Bring on tomorrow - AIG.com

More documents

Recommendations

Info

ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES.....................................................................................................................................................................................The following table presents a summary of AIG’s Consolidated Statement of Cash Flows:Years Ended December 31,(in millions) 2012 2011 2010Summary:Net cash provided by (used in) operating activities $ 3,676 $ (81) $ 16,597Net cash provided by (used in) investing activities 16,612 36,448 (9,912)Net cash used in financing activities (20,564) (36,926) (9,261)Effect of exchange rate changes on cash 16 29 39Decrease in cash (260) (530) (2,537)Cash at beginning of year 1,474 1,558 4,400Change in cash of businesses held for sale (63) 446 (305)Cash at end of year $ 1,151 $ 1,474 $ 1,558Operating Cash Flow Activities..............................................................................................................................................................................................Interest payments totaled $4.0 billion in 2012 compared to $9.0 billion in 2011. Cash paid for interest in 2011includes the payment of FRBNY Credit Facility accrued compounded interest totaling $6.4 billion. Excluding interestpayments, AIG generated positive operating cash flow of $7.7 billion and $8.9 billion in 2012 and 2011, respectively.Insurance companies generally receive most premiums in advance of the payment of claims or policy benefits. Theability of insurance companies to generate positive cash flow is affected by the frequency and severity of lossesunder their insurance policies, policy retention rates and operating expenses.Cash provided by AIG Property Casualty operating activities was $1.1 billion in 2012 compared to $1.9 billion in2011, primarily reflecting the decrease in net premiums written as a result of the continued execution of strategicinitiatives to improve business mix and the timing of the cash flows used to pay claims and claims adjustmentexpenses and the related reinsurance recoveries.Cash provided by operating activities by AIG Life and Retirement was $2.9 billion in 2012 compared to $2.4 billion in2011, primarily reflecting efforts to actively manage spread income.Cash provided by operating activities of discontinued operations of $2.9 billion in 2012 compared to $6.2 billion in2011, includes ILFC, and in 2011 and 2010, foreign life insurance subsidiaries that were divested in 2011, includingNan Shan, AIG Star and AIG Edison.Net cash provided by operating activities declined in 2011 compared to 2010, principally due to the following:• the cash payment by AIG Parent of $6.4 billion in accrued compounded interest and fees under the FRBNY CreditFacility. In prior periods, these payments were paid in-kind and did not affect operating cash flows;• cash provided by operating activities of foreign life subsidiaries declined by $10.4 billion due to the sale of thosesubsidiaries (AIA, ALICO, AIG Star, AIG Edison and Nan Shan). The subsidiaries generated operational cashinflows of $3.4 billion and $13.8 billion in 2011 and 2010, respectively; and• the effect of catastrophes and the cession of a large portion of AIG Property Casualty’s net asbestos liabilities inthe U.S. to NICO. Excluding the impact of the NICO cession and catastrophes, cash provided by AIG’s reportablesegments in 2011 is consistent with 2010, as increases in claims paid were offset by increases in premiumscollected at the insurance subsidiaries.Investing Cash Flow Activities..............................................................................................................................................................................................Net cash provided by investing activities for 2012 includes the following items:• payments received relating to the sale of the underlying assets held by ML II of approximately $1.6 billion;• payments of approximately $8.5 billion received in connection with the dispositions of ML III assets by the FRBNY;..................................................................................................................................................................................................................................AIG 2012 Form 10-K 123
ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES.....................................................................................................................................................................................• gross proceeds of approximately $14.5 billion from the sale of approximately 4.0 billion AIA ordinary shares; and• approximately $2.1 billion of cash collateral received in connection with the securities lending program launchedduring 2012 by AIG Life and Retirement.Net cash provided by investing activities in 2011 was primarily attributable to:• the utilization of $26.4 billion of restricted cash generated from the AIA IPO and ALICO sale in connection with theRecapitalization and $9.6 billion from the disposition of MetLife securities;• the sale of AIG Star, AIG Edison and Nan Shan in 2011 for total proceeds of $6.4 billion; and• net sales of short term investments and maturities of available for sale investments, primarily at AIG PropertyCasualty and AIG Life and Retirement, which were partially offset by purchases of available for sale investments.Net cash used in investing activities in 2010 primarily resulted from net purchases of fixed maturity securities,resulting from our investment of cash generated from operating activities, and the redeployment of liquidity that hadbeen accumulated by the insurance companies in 2009.Financing Cash Flow Activities..............................................................................................................................................................................................Net cash used in financing activities during 2012 includes the following activities:• $8.6 billion pay down of the Department of the Treasury’s AIA SPV Preferred Interests; and• total payments of approximately $13.0 billion for the purchase of approximately 421 million shares of AIG CommonStock.Net cash used in financing activities for 2011 primarily resulted from the repayment of the FRBNY Credit Facility andthe $12.4 billion partial repayment of the AIA SPV Preferred Interests and the ALICO SPV in connection with theRecapitalization and use of proceeds received from the sales of foreign life insurance entities in 2011.Net cash used in financing activities in 2010 reflected declines in policyholder contract withdrawals, due to improvedconditions for the life insurance and retirement services businesses. This was partially offset by the issuance oflong-term debt.Liquidity and Capital Resources of AIG Parent and Subsidiaries..............................................................................................................................................................................................AIG Parent..............................................................................................................................................................................................As of December 31, 2012, AIG Parent had $16.1 billion in liquidity resources. AIG Parent’s primary sources ofliquidity are dividends, distributions, and other payments from subsidiaries, as well as credit and contingent liquidityfacilities. AIG Parent’s primary uses of liquidity are for debt service, capital management, operating expenses andsubsidiary capital needs.AIG Parent’s primary sources of capital are dividends and distributions from subsidiaries. AIG Parent hasunconditional capital maintenance agreements (CMAs) in place with certain AIG Property Casualty and AIG Life andRetirement subsidiaries to facilitate the transfer of capital and liquidity within the consolidated company. We expectthese CMAs to continue to enhance AIG’s capital management practices, and help manage the flow of capitalbetween AIG Parent and these subsidiaries. We have entered into and expect to enter into additional CMAs withcertain other insurance companies in 2013. See AIG Property Casualty and AIG Life and Retirement below foradditional information. Nevertheless, regulatory and other legal restrictions could limit our ability to transfer capitalfreely, either to or from our subsidiaries.We believe that we have sufficient liquidity and capital resources to satisfy future requirements and meet ourobligations to policyholders, customers, creditors and debt-holders. We expect to access the debt markets from timeto time to meet funding requirements as needed...................................................................................................................................................................................................................................124 AIG 2012 Form 10-K
Page 1 and 2:
American International Group, Inc.2
Page 3 and 4:
KEY FACTS & FIGURES52,000+ $65.7 bi
Page 5 and 6:
■We said we would return to profi
Page 7 and 8:
Financial HighlightsYears Ended Dec
Page 9 and 10:
~63,000AIG EMPLOYEES AROUND THE WOR
Page 11 and 12:
$115.1 millionAVERAGE CLAIMS PAID E
Page 13 and 14:
$10,000MAXIMUM DONATION MADE BY AIG
Page 15 and 16:
American International Group, Inc.F
Page 18 and 19:
AMERICAN INTERNATIONAL GROUP, INC.A
Page 20 and 21:
ITEM 1 / BUSINESS / AIG............
Page 22 and 23:
ITEM 1 / BUSINESS / AIG............
Page 24 and 25:
ITEM 1 / BUSINESS / AIG PROPERTY CA
Page 27 and 28:
ITEM 1 / BUSINESS / AIG PROPERTY CA
Page 29 and 30:
ITEM 1 / BUSINESS / AIG LIFE AND RE
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
ITEM 1 / BUSINESS / OTHER OPERATION
Page 37 and 38:
ITEM 1 / BUSINESS / OTHER OPERATION
Page 39 and 40:
ITEM 1 / BUSINESS..................
Page 41 and 42:
ITEM 1 / BUSINESS..................
Page 43 and 44:
ITEM 1 / BUSINESS..................
Page 45 and 46:
ITEM 1 / BUSINESS..................
Page 47 and 48:
ITEM 1 / BUSINESS..................
Page 49 and 50:
ITEM 1A / RISK FACTORS.............
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
ITEM 1B / UNRESOLVED STAFF COMMENTS
Page 63 and 64:
ITEM 5 / MARKET FOR REGISTRANT’S
Page 65 and 66:
ITEM 6 / SELECTED FINANCIAL DATA...
Page 67 and 68:
ITEM 6 / SELECTED FINANCIAL DATA...
Page 69 and 70:
ITEM 7 / MANAGEMENT’S DISCUSSION
Page 71 and 72:
ITEM 7 / USE OF NON-GAAP MEASURES..
Page 73 and 74:
ITEM 7 / EXECUTIVE SUMMARY.........
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
ITEM 7 / RESULTS OF OPERATIONS.....
Page 87 and 88:
ITEM 7 / RESULTS OF OPERATIONS.....
Page 89 and 90: ITEM 7 / RESULTS OF OPERATIONS.....
Page 137 and 138: ITEM 7 / LIQUIDITY AND CAPITAL RESO
Page 139: ITEM 7 / LIQUIDITY AND CAPITAL RESO
Page 155 and 156: ITEM 7 / INVESTMENTS...............
Page 173 and 174: ITEM 7 / ENTERPRISE RISK MANAGEMENT
Page 189 and 190: ITEM 7 / CRITICAL ACCOUNTING ESTIMA
Page 191 and 192:
ITEM 7 / CRITICAL ACCOUNTING ESTIMA
Page 193 and 194:
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Page 203 and 204:
Page 205 and 206:
Page 207 and 208:
Page 209 and 210:
Page 211 and 212:
Page 213 and 214:
ITEM 7 / GLOSSARY..................
Page 215 and 216:
ITEM 7 / GLOSSARY..................
Page 217 and 218:
ITEM 7A / QUANTITATIVE AND QUALITAT
Page 219 and 220:
ITEM 8 / INDEX TO FINANCIAL STATEME
Page 221 and 222:
AMERICAN INTERNATIONAL GROUP, INC.C
Page 223 and 224:
Page 225 and 226:
Page 227 and 228:
ITEM 8 / NOTE 1. BASIS OF PRESENTAT
Page 229 and 230:
ITEM 8 / NOTE 2. SUMMARY OF SIGNIFI
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
Page 237 and 238:
Page 239 and 240:
Page 241 and 242:
ITEM 8 / NOTE 3. SEGMENT INFORMATIO
Page 243 and 244:
ITEM 8 / NOTE 3. SEGMENT INFORMATIO
Page 245 and 246:
ITEM 8 / NOTE 4. DIVESTED BUSINESSE
Page 247 and 248:
ITEM 8 / NOTE 4. DIVESTED BUSINESSE
Page 249 and 250:
ITEM 8 / NOTE 5. BUSINESS COMBINATI
Page 251 and 252:
ITEM 8 / NOTE 6. FAIR VALUE MEASURE
Page 253 and 254:
Page 255 and 256:
Page 257 and 258:
Page 259 and 260:
Page 261 and 262:
Page 263 and 264:
Page 265 and 266:
Page 267 and 268:
Page 269 and 270:
ITEM 8 / NOTE 7. INVESTMENTS.......
Page 271 and 272:
Page 273 and 274:
Page 275 and 276:
Page 277 and 278:
Page 279 and 280:
Page 281 and 282:
Page 283 and 284:
ITEM 8 / NOTE 8. LENDING ACTIVITIES
Page 285 and 286:
ITEM 8 / NOTE 9. REINSURANCE.......
Page 287 and 288:
ITEM 8 / NOTE 10. DEFERRED POLICY A
Page 289 and 290:
ITEM 8 / NOTE 10. DEFERRED POLICY A
Page 291 and 292:
ITEM 8 / NOTE 11. VARIABLE INTEREST
Page 293 and 294:
ITEM 8 / NOTE 11. VARIABLE INTEREST
Page 295 and 296:
ITEM 8 / NOTE 12. DERIVATIVES AND H
Page 297 and 298:
Page 299 and 300:
Page 301 and 302:
ITEM 8 / NOTE 13. LIABILITY FOR UNP
Page 303 and 304:
ITEM 8 / NOTE 14. VARIABLE LIFE AND
Page 305 and 306:
ITEM 8 / NOTE 15. DEBT OUTSTANDING.
Page 307 and 308:
ITEM 8 / NOTE 15. DEBT OUTSTANDING.
Page 309 and 310:
ITEM 8 / NOTE 16. CONTINGENCIES, CO
Page 311 and 312:
Page 313 and 314:
Page 315 and 316:
Page 317 and 318:
Page 319 and 320:
Page 321 and 322:
ITEM 8 / NOTE 17. TOTAL EQUITY.....
Page 323 and 324:
Page 325 and 326:
Page 327 and 328:
ITEM 8 / NOTE 18. NONCONTROLLING IN
Page 329 and 330:
ITEM 8 / NOTE 19. EARNINGS (LOSS) P
Page 331 and 332:
ITEM 8 / NOTE 20. STATUTORY FINANCI
Page 333 and 334:
ITEM 8 / NOTE 21. SHARE-BASED COMPE
Page 335 and 336:
ITEM 8 / NOTE 21. SHARE-BASED COMPE
Page 337 and 338:
ITEM 8 / NOTE 22. EMPLOYEE BENEFITS
Page 339 and 340:
Page 341 and 342:
Page 343 and 344:
Page 345 and 346:
Page 347 and 348:
ITEM 8 / NOTE 24. INCOME TAXES.....
Page 349 and 350:
Page 351 and 352:
Page 353 and 354:
ITEM 8 / NOTE 26. QUARTERLY FINANCI
Page 355 and 356:
ITEM 8 / NOTE 27. INFORMATION PROVI
Page 357 and 358:
Page 359 and 360:
Page 361 and 362:
PART II............................
Page 363 and 364:
PART IV............................
Page 365 and 366:
SignatureTitle/s/ ARTHUR C. MARTINE
Page 367 and 368:
ExhibitNumber Description Location(
Page 369 and 370:
Page 371 and 372:
Page 373 and 374:
Page 375 and 376:
Condensed Financial Information of
Page 377 and 378:
Condensed Financial Information of
Page 379 and 380:
Notes to Condensed Financial Inform
Page 381 and 382:
Supplementary Insurance Information
Page 383 and 384:
Valuation and Qualifying AccountsFo
Page 385 and 386:
Subsidiaries of RegistrantExhibit 2
Page 387 and 388:
Percentageof VotingSecuritiesJurisd
Page 389 and 390:
Percentageof VotingSecuritiesJurisd
Page 391 and 392:
CONSENT OF INDEPENDENT REGISTERED P
Page 393 and 394:
CERTIFICATIONSI, Robert H. Benmosch
Page 395 and 396:
CERTIFICATIONExhibit 32In connectio
Page 397 and 398:
SECURITIES REGISTERED PURSUANT TO S
Page 399:
American International Group, Inc.1
show all

Bring on tomorrow - AIG.com

Create successful ePaper yourself

Delete template?

Save as template?