Advanta Reports Second Quarter Earnings; Raises 2004 Earnings Guidance.SPRING HOUSE, Pa. -- Advanta Advanta is an American banking company. Currently, it controls two banks, Advanta Bank Corp and Advanta National Bank. The banking corporation is not associated with Advanta Energy Corp., an energy consulting practice based in California. Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ADVNB;ADVNA ADVNA Advanta Corporation (stock symbol) ) today reported income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $10.8 million or $0.40 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for second quarter 2004 for Class A and Class B shares combined, as compared to $6.3 million or $0.26 per diluted share for second quarter 2003. The current quarter's earnings reflect an 104 basis point decline in net principal charge-offs on managed business credit card receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed to 6.99% on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis, as compared to 8.03% for second quarter 2003. Net principal charge-offs on owned business credit card receivables declined 80 basis points to 6.75%, as compared to 7.55% for second quarter 2003. Advanta reported consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net income for the quarter of $11 million or $0.41 per diluted share up from $4.3 million or $0.18 per diluted share for second quarter 2003. The results for second quarter 2004 include a $0.01 per diluted share net gain associated with discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , and the results for second quarter 2003 included a $0.03 per diluted share asset valuation charge associated with the valuation of the Company's venture capital portfolio and an $0.08 charge associated with discontinued operations. Advanta also announced today that it was raising its 2004 earnings guidance. "Our high credit quality customers are delivering the benefits that we are seeking," said Dennis Dennis is a male first name derived from the Greco-Roman name Dionysius meaning "servant of Dionysus", the Thracian god of wine, which is ultimately derived from the Greek Dios (Διος, "of Zeus") combined with Nysos or Nysa (Νυσα), where the Alter, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "As a result of our favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. asset quality performance, we now expect earnings for the year to be at the upper end of our initial guidance range to 10 cents above that range." The Company's initial guidance for 2004 earnings from continuing operations was between $1.40 and $1.60 per diluted share for Class A and Class B shares combined. The initial and revised guidance estimates assume no gains or losses associated with the Company's venture capital portfolio as such amounts are based on future market conditions that cannot be reliably forecasted. These estimates also do not include the recently announced agreement with Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. to resolve all outstanding litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , including partnership tax disputes, between Advanta and FleetBoston Financial FleetBoston Financial was a Boston, Massachusetts-based bank created in 1999 by the merger of Fleet Financial Group and BankBoston. In 2004 it merged with Bank of America; all of its banks and branches were given the Bank of America logo. Corporation, which is expected to increase earnings by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.30 per diluted share and book value by approximately $2.45 per share. The agreement is subject to the Internal Revenue Service's final approval of the settlement of the tax disputes, which the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. is expected to approve. Consistent with historical presentation, the gain associated with the settlement will be classified as earnings from continuing operations. Advanta ended the quarter with managed business credit card receivables of $3.1 billion as compared to $2.8 billion at June June: see month. 30, 2003. Over 30 day delinquencies on managed business credit card receivables declined 148 basis points to 4.80% and over 90 day delinquencies decreased 69 basis points to 2.50%, each as compared to second quarter 2003. At June 30, 2004, owned business credit card receivables were $550 million as compared to $443 million at June 30, 2003. Over 30 day delinquencies on owned business credit card receivables declined 120 basis points to 4.64% and over 90 day delinquencies decreased 56 basis points to 2.42%, each as compared to second quarter 2003. Conference Call Details Advanta management will hold a conference call with analysts and institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. today, July July: see month. 29, at 9:00 a.m. Eastern time. The call will be broadcast simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics for the public over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through www.advanta.com or www.vcall.com. To listen to the live call, please go to the website at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. Replays of the call will be available beginning at noon today on the Internet at www.advanta.com or www.vcall.com or by dialing (719) 457-0820 and referring to confirmation code 726552. The conference call may include a discussion of non-GAAP financial measures, which are reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. to the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measure in this press release or our statistical supplements, both available at www.advanta.com in the "Corporate Info INFO Information INFO Information (logging abbreviation) INFO Inform(ed/ation) INFO Ionic Difluoroamino Oxidizer " section. About Advanta Advanta focuses on the small business market and related community, providing funding and support to the nation's small businesses through innovative products and services. Using its direct marketing and information based expertise, Advanta identifies potential customers and provides a high level of service tailored to the unique needs of small businesses. Advanta is one of the nation's largest issuers (through Advanta Bank Corp.) of MasterCard MasterCard Worldwide (NYSE: MA) is a mutinational corporation based in Purchase, NY in the United States. Throughout the world, its principal business is to process payments between the banks of merchants and the banks of purchasers that use its "Mastercard" branded debit- and business credit cards to small businesses. Since 1951, Advanta has pioneered many of the marketing techniques common in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry today, including remote lending and direct mail, affinity The relationship that a person has to the blood relatives of a spouse by virtue of the marriage. The doctrine of affinity developed from a Maxim of Canon Law that a Husband and Wife were made one by their marriage. There are three types of affinity. and relationship marketing. Learn more about Advanta at www.advanta.com. This Press Release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The most significant among these risks and uncertainties are: (1) the Company's managed net interest income including changes resulting from fluctuations in the volume of receivables and the range and timing of pricing offers to cardholders; (2) competitive pressures; (3) political conditions, social conditions, monetary and fiscal policies and general economic conditions that affect the level of new account originations, customer spending, delinquencies and charge-offs; (4) factors affecting fluctuations in the number of accounts or receivable balances, including the retention of cardholders after promotional pricing periods have expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. ; (5) interest rate fluctuations; (6) the level of expenses; (7) the timing of the securitizations of the Company's receivables; (8) factors affecting the value of investments held by the Company; (9) the effects of government regulation, including restrictions and limitations imposed by banking laws, regulators and examinations; (10) effect of, and changes in, tax laws, rates, regulations and policies; (11) relationships with customers, significant vendors and business partners; (12) difficulties or delays in the development, production, testing and marketing of products or services; (13) the amount and cost of financing available to the Company; (14) the ratings on the debt of the Company and its subsidiaries; (15) revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to estimates associated with the discontinued operations of the Company's mortgage and leasing businesses; (16) obtaining the approval of the Internal Revenue Service as required under the agreement with Bank of America; (17) the impact of litigation; (18) the proper design and operation of our disclosure controls and procedures; and (19) the ability to attract and retain key personnel. Additional risks that may affect the Company's future performance are detailed in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and its Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. . In addition to the GAAP results provided throughout this document, the Company has provided managed receivable data and other non-GAAP financial measurements. Management believes that these non-GAAP financial measures used in managing the business may provide users additional useful information. The tables attached to this press release include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure and a description of why the non-GAAP financial measures are useful to investors.
ADVANTA
SEGMENT INCOME STATEMENT
(in thousands)
Three Months Ended
June 30, 2004
----------------------------------------------------------------------
Advanta
Business Venture
Cards Capital Other (A) Total
---------- --------- ----------- ---------
Interest income $ 23,735 $ 0 $ 1,499 $ 25,234
Interest expense 8,590 86 2,170 10,846
---------- --------- ----------- ---------
Net interest income 15,145 (86) (671) 14,388
Provision for credit losses 10,654 0 (160) 10,494
---------- --------- ----------- ---------
Net interest income after
provision for credit
losses 4,491 (86) (511) 3,894
Noninterest revenues:
Securitization income 32,627 0 0 32,627
Servicing revenues 12,499 0 0 12,499
Other revenues, net 27,989 0 790 28,779
---------- --------- ----------- ---------
Total noninterest revenues 73,115 0 790 73,905
Operating expenses 59,608 9 279 59,896
---------- --------- ----------- ---------
Income (loss) before income
taxes 17,998 (95) 0 17,903
Income tax expense
(benefit) 7,109 (38) 0 7,071
---------- --------- ----------- ---------
Income (loss) from
continuing operations 10,889 (57) 0 10,832
Gain, net, on
discontinuance of mortgage
and leasing businesses,
net of tax 0 0 160 160
---------- --------- ----------- ---------
Net income (loss) $ 10,889 $ (57) $ 160 $ 10,992
========== ========= =========== =========
Three Months Ended
June 30, 2003
----------------------------------------------------------------------
Advanta
Business Venture
Cards Capital Other (A) Total
---------- --------- ----------- ---------
Interest income $ 23,007 $ 1 $ 2,442 $ 25,450
Interest expense 11,269 135 1,707 13,111
---------- --------- ----------- ---------
Net interest income 11,738 (134) 735 12,339
Provision for credit losses 9,555 0 (290) 9,265
---------- --------- ----------- ---------
Net interest income after
provision for credit
losses 2,183 (134) 1,025 3,074
Noninterest revenues:
Securitization income 31,752 0 0 31,752
Servicing revenues 9,873 0 0 9,873
Other revenues, net 24,658 (1,242) 1,513 24,929
---------- --------- ----------- ---------
Total noninterest revenues 66,283 (1,242) 1,513 66,554
Expenses:
Operating expenses 55,819 1,058 318 57,195
Minority interest in
income of consolidated
subsidiary 0 0 2,220 2,220
---------- --------- ----------- ---------
Total expenses 55,819 1,058 2,538 59,415
---------- --------- ----------- ---------
Income (loss) before income
taxes 12,647 (2,434) 0 10,213
Income tax expense
(benefit) 4,869 (937) 0 3,932
---------- --------- ----------- ---------
Income (loss) from
continuing operations 7,778 (1,497) 0 6,281
Loss, net, on
discontinuance of mortgage
and leasing businesses,
net of tax 0 0 (1,968) (1,968)
---------- --------- ----------- ---------
Net income (loss) $ 7,778 $ (1,497) $ (1,968) $ 4,313
========== ========= =========== =========
(A) Other includes investment and other activities not attributable to
the Advanta Business Cards or Venture Capital segments.
ADVANTA
SUPPLEMENTAL NON-GAAP DISCLOSURE
ADVANTA BUSINESS CARDS MANAGED INCOME STATEMENT AND MANAGED INCOME
RATIOS
(in thousands)
In addition to evaluating the financial performance of the Advanta
Business Cards segment under generally accepted accounting principles
(GAAP), we evaluate Advanta Business Cards' performance on a managed
basis. Our managed receivable portfolio is comprised of both owned and
securitized business credit card receivables. We sell business credit
card receivables through securitizations accounted for as sales under
GAAP. We continue to own and service the accounts that generate the
securitized receivables. Managed data presents performance as if the
securitized receivables had not been sold. We believe that performance
on a managed basis provides useful supplemental information because we
retain interests in the securitized receivables and, therefore, we
have a financial interest in and exposure to the performance of the
securitized receivables. Revenue and credit data on the managed
portfolio provides additional information useful in understanding the
performance of the retained interests in securitizations. A
reconciliation of these managed financial measures to the most
directly comparable GAAP financial measures is included in this press
release.
Advanta Business Cards Managed Income Statement
-----------------------------------------------
Three Months Ended
-------------------------
June 30, June 30,
2004 2003
------------ ------------
Interest income $ 115,781 $ 112,826
Interest expense 19,963 20,953
------------ ------------
Net interest income 95,818 91,873
Provision for credit losses 55,294 56,140
------------ ------------
Net interest income after provision for
credit losses 40,524 35,733
Noninterest revenues 37,082 32,733
------------ ------------
Risk-adjusted revenues (A) 77,606 68,466
Operating expenses 59,608 55,819
------------ ------------
Income before income taxes 17,998 12,647
Income tax expense 7,109 4,869
------------ ------------
Net income $ 10,889 $ 7,778
============ ============
Average managed business credit card
receivables $ 3,116,466 $ 2,796,871
(A) Risk-adjusted revenues represent net interest income and
noninterest revenues, less provision for credit losses.
ADVANTA
HIGHLIGHTS
(in thousands, except per share data)
Three Months Ended Percent
-------------------------- Change From
June 30, Mar. 31, June 30, Prior Prior
EARNINGS 2004 2004 2003 Quarter Year
----------------------------------------------------------------------
Basic income from
continuing operations
per common share:
Class A $ 0.42 $ 0.37 $ 0.25 13.5% 68.0%
Class B 0.44 0.39 0.27 12.8 63.0
Combined (A) 0.43 0.38 0.26 13.2 65.4
Diluted income from
continuing operations
per common share:
Class A 0.39 0.34 0.24 14.7 62.5
Class B 0.40 0.36 0.26 11.1 53.8
Combined (A) 0.40 0.35 0.26 14.3 53.8
Basic net income per
common share:
Class A 0.42 0.37 0.16 13.5 162.5
Class B 0.45 0.39 0.19 15.4 136.8
Combined (A) 0.44 0.38 0.18 15.8 144.4
Diluted net income per
common share:
Class A 0.40 0.34 0.16 17.6 150.0
Class B 0.41 0.36 0.18 13.9 127.8
Combined (A) 0.41 0.35 0.18 17.1 127.8
Return on average common
equity 12.21% 10.86% 5.30% 12.4 130.4
COMMON STOCK DATA
----------------------------------------------------------------------
Weighted average common
shares used to compute:
Basic earnings per
common share
Class A 8,794 8,786 9,151 0.1% (3.9)%
Class B 16,172 15,502 14,893 4.3 8.6
-------- -------- --------
Total 24,966 24,288 24,044 2.8 3.8
Diluted earnings per
common share
Class A 8,794 8,786 9,151 0.1 (3.9)
Class B 18,329 17,656 15,445 3.8 18.7
-------- -------- --------
Total 27,123 26,442 24,596 2.6 10.3
Ending shares outstanding
Class A 9,607 9,607 9,886 0.0 (2.8)
Class B 18,093 17,710 17,274 2.2 4.7
-------- -------- --------
Total 27,700 27,317 27,160 1.4 2.0
Stock price:
Class A
High $ 23.21 $ 16.88 $ 10.45 37.5 122.1
Low 15.43 12.92 6.70 19.4 130.3
Closing 21.93 16.83 9.84 30.3 122.9
Class B
High 24.12 16.90 11.00 42.7 119.3
Low 15.13 12.55 7.47 20.6 102.5
Closing 22.92 16.50 9.99 38.9 129.4
Cash dividends declared:
Class A 0.095 0.063 0.063 50.0 50.0
Class B 0.113 0.076 0.076 50.0 50.0
Book value per common
share 14.28 14.08 13.41 1.4 6.5
(A) Combined represents income available to common stockholders
divided by the combined total of Class A and Class B weighted
average common shares outstanding.
ADVANTA
BUSINESS CREDIT CARD STATISTICS
(in thousands)
Three Months Ended Percent
---------------------------------- Change From
June 30, Mar. 31, June 30, Prior Prior
2004 2004 2003 Quarter Year
---------------------------------------------------
Transaction volume $1,994,647 $1,921,933 $1,677,804 3.8% 18.9%
Securitization
volume increase
excluding
replenishment
sales 0 90,000 86,182 (100.0) (100.0)
Average managed
receivables:
Owned 583,581 551,652 506,200 5.8 15.3
Securitized 2,532,885 2,515,532 2,290,671 0.7 10.6
----------- ----------- -----------
Managed (A) 3,116,466 3,067,184 2,796,871 1.6 11.4
Ending managed
receivables:
Owned 549,862 528,204 442,769 4.1 24.2
Securitized 2,546,777 2,548,942 2,365,176 (0.1) 7.7
----------- ----------- -----------
Managed (A) 3,096,639 3,077,146 2,807,945 0.6 10.3
----------------------------------------------------------------------
CREDIT QUALITY -
OWNED
------------------
Receivables 30
days or more
delinquent $ 25,493 $ 26,908 $ 25,839
Receivables 90
days or more
delinquent 13,309 13,368 13,184
As a percentage of
gross
receivables:
Receivables 30
days or more
delinquent 4.64% 5.09% 5.84% (8.8)% (20.5)%
Receivables 90
days or more
delinquent 2.42 2.53 2.98 (4.3) (18.8)
Net principal
charge-offs:
Amount $ 9,854 $ 8,913 $ 9,555
As a percentage
of average
gross
receivables
(annualized) 6.75% 6.46% 7.55% 4.5 (10.6)
CREDIT QUALITY -
SECURITIZED
------------------
Receivables 30
days or more
delinquent $ 123,123 $ 138,440 $ 150,380
Receivables 90
days or more
delinquent 63,980 69,087 76,459
As a percentage of
gross
receivables:
Receivables 30
days or more
delinquent 4.83% 5.43% 6.36% (11.0)% (24.1)%
Receivables 90
days or more
delinquent 2.51 2.71 3.23 (7.4) (22.3)
Net principal
charge-offs:
Amount $ 44,640 $ 46,187 $ 46,585
As a percentage
of average
gross
receivables
(annualized) 7.05% 7.34% 8.13% (4.0) (13.3)
CREDIT QUALITY -
MANAGED (A)
------------------
Receivables 30
days or more
delinquent $ 148,616 $ 165,348 $ 176,219
Receivables 90
days or more
delinquent 77,289 82,455 89,643
As a percentage of
gross
receivables:
Receivables 30
days or more
delinquent 4.80% 5.37% 6.28% (10.6)% (23.6)%
Receivables 90
days or more
delinquent 2.50 2.68 3.19 (6.7) (21.6)
Net principal
charge-offs:
Amount $ 54,494 $ 55,100 $ 56,140
As a percentage
of average
gross
receivables
(annualized) 6.99% 7.19% 8.03% (2.8) (13.0)
(A) Managed statistics are non-GAAP financial measures and represent
the sum of owned (GAAP) business credit card statistics and
securitized business credit card statistics. We believe that
performance on a managed basis provides useful supplemental
information because we retain interests in the securitized
receivables and, therefore, we have a financial interest in and
exposure to the performance of the securitized receivables.
ADVANTA
RECONCILIATION OF MANAGED INCOME STATEMENT AND BALANCE SHEET MEASURES
TO GAAP FINANCIAL MEASURES
(in thousands)
In addition to evaluating the financial performance of the Advanta
Business Cards segment under generally accepted accounting principles
(GAAP), we evaluate Advanta Business Cards' performance on a managed
basis. Our managed receivable portfolio is comprised of both owned and
securitized business credit card receivables. We sell business credit
card receivables through securitizations accounted for as sales under
GAAP. We continue to own and service the accounts that generate the
securitized receivables. Managed data presents performance as if the
securitized receivables had not been sold. We believe that performance
on a managed basis provides useful supplemental information because we
retain interests in the securitized receivables and, therefore, we
have a financial interest in and exposure to the performance of the
securitized receivables. Revenue and credit data on the managed
portfolio provides additional information useful in understanding the
performance of the retained interests in securitizations.
Three Months Ended
June 30, 2004
----------------------------------------------
Advanta Advanta
Business Cards Securitization Business Cards
GAAP Adjustments Managed
-------------- -------------- --------------
INCOME STATEMENT
MEASURES
Interest income $ 23,735 $ 92,046 $ 115,781
Interest expense 8,590 11,373 19,963
Net interest income 15,145 80,673 95,818
Securitization income 32,627 (32,627) 0
Servicing revenues 12,499 (12,499) 0
Other revenues, net 27,989 9,093 37,082
Total noninterest
revenues 73,115 (36,033) 37,082
Provision for credit
losses 10,654 44,640 (A) 55,294
----------------------------------------------
BALANCE SHEET MEASURES
Average business credit
card receivables 583,581 2,532,885 3,116,466
Ending business credit
card receivables 549,862 2,546,777 3,096,639
Business credit card
receivables:
30 days or more
delinquent 25,493 123,123 148,616
90 days or more
delinquent 13,309 63,980 77,289
Net principal charge-
offs 9,854 44,640 54,494
Three Months Ended
June 30, 2003
----------------------------------------------
Advanta Advanta
Business Cards Securitization Business Cards
GAAP Adjustments Managed
-------------- -------------- --------------
INCOME STATEMENT
MEASURES
Interest income $ 23,007 $ 89,819 $ 112,826
Interest expense 11,269 9,684 20,953
Net interest income 11,738 80,135 91,873
Securitization income 31,752 (31,752) 0
Servicing revenues 9,873 (9,873) 0
Other revenues, net 24,658 8,075 32,733
Total noninterest
revenues 66,283 (33,550) 32,733
Provision for credit
losses 9,555 46,585 (A) 56,140
----------------------------------------------
BALANCE SHEET MEASURES
Average business credit
card receivables 506,200 2,290,671 2,796,871
Ending business credit
card receivables 442,769 2,365,176 2,807,945
Business credit card
receivables:
30 days or more
delinquent 25,839 150,380 176,219
90 days or more
delinquent 13,184 76,459 89,643
Net principal charge-
offs 9,555 46,585 56,140
(A) The provision for credit losses includes the amount by which the
provision for credit losses would have been higher had the
securitized receivables remained as owned and the provision for
credit losses on securitized receivables been equal to actual
reported charge-offs.
ADVANTA
RECONCILIATION OF FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES
(in thousands)
The examples in the tables below provide a reconciliation of
original and revised forward-looking managed receivables and managed
principal charge-offs as a percentage of average managed receivables
(non-GAAP financial measures) to owned receivables and owned principal
charge-offs as a percentage of average owned receivables (the most
directly comparable GAAP financial measures). The examples presented
below depict only certain possibilities out of a large set of possible
scenarios. A discussion of why management believes that performance of
the Advanta Business Cards segment on a managed basis provides useful
supplemental information is included in this press release.
December 31, 2004
-------------------------------------------
Original Guidance Revised Guidance
-------------------------- ----------------
Low End of High End of Low End of
Forward-Looking Business Range Range Range
Credit Card Receivable ------------ ------------- ----------------
Balances:
Owned $ 570,000 $ 622,000 $ 738,000
Securitized 2,710,000 2,956,000 2,542,000
------------ ------------- ----------------
Managed $ 3,280,000 $ 3,578,000 $ 3,280,000
Year Ended December 31,
2004
--------------------------
Original Revised
Forward-Looking Average Guidance Guidance
Business Credit Card ------------ -------------
Receivable Balances:
Owned $ 600,000 $ 645,000
Securitized 2,650,000 2,505,000
------------ -------------
Managed $ 3,250,000 $ 3,150,000
Year Ended December 31, 2004
-------------------------------------------
Original Guidance Revised Guidance
-------------------------- ----------------
Low End of High End of Low End of
Range Range Range
Forward-Looking Business ------------ ------------- ----------------
Credit Card Credit Data:
Owned net principal
charge-offs $ 37,800 $ 42,000 $ 41,000
As a percentage of
average receivables 6.3% 7.0% 6.4%
Securitized net
principal charge-offs $ 189,700 $ 208,250 $ 166,900
As a percentage of
average receivables 7.2% 7.9% 6.7%
Managed net principal
charge-offs $ 227,500 $ 250,250 $ 207,900
As a percentage of
average receivables 7.0% 7.7% 6.6%
-Statistical supplement available at www.advanta.com-
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