27. INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT

The following condensed consolidating financial statements reflect the results of SunAmerica Financial Group, Inc. (SAFG, Inc.), formerly known as AIG Life Holdings (U.S.), Inc. (AIGLH), a holding company and a 100 percent owned subsidiary of AIG. AIG provides a full and unconditional guarantee of all outstanding debt of SAFG, Inc.

Condensed Consolidating Balance Sheet

(in millions)	American International Group, Inc. (As Guarantor)		SAFG, Inc.		Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG



December 31, 2012
Assets:
Short-term investments	$	14,764	$	–	$	18,323		$	(4,279	)	$	28,808
Other investments(a)		3,902		–		345,706			(2,592	)		347,016

Total investments		18,666		–		364,029			(6,871	)		375,824
Cash		81		73		997			–			1,151
Loans to subsidiaries(b)		35,064		–		5,169			(40,233	)		–
Investment in consolidated subsidiaries(b)		70,781		43,891		(28,239	)		(86,433	)		–
Other assets, including current and deferred income taxes		23,153		150		121,345			(4,955	)		139,693
Assets held for sale		–		–		31,965			–			31,965

Total assets	$	147,745	$	44,114	$	495,266		$	(138,492	)	$	548,633

Liabilities:
Insurance liabilities	$	–	$	–	$	280,487		$	(235	)	$	280,252
Other long-term debt		36,366		1,638		10,197			299			48,500
Other liabilities, including intercompany balances(a)(c)		12,375		261		90,022			(9,146	)		93,512
Loans from subsidiaries(b)		1,002		472		41,754			(43,228	)		–
Liabilities held for sale		–		–		27,366			–			27,366

Total liabilities		49,743		2,371		449,826			(52,310	)		449,630

Other		–		–		192			142			334

Redeemable noncontrolling interests		–		–		192			142			334

Total AIG shareholders' equity		98,002		41,743		44,955			(86,698	)		98,002
Non-redeemable noncontrolling interests		–		–		293			374			667

Total equity		98,002		41,743		45,248			(86,324	)		98,669

Total liabilities and equity	$	147,745	$	44,114	$	495,266		$	(138,492	)	$	548,633

December 31, 2011
Assets:
Short-term investments	$	12,868	$	–	$	14,110		$	(4,406	)	$	22,572
Other investments(a)		6,599		–		481,525			(100,258	)		387,866

Total investments		19,467		–		495,635			(104,664	)		410,438
Cash		176		13		1,285			–			1,474
Loans to subsidiaries(b)		39,971		–		(39,971	)		–			–
Investment in consolidated subsidiaries(b)(d)		80,990		32,361		(11,463	)		(101,888	)		–
Other assets, including current and deferred income taxes		25,019		2,722		117,992			(4,591	)		141,142

Total assets	$	165,623	$	35,096	$	563,478		$	(211,143	)	$	553,054

Liabilities:
Insurance liabilities	$	–	$	–	$	282,790		$	(274	)	$	282,516
Other long-term debt		35,906		1,638		138,240			(100,531	)		75,253
Other liabilities, including intercompany balances(a)(c)(d)		15,863		249		77,767			(9,510	)		84,369
Loans from subsidiaries(b)		12,316		2,420		(14,736	)		–			–

Total liabilities		64,085		4,307		484,061			(110,315	)		442,138

Redeemable noncontrolling interests (see Note 18):
Nonvoting, callable, junior preferred interests held by Department of the Treasury		–		–		–			8,427			8,427
Other		–		–		29			67			96

Total redeemable noncontrolling interests		–		–		29			8,494			8,523

Total AIG shareholders' equity		101,538		30,789		78,996			(109,785	)		101,538
Non-redeemable noncontrolling interests		–		–		392			463			855

Total equity		101,538		30,789		79,388			(109,322	)		102,393

Total liabilities and equity	$	165,623	$	35,096	$	563,478		$	(211,143	)	$	553,054

(a) Includes intercompany derivative asset positions, which are reported at fair value before credit valuation adjustment.

(b) Eliminated in consolidation.

(c) For December 31, 2012 and December 31, 2011, includes intercompany tax payable of $6.1 billion and $9.8 billion, respectively, and intercompany derivative liabilities of $602 million and $901 million, respectively, for American International Group, Inc. (As Guarantor) and intercompany tax receivable of $120 million and $128 million, respectively, for SAFG, Inc.

Condensed Consolidating Statement of Income (Loss)

(in millions)	American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG



Year Ended December 31, 2012
Revenues:
Equity in earnings of consolidated subsidiaries(a)	$	1,970		$	2,315		$	–		$	(4,285	)	$	–
Change in fair value of ML III		2,287			–			601			–			2,888
Other income(b)		1,911			49			61,191			(383	)		62,768

Total revenues		6,168			2,364			61,792			(4,668	)		65,656

Expenses:
Other interest expense(c)		2,257			174			271			(383	)		2,319
Net loss on extinguishment of debt		9			–			–			–			9
Other expenses		1,602			–			52,404			–			54,006

Total expenses		3,868			174			52,675			(383	)		56,334

Income (loss) from continuing operations before income tax expense (benefit)		2,300			2,190			9,117			(4,285	)		9,322
Income tax expense (benefit)		(1,137	)		(17	)		2,724			–			1,570

Income (loss) from continuing operations		3,437			2,207			6,393			(4,285	)		7,752
Income (loss) from discontinued operations		1			–			(4,053	)		–			(4,052	)

Net income (loss)		3,438			2,207			2,340			(4,285	)		3,700
Less:
Net income from continuing operations attributable to noncontrolling interests:
Nonvoting, callable, junior and senior preferred interests		–			–			–			208			208
Other		–			–			54			–			54

Total net income attributable to noncontrolling interests		–			–			54			208			262

Net income (loss) attributable to AIG	$	3,438		$	2,207		$	2,286		$	(4,493	)	$	3,438

Year Ended December 31, 2011
Revenues:
Equity in earnings of consolidated subsidiaries(a)(d)	$	6,260		$	1,586		$	–		$	(7,846	)	$	–
Change in fair value of ML III		(723	)		–			77			–			(646	)
Other income(b)(d)		1,088			189			60,370			(1,189	)		60,458

Total revenues		6,625			1,775			60,447			(9,035	)		59,812

Expenses:
Interest expense on FRBNY Credit Facility		72			–			–			(2	)		70
Other interest expense(c)		2,845			281			437			(1,189	)		2,374
Net loss on extinguishment of debt		2,847			–			–			–			2,847
Other expenses		867			–			53,538			–			54,405

Total expenses		6,631			281			53,975			(1,191	)		59,696

Income (loss) from continuing operations before income tax expense (benefit)		(6	)		1,494			6,472			(7,844	)		116
Income tax expense (benefit)		(19,695	)		(103	)		374			–			(19,424	)

Income (loss) from continuing operations		19,689			1,597			6,098			(7,844	)		19,540
Income (loss) from discontinued operations		933			–			859			(2	)		1,790

Net income (loss)		20,622			1,597			6,957			(7,846	)		21,330
Less:
Net income from continuing operations attributable to noncontrolling interests:
Nonvoting, callable, junior and senior preferred interests		–			–			–			634			634
Other		–			–			54			–			54

Total income from continuing operations attributable to noncontrolling interests		–			–			54			634			688
Income from discontinued operations attributable to noncontrolling interests		–			–			20			–			20

Total net income attributable to noncontrolling interests		–			–			74			634			708

Net income (loss) attributable to AIG	$	20,622		$	1,597		$	6,883		$	(8,480	)	$	20,622

(in millions)	American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries		Reclassifications and Eliminations			Consolidated AIG



Year Ended December 31, 2010
Revenues:
Equity in earnings of consolidated subsidiaries(a)	$	21,385		$	1,695		$	–	$	(23,080	)	$	–
Change in fair value of ML III		–			–			1,792		–			1,792
Other income(b)		3,046			246			70,403		(2,658	)		71,037

Total revenues		24,431			1,941			72,195		(25,738	)		72,829

Expenses:
Interest expense on FRBNY Credit Facility		4,107			–			–		(79	)		4,028
Other interest expense(c)		2,279			378			2,711		(2,654	)		2,714
Loss on extinguishment of debt		104			–			–		–			104
Other expenses		1,664			–			44,072		–			45,736

Total expenses		8,154			378			46,783		(2,733	)		52,582

Income (loss) from continuing operations before income tax expense (benefit)		16,277			1,563			25,412		(23,005	)		20,247

Income tax expense (benefit)(d)		5,402			(101	)		1,692		–			6,993

Income (loss) from continuing operations		10,875			1,664			23,720		(23,005	)		13,254
Loss from discontinued operations		(817	)		–			(73)		(79	)		(969)

Net income (loss)		10,058			1,664			23,647		(23,084	)		12,285
Less:
Net income from continuing operations attributable to noncontrolling interests:
Nonvoting, callable, junior and senior preferred interests		–			–			–		1,818			1,818
Other		–			–			354		–			354

Total income from continuing operations attributable to noncontrolling interests		–			–			354		1,818			2,172

Income from discontinued operations attributable to noncontrolling interests		–			–			55		–			55

Total net income attributable to noncontrolling interests		–			–			409		1,818			2,227

Net income (loss) attributable to AIG	$	10,058		$	1,664		$	23,238	$	(24,902	)	$	10,058

(a) Eliminated in consolidation.

(b) Includes intercompany income of $242 million, $489 million, and $2.6 billion for 2012, 2011, and 2010, respectively, for American International Group, Inc. (As Guarantor).

(c) Includes intercompany interest expense of $141 million, $700 million, and $28 million for 2012, 2011, and 2010, respectively, for American International Group, Inc. (As Guarantor).

(d) For 2010 and 2009, income taxes recorded by American International Group, Inc. (As Guarantor) include deferred tax expense attributable to foreign businesses sold and a valuation allowance to reduce the consolidated deferred tax asset to the amount more likely than not to be realized. For 2011, the income tax benefit includes the effect of releasing a significant portion of the deferred tax asset valuation allowance. See Note 24 herein for additional information.

Condensed Consolidating Statement of Comprehensive Income (Loss)




(in millions)	American International Group, Inc. (As Guarantor)			SAFG, Inc.		Other Subsidiaries			Reclassifications and Eliminations			Consolidated AIG

Year Ended December 31, 2012
Net income (loss)	$	3,438		$	2,207	$	2,340		$	(4,285	)	$	3,700
Other comprehensive income (loss)		6,093			3,973		7,158			(11,128	)		6,096

Comprehensive income (loss)		9,531			6,180		9,498			(15,413	)		9,796
Total comprehensive income attributable to noncontrolling interests		–			–		57			208			265

Comprehensive income (loss) attributable to AIG	$	9,531		$	6,180	$	9,441		$	(15,621	)	$	9,531

Year Ended December 31, 2011
Net income (loss)	$	20,622		$	1,597	$	6,957		$	(7,846	)	$	21,330
Other comprehensive income (loss)		(2,483	)		1,101		(2,674	)		1,452			(2,604	)

Comprehensive income (loss)		18,139			2,698		4,283			(6,394	)		18,726
Total comprehensive income (loss) attributable to noncontrolling interests		–			–		(47	)		634			587

Comprehensive income (loss) attributable to AIG	$	18,139		$	2,698	$	4,330		$	(7,028	)	$	18,139

Year Ended December 31, 2010
Net income (loss)	$	10,058		$	1,664	$	23,647		$	(23,084	)	$	12,285
Other comprehensive income (loss)		2,782			3,258		2,270			(5,347	)		2,963

Comprehensive income (loss)		12,840			4,922		25,917			(28,431	)		15,248
Total comprehensive income attributable to noncontrolling interests		–			–		590			1,818			2,408

Comprehensive income (loss) attributable to AIG	$	12,840		$	4,922	$	25,327		$	(30,249	)	$	12,840

Condensed Consolidating Statement of Cash Flows

(in millions)	American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries and Eliminations			Consolidated AIG



Year Ended December 31, 2012
Net cash (used in) provided by operating activities – continuing operations		(825	)		2,682			(1,109	)		748
Net cash provided by operating activities – discontinued operations		–			–			2,928			2,928

Net cash (used in) provided by operating activities	$	(825	)	$	2,682		$	1,819		$	3,676

Cash flows from investing activities:
Sales of investments		16,874			–			84,025			100,899
Purchase of investments		(4,406	)		–			(70,222	)		(74,628	)
Loans to subsidiaries – net		5,126			–			(5,126	)		–
Contributions to subsidiaries – net		(152	)		–			152			–
Net change in restricted cash		(377	)		–			1,072			695
Net change in short-term investments		(2,029	)		–			(6,129	)		(8,158	)
Other, net		259			–			(785	)		(526	)

Net cash provided by investing activities – continuing operations		15,295			–			2,987			18,282
Net cash (used in) investing activities – discontinued operations		–			–			(1,670	)		(1,670	)

Net cash provided by investing activities		15,295			–			1,317			16,612

Cash flows from financing activities:
Issuance of long-term debt		3,754			–			1,090			4,844
Repayments of long-term debt		(3,238	)		–			(4,038	)		(7,276	)
Purchase of Common Stock		(13,000	)		–			–			(13,000	)
Intercompany loans – net		(2,032	)		(2,622	)		4,654			–
Other, net		(49	)		–			(4,951	)		(5,000	)

Net cash (used in) financing activities – continuing operations		(14,565	)		(2,622	)		(3,245	)		(20,432	)
Net cash (used in) financing activities – discontinued operations		–			–			(132	)		(132	)

Net cash (used in) financing activities		(14,565	)		(2,622	)		(3,377	)		(20,564	)

Effect of exchange rate changes on cash		–			–			16			16

Change in cash		(95	)		60			(225	)		(260	)
Cash at beginning of period		176			13			1,285			1,474
Reclassification to assets held for sale		–			–			(63	)		(63	)

Cash at end of period	$	81		$	73		$	997		$	1,151



Year Ended December 31, 2011
Net cash (used in) provided by operating activities – continuing operations	$	(5,600	)	$	1,277		$	(1,933	)	$	(6,256	)
Net cash provided by operating activities – discontinued operations		–			–			6,175			6,175

Net cash (used in) provided by operating activities		(5,600	)		1,277			4,242			(81	)

Cash flows from investing activities:
Sales of investments		2,565			–			82,134			84,699
Sales of divested businesses, net		1,075			–			(488	)		587
Purchase of investments		(19	)		–			(100,471	)		(100,490	)
Loans to subsidiaries – net		3,757			–			(3,757	)		–
Contributions to subsidiaries – net*		(15,973	)		(2	)		15,975			–
Net change in restricted cash		1,945			–			25,257			27,202
Net change in short-term investments		(7,130	)		–			25,929			18,799
Other, net*		1,543			–			(1,363	)		180

Net cash (used in) provided by investing activities – continuing operations		(12,237	)		(2	)		43,216			30,977
Net cash provided by investing activities – discontinued operations		–			–			5,471			5,471

Net cash (used in) provided by investing activities		(12,237	)		(2	)		48,687			36,448

(in millions)	American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries and Eliminations			Consolidated AIG



Cash flows from financing activities:
FRBNY credit facility repayments		(14,622	)		–			–			(14,622	)
Issuance of long-term debt		2,135			–			1,055			3,190
Repayments of long-term debt		(6,181	)		–			(3,305	)		(9,486	)
Proceeds from drawdown on the Department of the Treasury Commitment*		20,292			–			–			20,292
Issuance of common stock		5,055			–			–			5,055
Intercompany loans – net		11,519			(1,262	)		(10,257	)		–
Purchase of common stock		(70	)		–			–			(70	)
Other, net*		(164	)		–			(35,325	)		(35,489	)

Net cash (used in) provided by financing activities – continuing operations		17,964			(1,262	)		(47,832	)		(31,130	)
Net cash (used in) financing activities – discontinued operations		–			–			(5,796	)		(5,796	)

Net cash (used in) provided by financing activities		17,964			(1,262	)		(53,628	)		(36,926	)

Effect of exchange rate changes on cash		–			–			29			29

Change in cash		127			13			(670	)		(530	)
Cash at beginning of period		49			–			1,509			1,558
Change in cash of businesses held for sale		–			–			446			446

Cash at end of period	$	176		$	13		$	1,285		$	1,474



Year Ended December 31, 2010
Net cash (used in) provided by operating activities – continuing operations	$	(1,942	)	$	(141	)	$	8,244		$	6,161
Net cash provided by operating activities – discontinued operations		–			–			10,436			10,436

Net cash (used in) provided by operating activities		(1,942	)		(141	)		18,680			16,597

Cash flows from investing activities:
Sales of investments		3,997			–			86,869			90,866
Sales of divested businesses, net		278			–			21,482			21,760
Purchase of investments		(55	)		–			(92,780	)		(92,835	)
Loans to subsidiaries – net		5,703			–			(5,703	)		–
Contributions to subsidiaries – net*		(2,574	)		–			2,574			–
Net change in restricted cash		(183	)		–			(26,843	)		(27,026	)
Net change in short-term investments		(4,291	)		–			1,845			(2,446	)
Other, net*		(300	)		–			133			(167	)

Net cash (used in) provided by investing activities – continuing operations		2,575			–			(12,423	)		(9,848	)
Net cash (used in) investing activities – discontinued operations		–			–			(64	)		(64	)

Net cash (used in) provided by investing activities		2,575			–			(12,487	)		(9,912	)

Cash flows from financing activities:
FRBNY credit facility repayments		(19,110	)		–			(4,068	)		(23,178	)
FRBNY credit facility borrowings		19,900			–			–			19,900
Issuance of long-term debt		1,996			–			1,346			3,342
Repayments of long-term debt		(3,681	)		(500	)		(3,805	)		(7,986	)
Proceeds from drawdown on the Department of the Treasury Commitment*		2,199			–			–			2,199
Intercompany loans – net		(1,777	)		639			1,138			–
Other, net*		(168	)		–			(1,126	)		(1,294	)

Net cash (used in) provided by financing activities – continuing operations		(641	)		139			(6,515	)		(7,017	)
Net cash (used in) financing activities – discontinued operations		–			–			(2,244	)		(2,244	)

Net cash (used in) provided by financing activities		(641	)		139			(8,759	)		(9,261	)

Effect of exchange rate changes on cash		–			–			39			39

Change in cash		(8	)		(2	)		(2,527	)		(2,537	)
Cash at beginning of period		57			2			4,341			4,400
Change in cash of businesses held for sale		–			–			(305	)		(305	)

Cash at end of period	$	49		$	–		$	1,509		$	1,558

* Includes activities related to the Recapitalization. See Note 17 herein.

Supplementary Disclosure of Cash Flow Information

	American International Group, Inc. (As Guarantor)			SAFG, Inc.			Other Subsidiaries and Eliminations			Consolidated AIG



Cash (paid) received during the Year Ended December 31, 2012 for:
Interest:
Third party	$	(2,089	)	$	(128	)	$	(1,820	)	$	(4,037	)
Intercompany		(133	)		(56	)		189			–
Taxes:
Income tax authorities	$	(7	)	$	–		$	(440	)	$	(447	)
Intercompany		230			(41	)		(189	)		–

Cash (paid) received during the Year Ended December 31, 2011 for:
Interest:
Third party*	$	(6,909	)	$	(128	)	$	(1,948	)	$	(8,985	)
Intercompany		(311	)		(169	)		480			–
Taxes:
Income tax authorities	$	13		$	–		$	(729	)	$	(716	)
Intercompany		(335	)		1			334			–

Cash (paid) received during the Year Ended December 31, 2010 for:
Interest:
Third party	$	(2,493	)	$	(166	)	$	(2,507	)	$	(5,166	)
Intercompany		(12	)		(222	)		234			–
Taxes:
Income tax authorities	$	(32	)	$	–		$	(970	)	$	(1,002	)
Intercompany		859			–			(859	)		–

* Includes payment of FRBNY Credit Facility accrued compounded interest of $4.7 billion in the first quarter of 2011.

American International Group, Inc (As Guarantor) supplementary disclosure of non-cash activities:




Year Ended December 31, (in millions)	2012		2011		2010

Intercompany non-cash financing and investing activities:
Capital contributions
to subsidiaries through the forgiveness of loans	$	–	$	–	$	2,510
in the form of bond available for sale securities		4,078		–		–
Return of capital and dividend received
in the form of cancellation of intercompany loan		9,303		–		–
in the form of bond trading securities		3,320		3,668		–
Intercompany loan receivable offset by intercompany payable		–		18,284		1,364
Exchange of intercompany payable with loan payable		–		–		469
Investment assets received through reduction of intercompany loan receivable		–		–		468
Paydown of FRBNY Credit Facility by subsidiary		–		–		4,068
Other capital contributions – net		579		523		346