EX-12 9 w47639exv12.htm COMPUTATION OF RATIO OF 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
                                         
    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.