IPSCO 2006 Annual Report

Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income adjusted for preferred share dividends and subordinated note interest by the weighted average shares outstanding plus share equivalents that would arise from a) the exercise of share options, deferred share units, restricted shares and performance units, and b) the conversion of preferred shares and subordinated notes. The per share amounts disclosed on the Consolidated Statements of Income are based on the following:

	2006			2005			2004
Numerator for basic earnings per share— Net income available to common shareholders	$	643,114		$	585,816		$	454,942
Dividends on preferred shares, including part VI.I tax (Note 13)	—			—			2,461
Interest on subordinated notes, net of income tax	—			—			5,257
Numerator for diluted earnings per share	$	643,114		$	585,816		$	462,660
Common shares outstanding—December 31	47,213,592			48,051,619			49,737,180
Non-vested restricted shares	(163,884		)	(210,003		)	(171,504		)
Weighted average impact of shares repurchased (issued)	331,455			705,925			(1,263,632		)
Denominator for basic earnings per share	47,381,163			48,547,541			48,302,044
Adjustment for share options	97,760			202,061			554,164
Adjustment for deferred share units	119,037			110,243			94,433
Adjustment for restricted shares	128,324			106,847			55,289
Adjustment for performance units	146,167			33,832			35,139
Adjustment for preferred shares	—			—			2,284,644
Adjustment for subordinated notes	—			—			1,908,213
Denominator for diluted earnings per share	47,872,451			49,000,524			53,233,926