HELD-FOR-SALE CLASSIFICATION AND DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 2014

HELD-FOR-SALE CLASSIFICATION AND DISCONTINUED OPERATIONS

HELD-FOR-SALE CLASSIFICATION AND DISCONTINUED OPERATIONS

4. HELD-FOR-SALE CLASSIFICATION AND DISCONTINUED OPERATIONS

Held-For-Sale Classification

On December 16, 2013, we entered into a definitive agreement with AerCap and Purchaser, a wholly-owned subsidiary of AerCap, for the sale of 100 percent of the common stock of ILFC (the AerCap Transaction) for consideration consisting of $3.0 billion in cash, a portion of which will be funded by a special dividend of $600 million to be paid by ILFC to AIG upon consummation of the transaction, and approximately 97.6 million newly-issued AerCap common shares. The consideration had a value of approximately $5.4 billion based on AerCap’s pre-announcement closing price per share of $24.93 on December 13, 2013. The disposition of the AerCap common shares by AIG will be subject to certain restrictions as to the amount and timing of potential sales in accordance with the definitive agreement. In connection with the AerCap Transaction, we entered into a credit agreement for a senior unsecured revolving credit facility between the Purchaser as borrower and AIG as lender (the Revolving Credit Facility). The Revolving Credit Facility provides for an aggregate commitment of $1 billion and permits loans for general corporate purposes after the closing of the AerCap Transaction. The AerCap Transaction was approved by AerCap shareholders on February 13, 2014 and we expect it to close in the second quarter of 2014. We determined ILFC continued to meet the criteria for held-for-sale accounting at March 31, 2014. Because we expect to hold approximately 46 percent of the common stock of the combined company upon closing of the transaction, ILFC’s results are presented in continuing operations for all periods presented.

The following table summarizes the components of ILFC assets and liabilities held-for-sale:

		March 31,		December 31,
(in millions)		2014		2013
Assets:
Equity securities	$	4	$	3
Mortgage and other loans receivable, net		262		229
Flight equipment primarily under operating leases, net of accumulated depreciation		35,612		35,508
Short-term investments		1,626		658
Cash		84		88
Premiums and other receivables, net of allowance		343		318
Other assets		2,798		2,066
Assets held-for-sale		40,729		38,870
Less: Loss accrual		(9,962)		(9,334)
Total assets held-for-sale	$	30,767	$	29,536
Liabilities:
Other liabilities	$	3,082	$	3,127
Long-term debt		22,733		21,421
Total liabilities held-for-sale	$	25,815	$	24,548

Discontinued Operations

In connection with the 2010 sale of American Life Insurance Company (ALICO) to MetLife, Inc. (MetLife), we recognized the following income (loss) from discontinued operations:

Three Months Ended March 31,
(in millions)		2014		2013
Revenues:
Gain (loss) on sale	$	(1)	$	117
Income from discontinued operations, before income tax expense		(1)		117
Income tax expense		46		44
Income (loss) from discontinued operations, net of income tax expense	$	(47)	$	73