AIG 2013 Annual Report Download - page 57

meet certain conditions. Licenses issued by foreign authorities to our subsidiaries are subject to modification and
revocation. Consequently, our insurance subsidiaries could be prevented from conducting future business in some of
the jurisdictions where they currently operate. Adverse actions from any single country could adversely affect our
results of operations, depending on the magnitude of the event and our financial exposure at that time in that
country.
We may experience difficulty in marketing and distributing products through our current and future
distribution channels. Although we distribute our products through a wide variety of distribution channels, we
maintain relationships with certain key distributors. Distributors have in the past, and may in the future, elect to
renegotiate the terms of existing relationships, or reduce or terminate their distribution relationships with us, including
for such reasons as industry consolidation of distributors or other industry changes that increase the competition for
access to distributors, adverse developments in our business, adverse rating agency actions or concerns about
market-related risks. An interruption in certain key relationships could materially affect our ability to market our
products and could have a material adverse effect on our businesses, operating results and financial condition.
In addition, when our products are distributed through unaffiliated firms, we may not be able to monitor or control the
manner of their distribution, despite our training and compliance programs. If our products are distributed to
customers for whom they are unsuitable or distributed in any other inappropriate manner, we may suffer reputational
and other harm to our business.
Significant conditions precedent must be satisfied to complete the sale of the common stock of ILFC on the
agreed terms. On December 16, 2013, AIG and AIG Capital Corporation (Seller), a wholly-owned direct subsidiary
of AIG, entered into a definitive agreement (the AerCap Share Purchase Agreement) with AerCap Holdings N.V.
(AerCap) and AerCap Ireland Limited (Purchaser), a wholly-owned subsidiary of AerCap, for the sale of 100% of the
common stock of ILFC by Seller to Purchaser (such transaction, the AerCap Transaction). Under the terms of the
AerCap Share Purchase Agreement, consummation of the AerCap Transaction is subject to the satisfaction or waiver
of a number of conditions precedent, such as certain customary conditions and other closing conditions, including the
receipt of approvals or non-disapprovals from antitrust and other regulatory bodies. The AerCap Transaction was
approved by AerCap shareholders on February 13, 2014.
Any relevant regulatory body may refuse its approval or may seek to make its approval subject to compliance by
ILFC or the Purchaser with unanticipated or onerous conditions. Even if approval is not required, the regulator may
impose requirements on ILFC subsequent to consummation of the AerCap Transaction. We or the Purchaser might
not agree to such conditions or requirements and may have a contractual right to terminate the AerCap Share
Purchase Agreement.
In addition to other customary termination events, the Share Purchase Agreement allows termination by (i) AIG,
Seller or Purchaser if the closing of the AerCap Transaction has not occurred on or before September 16, 2014 (the
Long-Stop Date), subject to an extension to December 16, 2014 for the receipt of certain approvals, (ii) AIG, Seller or
Purchaser in the event that approvals or non-disapprovals from certain regulatory bodies have not been obtained by
the Long-Stop Date (as extended), (iii) AIG or Seller, if the AerCap board of directors withdraws or adversely
modifies its approval of the AerCap Transaction or (iv) AIG or Seller if all conditions are satisfied, AIG and Seller are
prepared to close but Purchaser fails to close the AerCap Transaction as required.
Because of the closing conditions and termination rights applicable to the AerCap Transaction, completion of the
AerCap Transaction is not assured or may be delayed or, even if the transaction is completed, the terms of the sale
may need to be significantly restructured.
The completion of the AerCap Transaction as contemplated could expose us to additional risks related to
AerCap’s stock and credit. Upon completion of the AerCap Transaction, we will hold approximately 46 percent of
the common stock of AerCap. As a result, declines in the value of AerCap’s common stock, and the other effects of
our accounting for this investment under the equity method of accounting, could have a material adverse effect on
our results of operations in a reporting period.
In addition, in connection with the AerCap Transaction, AIG, AerCap, Purchaser, AerCap Ireland Capital Limited
(AerCap Ireland) and certain subsidiaries of AerCap, as guarantors, entered into a credit agreement for a senior
unsecured revolving credit facility between AerCap Ireland, as borrower, and AIG, as lender and administrative agent
(the Revolving Credit Facility). The Revolving Credit Facility provides for an aggregate commitment of $1 billion and
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AIG 2013 Form 10-K 39
ITEM 1A / RISK FACTORS
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