AIG - 2003 0630 - 10Q

  • Capital Resources: At June 30, 2003, AIG had total capital funds of $68.36 billion and total borrowings of $76.87 billion. At that date, $67.93 billion of such borrowings were either not guaranteed by AIG or were matched borrowings under obligations of guaranteed investment agreements (GIAs) or matched notes and bonds payable. During the period from January 1, 2003 through June 30, 2003, AIG repurchased in the open market 1,625,000 shares of its common stock.
  • Liquidity: At June 30, 2003, consolidated invested assets were $479.8 billion including $14.03 billion in cash and short-term investments. Consolidated net cash provided from operating activities in the first six months of 2003 amounted to $13.11 billion.
  • (p38)
    • Since AIG purchased AIG Star Life, a part of income earned by AIG Star Life has resulted from surrender charges earned on policies that were either surrendered or lapsed.
      • This favorable impact on operating income was anticipated when AIG took control.
    • Life insurance realized capital losses for the first six months were $516 million in 2003 and $339 million in 2002.
      • These realized capital losses resulted from the ongoing management of the life insurance investment portfolios within the overall objectives of the life insurance operations and reflect continued weakness in the equity markets and impairment loss provisions for both equity and fixed income holdings.
        (See the discussion on “Valuation of Invested Assets” herein.)
  • AIG Asset Management Holdings Corp. (formerly known as AIG Global Investment Group, Inc.) and its subsidiaries and affiliated companies (AIG Global Investment Group).
  • AIG SunAmerica develops and sells variable annuities and other investment products, sells and manages mutual funds and provides financial services.
  • AIG VALIC provides tax qualified annuities to the employees of educational, healthcare and governmental entities.
  • AIG Global Investment Group manages third-party institutional, retail and private equity funds invested assets on a global basis, provides securities lending and custodial services and organizes, and manages the invested assets of institutional private equity investment funds.

Each of these subsidiary operations receives fees for investment products and services provided. (p46)