AIG 2012 Annual Report Download - page 259

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Transfers of Level 1 and Level 2 Assets and Liabilities
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Our policy is to record transfers of assets and liabilities between Level 1 and Level 2 at their fair values as of the
end of each reporting period, consistent with the date of the determination of fair value. Assets are transferred out of
Level 1 when they are no longer transacted with sufficient frequency and volume in an active market. Conversely,
assets are transferred from Level 2 to Level 1 when transaction volume and frequency are indicative of an active
market. During the year ended December 31, 2012, we transferred $464 million of securities issued by Non-U.S.
government entities from Level 1 to Level 2, as they are no longer considered actively traded. For similar reasons,
during the year ended December 31, 2012, we transferred $888 million of securities issued by the U.S. government
and government-sponsored entities from Level 1 to Level 2. We had no material transfers from Level 2 to Level 1
during the year ended December 31, 2012.
Changes in Level 3 Recurring Fair Value Measurements
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The following tables present changes during December 31, 2012 and 2011 in Level 3 assets and liabilities
measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the
Level 3 assets and liabilities in the Consolidated Balance Sheet at December 31, 2012 and 2011:
December 31, 2012
Assets:
Bonds available for sale:
Obligations of states,
municipalities and political
subdivisions
Non-U.S. governments
Corporate debt
RMBS
CMBS
CDO/ABS
Total bonds available for sale
Bond trading securities:
Corporate debt
RMBS
CMBS
CDO/ABS
Total bond trading securities
Equity securities available for
sale:
Common stock
Preferred stock
Total equity securities available
for sale
Mortgage and other loans
receivable
Other invested assets
Total
Liabilities:
Policyholder contract deposits
Derivative liabilities, net:
Interest rate contracts
Foreign exchange contracts
Equity contracts
Commodity contracts
Credit contracts
Other contracts
Total derivative liabilities, net
Long-term debt(b)
Total
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AIG 2012 Form 10-K242
Net Changes in
Realized and Unrealized Gains
Unrealized Accumulated Purchases, (Losses) Included
Fair value Gains (Losses) Other Sales, Gross Gross Fair value in Income on
Beginning Included Comprehensive Issues and Transfers Transfers End Instruments Held
(in millions) of Year(a) in Income Income (Loss) Settlements, Net in out of Year at End of Year
$ 960 $ 48 $ 12 $ 84 $ 70 $ (150) $ 1,024 $ –
9 1 (1) 1 4 – 14 –
1,935 (44) 145 24 664 (1,237) 1,487 –
10,877 522 2,121 (316) 952 (2,494) 11,662 –
3,955 (135) 786 636 44 (162) 5,124 –
4,220 334 289 10 691 (703) 4,841 –
21,956 726 3,352 439 2,425 (4,746) 24,152 –
7 – – (7) – – – –
303 76 2 (109) 128 (4) 396 42
554 70 2 (159) 446 (101) 812 87
8,432 3,683 3 (3,968) 386 – 8,536 2,547
9,296 3,829 7 (4,243) 960 (105) 9,744 2,676
57 22 (28) (33) 6 – 24 –
99 17 (35) (36) 11 (12) 44 –
156 39 (63) (69) 17 (12) 68 –
1 – – (1) – – – –
6,618 (95) 290 (257) 1,204 (2,371) 5,389 –
$ 38,027 $ 4,499 $ 3,586 $ (4,131) $ 4,606 $ (7,234) $ 39,353 $ 2,676
$ (918) $ (275) $ (72) $ 8 $ – $ – $ (1,257) $ 112
785 (11) – (42) – – 732 56
2 – – (2) – – – –
28 10 – 12 (3) – 47 (10)
2 5 – (6) – – 1 (6)
(3,273) 638 – 644 – – (1,991) (1,172)
33 (76) (18) 15 (116) – (162) 46
(2,423) 566 (18) 621 (119) – (1,373) (1,086)
(508) (411) (77) 242 (14) 424 (344) 105
$ (3,849) $ (120) $ (167) $ 871 $ (133) $ 424 $ (2,974) $ (869)
ITEM 8 / NOTE 6. FAIR VALUE MEASUREMENTS