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ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES.....................................................................................................................................................................................UsesDuring 2012, we:• purchased an aggregate of approximately $13.0 billion of AIG Common Stock at the initial public offering price infour registered public offerings of AIG Common Stock completed by the Department of the Treasury, as theselling shareholder; we purchased approximately 421 million shares (see Note 17 to the Consolidated FinancialStatements for additional information on these offerings);• retired $3.2 billion of debt, including $2.6 billion of MIP long-term debt, and made interest payments totaling$2.1 billion;• utilized approximately $1.6 billion in proceeds from the distributions from ML II, approximately $6.0 billion in grossproceeds from the sale of AIA ordinary shares and existing funds from the MIP to pay down in full the liquidationpreference of the AIA SPV Preferred Interests and redeem the Department of the Treasury’s preferred participatingreturn rights in the AIA SPV and the ALICO SPV; as a result, the following items, which had been held assecurity to support the repayment of the AIA SPV Preferred Interests, were released from that pledge:• the equity interests in ILFC,• the ordinary shares of AIA held by the AIA SPV,• the common equity interest in the AIA SPV held by us,• our interests in ML III, and• cash held in escrow to secure indemnifications provided to MetLife under the ALICO stock purchase agreement.• paid $550 million as a result of final approval of a settlement under the Consolidated 2004 Securities Litigation(see Note 16 to the Consolidated Financial Statements for additional information); and• made $1.2 billion in net capital contributions to subsidiaries, including a contribution of approximately $1.0 billionto AIG Property Casualty in the aftermath of Storm Sandy.AIG Property Casualty..............................................................................................................................................................................................We expect that AIG Property Casualty subsidiaries will be able to continue to satisfy future liquidity requirements andmeet their obligations, including those arising from reasonably foreseeable contingencies or events, through cashfrom operations and, to the extent necessary, asset dispositions. AIG Property Casualty subsidiaries maintainsubstantial liquidity in the form of cash and short-term investments, totaling $8.6 billion as of December 31, 2012.Further, AIG Property Casualty subsidiaries maintain significant levels of investment-grade fixed maturity securities,including substantial holdings in government and corporate bonds, which could be monetized in the event liquiditylevels are deemed insufficient.AIG Property Casualty paid cash and non-cash dividends totaling of $2.5 billion to AIG Parent in 2012, consisting ofcash and municipal bonds, including $902 million of cash dividends in the fourth quarter of 2012.In December 2012, AIG Parent contributed $1.0 billion of capital to AIG Property Casualty U.S. insurance companiesto strengthen capital levels, as a result of the impact of Storm Sandy-related catastrophe losses.AIG Parent could be required to provide additional funding to AIG Property Casualty subsidiaries to meet capital orliquidity needs under certain circumstances, including:• large catastrophes that may require AIG to provide additional support to the affected operations;• downgrades in AIG’s credit ratings that could put pressure on the insurer financial strength ratings of AIG’ssubsidiaries which could result in non-renewals or cancellations by policyholders and adversely affect thesubsidiary’s ability to meet its own obligations;..................................................................................................................................................................................................................................126 AIG 2012 Form 10-K