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EXHIBIT 12
COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
PRO
FORMA
(IN MILLIONS, EXCEPT RATIOS) 1994(A) 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- -------
Consolidated operations:
Income before income tax expense, accounting changes, and
dividends on preferred securities............................ $ 940 $ 802(b) $ 602(c) $ 775 $ 678 $ 836
Fixed charges deducted from income
Interest expense
Consolidated............................................... 584 526 483 508 565 607
Relating to real estate operations......................... - - 5 8 3 1
Implicit interest in rents................................... 16 16 15 13 13 12
Preferred dividend of subsidiary............................. - - - - - 6
------- ------- ------- ------- ------- -------
Total fixed charges deducted from income................. 600 542 503 529 581 626
------- ------- ------- ------- ------- -------
Earnings available for fixed charges................... $ 1,540 $ 1,344 $ 1,105 $ 1,304 $ 1,259 $ 1,462
====== ====== ====== ====== ====== ======
Fixed charges per above........................................ $ 600 $ 542 $ 503 $ 529 $ 581 $ 626
Capitalized interest relating to real estate operations........ 18 18 15 21 31 39
------- ------- ------- ------- ------- -------
Total fixed charges.......................................... 618 560 518 550 612 665
Dividends on preferred securities............................ 22 - - - - -
------- ------- ------- ------- ------- -------
Total fixed charges and dividends on preferred
securities........................................... $ 640 $ 560 $ 518 $ 550 $ 612 $ 665
====== ====== ====== ====== ====== ======
Ratio of earnings to fixed charges..................... 2.5 2.4 2.1 2.4 2.1 2.2
====== ====== ====== ====== ====== ======
Ratio of earnings to combined fixed charges and
preferred stock dividends............................ 2.4 2.4 2.1 2.4 2.1 2.2
====== ====== ====== ====== ====== ======
Consolidated operations, corporate fixed charges and preferred
stock dividends only:
Income before income tax expense, accounting changes, and
dividends on preferred securities............................ $ 940 $ 802(b) $ 602(c) $ 775 $ 678 $ 836
Corporate fixed charges deducted from income
Corporate interest expense................................... 179 121 121 126 140 191
------- ------- ------- ------- ------- -------
Earnings available for fixed charges................... $ 1,119 $ 923 $ 723 $ 901 $ 818 $ 1,027
====== ====== ====== ====== ====== ======
Total corporate fixed charges per above........................ $ 179 $ 121 $ 121 $ 126 $ 140 $ 191
Dividends on preferred securities.............................. 22 - - - - -
------- ------- ------- ------- ------- -------
Total fixed charges and dividends on preferred
securities........................................... $ 201 $ 121 $ 121 $ 126 $ 140 $ 191
====== ====== ====== ====== ====== ======
Ratio of earnings to corporate fixed charges........... 6.2 7.6 6.0 7.2 5.8 5.3
====== ====== ====== ====== ====== ======
Ratio of earnings to combined corporate fixed charges
and preferred stock dividends........................ 5.6 7.6 6.0 7.2 5.8 5.3
====== ====== ====== ====== ====== ======
American General Finance, Inc.:
Income before income tax expense and accounting changes........ $ 392 $ 392 $ 337 $ 250 $ 208 $ 191
Fixed charges deducted from income
Interest expense............................................. 416 416 380 398 440 452
Implicit interest in rents................................... 11 11 10 9 9 9
Preferred dividend of subsidiary............................. - - - - - 6
------- ------- ------- ------- ------- -------
Total fixed charges...................................... 427 427 390 407 449 467
------- ------- ------- ------- ------- -------
Earnings available for fixed charges................... $ 819 $ 819 $ 727 $ 657 $ 657 $ 658
====== ====== ====== ====== ====== ======
Ratio of earnings to fixed charges..................... 1.9 1.9 1.9 1.6 1.5 1.4
====== ====== ====== ====== ====== ======
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(a) Assuming the American Franklin Company ("AFC") and Western National
Corporation acquisitions and the proposed AFC permanent financing had been
effective as of January 1, 1994. See American General's Current Report on
Form 8-K dated May 9, 1995 incorporated herein by reference.
(b) Includes net realized investment losses of $114 million primarily due to the
capital gains offset program. See "Significant Events -- Capital Gains
Offset Program" within Item 7 of American General's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 incorporated herein by
reference.
(c) Includes $300 million write-down of goodwill. See "Significant
Events -- 1993 Significant Events" within Item 7 and Note 1.7 within Item 8
of American General's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 incorporated herein by reference.
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EXHIBIT 12 (CONTINUED)
COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
THREE MONTHS ENDED MARCH 31,
----------------------------
PRO
FORMA
(IN MILLIONS, EXCEPT RATIOS) 1995(A) 1995 1994
------- ---- ----
Consolidated operations:
Income before income tax expense and dividends on preferred
securities................................................... $ 282 $ 272(b) $ 253
Fixed charges deducted from income
Interest expense
Consolidated............................................... 167 164 121
Relating to real estate operations......................... 1 1 (1)
Implicit interest in rents................................... 4 4 4
----- ----- -----
Total fixed charges deducted from income................ 172 169 124
----- ----- -----
Earnings available for fixed charges.................. $ 454 $ 441 $ 377
===== ===== =====
Fixed charges per above......................................... $ 172 $ 169 $ 124
Capitalized interest relating to real estate operations......... 5 5 4
----- ----- -----
Total fixed charges.......................................... 177 174 128
Dividends on preferred securities............................ 6 - -
----- ----- -----
Total fixed charges and dividends on preferred
securities........................................ $ 183 $ 174 $ 128
===== ===== =====
Ratio of earnings to fixed charges.................... 2.6 2.5 3.0
===== ===== =====
Ratio of earnings to combined fixed charges and
preferred stock dividends......................... 2.5 2.5 3.0
===== ===== =====
Consolidated operations, corporate fixed charges and preferred
stock dividends only:
Income before income tax expense and dividends on preferred
securities................................................... $ 282 $ 272(b) $ 253
Corporate fixed charges deducted from income
Corporate interest expense................................... 45 42 31
----- ----- -----
Earnings available for fixed charges.................. $ 327 $ 314 $ 284
===== ===== =====
Total corporate fixed charges per above......................... $ 45 $ 42 $ 31
Dividends on preferred securities............................... 6 - -
----- ----- -----
Total fixed charges and dividends on preferred
securities........................................ $ 51 $ 42 $ 31
===== ===== =====
Ratio of earnings to corporate fixed charges.......... 7.3 7.6 9.3
===== ===== =====
Ratio of earnings to combined corporate fixed charges
and preferred stock dividends..................... 6.4 7.6 9.3
===== ===== =====
American General Finance, Inc.:
Income before income tax expense................................ $ 96 $ 96 $ 86
Fixed charges deducted from income
Interest expense............................................. 125 125 93
Implicit interest in rents................................... 3 3 3
----- ----- -----
Total fixed charges..................................... 128 128 96
----- ----- -----
Earnings available for fixed charges.................. $ 224 $ 224 $ 182
===== ===== =====
Ratio of earnings to fixed charges.................... 1.8 1.8 1.9
===== ===== =====
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(a) Assuming the AFC acquisition and proposed permanent financing had been
effective as of January 1, 1994. See American General's Current Report on
Form 8-K dated May 9, 1995 incorporated herein by reference.
(b) Includes two months of operations for AFC, which was acquired January 31,
1995.