ShawCor Ltd. Announces Fourth Quarter 2012 Results

              ShawCor Ltd. Announces Fourth Quarter 2012 Results

PR Newswire

TORONTO, Feb. 28, 2013

(TSX: SCL.A, SCL.B)

TORONTO, Feb. 28, 2013 /PRNewswire/ -

  *Revenue in the fourth quarter of $448.4 million increased by 13.4% from
    the $395.3 million reported in the third quarter of 2012 and increased
    31.2% from the $341.8 million reported in the fourth quarter a year ago.
  *EBITDA in the fourth quarter of 2012 was $102.4 million, an improvement of
    $18.3 million from the third quarter of 2012 and an improvement of over
    $55.8 million from the same period of the prior year.
  *The EBITDA margin reached 22.8% as a result of favourable revenue mix and
    the benefits of significantly higher facility utilization from the growth
    in revenue in the Company's Latin America and Asia Pacific operations.
  *Net income (attributable to shareholders of the Company) in the fourth
    quarter was $80.3 million (or $1.13 per share diluted) compared with net
    income of $53.4 million, (or $0.75 per share diluted) in the third quarter
    of 2012 and $23.2 million (or $0.32 per share diluted) in the fourth
    quarter of the prior year. Net income in the fourth quarter includes one
    time gains totaling $12.5 million (or $0.18 per share diluted).
  *The Company completed the acquisition of the remaining 60% of Fineglade
    Limited in the quarter for a purchase price of $144.7 million. Fineglade
    Limited owns 96% of the global pipe-coater Socotherm S.p.A.
  *Subsequent to the quarter end, the Company announced a reorganization
    transaction which would result in the collapse of the Company's dual class
    share structure. Further details on the proposed transaction, including
    the Pro Forma impact on the Company's financial condition are provided
    below under "Key Developments" and in the Company's Management Circular
    dated February 11, 2013, which may be found on the Company's website and
    at www.sedar.com.

Mr. Bill Buckley, President and CEO  of ShawCor Ltd. remarked "We are  pleased 
to announce record financial results for  the fourth quarter and for the  full 
year 2012. For the full year 2012, revenue was $1.48 billion, up 28% over the
prior year, EBITDA was  $267 million, up 108%  and fully diluted earnings  per 
share reached $2.50, up 221%. These record results reflect the high level  of 
business activity combined with continuing excellent execution".

Mr. Buckley added "ShawCor continued to increase its backlog which reached  an 
all-time high of $850 million at year end. The backlog includes firm customer
contracts which will be executed over the next twelve months and is indicative
of the  strong business  environment as  well as  the positive  impact of  the 
acquisition of Socotherm. In  light of this record  backlog and bid  activity 
that remains very robust, we anticipate strong financial performance in 2013."

Selected Financial                                                       
Highlights
(in thousands of          Three Months ended        Twelve Months ended
Canadian dollars,             December 31,                 December 31,
except per share
amounts and
percentages)
                         2012         2011          2012         2011
                                                                    
Revenue                $   448,384   $   341,780   $  1,482,849  $  1,157,265
                                                                    
Gross profit              182,341      130,795       578,487        
                                                                      421,999
Gross profit %              40.7%        38.3%         39.0%        36.5%
                                                                    
EBITDA^(a)               102,448       46,616       266,886      128,168
                                                                    
Income (Loss) from         91,299       31,212       212,226       83,907
operations
                                                                    
Net income (loss)      $    80,302   $    23,236   $    178,418  $     56,280
for the period^(b)
                                                           
Earnings per share:                                                  
       Basic          $      1.14   $      0.32  $       2.53  $       0.79
       Fully          $      1.13   $      0.32   $       2.50  $       0.78
        diluted
(a)EBITDA is a non-GAAP measure calculated by adding back to net income the
sum of net interest expense, taxes, depreciation/amortization of property,
plant and equipment and intangible assets, impairment of assets, gain on sale
of land and accounting gain on acquisition. EBITDA does not have a
standardized meaning prescribed by GAAP and is not necessarily comparable to
similar measures provided by other companies. EBITDA is used by many
analysts in the oil and gas industry as one of several important analytical
tools. The above calculation of EBITDA is consistent with the methodology
used in prior periods, except for the inclusion of income/loss on investment
in associate.
(b)Attributable to shareholders of the Company, excluding non-controlling
interests.

1.0KEY DEVELOPMENTS

Strategic Review and Reorganization

On August 30,  2012, Ms.  Virginia Shaw,  the Chair  of the  ShawCor Board  of 
Directors  and  the   indirect  controlling   shareholder  (the   "Controlling 
Shareholder") of the  Company, advised  the Board  of Directors  that she  was 
prepared to consider a  possible sale of  her shares of ShawCor  as part of  a 
sale of the Company.

The  Board  struck  a  committee   of  independent  directors  (the   "Special 
Committee")  to  conduct  a   strategic  review  of  alternatives,   including 
canvassing potentially interested third parties to determine if an appropriate
transaction was available that would be acceptable to Ms. Shaw and would be in
the best interests of ShawCor and its shareholders.

On January 14,  2013, the  Company announced that  the Board  of Directors  of 
ShawCor, after careful  analysis, consideration  and advice  from the  Special 
Committee, and  advice  from independent  financial  and legal  advisors,  had 
unanimously approved and the Company  had entered into a definitive  agreement 
with respect to a reorganization proposal negotiated by the Special  Committee 
with the Controlling Shareholder. The Chair and the Vice-Chair abstained  from 
voting on the transaction.

The proposed reorganization is to be implemented pursuant to a  court-approved 
plan of arrangement under  the Canada Business Corporations  Act. It has  been 
announced that the shareholders' meeting to consider the arrangement will take
place on March 14, 2013. The arrangement will require a special resolution  of 
ShawCor shareholders  approving  the  transaction  in  addition  to  approvals 
required under applicable securities laws.

The arrangement  also  requires approval  by  the Ontario  Superior  Court  of 
Justice at  a hearing  to  be held  following  the shareholders'  meeting.  If 
approved, the arrangement is  expected to close late  in the first quarter  of 
2013 or early in the second quarter.

The Special Committee retained TD Securities Inc. ("TD Securities") to act  as 
its financial  advisor and  to provide  an independent  fairness opinion,  and 
received  independent  legal  advice  from  Stikeman  Elliott  LLP.  Kingsdale 
Shareholder Services Inc. has been retained as proxy solicitation agent.

Terms of the Transaction

The reorganization  proposal contemplates  the elimination  of ShawCor's  dual 
class share structure through the purchase of  all of the Class A and Class  B 
shares of ShawCor by a newly formed Canadian corporation. The new  corporation 
would purchase all of the Class A shares of ShawCor in exchange for new common
shares on a 1:1 basis. The new corporation would also acquire all of the Class
B shares of ShawCor in exchange for a  mix of new common shares and cash.  The 
consideration paid for the Class B shares of ShawCor will be $43.43 in cash or
1.1 new  common  shares  per  Class  B share,  such  that  90%  of  the  total 
consideration will be paid in cash and 10% of the total consideration will  be 
paid in new common shares. At  closing, the new corporation and ShawCor  would 
amalgamate, under  the name  ShawCor Ltd.  All issued  and outstanding  shares 
would as a result  be the same  class of common  shares. Following closing,  a 
special dividend of $1.00 per share would be paid on all remaining shares (the
payment date for such dividend remains to be determined).

The closing conditions of the  reorganization proposal include, among  others, 
receipt of required  ShawCor shareholder approvals,  receipt of Toronto  Stock 
Exchange approval, receipt of court approvals, there being no material adverse
change in the affairs of ShawCor or applicable laws, and sufficient  financing 
being  available   to   complete   the  transactions   contemplated   in   the 
reorganization. ShawCor's board would also retain a "fiduciary out" ability to
change its recommendation to shareholders.

Recommendation of the Board and the Special Committee

In approving  the  definitive agreement  and  making its  recommendation  that 
shareholders (other than the  Controlling Shareholder) vote  in favour of  the 
reorganization proposal,  the Board  of Directors  and the  Special  Committee 
considered the fairness  opinion prepared  by TD  Securities and  a number  of 
other factors relating to the fairness of the reorganization proposal.

The factors  relating to  fairness considered  by the  Board and  the  Special 
Committee included, among others, the following:

  a) The reorganization transaction is expected to be accretive to
            ShawCor from an earnings per share perspective,
         
  b) The premium to the then current trading price and resulting
            dilution to Class A shareholders is within the range of precedents
            generally for similar types of transactions,
         
  c) The Special Committee has received a fairness opinion from TD
            Securities that the consideration to be paid to the Class B
            shareholders pursuant to the Arrangement is fair, from a financial
            point of view, to the Class A and Class B shareholders, other than
            the Controlling Shareholder,
         
  d) The elimination of the Class B shares may facilitate future change
            of control transactions following the completion of the
            transaction. It will also result in a widely held single class
            structure, and is expected to diversify ShawCor's shareholder
            base, as many investment mandates exclude investment in companies
            with dual class structures, and to increase liquidity and provide
            for enhancing financing flexibility going forward,
         
  e) The transaction is subject to shareholder and court approval, and
            shareholders will be provided with dissent rights, and
         
  f) After completion of the transaction, all remaining shareholders
            will receive a $1.00 per share special dividend.

Pro Forma Impact of Proposed Transaction on the Company's Financial Condition
                                     Reported      Adjusted for     Pro Forma
(in millions of Canadian dollars,    December        Proposed        December
except ratios)                      31, 2012    Transaction     31, 2012
                                                                     
Cash and cash equivalents^(a)           372.0        (223.9)  $      148.1
                                                                     
Debt:                                                                 
            Bank indebtedness           3.8              -          3.8
         Loan payable               17.1              -         17.1
         Obligations under          14.6              -         14.6
              finance leases
                                                                     
     New private placement notes          -          347.4        347.4
      (less DF^(b) costs)
                                        35.5                      382.9
                                                                     
Shareholders' equity(including        1,005.9        (572.6)        433.2
minority interest)
                                                                     
     Total capitalization            1,041.4                      816.2
                                                                     
     EBITDA                            266.9                      266.9
                                                                     
     Total debt/capitalization         3.41%                     46.92%
     Net debt/capitalization          NM^(c)                     28.77%
     Total debt/EBITDA                  0.13                       1.43
     Net debt^(d)/EBITDA              NM^(c)                       0.88

(a) Includes short-term deposits
(b) Debt Financing
(c) NM - Not Meaningful
(d)      Net debt = Total debt less cash and cash equivalents

Based on the  proforma impact  of the  proposed transaction  on the  Company's 
financial condition, ShawCor believes that  the increase in net finance  costs 
and leverage that will result from the completion of the transaction will  not 
be excessive taking into account the cyclicality of the Company's  businesses. 
Furthermore, the Company  believes that  based on available  cash balances  of 
$148 million, combined with available committed credit lines in excess of $165
million, the Company is  fully able to carry  out its capital expenditure  and 
growth investment strategic plan.

Acquisition of Fineglade

On October 24, 2012, ShawCor Ltd.,  through one of its subsidiaries,  acquired 
the remaining 60%  of Fineglade Limited.  Fineglade Limited, which  currently 
holds approximately  96% of  the outstanding  shares of  Socotherm S.p.A,  was 
previously owned 40% by ShawCor Ltd. and 60% by an entity controlled by Sophia
Capital.

The total consideration for the acquisition of the remaining 60% of  Fineglade 
Limited was $144.7  million, which included  a cash payment  of $68.0  million 
(€52.3 million), the  set-off of a  pre-existing loan from  ShawCor to  Sophia 
Capital in  the amount  of $57.4  million (€44.6  million), deferred  purchase 
consideration of $3.3 million  (€2.6 million) and the  set-off of other  loans 
provided to  Fineglade and  the entity  controlled by  Sophia Capital  in  the 
amount of $16.0 million (US$16.0 million).

Socotherm S.p.A., headquartered  in Italy,  is an  international pipe  coating 
contractor primarily serving the oil  and gas industry from active  operations 
in Brazil, Argentina, Venezuela, the Gulf of Mexico and Italy.

1.1 OUTLOOK

The outlook for market  activity in the Company's  Pipeline segment by  region 
and in the Petrochemical and Industrial segment is outlined below:

Pipeline Segment - North America
Following a 10% increase in revenue in 2012, the Company expects that revenues
from the  pipeline  segment  businesses  in North  America  in  2013  will  be 
consistent with 2012. The Company  expects that increasing market share  gains 
in spoolable composite pipe and at ShawCor's Guardian OCTG pipe inspection and
refurbishment business,  where the  previously  announced expansion  into  the 
Eagle Ford region  of Texas is  underway, should offset  any weakness in  well 
drilling and completions. The Company is currently experiencing healthy demand
for large diameter  pipe coating projects  in Canada and  this is expected  to 
continue for the next  few years based on  bidding activity. Also expected  to 
bolster activity in North America is  the increase in project activity in  the 
Gulf of Mexico which should translate into consistent project activity at  the 
Company's Bredero Shaw and Socotherm facilities that supply the Gulf of Mexico
offshore market.

Pipeline Segment - Latin America
ShawCor expects  that 2013  revenue for  the Latin  America region  will be  a 
continued source  of growth  for  the Company  particularly  in light  of  the 
acquisition of Socotherm and its strong position in Argentina, Venezuela,  and 
Brazil. In 2012, the Company's Latin America region produced revenue growth of
348% with the launch in  the second half of the  year of the Company's  mobile 
concrete coating site in Trinidad for the $90 million Technip project as  well 
as the $40 million Linea 5 project at the Company's concrete coating  facility 
in Mexico. Production on the Technip  project will continue in the first  half 
of 2013 with  approximately half  of the project  complete at  year end  2012. 
While activity in  Mexico is  expected to  remain strong  and consistent,  the 
Company's Bredero Shaw facility  in Brazil will likely  not see a  significant 
improvement in volumes until 2014.

Pipeline Segment - EMAR
The  Company's  Europe,  Middle  East,  Africa,  Russia  ("EMAR")  region  has 
experienced strong  project  revenues  from the  pipe  coating  facilities  in 
Orkanger, Norway and Ras Al Khaimah, UAE  and this is expected to continue  in 
2013 supported by  the Company's  recent acquisition of  Socotherm which  will 
contribute revenue from its facilities in Europe.

Pipeline Segment - Asia Pacific
In 2012, the  73% growth in  revenue generated by  the Company's Asia  Pacific 
region, particularly  in the  second half  of 2012,  was instrumental  in  the 
Company's overall growth. In 2013, Asia  Pacific will again be the key  source 
of growth for ShawCor.  At December 31, 2012,  the Company's backlog  includes 
large projects for Chevron Wheatstone, Inpex Ichthys, and Apace Julimar.  With 
this backlog in hand,  strong revenue growth from  the Asia Pacific region  is 
assured. The gains in facility utilization and strong operational  performance 
on these projects already evident in the fourth quarter of 2012 indicate  that 
2013 revenue growth should be matched by gains in operating income.

Petrochemical and Industrial Segment
ShawCor's Petrochemical and  Industrial segment  businesses are  significantly 
exposed to demand in the North American and European automotive and industrial
markets. Although the outlook  for demand in  industrial markets in  developed 
economies remains uncertain  the Company's strong  order book should  generate 
modest growth in 2013. In addition, the Company will be focused on seeking  to 
capture market opportunities in areas less sensitive to the performance of the
developed economies, such as growth in  Asia at the DSG-Canusa China  facility 
and the demand for highly engineered wire and cable systems related to nuclear
facility refurbishment and continued oil sands and other resource  development 
projects.

Order Backlog
The Company's  order  backlog  consists  of  firm  customer  orders  only  and 
represents the revenue the  Company expects to realize  on booked orders  over 
the succeeding twelve months.  The Company reports  the twelve month  billable 
backlog because  it provides  a leading  indicator of  significant changes  in 
consolidated revenue. The  order backlog at  December 31, 2012  reached a  new 
record level of  $850 million, an  increase of  17.7% from the  level of  $722 
million at September 30, 2012  and also up 55.1%  from the $548 million  level 
reported one year ago.  The reported backlog increased  by $65 million in  the 
quarter as  a result  of the  completion of  the Socotherm  acquisition.  Also 
contributing to backlog growth  was the inclusion of  a greater percentage  of 
the orders booked in the Asia Pacific region that are expected to be  executed 
in the upcoming twelve months. Including the value of booked projects that are
expected to be  executed beyond the  next twelve months,  the Company's  order 
book at December 31,  2012 is approximately one  billion dollars. In  addition 
the Company  currently has  outstanding bids  with a  value that  exceeds  one 
billion dollars. This order  backlog and longer term  order book supports  our 
outlook for continued strong performance.

2.0 CONSOLIDATED INFORMATION AND RESULTS FROM OPERATIONS

2.1Revenue

The following table sets forth revenue by reportable operating segment for the
following periods:

                                                    
(in thousands of            Three Months ended          Twelve Months ended
Canadian dollars)
                     December  September  December  December   December
                       31, 2012   30, 2012    31, 2011   31, 2012    31, 2011
Pipeline and Pipe    $  415,456 $   359,591 $  305,808 $ 1,337,877 $ 1,021,099
Services
Petrochemical and       33,414     36,374    36,537    147,068    138,080
Industrial
Elimination              (486)      (690)     (565)    (2,096)    (1,914)
                    $  448,384 $   395,275 $  341,780 $ 1,482,849 $ 1,157,265

Fourth Quarter 2012 versus Fourth Quarter 2011

Consolidated revenue increased  31%, or  $106.6 million,  from $341.8  million 
during the fourth quarter of 2011 to $448.4 million during the fourth  quarter 
of 2012, due to  an increase of  $109.6 million, or 36%,  in the Pipeline  and 
Pipe Services segment, partially offset by  a decrease of $3.1 million, or  9% 
in the Petrochemical and Industrial segment.

Revenue for the Pipeline and Pipe Services segment was significantly higher in
the fourth quarter of 2012 than in the fourth quarter of 2011, as a result  of 
increased activity in Asia Pacific and  Latin America, and the acquisition  of 
Socotherm, partially offset by lower revenue  in North America and EMAR.  See 
section 3.1 -  Pipeline and  Pipe Services segment  for additional  disclosure 
with respect  to the  change in  revenue  in the  Pipeline and  Pipe  Services 
segment.

Revenue for the Petrochemical and Industrial  segment was lower in the  fourth 
quarter of  2012 than  in the  fourth quarter  of 2011,  mainly because  of  a 
decrease of 11% in  North American revenues. See  section 3.2 -  Petrochemical 
and Industrial segment for additional disclosure with respect to the change in
revenue in the Petrochemical and Industrial segment.

Fourth Quarter 2012 versus Third Quarter 2012

Consolidated revenue increased by $53.1  million, or 13%, from $395.3  million 
during the third quarter of 2012 to $448.4 million during the fourth  quarter 
of 2012, due to an increase of $55.9 million, or 16%, in the Pipeline and Pipe
Services segment, partially offset  by a decrease of  $3.0 million, or 8%,  in 
the Petrochemical and Industrial segment.

Revenue for the Pipeline  and Pipe Services segment  in the fourth quarter  of 
2012 was $415.5 million, or $55.9 million higher than in the third quarter  of 
2012, primarily due to increased activity  in Asia Pacific and Latin  America, 
and the acquisition of  Socotherm, partially offset by  lower revenue in  EMAR 
and North America. See  section 3.1 - Pipeline  and Pipe Services segment  for 
additional disclosure with respect  to the change in  revenue in the  Pipeline 
and Pipe Services segment.

Revenue for the Petrochemical and Industrial segment decreased by $3.0 million
during the  fourth quarter  of 2012  compared to  the third  quarter of  2012, 
primarily due to  lower activity levels  in North America.  See section 3.2  - 
Petrochemical and Industrial segment for additional disclosure with respect to
the change in revenue in the Petrochemical and Industrial segment.

Twelve Months ended December 31, 2012 versus Twelve Months ended December  30, 
2011

Consolidated revenue  increased  by  $325.6 million,  or  28%,  from  $1,157.3 
million for  the twelve  month  period ended  December  31, 2011  to  $1,482.9 
million for  the  twelve month  period  ended December  31,  2012, due  to  an 
increase of $ 316.8 million, or 31%, in the Pipeline and Pipe Services segment
and $9.0 million, or 7%, in the Petrochemical and Industrial segment.

Revenue for  the Pipeline  and  Pipe Services  segment  in 2012  was  $1,337.9 
million, or $316.8 million higher than in 2011, due to higher revenue in  Asia 
Pacific, Latin America and North America, partially offset by lower revenue in
EMAR. See section  3.1 -  Pipeline and  Pipe Services  segment for  additional 
disclosure with respect  to the  change in revenue  in the  Pipeline and  Pipe 
Services segment.

Revenue for the Petrochemical and Industrial segment increased by $9.0 million
in 2012 compared  to 2011, primarily  due to higher  activity levels in  North 
America and  Asia Pacific,  partially offset  by lower  revenue in  EMAR.  See 
section 3.2 - Petrochemical and  Industrial segment for additional  disclosure 
with respect to  the change  in revenue  in the  Petrochemical and  Industrial 
segment.

2.2 Income from Operations

The following table sets forth income from operations ("Operating Income") and
Operating Margin for the following periods:

                                                      
(in thousands of              Three Months ended         Twelve Months ended
Canadian dollars)
                       December  September  December  December  December
                         31, 2012   30, 2012    31, 2011   31, 2012   31, 2011
Operating Income       $   91,299 $    67,277 $   31,212 $  212,226 $   83,907
Operating Margin^(a)       20.4%      17.0%      9.1%     14.3%      7.3%

(a)Operating Margin is defined as Operating Income divided by revenue.

Fourth Quarter 2012 versus Fourth Quarter 2011

Operating Income increased  by $60.1  million, from $31.2  million during  the 
fourth quarter of  2011 to $91.3  million during the  fourth quarter of  2012. 
Gross profit increased by $51.5 million, primarily due to higher revenue and a
higher gross margin percentage,  a gain on  sale of land  of $12.1 million,  a 
lower impairment loss on property plant  and equipment of $4.4 million,  lower 
research and development expenses of $1.8 million and a foreign exchange  gain 
of $0.8 million in the fourth quarter  of 2012 compared to a foreign  exchange 
loss of $0.5 million in  the fourth quarter of  2011. These sources of  income 
growth  were  partially  offset  by  an  increase  in  selling,  general   and 
administration  ("SG&A")  expenses  of  $6.8   million  and  an  increase   in 
amortization expenses pertaining to property, plant, equipment and  intangible 
assets of $4.3 million.

Higher revenue of  $106.6 million,  as explained  above, combined  with a  2.4 
percentage point  increase  in gross  margin,  generated the  increased  gross 
profit, with  the gross  margin percentage  improvement driven  by  favourable 
product and  project mix  and better  facility utilization  and absorption  of 
overheads.

SG&A expenses increased by  $6.8 million compared with  the fourth quarter  of 
2011 primarily due to a $3.0 million increase in salaries and other  personnel 
related costs,  expenses  of $4.0  million  related to  the  strategic  review 
process announced in September 2012 and  a $7.2 million increase in short  and 
long term  management incentive  compensation accruals.  These increases  were 
partially offset by lower expenses for pensions and the provision for doubtful
debts of $6.1 million.

A $0.8 million impairment charge was recorded in the fourth quarter of 2012 to
provide for  costs to  dismantle the  plant, machinery  and buildings  at  the 
Kembla Grange,  Australia  facility  in  anticipation  of  the  sale  of  that 
facility's land that is expected to be completed in the next few months.

Fourth Quarter 2012 versus Third Quarter 2012

Operating Income increased by $24.0 million from the third quarter of 2012  to 
$91.3 million during  the fourth quarter  of 2012. Gross  profit increased  by 
$18.3 million,  primarily  due  to  higher  revenue  of  $53.1  million.  Also 
contributing to the increase in operating  income was a reduction in  research 
and development expenses and the charge  for impairment of property plant  and 
equipment of $1.2 million and $3.0  million, respectively, and a gain on  sale 
of land of $12.1 million. These sources of higher income were partially offset
by an increase  in SG&A expenses  of $7.5 million  and higher amortization  of 
property, plant, equipment and intangible assets of $3.5 million.

SG&A expenses increased  by $7.5 million  compared with the  third quarter  of 
2012 due to expenses of $4.0 million, related to the strategic review  process 
and a $3.2 million increase in salaries and other personnel related costs.

A $0.8 million impairment  charge was recorded in  the fourth quarter 2012  as 
noted above, compared to a charge of $3.9 million in the third quarter of 2012
pertaining to the Kembla Grange, Australia facility.

Twelve Months ended December 31, 2012 versus Twelve Months ended December  31, 
2011

Operating Income increased by  $128.3 million during  the twelve month  period 
ended December 31, 2012  to $212.2 million. Gross  profit increased by  $156.5 
million, primarily due to higher revenue and a higher gross margin percentage.
Detracting from the increase in gross profit was the increase in SG&A expenses
of $38.9  million  and an  increase  in amortization  expenses  pertaining  to 
property, plant, equipment  and intangible assets  of $4.2 million,  partially 
offset by a gain on sale of land of $12.1 million.

The increase in gross profit resulted  from higher revenue of $325.6  million, 
as explained above, and an increase  in gross margin of 2.5 percentage  points 
due to favourable product and project mix and better facility utilization  and 
absorption of overheads.

SG&A expenses increased by $38.9 million in 2012 compared with 2011  primarily 
due to a $17.3 million increase in salaries and other personnel related costs,
a $27.6  increase in  short and  long term  management incentive  compensation 
accruals and  expenses pertaining  to  the strategic  review process  of  $4.0 
million. These cost increases were partially offset by the fact that the  2011 
SG&A had included a provision for bad  debts of $9.6 million, pertaining to  a 
contract dispute with a customer.

2.3Finance Costs, net

The following table sets  forth the components of  finance costs, net for  the 
following periods:

                                                      
(in thousands of              Three Months ended         Twelve Months ended
Canadian dollars)
                       December  September  December  December  December
                         31, 2012   30, 2012    31, 2011   31, 2012   31, 2011
Interest income in     $    (968) $     (940) $    (293) $  (3,001) $  (1,024)
short-term deposits
Interest expense,              -        781     1,447     1,683     4,864
other
Interest expense on            -          -         -         -       667
long-term debt
Finance (income) cost, $    (968) $     (159) $    1,154 $  (1,318) $    4,507
net

Fourth Quarter 2012 versus Fourth Quarter 2011

In the fourth quarter of 2012,  net finance income was $1.0 million,  compared 
to a net finance cost of $1.2 million during the fourth quarter of 2011, as  a 
result of  lower  accretion expense  on  certain non-current  liabilities  and 
higher interest income on short-term deposits.

Fourth Quarter 2012 versus Third Quarter 2012

In the fourth quarter of 2012,  net finance income was $1.0 million,  compared 
to a net finance income of $0.2 million during the third quarter of 2012, as a
result  of  the  elimination  of  accretion  expense  on  certain  non-current 
liabilities.

Twelve Months ended December 31, 2012 versus Twelve Months ended December  31, 
2011

In the twelve  months ended  December 31, 2012,  net finance  income was  $1.3 
million, compared to a net finance cost of $4.5 million during the  comparable 
period  of  2011,  primarily  due  to  lower  accretion  expense  on   certain 
non-current liabilities,  no interest  expense on  long term  debt and  higher 
interest income on short-term deposits.

2.4Income Taxes

Fourth Quarter 2012 versus Fourth Quarter 2011

The Company recorded  an income tax  expense of $18.3  million (19% of  income 
before income taxes) in the fourth quarter of 2012, compared to an income  tax 
expense of $4.8  million (17%  of income before  income taxes)  in the  fourth 
quarter of 2011.  The effective tax  rate in  the fourth quarter  of 2012  was 
lower than the Company's expected effective income tax rate of 27%, due to the
significant portion of  the Company's taxable  income that was  earned in  the 
Trinidad Free  Zone, Asia  Pacific, the  Middle East  and other  jurisdictions 
where the expected tax rate is 25% or less.

Fourth Quarter 2012 versus Third Quarter 2012

The Company recorded  an income tax  expense of $18.3  million (19% of  income 
before income taxes) in the fourth quarter of 2012, compared to an income  tax 
expense of  $14 million  (21% of  income  before income  taxes) in  the  third 
quarter of 2012.  The effective tax  rate in  the fourth quarter  of 2012  was 
lower than the Company's expected effective income tax rate of 27%, due to the
significant portion of  the Company's taxable  income that was  earned in  the 
Trinidad Free  Zone, Asia  Pacific, the  Middle East  and other  jurisdictions 
where the expected tax rate is 25% or less.

Twelve Months ended December 31, 2012 versus Twelve Months ended December  31, 
2011

The Company recorded  an income tax  expense of $44.2  million (20% of  income 
before income taxes) during the  twelve-month period ended December 31,  2012, 
compared to  an income  tax expense  of $13.0  million (19%  of income  before 
income taxes)  during the  twelve-month period  ended December  31, 2011.  The 
effective income tax rate  for the twelve months  ending December 31, 2012  is 
much lower than the expected income tax rate of 27% for the reasons  discussed 
above.

2.5 Foreign Exchange Impact

The following table sets forth the significant currencies in which the Company
operates and the average  foreign exchange rates  for these currencies  versus 
Canadian dollars, for the following periods:

                                  
               Three Months ended  Twelve Months ended
                    December 31,         December 31,
                  2012      2011      2012      2011
                                                
U.S. dollar      0.9919    1.0255    1.0036    0.9931
Euro             1.2900    1.3727    1.2921    1.3750
British Pounds   1.5993    1.6035    1.5888    1.5854

The following table sets forth the  impact on revenue, income from  operations 
and net income, compared with  the prior year period,  as a result of  foreign 
exchange fluctuations on the translation of foreign currency operations:

                                                    
(in thousands of Canadian dollars)  Q4-2012  Q4-2012   Year ended
                                     Versus     versus     December
                                     Q3-2012   Q4-2011     31, 2012
Revenue                            $ (2,558)  (11,640)         409
Income from operations                (932)   (3,439)       2,346
Net income                         $   (868)   (2,584)       3,335

In addition to  the translation  impact noted  above, the  Company recorded  a 
foreign exchange gain of $0.8 million in the fourth quarter of 2012,  compared 
to a loss of $0.5  million for the comparable period  in the prior year, as  a 
result of the impact of changes  in foreign exchange rates on monetary  assets 
and liabilities and short term foreign currency intercompany loans within  the 
group, net of hedging activities.

For the twelve months ended December  31, 2012 the Company recorded a  foreign 
exchange gain of $0.1 million, compared to a loss of $1.3 million in 2011,  as 
a result of the impact of changes in foreign exchange rates on monetary assets
and liabilities and short term foreign currency intercompany loans within  the 
group, net of hedging activities.

2.6Net Income

Fourth Quarter 2012 versus Fourth Quarter 2011

Net income increased by  $57.1 million, from $23.2  million during the  fourth 
quarter ended December  31, 2011 to  $80.3 million during  the fourth  quarter 
ended December 31, 2012, mainly due to higher revenue and gross profit margins
as explained above. In  addition, an increase in  the income on investment  in 
associate (Fineglade Ltd., prior to the completion of the acquisition noted in
section 1.0) of $8.0 million, and a gain on the sale of land of $12.1 million.

Fourth Quarter 2012 versus Third Quarter 2012

Net income increased  by $26.9 million,  from $53.4 million  during the  third 
quarter ended December  31, 2011 to  $80.3 million during  the fourth  quarter 
ended December 31, 2012, mainly due  to higher revenue as explained above.  In 
addition, a gain on the sale of land of $12.1 million and income on investment
in associate of $6.0 million was  partially offset by higher SG&A expenses  of 
$7.5 million.

Twelve Months ended December 31, 2012 versus Twelve Months ended December  31, 
2011

Net income increased by $122.2 million,  from $56.3 million during the  twelve 
months ended December  31, 2011  to $178.4  million during  the twelve  months 
ended December 31, 2012, mainly due to higher revenue and gross profit margins
as explained above. An increase in income on investment in associate of  $18.8 
million and a gain on the sale of  land of $12.1 million was offset by  higher 
SG&A expenses of $38.9 million.

3.0 SEGMENT INFORMATION

3.1Pipeline and Pipe Services segment

The following table sets forth, by geographic location, the Revenue, Operating
Income and Operating Margin for the Pipeline and Pipe Services segment for the
following periods:

                                                    
(in thousands of            Three Months ended          Twelve Months ended
Canadian dollars)
                     December  September  December  December   December
                       31, 2012   30, 2012    31, 2011   31, 2012    31, 2011
North America        $  142,193 $   162,633 $  161,437 $   605,196 $   547,881
Latin America           76,986     58,391    18,448    172,300     38,499
EMAR                    44,812     54,489    80,935    226,392    241,885
Asia Pacific           151,465     84,078    44,988    333,989    192,834
Total Revenue        $  415,456 $   359,591 $  305,808 $ 1,337,877 $ 1,021,099
                                                                   
Operating Income     $   99,660 $    74,192 $   34,168 $   237,707 $    96,446
Operating Margin         24.0%      20.6%     11.2%      17.8%       9.4%

Fourth Quarter 2012 versus Fourth Quarter 2011

Revenue in  the fourth  quarter of  2012 was  $415.5 million,  an increase  of 
$109.6 million, or 36%, over  the fourth quarter of  2011. This was driven  by 
significant revenue increases  in Asia  Pacific and  Latin America,  partially 
offset by lower activity levels in EMAR and North America and the  translation 
impact of a weaker  US dollar and Euro  against the Company's Canadian  dollar 
reporting currency:

  *North America revenue decreased by $19.2 million, or 12%, as a result of
    reduced demand for small diameter pipe coating in the US and reductions in
    flexible composite pipe volumes and tubular management services all of
    which were impacted by lower well drilling and completion and gathering
    line activities in North America compared to the prior year.
  *Latin America revenue increased by $58.5 million, or 317%, as a result of
    the increased production volume on the Technip project in Trinidad and on
    the Linea 5 project in Mexico.
  *In EMAR, revenue decreased by $36.1 million, or 45%, due to decreased
    activity at the Company's pipe coating facility in Leith Scotland compared
    to the prior year when the Total Laggan project has been in full
    production.
  *Asia Pacific revenue increased $106.5 million, or 237%, mainly due to full
    production being achieved on the Chevron Wheatstone and Inpex Ichthys
    projects at both Kabil, Indonesia and Kuantan, Malaysia. This was
    partially offset by the closure of the Kembla Grange, Australia facility
    in early 2012.

Operating Income in the fourth quarter  of 2012 was $99.7 million compared  to 
$34.2 million in the fourth quarter of 2011, an increase of $65.5 million,  or 
192%, primarily  due to  the increase  in revenue  as explained  above and  an 
increase in  the gross  margin  by 5.0  percentage  points due  to  favourable 
project mix, better  facilities utilization and  the absorption of  overheads. 
The increase in gross profit was  partially offset by higher SG&A expenses  in 
2012, as  explained  in section  2.2  above.  The operating  income  was  also 
impacted by a gain on the sale of land of $12.1 million.

Fourth Quarter 2012 versus Third Quarter 2012

In the  fourth quarter  of 2012,  revenue  was $415.5,  an increase  of  $55.9 
million, or 16%, from $359.6 million in the third quarter of 2012. Revenues in
Asia Pacific and Latin America were  higher, partially offset by decreases  in 
EMAR and North America revenue:

  *In North America, revenue decreased by $20.4 million, or 13%, due to
    reduced sales of flexible composite pipe due to lower well completions in
    North America, and lower activity on offshore pipe coating projects with
    the completion of the Jack St. Malo and Cardon IV projects in Beaumont
    Texas in the third quarter.
  *In Latin America, revenue was higher by $18.6 million, or 32%, due to
    increased volumes on the P-55 Risers project in Brazil, the Technip
    project in Trinidad and the addition of Socotherm in the fourth quarter
    revenues, partially offset by lower activity in Mexico.
  *In EMAR, revenue decreased by $9.7 million, or 18%, primarily due to
    decreased activity on the Barzan project in RAK and in Russia at the
    Arkangelsk joint venture facility, partially offset by an increase in
    revenue at Leith, Scotland.
  *Revenue in Asia Pacific increased by $67.4 million, or 80%, mainly due to
    an increase in large project volumes with the Inpex Ichthys and Chevron
    Wheatstone projects at both Kabil, Indonesia and Kuantan, Malaysia
    reaching full production.

Operating Income in the fourth quarter  of 2012 was $99.7 million compared  to 
$74.2 million in the third quarter of  2012, an increase of $25.5 million,  or 
34%, with the operating margin increasing  by 3.4 percentage points to  24.0%. 
The increase in operating income is primarily due to a gain on sale of land of
$12.1 million and the higher revenue, as explained above, partially offset  by 
higher SG&A expenses in 2012, as explained in section 2.2 above.

Twelve Months ended December 31, 2012 versus Twelve Months ended December  31, 
2011

In the Pipeline and Pipe Services segment, revenue for the twelve month period
ended December 31, 2012 was $1,337.9  million, an increase of $316.8  million, 
or 31%, from  $1,021.1 million  in the comparable  period in  the prior  year. 
Activity level in all  regions, except for EMAR,  was significantly higher  in 
2012 compared to 2011:

  *In North America, revenue increased by $57.3 million, or 11%, due to
    increased sales of flexible composite pipe, tubular management services,
    the CSI acquisition, small diameter pipe coating and increased large
    project activity particularly with the execution of the Jack St. Malo and
    Cardon IV projects at mobile plants in Beaumont Texas and several large
    diameter pipe coating projects in Canada.
  *Latin America revenue was higher by $133.8 million, or 348%, due to higher
    activity levels on the P55 Risers project in Brazil, the Technip project
    in Trinidad, the Linea 5 project at the Veracruz and Monterrey facilities
    in Mexico and the acquisition of Socotherm in the fourth quarter of 2012.
  *EMAR revenue decreased by $15.5 million, or 6%. Increased volumes from the
    Barzan project in RAK and higher flow assurance pipe coating volumes in
    Orkanger, Norway were more than offset by the reduction in volumes at the
    Leith, Scotland facility where the Total Laggan, Breagh and Gundrun
    projects had been executed in 2011 and reduced activity levels in pipeline
    inspection services.
  *In Asia Pacific, revenue increased by $141.2 million, or 73%, in 2012,
    mainly due to increased production levels on large offshore coating
    projects such as M9 Zawtika, Pearl Energy Ruby Inpex Ichthys and Chevron
    Wheatstone. This was partially offset by closure of the Krembla Grange,
    Australia facility in early 2012.

Operating Income  for the  twelve month  period ended  December 31,  2012  was 
$237.7 million compared  to $96.4 million  for the twelve  month period  ended 
December 31, 2011, an increase of $141.3 million, or 147%, with the  operating 
margin increasing by 8.4 percentage points to 17.8%. The increase in operating
income is primarily  due to a  2.5 percentage point  increase in gross  profit 
margin due to  a favourable change  in project mix  and better utilization  of 
facilities and absorption of overheads on higher revenues, as explained  above 
and a gain on sale of land and others items $12.1 million, partially offset by
higher SG&A expenses as explained in section 2.2.

3.2Petrochemical and Industrial segment

The following table sets forth, by geographic location, the Revenue, Operating
Income and Operating Margin for  the Petrochemical and Industrial segment  for 
the following periods:

                                                      
(in thousands of              Three Months ended         Twelve Months ended
Canadian dollars)
                       December  September  December  December  December
                         31, 2012   30, 2012    31, 2011   31, 2012   31, 2011
North America          $   20,818 $    23,827 $   23,467 $   92,551 $   80,762
EMAR                      11,434     11,468    12,380    50,496    54,237
Asia Pacific               1,162      1,079       690     4,021     3,081
Total Revenue          $   33,414 $    36,374 $   36,537 $  147,068 $  138,080
                                                                   
Operating Income       $    4,510 $     4,911     6,702 $   19,886 $   18,242
Operating Margin           13.5%      13.5%     18.3%     13.5%     13.2%

Fourth Quarter 2012 versus Fourth Quarter 2011

Revenue decreased in  the fourth quarter  by $3.1  million, or 9  %, to  $33.4 
million, compared to the fourth  quarter of 2011 due  to lower wire and  cable 
products shipment to North America  electrical utilities and softness in  EMAR 
due to reduced automotive shipments associated with economic weakness.

Operating Income of $4.5  million in the fourth  quarter of 2012 decreased  by 
$2.2 million, or 33%, compared to $6.7 million in the fourth quarter of  2011. 
The decrease was primarily due to the  lower revenue as explained above and  a 
2.7 percentage point decrease in gross margin due to unfavourable product mix.

Fourth Quarter 2012 versus Third Quarter 2012

In the fourth quarter of 2012, revenue totaled $33.4 million compared to $36.4
million in the third  quarter of 2012,  a decrease of $3  million, or 8%.  The 
decrease was driven  by lower shipments  of wire and  cable products to  North 
American electrical  utilities and  slightly lower  revenues in  the EMAR  and 
North American automotive market.

Operating Income in the  fourth quarter of 2012  was $4.5 million compared  to 
$4.9 million in the third quarter of 2012, primarily due to the lower  revenue 
as explained above.

Twelve Months ended December 31, 2012 versus Twelve Months ended December  31, 
2011

Revenue increased  in  the twelve  months  ended  December 31,  2012  by  $9.0 
million, or 7%, to $147.1 million,  compared to the comparable period in  2011 
due to increased shipments  of wire and  cable products to  the oil sands  and 
electrical utilities markets and  increased heat shrinkable product  shipments 
in North America. This was partially  offset by lower automotive shipments  to 
EMAR due to a weaker European economy.

Operating Income  for the  twelve months  ended December  31, 2012  was  $19.9 
million compared to  $18.2 million for  the twelve months  ended December  31, 
2011, an increase of $1.6  million, or 9%. The  increase was primarily due  to 
higher revenue, as explained above.

3.3 Financial and Corporate

Financial and corporate costs include corporate expenses not allocated to  the 
operating segments and other  non-operating items, including foreign  exchange 
gains and  losses on  foreign currency  denominated cash  and working  capital 
balances. The corporate  division of the  Company only earns  revenue that  is 
considered incidental to the activities of the Company. As a result, it  does 
not meet the  definition of a  reportable operating segment  as defined  under 
IFRS.

The following  table  sets  forth  the  Company's  unallocated  financial  and 
corporate  expenses,  before  foreign  exchange  gains  and  losses,  for  the 
following periods:

                                                      
(in thousands of              Three Months ended         Twelve Months ended
Canadian dollars)
                       December  September  December  December  December
                         31, 2012   30, 2012    31, 2011   31, 2012   31, 2011
Financial and          $ (13,706) $  (12,354) $  (9,114) $ (45,486) $ (29,443)
Corporate Expenses

Fourth Quarter 2012 versus Fourth Quarter 2011

Financial and  corporate costs  increased by  $4.6 million  from $9.1  million 
during the fourth quarter of 2011, to $13.7 million during the fourth  quarter 
of 2012, primarily  as a result  of expenses related  to the strategic  review 
process of  $4.0  million and  increased  accruals  for short  and  long  term 
management incentive compensation of $2.4 million.

Fourth Quarter 2012 versus Third Quarter 2012

Financial and corporate costs increased by $1.4 million from the third quarter
of 2012 to  $13.7 million  in the  fourth quarter  of 2012,  primarily due  to 
expenses related to the strategic review  of $4.0 million partially offset  by 
lower personnel related expenses and stock based compensation costs.

Twelve Months ended December 31, 2012 versus Twelve Months ended December  31, 
2011

Financial and  corporate costs  increased by  $16.0 million,  from the  twelve 
month period ended December  31, 2011, to $45.5  million for the twelve  month 
period ended  December 31,  2012, primarily  as  a result  of an  increase  in 
salaries and personnel related expenses  $1.8 million, increased accruals  for 
short and long  term management  incentive compensation of  $12.0 million  and 
expenses related to the strategic review process of $4.0 million.

4.0 FORWARD-LOOKING INFORMATION

This  document   includes  certain   statements  that   reflect   management's 
expectations  and   objectives   for   the   Company's   future   performance, 
opportunities  and   growth,  which   statements  constitute   forward-looking 
information under  applicable securities  laws. Such  statements, other  than 
statements of historical fact,  are predictive in nature  or depend on  future 
events  or  conditions.  Forward   looking  information  involves   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. 
Specifically, this  document  includes  forward  looking  information  in  the 
Outlook section and elsewhere in respect of, among other things, the timing of
major project  activity, the  completion  of the  sale  of the  Kembla  Grange 
facility, the impact of  the existing order backlog  and other factors on  the 
Company's revenue and operating income, the impact of global economic activity
on the  demand for  the  Company's products,  the  impact of  changing  energy 
demand, supply and prices, the impact and likelihood of changes in competitive
conditions in the  markets in which  the Company participates,  the impact  of 
changing laws  for  environmental  compliance on  the  Company's  capital  and 
operating costs,  and  the adequacy  of  the Company's  existing  accruals  in 
respect thereof and in respect of  litigation matters generally, the level  of 
payments under the Company's  performance bonds, the  outlook for revenue  and 
operating income and the expected development in the Company's order backlog.

Forward looking information involves known and unknown risks and uncertainties
that could cause actual results to  differ materially from those predicted  by 
the forward-looking  information.  We  caution readers  not  to  place  undue 
reliance on forward  looking information as  a number of  factors could  cause 
actual events, results and prospects to differ materially from those expressed
in or implied by  the forward looking  information. Significant risks  facing 
the Company include,  but are not  limited to: changes  in global or  regional 
economic activity and changes in energy supply and demand, which impact on the
level of drilling activity and pipeline construction; exposure to product  and 
other liability claims; shortages of or significant increases in the prices of
raw materials used by the  Company; compliance with environmental, trade  and 
other laws; political,  economic and  other risks arising  from the  Company's 
international operations; fluctuations in foreign  exchange rates, as well  as 
other risks  and uncertainties,  as  more fully  described under  the  heading 
"Risks and Uncertainties" in the Company's annual MD&A.

These statements  of forward  looking information  are based  on  assumptions, 
estimates and  analysis made  by management  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. 
These assumptions  include  those  in respect  of  continued  global  economic 
recovery, increased investment in global energy infrastructure, the  Company's 
ability to execute projects under contract, the continued supply of and stable
pricing for commodities  used by  the Company, the  availability of  personnel 
resources sufficient  for  the  Company  to operate  its  businesses  and  the 
maintenance of operations in major oil and gas producing regions. The  Company 
believes that the  expectations reflected in  the forward looking  information 
are  based  on  reasonable  assumptions   in  light  of  currently   available 
information. However,  should one  or more  risks materialize  or should  any 
assumptions prove incorrect,  then actual results  could vary materially  from 
those expressed or implied in the forward looking information included in this
document and the Company can give no assurance that such expectations will  be 
achieved.

When considering  the forward  looking information  in making  decisions  with 
respect to  the  Company,  readers should  carefully  consider  the  foregoing 
factors and other uncertainties  and potential events.  The Company does  not 
assume the obligation to  revise or update  forward looking information  after 
the date of this document or to revise it to reflect the occurrence of  future 
unanticipated events, except  as may be  required under applicable  securities 
laws.

ShawCor will be hosting a Shareholder and Analyst Conference Call and  Webcast 
on Friday, March 1st, 2013, at 10:00 AM EST, which will discuss the  Company's 
fourth quarter financial results.

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

Please visit our website at www.shawcor.com for further details.

ShawCor Ltd.
Consolidated Balance Sheets
(Unaudited)

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

                                                 December 31,  December 31,
                                                           2012           2011
                                                              $              $
Assets                                                                    
                                                                         
Current Assets                                                            
Cash and cash equivalents                              293,266        56,731
Short-term investments                                  78,747        10,545
Loan receivable                                            604         2,047
Accounts receivable                                    389,929       279,324
Income taxes receivable                                13,675        15,981
Inventories                                           202,887       146,786
Prepaid expenses                                        41,370        24,454
Derivative financial instruments                         3,988           270
                                                    1,024,466       536,138
Non-current Assets                                                        
Loans receivable                                         6,527        12,622
Property, plant and equipment                          392,592       299,118
Intangible assets                                      144,694        86,362
Long-term Investment                                    1,348        30,095
Deferred income taxes                                   32,453        30,058
Other assets                                            12,638        12,022
Goodwill                                               285,710       220,334
                                                      875,962       690,611
Assets held for Sale                                    27,141             -
                                                    1,927,569     1,226,749
Liabilities                                                               
                                                                         
Current Liabilities                                                       
Bank indebtedness                                        3,801        12,281
Loans payable                                            8,395         5,001
Accounts payable and accrued liabilities               224,497       156,064
Provisions                                              43,193        12,317
Income taxes payable                                    37,991        35,200
Derivative financial instruments                         1,275           419
Deferred revenue                                       377,091        27,446
Obligations under finance lease                          1,927           268
                                                      698,170       248,996
Non-current Liabilities                                                   
Loans payable                                            8,682             -
Obligations under finance lease                         12,728             -
Provisions                                              54,151        50,859
Deferred revenue                                        64,392             -
Derivative financial instruments                             -         2,499
Deferred income taxes                                   71,664        56,984
                                                      211,617       110,342
Liabilities directly associated with the assets         11,917             -
classified as held for sale
                                                      921,704       359,338
Equity                                                                    
Share capital                                          221,687       218,381
Contributed surplus                                     17,525        16,391
Retained earnings                                      799,849       664,475
Non-controlling interest                                 (331)             -
Accumulated other comprehensive loss                  (32,865)      (31,836)
                                                    1,005,865       867,411
                                                                         
                                                    1,927,569     1,226,749

ShawCor Ltd.
Consolidated Statements of Income
(Unaudited)

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



                                                     
(in thousands of Canadian          Three Months Ended   Twelve Months Ended
dollars)                               December 31,          December 31,
                                    2012     2011      2012       2011
                                                                     
Revenue                                                               
Sale of products                  $   96,533 $ 104,005 $   385,933 $   332,242
Rendering of services               351,851  237,775  1,096,916    825,023
Total Revenue                       448,384  341,780  1,482,849  1,157,265
                                                                     
Cost of Goods Sold                  266,043  210,985    904,362    735,266
                                                                     
Gross Profit                      $  182,341 $ 130,795 $   578,487 $   421,999
                                                                     
Selling, general and                 84,569   77,743    308,172    269,241
administrative expenses
Research and development expenses     2,127    3,894     12,242     13,119
Foreign exchange (gains) losses      (835)      543      (119)      1,338
Amortization of property, plant      13,554   10,353     45,133     41,906
and equipment
Amortization of intangible            2,896    1,806      8,248      7,244
assets
(Gain) on land and other items     (12,101)        -   (12,101)          -
Impairment of property, plant,          832    5,244      4,686      5,244
and equipment
Income (loss) from Operations        91,299   31,212    212,226     83,907
                                                                     
Accounting gain on acquisition          413        -        413          -
Income (loss) on investment in        5,968  (2,001)      8,694   (10,133)
associate
Finance income (costs), net             968  (1,154)      1,318    (4,507)
                                                                     
Income before Income Taxes        $   98,648 $  28,057 $   222,651 $    69,267
                                                                     
Income taxes (recovery)              18,301    4,821     44,188     12,987
                                                                     
Net Income for the Period        $   80,347 $  23,236 $   178,463 $    56,280
                                                                     
Net Income Attributable to:                                           
Shareholders of the company          80,302   23,236    178,418     56,280
Non-controlling interest                 45   -         45     -
                                 $   80,347 $  23,236 $   178,463 $    56,280
Earnings (loss) per Share                                             
             Basic               $     1.14 $    0.32 $      2.53 $      0.79
             Diluted             $     1.13 $    0.32 $      2.50 $      0.78
                                                                     
Weighted Average Number of Shares                                     
Outstanding (000's)
             Basic                  70,221   70,630     70,413     70,725
             Diluted                71,295   71,126     71,278     71,536
                                                                     

ShawCor Ltd.
Consolidated Statements of Comprehensive Income
(unaudited)

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



                                                       
(in thousands of Canadian dollars)   Three Months Ended  Twelve Months Ended
                                         December 31,         December 31,
                                     2012      2011      2012      2011
                                                                     
                                                                     
Net Income (Loss) for the Period    $  80,347  $  23,236 $  178,463  $  56,280
                                                                     
Other Comprehensive Income (loss)                                     
 Unrealized (loss) gain on           17,467   (2,891)     (826)     9,134
  translation of foreign operations
 Other comprehensive income (loss)      605         -         -         -
  attributable to investment in
  associate
 Gain on hedge of unrealized              -         -         -       603
  foreign currency translation
 Gain on hedges of unrealized             -         -         -   (1,833)
  foreign currency translation
  transferred to net income during
  the period
 Share of other Comprehensive             -   (3,081)         -   (3,081)
  income attributable to investment
  in associate
                                                                     
Income tax on other comprehensive                                     
(loss) income
   Gain on hedges of unrealized          -         -         -     (103)
     foreign currency translation
   Gain on hedges of unrealized          -         -         -       311
     foreign currency translation
     transferred to net income
     during the period
Other Comprehensive (Loss) Income   $  18,072  $ (5,972) $    (826)  $   5,031
for the Period, net of Income Tax
                                                                     
Comprehensive Income for the Period $  98,419  $  17,264 $  177,637  $  61,311
                                                                     
Comprehensive Income Attributable                                     
to:
Shareholders of the company           98,171    17,264   177,389    61,311
Non - controlling interest               248         -       248         -
                                   $  96,419  $  17,264 $  177,637  $  61,311

ShawCor Ltd.
Consolidated Statements of Shareholders' Equity
(Unaudited)

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



                                                                       
(in thousands                                                                   
of Canadian
dollars)
                                                              Accumulate   
                                                           Non -       Other
                    Share   Contributed   Retained   controlling   Comprehensive       Total
                  Capital       Surplus   Earnings      interest       Loss           Equity
                                                                               
                                                                               
December 31,    $ 218,381 $      16,391 $  664,475 $           - $      (31,836) $   867,411
2011
                                                                               
Net income for         -            -   178,418           45              -    178,463
the year
Issued on          3,988            -         -            -              -      3,988
exercise of
stock options
Compensation       1,415      (1,415)         -            -              -          -
cost on
exercised
options
Compensation          79         (79)         -            -              -          -
cost on
exercised RSUs
Stock-based            -        2,628         -            -              -      2,628
compensation
Other                  -            -         -          203        (1,029)      (826)
comprehensive
income (loss)
Acquisition of         -            -         -        (579)              -      (579)
non-controlling
interest
Dividends paid         -            -  (26,332)            -              -   (26,332)
Purchase -       (2,176)            -         -            -              -    (2,176)
normal course
issuer bid
Excess of              -            -  (16,712)            -              -   (16,712)
purchase price
over stated
value of shares
                                                                               
December31,    $ 221,687 $      17,525 $  799,849      (331) $      (32,865) $ 1,005,865
2012
                                                                               
December 31,    $ 206,775 $      18,144 $  644,191            - $      (36,867) $   832,243
2010
                                                                               
Net income for         -            -    56,280            -              -     56,280
the year
Issued on          9,878            -         -            -              -      9,878
exercise of
stock options
Compensation       4,122      (4,122)         -            -              -          -
cost on
exercised
options
Compensation           7          (7)         -            -              -          -
cost on
exercised RSUs
Stock-based            -        2,376         -            -              -      2,376
compensation
Other                  -            -         -            -          5,031      5,031
comprehensive
loss
Dividends paid         -            -  (21,930)            -              -   (21,930)
Purchase -       (2,401)            -         -            -              -    (2,401)
normal course
issuer bid
Excess of              -            -  (14,066)            -              -   (14,066)
purchase price
over stated
value of shares
                                                                               
December 31,    $ 218,381 $      16,391 $  664,475            - $      (31,836) $   867,411
2011


ShawCor Ltd.
Consolidated Statements of Cash Flows
(Unaudited)

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



                                                     
(in thousands of Canadian         Three Months Ended    Twelve Months Ended
dollars)                              December 31,          December 31,
                                   2012      2011      2012       2011
Operating Activities                                                  
Net income for the period       $   80,347 $   23,236 $   178,463 $    56,280
Add (deduct) items not affecting                                      
cash
    Amortization of property,      13,554    10,353     45,133     41,906
     plant and equipment
    Amortization of intangible      2,896     1,806      8,248      7,244
     assets
    Amortization of long-term         200         -        900        754
     prepaid expenses
    Decommissioning liabilities   (1,538)        74      (472)        425
     expenses
    Other provision expenses        4,025     4,143      1,457      4,362
    Stock-based and                4,681     1,526     15,297      4,501
     incentive-based
     compensation
    Deferred income taxes           1,474  (16,495)      (881)   (14,686)
    (Gain) loss on disposal of       (28)      (18)      (416)        180
     property, plant and
     equipment
    (Gain) on sale of land       (12,101)         -   (12,101)          -
    Accounting (gain) on          (9,445)         -    (9,445)          -
     acquisition
    (Income) loss on investment   (5,968)     2,001    (8,694)     10,133
     in associate
    Impairment of property,           832     5,244      4,686      5,244
     plant and equipment
    Others                        (3,085)       912    (3,351)      3,791
Settlement of decommissioning        (249)     (790)    (1,580)    (1,074)
liabilities
Settlement of other provisions     (6,810)     (401)    (7,292)    (2,240)
(Decrease) increase in deferred   (86,088)         -     64,392          -
revenue - non-current
Net change in employee future          514       636      1,168        636
benefits
Net change in non-cash working     115,553  (10,382)    254,579   (72,131)
capital and foreign exchange
Cash provided by (used in)       $   98,764 $   21,845 $   530,091 $    45,325
Operating Activities
                                                                     
Investing Activities                                                  
(Increase) in loan receivable      (3,127)  (10,920)   (62,085)   (10,911)
Redemption (purchase) of short     133,140  (10,545)   (68,202)   (10,545)
term investments, net
Purchases of property, plant and  (28,128)  (18,532)   (74,439)   (55,982)
equipment
Proceeds on disposal of land        12,722        -     12,722         -
Proceeds on disposal of                153       299      1,465        745
property, plant and equipment
Purchase of intangible assets         (10)     (372)       (62)      (392)
Investment in associate            (2,824)        -    (2,824)  (10,517)
Business acquisition              (46,819)        -   (49,024)   (12,839)
Loan provided to associate              -   (2,108)          -   (10,347)
(Increase) decrease in other         (613)     4,815      (956)      4,815
assets
Cash provided by (used in)       $   64,494 $ (37,363) $ (243,405) $ (105,973)
Investing Activities
                                                                     
Financing Activities                                                  
Proceeds from (repayment of)         3,747    12,281    (8,480)     12,281
bank indebtedness
Repayment of loan                  (2,124)         -      (522)          -
Repayments of finance lease          (266)     (181)      (465)      (416)
obligation
Repayments of long-term debt             -         -          -   (24,402)
Issuance of shares                     878       555      3,988      9,878
Repurchase of shares                     -   (1,200)   (18,888)   (16,467)
Dividend paid to shareholders      (6,905)   (5,558)   (26,332)   (21,930)
Cash Used in Financing           $  (4,670) $    5,897 $  (50,699) $  (41,056)
Activities
                                                                     
Foreign Exchange gain (loss) on  $    1,065 $    (882) $       548 $     2,437
foreigncash and cash
Equivalents
                                                                     
Net change in cash and cash        159,653  (10,503)    236,535   (99,267)
Equivalents for the Period
                                                                     
Cash and Cash Equivalents -      $  133,613 $   67,234 $    56,731 $   155,998
Beginning of Period
                                                                     
Cash and Cash Equivalents - End  $  293,266 $   56,731 $   293,266 $    56,731
of Period





















SOURCE ShawCor Ltd.

Contact:

Gary S. Love
Vice President, Finance and CFO
Telephone: 416.744.5818
E-mail:glove@shawcor.com
Website:www.shawcor.com
 
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