Extendicare Real Estate Investment Trust 6-K Extendicare Achieves 75% Increase in Third Quarter Earnings

Exhibit 99.1

FOR IMMEDIATE RELEASE
November 6, 2003

Extendicare Achieves 75% Increase in Third Quarter Earnings

• Third quarter net earnings reach $13.8 million

• Average US nursing home occupancy reaches 91.6%

• Medicare census remains strong at 15.2%

• Independent actuary confirms adequacy of balance sheet reserves

• Announces purchase of 99-bed nursing home in Wisconsin for US$4.4 million

MARKHAM, ONTARIO (TSX: EXE and EXE.A; NYSE: EXE.A). Extendicare Inc. released its financial results for the third quarter ended September 30, 2003.

For the quarter, Extendicare’s net earnings increased to $13.8 million, or $0.19 per diluted share, up from $7.9 million, or $0.11 per diluted share, reflecting a 75% increase over the same period last year. For the nine month period, net earnings increased to $43.8 million, or $0.62 per diluted share compared to $15.9 million or $0.22 per diluted share in 2002.

“The Company’s strong performance during the period was attributable to solid operating results from all segments of our business,” said Mel Rhinelander, President and Chief Executive Officer of Extendicare Inc. “In the United States we achieved high levels of overall nursing home occupancy while maintaining strong Medicare census levels. In Canada, Extendicare benefited from the governments of Ontario and Alberta’s improved funding for long-term care services.”

Third Quarter Operational Highlights:

• Extendicare benefited from an average 4.7% rise in Medicaid revenue per day, increasing quarterly revenue by $7.4 million.

• The Ontario and Alberta governments implemented long-term care spending increases effective July 1 and August 1, respectively. These combined funding changes improved the Company’s third quarter revenue from Canadian operations by approximately $3.0 million and EBITDA by approximately $1.5 million.

• The Company also benefited from the opening of new nursing homes in Ontario, adding approximately $6.3 million of revenue and EBITDA of $1.4 million to the quarter. Four nursing homes were opened in 2003, with an additional one scheduled to open in January.

Average U.S. nursing home occupancy climbed to 91.6% in the 2003 third quarter from 90.8% in the third quarter of 2002, and from 91.2% in the 2003 second quarter. Medicare increased to 15.2% of total nursing home census from 13.3% in the 2002 third quarter.

Extendicare’s cash provided by operations, prior to the net change in operating working capital, for the three months ended September 30, 2003 was $32.1 million ($0.47 per share) compared to $39.5 million ($0.56 per share) in the 2002 third quarter. The 2002 third quarter cash flow included a $20.9 million cash dividend from Crown Life Insurance Company.

The majority of the states in which the Company operates enacted changes to their Medicaid funding levels on July 1, 2003, which resulted in an increase in the Company’s average Medicaid rate of 3.3% from the second quarter of 2003, contributing $4.7 million (US$3.4 million) of additional revenue. However, in conjunction with the Medicaid rate increases, some states imposed provider taxes, which increased the Company’s operating costs by $2.8 million (US$1.8 million) in the third quarter of 2003.

The October 1, 2003, 6.26% Medicare rate increase (comprised of a 3.26% administrative fix and a 3% market basket adjustment) should improve Extendicare’s revenue by an annualized total of about $19.0 million (US$13.3 million) based on Medicare census for the first nine months of this year. “The Company supports the industry commitment issued to Senator Grassley, Chairman of the U.S. Senate Committee on Finance, to ensure the 3.26% administrative fix is spent on patient care and services,” continued Mr. Rhinelander.

Notwithstanding the funding increases in the U.S. and Canada, the Company anticipates results in the fourth quarter will be tempered by a number of cost factors including: seasonality, the impact of holidays, and wage and utility increases, but will still show a significant increase over the same quarter last year.

“Our strategy of maintaining our focus on revenue growth by census improvement will remain a key component of our business plan going forward in 2004,” concluded Mr. Rhinelander.

Quarters ended September 30, 2003 and September 30, 2002

Revenue increased by $36.1 million, or 8.3% over the prior year period, before the impact of the change in the foreign exchange rate of $40.2 million, the ceasing of home health care operations in British Columbia of $6.3 million, and the sale of an Alberta nursing home of $0.5 million. The U.S. operations contributed $20.4 million to this increase and $15.7 million was from the Canadian operations. The keys to this strong improvement were growth in Medicare patient census, higher funding levels, the new Ontario homes, higher home health care volumes, and additional management contracts.

Revenue from U.S. operations for the 2003 third quarter included: $2.7 million (US$1.9 million) of prior period Medicaid cost settlements; and a provision of $3.1 million (US$2.2 million) related to pre-1999 Medicare cost settlements.

EBITDA rose to $50.7 million in the 2003 third quarter from $43.0 million in the same quarter last year. EBITDA as a percent of revenue increased to 11.7% from 9.7% in the prior year quarter.

U.S. EBITDA increased 14.2% to $36.6 million from $32.1 million in the prior year quarter. Growth in Medicare patient census and higher Medicaid and private payor rates contributed to earnings. A stronger Canadian dollar on translation of U.S. results negatively impacted EBITDA by $4.6 million and net earnings by $0.9 million.

EBITDA from Canadian operations rose 28.6% to $14.0 million from $10.9 million in the prior year period. Earnings strengthened due to the third quarter Ontario and Alberta funding improvements of about $1.5 million, the opening of new Ontario nursing homes of approximately $1.4 million, improvements in home health care operations, and additional management contracts.

Pre-tax earnings from health care operations increased by $10.0 million to $20.1 million from $10.1 million in the prior year period.

Nine Months ended September 30, 2003 and September 30, 2002

Revenue increased by $95.9 million, or 7.5% over the prior year period, before the impact of the change in the foreign exchange rate of $91.7 million, the ceasing of home health care operations in British Columbia of $17.0 million, and the sale of an Alberta nursing home of $0.9 million. The U.S. operations contributed $59.4 million to this increase and $36.5 million was from the Canadian operations. The factors contributing to this strong improvement were growth in Medicare patient census, higher funding levels, the new Ontario homes, higher home health care volumes, and additional management contracts.

In the nine months ended September 30, 2003, average U.S. nursing home occupancy rose to 91.4% from 90.0% in the comparable 2002 period, with Medicare representing 15.4% of resident days, up from 13.1% in the prior year period.

The 2003 nine month results included an after-tax gain from asset disposals and other items of $0.9 million, or $0.01 per share, compared to the prior year after-tax loss from asset disposals and other items of $3.8 million, or $0.05 loss per share.

EBITDA rose 9.5% to $136.2 million in the nine months ended September 30, 2003 from $124.4 million in the same period last year. EBITDA as a percent of revenue increased to 10.5% from 9.5% in the nine months ended September 30, 2002. The stronger Canadian dollar on translation of U.S. results negatively impacted EBITDA by $10.1 million and net earnings by $1.6 million.

Pre-tax earnings from health care operations rose by $24.0 million to $44.1 million from $20.1 million in the 2002 comparative period.

Other Items

The Company has just completed an interim independent actuarial review of resident care liability costs, based on data through September 30, which confirms the adequacy of balance sheet reserves for liability claims.

Extendicare is completing a project to install sprinkler systems in the few remaining facilities that do not currently have them in both the U.S. and Canada.

EHSI is in the process of acquiring a 99-bed nursing home, built in 1999 in Manitowoc, Wisconsin for approximately US$4.4 million. The transaction also includes an adjacent five acres of land and is expected to close by the end of 2003, pending regulatory approval.

As previously announced pending regulatory approval, Extendicare expects to close the sale of a nursing and retirement home in Ontario in the fourth quarter.

Under the terms of its November 27, 2002 Normal Course Issuer Bid, the Company has purchased to date for cancellation 1,390,100 Subordinate Voting and Multiple Voting shares at an average cost per share of $4.03, of which 1,370,100 were acquired in 2003 at an average cost per share of $4.02. This bid expires on November 26, 2003. Subject to regulatory approval, the Board of Directors of the Company intends to commence a Normal Course Issuer Bid on November 27, 2003, for just less than 10% of the public float of each of the Company’s Subordinate Voting Shares and Class II Preferred Shares, Series 1 (EXE.PR.E), and for just less than 5% of the outstanding Multiple Voting Shares.

At their meeting today, the Directors declared a monthly dividend of $0.075 per share on Extendicare’s Class II Preferred Shares, Series 1, payable on December 15, 2003 to shareholders of record on November 28, 2003. Extendicare, through its subsidiaries, operates 276 long-term care facilities across North America, with capacity for over 29,000 residents. As well, through its operations in the United States, Extendicare offers medical specialty services such as subacute care and rehabilitative therapy services, while home health care services are provided in Canada. The Company employs 36,400 people in the United States and Canada.

In a separate news release issued today, Extendicare Inc. announced the 2003 third quarter financial results of its wholly owned U.S. subsidiary, Extendicare Health Services, Inc.

On November 7, 2003, at 10:00 a.m. (EST), Extendicare Inc. will hold a conference call to discuss its results for the third quarter. The toll-free number for the call is 1-800-273-9672. Local callers please dial 416-695-5806. For those unable to listen to the call live, a taped rebroadcast will be available from two hours after completion of the live call until midnight on November 21, 2003. To access the rebroadcast, dial 1-800-408-3053. Local callers please dial 416-695-5800. The conference ID number is 1482030. The call will also be webcast live, and archived, in the investor information section of Extendicare’s website, www.extendicare.com. In addition, the Company has posted a supplemental information package on its website under investor information/investor documents/supplemental information, which contains historical quarterly financial and operating statistics.

Statements contained in this release other than statements of historical fact, including statements regarding anticipated financial performance, business strategy and management’s plans and objectives for future operations, are forward-looking statements. These forward-looking statements can be identified as such because the statements generally include words such as “expect”, “intend”, “anticipate”, “believe”, “estimate”, “plan” or “objective” or other similar expressions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, these statements. In addition to the risks and uncertainties related to these statements, other risks and uncertainties are identified in Extendicare Inc.’s or Extendicare Health Services, Inc.’s filings with Canadian and United States securities regulators and include, but are not limited to, the following: changes in the health care industry in general and the long-term care industry in particular because of political and economic influences; changes in regulations governing the industry and the Company’s compliance with such regulations; changes in government funding levels for health care services; resident care litigation, including exposure for punitive damage claims and increased insurance costs, and other claims asserted against the Company; the Company’s ability to attract and retain qualified personnel; the availability and terms of capital to fund the Company’s capital expenditures; changes in competition; and demographic changes. Given these risks and uncertainties, readers are cautioned not to place undue reliance on the Company’s forward-looking statements. All forward-looking statements contained in this report are necessarily estimates reflecting the best judgement of the party making such statements based upon current information, and the Company assumes no obligation to update any forward-looking statement.

For further information, contact:

Christopher Barnes
Manager, Investor Relations
Phone: (905) 470-5483
Fax: (905) 470-4003
Email: cbarnes@extendicare.com

Visit Extendicare’s Website @www.extendicare.com

EXTENDICARE INC.

Consolidated Statements of Earnings
(unaudited)

		Three months ended				Nine months ended
(thousands of Canadian dollars except per share amounts)		September 30				September 30
		2003		2002		2003			2002
				(note 1)					(note 1)
Revenue
Nursing and assisted living centres
	United States		294,044		313,134		891,774			920,740
	Canada		90,858		80,198		257,166			232,433
Outpatient therapy — U.S.			4,171		3,892		12,501			11,911
Home health — Canada			33,440		35,688		101,218			109,331
Other			10,541		11,042		30,412			32,284
			433,054		443,954		1,293,071			1,306,699
Operating and administrative costs			377,530		394,608		1,142,803			1,163,545
Lease costs			4,873		6,366		14,041			18,740
EBITDA(note 2)			50,651		42,980		136,227			124,414
Depreciation and amortization			15,816		17,021		47,672			51,393
Interest, net			14,768		15,876		45,323			46,306
Loss (gain) from asset disposals and other items			—		—		(905	)		6,579
Earnings before income taxes			20,067		10,083		44,137			20,136
Income taxes
Current			5,521		1,495		11,102			5,363
Future			1,977		2,561		5,593			4,288
			7,498		4,056		16,695			9,651
Earnings from health care			12,569		6,027		27,442			10,485
Share of earnings of Crown Life			1,197		1,893		16,325			5,452
Net earnings			13,766		7,920		43,767			15,937
Basic earnings per share			0.20		0.11		0.63			0.22
Diluted earnings per share			0.19		0.11		0.62			0.22

Notes:
(1)	Certain reclassifications have been made to the prior period results to conform to the 2003 presentation.
(2)	EBITDA refers to earnings before interest, taxes, depreciation, amortization, and loss (gain) from asset disposals and other items.

EXTENDICARE INC.

Consolidated Statements of Cash Flows
(unaudited)

		Three months ended						Nine months ended
(thousands of Canadian dollars)		September 30						September 30
		2003			2002			2003			2002
Cash provided by (used in) operations
Net earnings			13,766			7,920			43,767			15,937
Adjustments for:
	Depreciation and amortization		15,816			17,021			47,672			51,393
	Provision for self-insured liabilities		3,240			4,049			9,915			12,599
	Payments for self-insured liabilities		(4,379	)		(11,100	)		(27,245	)		(41,299	)
	Reserve for settlement with third parties		3,145			—			3,145			—
	Future income taxes		1,977			2,561			5,593			4,288
	Loss (gain) from asset disposals and other items		—			—			(905	)		6,579
	Undistributed share of earnings of Crown Life, net of dividends received		(1,197	)		18,989			(16,325	)		16,544
	Other		(246	)		36			1,016			2,201
			32,122			39,476			66,633			68,242
Net change in operating working capital, excluding cash
	Accounts receivable		1,932			(7,901	)		7,444			7,972
	Inventories, supplies and prepaid expenses		2,444			882			(1,506	)		(4,966	)
	Accounts payable and accrued liabilities		(4,304	)		8,623			(12,036	)		7,817
	Income taxes		689			908			265			(2,212	)
			32,883			41,988			60,800			76,853
Cash provided by (used in) investment activities
Property and equipment			(16,382	)		(14,942	)		(44,252	)		(33,684	)
Net proceeds from dispositions			—			—			2,047			19,680
Other assets			(1,260	)		597			(641	)		6,477
			(17,642	)		(14,345	)		(42,846	)		(7,527	)
Cash provided by (used in) financing activities
Issue of long-term debt			—			—			11,021			235,585
Repayment of long-term debt			(4,348	)		(3,695	)		(8,980	)		(233,369	)
Decrease (increase) in investments held for self-insured liabilities			(2,336	)		(22,562	)		8,030			(21,343	)
Purchase of shares for cancellation			(2,984	)		(5,715	)		(5,766	)		(7,386	)
Financing costs			(121	)		(1,087	)		(156	)		(12,429	)
Other			773			(870	)		549			(1,867	)
			(9,016	)		(33,929	)		4,698			(40,809	)
Foreign exchange gain (loss) on cash held in foreign currency			29			2,237			(7,326	)		487
Increase (decrease) in cash and cash equivalents			6,254			(4,049	)		15,326			29,004
Cash and cash equivalents at beginning of period			61,696			58,602			52,624			25,549
Cash and cash equivalents at end of period			67,950			54,553			67,950			54,553

EXTENDICARE INC.

Consolidated Balance Sheets
(unaudited)

		September 30		December 31
(thousands of Canadian dollars)		2003		2002
Assets
Current assets
	Cash and short-term investments		80,028		56,815
	Accounts receivable		160,807		191,443
	Income taxes recoverable		14,787		17,912
	Future income taxes		47,035		55,849
	Inventories, supplies and prepaid expenses		15,591		15,709
			318,248		337,728
Property and equipment			833,297		953,591
Goodwill and other intangible assets			101,956		120,504
Other assets			252,197		276,505
			1,505,698		1,688,328
Investment in Crown Life Insurance Company			136,911		121,508
			1,642,609		1,809,836
Liabilities and Shareholders’ Equity
Current liabilities
	Bank overdraft		12,078		4,191
	Accounts payable and accrued liabilities		265,342		311,062
	Accrual for self-insured liabilities		36,447		55,216
	Current maturities of long-term debt		6,807		6,209
			320,674		376,678
Accrual for self-insured liabilities			64,372		81,735
Long-term debt			773,405		846,734
Other liabilities			40,497		47,328
Future income taxes			91,940		99,335
			1,290,888		1,451,810
Share capital			311,751		317,314
Retained earnings (deficit)			16,955		(26,545	)
Foreign currency translation adjustment account			23,015		67,257
			1,642,609		1,809,836
Closing US/Cdn. Dollar Exchange Rate			1.3499		1.5776

EXTENDICARE INC.

Financial and Operating Statistics
(unaudited)

	Three months ended						Nine months ended
(dollar amounts in Canadian dollars, unless otherwise noted)	September 30						September 30
	2003			2002			2003			2002
Revenue(millions)
United States	$	307.1		$	326.9		$	929.5		$	961.7
Canada		126.0			117.1			363.6			345.0
	$	433.1		$	444.0		$	1,293.1		$	1,306.7
EBITDA(millions)
United States	$	36.6		$	32.1		$	102.2		$	96.4
Canada		14.0			10.9			34.0			28.0
	$	50.7	(a)	$	43.0		$	136.2		$	124.4
Health Care Net Earnings(millions)
United States	$	7.6		$	2.7		$	16.6		$	4.4
Canada		5.0			3.3			10.8			6.1
	$	12.6		$	6.0		$	27.4		$	10.5
Components of Basic Earnings per Share
Health care operations, after preferred share dividends	$	0.18		$	0.08		$	0.38		$	0.19
Gain (loss) from asset disposals		—			—			0.01			(0.05	)
Share of earnings of Crown Life		0.02			0.03			0.24			0.08
	$	0.20		$	0.11		$	0.63		$	0.22
Cash Flow from Operations, before changes in Working Capital, per Share	$	0.47		$	0.56		$	0.97		$	0.96
U.S. Nursing Centre Percent of Revenue by Payor Source
Private/other		18.5	%		19.4	%		18.6	%		19.2	%
Medicare		27.8			27.6			28.8			27.3
Medicaid		53.7			53.0			52.6			53.5
U.S. Nursing Centre Patient Days by Payor Source(thousands)
Private/other		202.8			214.3			605.0			632.9
Medicare		181.2			156.6			540.1			454.0
Medicaid		804.6			804.6			2,370.0			2,376.0
U.S. Average Medicare Part A Rate(US dollars)	$	294.12		$	311.11		$	292.93		$	311.55
Average Occupancy (excluding managed facilities)
U.S. nursing		91.6	%		90.8	%		91.4	%		90.0	%
U.S. assisted living		86.9			84.5			86.0			83.1
U.S. nursing and assisted living		91.1			90.1			90.8			89.3
Extendicare Inc. total facilities in operation		93.2			92.5			92.7			91.7
Extendicare Inc., same-facility basis		93.3			92.5			93.0			91.9
Average US/Cdn. Dollar Exchange Rate		1.3807			1.5626			1.4295			1.5705

(a) Does not add due to rounding.