AIG 2006 Annual Report Download - page 125

American International Group, Inc. and Subsidiaries
Contractual Obligations and Other Commercial Commitments
The maturity schedule of contractual obligations of AIG and its consolidated subsidiaries at December 31, 2006 was as
follows:
Payments due by Period
Total Less Than 1-3 3+-5 Over
(in millions) Payments One Year Years Years Five Years
Borrowings(a) $133,285 $ 34,670 $ 29,949 $30,483 $ 38,183
Interest payments on borrowings 44,090 4,960 8,130 5,445 25,555
Loss reserves(b) 79,999 22,000 24,399 11,600 22,000
Insurance and investment contract liabilities(c) 577,730 16,023 27,728 39,376 494,603
GIC liabilities(d) 56,042 19,399 23,209 3,889 9,545
Aircraft purchase commitments 19,042 5,442 7,079 2,155 4,366
Operating leases 2,763 626 802 581 754
Total $912,951 $103,120 $121,296 $93,529 $595,006
(a) Excludes commercial paper and obligations included as debt pursuant to FASB Interpretation No. 46, ‘‘Consolidation of Variable Interest Entities’’
(FIN 46R), and includes hybrid financial instrument liabilities recorded at fair value. 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 cer tain nature. Insurance and investment contract liabilities also include benefit and claim liabilities, of which a significant portion
represents policies and contracts that do not have stated contractual maturity dates and may not result in any future payment obligations. For these
policies and contracts (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. AIG has made
significant assumptions to determine the estimated undiscounted cash flows of these contractual policy benefits which include mor tality, morbidity,
future lapse rates, expenses, investment returns and interest crediting rates, offset by expected future deposits and premium on in-force policies. Due
to the significance of the assumptions used, the amounts presented could be materially different from actual required payments. The amounts
presented in this table are undiscounted and therefore exceed the future policy benefits and policyholder contract deposits included in the balance
sheet.
(d) Represents guaranteed maturities under GICs.
The maturity schedule of other commercial commitments of AIG and its consolidated subsidiaries at December 31,
2006 was as follows:
Amount of Commitment Expiration
Less Over
Total Amounts Than 1-3 3+-5 Five
Committed One Year Years Years Years
Letters of credit:
Life Insurance & Retirement Services $ 185 $ 21 $ 28 $ — $ 136
Parent Company(a) 641 522 1 118 —
DBG 198 198 — — —
Standby letters of credit:
Capital Markets 1,739 1,427 104 40 168
Guarantees:
Life Insurance & Retirement Services(b) 2,100 113 423 7 1,557
Aircraft Leasing 161 — 52 — 109
Asset Management 246 23 53 — 170
Other commercial commitments(c):
Capital Markets(d) 15,946 5,127 2,313 2,640 5,866
Aircraft Leasing(e) 344 — — — 344
Life Insurance & Retirement Services(f) 4,896 1,119 1,730 1,177 870
Asset Management(g) 1,310 896 255 91 68
Life Settlement 203 — 203 — —
DBG(h) 1,588 690 603 295 —
Parent Company 193 56 137 — —
Total $29,750 $10,192 $5,902 $4,368 $9,288
(a) Represents reimbursement obligations under letters of credit issued by commercial banks.
(b) Primarily AIG SunAmerica construction guarantees connected to affordable housing investments.
(c) Excludes commitments with respect to pension plans. The annual pension contribution for 2007 is expected to be approximately $95 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) Includes commitments to invest in limited partnerships, private equity and hedge funds and real estate.
(h) Primarily commitments to invest in limited partnerships.
Form 10-K 2006 AIG 75