AIG 2009 Annual Report Download - page 68

American International Group, Inc., and Subsidiaries
(d) Represents guaranteed maturities under GICs.
(e) Primarily includes contracts to purchase future services and other capital expenditures.
(f) Does not reflect unrecognized tax benefits of $4.8 billion, the timing of which is uncertain.
(g) 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, 2009, the fair value derivative liability was $4.4 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. However, AIGFP has posted collateral of $3.7 billion with
respect to these swaps (prior to offsets for other transactions).
Off Balance Sheet Arrangements and Commercial Commitments
The following table summarizes Off Balance Sheet Arrangements and Commercial Commitments in total, and by
remaining maturity:
Amount of Commitment Expiration
Total
At December 31, 2009
Amounts 2011 - 2013 -
(in millions) Committed 2010 2012 2014 Thereafter
Guarantees:
Liquidity facilities(a) $ 890 $ - $ 789 $ - $ 101
Standby letters of credit 1,264 1,094 28 19 123
Construction guarantees(b) 104 2 21 - 81
Guarantees of indebtedness 213 - - - 213
All other guarantees(c) 1,911 11 139 128 1,633
Commitments:
Investment commitments(d) 7,418 2,382 2,477 1,426 1,133
Commitments to extend credit 194 84 89 19 2
Letters of credit 267 198 69 - -
Other commercial commitments(e) 723 46 20 10 647
Total(f) $12,984 $3,817 $3,632 $1,602 $3,933
(a) Primarily liquidity facilities provided in connection with certain municipal swap transactions and collateralized bond obligations.
(b) Primarily SunAmerica construction guarantees connected to affordable housing investments.
(c) Excludes potential amounts attributable to indemnifications included in asset sales agreements.
(d) Includes commitments to invest in limited partnerships, private equity, hedge funds and mutual funds and commitments to purchase and develop
real estate in the United States and abroad.
(e) Includes options to acquire aircraft. Excludes commitments with respect to pension plans. The annual pension contribution for 2010 is expected to
be approximately $134 million for U.S. and non-U.S. plans.
(f) Does not include guarantees or other support arrangements among AIG consolidated entities.
Arrangements with Variable Interest Entities
AIG enters into various arrangements with variable interest entities (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 segment and Noncore Asset Management businesses,
AIG has participated in arrangements with VIEs that include designing and structuring entities, warehousing and
managing the collateral of the entities, and entering into insurance, credit and derivative transactions with the VIEs.
AIG has also established trusts for the sole purpose of issuing mandatorily redeemable preferred stock to investors.
AIG has determined that the trusts are VIEs, but has not consolidated these VIEs because AIG is not the primary
beneficiary and does not hold a variable interest in these VIEs.
AIG 2009 Form 10-K 60