/C O R R E C T I O N from Source -- ShawCor Ltd./



    In c2939 transmitted on Tuesday, February 19, 2008, an error occurred in
    the Financial Summary Table. In the first column, "0.46" in "Continuing
    operations" should have read "0.47" and "(0.41)" in "Discontinued
    operations" should have read "(0.42)". Corrected copy follows:

    ShawCor Ltd. announces fourth quarter and full year 2007 results

    (TSX: SCL.A, SCL.B)

    TORONTO, Feb. 19 /CNW/ -

    
    Financial Summary

    (In thousands of Canadian     Three Months Ended              Year Ended
     dollars except per share                Dec. 31                 Dec. 31
     amounts)                       2007        2006        2007        2006
    -------------------------------------------------------------------------

    Operating Results
    Revenue                   $  285,438  $  276,315  $1,048,099  $1,059,619
    EBITDA (note 1)               50,731      54,891     202,808     187,828
    Operating income from
     continuing operations        39,492      41,791     160,001     138,780
    Income from continuing
     operations                   34,053      26,722     117,819      92,924
    Income (loss) from
     discontinued operations     (30,300)        (69)    (30,462)       (289)
    Net income (loss)              3,753      26,653      87,357      92,635

    Net income (loss) per share
     (Class A and B) - Basic
      Continuing operations         0.48        0.36        1.62        1.25
      Discontinued operations      (0.42)       0.00       (0.42)       0.00
      Total                         0.06        0.36        1.20        1.25

    Net income (loss) per share
     (Class A and B) - Diluted
      Continuing operations         0.47        0.36        1.60        1.25
      Discontinued operations      (0.42)       0.00       (0.41)       0.00
      Total                         0.05        0.36        1.19        1.25
    -------------------------------------------------------------------------
    Cash Flow
    Cash from continuing
     operating activities          8,710      38,752      97,513     189,877
    Purchases of property,
     plant and equipment          28,551      15,579      91,855      58,170
    -------------------------------------------------------------------------
    Financial Position
    Working capital                                      255,625     341,375
    Total assets                                         960,326     948,565
    Shareholders' equity per share
     (Class A and B)                                  $     8.13  $     8.51
    -------------------------------------------------------------------------

    Note 1: EBITDA is a non-GAAP measure calculated by adding back to income
    from continuing operations, the sum of reported interest
    (income)/expense, taxes and depreciation/amortization, excluding the
    impact of non-wholly owned subsidiaries. EBITDA does not have a
    standardized meaning prescribed by GAAP and is not necessarily comparable
    to similar measures prescribed by other companies. EBITDA is used by many
    analysts in the oil and gas industry as one of several important
    analytical tools.
    Note 2: Shareholders' equity per share is a non-GAAP measure calculated
    by dividing shareholders' equity by the number of Class A and Class B
    shares outstanding at the date of the balance sheet.
    Note 3: During the fourth quarter of 2006, ShawCor Ltd. adopted the
    proportionate consolidation method of accounting for its 30% investment
    in the Arabian Pipecoating Company Limited ("APCO"). The Company
    previously accounted for this investment using the equity method. This
    change in accounting policy has been applied retroactively and as a
    result, revenue, operating expenses and certain balance sheet accounts
    for previous periods have been restated. Refer to note 2 of the 2006
    annual consolidated financial statements.


    Fourth Quarter 2007 Results

    Revenue
    -------

    Consolidated Results

    -------------------------------------------------------------------------
    Three months ended                         Dec. 31   Sept. 30    Dec. 31
    (in thousands of Canadian dollars)            2007       2007       2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Pipeline and Pipe Services Segment         254,316    227,779    243,951
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Petrochemical and Industrial Segment        28,450     37,517     32,795
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Intersegment eliminations                    2,672       (404)      (431)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Consolidated                               285,438    264,892    276,315
    -------------------------------------------------------------------------
    

    Current Quarter vs. Q4 2006
    Consolidated revenue from continuing operations in the fourth quarter of
the year totaled $285.4 million compared to $276.3 million in the fourth
quarter of last year, with the increase achieved despite the adverse impact of
the stronger Canadian dollar on the translation of foreign currency based
revenue in the period. The Canadian dollar was approximately 15% stronger on
average, in terms of the U.S. dollar, in the fourth quarter of 2007 compared
with the fourth quarter of 2006, while it was 9% stronger in terms of the U.K.
pound and 3% stronger in terms of the Euro. The Company's fourth quarter 2007
revenue would have been higher than reported by approximately $28 million, had
exchange rates been the same as in the fourth quarter of 2006. On a full year
basis, consolidated revenue totaled $1.049 billion compared to $1.060 billion
in 2006.

    Current Quarter vs. Q3 2007
    Consolidated revenue in the fourth quarter was 8% higher than in the
third quarter of the year as increased revenue in the Pipeline and Pipe
Services segment was partially offset by lower revenue generated by the
Petrochemical and Industrial segment.

    Pipeline and Pipe Services Segment

    Current Quarter vs. Q4 2006
    Revenue in the quarter for the Pipeline and Pipe Services segment totaled
$254.3 million, 104% of the level achieved in the fourth quarter of last year,
despite the impact of the stronger Canadian dollar in the period. Revenue at
Bredero Shaw in the period was largely the same as in the fourth quarter of
2006, in terms of Canadian dollars; however, revenue was 14% higher in terms
of U.S. dollars, the division's functional currency. In the North American
region, revenue increased 30% over the fourth quarter of last year, in U.S.
dollar terms, driven by significantly higher pipe coating volumes at the
division's large-diameter plants in Canada and the United States which more
than offset the decline in small diameter volumes associated with lower
Western Canadian drilling activity. In the Far East region, U.S. dollar
revenue increased 62% from levels in the fourth quarter of 2006 reflecting
increased pipe coating volumes at all of the region's plants. Revenue in the
Middle East region declined from levels in the corresponding quarter of last
year reflecting the impact of the temporary idling of the plant in Ras Al
Khaimah, U.A.E. during a planned upgrade and capacity expansion program.
    In the segment's other divisions, revenue at Shaw Pipeline Services was
28% higher than in the fourth quarter of 2006, while revenue at Guardian and
Canusa-CPS decreased with revenue at Canusa-CPS adversely impacted by the
stronger Canadian dollar and both divisions affected by the aforementioned
impact of lower Western Canadian drilling activity. On a full year basis,
revenue for the Pipeline and Pipe Services segment totaled $903.4 million
compared to $922.3 million in 2006.

    Current Quarter vs. Q3 2007
    Revenue in the Pipeline and Pipe Services segment in the fourth quarter
increased 12% over the prior quarter as revenue growth at Bredero Shaw and
Shaw Pipeline Services was partially offset by declines at Canusa-CPS and
Guardian. At Bredero Shaw, revenue growth resulted from increased
large-diameter pipe coating activity in Canada and the United States,
increased business activity at the division's Thermotite pipe coating plant in
Orkanger, Norway, and commencement of the Balearic pipe coating project at a
project plant mobilized in Alicante, Spain.
    Revenue at Shaw Pipeline Services increased 23% over the prior quarter as
a result of increased ultrasonic girth weld inspection activity and strong USA
land pipeline construction. Revenue at Canusa-CPS and Guardian both decreased
from third quarter levels with Canusa-CPS particularly impacted by the
strengthening of the Canadian dollar.

    Petrochemical and Industrial Segment

    Current Quarter vs. Q4 2006
    Revenue in the quarter for the Petrochemical and Industrial segment
decreased 13% from the level achieved in the fourth quarter of 2006 with
reductions experienced at both DSG-Canusa and ShawFlex. At DSG-Canusa,
business levels in the U.S. were in line with the fourth quarter of last year
while at the division's European operations, sales volumes increased modestly;
however, the stronger Canadian dollar in the fourth quarter of 2007, compared
to the fourth quarter of last year, resulted in lower reported revenue for the
division in Canadian dollar terms. At ShawFlex, revenue in the quarter was
adversely impacted by temporarily reduced demand for the division's products
for Western Canadian oil sands development projects, the result of the tight
labour market and increasing costs in that region. On a full year basis,
revenue for the segment for 2007 was $143.7 million, 103% of the level
achieved in the previous year.

    Current Quarter vs. Q3 2007
    Revenue in the fourth quarter for the segment decreased by 24% from the
level achieved in the third quarter of the year. At DSG-Canusa, revenue in the
quarter decreased 9% from the level in the prior quarter in line with the
historical seasonal trend while revenue at ShawFlex was significantly lower as
the result of the temporary slow-down in Western Canadian oil sands
development projects discussed above.


    
    Operating Income From Continuing Operations
    -------------------------------------------

    Consolidated Results

    -------------------------------------------------------------------------
    Three months ended                         Dec. 31   Sept. 30    Dec. 31
    (in thousands of Canadian dollars)            2007       2007       2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Revenue from continuing operations         285,438    264,892    276,315
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating income from continuing
     operations                                 39,492     45,500     41,791
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating margin                              13.8%      17.2%      15.1%
    -------------------------------------------------------------------------
    

    Current Quarter vs. Q4 2006
    Consolidated income from continuing operations before interest, income
taxes and non-controlling interest totaled $39.5 million (13.8% of
consolidated revenue from continuing operations) in the fourth quarter of 2007
compared to $41.8 million (15.1% of consolidated revenue from continuing
operations) in the fourth quarter of 2006, with the decrease reflecting the
adverse impact on operating margins of the stronger Canadian dollar compared
to the fourth quarter of last year. Certain of the Company's Canadian-based
operations have large U.S. dollar-based revenue streams but incur the majority
of their production and operating costs in Canadian dollars. As a result, a
strengthening of the Canadian dollar reduces the Canadian dollar value of
those U.S. dollar revenue streams, which in turn has the impact of reducing
the operating margins of those divisions. The stronger Canadian dollar had an
adverse impact on operating income from continuing operations of approximately
$8 million in the quarter, when compared to the fourth quarter of last year,
and a 3 percentage point adverse effect on operating margins. On a full year
basis, consolidated income from continuing operations before interest, income
taxes and non-controlling interest totaled $160.0 million, 15% higher than the
level achieved in 2006.

    Current Quarter vs. Q3 2007
    Consolidated income from continuing operations before interest, income
taxes and non-controlling interest in the quarter was 87% of the level
achieved in the prior quarter due mainly to lower operating margins at Bredero
Shaw, the impact of the strengthening in the quarter of the Canadian dollar on
the operating margins of non-Bredero Shaw divisions and increased corporate
and financial costs in the quarter.

    
    Pipeline and Pipe Services Segment

    -------------------------------------------------------------------------
    Three months ended                         Dec. 31   Sept. 30    Dec. 31
    (in thousands of Canadian dollars)            2007       2007       2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Revenue from continuing operations         254,316    227,779    243,951
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating income from continuing
     operations                                 40,280     42,738     40,816
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating margin                              15.8%      18.8%      16.7%
    -------------------------------------------------------------------------
    

    Current Quarter vs. Q4 2006
    In the Pipeline and Pipe Services segment, operating income from
continuing operations in the quarter of $40.3 million (15.8% of revenue from
continuing operations) was in line with the level achieved in the fourth
quarter of 2006, while operating margins decreased 0.9 percentage points. In
Bredero Shaw, both operating income and operating margins were improved over
the prior year, reflecting margin expansion in North America due to increased
production throughput particularly in the region's large diameter plants, and
reduced losses in Nigeria and the North Sea region. The operating margin
improvements at Bredero Shaw were offset by lower operating margins at
Canusa-CPS due in large part to the stronger Canadian dollar in the quarter
compared to in the fourth quarter of 2006. On a full year basis, operating
income from continuing operations for the segment totaled $153.9 million
(17.0% of revenue) compared to $138.5 million (15.0% of revenue) in 2006.

    Current Quarter vs. Q3 2007
    Operating income from continuing operations for the segment in the
quarter decreased 6% from the third quarter of the year while operating
margins decreased 3.0 percentage points. Operating income from continuing
operations and operating margins at Bredero Shaw decreased from the prior
quarter as a result of the shut-down of the plant at Ras Al Khamiah, U.A.E.
during a scheduled plant upgrade and capacity expansion program, and by start
up costs associated with the Hasdrubal pipe coating project at the division's
project-specific plant established in Gabes, Tunisia, partially offset by
improvements in Canada and the United States stemming from increased factory
throughput in the quarter.
    At Guardian, operating income from continuing operations and operating
margins increased from the prior quarter due to reduced fixed costs, while at
Shaw Pipeline Services, operating income increased in line with the increased
revenue while operating margins declined due to a greater proportion of lower
margin radiographic inspection work in the quarter's revenue.  Operating
income from continuing operations decreased at Canusa-CPS from levels in the
prior quarter as did operating margins, largely reflecting the negative impact
of the stronger Canadian dollar on the division's operating margins.

    
    Petrochemical and Industrial Segment

    -------------------------------------------------------------------------
    Three months ended                         Dec. 31   Sept. 30    Dec. 31
    (in thousands of Canadian dollars)            2007       2007       2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Revenue from continuing operations          28,450     37,517     32,795
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating income from continuing
     operations                                  3,065      6,274      5,589
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating margin                              10.8%      16.7%      17.0%
    -------------------------------------------------------------------------
    

    Current Quarter vs. Q4 2006
    In the Petrochemical and Industrial segment, operating income from
continuing operations in the quarter of $3.1 million (10.8% of revenue from
continuing operations) decreased $2.5 million from the level achieved in the
fourth quarter of last year while operating margins decreased 6.2 percentage
points. The decreases resulted from the lower revenue at DSG-Canusa and
ShawFlex in the quarter and well as from the impact of the stronger Canadian
dollar on the operating margins of DSG-Canusa's North American operations. On
a full year basis, operating income for the segment totated $22.8 million
(15.9% of revenue) compared to $19.2 million (13.8% of revenue) in 2006.

    Current Quarter vs. Q3 2007
    Operating income for the segment in the quarter was 49% of the level in
the prior quarter while operating margins decreased 5.9 percentage points.
Operating income performance in the quarter reflected the lower level of
revenue in the quarter as well as the adverse effect on the operating margins
of DSG-Canusa's North American operations of the stronger Canadian dollar in
the period.

    Financial and Corporate

    Current Quarter vs. Q4 2006
    Financial and corporate costs in the quarter consisted of unallocated
corporate expenses of $3.9 million, net of foreign exchange gains of $47
thousand on the translation of foreign cash and working capital balances,
compared to $4.6 million, including foreign exchange losses of $1.0 million,
in the fourth quarter of last year, with the increase in corporate expenses
reflecting higher management compensation expenses in line with the Company's
improved consolidated financial results. On a full year basis, financial and
corporate costs totaled $16.8 million, net of foreign exchange gains of $475
thousand, compared to $18.9 million in 2006, net of foreign exchange gains of
$970 thousand.

    Current Quarter vs. Q3 2007
    Financial and corporate costs in the quarter, excluding foreign exchange
gains and losses, decreased $322 thousand over the level in the third quarter
of the year, mainly as a result of lower levels of corporate spending in the
quarter. Foreign exchange gains in the quarter, stemming from foreign currency
cash balances and working capital, totaled $47 thousand compared to $1.5
million in the third quarter of the year.

    Non-Operating Income and Expenses
    ---------------------------------

    Interest Income

    Consolidated net interest income totaled $743 thousand in the fourth
quarter compared to $811 thousand last quarter and $1.4 million in the fourth
quarter of last year, with the decrease reflecting lower average cash balances
in the quarter and the impact of the stronger Canadian dollar on the
translation of interest expense related to the Company's U.S.
dollar-denominated Senior Notes. Net interest income for the full year totaled
$4.4 million compared to $2.8 million in 2006.

    Income Tax Expense

    Income tax expense related to continuing operations totaled $6.3 million
(15.6% of income from continuing operations before income taxes) compared to
$15.9 million (34.4% of income from continuing operations before income taxes)
in the prior quarter and $15.7 million (36.4% of income from continuing
operations before income taxes) in the fourth quarter of 2006. The income tax
rate in the fourth quarter of 2007 was favourably impacted by the utilization
of previously unrecognized tax loss carry forwards in certain countries,
particularly Nigeria. This benefit reduced the effective tax rate in the
fourth quarter by approximately 15 percentage points. Also benefiting the tax
rate was the impact on Canadian future tax balances of announced reductions in
future income tax rates. Tax expense in the full year 2007 totaled $47.2
million (28.7% of income from continuing operations before income taxes)
compared to $46.8 million (33.1% of income from continuing operations before
income taxes) in 2006.

    Income from Continuing Operations

    Consolidated income from continuing operations for the quarter totaled
$34.1 million ($0.47 per share, diluted), compared to $30.2 million ($0.42 per
share, diluted) in the third quarter and $26.7 million ($0.36 per share,
diluted) in the fourth quarter of last year. On a full year basis,
consolidated income from continuing operations totaled $117.8 million ($1.60
per share, diluted) compared to $92.9 million ($1.25 per share, diluted) in
2006.

    Discontinued Operations
    -----------------------

    Loss from discontinued operations for the quarter totaled $30.3 million
($0.42 per share, diluted) and reflected provisions recorded in the quarter of
$46.6 million, less the related income tax benefit of $16.3 million, in
response to an adverse verdict in a lawsuit relating to the Company's
shuttered facility in Mobile, Alabama. Although the Company intends to appeal,
it has provided for its share of the jury verdict. Loss from discontinued
operations was $59 thousand ($0.00 per share) last quarter and $69 thousand
($0.00 per share) in the fourth quarter of last year.

    Net Income and Earnings Per Share
    ---------------------------------

    Consolidated net income for the fourth quarter of the year was $3.8
million ($0.05 per share, diluted) compared to $30.1 million ($0.42 per share,
diluted) in the third quarter and $26.7 million ($0.36 per share, diluted) in
the fourth quarter of 2006. Consolidate net income for the full year 2007
totaled $87.4 million ($1.19 per share, diluted) compared to $92.6 million
($1.25 per share, diluted) in 2006.

    Cash Flows
    ----------

    Cash flow generated by continuing operations in the quarter totaled $8.7
million compared to cash flow provided by continuing operations of $38.7
million in the fourth quarter of 2006, and reflected increased levels of
working capital investment in support of higher levels of business activity
experienced in the quarter and expected to continue in 2008. On a full year
basis, cash flow generated by continuing operations totaled $97.5 million in
2007 compared to $189.9 million in 2006.
    Cash flow used in continuing investing activities in the quarter totaled
$33.2 million, comprised mainly of capital expenditures of $28.6 million and
increases in deferred project costs of $4.7 million. Major additions to
property, plant and equipment in the quarter included continuing pipe coating
capacity expansions at Bredero Shaw's facilities in Camrose, Alberta and Ras
Al Khaimah, U.A.E. In the fourth quarter of 2006, cash used in continuing
investing activities totaled $14.9 million, mainly reflecting capital
expenditures of $15.6 million less the proceeds on disposal of property, plant
and equipment of $1.3 million. On a full year basis, cash flow used in
continuing investing activities totaled $99.4 million in 2007 compared to
$74.0 million in 2006.
    Cash flow used in continuing financing activities totaled $17.8 million
in the quarter, mainly consisting of $14.0 million paid to repurchase 425,300
Class A shares under the Company's NCIB and dividends paid to shareholders of
$4.0 million. In the fourth quarter of 2006, cash flow generated by continuing
financing activities totaled $899 thousand, comprised of dividends paid to
shareholders of $3.3 million, partially offset by $3.0 million received on an
increase in bank indebtedness and $1.2 million received from the issuance of
Class A shares on the exercise of stock options. On a full year basis, cash
flow used in continuing financing activities totaled $107.7 million in 2007
compared to $14.9 million in 2006.
    Overall, cash and cash equivalents decreased $40.8 million during the
quarter to $175.0 million, compared with an increase of $39.2 million during
the fourth quarter of 2006 to $309.3 million. During the full year 2007, cash
and cash equivalents decreased $134.5 million while in the full year 2006,
cash and cash equivalents increased $109.0 million.

    Outlook
    -------

    Demand for the products and services of the Company's largest market
segment, the Pipeline and Pipe Services segment, is mainly driven by the level
of pipeline infrastructure investment. This investment, in turn, is determined
by energy supply and demand, which itself is a function of global economic
activity. Demand for the products and services of the Petrochemical and
Industrial segment is driven by the general level of economic activity in the
regions where the segment operates, primarily North America and Western
Europe. The pace of economic growth in North America and Western Europe is
expected to slow during 2008 from the high level experienced in 2007; however,
it is expected to remain robust in the developing economies, particularly in
the large economies of China and India.
    Growth in economic activity translates into strong demand for energy.
Since energy supply is limited in the medium-term, oil prices are expected to
remain strong; however, at levels below those experienced during most of 2007.
Strong demand together with limited supply and depletion of existing energy
reserves should encourage additional production and infrastructure
development. In addition, record profits and cash flows at the major energy
producers during the past few years have strengthened their balance sheets and
put them in the position to fund major expansion programs. These factors
should result in increased pipeline construction and translate into favourable
business prospects for the Company over the next several years.
    In North America, new pipeline construction activity is currently
resulting in high levels of utilization at the Company's large diameter pipe
coating facilities. With the North American pipe coating market projected to
remain strong and the Company adding capacity in both Canada and the United
States, the North American region will be a key source of growth over the next
few years. In the Middle East, the Company's facility in Ras Al Khaimah,
U.A.E. will start up production in the first quarter 2008 following nine
months of downtime to allow for a complete plant refurbishment and capacity
expansion. Additionally, strong growth prospects are evident in the Far East
with the Company launching the recently awarded Pluto project in mid-2008 and
future growth potential expected to result from pipeline infrastructure
developments in Malaysia, Indonesia and the northwest shelf of Australia.
    In Europe, the recently awarded Gjoa project coupled with bidding
activity on North Sea pipe coating projects will enable the Company to
remobilize its currently inactive facility in Leith Scotland. It should be
noted however that the Company does not now expect to participate in the pipe
coating of the Nord Stream pipeline project. The Company has been advised by
Nord Stream that it intends to award the pipe coating contract to a competitor
and the Company understands that the pricing and contractual terms at which
the pipe coating work will be awarded is below the level the Company requires
to obtain a satisfactory financial return and ensure timely and adequate
execution given the scope and risks associated with meeting Nord Stream's
requirement that the project be executed through greenfield facilities in
Germany and Finland. Notwithstanding this development, the remobilization of
the Leith facility coupled with continued strong growth at the Company's
Orkanger Norway deepwater insulation facility and newly launched concrete
weight coating plants in Spain and Tunisia offer the prospect for growth in
Europe in 2008 and beyond.
    As a result of the above factors, ShawCor's consolidated revenue is
forecast to increase moderately in 2008 followed by more robust growth in 2009
as the Company benefits from the anticipated pipe coating market growth and
realizes the benefit of the capacity expansions now being put in place to
accommodate these anticipated projects. Growth is also expected at the
businesses of the Industrial and Petrochemical segment as they benefit from
the continuing moderate economic growth in Canada and Europe and from
increasing Western Canadian oil sands development.
    Consolidated order backlog, representing customer orders expected to be
completed within one year, totaled $460.1 million at December 31, 2007,
compared to $411.2 million at the end of the third quarter, and $367.8 million
at the beginning of the year.
    The Company continues to enjoy a very strong balance sheet with the
financial capacity to fund significant internal and external growth
opportunities as they arise. This opportunity to fund expansion together with
the strong market fundamentals enjoyed by the Company provides the potential
for strong growth for ShawCor in the years ahead.

    Forward-Looking Information
    ---------------------------

    This document includes certain statements that reflect management's
expectations and objectives for ShawCor's future performance, opportunities
and growth which constitute forward-looking information under applicable
securities laws. Such statements, except to the extent that they contain
historical facts, are forward-looking and accordingly involve estimates,
assumptions, judgments and uncertainties. These statements may be identified
by the use of forward-looking terminology such as "may," "will," "should",
"anticipate," "expect", "believe", "predict", "estimate," "continue,"
"intend," "plan," and variations of these words or other similar expressions.
These statements are based on assumptions, estimates and analysis made by
ShawCor in light of its experience and perception of trends, current
conditions and expected developments as well as other factors believed to be
reasonable and relevant in the circumstances. Although ShawCor believes that
the expectations reflected in these forward-looking statements are based on
reasonable assumptions in light of currently available information, ShawCor
can give no assurance that such expectations will be achieved.
    Forward-looking statements involve known and unknown risks and
uncertainties that could cause actual results to differ materially from those
predicted, expressed or implied by the forward-looking statements. Significant
risks facing ShawCor include, but are not limited to: changes in global
economic activity and changes in energy supply and demand which impact on the
level of drilling activity and pipeline construction; political, economic and
other risks arising from ShawCor's international operations; compliance with
environmental, trade and other laws; liability claims; fluctuations in foreign
exchange rates; fluctuations in prices of raw materials, as well as other
risks and uncertainties.

    Other information relating to the Company, including its Annual
Information Form, is available on SEDAR at www.sedar.com.

    ShawCor will be hosting a Shareholder and Analyst Conference Call and
Webcast on February 20, 2008 at 10:00 a.m. ET to discuss the Company's fourth
quarter 2007 financial results. Please visit our website at www.shawcor.com
for further details.


    
    SHAWCOR LTD.
    INTERIM FINANCIAL INFORMATION (Unaudited)
    (in thousands of Canadian dollars except per share data)

    CONSOLIDATED STATEMENTS OF INCOME

                             Three Months Ended        Twelve Months Ended
                                 December 31               December 31
                           ------------------------  ------------------------
                              2007         2006         2007         2006
                           -----------  -----------  -----------  -----------

    Revenue                $  285,438   $  276,315   $1,048,099   $1,059,619
                           -----------  -----------  -----------  -----------
    Operating expenses
     (notes 2, 3 and 4)       233,880      218,822      839,853      863,889
    Amortization               11,136       13,892       42,165       50,868
    Research and development      930        1,810        6,080        6,082
                           -----------  -----------  -----------  -----------
                              245,946      234,524      888,098      920,839
                           -----------  -----------  -----------  -----------

    Operating income from
     continuing operations     39,492       41,791      160,001      138,780
    Interest income (note 5)      743        1,440        4,381        2,804
                           -----------  -----------  -----------  -----------

    Income before income
     taxes and non-
     controlling interests     40,235       43,231      164,382      141,584
    Income taxes                6,285       15,717       47,205       46,840
                           -----------  -----------  -----------  -----------

    Income before non-
     controlling interest      33,950       27,514      117,177       94,744
    Non-controlling interest      103         (792)         642       (1,820)
                           -----------  -----------  -----------  -----------

    Income from continuing
     operations                34,053       26,722      117,819       92,924
    Income (loss) from
     discontinued operations
     (note 7)                 (30,300)         (69)     (30,462)        (289)
                           -----------  -----------  -----------  -----------

    Net income             $    3,753   $   26,653   $   87,357   $   92,635
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Earnings per share,
     Class A and B - Basic
     (note 19)
      Continuing
       operations          $     0.48   $     0.36   $     1.62   $     1.25
      Discontinued
       operations               (0.42)           -        (0.42)           -
                           -----------  -----------  -----------  -----------
      Total                $     0.06   $     0.36   $     1.20   $     1.25
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Earnings per share
     Class A and B -
     Diluted (note 19)
      Continuing
       operations          $     0.46   $     0.36   $     1.60   $     1.25
      Discontinued
       operations               (0.41)           -        (0.41)           -
                           -----------  -----------  -----------  -----------
      Total                $     0.05   $     0.36   $     1.19   $     1.25
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    -------------------------------------------------------------------------

    SEGMENTED INFORMATION

                             Three Months Ended        Twelve Months Ended
                                 December 31               December 31
                           ------------------------  ------------------------
                              2007         2006         2007         2006
                                         Restated                  Restated
    Revenue                              (note 1)                  (note 1)
                           -----------  -----------  -----------  -----------

      Pipeline and Pipe
       Services            $  254,316   $  243,951   $  903,427   $  922,328
      Petrochemical and
       Industrial              28,450       32,795      143,665      138,938
      Intersegment
       Eliminations             2,672         (431)       1,007       (1,647)
                           -----------  -----------  -----------  -----------
                           $  285,438   $  276,315   $1,048,099   $1,059,619
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------
    Income (loss) from
     operations
      Pipeline and
       Pipe Services       $   40,280   $   40,816   $  153,932   $  138,483
      Petrochemical and
       Industrial               3,065        5,589       22,822       19,192
      Financial and
       Corporate               (3,853)      (4,614)     (16,753)     (18,895)
                           -----------  -----------  -----------  -----------
                           $   39,492   $   41,791   $  160,001   $  138,780
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------



    SHAWCOR LTD.
    INTERIM FINANCIAL INFORMATION (Unaudited)
    (in thousands of Canadian dollars)

    CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

                             Three Months Ended        Twelve Months Ended
                                 December 31               December 31
                           ------------------------  ------------------------
                              2007         2006         2007         2006
                           -----------  -----------  -----------  -----------

    Balance at beginning
     of period             $  499,402   $  474,616   $  498,001   $  421,547
    Transitional
     adjustment (note 1)            -            -         (585)           -
                           -----------  -----------  -----------  -----------
    Adjusted balance at
     beginning of year        499,402      474,616      497,416      421,547
    Net income                  3,753       26,653       87,357       92,635
                           -----------  -----------  -----------  -----------
                              503,155      501,269      584,773      514,182

    Excess of purchase
     price paid over stated
     value of shares
     (note 11)                (12,551)           -      (81,756)      (6,356)
    Dividends paid             (4,056)      (3,268)     (16,469)      (9,825)
                           -----------  -----------  -----------  -----------
    Balance at end
     of period             $  486,548   $  498,001   $  486,548   $  498,001
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------



    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                             Three Months Ended        Twelve Months Ended
                                 December 31               December 31
                           ------------------------  ------------------------
                              2007         2006         2007         2006
                           -----------  -----------  -----------  -----------

    Net income             $    3,753   $   26,653   $   87,357   $   92,635
    Other comprehensive
     income (loss), net of
     income taxes:
      Unrealized loss on
       translating financial
       statements of self-
       sustaining foreign
       operations              (1,176)      19,866      (49,954)      14,731
      Gain on hedges of
       unrealized foreign
       currency translation     1,357            -       13,830            -
      Income tax expense        2,120            -            -            -
                           -----------  -----------  -----------  -----------
    Unrealized foreign
     currency translation
     gain, net of hedging
     activites                  2,301       19,866      (36,124)      14,731
                           -----------  -----------  -----------  -----------
      Unrealized gain (loss)
       on available-for-sale
       financial assets
       arising during the
       period                     264            -       (1,331)           -
      Income tax expense         (542)           -            -            -
                           -----------  -----------  -----------  -----------
    Change in unrealized
     loss on available-
     for-sale financial
     assets                      (278)           -       (1,331)           -
                           -----------  -----------  -----------  -----------
      Gain on derivatives
       designated as cash
       flow hedges                816            -        4,112            -
      Income tax expense         (277)           -       (1,398)           -
      Gain on derivatives
       designated as cash
       flow hedges in
       prior periods
       transferred to net
       income in the
       current period            (609)           -       (1,679)           -
      Income tax expenses
       transferred to net
       income in the
       current period             207            -          571            -
                           -----------  -----------  -----------  -----------
    Change in gain on
     derivatives designated
     as cash flow hedges          137            -        1,606            -
                           -----------  -----------  -----------  -----------

    Other comprehensive
     gain (loss)                2,160       19,866      (35,849)      14,731

    Comprehensive income   $    5,913   $   46,519   $   51,508   $  107,366
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------



      SHAWCOR LTD.
      INTERIM FINANCIAL INFORMATION (Unaudited)
      (in thousands of Canadian dollars)

      CONSOLIDATED STATEMENTS OF CASH FLOW

                             Three Months Ended        Twelve Months Ended
                                 December 31               December 31
                           ------------------------  ------------------------
                              2007         2006         2007         2006
                                         Restated                  Restated
                                         (note 1)                  (note 1)
                           -----------  -----------  -----------  -----------
    Operating activities:
    Income from continuing
     operations            $   34,053   $   26,722   $  117,819   $   92,924
      Items not requiring
       an outlay of cash:
        Amortization           11,136       13,892       42,165       50,868
        Asset retirement
         obligation expense        (3)       3,652        1,147        4,947
        Stock-based
         compensation
         (note 2)                 697          659        2,765        2,798
        Future income taxes     2,194        1,182          681       (3,498)
        Gain on disposal of
         property, plant
         and equipment            231          (63)        (372)         (56)
        Non-controlling
         interest in
         earnings of
         subsidiaries            (103)         792         (642)       1,820
        Settlement of asset
         retirement
         obligations              855         (711)      (1,906)      (1,276)
        Change in employee
         future benefits       (2,044)        (632)         175          221
        Change in non-cash
         working capital
         and other            (38,306)      (6,741)     (64,319)      41,129
                           -----------  -----------  -----------  -----------
    Cash provided by
     continuing operating
     activities                 8,710       38,752       97,513      189,877
                           -----------  -----------  -----------  -----------

    Investing activities:
      Purchases of property,
       plant and equipment    (28,551)     (15,579)     (91,855)     (58,170)
      Proceeds on disposal
       of property, plant
       and equipment               27        1,334          732        1,451
      Increase in deferred
       project costs           (4,697)        (133)      (5,150)      (8,159)
      Acquisition of
       subsidiary                   -                    (2,786)           -
      Acquisition of joint
       venture interest             -         (544)           -       (9,099)
      Investment in shares          -            -         (301)           -
                           -----------  -----------  -----------  -----------
    Cash used in continuing
     investing activities     (33,221)     (14,922)     (99,360)     (73,977)
                           -----------  -----------  -----------  -----------

    Financing activities:
      Increase (decrease)
       in bank indebtedness        31        2,976       (4,275)       1,183
      Increase in deferred
       financing costs              -            -            -         (655)
      Issue of shares             243        1,191        4,955        2,147
      Purchase of shares
       for cancellation       (14,026)           -      (91,949)      (7,797)
      Dividends paid to
       shareholders            (4,056)      (3,268)     (16,469)      (9,825)
                           -----------  -----------  -----------  -----------
    Cash provided by (used)
     in continuing
     financing activities     (17,808)         899     (107,738)     (14,947)
                           -----------  -----------  -----------  -----------

    Foreign exchange on
     foreign cash and cash
     equivalents               (1,182)       9,893      (21,585)       4,167
                           -----------  -----------  -----------  -----------

    Net cash provided by
     (used in) continuing
     operations               (43,501)      34,622     (131,170)     105,120

    Net cash provided by
     (used) in discontinued
     operations (note 7)        2,707        4,562       (3,135)       3,867

    Cash and cash
     equivalents at
     beginning of period      215,811      270,138      309,322      200,335
                           -----------  -----------  -----------  -----------

    Cash and cash
     equivalents at end
     of period             $  175,017   $  309,322   $  175,017   $  309,322
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------



    SHAWCOR LTD.
    INTERIM FINANCIAL INFORMATION (Unaudited)
    (in thousands of Canadian dollars)

    CONSOLIDATED BALANCE SHEETS

                                                     December 31  December 31
                                                         2007         2006
                                                     -----------  -----------
    Assets
    Current assets
      Cash and cash equivalents                      $  175,017   $  309,322
      Accounts receivable                               203,547      188,865
      Taxes receivable                                    3,169        4,293
      Inventories                                       102,486       79,662
      Prepaid expenses                                   11,362        8,264
      Derivative financial instruments                    1,508            -
      Current future income taxes                         2,770            -
      Current assets of discontinued operation
       (note 7)                                          16,305          156
                                                     -----------  -----------
                                                        516,164      590,562
    Property, plant and equipment, net                  242,783      202,078
    Goodwill                                            161,038      175,813
    Future income taxes                                  24,463       25,404
    Other assets (note 8)                                15,878       14,169
                                                     -----------  -----------
                                                     $  960,326   $1,008,026
                                                     -----------  -----------
                                                     -----------  -----------

    Liabilities
    Current liabilities
      Bank indebtedness (note 9)                     $      107   $    4,094
      Accounts payable and accrued liabilities          153,116      169,387
      Taxes payable                                      32,030       57,010
      Deferred revenues                                  24,021       10,907
      Current liabilities of discontinued
       operation (note 7)                                51,265        7,789
                                                     -----------  -----------
                                                        260,539      249,187
    Long-term debt                                       72,726       87,480
    Future income taxes                                  33,006       30,496
    Other non-current liabilities (note 10)              10,740        5,923
                                                     -----------  -----------
                                                        377,011      373,086
                                                     -----------  -----------

    Non-controlling interest in subsidiaries              3,283        5,013
                                                     -----------  -----------

    Shareholders' Equity
    Capital stock (note 11)                             203,252      206,852
    Contributed surplus (note 12)                        11,729       10,603
    Retained earnings                                   486,548      498,001
    Accumulated other comprehensive loss (note 13)     (121,497)     (85,529)
                                                     -----------  -----------
                                                        580,032      629,927
                                                     -----------  -----------
                                                     $  960,326   $1,008,026
                                                     -----------  -----------
                                                     -----------  -----------


    ShawCor Ltd.
    Notes to the Consolidated Financial Statements (Unaudited)

    1.  Accounting policies

    On January 1, 2007, the Company adopted the Canadian Institute of
    Chartered Accountants' ("CICA") Handbook Section 1530, Comprehensive
    Income; Section 3251, Equity; Section 3855, Financial Instruments -
    Recognition and Measurement; Section 3861, Financial Instruments -
    Disclosure and Presentation; and Section 3865, Hedges. As required, these
    new accounting standards have been adopted prospectively with an
    adjustment to accumulated other comprehensive income. Prior year figures
    have not been restated except that the translation impact of self-
    sustaining foreign operations has been reclassified from cumulative
    translation account to accumulated other comprehensive income in
    accordance with the transitional provisions of the accounting standards.
    The following adjustments were made to the Company's balance sheet as a
    result of adopting these new accounting standards:

    -------------------------------------------------------------------------
     (in thousands of Canadian dollars)                            January 1,
                                                                        2007
    -------------------------------------------------------------------------
    Decrease in assets:
      Other assets ...........................................   $    (1,345)
                                                                 ------------
    Total decrease in assets..................................   $    (1,345)
                                                                 ------------
                                                                 ------------

    Increase (decrease) in liabilities:
      Derivative financial instruments liability .............   $       925
      Current future income taxes payable ....................          (315)
      Future income taxes ....................................           253
      Long-term debt .........................................        (1,504)
                                                                 ------------
    Total decrease in liabilities ............................          (641)
                                                                 ------------

    Increase (decrease) in shareholders' equity:
      Retained earnings ......................................          (585)
      Accumulated other comprehensive income related to
       available-for-sale financial assets ...................           492
      Accumulated other comprehensive income
       related to cash flow hedges ...........................          (611)
                                                                 ------------
    Total decrease to shareholders' equity ...................          (704)
                                                                 ------------
    Total decrease to liabilities and shareholders' equity ...   $    (1,345)
                                                                 ------------
                                                                 ------------

    The following is a description of the accounting policies adopted by the
    Company as a result of implementing these accounting changes:

    a) Comprehensive Income

    The Company's comprehensive income is comprised of net income and other
    comprehensive income, which is made up of unrealized foreign currency
    gains or losses on the translation of the financial statements of self-
    sustaining foreign operations, unrealized gains or losses on available-
    for-sale financial assets and changes in unrealized gains or losses on
    derivatives designated as effective cash flow hedges.

    b) Accumulated Other Comprehensive Income

    Accumulated other comprehensive income is included on the consolidated
    balance sheet as a separate component of shareholders' equity and
    includes accumulated unrealized foreign currency gains or losses on the
    translation of the financial statements of self-sustaining foreign
    operations, accumulated unrealized gains or losses on available-for-sale
    financial assets and accumulated unrealized gains or losses on
    derivatives designated as effective cash flow hedges.

    c) Financial Instruments

    Held-for-trading financial assets are financial assets which are acquired
    for resale prior to maturity. Held-for trading financial assets are
    reflected in the consolidated balance sheet at fair value with changes in
    fair value during a period charged to operating expenses. Available-for-
    sale financial assets are those non-derivative financial assets which are
    so designated by the Company or that do not fall into another category.
    Available-for-sale financial assets are carried on the consolidated
    balance sheet at fair value with gains or losses from changes in fair
    value in a period included in other comprehensive income. Held-to-
    maturity financial assets, loans and receivables and other liabilities
    not held for trading are accounted for at amortized cost with related
    expenses charged to interest income or interest expense.

    The following is a summary of the classes of financial instruments
    included in the Company's consolidated balance sheet as well as their
    designation by the Company under the new accounting standards:

    -------------------------------------------------------------------------
            Balance sheet item                       Designation
    -------------------------------------------------------------------------
    Cash                                       Held-for-trading
    -------------------------------------------------------------------------
    Cash equivalents                           Held-to-maturity
    -------------------------------------------------------------------------
    Accounts receivable                        Loans and receivables
    -------------------------------------------------------------------------
    Long-term investments                      Available-for-sale
    -------------------------------------------------------------------------
    Accounts payable and accrued liabilities   Other liabilities
    -------------------------------------------------------------------------
    Long-term debt                             Other liabilities
    -------------------------------------------------------------------------
    Bank indebtedness                          Other liabilities
    -------------------------------------------------------------------------

    d) Derivative Financial Instruments

    The Company's policy is to document all relationships between hedging
    instruments and hedged items, as well as the risk management objectives
    and strategy for undertaking various hedge transactions. This process
    includes linking all derivatives to specific assets and liabilities on
    the consolidated statement of financial position or to the specific firm
    commitments or forecasted transactions. The Company also assesses, both
    at the inception of the hedge and on an ongoing basis, whether the
    derivatives that are used are effective in offsetting changes in fair
    values or cash flows of hedged items.

    Derivative financial instruments designated as effective cash flow hedges
    are reflected in the consolidated balance sheet at fair value with any
    gains or losses resulting from fair value changes included in other
    comprehensive income to the extent of hedge effectiveness. Derivatives
    with positive exposures are classified as assets while those with
    negative exposures are classified as liabilities. Derivative financial
    instruments not designated as effective cash flow hedges are carried at
    fair value in the consolidated balance sheet with gains or losses
    resulting from changes in fair value in a period charged to operating
    expenses.

    e) Transaction Costs

    Transaction costs related to the acquisition or issue of held-for-trading
    financial instruments are charged to net income as incurred. Transaction
    costs related to financial instruments not designated as held-for-trading
    are included in the financial instrument's initial recognition amount.

    2.  Stock-based compensation

    The compensation cost from the continuing amortization of granted stock
    options for the three months and twelve months ended December 31, 2007,
    included in operating expenses, is $ 697 thousand and $2.8 million,
    respectively (December 31, 2006 - $659 thousand and $ 2.8 million,
    respectively).

    3.  Foreign exchange gains and losses

    Included in operating expenses for the three months ended December 31,
    2007 are foreign exchange gains totaling $47 thousand, while foreign
    exchange gains for the twelve months ended December 31, 2007 totaled
    $475 thousand (December 31, 2006 - losses of $1.0 million and gains of
    $970 thousand, respectively). These gains arise from foreign currency
    transactions and from the translation of the financial statements of
    foreign integrated subsidiaries.

    4.  Employee future benefits

    The Company's cost under both defined benefit and defined contribution
    arrangements included in operating expenses for the three months and
    twelve months ended December 31, 2007 is $3.3 million and $10.5 million,
    respectively (December 31, 2006 - $1.4 million and $9.4 million,
    respectively).

    5.  Interest income (expense)

                              Three Months Ended        Twelve Months Ended
    (in thousands of                Dec. 31                   Dec. 31
     Canadian dollars)         2007         2006         2007         2006
    -------------------------------------------------------------------------

    Interest income on
     short-term deposits   $    2,125   $    3,253   $   10,224   $    9,566
    Interest expense on
     bank indebtedness           (176)        (483)        (707)      (1,456)
    Interest expense on
     long-term debt            (1,206)      (1,330)      (5,136)      (5,306)
                          ---------------------------------------------------
                           $      743   $    1,440   $    4,381   $    2,804
                          ---------------------------------------------------
                          ---------------------------------------------------

    Net interest paid during the three months and twelve months ended
    December 31, 2007 totaled $743 thousand and $4.7 million, respectively
    (December 31, 2006 - $553 thousand and $1.9 million received,
    respectively).

    6.  Income taxes

    Net income taxes paid during the three months and twelve months ended
    December 31, 2007 totaled $4.6 million and $54.1 million, respectively
    (December 31, 2006 - $10.3 million and $42.1 million, respectively).

    7.  Discontinued operations

    On November 2, 2004, the Company announced its decision to close the
    Mobile, Alabama pipe coating facility (the "Mobile Facility") and by
    December 31, 2005, operations at the facility had ceased. The Company
    adopted discontinued operation accounting treatment for the facility in
    2005. The Mobile Facility was part of the Pipeline and Pipe Services
    market segment.

    On December 31, 2005, the Company accrued $6.3 million related to the
    Mobile Facility, representing the present value of future lease and other
    cost obligations for properties where it had ceased using the rights
    conveyed by the leases. During 2007, the Company reached an agreement
    with some of these lessors whereby the Company exited some leases prior
    to their expiration. The settlement costs of these leases approximated
    the related accruals.

    On November 1, 2007, the Company announced a jury verdict of
    U.S.$100 million in compensatory damages and U.S.$8 million in punitive
    damages against the Company and Halliburton Energy Services Inc. ("HESI")
    with the Company and HESI each responsible for 50% of the total award.
    The verdict resulted from a lawsuit brought by Dirt Inc., a Mobile,
    Alabama-based non-hazardous waste landfill operator, and related to the
    disposal of industrial waste from the operations of the Mobile Facility.
    The Company has reviewed the verdict with legal counsel and has
    determined that it has strong grounds for an appeal, which will be
    initiated as soon as possible. As a result of the verdict, the Company
    has increased its accrual related to this issue to U.S. $54 million, this
    being the Company's share of the verdict. The total charge to
    discontinued operations in the year was $46.6 million, less estimated
    income tax recoveries of $16.3 million.

    The following table summarizes the financial results and cash flows from
    discontinued operations for the years ended December 31, 2007 and 2006
    and the assets and liabilities of the discontinued operations as at those
    dates:

                              Three Months Ended        Twelve Months Ended
    (in thousands of                Dec. 31                   Dec. 31
     Canadian dollars)         2007         2006         2007         2006
    -------------------------------------------------------------------------

    Revenue                $        -   $        -   $        -   $       60
                          ---------------------------------------------------

    Loss from operations      (46,603)         (69)     (46,765)        (289)
    Interest expenses                                         -            -
                          ---------------------------------------------------
    Loss from discontinued
     operations before
     income taxes             (46,603)         (69)     (46,765)        (289)
    Income tax recovery       (16,303)           -      (16,303)           -
                          ---------------------------------------------------
    Loss from discontinued
     operations            $  (30,300)  $      (69)  $  (30,462)  $     (289)
                          ---------------------------------------------------
                          ---------------------------------------------------
    Cash flow provided by
     (used in) operating
     activities            $    2,707   $    4,562   $   (3,135)  $    3,867
                          ---------------------------------------------------
                          ---------------------------------------------------

    Current assets                                   $   16,305   $      156
    Property, plant and
     equipment, net                                           -            -
    Current liabilities                              $   51,265   $    7,789


    8.  Other assets

                                                       Dec. 31      Dec. 31
    (in thousands of Canadian dollars)                   2007         2006
    -------------------------------------------------------------------------

    Long-term investment                             $    2,589   $    2,875
    Deferred financing costs                                  -        2,089
    Deferred project costs                                8,492        4,633
    Accrued employee future benefit asset                 4,797        4,572
                                                    -------------------------
                                                     $   15,878   $   14,169
                                                    -------------------------
                                                    -------------------------

    Other assets include a long-term investment in Garneau Inc., a Canadian-
    based, publicly traded pipe-coating company. This investment is
    classified as available-for-sale under the new accounting standards
    related to financial instruments and accordingly, subsequent to
    January 1, 2007, is carried at fair value with changes in fair value
    charged to other comprehensive income.

    9.  Bank indebtedness

    At December 31, 2007, the Company had total operating credit lines of
    $172.0 million (December 31, 2006 - $204.1 million), of which
    $107.0 million has been drawn for various standby letters of credit for
    performance, bid and surety bonds (December 31, 2006 - $74.1 million) and
    bank indebtedness of nil (December 31, 2006 - $3.0 million), to yield
    unutilized credit facilities of $64.9 million (2006 - $127.0 million),
    excluding the Company's proportionate share of the bank indebtedness of
    its joint venture, Arabian Pipecoating Company Limited.

    10. Other non-current liabilities

                                                       Dec. 31      Dec. 31
    (in thousands of Canadian dollars)                   2007         2006
    -------------------------------------------------------------------------

    Non-current asset retirement obligations         $    7,977   $    3,561
    Accrued employee future benefit obligations           2,763        2,362
                                                    -------------------------
                                                     $   10,740   $    5,923
                                                    -------------------------
                                                    -------------------------

    11. Capital stock

    (in thousands of Canadian dollars                  Dec. 31,     Dec. 31,
     except share information)                           2007         2006
    -------------------------------------------------------------------------
    Number of shares: Class A
    Balance, beginning of the period                 60,914,175   61,006,045
    Issued - stock options                              320,295      331,157
    Conversions Class B to Class A                            -        9,873
    Purchase and cancelled under
     Normal Course Issuer Bid                        (2,999,900)    (432,900)
                                                    -------------------------
    Balance, end of the period                       58,234,570   60,914,175
                                                    -------------------------
    Number of shares: Class B                        13,078,142   13,078,142
                                                    -------------------------
    Total number of shares                           71,312,712   73,992,317
                                                    -------------------------
                                                    -------------------------

    Stated value: Class A
    Balance, beginning of the period                 $  205,848   $  203,716
    Issued - stock options                                4,955        2,147
    Conversion Class B to Class A                             -            -
    Compensation cost on exercised options                1,639        1,426
    Purchased and cancelled under
     Normal Course Issuer Bid                           (10,194)      (1,441)
                                                    -------------------------
    Balance, end of the period                          202,248      205,848
                                                    -------------------------
    Stated Value: Class B                                 1,004        1,004
                                                    -------------------------
    Total stated value Class A and Class B           $  203,252   $  206,852
                                                    -------------------------
                                                    -------------------------

    During the three months and twelve months ending December 31, 2007, the
    Company repurchased and cancelled 425,300 and 2,999,900 Class A
    Subordinated Voting Shares ("Class A shares"), respectively (December 31,
    2006 - Nil and 432,900, respectively) under the terms of a Normal Course
    Issuer Bid ("NCIB"). The excess of cost over stated capital of the
    acquired shares, which for the three and twelve months ended December 31,
    2007 totaled $12.6 million and $81.8 million, respectively (December 31,
    2006 - Nil and $6.4 million, respectively), was charged to retained
    earnings. Under the terms of the NCIB, which was renewed on November 29,
    2007, the Company is entitled to repurchase up to 5,000,000 Class A
    shares and up to 100,000 Class B shares between December 3, 2007 and
    November 30, 2008. The repurchase of shares is made on the open market at
    prevailing market prices.

    12. Contributed surplus

                              Three Months Ended        Twelve Months Ended
    (in thousands of                Dec. 31                    Dec. 31
     Canadian dollars)         2007         2006         2007         2006
    -------------------------------------------------------------------------

    Balance, beginning
     of period             $   11,139   $   10,951   $   10,603   $    9,231
    Adjustment for stock-
     based compensation             -            -            -            -
    Stock compensation
     expense (note 2)             697          659        2,765        2,798
    Fair value of stock
     options exercised           (107)      (1,007)      (1,639)      (1,426)
                          ---------------------------------------------------
    Balance, end of period $   11,729   $   10,603   $   11,729   $   10,603
                          ---------------------------------------------------
                          ---------------------------------------------------

    13. Accumulated other comprehensive loss

                              Three Months Ended        Twelve Months Ended
    (in thousands of                Dec. 31                    Dec. 31
     Canadian dollars)         2007         2006         2007         2006
    -------------------------------------------------------------------------
    Balance, beginning
     of period             $ (123,657)  $ (105,395)  $  (85,529)  $ (100,260)
    Transitional adjustment
     on adoption of new
     accounting policies
     (note 1)                       -            -         (119)           -
    Unrealized foreign
     currency translation
     losses, net of hedging
     activities                 2,303       19,866      (36,124)      14,731
    Unrealized loss on
     available-for-sale
     financial assets            (278)           -       (1,331)           -
    Gain on derivatives
     designated as
     cash flow hedges             137            -        1,606            -
                          ---------------------------------------------------
    Balance, end of period $ (121,497)  $  (85,529)  $ (121,497)  $  (85,529)
                          ---------------------------------------------------
                          ---------------------------------------------------

    14. Stock option plans

    A summary of the status of the Company's stock option plans and changes
    during the period are presented below:

    -------------------------------------------------------------------------
                                                    2007
    -------------------------------------------------------------------------
                                                                    Weighted
                                                                     Average
                           Market Growth    Other       Total       Exercise
                              Plan(1)       Plans       Shares        Price
    -------------------------------------------------------------------------
    Balance outstanding,
     beginning of year          7,875    2,261,520    2,269,395        15.76
    -------------------------------------------------------------------------
    Granted                         -      371,800      371,800        25.02
    -------------------------------------------------------------------------
    Exercised                  (2,955)    (317,340)    (320,295)       15.64
    -------------------------------------------------------------------------
    Forfeited                       -     (142,000)    (142,000)       17.42
    -------------------------------------------------------------------------
    Expired                    (4,920)           -       (4,920)       17.91
    -------------------------------------------------------------------------
    Balance outstanding,
     end of period                  -    2,173,980    2,173,980        17.24
    -------------------------------------------------------------------------


    -----------------------------------------------
                                     2006
    -----------------------------------------------
                                          Weighted
                                           Average
                              Total       Exercise
                              Shares        Price
    -----------------------------------------------
    Balance outstanding,
     beginning of year      2,578,165        15.76
    -----------------------------------------------
    Granted                   457,700        17.27
    -----------------------------------------------
    Exercised                (331,157)       16.43
    -----------------------------------------------
    Forfeited                 (66,890)       15.75
    -----------------------------------------------
    Expired                  (368,423)       17.31
    -----------------------------------------------
    Balance outstanding,
     end of period          2,269,395        15.76
    -----------------------------------------------

    (1) This maximum number is achieved only when the market value of the
        shares at the time of exercise is equal to no less than four times
        the value at the date of the grant.

    -------------------------------------------------------------------------
                    Options Outstanding                  Options Exercisable
    -------------------------------------------------------------------------
       Range of     Outstanding    Weighted   Weighted Exercisable  Weighted
       exercise              at     average    average          at   average
        prices      Demember 31,  remaining   exercise December 31, exercise
                           2007 contractual      price        2007     price
                                    life in
                                      years
    -------------------------------------------------------------------------
    $10.00 to $15.00     518,620       5.28     $12.69     387,616    $12.80
    -------------------------------------------------------------------------
    $15.01 to $20.00   1,259,760       6.36     $16.81     645,568    $16.71
    -------------------------------------------------------------------------
    $20.01 to $25.00      40,000       7.51     $20.90      11,200    $21.19
    -------------------------------------------------------------------------
    $25.01 to $30.00     355,600       9.01     $25.02           -         -
    -------------------------------------------------------------------------
                       2,173,980                         1,044,384
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                    Options Outstanding                  Options Exercisable
    -------------------------------------------------------------------------
       Range of     Outstanding    Weighted   Weighted Exercisable  Weighted
       exercise              at     average    average          at   average
        prices      Demember 31,  remaining   exercise December 31, exercise
                           2006 contractual      price        2006     price
                                    life in
                                      years
    -------------------------------------------------------------------------
    $10.00 to $15.00     626,920       6.13     $12.78     626,920    $12.78
    -------------------------------------------------------------------------
    $15.01 to $20.00   1,600,475       7.26     $16.79   1,237,275    $16.75
    -------------------------------------------------------------------------
    $20.01 to $25.00      42,000       8.53     $20.90       4,000    $21.90
    -------------------------------------------------------------------------
                       2,269,395                         1,868,195
    -------------------------------------------------------------------------

    15. Financial instruments

    The Company has determined the estimated fair values of its financial
    instruments based on appropriate valuation methodologies; however,
    considerable judgment is required to develop these estimates.
    Accordingly, these estimated fair values are not necessarily indicative
    of the amounts the Company could realize in a current market exchange.
    The estimated fair value amounts can be materially affected by the use of
    different assumptions or methodologies. The methods and assumptions used
    to estimate the fair value of financial instruments as well as related
    interest rate credit and foreign exchange risk are described below:

    a) Accounts receivable, accounts payable and accrued liabilities, and
       income taxes

    Due to the short period to maturity of the financial instruments, the
    carrying values as presented in the consolidated balance sheet are
    reasonable estimates of fair values.

    b) Long-term debt

    The fair value of the Company's long-term debt is based on current rates
    for debt with similar terms and maturities and is not materially
    different from its carrying value.

    The following are key risks associated with the Company's financial
    instruments:

    a) Interest rate risk

    The following table summarizes the Company's exposure to interest rate
    risk at December 31, 2007:

    -------------------------------------------------------------------------
                                            Fixed interest rate
    (in thousands of Canadian dollars)          maturing in
    -------------------------------------------------------------------------
                             Floating       1 year      Greater        Total
                                 rate      or less         than
                                                         1 year
    -------------------------------------------------------------------------
    Financial assets
    -------------------------------------------------------------------------
      Cash and cash
       equivalents         $  175,017   $        -   $        -   $  175,017
    -------------------------------------------------------------------------
    Total                  $  175,017   $        -   $        -   $  175,017
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Financial liabilities
    -------------------------------------------------------------------------
      Bank indebtedness    $      107   $        -   $        -   $      107
    -------------------------------------------------------------------------
      Long-term debt                -            -       72,726       72,726
    -------------------------------------------------------------------------
    Total                  $      107   $        -   $   72,726   $   72,833
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average fixed rates
     of debt                        -            -        5.11%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    b) Credit risk

    Certain of the Company's financial assets are exposed to credit risk.

    Cash and cash equivalents consist of deposits and short-term term
    deposits, with major financial institutions, which are readily
    convertible into cash.

    The Company, in the normal course of business, is exposed to credit risk
    from its customers, substantially all of which are in the energy
    industry. These accounts receivable are subject to normal industry
    credit risks.

    The Company is also exposed to credit risk from the potential default by
    any of its counterparties on its foreign exchange forward contracts. The
    Company mitigates this credit risk by dealing with counterparties that
    are major financial institutions and which the Company anticipates will
    satisfy their obligations under the contracts.

    c) Foreign exchange risk

    The Company operates in several countries, which gives rise to a risk
    that its earnings and cash flows may be adversely impacted by
    fluctuations in foreign exchange. The Company utilizes foreign exchange
    forward contracts to manage foreign exchange risk from its underlying
    customer contracts. In particular, the Company uses foreign exchange
    forward contracts for the sole purpose of hedging a portion of its
    projected foreign currency inflows, consisting primarily of foreign
    currency sales to the Company's customers. Gains or losses on these
    hedging instruments are recognized in other comprehensive income to the
    extent of hedge effectiveness and then transferred to net income in the
    same period as, and as part of, the hedged transactions. The Company does
    not enter into foreign exchange contracts for speculative purposes. The
    Company does not generally attempt to hedge the net investment and equity
    of self-sustaining foreign operations, except that the Company has
    designated, effective July 3, 2003, the 5.11% Senior Notes as a hedge of
    a portion of its net investment in the Company's U.S. dollar based
    operations. Gains and losses from the translation of this debt are not
    included in the income statement, but are shown in the accumulated other
    comprehensive income.

    The following table sets out the notional amounts outstanding under
    foreign exchange contracts, the average contractual exchange rates and
    the settlement of these contracts as at December 31, 2007:

    (in thousands)
    -------------------------------------------------------------------------
                   Maturity                              December 31, 2007
    -------------------------------------------------------------------------
    U.S. dollars sold for Canadian dollars
    -------------------------------------------------------------------------
      Less than one year                                           US$12,000
    -------------------------------------------------------------------------
      Weighted average rate                                           1.0540
    -------------------------------------------------------------------------
    Euros sold for U.S. dollars
    -------------------------------------------------------------------------
      Less than one year                                             EUR 883
    -------------------------------------------------------------------------
      Weighted average rate                                           1.4150
    -------------------------------------------------------------------------
      One year to two years                                        EUR 2,150
    -------------------------------------------------------------------------
      Weighted average rate                                           1.4545
    -------------------------------------------------------------------------
      Two years to three years                                     EUR 2,150
    -------------------------------------------------------------------------
      Weighted average rate                                           1.4490
    -------------------------------------------------------------------------
      Three years to four years                                    EUR 2,200
    -------------------------------------------------------------------------
      Weighted average rate                                           1.4465
    -------------------------------------------------------------------------
    U.S. dollars sold for Norwegian Kroners
    -------------------------------------------------------------------------
      Less than one year                                            US$6,243
    -------------------------------------------------------------------------
      Weighted average rate                                           5.3980
    -------------------------------------------------------------------------
    U.S. dollars sold for Malaysian Ringgit
    -------------------------------------------------------------------------
      Less than one year                                            US$7,250
    -------------------------------------------------------------------------
      Weighted average rate                                           3.4062
    -------------------------------------------------------------------------

    Foreign exchange options and forward exchange contracts are used to hedge
    foreign exchange exposures related to commercial activities. At
    December 31, 2007, the Company had notional amounts of $35.7 million of
    forward contracts outstanding (December 31, 2006 - $38.7 million). These
    amounts are used to express the volume of transactions and are not
    recognized in the consolidated financial statements. These financial
    instruments are contracted with major, chartered banks; as a result,
    credit and liquidity risks related to these instruments are considered to
    be low.

    The fair values of foreign exchange forward contracts represent an
    approximation of the amounts the Company would have paid to or received
    from counterparties to unwind its positions at December 31, 2007. The
    fair value of the Company's net benefit for all foreign exchange forward
    contracts at December 31, 2007 was $1.5 million (December 31, 2006 -
    $3.1 million net liability) and has been recognized on the consolidated
    balance sheet through a charge to other comprehensive income. If these
    contracts ceased to be effective as hedges, unrecognized gains or losses
    pertaining to the portion of the hedging transactions in excess of
    projected foreign-denominated cash flows would be transferred from
    accumulated other comprehensive income and recognized in net income at
    the time this condition was identified.


    16. Segmented information

    The company classifies its operations into two general segments of the
    global energy industry: Pipeline and Pipe Services and Petrochemical and
    Industrial. Revenue and income (loss) from operations for the three and
    twelve months ended December 31, 2007 and 2006, and goodwill and total
    assets as of those dates by segments are as follows:

                              Three Months Ended        Twelve Months Ended
    (in thousands)               December 31               December 31
    -------------------------------------------------------------------------
    Revenue                    2007         2006         2007         2006
                                         -restated                 -restated
                           -----------  -----------  -----------  -----------
      Pipeline and Pipe
       Services            $  254,316   $  243,951   $  903,427   $  922,328
      Petrochemical and
       Industrial              28,450       32,795      143,665      138,938
      Intersegment
       Eliminations             2,672         (431)       1,007       (1,647)
                           -----------  -----------  -----------  -----------
                           $  285,438   $  276,315   $1,048,099   $1,059,619
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------
    Income (loss) from
     operations
      Pipeline and Pipe
       Services            $   40,280   $   40,816   $  153,932   $  138,483
      Petrochemical and
       Industrial               3,065        5,589       22,822       19,192
      Financial and
       Corporate               (3,853)      (4,614)     (16,753)     (18,895)
                           -----------  -----------  -----------  -----------
                           $   39,492   $   41,791   $  160,001   $  138,780
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Goodwill
      Pipeline and Pipe
       Services                                      $  143,960   $  157,630
      Petrochemical and
       Industrial                                        17,078       18,183
                                                     -----------  -----------

                                                     $  161,038   $  175,813
                                                     -----------  -----------
                                                     -----------  -----------

    Total assets                                     $            $
      Pipeline and Pipe Services                        973,688      984,850
      Petrochemical and Industrial                       74,480      110,965
      Financial and Corporate                           864,079    1,235,684
      Elimination                                      (951,921)  (1,323,473)
                                                     -----------  -----------

                                                     $  960,326   $1,008,026
                                                     -----------  -----------
                                                     -----------  -----------

    17. Joint venture operations

    The Company's joint venture operations consist of its 50% interests in
    Bredero Shaw Revestimentos de Tubos Ltda. and Thermotite Brasil Ltda. and
    its 30% interest in the jointly controlled Arabian Pipecoating Company
    Limited. These investments have been accounted for through proportionate
    consolidation with the Company's share of each joint venture's assets,
    liabilities, revenue, expenses, net income and cash flows consolidated
    based on the Company's ownership position. The figures related to these
    joint ventures included in the Company's consolidated financial
    statements are summarized as follows:


                              Three Months Ended        Twelve Months Ended
    (in thousands)                  Dec 31                     Dec 31
    ----------------------------------------------- -------------------------
                               2007         2006         2007         2006
                           -----------  -----------  -----------  -----------

    Revenue                $   20,685   $    7,657   $   65,213   $   25,919
    Operating and other
     expenses                  16,121        6,981       48,663       20,803
    Net income before
     income taxes               4,564          676       16,550        5,116
    Provision for taxes           931           23        2,016          312
                           -----------  -----------  -----------  -----------
    Net income             $    3,633   $      653   $   14,534   $    4,804
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Cash provided by
     (used in):
    Operating activities   $   17,175   $   (1,326)  $   15,802   $    2,566
    Investing activities       (5,993)      (1,350)      (5,924)      (3,298)
    Financing activities       (5,228)       1,248       (1,120)         (76)

    Current assets                                   $   25,597   $    9,318
    Property, plant and
     equipment, net                                      11,877        9,984
    Goodwill                                              4,521        4,451
    Current liabilities                                  17,103        5,868


    18. Acquisition

    a) On June 6, 2007, the Company purchased all of the outstanding shares
    of X-Tek Industrial Limited from X-Tek Systems Limited. The name of the
    company was subsequently changed to Shaw Inspection Systems Limited
    ("SISL"). SISL provides specialized, real-time/digital non-destructive
    weld testing services to the onshore and offshore pipeline industry and
    is based in the United Kingdom. Preliminary details of this acquisition
    which will be finalized before the end of the second quarter of 2008,
    follow:

    -------------------------------------------------------------------------
    (in thousands of Canadian dollars)
    -------------------------------------------------------------------------
    Net assets acquired at assigned values:
      Current assets..........................................   $     2,324
      Property, plant and equipment ..........................           329
      Goodwill ...............................................         2,117
      Current liabilities ....................................        (1,984)
                                                                 ------------
                                                                 $     2,786
                                                                 ------------
                                                                 ------------

    Consideration given:
      Cash ...................................................   $     2,786
                                                                 ------------
                                                                 $     2,786
                                                                 ------------
                                                                 ------------
    19. Earnings per share

    The weighted average number of common shares for the purpose of the
    earnings per share calculations was as follows:

                              Three Months Ended        Twelve Months Ended
                                    Dec. 31                   Dec. 31
                               2007         2006         2007         2006
    -------------------------------------------------------------------------
    Basic
      Class A              58,478,597   60,916,786   59,472,114   60,916,786
      Class B              13,078,142   13,078,142   13,078,142   13,078,142
                           -----------  -----------  -----------  -----------
    Total                  71,556,739   73,994,928   72,550,256   73,994,928
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Diluted
      Class A              59,447,176   61,035,758   60,350,112   61,035,758
      Class B              13,078,142   13,078,142   13,078,142   13,078,142
                           -----------  -----------  -----------  -----------
    Total                  72,525,318   74,113,900   73,428,254   74,113,900
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    20. Comparative figures

    Comparative figures have been reclassified where necessary to correspond
    with the current year's presentation.
    





For further information:

For further information: Gary Love, Vice President, Finance and CFO,
Telephone: (416) 744-5818, e-mail: glove@shawcor.com, website:
www.shawcor.com

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ShawCor Ltd.

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