The Board of Directors is responsible for identifying the principal risks of Precision’s business and for ensuring the implementation of systems to manage these risks. With the assistance of senior management, who report to the Board of Directors on the risks of Precision’s business, the Board of Directors considers such risks and discusses the management of such risks on a regular basis.

Precision has exposure to the following risks from its use of financial instruments:

Accounts receivable includes balances from customers primarily operating in the oil and natural gas industry. The Corporation manages credit risk by assessing the creditworthiness of its customers before providing services and on an ongoing basis, and by monitoring the amount and age of balances outstanding. In some instances, the Corporation will take additional measures to reduce credit risk including obtaining letters of credit and prepayments from customers. When indicators of credit problems appear, the Corporation takes appropriate steps to reduce its exposure including negotiating with the customer, filing liens and entering into litigation. For the years ended December 31, 2024 and 2023, Precision did not have any customers with revenue from transactions exceeding 10% of consolidated revenue. In addition, Precision’s most significant customer accounted for $36 million of the trade receivables balance at December 31, 2024 (2023 – $24 million).

The movement in the expected credit loss allowance during the year was as follows:


	2024			2023
Balance, January 1,	$	338		$	1,732
Impairment loss recognized		780			437
Amounts written-off as uncollectible		(680	)		(1,784	)
Impairment loss reversed		(301	)		(53	)
Effect of movement in exchange rates		2			6
Balance, December 31,	$	139		$	338

The aging of trade receivables at December 31 was as follows:


	2024				2023
	Gross		Provision for Impairment		Gross		Provision for Impairment
Not past due	$	194,649	$	—	$	214,897	$	1
Past due 0 – 30 days		58,141		1		70,398		3
Past due 31 – 120 days		9,283		112		17,465		273
Past due more than 120 days		1,276		26		2,719		61
	$	263,349	$	139	$	305,479	$	338

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Precision has exposure to interest rate fluctuations on amounts drawn on its Senior Credit Facility as it is subject to floating rates of interest.

At December 31, 2024, Precision had drawn US$12 million on its Senior Credit Facility (2023 – nil). As at December 31, 2024, a 1% change to the interest rate would have less than a $1 million impact on net earnings (2023 – less than $1 million). The interest rate on Precision’s unsecured senior notes is fixed and is not subject to interest rate risk.

The Corporation is primarily exposed to foreign currency fluctuations in relation to the working capital of its foreign operations and certain long-term debt facilities of its Canadian operations. The Corporation has no significant exposures to foreign currencies other than the U.S. dollar. The Corporation monitors its foreign currency exposure and attempts to minimize the impact by aligning appropriate levels of U.S. denominated debt with cash flows from U.S. based operations.

The following financial instruments were denominated in U.S. dollars:


		2024								2023
		Canadian Operations				Foreign Operations				Canadian Operations				Foreign Operations
Cash	US	$	3,084		US	$	27,474		US	$	9,539		US	$	16,459
Accounts receivable			2				113,400				17				148,885
Accounts payable and accrued liabilities			(20,695	)			(98,523	)			(26,706	)			(120,416	)
Long-term liabilities, excluding long-term incentive plans (1)			—				(5,197	)			—				(13,708	)
Net foreign currency exposure	US	$	(17,609	)	US	$	37,154		US	$	(17,150	)	US	$	31,220
Impact of $0.01 change in the U.S. dollar to Canadian dollar exchange rate on net earnings		$	(176	)		$	—			$	(172	)		$	—
Impact of $0.01 change in the U.S. dollar to Canadian dollar exchange rate on comprehensive income		$	—			$	372			$	—			$	312

(1) Excludes U.S. dollar long-term debt that has been designated as a hedge of the Corporation’s net investment in certain self-sustaining foreign operations.

Liquidity risk is the exposure of the Corporation to the risk of not being able to meet its financial obligations as they become due. The Corporation manages liquidity risk by monitoring and reviewing actual and forecasted cash flows to ensure there are available cash resources to meet these needs. The following are the contractual maturities of the Corporation’s financial liabilities and other contractual commitments as at December 31, 2024:


		2025		2026		2027		2028		2029	Thereafter		Total
Accounts payable and accrued liabilities (1)	$	270,163	$	—	$	—	$	—	$	—	$	—	$	270,163
Share-based compensation		37,644		17,487		18,238		—		—		—		73,369
Long-term debt		—		230,026		17,252		—		575,064		—		822,342
Interest on long-term debt (2)		57,029		41,323		40,088		39,536		1,647		—		179,623
Commitments		115,649		35,813		33,663		11,128		6,058		24,429		226,740
Total	$	480,485	$	324,649	$	109,241	$	50,664	$	582,769	$	24,429	$	1,572,237

(1) Excludes the current portion of share-based compensation.

(2) Excludes amortization of long-term debt issue costs.

The carrying value of cash, accounts receivable, and accounts payable and accrued liabilities approximates their fair value due to the relatively short period to maturity of the instruments. Amounts drawn on the Senior Credit Facility, measured at amortized cost, approximate fair value as this indebtedness is subject to floating rates of interest. The fair value of the unsecured senior notes at December 31, 2024 was approximately $801 million (2023 – $867 million).

Financial assets and liabilities recorded or disclosed at fair value in the consolidated statements of financial position are categorized based on the level of judgement 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.