AIG 2010 Annual Report Download - page 285

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
•Policyholder contract deposits associated with investment-type contracts: Fair values for policyholder contract
deposits associated with investment-type contracts not accounted for at fair value were estimated for
disclosure purposes using discounted cash flow calculations based upon interest rates currently being offered
for similar contracts with maturities consistent with those remaining for the contracts being valued. Where
no similar contracts are being offered, the discount rate is the appropriate tenor swap rates (if available) or
current risk-free interest rates consistent with the currency in which the cash flows are denominated.
•Trust deposits and deposits due to banks and other depositors: The fair values of certificates of deposit that
mature in more than one year are estimated for disclosure purposes using discounted cash flow calculations
based upon interest rates currently offered for deposits with similar maturities. For demand deposits and
certificates of deposit that mature in less than one year, carrying values approximate fair value.
•Long-term debt: Fair values of these obligations were determined for disclosure purposes by reference to
quoted market prices, where available and appropriate, or discounted cash flow calculations based upon
AIG’s current market-observable implicit-credit-spread rates for similar types of borrowings with maturities
consistent with those remaining for the debt being valued.
The following table presents the carrying value and estimated fair value of AIG’s financial instruments:
December 31, 2010 December 31, 2009
(in millions) Carrying Value Fair Value Carrying Value Fair Value
Assets:
Fixed maturities $254,484 $254,484 $396,794 $396,794
Equity securities 11,233 11,233 17,840 17,840
Mortgage and other loans receivable 19,367 19,558 27,461 25,957
Finance receivables, net of allowance 870 802 20,327 18,974
Other invested assets*40,828 40,220 43,737 42,474
Securities purchased under agreements to resell 1,553 1,553 2,154 2,154
Short-term investments 42,185 42,185 47,263 47,263
Cash 1,558 1,558 4,400 4,400
Unrealized gain on swaps, options and forward transactions 5,917 5,917 9,130 9,130
Liabilities:
Policyholder contract deposits associated with
investment-type contracts 102,585 112,710 168,846 175,612
Securities sold under agreements to repurchase 2,119 2,119 3,505 3,505
Securities and spot commodities sold but not yet purchased 485 485 1,030 1,030
Unrealized loss on swaps, options and forward transactions 5,735 5,735 5,403 5,403
Trust deposits and deposits due to banks and other
depositors 892 892 1,641 1,641
Federal Reserve Bank of New York Commercial Paper
Funding Facility -- 4,739 4,739
Federal Reserve Bank of New York credit facility 20,985 21,009 23,435 23,390
Other long-term debt 85,476 84,879 113,298 94,458
* Excludes aircraft asset investments held by non-Financial Services subsidiaries.
AIG 2010 Form 10-K 269