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EXHIBIT 12
EXTENDICARE HEALTH SERVICES, INC.
RATIO OF EARNINGS TO FIXED CHARGES
PROFORMA
-------------------------------------- ACTUAL FOR THREE
3 MONTHS 12 MONTHS MONTHS ENDED
ENDED ENDED -------------------------------
MAR. 31 DEC. 31 MAR. 31 MAR. 31
2004 2003 2004 2003
------- -------- -------- -------
Earnings before income taxes from
continuing operations 17,454 41,923 14,986 3,828
Add: fixed charges 6,877 28,267 9,345 9,503
Add: Amortization of interest capitalized - - - -
Less: interest capitalized (131) (75) (131) -
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Earnings before fixed charges 24,200 70,115 24,200 13,331
=========================================================================
Fixed charges:
Interest expense (including amortization
of deferred financing costs) 5,732 24,109 8,200 8,495
Interest capitalized 131 75 131 -
Estimate of interest within lease expense 1,014 4,083 1,014 1,008
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Total fixed charges 6,877 28,267 9,345 9,503
=========================================================================
Earnings to fixed charge ratio 3.52 2.48 2.59 1.40
=========================================================================
Dollar Amount Of The Deficiency
(if less than 1:1 Ratio) not applic not applic not applic not applic
=========================================================================
ESTIMATE OF INTEREST WITHIN RENT EXPENSE:
- -----------------------------------------
Lease expense 2,264 9,113 2,264 2,251
Multiplier 8 8 8 8
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Value of rented equipment/assets 18,112 72,904 18,112 18,008
Lessors' equity assumed at 20% 3,622 14,581 3,622 3,602
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Debt of lessor 14,490 58,323 14,490 14,406
Estimated interest rate 7.0% 7.0% 7.0% 7.0%
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Lessor financing charge 1,014 4,083 1,014 1,008
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PROFORMA IMPACT OF DEBT OFFERING
- --------------------------------
Actual fixed charges 9,345 38,139
Interest savings from debt offering (2,468) (9,872)
------------------------------------
Proforma interest expense 6,877 28,267
====================================
Earnings before fixed charges 14,986 32,051
Proforma adjustment to earnings 2,468 9,872
------------------------------------
Proforma earnings before fixed charges 17,454 41,923
====================================
ACTUAL FOR 12 MONTHS ENDED
----------------------------------------------------------------------------------
MAR. 31 DEC. 31 DEC. 31 DEC. 31 DEC. 31 DEC. 31 DEC. 31
2004 2003 2002 2001 2000 1999 1998
------- ------- ------- ------- ------- ------- -------
Earnings before income taxes from
continuing operations 43,209 32,051 6,337 (39,932) (82,346) (123,180) 109,252
Add: fixed charges 37,980 38,139 38,422 44,387 53,588 60,251 66,175
Add: Amortization of interest capitalized - - - - - - -
Less: interest capitalized (206) (75) - - - (301) (1,099)
---------------------------------------------------------------------------------
Earnings before fixed charges 80,983 70,115 44,759 4,455 (28,758) (63,230) 174,328
=================================================================================
Fixed charges:
Interest expense (including amortization
of deferred financing costs) 33,686 33,981 33,654 37,857 46,541 52,499 57,955
Interest capitalized 206 75 - - - 301 1,099
Estimate of interest within lease expense 4,088 4,083 4,768 6,530 7,047 7,451 7,121
---------------------------------------------------------------------------------
Total fixed charges 37,980 38,139 38,422 44,387 53,588 60,251 66,175
=================================================================================
Earnings to fixed charge ratio 2.13 1.84 1.16 0.10 (0.54) (1.05) 2.63
=================================================================================
Dollar Amount Of The Deficiency
(if less than 1:1 Ratio) not applic not applic not applic 39,932 82,346 123,481 not applic
=================================================================================
ESTIMATE OF INTEREST WITHIN RENT EXPENSE:
- -----------------------------------------
Lease expense 9,126 9,113 10,642 14,575 15,731 16,631 15,895
Multiplier 8 8 8 8 8 8 8
---------------------------------------------------------------------------------
Value of rented equipment/assets 73,008 72,904 85,136 116,600 125,848 133,048 127,160
Lessors' equity assumed at 20% 14,602 14,581 17,027 23,320 25,170 26,610 25,432
---------------------------------------------------------------------------------
Debt of lessor 58,406 58,323 68,109 93,280 100,678 106,438 101,728
Estimated interest rate 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
---------------------------------------------------------------------------------
Lessor financing charge 4,088 4,083 4,768 6,530 7,047 7,451 7,121
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EXTENDICARE HEALTH SERVICES, INC.
PROFORMA INTEREST EXPENSE FOR 2003
ASSUMING REFINANCE OCCURRED ON JANUARY 1, 2003
UPDATED INTEREST
BALANCE RATE EXPENSE
------- ---- -------
Actual Interest expense for 2003 33,981
Repay Senior Subordinated Notes due 2007 (200,000) 9.350% (18,700)
Draw on line of credit - 4.300% -
New Senior Subordinated Notes 121,875 7.229% 8,810
Amortization of deferred finance charges:
Deduct: amortization on Senior Sub Notes due 2007 (643)
Add: amortization on new Senior Sub Notes due 2014 661
--------------
Change in interest expense (9,872)
--------------
--------------
Proforma interest expense for 2003 24,109
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EXTENDICARE HEALTH SERVICES, INC.
PROFORMA INTEREST EXPENSE FOR 2003
ASSUMING REFINANCE OCCURRED ON JANUARY 1, 2003
UPDATED INTEREST
BALANCE RATE EXPENSE
------- ---- -------
Actual Interest expense for Q1-2004 8,200
Repay Senior Subordinated Notes due 2007 (200,000) 9.350% (4,675)
Draw on line of credit - 4.300% -
New Senior Subordinated Notes 121,875 7.229% 2,203
Amortization of deferred finance charges:
Deduct: amortization on Senior Sub Notes due 2007 (161)
Add: amortization on new Senior Sub Notes due 2014 165
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Change in interest expense (2,468)
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Proforma interest expense for Q1-2004 5,732
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