EX-12 6 a2196553zex-12.htm EXHIBIT 12


American International Group, Inc., and Subsidiaries

Exhibit 12

Computation of Ratios of Earnings to Fixed Charges

   
Years Ended December 31,
(in millions, except ratios)
   2009
   2008
   2007
   2006
   2005
  
   

Earnings:

                                
 

Pre-tax income (loss)(a):

   $ (13,331 ) $ (106,555 ) $ 8,097   $ 20,981   $ 14,806  
 

Add – Fixed charges

     16,592     20,456     11,470     9,062     7,663  
   

Adjusted Pre-tax income (loss)

   $ 3,261     (86,099 )   19,567     30,043     22,469  
   

Fixed charges:

                                
 

Interest expense

   $ 15,136   $ 17,665   $ 4,553   $ 3,715   $ 2,704  
 

Portion of rent expense representing interest

     244     299     257     219     199  
 

Interest credited to policy and contract holders

     1,212     2,492     6,660     5,128     4,760  
   

Total fixed charges

   $ 16,592   $ 20,456   $ 11,470   $ 9,062   $ 7,663  
   
 

Preferred stock dividend requirements

   $ 1,295   $ 400   $ -   $ -   $ -  

Total fixed charges and preferred stock dividend requirements

   $ 17,887   $ 20,856   $ 11,470   $ 9,062   $ 7,663  

Total fixed charges, excluding interest credited to policy and contract holders

   $ 15,380   $ 17,964   $ 4,810   $ 3,934   $ 2,903  
   

Ratio of earnings to fixed charges:

                                
 

Ratio

     n/a     n/a     1.71     3.32     2.93  
 

Coverage deficiency

     (13,331 )   (106,555 )   n/a     n/a     n/a  
   

Ratio of earnings to fixed charges and preferred stock dividends:

                                
 

Ratio

     n/a     n/a     1.71     3.32     2.93  
 

Coverage deficiency

     (14,626 )   (106,955 )   n/a     n/a     n/a  
   

Ratio of earnings to fixed charges, excluding interest credited to policy and contract holders(b) :

                                
 

Ratio

     n/a     n/a     4.07     7.64     7.74  
 

Coverage deficiency

     (12,119 )   (104,063 )   n/a     n/a     n/a  
   
(a)
From continuing operations, excluding undistributed earnings (loss) from equity method investments and capitalized interest.

(b)
The Ratio of earnings to fixed charges excluding interest credited to policy and contract holders removes interest credited to guaranteed investment contract (GIC) policyholders and guaranteed investment agreement (GIA) contract holders. Such interest expenses are also removed from earnings used in this calculation. GICs and GIAs are entered into by AIG's insurance subsidiaries, principally SunAmerica Life Insurance Company and AIG Financial Products Corp. and its subsidiaries, respectively. The proceeds from GICs and GIAs are invested in a diversified portfolio of securities, primarily investment grade bonds. The assets acquired yield rates greater than the rates on the related policyholders obligation or contract, with the intent of earning a profit from the spread.