INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT

6 Months Ended

Jun. 30, 2012

INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT

INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT

14. INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT

The following condensed consolidating financial statements reflect the results of SunAmerica Financial Group, Inc. (SAFG, Inc.), a holding company and a 100 percent 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.		Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG
June 30, 2012
Assets:
Short-term investments	$	11,705	$	-	$	14,671		$	(2,011	)	$	24,365
Other investments(a)		12,884		-		374,798			483			388,165
Total investments		24,589		-		389,469			(1,528	)		412,530
Cash		72		-		1,160			-			1,232
Loans to subsidiaries(b)		36,677		-		(29,987	)		(6,690	)		-
Debt issuance costs		198		-		(198	)		-			-
Investment in consolidated subsidiaries(b)		74,422		41,107		(27,558	)		(87,971	)		-
Other assets, including current and deferred income taxes		25,652		224		103,400			12,345			141,621
Total assets	$	161,610	$	41,331	$	436,286		$	(83,844	)	$	555,383
Liabilities:
Insurance liabilities	$	-	$	-	$	280,694		$	(245	)	$	280,449
Other long-term debt		36,162		1,638		35,639			458			73,897
Other liabilities, including intercompany balances(a)(c)		19,732		711		64,357			10,596			95,396
Loans from subsidiaries(b)		1,007		791		4,898			(6,696	)		-
Total liabilities		56,901		3,140		385,588			4,113			449,742
Redeemable noncontrolling interests (see Note 1):
Nonvoting, callable, junior preferred interests held by Department of the Treasury		-		-		-			-			-
Other		-		-		34			78			112
Total redeemable noncontrolling interests		-		-		34			78			112
Total AIG shareholders' equity		104,709		38,191		50,262			(88,453	)		104,709
Other noncontrolling interests		-		-		402			418			820
Total noncontrolling interests		-		-		402			418			820
Total equity		104,709		38,191		50,664			(88,035	)		105,529
Total liabilities and equity	$	161,610	$	41,331	$	436,286		$	(83,844	)	$	555,383

CONDENSED CONSOLIDATING BALANCE SHEET (continued)

(in millions)	American International Group, Inc. (As Guarantor)		SAFG, Inc.		Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG
December 31, 2011
Assets:
Short-term investments	$	12,868	$	-	$	14,110		$	(4,406	)	$	22,572
Other investments(a)		6,599		-		481,525			(100,258	)		387,866
Total investments		19,467		-		495,635			(104,664	)		410,438
Cash		176		13		1,285			-			1,474
Loans to subsidiaries(b)		39,971		-		(39,971	)		-			-
Debt issuance costs		196		-		297			-			493
Investment in consolidated subsidiaries(b)(d)		80,990		32,361		(11,463	)		(101,888	)		-
Other assets, including current and deferred income taxes		24,595		2,704		117,231			(4,575	)		139,955
Total assets	$	165,395	$	35,078	$	563,014		$	(211,127	)	$	552,360
Liabilities:
Insurance liabilities	$	-	$	-	$	282,790		$	(274	)	$	282,516
Other long-term debt		35,906		1,638		138,240			(100,531	)		75,253
Other liabilities, including intercompany balances(a)(c)(d)		15,635		2,402		75,132			(9,494	)		83,675
Loans from subsidiaries(b)		12,316		249		(12,565	)		-			-
Total liabilities		63,857		4,289		483,597			(110,299	)		441,444
Redeemable noncontrolling interests (see Note 1):
Nonvoting, callable, junior preferred interests held by Department of the Treasury		-		-		-			8,427			8,427
Other		-		-		29			67			96
Total redeemable noncontrolling interests		-		-		29			8,494			8,523
Total AIG shareholders' equity		101,538		30,789		78,996			(109,785	)		101,538
Other noncontrolling interests		-		-		392			463			855
Total noncontrolling interests		-		-		392			463			855
Total equity		101,538		30,789		79,388			(109,322	)		102,393
Total liabilities and equity	$	165,395	$	35,078	$	563,014		$	(211,127	)	$	552,360

(a)

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

(b)

Eliminated in consolidation.

(c)

For both June 30, 2012 and December 31, 2011, includes intercompany tax payable of $9.8 billion and intercompany derivative liabilities of $990 million and $901 million, respectively, for American International Group, Inc. (As Guarantor) and intercompany tax receivable of $169 million and $128 million, respectively, for SAFG, Inc.

(d)

Prior period amounts have been conformed to the current period presentation.

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, 2012
Revenues:
Equity in earnings of consolidated subsidiaries(a)	$	1,126		$	1,440		$	-		$	(2,566	)	$	-
Change in fair value of ML III		1,306			-			-			-			1,306
Other income(b)		50			(1,388	)		17,220			(65	)		15,817
Total revenues		2,482			52			17,220			(2,631	)		17,123
Expenses:
Other interest expense(c)		525			12			481			(64	)		954
Net loss on extinguishment of debt		9			-			2			-			11
Other expenses		926			-			13,481			-			14,407
Total expenses		1,460			12			13,964			(64	)		15,372
Income (loss) from continuing operations before income tax expense (benefit)		1,022			40			3,256			(2,567	)		1,751
Income tax expense (benefit)		(1,310	)		463			254			-			(593	)
Income (loss) from continuing operations		2,332			(423	)		3,002			(2,567	)		2,344
Loss from discontinued operations		-			-			(5	)		-			(5	)
Net income (loss)		2,332			(423	)		2,997			(2,567	)		2,339
Less:
Net income from continuing operations attributable to noncontrolling interests:
Nonvoting, callable, junior and senior preferred interests		-			-			-			-			-
Other		-			-			7			-			7
Total net income attributable to noncontrolling interests		-			-			7			-			7
Net income (loss) attributable to AIG	$	2,332		$	(423	)	$	2,990		$	(2,567	)	$	2,332
Three Months Ended June 30, 2011
Revenues:
Equity in earnings of consolidated subsidiaries(a)(d)	$	2,186		$	174		$	-		$	(2,360	)	$	-
Change in fair value of ML III		(347	)		-			(320	)		-			(667	)
Other income(b)(d)		192			208			17,192			(245	)		17,347
Total revenues		2,031			382			16,872			(2,605	)		16,680
Expenses:
Interest expense on FRBNY Credit Facility		-			-			-			-			-
Other interest expense(c)		731			65			450			(245	)		1,001
Net loss on extinguishment of debt		18			-			61			-			79
Other expenses		225			-			13,581			-			13,806
Total expenses		974			65			14,092			(245	)		14,886
Income (loss) from continuing operations before income tax expense (benefit)		1,057			317			2,780			(2,360	)		1,794
Income tax expense (benefit)		(771	)		(77	)		552			-			(296	)
Income (loss) from continuing operations		1,828			394			2,228			(2,360	)		2,090
Income (loss) from discontinued operations		8			-			(45	)		-			(37	)
Net income (loss)		1,836			394			2,183			(2,360	)		2,053
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 attributable to 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	$	1,836		$	394		$	2,107		$	(2,501	)	$	1,836

(in millions)	American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries		Reclassifications and Eliminations			Consolidated AIG
Six Months Ended June 30, 2012
Revenues:
Equity in earnings of consolidated subsidiaries(a)	$	3,946		$	104		$	-	$	(4,050	)	$	-
Change in fair value of ML III		1,957			-			601		-			2,558
Other income(b)		701			49			32,527		(269	)		33,008
Total revenues		6,604			153			33,128		(4,319	)		35,566
Expenses:
Other interest expense(c)		1,169			66			940		(268	)		1,907
Net loss on extinguishment of debt		9			-			23		-			32
Other expenses		1,105			-			26,187		-			27,292
Total expenses		2,283			66			27,150		(268	)		29,231
Income (loss) from continuing operations before income tax expense (benefit)		4,321			87			5,978		(4,051	)		6,335
Income tax expense (benefit)		(1,219	)		463			1,311		-			555
Income (loss) from continuing operations		5,540			(376	)		4,667		(4,051	)		5,780
Income from discontinued operations		-			-			8		-			8
Net income (loss)		5,540			(376	)		4,675		(4,051	)		5,788
Less:
Net income from continuing operations attributable to noncontrolling interests:
Nonvoting, callable, junior and senior preferred interests		-			-			-		208			208
Other		-			-			40		-			40
Total net income attributable to noncontrolling interests		-			-			40		208			248
Net income (loss) attributable to AIG	$	5,540		$	(376	)	$	4,635	$	(4,259	)	$	5,540
Six Months Ended June 30, 2011
Revenues:
Equity in earnings of consolidated subsidiaries(a)(d)	$	6,178		$	510		$	-	$	(6,688	)	$	-
Change in fair value of ML III		(347	)		-			424		-			77
Other income(b)(d)		233			466			33,929		(586	)		34,042
Total revenues		6,064			976			34,353		(7,274	)		34,119
Expenses:
Interest expense on FRBNY Credit Facility		72			-			-		(2	)		70
Other interest expense(c)		1,482			159			960		(586	)		2,015
Net loss on extinguishment of debt		3,331			-			61		-			3,392
Other expenses		272			-			27,886		-			28,158
Total expenses		5,157			159			28,907		(588	)		33,635
Income (loss) from continuing operations before income tax expense (benefit)		907			817			5,446		(6,686	)		484
Income tax expense (benefit)		(1,087	)		4			561		-			(522	)
Income (loss) from continuing operations		1,994			813			4,885		(6,686	)		1,006
Income (loss) from discontinued operations		1,139			-			1,411		(2	)		2,548
Net income (loss)		3,133			813			6,296		(6,688	)		3,554
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	$	3,133		$	813		$	6,268	$	(7,081	)	$	3,133

(a)

Eliminated in consolidation.

(b)

Includes intercompany income of $60 million and $65 million for the three-month periods ended June 30, 2012 and 2011, respectively, and $132 million and $211 million for the six-month periods ended June 30, 2012 and 2011, respectively, for American International Group, Inc. (As Guarantor).

(c)

Includes intercompany interest expense of $3 million and $180 million for the three-month periods ended June 30, 2012 and 2011, respectively, and $136 million and $375 million for the six-month periods ended June 30, 2012 and 2011, respectively, for American International Group, Inc. (As Guarantor).

(d)

Prior period amounts have been conformed to the current period presentation.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(in millions)	American International Group, Inc. (As Guarantor)		SAFG, Inc.			Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG
Three Months Ended June 30, 2012
Net income (loss)	$	2,332	$	(423	)	$	2,997		$	(2,567	)	$	2,339
Other comprehensive income (loss)		918		934			1,720			(2,662	)		910
Comprehensive income (loss)		3,250		511			4,717			(5,229	)		3,249
Total comprehensive income (loss) attributable to noncontrolling interests		-		-			(1	)		-			(1	)
Comprehensive income (loss) attributable to AIG	$	3,250	$	511		$	4,718		$	(5,229	)	$	3,250
Three Months Ended June 30, 2011
Net income (loss)	$	1,836	$	394		$	2,183		$	(2,360	)	$	2,053
Other comprehensive income (loss)		2,197		528			1,258			(1,869	)		2,114
Comprehensive income (loss)		4,033		922			3,441			(4,229	)		4,167
Total comprehensive income (loss) attributable to noncontrolling interests		-		-			(7	)		141			134
Comprehensive income (loss) attributable to AIG	$	4,033	$	922		$	3,448		$	(4,370	)	$	4,033
Six Months Ended June 30, 2012
Net income (loss)	$	5,540	$	(376	)	$	4,675		$	(4,051	)	$	5,788
Other comprehensive income (loss)		2,638		1,759			3,695			(5,457	)		2,635
Comprehensive income (loss)		8,178		1,383			8,370			(9,508	)		8,423
Total comprehensive income (loss) attributable to noncontrolling interests		-		-			37			208			245
Comprehensive income (loss) attributable to AIG	$	8,178	$	1,383		$	8,333		$	(9,716	)	$	8,178
Six Months Ended June 30, 2011
Net income (loss)	$	3,133	$	813		$	6,296		$	(6,688	)	$	3,554
Other comprehensive income (loss)		1,381		1,105			185			(1,337	)		1,334
Comprehensive income (loss)		4,514		1,918			6,481			(8,025	)		4,888
Total comprehensive income (loss) attributable to noncontrolling interests		-		-			(19	)		393			374
Comprehensive income (loss) attributable to AIG	$	4,514	$	1,918		$	6,500		$	(8,418	)	$	4,514

Prior period amounts have been conformed to the current period presentation.

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, 2012
Net cash (used in) provided by operating activities	$	(189	)	$	2,290		$	(469	)	$	1,632
Cash flows from investing activities:
Sales of investments		1,055			-			45,920			46,975
Purchase of investments		(526	)		-			(35,222	)		(35,748	)
Loans to subsidiaries – net		3,327			-			(3,327	)		-
Contributions to subsidiaries – net		(106	)		-			106			-
Net change in restricted cash		(370	)		-			105			(265	)
Net change in short-term investments		2,898			-			(3,109	)		(211	)
Net change in derivative assets and liabilities		349			-			(71	)		278
Other, net		(7	)		-			(151	)		(158	)
Net cash (used in) provided by investing activities		6,620			-			4,251			10,871
Cash flows from financing activities:
Issuance of long-term debt		3,504			-			3,272			6,776
Repayments of long-term debt		(2,981	)		-			(5,174	)		(8,155	)
Purchase of Common Stock		(5,000	)		-			-			(5,000	)
Intercompany loans – net		(2,014	)		(2,303	)		4,317			-
Other, net		(44	)		-			(6,298	)		(6,342	)
Net cash (used in) financing activities		(6,535	)		(2,303	)		(3,883	)		(12,721	)
Effect of exchange rate changes on cash		-			-			(24	)		(24	)
Change in cash		(104	)		(13	)		(125	)		(242	)
Cash at beginning of period		176			13			1,285			1,474
Cash at end of period	$	72		$	-		$	1,160		$	1,232

(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		$	(1,681	)	$	(6,212	)
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			994			(3,537	)
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			-
Net change in restricted cash		2,273			-			24,207			26,480
Net change in short-term investments		(2,750	)		-			15,717			12,967
Net change in derivative assets and liabilities		1,073			-			(683	)		390
Other, net*		(38	)		-			71			33
Net cash (used in) provided by investing activities – continuing operations		(15,542	)		-			50,342			34,800
Net cash (used in) provided by investing activities – discontinued operations		-			-			3,021			3,021
Net cash (used in) provided by investing activities		(15,542	)		-			53,363			37,821
Cash flows from financing activities:
FRBNY credit facility repayments		(14,622	)		-			-			(14,622	)
Issuance of long-term debt		150			-			2,871			3,021
Repayments of long-term debt		(3,571	)		-			(6,397	)		(9,968	)
Proceeds from drawdown on the Department of the Treasury Commitment*		20,292			-			-			20,292
Settlement of equity unit stock purchase contract		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

*

Includes activities related to the Recapitalization. See Note 10 herein.

SUPPLEMENTARY DISCLOSURE OF CONDENSED CONSOLIDATING 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, 2012 for:
Interest:
Third party	$	(1,136	)	$	(64	)	$	(888	)	$	(2,088	)
Intercompany		(128	)		(33	)		161			-
Taxes:
Income tax authorities	$	2		$	-		$	(208	)	$	(206	)
Intercompany		605			(41	)		(564	)		-
Cash (paid) received during the six months ended June 30, 2011 for:
Interest:
Third party*	$	(5,946	)	$	(64	)	$	(1,071	)	$	(7,081	)
Intercompany		(162	)		(95	)		257			-
Taxes:
Income tax authorities	$	13		$	-		$	(560	)	$	(547	)
Intercompany		638			-			(638	)		-

*

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)	2012		2011
Intercompany non-cash financing and investing activities:
Capital contributions in the form of bond available for sale securities	$	959	$	-
Return of capital and dividend received in the form of cancellation of intercompany loan		9,303		-
in the form of bond trading securities		3,320		3,668
Intercompany loan receivable offset by intercompany payable		-		18,284
Other capital contributions – net		339		292