Implementation and Uses of Economic Capital ... - ERM Symposium
Implementation and Uses of Economic Capital ... - ERM Symposium
Implementation and Uses of Economic Capital ... - ERM Symposium
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$BN<br />
101.68<br />
GAAP<br />
Shareholders'<br />
Equity at<br />
December 31,<br />
2006<br />
6.28<br />
AIG Disclosures (1 <strong>of</strong> 3)<br />
Change in Available <strong>Economic</strong> <strong>Capital</strong><br />
Year End 2006 to Year End 2007<br />
101.68 6.28 6.20 (5.71)<br />
6.20<br />
Net Income AIGFP Market<br />
Consistent<br />
Settlement<br />
Value<br />
Adjustment<br />
5.71<br />
OCI Unrealized<br />
Losses Net <strong>of</strong><br />
Tax<br />
1.61 (7.98) 5.81 107.89<br />
Plus Plus Less Plus Less Plus<br />
1.61<br />
OCI Translation<br />
Adj. Net <strong>of</strong> Tax &<br />
Other<br />
6.02<br />
1.96<br />
Share<br />
Repurchases &<br />
Dividends<br />
5.81<br />
AIG Hybrid<br />
Issuances<br />
6.20<br />
5.81<br />
95.88<br />
Available<br />
<strong>Economic</strong><br />
<strong>Capital</strong> at<br />
December 31,<br />
2007<br />
• Dividends <strong>and</strong><br />
Share<br />
Repurchases ($8.0<br />
BN) exceeded<br />
Hybrid Issuances<br />
($5.8 billion)<br />
• The AIGFP market<br />
consistent<br />
settlement value<br />
adjustment ($6.2<br />
BN) was largely<br />
<strong>of</strong>fset by OCI<br />
unrealized losses<br />
($5.7 billion)<br />
During 2007, AIG’s conservative estimate <strong>of</strong> Available <strong>Economic</strong> <strong>Capital</strong> increased by $6.2<br />
billion (i.e. $107.9 less $101.7 billion).<br />
Source: AIG Investor Relations Website, February 2008<br />
20 20
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