AIG 2007 Annual Report Download - page 208

American International Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements Continued
3. Investments
Continued
(c) Net Realized Gains and Losses:
The Net realized capital gains (losses) and increase (decrease) in unrealized appreciation of AIG’s available for sale
investments were as follows:
(in millions) 2007 2006 2005
Net realized capital gains (losses):
Sales of fixed maturities $ (468) $ (382) $ 372
Sales of equity securities 1,087 813 643
Sales of real estate and other assets 619 303 88
Other-than-temporary impairments (4,072) (944) (598)
Foreign exchange transactions (643) (382) 701
Derivative instruments (115) 698 (865)
Total $(3,592) $ 106 $ 341
Increase (decrease) in unrealized appreciation of investments:
Fixed maturities $(5,504) $ (198) $(4,656)
Equity securities 2,440 432 850
Other investments (3,842) 986 2,138
AIGFP investments (1,140) 1,354 (1,909)
Increase (decrease) in unrealized appreciation $(8,046) $2,574 $(3,577)
Net unrealized gains (losses) included in the consolidated statement of income from investment securities classified as trading
securities in 2007, 2006 and 2005 were $1.1 billion, $938 million and $1.1 billion, respectively.
The gross realized gains and gross realized losses from sales of AIG’s available for sale securities were as follows:
2007 2006 2005
Gross Gross Gross Gross Gross Gross
Realized Realized Realized Realized Realized Realized
(in millions) Gains Losses Gains Losses Gains Losses
Fixed maturities $ 680 $ 1,148 $ 711 $1,093 $1,586 $1,214
Equity securities 1,368 291 1,111 320 930 354
Preferred stocks 10 — 22 — 101 34
Total $2,058 $ 1,439 $1,844 $1,413 $2,617 $1,602
(d) Fair Value of Investment Securities:
The amortized cost or cost and estimated fair value of AIG’s available for sale and held to maturity securities at
December 31, 2007 and 2006 were as follows:
December 31, 2007* December 31, 2006
Amortized Gross Gross Amortized Gross Gross
Cost or Unrealized Unrealized Fair Cost or Unrealized Unrealized Fair
(in millions) Cost Gains Losses Value Cost Gains Losses Value
Available for sale:*
U.S. government and government
sponsored entities $ 7,956 $ 333 $ 37 $ 8,252 $ 7,667 $ 221 $ 140 $ 7,748
Obligations of states, municipalities
and political subdivisions 46,087 927 160 46,854 59,785 1,056 210 60,631
Non-U.S. governments 67,023 3,920 743 70,200 62,860 5,461 437 67,884
Corporate debt 239,822 6,216 4,518 241,520 257,383 7,443 2,536 262,290
Mortgage-backed, asset-backed and
collateralized 140,982 1,221 7,703 134,500 104,687 502 362 104,827
Total bonds $501,870 $12,617 $13,161 $501,326 $492,382 $14,683 $3,685 $503,380
Equity securities 15,188 5,545 463 20,270 13,147 2,807 159 15,795
Total $517,058 $18,162 $13,624 $521,596 $505,529 $17,490 $3,844 $519,175
Held to maturity:*
Bonds — Obligations of states,
municipalities and political
subdivisions $21,581 $609 $33 $22,157 $21,437 $731 $14 $22,154
* At December 31, 2007 and 2006, fixed maturities held by AIG that were below investment grade or not rated totaled $27.0 billion and $26.6 billion,
respectively.
154 AIG 2007 Form 10-K