CONDENSED CONSOLIDATING FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2012

Condensed Consolidating Financial Information Disclosure [Abstract]

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

CONDENSED CONSOLIDATING FINANCIAL INFORMATION:

The Company’s 8½% senior notes due 2014, 7¼% senior notes due 2019, and 7½% senior notes due 2020 have been fully and unconditionally guaranteed by a 100%-owned subsidiary of the Company (the “Guarantor Subsidiary”). The Company’s remaining subsidiaries (the “Non-Guarantor Subsidiaries”) have not provided guarantees. The Guarantor Subsidiary’s guarantee may be released automatically under the following customary circumstances:

• in connection with any sale or other disposition of all or substantially all of the property of the Guarantor Subsidiary (including by way of merger or consolidation) to a person that is not (either before or after giving effect to such transaction) a restricted subsidiary of the Company;

• in connection with any sale or other disposition of the capital stock of the Guarantor Subsidiary to a person that is not (either before or after giving effect to such transaction) a restricted subsidiary of the Company;

• if the Company designates that Guarantor Subsidiary as an unrestricted subsidiary in accordance with the applicable provisions of the indentures;

• if the Company exercises its legal defeasance option or its covenant defeasance option or upon satisfaction and discharge of the indentures; or

• at such time as such Guarantor Subsidiary ceases to guarantee any other indebtedness of the Company, provided that at such time it does not have outstanding an aggregate of $25.0 million or more of indebtedness and preferred stock.

The following presents condensed consolidating financial information as of December 31, 2012 and 2011, and for the three years in the period ended December 31, 2012 on an issuer (parent company), guarantor subsidiary, non-guarantor subsidiaries, eliminating entries, and consolidated basis. Eliminating entries presented are necessary to combine the entities.

CONDENSED CONSOLIDATING BALANCE SHEETS

(In Thousands)

	December 31, 2012
	Parent Company			Guarantor Subsidiary		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	667		$	45	$	344		$	—		$	1,056
Accounts receivable	33,979			27,969		6,393			(825		)	67,516
Other current assets	55,869			286		353			—			56,508
Total current assets	90,515			28,300		7,090			(825		)	125,080
Property and equipment, at cost	8,439,898			1,416,364		182,070			—			10,038,332
Less accumulated depreciation, depletion, and amortization	6,937,606			1,173,332		173,156			—			8,284,094
Net property and equipment	1,502,292			243,032		8,914			—			1,754,238
Investment in subsidiaries	68,048			—		—			(68,048		)	—
Goodwill	216,460			22,960		—			—			239,420
Due from subsidiaries	116,602			83,983		—			(200,585		)	—
Deferred income taxes	111,015			—		36,106			(132,440		)	14,681
Other assets	68,443			—		—			—			68,443
	$	2,173,375		$	378,275	$	52,110		$	(401,898	)	$	2,201,862
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	157,404		$	2,133	$	6,074		$	(825	)	$	164,786
Other current liabilities	55,187			67		6,285			—			61,539
Total current liabilities	212,591			2,200		12,359			(825		)	226,325
Long-term debt	1,862,088			—		—			—			1,862,088
Due to parent and subsidiaries	—			—		200,585			(200,585		)	—
Deferred income taxes	—			132,440		—			(132,440		)	—
Other liabilities	141,520			3,642		11,111			—			156,273
Total liabilities	2,216,199			138,282		224,055			(333,850		)	2,244,686
Shareholders’ equity (deficit)	(42,824		)	239,993		(171,945		)	(68,048		)	(42,824		)
	$	2,173,375		$	378,275	$	52,110		$	(401,898	)	$	2,201,862

	December 31, 2011
	Parent Company		Guarantor Subsidiary		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	1,734	$	1	$	1,277		$	—		$	3,012
Accounts receivable	43,999		34,142		2,201			(1,253		)	79,089
Other current assets	127,667		313		591			—			128,571
Total current assets	173,400		34,456		4,069			(1,253		)	210,672
Property and equipment, at cost	8,000,466		1,317,917		282,719			—			9,601,102
Less accumulated depreciation, depletion, and amortization	5,782,409		1,102,339		65,238			—			6,949,986
Net property and equipment	2,218,057		215,578		217,481			—			2,651,116
Investment in subsidiaries	160,591		—		—			(160,591		)	—
Goodwill	216,460		22,960		—			—			239,420
Due from subsidiaries	214,394		46,944		—			(261,338		)	—
Deferred income taxes	312,564		—		25,564			(107,012		)	231,116
Other assets	48,827		—		—			—			48,827
	$	3,344,293	$	319,938	$	247,114		$	(530,194	)	$	3,381,151
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	235,788	$	8,846	$	4,499		$	(1,253	)	$	247,880
Other current liabilities	86,618		63		6,276			—			92,957
Total current liabilities	322,406		8,909		10,775			(1,253		)	340,837
Long-term debt	1,693,044		—		—			—			1,693,044
Due to parent	—		—		261,338			(261,338		)	—
Deferred income taxes	—		107,012		—			(107,012		)	—
Other liabilities	135,730		2,614		15,813			—			154,157
Total liabilities	2,151,180		118,535		287,926			(369,603		)	2,188,038
Shareholders’ equity	1,193,113		201,403		(40,812		)	(160,591		)	1,193,113
	$	3,344,293	$	319,938	$	247,114		$	(530,194	)	$	3,381,151

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

	Year Ended December 31, 2012
	Parent Company			Guarantor Subsidiary			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Oil, natural gas, and natural gas liquids sales	$	442,034		$	159,578		$	3,911		$	—		$	605,523
Interest and other	4,888			2,360			—			(7,112		)	136
Equity earnings in subsidiaries	(71,028		)	—			—			71,028			—
Total revenues	375,894			161,938			3,911			63,916			605,659
Costs, expenses, and other:
Lease operating expenses	91,214			16,422			391			—			108,027
Other production expenses	45,211			3,383			288			—			48,882
General and administrative	54,815			2,730			1,717			—			59,262
Depreciation, depletion, and amortization	207,622			70,993			1,843			—			280,458
Ceiling test write-down of oil and natural gas properties	950,157			—			42,247			—			992,404
Impairment of properties	—			—			79,529			—			79,529
Interest expense	141,830			1,058			6,055			(7,112		)	141,831
Realized and unrealized gains on derivative instruments, net	(58,123		)	(14,275		)	(248		)	—			(72,646		)
Other, net	73,548			413			9,445			—			83,406
Total costs, expenses, and other	1,506,274			80,724			141,267			(7,112		)	1,721,153
Earnings (loss) before income taxes	(1,130,380		)	81,214			(137,356		)	71,028			(1,115,494		)
Income tax	158,551			25,428			(10,542		)	—			173,437
Net earnings (loss)	(1,288,931		)	55,786			(126,814		)	71,028			(1,288,931		)
Other comprehensive loss:
Defined benefit postretirement plans losses, net of tax	(2,242		)	—			—			—			(2,242		)
Total other comprehensive loss	(2,242		)	—			—			—			(2,242		)
Total comprehensive income (loss)	$	(1,291,173	)	$	55,786		$	(126,814	)	$	71,028		$	(1,291,173	)

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (Continued)

(In Thousands)

	Year Ended December 31, 2011
	Parent Company			Guarantor Subsidiary		Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Oil, natural gas, and natural gas liquids sales	$	517,649		$	183,391	$	2,491		$	—		$	703,531
Interest and other	3,569			5,834		—			(8,377		)	1,026
Equity earnings in subsidiaries	102,237			—		—			(102,237		)	—
Total revenues	623,455			189,225		2,491			(110,614		)	704,557
Costs, expenses, and other:
Lease operating expenses	84,117			14,620		421			—			99,158
Other production expenses	47,066			7,122		172			—			54,360
General and administrative	60,855			2,787		1,463			—			65,105
Depreciation, depletion, and amortization	165,270			52,692		1,722			—			219,684
Interest expense	149,755			4,949		3,428			(8,377		)	149,755
Realized and unrealized (gains) losses on derivative instruments, net	(91,221		)	3,192		(35		)	—			(88,064		)
Other, net	11,386			238		5,540			—			17,164
Total costs, expenses, and other	427,228			85,600		12,711			(8,377		)	517,162
Earnings (loss) from continuing operations before income taxes	196,227			103,625		(10,220		)	(102,237		)	187,395
Income tax	53,398			39,647		(3,910		)	—			89,135
Net earnings (loss) from continuing operations	142,829			63,978		(6,310		)	(102,237		)	98,260
Net earnings from discontinued operations	—			—		44,569			—			44,569
Net earnings	142,829			63,978		38,259			(102,237		)	142,829
Less: net earnings attributable to noncontrolling interest	—			—		4,987			—			4,987
Net earnings attributable to Forest Oil Corporation common shareholders	142,829			63,978		33,272			(102,237		)	137,842
Net earnings	142,829			63,978		38,259			(102,237		)	142,829
Other comprehensive loss:
Foreign currency translation losses	—			—		(27,852		)	—			(27,852		)
Defined benefit postretirement plans losses, net of tax	(6,669		)	—		—			—			(6,669		)
Total other comprehensive loss	(6,669		)	—		(27,852		)	—			(34,521		)
Total comprehensive income	136,160			63,978		10,407			(102,237		)	108,308
Less: total comprehensive loss attributable to noncontrolling interest	—			—		(1,330		)	—			(1,330		)
Total comprehensive income attributable to Forest Oil Corporation common shareholders	$	136,160		$	63,978	$	11,737		$	(102,237	)	$	109,638

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (Continued)

(In Thousands)

	Year Ended December 31, 2010
	Parent Company			Guarantor Subsidiary			Combined Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Oil, natural gas, and natural gas liquids sales	$	479,250		$	225,937		$	2,505		$	—		$	707,692
Interest and other	5,504			32			—			(4,547		)	989
Equity earnings in subsidiaries	138,354			—			—			(138,354		)	—
Total revenues	623,108			225,969			2,505			(142,901		)	708,681
Costs, expenses, and other:
Lease operating expenses	79,927			11,974			493			—			92,394
Other production expenses	45,318			11,454			126			—			56,898
General and administrative	60,901			2,408			1,577			—			64,886
Depreciation, depletion, and amortization	130,777			55,642			1,554			—			187,973
Interest expense	149,891			1,381			3,166			(4,547		)	149,891
Realized and unrealized gains on derivative instruments, net	(122,389		)	(27,457		)	(286		)	—			(150,132		)
Other, net	877			(456		)	6,918			—			7,339
Total costs, expenses, and other	345,302			54,946			13,548			(4,547		)	409,249
Earnings (loss) from continuing operations before income taxes	277,806			171,023			(11,043		)	(138,354		)	299,432
Income tax	50,285			62,919			(3,434		)	—			109,770
Net earnings (loss) from continuing operations	227,521			108,104			(7,609		)	(138,354		)	189,662
Net earnings from discontinued operations	—			—			37,859			—			37,859
Net earnings	227,521			108,104			30,250			(138,354		)	227,521
Other comprehensive income (loss):
Foreign currency translation gains	—			—			15,153			—			15,153
Defined benefit postretirement plans (losses) gains, net of tax	(932		)	—			186			—			(746		)
Total other comprehensive income (loss)	(932		)	—			15,339			—			14,407
Total comprehensive income	$	226,589		$	108,104		$	45,589		$	(138,354	)	$	241,928

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(In Thousands)

	Year Ended December 31, 2012
	Parent Company			Guarantor Subsidiary			Combined Non- Guarantor Subsidiaries			Consolidated
Operating activities:
Net earnings (loss)	$	(1,217,903	)	$	55,786		$	(126,814	)	$	(1,288,931	)
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities:
Depreciation, depletion, and amortization	207,622			70,993			1,843			280,458
Deferred income tax	194,089			25,428			(10,542		)	208,975
Unrealized losses on derivative instruments, net	32,448			6,563			115			39,126
Ceiling test write-down of oil and natural gas properties	950,157			—			42,247			992,404
Impairment of properties	—			—			79,529			79,529
Loss on debt extinguishment, net	36,312			—			—			36,312
Other, net	31,889			404			(3,872		)	28,421
Changes in operating assets and liabilities:
Accounts receivable	10,020			6,173			(4,620		)	11,573
Other current assets	2,428			27			175			2,630
Accounts payable and accrued liabilities	(22,240		)	(1,549		)	2,625			(21,164		)
Accrued interest and other	1,574			(47		)	795			2,322
Net cash provided (used) by operating activities	226,396			163,778			(18,519		)	371,655
Investing activities:
Capital expenditures for property and equipment	(615,167		)	(102,596		)	(12,901		)	(730,664		)
Proceeds from sales of assets	234,017			88			28,777			262,882
Net cash (used) provided by investing activities	(381,150		)	(102,508		)	15,876			(467,782		)
Financing activities:
Proceeds from bank borrowings	1,244,000			—			—			1,244,000
Repayments of bank borrowings	(1,284,000		)	—			—			(1,284,000		)
Issuance of senior notes, net of issuance costs	491,250			—			—			491,250
Redemption of senior notes	(330,709		)	—			—			(330,709		)
Change in bank overdrafts	(23,922		)	(428		)	133			(24,217		)
Net activity in investments in subsidiaries	59,221			(60,798		)	1,577			—
Other, net	(2,153		)	—			—			(2,153		)
Net cash provided (used) by financing activities	153,687			(61,226		)	1,710			94,171
Net (decrease) increase in cash and cash equivalents	(1,067		)	44			(933		)	(1,956		)
Cash and cash equivalents at beginning of period	1,734			1			1,277			3,012
Cash and cash equivalents at end of period	$	667		$	45		$	344		$	1,056

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Continued)

(In Thousands)

	Year Ended December 31, 2011
	Parent Company			Guarantor Subsidiary			Combined Non- Guarantor Subsidiaries			Consolidated
Operating activities:
Net earnings	$	40,592		$	63,978		$	38,259		$	142,829
Less: net earnings from discontinued operations	—			—			44,569			44,569
Net earnings (loss) from continuing operations	40,592			63,978			(6,310		)	98,260
Adjustments to reconcile net earnings (loss) from continuing operations to net cash provided (used) by operating activities of continuing operations:
Depreciation, depletion, and amortization	165,270			52,692			1,722			219,684
Deferred income tax	23,257			39,647			(3,910		)	58,994
Unrealized (gains) losses on derivative instruments, net	(40,666		)	1,596			(17		)	(39,087		)
Other, net	36,714			331			(2,313		)	34,732
Changes in operating assets and liabilities:
Accounts receivable	6,025			16,069			1,142			23,236
Other current assets	12,816			442			1,056			14,314
Accounts payable and accrued liabilities	(7,894		)	1,564			(140		)	(6,470		)
Accrued interest and other	(5,165		)	(252		)	(149		)	(5,566		)
Net cash provided (used) by operating activities of continuing operations	230,949			176,067			(8,919		)	398,097
Investing activities:
Capital expenditures for property and equipment	(683,758		)	(114,715		)	(82,372		)	(880,845		)
Proceeds from sales of assets	120,992			—			123			121,115
Net cash used by investing activities of continuing operations	(562,766		)	(114,715		)	(82,249		)	(759,730		)
Financing activities:
Proceeds from bank borrowings	160,000			—			—			160,000
Repayments of bank borrowings	(55,000		)	—			—			(55,000		)
Redemption of senior notes	(285,000		)	—			—			(285,000		)
Change in bank overdrafts	16,682			478			(44		)	17,116
Net activity in investments in subsidiaries	290,710			(61,832		)	(228,878		)	—
Other, net	(10,421		)	—			—			(10,421		)
Net cash provided (used) by financing activities of continuing operations	116,971			(61,354		)	(228,922		)	(173,305		)
Cash flows of discontinued operations:
Operating cash flows	—			—			101,292			101,292
Investing cash flows	—			—			(255,470		)	(255,470		)
Financing cash flows	—			—			478,324			478,324
Net cash provided by discontinued operations	—			—			324,146			324,146
Effect of exchange rate changes on cash	—			—			(3,476		)	(3,476		)
Net (decrease) increase in cash and cash equivalents	(214,846		)	(2		)	580			(214,268		)
Net increase in cash and cash equivalents of discontinued operations	—			—			(289		)	(289		)
Net (decrease) increase in cash and cash equivalents of continuing operations	(214,846		)	(2		)	291			(214,557		)
Cash and cash equivalents of continuing operations at beginning of period	216,580			3			986			217,569
Cash and cash equivalents of continuing operations at end of period	$	1,734		$	1		$	1,277		$	3,012

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Continued)

(In Thousands)

	Year Ended December 31, 2010
	Parent Company			Guarantor Subsidiary			Combined Non- Guarantor Subsidiaries			Consolidated
Operating activities:
Net earnings	$	89,167		$	108,104		$	30,250		$	227,521
Less: net earnings from discontinued operations	—			—			37,859			37,859
Net earnings (loss) from continuing operations	89,167			108,104			(7,609		)	189,662
Adjustments to reconcile net earnings (loss) from continuing operations to net cash provided (used) by operating activities of continuing operations:
Depreciation, depletion, and amortization	130,777			55,642			1,554			187,973
Deferred income tax	64,185			62,919			(3,433		)	123,671
Unrealized gains on derivative instruments, net	(33,602		)	(4,274		)	(44		)	(37,920		)
Gain on debt extinguishment, net	(4,576		)	—			—			(4,576		)
Other, net	34,512			263			(3,435		)	31,340
Changes in operating assets and liabilities:
Accounts receivable	29,833			(25,805		)	(1,388		)	2,640
Other current assets	22,818			42			1,276			24,136
Accounts payable and accrued liabilities	(60,768		)	(2,557		)	890			(62,435		)
Accrued interest and other	(17,023		)	(191		)	9,448			(7,766		)
Net cash provided (used) by operating activities of continuing operations	255,323			194,143			(2,741		)	446,725
Investing activities:
Capital expenditures for property and equipment	(432,484		)	(121,458		)	(8,189		)	(562,131		)
Proceeds from sales of assets	140,643			(1,565		)	(1		)	139,077
Net cash used by investing activities of continuing operations	(291,841		)	(123,023		)	(8,190		)	(423,054		)
Financing activities:
Redemption of senior notes	(152,038		)	—			—			(152,038		)
Change in bank overdrafts	7,834			(1,334		)	(122		)	6,378
Net activity in investments in subsidiaries	(63,126		)	(70,162		)	133,288			—
Other, net	3,450			—			(1		)	3,449
Net cash (used) provided by financing activities of continuing operations	(203,880		)	(71,496		)	133,165			(142,211		)
Cash flows of discontinued operations:
Operating cash flows	—			—			86,204			86,204
Investing cash flows	—			—			(218,155		)	(218,155		)
Financing cash flows	—			—			1,692			1,692
Net cash used by discontinued operations	—			—			(130,259		)	(130,259		)
Effect of exchange rate changes on cash	—			—			(277		)	(277		)
Net decrease in cash and cash equivalents	(240,398		)	(376		)	(8,302		)	(249,076		)
Net decrease in cash and cash equivalents of discontinued operations	—			—			8,370			8,370
Net (decrease) increase in cash and cash equivalents of continuing operations	(240,398		)	(376		)	68			(240,706		)
Cash and cash equivalents of continuing operations at beginning of period	456,978			379			918			458,275
Cash and cash equivalents of continuing operations at end of period	$	216,580		$	3		$	986		$	217,569