MANAGEMENTS REPORT TO THE UNITHOLDERS
       -s- Kevin A. Neveu
    
    -s- Doug J. StrongKevin A. Neveu
    
    Doug J. StrongChief Executive Officer
    
    Chief Financial OfficerPrecision Drilling Corporation,
    
    Precision Drilling Corporation,Administrator to Precision Drilling Trust
    
    Administrator to Precision Drilling TrustMarch 10, 2010
    
    March 10, 2010




---



##### 



AUDITORS REPORT TO THE UNITHOLDERS
 To the Unitholders of Precision Drilling Trust
   
 
 Chartered Accountants
Calgary, Alberta
 March 10, 2010




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 To the Board of Directors of Precision Drilling Corporation, as Administrator of Precision
Drilling Trust and the Unitholders of Precision Drilling Trust
    
  
 Chartered Accountants
Calgary, Alberta
 March 10, 2010




---



##### 



CONSOLIDATED BALANCE SHEETS
  (Stated in thousands of Canadian dollars)
    
    
    
    
    
    2009
    
    
    
    2008ASSETSCurrent assets:Cash
    
    
    
    
    
    $
    130,799
    
    
    
    $
    61,511Accounts receivable
    
    (Note 25)
    
    
    283,899
    
    
    
    
    601,753Income tax recoverable
    
    
    
    
    
    
    25,753
    
    
    
    
    13,313Inventory
    
    
    
    
    
    
    9,008
    
    
    
    
    8,652449,459
    
    
    
    
    685,229Income tax recoverable
    
    
    
    
    
    
    64,579
    
    
    
    
    58,055Property, plant and equipment
    
    (Note 4)
    
    
    2,913,966
    
    
    
    
    3,243,213Intangibles
    
    (Note 5)
    
    
    3,156
    
    
    
    
    5,676Goodwill
    
    (Note 6)
    
    
    760,553
    
    
    
    
    841,529$
    4,191,713
    
    
    
    $
    4,833,702LIABILITIES AND UNITHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    (Note 25)
    
    $
    128,376
    
    
    
    $
    270,122Distributions payable
    
    (Note 8)
    
    
    
    
    
    
    
    20,825Current portion of long-term debt
    
    (Note 10)
    
    
    223
    
    
    
    
    48,953128,599
    
    
    
    
    339,900Long-term liabilities
    
    (Note 9)
    
    
    26,693
    
    
    
    
    30,951Long-term debt
    
    (Note 10)
    
    
    748,725
    
    
    
    
    1,368,349Future income taxes
    
    (Note 11)
    
    
    703,195
    
    
    
    
    770,6231,607,212
    
    
    
    
    2,509,823Commitments and contingencies
    
    (Notes 17 and 26)Subsequent event
    
    (Notes 10 and 29)Unitholders equity:Unitholders capital
    
    (Note 12(b))
    
    
    2,770,708
    
    
    
    
    2,355,590Contributed surplus
    
    (Note 12(d))
    
    
    4,063
    
    
    
    
    998Retained earnings (deficit)
    
    
    
    
    
    
    107,227
    
    
    
    
    (48,068
    )Accumulated other comprehensive income (loss)
    
    (Note 13)
    
    
    (297,497
    )
    
    
    
    15,3592,584,501
    
    
    
    
    2,323,879$
    4,191,713
    
    
    
    $
    4,833,702
 See accompanying notes to consolidated financial statements.
  (-s- ROBERT J.S. GIBSON)
    
    (-s- ROBERT J.S. GIBSON)Robert J.S. GibsonTrustee
    
    Patrick M. MurrayTrustee




---



##### 



CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (DEFICIT)
  (Stated in thousands of Canadian dollars, except per unit amounts)
    
    
    
    
    
    2009
    
    
    
    2008
    
    
    2007Revenue
    
    
    
    
    
    $
    1,197,446
    
    
    
    $
    1,101,891
    
    
    $
    1,009,201Expenses:Operating
    
    
    
    
    
    
    692,243
    
    
    
    
    598,181
    
    
    
    516,094General and administrative
    
    
    
    
    
    
    98,202
    
    
    
    
    67,174
    
    
    
    56,032Depreciation and amortization
    
    
    
    
    
    
    138,000
    
    
    
    
    83,829
    
    
    
    71,604Loss on asset decommissioning
    
    (Note 4)
    
    
    82,173
    
    
    
    
    
    
    
    
    6,722Foreign exchange
    
    
    
    
    
    
    (122,846
    )
    
    
    
    (2,041
    )
    
    
    2,398Finance charges
    
    (Note 15)
    
    
    147,401
    
    
    
    
    14,174
    
    
    
    7,318Earnings from continuing operations before income taxes
    
    
    
    
    
    
    162,273
    
    
    
    
    340,574
    
    
    
    349,033Income taxes:
    
    (Note 11)Current
    
    
    
    
    
    
    (14,901
    )
    
    
    
    6,102
    
    
    
    (737
    )Future
    
    
    
    
    
    
    15,471
    
    
    
    
    31,742
    
    
    
    6,950570
    
    
    
    
    37,844
    
    
    
    6,213Earnings from continuing operations
    
    
    
    
    
    
    161,703
    
    
    
    
    302,730
    
    
    
    342,820Gain on disposal of discontinued operations, net of tax
    
    (Note 28)
    
    
    
    
    
    
    
    
    
    
    
    2,956Net earnings
    
    
    
    
    
    
    161,703
    
    
    
    
    302,730
    
    
    
    345,776Deficit, beginning of year
    
    
    
    
    
    
    (48,068
    )
    
    
    
    (126,110
    )
    
    
    (195,219
    )Distributions declared
    
    (Note 8)
    
    
    (6,408
    )
    
    
    
    (224,688
    )
    
    
    (276,667
    )Retained earnings (deficit), end of year
    
    
    
    
    
    $
    107,227
    
    
    
    $
    (48,068
    )
    
    $
    (126,110
    )Earnings per unit from continuing operations:
    
    (Note 18)Basic
    
    
    
    
    
    $
    0.65
    
    
    
    $
    2.23
    
    
    $
    2.54Diluted
    
    
    
    
    
    $
    0.63
    
    
    
    $
    2.23
    
    
    $
    2.54Net earnings per unit:
    
    (Note 18)Basic
    
    
    
    
    
    $
    0.65
    
    
    
    $
    2.23
    
    
    $
    2.57Diluted
    
    
    
    
    
    $
    0.63
    
    
    
    $
    2.23
    
    
    $
    2.57See accompanying notes to consolidated financial statements.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)Years ended December 31,(Stated in thousands of Canadian dollars)
    
    
    
    
    
    2009
    
    
    
    2008
    
    
    2007Net earnings
    
    
    
    
    
    $
    161,703
    
    
    
    $
    302,730
    
    
    $
    345,776Unrealized
gain (loss) on translation of assets and liabilities ofself-sustaining operations denominated in foreign currency
    
    (Note 13)
    
    
    (312,856
    )
    
    
    
    11,222
    
    
    
    Comprehensive income (loss)
    
    
    
    
    
    $
    (151,153
    )
    
    
    $
    313,952
    
    
    $
    345,776
 See accompanying notes to consolidated financial statements.




---



##### 



CONSOLIDATED STATEMENTS OF CASH FLOW
  (Stated in thousands of Canadian dollars)
    
    
    
    
    
    2009
    
    
    
    2008
    
    
    2007Cash provided by (used in):Continuing operations:Earnings from continuing operations
    
    
    
    
    
    $
    161,703
    
    
    
    $
    302,730
    
    
    $
    342,820Adjustments and other items not involving cash:Long-term compensation plans
    
    
    
    
    
    
    3,310
    
    
    
    
    2,163
    
    
    
    (8,496
    )Depreciation and amortization
    
    
    
    
    
    
    138,000
    
    
    
    
    83,829
    
    
    
    71,604Loss on asset decommissioning
    
    
    
    
    
    
    82,173
    
    
    
    
    
    
    
    
    6,722Future income taxes
    
    
    
    
    
    
    15,471
    
    
    
    
    31,742
    
    
    
    6,950Unrealized foreign exchange
    
    
    
    
    
    
    (113,649
    )
    
    
    
    7,219
    
    
    
    Amortization of debt issue costs and debt settlement
    
    (Note 15)
    
    
    43,893
    
    
    
    
    798
    
    
    
    Other
    
    
    
    
    
    
    655
    
    
    
    
    
    
    
    
    112Changes in non-cash working capital balances
    
    (Note 25)
    
    
    173,173
    
    
    
    
    (84,571
    )
    
    
    64,403504,729
    
    
    
    
    343,910
    
    
    
    484,115Investments:Purchase of property, plant and equipment
    
    
    
    
    
    
    (193,435
    )
    
    
    
    (229,579
    )
    
    
    (186,973
    )Proceeds on sale of property, plant and equipment
    
    
    
    
    
    
    15,978
    
    
    
    
    10,440
    
    
    
    5,767Business acquisitions, net of cash acquired
    
    (Note 20)
    
    
    
    
    
    
    
    (768,392
    )
    
    
    Changes in income tax recoverable
    
    
    
    
    
    
    (6,524
    )
    
    
    
    (55,148
    )
    
    
    Proceeds on disposal of discontinued operations
    
    (Note 28)
    
    
    
    
    
    
    
    
    
    
    
    2,956Purchase of intangibles
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33
    )Changes in non-cash working capital balances
    
    (Note 25)
    
    
    (26,250
    )
    
    
    
    22,583
    
    
    
    (13,119
    )(210,231
    )
    
    
    
    (1,020,096
    )
    
    
    (191,402
    )Financing:Distributions paid
    
    (Note 8)
    
    
    (27,233
    )
    
    
    
    (216,304
    )
    
    
    (249,000
    )Repayment of long-term debt
    
    
    
    
    
    
    (974,271
    )
    
    
    
    (179,826
    )
    
    
    (99,700
    )Debt issue costs
    
    
    
    
    
    
    (21,628
    )
    
    
    
    (160,098
    )
    
    
    Increase in long-term debt
    
    
    
    
    
    
    408,893
    
    
    
    
    1,308,040
    
    
    
    78,646Issuance of Trust units, net of issue costs
    
    
    
    
    
    
    413,223
    
    
    
    
    
    
    
    
    Change in bank indebtedness
    
    
    
    
    
    
    
    
    
    
    
    (14,115
    )
    
    
    (22,659
    )(201,016
    )
    
    
    
    737,697
    
    
    
    (292,713
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    (24,194
    )
    
    
    
    
    
    
    
    Increase in cash and cash equivalents
    
    
    
    
    
    
    69,288
    
    
    
    
    61,511
    
    
    
    Cash and cash equivalents, beginning of year
    
    
    
    
    
    
    61,511
    
    
    
    
    
    
    
    
    Cash and cash equivalents, end of year
    
    
    
    
    
    $
    130,799
    
    
    
    $
    61,511
    
    
    $
    
 See accompanying notes to consolidated financial statements.




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Tabular amounts are stated in thousands of Canadian dollars except unit numbers and per unit amounts)
 NOTE 1. DESCRIPTION OF BUSINESS
  NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
 (a) Basis of presentation
    (b) Principles of consolidation
   (c) Cash and cash equivalents
  (d) Inventory
  (e) Property, plant and equipment




---



##### 



Expected life
    
    Salvage value
    
    Basis of depreciationDrilling rig equipment
    
    5,000 utilization days
    
    20%
    
    unit-of-productionDrill pipe and drill collars
    
    1,500 operating days
    
    
    
    unit-of-productionService rig equipment
    
    24,000 service hours
    
    20%
    
    unit-of-productionDrilling rig spare equipment
    
    15 years
    
    
    
    straight-lineService rig spare equipment
    
    10 years
    
    
    
    straight-lineRental equipment
    
    10 to 15 years
    
    
    
    straight-lineOther equipment
    
    3 to 10 years
    
    
    
    straight-lineLight duty vehicles
    
    4 years
    
    
    
    straight-lineHeavy duty vehicles
    
    7 to 10 years
    
    
    
    straight-lineBuildings
    
    10 to 20 years
    
    
    
    straight-line
 (f) Intangibles
  Customer relationships
    
    1 to 5 yearsPatents
    
    10 years
 (g) Goodwill
 
 (h) Long-lived assets
  (i) Income taxes




---



##### 



Bill C-52 Budget Implementation Act, 2007
 (j) Revenue recognition
  (k) Employee benefit plans
   (l) Long-term incentive plan
  (m) Unit-based compensation plans




---



##### 








---



##### 



(n) Foreign currency translation
     (o) Exchangeable LP units
  (p) Per unit amounts
  (q) Financial instruments




---



##### 



NOTE 3. CHANGES IN ACCOUNTING POLICIES
 (a) 2009 changes
 
 (b) 2008 changes
  (c) Future accounting pronouncements




---



##### 



NOTE 4. PROPERTY, PLANT AND EQUIPMENT
 Accumulated
    
    
    Net Book2009
    
    Cost
    
    
    Depreciation
    
    
    ValueRig equipment
    
    $
    3,308,987
    
    
    $
    612,826
    
    
    $
    2,696,161Rental equipment
    
    
    87,410
    
    
    
    47,357
    
    
    
    40,053Other equipment
    
    
    112,862
    
    
    
    78,403
    
    
    
    34,459Vehicles
    
    
    82,658
    
    
    
    36,032
    
    
    
    46,626Buildings
    
    
    43,312
    
    
    
    15,452
    
    
    
    27,860Assets under construction
    
    
    49,641
    
    
    
    
    
    
    
    49,641Land
    
    
    19,166
    
    
    
    
    
    
    
    19,166$
    3,704,036
    
    
    $
    790,070
    
    
    $
    2,913,966Accumulated
    
    
    Net Book2008
    
    Cost
    
    
    Depreciation
    
    
    ValueRig equipment
    
    $
    3,444,120
    
    
    $
    548,380
    
    
    $
    2,895,740Rental equipment
    
    
    89,433
    
    
    
    44,240
    
    
    
    45,193Other equipment
    
    
    122,795
    
    
    
    76,841
    
    
    
    45,954Vehicles
    
    
    86,260
    
    
    
    30,817
    
    
    
    55,443Buildings
    
    
    43,048
    
    
    
    12,775
    
    
    
    30,273Assets under construction
    
    
    151,003
    
    
    
    
    
    
    
    151,003Land
    
    
    19,607
    
    
    
    
    
    
    
    19,607$
    3,956,266
    
    
    $
    713,053
    
    
    $
    3,243,213In 2009 the Trust incurred $82.2 million (2008  $nil; 2007  $6.7 million) as a loss associated
with the reduction in the carrying amounts of assets decommissioned during the year. The assets
were decommissioned due to the inefficient nature of the asset and the high cost to maintain. The
charge was allocated $67.8 million (2008  $nil; 2007  $2.4 million) to the Contract Drilling
Services segment and $14.4 million (2008  $nil; 2007  $4.3 million) to the Completion and
Production Services segment.NOTE 5. INTANGIBLESAccumulated
    
    
    Net Book2009
    
    Cost
    
    
    Amortization
    
    
    ValueCustomer relationships
    
    $
    4,488
    
    
    $
    1,464
    
    
    $
    3,024Patents
    
    
    931
    
    
    
    799
    
    
    
    132$
    5,419
    
    
    $
    2,263
    
    
    $
    3,156Accumulated
    
    
    Net Book2008
    
    Cost
    
    
    Depreciation
    
    
    ValueCustomer relationships
    
    $
    5,585
    
    
    $
    134
    
    
    $
    5,451Patents
    
    
    931
    
    
    
    706
    
    
    
    225$
    6,516
    
    
    $
    840
    
    
    $
    5,676




---



##### 



NOTE 6. GOODWILL
 Balance, December 31, 2007
    
    $
    280,749Acquisitions (Note 20)
    
    
    557,165Exchange adjustment
    
    
    3,615Balance, December 31, 2008
    
    
    841,529Exchange adjustment
    
    
    (80,976
    )Balance, December 31, 2009
    
    $
    760,553
 NOTE 7. BANK INDEBTEDNESS
  NOTE 8. DISTRIBUTIONS
    2009
    
    
    
    2008Declared
    
    $
    6,408
    
    
    
    $
    224,688Paid
    
    $
    27,233
    
    
    
    $
    216,304Payable in cash at December 31
    
    $
    
    
    
    
    $
    20,825Payable in units at December 31
    
    $
    
    
    
    
    $
    24,029




---



##### 



NOTE 9. LONG-TERM LIABILITIES
 2009
    
    
    
    2008Long-term incentive plans (Note 14)
    
    $
    6,602
    
    
    
    $
    7,489Long-term workers compensation and other liabilities
    
    
    20,091
    
    
    
    
    23,462$
    26,693
    
    
    
    $
    30,951NOTE 10. LONG-TERM DEBT2009
    
    
    
    2008Secured facility:Term Loan A
    
    $
    288,887
    
    
    
    $
    489,215Term Loan B
    
    
    422,097
    
    
    
    
    489,840Revolving credit facility
    
    
    
    
    
    
    
    107,981Unsecured senior notes
    
    
    175,000
    
    
    
    
    Unsecured facility
    
    
    
    
    
    
    
    168,352Unsecured convertible notes:3.75% notes
    
    
    
    
    
    
    
    168,413Floating rate notes
    
    
    
    
    
    
    
    152,801885,984
    
    
    
    
    1,576,602Less net unamortized debt issue costs
    
    
    (137,036
    )
    
    
    
    (159,300
    )748,948
    
    
    
    
    1,417,302Less current portion
    
    
    (223
    )
    
    
    
    (48,953
    )$
    748,725
    
    
    
    $
    1,368,349
 (a) Secured facility




---



##### 








---



##### 



(b) Unsecured senior notes
   (c) Unsecured facility
  (d) Unsecured convertible notes




---



##### 



2010
    
    $
    2232011
    
    
    31,6632012
    
    
    76,9172013
    
    
    234,0392014
    
    
    368,142Thereafter
    
    
    175,000
 NOTE 11. INCOME TAXES
  2009
    
    
    
    2008
    
    
    2007Earnings from continuing operations before income taxes
    
    $
    162,273
    
    
    
    $
    340,574
    
    
    $
    349,033Federal and provincial statutory rates
    
    
    29%
    
    
    
    
    30%
    
    
    
    33%Tax at statutory rates
    
    $
    47,059
    
    
    
    $
    102,172
    
    
    $
    115,181Adjusted for the effect of:Non-deductible expenses
    
    
    7,562
    
    
    
    
    372
    
    
    
    1,080Non- taxable capital gains
    
    
    (20,136
    )
    
    
    
    
    
    
    
    Income taxed at lower rates
    
    
    (30,983
    )
    
    
    
    
    
    
    
    Income to be distributed to unitholders,
not subject to tax in the Trust
    
    
    (2,771
    )
    
    
    
    (67,463
    )
    
    
    (91,013
    )Other
    
    
    (161
    )
    
    
    
    2,763
    
    
    
    3,426Income tax expense before tax rate reductions
    
    
    570
    
    
    
    
    37,844
    
    
    
    28,674Reduction of future income tax balances
due to enacted tax rate reductions
    
    
    
    
    
    
    
    
    
    
    
    (22,461
    )Income tax expense
    
    $
    570
    
    
    
    $
    37,844
    
    
    $
    6,213Effective income tax rate before enacted tax rate reductions
    
    
    0%
    
    
    
    
    11%
    
    
    
    8%
   2009
    
    
    
    2008Future income tax liability:Property, plant and equipment and intangibles
    
    $
    747,779
    
    
    
    $
    783,945Partnership deferrals
    
    
    37,674
    
    
    
    
    4,716Other
    
    
    14,296
    
    
    
    
    Debt issue costs
    
    
    
    
    
    
    
    3,352799,749
    
    
    
    
    792,013Future income tax assets:Losses (expire from time to time up to 2029)
    
    
    84,365
    
    
    
    
    7,416Debt issue costs
    
    
    3,769
    
    
    
    
    Long-term incentive plan
    
    
    4,407
    
    
    
    
    5,664Other
    
    
    4,013
    
    
    
    
    8,310Net future income tax liability
    
    $
    703,195
    
    
    
    $
    770,623




---



##### 



NOTE 12. UNITHOLDERS CAPITAL
 (a) Authorized
  (b) Unitholders capital
 Trust units
    
    Number
    
    
    AmountBalance, December 31, 2006
    
    
    125,536,329
    
    
    $
    1,409,828Issued on retraction of exchangeable LP units
    
    
    51,590
    
    
    
    574Issued and consolidated pursuant to special distribution (Note 8)
    
    
    
    
    
    
    30,141Balance, December 31, 2007
    
    
    125,587,919
    
    
    
    1,440,543Issued on the acquisition of Grey Wolf
    
    
    34,435,724
    
    
    
    889,085Issued on retraction of exchangeable LP units
    
    
    18,422
    
    
    
    209Issued and consolidated pursuant to special distribution (Note 8)
    
    
    
    
    
    
    24,006Balance, December 31, 2008
    
    
    160,042,065
    
    
    
    2,353,843Issued for cash on February 18, 2009
    
    
    46,000,000
    
    
    
    217,281Issued for cash pursuant to private placement
    
    
    35,000,000
    
    
    
    70,181Issued upon exercise of rights on June 4, 2009
    
    
    34,441,950
    
    
    
    103,326Issued on retraction of exchangeable LP units
    
    
    32,763
    
    
    
    377Unit issue costs, net of related tax effect of $1.9 million
    
    
    
    
    
    
    (10,489
    )275,516,778
    
    
    
    2,734,519Warrants issued pursuant to private placement
    
    
    
    
    
    
    34,819Balance, December 31, 2009
    
    
    275,516,778
    
    
    $
    2,769,338
  Exchangeable LP units
    
    Number
    
    
    AmountBalance, December 31, 2006
    
    
    221,595
    
    
    $
    2,466Redeemed on retraction of exchangeable LP units
    
    
    (51,590
    )
    
    
    (574
    )Issued and consolidated pursuant to special distribution (Note 8)
    
    
    
    
    
    
    41Balance, December 31, 2007
    
    
    170,005
    
    
    
    1,933Redeemed on retraction of exchangeable LP units
    
    
    (18,422
    )
    
    
    (209
    )Issued and consolidated pursuant to special distribution (Note 8)
    
    
    
    
    
    
    23Balance, December 31, 2008
    
    
    151,583
    
    
    
    1,747Redeemed on retraction of exchangeable LP units
    
    
    (32,763
    )
    
    
    (377
    )Balance, December 31, 2009
    
    
    118,820
    
    
    $
    1,370
  2009
    
    
    2008Summary as at December 31,
    
    Number
    
    
    Amount
    
    
    Number
    
    
    AmountTrust units
    
    
    275,516,778
    
    
    $
    2,769,338
    
    
    
    160,042,065
    
    
    $
    2,353,843Exchangeable LP units
    
    
    118,820
    
    
    
    1,370
    
    
    
    151,583
    
    
    
    1,747Unitholders capital
    
    
    275,635,598
    
    
    $
    2,770,708
    
    
    
    160,193,648
    
    
    $
    2,355,590




---



##### 



(c) Warrants
  (d) Contributed surplus
 Balance, December 31, 2007
    
    $
    307Unit based compensation expense (Note 14(c))
    
    
    691Balance, December 31, 2008
    
    
    998Unit based compensation expense (Notes 14(c) and 14(d))
    
    
    3,065Balance, December 31, 2009
    
    $
    4,063
 NOTE 13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 Balance, December 31, 2007
    
    $
    Foreign currency translation adjustment upon change in translation methods
    
    
    4,137Unrealized foreign currency translation gains
    
    
    11,222Balance, December 31, 2008
    
    
    15,359Unrealized foreign currency translation losses
    
    
    (312,856
    )Balance, December 31, 2009
    
    $
    (297,497
    )
 NOTE 14. UNIT BASED COMPENSATION PLANS
 (a) Officers and employees




---



##### 



Deferred Trust Units
    
    OutstandingBalance, December 31, 2007
    
    
    76,729Issued, including as a result of distributions
    
    
    31,006Redeemed on employee resignations and withdrawals
    
    
    (24,300
    )Balance, December 31, 2008
    
    
    83,435Issued, including as a result of distributions
    
    
    211,156Redeemed on employee resignations and withdrawals
    
    
    (48,675
    )Balance, December 31, 2009
    
    
    245,916
   WeightedRange of
    
    
    AverageUnit Appreciation Rights
    
    Outstanding
    
    
    Exercise Price
    
    
    Exercise Price
    
    
    ExercisableOutstanding at December 31, 2007
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    
    Granted
    
    
    925,746
    
    
    
    9.69  18.76
    
    
    
    15.56Outstanding at December 31, 2008
    
    
    925,746
    
    
    
    9.69  18.76
    
    
    
    15.56
    
    
    
    469,267Forfeitures
    
    
    (128,206
    )
    
    
    9.69  18.19
    
    
    
    16.02Outstanding at December 31, 2009
    
    
    797,540
    
    
    $
    9.69  18.76
    
    
    $
    15.48
    
    
    
    607,168
 Total UARs Outstanding
    
    
    Exercisable UARsWeightedAverageWeighted
    
    
    Remaining
    
    
    
    
    
    
    WeightedAverage
    
    
    Contractual
    
    
    
    
    
    
    AverageRange of Exercise Prices:
    
    Number
    
    
    Exercise Price
    
    
    Life (Years)
    
    
    Number
    
    
    Exercise Price$   9.69   12.99
    
    
    76,109
    
    
    $
    9.70
    
    
    
    4.24
    
    
    
    76,109
    
    
    $
    9.7013.00  15.99
    
    
    420,471
    
    
    
    15.35
    
    
    
    7.29
    
    
    
    274,098
    
    
    
    15.1216.00  18.76
    
    
    300,960
    
    
    
    17.13
    
    
    
    6.74
    
    
    
    256,961
    
    
    
    17.23$   9.69   18.76
    
    
    797,540
    
    
    $
    15.48
    
    
    
    6.79
    
    
    
    607,168
    
    
    $
    15.33
  (b) Executive




---



##### 



(c) Non-management directors
  Deferred Trust Units
    
    OutstandingBalance, December 31, 2007
    
    
    18,280Granted
    
    
    33,058Issued as a result of distributions
    
    
    3,205Balance, December 31, 2008
    
    
    54,543Granted
    
    
    234,142Issued as a result of distributions
    
    
    2,047Balance, December 31, 2009
    
    
    290,732
  (d) Option plan
   WeightedOptions
    
    
    Range of
    
    
    Average
    
    
    OptionsOutstanding
    
    
    Exercise Price
    
    
    Exercise Price
    
    
    ExercisableOutstanding as at December 31, 2008Granted
    
    
    1,929,200
    
    
    $
    5.18  7.35
    
    
    $
    5.52
    
    
    
    Forfeitures
    
    
    (141,500
    )
    
    $
    5.18  5.85
    
    
    $
    5.23
    
    
    
    Outstanding as at December 31, 2009
    
    
    1,787,700
    
    
    $
    5.18  7.35
    
    
    $
    5.63
    
    
    
    
  NOTE 15. FINANCE CHARGES
 2009
    
    
    2008
    
    
    2007Interest:Long-term debt
    
    $
    101,108
    
    
    
    13,680
    
    
    
    7,767Other
    
    
    2,883
    
    
    
    151
    
    
    
    106Income
    
    
    (483
    )
    
    
    (455
    )
    
    
    (555
    )Amortization of debt issue costs
    
    
    25,681
    
    
    
    798
    
    
    
    Accelerated amortization of debt issue costs
from voluntary debt repayments
    
    
    8,313
    
    
    
    
    
    
    
    Loss on settlement of unsecured facility (Note 10)
    
    
    9,899
    
    
    
    
    
    
    
    $
    147,401
    
    
    $
    14,174
    
    
    $
    7,318




---



##### 



NOTE 16. EMPLOYEE BENEFIT PLANS
  NOTE 17. COMMITMENTS
  2010
    
    $
    11,0342011
    
    
    41,9042012
    
    
    2,9382013
    
    
    1,8772014
    
    
    1,313
  2009
    
    $
    6,9372008
    
    
    3,6362007
    
    
    3,838
 NOTE 18. PER UNIT AMOUNTS
  (Stated in thousands)
    
    2009
    
    
    
    2008
    
    
    2007Net earnings  basic
    
    $
    161,703
    
    
    
    $
    302,730
    
    
    $
    345,776Impact of assumed conversion of convertible debt, net of tax
    
    
    1,229
    
    
    
    
    164
    
    
    
    Net earnings  diluted
    
    $
    162,932
    
    
    
    $
    302,894
    
    
    $
    345,776
 (Stated in thousands)
    
    2009
    
    
    
    2008
    
    
    2007Weighted average units outstanding  basic
    
    
    243,748
    
    
    
    
    126,507
    
    
    
    125,758Effect of rights offering
    
    
    6,177
    
    
    
    
    9,061
    
    
    
    9,007Weighted average units outstanding  basic
    
    
    249,925
    
    
    
    
    135,568
    
    
    
    134,765Effect of trust unit warrants
    
    
    5,261
    
    
    
    
    
    
    
    
    Effect of stock options and other equity compensation plans
    
    
    181
    
    
    
    
    33
    
    
    
    2Effect of convertible debt
    
    
    3,896
    
    
    
    
    372
    
    
    
    Effect of rights offering
    
    
    342
    
    
    
    
    29
    
    
    
    Weighted average units outstanding  diluted
    
    
    259,605
    
    
    
    
    136,002
    
    
    
    134,767




---



##### 



NOTE 19. SIGNIFICANT CUSTOMERS
  NOTE 20. BUSINESS ACQUISITIONS
     Grey Wolf
    
    
    RWS
    
    
    TotalNet assets at assigned values:Working capital
    
    $
    470,586
    (1)
    
    $
    19
    
    
    $
    470,605Property, plant and equipment
    
    
    1,869,875
    
    
    
    10,542
    
    
    
    1,880,417Intangible assets
    
    
    4,428
    
    
    
    1,128
    
    
    
    5,556Goodwill (no tax basis)
    
    
    553,335
    
    
    
    3,830
    
    
    
    557,165Long-term liabilities
    
    
    (23,308
    )
    
    
    
    
    
    
    (23,308
    )Long-term debt
    
    
    (319,115
    )
    
    
    
    
    
    
    (319,115
    )Future income taxes
    
    
    (553,682
    )
    
    
    
    
    
    
    (553,682
    )$
    2,002,119
    
    
    $
    15,519
    
    
    $
    2,017,638Consideration:Cash
    
    $
    1,113,034
    
    
    $
    15,519
    
    
    $
    1,128,553Trust units
    
    
    889,085
    
    
    
    
    
    
    
    889,085$
    2,002,119
    
    
    $
    15,519
    
    
    $
    2,017,638
  NOTE 21. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
  (a) Income taxes




---



##### 



Reconciliation of unrecognized tax benefits
 Year ended December 31,
    
    2009
    
    
    2008Unrecognized tax benefits, beginning of year
    
    $
    56,563
    
    
    $
    44,407Additions:Prior years tax positions
    
    
    2,514
    
    
    
    2,822Assumed on acquisition of Grey Wolf, Inc.
    
    
    
    
    
    
    9,696Reductions:Prior years tax positions
    
    
    (10,425
    )
    
    
    (362
    )Unrecognized tax benefits, end of year
    
    $
    48,652
    
    
    $
    56,563
   (b) Equity settled unit based compensation
    Trust Unit
    
    
    DirectorsAs at December 31, 2009
    
    Options
    
    
    DTUsNumber vested and expected to vest
    
    
    1,698,315
    
    
    
    290,732Weighted average exercise price per unit (1)
    
    $
    5.63
    
    
    $
    Aggregate intrinsic value (2)
    
    $
    3,425
    
    
    $
    2,224Weighted average remaining life (years)
    
    
    6.3
    
    
    
    Trust Unit
    
    
    DirectorsAs at December 31, 2008
    
    Options
    
    
    DTUsNumber vested and expected to vest
    
    
    
    
    
    
    54,543Weighted average exercise price per unit (1)
    
    $
    
    
    
    $
    Aggregate intrinsic value (2)
    
    $
    
    
    
    $
    549Weighted average remaining life (years)
    
    
    
    
    
    
    




---



##### 



(c) Cash settled unit based compensation
   As at December 31, 2009
    
    UARsNumber vested and expected to vest
    
    
    757,663Weighted average exercise price per unit
    
    $
    15.48Aggregate intrinsic value (1)
    
    $
    Weighted average remaining life (years)
    
    
    6.8Number exercisable
    
    
    607,168Weighted average exercise price per unit
    
    $
    15.33Aggregate intrinsic value (1)
    
    $
    Weighted average remaining life (years)
    
    
    6.5
 As at December 31, 2008
    
    UARsNumber vested and expected to vest
    
    
    879, 459Weighted average exercise price per unit
    
    $
    15.56Aggregate intrinsic value (1)
    
    $
    Weighted average remaining life (years)
    
    
    7.8Number exercisable
    
    
    469,267Weighted average exercise price per unit
    
    $
    15.43Aggregate intrinsic value (1)
    
    $
    Weighted average remaining life (years)
    
    
    7.4
 (1)
    
    Based on December 31 closing price for Precisions Trust units on the Toronto Stock
Exchange.
 (d) Redemption of Trust units
  (e) Debt issuance costs




---



##### 



(f) Goodwill
  (g) Business acquisitions
   Pro Forma (unaudited)
    
    2008
    
    
    
    2007Revenue
    
    $
    2,038,828
    
    
    
    $
    1,983,046Net earnings
    
    $
    289,892
    
    
    
    $
    437,239Net earnings per unit:Basic
    
    $
    1.81
    
    
    
    $
    2.73Diluted
    
    $
    1.81
    
    
    
    $
    2.73
 (h) New accounting policies adopted
    (i) Fair value disclosure




---



##### 



Consolidated Statements of Earnings
 Years ended December 31,
    
    2009
    
    
    
    2008
    
    
    2007Earnings from continuing operations under Canadian GAAP
    
    $
    161,703
    
    
    
    $
    302,730
    
    
    $
    342,820Adjustments under U.S. GAAP:Equity-based compensation expense
    
    
    (1,610
    )
    
    
    
    183
    
    
    
    35Earnings from continuing operations under U.S. GAAP
    
    
    160,093
    
    
    
    
    302,913
    
    
    
    342,855Earnings from discontinued operations under Canadian and U.S. GAAP
    
    
    
    
    
    
    
    
    
    
    
    2,956Net earnings under U.S. GAAP
    
    $
    160,093
    
    
    
    $
    302,913
    
    
    $
    345,811Earnings from continuing operations per unit under U.S. GAAP:Basic
    
    $
    0.64
    
    
    
    $
    2.23
    
    
    $
    2.54Diluted
    
    $
    0.62
    
    
    
    $
    2.23
    
    
    $
    2.54Net earnings per unit under U.S. GAAP:Basic
    
    $
    0.64
    
    
    
    $
    2.23
    
    
    $
    2.57Diluted
    
    $
    0.62
    
    
    
    $
    2.23
    
    
    $
    2.57
 Consolidated Statements of Comprehensive Income (Loss)
 Years ended December 31,
    
    2009
    
    
    
    2008
    
    
    2007Net earnings under U.S. GAAP
    
    $
    160,093
    
    
    
    $
    302,913
    
    
    $
    345,811Unrealized gain (loss) on translation of assets and liabilities of
self-sustaining operations denominated in foreign currency
    
    
    (312,856
    )
    
    
    
    11,222
    
    
    
    Comprehensive income (loss) under U.S. GAAP
    
    $
    (152,763
    )
    
    
    $
    314,135
    
    

        $
345,811
 Consolidated Statements of Retained Earnings (Deficit)
 Years ended December 31,
    
    2009
    
    
    
    2008
    
    
    2007Retained earnings (deficit) under U.S. GAAP, beginning of year
    
    $
    1,060,802
    
    
    
    $
    (350,898
    )
    
    $
    (1,873,490
    )Net earnings under U.S. GAAP
    
    
    160,093
    
    
    
    
    302,913
    
    
    
    345,811Distributions declared
    
    
    (6,408
    )
    
    
    
    (224,688
    )
    
    
    (276,667
    )Change in redemption value of temporary equity
    
    
    (173,658
    )
    
    
    
    1,333,475
    
    
    
    1,453,448Retained earnings (deficit) under U.S. GAAP, end of year
    
    $
    1,040,829
    
    
    
    $
    1,060,802
    
    
    $
    (350,898
    )




---



##### 



Consolidated Balance Sheets
 2009
    
    
    
    2008As at December 31,
    
    As reported
    
    
    U.S. GAAP
    
    
    
    As reported
    
    
    U.S. GAAPCurrent assets
    
    $
    449,459
    
    
    $
    449,459
    
    
    
    $
    685,229
    
    
    $
    685,229Income taxes recoverable
    
    
    64,579
    
    
    
    64,579
    
    
    
    
    58,055
    
    
    
    58,055Other long-term assets
    
    
    
    
    
    
    137,036
    
    
    
    
    
    
    
    
    159,300Property, plant and equipment
    
    
    2,913,966
    
    
    
    2,913,966
    
    
    
    
    3,243,213
    
    
    
    3,243,213Intangibles
    
    
    3,156
    
    
    
    3,156
    
    
    
    
    5,676
    
    
    
    5,676Goodwill
    
    
    760,553
    
    
    
    823,582
    
    
    
    
    841,529
    
    
    
    904,558$
    4,191,713
    
    
    $
    4,391,778
    
    
    
    $
    4,833,702
    
    
    $
    5,056,031Current liabilities
    
    $
    128,599
    
    
    $
    158,482
    
    
    
    $
    339,900
    
    
    $
    349,780Long-term liabilities
    
    
    26,693
    
    
    
    26,693
    
    
    
    
    30,951
    
    
    
    30,951Long-term debt
    
    
    748,725
    
    
    
    885,761
    
    
    
    
    1,368,349
    
    
    
    1,527,649Future income taxes
    
    
    703,195
    
    
    
    654,056
    
    
    
    
    770,623
    
    
    
    713,918Other long-term liabilities
    
    
    
    
    
    
    24,711
    
    
    
    
    
    
    
    
    47,605Temporary equity
    
    
    
    
    
    
    1,898,743
    
    
    
    
    
    
    
    
    1,309,967Unitholders capital
    
    
    2,770,708
    
    
    
    
    
    
    
    
    2,355,590
    
    
    
    Contributed surplus
    
    
    4,063
    
    
    
    
    
    
    
    
    998
    
    
    
    Accumulated other comprehensive income (loss)
    
    
    (297,497
    )
    
    
    (297,497
    )
    
    
    
    15,359
    
    
    
    15,359Retained earnings (deficit)
    
    
    107,227
    
    
    
    1,040,829
    
    
    
    
    (48,068
    )
    
    
    1,060,802$
    4,191,713
    
    
    $
    4,391,778
    
    
    
    $
    4,833,702
    
    
    $
    5,056,031
 NOTE 22. SEGMENTED INFORMATION
  Contract
    
    
    Completion andDrilling
    
    
    Production
    
    
    Corporate
    
    
    Inter-segment2009
    
    Services
    
    
    Services
    
    
    and Other
    
    
    Eliminations
    
    
    TotalRevenue
    
    $
    1,030,852
    
    
    $
    176,422
    
    
    $
    
    
    
    $
    (9,828
    )
    
    $
    1,197,446Segment profit (loss) (1)
    
    
    210,784
    
    
    
    10,934
    
    
    
    (34,890
    )
    
    
    
    
    
    
    186,828Depreciation and amortization
    
    
    118,889
    
    
    
    17,186
    
    
    
    1,925
    
    
    
    
    
    
    
    138,000Total assets
    
    
    3,566,078
    
    
    
    388,245
    
    
    
    237,390
    
    
    
    
    
    
    
    4,191,713Goodwill
    
    
    648,414
    
    
    
    112,139
    
    
    
    
    
    
    
    
    
    
    
    760,553Capital expenditures
    
    
    182,855
    
    
    
    2,897
    
    
    
    7,683
    
    
    
    
    
    
    
    193,435Contract
    
    
    Completion andDrilling
    
    
    Production
    
    
    Corporate
    
    
    Inter-segment2008
    
    Services
    
    
    Services
    
    
    and Other
    
    
    Eliminations
    
    
    TotalRevenue
    
    $
    809,317
    
    
    $
    308,624
    
    
    $
    
    
    
    $
    (16,050
    )
    
    $
    1,101,891Segment profit (loss) (1)
    
    
    302,061
    
    
    
    86,088
    
    
    
    (35,442
    )
    
    
    
    
    
    
    352,707Depreciation and amortization
    
    
    57,076
    
    
    
    22,966
    
    
    
    3,787
    
    
    
    
    
    
    
    83,829Total assets
    
    
    4,289,517
    
    
    
    448,697
    
    
    
    95,488
    
    
    
    
    
    
    
    4,833,702Goodwill
    
    
    729,390
    
    
    
    112,139
    
    
    
    
    
    
    
    
    
    
    
    841,529Capital expenditures*
    
    
    202,863
    
    
    
    23,713
    
    
    
    3,003
    
    
    
    
    
    
    
    229,579
 *
    
    Excludes business acquisitions




---



##### 



Contract
    
    
    Completion andDrilling
    
    
    Production
    
    
    Corporate
    
    
    Inter-segment2007
    
    Services
    
    
    Services
    
    
    and Other
    
    
    Eliminations
    
    
    TotalRevenue
    
    $
    694,340
    
    
    $
    327,471
    
    
    $
    
    
    
    $
    (12,610
    )
    
    $
    1,009,201Segment profit (loss) (1)
    
    
    286,231
    
    
    
    100,609
    
    
    
    (28,091
    )
    
    
    
    
    
    
    358,749Depreciation and amortization
    
    
    40,660
    
    
    
    27,159
    
    
    
    3,785
    
    
    
    
    
    
    
    71,604Total assets
    
    
    1,282,865
    
    
    
    457,587
    
    
    
    23,025
    
    
    
    
    
    
    
    1,763,477Goodwill
    
    
    172,440
    
    
    
    108,309
    
    
    
    
    
    
    
    
    
    
    
    280,749Capital expenditures
    
    
    159,004
    
    
    
    26,772
    
    
    
    1,230
    
    
    
    
    
    
    
    187,006
 (1)
    
    Segment profit (loss) is defined as revenue less operating, general and administrative,
loss on asset decommissioning and depreciation and amortization. A reconciliation of segment profit
(loss) to earnings from continuing operations before income taxes is as follows:
 2009
    
    
    
    2008
    
    
    2007Total segment profit (loss)
    
    $
    186,828
    
    
    
    $
    352,707
    
    
    $
    358,749Add (deduct):Foreign exchange
    
    
    122,846
    
    
    
    
    2,041
    
    
    
    (2,398
    )Finance charges
    
    
    (147,401
    )
    
    
    
    (14,174
    )
    
    
    (7,318
    )Earnings from continuing operations before income taxes
    
    $
    162,273
    
    
    
    $
    340,574
    
    
    $
    349,033
  Inter-segment2009
    
    Canada
    
    
    United States
    
    
    International
    
    
    Eliminations
    
    
    TotalRevenue
    
    $
    569,013
    
    
    $
    608,109
    
    
    $
    23,748
    
    
    $
    (3,424
    )
    
    $
    1,197,446Total assets
    
    
    1,639,046
    
    
    
    2,498,909
    
    
    
    53,758
    
    
    
    
    
    
    
    4,191,713Inter-segment2008
    
    Canada
    
    
    United States
    
    
    International
    
    
    Eliminations
    
    
    TotalRevenue
    
    $
    909,001
    
    
    $
    189,796
    
    
    $
    4,686
    
    
    $
    (1,592
    )
    
    $
    1,101,891Total assets
    
    
    1,741,462
    
    
    
    3,033,378
    
    
    
    58,862
    
    
    
    
    
    
    
    4,833,702Inter-segment2007
    
    Canada
    
    
    United States
    
    
    International
    
    
    Eliminations
    
    
    TotalRevenue
    
    $
    958,937
    
    
    $
    51,082
    
    
    $
    
    
    
    $
    (818
    )
    
    $
    1,009,201Total assets
    
    
    1,651,920
    
    
    
    108,683
    
    
    
    2,874
    
    
    
    
    
    
    
    1,763,477
 NOTE 23. FINANCIAL INSTRUMENTS
 (a) Fair value




---



##### 



Fair Value Measurements at Reporting Date Using:Quoted Prices
    
    
    Significantin Active
    
    
    Other
    
    
    SignificantCarrying Amount
    
    
    Markets for
    
    
    Observable
    
    
    Observableof Asset at
    
    
    Identical Assets
    
    
    Inputs
    
    
    InputsDescription
    
    December 31, 2009
    
    
    (Level I)
    
    
    (Level II)
    
    
    (Level III)Interest rate swap
    
    $
    2,378
    
    
    $
    
    
    
    $
    2,378
    
    
    $
    Interest rate cap
    
    
    493
    
    
    
    
    
    
    
    493
    
    
    
    
 (b) Credit risk
   (c) Interest rate risk
  (d) Foreign currency risk




---



##### 



Canadian
    
    
    U.S.Operations
    
    
    OperationsCash
    
    $
    4,466
    
    
    $
    35,491Accounts receivable
    
    
    2,368
    
    
    
    127,992Accounts payable and accrued liabilities
    
    
    (1,735
    )
    
    
    (58,093
    )Long-term liabilities, excluding long-term incentive plans
    
    
    
    
    
    
    (19,196
    )Long-term debt, including current portion
    
    
    (660,840
    )
    
    
    Net foreign currency exposure
    
    $
    (655,741
    )
    
    $
    86,194Impact of $0.01 change in the U.S. dollar to Canadian dollar
exchange rate on net earnings
    
    $
    6,557
    
    
    $
    Impact of $0.01 change in the U.S. dollar to Canadian dollar
exchange rate on comprehensive income
    
    $
    
    
    
    $
    862
 (e) Liquidity risk
  2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    TotalLong-term debt
    
    $
    223
    
    
    $
    31,663
    
    
    $
    76,917
    
    
    $
    234,039
    
    
    $
    368,142
    
    
    $
    175,000
    
    
    $
    885,984Interest on long-term debt (1)
    
    
    74,619
    
    
    
    74,219
    
    
    
    70,606
    
    
    
    65,320
    
    
    
    43,740
    
    
    
    21,863
    
    
    
    350,367Commitments
    
    
    11,034
    
    
    
    41,904
    
    
    
    2,938
    
    
    
    1,877
    
    
    
    1,313
    
    
    
    1,562
    
    
    
    60,628Total
    
    $
    85,876
    
    
    $
    147,786
    
    
    $
    150,461
    
    
    $
    301,236
    
    
    $
    413,195
    
    
    $
    198,425
    
    
    $
    1,296,979
 (1)
    
    Interest has been calculated based upon debt balances, interest rates and foreign exchange
rates in effect as at December 31, 2009 and excludes amortization of long-term debt issue costs.
 NOTE 24. CAPITAL MANAGEMENT
  2009
    
    
    
    2008Long-term debt
    
    $
    748,725
    
    
    
    $
    1,368,349Unitholders equity
    
    
    2,584,501
    
    
    
    
    2,323,879Total capitalization
    
    $
    3,333,226
    
    
    
    $
    3,692,228Long-term debt to long-term debt plus equity ratio
    
    
    0.22
    
    
    
    
    0.37




---



##### 



NOTE 25. SUPPLEMENTAL INFORMATION
 2009
    
    
    
    2008
    
    
    2007Interest paid
    
    $
    103,109
    
    
    
    $
    13,394
    
    
    $
    7,870Income taxes paid
    
    $
    23,697
    
    
    
    $
    764
    
    
    $
    4,307Components of change in non-cash working capital balances:Accounts receivable
    
    $
    295,844
    
    
    
    $
    (114,444
    )
    
    $
    98,055Inventory
    
    
    (467
    )
    
    
    
    603
    
    
    
    (182
    )Accounts payable and accrued liabilities
    
    
    (133,419
    )
    
    
    
    56,299
    
    
    
    (49,338
    )Income taxes
    
    
    (15,035
    )
    
    
    
    (4,446
    )
    
    
    2,749$
    146,923
    
    
    
    $
    (61,988
    )
    
    $
    51,284Pertaining to:Operations
    
    $
    173,173
    
    
    
    $
    (84,571
    )
    
    $
    64,403Investments
    
    $
    (26,250
    )
    
    
    $
    22,583
    
    
    $
    (13,119
    )
  2009
    
    
    
    2008Trade
    
    $
    185,144
    
    
    
    $
    387,004Accrued trade
    
    
    67,918
    
    
    
    
    178,946Prepaids and other
    
    
    30,837
    
    
    
    
    35,803$
    283,899
    
    
    
    $
    601,753
  2009
    
    
    
    2008Accounts payable
    
    $
    53,546
    
    
    
    $
    136,054Accrued liabilities:Payroll
    
    
    35,926
    
    
    
    
    78,143Other
    
    
    38,904
    
    
    
    
    55,925$
    128,376
    
    
    
    $
    270,122




---



##### 



NOTE 26. CONTINGENCIES AND COMMITMENTS
   NOTE 27. GUARANTEES
  NOTE 28. DISCONTINUED OPERATIONS
   2009
    
    
    
    2008
    
    
    2007Net earnings of discontinued operations
    
    $
    
    
    
    
    $
    
    
    
    $
    2,956Items not affecting cash:Gain on disposal of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    (2,956
    )Funds provided by discontinued operations
    
    $
    
    
    
    
    $
    
    
    
    $
    
 NOTE 29. SUBSEQUENT EVENT




---



##### 



SUPPLEMENTAL INFORMATION
 
 UNIT TRADING SUMMARY  2009




---



##### 



CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (DEFICIT)
 Years ended December 31,(Stated in millions of Canadian dollars,except per unit amounts)
    
    2009
    
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Revenue
    
    $
    1,197.4
    
    
    
    $
    1,101.9
    
    
    $
    1,009.2
    
    
    $
    1,437.6
    
    
    $
    1,269.2Expenses:Operating
    
    
    692.2
    
    
    
    
    598.2
    
    
    
    516.1
    
    
    
    688.2
    
    
    
    641.8General and administrative
    
    
    98.2
    
    
    
    
    67.2
    
    
    
    56.0
    
    
    
    81.2
    
    
    
    76.4Reorganization costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17.5EBITDA
    
    
    407.0
    
    
    
    
    436.5
    
    
    
    437.1
    
    
    
    668.2
    
    
    
    533.5Depreciation and amortization
    
    
    138.0
    
    
    
    
    83.8
    
    
    
    71.6
    
    
    
    73.2
    
    
    
    71.6Loss on asset decommissioning
    
    
    82.1
    
    
    
    
    
    
    
    
    6.7
    
    
    
    
    
    
    
    Operating earnings
    
    
    186.9
    
    
    
    
    352.7
    
    
    
    358.8
    
    
    
    595.0
    
    
    
    461.9Foreign exchange
    
    
    (122.8
    )
    
    
    
    (2.0
    )
    
    
    2.4
    
    
    
    (0.3
    )
    
    
    (3.5
    )Finance charges
    
    
    147.4
    
    
    
    
    14.1
    
    
    
    7.4
    
    
    
    8.0
    
    
    
    29.3Premium on redemption of bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71.9Loss on disposal of short-term investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71.0Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )
    
    
    Earnings from continuing operations
before income taxes
    
    
    162.3
    
    
    
    
    340.6
    
    
    
    349.0
    
    
    
    587.7
    
    
    
    293.2Income taxes
    
    
    0.6
    
    
    
    
    37.9
    
    
    
    6.2
    
    
    
    15.2
    
    
    
    72.4Earnings from continuing operations
    
    
    161.7
    
    
    
    
    302.7
    
    
    
    342.8
    
    
    
    572.5
    
    
    
    220.8Discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    3.0
    
    
    
    7.1
    
    
    
    1,409.8Net earnings
    
    
    161.7
    
    
    
    
    302.7
    
    
    
    345.8
    
    
    
    579.6
    
    
    
    1,630.6Retained earnings (deficit), beginning of year
    
    
    (48.1
    )
    
    
    
    (126.1
    )
    
    
    (195.2
    )
    
    
    (303.3
    )
    
    
    1,041.7Adjustment on cash purchase of employee
stock options, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (42.1
    )Reclassification from contributed surplus
on cash buy-out of employee stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23.2Distribution of disposal proceeds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,851.8
    )Repurchase of common shares of
dissenting shareholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34.4
    )Distributions declared
    
    
    (6.4
    )
    
    
    
    (224.7
    )
    
    
    (276.7
    )
    
    
    (471.5
    )
    
    
    (70.5
    )Retained earnings (deficit), end of year
    
    $
    107.2
    
    
    
    $
    (48.1
    )
    
    $
    (126.1
    )
    
    $
    (195.2
    )
    
    $
    (303.3
    )Earnings per unit from continuing operations:Basic
    
    $
    0.65
    
    
    
    $
    2.23
    
    
    $
    2.54
    
    
    $
    4.26
    
    
    $
    1.67Diluted
    
    $
    0.63
    
    
    
    $
    2.23
    
    
    $
    2.54
    
    
    $
    4.26
    
    
    $
    1.64Net earnings per unit:Basic
    
    $
    0.65
    
    
    
    $
    2.23
    
    
    $
    2.57
    
    
    $
    4.31
    
    
    $
    12.34Diluted
    
    $
    0.63
    
    
    
    $
    2.23
    
    
    $
    2.57
    
    
    $
    4.31
    
    
    $
    12.13




---



##### 



ADDITIONAL SELECTED FINANCIAL INFORMATION
 Years ended December 31,(Stated in millions of Canadian dollars,except per unit amounts)
    
    2009
    
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Return on sales  % (1)
    
    
    13.5
    
    
    
    
    27.5
    
    
    
    34.0
    
    
    
    39.8
    
    
    
    17.4Return on assets  % (2)
    
    
    3.6
    
    
    
    
    12.4
    
    
    
    19.9
    
    
    
    33.6
    
    
    
    43.3Return on equity  % (3)
    
    
    6.2
    
    
    
    
    19.6
    
    
    
    27.0
    
    
    
    49.4
    
    
    
    66.1Working capital
    
    $
    320.9
    
    
    
    $
    345.3
    
    
    $
    140.4
    
    
    $
    166.5
    
    
    $
    152.8Current ratio
    
    
    3.5
    
    
    
    
    2.0
    
    
    
    2.1
    
    
    
    1.81
    
    
    
    1.43PP&E and intangibles
    
    $
    2,917.1
    
    
    
    $
    3,248.9
    
    
    $
    1,210.9
    
    
    $
    1,108.0
    
    
    $
    944.4Total assets
    
    $
    4,191.7
    
    
    
    $
    4,833.7
    
    
    $
    1,763.5
    
    
    $
    1,761.2
    
    
    $
    1,718.9Long-term debt
    
    $
    748.7
    
    
    
    $
    1,368.3
    
    
    $
    119.8
    
    
    $
    140.9
    
    
    $
    96.8Unitholders equity
    
    $
    2,584.5
    
    
    
    $
    2,323.9
    
    
    $
    1,316.7
    
    
    $
    1,217.1
    
    
    $
    1,074.6Long-term debt to long-term debt plus equity
    
    
    0.22
    
    
    
    
    0.37
    
    
    
    0.08
    
    
    
    0.10
    
    
    
    0.08Interest coverage (4)
    
    
    1.3
    
    
    
    
    24.9
    
    
    
    49.0
    
    
    
    74.1
    
    
    
    15.9Net capital expenditures from continuingoperations excluding business acquisitions
    
    $
    177.5
    
    
    
    $
    219.1
    
    
    $
    181.2
    
    
    $
    233.7
    
    
    $
    140.1EBITDA
    
    $
    407.0
    
    
    
    $
    436.5
    
    
    $
    437.1
    
    
    $
    668.2
    
    
    $
    533.5EBITDA  % of revenue
    
    
    34.0
    
    
    
    
    39.6
    
    
    
    43.3
    
    
    
    46.5
    
    
    
    42.0Operating earnings
    
    $
    186.9
    
    
    
    $
    352.7
    
    
    $
    358.8
    
    
    $
    595.0
    
    
    $
    461.9Operating earnings  % of revenue
    
    
    15.6
    
    
    
    
    32.0
    
    
    
    35.6
    
    
    
    41.4
    
    
    
    36.4Cash flow from continuing operations
    
    $
    504.7
    
    
    
    $
    343.9
    
    
    $
    484.1
    
    
    $
    609.7
    
    
    $
    206.0Cash flow from continuing operations per unitBasic
    
    $
    2.02
    
    
    
    $
    2.54
    
    
    $
    3.59
    
    
    $
    4.53
    
    
    $
    1.56Diluted
    
    $
    1.94
    
    
    
    $
    2.53
    
    
    $
    3.59
    
    
    $
    4.53
    
    
    $
    1.53Book value per unit (5)
    
    $
    9.38
    
    
    
    $
    14.51
    
    
    $
    10.47
    
    
    $
    9.68
    
    
    $
    8.57Price earnings ratio (6)
    
    
    11.77
    
    
    
    
    4.52
    
    
    
    5.87
    
    
    
    6.26
    
    
    
    3.11Basic weighted average units outstanding (000s)
    
    
    249,925
    
    
    
    
    135,568
    
    
    
    134,765
    
    
    
    134,537
    
    
    
    132,135
 (1)
    
    Return on sales was calculated by dividing earnings
from continuing operations by total revenues.(2)
    
    Return on assets was calculated by dividing net earnings
by quarter average total assets.(3)
    
    Return on equity was calculated by dividing net earnings by
quarter average total unitholders equity.(4)
    
    Interest coverage was calculated by dividing operating
earnings by net interest expense.(5)
    
    Book value per unit was calculated by dividing
unitholders equity by units outstanding.(6)
    
    Year end closing price from the TSX divided by
basic earnings per unit.