EXHIBIT 12
EXTENDICARE HEALTH SERVICES INC.
EARNINGS TO FIXED CHARGE CALCULATION
PROFORMA
---------------------- ACTUAL FOR THREE
3 months 12 months MONTHS ENDED
ended ended -------------------
Mar. 31 Dec. 31 Mar. 31 Mar. 31
2002 2001 2002 2001
-------- --------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS
Earnings before extraordinary items, taxes
and minority interest 1,613 (45,360) 2,970 (10,430)
Add: Fixed charges 11,046 49,815 9,689 11,993
Amortization of interest capitalized - - - -
Less: Interest capitalized - - - -
------- ------- ------- -------
EARNINGS 12,659 4,455 12,659 1,563
======= ======= ======= =======
FIXED CHARGES
Interest expense (including amortization
of deferred financing charges) 9,687 43,285 8,330 10,283
Interest capitalized - - - -
Estimate of interest within rental expense 1,359 6,530 1,359 1,710
------- ------- ------- -------
TOTAL FIXED CHARGES 11,046 49,815 9,689 11,993
======= ======= ======= =======
EARNINGS TO FIXED CHARGES RATIO 1.15 0.09 1.31 0.13
------- ------- ------- -------
DOLLAR AMOUNT OF THE DEFICIENCY na 45,360 na 10,430
(if less than 1:1 ratio)
ESTIMATE OF INTEREST WITHIN RENT EXPENSE:
Rental expense 3,034 14,575 3,034 3,817
Multiplier 8 8 8 8
------- ------- ------- -------
Value of rented equipment/assets 24,272 116,600 24,272 30,536
Equity assumed at 20% 4,854 23,320 4,854 6,107
Debt of Lessor 19,418 93,280 19,418 24,429
Estimated interest rate 7.0% 7.0% 7.0% 7.0%
------- ------- ------- -------
Estimated interest expense in rent 1,359 6,530 1,359 1,710
======= ======= ======= =======
PROFORMA IMPACT OF DEBT OFFERING
Interest expense as reported 8,330 37,857
Incremental interest expense 1,357 5,428
------- -------
Proforma interest expense 9,687 43,285
======= =======
Earnings as reported 2,970 (39,932)
Incremental interest expense (1,357) (5,428)
------- -------
Proforma earnings 1,613 (45,360)
======= =======
<Table>
ACTUAL FOR 12 MONTHS ENDED
------------------------------------------------------------------
Mar. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31
2002 2001 2000 1999 1998 1997
------- ------- ------- ------- ------- -------
EARNINGS FROM CONTINUING OPERATIONS
Earnings before extraordinary items, taxes
and minority interest (26,532) (39,932) (82,346) (123,180) 109,252 59,130
Add: Fixed charges 42,083 44,387 53,588 60,251 66,175 30,919
Amortization of interest capitalized - - - - - -
Less: Interest capitalized - - - (301) (1,099) (825)
------- ------- ------- ------- ------- --------
EARNINGS 15,551 4,455 (28,758) (63,230) 174,328 89,224
======= ======= ======= ======= ======= ========
FIXED CHARGES
Interest expense (including amortization
of deferred financing charges) 35,904 37,857 46,541 52,499 57,955 25,519
Interest capitalized - - - 301 1,099 825
Estimate of interest within rental expense 6,179 6,530 7,047 7,451 7,121 4,575
------- ------- ------- ------- ------- --------
TOTAL FIXED CHARGES 42,083 44,387 53,588 60,251 66,175 30,919
======= ======= ======= ======= ======= ========
EARNINGS TO FIXED CHARGES RATIO 0.37 0.10 (0.54) (1.05) 2.63 2.89
------- ------- ------- ------- ------- --------
DOLLAR AMOUNT OF THE DEFICIENCY 26,532 39,932 82,346 123,481 na na
(if less than 1:1 ratio)
ESTIMATE OF INTEREST WITHIN RENT EXPENSE:
Rental expense 13,792 14,575 15,731 16,631 15,895 10,213
Multiplier 8 8 8 8 8 8
------- ------- ------- ------- ------- --------
Value of rented equipment/assets 110,336 116,600 125,848 133,048 127,160 81,704
Equity assumed at 20% 22,067 23,320 25,170 26,610 25,432 16,341
Debt of Lessor 88,269 93,280 100,678 106,438 101,728 65,363
Estimated interest rate 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
------- ------- ------- ------- ------- --------
Estimated interest expense in rent 6,179 6,530 7,047 7,451 7,121 4,575
======= ======= ======= ======= ======= ========
PROFORMA IMPACT OF DEBT OFFERING
Interest expense as reported
Incremental interest expense
Proforma interest expense
Earnings as reported
Incremental interest expense
Proforma earnings
</Table>