EX-12 5 w60429ex12.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12 ADVANTA CORP. AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS ENDED ($ IN THOUSANDS) MARCH 31, --------------------------------------------------------------------------------------------------------------- 2002 2001 --------------------------------------------------------------------------------------------------------------- Income (loss) from continuing operations $ 4,234 $(37,356) Income tax expense (benefit) 2,651 (16,880) ------- -------- Earnings (loss) before income taxes (A) 6,885 (54,236) Fixed charges: Interest 13,110 24,276 One-third of all rentals 486 321 Preferred stock dividend of subsidiary trust 2,248 2,248 -------- ------- Total fixed charges 15,844 26,845 -------- ------- Earnings (loss) before income taxes and fixed charges $22,729 $(27,391) Ratio of earnings to fixed charges (B) 1.43x N/M (C)
(A) Earnings (loss) before income taxes in the three months ended March 31, 2001 include $40.8 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 three months ended March 31, 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 $54,236 for the three months ended March 31, 2001.