Information Provided in Connection With Outstanding Debt

6 Months Ended

Jun. 30, 2011

Information Provided in Connection With Outstanding Debt

Information Provided in Connection With Outstanding Debt

15. Information Provided in Connection With Outstanding Debt

    The following condensed consolidating financial statements reflect the results of SunAmerica Financial Group, Inc. (SAFG, Inc.) formerly known as AIG Life Holdings (US), Inc. (AIGLH), a holding company and a wholly owned subsidiary of AIG. AIG provides a full and unconditional guarantee of all outstanding debt of SAFG, Inc.

Condensed Consolidating Balance Sheet

(in millions)			American International Group, Inc. (As Guarantor)		SAFG, Inc.(a)		Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG
June 30, 2011
Assets:
		Short-term investments	$	8,844	$	-	$	22,647		$	(1,002	)	$	30,489
		Other investments(a)		7,652		-		480,538			(106,866	)		381,324
	Total investments			16,496		-		503,185			(107,868	)		411,813
	Cash			598		1		1,991			-			2,590
	Loans to subsidiaries(b)			44,058		-		(44,058	)		-			-
	Debt issuance costs			169		-		305			-			474
	Investment in consolidated subsidiaries(b)			90,624		33,477		2,577			(126,678	)		-
	Other assets, including current and deferred income taxes			5,416		2,749		133,557			(1,394	)		140,328
	Assets held for sale			-		-		61,593			-			61,593
Total assets			$	157,361	$	36,227	$	659,150		$	(235,940	)	$	616,798
Liabilities:
	Insurance liabilities		$	-	$	-	$	283,207		$	(245	)	$	282,962
	Other long-term debt			37,874		1,638		144,882			(104,933	)		79,461
	Other liabilities, including intercompany balances(a)(c)			12,226		4,120		81,195			(5,521	)		92,020
	Loans from subsidiaries(b)			14,580		389		(14,969	)		-			-
	Liabilities held for sale			-		-		57,150			-			57,150
Total liabilities				64,680		6,147		551,465			(110,699	)		511,593
Redeemable noncontrolling interests (see Note 1):
Nonvoting, callable, junior preferred interests held by Department of the Treasury				-		-		-			11,465			11,465
Other				-		-		35			76			111
Total redeemable noncontrolling interests				-		-		35			11,541			11,576
Total AIG shareholders' equity				92,681		30,080		107,189			(137,269	)		92,681
Noncontrolling interests:
	Nonvoting, callable, junior and senior preferred interests held by Federal Reserve Bank of New York			-		-		-			-			-
	Other			-		-		461			487			948
Total equity				92,681		30,080		107,650			(136,782	)		93,629
Total liabilities and equity			$	157,361	$	36,227	$	659,150		$	(235,940	)	$	616,798
December 31, 2010
Assets:
		Short-term investments	$	5,602	$	-	$	39,907		$	(1,771	)	$	43,738
		Other investments(a)		5,852		-		486,494			(125,672	)		366,674
	Total investments			11,454		-		526,401			(127,443	)		410,412
	Cash			49		-		1,509			-			1,558
	Loans to subsidiaries(b)			61,630		-		(61,630	)		-			-
	Debt issuance costs, including prepaid commitment asset of $3,628			3,838		-		241			-			4,079
	Investment in consolidated subsidiaries(b)			93,511		33,354		(6,788	)		(120,077	)		-
	Other assets, including current and deferred income taxes			7,852		2,717		150,157			(785	)		159,941
	Assets held for sale			-		-		107,453			-			107,453
Total assets			$	178,334	$	36,071	$	717,343		$	(248,305	)	$	683,443
Liabilities:
	Insurance liabilities		$	-	$	-	$	274,590		$	(237	)	$	274,353
	Federal Reserve Bank of New York credit facility			20,985		-		-			-			20,985
	Other long-term debt			40,443		1,637		167,532			(124,136	)		85,476
	Other liabilities, including intercompany balances(a)(c)			31,586		4,414		59,354			(3,710	)		91,644
	Loans from subsidiaries(b)			1		379		(380	)		-			-
	Liabilities held for sale			-		-		97,300			12			97,312
Total liabilities				93,015		6,430		598,396			(128,071	)		569,770
Redeemable noncontrolling nonvoting, callable, junior preferred interests				-		-		207			227			434
Total AIG shareholders' equity				85,319		29,641		117,641			(147,282	)		85,319
Noncontrolling interests:
	Nonvoting, callable, junior and senior preferred interests held by Federal Reserve Bank of New York			-		-		-			26,358			26,358
	Other			-		-		1,099			463			1,562
Total noncontrolling interests				-		-		1,099			26,821			27,920
Total equity				85,319		29,641		118,740			(120,461	)		113,239
Total liabilities and equity			$	178,334	$	36,071	$	717,343		$	(248,305	)	$	683,443

(a)

Includes intercompany derivative asset positions, which are reported at fair value before credit valuation adjustment.

(b)

Eliminated in consolidation.

(c)

For June 30, 2011 and December 31, 2010, includes intercompany tax payable of $8.2 billion and $28.1 billion, respectively, and intercompany derivative liabilities of $496 million and $150 million, respectively, for American International Group, Inc. (As Guarantor) and intercompany tax receivable of $173 million and $152 million, respectively, for SAFG, Inc.

Condensed Consolidating Statement of Income (Loss)

(in millions)			American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG
Three Months Ended June 30, 2011
Revenues:
	Equity in undistributed net income (loss) of consolidated subsidiaries(a)		$	2,064		$	-		$	-		$	(2,064	)	$	-
	Dividend income from consolidated subsidiaries(a)			130			171			-			(301	)		-
	Change in fair value of ML III			(347	)		-			(320	)		-			(667	)
	Other revenue(b)			192			208			16,943			-			17,343
Total revenues				2,039			379			16,623			(2,365	)		16,676
Expenses:
	Other interest expense			731			65			172			-			968
	Loss on extinguishment of debt			18			-			61			-			79
	Other expense			225			-			13,598			-			13,823
Total expenses				974			65			13,831			-			14,870
Income (loss) from continuing operations before income tax expense (benefit)				1,065			314			2,792			(2,365	)		1,806
Income tax expense (benefit)(c)				(767	)		(78	)		557			-			(288	)
Income (loss) from continuing operations				1,832			392			2,235			(2,365	)		2,094
Income (loss) from discontinued operations				8			-			(45	)		-			(37	)
Net income (loss)				1,840			392			2,190			(2,365	)		2,057
Less:
Net income from continuing operations attributable to noncontrolling interests:
		Nonvoting, callable, junior and senior preferred interests		-			-			-			141			141
		Other		-			-			64			-			64
Total income from continuing operations attributableto noncontrolling interests				-			-			64			141			205
Income from discontinued operations attributable to noncontrolling interests				-			-			12			-			12
Total net income attributable to noncontrolling interests				-			-			76			141			217
Net income (loss) attributable to AIG				1,840		$	392		$	2,114		$	(2,506	)	$	1,840
Three Months Ended June 30, 2010
Revenues:
	Equity in undistributed net income (loss) of consolidated subsidiaries(a)		$	(2,170	)	$	224		$	-		$	1,946		$	-
	Dividend income from consolidated subsidiaries(a)			393			-			-			(393	)		-
	Change in fair value of ML III			-			-			358			-			358
	Other revenue(b)			938			46			16,972			-			17,956
Total revenues				(839	)		270			17,330			1,553			18,314
Expenses:
	Interest expense on FRBNY Credit Facility			755			-			-			(20	)		735
	Other interest expense			615			94			289			1			999
	Other expenses			708			-			14,371			-			15,079
Total expenses				2,078			94			14,660			(19	)		16,813
Income (loss) from continuing operations before income tax expense (benefit)				(2,917	)		176			2,670			1,572			1,501
Income tax expense (benefit)(c)				(261	)		(15	)		1,281			-			1,005
Income (loss) from continuing operations				(2,656	)		191			1,389			1,572			496
Loss from discontinued operations				-			-			(2,591	)		(20	)		(2,611	)
Net income (loss)				(2,656	)		191			(1,202	)		1,552			(2,115	)
Less:
Net income from continuing operations attributable to noncontrolling interests:
		Nonvoting, callable, junior and senior preferred interests		-			-			-			508			508
		Other		-			-			20			-			20
Total income from continuing operations attributable to noncontrolling interests				-			-			20			508			528
Income from discontinued operations attributable to noncontrolling interests				-			-			13			-			13
Total net income attributable to noncontrolling interests				-			-			33			508			541
Net income (loss) attributable to AIG				(2,656	)	$	191		$	(1,235	)	$	1,044		$	(2,656	)

Condensed Consolidating Statement of Income (Loss) (Continued)

(in millions)			American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG
Six Months Ended June 30, 2011
Revenues:
	Equity in undistributed net income (loss) of consolidated subsidiaries(a)		$	784		$	470		$	-		$	(1,254	)	$	-
	Dividend income from consolidated subsidiaries(a)			4,424			-			-			(4,424	)		-
	Change in fair value of ML III			(347	)		-			424			-			77
	Other revenue(b)			233			466			33,336			-			34,035
Total revenues				5,094			936			33,760			(5,678	)		34,112
Expenses:
	Interest expense on FRBNY Credit Facility			72			-			-			(2	)		70
	Other interest expense			1,482			159			318			-			1,959
	Loss on extinguishment of debt			3,331			-			61			-			3,392
	Other expense			272			-			27,993			-			28,265
Total expenses				5,157			159			28,372			(2	)		33,686
Income (loss) from continuing operations before income tax expense (benefit)				(63	)		777			5,388			(5,676	)		426
Income tax expense (benefit)(c)				(1,033	)		(10	)		555			-			(488	)
Income (loss) from continuing operations				970			787			4,833			(5,676	)		914
Income (loss) from discontinued operations				1,139			-			479			(2	)		1,616
Net income (loss)				2,109			787			5,312			(5,678	)		2,530
Less:
Net income from continuing operations attributable to noncontrolling interests:
		Nonvoting, callable, junior and senior preferred interests		-			-			-			393			393
		Other		-			-			9			-			9
Total income from continuing operations attributable to noncontrolling interests				-			-			9			393			402
Income from discontinued operations attributable to noncontrolling interests				-			-			19			-			19
Total net income attributable to noncontrolling interests				-			-			28			393			421
Net income (loss) attributable to AIG				2,109		$	787		$	5,284		$	(6,071	)	$	2,109
Six Months Ended June 30, 2010
Revenues:
	Equity in undistributed net income (loss) of consolidated subsidiaries(a)		$	(928	)	$	479		$	-		$	449		$	-
	Dividend income from consolidated subsidiaries(a)			683			-			-			(683	)		-
	Change in fair value of ML III			-			-			1,109			-			1,109
	Other revenue(b)			1,919			99			33,742			-			35,760
Total revenues				1,674			578			34,851			(234	)		36,869
Expenses:
	Interest expense on FRBNY Credit Facility			1,588			-			-			(40	)		1,548
	Other interest expense			1,222			187			526			2			1,937
	Other expenses			863			-			29,379			-			30,242
Total expenses				3,673			187			29,905			(38	)		33,727
Income (loss) from continuing operations before income tax expense (benefit)				(1,999	)		391			4,946			(196	)		3,142
Income tax expense (benefit)(c)				(1,126	)		(27	)		1,711			-			558
Income (loss) from continuing operations				(873	)		418			3,235			(196	)		2,584
Loss from discontinued operations				-			-			(2,228	)		(40	)		(2,268	)
Net income (loss)				(873	)		418			1,007			(236	)		316
Less:
Net income from continuing operations attributable to noncontrolling interests:
		Nonvoting, callable, junior and senior preferred interests		-			-			-			1,027			1,027
		Other		-			-			139			-			139
Total income from continuing operations attributable to noncontrolling interests				-			-			139			1,027			1,166
Income from discontinued operations attributable to noncontrolling interests				-			-			23			-			23
Total net income attributable to noncontrolling interests				-			-			162			1,027			1,189
Net income (loss) attributable to AIG				(873	)	$	418		$	845		$	(1,263	)	$	(873	)

(a)

Eliminated in consolidation.

(b)

Includes interest income of $126 million and $835 million for the three-month periods ended June 30, 2011 and 2010, respectively, and $394 million and $1.7 billion for the six-month periods ended June 30, 2011 and 2010, respectively, for American International Group, Inc. (As Guarantor).

(c)

Income taxes recorded by American International Group, Inc. (As Guarantor) include deferred tax expense attributable to the pending sale of foreign businesses and a valuation allowance to reduce the consolidated deferred tax asset to the amount more likely than not to be realized. See Note 14 herein for additional information.

Condensed Consolidating Statement of Cash Flows

(in millions)		American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries and Eliminations			Consolidated AIG
Six Months Ended June 30, 2011
Net cash (used in) provided by operating activities – continuing operations		$	(4,826	)	$	295		$	(1,608	)	$	(6,139	)
Net cash (used in) provided by operating activities – discontinued operations			-			-			2,675			2,675
Net cash (used in) provided by operating activities			(4,826	)		295			1,067			(3,464	)
Cash flows from investing activities:
	Sales of investments		2,325			-			45,477			47,802
	Sales of divested businesses, net		1,075			-			(488	)		587
	Purchase of investments		(5	)		-			(53,454	)		(53,459	)
	Loans to subsidiaries – net		(470	)		-			470			-
	Contributions to subsidiaries – net*		(19,025	)		-			19,025			-
	Change in short-term investments		(2,750	)		-			15,717			12,967
	Other, net*		3,308			-			23,522			26,830
Net cash (used in) provided by investing activities – continuing operations			(15,542	)		-			50,269			34,727
Net cash (used in) provided by investing activities – discontinued operations			-			-			3,021			3,021
Net cash (used in) provided by investing activities			(15,542	)		-			53,290			37,748
Cash flows from financing activities:
	Federal Reserve Bank of New York credit facility repayments		(14,622	)		-			-			(14,622	)
	Issuance of other long-term debt		150			-			2,871			3,021
	Repayments on other long-term debt		(3,571	)		-			(6,397	)		(9,968	)
	Drawdown on the Department of the Treasury Commitment*		20,292			-			-			20,292
	Issuance of Common Stock		4,332			-			-			4,332
	Intercompany loans – net		14,366			(294	)		(14,072	)		-
	Other, net*		(30	)		-			(34,807	)		(34,837	)
Net cash (used in) provided by financing activities – continuing operations			20,917			(294	)		(52,405	)		(31,782	)
Net cash (used in) provided by financing activities – discontinued operations			-			-			(1,932	)		(1,932	)
Net cash (used in) provided by financing activities			20,917			(294	)		(54,337	)		(33,714	)
Effect of exchange rate changes on cash			-			-			29			29
Change in cash			549			1			49			599
Cash at beginning of period			49			-			1,509			1,558
Change in cash of businesses held for sale			-			-			433			433
Cash at end of period		$	598		$	1		$	1,991		$	2,590

Condensed Consolidating Statement of Cash Flows (Continued)

(in millions)		American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries and Eliminations			Consolidated AIG
Six Months Ended June 30, 2010
Net cash (used in) provided by operating activities – continuing operations		$	(276	)	$	(79	)	$	6,252		$	5,897
Net cash (used in) provided by operating activities – discontinued operations			-			-			3,874			3,874
Net cash (used in) provided by operating activities			(276	)		(79	)		10,126			9,771
Cash flows from investing activities:
	Sales of investments		1,007			-			33,813			34,820
	Sales of divested businesses, net		277			-			1,396			1,673
	Purchase of investments		(28	)		-			(40,750	)		(40,778	)
	Loans to subsidiaries – net		(504	)		-			504			-
	Contributions to subsidiaries – net		(2,183	)		-			2,183			-
	Other, net		(868	)		-			800			(68	)
Net cash (used in) provided by investing activities – continuing operations			(2,299	)		-			(2,054	)		(4,353	)
Net cash (used in) provided by investing activities – discontinued operations			-			-			(1,714	)		(1,714	)
Net cash (used in) provided by investing activities			(2,299	)		-			(3,768	)		(6,067	)
Cash flows from financing activities:
	Federal Reserve Bank of New York credit facility borrowings		12,700			-			-			12,700
	Federal Reserve Bank of New York credit facility repayments		(10,030	)		-			(93	)		(10,123	)
	Issuance of other long-term debt		-			-			4,882			4,882
	Repayments on other long-term debt		(1,405	)		-			(5,280	)		(6,685	)
	Proceeds from drawdown on the Department of the Treasury Commitment		2,199			-			-			2,199
	Repayment of Department of the Treasury SPV Preferred Interests
	Repayment of Federal Reserve Bank of New York SPV Preferred Interests
	Issuance of Common Stock
	Acquisition of noncontrolling interest
	Intercompany loans – net		(881	)		77			804			-
	Other, net		-			-			(4,637	)		(4,637	)
Net cash (used in) provided by financing activities – continuing operations			2,583			77			(4,324	)		(1,664	)
Net cash (used in) provided by financing activities – discontinued operations			-			-			(2,863	)		(2,863	)
Net cash (used in) provided by financing activities			2,583			77			(7,187	)		(4,527	)
Effect of exchange rate changes on cash			-			-			(92	)		(92	)
Change in cash			8			(2	)		(921	)		(915	)
Cash at beginning of period			57			2			4,341			4,400
Change in cash of businesses held for sale			-			-			(645	)		(645	)
Cash at end of period		$	65		$	-		$	2,775		$	2,840

*

Includes activities related to the Recapitalization. See Note 12 herein.

Supplementary disclosure of cash flow information:

		American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries and Eliminations			Consolidated AIG
Cash (paid) received during the six months ended June 30, 2011 for:
Interest:
	Third party*	$	(5,946	)	$	(64	)	$	(1,071	)	$	(7,081	)
	Intercompany		(162	)		(91	)		253			-
Taxes:
	Income tax authorities	$	13		$	-		$	(560	)	$	(547	)
	Intercompany		638			-			(638	)		-
Cash (paid) received during the six months ended June 30, 2010 for:
Interest:
	Third party	$	(1,348	)	$	(83	)	$	(1,304	)	$	(2,735	)
	Intercompany		(1	)		(103	)		104			-
Taxes:
	Income tax authorities	$	(14	)	$	-		$	(845	)	$	(859	)
	Intercompany		438			8			(446	)		-

*

Includes payment of FRBNY credit facility accrued compounded interest of $4.7 billion in the first quarter of 2011.

American International Group, Inc. (As Guarantor) supplementary disclosure of non-cash activities:

Six Months Ended June 30, (in millions)		2011		2010
Intercompany non-cash financing and investing activities:
	Temporary paydown of FRBNY Credit Facility by subsidiary	$	-	$	93
	Return of capital and dividend received in the form of bond trading securities		3,668		-
	Capital contributions to subsidiaries through forgiveness of loans		-		100
	Intercompany loan receivable offset by intercompany payable		18,284		25
	Other capital contributions – net		292		578