EX-12 3 y62622qexv12.htm EX-12: STATEMENT RE. COMPUTATION OF RATIOS EX-12: STATEMENT RE. COMPUTATION OF RATIOS
 

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,
2002 2001 2002 2001
Income before income taxes, minority interest and cumulative effect of accounting changes
  $ 5,726     $ 4,805     $ 2,767     $ 2,005  
Less — Equity income of less than 50% owned persons
    47       11       23       6  
Add — Dividends from less than 50% owned persons
    11       1       9       1  
     
     
     
     
 
      5,690       4,795       2,753       2,000  
Add —
                               
 
Fixed charges
    1,904       2,092       901       1,042  
Less —
                               
 
Capitalized interest
    29       32       14       16  
     
     
     
     
 
Income before income taxes, minority interest, cumulative effect of accounting changes and fixed charges
  $ 7,565     $ 6,855     $ 3,640     $ 3,026  
     
     
     
     
 
Fixed charges:
                               
 
Interest costs
  $ 1,814     $ 2,019     $ 856     $ 1,006  
 
Rent expense*
    90       73       45       36  
     
     
     
     
 
   
Total fixed charges
  $ 1,904     $ 2,092     $ 901     $ 1,042  
     
     
     
     
 
Ratio of earnings to fixed charges
    3.97       3.28       4.04       2.90  
*  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 6.05 and 4.12 for the second quarter and 6.26 and 4.77 for the first six months of 2002 and 2001, 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.