AIG 2013 Annual Report Download - page 275

The following table presents the components of Net investment income:
Fixed maturity securities, including short-term investments $ 12,592 $ 11,814
Change in fair value of ML II 246 42
Change in fair value of ML III 2,888 (646)
Change in fair value of AIA securities including realized gain 2,069 1,289
Change in the fair value of MetLife securities prior to their sale – (157)
Equity securities 162 92
Interest on mortgage and other loans 1,083 1,065
Alternative investments*1,769 1,622
Real estate 127 107
Other investments 11 36
Total investment income 20,947 15,264
Investment expenses 604 509
Net investment income $ 20,343 $ 14,755
* Includes hedge funds, private equity funds, affordable housing partnerships, investments in life settlements and other investment partnerships.
Net realized capital gains and losses are determined by specific identification. The net realized capital gains and
losses are generated primarily from the following sources:
• Sales of available for sale fixed maturity securities, available for sale equity securities and real estate.
• Reductions to the cost basis of available for sale fixed maturity securities, available for sale equity securities and
certain other invested assets for other-than-temporary impairments.
• Impairments on investments in life settlements.
• Changes in fair value of derivatives except for (1) those instruments at AIGFP that are not intermediated on behalf
of other AIG subsidiaries and (2) those instruments that are designated as hedging instruments when the change
in the fair value of the hedged item is not reported in Net realized capital gains (losses).
• Exchange gains and losses resulting from foreign currency transactions.
The following table presents the components of Net realized capital gains (losses):
Sales of fixed maturity securities $ 2,607 $ 1,913
Sales of equity securities 484 164
Other-than-temporary impairments:
Severity (44) (51)
Change in intent (62) (12)
Foreign currency declines (8) (32)
Issuer-specific credit events (1,048) (1,165)
Adverse projected cash flows (5) (20)
Provision for loan losses 104 48
Change in the fair value of MetLife securities prior to their sale – (191)
Foreign exchange transactions (233) (96)
Derivative instruments (685) 447
Impairments of investments in life settlements (309) (312)
Other 129 (2)
Net realized capital gains $ 930 $ 691
Net Realized Capital Gains and Losses
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AIG 2013 Form 10-K 257
ITEM 8 / NOTE 6. INVESTMENTS
Years Ended December 31,
(in millions) 2013 2012 2011
$ 12,044
–
–
–
–
178
1,144
2,803
128
61
16,358
548
$ 15,810
Years Ended December 31,
(in millions) 2013 2012 2011
$ 2,432
111
(6)
(48)
(1)
(265)
(7)
(26)
–
151
92
(971)
282
$ 1,744
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