EXHIBIT 1.2
EARNINGS COVERAGE RATIO
PRELIMINARY SHORT FORM PROSPECTUS DATED DECEMBER 5, 2003 -- U.S.$405,000,000
10 3/8% SENIOR NOTES DUE 2011 (THE "EXISTING NOTES") WHICH MAY BE DELIVERED UPON
THE EXCHANGE OF U.S.$405,000,000 10 3/8% SENIOR NOTES DUE 2011 (THE "EXCHANGE
NOTES")
12 MONTHS ENDED
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US$ Millions SEPTEMBER 30, 2003 DECEMBER 31, 2002
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Earnings before interest and income taxes 4.7 50.1
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Total interest expense 38.2 38.6
Adjustments to interest expense:
Interest on Existing Notes repaid with proceeds of (26.8) (38.0)
Exchange Notes being issued
Interest on Exchange Notes being issued 42.0 42.0
Capitalized Interest 0.2 0.1
Adjusted interest 53.6 42.7
Income taxes (21.8) 0.3
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Earnings coverage ratio 9%(1) 117%(1)
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Actual dollar amounts of the coverage deficiency to
attain a ratio of one to one 48.9 --
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(1) Ratios have been calculated excluding the carrying charges for the Issuers'
controvertible debentures, accounted for as equity under Canadian GAAP,
which have been reflected in equity in the calculation of the Issuers'
interest and dividend obligations. If those securities had been accounted
for as debt for the purpose of calculating the ratios set out herein, the
entire amount of the annual carrying charges for those securities would
have been reflected in the calculation of the Issuers' interest and
dividend obligations. If the convertible debentures were accounted for in
their entirety as debt, the earnings coverage ratio for the twelve month
period ended September 30, 2003 would be 8% and the earnings coverage ratio
for the twelve month period ended December 31, 2002 would be 115%.