AIG 2006 Annual Report Download - page 181

American International Group, Inc. and Subsidiaries
8. Investment Information
Continued
(c) Realized Gains and Losses:
The realized capital gains (losses) and increase (decrease) in unrealized appreciation of AIG’s consolidated available
for sale investments were as follows:
Years Ended December 31,
(in millions) 2006 2005 2004
Realized capital gains (losses):
Fixed maturities*$(1,069) $ (108) $ 178
Equity securities*679 588 541
Other gains (losses) 496 (139) (675)
Realized capital gains (losses) $ 106 $ 341 $ 44
Increase (decrease) in unrealized appreciation of investments:
Fixed maturities $ (198) $(4,656) $1,436
Equity securities 432 850 445
Other investments 986 2,138 (283)
Capital Markets investments 1,354 (1,909) 270
Increase (decrease) in unrealized appreciation $ 2,574 $(3,577) $1,868
* Includes other-than-temporary impairments.
Net unrealized gains included in the Consolidated Income Statement from investment securities classified as trading securities for 2006,
2005 and 2004 were $938 million, $1.1 billion and $269 million, respectively.
The gross realized gains and gross realized losses on AIG’s consolidated available for sale securities were as follows:
2006 2005 2004
Gross Gross Gross Gross Gross Gross
Realized Realized Realized Realized Realized Realized
(in millions) Gains Losses Gains Losses Gains Losses
Fixed maturities $ 711 $ 1,780 $1,586 $1,694 $1,560 $1,382
Equity securities 1,111 454 930 409 774 379
Preferred stocks 22 — 101 34 173 27
Total $ 1,844 $ 2,234 $2,617 $2,137 $2,507 $1,788
(d) Fair Value of Investment Securities:
The amortized cost and estimated fair value of securities available for sale and held to maturity for the Insurance and
Asset Management segments at December 31, 2006 and December 31, 2005 follows:
December 31, 2006 December 31, 2005
Gross Gross Estimated Gross Gross Estimated
Amortized Unrealized Unrealized Fair Amor tized Unrealized Unrealized Fair
(in millions) Cost Gains Losses Value Cost Gains Losses Value
Available for sale:(a)(b)
U.S. government and government
sponsored entities $ 5,386 $ 106 $ 130 $ 5,362 $ 7,848 $ 124 $ 94 $ 7,878
States(b)(c) 59,785 1,056 210 60,631 49,116 853 315 49,654
Foreign governments 62,153 5,428 436 67,145 57,509 4,881 665 61,725
Corporate debt 249,839 6,519 2,627 253,731 235,139 7,770 2,650 240,259
Total bonds $377,163 $13,109 $3,403 $386,869 $349,612 $13,628 $3,724 $359,516
Equity securities 13,147 2,813 159 15,801 12,407 2,479 257 14,629
Total $390,310 $15,922 $3,562 $402,670 $362,019 $16,107 $3,981 $374,145
Held to maturity:(a)
Bonds — States(c) $ 21,437 $ 731 $ 14 $ 22,154 $ 21,528 $ 552 $ 33 $ 22,047
(a) At December 31, 2006 and 2005, fixed maturities held by AIG that were below investment grade or not rated totaled $21.24 billion and $20.54 billion,
respectively.
(b) In 2006, excludes hybrid financial instruments with an estimated fair value of $522 million at December 31, 2006.
(c) Including municipalities and political subdivisions.
Form 10-K 2006 AIG 131