EX-12 3 w54766ex12.txt CONSOLIDATED COMP. OF RATIO OF EARNINGS TO FIX CHG EXHIBIT 12 ADVANTA CORP. AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS ENDED NINE MONTHS ENDED ($ IN THOUSANDS) SEPTEMBER 30, SEPTEMBER 30, ---------------- ------------- ------------- 2001 2000 2001 2000 ---- ---- ---- ---- Income (loss) from continuing operations $ 2,270 $ 689 $(38,259) $ 23,728 Income tax benefit 0 0 (16,880) 0 -------- -------- -------- -------- Earnings (loss) before income tax benefit (A) 2,270 689 (55,139) 23,728 Fixed charges: Interest 16,919 24,457 67,314 66,195 One-third of all rentals 494 453 1,299 1,349 Preferred stock dividend of subsidiary trust 2,248 2,248 6,743 6,743 -------- -------- -------- -------- Total fixed charges 19,661 27,158 75,356 74,287 -------- -------- -------- -------- Earnings before income tax benefit and fixed charges $ 21,931 $ 27,847 $ 20,217 $ 98,015 Ratio of earnings to fixed charges (B) 1.12 x 1.03 x N/M (C) 1.32 x
(A) Earnings before income taxes in the nine months ended September 30, 2001 include $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) 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. (C) The ratio calculated in the nine months ending September 30, 2001 is 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 $55,139 for the nine months ended September 30, 2001. 42