AIG 2013 Annual Report Download - page 149

The following table presents a summary of AIG’s Consolidated Statement of Cash Flows:
Summary:
Net cash provided by (used in) operating activities $ 3,676 $ (81)
Net cash provided by investing activities 16,612 36,448
Net cash used in financing activities (20,564) (36,926)
Effect of exchange rate changes on cash 16 29
Increase (decrease) in cash (260) (530)
Cash at beginning of year 1,474 1,558
Change in cash of businesses held for sale (63) 446
Cash at end of year $ 1,151 $ 1,474
Interest payments totaled $3.9 billion in 2013 compared to $4.0 billion in 2012. Excluding interest payments, AIG
generated positive operating cash flow of $9.7 billion and $7.7 billion in 2013 and 2012, respectively.
Insurance companies generally receive most premiums in advance of the payment of claims or policy benefits. The
ability of insurance companies to generate positive cash flow is affected by the frequency and severity of losses
under their insurance policies, policy retention rates and operating expenses.
Cash provided by AIG Property Casualty operating activities was $0.4 billion in 2013 compared to $1.1 billion in
2012, primarily reflecting the timing of the payments related to catastrophe losses.
Cash provided by AIG Life and Retirement operating activities was $4.3 billion in 2013 compared to $2.9 billion in
2012, primarily due to higher pre-tax operating income and the receipt of approximately $800 million of legal
settlement proceeds in 2013.
Cash provided by operating activities of business held for sale was $2.9 billion for each of 2013 and 2012.
Net cash provided by operating activities improved in 2012 compared to 2011, principally due to cash paid for
interest in 2011 by AIG Parent of $6.4 billion in accrued compounded interest and fees under the FRBNY Credit
Facility, partially offset by a decline in cash provided by operating activities of foreign life subsidiaries of $3.4 billion
due to the sale of those subsidiaries (AIA, ALICO, AIG Star, AIG Edison and Nan Shan Life Insurance
Company, LTD. (Nan Shan)) in 2011.
Net cash provided by investing activities for 2013 includes approximately $0.9 billion of cash collateral received in
connection with the securities lending program launched during 2012 by AIG Life and Retirement.
Net cash provided by investing activities for 2012 includes:
• payments received relating to the sale of the underlying assets held by ML II of approximately $1.6 billion;
• payments of approximately $8.5 billion received in connection with the dispositions of ML III assets by the FRBNY;
• gross proceeds of approximately $14.5 billion from the sale of AIA ordinary shares; and
• approximately $2.1 billion of cash collateral received in connection with the securities lending program launched
during 2012 by AIG Life and Retirement.
Net cash provided by investing activities for 2011 includes:
• the utilization of $26.4 billion of restricted cash generated from the AIA initial public offering and ALICO sale in
connection with the Recapitalization and $9.6 billion from the disposition of MetLife securities;
• the sale of AIG Star, AIG Edison and Nan Shan in 2011 for total proceeds of $6.4 billion; and
• net sales of short term investments and maturities of available for sale investments, primarily at AIG Property
Casualty and AIG Life and Retirement, which were partially offset by purchases of available for sale investments.
Operating Cash Flow Activities
Investing Cash Flow Activities
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AIG 2013 Form 10-K 131
ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES
Years Ended December 31,
(in millions) 2013 2012 2011
$ 5,865
7,099
(11,758)
(92)
1,114
1,151
(24)
$ 2,241
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