IPSCO INC.
P.O. Box 1670
Regina, Saskatchewan, Canada
S4P 3C7
Tel (306) 924-7700
as of February 28, 2003
ANNUAL INFORMATION FORM
For the year ended December 31, 2002
THE COMPANY
NAME AND INCORPORATION
IPSCO Inc. (the "Company" or "IPSCO") was incorporated by certificate
of incorporation under the laws of Saskatchewan on July 13, 1956 and was
continued by articles of continuance under the Canada Business Corporations Act
on January 28, 1977. Originally known as Prairie Pipe Manufacturing Co. Ltd.,
the name of the Company was changed to Interprovincial Steel and Pipe
Corporation Ltd. on April 26, 1960. On April 2, 1984, the Company changed its
name to IPSCO Inc.
INTERCORPORATE RELATIONSHIPS
The following corporate organization chart shows IPSCO's principal
subsidiaries, each of which is 100% owned, and their jurisdictions of
incorporation.
[GRAPHIC OMITTED]
[ORGANIZATION CHART]
--------------------
IPSCO INC.
(CANADA CORPORATION)
--------------------
--------------------- --------------------------
Canadian Subsidiaries United States Subsidiaries
--------------------- --------------------------
IPSCO Direct Inc. IPSCO Construction Inc.
(Albert Corporation) (Alabama Corporation)
IPSCO Ontario Inc. IPSCO Enterprises Inc.
(Canada Corporation) (Delaware Corporation)
IPSCO Recycling Inc. IPSCO Investments Inc.
(Canada Corporation) (Delaware Corporation)
IPSCO Sales Inc. IPSCO Minnesota Inc.
(Canada Corporation) (Delaware Corporation)
IPSCO Saskatchewan Inc. IPSCO Sales Inc.
(Canada Corporation) (Delaware Corporation)
General Scrap Partnership IPSCO Steel Inc.
(Saskatchewan General Partnership) (Delaware Corporation)
Western Steel Limited IPSCO Steel (Alabama) Inc.
(British Columbia Corporation) (Alabama Corporation)
IPSCO Texas Inc.
(Delaware Corporation)
IPSCO Tubulars Inc.
(Delaware Corporation)
IPSCO Alabama Ltd.
(Alabama Limited Partnership)
General Scrap Inc.
(Delaware Corporation)
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In this Annual Information Form, unless otherwise indicated, a
reference to the "Company" or "IPSCO" includes IPSCO Inc. and its subsidiaries
or other entities. Reference to "dollars", "$" and "US$" are to United States
dollars and reference to "CDN$" are to Canadian dollars. Estimates of imports
and other market statistics are derived from a variety of external sources
including the American Iron and Steel Institute, the Canadian Steel Producers
Association and certain government agencies and should not be relied on as being
fully accurate but rather indicative of trends and relative sizes. When the
United States and Canada are referred to together, the import figures include
amounts coming into the two countries from other than the United States and
Canada.
GENERAL DEVELOPMENT OF THE BUSINESS
THREE-YEAR HISTORY - SIGNIFICANT EVENTS OF 2000, 2001 AND 2002
2000
Sales revenues were $949 million, 17% higher than the prior year figure
of $808 million. Net income fell to $57.7 million, a 22% decline from the prior
year as average composite prices, impacted by surging low price imports and a
lower mix of energy tubulars, fell by 3% to $421 per ton.
The Company produced 2,021,000 tons of raw steel of which 980,000 were
produced at the Montpelier Steelworks. Total tons sold were a record 2,233,000,
a 22% increase over 1999. Steel mill products (discrete plate, coil and cut
plate), comprised 62% of the total amount shipped while energy tubulars, large
diameter pipe, and non-energy tubulars were 38% of the total shipped. For the
first time in its history IPSCO's tons sold to U.S. customers comprised over
half of shipments, reaching 1,303,000 tons or 58% of total tons shipped.
Additions to capital assets were a record $370.3 million with over 90%
of the spending concentrated on the new steelworks in Alabama. The Company met
the financing needs generated by the construction of the Mobile Steelworks
project by raising $158.0 million from the sale and leaseback of equipment at
the Montpelier Steelworks and the St. Paul, Minnesota coil processing facility.
An additional $89.8 million was raised from the issuance of junior subordinated
notes previously arranged in 1998. In the fourth quarter IPSCO renegotiated
existing bank lines and obtained a $200 million unsecured committed facility to
March 2005.
2001
IPSCO achieved sales of $931 million including $27 million of revenue
recorded by the new Mobile Steelworks during start up. Sales were 2% lower than
the prior year primarily due to price attrition resulting from the prior year's
excess supply condition, including imports. Net income of $38.9 million dropped
33% and net income available to common shareholders of $27.4 million dropped 42%
from prior year results.
The Company produced 2,414,000 tons of raw steel of which 379,000 tons
were produced at the new Mobile Steelworks and 967,000 tons at Montpelier. Total
tons sold were a record 2,435,000, a 9% increase over 2000. Steel mill products
comprised 64% of the total shipped while energy tubulars, large diameter pipe,
and non-energy tubulars were 36% of shipments. IPSCO increased its U.S. market
penetration as shipments to U.S. customers climbed 21% to 1,570,000 and
accounted for 64% of total tons shipped.
Since its startup in 1997, the Montpelier Steelworks has required
substantial modifications due to original equipment unreliability and the
plant's failure to meet contracted output. The non-performance of Montpelier's
equipment and turnkey contractor was the subject of a civil suit settled out of
court in mid-
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2001. IPSCO settled all claims and counter claims for $49 million, paid by the
contractor, of which $39 million was recorded to income as a non-recurring item.
Late in the year management undertook a 17-day maintenance shutdown to modify
original equipment and remedy turnkey deficiencies. Capital spending for the
year at Montpelier was $13.1 million.
In 2001, a non-cash charge of $10 million was recorded to adjust the
carrying value of assets held for sale to their estimated net realizable value.
The Company raised $15 million from the sale and leaseback of its coil
processing equipment in Houston, Texas. The sale-leaseback was completed in two
parts, with $10 million received in June and $5 million in September.
The average unit-selling price for IPSCO products dropped almost 10%
from $421 per ton in the prior year to $380 per ton in 2001. Fourth quarter
prices were $366 per ton and reflected the lowest prices in decades. The price
reductions were related to a general slowdown in the North American economy and
excess supply. The price and volume of imports and the subsequent injury to U.S.
producers became the subject of a U.S. Section 201 trade investigation.
The Company increased its reserve for bad debts by $4 million to
reflect conditions in the market.
2002
IPSCO achieved sales of $1.08 billion, which were 20% higher than the
prior year and reflect the significantly higher shipments made from the Mobile
Steelworks, as well as continued market penetration by IPSCO coil processing
facilities opened over the past few years. Net income of $20.3 million dropped
$18.6 million or 48% and net income available to common shareholders was $8.9
million, down 68% from the $27.4 million recorded in 2001. In 2002, the Company
successfully completed the sale of certain non-productive assets and recorded
associated pre-tax income of $6.5 million.
IPSCO's average unit selling price declined to $369 per ton in 2002
from $380 per ton in 2001, primarily due to changes in product mix (a higher
percentage of steel mill products compared to tubular products), but also due to
continued price competition.
The Company produced 3,007,000 tons of raw steel of which 2,046,000
were produced in the United States. Total tons sold were a record 2,897,000, a
19% increase over 2001. Shipments of 2,115,000 tons of steel mill products were
73% of total tons sold and surpassed those of a year earlier by 35%.
Approximately 27% of the Company's total shipments in 2002 were tubular
products, down from about 36% in 2001, reflecting the impact of both the Mobile
Steelworks ramp-up and a slow market for many tubular product lines.
Shipments to U.S. customers reached 2,126,000 tons, over 73% of the
total, while Canadian based customers accounted for 771,000 tons, about 27%.
Despite growth in the Company's total shipments, Canadian shipments were 11%
below that of 2001, indicating that the U.S. market continued to provide the
growth in sales.
The Company completed two key financing initiatives in the year. In
February, the Company completed a common stock issue of 6.5 million shares for
net cash proceeds of $90.7 million. Proceeds were used to pay down revolving
bank line borrowings. In addition, the Company renegotiated an increase to its
debt ratio covenant from .45 to .50 under its bank facility and obtained a
committed $50 million, 364 day facility to improve its financial flexibility.
In March 2002, as a result of the Section 201 investigation, President
Bush announced tariffs (ranging from 8% to 30%) and quotas on many key steel
products. Canada was excluded from this action. Anticipating the diversion of
imported steel to Canada from countries affected by the remedies, the Company
and other Canadian steel producers began discussions with the Canadian
government regarding
4
the implementation of a similar safeguard action. The Canadian government
conducted a safeguard investigation under section 20 of the Canadian
International Trade Tribunal, however a remedy has not yet been imposed and
discussions are continuing.
Industry consolidation was accelerated with the emergence of
International Steel Group ("ISG"), which purchased the steelmaking assets of LTV
and Acme Steel out of Chapter 11 proceedings. ISG is currently pursuing
additional acquisitions in the sector. Other integrated producers may follow the
new business model used by ISG as a way to purchase assets cheaply, shed legacy
costs, and reduce manpower requirements to become more competitive.
SIGNIFICANT ACQUISITIONS AND DISPOSITIONS
The Company made no significant acquisitions or dispositions in 2002.
TRENDS
In addition to the risks and uncertainties discussed in "Narrative
Description of the Business" below, the Company is particularly sensitive to
trends in the oil and gas exploration, oil and gas transmission, construction
and heavy equipment industries, which are significant markets for the Company's
products and are highly cyclical. In addition, as a result of the Company's
substantial investments in facilities in both the U.S. and Canada, the Company
transacts business in the currencies of both countries, with the ratio between
the U.S. dollar and the Canadian dollar denominated sales and expenditures
varying over time. The average value of the Canadian dollar declined slightly
from $0.6460 U.S. in fiscal 2001 to $0.6369 U.S. in fiscal 2002. In addition,
the strength of both the Canadian and U.S. dollars relative to other foreign
currencies influences import and export activity. Both currencies weakened
against the Euro and other major currencies in fiscal 2002. Future fluctuations
in the exchange rate between the Canadian and U.S. dollars and other foreign
currencies could have a material effect on the Company.
NARRATIVE DESCRIPTION OF THE BUSINESS
GENERAL
The Company is a North American steel producer with facilities and
process equipment located at 12 sites throughout Canada and the United States.
IPSCO operates within a single business segment which is the production of steel
and sale of primary and secondary manufactured steel products such as carbon
steel slabs, discrete plate and coil, cut plate, and finished tubular products.
The bulk of IPSCO's capital is invested in steel mill and finishing facilities.
The output of the steel facilities is either sold directly to third
parties in the as-produced condition or used in IPSCO operations, which further
fabricate the steel for sale to third parties. As steelmaking facilities
comprise the bulk of the Company's capital investment, the Company attempts to
earn the best overall return on the available steel by allocating it to the
products that command the best return from the business. Shifts in the price,
cost and demand for specific products will affect their ability to contribute to
overall financial results. Swings in demand between products and product groups
may occur on a frequent basis as the Company adjusts its production and sales
plans to take these into account.
The Company produces steel in three North American steelworks: Regina,
Saskatchewan; Montpelier, Iowa; and Mobile, Alabama. All three steelworks use
electric arc furnace technology to convert scrap steel into liquid steel. Each
steelworks casts the liquid steel into slabs and hot rolls the slabs into
various grades of discrete plate or coil. The plate and coil can be sold
directly to customers or may be further processed within IPSCO's downstream
facilities. Five coil processing locations produce cut plate and sheet to
customer requirements. Pipe mills at six locations use coil feedstock to produce
tubular
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products that range from one and one-half inches up to 16 inches in diameter
("small diameter"), and 16 inches through 80 inches in diameter ("large
diameter").
IPSCO currently has over 600 active customers spanning a large number
of applications. IPSCO produces steel plate and sheet in an assortment of
widths, lengths, gauges and grades used to make railroad cars, barges and ships;
industrial, construction and farm equipment; storage tanks, bridges, structural
poles and a host of additional products. Tubular products include oil and gas
well casing and tubing ("oil country tubular goods" or "OCTG"); pipe for
transporting oil and gas from wells, transmitting oil and/or gas long distances
and for final distribution to end-customers ("line pipe"); pipe for low pressure
water and air distribution; water and sewage transmission pipe; and tubular
products for building and construction applications, most often in square or
rectangular cross-sections ("hollow structural sections", "HSS" or "structural
tubing").
PRINCIPAL PRODUCTS AND SERVICES
The following chart describes the Company's principal products,
principal markets and methods of distribution:
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PRINCIPAL PRODUCT GROUPS PRINCIPAL MARKETS PRIMARY DISTRIBUTION METHODS
------------------------ ----------------- ----------------------------
- -------------------------------------------------------------------------------------------------------------
STEEL MILL PRODUCTS:
- -------------------------------------------------------------------------------------------------------------
Slabs, discrete plate, cut plate General manufacturing Majority through distributors
and coil construction, agricultural located throughout North America
equipment, oil field equipment,
transportation and others
- -------------------------------------------------------------------------------------------------------------
TUBULAR PRODUCTS:
- -------------------------------------------------------------------------------------------------------------
Large diameter line pipe Oil, natural gas and water Predominantly through the Company
transmission
- -------------------------------------------------------------------------------------------------------------
Energy Tubulars Oil and natural gas exploration Predominantly through
and development distributors located throughout
North America
- -------------------------------------------------------------------------------------------------------------
Non-Energy Tubulars Manufacturing, construction and Predominantly through
other industrial product uses distributors located throughout
North America
- -------------------------------------------------------------------------------------------------------------
IPSCO markets steel through two separate sales channels. One sells
steel mill products such as discrete plate, cut plate and coil. The second sells
tubular products. Each marketing operation is disciplined with regard to the
products it sells and the markets it pursues, and each continually enhances its
diversified product lines. Although sales personnel are located to maximize
customer service, each channel is centrally managed. Members of the sales teams
are experienced and well trained to deal with customer requirements. A pool of
highly trained research and technical experts also supports both sales
organizations.
The following chart sets out the approximate percentages for the two
most recently completed fiscal years for sales of principal products of the
Company:
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PRINCIPAL PRODUCT GROUPS % OF REVENUES FOR 2002 % OF REVENUES FOR 2001
------------------------ ---------------------- ----------------------
- -------------------------------------------------------------------------------------------------------------
Steel Mill Products 64 51
- -------------------------------------------------------------------------------------------------------------
Tubular Products 36 49
- -------------------------------------------------------------------------------------------------------------
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COMPETITIVE CONDITIONS
Competition in the steel industry is intense. The Company faces
significant competition from steel manufacturers in North America as well as the
rest of the world. Competition also comes from manufacturers of other materials
that can be substituted for steel.
World steelmaking capacity currently exceeds demand, which has led to
unfair trading of steel into the North American market. Because of these
conditions, the Company supports trade actions in the form of anti-dumping and
countervailing duty cases or other trade remedies. In recognition of the
overwhelming surge of imported steel, the U.S. government imposed significant
Section 201 sanctions in 2002 against many offshore sources. The action was
taken as the result of the injury these imports inflicted on domestic producers
and to allow domestic producers an opportunity to recover as provided for in
U.S. Section 201 legislation. A similar Canadian action has been proposed and is
under consideration.
NEW PRODUCT INTRODUCTION
The Company has not issued any news releases on the introduction of new
products for 2002.
SOURCES, PRICING AND AVAILABILITY OF RAW MATERIALS
The major raw material used in the steelmaking process is scrap metal.
The Company's total annual consumption of iron and steel scrap is approximately
110% of its liquid steel production tonnage.
In 2002, a total of $500 million was spent on major raw materials and
consumables for the Company's three steelworks, up by 27% from the $395 million
spent in 2001. Included in the amount are expenditures for steel scrap, pig
iron, alloy materials, carbon electrodes, oxygen, refractories, limestone,
natural gas and electricity.
During 2002, IPSCO recycled 3.3 million tons of scrap, the principal
raw material for its steelmills, at an average cost per ton about 15% percent
higher than the previous year. IPSCO's General Scrap Partnership and IPSCO
Direct Inc., an Alberta scrap collection company, provided 12% of the Company's
overall needs. The remainder was readily available from other parties.
Electricity and natural gas are also important variable costs for
IPSCO. These are procured through different methods, including competitive
long-term supply contracts.
IDENTIFIABLE INTANGIBLE PROPERTIES
The Company holds a variety of patents dealing with steelmaking
processes and has made application for a variety of patents dealing with casting
and rolling mill technology. The Company's operations are not dependent to any
significant extent on these or any other patent, license or franchise.
Similarly, the Company's operations are also not dependent upon any single
trademark, although certain trademarks are identified with several of the
Company's products, and are important in the marketing and sale of such
products.
All of IPSCO's operating facilities have received ISO 14001
certification of their environmental management systems.
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BUSINESS CYCLE AND SEASONALITY
The steel industry is highly cyclical in nature and sensitive to
general economic conditions. The financial condition and results of operations
of companies in the steel industry are generally affected by macroeconomic
fluctuations in the U.S., Canadian and global economies. The Company's Canadian
energy tubular product lines are very seasonal, with sales strongest during the
winter and weakest during spring thaw.
RENEGOTIATION OR TERMINATION OF CONTRACTS
Given the purchase order nature of IPSCO's sales, it is not expected
that IPSCO's business will be affected in the current financial year by the
renegotiation or termination of contracts or sub-contracts.
ENVIRONMENT
The Company's operations are subject to environmental regulation in the
various jurisdictions in which it operates. Environmental legislation is
evolving in a manner that requires stricter standards and enforcement, increased
fines and penalties for non-compliance, more stringent environmental assessments
and a heightened degree of responsibility for corporations, their officers,
directors and employees. During 2002, non-routine project expense and capital
spending on programs aimed at environmental issues, amounted to $ 2.7 million,
compared to $11.4 million spent in 2001 (including $7.5 million spent on the
Mobile Steelworks in 2001).
Canada is a signatory to the United Nations Framework Convention on
Climate Change. On December 10, 2002, Parliament ratified the Kyoto Protocol,
which sets binding targets to reduce national emissions of carbon dioxide,
methane and a number of other gases collectively referred to as greenhouse
gases. With ratification completed, focus has shifted to future federal and
provincial legislation to implement programs with industry-specific numerical
goals to meet the reductions set by the Protocol. The Canadian Government has
issued a Climate Change Plan that identifies groups of large industrial
emitters, which will be required to reduce emissions in an effort to meet the
Protocol targets. "Iron and Steel Production Facilities" is one of the sectors
included in this effort. While the Canadian Government has expressed its support
for limiting the impact of the Kyoto Protocol on industry, the specific
processes for achieving the targets have yet to be determined. It is too early
to speculate whether implementation of required processes will have a material
adverse impact on the Company's Canadian operations. The U.S. is not currently a
signator of the Kyoto Protocol.
There is no assurance that future changes in environmental regulation,
if any, will not adversely affect the Company's operations, including its
capital expenditures, earnings and competitive position.
EMPLOYEES
As of December 31, 2002, the Company, directly and through its
subsidiaries, has approximately 2,300 fulltime employees of whom approximately
1,300 are non-unionized personnel and approximately 1,000, mainly in Canada, are
represented by trade unions. The Company also has 32 temporary employees.
Additional work was conducted on the Company's behalf by contractors and
consultants on a contract basis.
FOREIGN OPERATIONS
As disclosed above, the Company operates facilities in Canada and the
U.S. as a consolidated North American company.
8
BANKRUPTCY OR RECEIVERSHIP PROCEEDINGS
Neither the Company nor any of its subsidiaries are, nor have been, the
subject of any bankruptcy, receivership or similar proceedings within the three
most recently completed financial years or the current financial year.
MATERIAL REORGANIZATIONS
There has not been any material reorganization of the Company or any of
its subsidiaries within the three most recently completed financial years or the
current financial year.
ASSET-BACKED SECURITIES
The Company has no asset-backed securities outstanding that were
distributed under a prospectus or otherwise.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
ANNUAL INFORMATION
The following table sets out the consolidated financial results for
each of the last three fiscal years of the Company:
(In millions except per share amounts)
YEAR ENDED DECEMBER 31 2002 2001 2000
- -------------------------------------------------------------------------------------------------
Sales $ 1,081.7 $ 903.7 $ 949.3
Net income 20.3 38.9 57.7
Net income available to common shareholders 8.9 27.4 46.8
EBIT 55.7 66.4 86.9
EBITDA 106.7 103.5 122.2
Free Cash Flow 72.3 (54.3) (248.1)
Total Assets 1,744.3 1,724.1 1,622.7
Long-Term Debt 342.2 386.8 343.8
Net income per common share - Basic $ 0.19 $ 0.67 $ 1.15
Net income per common share - Diluted $ 0.19 $ 0.66 $ 0.91
Dividends declared per common share in CDN$ $ 0.20 $ 0.425 $ 0.50
Dividends declared per preferred share in CDN$ $ 1.375 $ 1.375 $ 1.375
EBIT is defined as earnings before interest expense and income taxes. EBITDA is
defined as earnings before interest expense, income taxes, depreciation and
amortization. Free cash flow is defined as EBITDA less net capital expenditures.
The Company believes that EBIT, EBITDA, and free cash flow are standard measures
of performance that are commonly reported and widely used by analysts, investors
and other interested parties. Accordingly, this information has been disclosed
to permit a more complete comparative analysis of the Company's operating
performance and capitalization relative to other companies. These indicators
should not be considered as a substitute or alternative for net income, net
income available to common shareholders or cash flow.
DIVIDENDS
IPSCO has historically paid a dividend on its outstanding common
shares. The Board of Directors reviews the level of dividend payments regularly,
taking into consideration such factors as North American
9
steel market conditions and the economy in general. Cash conservation is a high
priority in times of uncertain market conditions and therefore IPSCO reduced its
quarterly dividend on Common Shares from CDN $0.125 per share to CDN $0.05 per
share commencing in the fourth quarter of 2001, and the dividend remained at
this level throughout 2002.
For the six million 5.50% Cumulative Redeemable First Preferred Series
1 shares issued at a price of CDN $25 per share in November 1998, quarterly
dividends of CDN $0.34375 have been paid commencing February 15, 1999.
GAAP
The Company presents its consolidated financial information on the
basis of Canadian generally accepted accounting principles ("GAAP").
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following information contained in the Company's 2002 Annual Report
is incorporated herein by reference:
(a) Management's Discussion and Analysis for the year ended
December 31, 2002 as filed with various regulators in Canada
and the United States; and
(b) Audited Consolidated Financial Statements of the Company for
the year ended December 31, 2002, together with the auditors'
report thereon.
MARKET FOR SECURITIES
The common shares of the Company are listed for trading on the Toronto
Stock Exchange and New York Stock Exchange and trade under the symbol "IPS". The
rights of the holders of common shares of the Company are subject to the
provisions of a Shareholder Rights Agreement, dated March 14, 1990, as amended
on April 20, 1995 and May 2, 2001, between the Company and Computershare Trust
Company of Canada.
DIRECTORS AND OFFICERS
NAMES, ADDRESSES AND OCCUPATIONS
The following is a list of directors and executive officers of IPSCO as
at the date hereof:
NAME, POSITION AND DIRECTOR OR OFFICER PRINCIPAL OCCUPATIONS FOR PAST FIVE YEARS
MUNICIPALITY OF RESIDENCE SINCE
Burton M. Joyce 1993 President and Chief Executive Officer and a
Chairman of the Board Director of Terra Industries (1991-2001).
Penhook, Virginia Mr. Joyce retired from this position in 2001
Michael A. Grandin 2003 Chairman and Chief Executive Officer of the
Director Fording Canadian Coal Trust (2003-present),
Calgary, Alberta former President of Pan Canadian Petroleum
Ltd. (2001-2002) and former Chief Financial
Officer of Canadian Pacific Limited (1997-
2001)
10
NAME, POSITION AND DIRECTOR OR OFFICER PRINCIPAL OCCUPATIONS FOR PAST FIVE YEARS
MUNICIPALITY OF RESIDENCE SINCE
Juanita H. Hinshaw 2002 Senior Vice President and Chief Financial
Director Officer of Graybar Electric Company, Inc.
Chesterfield, Missouri (2000-present) and former Vice President and
Treasurer of Monsanto Company (1988-1999)
Thomas E. Kierans, O.C. 1989 Chairman, the Canadian Institute of Advanced
Director Research (September 1999-present) and former
Toronto, Ontario President and Chief Executive Officer of C.
D. Howe Institute for the preceding five
years
Jack D. Michaels 2000 Chairman and Chief Executive Officer of
Director HON INDUSTRIES and former President of
Muscatine, Iowa HON INDUSTRIES in excess of five years
Bernard Michel 1998 Chairman of Cameco Corporation and former
Director President and Chief Executive Officer of
Saskatoon, Saskatchewan Cameco Corporation for the preceding five
years
Allan S. Olson 1989 President of First Industries Corporation
Director
Spruce Grove, Alberta
Arthur R. Price 1979 Chairman and Chief Executive Officer of
Director Axia NetMedia Corporation for the preceding
Calgary, Alberta five years
Richard G. Sim 1994 Chairman, President and Chief Executive
Director Officer of APW Ltd. for the preceding five
Dublin, Ireland years
David Sutherland 2002 - Director President and Chief Executive Officer of
Director and President and 1992 - Officer IPSCO Inc. (2002-present), former Executive
Chief Executive Officer of Vice President and Chief Operating Officer of
IPSCO Inc. IPSCO Inc. (2001) and former Vice President
Naperville, Illinois and General Manager, Raw Materials and
Coil Processing of IPSCO Inc. (1997-2001)
Roger E. Tetrault 1999 In August 2000, Mr. Tetrault retired from his
Director position as Chairman of the Board and Chief
Punta Gorda, Florida Executive Officer of McDermott
International, Inc. which he held for the
preceding four years
Gordon Thiessen, O.C. 2001 Chair, Canadian Public Accountability Board
Director (2002-present) and former Governor of the
Ottawa, Ontario Bank of Canada for the five preceding years
D. Murray Wallace 1975 - 1983 Chairman and Chief Executive Officer of
Director 1991 Park Street Capital Corporation (July 1998 -
London, Ontario present), President of Axia NetMedia
Corporation since September 2000 and former
President and CEO of Avco Financial
Services (1993-1998)
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NAME, POSITION AND DIRECTOR OR OFFICER PRINCIPAL OCCUPATIONS FOR PAST FIVE YEARS
MUNICIPALITY OF RESIDENCE SINCE
John B. Zaozirny, Q.C. 1987 Counsel to McCarthy Tetrault LLP for the
Director preceding five years
Calgary, Alberta
Charles Backman 1983 Senior Vice President and Chief
Senior Vice President and Administrative and Engineering Officer of
Chief Administrative and IPSCO Inc. for the preceding five years
Engineering Officer Regina,
Saskatchewan
David Britten 1999 Vice President and General Manager, Tubular
Vice President and General Products of IPSCO Inc. and has held other
Manager, Tubular Products executive positions with IPSCO Inc. for the
Naperville, Illinois preceding five years
Barry Hodson 1999 Vice President and General Sales Manager of
Vice President and General IPSCO Inc. and has held other executive
Sales Manager positions with IPSCO Inc. for the preceding
Bragg Creek, Alberta five years
Peter MacPhail 1996 Vice President of Primary Operations of
Vice President of Primary IPSCO Inc. and has held other executive
Operations positions with IPSCO Inc. for the preceding
Regina, Saskatchewan five years
Daniel Miksta 2000 Vice President and General Sales Manager of
Vice President and General IPSCO Inc. (2000-present) and former
Sales Manager Director of Commercial and Industrial Sales
Libertyville, Illinois of Inland Steel for the preceding five years
Raymond Rarey 2000 Vice President and Chief Human Resources
Vice President and Chief Officer of IPSCO Inc. (2000-present) and
Human Resources Officer former Vice President, Human Resources for
Geneva, Illinois Berg Electronics Group (1996-1999)
Robert Ratliff 2000 Vice President and Chief Financial Officer of
Vice President and Chief IPSCO Inc. (2000-present) and former
Financial Officer Corporate Controller of Nalco Chemical
Batavia, Illinois Company for the preceding five years
Joseph Russo 1988 Senior Vice President and Chief Technical
Senior Vice President and Officer of IPSCO Inc. and has held other
Chief Technical Officer executive positions with IPSCO Inc. for the
Aurora, Illinois preceding five years
John Tulloch 1986 Senior Vice President and Chief Commercial
Senior Vice President and Officer and former Vice President, General
Chief Commercial Officer Manager, Tubular Products of IPSCO Inc. for
Naperville, Illinois the preceding five years
George Valentine 2001 Vice President and General Counsel of
Vice President and General IPSCO Inc. (2001-present) and Senior Vice
Counsel President, General Counsel and Corporate
Chicago, Illinois Secretary of Terra Industries Inc. for the
preceding five years
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NAME, POSITION AND DIRECTOR OR OFFICER PRINCIPAL OCCUPATIONS FOR PAST FIVE YEARS
MUNICIPALITY OF RESIDENCE SINCE
John Comrie, Q.C. 1983 Secretary of IPSCO Inc. for the preceding
Secretary five years
Naperville, Illinois
Philip Marusarz 2001 Treasurer of IPSCO Inc., former Vice
Treasurer President, Finance of Invensys Inc. (Oct.
Lemont, Illinois 2000-March 2001), former Vice President,
Controller of Netgov.com (April 2000-Oct.
2000), former Director of Finance of Pittway
Corporation (May 1999-April 2000) and
former Chief Financial Officer of Strategic
Research Inc. (April 1997 to May 1999)
Robert Eisner 1997 Assistant Treasurer of IPSCO Inc. and has
Assistant Treasurer held other executive positions with IPSCO
Regina, Saskatchewan Inc. for the preceding five years
Directors are elected annually at the Company's annual general meeting
of shareholders. Each director's term of office will expire on April 30, 2003.
COLLECTIVE SHAREHOLDINGS
As a group, the executive officers and directors of the Company
beneficially own, directly or indirectly, or exercise control or direction over
a total of 151,737 common shares, less than 1% of the issued shares of the
Company.
BOARD COMMITTEES
The following is a list of the Committees of the Board of Directors of
IPSCO as at the date hereof:
- --------------------------------------------------------------------------------
COMMITTEE MEMBERS
- --------------------------------------------------------------------------------
Management Resources and Compensation Burton M. Joyce - Chairman
Committee Thomas E. Kierans
Bernard Michel
Jack Michaels
Richard G. Sim
Roger E. Tetrault
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Audit Committee D. Murray Wallace - Chairman
Juanita Hinshaw
Allan S. Olson
Arthur R. Price
John B. Zaozirny
- --------------------------------------------------------------------------------
Governance and Compliance Committee Burton M. Joyce - Chairman
Allan S. Olson
Jack Michaels
John B. Zaozirny
- --------------------------------------------------------------------------------
CORPORATE CEASE TRADE ORDERS AND BANKRUPTCIES
None of the directors or officers of the Company, or, to IPSCO's
knowledge, shareholders holding sufficient shares to materially affect the
control of the Company is, or within the previous 10 years, has been a director
or officer of any other issuer that, while acting in such capacity, (i) was
subject to a cease
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trade or similar order or an order that denied the issuer access to any
exemptions under Canadian securities legislation for a period of more than 30
consecutive days, or (ii) became bankrupt, made a proposal under any legislation
relation to bankruptcy or insolvency or was subject to or instituted any
proceeding, arrangement or compromise with creditors or had a receiver, receiver
manager or trustee appointed to hold the assets of such issuer except for the
following: Mr. M. Grandin was a director of Pegasus Gold Inc. ("Pegasus") when
it filed a voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code in January of 1998. The United States Bankruptcy Court, District
of Nevada confirmed the joint liquidating plan of reorganization filed by
Pegagsus in December 1998 and Pegasus' successor company emerged from bankruptcy
in 1999. Mr. R. Sim was a director of APW Ltd. ("APW") when APW filed a
voluntary petition for relief under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the Southern District of New York
in May 2002. In July 2002, the noted bankruptcy court entered an order
confirming APW's plan of reorganization and APW's successor corporation emerged
from bankruptcy on July 31, 2002. Mr. R. Tetrault was a director of the Babcock
& Wilcox Company ("B&W") when it filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy
Court for the Eastern District of Louisiana in February 2000. In December 2002
B&W filed a substantially complete consensual plan of reorganization and
settlement agreement with the noted bankruptcy court and is awaiting such
court's confirmation of the plan.
PENALTIES OR SANCTIONS
None of the directors or officers of the Company, or, to IPSCO's
knowledge, shareholders holding sufficient shares to materially affect the
control of the Company has been subject to (i) any penalties or sanctions
proposed by a court relating to Canadian securities legislation or by a Canadian
securities regulatory authority or have entered into a settlement agreement with
a Canadian securities regulatory authority, or (ii) any other penalties or
sanctions imposed by a court of regulatory body that would likely be considered
important to a reasonable investor in making an investment decision.
PERSONAL BANKRUPTCIES
None of the directors or officers of the Company, or, to IPSCO's
knowledge, shareholders holding sufficient shares to materially affect the
control of the Company, or a personal holding company of any such persons has
become, within the previous 10 years of this annual information form, bankrupt,
made a proposal under any legislation relating to bankruptcy or insolvency or
was subject to or instituted any proceedings, arrangement or compromise with
creditors or had a receiver, receiver manager or trustee appointed to hold their
assets.
CONFLICTS OF INTEREST
To IPSCO's knowledge, there are no existing or potential material
conflicts of interest between the Company or a subsidiary of the Company and a
director or officer of the Company or a subsidiary of the Company.
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NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information contained in this document and in the documents
incorporated or deemed to be incorporated by reference herein, other than
historical information, may be considered forward-looking. Forward-looking
information reflects Management's current views of future events and financial
performance that involve a number of risks and uncertainties. The factors that
could cause actual results to differ materially include, but are not limited to,
the following: general economic conditions, changes in financial markets,
political conditions and developments, including conflict in the Middle East and
the war on terrorism, changes in the supply and demand for steel and specific
steel products of the Company, the level of demand outside of North America for
steel and steel products, equipment performance at the Company's manufacturing
facilities, the progress of any material lawsuits, the availability of capital,
the ability to properly and efficiently staff the Company's manufacturing
facilities, domestic and international competitive factors, including the level
of steel imports into the Canadian and United States markets, economic
conditions in steel exporting nations, trade sanction activities and the
enforcement of trade sanction remedies, supply and demand for scrap steel and
iron, alloys and other raw materials, supply, demand and pricing for the
electricity and natural gas used by the Company, changes in environmental and
other regulations, including regulations arising from the Canadian Parliament's
ratification of the Kyoto Protocol, and the magnitude of future environmental
expenditures, inherent uncertainties in the development and performance of new
or modified equipment or technologies, North American interest rates, exchange
rates and other risks detailed in the "Business Risks and Uncertainties" section
of this document. This list is not exhaustive of the factors which may impact
the Company's forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on the
Company's forward-looking statements. As a result of the foregoing and other
factors, no assurance can be given as to any such future results, levels of
activity or achievements and neither the Company nor any other person assumes
responsibility for the accuracy and completeness of these forward-looking
statements. The Company undertakes no obligation to update forward-looking
statements contained in this document.
ADDITIONAL INFORMATION
Additional information, including particulars of directors' and
officers' remuneration and indebtedness, principal holders of the Company's
securities, options to purchase securities and interest of insiders in material
transactions, where applicable, is contained in the Management Proxy Circular of
the Company for the Annual General Meeting of the Shareholders of the Company to
be held on Wednesday, April 30, 2003. Additional financial information is
provided in the Company's Audited Consolidated Financial Statements for the year
ended December 31, 2002.
The Company will provide to any person, on request to the Secretary of
the Company:
(a) when the Company's securities are in the course of a distribution
pursuant to a short form prospectus or a preliminary short form
prospectus:
(i) one copy of this annual information form, together with one
copy of any document, or the pertinent pages of any document,
incorporated by reference herein;
(ii) one copy of the comparative financial statements of the
Company for its most recently completed financial year,
together with the accompanying report of the Company's auditor
and one copy of the most recent interim financial statements
of the Company that have been filed, if any, for the period
after the end of the most recently completed financial year;
(iii) one copy of the management proxy circular of the Company in
respect of its most recent annual meeting of shareholders that
involved the election of directors or of any annual filing
prepared in lieu of that management proxy circular; and
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(iv) one copy of any documents that are incorporated by reference
into the preliminary short form prospectus or the short form
prospectus and are not required to be provided under (i)
through (iii) above; or
(b) at any other time, one copy of any other documents referred to in
(a)(i), (ii) and (iii) above, for which the Company may require the
payment of a reasonable charge if the request is made by a person who
is not a security holder of the Company.
For copies of documents, please check the Company's website
(www.ipsco.com) or contact:
Mr. John Comrie, Q.C.
Secretary
650 Warrenville Road, Suite 500
Lisle, Illinois
60532
Telephone: (630) 810-4800
Facsimilie: (630) 810-4602
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