AIG 2005 Annual Report Download - page 113

AMERICAN INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
Contractual Obligations and Other Commercial Commitments
The maturity schedule of AIG’s contractual obligations at December 31, 2005 was as follows:
Payments due by Period
Less One Four
Than Through Through After
Total One Three Five Five
(in millions) Payments Year Years Years Years
Borrowings(a) $ 99,291 $31,504 $20,717 $16,886 $30,184
Loss reserves(b) 77,169 21,221 23,537 11,191 21,220
Insurance and investment contract liabilities(c) 47,956 8,639 16,019 9,855 13,443
Operating leases 2,734 573 761 468 932
Aircraft purchase commitments 23,320 6,037 10,524 3,775 2,984
Total $250,470 $67,974 $71,558 $42,175 $68,763
(a) Excludes commercial paper and obligations included as debt pursuant to FIN46R. See also Note 9 of Notes to Consolidated Financial Statements.
(b) Represents future loss and loss adjustment expense payments estimated based on historical loss development payment patterns.
(c) Insurance and investment contract liabilities include various investment-type products with contractually scheduled maturities including periodic payments
of a term certain nature and guaranteed maturities under guaranteed investment contracts. Items excluded from the table include (i) liabilities for future
policy benefits of approximately $109 billion, and (ii) policyholder contract deposits of approximately $182 billion. Amounts excluded from the table are
generally comprised of policies or contracts where (i) AIG is currently not making payments until the occurrence of an insurable event, such as death or
disability, (ii) payments are conditional on survivorship, or (iii) the occurrence of a payment due to a surrender or other non-scheduled event out of
AIG’s control. The determination of these liability amounts and timing of payment are not reasonably fixed and determinable. Significant uncertainties
relating to these liabilities include mortality, morbidity, expenses, persistency, investment returns, inflation, and future policyholder elections as to benefits.
The maturity schedule of AIG’s other commercial commitments by segment at December 31, 2005 was as follows:
Amount of Commitment Expiration
Less One Four
Total Than Through Through After
Amounts One Three Five Five
(in millions) Committed Year Years Years Years
Letters of credit:
Life Insurance & Retirement Services $ 185 $ 53 $ 9 $ 22 $ 101
DBG 188 188 — — —
Standby letters of credit:
Capital Markets 1,758 8 52 70 1,628
Guarantees:
Life Insurance & Retirement Services(a) 3,456 109 400 — 2,947
Aircraft Finance 147 51 14 — 82
Asset Management 82 27 9 46 —
Parent Company(b) 393 392 1 — —
Other commercial commitments(c):
Capital Markets(d) 10,932 2,241 1,734 789 6,168
Aircraft Finance(e) 1,883 — 131 868 884
Life Insurance & Retirement Services(f) 3,505 626 1,286 748 845
Asset Management 607 437 155 15 —
DBG(g) 1,334 — — — 1,334
Total $ 24,470 $4,132 $3,791 $2,558 $13,989
(a) Primarily AIG SunAmerica construction guarantees connected to affordable housing investments.
(b) Represents reimbursement obligations under letters of credit issued by commercial banks.
(c) Excludes commitments with respect to pension plans. The annual pension contribution for 2006 is expected to be approximately $70 million for U.S. and
non-U.S. plans. See also Note 15 of Notes to Consolidated Financial Statements.
(d) Primarily liquidity facilities provided in connection with certain municipal swap transactions and collateralized bond obligations.
(e) Primarily in connection with options to acquire aircraft.
(f) Primarily AIG SunAmerica commitments to invest in partnerships.
(g) Primarily commitments to invest in limited partnerships.
‘‘Rating triggers’’ have been defined by one independent which (i) could result in the termination or limitation of credit
rating agency to include clauses or agreements the outcome of availability, or require accelerated repayment, (ii) could result
which depends upon the level of ratings maintained by one or in the termination of business contracts or (iii) could require a
more rating agencies. Rating triggers generally relate to events company to post collateral for the benefit of counterparties.
AIG m Form 10-K 61