AIG 2013 Annual Report Download - page 150

Net cash used in financing activities for 2013 includes:
• approximately $294 million in the aggregate to pay dividends of $0.10 per share on AIG Common Stock in each of
the third and fourth quarters of 2013;
• approximately $597 million to repurchase approximately 12 million shares of AIG Common Stock; and
• approximately $9.3 billion to repay long term debt; see Debt — Debt Maturities below.
• approximately $4.9 billion in repayments of long term debt of business held-for-sale.
Net cash used in financing activities for 2012 includes:
• $8.6 billion to pay down the Department of the Treasury’s preferred interests (AIA SPV Preferred Interests) in the
special purpose vehicle holding the AIA ordinary shares; and
• total payments of approximately $13.0 billion for the purchase of shares of AIG Common Stock.
Net cash used in financing activities for 2011 primarily includes repayment of the FRBNY Credit Facility and the
$12.4 billion partial repayment of the AIA SPV Preferred Interests and the ALICO SPV in connection with the
Recapitalization and use of proceeds received from the sales of foreign life insurance entities in 2011.
As of December 31, 2013, AIG Parent had approximately $17.6 billion in liquidity sources. AIG Parent’s liquidity
sources are held in the form of cash, short-term investments and publicly traded, intermediate-term investment grade
rated fixed maturity securities. Fixed maturity securities consist of U.S. government and government sponsored entity
securities, U.S. agency mortgage-backed securities, and corporate and municipal bonds. AIG Parent actively
manages its assets and liabilities in terms of products, counterparties and duration. During 2013, upon an
assessment of its immediate and longer-term funding needs, AIG Parent purchased publicly traded, intermediate-term
investment grade rated fixed maturity securities that can be readily monetized through sales or repurchase
agreements. These securities allow us to diversify sources of liquidity while reducing the cost of maintaining sufficient
liquidity. AIG Parent liquidity sources are monitored through the use of various internal liquidity risk measures. AIG
Parent’s primary sources of liquidity are dividends, distributions, loans, and other payments from subsidiaries, as well
as credit and contingent liquidity facilities. AIG Parent’s primary uses of liquidity are for debt service, capital and
liability management, operating expenses and subsidiary capital needs.
AIG Parent has unconditional capital maintenance agreements (CMAs) in place with certain AIG Property Casualty,
AIG Life and Retirement and Mortgage Guaranty subsidiaries to facilitate the transfer of capital and liquidity within
AIG. On February 18, 2014, certain of these CMAs were recharacterized as capital support agreements as a result of
our intention to manage capital flows between AIG Parent and its subsidiaries through internal, Board-approved
policies and guidelines rather than CMAs. See AIG Property Casualty, AIG Life and Retirement and Other
Operations — Mortgage Guaranty below for additional details regarding CMAs that we have entered into with our
insurance subsidiaries. Nevertheless, regulatory and other legal restrictions could limit our ability to transfer capital
freely, either to or from our subsidiaries.
We believe that we have sufficient liquidity and capital resources to satisfy our reasonably foreseeable future
requirements and meet our obligations to our creditors, debt-holders and insurance company subsidiaries. We expect
to access the debt markets from time to time to meet funding requirements as needed.
We utilize our capital resources to support our businesses, with the majority of capital allocated to our core insurance
operations. Should we have or generate more capital than is needed to support our business strategies (including
organic growth or acquisition opportunities) or mitigate risks inherent to our business, we may develop plans to
distribute such capital to shareholders via dividend or share repurchase authorizations or deploy such capital towards
liability management.
Financing Cash Flow Activities
Liquidity and Capital Resources of AIG Parent and Subsidiaries
AIG Parent
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AIG 2013 Form 10-K132
ITEM 7 / LIQUIDITY AND CAPITAL RESOURCES
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