##### 



Exhibit 99.1 (EXTENDICARE LOGO) NEWS RELEASE
FOR IMMEDIATE RELEASE
February 22, 2005 Extendicare Inc. Delivers Record EPS of $1.78 in 2004 and
Initiates Common Share Dividend  
    Initiates quarterly dividend payment of $0.05 per Subordinate Voting Share
    Q4 health care earnings of $0.29 per diluted share; net earnings of $0.84 per diluted share
    Consolidated EBITDA margin of 12.2%; U.S. operations EBITDA margin of 12.8%
    U.S. Medicare census of 16.7% compared to 15.9% in Q4/03
    U.S. nursing home occupancy increases to 92.7% compared to 91.7% in Q4/03 MARKHAM, ONTARIO (TSX: EXE.MV and EXE.SV; NYSE: EXE). Extendicare Inc. today announced its Board of
Directors has declared dividends of $0.05 per Subordinate Voting Share and $0.025 per Multiple
Voting Share, payable on May 16, 2005 to shareholders of record on April 29, 2005. This will result
in an annualized dividend payment to the Subordinate and Multiple Voting shareholders of $0.20 per
share and $0.10 per share, respectively, for total dividends of approximately $12.5 million per
year. The Company reported fourth quarter net earnings of $58.9 million ($0.84 per diluted share)
compared to $16.9 million ($0.24 per diluted share) in the 2003 fourth quarter. Earnings from
health care operations prior to the undernoted items rose to $20.6 million ($0.29 per diluted
share) compared to $14.3 million ($0.21 per diluted share) in the 2003 fourth quarter. The following table illustrates components of the Companys net earnings for the fourth quarter and
year ended December 31, 2004 and 2003. Three months ended Dec. 31
    
    
    Twelve months ended Dec. 31Components of Earnings (Loss) (1)
    
    2004
    
    
    2003
    
    
    2004
    
    
    2003(thousands of Canadian
dollars except per share
    
    After
    
    Diluted
    
    After
    
    Diluted
    
    After
    
    Diluted
    
    After
    
    Dilutedamounts)
    
    -tax
    
    EPS
    
    -tax
    
    EPS
    
    -tax
    
    EPS
    
    -tax
    
    EPSHealth care operations,
before undernoted(1)
    
    
    20,587
    
    
    $
    0.29
    
    
    
    14,348
    
    
    $
    0.21
    
    
    
    80,702
    
    
    $
    1.14
    
    
    
    40,885
    
    
    $
    0.58Valuation adjustment on interest
rate caps
    
    
    (1,143
    )
    
    
    (0.01
    )
    
    
    
    
    
    
    
    
    
    
    (6,396
    )
    
    
    (0.09
    )
    
    
    
    
    
    
    Gain (loss) from asset disposals,
impairment and other items
    
    
    (4,760
    )
    
    
    (0.08
    )
    
    
    
    
    
    
    
    
    
    
    2,552
    
    
    
    0.03
    
    
    
    905
    
    
    
    0.01Prior year tax benefit
    
    
    38,968
    
    
    
    0.56
    
    
    
    
    
    
    
    
    
    
    
    38,968
    
    
    
    0.56
    
    
    
    
    
    
    
    53,652
    
    
    $
    0.76
    
    
    
    14,348
    
    
    $
    0.21
    
    
    
    115,826
    
    
    $
    1.64
    
    
    
    41,790
    
    
    $
    0.59Share of equity accounted
earnings
    
    
    5,256
    
    
    
    0.08
    
    
    
    2,559
    
    
    
    0.03
    
    
    
    9,375
    
    
    
    0.14
    
    
    
    18,884
    
    
    
    0.27Net earnings
    
    
    58,908
    
    
    $
    0.84
    
    
    
    16,907
    
    
    $
    0.24
    
    
    
    125,201
    
    
    $
    1.78
    
    
    
    60,674
    
    
    $
    0.86
 (1) Refer to discussion of non-GAAP measures.




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##### 



The past year was a successful one for Extendicare, driven by the strength of our sales approach
to Medicare census in the U.S. and the steady performance of our Canadian operations, said Mel
Rhinelander, Extendicare Inc.s President and Chief Executive Officer. With strong cash flow and a
strengthened balance sheet, Extendicare is now positioned to offer investors a regular quarterly
dividend, making us one of a few dividend paying growth companies in our health care sector. Extendicare Health Services, Inc.s (EHSI) Medicare patient census on a same-facility basis
increased to 16.7% of total nursing home census in the 2004 fourth quarter compared to 15.9% in the
2003 fourth quarter, and EHSIs average daily Medicare patient census rose 6.4% to 2,121. Nursing
home occupancy, on a same-facility basis, rose during the 2004 fourth quarter to 92.7% compared to
91.7% in the 2003 fourth quarter. As previously reported on February 8, 2005, Extendicare recorded a tax benefit of $39.0 million
(US$31.9 million) related to the 1999 sale of its former subsidiary Arbor Health Care Company. EHSI
has already realized US$9.2 million and expects to receive the remaining US$22.7 million either
through a refund of taxes paid or as an offset against taxes to be paid in 2005. On January 31, 2005, EHSI finalized the acquisition of Assisted Living Concepts, Inc. (ALC) of
Dallas, Texas for approximately US$278.2 million, including the assumption of US$137.3 million of
debt. The acquisition solidifies the Companys position as a leading provider in the assisted
living segment of senior care. ALCs unaudited revenue, EBITDA and pre-tax earnings for the year
ended December 31, 2004 were US$176.0 million, US$28.1 million, and US$10.7 million, respectively.
As earlier stated, Extendicare expects the acquisition to be accretive in 2005. The Company
anticipates achieving operational improvements and synergies ranging from US$4.0 million to US$6.0
million on an annualized basis by the third quarter of 2005. Extendicare expects the cost savings
will be realized through the integration of the executive management teams, elimination of ALCs
reorganization program, board of directors fees, and public reporting requirements, and through
lower professional fees and insurance costs. The U.S. Presidents recent budget is proposing Medicare savings of US$1.5 billion in 2006 by
eliminating funding enhancements to long-term care providers. If implemented in full, this would
negatively impact Extendicare by US$20.0 million based on 2004 results. Extendicare cautions
investors that legislation of this nature often changes significantly as it moves through Congress.
Extendicare along with other members of its industry is lobbying for the continuation of the
funding as it contributes significantly to maintaining quality care for seniors. In early 2005, the State of Pennsylvania received approval from the Centers for Medicare and
Medicaid Services for its four-year supplemental provider tax plan, retroactive to July 1, 2003.
The plan allows for an increase in funding from the State, a portion of which will be offset by an
increase in state assessment taxes to be paid by long-term care providers. Although subject to
finalization, the State has indicated the impact for the first two years, and the Company
anticipates receiving a net benefit to EHSIs 2005 pre-tax earnings of US$2.6 million, for the July
1, 2003 to June 30, 2004 period, and US$1.0 million covering the July 1, 2004 to June 30, 2005
period. At year end, Extendicare confirmed the adequacy of the Companys balance sheet reserves related to
resident care liability claims with its independent actuary. Quarters ended December 31, 2004 and December 31, 2003 Revenue declined by $5.6 million to $426.0 million during the 2004 fourth quarter in
comparison to the 2003 fourth quarter. However, prior to the negative impact of the stronger
Canadian dollar, revenue grew 4.2%. Of this 4.2% increase, ongoing operations grew 7.4% but were
partially offset by the disposal, or ceasing of operations that had contributed $12.6 million in
revenue in the 2003 fourth quarter. Ongoing U.S. operations revenue grew 9.7% in its functional
currency, primarily due to a 6.8% increase in average nursing home rates, and a 6.4% increase in
average daily Medicare patient census. EHSIs new nursing and assisted living centres contributed
2.0% to the growth over the 2003 fourth quarter. Revenue from ongoing Canadian operations grew $2.3
million, or 1.8%, approximately half of which was from the new Ontario homes. ParaMeds home health
care revenue declined $1.6 million due to a 5.4% reduction in service hours.




---



##### 



EBITDA rose to $52.0 million in the 2004 fourth quarter from $50.6 million in the 2003 fourth
quarter. EBITDA as a percent of revenue increased to 12.2% from 11.7% in the 2003 fourth quarter.
EBITDA for the 2004 fourth quarter grew by 10% over the 2003 fourth quarter, prior to the $3.7
million negative impact of the stronger Canadian dollar. U.S. EBITDA grew 9.0% in its functional currency for the 2004 fourth quarter in comparison to the
2003 fourth quarter. The impact of new facilities was offset by disposed operations. EBITDA from Canadian operations improved $1.7 million, or 13.7%, to $13.8 million in the 2004
fourth quarter. The contribution from new Ontario homes was offset by disposed operations.
Remaining nursing home operations improved primarily due to funding enhancements. Canadian home
health care operations generated improved earnings, despite lower volumes, as a result of higher
rates and reduced costs. Net interest costs for the 2004 fourth quarter declined $6.2 million from the 2003 fourth quarter.
Lower average debt levels and interest rates reduced the Companys interest costs between periods.
In addition, interest income was higher between periods by $2.3 million as a result of recording
$4.8 million of interest in the 2004 fourth quarter associated with the tax refunds, partially
offset by lower interest income on notes receivable that have been collected. The Companys share of earnings of equity investments improved to $5.3 million in the 2004 fourth
quarter, compared to $2.6 million in the 2003 fourth quarter, primarily due to an investment gain
earned by Crown Life Insurance Company. The Company benefited from a $66.8 million cash dividend from Crown Life Insurance Company during
the 2004 fourth quarter, of which $52.7 million was classified as cash from operations, and $14.1
million was classified as a return of investment on the cash flow statement. As a result of the
dividend and improvement in earnings, cash flow from operations increased by $78.8 million to
$108.1 million. Years ended December 31, 2004 and December 31, 2003 Net earnings for the year ended December 31, 2004 doubled to $125.2 million ($1.78 per diluted
share) from net earnings of $60.7 million ($0.86 per diluted share) for the year ended December 31,
2003. Earnings from health care operations, prior to the items disclosed separately, increased by
$39.8 million to $80.7 million ($1.14 per diluted share) from $40.9 million ($0.58 per diluted
share) in 2003. The stronger Canadian dollar negatively impacted net earnings for 2004 by $9.3
million in comparison to 2003. Revenue increased $22.2 million to $1,746.8 million in 2004. However, prior to the negative impact
of the stronger Canadian dollar, revenue in 2004 grew 6.8% over 2003. Of this 6.8% increase,
ongoing operations grew 9.0%, but were partially offset by the disposal, or ceasing of operations
that had contributed $22.9 million and $57.0 million in revenue in 2004 and 2003, respectively.
Ongoing U.S. operations revenue grew 10.5% in its functional currency, primarily due to higher
funding levels and an 8.5% growth in average daily Medicare patient census. EHSIs new U.S. nursing
and assisted living centres contributed 1.5% to the growth over last year. Revenue from ongoing
Canadian operations grew $24.9 million, or 5.3%, of which new Ontario nursing homes added $14.1
million, with the remaining improvement primarily due to funding to enhance resident care,
partially offset by lower home health care revenue. Revenue from ongoing Canadian home health care
operations declined by $3.8 million due to a 6.0% decline in service hours, partially offset by
improved rates. EBITDA rose 20.2% to $224.6 million in 2004 from $186.8 million last year, despite a 7.3% decline
due to the stronger Canadian dollar. EBITDA as a percent of revenue increased to 12.9% from 10.8%
in the prior year. EBITDA from U.S. operations improved 25.8%, or $36.3 million to $176.9 million.
EBITDA from Canadian operations grew 3.1% to $47.7 million. The sale of nursing homes and
discontinuation of home health care operations in B.C. unfavourably impacted Canadian EBITDA by
$1.5 million between years. Ongoing Canadian operations experienced a 6.7% growth in EBITDA due
primarily to a $2.7 million contribution from new Ontario nursing homes. EBITDA from the remaining
Canadian operations remained stable despite a challenging Ontario market in which Extendicare
experienced lower home health care volumes, lower property tax funding of $0.8 million and reduced
accommodation revenue due to lower occupancy of $0.8 million.




---



##### 



Other Items The loss from asset disposals, impairment and other items of $8.1 million reported in the 2004
fourth quarter related to an asset impairment provision on a U.S. nursing home, whose operations
were transferred to a third-party during the year. Under the terms of its normal course issuer bids, the Company purchased and cancelled during 2004,
463,800 Subordinate Voting and Multiple Voting shares at an average cost per share of $14.54, of
which 228,600 were acquired during the fourth quarter of 2004 at an average cost per share of
$15.58. At their meeting today the Directors also declared, in addition to the common share dividends,
quarterly dividends on Extendicares Class I Preferred Shares, payable on May 16, 2005, to
shareholders of record on April 29, 2005. The dividends on the Class I, Series 3 Preferred Shares
(EXE.PR.C) are $0.2475 per share. The dividends on the Class I, Series 2 (EXE.PR.B) and Series 4
(EXE.PR.D) Preferred Shares will be determined by applying $25.00 to one quarter of 71% and 72% of
the average Canadian prime rate of interest, respectively, for the quarter ending March 31, 2005. Extendicare, through its subsidiaries, currently operates 440 long-term care facilities across
North America, with capacity for over 34,400 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 38,000 people in North America. In a separate news release issued today, Extendicare Inc. announced the 2004 fourth quarter and
year-end financial results of its wholly owned U.S. subsidiary, Extendicare Health Services, Inc. On February 23, 2005, at 10:00 a.m. (ET), Extendicare Inc. will hold a conference call to discuss
its results for the fourth quarter. The call will be webcast live, and archived, in the investor
information section of Extendicares website, www.extendicare.com. Alternatively, the call in
number is 1-800-387-6216 or 416-405-9328. 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
March 11, 2005. To access the rebroadcast, dial 1-800-408-3053 or 416-695-5800, conference ID
number 3132614. Also, a supplemental information package containing historical annual and quarterly
financial results and operating statistics on the Company can be found on the website under
Investor Information/Investor Documents/Supplemental Information. On February 24, 2005, Extendicare Inc. is hosting an Investor Day. The program will be webcast live
beginning at 8:00 a.m. (ET) and lasting until approximately noon. The webcast may be accessed on
the Companys website at www.extendicare.com. The webcast also will be archived and will be
available after the event for 60 days. The attached statements reflect certain reclassifications to the prior period figures to conform to
the 2004 presentation. Non-GAAP Measures EBITDA is a measure commonly used in the long-term care industry to evaluate performance, primarily
by lenders and investors in notes, and is generally defined as earnings before interest, income
taxes, depreciation and amortization. In this calculation, the Company has excluded the line items
valuation adjustment on interest rate caps and loss (gain) from asset disposal, impairment and
other items. These line items are reported separately because they relate to the change in fair
value of interest rate caps associated with the Companys long-term debt, gains or losses on the
disposal or impairment of assets, provisions for ceased operations, and the write-off of
unamortized financing costs on early retirement of debt. The Company has also reported separately a prior year tax benefit in 2004, as this related to the
tax benefit on a loss that occurred in 1999 and does not relate to income earned in the current
period. In addition, the Company determines and reports the above line items on an after-tax basis as a
means of deriving the remaining earnings from health care operations and related diluted earnings
per share. The resulting term health care
operations, before undernoted is a measure commonly used by the Company and its investors as a
means of assessing the performance of the core operations in comparison to prior periods.




---



##### 



Neither EBITDA nor health care operations, before undernoted have a standardized meaning under
Canadian GAAP, and they are not necessarily comparable to similar measures disclosed by other
issuers. Accordingly, EBITDA and health care operations, before undernoted are not intended to
replace earnings (loss) from operations, net earnings (loss) for the period, cash flow, or other
measures of financial performance and liquidity reported in accordance with Canadian GAAP. Forward-looking Statements 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 successful integration of Assisted Living
Concepts, Inc.; changes in foreign currency translation; 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: Extendicare Inc.
Christopher Barnes
Manager, Investor Relations
Phone: (905) 470-5483; Fax: (905) 470-4003
Email: cbarnes@extendicare.comVisit Extendicares Website @ www.extendicare.com




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##### 



EXTENDICARE INC.
Condensed Consolidated Earnings Three months ended
    
    
    Twelve months ended(thousands of Canadian dollars except per share amounts)
    
    December 31
    
    
    December 312004
    
    
    2003
    
    
    2004
    
    
    2003RevenueNursing and assisted living centresUnited States
    
    
    286,106
    
    
    
    290,271
    
    
    
    1,195,904
    
    
    
    1,182,045Canada
    
    
    94,208
    
    
    
    94,815
    
    
    
    366,863
    
    
    
    351,981Outpatient therapy  U.S.
    
    
    2,984
    
    
    
    3,650
    
    
    
    14,300
    
    
    
    16,151Home health  Canada
    
    
    32,103
    
    
    
    33,703
    
    
    
    127,971
    
    
    
    134,921Other
    
    
    10,587
    
    
    
    9,104
    
    
    
    41,762
    
    
    
    39,516425,988
    
    
    
    431,543
    
    
    
    1,746,800
    
    
    
    1,724,614Operating and administrative costs
    
    
    370,075
    
    
    
    376,764
    
    
    
    1,505,978
    
    
    
    1,519,567Lease costs
    
    
    3,921
    
    
    
    4,176
    
    
    
    16,230
    
    
    
    18,217EBITDA(1)
    
    
    51,992
    
    
    
    50,603
    
    
    
    224,592
    
    
    
    186,830Depreciation and amortization
    
    
    13,909
    
    
    
    15,985
    
    
    
    56,873
    
    
    
    63,657Interest, net
    
    
    6,253
    
    
    
    12,426
    
    
    
    39,991
    
    
    
    57,749Valuation adjustment on interest rate caps
    
    
    1,901
    
    
    
    
    
    
    
    10,379
    
    
    
    Loss (gain) from asset disposals, impairment
and other items
    
    
    8,097
    
    
    
    
    
    
    
    5,240
    
    
    
    (905
    )Earnings before income taxes
    
    
    21,832
    
    
    
    22,192
    
    
    
    112,109
    
    
    
    66,329Income taxesProvision before undernoted
    
    
    7,148
    
    
    
    7,844
    
    
    
    35,251
    
    
    
    24,539Prior year tax benefit
    
    
    (38,968
    )
    
    
    
    
    
    
    (38,968
    )
    
    
    (31,820
    )
    
    
    7,844
    
    
    
    (3,717
    )
    
    
    24,539Earnings from health care
    
    
    53,652
    
    
    
    14,348
    
    
    
    115,826
    
    
    
    41,790Share of equity accounted earnings
    
    
    5,256
    
    
    
    2,559
    
    
    
    9,375
    
    
    
    18,884Net earnings
    
    
    58,908
    
    
    
    16,907
    
    
    
    125,201
    
    
    
    60,674Earnings per shareBasic
    
    
    0.85
    
    
    
    0.24
    
    
    
    1.81
    
    
    
    0.87Diluted
    
    
    0.84
    
    
    
    0.24
    
    
    
    1.78
    
    
    
    0.86Components of Diluted Earnings (Loss) per ShareHealth care operations, before undernoted (1)
and after preferred share dividends
    
    $
    0.29
    
    
    $
    0.21
    
    
    $
    1.14
    
    
    $
    0.58Valuation adjustment on interest rate caps
    
    
    (0.01
    )
    
    
    
    
    
    
    (0.09
    )
    
    
    Gain (loss) from asset disposals, impairment
and other items
    
    
    (0.08
    )
    
    
    
    
    
    
    0.03
    
    
    
    0.01Prior year tax benefit
    
    
    0.56
    
    
    
    
    
    
    
    0.56
    
    
    
    Share of equity accounted earnings
    
    
    0.08
    
    
    
    0.03
    
    
    
    0.14
    
    
    
    0.27$
    0.84
    
    
    $
    0.24
    
    
    $
    1.78
    
    
    $
    0.86
   (1)
    
    Refer to discussion on non-GAAP measures.




---



##### 



EXTENDICARE INC.
Condensed Consolidated Cash Flows Three months ended
    
    
    Twelve months ended(thousands of Canadian dollars)
    

    December 31
    
    
    December 312004
    
    
    2003
    
    
    2004
    
    
    2003Cash provided by (used in) operationsNet earnings
    
    
    58,908
    
    
    
    16,907
    
    
    
    125,201
    
    
    
    60,674Adjustments for:Depreciation and amortization
    
    
    13,909
    
    
    
    15,985
    
    
    
    56,873
    
    
    
    63,657Provision for self-insured liabilities
    
    
    2,544
    
    
    
    3,095
    
    
    
    13,762
    
    
    
    13,010Payments for self-insured liabilities
    
    
    (3,129
    )
    
    
    (4,300
    )
    
    
    (24,494
    )
    
    
    (31,545
    )Future income taxes
    
    
    (22,540
    )
    
    
    (133
    )
    
    
    (40,789
    )
    
    
    5,460Valuation adjustment on interest rate caps
    
    
    1,901
    
    
    
    
    
    
    
    10,379
    
    
    
    Loss (gain) from asset disposals, impairment
and other items
    
    
    8,097
    
    
    
    
    
    
    
    5,240
    
    
    
    (905
    )Dividends received from equity investments,
net of undistributed share of earnings
    
    
    47,446
    
    
    
    (2,559
    )
    
    
    58,919
    
    
    
    (18,884
    )Other
    
    
    1,006
    
    
    
    293
    
    
    
    2,664
    
    
    
    1,309108,142
    
    
    
    29,288
    
    
    
    207,755
    
    
    
    92,776Net change in operating working capital, excluding cashAccounts receivable
    
    
    3,444
    
    
    
    (6,124
    )
    
    
    10,861
    
    
    
    4,724Inventories, supplies and prepaid expenses
    
    
    4,236
    
    
    
    1,281
    
    
    
    (541
    )
    
    
    (225
    )Accounts payable and accrued liabilities
    
    
    7,569
    
    
    
    13,387
    
    
    
    (40
    )
    
    
    (128
    )Income taxes
    
    
    (8,208
    )
    
    
    3,267
    
    
    
    5,927
    
    
    
    3,532115,183
    
    
    
    41,099
    
    
    
    223,962

    
    
    
    100,679Cash provided by (used in) investment activitiesProperty and equipment
    
    
    (21,482
    )
    
    
    (20,095
    )
    
    
    (69,122
    )
    
    
    (64,347
    )Acquisitions
    
    
    
    
    
    
    (5,346
    )
    
    
    (8,750
    )
    
    
    (5,346
    )Net cash proceeds from dispositions
    
    
    
    
    
    
    
    
    
    
    42,496
    
    
    
    2,047Return of equity investment
    
    
    14,119
    
    
    
    
    
    
    
    14,119
    
    
    
    Other assets
    
    
    327
    
    
    
    2,769
    
    
    
    25,190
    
    
    
    1,869(7,036
    )
    
    
    (22,672
    )
    
    
    3,933
    
    
    
    (65,777
    )Cash provided by (used in) financing activitiesIssue of long-term debt
    
    
    
    
    
    
    
    
    
    
    170,480
    
    
    
    11,021Repayment of long-term debt
    
    
    (2,038
    )
    
    
    (5,340
    )
    
    
    (283,067
    )
    
    
    (14,320
    )Decrease (increase) in investments held for
self-insured liabilities
    
    
    (17,232
    )
    
    
    (2,404
    )
    
    
    (12,082
    )
    
    
    5,626Financing costs
    
    
    (201
    )
    
    
    (30
    )
    
    
    (16,494
    )
    
    
    (186
    )Purchase of shares for cancellation
    
    
    (3,729
    )
    
    
    (2,327
    )
    
    
    (7,294
    )
    
    
    (8,093
    )Other
    
    
    1,122
    
    
    
    1,049
    
    
    
    4,663
    
    
    
    3,077(22,078
    )
    
    
    (9,052
    )
    
    
    (143,794
    )
    
    
    (2,875
    )Foreign exchange loss on cash held in
foreign currency
    
    
    (2,331
    )
    
    
    (2,479
    )
    
    
    (2,754
    )
    
    
    (9,805
    )Increase in cash and cash equivalents
    
    
    83,738
    
    
    
    6,896
    
    
    
    81,347
    
    
    
    22,222Cash and cash equivalents at beginning of period
    
    
    72,455
    
    
    
    67,950
    
    
    
    74,846
    
    
    
    52,624Cash and cash equivalents at end of period
    
    
    156,193
    
    
    
    74,846
    
    
    
    156,193
    
    
    
    74,846




---



##### 



EXTENDICARE INC.
Condensed Consolidated Balance Sheets December 31
    
    
    December 31(thousands of Canadian dollars)
    
    2004
    
    
    2003AssetsCurrent assetsCash and cash equivalents
    
    
    156,193
    
    
    
    74,846Accounts receivable
    
    
    140,761
    
    
    
    150,048Assets under divestiture agreement
    
    
    
    
    
    
    43,722Income taxes recoverable
    
    
    2,916
    
    
    
    9,654Future income taxes
    
    
    19,296
    
    
    
    34,571Inventories, supplies and prepaid expenses
    
    
    13,312
    
    
    
    13,928332,478
    
    
    
    326,769Property and equipment
    
    
    767,401
    
    
    
    821,682Goodwill and other intangible assets
    
    
    89,683
    
    
    
    97,558Other assets
    
    
    168,238
    
    
    
    205,6291,357,800
    
    
    
    1,451,638Equity accounted investments
    
    
    68,531
    
    
    
    141,7791,426,331
    
    
    
    1,593,417Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable and accrued liabilities
    
    
    214,846
    
    
    
    236,947Deposits under divestiture agreement
    
    
    
    
    
    
    38,895Accrual for self-insured liabilities
    
    
    30,050
    
    
    
    32,413Current maturities of long-term debt
    
    
    7,251
    
    
    
    7,409252,147
    
    
    
    315,664Accrual for self-insured liabilities
    
    
    48,487
    
    
    
    62,990Long-term debt
    
    
    613,651
    
    
    
    750,094Other long-term liabilities
    
    
    34,879
    
    
    
    31,259Future income taxes
    
    
    20,180
    
    
    
    76,977969,344
    
    
    
    1,236,984Share capital and contributed surplus
    
    
    312,707
    
    
    
    312,328Retained earnings
    
    
    151,903
    
    
    
    31,959Foreign currency translation adjustment account
    
    
    (7,623
    )
    
    
    12,1461,426,331
    
    
    
    1,593,417Closing US/Cdn. Dollar Exchange Rate
    
    
    1.2020
    
    
    
    1.2965




---



##### 



EXTENDICARE INC.
Financial and Operating Statistics Three months ended
    
    
    Twelve months ended(dollar amounts in Canadian dollars, unless otherwise noted)
    
    December 31
    
    
    December 312004
    
    
    2003
    
    
    2004
    
    
    2003Revenue(millions)United States
    
    $
    297.8
    
    
    $
    301.2
    
    
    $
    1,244.9
    
    
    $
    1,230.7Canada
    
    
    128.2
    
    
    
    130.3
    
    
    
    501.9
    
    
    
    493.9$
    426.0
    
    
    $
    431.5
    
    
    $
    1,746.8
    
    
    $
    1,724.6EBITDA(millions)United States
    
    $
    38.1
    
    
    $
    38.4
    
    
    $
    176.9
    
    
    $
    140.6Canada
    
    
    13.9
    
    
    
    12.2
    
    
    
    47.7
    
    
    
    46.2$
    52.0
    
    
    $
    50.6
    
    
    $
    224.6
    
    
    $
    186.8Health Care Net Earnings(millions)United States
    
    $
    49.5
    
    
    $
    11.3
    
    
    $
    87.9
    
    
    $
    28.0Canada
    
    
    4.2
    
    
    
    3.0
    
    
    
    27.9
    
    
    
    13.8$
    53.7
    
    
    $
    14.3
    
    
    $
    115.8
    
    
    $
    41.8Components of Diluted Earnings (Loss) per ShareHealth care operations, before undernoted and after
preferred share dividends
    
    $
    0.29
    
    
    $
    0.21
    
    
    $
    1.14
    
    
    $
    0.58Valuation adjustment on interest rate caps
    
    
    (0.01
    )
    
    
    
    
    
    
    (0.09
    )
    
    
    Gain (loss) from asset disposals, impairment and other items
    
    
    (0.08
    )
    
    
    
    
    
    
    0.03
    
    
    
    0.01Prior year tax benefit
    
    
    0.56
    
    
    
    
    
    
    
    0.56
    
    
    
    Share of equity accounted earnings
    
    
    0.08
    
    
    
    0.03
    
    
    
    0.14
    
    
    
    0.27$
    0.84
    
    
    $
    0.24
    
    
    $
    1.78
    
    
    $
    0.86U.S. Nursing Centre StatisticsPercent of Revenue by Payor Source(same-facility basis)Medicare
    
    
    32.8
    %
    
    
    30.6
    %
    
    
    32.2
    %
    
    
    29.3
    %Private/other

    
    
    16.6
    
    
    
    17.9
    
    
    
    17.3
    
    
    
    18.3Medicaid
    
    
    50.6
    
    
    
    51.5
    
    
    
    50.5
    
    
    
    52.4Average Daily Census by Payor Source(same-facility basis)Medicare
    
    
    2,121
    
    
    
    1,994
    
    
    
    2,100
    
    
    
    1,935Private/other
    
    
    2,100
    
    
    
    2,158
    
    
    
    2,103
    
    
    
    2,134Medicaid
    
    
    8,493
    
    
    
    8,427
    
    
    
    8,404
    
    
    
    8,42112,714
    
    
    
    12,579
    
    
    
    12,607
    
    
    
    12,490Average Revenue per Resident Day by Payor Source(excluding prior period settlement adjustments) (US dollars)Medicare (Part A and B)
    
    $
    370.57
    
    
    $
    340.26
    
    
    $
    357.94
    
    
    $
    326.31Private/other
    
    
    189.57
    
    
    
    183.93
    
    
    
    191.09
    
    
    
    183.76Medicaid
    
    
    141.45
    
    
    
    134.32
    
    
    
    138.76
    
    
    
    131.31Medicare Part A only
    
    
    338.07
    
    
    
    315.61
    
    
    
    325.85
    
    
    
    298.81Average Occupancy(excluding managed facilities) (same-facility basis)Nursing facilities
    
    
    92.7
    %
    
    
    91.7
    %
    
    
    92.1
    %
    
    
    91.4
    %Assisted living facilities
    
    
    83.8
    
    
    
    87.0
    
    
    
    84.6
    
    
    
    85.8Combined nursing and assisted living facilities
    
    
    91.8
    
    
    
    91.2
    
    
    
    91.3
    
    
    
    90.8Canadian facilities average occupancy(same-facility basis)
    
    
    97.9
    %
    
    
    97.9
    %
    
    
    97.4
    %
    
    
    98.0
    %Extendicare Inc. total average occupancy(same-facility basis)
    
    
    93.8
    %
    
    
    93.3
    %
    
    
    93.2
    %
    
    
    93.0
    %Average US/Cdn. dollar exchange rate
    
    
    1.2226
    
    
    
    1.3184
    
    
    
    1.3015
    
    
    
    1.4015