Exhibit 12.1
IPSCO Inc.
Computation of Ratio of Earnings to Fixed Charges
(thousands of United States dollars except ratio information)
| Fiscal year ended December 31, |
Nine Months Ended September 30, |
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| 1998 |
1999 |
2000 |
2001 |
2002 |
2002 |
2003 |
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| Canadian GAAP |
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| Earnings |
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| Pretax income from continuing operations |
$ | 97,295 | $ | 97,565 | $ | 80,798 | $ | 60,733 | $ | 31,693 | $ | 11,644 | $ | 6,525 | ||||||||||||||
| Amortization of capitalized interest |
1,259 | 1,889 | 1,777 | 1,355 | 2,065 | 1,572 | 1,980 | |||||||||||||||||||||
| Interest capitalized |
(4,841 | ) | (2,654 | ) | (17,055 | ) | (20,523 | ) | — | — | — | |||||||||||||||||
| Preference security dividend requirements of consolidated subsidiaries |
(986 | ) | (7,942 | ) | (15,514 | ) | (17,394 | ) | (17,263 | ) | (12,947 | ) | (21,812 | ) | ||||||||||||||
| Subtotal |
92,727 | 88,858 | 50,006 | 24,171 | 16,495 | 269 | (13,307 | ) | ||||||||||||||||||||
| Fixed Charges |
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| Interest expensed and capitalized |
20,881 | 22,529 | 28,055 | 27,790 | 24,814 | 18,661 | 21,427 | |||||||||||||||||||||
| Interest within rental expense |
276 | 387 | 3,509 | 11,436 | 12,407 | 9,532 | 8,667 | |||||||||||||||||||||
| Preference security dividend requirements of consolidated subsidiaries |
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| Subordinated notes |
— | 196 | 7,202 | 8,500 | 8,500 | 6,375 | 6,375 | |||||||||||||||||||||
| Preferred shares |
986 | 7,746 | 8,312 | 8,894 | 8,763 | 6,572 | 15,437 | |||||||||||||||||||||
| Total fixed charges |
22,143 | 30,858 | 47,078 | 56,620 | 54,484 | 41,140 | 51,906 | |||||||||||||||||||||
| Earnings, as adjusted |
$ | 114,870 | $ | 119,716 | $ | 97,084 | $ | 80,791 | $ | 70,979 | $ | 41,409 | $ | 38,599 | ||||||||||||||
| Ratio of earnings to fixed charges |
5.19 | 3.88 | 2.06 | 1.43 | 1.30 | 1.01 | (1) | |||||||||||||||||||||
| U.S. GAAP |
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| Earnings |
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| Pretax income from continuing operations |
$ | 83,238 | $ | 89,233 | $ | 32,556 | $ | (6,416 | ) | $ | 19,179 | $ | 3,864 | $ | 2,174 | |||||||||||||
| Amortization of capitalized interest |
1,331 | 1,959 | 1,788 | 799 | 1,509 | 1,155 | 1,563 | |||||||||||||||||||||
| Interest capitalized |
305 | (2,607 | ) | (14,663 | ) | (5,358 | ) | — | — | — | ||||||||||||||||||
| Preference security dividend requirements of consolidated subsidiaries |
(986 | ) | (7,746 | ) | (8,312 | ) | (8,894 | ) | (8,763 | ) | (6,572 | ) | (15,437 | ) | ||||||||||||||
| Subtotal |
83,888 | 80,839 | 11,369 | (19,869 | ) | 11,925 | (1,553 | ) | (11,700 | ) | ||||||||||||||||||
| Fixed Charges |
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| Interest expensed and capitalized |
20,881 | 22,725 | 38,107 | 45,807 | 43,597 | 32,742 | 34,982 | |||||||||||||||||||||
| Interest within rental expense |
276 | 387 | 659 | 1,919 | 2,124 | 1,826 | 1,487 | |||||||||||||||||||||
| Preference security dividend requirements of consolidated subsidiaries |
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| Preferred shares |
986 | 7,746 | 8,312 | 8,894 | 8,763 | 6,572 | 15,437 | |||||||||||||||||||||
| Total fixed charges |
22,143 | 30,858 | 47,078 | 56,620 | 54,484 | 41,140 | 51,906 | |||||||||||||||||||||
| Earnings, as adjusted |
$ | 106,031 | $ | 111,697 | $ | 58,447 | $ | 36,751 | $ | 66,409 | $ | 39,587 | $ | 40,206 | ||||||||||||||
| Ratio of earnings to fixed charges |
4.79 | 3.62 | 1.24 | (2) | 1.22 | (2) | (2) | |||||||||||||||||||||
| (1) | Under Canadian GAAP, earnings were insufficient to cover fixed charges by $13.3 million for the nine months ended September 30, 2003. |
| (2) | Under U.S. GAAP, earnings were insufficient to cover fixed charges by $19.9 million, $1.6 million and $11.7 million for the year ended December 31, 2001 and for the nine months ended September 30, 2002 and September 30, 2003, respectively. |
IPSCO Inc.
Pro-Forma Computation of Ratio of Earnings to Fixed Charges
(thousands of United States dollars except ratio information)
| Fiscal Year Ended |
Nine Months September 30, |
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| Canadian GAAP |
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| Earnings |
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| Pretax income from continuing operations |
$ | 31,693 | $ | 6,525 | ||||
| Amortization of capitalized interest |
2,065 | 1,980 | ||||||
| Interest capitalized |
— | — | ||||||
| Preference security dividend requirements of consolidated subsidiaries |
(17,263 | ) | (21,812 | ) | ||||
| Net pro-forma interest adjustment |
(13,582 | ) | (6,534 | ) | ||||
| Subtotal |
2,913 | (19,841 | ) | |||||
| Fixed Charges |
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| Interest expensed and capitalized |
24,814 | 21,427 | ||||||
| Interest within rental expense |
12,407 | 8,667 | ||||||
| Preference security dividend requirements of consolidated subsidiaries |
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| Subordinated notes |
8,500 | 6,375 | ||||||
| Preferred shares |
8,763 | 15,437 | ||||||
| Net pro-forma interest adjustment |
13,582 | 6,534 | ||||||
| Total fixed charges |
68,066 | 58,440 | ||||||
| Earnings, as adjusted |
$ | 70,979 | $ | 38,599 | ||||
| Ratio of earnings to fixed charges |
1.04 | (3) | ||||||
| U.S. GAAP |
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| Earnings |
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| Pretax income from continuing operations |
$ | 19,179 | $ | 2,174 | ||||
| Amortization of capitalized interest |
1,509 | 1,563 | ||||||
| Interest capitalized |
— | — | ||||||
| Preference security dividend requirements of consolidated subsidiaries |
(8,763 | ) | (15,437 | ) | ||||
| Net pro-forma interest adjustment |
(13,582 | ) | (6,534 | ) | ||||
| Subtotal |
(1,657 | ) | (18,234 | ) | ||||
| Fixed Charges |
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| Interest expensed and capitalized |
43,597 | 34,982 | ||||||
| Interest within rental expense |
2,124 | 1,487 | ||||||
| Preference security dividend requirements of consolidated subsidiaries |
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| Preferred shares |
8,763 | 15,437 | ||||||
| Net pro-forma interest adjustment |
13,582 | 6,534 | ||||||
| Total fixed charges |
68,066 | 58,440 | ||||||
| Earnings, as adjusted |
$ | 66,409 | $ | 40,206 | ||||
| Ratio of earnings to fixed charges |
(4) | (4) | ||||||
| (3) | Under Canadian GAAP, earnings were insufficient to cover fixed charges by $19.8 million for the nine months ended September 30, 2003. |
| (4) | Under U.S. GAAP, earnings were insufficient to cover fixed charges by $1.7 million for the year ended December 31, 2002 and $18.2 million for the nine months ended September 30, 2003. |