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ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES.....................................................................................................................................................................................Contractual Obligations..............................................................................................................................................................................................The following table summarizes contractual obligations in total, and by remaining maturity:December 31, 2012Payments due by PeriodTotal 2014 - 2016 -(in millions) Payments 2013 2015 2017 ThereafterInsurance operationsLoss reserves $ 91,237 $ 23,579 $ 26,111 $ 13,480 $ 28,067Insurance and investment contract liabilities 234,492 14,502 25,144 24,066 170,780Borrowings 1,843 43 15 8 1,777Interest payments on borrowings 3,525 131 264 265 2,865Operating leases 1,196 284 390 276 246Other long-term obligations 37 9 14 8 6Total $ 332,330 $ 38,548 $ 51,938 $ 38,103 $ 203,741Other and discontinued operationsBorrowings (a) 69,166 7,199 11,670 16,104 34,193Interest payments on borrowings 48,478 3,873 6,931 5,525 32,149Operating leases 302 106 99 33 64Aircraft purchase commitments 17,511 1,517 4,146 7,374 4,474Other long-term obligations 231 56 84 – 91Total $ 135,688 $ 12,751 $ 22,930 $ 29,036 $ 70,971ConsolidatedLoss reserves (b) $ 91,237 $ 23,579 $ 26,111 $ 13,480 $ 28,067Insurance and investment contract liabilities 234,492 14,502 25,144 24,066 170,780Borrowings (a) 71,009 7,242 11,685 16,112 35,970Interest payments on borrowings 52,003 4,004 7,195 5,790 35,014Operating leases 1,498 390 489 309 310Aircraft purchase commitments 17,511 1,517 4,146 7,374 4,474Other long-term obligations (c) 268 65 98 8 97Total (d) $ 468,018 $ 51,299 $ 74,868 $ 67,139 $ 274,712(a) Includes $24.3 billion of borrowings related to ILFC(b) Loss reserves relate to the AIG Property Casualty and the Mortgage Guaranty business, and represent future loss and loss adjustmentexpense payments estimated based on historical loss development payment patterns. Due to the significance of the assumptions used, thepayments by period presented above could be materially different from actual required payments. We believe that the AIG Property Casualty andMortgage Guaranty subsidiaries maintain adequate financial resources to meet the actual required payments under these obligations.(c) Primarily includes contracts to purchase future services and other capital expenditures.(d) Does not reflect unrecognized tax benefits of $4.4 billion ($4.1 billion excluding Aircraft Leasing), the timing of which is uncertain. In addition,the majority of our credit default swaps require us to provide credit protection on a designated portfolio of loans or debt securities. At December 31,2012, the fair value derivative liability was $1.9 billion, relating to the super senior multi-sector CDO credit default swap portfolio. At December 31,2012, collateral posted with respect to these swaps was $1.6 billion.Insurance ..............................................................................................................................................................................................and Investment Contract LiabilitiesInsurance and investment contract liabilities, including GIC liabilities, relate to AIG Life and Retirementbusinesses. These liabilities include various investment-type products with contractually scheduled maturities,including periodic payments of a term certain nature. These liabilities also include benefit and claim liabilities, ofwhich a significant portion represents policies and contracts that do not have stated contractual maturity dates andmay not result in any future payment obligations. For these policies and contracts (i) we are currently not makingpayments until the occurrence of an insurable event, such as death or disability, (ii) payments are conditional onsurvivorship or (iii) payment may occur due to a surrender or other non-scheduled event out of our control.We have made significant assumptions to determine the estimated undiscounted cash flows of these contractualpolicy benefits. These assumptions include mortality, morbidity, future lapse rates, expenses, investment returns andinterest crediting rates, offset by expected future deposits and premiums on in-force policies. Due to the significanceof the assumptions, the periodic amounts presented could be materially different from actual required payments. The..................................................................................................................................................................................................................................AIG 2012 Form 10-K 131
ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES.....................................................................................................................................................................................amounts presented in this table are undiscounted and exceed the future policy benefits and policyholder contractdeposits included in the Consolidated Balance Sheet.We believe that AIG Life and Retirement subsidiaries have adequate financial resources to meet the paymentsactually required under these obligations. These subsidiaries have substantial liquidity in the form of cash andshort-term investments. In addition, AIG Life and Retirement businesses maintain significant levels of investmentgradefixed income securities, including substantial holdings in government and corporate bonds, and could seek tomonetize those holdings in the event operating cash flows are insufficient. We expect liquidity needs related to GICliabilities to be funded through cash flows generated from maturities and sales of invested assets.Borrowings..............................................................................................................................................................................................Our borrowings exclude those incurred by consolidated investments and include hybrid financial instrument liabilitiesrecorded at fair value. We expect to repay the long-term debt maturities and interest accrued on borrowings by AIGand its subsidiaries through maturing investments and asset sales, future cash flows from operations, cash flowsgenerated from invested assets, future debt issuance and other financing arrangements...................................................................................................................................................................................................................................132 AIG 2012 Form 10-K
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American International Group, Inc.2
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KEY FACTS & FIGURES52,000+ $65.7 bi
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■We said we would return to profi
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Financial HighlightsYears Ended Dec
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~63,000AIG EMPLOYEES AROUND THE WOR
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$115.1 millionAVERAGE CLAIMS PAID E
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$10,000MAXIMUM DONATION MADE BY AIG
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American International Group, Inc.F
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AMERICAN INTERNATIONAL GROUP, INC.A
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ITEM 1 / BUSINESS / AIG............
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ITEM 1 / BUSINESS / AIG............
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ITEM 1 / BUSINESS / AIG PROPERTY CA
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ITEM 1 / BUSINESS / AIG PROPERTY CA
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ITEM 1 / BUSINESS / AIG LIFE AND RE
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ITEM 1 / BUSINESS / OTHER OPERATION
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ITEM 1 / BUSINESS / OTHER OPERATION
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ITEM 1 / BUSINESS..................
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ITEM 1 / BUSINESS..................
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ITEM 1 / BUSINESS..................
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ITEM 1 / BUSINESS..................
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ITEM 1 / BUSINESS..................
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ITEM 1A / RISK FACTORS.............
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ITEM 1B / UNRESOLVED STAFF COMMENTS
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ITEM 5 / MARKET FOR REGISTRANT’S
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ITEM 6 / SELECTED FINANCIAL DATA...
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ITEM 6 / SELECTED FINANCIAL DATA...
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ITEM 7 / MANAGEMENT’S DISCUSSION
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ITEM 7 / USE OF NON-GAAP MEASURES..
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ITEM 7 / EXECUTIVE SUMMARY.........
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ITEM 7 / RESULTS OF OPERATIONS.....
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ITEM 7 / CRITICAL ACCOUNTING ESTIMA
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ITEM 7 / GLOSSARY..................
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ITEM 7 / GLOSSARY..................
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ITEM 7A / QUANTITATIVE AND QUALITAT
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ITEM 8 / INDEX TO FINANCIAL STATEME
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AMERICAN INTERNATIONAL GROUP, INC.C
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ITEM 8 / NOTE 1. BASIS OF PRESENTAT
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ITEM 8 / NOTE 2. SUMMARY OF SIGNIFI
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ITEM 8 / NOTE 3. SEGMENT INFORMATIO
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ITEM 8 / NOTE 3. SEGMENT INFORMATIO
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ITEM 8 / NOTE 4. DIVESTED BUSINESSE
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ITEM 8 / NOTE 4. DIVESTED BUSINESSE
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ITEM 8 / NOTE 5. BUSINESS COMBINATI
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ITEM 8 / NOTE 6. FAIR VALUE MEASURE
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ITEM 8 / NOTE 7. INVESTMENTS.......
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ITEM 8 / NOTE 8. LENDING ACTIVITIES
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ITEM 8 / NOTE 9. REINSURANCE.......
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ITEM 8 / NOTE 10. DEFERRED POLICY A
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ITEM 8 / NOTE 10. DEFERRED POLICY A
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ITEM 8 / NOTE 11. VARIABLE INTEREST
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ITEM 8 / NOTE 11. VARIABLE INTEREST
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ITEM 8 / NOTE 12. DERIVATIVES AND H
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ITEM 8 / NOTE 13. LIABILITY FOR UNP
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ITEM 8 / NOTE 14. VARIABLE LIFE AND
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ITEM 8 / NOTE 15. DEBT OUTSTANDING.
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ITEM 8 / NOTE 15. DEBT OUTSTANDING.
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ITEM 8 / NOTE 16. CONTINGENCIES, CO
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ITEM 8 / NOTE 17. TOTAL EQUITY.....
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ITEM 8 / NOTE 18. NONCONTROLLING IN
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ITEM 8 / NOTE 19. EARNINGS (LOSS) P
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ITEM 8 / NOTE 20. STATUTORY FINANCI
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ITEM 8 / NOTE 21. SHARE-BASED COMPE
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ITEM 8 / NOTE 21. SHARE-BASED COMPE
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ITEM 8 / NOTE 22. EMPLOYEE BENEFITS
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ITEM 8 / NOTE 24. INCOME TAXES.....
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ITEM 8 / NOTE 26. QUARTERLY FINANCI
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ITEM 8 / NOTE 27. INFORMATION PROVI
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PART II............................
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PART IV............................
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SignatureTitle/s/ ARTHUR C. MARTINE
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ExhibitNumber Description Location(
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Condensed Financial Information of
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Condensed Financial Information of
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Notes to Condensed Financial Inform
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Supplementary Insurance Information
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Valuation and Qualifying AccountsFo
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Subsidiaries of RegistrantExhibit 2
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Percentageof VotingSecuritiesJurisd
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Percentageof VotingSecuritiesJurisd
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CONSENT OF INDEPENDENT REGISTERED P
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CERTIFICATIONSI, Robert H. Benmosch
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CERTIFICATIONExhibit 32In connectio
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SECURITIES REGISTERED PURSUANT TO S
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American International Group, Inc.1
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