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ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES.....................................................................................................................................................................................Liquidity and Capital Resources Management Highlights 2012Sources• Sales of AIA SharesWe sold our remaining interest of approximately 4.0 billion AIA ordinary shares for gross proceeds ofapproximately $14.5 billion.• ML III DistributionsWe received approximately $8.5 billion in distributions from the FRBNY’s dispositions of ML III assets.• AIG Parent Funding from SubsidiariesApproximately $5.2 billion was paid to AIG Parent from subsidiaries in cash. In addition, AIG Parent receivednon-cash dividends of approximately $1.0 billion in the form of municipal bonds from AIG Property Casualty.• AIG Notes OfferingsWe received approximately $3.8 billion in proceeds in registered public note offerings.• ALICO Escrow ReleaseApproximately $1.0 billion held in escrow to secure indemnifications provided to MetLife under the ALICO stockpurchase agreement was released to AIG (see Note 16 to the Consolidated Financial Statements for additionalinformation).Uses• AIG Share PurchasesWe purchased an aggregate of approximately $13 billion of AIG Common Stock at the initial public offering pricein four registered public offerings of AIG Common Stock conducted by the Department of the Treasury, as theselling shareholder. See Note 17 to the Consolidated Financial Statements for additional information on theseofferings.• Pay Down of AIA SPV Preferred InterestsWe paid down in full the remaining $8.6 billion liquidation preference of the Department of the Treasury’s AIASPV Preferred Interests and redeemed the Department of the Treasury’s preferred participating return rights inthe AIA SPV and the special purpose vehicle holding the proceeds from the sale of ALICO (ALICO SPV). Thepayment was funded using both existing funds and approximately $1.6 billion in proceeds to us from theFRBNY’s final disposition of ML II securities, approximately $6.0 billion in proceeds from the sale of AIA ordinaryshares and funds allocated to the MIP.• Debt ReductionWe repaid an aggregate total of $7.7 billion of debt, which includes repayments by AIG Parent of $3.2 billion.• AIG Parent Funding to SubsidiariesWe made $1.2 billion in net capital contributions to subsidiaries, including a contribution of approximately$1.0 billion to AIG Property Casualty in the aftermath of Storm Sandy...................................................................................................................................................................................................................................AIG 2012 Form 10-K 121