EX-12 3 w94375exv12.htm COMPUTATION OF RATIO EARNINGS TO FIXED CHARGES exv12
 

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.