IPSCO's large diameter spiral pipe mills are booked at full capacity through the first quarter of 2008.

As part of the acquisition of NS Group, we also acquired ULTRA^TM Premium Oilfield Services Ltd. ("ULTRA") which specializes in premium connections, oilfield accessories and field services for complex oil and gas exploration and production, with operating facilities in Odessa and Houston, Texas. ULTRA is well positioned to support our growing carbon and alloy tubular market.

DIVERSIFIED CUSTOMER BASE
During 2006, our products served the needs of approximately 700 customers in the service center, distribution, energy, agricultural equipment, transportation equipment, heavy machinery and construction industries. Seventy percent of our sales were made to U.S. customers. Our wide assortment of plate product widths, lengths, thicknesses and grades are used by end customers to manufacture construction and farm equipment, rail cars, barges, ships, storage tanks, bridges, structural poles, wind towers, large diameter pipe and many other products.

FINANCIAL PERFORMANCE AND POSITION

• Net sales increased 24% to a record $3.78 billion
• Operating income increased 10% to a record $997 million
• Net income increased 10% to a record $643 million
• Earnings per diluted share increased 12.3% to a record $13.43
• Cash dividends on common shares increased 39% to CDN $0.78

CAPITAL AND STRATEGIC INVESTMENTS

• Completed the $1.43 billion acquisition of NS Group, Inc., a leading U.S. producer of tubular products serving energy and certain other industrial markets. This transaction broadened the Company's energy product offering with seamless pipe and premium oilfield connections and strengthened IPSCO's position as a leading North American supplier of tubular products to the oil and natural gas sectors.
• Announced plans for the installation of a vacuum degasser at our Montpelier, Iowa Steelworks to provide a more sophisticated and extensive range of steel products.
• Announced plans for the construction of Oil Country Tubular Goods (OCTG) heat treat facilities in Blytheville, Arkansas and Baytown, Texas. These new facilities will produce heat treated OCTG beginning in the third quarter of 2007 and increase our total tubular heat treat capacity to 575,000 tons annually.
• Announced the expansion of our large diameter pipe facility in Regina, Saskatchewan to include an additional pipe forming mill and related finishing equipment. This will increase our large diameter spiral pipe capacity to 500,000 tons by early 2008.