Schedule II Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2011

Schedule II Condensed Financial Information of Registrant

Schedule II Condensed Financial Information of Registrant

Condensed Financial Information of Registrant
Balance Sheet – Parent Company Only

Schedule II

December 31, (in millions)			2011			2010
Assets:
		Short-term investments	$	12,868		$	5,602
		Other investments		6,599			5,852
	Total investments			19,467			11,454
	Cash			176			49
	Loans to subsidiaries*			39,971			61,630
	Due from affiliates – net*			303			380
	Current and deferred income taxes			22,438			3,957
	Debt issuance costs including prepaid commitment fee asset of $3,628 in 2010			196			3,838
	Investments in consolidated subsidiaries*			83,215			93,511
	Other assets			1,576			3,515
Total assets			$	167,342		$	178,334
Liabilities:
	Intercompany tax payable*		$	9,801		$	28,083
	Federal Reserve Bank of New York credit facility			-			20,985
	Parent company long-term debt			21,584			24,953
	MIP notes payable			10,138			11,318
	Series AIGFP matched notes and bonds payable			3,560			3,703
	Loans and notes payable			624			469
	Loans from subsidiaries*			12,316			1
	Other liabilities (includes intercompany derivative liabilities of $901 in 2011 and $150 in 2010)			4,368			3,503
Total liabilities				62,391			93,015
AIG Shareholders' equity:
	Preferred stock			-			71,983
	Common stock			4,766			368
	Treasury stock			(942	)		(873	)
	Additional paid-in capital			81,787			9,683
	Retained earnings (accumulated deficit)			14,332			(3,466	)
	Accumulated other comprehensive income			5,008			7,624
Total AIG shareholders' equity				104,951			85,319
Total liabilities and equity			$	167,342		$	178,334

*

Eliminated in consolidation.

See Accompanying Notes to Condensed Financial Information of Registrant.

Condensed Financial Information of Registrant (Continued)
Statement of Income (Loss) – Parent Company Only

Schedule II

Years Ended December 31, (in millions)		2011			2010			2009
Revenues:
	Equity in earnings of consolidated subsidiaries*	$	5,222		$	18,040		$	(1,477	)
	Interest income		596			3,249			4,126
	Change in fair value of ML III		(723	)		-			(1,401	)
	Net realized capital gains (losses)		213			(209	)		(54	)
	Other income		279			6			94
Expenses:
	Accrued and compounding interest		(24	)		(636	)		(2,022	)
	Amortization of prepaid commitment asset		(48	)		(3,471	)		(8,359	)
	Total interest expense on FRBNY Credit Facility		(72	)		(4,107	)		(10,381	)
	Other interest expense		(2,845	)		(2,279	)		(2,496	)
	Restructuring expense and related asset impairment and other expenses		(36	)		(451	)		(407	)
	Net loss on extinguishment of debt		(2,847	)		(104	)		-
	Other expenses		(831	)		(1,213	)		(1,230	)
Income (loss) from continuing operations before income tax expense (benefit)			(1,044	)		12,932			(13,226	)
Income tax expense (benefit)			(17,909	)		5,144			(2,277	)
Net income (loss)			16,865			7,788			(10,949	)
Income (loss) from discontinued operations			933			(2	)		-
Net income (loss) attributable to AIG Parent Company		$	17,798		$	7,786		$	(10,949	)

*

Eliminated in consolidation.

See Accompanying Notes to Condensed Financial Information of Registrant.

Condensed Financial Information of Registrant (Continued)
Statement of Cash Flows – Parent Company Only

Schedule II

Years Ended December 31, (in millions)		2011			2010			2009
Net cash used in operating activities		$	(5,600	)	$	(1,942	)	$	(1,393	)
Cash flows from investing activities:
	Sale of investments		2,215			3,201			1,466
	Maturities of investments		9			11			-
	Sales of divested businesses		1,075			278			857
	Purchase of investments		(19	)		(55	)		(400	)
	Net change in restricted cash		1,945			(183	)		99
	Net change in short-term investments		(7,130	)		(4,291	)		702
	Contributions to subsidiaries – net		(15,973	)		(2,574	)		(5,683	)
	Payments received on mortgages and other loan receivables		341			785			515
	Loans to subsidiaries – net		3,757			5,703			(5,927	)
	Other, net		1,543			(300	)		(254	)
Net cash provided by (used in) investing activities			(12,237	)		2,575			(8,625	)
Cash flows from financing activities:
	Federal Reserve Bank of New York credit facility borrowings		-			19,900			32,526
	Federal Reserve Bank of New York credit facility repayments		(14,622	)		(19,110	)		(26,400	)
	Issuance of other long-term debt		2,135			1,996			-
	Repayment of other long-term debt		(6,181	)		(3,681	)		(2,931	)
	Proceeds from drawdown on the Department of the Treasury Commitment		20,292			2,199			5,344
	Issuance of Common Stock		5,055			-			-
	Loans from subsidiaries – net		11,519			(1,777	)		1,563
	Purchase of Common Stock		(70	)		-			-
	Other, net		(164	)		(168	)		(130	)
Net cash provided by (used in) financing activities			17,964			(641	)		9,972
Change in cash			127			(8	)		(46	)
Cash at beginning of year			49			57			103
Cash at end of year		$	176		$	49		$	57

Supplementary disclosure of cash flow information:

		Years Ended December 31,
(in millions)		2011		2010		2009
Intercompany non-cash financing and investing activities:
	Capital contributions in the form of bonds	$	-	$	-	$	2,698
	Capital contributions to subsidiaries through forgiveness of loans		-		2,510		287
	Other capital contributions – net		523		346		2,834
	Paydown of FRBNY Credit Facility by subsidiary		-		4,068		26
	Investment assets received through reduction of intercompany loan receivable		-		468		-
	Exchange of intercompany payable with loan payable		-		469		-
	Settlement of payable to subsidiary with return of capital from subsidiary		-		-		15,500
	Exchange of intercompany receivable with loan receivable		-		-		528
	Intercompany loan receivable offset by intercompany payable		18,284		1,364		-
	Return of capital and dividend received in the form of bond trading securities		3,668		-		-

See Accompanying Notes to Condensed Financial Information of Registrant.

Notes To Condensed Financial Information of Registrant

    American International Group, Inc.'s (the Registrant) investments in consolidated subsidiaries are stated at cost plus equity in undistributed income of consolidated subsidiaries. The accompanying condensed financial statements of the Registrant should be read in conjunction with the consolidated financial statements and notes thereto of American International Group, Inc. and subsidiaries included in the Registrant's 2011 Annual Report on Form 10-K for the year ended December 31, 2011 (2011 Annual Report on Form 10-K) filed with the Securities and Exchange Commission on February 23, 2012.

    The Registrant includes in its statement of income (loss) dividends from its subsidiaries and equity in undistributed income (loss) of consolidated subsidiaries, which represents the net income (loss) of each of its wholly-owned subsidiaries.

    On December 1, 2009, the Registrant and the Federal Reserve Bank of New York (FRBNY) completed two transactions that reduced the outstanding balance and the maximum amount of credit available under the FRBNY Credit Facility by $25 billion. In connection with one of those transactions, the Registrant assigned $16 billion of its obligation under the FRBNY Credit Agreement to a subsidiary. The Registrant subsequently settled its obligation to the subsidiary with a $15.5 billion non-cash dividend from the subsidiary. The difference was recognized over the remaining term of the FRBNY Credit Agreement as a reduction to interest expense. The remaining difference was derecognized by AIG through earnings due to the repayment in January 2011 of all amounts owed under, and the termination of, the FRBNY Credit Facility.

    Certain prior period amounts have been reclassified to conform to the current period presentation.

    The five-year debt maturity schedule is incorporated by reference from Note 15 to Consolidated Financial Statements.

    The Registrant files a consolidated federal income tax return with certain subsidiaries and acts as an agent for the consolidated tax group when making payments to the Internal Revenue Service. The Registrant and its subsidiaries have adopted, pursuant to a written agreement, a method of allocating consolidated Federal income taxes. Amounts allocated to the subsidiaries under the written agreement are included in Due to Affiliates in the accompanying Condensed Balance Sheets.

    Income taxes in the accompanying Condensed Balance Sheets are comprised of the Registrant's current and deferred tax assets, the consolidated group's current income tax receivable, deferred taxes related to tax attribute carryforwards of AIG's U.S. consolidated income tax group and a valuation allowance to reduce the consolidated deferred tax asset to an amount more likely than not to be realized. See Note 22 to the Consolidated Financial Statements for additional information.

    The consolidated U.S. deferred tax asset for net operating loss, capital loss and tax credit carryforwards and valuation allowance are recorded by the Parent Company, which files the consolidated U.S. Federal income tax return, and are not allocated to its subsidiaries. Generally, as, and if, the consolidated net operating losses and other tax attribute carryforwards are utilized, the intercompany tax balance will be settled with the subsidiaries.