Schedule II Condensed Financial Information of Registrant - Parent Company Only

12 Months Ended

Dec. 31, 2016

Schedule II Condensed Financial Information of Registrant - Parent Company Only

Schedule II Condensed Financial Information of Registrant - Parent Company Only

Condensed Financial Information of Registrant

Balance Sheets — Parent Company Only

		Schedule II
December 31,
(in millions)		2016		2015
Assets:
Short-term investments	$	4,424	$	4,042
Other investments		7,154		7,425
Total investments		11,578		11,467
Cash		2		34
Loans to subsidiaries*		34,692		35,927
Due from affiliates - net*		3,460		1,967
Intercompany tax receivable*		5,129		3,234
Deferred income taxes		15,169		17,564
Investments in consolidated subsidiaries*		42,582		51,151
Other assets		341		534
Total assets	$	112,953	$	121,878
Liabilities:
Due to affiliate*	$	6,083	$	4,059
Intercompany tax payable*		4,152		3,916
Deferred tax liabilities		-		9
Notes and bonds payable		19,432		17,047
Junior subordinated debt		843		1,327
MIP notes payable		1,099		1,372
Series AIGFP matched notes and bonds payable		31		31
Loans from subsidiaries*		577		574
Other liabilities (includes intercompany derivative liabilities of $419 in 2016 and $144 in 2015)		4,436		3,885
Total liabilities		36,653		32,220
AIG Shareholders’ equity:
Common stock		4,766		4,766
Treasury stock		(41,471)		(30,098)
Additional paid-in capital		81,064		81,510
Retained earnings		28,711		30,943
Accumulated other comprehensive income		3,230		2,537
Total AIG shareholders’ equity		76,300		89,658
Total liabilities and equity	$	112,953	$	121,878

* Eliminated in consolidation.

See Accompanying Notes to Condensed Financial Information of Registrant.

Condensed Financial Information of Registrant (Continued)
Statements of Income — Parent Company Only
				Schedule II
Years Ended December 31,
(in millions)		2016		2015		2014
Revenues:
Equity in undistributed net income (loss) of consolidated subsidiaries(a)	$	(8,633)	$	(2,929)	$	(5,573)
Dividend income from consolidated subsidiaries(a)		7,364		6,883		15,023
Interest income		411		342		305
Net realized capital gains (losses)		2		(587)		8
Other income		103		333		1,345
Expenses:
Interest expense		988		1,049		1,507
Net loss on extinguishment of debt		77		703		2,248
Net (gain) loss on sale of divested businesses(b)		(690)		11		(42)
Other expenses		985		1,167		1,588
Income (loss) from continuing operations before income tax expense (benefit)		(2,113)		1,112		5,807
Income tax benefit		(1,301)		(1,086)		(1,735)
Net income (loss)		(812)		2,198		7,542
Loss from discontinued operations		(37)		(2)		(13)
Net income (loss) attributable to AIG Parent Company	$	(849)	$	2,196	$	7,529
(a) Eliminated in consolidation.
(b) Primarily includes pre-tax gain of $697 million on the sale of United Guaranty Corporation (UGC) on December 31,2016
See Accompanying Notes to Condensed Financial Information of Registrant.

Condensed Financial Information of Registrant (Continued)
Statements of Comprehensive Income — Parent Company Only
				Schedule II
Years Ended December 31,
(in millions)		2016		2015		2014
Net income	$	(849)	$	2,196	$	7,529
Other comprehensive income		693		(8,080)		4,257
Total comprehensive income attributable to AIG	$	(156)	$	(5,884)	$	11,786
See accompanying Notes to Condensed Financial Information of Registrant

Condensed Financial Information of Registrant (Continued)
Statements of Cash Flows — Parent Company Only
				Schedule II
Years Ended December 31,
(in millions)		2016		2015		2014
Net cash provided by operating activities	$	2,112	$	4,443	$	9,316
Cash flows from investing activities:
Sales and maturities of investments		5,598		7,609		2,996
Sales of divested businesses		2,160		-		-
Purchase of investments		(1,002)		(1,881)		(1,051)
Net change in restricted cash		-		-		(501)
Net change in short-term investments		(789)		2,300		5,792
Contributions to subsidiaries - net		1,637		565		(148)
Mortgage and other loan receivables - originations and purchases		(85)		-		-
Payments received on mortgages and other loan receivables		171		158		40
Loans to subsidiaries - net		1,525		(83)		446
Other, net		(56)		(175)		(141)
Net cash provided by investing activities		9,159		8,493		7,433
Cash flows from financing activities:
Issuance of long-term debt		3,831		5,540		3,247
Repayment of long-term debt		(1,996)		(6,504)		(14,468)
Cash dividends paid		(1,372)		(1,028)		(712)
Loans from subsidiaries - net		3		(201)		110
Purchase of Common Stock		(11,460)		(10,691)		(4,902)
Other, net		(309)		(44)		(28)
Net cash used in financing activities		(11,303)		(12,928)		(16,753)
Change in cash		(32)		8		(4)
Cash at beginning of year		34		26		30
Cash at end of year	$	2	$	34	$	26
Supplementary disclosure of cash flow information:
	Years Ended December 31,
(in millions)		2016		2015		2014
Cash (paid) received during the period for:
Interest:
Third party	$	(975)	$	(1,030)	$	(1,624)
Intercompany		2		-		5
Taxes:
Income tax authorities		(15)		(11)		(18)
Intercompany		479		829		1,172
Intercompany non-cash financing and investing activities:
Capital contributions		3,245		494		2,457
Return of capital*		-		-		4,836
Dividends received in the form of securities		5,234		2,326		3,088
Fixed maturity securities received in exchange for equity securities		440		-		-
Non-cash financing/investing activities
Non-cash consideration received from sale of shares of AerCap		-		500		-
Non-cash consideration received from sale of UGC		1,101		-		-
See Accompanying Notes to Condensed Financial Information of Registrant.
* Includes $4.8 billion return of capital from AIG Capital Corporation related to the sale of ILFC.

Notes to Condensed Financial Information of Registrant

American International Group, Inc.’s (the Registrant) investments in consolidated subsidiaries are stated at cost plus equity in undistributed income of consolidated subsidiaries. The accompanying condensed financial statements of the Registrant should be read in conjunction with the consolidated financial statements and notes thereto of American International Group, Inc. and subsidiaries included in the Registrant’s 2016 Annual Report on Form 10-K for the year ended December 31, 2016 (Annual Report on Form 10-K) filed with the Securities and Exchange Commission on February 22, 2017.

The Registrant includes in its Statement of Income dividends from its subsidiaries and equity in undistributed income (loss) of consolidated subsidiaries, which represents the net income (loss) of each of its wholly-owned subsidiaries.

Certain prior period amounts have been reclassified to conform to the current period presentation.

The five-year debt maturity schedule is incorporated by reference from Note 15 to Consolidated Financial Statements.

The Registrant files a consolidated federal income tax return with certain subsidiaries and acts as an agent for the consolidated tax group when making payments to the Internal Revenue Service. The Registrant and its subsidiaries have adopted, pursuant to a written agreement, a method of allocating consolidated Federal income taxes. Amounts allocated to the subsidiaries under the written agreement are included in Due from affiliates in the accompanying Condensed Balance Sheets.

Income taxes in the accompanying Condensed Balance Sheets are composed of the Registrant’s current and deferred tax assets, the consolidated group’s current income tax receivable and deferred taxes related to tax attribute carryforwards of AIG’s U.S. consolidated income tax group. See Note 23 to the Consolidated Financial Statements for additional information.

The consolidated U.S. deferred tax asset for net operating loss, capital loss and tax credit carryforwards are recorded by the Parent Company, which files the consolidated U.S. Federal income tax return, and are not allocated to its subsidiaries. Generally, as, and if, the consolidated net operating losses and other tax attribute carryforwards are utilized, the intercompany tax balance will be settled with the subsidiaries.