EX-12 5 c70535a1exv12.txt STATEMENT RE: COMPUTATION OF RATIOS OF EARNINGS 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 -------------- -------------- ----------- ------------- 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 - - - - -------------- -------------- ----------- ------------- EARNINGS 25,779 4,455 25,779 1,959 -------------- -------------- ----------- ------------- 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 -------------- -------------- ----------- ------------- TOTAL FIXED CHARGES 21,793 49,815 18,530 23,286 -------------- -------------- ----------- ------------- EARNINGS TO FIXED CHARGES RATIO 1.18 0.09 1.39 0.08 -------------- -------------- ----------- ------------- 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 -------------- -------------- ----------- ------------- 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% -------------- -------------- ----------- ------------- Estimated interest expense in rent 2,560 6,530 2,560 3,455 ============== ============== =========== ============= PROFORMA IMPACT OF DEBT OFFERING Interest expense as reported 15,970 37,857 Incremental interest expense 3,264 5,428 -------------- -------------- 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 ------------ ---------- ---------- ---------- ---------- --------- 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