AIG 2006 Annual Report Download - page 173

American International Group, Inc. and Subsidiaries
2. Segment Information
Continued
The following table summarizes AIG’s Financial Services operations by major internal reporting unit for the years ended
December 31, 2006, 2005 and 2004:
Financial Services
Total Consolidation Total
Aircraft Capital Consumer Reportable and Financial
(in millions) Leasing Markets(a) Finance Other(b) Segment Elimination Services
2006
Revenues(c)(d)(e) $ 4,143 $ (186) $ 3,819 $ 626 $ 8,402 $ (392) $ 8,010
Interest expense(d) 1,442 3,215 1,303 319 6,279 (63) 6,216
Operating income (loss)(e) 639 (873) 761(f) (3) 524 — 524
Depreciation expense 1,584 19 41 11 1,655 — 1,655
Capital expenditures 6,012 15 52 199 6,278 — 6,278
Identifiable assets 41,975 121,243 32,702 16,786 212,706 (5,861) 206,845
2005
Revenues(c)(d)(e) $ 3,578 $ 3,260 $ 3,613 $ 387 $ 10,838 $ (313) $ 10,525
Interest expense(d) 1,125 3,033 1,005 316 5,479 (200) 5,279
Operating income(e) 679 2,661 876(f) 60 4,276 — 4,276
Depreciation expense 1,384 20 38 5 1,447 — 1,447
Capital expenditures 6,193 3 54 50 6,300 — 6,300
Identifiable assets 37,515 90,090 30,704 14,872 173,181 (6,693) 166,488
2004
Revenues(c)(d)(e) $ 3,136 $ 1,278 $ 2,978 $ 835 $ 8,227 $ (732) $ 7,495
Interest expense(d) 993 2,300 705 144 4,142 (101) 4,041
Operating income(e) 642 662 786 90 2,180 — 2,180
Depreciation expense 1,273 42 33 18 1,366 — 1,366
Capital expenditures 4,400 29 35 17 4,481 — 4,481
Identifiable assets 33,997 98,303 26,560 13,985 172,845 (6,850) 165,995
(a) Certain transactions entered into by AIGFP generate tax credits and benefits which are included in income taxes in the consolidated statement of
income. The amount of such tax credits and benefits for the years ended December 31, 2006, 2005 and 2004 were $50 million, $67 million, and
$107 million, respectively.
(b) Operating loss in 2006 includes specific reser ves of $42 million related to two commercial lending transactions.
(c) Represents primarily the sum of aircraft lease rentals from ILFC, AIGFP hedged financial positions entered into in connection with counterparty
transactions, the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange
gains and losses, and finance charges from consumer finance operations.
(d) Interest expense for the Capital Markets business is included in Revenues above and in Other income on the Consolidated Statement of Income.
(e) Includes the effect of hedging activities that did not qualify for hedge accounting treatment under FAS 133, including the related foreign exchange gains
and losses. For 2006, 2005 and 2004, respectively, the effect was $(1.82) billion, $2.01 billion and $(122) million in both revenues and operating
income for Capital Markets. These amounts result primarily from interest rate and foreign currency derivatives that are economically hedging available
for sale securities and borrowings. For 2004, the effect was $(27) million in operating income for Aircraft Leasing. During 2006 and 2005, Aircraft
Leasing derivative gains and losses were reported as part of AIG’s Other category, and were not reported in Aircraft Leasing’s operating income.
(f) Includes catastrophe-related losses of $62 million recorded in 2005 resulting from hurricane Katrina, which were reduced by $35 million in 2006 as a
result of reevaluation of the remaining estimated losses.
Form 10-K 2006 AIG 123