AIG 2011 Annual Report Download - page 282

American International Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Less than 12 Months 12 Months or More Total
Gross Gross Gross
Fair Unrealized Fair Unrealized Fair Unrealized
(in millions) Value Losses Value Losses Value Losses
December 31, 2010*
Bonds available for sale:
U.S. government and government sponsored
entities $ 2,142 $ 73 $ - $ - $ 2,142 $ 73
Obligations of states, municipalities and
political subdivisions 9,300 296 646 106 9,946 402
Non-U.S. governments 1,427 34 335 41 1,762 75
Corporate debt 18,246 579 7,343 619 25,589 1,198
RMBS 4,461 105 6,178 1,448 10,639 1,553
CMBS 462 19 3,014 1,130 3,476 1,149
CDO/ABS 996 48 2,603 586 3,599 634
Total bonds available for sale 37,034 1,154 20,119 3,930 57,153 5,084
Equity securities available for sale:
Common stock 576 52 - - 576 52
Preferred stock 11 1 - - 11 1
Mutual funds 65 2 - - 65 2
Total equity securities available for sale 652 55 - - 652 55
Total $ 37,686 $ 1,209 $ 20,119 $ 3,930 $ 57,805 $ 5,139
* Excludes fixed maturity and equity securities of businesses held for sale. See Note 4 herein.
At December 31, 2011, AIG held 7,582 and 304 individual fixed maturity and equity securities, respectively, that
were in an unrealized loss position, of which 2,045 individual securities were in a continuous unrealized loss
position for longer than 12 months. AIG did not recognize the unrealized losses in earnings on these fixed
maturity securities at December 31, 2011, because management neither intends to sell the securities nor does it
believe that it is more likely than not that it will be required to sell these securities before recovery of their
amortized cost basis. Furthermore, management expects to recover the entire amortized cost basis of these
securities. In performing this evaluation, management considered the recovery periods for securities in previous
periods of broad market declines. For fixed maturity securities with significant declines, management performed
fundamental credit analysis on a security-by-security basis, which included consideration of credit enhancements,
expected defaults on underlying collateral, review of relevant industry analyst reports and forecasts and other
available market data.
Contractual Maturities of Securities Available for Sale
The following table presents the amortized cost and fair value of fixed maturity securities available for sale by
contractual maturity:
Total Fixed Maturity Fixed Maturity
December 31, 2011 Available for Sale Securities Securities in a Loss Position
(in millions) Amortized Cost Fair Value Amortized Cost Fair Value
Due in one year or less $ 9,967 $ 10,101 $ 1,884 $ 1,866
Due after one year through five years 58,207 60,179 12,911 12,302
Due after five years through ten years 70,031 74,362 10,928 10,253
Due after ten years 62,015 69,487 5,585 4,986
Mortgage-backed, asset-backed and collateralized 50,550 49,852 24,564 21,555
Total $ 250,770 $ 263,981 $ 55,872 $ 50,962
268 AIG 2011 Form 10-K