AIG 2013 Annual Report Download - page 342

jurisdictions and $298 million associated with tax exempt interest income. These items were partially offset by
charges of $632 million related to uncertain tax positions.
For the year ended December 31, 2012, the effective tax rate on income from continuing operations was (27.9)
percent. The effective tax rate on income from continuing operations differs from the statutory tax rate of 35 percent
primarily due to decreases in AIG Life and Retirement’s capital loss carryforward valuation allowance of $1.9 billion
related to the actual and projected gains from AIG Life and Retirement’s available-for-sale securities, and tax effects
associated with tax exempt interest income of $302 million. These items were partially offset by changes in uncertain
tax positions of $446 million.
For the year ended December 31, 2011, the effective tax rate on loss from continuing operations was not meaningful,
due to the significant effect of releasing approximately $18.4 billion of the deferred tax asset valuation allowance.
Other factors that contributed to the difference from the statutory rate included tax benefits of $454 million associated
with tax exempt interest income, $386 million associated with the effect of foreign operations, and $224 million
related to our investment in subsidiaries and partnerships.
The following table presents the components of the net deferred tax assets (liabilities):
Deferred tax assets:
Losses and tax credit carryforwards $ 25,359
Unrealized loss on investments 3,365
Accruals not currently deductible, and other 4,499
Investments in foreign subsidiaries and joint ventures 1,435
Loss reserve discount 1,235
Loan loss and other reserves 547
Unearned premium reserve reduction 1,145
Employee benefits 1,483
Total deferred tax assets 39,068
Deferred tax liabilities:
Adjustment to life policy reserves (1,817)
Deferred policy acquisition costs (2,816)
Flight equipment, fixed assets and intangible assets (2,015)
Unrealized gains related to available for sale debt securities (7,464)
Other (225)
Total deferred tax liabilities (14,337)
Net deferred tax assets before valuation allowance 24,731
Valuation allowance (8,036)
Net deferred tax assets (liabilities) $ 16,695
The following table presents our U.S. consolidated income tax group tax losses and credits carryforwards as
of December 31, 2013 on a tax return basis.
Net operating loss carryforwards $ 34,233 $ 11,981 2028 – 2031
Capital loss carryforwards – Life 1,117 391 2014
Capital loss carryforwards – Non-Life – – N/A
Foreign tax credit carryforwards – 5,796 2016 – 2023
Other carryforwards and other – 513 Various
Total AIG U.S. consolidated income tax group tax losses and credits carryforwards $ 18,681
The evaluation of the recoverability of the deferred tax asset and the need for a valuation allowance requires us to
weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion
of the deferred tax asset will not be realized. The weight given to the evidence is commensurate with the extent to
Assessment of Deferred Tax Asset Valuation Allowance
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AIG 2013 Form 10-K324
ITEM 8 / NOTE 23. INCOME TAXES
December 31,
(in millions) 2013 2012
$ 20,825
4,843
2,935
1,035
1,164
888
1,451
1,217
34,358
445
(3,396)
(2,354)
(3,693)
(571)
(9,569)
24,789
(3,596)
$ 21,193
December 31, 2013 Tax Expiration
(in millions) Gross Effected Periods
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