AIG 2013 Annual Report Download - page 143

The following table presents credit valuation adjustment gains (losses) for the DIB (excluding intercompany
transactions):
Counterparty Credit Valuation Adjustment on Assets:
Other bond securities $ 1,401 $ (71)
Loans and other assets 29 31
Increase (decrease) in assets 1,430 (40)
AIG’s Own Credit Valuation Adjustment on Liabilities:
Notes and bonds payable (526) 288
Guaranteed Investment Agreements (81) 112
Other liabilities (34) 20
(Increase) decrease in liabilities (641) 420
Net increase to pre-tax operating income $ 789 $ 380
We sold our remaining 33 percent interest in AIA ordinary shares for proceeds of $14.5 billion and a net gain of
$2.1 billion through three sale transactions on March 7, September 11 and December 20, 2012.
We recognized a $1.3 billion gain in 2011, representing a 12 percent increase in the value of AIG’s then 33 percent
interest in AIA, which was recorded in Other invested assets and accounted for under the fair value option.
The gains attributable to AIG’s interest in ML III for 2012 were based in part on the completion of the final auction of
ML III assets by the FRBNY, in the third quarter of 2012.
The loss attributable to AIG’s interest in ML III for 2011 was due to significant spread widening and reduced interest
rates.
We recognized a loss in 2011, representing the decline in the securities’ value, due to market conditions, from
December 31, 2010 through the date of their sale in the first quarter of 2011.
Corporate & Other reported an increase in pre-tax operating losses in 2013 compared to 2012 primarily due to
severance charges in 2013 of $265 million as a result of centralizing work streams to lower-cost locations and
creating a more streamlined organization, and higher incentive compensation costs. These increases were partially
offset by lower interest expense due to various debt reduction activities described in Liquidity and Capital Resources.
In addition, Corporate expenses, net in 2012 included reductions in expenses of $211 million, from the decrease in
the estimate of the liability for the Department of the Treasury’s underwriting fees in connection with the sales of AIG
Common Stock.
Corporate & Other reported lower operating losses in 2012 compared to 2011 primarily due to a reduction in expense
of $211 million in 2012 resulting from settlements of the liability for the Department of the Treasury’s underwriting
fees for the sale of AIG Common Stock at amounts lower than had been estimated at the time the accrual was
established, and AIG purchased a significant amount of shares for which no payment to the underwriters was
Retained Interests
Change in Fair Value of AIA Securities Prior to Their Sale
Change in Fair Value of ML III Prior to Liquidation
Change in the Fair Value of the MetLife Securities Prior to Their Sale
Corporate and Other Results
2013 and 2012 Comparison
2012 and 2011 Comparison
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AIG 2013 Form 10-K 125
ITEM 7 / RESULTS OF OPERATIONS / OTHER OPERATIONS
Years Ended December 31,
(in millions) 2013 2012 2011
$ 488
10
498
(88)
41
(7)
(54)
$ 444
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