NONCONTROLLING INTERESTS

9 Months Ended

Sep. 30, 2012

NONCONTROLLING INTERESTS

NONCONTROLLING INTERESTS

11. NONCONTROLLING INTERESTS

During the first quarter of 2012, the remaining liquidation preference of the AIA SPV Preferred Interests held by the Department of the Treasury was paid down in full. The transactions described below provided the majority of the funds used to pay down the remaining liquidation preference.

On March 7, 2012, AIG entered into an agreement with the Department of the Treasury to amend various agreements (the Amendment), which enabled the AIA SPV to retain and distribute to AIG the net proceeds in excess of $5.6 billion received by the AIA SPV from the sale of AIA ordinary shares in March 2012.

In addition, the liens created by the agreements on (i) the equity interests in ILFC, (ii) the ordinary shares of AIA held by the AIA SPV subsequent to the closing of the sale of AIA ordinary shares in March 2012 and (iii) the common equity interests in the AIA SPV were released and such interests and AIA ordinary shares no longer constituted collateral securing the repayment of the liquidation preference of the AIA SPV Preferred Interests. The Amendment also required the AIA SPV and AM Holdings LLC (the ALICO SPV) to redeem their preferred participating return rights held in such SPVs by the Department of the Treasury before the release of the collateral. AIG contributed a portion of the net proceeds received by AIG in respect of its interest in Maiden Lane II LLC (ML II) to redeem these residual rights.

On March 21, 2012, AIG entered into an agreement with the Department of the Treasury, pursuant to which the AIA SPV paid down in full the remaining liquidation preference of the AIA SPV Preferred Interests. As a result of the payment, the remaining liens on AIG assets supporting the paydown of these interests were released.

The following table presents a rollforward of non-controlling interests:

	Redeemable Noncontrolling interests
										Non-redeemable Noncontrolling interests
	Held by Department of Treasury
(in millions)				Other			Total			Held by FRBNY			Other			Total
Nine Months Ended September 30, 2012
Balance, beginning of year	$	8,427		$	96		$	8,523		$	–		$	855		$	855
Repayment to Department of the Treasury		(8,635	)		–			(8,635	)		–			–			–
Net contributions (distributions)		–			59			59			–			(117	)		(117	)
Consolidation (deconsolidation)		–			(5	)		(5	)		–			–			–
Comprehensive income:
Net income		208			5			213			–			40			40
Other comprehensive income (loss), net of tax:
Unrealized gains on investments		–			4			4			–			3			3
Foreign currency translation adjustments		–			–			–			–			(7	)		(7	)
Total other comprehensive income (loss), net of tax		–			4			4			–			(4	)		(4	)
Total comprehensive income		208			9			217			–			36			36
Other		–			–			–			–			(26	)		(26	)
Balance, end of period	$	–		$	159		$	159		$	–		$	748		$	748
Nine Months Ended September 30, 2011
Balance, beginning of year	$	–		$	434		$	434		$	26,358		$	1,562		$	27,920
Repurchase of SPV preferred interests in connection with Recapitalization		–			–			–			(26,432	)		–			(26,432	)
Exchange of consideration for preferred stock in
connection with Recapitalization		20,292			–			20,292			–			–			–
Repayment to Department of the Treasury		(11,453	)		–			(11,453	)		–			–			–
Net distributions		–			(16	)		(16	)		–			(34	)		(34	)
Deconsolidation		–			(309	)		(309	)		–			(123	)		(123	)
Acquisition of noncontrolling interest		–			–			–			–			(487	)		(487	)
Comprehensive income (loss):
Net income (loss)		464			(4	)		460			74			51			125
Other comprehensive income (loss), net of tax:
Unrealized losses on investments		–			–			–			–			(157	)		(157	)
Foreign currency translation adjustments		–			–			–			–			4			4
Total other comprehensive income (loss), net of tax		–			–			–			–			(153	)		(153	)
Total comprehensive income (loss)		464			(4	)		460			74			(102	)		(28	)
Other		–			–			–			–			(45	)		(45	)
Balance, end of period	$	9,303		$	105		$	9,408		$	–		$	771		$	771