AIG 2010 Annual Report Download - page 255

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table presents AIG’s operations and long-lived assets by major geographic area:
Geographic Area
United Other
(in millions) States Asia Foreign Consolidated
2010
Total revenues(a) $ 40,772 $ 20,407 $16,122 $ 77,301
Real estate and other fixed assets, net of accumulated depreciation 1,896 557 392 2,845
Flight equipment primarily under operating leases, net of accumulated
depreciation(b) 38,510 - - 38,510
2009
Total revenues(a) $ 34,896 $ 23,178 $17,278 $ 75,352
Real estate and other fixed assets, net of accumulated depreciation 2,328 1,189 625 4,142
Flight equipment primarily under operating leases, net of accumulated
depreciation(b) 44,091 - - 44,091
2008
Total revenues(a) $(37,198) $ 15,207 $15,151 $ (6,840)
Real estate and other fixed assets, net of accumulated depreciation 3,220 1,552 794 5,566
Flight equipment primarily under operating leases, net of accumulated
depreciation(b) 43,395 - - 43,395
(a) Revenues are generally reported according to the geographic location of the reporting unit.
(b) ILFC derives more than 94 percent of its revenue from foreign-operated airlines.
4. Divested Businesses, Discontinued Operations and Held-for-Sale Classification
Divested Businesses
AIA Initial Public Offering
During the second quarter of 2010, AIG and Prudential plc terminated the AIA purchase agreement they had
entered in March 2010 and in accordance with the terms of the purchase agreement, Prudential plc paid AIG a
termination fee of $228 million, which is included in Net loss (gain) on sale of divested businesses and properties
in the Consolidated Statement of Income (Loss).
On October 29, 2010, AIG completed an initial public offering of 8.08 billion ordinary shares of AIA for
aggregate gross proceeds of approximately $20.51 billion. Upon completion of the initial public offering, AIG
owned 33 percent of AIA’s outstanding shares. Accordingly, AIG deconsolidated AIA and recorded a pre-tax gain
of $16.3 billion in 2010. Under the terms of an agreement with the underwriters, AIG is precluded from selling or
hedging any of its remaining shares of AIA until October 18, 2011 and more than half of its remaining shares of
AIA until April 18, 2012. Based on AIG’s continuing involvement as a result of its 33 percent ownership and
board representation, AIA is not being presented as a discontinued operation in the Consolidated Financial
Statements at December 31, 2010. AIG is accounting for its investment in AIA under the fair value option with
gains and losses recorded in Net investment income. At December 31, 2010, the fair value of AIG’s retained
interest in AIA was approximately $11.1 billion and is included in Other invested assets.
Under the Master Transaction Agreement, dated as of December 8, 2010 (the Master Transaction Agreement),
among AIG, the SPVs, the FRBNY, the Department of the Treasury and the Trust, net cash proceeds from the
AIA public offering were held in escrow pending the Closing of the Recapitalization. Upon the Closing, these
cash proceeds were loaned by AIA SPV to AIG and used to repay amounts owing under the FRBNY Credit
Facility as described in Note 1.
AIG 2010 Form 10-K 239