INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT

12 Months Ended

Dec. 31, 2011

INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT

INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT

24. 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 (U.S.), 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.		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)			79,802		32,361		(11,600	)		(100,563	)		-
	Other assets, including current and deferred income taxes			24,317		2,704		117,231			(4,297	)		139,955
Total assets			$	163,929	$	35,078	$	562,877		$	(209,524	)	$	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)			14,169		2,402		75,132			(8,028	)		83,675
	Loans from subsidiaries(b)			12,316		249		(12,565	)		-			-
Total liabilities				62,391		4,289		483,597			(108,833	)		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		78,859			(109,648	)		101,538
Other noncontrolling interests				-		-		392			463			855
Total noncontrolling interests				-		-		392			463			855
Total equity				101,538		30,789		79,251			(109,185	)		102,393
Total liabilities and equity			$	163,929	$	35,078	$	562,877		$	(209,524	)	$	552,360

CONDENSED CONSOLIDATING BALANCE SHEET (Continued)

(in millions)			American International Group, Inc. (As Guarantor)		SAFG, Inc.		Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG
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 fee asset of $3,628			3,838		-		241			-			4,079
	Investment in consolidated subsidiaries(b)			88,834		31,152		(6,788	)		(113,198	)		-
	Other assets, including current and deferred income taxes			6,066		2,717		144,779			1,001			154,563
	Assets held for sale			-		-		104,961			-			104,961
Total assets			$	171,871	$	33,869	$	709,473		$	(239,640	)	$	675,573
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		3,643		59,336			(2,939	)		91,626
	Loans from subsidiaries(b)			1		379		(380	)		-			-
	Liabilities held for sale			-		-		95,911			12			95,923
Total liabilities				93,015		5,659		596,989			(127,300	)		568,363
Redeemable noncontrolling nonvoting, callable, junior preferred interests				-		-		207			227			434
Total AIG shareholders' equity				78,856		28,210		111,178			(139,388	)		78,856
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				78,856		28,210		112,277			(112,567	)		106,776
Total liabilities and equity			$	171,871	$	33,869	$	709,473		$	(239,640	)	$	675,573

(a)

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

(b)

Eliminated in consolidation.

(c)

For December 31, 2011 and December 31, 2010, includes intercompany tax payable of $9.8 billion and $28.1 billion, respectively, and intercompany derivative liabilities of $901 million and $150 million, respectively, for American International Group, Inc. (As Guarantor) and intercompany tax receivable of $128 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
Year Ended December 31, 2011
Revenues:
	Equity in earnings of consolidated subsidiaries(a)		$	6,260		$	159		$	-	$	(6,419	)	$	-
	Change in fair value of ML III			(723	)		-			77		-			(646	)
	Other income(b)			1,088			1,616			63,388		(1,189	)		64,903
Total revenues				6,625			1,775			63,465		(7,608	)		64,257
Expenses:
	Interest expense on FRBNY Credit Facility			72			-			-		(2	)		70
	Other interest expense(c)			2,845			281			1,864		(1,189	)		3,801
	Net loss on extinguishment of debt			2,847			-			61		-			2,908
	Other expenses			867			-			57,512		-			58,379
Total expenses				6,631			281			59,437		(1,191	)		65,158
Income (loss) from continuing operations before income tax expense (benefit)				(6	)		1,494			4,028		(6,417	)		(901	)
Income tax expense (benefit)(d)				(19,695	)		(103	)		34		-			(19,764	)
Income (loss) from continuing operations				19,689			1,597			3,994		(6,417	)		18,863
Income (loss) from discontinued operations				933			-			1,536		(2	)		2,467
Net income (loss)				20,622			1,597			5,530		(6,419	)		21,330
Less:
Net income from continuing operations attributable to noncontrolling interests:
		Nonvoting, callable, junior and senior preferred interests		-			-			-		634			634
		Other		-			-			55		-			55
Total income from continuing operations attributable to noncontrolling interests				-			-			55		634			689
Income from discontinued operations attributable to noncontrolling interests				-			-			19		-			19
Total net income attributable to noncontrolling interests				-			-			74		634			708
Net income (loss) attributable to AIG			$	20,622		$	1,597		$	5.456	$	(7,053	)	$	20,622

(a)

Eliminated in consolidation.

(b)

Includes intercompany income of $489 million 2011 for American International Group, Inc. (As Guarantor).

(c)

Includes intercompany interest expense of $700 million for 2011 for American International Group, Inc. (As Guarantor).

(d)

The income tax benefit includes the effect of releasing a significant portion of the deferred tax asset valuation allowance. See Note 22 herein for additional information.

CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS) (continued)

(in millions)			American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries		Reclassifications and Eliminations			Consolidated AIG
Year Ended December 31, 2010
Revenues:
	Equity in earnings of consolidated subsidiaries(a)		$	21,385		$	1,695		$	—	$	(23,080	)	$	—
	Change in fair value of ML III			-			-			1,792		-			1,792
	Other income(b)			3,046			246			75,111		(2,658	)		75,745
Total revenues				24,431			1,941			76,903		(25,738	)		77,537
Expenses:
	Interest expense on FRBNY Credit Facility			4,107			-			-		(79	)		4,028
	Other interest expense(c)			2,279			378			3,950		(2,654	)		3,953
	Net loss on extinguishment of debt			104			-			-		-			104
	Other expenses			1,664			-			48,122		-			49,786
Total expenses				8,154			378			52,072		(2,733	)		57,871
Income (loss) from continuing operations before income tax expense (benefit)				16,277			1,563			24,831		(23,005	)		19,666
Income tax expense (benefit)(d)				5,402			(101	)		1,435		-			6,736
Income (loss) from continuing operations				10,875			1,664			23,396		(23,005	)		12,930
Income (loss) from discontinued operations				(817	)		-			251		(79	)		(645	)
Net income (loss)				10,058			1,664			23,647		(23,084	)		12,285
Less:
	Net income from continuing operations attributable to noncontrolling interests:
		Nonvoting, callable, junior and senior preferred interests		-			-			-		1,818			1,818
		Other		-			-			355		-			355
Total income from continuing operations attributable to noncontrolling interests				-			-			355		1,818			2,173
Income from discontinued operations attributable to noncontrolling interests				-			-			54		-			54
Total net income attributable to noncontrolling interests				-			-			409		1,818			2,227
Net income (loss) attributable to AIG			$	10,058		$	1,664		$	23,238	$	(24,902	)	$	10,058

(a)

Eliminated in consolidation.

(b)

Includes intercompany income of $2.6 billion for 2010 for American International Group, Inc. (As Guarantor).

(c)

Includes intercompany interest expense of $28 million for 2010 for American International Group, Inc. (As Guarantor).

(d)

Income taxes recorded by American International Group, Inc. (As Guarantor) include deferred tax expense attributable to foreign businesses sold and a valuation allowance to reduce the consolidated deferred tax asset to the amount more likely than not to be realized.

CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS) (continued)

(in millions)			American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG
Year Ended December 31, 2009
Revenues:
	Equity in earnings of consolidated subsidiaries(a)		$	(226	)	$	(366	)	$	—		$	592		$	—
	Change in fair value of ML III			(1,401	)		-			1,820			-			419
	Other income(b)			4,166			199			74,100			(3,437	)		75,028
Total revenues				2,539			(167	)		75,920			(2,845	)		75,447
Expenses:
	Interest expense on FRBNY Credit Facility			10,381			-			-			(89	)		10,292
	Other interest expense(c)			2,496			355			4,652			(3,437	)		4,066
	Other expenses			1,637			-			73,894			-			75,531
Total expenses				14,514			355			78,546			(3,526	)		89,889
Income (loss) from continuing operations before income tax expense (benefit)				(11,975	)		(522	)		(2,626	)		681			(14,442	)
Income tax expense (benefit)(d)				(2,798	)		(7	)		750			-			(2,055	)
Income (loss) from continuing operations				(9,177	)		(515	)		(3,376	)		681			(12,387	)
Income (loss) from discontinued operations				815			-			1,935			(89	)		2,661
Net income (loss)				(8,362	)		(515	)		(1,441	)		592			(9,726	)
Less:
Net income (loss) from continuing operations attributable to noncontrolling interests:
		Nonvoting, callable, junior and senior preferred interests		-			-			96			44			140
		Other		-			-			(1,576	)		-			(1,576	)
Total income (loss) from continuing operations attributable to noncontrolling interests				-			-			(1,480	)		44			(1,436	)
Income from discontinued operations attributable to noncontrolling interests				-			-			72			-			72
Total net income (loss) attributable to noncontrolling interests				-			-			(1,408	)		44			(1,364	)
Net income (loss) attributable to AIG			$	(8,362	)	$	(515	)	$	(33	)	$	548		$	(8,362	)

(a)

Eliminated in consolidation.

(b)

Includes intercompany income of $3.4 billion for 2009 for American International Group, Inc. (As Guarantor).

(c)

Includes intercompany interest expense of $27 million for 2009 for American International Group, Inc. (As Guarantor).

(d)

Income taxes recorded by American International Group, Inc. (As Guarantor) include deferred tax expense attributable to foreign businesses sold and a valuation allowance to reduce the consolidated deferred tax asset to the amount more likely than not to be realized.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(in millions)	American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG
Year Ended December 31, 2011
Net income (loss)	$	20,622		$	1,597		$	5,530		$	(6,419	)	$	21,330
Other comprehensive income (loss)		(2,604	)		-			(1,809	)		1,809			(2,604	)
Comprehensive income (loss)		18,018			1,597			3,721			(4,610	)		18,726
Total comprehensive income (loss) attributable to noncontrolling interests		(121	)		-			73			635			587
Total comprehensive income (loss) attributable to AIG	$	18,139		$	1,597		$	3,648		$	(5,245	)	$	18,139
Year Ended December 31, 2010
Net income (loss)	$	10,058		$	1,664		$	23,647		$	(23,084	)	$	12,285
Other comprehensive income (loss)		2,963			-			11,968			(11,968	)		2,963
Comprehensive income (loss)		13,021			1,664			35,615			(35,052	)		15,248
Total comprehensive income attributable to noncontrolling interests		181			-			415			1,812			2,408
Comprehensive income (loss) attributable to AIG	$	12,840		$	1,664		$	35,200		$	(36,864	)	$	12,840
Year Ended December 31, 2009
Net income (loss)	$	(8,362	)	$	(515	)	$	(1,441	)	$	592		$	(9,726	)
Other comprehensive income (loss)		21,799			-			8,366			(8,366	)		21,799
Comprehensive income (loss)		13,437			(515	)		6,925			(7,774	)		12,073
Total comprehensive income (loss) attributable to noncontrolling interests		388			-			(1,407	)		43			(976	)
Comprehensive income (loss) attributable to AIG	$	13,049		$	(515	)	$	8,332		$	(7,817	)	$	13,049

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(in millions)		American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries and Eliminations			Consolidated AIG
Year Ended December 31, 2011
Net cash (used in) provided by operating activities – continuing operations		$	(5,600	)	$	1,277		$	988		$	(3,335	)
Net cash (used in) provided by operating activities – discontinued operations			-			-			3,370			3,370
Net cash (used in) provided by operating activities			(5,600	)		1,277			4,358			35
Cash flows from investing activities:
	Sales of investments		2,565			-			82,468			85,033
	Sales of divested businesses, net		1,075			-			(488	)		587
	Purchase of investments		(19	)		-			(101,136	)		(101,155	)
	Loans to subsidiaries – net		3,757			-			(3,757	)		-
	Contributions to subsidiaries – net*		(15,973	)		(2	)		15,975			-
	Net change in restricted cash		1,945			-			25,299			27,244
	Net change in short-term investments		(7,130	)		-			27,118			19,988
	Other, net*		1,543			-			(1,386	)		157
Net cash (used in) provided by investing activities – continuing operations			(12,237	)		(2	)		44,093			31,854
Net cash (used in) provided by investing activities – discontinued operations			-			-			4,478			4,478
Net cash (used in) provided by investing activities			(12,237	)		(2	)		48,571			36,332
Cash flows from financing activities:
	Federal Reserve Bank of New York credit facility repayments		(14,622	)		-			-			(14,622	)
	Issuance of other long-term debt		2,135			117			5,510			7,762
	Repayments on other long-term debt		(6,181	)		-			(11,629	)		(17,810	)
	Proceeds from drawdown on the Department of the Treasury Commitment*		20,292			-			-			20,292
	Issuance of Common Stock		5,055			-			-			5,055
	Purchase of Common Stock		(70	)		-			-			(70	)
	Intercompany loans – net		11,519			(1,379	)		(10,140	)		-
	Other, net*		(164	)		-			(35,427	)		(35,591	)
Net cash (used in) provided by financing activities – continuing operations			17,964			(1,262	)		(51,686	)		(34,984	)
Net cash (used in) provided by financing activities – discontinued operations			-			-			(1,942	)		(1,942	)
Net cash (used in) provided by financing activities			17,964			(1,262	)		(53,628	)		(36,926	)
Effect of exchange rate changes on cash			-			-			29			29
Change in cash			127			13			(670	)		(530	)
Cash at beginning of period			49			-			1,509			1,558
Change in cash of businesses held for sale			-			-			446			446
Cash at end of period		$	176		$	13		$	1,285		$	1,474

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Continued)

(in millions)		American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries and Eliminations			Consolidated AIG
Year Ended December 31, 2010
Net cash (used in) provided by operating activities – continuing operations		$	(1,942	)	$	(141	)	$	11,786		$	9,703
Net cash (used in) provided by operating activities – discontinued operations			-			-			7,207			7,207
Net cash (used in) provided by operating activities			(1,942	)		(141	)		18,993			16,910
Cash flows from investing activities:
	Sales of investments		3,997			-			89,091			93,088
	Sales of divested businesses, net		278			-			21,482			21,760
	Purchase of investments		(55	)		-			(93,056	)		(93,111	)
	Loans to subsidiaries – net		5,703			-			(5,703	)		-
	Contributions to subsidiaries – net		(2,574	)		-			2,574			-
	Net change in restricted cash		(183	)		-			(26,932	)		(27,115	)
	Net change in short-term investments		(4,291	)		-			(942	)		(5,233	)
	Other, net		(300	)		-			(32	)		(332	)
Net cash (used in) provided by investing activities – continuing operations			2,575			-			(13,518	)		(10,943	)
Net cash (used in) provided by investing activities – discontinued operations			-			-			718			718
Net cash (used in) provided by investing activities			2,575			-			(12,800	)		(10,225	)
Cash flows from financing activities:
	Federal Reserve Bank of New York credit facility borrowings		19,900			-			-			19,900
	Federal Reserve Bank of New York credit facility repayments		(19,110	)		-			(4,068	)		(23,178	)
	Issuance of other long-term debt		1,996			-			11,050			13,046
	Repayments on other long-term debt		(3,681	)		(500	)		(11,795	)		(15,976	)
	Proceeds from drawdown on the Department of the Treasury Commitment		2,199			-			-			2,199
	Intercompany loans – net		(1,777	)		639			1,138			-
	Other, net		(168	)		-			(1,368	)		(1,536	)
Net cash (used in) provided by financing activities – continuing operations			(641	)		139			(5,043	)		(5,545	)
Net cash (used in) provided by financing activities – discontinued operations			-			-			(3,716	)		(3,716	)
Net cash (used in) provided by financing activities			(641	)		139			(8,759	)		(9,261	)
Effect of exchange rate changes on cash			-			-			39			39
Change in cash			(8	)		(2	)		(2,527	)		(2,537	)
Cash at beginning of period			57			2			4,341			4,400
Change in cash of businesses held for sale			-			-			(305	)		(305	)
Cash at end of period		$	49		$	-		$	1,509		$	1,558

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Continued)

(in millions)		American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries and Eliminations			Consolidated AIG
Year Ended December 31, 2009
Net cash (used in) provided by operating activities – continuing operations		$	(1,393	)	$	(120	)	$	13,796		$	12,283
Net cash (used in) provided by operating activities – discontinued operations			-			-			6,301			6,301
Net cash (used in) provided by operating activities			(1,393	)		(120	)		20,097			18,584
Cash flows from investing activities:
	Sales of investments		1,981			-			86,199			88,180
	Sales of divested businesses, net		857			169			4,252			5,278
	Purchase of investments		(400	)		-			(79,866	)		(80,266	)
	Loans to subsidiaries – net		(5,927	)		-			5,927			-
	Contributions to subsidiaries – net		(5,683	)		(2,350	)		8,033			-
	Net change in restricted cash		99			-			(349	)		(250	)
	Net change in short-term investments		702			-			(9,723	)		(9,021	)
	Other, net		(254	)		-			2,739			2,485
Net cash (used in) provided by investing activities – continuing operations			(8,625	)		(2,181	)		17,212			6,406
Net cash (used in) provided by investing activities – discontinued operations			-			-			(628	)		(628	)
Net cash (used in) provided by investing activities			(8,625	)		(2,181	)		16,584			5,778
Cash flows from financing activities:
	Federal Reserve Bank of New York credit facility borrowings		32,526			-			-			32,526
	Federal Reserve Bank of New York credit facility repayments		(26,400	)		-			(26	)		(26,426	)
	Issuance of other long-term debt		-			-			3,452			3,452
	Repayments on other long-term debt		(2,931	)		-			(16,520	)		(19,451	)
	Proceeds from drawdown on the Department of the Treasury Commitment		5,344			-			-			5,344
	Intercompany loans – net		1,563			1,103			(2,666	)		-
	Other, net		(130	)		1,200			(17,525	)		(16,455	)
Net cash (used in) provided by financing activities – continuing operations			9,972			2,303			(33,285	)		(21,010	)
Net cash (used in) provided by financing activities – discontinued operations			-			-			(7,987	)		(7,987	)
Net cash (used in) provided by financing activities			9,972			2,303			(41,272	)		(28,997	)
Effect of exchange rate changes on cash			-			-			533			533
Change in cash			(46	)		2			(4,058	)		(4,102	)
Cash at beginning of period			103			-			8,539			8,642
Change in cash of businesses held for sale			-			-			(140	)		(140	)
Cash at end of period		$	57		$	2		$	4,341		$	4,400

*

Includes activities related to the Recapitalization. See Note 17 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 year ended December 31, 2011 for:
Interest:
	Third party*	$	(6,909	)	$	(129	)	$	(1,947	)	$	(8,985	)
	Intercompany		(311	)		(153	)		464			-
Taxes:
	Income tax authorities	$	13		$	-		$	(729	)	$	(716	)
	Intercompany		(335	)		-			335			-
Cash (paid) received during the year ended December 31, 2010 for:
Interest:
	Third party	$	(2,493	)	$	(152	)	$	(2,521	)	$	(5,166	)
	Intercompany		(12	)		(226	)		238			-
Taxes:
	Income tax authorities	$	(32	)	$	-		$	(970	)	$	(1,002	)
	Intercompany		859			-			(859	)		-
Cash (paid) received during the year ended December 31, 2009 for:
Interest:
	Third party	$	(2,595	)	$	(166	)	$	(3,016	)	$	(5,777	)
	Intercompany		(6	)		(186	)		192			-
Taxes:
	Income tax authorities	$	1,140		$	-		$	(1,366	)	$	(226	)
	Intercompany		(1,287	)		(21	)		1,308			-

*

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:

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