AIG 2005 Annual Report Download - page 110

Management’s Discussion and Analysis of
Financial Condition and Results of Operations Continued
Other realized capital gains (losses) amounted to $225 mil- December 31,
lion, $(227) million and $(643) million for 2005, 2004 and (in millions) 2005 2004
2003, respectively. Borrowings not guaranteed by AIG:
ILFC
Capital Resources Commercial paper 2,615 2,670
Medium term notes 4,689 5,972
At December 31, 2005, AIG had total consolidated sharehold- Notes and bonds payable(a) 19,026 15,734
ers’ equity of $86.32 billion and total consolidated borrowings Loans and mortgages payable –40(b)
of $109.85 billion. At that date, $99.42 billion of such
Total 26,330 24,416
borrowings were either not guaranteed by AIG or were
matched borrowings under obligations of guaranteed invest- AGF
ment agreements (GIAs), liabilities connected to trust pre- Commercial paper 3,423 3,686
ferred stock, or matched notes and bonds payable. Medium term notes 17,736 13,709
Notes and bonds payable 983 1,585
Borrowings Total 22,142 18,980
Commercial paper:
At December 31, 2005, AIG’s net borrowings were $10.43 bil-
AIG Credit Card Company (Taiwan) 476 359
lion after reflecting amounts that were matched borrowings AIG Finance (Taiwan) Limited –9
under AIGFP’s obligations of GIAs, matched notes and bonds
Total 476 368
payable, amounts not guaranteed by AIG and liabilities
connected to trust preferred stock. The following table Loans and mortgages payable:
summarizes borrowings outstanding at December 31, 2005 AIGCFG 864 792
AIG Finance (Hong Kong) Limited 183 49
and 2004:
Total 1,047 841
December 31, Other Subsidiaries 927 832
(in millions) 2005 2004
Variable Interest Entity debt:
AIG’s net borrowings $ 10,425 $ 8,498
AIG Global Investment Group 140 165
Liabilities connected to trust preferred
AIG Global Real Estate Investment 977 8
stock 1,391 1,489
AIG SunAmerica 233 126
AIGFP
GIAs 20,811 18,919 Total 1,350 299
Matched notes and bonds payable 24,950 22,257 Total borrowings not guaranteed by
Borrowings not guaranteed by AIG 52,272 45,736 AIG 52,272 45,736
Total debt $109,849 $96,899 Total debt $109,849 $96,899
(a) Includes borrowings under Export Credit Facility of $2.6 billion.
Borrowings issued or guaranteed by AIG and those borrowings
(b) Represents capital lease obligations.
not guaranteed by AIG at December 31, 2005 and 2004 were
as follows: For a description of the effects on AIG’s capital resources,
including the cost of borrowing, of recent downgrades and
December 31, rating actions by the major rating agencies, see the discussion
(in millions) 2005 2004
under ‘‘Outlook’’ herein and ‘‘Risk Factors — AIG’s Credit
AIG borrowings: Ratings,’’ in Item 1A. Risk Factors as well as Note 9 of Notes
Medium term notes $ 112 $ 667 to Consolidated Financial Statements.
Notes and bonds payable 4,495 2,980 During 2005, AIG did not issue any medium term notes,
Loans and mortgages payable 814 349 and $555 million of previously issued notes matured.
Total 5,421 3,996 On September 30, 2005, AIG sold $1.5 billion principal
Borrowings guaranteed by AIG: amount of notes in a Rule 144A/Regulation S offering,
AIGFP $500 million of which bear interest at a rate of 4.700 percent
GIAs 20,811 18,919 per annum and mature in 2010 and $1.0 billion of which bear
Notes and bonds payable 26,463 22,695 interest at a rate of 5.05 percent per annum and mature in
Total 47,274 41,614 2015. The notes are senior unsecured obligations of AIG and
rank equally with all of AIG’s other senior debit outstanding.
AIG Funding, Inc. commercial paper 2,694 2,969 AIG has agreed to use commercially reasonable efforts to
AGC Notes and bonds payable 797 1,095 consummate an exchange offer for the notes pursuant to an
Liabilities connected to trust preferred effective registration statement within 360 days of the date on
stock 1,391 1,489 which the notes were issued.
Total borrowings issued or AIG intends to continue its customary practice of issuing
guaranteed by AIG 57,577 51,163 debt securities from time to time to meet its financing needs
58 AIG m Form 10-K