AIG 2009 Annual Report Download - page 51

American International Group, Inc., and Subsidiaries
understanding that additional and independently sufficient consideration was also furnished to AIG by the FRBNY
Credit Facility under the FRBNY Credit Agreement.
See Note 1 to the Consolidated Financial Statements for further information on the transactions in the proceeding
paragraphs and Note 16 to the Consolidated Financial Statements for information on additional transactions
completed in 2009.
Life Insurance Securitizations
The previously contemplated life insurance securitization transaction with the FRBNY is no longer being pursued
by AIG.
Consideration of AIG’s Ability to Continue as a Going Concern
In connection with the preparation of this Annual Report on Form 10-K, management has assessed whether AIG
has the ability to continue as a going concern (See Note 1 to the Consolidated Financial Statements). In making this
assessment, AIG has considered:
• The commitment of the U.S. government to continue to work with AIG to maintain its ability to meet its
obligations as they come due;
• AIG’s liquidity-related actions and plans to stabilize its businesses and repay the debt outstanding under the
FRBNY Credit Facility;
• The level of AIG’s realized and unrealized losses and the negative impact of these losses in shareholders’ equity
and on the capital levels of AIG’s insurance subsidiaries;
• The additional capital provided or committed through the Department of the Treasury Commitment;
• The completion on December 1, 2009 of the transactions contemplated by Purchase Agreement between AIG,
AIRCO and the FRBNY dated June 25, 2009 (AIA Purchase Agreement) and the Purchase Agreement
between AIG and the FRBNY dated June 25, 2009 (ALICO Purchase Agreement);
• The planned sales of significant subsidiaries;
• The continuing liquidity issues in certain of AIG’s businesses and AIG’s actions to address such issues; and
• The substantial risks to which AIG is subject.
In considering these items, management made significant judgments and estimates with respect to the potentially
adverse financial and liquidity effects of AIG’s risks and uncertainties. Management also assessed other items and
risks arising in AIG’s businesses and made reasonable judgments and estimates with respect thereto. After
consideration, management believes that it will have adequate liquidity to finance and operate AIG’s businesses and
continue as a going concern for at least the next twelve months.
It is possible that the actual outcome of one or more of management’s plans could be materially different or that
one or more of management’s significant judgments or estimates about the potential effects of the risks and
uncertainties could prove to be materially incorrect. If one or more of these possible outcomes is realized, AIG may
need additional U.S. government support to meet its obligations as they come due. If additional support is not
available in such circumstances, there could be substantial doubt about AIG’s ability to operate as a going concern.
Capital Resources and Liquidity
Liquidity
FRBNY Credit Facility
At February 17, 2010, AIG had outstanding net borrowings under the FRBNY Credit Facility of $21 billion, with a
remaining available amount of $14 billion, and accrued compounding interest and fees of $5.5 billion. As a result of
43 AIG 2009 Form 10-K