AIG 2014 Annual Report Download - page 171

ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES
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154
Commitments:
Investment commitments(b) 252 65 55 27 105
Commitments to extend credit(f) 1,002 2- 1,000 -
Letters of credit 25 25 - - -
Other commercial commitments(e) 10 -5 4 1
Tota l(c) $1,616 $315 $87 $ 1,031 $183
Consolidated
Guarantees:
Liquidity facilities(d) $77 $ - $ - $ - $ 77
Standby letters of credit 1,067 232 785 42 8
Guarantees of indebtedness 180 -23 -157
All other guarantees(a) 43 10 26 - 7
Commitments:
Investment commitments(b) 2,490 1,795 507 83 105
Commitments to extend credit(f) 2,697 871 174 1,468 184
Letters of credit 31 31 - - -
Other commercial commitments(e) 10 -5 4 1
Tota l(c) $6,595 $2,939 $1,520 $ 1,597 $539
(a) Includes construction guarantees connected to affordable housing investments by our Life Insurance Companies. Excludes potential amounts for
indemnification obligations included in asset sales agreements. See Note 10 to the Consolidated Financial Statements for further information on indemnification
obligations.
(b) Includes commitments to invest in private equity funds, hedge funds and mutual funds and commitments to purchase and develop real estate in the United
States and abroad. The commitments to invest in private equity funds, hedge funds and other funds are called at the discretion of each fund, as needed for
funding new investments or expenses of the fund. The expiration of these commitments is estimated in the table above based on the expected life cycle of the
related fund, consistent with past trends of requirements for funding. Investors under these commitments are primarily insurance and real estate subsidiaries.
(c) Does not include guarantees, CMAs or other support arrangements among AIG consolidated entities.
(d) Primarily represents liquidity facilities provided in connection with certain municipal swap transactions and collateralized bond obligations.
(e) Excludes commitments with respect to pension plans. The annual pension contribution for 2015 is expected to be approximately $173 million for U.S. and
non-U.S. plans.
(f) Includes a five-year senior unsecured revolving credit facility between AerCap Ireland Capital Limited, as borrower, and AIG Parent, as lender (the AerCap
Credit Facility). The AerCap Credit Facility provides for an aggregate commitment of $1.0 billion and permits loans for general corporate purposes. At December
31, 2014, no amounts were outstanding under the AerCap Credit Facility.
Arrangements with Variable Interest Entities
We enter into various arrangements with variable interest entities (VIEs) in the normal course of business, and we consolidate
a VIE when we are the primary beneficiary of the entity. For a further discussion of our involvement with VIEs, see Note 10 to
the Consolidated Financial Statements.
Indemnification Agreements
We are subject to financial guarantees and indemnity arrangements in connection with our sales of businesses. These
arrangements may be triggered by declines in asset values, specified business contingencies, the realization of contingent
liabilities, litigation developments, or breaches of representations, warranties or covenants provided by us. These
arrangements are typically subject to time limitations, defined by contract or by operation of law, such as by prevailing statutes
of limitation. Depending on the specific terms of the arrangements, the maximum potential obligation may or may not be
subject to contractual limitations. For additional information regarding our indemnification agreements, see Note 16 to the
Consolidated Financial Statements.
We have recorded liabilities for certain of these arrangements where it is possible to estimate them. These liabilities are not
material in the aggregate. We are unable to develop a reasonable estimate of the maximum potential payout under some of
these arrangements. Overall, we believe that it is unlikely we will have to make any material payments under these
arrangements.