0001445305-12-001530.txt : 20120508 0001445305-12-001530.hdr.sgml : 20120508 20120508101620 ACCESSION NUMBER: 0001445305-12-001530 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20120507 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120508 DATE AS OF CHANGE: 20120508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER DRILLING CO CENTRAL INDEX KEY: 0000320575 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 742088619 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08182 FILM NUMBER: 12820015 BUSINESS ADDRESS: STREET 1: 1250 N.E. LOOP 410 STREET 2: SUITE 1000 CITY: SAN ANTONIO STATE: TX ZIP: 78209 BUSINESS PHONE: 5128287689 MAIL ADDRESS: STREET 1: 1250 N.E. LOOP 410 STREET 2: SUITE 1000 CITY: SAN ANTONIO STATE: TX ZIP: 78209 FORMER COMPANY: FORMER CONFORMED NAME: SOUTH TEXAS DRILLING & EXPLORATION INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SOUTH TEXAS DRILLING CO DATE OF NAME CHANGE: 19810715 8-K 1 a2012q18k.htm FORM 8K 2012 Q1 8K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934



Date of Report (date of earliest event reported): May 8, 2012



PIONEER DRILLING COMPANY
(Exact name of registrant as specified in its charter)


Texas
1-8182
74-2088619
(State or other jurisdiction
of incorporation)

(Commission File Number)
(IRS Employer
Identification No.)

        
1250 N.E. Loop 410, Suite 1000
San Antonio, Texas
78209
(Address of principal executive offices)
(ZIP Code)


Registrant’s telephone number, including area code: (210) 828-7689

_________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
•Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
•Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
•Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
•Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
_________________________________________







Item 2.02 Results of Operations and Financial Condition

On May 8, 2012, we issued a press release announcing our results of operations for the quarter ended March 31, 2012. A copy of that press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.

The information in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated by reference therein.






Item 9.01. Financial Statements and Exhibits

(d)    Exhibits

99.1     Press release issued by Pioneer Drilling Company on May 8, 2012.








SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
PIONEER DRILLING COMPANY
 
 
 
 
 
 
 
 
By:
 /s/ Lorne E. Phillips      
 
Lorne E. Phillips
 
Executive Vice President and Chief Financial Officer
 
 

    


Date: May 8, 2012




EXHIBIT INDEX

No.        Description

99.1
Press release issued by Pioneer Drilling Company on May 8, 2012.



 EX-99.1 2 a2012q1pr.htm PRESS RELEASE 2012 Q1 PR


        
Contacts:
Lorne E. Phillips, CFO
Pioneer Drilling Company
(210) 828-7689

Lisa Elliott / lelliott@drg-l.com 
Anne Pearson / apearson@drg-l.com
DRG&L / (713) 529-6600
FOR IMMEDIATE RELEASE
Pioneer Drilling Reports First Quarter 2012 Results
SAN ANTONIO, Texas, May 8, 2012 - Pioneer Drilling Company, Inc. (NYSE Amex: PDC) today reported financial and operating results for the three months ended March 31, 2012. Financial and operational highlights include:
•
Net income for the first quarter of 2012 was $14.2 million, or $0.23 per diluted share, an increase of 109% over the fourth quarter of 2011
•
Production Services revenue increased 27% over the fourth quarter of 2011, represented 46% of total revenues and generated 52% of total gross margin in the first quarter of 2012
•
Approximately 88% of the working drilling rigs and 80% of the Production Services assets are currently operating on wells in oil and liquids-rich plays
•
Currently 79% of the working drilling rigs in our fleet are operating under term drilling contracts

Financial Results
Revenues for the first quarter of 2012 were $232.0 million, a 14% increase over $203.7 million for the fourth quarter of 2011 (“the prior quarter”) and a 51% increase over $153.3 million for the first quarter of 2011 (“the year-earlier quarter”). The increase in first quarter revenues as compared to the prior quarter was primarily due to higher pricing in Drilling Services, fleet additions and higher utilization and pricing in Production Services, as well as contributions from our new coiled tubing business that was acquired at year end 2011. Utilization and pricing improved for both Drilling Services and Production Services when




compared to the year-earlier quarter.
First quarter Adjusted EBITDA(1) was $70.1 million, a 26% increase over $55.5 million in the prior quarter and a 121% increase over Adjusted EBITDA of $31.7 million in the year-earlier quarter.
Net income for the first quarter was $14.2 million, or $0.23 per diluted share, compared with net income for the prior quarter of $6.8 million, or $0.11 per diluted share, and a net loss for the year-earlier quarter of $6.0 million, or $0.11 per share.
Partially offsetting our first quarter revenue growth as compared to the prior quarter were increases in general and administrative expense of $1.9 million and depreciation expense of $3.2 million, primarily due to the addition of our new coiled tubing business. In addition, interest expense increased by $1.5 million due to the issuance of Senior Notes in November 2011, and the retirement of two drilling rigs and two wireline units resulted in an equipment impairment charge of $1.0 million.
Operating Results
Revenues for the Drilling Services Division were $124.3 million in the first quarter, a 5% increase over the prior quarter and a 25% increase from the year-earlier quarter. During the first quarter, the utilization rate for our fleet of 64 drilling rigs averaged 87%, the same as in the prior quarter, and up from 65% a year ago when the fleet count was 71 rigs. We retired seven drilling rigs at the end of the third quarter of 2011. The drilling rig count has been further reduced to 62 rigs effective March 31, 2012 due to the retirement of two stacked mechanical rigs that will be used for spare parts. First quarter average drilling revenues per day increased 6% from the prior quarter as a result of higher turnkey revenue, a fuel cost reimbursement that was negotiated for our rigs operating in Colombia and higher contract pricing. Drilling Services margin(2) was $8,537 per day in the first quarter as compared to $7,686 per day in the prior quarter and $7,769 per day in the year-earlier quarter.
Revenues for the Production Services Division were $107.7 million in the first quarter, up 27% from the prior quarter and up 101% from the year-earlier quarter. First quarter Production Services margin(2) as a percentage of revenue was 44%, compared to 42% in the prior quarter and 38% in the year-earlier quarter. During the first quarter, our well service rig utilization was approximately 92%, compared to 86%




in the prior quarter and 82% in the year-earlier quarter, while pricing increased to $581 from $577 per hour as compared to the prior quarter and $509 per hour in the year-earlier quarter.
“We are pleased with our strong start to 2012, including the better-than-expected results we achieved in our Production Services Division,” said Wm. Stacy Locke, President and CEO of Pioneer Drilling. “Although much of the industry is working to adjust to lower natural gas prices, we continued to see good demand for our services in oil and liquids-rich basins and generated both top-line and bottom-line improvements across all of our businesses.
“With over 80% of our assets operating in oil and natural gas liquids-producing areas, we believe we will continue to have good equipment utilization and solid margins throughout 2012. We also expect to generate revenue growth this year as we bring on additional equipment. We added six well service rigs and five wireline units in the first quarter. During the last nine months of 2012, we expect to add seven new-build drilling rigs, 13 well service rigs, 11 wireline units and three coiled tubing units. The remaining three new-build drilling rigs are expected to begin operating in the first quarter of 2013. Our Drilling Services revenue will be substantially supported by term contracts, with all of the new-build drilling rigs being deployed under multi-year contracts and much of our existing fleet continuing to attract new or renewing term contracts.
“In the first quarter, our Drilling Services Division moved two drilling rigs out of a dry gas area of the Marcellus Shale in Appalachia to oil and liquids-rich basins under term contracts and successfully negotiated higher day rates on six of our rigs operating in Colombia. In the second quarter, we expect drilling rig utilization to average between 89% and 91%. We expect our Drilling Services margin to be approximately $8,000 to $8,300 per day, which is down slightly from the first quarter when we had more turnkey work and we benefited from a fuel cost reimbursement for our rigs operating in Colombia.
“Our Production Services Division maintained its strong performance in the first quarter, with a less-than-typical seasonal impact, a solid contribution from our new coiled tubing business and well service rig and wireline unit additions. In the second quarter, we anticipate that Production Services revenues will increase approximately 5% to 10% due to fleet additions, and margin as a percentage of revenues




will be flat,” Locke said.
Liquidity
Working capital was $81.5 million at March 31, 2012, compared to $129.9 million at December 31, 2011. Our cash and cash equivalents at the end of the first quarter were $21.4 million, down from $86.2 million at year-end 2011.
The change in cash and cash equivalents during the quarter is primarily due to $95.1 million used for purchases of property and equipment, partially offset by cash provided by operations of $29.7 million. Our $250 million Revolving Credit Facility remained undrawn at the end of the first quarter, but now has $20 million outstanding and $9 million in committed letters of credit, resulting in borrowing availability under our Revolving Credit Facility of $221 million.
Capital Expenditures
For the quarter ended March 31, 2012, total cash capital expenditures were $95.1 million. Currently, we expect to spend approximately $300 million to $330 million in 2012, which includes a portion of the construction costs for new-build drilling rigs, upgrades to certain drilling rigs, additional well service rigs, wireline units, coiled tubing units, and routine capital expenditures. We expect to fund the remaining capital expenditures from operating cash flow in excess of our working capital requirements and from borrowings under our Revolving Credit Facility.
Conference Call
Pioneer's management team will hold a conference call today at 11:00 a.m. Eastern Time (10:00 a.m. Central Time), to discuss these results. To participate in the call, dial 480-629-9818 approximately 10 minutes early and ask for the Pioneer Drilling conference call. A replay will be available after the call ends and will be accessible until May 15. To access the replay, dial (303) 590-3030 and enter the pass code 4529955#. A broadcast of the conference call will also be webcast on the Internet and accessible from Pioneer's Web site at www.pioneerdrlg.com. To listen to the live call, visit Pioneer's Web site at least 10 minutes early to register and download any necessary audio software. An archive will be available




shortly after the call. For more information, please contact Donna Washburn at DRG&L at (713) 529-6600 or e-mail dmw@drg-l.com.
About Pioneer
Pioneer Drilling Company provides contract land drilling services to independent and major oil and gas operators in Texas, Louisiana, the Mid-Continent, Rocky Mountain and Appalachian regions and internationally in Colombia through its Pioneer Drilling Services Division. Pioneer also provides well, wireline, coiled tubing and fishing and rental services to producers in the U.S. Gulf Coast, offshore Gulf of Mexico, Mid-Continent, Rocky Mountain and Appalachian regions through its Pioneer Production Services Division.
Cautionary Statement Regarding Forward-Looking Statements,
Non-GAAP Financial Measures and Reconciliations
Statements we make in this news release that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements that are subject to risks, uncertainties and assumptions. Our actual results, performance or achievements, or industry results, could differ materially from those we express in this news release as a result of a variety of factors, including general economic and business conditions and industry trends; levels and volatility of oil and gas prices; decisions about onshore exploration and development projects to be made by oil and gas exploration and production companies; risks associated with economic cycles and their impact on capital markets and liquidity; the continued demand for the drilling services or production services in the geographic areas where we operate; the highly competitive nature of our business; our future financial performance, including availability, terms and deployment of capital; future compliance with covenants under our senior secured revolving credit facility and our senior notes; the supply of marketable drilling rigs, well service rigs, coiled tubing and wireline units within the industry; the continued availability of drilling rig, well service rig, coiled tubing and wireline unit components; the continued availability of qualified personnel; the success or failure of our acquisition strategy, including our ability to finance acquisitions, manage growth and effectively integrate acquisitions; and changes in, or our failure or inability to comply with, governmental regulations, including those relating to the environment.  We have discussed many of these factors in more detail in our annual report on Form 10-K for the year ended December 31, 2011.  These factors are not necessarily all the important factors that could affect us.  Unpredictable or unknown factors we have not discussed in this news release, or in our annual report on Form 10-K, could also have material adverse effects on actual results of matters that are the subject of our forward-looking statements.  All forward-looking statements speak only as of the date on which they are made and we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.  We advise our shareholders that they should (1) be aware that important factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements.
 
This news release contains non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided in the following tables.
_________________________________
 
(1)
Adjusted EBITDA is a financial measure that is not in accordance with GAAP, and should not be considered (i) in isolation of, or as a substitute for, net income (loss), (ii) as an indication of operating performance or cash flows from operating activities or (iii) as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for discretionary use. We define Adjusted EBITDA as income (loss) before interest income (expense), taxes, depreciation, amortization and any impairments. We use this measure, together




with our GAAP financial metrics, to assess our financial performance and evaluate our overall progress towards meeting our long-term financial objectives. We believe that this non-GAAP financial measure is useful to investors and analysts in allowing for greater transparency of our operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA, as we calculate it, may not be comparable to Adjusted EBITDA measures reported by other companies. A reconciliation of Adjusted EBITDA to net income (loss) is set forth below.
 
(2)
Drilling Services margin represents contract drilling revenues less contract drilling operating costs. Production Services margin represents production services revenues less production services operating costs. We believe that Drilling Services margin and Production Services margin are useful measures for evaluating financial performance, although they are not measures of financial performance under GAAP. However, Drilling Services margin and Production Services margin are common measures of operating performance used by investors, financial analysts, rating agencies and Pioneer management. A reconciliation of Drilling Services margin and Production Services margin to net income (loss) as reported is included in the tables to this press release. Drilling Services margin and Production Services margin as presented may not be comparable to other similarly titled measures reported by other companies.
 
 
 
- Financial Statements and Operating Information Follow -








PIONEER DRILLING COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)


 
Three months ended
 
March 31,
 
December 31,
 
2012
 
2011
 
2011
 
 
Revenues:
 
 
 
 
 
Drilling services
$
124,304

 
$
99,756

 
$
118,859

Production services
107,674

 
53,593

 
84,797

Total revenues
231,978

 
153,349

 
203,656

 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
Drilling services
81,077

 
67,509

 
79,430

Production services
60,696

 
33,228

 
48,989

Depreciation and amortization
38,373

 
32,256

 
35,160

General and administrative
21,143

 
14,521

 
19,232

Bad debt (recovery) expense
(91
)
 
(84
)
 
548

Impairment of equipment
1,032

 
—

 
—

 
 
 
 
 
 
Total costs and expenses
202,230

 
147,430

 
183,359

Income from operations
29,748

 
5,919

 
20,297

 
 
 
 
 
 
Other (expense) income:
 
 
 
 
 
Interest expense
(9,555
)
 
(7,539
)
 
(8,062
)
Other
932

 
(6,517
)
 
52

Total other expense
(8,623
)
 
(14,056
)
 
(8,010
)
 
 
 
 
 
 
Income (loss) before income taxes
21,125

 
(8,137
)
 
12,287

Income tax (expense) benefit
(6,953
)
 
2,102

 
(5,469
)
 
 
 
 
 
 
Net income (loss)
$
14,172

 
$
(6,035
)
 
$
6,818

 
 
 
 
 
 
Income (loss) per common share:
 
 
 
 
 
Basic
$
0.23

 
$
(0.11
)
 
$
0.11

Diluted
$
0.23

 
$
(0.11
)
 
$
0.11

 
 
 
 
 
 
Weighted-average number of shares outstanding:
 
 
 
 
 
Basic
61,578

 
53,968

 
61,380

Diluted
62,647

 
53,968

 
62,568












PIONEER DRILLING COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)


 
March 31,
2012
 
December 31,
2011
 
(unaudited)
 
(audited)
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
21,401

 
$
86,197

Receivables, net of allowance for doubtful accounts
163,643

 
145,234

Deferred income taxes
16,259

 
15,433

Inventory
12,220

 
11,184

Prepaid expenses and other current assets
12,207

 
11,564

Total current assets
225,730

 
269,612

 
 
 
 
Net property and equipment
868,488

 
793,956

Intangible assets, net of amortization
50,503

 
52,680

Goodwill
41,683

 
41,683

Noncurrent deferred income taxes
—

 
735

Other long-term assets
12,680

 
14,088

Total assets
$
1,199,084

 
$
1,172,754

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
85,117

 
$
66,440

Current portion of long-term debt
873

 
872

Prepaid drilling contracts
4,733

 
3,966

Accrued expenses
53,465

 
68,402

Total current liabilities
144,188

 
139,680

 
 
 
 
Long-term debt, less current portion
418,279

 
418,728

Noncurrent deferred income taxes
100,701

 
94,745

Other long-term liabilities
9,375

 
9,156

Total liabilities
672,543

 
662,309

Total shareholders’ equity
526,541

 
510,445

Total liabilities and shareholders’ equity
$
1,199,084

 
$
1,172,754















PIONEER DRILLING COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

 
Three months ended
 
March 31,
 
2012
 
2011
 
 
 
 
Cash flows from operating activities:
 
 
 
Net income (loss)
$
14,172

 
$
(6,035
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation and amortization
38,373

 
32,256

Allowance for doubtful accounts
(94
)
 
(84
)
Loss (gain) on dispositions of property and equipment
(733
)
 
923

Stock-based compensation expense
2,000

 
1,712

Amortization of debt issuance costs, discount and premium
732

 
742

Impairment of equipment
1,032

 
—

Deferred income taxes
5,846

 
(2,823
)
Change in other long-term assets
720

 
734

Change in other long-term liabilities
219

 
4,477

Changes in current assets and liabilities
(32,615
)
 
(22,858
)
Net cash provided by operating activities
29,652

 
9,044

 
 
 
 
Cash flows from investing activities:
 
 
 
Acquisition of production services businesses
—

 
(2,000
)
Purchases of property and equipment
(95,109
)
 
(31,379
)
Proceeds from sale of property and equipment
1,357

 
786

Proceeds from sale of auction rate securities
—

 
12,569

Net cash used in investing activities
(93,752
)
 
(20,024
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Debt repayments
(656
)
 
(13,529
)
Proceeds from issuance of debt
—

 
17,000

Proceeds from exercise of options
253

 
560

Purchase of treasury stock
(293
)
 
(210
)
Excess tax benefit of stock option exercises
—

 
459

Net cash (used in) provided by financing activities
(696
)
 
4,280

 
 
 
 
Net decrease in cash and cash equivalents
(64,796
)
 
(6,700
)
Beginning cash and cash equivalents
86,197

 
22,011

Ending cash and cash equivalents
$
21,401

 
$
15,311






PIONEER DRILLING COMPANY AND SUBSIDIARIES
Operating Statistics
(in thousands, except average number of drilling rigs, utilization rate, revenue days and per day information)
(unaudited)

 
Three months ended
 
March 31,
 
December 31,
 
2012
 
2011
 
2011
 
 
 
 
 
 
Drilling Services Division:
 
 
 
 
 
Revenues
$
124,304

 
$
99,756

 
$
118,859

Operating costs
81,077

 
67,509

 
79,430

Drilling Services margin (1)
$
43,227

 
$
32,247

 
$
39,429

 
 
 
 
 
 
Average number of drilling rigs (3)
64.0

 
71.0

 
64.0

Utilization rate
87
%
 
65
%
 
87
%
Revenue days
5,064

 
4,151

 
5,130

 
 
 
 
 
 
Average revenues per day
$
24,547

 
$
24,032

 
$
23,169

Average operating costs per day
16,010

 
16,263

 
15,483

 
 
 
 
 
 
Drilling Services margin per day (2)
$
8,537

 
$
7,769

 
$
7,686

 
 
 
 
 
 
Production Services Division:
 
 
 
 
 
Revenues
$
107,674

 
$
53,593

 
$
84,797

Operating costs
60,696

 
33,228

 
48,989

Production Services margin (1)
$
46,978

 
$
20,365

 
$
35,808

 
 
 
 
 
 
Combined:
 
 
 
 
 
Revenues
$
231,978

 
$
153,349

 
$
203,656

Operating Costs
141,773

 
100,737

 
128,419

Combined margin
$
90,205

 
$
52,612

 
$
75,237

 
 
 
 
 
 
Adjusted EBITDA (4) & (5)
$
70,085

 
$
31,658

 
$
55,509



(1)Drilling Services margin represents contract drilling revenues less contract drilling operating costs. Production Services margin represents production services revenue less production services operating costs. We believe that Drilling Services margin and Production Services margin are useful measures for evaluating financial performance, although they are not measures of financial performance under generally accepted accounting principles. However, Drilling Services margin and Production Services margin are common measures of operating performance used by investors, financial analysts, rating agencies and Pioneer’s management. A reconciliation of Drilling Services margin and Production services margin to net income (loss) as reported is included in the table on the following page. Drilling Services margin and Production Services margin as presented may not be comparable to other similarly titled measures reported by other companies.

(2)Drilling Services margin per revenue day represents the Drilling Services Division’s average revenue per revenue day less average operating costs per revenue day.

(3)Effective March 31, 2012, we had 62 drilling rigs in our fleet, which excluded the two drilling rigs which were retired for spare equipment.

(4)Adjusted EBITDA is a financial measure that is not in accordance with GAAP, and should not be considered (i) in isolation of, or as a substitute for, net income (loss), (ii) as an indication of operating performance or cash flows from operating activities or (iii) as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for discretionary use. We define Adjusted EBITDA as income (loss) before interest income (expense), taxes, depreciation, amortization and any impairments. We use this measure, together with our GAAP financial metrics, to assess our financial performance and evaluate our overall progress towards meeting our long-term financial objectives. We believe that this non-GAAP financial measure is useful to investors and analysts in allowing for greater transparency of our operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA, as we calculate it, may not be comparable to Adjusted EBITDA measures reported by other companies. A reconciliation of Adjusted EBITDA to net income (loss) is set forth below.

See following page for footnote (5).




PIONEER DRILLING COMPANY AND SUBSIDIARIES
Reconciliation of Combined Drilling Services and Production Services
Margin and Adjusted EBITDA to Net Income (Loss)
(in thousands)
(unaudited)
 
Three months ended
 
March 31,
 
December 31,
 
2012
 
2011
 
2011
 
 
 
 
 
 
Combined margin
$
90,205

 
$
52,612

 
$
75,237

 
 
 
 
 
 
General and administrative
(21,143
)
 
(14,521
)
 
(19,232
)
Bad debt expense
91

 
84

 
(548
)
Other (expense) income (5)
932

 
(6,517
)
 
52

Adjusted EBITDA (4) & (5)
70,085

 
31,658

 
55,509

 
 
 
 
 
 
Depreciation and amortization
(38,373
)
 
(32,256
)
 
(35,160
)
Impairment of equipment
(1,032
)
 
—

 
—

Interest expense
(9,555
)
 
(7,539
)
 
(8,062
)
Income tax (expense) benefit
(6,953
)
 
2,102

 
(5,469
)
Net income (loss)
$
14,172

 
$
(6,035
)
 
$
6,818


(5)Our Adjusted EBITDA for the three months ended March 31, 2011 was reduced by a $7.3 million net-worth tax expense for our Colombian operations that was a non-recurring charge and was included in other (expense) income.








PIONEER DRILLING COMPANY AND SUBSIDIARIES
Capital Expenditures
(in thousands)
(unaudited)



 
Three months ended
 
March 31,
 
December 31,
 
2012
 
2011
 
2011
 
 
 
 
 
 
Drilling Services Division:
 
 
 
 
 
Routine and tubulars
$
8,506

 
$
10,051

 
$
9,685

Discretionary
16,192

 
8,200

 
21,862

New-builds and acquisitions
40,482

 
—

 
14,768

 
65,180

 
18,251

 
46,315

Production Services Division:
 
 
 
 
 
Routine
3,729

 
1,714

 
2,691

Discretionary
10,209

 
4,572

 
11,322

New-builds and acquisitions
15,991

 
6,842

 
9,173

 
29,929

 
13,128

 
23,186

Net cash used for purchases of property and equipment
95,109

 
31,379

 
69,501

  Net effect of accruals
17,268

 
3,315

 
9,948

Total capital expenditures
$
112,377

 
$
34,694

 
$
79,449








































PIONEER DRILLING COMPANY AND SUBSIDIARIES
Drilling Rig, Well Service Rig, Wireline and Coiled Tubing Unit
Current Information



 
Rig Type
 
 
 
Mechanical
 
Electric
 
Total Rigs
Drilling Services Division:
 
 
 
 
 
 
 
 
 
 
 
Drilling rig horsepower ratings:
 
 
 
 
 
    550 to 700 HP
1

 
—

 
1

    750 to 950 HP
8

 
2

 
10

    1000 HP
18

 
12

 
30

    1200 to 2000 HP
6

 
15

 
21

        Total
33

 
29

 
62

 
 
 
 
 
 
Drilling rig depth ratings:
 
 
 
 
 
    Less than 10,000 feet
3

 
2

 
5

    10,000 to 13,900 feet
19

 
6

 
25

    14,000 to 25,000 feet
11

 
21

 
32

        Total
33

 
29

 
62

 
 
 
 
 
 
Production Services Division:
 
 
 
 
 
 
 
 
 
 
 
Well service rig horsepower ratings:
 
 
 
 
 
    400 HP
 
 
 
 
1

    550 HP
 
 
 
 
88

    600 HP
 
 
 
 
9

        Total
 
 
 
 
98

 
 
 
 
 
 
Wireline units
 
 
 
 
112

 
 
 
 
 
 
Coiled tubing units
 
 
 
 
10

 
 
 
 
 
 



 GRAPHIC 3 pioneerdrillinglogo.jpg GRAPHIC begin 644 pioneerdrillinglogo.jpg M_]C_X``02D9)1@`!`0$`2`!(``#__@`<4V]F='=AP* MGR3N8JG*HV-.$U+>6(E=U)0PW62)U:L6_P"W_=S^Y.K5BW_;_NY_U"?'J>XD3JU8M_V_P"[G]R=6K%O^W_=S^Y1VB/#TO:@X]3W$B=6K%O^W_=S M^Y.K5BW_`&_[N?W*.T1X>E[4''J>XD3JU8M_V_[N?W)U:L6_[?\`=S^Y1VB/ M#TO:@X]3W$B=6K%O^W_=S^Y9-NTP8MKKI1TG_0?QYV1;4!_F`* M;W7C^QQ99@539#_QS=^BYG0I1BWNHZA6J.26):I$102N$1$`$1$`%PETQE70 MW2HAH^@]`C?L&ES,RZ4`='T[ M7?\`^OZL^U?4>-;N^5C3[GR:K#^$+A= M*(1FHIV-+!(W-NVX#;'G6^7(Z4.#>\^39KM6E))U(I]4$6T1-U;,5_-V[ MU#OW)U;,5_-V[U#OW*.45SPU+VHC\>I[B1NK9BOYNW>H=^Y?3--V*6GX4%M< M.\87#_)1NB/#4O:CWCU/<2O3:=[NQP]U6>BE;W>AOFC#URD;#7Q MS6R1QR#I?AQ_W#<\X5>46]%&-Y[+>8;)6S%ULK'[",./Q,AW".\"=HCPYJPBDUZ+HRW64:555(XHP M;U62T%BN%9#L>BT]-)*S9#,;)K21GZ%`PTV8KR'\.W>H=^Y3EB?>G>>0S:A5 M1AN!.6-*$XO>6(M=U)0:W62/U;,5_-V[U#OW+HL#Z4L08BQ?0VNM91"GFV>S M,<1#MII(R.R/>4+KLM%7"1:OZFHY-5;>DJ*EIY: MB=X9%$PO>\[C6@9DJ&5C%NUXH+%;Y*^Y53*>G9NN=W3W@-TGP!0]B#3E62RO MBL%#'#$-H3U0V3SX0T'(>?-<1CC&-5C"^/J'NY8?V+SJL8V^NO\`\6']BXQ$UP*7 MM7Z%N+4]S_9(5LTS8KHY0:R2FN$>>VV6%K#YBP#F*EK!^DBS8N(IV$TEQRS- M+,=MWA8=QW/X%6-?<,TM//'-#(Z.6-P!X><%=HHLX.$G&7H5(R4EO(X32?C" MYX0MM!46QM.7SS.8_HS"X9!N>UD0HSZMF*_F[=ZAW[EUNGCM':.5/U5!BJVE M&G*DG)$^YJSC4P3)&ZMF*_F[=ZAW[EO<'Z7;S=<5T%NNK*)M+4OZ$711EK@X MCX.V2>[D/.H<7W#-)33QSPNV,L3P]A'<(.86\K6DTTHF,;BHFFV7*7Q,\L@D M>-UK21Z%B6:Y1WBR45RB(V%3"V3:[A(VQYBLFI[%F\1W,H6&#P973Q6)7XZ; M,5@D=#MV[\P[]R\ZMF*_F[=ZAW[E'3NN=QE>*_X:E[41^/4]Q-&!M*.(,18P MH;57,HA3S;/9F*(AVTPD9'9'NA3*JRZ*.$FU<4OY;E9I2[V$85$HK#R*%K.4 MH8R?J1GI/Q]><(72@I[8VE+)X7/?T:,N.8=EM9$+A.K9BOYNW>H=^Y;/3QV^ MM')7ZRB9.VU"G*DFXBEQ6G&HTF2-U;,5_-V[U#OW)U;,5_-V[U#OW*.46_AJ M7M1CQZGN)&ZMF*_F[=ZAW[DZMF*_F[=ZAW[E'*(\-2]J#CU/<3)@S2KB*_XO MMUKK&4(IZA[FO,<1#MII.T=EX%-*J_HQX1[-Y1_Y;E:!2[V$832BL/(H6DY3 M@W)G$Z3<67+"-DI*RVM@,LM1T)W1F%PRV)/<([RB[JV8K^;MWJ'?N7::==ZU MNY:-1R@5-6E&G.DG)8B]S5G&IA%DC=6S%?S=N]0[]R=6S%?S=N]0[]RCE$UX M:E[4+\>I[B1NK9BOYNW>H=^Y.K9BOYNW>H=^Y1RB/#4O:@X]3W$FT6F?%-17 MTT+X[?L))6,=E"[/(D#Y2L`J>6OMO0\HCU@KAJ=?4X0<=U8#UI.4T]YF@QK> M:K#^$+A=*(1FHIVM+!(W-NVX#;'G4+]6S%?S=N]0[]REC2CP;WCR;-=JK"M; M*E"=-N2Q\SB[J3A)*+)&ZMF*_F[=ZAW[DZMF*_F[=ZAW[E'*)SPU+VH4X]3W M$C=6S%?S=N]0[]RRJ?3GB&,CH]NMTH[NQ#V'6*B]%X[:B_Q/5<5>I/5ETX6B MLD;%=J*:@)VNBL/18QQY#,>@J3:2LIKA21U5'/'/3R#9,DC<'-<.-4X7>:+L M93X=IKQWMO('P<25KV,=URIC-&[;>[,__]"?D1$` M?A6]@5/DG1F(()9/PV/^2X)2MH)IMGB*Z51'Q5*U@/A<[_]5A\['Q1M#\%A(`+[A[(B\=O.OA?\^39KM6E'4CW1Q4Y'V*P(B+Z(AG18-PG+C&\26Z&K93.9"9=F]A<#D0,MK MC795>@J]10N?2W6BG>!F&.:YFR\^VL;0AOVJ>1/UFJP2FW5S4IU-V+\BA;T( M3IXR13FMHZBW5LU'5Q.AJ(7EDD;MUI"_!2)III&4V/>BL`!J:2.1V7=();GZ M&A1VGZ4]^"EU$JD-R;B>M^V';=<"G>>0S:A51AN!>;.Y9!?9H]79:*N$BU?U-1RXU=EHJX2+5_4U')VMIR[, M5HZD>Y9M(IW![9,MLC,`9%9^@L`85N!RVS6G/^QJE!X!C< M#N$%2;BYJ1K-)^2*=&A"5-8K,IHB_2H`;53`;@DTT M&R(BKF.IWCOG+9-_$?BK)*IN#9#%C:QO&Z*Z(>EP'ZJV2D;0CA43^"G9/ M$NGCM':.5/U5!BG/3QVCM'*GZJ@Q.66BA6[U6$1$V+%@M"EY]W81FMSW9R4$ MQ:!G_(_X0_'9*1JGL6;Q']37P4X=USN,KQ>NZYW&5XK9(.ST4<)-JXI?RW*S2K+H MHX2;5Q2_EN5FE'VAJKL5++3?<@O3QV^M')7ZRB92SIX[?6CDK]91,J%IHQ$K MG5872V7`.),0VUMPME"V:FD;TJ4::PB19IUWK6[EHU M'*!5/6G7>M;N6C47BU2M;BHZ=-R1Q0IJI-19PW4EQI]5,^\Q^U.I+C3ZJ9]YC]JL MPBF_Y"KT0]X.G\E;Z'15C&&XTLLEK8&1S,#>\>39KM5851V?ION)7O.NP74X#PE%C*^ M2VZ6K?2MC@,NS8P.)R(&61XURRDS0?OTJN1.UFIFO)QIN2S%Z,5*HDS=5N@; M*!QH;Z73`;39X,FGS@[7H41W&WU-IN51;ZR/H=33O,(U=4(0CO11_]&,$S+=L'(C;!1#N+Z8@%OK M'6&X6"W5CCFZ>FCD)\):"46#@H%N"+(';ON*+5"+YN:PDT7HO%)FVK>P*GR3 MN8JG*N-6]@5/DG)I/^2A!6(T*TW0\^39KM6E'4CW1Q M4Y'V*P(B+Z(ADEZ$-^U3R)^LU6"57M'N*Z7!]_EN%73S3QOIW1!L.68)(.>W MQ*1ZG3O;&PN-+9JQ\N7P1*]K6Y^$C-2[NA4J5<8HHVU:$*>$FH=F0W<:-P-'@`R"UZH4H;D%%^@E5 MDI3Y9M1!IZ[`L?EI=5JE]1!IZ[`L M?EI=5JC6FM'^^A4N=)D(HB*Z1R?-!>].OY:=1JE!W6.XE%^@O>G7\M.HU2@[ MK'<2@W6M(LT--%.*KLR?RCN:)0L>5D2Z>.T=HY4_54&*<]/':.T8V_&5,]-*?",G-_#9>A-.26&/J8*+>/P:F@K9;;<::N@. M4M-*V5O&TYJW,57%<+,VL@.<4]/T5A\!;F%3Y6)T3WGWST>&F>[.6@+X".[L M.WUHY*_643*A::,1 M*YU6%8W0UP>0W-%U8;J"WJJ MG+%EM455>G_%OVAKO6)T_P"+?M#7>L2'^/GU0YXV'0M4BX31+=KA><&OJKE5 MRU4XJY&=$E.9V(#M;N6C47BU2H16SM6(KQ8V2LM=RJ*1LI!D$3LMD1N9K M6O3=6FX(SHU%3GO,MTBJKT_XM^T-=ZQ.G_%OVAKO6*?_`(^?5#WC8="U2*)] M#6(+O?);P+I<:BK$38NAB5V>QSV6>7H"EA)U:;IS<&,TYJ<=Y'(:4>#>\>39 MKM5859[2CP;WCR;-=JK"JFS]-]Q"]YUV"DS0?OTJN1.UFJ,UL[%B&YX;K7UE MJJ!!.]AC0UH'=)V@OGN@=T[BEO1=HWK);C!?[U3N@IH" M)*:"09.D?W'$=QHW1GNE,U:L:<=Z0O2INI+!$S6JD]P6>BHSNP0,B/\`Q:`B MS$7SS>+Q+:\C\*WL"I\D[F*IRKC5O8%3Y)W,53E4]G92^B???C]A$14A`(B( M`(B(`(B(`*T6C2F]RZ.[,S+(OA,A_P"3B[]55P[A5O,/TPHL-VRF`RZ%2Q-R MXFA3]HO^"7R/6*_DV;)$122B$1$`?G43LIJ:6>0Y,C:7.X@H?J:A]752U$A^ M'*\O/G7?8VK_`'-:&TK3\.I=D?%&V?T4>(`(B(`+[A[(B\=O.OA?<7QT?CCG M0!,RY'2AP;WGR;-=JZX;@7(Z4.#>\^39KM6E'4CW1Q4Y'V*P(B+Z(AA%G6JS M7*^53J:UT61Y9ANYGM\86YZG6,/L_5_\`;[5RYQB\&SI4Y-8I',(N MJBT:XQF>&BPU#?"]S&C\2NJL6A"[5,K7WNKAHH`?A1PGHDA\&>X/Q6#1XAKK8]W\. MOI7%HS_G8"1^!+UQ!<2-PG->+0R.ST4<)-JXI M?RW*S2K+HHX2;5Q2_EN5FE'VAJKL5++3?<@O3QV^M')7ZRB92SIX[?6CDK]9 M1,J%IHQ$KG581%WF%-%M?BRQ,NM/LEI:Z"F%*]K'"5I.RS!.UEQ) MF$3D$4L=0B[_`%S0^K>G4(N_US0^K>L?%T?<:^&J]#+T"_'7 MWQ8?\U-2X+1S@*LP5)<755;!4BJ#`WH32-CL<]W/C7>J3=3C.JY1R*5"+C32 M9R&E'@WO'DV:[56%6>TH\&]X\FS7:JPJAL_3?<3O>==C_].,$1=?HYPK0XOQ M#-05\L\<3*=TH,#@#F'`=T':VU]).:A%R?H0H1\0*RCAI)9`1M5$`D]!W1YB%8+`ND6@QE&ZG?&*2YQMV3Z*2;:7H>N+23?J$1%Z>&100&JN5)3@9F69C/2X!7$:T,8&M&0:,@JIX%IO= MF.['"1F/=;'$>!OPOT5K5*VB_P"444;)?Q;"(BG#P1%AW2M%NM=15'=C82WP MGN?B@"/L65_NZ_2M:?)LUVK2CJ1[HXJNP+'Y:75:I?40Z>FDVVR/[@GE!\[1[%& MM-:)4N=)D((B*Z1R?-!>].OY:=1JE!W6.XE%V@L@X5N`SVQ6G/\`L:I0>0(W M$[@!4&ZUI%FAIHIS5=F3^4=SE?DOTJ"'54Q&X9''\2OS5Y$=YFXPEORLG+X= M<*VJJ;@Z,RXVL;!NFNA/H<"K9*5M'FB4;+E9$NGCM':.5/U5!BG/3QVCM'*G MZJ@Q-66BA:[U6%8K0MP?MY7+^BKJK%:%N#]O*Y?T7-_I?9U9ZGT<%IMM'N/% M=-1S=0W:C^0B(FA8[/11PDVKBE_+UU\\O%JE0BINT"]KKYY>+5*]O=%_WU"TU42^B(H96"(B`/_4 MD_2CP;WCR;-=JK"K/:4>#>\>39KM5858V?ION3;WG78*3-!^_2JY$[6:HS4F M:#]^E5R)VLU;W.C(PM]5%@55W26`-(UZ`&7\9I_[&JT2J[I+X1KUY5NHU3]G MZC[#M[R+N^T]W]%1M[F-989,1K6\J;Q]#HM M$--[HTBT3B,Q!%++_P!N7^2LHH%T%TW1,47&I(^)I-B#X7.'L4]*??O&KA\# MMHL*81$20T%QN.Z_8Q4]`T[;CT5_$-H?CGZ%V2B>^5_OC>:FH!S9LMBSQ1M! M`&N1$0`1$0`7W%\='XXYU\+[B^.C\<G>>0S:A51AN!5=GY9M-NRDH M9FU&U\G;:[\'9^9=^OSG@BJJ>6GG8'Q2L+'M.XYI&1"@4Y[DU+H69QWHN)39 M%TV-\'U6#[Z^F>USJ*4EU+/EM/;WC_J&X?2N97T,9*2WED1)1<7@SN=&^/68 M,K*F&LADEM]5D7]#R+HW#<<`=W:W1Q+N<3Z9[3)9*BGL<=3+63L,;9)8]@V+ M,9%W?)[P4&HL9VM.<]]KS-8W$XQW4$1?<44D\S(88W22O<&L8T9EQ.X`$P8' M;Z([2ZY8^I9]B3%0L=4//>.6Q;^)_!637%Z-<&G"6'_^J:/?*K(DJ,OY/DLS M\'.2NT4*[JJI4Q62+%O3<(8/,B73QVCM'*GZJ@Q3GIX[1VCE3]508J5EHH0N M]5A6*T+<'[>5R_HJZJQ6A;@_;RN7]%S?Z7V=6>I]'%IR/,KD*MFENT>]>/:F5K,6=_U9<8?2*/[L$ZLN,/I%'] MV"X!%GX>E[4=\>I[B2K7I=Q95W>BII9Z0QS5$<;\J<`Y%P!5@U4*Q;XK9RN+ M7"MZIU]3C!QW5@/6DY23WF19IUWK6[EHU'*!5/6G7>M;N6C4.1Y`R&9:"53UW6GB5O;!O;M?(XM0*E?4X04=U8"-I4E)O>9H=*/!O> M/)LUVJL*L]I1X-[QY-FNU5A6VS]-]S.]YUV"DS0?OTJN1.UFJ,U)F@_?I5TF`C2->L_G6ZC5:%5ETK0F'21=,_P"?H;QQ%C5/V?J/ ML.WNFNYQB\/6GB7J\.X57)A;^Q[W[;R6+4"+\L-2";"UID:J5+JB+0-VIO7*(]4J75"N]:19M])!:R_8?MN)+8^@N=.)8G;;7;CF'Y M33W"MFB73:>*-6DU@SA-'N!9\%UUY$LS9X*AT?N>4;3BP;+,.'<.VN[1%U4G M*#ID1Z,<`X@POB::NNE/#'`^F=&"R8..R+FG<'$5+B(E:M M6566](WITU3CNH(B+,["(B`,"^4LM=A^Y4D`!FGI98HP3D"YS2!M\95?1H=Q MED/^CIOO+59%$Q1N9T4U$QJT(U/.16[J.XR^ATWWEJZ3`>C7$U@QG07*OIH& M4L.SV;FSM<1FT@;0\)4VHM)7M247%X>9Q&UIQ::"(B3&3`O%EM]_MTE!,NZR(O'I;FL>+"V()G;&.QW%QY,_V*VZ)O_(R]HOX M*/4K7:-$N++H]O1J-E!$3MR53P"/^(S*F#!NC6T82(JLS6W+++W3*W+8=_8- M[G'NKM$2]6[J5%@_)&U.WA3>*S"(B6-S@-*N%+MBNUVZ"TQ1R203N>\/D#,@ M6Y=U1;U'<9?0Z;[RU611-4KNI3CNQP,*EO"I+>96[J.XR^ATWWEJF+1KA^X8 M:PD+?'#(Y9;877HO*MU.K'=D%.WA3>,0H\TJ8)K\64=OEM4 M4;ZRFD\,SC<.^>\0/2I#18TZCIR4HFLX*<=UE;NH[C+Z'3?>6IU'<9?0 MZ;[RU611-^/J_`OX.F0E@+1MB6P8TH+G<*:!E+#L]FYL[7$9L(&T/"5-J(EJ MU:566](VITXTUA$BW2K@B^8KNMOJ+3!%)'!`YCR^4,R)=GW5P'4=QE]#IOO+ M59%%M3O*E.*BL/(SG;0G+>96[J.XR^ATWWEJ=1W&7T.F^\M5D47?CZOP<^#I ME;NH[C+Z'3?>6IU'<9?0Z;[RU611'CZOP'@Z97FUZ)<74MXH:F6DIQ'#41R/ M(J6G(!P)5AD1+UJ\JV&]Z&M*E&FL(G":4\+W3%5BHZ6U11R2Q5/1'!\@8`W8 MD=WC44]1W&7T.F^\M5D46E*[J4X[L<#FI;PJ2WF5NZCN,OH=-]Y:G4=QE]#I MOO+59%%IX^K\''@Z9__6UG4=QE]#IOO+4ZCN,OH=-]Y:K(HGO'U?@5\'3*VN MT.XR+2/<=-N?26JPUIIY*2S4--,`)8:>.-X!SR(:`5F(L*UQ.LDI>AI2HQI\ MISV.;35WW!EQMM`QKZJ=C0QKG!H.3@=T^`*#^H[C+Z'3?>6JR*+VC'-!^"%S6D`N`+MH`G=2QL>HB(`+XED;#$^5YR8QIJ?UTKR[B'<'H7X(B`"(B`"( MB`"^XOCH_''.OA?<7QT?CCG0!,PW`B#<"Q;A<:2TT$M=7SM@I8@#)([<;MY< MY0ECY(#*1Q.J3@WZ_I?0[V+3A5/:_T<<2'4ZI%RO5)P;]?T MOH=[$ZI.#?K^E]#O8CA5/:_T'$AU.J1LB$M+/%/&=Q\3PX>D+F4)1S6!TI)Y,_5$1Q=JE-K%)G+G%9LZI%RO5)P;]?TOH=[$ZI.#? MK^E]#O8O>%4]K_1YQ(=3JD7+-TCX.<QQ:X$.VB-H]Q=1A*7* ML3QR2S9U"+E>J3@WZ_I?0[V+[ATB81J)XX8K[3/DD<&,:`[;).0&XNN%4]K_ M`$>;\>ITZ(M!<\;8;LU?)0W&[P4]5&`71O!S&8S&X.\N(QMI9F_1Q.J5@WZ_I?0[V+OA5/:_T<\2/4ZI%^5+50UM)%54T@D@F8'QO M&XYIVP5^JS.PB(@`BYJJT@84HJN:EJ;W3QSPO,IU2+EFZ2,'.<&B_4Q).0&3O8NI!S&87,H2CS+`]4D\F$1 M%R>A$7,3:1,(T\\D,M]IF21N+'M(=M$'(C<7482ERK$\U_H\WX]3J$1:&Z8TPY9:YU M##F`=L;@7$8N3P2Q/6TLS?(N5ZI.#?K^E]#O8G5)P;]?TOH= M[%WPJGM?Z.>)#J?_UY^1:RS8AM.((I9+3715;(G!LACS^"3MC=6S7K33P9XF MGYH(L.Z7:@LM"ZMN52RFIFD!TC\\@29DA(HL&G6Q;+(VNXAO?R9^Y;*BTRX2JWALLM72$]V>`Y M#SMS7;MJR_$Y5>F_4D%%A6V[VZ\T_1[;70547==$\.RX^\LU8M->3-4\0B(O M`/PK>P*GR3N8JG*N-6]@5/DG.4LU5+2A7>M(LV^D@N-QW5NC=011O+'M+IVHV%)\ESCX2@#Y1$0`1$0`1$0`7W%\='XXYU\+[B^ M.C\<KG8JMM5:ZV:EE!S^`[:=X"-PCC6`B&DU@P3:>*+*Z.]($6,:)]/4M M9#=:=H,L;>MD;\MOZCN+N%4S"5[DP]BFWW)CB&QRALH!ZZ,[3AZ"K9@@@$', M'<*B7E!4I_QR95MJKJ1\\T5[TW;^(.1,UG*-E).F[?Q!R)FLY1LJMMI1[$^X MU6$19L%HN=3"V:"VUDL3NM?'`YS3Q$!;-I9F*3>1A)EMY]U?I-!-32=#GADB M?\F1A:?05^:`R.MPMI&O^&)V-95/JZ$'X5+4/+AE_I)VVG\/`K&X?OM%B2RP M72@>3#*-MIZYCANM/A"J*I9T&7E\-YK[,]YZ%41='C:>X]I`/I!_!(7EO%P< MTO-#MK6DI;CR)T5/;KVXKN42:Q5PE3VZ]N*[E$FL5EL[.7T:7V2,19]BWPVS ME<6N%@+/L6^&VZ?V<0O#N%>KP[A5@EEM,'[S++R*+5"W2TN#]YEEY%%JA;I?.5.= MEV'*@B(N#HJ9C#?I?.73:Y6E6ZQAOTOG+IMG[*A\HWG5R&=8WB"G;1_'[_\'K'*1ZB(I@^%4&^[X;GRN77*M\J@ MWW?#<^5RZY5+9V/<.+IK<]V4= M?"0!G_.S;'X;)6#50+-Z*Y19[.EF;+Q@';'G&:MW!-'4T\4\3ME'*P/ M8>^",PI&T(834NI3LYXPW>AP^F'@ZJ_+1:X5;E9'3#P=5?EHM<*MR:L-+[%[ MW478*:-`OQ5]\:'F`#<`\`6$B`$D``DG:`"M))+!$IMMXL(M_TCXI]Q^Z_>&NZ#L=EGT+;R[^QW M?P6A(+20000^/`58?1Q MI"9B^E?1UH9%=J=N;VMVFS-^6T=SPA5N6VPS>9;!B6@N<3B.@3-+P#US#M.' MG!*PN*$:L?DVH5G3E\%MT7C7![0YIS:1F#WPB@E@_&M[`J?).YBJ\^39KM77#<"Y'2AP;WGR;-=JTHZD>Z.*G(^Q6!$1?1$ M,DO0AOVJ>1/UFJ>ZRCIKA2R4M9!'/!(,GQR-#@1Q*!-"&_:IY$_6:K!*-?>5 M8JVFD5/QE98L/8ON5L@)Z!#)G%F#>S^(_\`,<%7%T\+'3TT+IX)2/A,,'!N#+T2WN-'MZEO)A=QHC>6Z2+>!_-'*#Q;` M^Q<.N[T/PF72-1N`VHH97G^W+]4U7TI=F+T-2/W7MQ7'<*]7AW"K!++:8/WF6 M7D46J%NEI<'[S++R*+5"W2^=7(9UC>(*F]/V5#Y1O.KD,ZQO$%.VC^/W_X/ M6.4CU$13!\*H-]WPW/E:9P:(BL$H*R^BB\^^^`J-KW9S49-,_;V_@];_VD*M"E;0;>/<]]K[0]WP*N M(2QC_6S=_`_@E+V&]2;Z#-I/=J8=3N],/!U5^6BUPJW*R.F'@ZJ_+1:X5;ES M8:7V=7NHNP4T:!?BK[XT/,Y0NIHT"_%7WQH>9RTO-%_WU.+751W.DRK=1Z.[ MS(TY.?$(@?&<&G\"55Y67TM<&]SXXOS&JM"RV>O];[FEZ_YKL%(.ART073&_ M1JAC7LH8'3M:X9C9YAK3YL\_0H^4IZ"M]5RY#_FU;W+:I2:,;=8U%B3TJWZ8 M+?!08^F=3L:P5,#)WM:,ALSF"?/EFK(*O6FT'IZBVCV%'W/]3E-L'_M^A^\7 M^LC=>'K2O]^V\EBU`B^ M:EFR\LC(K>P*GR3N8JG*N-6]@5/DG\O(XAE^JX5+&P1$0`1$0`1$0`1$0`1$0`7TSXQGC#G7ROIGQC/& M'.@"9F]8WB7):4.#>\^39KM76MZQO$N2TH<&]Y\FS7:M*.I'NCBIR/L5@1$7 MT1#)+T(;]JGD3]9JL$J^Z$-^U3R)^LU6"46^UBM::1632KPD77^G^6U<:NRT MJ\)%U_I_EM7&JM1TX]D3:VI+N>'<*MSAC>G9^10Z@51CN%6YPQO3L_(H=0)+ M:/+$:L`A0@B]K48U8[LCFE5=-XHE_'^EB@O-BGL]CCG M<*D!LU1*S8`,SVPT;N9[ZB!$7M*E&E'=B%2K*H\9!39H0PW-!#68AJ(RUL[> M@4V8ZYH.;G<68`\Q6@T=X-PG>ZF*2X7R.KJ1\+WM#3%F>\2[;=_Q4^Q0QT\+ M(88VQQ,:&L8P9!H&X`$C>W*PX<1NUH>>^S[5/;KVXKN42:Q5PE3VZ]N*[E$F ML5SL[.7T=7V2,19]BWPVSE<6N%@+/L6^&VZ?V<0O#N%>KP[A5@EEM,'[S++R*+5" MW2TN#]YEEY%%JA;I?.5.=EV'*@B(N#HJ9C#?I?.73:Y6E6ZQAOTOG+IMG[*A\HWG5R&=8WB"G;1_'[_`/!ZQRD> MHB*8/A5!ON^&Y\KEURK?*H-]WPW/E$:K\A#JJ18:K[%2\TS M@T1>.ZTJP2C*N%#+;;A-1SC^)$!S9'SJ&5A91<8.+]& MS:[EO3370*:-`OQ5]\:'F@K?5D/23?\`#&+9;9;_`')[G;#&\=%B+G9D M;>WFN5ZM.+/_`*'J#^Y2X6=645)>H_*ZIQ;BRPON>#YF/^T)[G@^9C_M"KUU M:<6?_0]0?W+PZ:L6Y'L#U!_P*GR3N8JG*I[.RE]$^^_'["(BI"` M1$0!.>@<'WCNY[AJ6C_M4M*)]!&]^[,.=?*^F?&,\8)Z.*G(^Q6!$1?1$,DO0AOVJ>1/UFJP2K[H0W[5/(GZS58)1;[6*UII%9-* MO"1=?Z?Y;5QJ[+2KPD77^G^6U<:JU'3CV1-K:DNYX=PJW.&-Z=GY%#J!5&.X M5;G#&].S\BAU`DMH\L1JQS9"&F[?Q!R)FLY1LI)TW;^(.1,UG*-DW;:4>PO< M:K"W=#@_$=RHXZRBLU944T@)9+&S-KLCEM><+2*SNBW@WL_B/_,+/=6*K-:4[73W+`-QDFC:9:1HGA M?EMM<",\N,9A5E7MO7XT-[`\KT>%+`]8]T;VO8YS7M.;7-.1![X*L5HIQK-B M>T2T-PDV=QH0-E(=V6,[CCX1N'S=]5T4B:%9GQX^,;3DV6DD#AW\BTCF7-W3 M4Z3;]#JUFXU$NI8E4]NO;BNY1)K%7"5/;KVXKN42:Q2FSLY?0S?9(Q%GV+?# M;.5Q:X6`L^Q;X;9RN+7"IRR8A'F1;Y5ITN<)-Q\2'\MJLLJTZ7.$FX^)#^6U M2-GZK[?\*5[I_9Q"\.X5ZO#N%6"66TP?O,LO(HM4+=+2X/WF67D46J%NE\Y4 MYV78=7(9UC>(*=M'\?O_P`'K'*1ZB(I@^?_TY^50;[OAN?* MY=L%B++M7;F@Y3'K!4Y9$^. M:+A*MVF'A&J_(0ZJLBJW:8>$:K\A#JJ18:K[%2\TS@UX[K2O5X[K2K!*)_TI M6?WPT945:QN2DJIJ:8;&6%[HWCO$'(\R1L9XQ<>C';RNIT=JNX;@'$%ED=U\D%3"/"' MAK_PV/H7,)F0B9RA=31H%^*OOC0\SEA>:+_ M`+ZFUKJHZ_2UP;W/CB_,:JT*R^EK@WN?'%^8U5H66S])]S2]U%V"E/05OJN7 M(?\`-JBQ2GH*WU7+D/\`FU;W6C(RMM5&KTR<(D_)HN8K@%.&D+1I?<48LEN= M`^C%.Z%C`)9"UV8&WM9%1+B/#M;A>[NMEP=$Z=K&O)B<7-R.YMD!W%.2FY->1J5X>M/$O5X>M/$F1]^V\EBU`B^:EFR\ MLC(K>P*GR3N8JG*N-6]@5/DG404\LIW&,+CY@HKT$;W[MRINH%(.)ZCW-AVL<#D7,V`\YR4&[UI%FW MTD1YYW7$N/G7B(ES8(B(`(B(`(B(`(B(`(B(`+Z9\8SQASKY7TSXQGC M#G0!,S>L;Q+DM*'!O>?)LUVKK6]8WB7):4.#>\^39KM6E'4CW1Q4Y'V*P(B+ MZ(ADEZ$-^U3R)^LU6"5?="&_:IY$_6:IWN-TH;32/JKA5PTT+!F72.`]'?4: M^3=;!%6T\J16_2KPD77^G^6U<:MWBZ]MQ%BNXW6-I;%/)_##MW8`!HS\P6D5 M:DG&$4^A-JM.;:/#N%6YPQO3L_(H=0*HY!(R&ZK?6.G=26"VTSQDZ*EB81X0 MT!([1Y8C=CFR"M-V_B#D3-9RC923INW\0XU6%9W1;P;V? MQ'_F.58E9W1;P;V?Q'_F.2^T--=S:RYWV,O2%P?7SDKE5=6HTA<'U\Y*Y577 MFS^1]SV]YD%(&AGA"CY++^BC]2!H9X0H^2R_HF;C2EV,*&HBQJI[=>W%=RB3 M6*N$J>W7MQ7'<*]0[BL M$LMG@_>99>11:H6Z4=X;TD82H,,6NDJ;PR.>&ECCD88GG8N#0"-IJVG53P7] M=L]3)^U0)T:CD_XO]%J-2&ZO-'8(N/ZJ>"_KMGJ9/VKIK;<:2[V^&OH9A-2S M#91R`$;(9Y;AVUG*G./G)8':E%Y,JMC#?I?.73:Y6E6ZQAOTOG+IM_;-SYF3]J M0OX2EN[JQS';*48IXL__U)^1V>ID_:M>#4]K_ M`$<<2'5'8JH-]WPW/EQW?!&8*J+?=\-SY7+KE.[ M.YI"E[RHP%EVKMS0J%732Q9_>K'M6 M]KJ%&6G.S]'LEON[&_"I93#(?]#]S\0/2 MHMG/=K8=2M`!F61MD_M>TJL*RV?I/N:7O.NP4IZ"M M]5RY#_FU18I#T-7:GMN-G0U$C8Q6T[H6.<SLI?0A??C]A$14A`(B(`G701O?NW*FZ@76X[J M-A:Z>`';EES/$!_Y"Y+01O?NW*FZ@6YQW4;.Z4\`.U'%LCQD_P#A0;O6D6;? M21RJ(B7-@B(@`B(@`B(@`B(@`B(@`OIGQC/&'.OE?3/C&>,.=`$S-ZQO$N2T MH<&]Y\FS7:NM;UC>)9COKI\-8#O\`BB=GN2C?#2D_ M"JIVEL;1X/E'P!>2E&*QD\#J,7)X)'WH]PW)B;%U)3EA-)3N$]2[N!C3GEYS MD/2K2+081PE;\'V@45$"^1YV4\[A\*5W?/>'>'<6_4.ZK\6>*R16MZ7#C@\R MO>F[?Q!R)FLY1LI)TW;^(.1,UG*-E7MM*/8FW&JPK.Z+>#>S^(_\QRK$K.Z+ M>#>S^(_\QR7VAIKN;67.^QF:0&EVC^^`?17%565O,041N6';E1-&;IZ:2-H[ MY+3E^*J'D6_!<,G#:(/<*YV<_P",D=7R_DF%(&AD@:0XL^[2RY?@H_78:+:Y ME!I$M;I'`-E+X,SWW-('XY)NNL:4E\"U!X5(EG53VZ]N*[E$FL5<)4]NO;BN MY1)K%(;.SE]#E]DC$6?8M\-LY7%KA8"S[%OAMG*XM<*G+)B$>9%OE6G2YPDW M'Q(?RVJRRK3I1.L M55U6BT:<'-D\B=8I#:&FNX[9<[*[XPWZ7SETVN5I5NL8;]+YRZ;7*TJ=ARH4 MGS,__]6,$1%],0`O'=:>)>KQW6GB0!;^Q;W[9R2+4"JA?=\-SY7+KE6OL6]^ MVL%B++M7;F@Y3'K!4I9"$ MKQW6E6"47#M M?:BBY/'JA8&+K0+[A.YV[+-\L#NA^.-MOX@+/M?:BBY/'JA9:^;Q<98HO88K M!E,ML;1&1[H1='CVS^\>-[I1M;L8C*9HA_H?\(9R7O-%_WU-K751+%XM[;K9:VWORRJ8'Q; M?8WM/<<#D0KDJ$=+>`*AM=+B2U0.EBEVZR*,9ECO MG`.\>[Z4C8UE&3@_4;NZ3E'>7H1`@)!!!((VP1W$15R8;>3%.():3W))>[@Z MGRRZ&:AV67>W5J%^D$$U5/'!3Q/EFD.Q9&QN;G'O`+M,48'?A/!5NJJ]H]]* MRI/1&@YB)FQ)#./ND^Q9N4(-1]6:*,IIOH<.O#UIXEZO#UIXEH9EO['O?MO) M8M0(ECWOVWDL6H$7S4LV7ED9SFM>QS'`%KAD0>Z%S?4^PC]GZ'U:Z5%[&4HY M/`'%/-'-]3["/V?H?5IU/L(_9^A]6ND1>\6?N?[/-R/0YOJ?81^S]#ZM.I]A M'[/T/JUTB(XL_<_V&Y'H:^U6.UV.&2*UT,-)'([9/;$W(..YFONIM%NK)S-4 M4<4LA`!M'U=!_:MDB\`UO2]:/JZ#^U M.EZT?5T']JV2(`UO2]:/JZ#^U.EZT?5T']JV2(`UO2]:/JZ#^U.EZT?5T']J MV2(`UO2]:/JZ#^U.EZT?5T']JV2(`UO2]:/JZ#^U.EZT?5T']JV2(`UO2]:/ MJZ#^U!A^T`Y^]\&U_I6R1`#<6/6T-+09/CD&;7;>>V%D(A/`# MG>D/"?V?M_J0G2'A/[/V_P!2%T2+OBSZLYW(]#G>D/"?V?M_J0G2'A/[/V_U M(71(CBSZL-R/0T])A3#U`\/I;)01.&XYL#&9DL5AH62,<'-<(AF"-L%;]%[Q M)]6>;D>@6FK\)X?NE8^LK[/25%2\`.EDC!<9SO2'A M/[/V_P!2$Z0\)_9^W^I"Z)%UQ9]6>;D>ASO2'A/[/V_U(3I#PG]G[?ZD+HD1 MQ9]6&Y'H<[TAX3^S]O\`4A;NCHJ:W4<=)1P,@IXADR.,9-:/`%^Z+QSE+-GJ MBEDC_]:8*C!6&:NIEJ*BQT,DTKB][W1`ESCMDE?GTAX3^S]O]2%T2+OB3ZLY MW(]#G>D/"?V?M_J0G2'A/[/V_P!2%T2(XL^K#PAS7"(9@C<*Z! M%[Q)]6>;D>@6GN&%+!=:QU77VBDJ:AP`,DL8+B!N;:W"+E2D$N71.@LV.RRW,_2MBB\;\SM126&'D<[TAX3^S]O]2$Z0L)_9^W^I"Z)%[Q9]6>; MD>A\Q1LAB9%&T,C8T-:T;@`W`B^D7!T%I:_%-KMU0ZGED>^5NTYL;<]B>\2M MTH=ESFN,FS)S?.+3\BI]6/:OGI$MGS]5_>WV+SI M%MGS]5_>WV(`S[?BBV7*H;3Q2/9*[K6R-RV7@"W*B.@AF]](.@QR.V$[=MK2 MU.GBT_(J?5CVK4X?PM176TLJIY9VR.B-&98]N1R[ZYZZ8.M]%:ZF MJCFJ2^*,N:'.&6?H6DPDXMQ+2Y'+,.!_M*`).1$0`1$0`1$0`1$0!I;EBBWV MJL=2U#9S(UH<=@S,;?G6SI*N&NI8ZFG?LXI!F#^BCS&>^27R;.9,,7XVBKZ! M.3[DE=\+/_TW?*]J`)*3<&97@(<`000=L$=UXN@4-THRK*XMFN*Q_NT'_/\`1`&PZ>+3\BI]6/:G M3Q:?D5/JQ[5I,,XR4]EJ8&4[Y'-E:21(02""NH MP02(Q&_**K:/A1Y[3O"U` M&WGF;3T\D[\]A&TO=ENY`9K46[%-ONE:REIVSB1X)&S9D-H9]];"Z]J*WR#^ M8J/<';Y*?Q'ZJ`)-1$0`1$0`1$0`6ONMW@M$3):F*=T;CELXVY@'P[>TM@OS MG@BJ8'PS,#XWC)S3N$(`TM'B^UUM4RG:Z6-SSDTR-R&?>SS6^488AL$MFJ=D MS9/I'G^&_P"3_I/A7089Q3')3FDN4P9)$TEDKCU[1W#X>=`'45=7!0TLE34/ M#(F#,G]!X5I(<9VVHF9###5OD>_5S8H6O]SM=E#$!MN/? M([ZZ[#>'66B'H\X#JUXVSNB,=X?J4`=`-L`Y9>!$1`!0[_[C_7_R4Q*'JICZ M6YS->W)\:E]`!$1`!$1`!$1`!1]COMW!R<:Q M4@K@,>1N;=J:4CX#H=B#X03GSH`W^#-[D7E'\ZZ!1M:<5S6BWMI&4DL/L0!U.(-[]?Y%RX+">^6D_Y:I6;78SJ*ZAGI7443&RL+ M2X/)RS6)A"-TF)*`?"]JP,:;XYO)LYE(=*UK[=`UP#FNB:"#N$9(`X.U8 MMFM]GEI'M,DK!E3O.X/`>+N+S#%EDO%>ZNJ]DZGC?LG%W_JOWX`HLK:FHQ#?=DP'93/#(FG^5O M<]I0!^^&:BW45Q-77REO0A_":&DYN/=\WZK98INEHN])')33DU41^#FPC9-. MZ,_Q6:,`4^6W<)<_$"=(%/\`6$W]@0!J\'7?W#G<]"D M113?+1)9;AT#9N>P@/CDRR)'M!7?8:NXNUJ:YY_ZB+X$H[Y[A\Z`-PB(@`B( M@`B(@`N/Q_V+0^4=S+L%Q^/^Q:'RCN9`'XX9M5-=\-3T]2WNEIK;%6-$A(&><4[-H'B[Q\"Z_`G:6;RYY@NBJJ2"MIGT]3&V2)VZ"@#CZ' M%8K;34T5>0VI,#PR3<$GP3M'O%:C!V^2G\1^JO;_`(9GM#C-%LIJ,G:?EML\ M#O:F#]\M/XK^9`$F(B(`(B(`(B(`(B(`_&JI8:RF?3U#`^)XR<"HKO5M%JNL MU&'[-K8'89CXL9Y;7A7 M5+486WLT/B'6*VZ`"(B`"P:NSVZODZ)54<4C]S9$9'TA9R(`U'2O9/J^/TGV MITKV3ZOC])]JVZ(`PJ.T6Z@DZ)2TD43\LMD!M^DK-1$`$1$`$1$`$1$`%^-5 M1T];%T*IA9*S=R>,U^R(`U/2Q9?J^/TGVKSI7LGU?'Z3[5MT0!J.E>R?5\?I M/M6=1VZCH&EM)31PAV[L1MGSK)1`!$1`!$1`!$1`!$1`&OJ[';*^H,]52,EE M(`+B3N#SK/8UK&-8T9-:,@.\%ZB`"(B`-6<.VATYF-#&9"[9EV9W<\\]U;1$ M0`1$0`1$0`1$0`6)76NBN6P]V4[9MAGL=D3M9K+1`&-16^EMT3HJ2%L3''9$ M#/;*R41`!$1`!$1`'__1GY$1`!$1`'XU-+#64[H*A@DB=US22,UBTECME#4" M>FHXXY0"`X9YC-;!$`$1$`8E;;**Y-8*RG9,&$ENRSVE\T5HH+=(Z2CIFPN> M,G%I.V%FH@`B(@`B(@`B(@`L6NMM'.:U[2UP#FD9$$9@K`I;';**I%134;(Y1GDYI.UGNK8(@ M`B(@`B(@`B(@`B(@`M?5V.V5U0:BIHV22N`!<2=O+SK8(@#\J:FAI*=E/3QB /.)@R:T=Q?JB(`(B(`__9 ` end