AIG 2014 Annual Report Download - page 234

ITEM 8 / NOTE 1. BASIS OF PRESENTATION
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1. BASIS OF PRESENTATION
American International Group, Inc. (AIG) is a leading global insurance organization serving customers in more than 100
countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through one of the most
extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life
insurance and retirement services in the United States. AIG Common Stock, par value $2.50 per share (AIG Common Stock),
is listed on the New York Stock Exchange (NYSE: AIG) and the Tokyo Stock Exchange. Unless the context indicates
otherwise, the terms “AIG,” “we,” “us” or “our” mean American International Group, Inc. and its consolidated subsidiaries and
the term “AIG Parent” means American International Group, Inc. and not any of its consolidated subsidiaries.
The consolidated financial statements include the accounts of AIG Parent, our controlled subsidiaries (generally through a
greater than 50 percent ownership of voting rights of a voting interest entity), and variable interest entities (VIEs) of which we
are the primary beneficiary. Equity investments in entities that we do not consolidate, including corporate entities in which we
have significant influence and partnership and partnership-like entities in which we have more than minor influence over
operating and financial policies, are accounted for under the equity method unless we have elected the fair value option.
Certain of our foreign subsidiaries included in the consolidated financial statements report on different annual fiscal year
bases, in most cases ending November 30. The effect on our consolidated financial condition and results of operations of all
material events occurring at these subsidiaries between such fiscal year end and December 31st for all periods presented in
these consolidated financial statements has been recorded.
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States (GAAP). All material intercompany accounts and transactions have been eliminated.
Segment changes are discussed in Note 3 herein.
Presentation Changes
Policy fees related to features accounted for as embedded derivatives in variable annuity products, including guaranteed
minimum withdrawal benefits and guaranteed minimum account value benefits, are included in the fair value measurement of
embedded derivatives. Effective December 31, 2014, we reclassified fees related to these embedded derivatives to Net
realized capital gains, with no effect to the fair value measurement of the embedded derivatives, Income from continuing
operations, Net income attributable to AIG, or Shareholders’ equity. Accordingly, a portion of prior period policy fees have been
reclassified to Net realized capital gains to conform to the current period presentation. See Note 14 herein for our accounting
policy and Note 5 for a discussion of the fair value measurement of embedded policy derivatives, including policy on
classification of fees.
Revisions were made to change the classification of certain miscellaneous income from General operating and other expenses
to Premiums and of certain broker-dealer fees from General operating and other expenses to Other income, to conform with
the current period presentation, with no effect to Income from continuing operations or Net income attributable to AIG.
Sale of ILFC
On May 14, 2014, we completed the sale of 100 percent of the common stock of International Lease Finance Corporation
(ILFC) to AerCap Ireland Limited, a wholly owned subsidiary of AerCap Holdings N.V. (AerCap), in exchange for total
consideration of approximately $7.6 billion, including cash and 97.6 million newly issued AerCap common shares (the AerCap
Transaction). The total value of the consideration was based in part on AerCap’s closing price per share of $47.01 on May 13,
2014. ILFC’s results of operations are reflected in Aircraft leasing revenue and Aircraft leasing expenses in the Consolidated
Statements of Income through the date of the completion of the sale. ILFC’s assets and liabilities were classified as held-for-
sale at December 31, 2013 in the Consolidated Balance Sheets. See Note 4 herein for further discussion.