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
Six Months Ended | For the years ended December 31, | |||||||||||||||||||||||
($ in thousands) | June 30, 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||
Income (loss) from continuing operations | $ | (405,974 | ) | $ | (43,823 | ) | $ | 71,028 | $ | 84,248 | $ | 116,689 | $ | 44,273 | ||||||||||
Income tax expense (benefit) | 37,688 | (22,308 | ) | 44,652 | 52,740 | 40,490 | 28,034 | |||||||||||||||||
Earnings (loss) before income tax expense (benefit) | (368,286 | ) | (66,131 | ) | 115,680 | 136,988 | 157,179 | (2) | 72,307 | |||||||||||||||
Fixed charges: | ||||||||||||||||||||||||
Interest on debt, deposits and other borrowings | 54,529 | 110,205 | 90,063 | 66,143 | 48,428 | 36,419 | ||||||||||||||||||
Interest on subordinated debt payable to preferred securities trust | 4,599 | 9,268 | 9,268 | 9,167 | 9,158 | 9,158 | ||||||||||||||||||
One-third of all rentals | 918 | 1,841 | 1,885 | 1,809 | 1,712 | 1,827 | ||||||||||||||||||
Total fixed charges | 60,046 | 121,314 | 101,216 | 77,119 | 59,298 | 47,404 | ||||||||||||||||||
Earnings (loss) before income tax expense (benefit) and fixed charges | $ | (308,240 | ) | $ | 55,183 | $ | 216,896 | $ | 214,107 | $ | 216,477 | $ | 119,711 | |||||||||||
Ratio of earnings to fixed charges(1) | (5.13 | )x(3) | 0.45 | x(4) | 2.14 | x | 2.78 | x | 3.65 | x | 2.53 | x |
(1) | For purposes of computing these ratios, “earnings” represent income from continuing operations before income taxes plus fixed charges. “Fixed charges” consist of interest expense and one-third (the portion deemed representative of the interest factor) of rental expense on operating leases. Fixed charges do not include interest expense related to unrecognized tax benefits, which we classify as income tax expense. | |
(2) | 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. | |
(3) | In order to achieve a ratio of 1.00, earnings before income taxes and fixed charges would need to increase by $368.3 million for the six months ended June 30, 2009. | |
(4) | In order to achieve a ratio of 1.00, earnings before income taxes and fixed charges would need to increase by $66.1 million for the year ended December 31, 2008. | |