EX-12 3 y42094ex12.txt COMPUTATION OF RATIOS 1 EXHIBIT 12 AMERICAN INTERNATIONAL GROUP, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (IN MILLIONS, EXCEPT RATIOS)
NINE MONTHS THREE MONTHS ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------- ---------------- 2000 1999 2000 1999 ------ ------ ------ ------ Income before income taxes and minority interest........ $6,151 $5,584 $2,064 $1,867 Less -- Equity income of less than 50% owned persons.... 5 18 6 4 Add -- Dividends from less than 50% owned persons....... 2 10 1 3 ------ ------ ------ ------ 6,148 5,576 2,059 1,866 Add -- Fixed charges......................................... 2,144 1,686 860 577 Less -- Capitalized interest.................................. 47 43 18 13 ------ ------ ------ ------ Income before income taxes, minority interest and fixed charges............................................... $8,245 $7,219 $2,901 $2,430 ====== ====== ====== ====== Fixed charges: Interest costs........................................ $2,051 $1,609 $ 829 $ 551 Rent expense*......................................... 93 77 31 26 ------ ------ ------ ------ Total fixed charges........................... $2,144 $1,686 $ 860 $ 577 ====== ====== ====== ====== Ratio of earnings to fixed charges...................... 3.85 4.28 3.37 4.21
--------------- * The proportion deemed representative of the interest factor. The ratio shown is significantly affected as a result of the inclusion of the fixed charges and operating results of AIG Financial Products Corp. and its subsidiaries (AIGFP). AIGFP structures borrowings through guaranteed investment agreements and engages in other complex financial transactions, including interest rate and currency swaps. In the course of its business, AIGFP enters into borrowings that are primarily used to purchase assets that yield rates greater than the rates on the borrowings with the intent of earning a profit on the spread and to finance the acquisition of securities utilized to hedge certain transactions. The pro forma ratios of earnings to fixed charges, which exclude the effects of the operating results of AIGFP, are 6.18 and 6.89 for the third quarter and 6.72 and 7.00 for the first nine months of 2000 and 1999, respectively. As AIGFP will continue to be a subsidiary, AIG expects that these ratios will continue to be lower than they would be if the fixed charges and operating results of AIGFP were not included therein.