Extendicare REIT
TSX : EXE.UN

Extendicare REIT

December 18, 2009 12:39 ET

Extendicare REIT Declares December 2009 Distribution and Intention to Renew Normal Course Issuer Bid

MARKHAM, ONTARIO--(Marketwire - Dec. 18, 2009) - Extendicare Real Estate Investment Trust ("Extendicare REIT" or the "REIT") (TSX:EXE.UN) today announced that it has declared a cash distribution of C$0.07 per unit of the REIT (the "REIT Units") for the month of December 2009, which is payable to unitholders of record at the close of business on December 31, 2009, and will be paid on January 15, 2010.

Extendicare Limited Partnership (the "Partnership") also announced that it has declared a cash distribution of C$0.07 per Class B limited partnership unit (the "Exchangeable LP Units") for the month of December 2009, which is payable to unitholders of record at the close of business on December 31, 2009, and will be paid on January 15, 2010.

The current annualized distribution rate of the REIT and Partnership is C$0.84 per unit, payable in monthly distributions of C$0.07 per unit. In accordance with the distribution policy of both the REIT and the Partnership, unitholders of record at the close of business on the last business day of each calendar month will be paid a distribution on or about the 15th day of the following month.

Management estimates that approximately 70% of the 2009 distributions of the REIT and Partnership will be characterized as tax deferred returns of capital for Canadian residents. To the extent the remaining 30% of distributions of the REIT and Extendicare LP to be made in 2009 are taxed as dividends, those paid to Canadian residents are eligible dividends as per the Income Tax Act (Canada). The REIT is not required to, and does not, calculate its "earnings and profits" pursuant to the United States Internal Revenue Code of 1986, as amended, and therefore no portion of its distributions represent qualified dividend income for U.S. tax purposes.

The REIT has a Distribution Reinvestment Plan, which provides Canadian resident holders of REIT Units and Exchangeable LP Units with the opportunity to increase their respective investments at a 3% discount to the volume weighted average trading price of the REIT Units on the TSX for the five trading days immediately preceding the distribution payment date. A copy of the Plan package is available under the investors section of the REIT's website.

Intention to Renew Normal Course Issuer Bid

Extendicare REIT also announced today that it intends to file a notice with the Toronto Stock Exchange (the "TSX") of its intention to renew its normal course issuer bid (the "Bid") to purchase for cancellation, from time to time, up to approximately:

  • 6,850,000 of REIT Units;

  • $11,390,000 aggregate principal amount of its 5.70% convertible unsecured subordinated debentures due June 30, 2014; and

  • $9,180,000 aggregate principal amount of its 7.25% convertible unsecured subordinated debentures due June 30, 2013;

(collectively, the "REIT Securities") representing, in each case, approximately 10% of the public float of these securities currently issued and outstanding, calculated in accordance with the rules of the TSX. Subject to the approval of the TSX, Extendicare REIT may begin to purchase REIT Securities at prevailing market prices over a twelve month period commencing on or about January 7, 2010 and terminating one year later or at such earlier time as the Bid is complete. The REIT's current normal course issuer bid expires on December 28, 2009.

The Board of Trustees of the REIT has authorized the renewal of the Bid because it believes that it is an attractive and appropriate use of the REIT's available funds to purchase REIT Securities when the market price of such securities do not fully reflect their underlying value. Any REIT Securities purchased under the Bid will increase the proportionate interest of and may be advantageous to, all remaining securityholders.

About Us

Extendicare REIT is a leading North American provider of long-term and short-term senior care services through its network of owned and operated health care centers. We employ 37,900 qualified and experienced individuals dedicated to helping people live better through a commitment to quality service that includes post-acute care, rehabilitative therapies and home health care services. Our 258 senior care centers in North America have capacity for approximately 28,700 residents.

Forward-looking Statements

Information provided by Extendicare REIT from time to time, including this release, contains or may contain forward-looking statements concerning anticipated financial events, results, circumstances, economic performance or expectations with respect to the REIT and its subsidiaries, including its business operations, business strategy, and financial condition. Forward-looking statements can be identified because they generally contain the words "expect", "intend", "anticipate", "believe", "estimate", "project", "plan" or "objective" or other similar expressions or the negative thereof. Forward-looking statements reflect management's beliefs and assumptions and are based on information currently available, and the REIT assumes no obligation to update or revise any forward-looking statement, except as required by applicable securities laws. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the REIT to differ materially from those expressed or implied in the statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on the REIT's forward-looking statements. Further information can be found in the disclosure documents filed by Extendicare REIT with the securities regulatory authorities, available at www.sedar.com and on the REIT's website at www.extendicare.com.

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