AIG 2013 Annual Report Download - page 36

Other Operations also include:
Global Capital Markets (GCM) consists of the operations of AIG Markets, Inc. (AIG Markets) and the remaining
derivatives portfolio of AIG Financial Products Corp. and AIG Trading Group Inc. and their respective subsidiaries
(collectively AIGFP). AIG Markets acts as the derivatives intermediary between AIG and its subsidiaries and third
parties to provide hedging services for AIG entities. The AIGFP portfolio continues to be wound down and is
managed consistent with AIG’s risk management objectives.
Direct Investment book (DIB) consists of a portfolio of assets and liabilities held directly by AIG Parent in the
Matched Investment Program (MIP) and certain non-derivative assets and liabilities of AIGFP. The DIB portfolio is
being wound down and is managed with the objective of ensuring that at all times it maintains the liquidity we believe
is necessary to meet all of its liabilities as they come due, even under stress scenarios, and to maximize returns
consistent with our risk management objectives.
Retained Interests includes the fair value gains or losses, prior to their sale in 2012, of the AIA ordinary shares
retained following the AIA initial public offering and the MetLife, Inc. (MetLife) securities that were received as
consideration from the sale of American Life Insurance Company (ALICO) and the fair value gains or losses, prior to
the Federal Reserve Bank of New York (FRBNY) liquidation of Maiden Lane III LLC (ML III) assets in 2012, on the
retained interest in ML III.
Corporate & Other consists primarily of interest expense, consolidation and eliminations, expenses of corporate staff
not attributable to specific reportable segments, certain expenses related to internal controls and the financial and
operating platforms, corporate initiatives, certain compensation plan expenses, corporate level net realized capital
gains and losses, certain litigation-related charges and credits, the results of AIG’s other non-core business
operations, and net loss on sale of properties and divested businesses that did not meet the criteria for discontinued
operations accounting treatment.
Aircraft Leasing consists of ILFC. ILFC is one of the world’s leading aircraft lessors. ILFC acquires commercial jet
aircraft from various manufacturers and other parties and leases those aircraft to airlines around the world. As of
December 31, 2013, ILFC had a lease portfolio of approximately 1,000 aircraft, of which it owned 911 aircraft with a
net book value of approximately $35.2 billion.
On December 16, 2013, AIG and AIG Capital Corporation (Seller), a wholly-owned direct subsidiary of AIG, entered
into a definitive agreement (the AerCap Share Purchase Agreement) with AerCap Holdings N.V. (AerCap) and
AerCap Ireland Limited (Purchaser), a wholly-owned subsidiary of AerCap, for the sale of 100 percent of the common
stock of ILFC by Seller to Purchaser (such transaction, the AerCap Transaction). Under the terms of the AerCap
Share Purchase Agreement, consummation of the AerCap Transaction is subject to the satisfaction or waiver of a
number of conditions precedent, such as certain customary conditions and other closing conditions, including the
receipt of approvals or non-disapprovals from antitrust and other regulatory bodies. The AerCap Transaction was
approved by AerCap shareholders on February 13, 2014. See Item 1A. Risk Factors — Business and Regulation and
Note 4 to the Consolidated Financial Statements for more information on the AerCap Transaction.
The liability for unpaid claims and claims adjustment expense represents the accumulation of estimates for unpaid
reported claims and claims that have been incurred but not reported (IBNR) for AIG Property Casualty and UGC.
Unpaid claims and claims adjustment expenses are also referred to as unpaid loss and loss adjustment expenses, or
just loss reserves.
We recognize as assets the portion of this liability that will be recovered from reinsurers. Reserves are discounted,
where permitted, in accordance with U.S. GAAP.
A REVIEW OF LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSE
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AIG 2013 Form 10-K18
ITEM 1 / BUSINESS / OTHER OPERATIONS
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