INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2015

INCOME TAXES

Schedule of income (loss) from continuing operations before income tax expense (benefit) by U.S. and foreign location

Years Ended December 31,
(in millions)		2015		2014		2013
U.S.	$	1,950	$	8,250	$	8,058
Foreign		1,331		2,251		1,310
Total	$	3,281	$	10,501	$	9,368

Schedule of income tax expense (benefit) attributable to pre-tax income (loss) from continuing operations

Years Ended December 31,
(in millions)		2015		2014		2013
Foreign and U.S. components of actual income tax expense:
Foreign:
Current	$	391	$	473	$	549
Deferred		(95)		154		(442)
U.S.:
Current		429		115		131
Deferred		334		2,185		122
Total	$	1,059	$	2,927	$	360

Schedule of reconciliation between actual income tax (benefit) expense and statutory U.S. federal amount computed by applying the federal income tax rate

	2015						2014							2013
		Pre-Tax		Tax	Percent of			Pre-Tax		Tax		Percent of					Tax	Percent of
Years Ended December 31,		Income		Expense/	Pre-Tax			Income		Expense/		Pre-Tax			Pre-Tax		Expense/	Pre-Tax
(dollars in millions)		(Loss)		(Benefit)	Income (Loss)			(Loss)		(Benefit)	Income (Loss)				Income		(Benefit)	Income
U.S. federal income tax at statutory rate	$	3,281	$	1,148	35.0	%	$	10,524	$	3,683		35.0	%	$	9,518	$	3,331	35.0	%
Adjustments:
Tax exempt interest				(195)	(5.9)					(236)		(2.2)					(298)	(3.1)
Uncertain tax positions				195	5.9					(81)		(0.8)					632	6.6
Reclassifications from accumulated
other comprehensive income				(127)	(3.9)					(61)		(0.6)					-	-
Non-deductible transfer pricing
charges				97	3.0					86		0.8					-	-
Dividends received deduction				(72)	(2.2)					(62)		(0.6)					(75)	(0.8)
Effect of foreign operations				(58)	(1.8)					(68)		(0.6)					(5)	(0.1)
State income taxes				34	1.0					39		0.4					(21)	(0.2)
Other				(73)	(2.2)					(184)		(1.7)					13	0.1
Effect of discontinued operations				-	-					65		0.6					14	0.1
Valuation allowance:
Continuing operations				110	3.4					(181)		(1.7)					(3,165)	(33.3)
Consolidated total amounts		3,281		1,059	32.3			10,524		3,000		28.5			9,518		426	4.5
Amounts attributable to discontinued
operations		-		-	-			23		73		317.4			150		66	44.3
Amounts attributable to continuing
operations	$	3,281	$	1,059	32.3	%	$	10,501	$	2,927		27.9	%	$	9,368	$	360	3.8	%

Schedule of components of the net deferred tax asset

December 31,
(in millions)		2015		2014
Deferred tax assets:
Losses and tax credit carryforwards	$	18,680	$	18,203
Basis differences on investments		4,886		4,114
Life policy reserves		353		629
Accruals not currently deductible, and other		1,003		1,804
Loss reserve discount		1,021		1,378
Loan loss and other reserves		8		152
Unearned premium reserve reduction		1,603		1,269
Flight equipment, fixed assets and intangible assets		129		28
Other		577		220
Employee benefits		1,286		1,543
Total deferred tax assets		29,546		29,340
Deferred tax liabilities:
Investments in foreign subsidiaries		(33)		(58)
Deferred policy acquisition costs		(3,467)		(3,003)
Unrealized gains related to available for sale debt securities		(3,077)		(5,795)
Total deferred tax liabilities		(6,577)		(8,856)
Net deferred tax assets before valuation allowance		22,969		20,484
Valuation allowance		(3,012)		(1,739)
Net deferred tax assets (liabilities)	$	19,957	$	18,745

Schedule of consolidated income tax group credits carryforwards

December 31, 2015				Tax	Expiration
(in millions)		Gross		Effected	Periods
Net operating loss carryforwards	$	34,883	$	12,209	2028 - 2035
Foreign tax credit carryforwards				6,853	2016 - 2024
Other carryforwards				538	Various
Total AIG U.S. consolidated income tax group tax losses and credits
carryforwards on a tax return basis				19,600
Unrecognized tax benefit				(2,523)
Total AIG U.S. consolidated income tax group tax losses and credits
carryforwards on a U.S. GAAP basis*			$	17,077

* Includes other carryforwards, e.g. general business credits, of $326 million on a U.S. GAAP basis.

Schedule of consolidated income tax group tax losses carryforwards

December 31, 2015				Tax	Expiration
(in millions)		Gross		Effected	Periods
Net operating loss carryforwards	$	34,883	$	12,209	2028 - 2035
Foreign tax credit carryforwards				6,853	2016 - 2024
Other carryforwards				538	Various
Total AIG U.S. consolidated income tax group tax losses and credits
carryforwards on a tax return basis				19,600
Unrecognized tax benefit				(2,523)
Total AIG U.S. consolidated income tax group tax losses and credits
carryforwards on a U.S. GAAP basis*			$	17,077

* Includes other carryforwards, e.g. general business credits, of $326 million on a U.S. GAAP basis.

Schedule of net deferred tax assets (liabilities)

December 31,
(in millions)		2015		2014
Net U.S. consolidated return group deferred tax assets	$	24,134	$	24,543
Net deferred tax assets (liabilities) in accumulated other comprehensive income		(2,806)		(5,510)
Valuation allowance		(1,281)		(129)
Subtotal		20,047		18,904
Net foreign, state and local deferred tax assets		2,078		2,045
Valuation allowance		(1,731)		(1,610)
Subtotal		347		435
Subtotal - Net U.S, foreign, state and local deferred tax assets		20,394		19,339
Net foreign, state and local deferred tax liabilities		(437)		(594)
Total AIG net deferred tax assets (liabilities)	$	19,957	$	18,745

Schedule of reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits

Years Ended December 31,
(in millions)		2015		2014		2013
Gross unrecognized tax benefits, beginning of year	$	4,395	$	4,340	$	4,385
Increases in tax positions for prior years		162		91		680
Decreases in tax positions for prior years		(209)		(60)		(796)
Increases in tax positions for current year		-		10		43
Lapse in statute of limitations		(4)		(6)		(20)
Settlements		(13)		-		(2)
Activity of discontinued operations		-		20		50
Gross unrecognized tax benefits, end of year	$	4,331	$	4,395	$	4,340

Schedule of tax years that remain subject to examination by major tax jurisdictions

At December 31, 2015	Open Tax Years
Major Tax Jurisdiction
United States	2000-2014
Australia	2011-2014
France	2013-2014
Japan	2009-2014
Korea	2010-2014
Singapore	2011-2014
United Kingdom	2013-2014