AIG 2010 Annual Report Download - page 370

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
22. Income Taxes
The following table presents income (loss) from continuing operations before income tax expense (benefit) by U.S.
and foreign location in which such pretax income (loss) was earned or incurred.
Years Ended December 31,
(in millions) 2010 2009 2008
U.S. $13,208 $(17,122) $(103,552)
Foreign 4,728 2,815 523
Total $17,936 $(14,307) $(103,029)
The following table presents the income tax expense (benefit) attributable to pre-tax income (loss) from
continuing operations:
Years Ended December 31,
(in millions) 2010 2009 2008
Foreign and U.S. components of actual income tax expense:
Foreign:
Current $ 807 $ 1,573 $ 1,135
Deferred 318 3,661 (1,511)
U.S.:
Current (163) 1,229 (86)
Deferred 4,897 (7,952) (9,221)
Total $ 5,859 $ (1,489) $ (9,683)
AIG’s actual income tax (benefit) expense differs from the statutory U.S. federal amount computed by applying
the federal income tax rate due to the following:
2010 2009 2008
Percent Percent Percent
Pre-tax of Pre-tax Pre-tax of Pre-tax Pre-tax of Pre-tax
(dollars in millions) Income Amount Income Loss Amount Income Loss Amount Income
U.S. federal income tax at statutory rate $17,711 $ 6,199 35.0% $(15,423) $ (5,398) 35.0% $(108,761) $(38,065) 35.0%
Adjustments:
Tax exempt interest (587) (3.3) (677) 4.4 (837) 0.8
Investment in subsidiaries and
partnerships (1,319) (7.5) (473) 3.1 490 (0.5)
Variable Interest Entities (2) (0.0) 435 (2.8) 279 (0.3)
Uncertain Tax Positions (37) (0.2) 874 (5.7) 1,000 (0.9)
Dividends received deduction (108) (0.6) (117) 0.8 (90) 0.1
Effect of foreign operations 206 1.2 (130) 0.8 2,546 (2.3)
Bargain purchase gain (116) (0.7) - - - -
State income taxes 162 0.9 (1,371) 8.9 (166) 0.2
Goodwill 2- 1 - 1,282 (1.2)
Other 183 1.0 313 (2.1) 1,680 (1.6)
Effect of discontinued operations (642) (3.6) (1,012) 6.6 2,644 (2.4)
Effect of discontinued operations –
goodwill 1,268 7.2 3 (0.0) 119 (0.1)
State tax valuation allowance –
continuing operations (289) (1.6) 1,526 (9.9) 71 (0.1)
Valuation allowance:
Continuing operations 1,486 8.4 3,137 (20.3) 20,121 (18.5)
Discontinued operations 1,292 7.3 (221) 1.4 552 (0.5)
Total income tax expense (benefit) 17,711 7,698 43.5 (15,423) (3,110) 20.2 (108,761) (8,374) 7.7
Amount included in discontinued
operations (225) 1,839 (817.3) (1,116) (1,621) 145.3 (5,732) 1,309 (22.8)
Tax expense (benefit) from continuing
operations $17,936 $ 5,859 32.7% $(14,307) $ (1,489) 10.4% $(103,029) $ (9,683) 9.4%
354 AIG 2010 Form 10-K