AIG 2013 Annual Report Download - page 80

We reduced our debt in 2013 as a result of maturities, repayments and repurchases of $9.7 billion. Partially
offsetting this decrease were the issuances of $1.0 billion aggregate principal amount of 3.375% senior notes due
2020 and $1.0 billion aggregate principal amount of 4.125% senior notes due 2024.
We maintained financial flexibility at AIG Parent in 2013 through $4.1 billion in cash dividends from AIG Property
Casualty subsidiaries and $4.4 billion in cash dividends and loan repayments from AIG Life and Retirement
subsidiaries.
Our Board of Directors authorized the repurchase of shares of AIG Common Stock on August 1, 2013, with
an aggregate purchase price of up to $1.0 billion, from time to time in the open market, private purchases, through
forward, derivative, accelerated repurchase or automatic repurchase transactions or otherwise. During 2013, we
repurchased approximately 12 million shares of AIG Common Stock, par value $2.50 per share (AIG Common Stock)
under this authorization at a total cost of approximately $597 million.
Our Board of Directors increased our AIG Common Stock share repurchase authorization by $1.0 billion on
February 13, 2014, resulting in an aggregate remaining repurchase authorization of approximately $1.4 billion.
We paid a cash dividend on AIG Common Stock of $0.10 per share on each of September 26, 2013 and
December 19, 2013.
On February 13, 2014, our Board of Directors declared a cash dividend on AIG Common Stock of $0.125 per
share, payable on March 25, 2014 to shareholders of record on March 11, 2014.
We announced an agreement to sell ILFC, which will support our capital management initiatives, sharpen our
business focus, and enable us to redeploy assets in a more productive manner.
Additional discussion and other liquidity and capital resources developments are included in Note 16 to the
Consolidated Financial Statements and Liquidity and Capital Resources herein.
Net investment income decreased 22 percent to $15.8 billion in 2013 compared to 2012, primarily due to gains
recognized in 2012 from our previous investments in ML II, ML III and AIA.
Net investment income for our insurance operations increased by approximately $645 million in 2013 compared to
2012, due to higher alternative investment income in 2013, driven primarily by favorable equity market performance,
which was partially offset by gains recognized in 2012 from our previous investment in ML II. While corporate debt
securities represented the core of new investment allocations, we continued to make investments in structured
securities and fixed income securities with favorable risk versus return characteristics to improve yields and increase
net investment income.
Net unrealized gains in our available for sale portfolio declined to approximately $12 billion as of December 31, 2013
from approximately $25 billion as of December 31, 2012 due to rising interest rates over the period and the
realization of approximately $2.5 billion in gains from sales of securities.
Other-than-temporary impairments were significantly lower relative to the prior year period partly driven by strong
performance in our structured products portfolios due to favorable developments in the housing sector.
The overall credit rating of our fixed maturity portfolio was largely unchanged from last year. Impairments on
investments in life settlements increased in 2013 compared to 2012 as a result of updated longevity assumptions in
the valuation tables used to estimate future expected cash flows.
Liquidity and Capital Resources Highlights
Investment Highlights
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AIG 2013 Form 10-K62
ITEM 7 / EXECUTIVE SUMMARY
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