AIG 2011 Annual Report Download - page 300

American International Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SunAmerica Affordable Housing Partners, Inc. (SAAHP) organizes and invests in limited partnerships that
develop and operate affordable housing qualifying for federal tax credits, in addition to a few market rate
properties across the United States. The general partners in the operating partnerships are almost exclusively
unaffiliated third-party developers. AIG does not consolidate an operating partnership if the general partner is an
unaffiliated person. Through approximately 1,050 partnerships, SAAHP has investments in developments with
approximately 135,000 apartment units nationwide, and as of December 31, 2011 has syndicated approximately
$7.7 billion in partnership equity to other investors who will receive, among other benefits, tax credits under
certain sections of the Internal Revenue Code. The pre-tax income of SAAHP is reported, along with other
SunAmerica partnership income, as a component of the SunAmerica segment.
In 2008, certain AIG wholly-owned life insurance companies sold all of their undivided interests in a pool of
$39.3 billion face amount of RMBS to ML II, whose sole member is the FRBNY. AIG has a significant variable
economic interest in ML II, which is a VIE.
In 2008, AIG entered into an agreement with the FRBNY, ML III and The Bank of New York Mellon, which
established arrangements, through ML III, to fund the purchase of multi-sector CDOs underlying or related to
CDS written by AIGFP. Concurrently, AIGFP’s counterparties to such CDS transactions agreed to terminate those
CDS transactions relating to the multi-sector CDOs purchased from them. AIG has a significant variable interest
in ML III, which is a VIE.
Aircraft Trusts
AIG has created two VIEs for the purpose of acquiring, owning, leasing, maintaining, operating and selling
aircraft. AIG subsidiaries hold beneficial interests, including all the equity interests in these entities. These
beneficial interests include passive investments by AIG’s insurance operations in non-voting preferred equity
interests and in the majority of the debt issued by these entities. AIG and its subsidiaries collectively maintain the
power to direct the activities of the VIEs that most significantly impact the entities’ economic performance, and
bear the obligation to absorb economic losses or receive economic benefits that could potentially be significant to
the VIEs. As a result, AIG has determined that it is the primary beneficiary and fully consolidates the assets and
liabilities of these entities, which totaled $1.3 billion and $0.8 billion, respectively at December 31, 2011. The debt
of these entities is not an obligation of, or guaranteed by, AIG or any of its subsidiaries. Under a servicing
agreement, ILFC acts as servicer for the aircraft owned by these entities.
Consumer Loans Vehicles
AIG sponsors one VIE that has issued a variable funding note backed by a consumer loan collateralized by
individual life insurance assets. As of December 31, 2011, total consolidated assets and liabilities for this entity
were $456 million and $248 million, respectively; AIG’s maximum exposure, representing the carrying value of the
consumer loan, was $434 million.
Structured Investment Vehicle
Through the Direct Investment book, AIG sponsors Nightingale Finance Ltd, a structured investment vehicle
(SIV), which invests in variable rate, investment-grade debt securities, the majority of which are ABS. AIG has no
equity interest in the SIV; however, it maintains the power to direct the activities of the SIV that most
286 AIG 2011 Form 10-K
AFFORDABLE HOUSING PARTNERSHIPS
MAIDEN LANE INTERESTS
OTHER ASSET ACCOUNTS