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,
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2001 2000 1999 1998 1997
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Income (loss) from continuing operations $ (30,456) $ 11,192 $ 41,334 $ 408,604 $ 25,920
Federal and state income tax expense (benefit) (11,995) 0 (55,785) (25,748) 19,664
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Earnings (loss) before income tax expense (benefit) (42,451)(A) 11,192 (14,451) 382,856(B) 45,584
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Fixed charges:
Interest 82,470 86,508 80,800 101,226 266,118
One-third of all rentals 1,736 1,853 1,759 1,366 2,721
Preferred stock dividend of
subsidiary trust 8,990 8,990 8,990 8,990 8,990
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Total fixed charges 93,196 97,351 91,549 111,582 277,829
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Earnings (loss) before income
tax expense (benefit) and fixed charges $ 50,745 $ 108,543 $ 77,098 $ 494,438 $ 323,413
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Ratio of earnings to fixed
charges (C) N/M (D) 1.11x N/M (D) 4.43x 1.16x
(A) 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.
(B) Earnings before income taxes in 1998 included a $541.3 million gain on the
transfer of the consumer credit card business and $125.1 million of unusual
charges including severance and outplacement costs associated with
workforce reduction, option exercise and other employee costs associated
with the Consumer Credit Card Transaction/Tender Offer; expense associated
with exited businesses/products; and asset impairment.
(C) 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.
(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.