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ITEM 8 / NOTE 11. VARIABLE INTEREST ENTITIES.....................................................................................................................................................................................Securitization Vehicles..............................................................................................................................................................................................During 2012, we created VIEs that hold investments, primarily in investment-grade debt securities, and issuedbeneficial interests in these investments. The majority of these beneficial interests are owned by AIG entities and wemaintain the power to direct the activities of the VIEs that most significantly impacts their economic performance andbear the obligation to absorb losses or receive benefits from the entities that could potentially be significant to theentities. Accordingly, we consolidate these entities and those beneficial interests issued to third-parties are reportedas Long-term debt.Structured Investment Vehicle..............................................................................................................................................................................................Through the DIB, we sponsor Nightingale Finance Ltd, a structured investment vehicle (SIV), which meets thedefinition of a VIE. Nightingale Finance Ltd. invests in variable rate, investment-grade debt securities, the majority ofwhich are ABS. We have no equity interest in the SIV, but we maintain the power to direct the activities of the SIVthat most significantly impact the entity’s economic performance and bear the obligation to absorb economic lossesthat could potentially be significant to the SIV. We are the primary beneficiary and consolidate the assets of the SIV,which totaled over $1.7 billion as of December 31, 2012. Related liabilities were not significant.Affordable Housing Partnerships..............................................................................................................................................................................................SunAmerica Affordable Housing Partners, Inc. (SAAHP) organizes and invests in limited partnerships that developand operate affordable housing qualifying for federal tax credits, in addition to a few market rate properties acrossthe United States. The general partners in the operating partnerships are almost exclusively unaffiliated third-partydevelopers. We do not consolidate an operating partnership if the general partner is an unaffiliated person. Throughapproximately 1,000 partnerships, SAAHP has investments in developments with approximately 130,000 apartmentunits nationwide, and as of December 31, 2012, has syndicated approximately $7.7 billion in partnership equity toother investors who will receive, among other benefits, tax credits under certain sections of the Internal RevenueCode. The pre-tax income of SAAHP is reported, along with other AIG Life and Retirement partnership income, as acomponent of the AIG Life and Retirement segment.Maiden Lane Interests..............................................................................................................................................................................................In 2008, certain of our wholly-owned life insurance companies sold all of their undivided interests in a pool of$39.3 billion face amount of RMBS to ML II, whose sole member is the FRBNY. AIG has a significant variableeconomic interest in ML II, which is a VIE.In 2008, AIG entered into an agreement with the FRBNY, ML III and The Bank of New York Mellon, whichestablished arrangements, through ML III, to fund the purchase of multi-sector CDOs underlying or related to CDSwritten by AIGFP. Concurrently, AIGFP’s counterparties to such CDS transactions agreed to terminate those CDStransactions relating to the multi-sector CDOs purchased from them. AIG had a significant variable interest in ML III,which was a VIE. In 2012, we received final distributions from ML II and ML III.Other Asset Accounts..............................................................................................................................................................................................Aircraft Trusts..............................................................................................................................................................................................We have created two VIEs for the purpose of acquiring, owning, leasing, maintaining, operating and selling aircraft.Our subsidiaries hold beneficial interests, including all the equity interests in these entities. These beneficial interestsinclude passive investments by our insurance operations in non-voting preferred equity interests and in the majorityof the debt issued by these entities. We maintain the power to direct the activities of the VIEs that most significantlyimpact the entities’ economic performance, and bear the obligation to absorb economic losses or receive economicbenefits that could potentially be significant to the VIEs. As a result, we have determined that we are the primarybeneficiary and we fully consolidate the assets and liabilities of these entities, which totaled $1.2 billion and$0.3 billion, respectively at December 31, 2012. The debt of these entities is not an obligation of, or guaranteed by,us or any of our subsidiaries. Under a servicing agreement, ILFC acts as servicer for the aircraft owned by theseentities...................................................................................................................................................................................................................................AIG 2012 Form 10-K 275