AIG 2011 Annual Report Download - page 144

The following table presents a rollforward of the amount of collateral posted by AIGFP:
Collateral Additional Collateral
Posted as of Postings, Collateral Posted as of
December 31, Netted by Returned by December 31,
(in millions) 2010 Counterparty Counterparties 2011
Super senior credit default swap (CDS) portfolio $ 3,786 $ 594 $ 1,183 $ 3,197
All other derivatives 1,335 1,511 1,128 1,718
Total $ 5,121 $ 2,105 $ 2,311 $ 4,915
The collateral amounts presented in the table above are reflective of counterparty netting adjustments available
under master netting agreements and is inclusive of collateral that exceeds the fair value of derivatives as of the
reporting date. Collateral obtained by AIGFP from third parties was $791 million and $2.3 billion at
December 31, 2011 and 2010, respectively.
The following table presents the net notional amount and number of outstanding trade positions in AIGFP’s
portfolios:
Percentage Decrease
December 31, December 31, December 31,
(dollars in billions) 2011 2010 2009 2011 vs. 2010 2010 vs. 2009
Net notional amount(a) $ 176 $ 341 $ 900 (48)% (62)%
Super senior CDS contracts
(included in net notional amount above) 25 60 184 (58) (67)
Outstanding trade positions(b) 2,000 3,900 16,100 (49) (76)
(a) Excludes $10.2 billion, $11.5 billion and $40.7 billion of intercompany derivatives in 2011, 2010 and 2009, respectively.
(b) Excludes approximately 4,800 non-derivative trade positions that were transferred to Direct Investment book in 2010.
Direct Investment Book
As of December 31, 2011, management expects the DIB’s investments to provide sufficient return to fund the
DIB maturing liabilities. The DIB’s investment portfolio consists primarily of cash, short term investments, fixed
maturity securities issued by U.S. government and government sponsored entities, mortgage and asset backed
securities and to a lesser extent bank loans, mortgage loans and equity securities. While a significant portion of
the DIB’s liquidity requirements are supported by existing liquidity sources or maturing investments, mismatches
in the timing of cash inflows and outflows may require assets to be sold or AIG to access the capital markets to
satisfy liquidity requirements. Depending on market conditions and the ability to sell assets if required, proceeds
from asset sales may not be sufficient to satisfy the full amount required. Management believes that sufficient
liquidity is maintained by the DIB to meet near-term liquidity requirements. Any additional liquidity shortfalls
would need to be funded by AIG Parent.
During 2011, $1.8 billion of assets held by the DIB were sold to certain Chartis subsidiaries. In addition, during
2011, AIG assigned approximately 52 percent of AIG’s interest in ML III to the DIB, subject to liens on those
interests as set forth in the Master Transaction Agreement dated December 8, 2010, among AIG Parent, AM
Holdings LLC (formerly known as ALICO Holdings LLC), AIA Aurora LLC, the FRBNY, the Department of the
Treasury, and the Trust.
In the third quarter of 2011, AIG issued $2.0 billion aggregate principal amount of senior unsecured notes,
$1.2 billion of 4.250% Notes Due 2014 and $800 million of 4.875% Notes Due 2016. The proceeds from the sale
of these notes are being used to pay maturing MIP debt and the notes are included within ‘‘MIP notes payable’’
in the debt outstanding table below.
130 AIG 2011 Form 10-K