AIG 2013 Annual Report Download - page 144

required, and a decline in interest expense as a result of the repayment of the FRBNY Credit Facility and the
exchange of outstanding junior subordinated debentures for senior unsecured notes in 2011.
Other non-core businesses declined due to lower gains on real estate dispositions and higher equity losses on real
estate investments in 2012 compared to 2011.
Legal reserves relate to increased estimated litigation liability based on developments in several actions.
The increase in loss on extinguishment of debt in 2013 compared to the prior year resulted from redemptions and
repurchases of, and cash tender offers for, certain debt securities in 2013. The loss on extinguishment of debt in
2011 includes a $3.3 billion charge primarily consisting of the accelerated amortization of the remaining prepaid
commitment fee asset resulting from the termination of the FRBNY Credit Facility.
The following table presents Aircraft Leasing results:
Aircraft leasing revenues, excluding net realized
capital gains (losses):
Rental revenue $ 4,358 $ 4,447 (3)% (2)%
Interest and other revenues 141 20 27 NM
Total aircraft leasing revenues, excluding net realized
capital gains (losses) 4,499 4,467 (2) 1
Operating expenses:
Loss on extinguishment of debt 23 61 NM (62)
Aircraft leasing expense:
Depreciation expense 1,927 1,871 NM 3
Impairment charges, fair value adjustments and
lease-related charges 230 1,689 (53) (86)
Other expenses 1,981 1,841 124 8
Total aircraft leasing expense 4,138 5,401 10 (23)
Operating income (loss) 338 (995) NM NM
Net realized capital gains (losses) 1 (10) NM NM
Pre-tax income (loss) $ 339 $ (1,005) NM% NM%
Aircraft Leasing reported a pre-tax loss in 2013 compared to pre-tax income in 2012, primarily due to certain
adjustments to ILFC’s assets and liabilities classified as held for sale. See Note 4 to the Consolidated Financial
Statements for more information regarding Aircraft Leasing.
Aircraft Leasing reported pre-tax income in 2012 compared to a pre-tax loss in 2011 primarily due to a decrease in
impairment charges, fair value adjustments and lease-related charges on aircraft and lower losses on extinguishment
of debt. This was partially offset by lower lease revenue and increased costs due to early returns of aircraft by
lessees who ceased operations, lower lease revenue earned on re-leased aircraft in ILFC’s fleet, charges relating to
Legal Reserves
Loss on Extinguishment of Debt
Aircraft Leasing Results
2013 and 2012 Comparison
2012 and 2011 Comparison
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AIG 2013 Form 10-K126
ITEM 7 / RESULTS OF OPERATIONS / OTHER OPERATIONS
Percentage Change
Years Ended December 31,
(in millions) 2013 2012 2011 2013 vs. 2012 2012 vs. 2011
$ 4,241
179
4,420
–
–
108
4,441
4,549
(129)
–
$ (129)
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