2008		54,543
Granted		161,450
Issued as a result of distributions		2,051
Balance, June 30, 2009		218,044

Included in net earnings for the three and six months ended June 30, 2009 as unit based compensation with a corresponding increase in contributed surplus, is $270,000 (2008 - $240,000) and $815,000 (2008 - $435,000), respectively.

NOTE 8. FINANCE CHARGES

The following table provides a summary of the finance charges:

	Three months ended June 30,						Six months ended June 30,
	2009			2008			2009			2008
Interest:
Long-term debt	$	28,151		$	2,109		$	60,569		$	4,344
Other		57			53			120			99
Income		(110	)		(75	)		(201	)		(160	)
Amortization of debt issue costs		6,884			–			13,164			–
Loss on settlement of unsecured facility (note 5)		9,899			–			9,899			–
Finance charges	$	44,881		$	2,087		$	83,551		$	4,283

P R E C I S I O N D R I L L I N G T R U S T 27

NOTE 9. CONTINGENCIES

The business and operations of the Trust are complex and the Trust has executed a number of significant financings, business combinations, acquisitions and dispositions over the course of its history. The computation of income taxes payable as a result of these transactions involves many complex factors as well as the Trust’s interpretation of relevant tax legislation and regulations. The Trust’s management believes that the provision for income tax is adequate and in accordance with generally accepted accounting principles and applicable legislation and regulations. However, there are a number of tax filing positions that can still be the subject of review by taxation authorities who may successfully challenge the Trust’s interpretation of the applicable tax legislation and regulations, with the result that additional taxes could be payable by the Trust and the amount owed, with estimated interest but without penalties, could be up to $391 million, including $58 million recorded as a long-term receivable.

NOTE 10. PER UNIT AMOUNTS

The following tables reconcile the net earnings and weighted average units outstanding used in computing basic and diluted earnings per unit:

	Three months ended June 30,				Six months ended June 30,
	2009		2008		2009		2008
Net earnings - basic	$	57,475	$	21,739	$	114,892	$	128,005
Impact of assumed conversion of convertible debt, net of tax		–		–		1,723		–
Net earnings - diluted	$	57,475	$	21,739	$	116,615	$	128,005
Weighted average units outstanding		242,573		125,758		211,861		125,758
Effect of rights offering		11,733		9,007		12,354		9,007
Weighted average units outstanding - basic		254,306		134,765		224,215		134,765
Effect of trust unit warrants		5,344		–		2,672		–
Effect of stock options and other equity compensation plans		172		27		124		23
Effect of convertible debt		–		–		7,793		-
Effect of rights offering		247		2		684		2
Weighted average units outstanding - diluted		260,069		134,794		235,488		134,790

28 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

NOTE 11. SEGMENTED INFORMATION

The Trust operates primarily in Canada and the United States, in two segments; Contract Drilling Services and Completion and Production Services. Contract Drilling Services includes drilling rigs, procurement and distribution of oilfield supplies, camp and catering services and manufacture, sale, and repair of drilling equipment. Completion and Production Services includes service rigs, snubbing units, wastewater treatment units, and oilfield equipment rental.

	Contract		Completion and
	Drilling		Production			Corporate			Inter-segment
Three months ended June 30, 2009	Services		Services			and Other				Eliminations			Total
Revenue	$	185,226	$	25,590		$	-			$	(1,219	)	$	209,597
Segment profit (loss)		43,520		(681	)		(11,801	)			-			31,038
Depreciation and amortization		23,434		3,698			1,090				-			28,222
Total assets		3,899,840		393,367			228,223				-			4,521,430
Goodwill		701,140		112,139			-				-			813,279
Capital expenditures		88,529		97			1,697				-			90,323

	Contract		Completion and
	Drilling		Production		Corporate			Inter-segment
Three months ended June 30, 2008	Services		Services		and Other				Eliminations			Total
Revenue	$	93,006	$	47,559	$	-			$	(2,051	)	$	138,514
Segment profit (loss)(1)		23,816		8,810		(10,446	)			-			22,180
Depreciation and amortization		8,442		4,044		908				-			13,394
Total assets		1,252,737		432,896		70,669				-			1,756,302
Goodwill		172,440		108,309		-				-			280,749
Capital expenditures		25,209		5,409		726				-			31,344

	Contract		Completion and
	Drilling		Production		Corporate			Inter-segment
Six months ended June 30, 2009	Services		Services		and Other				Eliminations			Total
Revenue	$	575,105	$	88,565	$	-			$	(5,628	)	$	658,042
Segment profit (loss)		161,052		12,875		(17,451	)			-			156,476
Depreciation and amortization		61,397		8,691		2,083				-			72,171
Total assets		3,899,840		393,367		228,223				-			4,521,430
Goodwill		701,140		112,139		-				-			813,279
Capital expenditures		159,907		521		4,817				-			165,245

	Contract		Completion and
	Drilling		Production		Corporate			Inter-segment
Six months ended June 30, 2008	Services		Services		and Other				Eliminations			Total
Revenue	$	335,371	$	152,279	$	-			$	(6,447	)	$	481,203
Segment profit (loss)(1)		123,863		42,673		(21,376	)			-			145,160
Depreciation and amortization		23,610		12,320		1,831				-			37,761
Total assets		1,252,737		432,896		70,669				-			1,756,302
Goodwill		172,440		108,309		-				-			280,749
Capital expenditures		44,812		9,181		819				-			54,812

(1) Amounts have been restated to effect the removal of foreign exchange expense which is now excluded from the calculation of segment profit.

P R E C I S I O N D R I L L I N G T R U S T 29

A reconciliation of segment profit to earnings before income taxes is as follows:

	Three months ended June 30,						Six months ended June 30,
(Stated in thousands of Canadian dollars)	2009			2008			2009			2008
Total segment profit	$	31,038		$	22,180		$	156,476		$	145,160
Add (deduct):
Foreign exchange		74,060			(133	)		41,569			1,125
Finance charges		(44,881	)		(2,087	)		(83,551	)		(4,283	)
Earnings before income taxes	$	60,217		$	19,960		$	114,494		$	142,002

The Trust's operations are carried on in the following geographic locations:

								Inter-segment
Three months ended June 30, 2009	Canada		United States			International		Eliminations			Total
Revenue	$	73,884		$	131,567	$	5,337	$	(1,191	)	$	209,597
Total Assets		1,656,793			2,807,998		56,639		-			4,521,430
								Inter-segment
Three months ended June 30, 2008	Canada		United States			International		Eliminations			Total
Revenue	$	105,961		$	31,189	$	1,750	$	(386	)	$	138,514
Total Assets		1,548,475			203,006		4,821		-			1,756,302
								Inter-segment
Six months ended June 30, 2009	Canada		United States			International		Eliminations			Total
Revenue	$	284,297		$	363,875	$	12,479	$	(2,609	)	$	658,042
Total Assets		1,656,793			2,807,998		56,639		-			4,521,430
								Inter-segment
Six months ended June 30, 2008	Canada		United States			International		Eliminations			Total
Revenue	$	420,363		$	57,733	$	3,831	$	(724	)	$	481,203
Total Assets		1,548,475			203,006		4,821		-			1,756,302

NOTE 12. FINANCIAL INSTRUMENTS

(a) Interest rate risk

As at June 30, 2009 approximately 82% of Precision’s $1.06 billion of long-term debt is subject to fixed interest rates after taking into consideration the interest rate derivatives that have been entered into by Precision. As a result, Precision is not exposed to significant fluctuations in interest expense as a result of changes in interest rates. Applying a 100 basis points change in interest rates to the Trust's long-term debt balance at June 30, 2009, with all other variables held constant, would impact earnings from continuing operations, on a go forward basis, by approximately $0.9 million.

(b) Liquidity risk

The following are the contractual maturities of the Trust's long-term debt obligations as at June 30, 2009:

(Stated in thousands)	2009		2010		2011		2012		2013		Thereafter		Total
Long-term debt	$	14,193	$	56,201	$	65,794	$	85,061	$	258,462	$	583,909	$	1,063,620
Interest on long-term debt(1)		43,303		84,238		79,789		74,848		69,146		87,171		438,495
Total	$	57,496	$	140,439	$	145,583	$	159,909	$	327,608	$	671,080	$	1,502,115

(1) Interest has been calculated based upon debt balances, interest rates and foreign exchange rates in effect as at June 30, 2009

30 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S

Precision Drilling Trust

UNITHOLDER INFORMATION

STOCK EXCHANGE LISTINGS

ACCOUNT QUESTIONS

Units of Precision Drilling Trust are listed on the Toronto Stock Exchange ("TSX") under the trading symbol PD.UN and on the New York Stock Exchange ("NYSE") under the trading symbol PDS.

Q2 2009 TRADING PROFILE

Toronto (TSX: PD.UN)

High: $7.13

Low: $3.30

Close: $5.59

Volume Traded: 140,843,881

New York (NYSE: PDS)

High: US$6.50

Low: US$2.60

Close: US$4.88

Volume Traded: 165,034,336

TRANSFER AGENT AND REGISTRAR

Computershare Trust Company of Canada

Calgary, Alberta

TRANSFER POINT

Computershare Trust Company NA

Denver, Colorado

Precision’s Transfer Agent can help you with a variety of unitholder related services, including:

• Change of address

• Lost unit certificates

• Transfer of units to another person

• Estate settlement

You can contact Precision’s Transfer Agent at:

Computershare Trust Company of Canada

100 University Avenue, 9th Floor, North Tower

Toronto, Ontario M5J 2Y1

Canada

Telephone: 1-800-564-6253

(toll free in Canada and the United States)

1-514-982-7555

(international direct dialing)

Email: service@computershare.com

ONLINE INFORMATION

To receive news releases by email, or to view this interim report online, please visit the Trust’s website at www.precisiondrilling.com and refer to the Investor Relations section. Additional information relating to the Trust, including the Annual Information Form, Annual Report and Management Information Circular has been filed with SEDAR and is available at www.sedar.com.

P R E C I S I O N D R I L L I N G T R U S T 31

Precision Drilling Trust

CORPORATE INFORMATION

HEAD OFFICE	OFFICERS
Precision Drilling Trust	Kevin A. Neveu
4200, 150 - 6th Avenue SW	President and Chief Executive Officer
Calgary, Alberta, Canada T2P 3Y7
Telephone: 403-716-4500	Joanne L. Alexander
Facsimile: 403-264-0251	Vice President, General Counsel and Corporate Secretary
Email: info@precisiondrilling.com
www.precisiondrilling.com	David J. Crowley
	President, U.S. Operations

	Kenneth J. Haddad
	Vice President, Business Development
TRUSTEES
Robert J. S. Gibson	Darren J. Ruhr
Allen R. Hagerman, FCA	Vice President, Corporate Services
Patrick M. Murray
	Gene C. Stahl
	President, Canadian Operations

DIRECTORS	Douglas J. Strong
Frank M. Brown	Chief Financial Officer
William T. Donovan
W.C. (Mickey) Dunn	David W. Wehlmann
Brian A. Felesky, CM, Q.C.	Executive Vice President, Investor Relations
Robert J. S. Gibson
Allen R. Hagerman, FCA	LEAD BANK
Stephen J.J. Letwin	Royal Bank of Canada
Patrick M. Murray	Calgary, Alberta
Kevin A. Neveu
Frederick W. Pheasey	AUDITORS
Robert L. Phillips	KPMG LLP
Trevor M. Turbidy	Calgary, Alberta