Exhibit 12
ADVANTA CORP. AND SUBSIDIARIES
Statement setting forth details of computation of ratio
of earnings to fixed charges
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
($ in thousands) | For the years Ended December 31, | ||||||||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | |||||||||||||||||||
Income (loss) from continuing operations | $ | 30,213 | $ | (15,572 | ) | $ | (30,456 | ) | $ | 11,192 | $ | 41,334 | |||||||||||
Income tax expense (benefit) | 18,913 | 17,170 | (11,995 | ) | 0 | (55,785 | ) | ||||||||||||||||
Earnings (loss) before income tax expense (benefit) | 49,126 | 1,598 | (A | ) | (42,451 | )(B | ) | 11,192 | (14,451 | ) | |||||||||||||
Fixed charges: | |||||||||||||||||||||||
Interest | 48,308 | 47,580 | 82,470 | 86,508 | 80,800 | ||||||||||||||||||
One-third of all rentals | 2,136 | 1,822 | 1,736 | 1,853 | 1,759 | ||||||||||||||||||
Preferred stock dividend of subsidiary trust | 8,990 | 8,990 | 8,990 | 8,990 | 8,990 | ||||||||||||||||||
Total fixed charges | 59,434 | 58,392 | 93,196 | 97,351 | 91,549 | ||||||||||||||||||
Earnings before income tax expense (benefit) and fixed charges | $ | 108,560 | $ | 59,990 | $ | 50,745 | $ | 108,543 | $ | 77,098 | |||||||||||||
Ratio of earnings to fixed charges (C) | 1.83x | 1.03x | N/M | (D | ) | 1.11x | N/M | (D | ) |
(A) | Earnings before income taxes in 2002 included a charge of $43.0 million related to a ruling in the litigation associated with the transfer of our consumer credit card business in 1998. |
(B) | Earnings before income taxes in 2001 included $41.8 million of unusual charges. Unusual charges include severance, outplacement and other compensation costs associated with restructuring our corporate functions commensurate with the ongoing businesses as well as expenses associated with exited businesses and asset impairments. |
(C) | For purposes of computing these ratios, “earnings” represent income (loss) from continuing operations before income taxes plus fixed charges. “Fixed charges” consist of interest expense, one-third (the portion deemed representative of the interest factor) of rental expense on operating leases, and preferred stock dividends of subsidiary trust. |
(D) | The ratios calculated in the years ended December 31, 2001 and 1999 are less than 1.00 and therefore, not meaningful. In order to achieve a ratio of 1.00, earnings before income taxes and fixed charges would need to increase by $42,451 for the year ended December 31, 2001 and $14,451 for the year ended December 31, 1999. |