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ITEM 8 / NOTE 6. FAIR VALUE MEASUREMENTS.....................................................................................................................................................................................December 31, 2011 Counterparty Cash(in millions) Level 1 Level 2 Level 3 Netting (a) Collateral (b) TotalAssets:Bonds available for sale:U.S. government and government sponsored entities $ 174 $ 5,904 $ – $ – $ – $ 6,078Obligations of states, municipalities and political subdivisions – 36,538 960 – – 37,498Non-U.S. governments 259 25,467 9 – – 25,735Corporate debt – 142,883 1,935 – – 144,818RMBS – 23,727 10,877 – – 34,604CMBS – 3,991 3,955 – – 7,946CDO/ABS – 3,082 4,220 – – 7,302Total bonds available for sale 433 241,592 21,956 – – 263,981Bond trading securities:U.S. government and government sponsored entities 100 6,362 – – – 6,462Obligations of states, municipalities and political subdivisions – 257 – – – 257Non-U.S. governments – 35 – – – 35Corporate debt – 809 7 – – 816RMBS – 1,345 303 – – 1,648CMBS – 1,283 554 – – 1,837CDO/ABS – 4,877 8,432 – – 13,309Total bond trading securities 100 14,968 9,296 – – 24,364Equity securities available for sale:Common stock 3,294 70 57 – – 3,421Preferred stock – 44 99 – – 143Mutual funds 55 5 – – – 60Total equity securities available for sale 3,349 119 156 – – 3,624Equity securities trading 43 82 – – – 125Mortgage and other loans receivable – 106 1 – – 107Other invested assets (c) 12,549 1,709 6,618 – – 20,876Derivative assets:Interest rate contracts 2 7,251 1,033 – – 8,286Foreign exchange contracts – 143 2 – – 145Equity contracts 92 133 38 – – 263Commodity contracts – 134 2 – – 136Credit contracts – – 89 – – 89Other contracts 29 462 250 – – 741Counterparty netting and cash collateral – – – (3,660) (1,501) (5,161)Total derivative assets 123 8,123 1,414 (3,660) (1,501) 4,499Short-term investments 2,309 3,604 – – – 5,913Separate account assets 48,502 2,886 – – – 51,388Total $ 67,408 $ 273,189 $ 39,441 $ (3,660) $ (1,501) $ 374,877Liabilities:Policyholder contract deposits $ – $ – $ 918 $ – $ – $ 918Derivative liabilities:Interest rate contracts – 6,661 248 – – 6,909Foreign exchange contracts – 178 – – – 178Equity contracts – 198 10 – – 208Commodity contracts – 146 – – – 146Credit contracts (d) – 4 3,362 – – 3,366Other contracts – 155 217 – – 372Counterparty netting and cash collateral – – – (3,660) (2,786) (6,446)Total derivative liabilities – 7,342 3,837 (3,660) (2,786) 4,733Long-term debt (e) – 10,258 508 – – 10,766Other liabilities 193 714 – – – 907Total $ 193 $ 18,314 $ 5,263 $ (3,660) $ (2,786) $ 17,324(a) Represents netting of derivative exposures covered by a qualifying master netting agreement.(b) Represents cash collateral posted and received. Securities collateral posted for derivative transactions that is reflected in Fixed maturitysecurities in the Consolidated Balance Sheet, and collateral received, not reflected in the Consolidated Balance Sheet, were $1.9 billion and$299 million, respectively, at December 31, 2012 and $1.8 billion and $100 million, respectively, at December 31, 2011.(c) Level 1 Other invested assets included $12.4 billion at December 31, 2011 of AIA ordinary shares publicly traded on the Hong Kong StockExchange.(d) Level 3 Credit contracts included the fair value derivative liability on the super senior credit default swap portfolio of $2.0 billion and $3.2 billionat December 31, 2012 and 2011, respectively.(e) Includes Guaranteed Investment Agreements (GIAs), notes, bonds, loans and mortgages payable...................................................................................................................................................................................................................................AIG 2012 Form 10-K 241
ITEM 8 / NOTE 6. FAIR VALUE MEASUREMENTS.....................................................................................................................................................................................Transfers of Level 1 and Level 2 Assets and Liabilities..............................................................................................................................................................................................Our policy is to record transfers of assets and liabilities between Level 1 and Level 2 at their fair values as of theend of each reporting period, consistent with the date of the determination of fair value. Assets are transferred out ofLevel 1 when they are no longer transacted with sufficient frequency and volume in an active market. Conversely,assets are transferred from Level 2 to Level 1 when transaction volume and frequency are indicative of an activemarket. During the year ended December 31, 2012, we transferred $464 million of securities issued by Non-U.S.government entities from Level 1 to Level 2, as they are no longer considered actively traded. For similar reasons,during the year ended December 31, 2012, we transferred $888 million of securities issued by the U.S. governmentand government-sponsored entities from Level 1 to Level 2. We had no material transfers from Level 2 to Level 1during the year ended December 31, 2012.Changes in Level 3 Recurring Fair Value Measurements..............................................................................................................................................................................................The following tables present changes during December 31, 2012 and 2011 in Level 3 assets and liabilitiesmeasured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to theLevel 3 assets and liabilities in the Consolidated Balance Sheet at December 31, 2012 and 2011:NetChanges inRealized andUnrealized GainsUnrealized Accumulated Purchases, (Losses) IncludedFair value Gains (Losses) Other Sales, Gross Gross Fair value in Income onBeginning Included Comprehensive Issues and Transfers Transfers End Instruments Held(in millions) of Year (a) in Income Income (Loss) Settlements, Net in out of Year at End of YearDecember 31, 2012Assets:Bonds available for sale:Obligations of states,municipalities and politicalsubdivisionsNon-U.S. governmentsCorporate debtRMBSCMBSCDO/ABSTotal bonds available for saleBond trading securities:Corporate debtRMBSCMBSCDO/ABSTotal bond trading securitiesEquity securities available forsale:Common stockPreferred stockTotal equity securities availablefor saleMortgage and other loansreceivableOther invested assetsTotalLiabilities:Policyholder contract depositsDerivative liabilities, net:Interest rate contractsForeign exchange contractsEquity contractsCommodity contractsCredit contractsOther contractsTotal derivative liabilities, netLong-term debt (b)Total$ 960 $ 48 $ 12 $ 84 $ 70 $ (150) $ 1,024 $ –9 1 (1) 1 4 – 14 –1,935 (44) 145 24 664 (1,237) 1,487 –10,877 522 2,121 (316) 952 (2,494) 11,662 –3,955 (135) 786 636 44 (162) 5,124 –4,220 334 289 10 691 (703) 4,841 –21,956 726 3,352 439 2,425 (4,746) 24,152 –7 – – (7) – – – –303 76 2 (109) 128 (4) 396 42554 70 2 (159) 446 (101) 812 878,432 3,683 3 (3,968) 386 – 8,536 2,5479,296 3,829 7 (4,243) 960 (105) 9,744 2,67657 22 (28) (33) 6 – 24 –99 17 (35) (36) 11 (12) 44 –156 39 (63) (69) 17 (12) 68 –1 – – (1) – – – –6,618 (95) 290 (257) 1,204 (2,371) 5,389 –$ 38,027 $ 4,499 $ 3,586 $ (4,131) $ 4,606 $ (7,234) $ 39,353 $ 2,676$ (918) $ (275) $ (72) $ 8 $ – $ – $ (1,257) $ 112785 (11) – (42) – – 732 562 – – (2) – – – –28 10 – 12 (3) – 47 (10)2 5 – (6) – – 1 (6)(3,273) 638 – 644 – – (1,991) (1,172)33 (76) (18) 15 (116) – (162) 46(2,423) 566 (18) 621 (119) – (1,373) (1,086)(508) (411) (77) 242 (14) 424 (344) 105$ (3,849) $ (120) $ (167) $ 871 $ (133) $ 424 $ (2,974) $ (869)..................................................................................................................................................................................................................................242 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 / LIQUIDITY AND CAPITAL RESO
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ITEM 7 / INVESTMENTS...............
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ITEM 7 / ENTERPRISE RISK MANAGEMENT
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ITEM 7 / CRITICAL ACCOUNTING ESTIMA
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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 227 and 228: ITEM 8 / NOTE 1. BASIS OF PRESENTAT
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Page 251 and 252: ITEM 8 / NOTE 6. FAIR VALUE MEASURE
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Page 291 and 292: ITEM 8 / NOTE 11. VARIABLE INTEREST
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Page 295 and 296: ITEM 8 / NOTE 12. DERIVATIVES AND H
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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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