1 American International Group, Inc Annual Report
2 In 1919, American entrepreneur Cornelius Vander Starr established a general insurance agency, American Asiatic Underwriters, in a two-room office in Shanghai, China. Ninety-five years later, AIG which traces its roots to that small Shanghai operation is a global insurer, with approximately 64,000 employees serving customers worldwide. Today, AIG continues to focus on what it has been known for throughout the years: the ability to provide products and services to meet the diverse needs of its customers. The Bund, which housed the headquarters of AIG s predecessor American Asiatic Underwriters in Shanghai beginning in 1927.
3 95years $68.7 billion AIG s revenue in 2013 $7 million Donations made by AIG s Matching Grants Program to match employees gifts to charitable organizations in ,300+ Loans modified, helping families in the U.S. keep their homes 300,000+ Financial professionals who make up the AIG Life and Retirement distribution organization 98% More than of Fortune 500 served
4 Robert H. Benmosche President and Chief Executive Officer To Our Shareholders, When we look back on 2013, we can truly say that it was an opportunity for us to demonstrate that what we ve done at AIG over the past few years is sustainable. Last year, we capitalized on strong forward momentum, driven by the winning spirit of our people and solid performance in our core insurance operating businesses. The actions we took last year positioned us for an even stronger 2014, as we concentrate on four core priorities: Intense focus on customers: We ve invested a tremendous amount of time and effort into changing the company for the better over the past few years, never losing sight of our driving force our customers along the way. Every step we took to improve AIG was designed to enable us to serve them better and become closer to them. Strong growth and profitability in our operating businesses: Our efforts to improve risk selection, strengthen distribution, and grow sales are really paying off. We became a stronger, and more efficient and sustainable company, thanks in part to our continued progress in such areas as technology, operations, and our centers of excellence. AIG is an insurance and retirement solutions leader, and we have opportunities to grow in smart ways that leverage shared technology and other resources. Operational efficiency: We continue to look at ways to simplify our organization so that there are as few layers as possible between us and our customers. We are also finetuning our decision-making processes to ensure that the best qualified people are the ones making the calls, in the most reasonable amount of time. Our people: We have endeavored to create a simpler organization, which, with clearer role responsibility, will help empower our people, increase collaboration and efficiency, and further strengthen our customer relationships. Our 2013 results illustrate how we are effectively leveraging all of our resources across every business to add value to our overall organization: AIG Property Casualty had growth in pre-tax operating income, attributable to an improvement in underwriting results and an increase in net investment income, partially offset by the impact of higher severe losses. 2
5 Last year, we capitalized on strong forward momentum, driven by the winning spirit of our people and solid performance in our core insurance operating businesses. AIG Life and Retirement experienced strong sales, generated significant positive net flows, and captured opportunities in an era where unprecedented numbers of baby boomers continue to retire. Assets under management continued to rise year-over-year, and the diversified distribution platform delivered near-record sales of variable annuities, fixed annuities, and retail mutual funds. United Guaranty Corporation saw net premiums written rise in The business also paid a $90 million cash dividend to AIG Parent in 2013, its first since AIG announced an agreement to sell International Lease Finance Corporation (ILFC) to a wholly owned subsidiary of AerCap Holdings N.V. in the fourth quarter of 2013 for total consideration of approximately $5.4 billion. Cash dividends and loan repayments to AIG Parent from insurance subsidiaries totaled $8.7 billion in AIG Common Stock purchases and cash dividends to shareholders totaled $891 million in This year, we celebrate the 95th anniversary of our roots in Shanghai, a city of entrepreneurs. When I first came to AIG in 2009, I visited The Bund headquarters for AIG s predecessor in China and got a real sense of the company s simple beginnings, as well as the interest in people and passion for enterprise. Today, we are looking for much the same thing, only on a larger, more global scale: a simplified organization that brings our talented people closer to our customers, so that we can better grow our business and deliver strong results to all of our stakeholders. Bring on tomorrow. Robert H. Benmosche 3
6 Robert S. Miller Non-Executive Chairman of the Board Dear AIG Shareholder, 2012 was the year we fully repaid America s financial support of AIG was a year in which AIG demonstrated that it has a solid foundation for sustainable profitability. Now, in 2014, it is time to look forward to future opportunities. We must be ready to capitalize on opportunity. The company is working on better understanding and providing for customer needs, and is working to intensify its customer focus and elevate innovation. The Board will continue to consider the right opportunities to help expand our global reach in all businesses, while at the same time supporting the company s initiative to become more scientific and selective in the business it does. While we have made remarkable progress over the last few years, there is still work to be done. For example, the current stock price still lags well behind book value. Consistent with the Board s role of representing the best interests of both the company and its shareholders, one of our goals is to make AIG an investment worth keeping, and to grow value for all of our stakeholders. Another area of focus is the current and developing regulatory structure, which is undergoing significant change. Under Dodd-Frank, AIG was officially named a non-bank systemically important financial institution in We were also named a global systemically important insurer by the Financial Stability Board in consultation with the International Association of Insurance Supervisors. As I have said many times, the Board welcomes regulation by the Federal Reserve, and we are committed to working with them with trust and transparency. They share our objective of making AIG a better, stronger company, able to withstand whatever may happen in the future. There is a lot of work being done both in the U.S. and internationally to build the appropriate regulatory structure for the insurance industry, and the next few years are going to be crucial as regulations are finalized. An important part of our work as a Board is to understand and help shape this new regulatory environment. We have two main objectives: ensuring global consistency of rules and requirements; and creating a framework that is appropriate for the insurance industry and that will help foster growth. Cultivating great talent is one of the most important ways that AIG distinguishes itself. We have put a lot of time and thought into making sure the company has the right people in the right roles, and toward developing a deep bench of incredibly capable leaders waiting to step up to whatever challenge is given to them. For those who were with AIG through the financial crisis, the company s turnaround further strengthened their leadership abilities, and our success is attracting top talent to AIG. We are winners, and the best players want to be on our team. The ability of the company to hire the best people in the industry allows us to gain new ideas and perspectives from their experience. I and the other Directors have had the pleasure of observing firsthand the people of AIG working together to bring the company to this moment. We are moving in the right direction, with the right priorities, the right perspectives, and, most importantly, the right internal and external checks and balances. I look forward to where we take AIG next. Robert S. Miller 4
7 Financial Highlights Years Ended December 31, (dollars in millions, except per share data) Operating results: Total revenues $ 68,678 $ 71,021 $ 65,105 Net income attributable to AIG 9,085 3,438 20,622 After-tax operating income attributable to AIG 6,762 6,635 2,086 Earnings per share (EPS): Basic Net income attributable to AIG Diluted Net income attributable to AIG After-tax operating income attributable to AIG $ 4.56 $ 3.93 $ 1.16 Balance sheet: Total assets $541,329 $548,633 $553,054 Shareholders equity 100,470 98, ,538 Book value per share (1) Book value per share, excluding Accumulated other comprehensive income (AOCI) $ $ $ Key metrics: AIG Property Casualty combined ratio AIG Property Casualty accident year combined ratio, as adjusted (2) AIG Life and Retirement premiums and deposits $ 28,809 $ 20,994 $ 24,392 (1) 2011 adjusted to reflect reclassification of income taxes from AOCI to Additional paid-in capital. (2) Combined ratio presented excluding catastrophe losses and related reinstatement premiums, prior year development, net of premium adjustments and the impact of reserve discounting. After-Tax Operating Income ($ in billions) Total Assets ($ in billions) Shareholders Equity ($ in billions) Book Value per Share Excluding AOCI $6.8 $6.6 $541.3 $548.6 $553.1 $100.5 $98.0 $101.5 $64.28 $57.87 $50.11 $
8 Where we need to be. AIG s customers around the globe count on us to be there wherever that may be. Throughout our history, we ve been among the first insurers to enter new markets, growing along with them. We have been in Latin America for over 75 years; Europe for over 65 years; the Middle East for over 60 years; and Asia, where we trace our roots, since the beginning. Even today, with customers in over 130 countries and jurisdictions, we see opportunities to expand our reach. Our global view gives us an advantage, as we are able to look across our network to find solutions from one region to another. For instance, when AIG entered into a joint venture agreement with PICC Life in 2013, we already had a product being marketed to Chinese Americans throughout the U.S. in both Cantonese and Mandarin. It was as if the product had originally been designed for exactly the consumers that PICC was looking to reach in China. AIG s Quality of Life Insurance does just that ensure a standard of living with benefits that customers can use during their lifetime. 95 years 6 C.V. Starr visits with a potential customer in the Wusih Hills outside Shanghai in 1922.
9 AIG provides coverage for a scientific expedition to the North Pole in the 1950s. 7
10 When we need to be there. AIG is in the business of helping customers plan for the future. One of the ways we do that is by selling insurance products that customers hope they will never use. Yet, when they need us, we are ready to make good on our promises. AIG Property Casualty paid an average of more than $100 million in claims each business day in For instance, when Storm Sandy hit the northeastern U.S. in late 2012, it created a worst-case scenario for many businesses, homeowners, and communities. One New York City-based customer had a retail location that was particularly hard-hit. In the early days of recovery, AIG advanced the business a $10 million claims payment, and with AIG s business interruption coverage, the store was able to retain all of its employees during the months it took to rebuild and reopen in March In total, AIG expects to pay out approximately $2.0 billion in claims related to Sandy, helping our customers get back on their feet. Through our insurance and retirement solutions, customers can also imagine a future that they might not have before. In 2014, for example, AIG VALIC celebrates the 50th anniversary of an American first: the enrollment of the first public K-12 school in a 403(b) retirement program. Two of that initial plan s longest-served teachers (pictured above) are now retired happily and, with the returns on their accounts, both have withdrawn more during retirement than they ever contributed. 95 years An employee in West Berlin after World War II stands with a Fiat Topolino; customers recognized the car and used to stop it so they could pay their insurance premiums on the spot. 8
11 Employees in Indonesia unload supplies to be flown to Banda Aceh following the 2004 tsunami in South Asia. 9
12 Why we do it. Since our beginnings, we ve insured some exciting events, and groundbreaking travels and projects like the rebuilding of the World Trade Center. We re as proud and passionate about insuring risks anyone may encounter: the woman in Argentina (pictured above, second from right) rebuilding her home after devastating floods the soldier recovering from an eye injury suffered during a training mission the hospital administrator focused on being able to make the most of retirement the person just starting to think about retirement the employee of a company in China who falls ill while based in Angola and must be flown to a South African hospital for treatment. Giving back is an important part of AIG s identity. In 2013, nearly 5,000 employees participated in global Volunteer Weeks around the world. The almost 400 projects ranged from visiting and supporting underprivileged children at a school in Guayaquil, Ecuador; to assisting at an animal shelter in Melbourne, Australia; to beautifying a dilapidated playground in Budapest, Hungary. We ve built our business on identifying the risks that individuals and companies face, creating the right solutions for them, and responding when they need help most. We segment claims into three categories major, complex, and express to better respond to customer needs. We also help our customers reduce their risk, first by understanding it and then by taking preventive measures. In all of these ways, we enable our customers and communities to bring on tomorrow. 95 years 10 The employee publication, Contact, represented in the collage at right, has been connecting the people of AIG across businesses and geographies for over 80 years, to better serve all of AIG s stakeholders.
13 Artwork by John Olsen 11
14 Board of Directors From left Arthur C. Martinez Former Chairman of the Board, President, and Chief Executive Officer Sears, Roebuck and Co. W. Don Cornwell Former Chairman of the Board and Chief Executive Officer Granite Broadcasting Corporation Henry S. Miller Chairman Marblegate Asset Management, LLC Former Chairman and Managing Director Miller Buckfire & Co., LLC John H. Fitzpatrick Secretary General The Geneva Association Former Chief Financial Officer, Head of the Life and Health Reinsurance Business Group, and Head of Financial Services Swiss Re William G. Jurgensen Former Chief Executive Officer Nationwide Insurance Suzanne Nora Johnson Former Vice Chairman The Goldman Sachs Group, Inc. Robert S. Miller Non-Executive Chairman of the Board American International Group, Inc. Former Chief Executive Officer Hawker Beechcraft, Inc. Former Executive Chairman Delphi Corporation Robert H. Benmosche President and Chief Executive Officer American International Group, Inc. Christopher S. Lynch Former National Partner in Charge of Financial Services KPMG LLP George L. Miles, Jr. Chairman Emeritus Chester Engineers, Inc. Former President and Chief Executive Officer WQED Multimedia Ronald A. Rittenmeyer Chairman, President, and Chief Executive Officer Expert Global Solutions, Inc. Former Chairman, Chief Executive Officer, and President Electronic Data Systems Corporation Theresa M. Stone Former Executive Vice President and Treasurer Massachusetts Institute of Technology Former Executive Vice President and Chief Financial Officer Jefferson-Pilot Corporation Former President Chubb Life Insurance Company Douglas M. Steenland Former President and Chief Executive Officer Northwest Airlines Corporation 12
15 American International Group, Inc. Form 10-K
17 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013 Commission file number OCT American International Group, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 175 Water Street, New York, New York (Address of principal executive offices) (Zip Code) Registrant s telephone number, including area code (212) Securities registered pursuant to Section 12(b) of the Act: See Exhibit Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ( of this chapter) is not contained herein, and will not be contained, to the best of registrant s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No The aggregate market value of the voting and nonvoting common equity held by nonaffiliates of the registrant (based on the closing price of the registrant s most recently completed second fiscal quarter) was approximately $65,993,000,000. As of February 14, 2014, there were outstanding 1,464,067,641 shares of Common Stock, $2.50 par value per share, of the registrant. DOCUMENTS INCORPORATED BY REFERENCE Document of the Registrant Form 10-K Reference Locations Portions of the registrant s definitive proxy statement for the Part III, Items 10, 11, 12, 13 and Annual Meeting of Shareholders
19 AMERICAN INTERNATIONAL GROUP, INC. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2013 TABLE OF CONTENTS FORM 10-K Item Number Description Page PART I Item 1. Business 2 AIG s Global Insurance Operations 3 A Review of Liability for Unpaid Claims and Claims Adjustment Expense 18 Reinsurance Activities 21 Generating Revenues: Investment Activities of Our Insurance Operations 22 Regulation 23 Our Competitive Environment 30 Our Employees 30 Directors and Executive Officers of AIG 31 Available Information about AIG 32 Item 1A. Risk Factors 33 Item 1B. Unresolved Staff Comments 47 Item 2. Properties 47 Item 3. Legal Proceedings 47 Item 4. Mine Safety Disclosures 47 PART II Item 5. Market for Registrant s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 48 Item 6. Selected Financial Data 51 Item 7. Management s Discussion and Analysis of Financial Condition and Results of Operations 54 Cautionary Statement Regarding Forward-Looking Information 54 Use of Non-GAAP Measures 56 Executive Overview 58 Results of Operations 71 Liquidity and Capital Resources 128 Investments 143 Enterprise Risk Management 161 Critical Accounting Estimates 178 Glossary 203 Acronyms 207 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 208 Item 8. Financial Statements and Supplementary Data 209 Index to Financial Statements and Schedules 209 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 339 Item 9A. Controls and Procedures 339 PART III Item 10. Directors, Executive Officers and Corporate Governance 340 Item 11. Executive Compensation 340 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 340 Item 13. Certain Relationships and Related Transactions, and Director Independence 340 Item 14. Principal Accounting Fees and Services 340 PART IV Item 15. Exhibits, Financial Statement Schedules 340 SIGNATURES 341 AIG 2013 Form 10-K 1
20 PART I... ITEM 1 / BUSINESS... American International Group, Inc. (AIG) is a leading global insurance company. Founded in 1919, today we provide a wide range of property casualty insurance, life insurance, retirement products, mortgage insurance and other financial services to customers in more than 130 countries and jurisdictions. Our diverse offerings include products and services that help businesses and individuals protect their assets, manage risks and provide for retirement security. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange. AIG s key strengths include: World class insurance franchises that are leaders in their categories and are continuing to improve their operating performance;... A diverse mix of businesses with a presence in most international markets;... Effective capital management of the largest shareholders equity of any insurance company in the world*, supported by enhanced risk management;... Execution of strategic objectives, such as our focus on growth of higher value lines of business to increase profitability and grow assets under management; and... Improved profitability, as demonstrated by growth in 2013 over 2012 of pre-tax operating income in each of our core insurance operations.... * At June 30, 2013, the latest date for which information was available for certain foreign insurance companies. 2 AIG 2013 Form 10-K
21 ITEM 1 / BUSINESS / AIG In this Annual Report on Form 10-K, unless otherwise mentioned or unless the context indicates otherwise, we use the terms AIG, the Company, we, us and our to refer to American International Group, Inc., a Delaware corporation, and its consolidated subsidiaries. We use the term AIG Parent to refer solely to American International Group, Inc., and not to any of its consolidated subsidiaries. AIG s Global Insurance Operations HOW... WE GENERATE REVENUES AND PROFITABILITY We earn revenues primarily from insurance premiums, policy fees from universal life insurance and investment products, income from investments and advisory fees. Our operating expenses consist of policyholder benefits and claims incurred, interest credited to policyholders, commissions and other costs of selling and servicing our products, and general business expenses. Our profitability is dependent on our ability to price and manage risk on insurance and annuity products, to manage our portfolio of investments effectively, and to control costs through expense discipline. AIG Property Casualty AIG Property Casualty is a leading provider of insurance products for commercial, institutional and individual customers through one of the world s most far-reaching property casualty networks. AIG Property Casualty offers one of the industry s most extensive ranges of products and services, through its diversified, multichannel distribution network, benefitting from its strong capital position. AIG Life and Retirement AIG Life and Retirement is a premier provider of protection, investment and income solutions for financial and retirement security. It is among the largest life insurance, annuity and retirement services businesses in the United States. With one of the broadest distribution networks and most diverse product offerings in the industry, AIG Life and Retirement helps to ensure financial and retirement security for more than 18 million customers. During the first quarter of 2013, AIG Life and Retirement implemented its previously announced changes reflecting its new structure and now presents its operating results in two operating segments Retail and Institutional. All prior period amounts presented have been revised to reflect the new structure. Other Operations Mortgage Guaranty (United Guaranty Corporation or UGC), is a leading provider of private residential mortgage guaranty insurance (MI). MI covers mortgage lenders for the first loss from mortgage defaults on high loan-to-value conventional first-lien mortgages. By providing this coverage, UGC enables mortgage lenders to remain competitive and enables individuals to purchase a house with a lower down payment. Other Operations also include Global Capital Markets, Direct Investment book, Corporate & Other and Aircraft Leasing. AIG 2013 Form 10-K 3
22 ITEM 1 / BUSINESS / AIG BUSINESS... MANAGEMENT On August 14, 2013, we announced a reorganization of our Consumer Insurance business and named a new management team. Under the new structure, AIG s global life insurance business will be managed as part of AIG Global Consumer Insurance enabling our consumer network across the world to benefit from the sophistication, scale, and success of our U.S. life insurance platform. During the fourth quarter of 2013, the newly appointed executive management team made a number of key appointments to its management team and certain key decisions regarding how its underlying operating segments will be organized. However, we continue to work on the final key elements of the new organization and operating structure. When the new structure is finalized, the presentation of AIG Property Casualty and AIG Life and Retirement results may be modified accordingly and prior periods presentations may be revised to conform to the new reporting presentation. AIG 2013 Revenue Sources from Insurance Operations* (dollars in millions) 21% Retail $12,715 Other $2,971 Consumer Insurance $13,601 22% 5% 38% Commercial Insurance $23,137 AIG PROPERTY CASUALTY $39,709 65% AIG LIFE AND RETIREMENT $20,590 34% 13% 1% MORTGAGE GUARANTY $949 Institutional $7,875 14FEB * Revenues for AIG Property Casualty and Mortgage Guaranty include net premiums earned, net investment income and net realized capital gains. Revenues for AIG Life and Retirement include premiums, policy fees, net investment income, advisory fees, legal settlements and net realized capital gains. For financial information concerning our reportable segments, including geographic areas of operation and changes made in 2013, see Note 3 to the Consolidated Financial Statements. Prior periods have been revised to conform to the current period presentation for segment changes and discontinued operations. 4 AIG 2013 Form 10-K
23 ITEM 1 / BUSINESS / AIG 2012 and 2013 Key Accomplishments AREA OF FOCUS ACTION RESULT CORE BUSINESS DEVELOPMENTS Improved insurance pre-tax operating income (a) Grew net premiums written, excluding the effect of foreign exchange Improved 2013 current accident year loss ratio, as adjusted(a) Improved net flows on investment products from strong sales through a unified distribution organization Improvements in base spread rates: Fixed Annuities product line base spread Group Retirement product line base spread Record new insurance written for Mortgage Guaranty Decline in newly reported delinquencies for Mortgage Guaranty Strategic investments in The People s Insurance Company (Group) of China Limited (PICC Group), Woodbury Financial Services, Inc. and Service Net in 2012 Exercise of PICC Property & Casualty Company Limited (PICC P&C) warrants in 2013 Utilization of life capital loss carryforwards $10.1 bn in 2013 $6.0 bn in percent 63.8 points in points in 2012 $4.6 bn in 2013 $(1.3) bn in percent in percent in percent in percent in 2012 $49.9 bn in 2013 $37.5 bn in thousand in thousand in 2012 $0.7 bn in 2012 $93 mn in percent cumulative utilization FOCUSED PORTFOLIO OF BUSINESSES NON-CORE ASSET DIVESTITURES Entered into agreement to sell International Lease $5.4 bn(b) Finance Corporation (ILFC) to AerCap Ireland Limited, a wholly-owned subsidiary of AerCap Holdings N.V. in 2013 Monetized remaining interests in Maiden Lane II LLC (ML $24.6 bn II) and Maiden Lane III LLC (ML III) and sold remaining interest in AIA Group Limited (AIA) in 2012 STRENGTHEN LIQUIDITY AND CAPITAL ACTIVE CAPITAL MANAGEMENT Cash distributions from subsidiaries in 2013 and 2012 Growth in 2013 book value per share excluding AOCI (a) from 2012 Decrease in debt outstanding AIG Common Stock purchases in 2013 and 2012 Cash dividends to shareholders in 2013 $8.7 bn and $5.2 bn $64.28 in 2013 $57.87 in 2012 $41.7 bn in 2013 $48.5 bn in 2012 $597 mn and $13.0 bn $294 mn INCREASED FINANCIAL FLEXIBILITY COMPLETE REPAYMENT OF GOVERNMENT SUPPORT United States Department of the Treasury (Department of the Treasury) exited ownership of AIG through five offerings of AIG Common Stock in 2012 Repurchased warrants in 2013 previously issued to the Department of the Treasury in 2008 and 2009 $45.8 bn(c) $25 mn EXITED FROM GOVERNMENT OWNERSHIP 17FEB (a) Pre-tax operating income, accident year loss ratio, as adjusted, and book value per share excluding AOCI are non-gaap measures. See Use of Non-GAAP Measures for additional information. (b) Based on AerCap s pre-announcement closing price per share of $24.93 as of December 13, (c) AIG did not receive any proceeds from the sale of AIG Common Stock by the Department of the Treasury. See Notes 4, 16, 17 and 24 to the Consolidated Financial Statements for further discussion of the government support provided to AIG and the Recapitalization. AIG 2013 Form 10-K 5