EX-99.2 5 exh99_2.htm EXHIBIT 99.2
 
Exhibit 99.2
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

(Stated in thousands of Canadian dollars)
  
June 30,
2016
    
December 31,
2015
  
ASSETS
            
Current assets:
            
  Cash
  
$
455,679
    
$
444,759
  
  Accounts receivable
    
175,006
      
311,595
  
Income tax recoverable
    
14,762
      
–
  
  Inventory
    
23,748
      
24,245
  
Total current assets
    
669,195
      
780,599
  
Non-current assets:
                
Income tax recoverable
    
–
      
2,917
  
Property, plant and equipment
    
3,632,922
      
3,883,332
  
Intangibles
    
3,977
      
3,363
  
Goodwill
    
206,306
      
208,479
  
Total non-current assets
    
3,843,205
      
4,098,091
  
Total assets
  
$
4,512,400
    
$
4,878,690
  
                 
LIABILITIES AND EQUITY
                
Current liabilities:
                
Accounts payable and accrued liabilities
  
$
166,836
    
$
235,948
  
Income tax payable
    
–
      
7,836
  
Total current liabilities
    
166,836
      
243,784
  
Non-current liabilities:
                
Share based compensation (Note 7)
    
16,463
      
15,201
  
Provisions and other
    
13,996
      
14,520
  
Long-term debt (Note 4)
    
2,049,286
      
2,180,510
  
Deferred tax liabilities
    
246,264
      
303,466
  
Total non-current liabilities
    
2,326,009
      
2,513,697
  
Shareholders' equity:
                
Shareholders' capital (Note 5)
    
2,319,276
      
2,316,321
  
Contributed surplus
    
36,742
      
35,800
  
Deficit
    
(474,573
)
    
(397,013
)
Accumulated other comprehensive income (Note 6)
    
138,110
      
166,101
  
Total shareholders' equity
    
2,019,555
      
2,121,209
  
Total liabilities and shareholders' equity
  
$
4,512,400
    
$
4,878,690
  

See accompanying notes to interim consolidated financial statements.

 
1

INTERIM CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED)

   
Three months ended June 30,
    
Six months ended June 30,
  
(Stated in thousands of Canadian dollars, except per share  amounts)
  
2016
    
2015
    
2016
    
2015
  
Revenue
  
$
163,979
    
$
334,462
    
$
465,706
    
$
846,582
  
Expenses:
                                
Operating
    
110,909
      
211,083
      
281,979
      
511,347
  
General and administrative
    
29,063
      
31,951
      
57,017
      
73,254
  
Restructuring
    
1,607
      
3,073
      
5,046
      
10,242
  
Earnings before income taxes, gain on repurchase of unsecured senior notes, finance charges, foreign exchange and depreciation and amortization
    
22,400
      
88,355
      
121,664
      
251,739
  
Depreciation and amortization
    
96,611
      
120,128
      
191,860
      
236,225
  
Operating earnings (loss)
    
(74,211
)
    
(31,773
)
    
(70,196
)
    
15,514
  
Foreign exchange
    
754
      
8,318
      
8,335
      
(20,088
)
Finance charges (Note 8)
    
33,161
      
32,348
      
69,398
      
52,030
  
Gain on repurchase of unsecured senior notes (Note 4)
    
–
      
–
      
(4,873
)
    
–
  
Loss before income taxes
    
(108,126
)
    
(72,439
)
    
(143,056
)
    
(16,428
)
Income taxes:
                                
Current
    
(11,395
)
    
1,213
      
(14,359
)
    
7,516
  
Deferred
    
(39,054
)
    
(43,835
)
    
(51,137
)
    
(18,160
)
     
(50,449
)
    
(42,622
)
    
(65,496
)
    
(10,644
)
Net loss
  
$
(57,677
)
  
$
(29,817
)
  
$
(77,560
)
  
$
(5,784
)
Net loss per share: (Note 9)
                                
Basic
  
$
(0.20
)
  
$
(0.10
)
  
$
(0.26
)
  
$
(0.02
)
Diluted
  
$
(0.20
)
  
$
(0.10
)
  
$
(0.26
)
  
$
(0.02
)

See accompanying notes to interim consolidated financial statements.

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

   
Three months ended June 30,
    
Six months ended June 30,
  
(Stated in thousands of Canadian dollars)
  
2016
    
2015
    
2016
    
2015
  
Net loss
  
$
(57,677
)
  
$
(29,817
)
  
$
(77,560
)
  
$
(5,784
)
Unrealized gain (loss) on translation of assets
and liabilities of operations denominated in foreign currency
    
6,107
      
(39,087
)
    
(147,991
)
    
165,380
  
Foreign exchange gain (loss) on net
investment hedge with U.S. denominated debt, net of tax
    
(5,473
)
    
30,305
      
120,000
      
(126,585
)
Comprehensive income (loss)
  
$
(57,043
)
  
$
(38,599
)
  
$
(105,551
)
  
$
33,011
  

See accompanying notes to interim consolidated financial statements.

2

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
   
Three months ended June 30,
    
Six months ended June 30,
  
(Stated in thousands of Canadian dollars)
  
2016
    
2015
    
2016
    
2015
  
Cash provided by (used in):
                        
Operations:
                        
Net loss
  
$
(57,677
)
  
$
(29,817
)
  
$
(77,560
)
  
$
(5,784
)
Adjustments for:
                                
Long-term compensation plans
    
7,565
      
9,300
      
15,089
      
12,707
  
Depreciation and amortization
    
96,611
      
120,128
      
191,860
      
236,225
  
Gain on repurchase of unsecured senior notes (Note 4)
    
–
      
–
      
(4,873
)
    
–
  
Foreign exchange
    
3,554
      
9,068
      
11,537
      
(20,377
)
Finance charges
    
33,161
      
32,348
      
69,398
      
52,030
  
Income taxes
    
(50,449
)
    
(42,622
)
    
(65,496
)
    
(10,644
)
Other
    
518
      
(50
)
    
140
      
1,349
  
Income taxes paid
    
(4,808
)
    
(4,092
)
    
(10,575
)
    
(9,788
)
Income taxes recovered
    
67
      
249
      
67
      
1,111
  
Interest paid
    
(61,478
)
    
(55,744
)
    
(69,509
)
    
(63,193
)
Interest received
    
1,564
      
14,405
      
2,143
      
14,723
  
Funds provided by (used in) operations
    
(31,372
)
    
53,173
      
62,221
      
208,359
  
Changes in non-cash working capital balances
    
52,037
      
116,704
      
70,618
      
176,656
  
     
20,665
      
169,877
      
132,839
      
385,015
  
Investments:
                                
Purchase of property, plant and equipment
    
(53,424
)
    
(113,045
)
    
(80,585
)
    
(338,867
)
Proceeds on sale of property, plant and equipment
    
1,548
      
3,598
      
3,705
      
6,474
  
Income taxes recovered
    
2,917
      
55,138
      
2,917
      
55,138
  
Changes in non-cash working capital balances
    
6,825
      
(99,649
)
    
(19,284
)
    
(154,276
)
     
(42,134
)
    
(153,958
)
    
(93,247
)
    
(431,531
)
Financing:
                                
Repurchase of unsecured senior notes (Note 4)
    
–
      
–
      
(8,409
)
    
–
  
Debt issue costs
    
(1,155
)
    
–
      
(1,155
)
    
(975
)
Dividends paid
    
–
      
(20,498
)
    
–
      
(40,995
)
Issuance of common shares on the exercise of options
    
1,724
      
93
      
1,914
      
93
  
     
569
      
(20,405
)
    
(7,650
)
    
(41,877
)
Effect of exchange rate changes on cash and cash equivalents
    
223
      
(11,005
)
    
(21,022
)
    
30,605
  
Increase (decrease)  in cash and cash equivalents
    
(20,677
)
    
(15,491
)
    
10,920
      
(57,788
)
Cash and cash equivalents, beginning of period
    
476,356
      
449,184
      
444,759
      
491,481
  
Cash and cash equivalents, end of period
  
$
455,679
    
$
433,693
    
$
455,679
    
$
433,693
  

See accompanying notes to interim consolidated financial statements.
 
3
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)



(Stated in thousands of Canadian dollars)
  
Shareholders'
capital
    
Contributed
surplus
    
Accumulated
other
comprehensive
income
(Note 6)
    
Deficit
    
Total
equity
  
Balance at January 1, 2016
  
$
2,316,321
    
$
35,800
    
$
166,101
    
$
(397,013
)
  
$
2,121,209
  
Net loss for the period
    
–
      
–
      
–
      
(77,560
)
    
(77,560
)
Other comprehensive loss for the period
    
–
      
–
      
(27,991
)
    
–
      
(27,991
)
Share options exercised (Note 5)
    
2,955
      
(1,041
)
    
–
      
–
      
1,914
  
Share based compensation expense (Note 7)
    
–
      
1,983
      
–
      
–
      
1,983
  
Balance at June 30, 2016
  
$
2,319,276
    
$
36,742
    
$
138,110
    
$
(474,573
)
  
$
2,019,555
  



(Stated in thousands of Canadian dollars)
  
Shareholders'
capital
    
Contributed
surplus
    
Accumulated
other
comprehensive
income
    
Retained earnings
    
Total
equity
  
Balance at January 1, 2015
  
$
2,315,539
    
$
31,109
    
$
46,292
    
$
48,426
    
$
2,441,366
  
Net loss for the period
    
–
      
–
      
–
      
(5,784
)
    
(5,784
)
Other comprehensive income for the period
    
–
      
–
      
38,795
      
–
      
38,795
  
Dividends
    
–
      
–
      
–
      
(40,995
)
    
(40,995
)
Share options exercised
    
142
      
(49
)
    
–
      
–
      
93
  
Shares issued on redemption of non-management directors' DSUs
    
640
      
(324
)
    
–
      
–
      
316
  
Share based compensation expense (Note 7)
    
–
      
2,548
      
–
      
–
      
2,548
  
Balance at June 30, 2015
  
$
2,316,321
    
$
33,284
    
$
85,087
    
$
1,647
    
$
2,436,339
  
See accompanying notes to interim consolidated financial statements.




4
 
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Tabular amounts are stated in thousands of Canadian dollars except share numbers and per share amounts)
NOTE 1. DESCRIPTION OF BUSINESS
Precision Drilling Corporation ("Precision" or the "Corporation") is incorporated under the laws of the Province of Alberta, Canada and is a provider of contract drilling and completion and production services primarily to oil and natural gas exploration and production companies in Canada, the United States and certain international locations. The address of the registered office is Suite 800, 525 - 8th Avenue S.W., Calgary, Alberta, Canada, T2P 1G1.

NOTE 2. BASIS OF PRESENTATION
(a) Statement of Compliance
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. The condensed consolidated interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Corporation as at and for the year ended December 31, 2015.
These condensed consolidated interim financial statements were prepared using accounting policies and methods of their application consistent with those used in the preparation of the Corporation's consolidated audited annual financial statements for the year ended December 31, 2015 which were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and Interpretations of the International Financial Reporting Interpretations Committee.
These condensed consolidated interim financial statements were approved by the Board of Directors on July 20, 2016.

(b) Seasonality
Precision has operations that are carried on in Canada which represent approximately 44% (2015 - 42%) of consolidated total assets as at June 30, 2016 and 37% (2015 - 35%) of consolidated revenue for the six months ended June 30, 2016. 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 Precision'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 Precision's slowest time in this region.

(c) Reclassification of prior period amounts
Certain comparative amounts have been reclassified to conform to the presentation adopted in the current period.
NOTE 3. BANK INDEBTEDNESS
During the quarter, Precision decreased the borrowing capacity of an existing secured operating facility to U$30.0 million from US$40.0 million.  This secured operating facility is used for the issuance of letters of credit and performance and bid bonds to support international operations.

5

NOTE 4. LONG-TERM DEBT
   
June 30,
    
December 31,
  
   
2016
    
2015
  
Secured credit facility
  
$
–
    
$
–
  
Unsecured senior notes:
                
6.625% senior notes due 2020 (US$650 million)
    
845,585
      
899,600
  
6.5% senior notes due 2021 (US$390.2 million)
    
507,572
      
553,600
  
5.25% senior notes due 2024 (US$400 million)
    
520,360
      
553,600
  
6.5% senior notes due 2019
    
200,000
      
200,000
  
     
2,073,517
      
2,206,800
  
Less net unamortized debt issue costs
    
(24,231
)
    
(26,290
)
   
$
2,049,286
    
$
2,180,510
  
 
During the first quarter of 2016 Precision repurchased and cancelled US$9.8 million of the 6.5% senior notes due 2021 for an aggregate purchase price of US$6.2 million.

During April 2016, Precision amended certain financial covenants governing its senior credit facility. This amendment among other things: (i) temporarily reduces the Adjusted EBITDA (as defined in the debt agreement) to interest expense coverage ratio of greater than 2:1 to 1.5:1 for the period up to and including June 30, 2018, reverting to 2.5:1 thereafter until maturity of the facility; (ii) permits second lien debt up to US$400 million subject to certain terms and conditions; (iii) amends certain negative covenants to, among other things, prevent distributions during the covenant relief period; (iv) adds a new covenant which limits borrowing on the facility to draw a maximum of $50 million on the facility if the only purpose is to accumulate cash; (v) adds a new covenant that restricts the repurchase and redemption of unsecured debt subject to a pro-forma minimum liquidity of US$500 million.

At June 30, 2016, we were in compliance with the covenants of our secured credit facility and unsecured senior notes.
Long-term debt obligations at June 30, 2016 will mature as follows:

2019
 
  
$
200,000
  
2020
    
845,585
  
Thereafter
    
1,027,932
  
   
$
2,073,517
  

 NOTE 5. SHAREHOLDERS' CAPITAL
   
Number
    
Amount
  
Common shares
            
Balance December 31, 2015
    
292,912,090
    
$
2,316,321
  
Options exercised:
                
Cash consideration
    
324,668
      
1,914
  
Reclassification from contributed surplus
    
-
      
1,041
  
Balance June 30, 2016
    
293,236,758
    
$
2,319,276
  
 
6

NOTE 6. ACCUMULATED OTHER COMPREHENSIVE INCOME

   
 
Unrealized
Foreign Currency
Translation Gains
  
 
Foreign Exchange
Loss on Net
Investment Hedge
  
 
Accumulated Other
Comprehensive
Income
 
Balance, December 31, 2015
 
$
 
         663,886
 
$
 
            (497,785)
 
$
 
        166,101
 
Other comprehensive income (loss)
  
 
(147,991)
  
 
120,000
  
 
(27,991)
 
Balance, June 30, 2016
 
$
 
515,895
 
$
 
(377,785)
 
$
 
138,110

NOTE 7. SHARE BASED COMPENSATION PLANS

Liability Classified Plans
   
Restricted
Share
Units(a)
  
Performance
Share Units(a)
  
Share
Appreciation
Rights(b)
  
Non-
Management
Directors'
DSUs(c)
  
 
 
 
Total
Balance, December 31, 2015
$
10,459
$
19,624
$
6
$
2,383
$
32,472
Expensed during the period
  
4,429
  
6,275
  
21
  
1,083
  
11,808
Payments
  
(5,568)
  
(9,378)
  
–
  
–
  
(14,946)
Balance, June 30, 2016
$
9,320
$
16,521
$
27
$
3,466
$
29,334
                     
Current
$
6,077
$
6,767
$
27
$
–
$
12,871
Long-term
  
3,243
  
9,754
  
–
  
3,466
  
16,463
 
$
9,320
$
16,521
$
27
$
3,466
$
29,334


 (a) Restricted Share Units and Performance Share Units
 A summary of the activity under the restricted share unit (RSUs) and the performance share unit (PSUs) plans are presented below:
   
RSUs
Outstanding
    
PSUs
Outstanding
  
December 31, 2015
    
2,896,818
      
4,898,455
  
Granted
    
1,868,600
      
3,384,500
  
Redeemed
    
(1,258,032
)
    
(1,113,362
)
Forfeitures
    
(231,747
)
    
(556,293
)
 
June 30, 2016
    
3,275,639
      
6,613,300
  

 
7

(b) Share Appreciation Rights
A summary of the activity under the share appreciation rights plan is presented below:

   
Outstanding
  
Range of
Exercise Price
(US$)
  
Weighted
Average
Exercise Price
(US$)
  
 
 
 
Exercisable
December 31, 2015
  
343,132
$
 15.22 – 17.38
$
15.93
  
343,132
Forfeitures
  
(89,756)
  
15.22 – 17.38
  
17.38
    
June 30, 2016
  
253,376
$
15.22 – 15.79
$
15.47
  
253,376


(c)  Non-Management Directors – Deferred Share Unit Plan
A summary of the activity under the non-management director deferred share unit plan is presented below:

   
Outstanding
  
December 31, 2015
    
428,028
  
Granted
    
90,397
  
 
June 30, 2016
    
518,425
  


Equity Settled Plans
(d)  Non-Management Directors
Prior to January 1, 2012, Precision had a deferred share unit plan for non-management directors. Under the plan fully vested deferred share units were granted quarterly based upon an election by the non-management director to receive all or a portion of their compensation in deferred share units. These deferred share units are redeemable into an equal number of common shares any time after the director's retirement.
Deferred share units outstanding as at December 31, 2015 and June 30, 2016 were 195,743.

(e) Option Plan

A summary of the activity under the option plan is presented below:
Canadian share options
  
Outstanding
  
Range of
Exercise Price
  
Weighted
Average
Exercise Price
  
 
 
 
Exercisable
December 31, 2015
  
6,168,596
$
 5.22
–
14.50
$
8.93
  
3,870,673
Granted
  
615,200
  
4.46
–
4.46
  
4.46
    
Exercised
  
(293,668)
  
5.85
–
5.85
  
5.85
    
Forfeitures
  
(283,452)
  
5.85
–
11.16
  
7.41
    
June 30, 2016
  
6,206,676
$
4.46
–
14.50
$
8.70
  
4,387,159


8

U.S. share options
  
Outstanding
    
Range of
Exercise Price
(US$)
    
Weighted
Average
Exercise Price (US$)
    
Exercisable
  
December 31, 2015
    
4,582,237
    
$
4.95
–
15.21
    
$
8.30
      
2,468,185
  
Granted
    
2,105,100
      
3.21
–
5.02
      
3.29
          
Exercised
    
(31,000
)
    
4.95
–
4.95
      
4.95
          
Forfeitures
    
(1,222,564
)
    
3.21
–
10.74
      
6.83
          
June 30, 2016
    
5,433,773
    
$
3.21
–
15.21
    
$
6.71
      
2,702,629
  


The per option weighted average fair value of the share options granted during 2016 was $1.78 estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: average risk-free interest rate 1%, average expected life of four years, expected forfeiture rate of 5% and expected volatility of 50%. Included in net loss for the three and six months ended June 30, 2016 is an expense of $0.8 million (2015 - $1.3 million) and $2.0 million (2015 - $2.5 million), respectively.


NOTE 8. FINANCE CHARGES
   
Three months ended June 30,
    
Six months ended June 30,
  
   
2016
    
2015
    
2016
    
2015
  
Interest:
                        
Long-term debt
  
$
33,419
    
$
31,914
    
$
68,771
    
$
63,997
  
Other
    
106
      
46
      
281
      
713
  
Income
    
(1,656
)
    
(739
)
    
(2,254
)
    
(14,831
)
Amortization of debt issue costs
    
1,292
      
1,127
      
2,600
      
2,151
  
Finance charges
  
$
33,161
    
$
32,348
    
$
69,398
    
$
52,030
  


NOTE 9. PER SHARE AMOUNTS

The following tables reconcile the net loss and weighted average shares outstanding used in computing basic and diluted earnings per share:
   
Three months ended June 30,
    
Six months ended June 30,
  
   
2016
    
2015
    
2016
    
2015
  
 
Net loss - basic and diluted
  
$
(57,677
)
  
$
(29,817
)
  
$
(77,560
)
  
$
(5,784
)
                                 
   
Three months ended June 30,
    
Six months ended June 30,
  
(Stated in thousands)
    
2016
      
2015
      
2016
      
2015
  
Weighted average shares outstanding – basic
    
293,134
      
292,865
      
293,027
      
292,843
  
Effect of stock options and other equity compensation plans
    
–
      
–
      
–
      
–
  
Weighted average shares outstanding – diluted
    
293,134
      
292,865
      
293,027
      
292,843
  


9

NOTE 10. SEGMENTED INFORMATION
The Corporation operates primarily in Canada, the United States and certain international locations, in two industry segments; Contract Drilling Services and Completion and Production Services. Contract Drilling Services includes drilling rigs, directional drilling, procurement and distribution of oilfield supplies, and manufacture, sale and repair of drilling equipment. Completion and Production Services includes service rigs, snubbing units, coil tubing services, oilfield equipment rental, camp and catering services, and wastewater treatment units.

Three months ended June 30, 2016
  
Contract
Drilling
Services
  
Completion
and
Production
Services
  
Corporate
and Other
  
Inter-
Segment
Eliminations
  
 
 
 
Total
Revenue
$
147,780
$
16,731
$
–
$
(532)
$
163,979
Operating loss
  
(43,909)
  
(9,136)
  
(21,166)
  
–
  
(74,211)
Depreciation and amortization
  
86,412
  
6,568
  
3,631
  
–
  
96,611
Total assets
  
3,811,152
  
198,794
  
502,454
  
–
  
4,512,400
Goodwill
  
206,306
  
–
  
–
  
–
  
206,306
Capital expenditures
  
51,718
  
705
  
1,001
  
–
  
53,424

Three months ended June 30, 2015
  
Contract
Drilling
Services
  
Completion
and
Production
Services
  
Corporate
and Other
  
Inter-
Segment
Eliminations
  
 
 
 
Total
Revenue
$
299,943
$
35,589
$
 –
$
(1,070)
$
334,462
Operating loss
  
(1,988)
  
(9,410)
  
(20,375)
  
–
  
(31,773)
Depreciation and amortization
  
108,407
  
8,706
  
3,015
  
–
  
120,128
Total assets
  
4,425,338
  
339,838
  
428,671
  
–
  
5,193,847
Goodwill
  
205,043
  
16,968
  
–
  
–
  
222,011
Capital expenditures
  
111,283
  
256
  
1,506
  
–
  
113,045

Six months ended June 30, 2016
  
Contract
Drilling
Services
  
Completion
and
Production
Services
  
Corporate
and Other
  
Inter-
Segment
Eliminations
  
 
 
 
Total
Revenue
$
422,617
$
45,185
$
–
$
(2,096)
$
465,706
Operating loss
  
(12,571)
  
(18,553)
  
(39,072)
  
–
  
(70,196)
Depreciation and amortization
  
170,691
  
13,778
  
7,391
  
–
  
191,860
Total assets
  
3,811,152
  
198,794
  
502,454
  
–
  
4,512,400
Goodwill
  
206,306
  
–
  
–
  
–
  
206,306
Capital expenditures
  
76,451
  
1,048
  
3,086
  
–
  
80,585

Six months ended June 30, 2015
  
Contract
Drilling
Services
  
Completion
and
 Production
Services
  
Corporate
and Other
  
Inter-
Segment
Eliminations
  
 
 
 
Total
Revenue
$
748,008
$
101,671
$
 –
$
(3,097)
$
846,582
Operating earnings (loss)
  
74,377
  
(11,111)
  
(47,752)
  
–
  
15,514
Depreciation and amortization
  
212,238
  
17,464
  
6,523
  
–
  
236,225
Total assets
  
4,425,338
  
339,838
  
428,671
  
–
  
5,193,847
Goodwill
  
205,043
  
16,968
  
–
  
–
  
222,011
Capital expenditures
  
333,877
  
1,779
  
3,211
  
–
  
338,867
 
 
10
The Corporation's operations are carried on in the following geographic locations:
Three months ended  June 30, 2016
  
Canada
    
United States
    
International
    
Inter-
Segment
Eliminations
    
Total
  
Revenue
  
$
45,721
    
$
83,826
    
$
36,453
    
$
(2,021
)
  
$
163,979
  
Total assets
    
2,007,631
      
1,870,792
      
633,977
      
–
      
4,512,400
  
                               
Three months ended June 30, 2015
  
Canada
    
United States
    
International
    
Inter-
Segment
Eliminations
    
Total
  
Revenue
  
$
82,901
    
$
193,507
    
$
63,497
    
$
(5,443
)
  
$
334,462
  
Total assets
    
2,157,194
      
2,324,324
      
712,329
      
–
      
5,193,847
  
                               
Six months ended  June 30, 2016
  
Canada
    
United States
    
International
    
Inter-
Segment
Eliminations
    
Total
  
Revenue
  
$
170,476
    
$
218,920
    
$
80,081
    
$
(3,771
)
  
$
465,706
  
Total assets
    
2,007,631
      
1,870,792
      
633,977
      
–
      
4,512,400
  
                               
Six months ended June 30, 2015
  
Canada
    
United States
    
International
    
Inter-
Segment
Eliminations
    
Total
  
Revenue
  
$
296,847
    
$
437,834
    
$
124,003
    
$
(12,102
)
  
$
846,582
  
Total assets
    
2,157,194
      
2,324,324
      
712,329
      
–
      
5,193,847
  


NOTE 11. FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying value of cash, accounts receivable, and accounts payable and accrued liabilities approximate their fair value due to the relatively short period to maturity of the instruments. The fair value of the unsecured senior notes at June 30, 2016 was approximately $1,853 million (December 31, 2015 - $1,736 million).
Financial assets and liabilities recorded or disclosed at fair value in the consolidated balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are based on the amount of subjectivity associated with the inputs in the fair determination and are as follows:

Level I—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level II—Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument's anticipated life.
Level III—Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The estimated fair value of unsecured senior notes is based on level II inputs. The fair value is estimated considering the risk free interest rates on government debt instruments of similar maturities, adjusted for estimated credit risk, industry risk and market risk premiums.


11
SHAREHOLDER INFORMATION
STOCK EXCHANGE LISTINGS
Shares of Precision Drilling Corporation are listed on the Toronto Stock Exchange under the trading symbol PD and on the New York Stock Exchange under the trading symbol PDS.
TRANSFER AGENT AND REGISTRAR
Computershare Trust Company of Canada
 Calgary, Alberta
TRANSFER POINT
Computershare Trust Company NA
 Canton, Massachusetts
Q2 2016 TRADING PROFILE
Toronto (TSX: PD)
High: $7.71
Low: $5.19
Close: $6.85
Volume Traded: 121,903,553
New York (NYSE: PDS)
High: US$6.08
Low: US$3.98
Close: US$5.30
Volume Traded: 134,791,600
ACCOUNT QUESTIONS
Precision's Transfer Agent can help you with a variety of shareholder related services, including:
• change of address
• lost unit certificates
• transfer of shares to another person
• estate settlement
Computershare Trust Company of Canada
100 University Avenue
9th Floor, North Tower
Toronto, Ontario M5J 2Y1
 Canada
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 Precision's website at www.precisiondrilling.com and refer to the Investor Relations section. Additional information relating to Precision, including the Annual Information Form, Annual Report and Management Information Circular has been filed with SEDAR and is available at www.sedar.com and on the EDGAR website www.sec.gov.
  
CORPORATE INFORMATION

DIRECTORS
William T. Donovan
Brian J. Gibson
Allen R. Hagerman, FCA
Catherine J. Hughes
Steven W. Krablin
Stephen J.J. Letwin
Kevin O. Meyers
Kevin A. Neveu
Robert L. Phillips

OFFICERS
Kevin A. Neveu
President and Chief Executive Officer

Niels Espeland
President, International

Douglas B. Evasiuk
Senior Vice President, Sales and Marketing

Veronica Foley
Senior Vice President, General Counsel and Corporate Secretary

Carey Ford
Senior Vice President and Chief Financial Officer

Darren J. Ruhr
Senior Vice President, Corporate Services

Gene C. Stahl
President, Drilling Operations

AUDITORS
KPMG LLP
Calgary, Alberta

HEAD OFFICE
Suite 800, 525-8th Avenue SW
Calgary, Alberta, Canada T2P 1G1
Telephone: 403-716-4500
Facsimile: 403-264-0251
Email: info@precisiondrilling.com
www.precisiondrilling.com


 
12