EXTENDICARE HEALTH SERVICES INC.
EARNINGS TO FIXED CHARGE CALCULATION
PROFORMA
------------------------------
6 months 12 months ACTUAL FOR SIX MONTHS ENDED
ended ended ---------------------------
June 30 Dec. 31 June 30 June 30
2002 2001 2002 2001
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EARNINGS FROM CONTINUING OPERATIONS
Earnings before extraordinary items, taxes 3,986 (45,360) 7,249 (21,327)
and minority interest
Add: Fixed charges 21,793 49,815 18,530 23,286
Amortization of interest capitalized - - - -
Less: Interest capitalized - - - -
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EARNINGS 25,779 4,455 25,779 1,959
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FIXED CHARGES
Interest expense (including amortization 19,234 43,285 15,970 19,831
of deferred financing charges)
Interest capitalized - - - -
Estimate of interest within rental expense 2,560 6,530 2,560 3,455
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TOTAL FIXED CHARGES 21,793 49,815 18,530 23,286
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EARNINGS TO FIXED CHARGES RATIO 1.18 0.09 1.39 0.08
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DOLLAR AMOUNT OF THE DEFICIENCY na 45,360 na 21,327
(if less than 1:1 ratio)
ESTIMATE OF INTEREST WITHIN RENT EXPENSE:
Rental expense 5,714 14,575 5,714 7,711
Multiplier 8 8 8 8
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Value of rented equipment/assets 45,712 116,600 45,712 61,688
Equity assumed at 20% 9,142 23,320 9,142 12,338
Debt of Lessor 36,570 93,280 36,570 49,350
Estimated interest rate 7.0% 7.0% 7.0% 7.0%
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Estimated interest expense in rent 2,560 6,530 2,560 3,455
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PROFORMA IMPACT OF DEBT OFFERING
Interest expense as reported 15,970 37,857
Incremental interest expense 3,264 5,428
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Proforma interest expense 19,234 43,285
============== ==============
Earnings as reported 7,249 (39,932)
Incremental interest expense (3,264) (5,428)
-------------- --------------
Proforma earnings 3,986 (45,360)
============== ==============
ACTUAL FOR 12 MONTHS ENDED
-----------------------------------------------------------------------
June 30 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 (11,356) (39,932) (82,346) (123,180) 109,252 59,130
and minority interest
Add: Fixed charges 39,631 44,387 53,588 60,251 66,175 30,919
Amortization of interest capitalized - - - - - -
Less: Interest capitalized - - - (301) (1,099) (825)
------------ ---------- ---------- ---------- ---------- ---------
EARNINGS 28,275 4,455 (28,758) (63,230) 174,328 89,224
------------ ---------- ---------- ---------- ---------- ---------
FIXED CHARGES
Interest expense (including amortization 33,996 37,857 46,541 52,499 57,955 25,519
of deferred financing charges)
Interest capitalized - - - 301 1,099 825
Estimate of interest within rental expense 5,635 6,530 7,047 7,451 7,121 4,575
------------ ---------- ---------- ---------- ---------- ---------
TOTAL FIXED CHARGES 39,631 44,387 53,588 60,251 66,175 30,919
------------ ---------- ---------- ---------- ---------- ---------
EARNINGS TO FIXED CHARGES RATIO 0.71 0.10 (0.54) (1.05) 2.63 2.89
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DOLLAR AMOUNT OF THE DEFICIENCY 11,356 39,932 82,346 123,481 na na
(if less than 1:1 ratio)
ESTIMATE OF INTEREST WITHIN RENT EXPENSE:
Rental expense 12,578 14,575 15,731 16,631 15,895 10,213
Multiplier 8 8 8 8 8 8
------------ ---------- ---------- ---------- ---------- ---------
Value of rented equipment/assets 100,624 116,600 125,848 133,048 127,160 81,704
Equity assumed at 20% 20,125 23,320 25,170 26,610 25,432 16,341
Debt of Lessor 80,499 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 5,635 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