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EXHIBIT 12
AMERICAN INTERNATIONAL GROUP, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN MILLIONS, EXCEPT RATIOS)
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<CAPTION>
NINE MONTHS THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
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2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Income before income taxes and minority interest........ $6,151 $5,584 $2,064 $1,867
Less -- Equity income of less than 50% owned persons.... 5 18 6 4
Add -- Dividends from less than 50% owned persons....... 2 10 1 3
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6,148 5,576 2,059 1,866
Add --
Fixed charges......................................... 2,144 1,686 860 577
Less --
Capitalized interest.................................. 47 43 18 13
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Income before income taxes, minority interest and fixed
charges............................................... $8,245 $7,219 $2,901 $2,430
====== ====== ====== ======
Fixed charges:
Interest costs........................................ $2,051 $1,609 $ 829 $ 551
Rent expense*......................................... 93 77 31 26
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Total fixed charges........................... $2,144 $1,686 $ 860 $ 577
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Ratio of earnings to fixed charges...................... 3.85 4.28 3.37 4.21
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* 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 6.18 and 6.89 for the
third quarter and 6.72 and 7.00 for the first nine months of 2000 and 1999,
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.
