AIG 2013 Annual Report Download - page 376

Exhibit 12
Earnings:
Pre-tax income (loss)(a): $ 433 $ (2,836) $ 19,666 $ (14,125)
Add – Fixed charges 4,717 4,644 8,811 16,592
Adjusted Pre-tax income (loss) $ 5,150 $ 1,808 $ 28,477 $ 2,467
Fixed charges:
Interest expense $ 3,605 $ 3,576 $ 7,613 $ 15,136
Portion of rent expense representing interest 148 161 196 244
Interest credited to policy and contract holders 964 907 1,002 1,212
Total fixed charges $ 4,717 $ 4,644 $ 8,811 $ 16,592
Preferred stock dividend requirements $ – $ – $ – $ 1,204
Total fixed charges and preferred stock dividend
requirements $ 4,717 $ 4,644 $ 8,811 $ 17,796
Total fixed charges, excluding interest credited to policy
and contract holders $ 3,753 $ 3,737 $ 7,809 $ 15,380
Ratio of earnings to fixed charges:
Ratio 1.09 n/a 3.23 n/a
Coverage deficiency n/a $ (2,836) n/a $ (14,125)
Ratio of earnings to fixed charges and preferred stock
dividends:
Ratio 1.09 n/a 3.23 n/a
Coverage deficiency n/a $ (2,836) n/a $ (15,329)
Ratio of earnings to fixed charges, excluding interest
credited to policy and contract holders(b): 1.37 n/a 3.65 n/a
Coverage deficiency n/a $ (1,929) n/a $ (12,913)
(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 subsidiaries. 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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AIG 2013 Form 10-K358
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
Years Ended December 31,
(in millions, except ratios) 2013 2012 2011 2010 2009
$ 7,942
4,279
$ 12,221
$ 3,292
138
849
$ 4,279
$–
$ 4,279
$ 3,430
2.86
n/a
2.86
n/a
3.56
n/a