EXHIBIT 12
TERRA INDUSTRIES INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS OF DOLLARS)
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
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PRO FORMA PRO FORMA
FOR AMCI FOR AMCI
ACQUISITION ACQUISITION
1990 1991 1992 1993 1994 1994 1994 1994 1995
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(A) Earnings:
Income from continuing
operations before
income taxes,
extraordinary items
and cumulative effect
of accounting changes. $(14,938) $13,106 $18,186 $32,145 $ 89,945 $181,884 $ (9,865) $ (3,879) $ 53,883
Add:
(a) Fixed charges per
Item (B) below........ 24,297 20,701 17,237 22,483 36,562 73,461 5,866 17,469 18,082
(b) Dividends of
unconsolidated
affiliates............ -- -- -- 537 190 190 73 73 246
Deduct:
(a) Undistributed
income from
unconsolidated
affiliates............ -- -- -- (2,275) (743) (743) 554 554 1,197
-------- ------- ------- ------- -------- -------- --------- --------- ---------
$ 9,359 $33,807 $35,423 $52,890 $125,954 $254,792 $ (3,372) $ 14,217 $ 73,408
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(B) Fixed charges:
Interest on
indebtedness, expensed
or capitalized........ $ 17,629 $14,352 $10,617 $12,944 $ 22,082 $ 57,922 $ 2,935 $ 14,102 $ 14,007
Amortization of debt
discount and expense
and premium on
indebtedness, expense
or capitalized........ 40 40 47 250 316 316 79 79 79
Portion or rents
representative of the
interest factor....... 6,628 6,309 6,573 9,289 14,164 15,223 2,852 3,288 3,996
-------- ------- ------- ------- -------- -------- --------- --------- ---------
Fixed charges, for
computation purposes.. $ 24,297 $20,701 $17,237 $22,483 $ 36,562 $ 73,461 $ 5,866 $ 17,469 $ 18,082
======== ======= ======= ======= ======== ======== ========= ========= =========
Ratios of earnings to
fixed charges(1)(2).... -- 1.63 2.06 2.35 3.45 3.47 -- -- 4.06
======== ======= ======= ======= ======== ======== ========= ========= =========
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(1) Earnings available for fixed charges were insufficient to cover fixed
charges by $14.9 million for the year ended December 31, 1990, and $9.2
million and $3.3 million for the historical and pro forma three-month
periods ended March 31, 1994, respectively. As a result, the financial
ratios for such periods are not meaningful and, therefore, not included.
(2) Assuming the 10 1/2% Senior Notes due 2005 were issued at the beginning of
1994, fixed charges would have been increased to $79,847 for pro forma
1994, and $19,065 and $19,228 for the pro forma three-month periods ended
March 31, 1994 and 1995, respectively. As a result, the ratio of pro forma
earnings to pro forma fixed charges would be 3.19 for 1994 and 3.82 for the
three-month period ended March 31, 1995. Pro forma earnings available for
fixed charges would have been insufficient to cover pro forma fixed charges
by $4.8 million for the three-month period ended March 31, 1994.