AIG 2008 Annual Report Download - page 66

Contractual Obligations
Contractual obligations in total, and by remaining maturity were as follows:
At December 31, 2008
Total
Payments
Less Than
One Year
1-3
Years
3+-5
Years
More Than
Five Years
Payments due by Period
(In millions)
Borrowings(a) ........................ $ 131,204 $20,417 $ 33,574 $ 18,607 $ 58,606
Fed Facility .......................... 40,431 — — 40,431 —
Interest payments on borrowings .......... 81,860 5,361 9,281 22,832 44,386
Loss reserves(b)....................... 89,258 24,546 27,224 12,942 24,546
Insurance and investment contract
liabilities(c) ........................ 620,440 32,059 41,703 38,103 508,575
GIC liabilities(d) ...................... 18,020 6,175 2,472 3,406 5,967
Aircraft purchase commitments ........... 16,677 3,028 448 2,917 10,284
Operating leases ...................... 4,258 800 1,094 699 1,665
Other long-term obligations .............. 562 228 308 12 14
Total(e)(f) ........................... $1,002,710 $92,614 $116,104 $139,949 $654,043
(a) Excludes commercial paper and borrowings incurred by consolidated investments and includes hybrid
financial instrument liabilities recorded at fair value.
(b) Represents future loss and loss adjustment expense payments estimated based on historical loss development
payment patterns. Due to the significance of the assumptions used, the periodic amounts presented could be
materially different from actual required payments.
(c) Insurance and investment contract liabilities include various investment-type products with contractually
scheduled maturities, including periodic payments of a term certain 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) payment
may occur 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
assumptions include mortality, morbidity, future lapse rates, expenses, investment returns and interest
crediting rates, offset by expected future deposits and premiums on inforce policies. Due to the significance
of the assumptions used, the periodic 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.
(e) Does not reflect unrecognized tax benefits of $3.4 billion, the timing of which is uncertain.
(f) The majority of AIGFP’s credit default swaps require AIGFP to provide credit protection on a designated
portfolio of loans or debt securities. At December 31, 2008, the fair value derivative liability was $5.9 billion
relating to AIGFP’s super senior multi-sector CDO credit default swap portfolio, net of amounts realized in
extinguishing derivative obligations. Due to the long-term maturities of these credit default swaps, AIG is
unable to make reasonable estimates of the periods during which any payments would be made.
60 AIG 2008 Form 10-K
American International Group, Inc., and Subsidiaries