INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

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)	2013		2012			2011
U.S.	$	8,058	$	(948	)	$	(1,626	)
Foreign		1,310		3,839			725
Total	$	9,368	$	2,891		$	(901	)

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

Years Ended December 31, (in millions)	2013			2012			2011
Foreign and U.S. components of actual income tax expense:
Foreign:
Current	$	548		$	484		$	303
Deferred		(442	)		(275	)		48
U.S.:
Current		131			278			(208	)
Deferred		123			(1,295	)		(19,907	)
Total	$	360		$	(808	)	$	(19,764	)

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

	2013								2012								2011
Years Ended December 31, (dollars in millions)	Pre-Tax Income (Loss)		Tax Expense/ (Benefit)			Percent of Pre-Tax Income (Loss)			Pre-Tax Income (Loss)		Tax Expense/ (Benefit)			Percent of Pre-Tax Income (Loss)			Pre-Tax Income			Tax Expense/ (Benefit)			Percent of Pre-Tax Income
U.S. federal income tax at statutory rate adjustments:	$	9,518	$	3,331			35.0	%	$	2,891	$	1,012			35.0	%	$	2,604		$	911			35.0	%
Tax exempt interest				(298	)		(3.1	)				(302	)		(10.4	)					(454	)		(17.4	)
Investment in subsidiaries and partnerships				–			–					(26	)		(0.9	)					(224	)		(8.6	)
Uncertain tax positions				632			6.6					446			15.4						(25	)		(1.0	)
Dividends received deduction				(75	)		(0.8	)				(58	)		(2.0	)					(52	)		(2.0	)
Effect of foreign operations				(5	)		–					171			5.9						(386	)		(14.8	)
State income taxes				(21	)		(0.2	)				(48	)		(1.7	)					(87	)		(3.3	)
Other				13			0.1					(96	)		(3.3	)					88			5.0
Effect of discontinued operations				14			0.2					–			–						(190	)		(7.3	)
Valuation allowance:
Continuing operations				(3,165	)		(33.3	)				(1,907	)		(65.9	)					(18,307	)		NM
Consolidated total amounts		9,518		426			4.5			2,891		(808	)		(27.9	)		2,604			(18,726	)		NM
Amounts attributable to discontinued operations		150		66			44.0			–		–			–			3,505			1,038			29.6
Amounts attributable to continuing operations	$	9,368	$	360			3.8	%	$	2,891	$	(808	)		(27.9	)%	$	(901	)	$	(19,764	)		NM	%

Schedule of components of the net deferred tax asset

December 31, (in millions)	2013			2012
Deferred tax assets:
Losses and tax credit carryforwards	$	20,825		$	25,359
Unrealized loss on investments		4,843			3,365
Accruals not currently deductible, and other		2,935			4,499
Investments in foreign subsidiaries and joint ventures		1,035			1,435
Loss reserve discount		1,164			1,235
Loan loss and other reserves		888			547
Unearned premium reserve reduction		1,451			1,145
Employee benefits		1,217			1,483
Total deferred tax assets		34,358			39,068
Deferred tax liabilities:
Adjustment to life policy reserves		445			(1,817	)
Deferred policy acquisition costs		(3,396	)		(2,816	)
Flight equipment, fixed assets and intangible assets		(2,354	)		(2,015	)
Unrealized gains related to available for sale debt securities		(3,693	)		(7,464	)
Other		(571	)		(225	)
Total deferred tax liabilities		(9,569	)		(14,337	)
Net deferred tax assets before valuation allowance		24,789			24,731
Valuation allowance		(3,596	)		(8,036	)
Net deferred tax assets (liabilities)	$	21,193		$	16,695

Schedule of consolidated income tax group tax losses and credits carryforwards

December 31, 2013 (in millions)	Gross		Tax Effected		Expiration Periods
Net operating loss carryforwards	$	34,233	$	11,981		2028 – 2031
Capital loss carryforwards – Life		1,117		391		2014
Capital loss carryforwards – Non-Life		–		–		N/A
Foreign tax credit carryforwards		–		5,796		2016 – 2023
Other carryforwards and other		–		513		Various
Total AIG U.S. consolidated income tax group tax losses and credits carryforwards			$	18,681

Schedule of net deferred tax assets (liabilities)

December 31, (in millions)	2013			2012
Net U.S. consolidated return group deferred tax assets	$	26,296		$	29,550
Net deferred tax assets (liabilities) in accumulated other comprehensive income		(3,337	)		(7,174	)
Valuation allowance		(1,650	)		(5,068	)
Subtotal		21,309			17,308
Net foreign, state and local deferred tax assets		2,563			3,126
Valuation allowance		(1,947	)		(2,968	)
Subtotal		616			158
Subtotal – Net U.S, foreign, state and local deferred tax assets		21,925			17,466
Net foreign, state and local deferred tax liabilities		(732	)		(771	)
Total AIG net deferred tax assets (liabilities)	$	21,193		$	16,695

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

Years Ended December 31, (in millions)	2013			2012			2011
Gross unrecognized tax benefits, beginning of year	$	4,385		$	4,279		$	5,296
Increases in tax positions for prior years		680			336			239
Decreases in tax positions for prior years		(796	)		(264	)		(1,046	)
Increases in tax positions for current year		43			47			48
Lapse in statute of limitations		(20	)		(8	)		(7	)
Settlements		(2	)		(5	)		(259	)
Activity of discontinued operations		50			–			8
Gross unrecognized tax benefits, end of year	$	4,340		$	4,385		$	4,279

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

At December 31, 2013	Open Tax Years
Major Tax Jurisdiction
United States		2000 – 2012
Australia		2009 – 2012
France		2011 – 2012
Japan		2008 – 2012
Korea		2008 – 2012
Singapore		2011 – 2012
United Kingdom		2012