EX-12 3 a2200724zex-12.htm EXHIBIT 12


American International Group, Inc. and Subsidiaries

Exhibit 12

Computation of Ratios of Earnings to Fixed Charges

   
 
   Three Months Ended
September 30, 		  Nine Months Ended
September 30, 		 
(in millions, except ratios)
   2010
   2009
   2010
   2009
  
   

Earnings:

                          
 

Pre-tax income (loss)(a):

   $ 419   $ (511 ) $ 3,791   $ (6,130 )
 

Add – Fixed charges

     2,780     2,793     7,178     8,964  
   

Adjusted Pre-tax income

   $ 3,199   $ 2,282   $ 10,969   $ 2,834  
   

Fixed charges:

                          
 

Interest expense

   $ 2,490   $ 2,434   $ 6,301   $ 7,807  
 

Portion of rent expense representing interest

     50     87     150     261  
 

Interest credited to policy and contract holders

     240     272     727     896  
   

Total fixed charges

   $ 2,780   $ 2,793   $ 7,178   $ 8,964  
   
 

Preferred stock dividend requirements

   $ -   $ -   $ -   $ 1,204  

Total fixed charges and preferred stock dividend requirements

   $ 2,780   $ 2,793   $ 7,178   $ 10,168  

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

   $ 2,540   $ 2,521   $ 6,451   $ 8,068  
   

Ratio of earnings to fixed charges:

                          
 

Ratio

     1.15     n/a     1.53     n/a  
 

Coverage deficiency

     n/a   $ (511 )   n/a   $ (6,130 )
   

Ratio of earnings to fixed charges and preferred stock dividends:

                          
 

Ratio

     1.15     n/a     1.53     n/a  
 

Coverage deficiency

     n/a   $ (511 )   n/a   $ (7,334 )
   

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

                          
 

Ratio

     1.26     n/a     1.70     n/a  
 

Coverage deficiency

     n/a   $ (239 )   n/a   $ (5,234 )
   
(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 Direct Investment business. 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.

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