AIG 2012 Annual Report Download - page 148

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Contractual Obligations
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The following table summarizes contractual obligations in total, and by remaining maturity:
Payments due by Period
December 31, 2012
Total 2014 - 2016 -
(in millions) Payments 2013 2015 2017 Thereafter
Insurance operations
Loss reserves $ 91,237 $ 23,579 $ 26,111 $ 13,480 $ 28,067
Insurance and investment contract liabilities 234,492 14,502 25,144 24,066 170,780
Borrowings 1,843 43 15 8 1,777
Interest payments on borrowings 3,525 131 264 265 2,865
Operating leases 1,196 284 390 276 246
Other long-term obligations 37 9 14 8 6
Total $ 332,330 $ 38,548 $ 51,938 $ 38,103 $ 203,741
Other and discontinued operations
Borrowings(a) 69,166 7,199 11,670 16,104 34,193
Interest payments on borrowings 48,478 3,873 6,931 5,525 32,149
Operating leases 302 106 99 33 64
Aircraft purchase commitments 17,511 1,517 4,146 7,374 4,474
Other long-term obligations 231 56 84 – 91
Total $ 135,688 $ 12,751 $ 22,930 $ 29,036 $ 70,971
Consolidated
Loss reserves(b) $ 91,237 $ 23,579 $ 26,111 $ 13,480 $ 28,067
Insurance and investment contract liabilities 234,492 14,502 25,144 24,066 170,780
Borrowings(a) 71,009 7,242 11,685 16,112 35,970
Interest payments on borrowings 52,003 4,004 7,195 5,790 35,014
Operating leases 1,498 390 489 309 310
Aircraft purchase commitments 17,511 1,517 4,146 7,374 4,474
Other long-term obligations(c) 268 65 98 8 97
Total(d) $ 468,018 $ 51,299 $ 74,868 $ 67,139 $ 274,712
(a) Includes $24.3 billion of borrowings related to ILFC
(b) Loss reserves relate to the AIG Property Casualty and the Mortgage Guaranty business, and represent future loss and loss adjustment
expense payments estimated based on historical loss development payment patterns. Due to the significance of the assumptions used, the
payments by period presented above could be materially different from actual required payments. We believe that the AIG Property Casualty and
Mortgage Guaranty subsidiaries maintain adequate financial resources to meet the actual required payments under these obligations.
(c) Primarily includes contracts to purchase future services and other capital expenditures.
(d) Does not reflect unrecognized tax benefits of $4.4 billion ($4.1 billion excluding Aircraft Leasing), the timing of which is uncertain. In addition,
the majority of our credit default swaps require us to provide credit protection on a designated portfolio of loans or debt securities. At December 31,
2012, the fair value derivative liability was $1.9 billion, relating to the super senior multi-sector CDO credit default swap portfolio. At December 31,
2012, collateral posted with respect to these swaps was $1.6 billion.
Insurance and Investment Contract Liabilities
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Insurance and investment contract liabilities, including GIC liabilities, relate to AIG Life and Retirement
businesses. These liabilities include various investment-type products with contractually scheduled maturities,
including periodic payments of a term certain nature. These 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) we are 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 our control.
We have made significant assumptions to determine the estimated undiscounted cash flows of these contractual
policy benefits. These assumptions include mortality, morbidity, future lapse rates, expenses, investment returns and
interest crediting rates, offset by expected future deposits and premiums on in-force policies. Due to the significance
of the assumptions, the periodic amounts presented could be materially different from actual required payments. The
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AIG 2012 Form 10-K 131
ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES