AIG 2009 Annual Report Download - page 55

American International Group, Inc., and Subsidiaries
These transactions included the following:
• On May 28, 2009, AIG completed the sale of its headquarters building in Tokyo for approximately $1.2 billion in
cash. Due to AIG’s continued involvement as a lessee, primarily in the form of a lease deposit, through 2011, the
sale is accounted for as a financing arrangement with any gain deferred until the expiration of AIG’s lease in
early 2011.
• On June 10, 2009, AIG closed the previously announced secondary public offering of 29.9 million shares of
Transatlantic common stock owned by AIG for aggregate proceeds of $1.1 billion. At the close of the public
offering, AIG retained 13.9 percent of Transatlantic’s outstanding shares of common stock. As a result, AIG
deconsolidated Transatlantic, which resulted in a $1.4 billion reduction in Noncontrolling interests, a component
of Total equity.
• On July 1, 2009, AIG closed the sale of its U.S. auto insurance business, 21st Century Insurance Group
(21st Century). This operation had total assets and liabilities with carrying values of $5.7 billion and $3.4 billion,
respectively, at June 30, 2009. Aggregate proceeds from the sale of this business, including proceeds applied to
repay intercompany loan facilities, were $1.9 billion.
• On July 28, 2009, AIG completed the sale of a majority of the U.S. life insurance premium finance business of
AIG Credit Corp. and A.I. Credit Consumer Discount Company (A.I. Credit), with a carrying value of
$941.3 million at that date, for $680 million in cash, including $230 million held in escrow, and an additional
$61.2 million if certain future conditions are met.
• On July 28, 2009, AIG entered into an agreement to combine its consumer finance business in Poland,
conducted through AIG Bank Polska S.A., into the Polish consumer finance business of Santander Consumer
Finance S.A (SCB). In exchange, AIG will receive equity interest in SCB. At closing, all of the AIG
intercompany debt facilities related to these entities will be repaid, and AIG will not be responsible for the
future funding of the combined consumer finance businesses. The closing is expected to occur in the first
quarter of 2010. This transaction met the criteria for held-for-sale accounting in 2009.
• On September 5, 2009, AIG entered into an agreement to sell its investment advisory and third party
institutional asset management business for total consideration consisting of a cash payment determined at
closing based on the net assets of the business being sold plus contingent consideration. This transaction met the
criteria for held-for-sale accounting.
• On October 12, 2009, AIG entered into an agreement to sell its 97.57 percent share of Nan Shan Life Insurance
Company, Ltd. (Nan Shan) for approximately $2.15 billion. As a result, Nan Shan qualified as a discontinued
operation and met the criteria for held-for-sale accounting in 2009. AIG recognized a $1.5 billion after tax loss
on the transaction. See Note 2 to the Consolidated Financial Statements.
AGF Portfolio Sales and Securitization Transaction
During 2009, AGF received proceeds of $1.9 billion from real estate loan portfolio sales. In addition, on July 30,
2009, AGF issued mortgage-backed certificates in a private securitization transaction of certain AGF real estate loans
and received cash proceeds of $967 million.
AIA and ALICO Transactions with the FRBNY
On December 1, 2009, AIG and the FRBNY completed two transactions pursuant to which AIG transferred to the
FRBNY preferred equity interests in newly-formed SPVs in settlement of a portion of the outstanding balance of the
FRBNY Credit Facility. Each SPV has (directly or indirectly) as its only asset 100 percent of the common stock of an
AIG operating subsidiary (AIA in one case and ALICO in the other). AIG owns the common interests of each SPV.
In exchange for the preferred equity interests received by the FRBNY, there was a $25 billion reduction in the
outstanding balance and maximum lending commitment under the FRBNY Credit Facility. See Note 16 to the
Consolidated Financial Statements for further discussion.
47 AIG 2009 Form 10-K