EX-12 3 y53394ex12.txt SUPPLEMENTAL COMPUTATION 1 -------------------------------------------------------------------------------- EXHIBIT 12 SUPPLEMENTAL COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES American International Group, Inc. and Subsidiaries
(IN MILLIONS, EXCEPT RATIOS) ----------------------------------------------------------------------------------------------------------- YEARS ENDED DECEMBER 31, 2000 1999 1998 1997 1996 ----------------------------------------------------------------------------------------------------------- Income before income taxes and minority interest $10,023 $ 9,399 $ 7,583 $6,383 $5,548 Less-Equity income of less than 50% owned persons 9 22 98 169 156 Add-Dividends from less than 50% owned persons 3 13 24 30 13 ----------------------------------------------------------------------------------------------------------- 10,017 9,390 7,509 6,244 5,405 Add-Fixed charges 3,842 3,152 2,884 2,617 2,379 Less-Capitalized interest 69 60 86 65 73 ----------------------------------------------------------------------------------------------------------- Income before income taxes, minority interest and fixed charges $13,790 $12,482 $10,307 $8,796 $7,711 ----------------------------------------------------------------------------------------------------------- Fixed charges: Interest costs $ 3,705 $ 3,022 $ 2,769 $2,513 $2,282 Rental expense* 137 130 115 104 97 ----------------------------------------------------------------------------------------------------------- Total fixed charges $ 3,842 $ 3,152 $ 2,884 $2,617 $2,379 ----------------------------------------------------------------------------------------------------------- Ratio of earnings to fixed charges 3.59 3.96 3.57 3.36 3.24 -----------------------------------------------------------------------------------------------------------
* The proportion deemed representative of the interest factor. The ratios shown are 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, excluding the effects of the operating results of AIGFP, are 5.06, 5.51, 4.76, 4.37, and 4.13 for 2000, 1999, 1998, 1997 and 1996, 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.
(IN MILLIONS, EXCEPT RATIOS) --------------------------------------------------------------------------------------------------- Six Months Three Months Ended June 30, Ended June 30, --------------- --------------- 2001 2000 2001 2000 --------------------------------------------------------------------------------------------------- Income before income taxes and minority interest $4,750 $4,729 $1,950 $2,260 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 --------------------------------------------------------------------------------------------------- 4,740 4,731 1,945 2,259 Add-Fixed charges 2,092 1,739 1,042 845 Less-Capitalized interest 32 29 16 15 --------------------------------------------------------------------------------------------------- Income before income taxes, minority interest, and fixed charges $6,800 $6,441 $2,971 $3,089 --------------------------------------------------------------------------------------------------- Fixed charges: Interest costs $2,019 $1,665 $1,006 $ 808 Rent expense* 73 74 36 37 --------------------------------------------------------------------------------------------------- Total fixed charges $2,092 $1,739 $1,042 $ 845 --------------------------------------------------------------------------------------------------- Ratio of earnings to fixed charges 3.25 3.70 2.85 3.66 ---------------------------------------------------------------------------------------------------
* 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 4.03 and 4.86 for the second quarter and 4.73 and 5.09 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. 118