EX-12 4 y52044ex12.txt STATEMENT RE COMPUTATION OF RATIOS 1 EXHIBIT 12 AMERICAN INTERNATIONAL GROUP, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (IN MILLIONS, EXCEPT RATIOS)
SIX MONTHS THREE MONTHS ENDED JUNE 30, ENDED JUNE 30, ---------------- ---------------- 2001 2000 2001 2000 ------ ------ ------ ------ Income before income taxes, minority interest and cumulative effect of an accounting change............. $4,657 $4,087 $2,385 $2,096 Less -- Equity income (loss) of less than 50% owned persons............................................... 11 (1) 6 2 Add -- Dividends from less than 50% owned persons....... 1 1 1 1 ------ ------ ------ ------ 4,647 4,089 2,380 2,095 Add -- Fixed charges......................................... 1,638 1,284 823 613 Less -- Capitalized interest.................................. 32 29 16 15 ------ ------ ------ ------ Income before income taxes, minority interest, cumulative effect of an accounting change and fixed charges............................................... $6,253 $5,344 $3,187 $2,693 ====== ====== ====== ====== Fixed charges: Interest costs........................................ $1,577 $1,222 $ 793 $ 582 Rent expense*......................................... 61 62 30 31 ------ ------ ------ ------ Total fixed charges........................... $1,638 $1,284 $ 823 $ 613 ====== ====== ====== ====== Ratio of earnings to fixed charges...................... 3.82 4.16 3.87 4.39
--------------- * 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 7.10 and 7.19 for the second quarter and 6.96 and 7.03 for the first six months of 2001 and 2000, 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.