Exhibit 12
ADVANTA CORP. AND SUBSIDIARIES
Statement setting forth details of computation of ratio
of earnings to fixed charges
of earnings to fixed charges
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
| For the years ended December 31, | ||||||||||||||||||||
| ($ in thousands) | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||
| Income from continuing operations | $ | 71,028 | $ | 84,248 | $ | 116,689 | $ | 44,273 | $ | 30,213 | ||||||||||
| Income tax expense | 44,652 | 52,740 | 40,490 | 28,034 | 18,913 | |||||||||||||||
| Earnings before income tax expense | 115,680 | 136,988 | 157,179 | (1) | 72,307 | 49,126 | ||||||||||||||
| Fixed charges: | ||||||||||||||||||||
| Interest on debt, deposits and other borrowings | 90,063 | 66,143 | 48,428 | 36,419 | 48,308 | |||||||||||||||
Interest on subordinated debt payable to preferred securities trust (3) | 9,268 | 9,167 | 9,158 | 9,158 | 0 | |||||||||||||||
| One-third of all rentals | 1,885 | 1,809 | 1,712 | 1,827 | 2,136 | |||||||||||||||
Preferred stock dividend of subsidiary trust(2) | 0 | 0 | 0 | 0 | 8,990 | |||||||||||||||
| Total fixed charges | 101,216 | 77,119 | 59,298 | 47,404 | 59,434 | |||||||||||||||
| Earnings before income tax expense and fixed charges | $ | 216,896 | $ | 214,107 | $ | 216,477 | $ | 119,711 | $ | 108,560 | ||||||||||
Ratio of earnings to fixed charges(3) | 2.14 | x | 2.78 | x | 3.65 | x | 2.53 | x | 1.83 | x | ||||||||||
| (1) | Earnings before income taxes in 2005 included a $67.7 million gain on the transfer of consumer credit card business related to our May 28, 2004 agreement with Bank of America. | |
| (2) | Our adoption of Financial Accounting Standards Board Interpretation No. 46,Consolidation of Variable Interest Entities — An Interpretation of ARB No. 51, as revised, resulted in the deconsolidation of the subsidiary trust that issued our trust preferred securities effective December 31, 2003. As a result of the deconsolidation of that trust, the consolidated income statements include interest expense on subordinated debt payable to preferred securities trust beginning January 1, 2004, as compared to periods through December 31, 2003 that included payments on the trust preferred securities classified as minority interest in income of consolidated subsidiary. | |
| (3) | For purposes of computing these ratios, “earnings” represent income 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. Fixed charges do not include interest expense related to unrecognized tax benefits, which we classify as income tax expense. |