AIG 2014 Annual Report Download - page 309

ITEM 8 / NOTE 16. CONTINGENCIES, COMMITMENTS AND GUARANTEES
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Commitments
We occupy leased space in many locations under various long-term leases and have entered into various leases covering the
long-term use of data processing equipment.
The following table presents the future minimum lease payments under operating leases at December 31, 2014:
(in millions)
2015 $ 349
2016 265
2017 191
2018 136
2019 98
Remaining years after 2019 265
Tota l $ 1,304
Rent expense was $471 million, $414 million and $445 million for the years ended December 31, 2014, 2013 and 2012,
respectively. These amounts include $7 million for the year ended December 31, 2014 related to ILFC prior to the sale in 2014,
and $15 million and $16 million attributable to businesses held for sale for the years ended December 31, 2013 and 2012,
respectively.
Other Commitments
In the normal course of business, we enter into commitments to invest in limited partnerships, private equity funds and hedge
funds and to purchase and develop real estate in the U.S. and abroad. These commitments totaled $2.5 billion at December
31, 2014.
Guarantees
Subsidiaries
We have issued unconditional guarantees with respect to the prompt payment, when due, of all present and future payment
obligations and liabilities of AIGFP and those arising from transactions entered into by AIG Markets.
In connection with AIGFP’s business activities, AIGFP has issued, in a limited number of transactions, standby letters of credit
or similar facilities to equity investors of structured leasing transactions in an amount equal to the termination value owing to
the equity investor by the lessee in the event of a lessee default (the equity termination value) that are not otherwise satisfied
by other arrangements. The total amount outstanding under these facilities at December 31, 2014 was $214 million. In those
transactions, AIGFP has agreed to pay the equity termination value if the lessee fails to pay. The amount payable by AIGFP is,
in certain cases, partially offset by amounts payable under other instruments typically equal to the present value of scheduled
payments to be made by AIGFP. In the event that AIGFP is required to make a payment to the equity investor, the lessee is
unconditionally obligated to reimburse AIGFP. To the extent that the equity investor is paid the equity termination value from
the standby letter of credit and/or other sources, including payments by the lessee, AIGFP takes an assignment of the equity
investor’s rights under the lease of the underlying property. Because the obligations of the lessee under the lease transactions
are generally economically defeased, lessee bankruptcy is the most likely circumstance in which AIGFP would be required to
pay without reimbursement.