AIG 2013 Annual Report Download - page 246

fuel-efficient aircraft, and the success of competing aircraft models resulted in a contracting operator base for these
aircraft types. These factors, together with the latest updates to airline fleet plans and efforts to remarket these
aircraft resulted in the impairment charge. Approximately $1.0 billion of the $1.1 billion impairment charge related to
the four-engine widebody aircraft and, in particular, the Airbus A340-600s. This had no effect on our consolidated
financial condition, results of operations, or cash flows as a result of the loss on sale of ILFC we recognized for the
year ended December 31, 2012.
We report the results of operations of a business as discontinued operations if the business is classified as held for
sale, the operations and cash flows of the business have been or will be eliminated from our ongoing operations as a
result of a disposal transaction and we will not have any significant continuing involvement in the operations of the
business after the disposal transaction. The results of discontinued operations are reported in Discontinued
Operations in the Consolidated Statements of Income for current and prior periods commencing in the period in
which the business meets the criteria of a discontinued operation, and include any gain or loss recognized on closing
or adjustment of the carrying amount to fair value less cost to sell.
The results of operations for the following businesses are presented as discontinued operations in our Consolidated
Statements of Income.
On January 12, 2011, we entered into an agreement to sell our 97.57 percent interest in Nan Shan Life Insurance
Company, Ltd. (Nan Shan) to a Taiwan-based consortium. The transaction was consummated on August 18, 2011
for net proceeds of $2.15 billion in cash. We recorded a pre-tax loss of $1.0 billion for the year ended December 31,
2011 largely offsetting Nan Shan operating results for the period, which is reflected in Income (loss) from
discontinued operations in the Consolidated Statements of Income. The net proceeds from the transaction were used
to pay down a portion of the liquidation preference of the Department of the Treasury’s preferred interests (AIA SPV
Preferred Interests) in the special purpose vehicle holding the proceeds of the AIA initial public offering (the AIA
SPV).
On September 30, 2010, we entered into a definitive agreement with Prudential Financial, Inc. for the sale of our
Japan-based insurance subsidiaries, AIG Star Life Insurance Co., Ltd. (AIG Star) and AIG Edison Life Insurance
Company (AIG Edison), for total consideration of $4.8 billion, including the assumption of certain outstanding debt
totaling $0.6 billion owed by AIG Star and AIG Edison. The transaction closed on February 1, 2011 and we
recognized a pre-tax gain of $3.5 billion on the sale that is reflected in Income (loss) from discontinued operations in
the Consolidated Statements of Income.
Nan Shan, AIG Star and AIG Edison previously were components of the AIG Life and Retirement reportable
segment. Results from discontinued operations for 2011 include the results of Nan Shan, AIG Star and AIG Edison
through the date of disposition.
Certain other sales completed during the periods presented were not classified as discontinued operations because
we continued to generate significant direct revenue-producing or cost-generating cash flows from the businesses or
because associated assets, liabilities and results of operations were not material, individually or in the aggregate, to
our consolidated financial position or results of operations for any period presented.
Discontinued Operations
Nan Shan Sale
AIG Star and AIG Edison Sale
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AIG 2013 Form 10-K228
ITEM 8 / NOTE 4. HELD-FOR-SALE CLASSIFICATION, DIVESTED BUSINESSES AND DISCONTINUED
OPERATIONS
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