EX-12 28 a2203832zex-12.htm EX-12


American International Group, Inc. and Subsidiaries

Exhibit 12

Computation of Ratios of Earnings to Fixed Charges

   
Three Months Ended March 31,
(in millions, except ratios)
   2011
   2010
  
   

Earnings:

              
 

Pre-tax income (loss)(a):

   $ (1,387 ) $ 1,640  
 

Add – Fixed charges

     1,249     1,980  
   
 

Adjusted Pre-tax income

     (138 )   3,620  
   

Fixed charges:

              
 

Interest expense

   $ 990   $ 1,695  
 

Portion of rent expense representing interest

     49     61  
 

Interest credited to policy and contract holders

     210     224  
   

Total fixed charges

   $ 1,249   $ 1,980  
   

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

   $ 1,039   $ 1,756  
   

Ratio of earnings to fixed charges:

              
 

Ratio

     n/a     1.83  
 

Coverage deficiency

     (1,387 )   n/a  
   

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

              
 

Ratio

     n/a     2.06  
 

Coverage deficiency

     (1,177 )   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 amounts are also removed from earnings used in this calculation. GICs and GIAs are entered into by AIG's subsidiaries. The proceeds from GICs and GIAs are invested in a diversified portfolio of securities, primarily investment grade bonds. When these investments yield rates greater than the rates on the related policyholders obligation or contract, a profit is earned from the spread.

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