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ITEM 8 / NOTE 7. INVESTMENTS.....................................................................................................................................................................................Contractual Maturities of Securities Available for Sale..............................................................................................................................................................................................The following table presents the amortized cost and fair value of fixed maturity securities available for saleby contractual maturity:December 31, 2012Total Fixed MaturityFixed Maturity SecuritiesSecurities Availablein a Loss Positionfor SaleAvailable for Sale(in millions) Amortized Cost Fair Value Amortized Cost Fair ValueDue in one year or lessDue after one year through five yearsDue after five years through ten yearsDue after ten yearsMortgage-backed, asset-backed and collateralizedTotalActual maturities may differ from contractual maturities because certain borrowers have the right to call or prepaycertain obligations with or without call or prepayment penalties.The following table presents the gross realized gains and gross realized losses from sales or redemptions ofour available for sale securities:Fixed maturity securities $ 2,778 $ 171 $ 2,042 $ 129 $ 2,138 $ 292Equity securities 515 31 199 35 811 86Total $ 3,293 $ 202 $ 2,241 $ 164 $ 2,949 $ 378For the year ended December 31, 2012, 2011 and 2010, the aggregate fair value of available for sale securities soldwas $40.3 billion, $44.0 billion and $56.0 billion, which resulted in net realized capital gains of $3.1 billion, $2.1 billionand $2.6 billion, respectively.Trading Securities..............................................................................................................................................................................................The following table presents the fair value of our trading securities:Fixed maturities:U.S. government and government sponsored entities $ 6,794 27% $ 6,462 26%Obligations of states, territories and political subdivisions – – 257 1Non-U.S. governments 2 – 35 –Corporate debt 1,320 5 816 3Mortgage-backed, asset-backed and collateralized:RMBS 1,727 7 1,648 7CMBS 2,236 9 1,837 8CDO/ABS and other collateralized * 12,497 50 6,324 26Total mortgage-backed, asset-backed and collateralized 16,460 66 9,809 41ML II – – 1,321 5ML III 8 – 5,664 23Total fixed maturities 24,584 98 24,364 99Equity securities 662 2 125 1Total $ 25,246 100% $ 24,489 100%* Includes $0.9 billion of U.S. Government agency backed ABS.$ 11,801 $ 12,001 $ 717 $ 71351,646 54,918 3,239 3,16272,091 79,531 4,641 4,51061,842 70,650 6,602 6,28348,769 52,859 7,025 6,160$ 246,149 $ 269,959 $ 22,224 $ 20,828Years Ended December 31,2012 2011 2010Gross Gross Gross Gross Gross GrossRealized Realized Realized Realized Realized Realized(in millions) Gains Losses Gains Losses Gains LossesDecember 31, 2012 December 31, 2011Fair Percent Fair Percent(in millions) Value of Total Value of Total..................................................................................................................................................................................................................................AIG 2012 Form 10-K 255
ITEM 8 / NOTE 7. INVESTMENTS.....................................................................................................................................................................................Maiden Lane III..............................................................................................................................................................................................The FRBNY completed the liquidation of ML III assets during the third quarter of 2012 and substantially all of thesales proceeds have been distributed in accordance with the priority of payments of the transaction. In 2012, wereceived total payments of approximately $8.5 billion, which included contractual and additional distributions and ouroriginal $5.0 billion equity interest in ML III.In 2012, we purchased $7.1 billion of securities through the FRBNY’s auction of ML III assets.Other Invested Assets..............................................................................................................................................................................................The following table summarizes the carrying values of other invested assets:December 31,(in millions) 2012 2011Alternative investments (a) $ 18,990 $ 18,793Mutual funds 128 258Investment real estate (b) 3,195 2,778Aircraft asset investments (c) 984 1,100Life settlement contracts 4,357 4,006Retained interest in AIA – 12,367All other investments 1,463 1,442Total $ 29,117 $ 40,744(a)Includes hedge funds, private equity funds, affordable housing partnerships and other investment partnerships.(b)(c)Net of accumulated depreciation of $469 million and $428 million in 2012 and 2011, respectively.Consist primarily of AIG Life and Retirement investments in aircraft equipment held in trusts.Other Invested Assets Carried at Fair Value..............................................................................................................................................................................................Certain hedge funds, private equity funds, affordable housing partnerships and other investment partnerships forwhich we have elected the fair value option are reported at fair value with changes in fair value recognized in Netinvestment income with the exception of DIB investments, for which such changes are reported in Other income.Other investments in hedge funds, private equity funds, affordable housing partnerships and other investmentpartnerships in which our insurance operations do not hold aggregate interests sufficient to exercise more than minorinfluence over the respective partnerships are reported at fair value with changes in fair value recognized as acomponent of Accumulated other comprehensive income (loss). These investments are subject toother-than-temporary impairment evaluation (see below for discussion on evaluating equity investments forother-than-temporary impairment). The gross unrealized loss recorded in Accumulated other comprehensive incomeon such investments was $68 million and $269 million at December 31, 2012 and 2011, respectively, the majority ofwhich pertains to investments in private equity funds and hedge funds that have been in continuous unrealized lossposition for less than 12 months.Other Invested Assets – Equity Method Investments..............................................................................................................................................................................................We account for hedge funds, private equity funds, affordable housing partnerships and other investment partnershipsusing the equity method of accounting unless our interest is so minor that we may have virtually no influence overpartnership operating and financial policies. Under the equity method of accounting, our carrying value generally isour share of the net asset value of the funds or the partnerships, and changes in our share of the net asset valuesare recorded in Net investment income with the exception of DIB investments, for which such changes are reportedin Other income. In applying the equity method of accounting, we consistently use the most recently availablefinancial information provided by the general partner or manager of each of these investments, which is one to threemonths prior to the end of our reporting period. The financial statements of these investees are generally auditedannually...................................................................................................................................................................................................................................256 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 / INVESTMENTS...............
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ITEM 7 / ENTERPRISE RISK MANAGEMENT
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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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ITEM 8 / NOTE 17. TOTAL EQUITY.....
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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 22. EMPLOYEE BENEFITS
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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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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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