AIG 2008 Annual Report Download - page 265

(a) AIG’s total maximum exposure to loss on unconsolidated VIEs declined from December 31, 2007 as a result of
the termination of certain of AIGFP’s transactions and the effects of overall market deterioration.
(b) In 2008, AIG made revisions to the presentation of assets and liabilities of unconsolidated VIEs to remove
previously disclosed equity investments in entities that do not meet the criteria of a VIE as defined in FIN 46R.
The investments are classified on the consolidated balance sheet as other invested assets. Accordingly, AIG
revised the prior period presented to conform to the revised presentation.
(c) Includes $1.4 billion and $2.4 billion of assets held in an unconsolidated SIV sponsored by AIGFP in 2008 and
2007, respectively. As of December 31, 2008 and 2007, AIGFP’s invested assets included $0.6 billion and
$1.7 billion, respectively, of securities purchased under agreements to resell, commercial paper and medium-
term and capital notes issued by this entity.
Balance Sheet Classification
AIG’s interest in the assets and liabilities of consolidated and unconsolidated VIEs were classified on
AIG’s consolidated balance sheet as follows:
2008 2007 2008 2007
Consolidated
VIEs
Unconsolidated
VIEs
At December 31,
(In billions)
Assets:
Cash ............................................ $— $ 0.9 $— $—
Mortgage and other loans receivable .................... ——0.5 0.3
Available for sale securities ........................... 9.1 10.7 6.4 20.1
Trading securities (primarily Maiden Lane Interests in 2008) . . —3.4 5.5 0.6
Other invested assets ................................ 4.3 3.9 3.5 9.0
Other asset accounts ................................ 4.2 4.0 2.0 0.8
Total ............................................. $17.6 $22.9 $17.9 $30.8
Liabilities:
Federal Reserve Bank of New York commercial paper funding
facility ........................................ $ 6.8 $— $— $—
Other long-term debt ................................ 4.8 11.2 ——
Total ............................................. $11.6 $11.2 $— $—
AIG enters into various arrangements with VIEs in the normal course of business. AIG’s insurance companies
are involved with VIEs primarily as passive investors in debt securities (rated and unrated) and equity interests
issued by VIEs. Through its Financial Services and Asset Management operations, AIG has participated in
arrangements with VIEs that included designing and structuring entities, warehousing and managing the collateral
of the entities, and entering into insurance, credit and derivative transactions with the VIEs.
Real Estate and Investment Funds
AIG Investments, through AIG Global Real Estate, is an investor in various real estate investments, some of
which are VIEs. These investments are typically with unaffiliated third-party developers via a partnership or limited
liability company structure. The VIE’s activities consist of the development or redevelopment of commercial and
residential real estate. AIG’s involvement varies from being a passive equity investor or finance provider to actively
managing the activities of the VIE.
AIG 2008 Form 10-K 259
American International Group, Inc., and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)