AIG 2014 Annual Report Download - page 87

ITEM 7 / RESULTS OF OPERATIONS
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The following table presents a reconciliation of net income attributable to AIG to after-tax operating income
attributable to AIG:
Years Ended December 31,
(in millions) 2014 2013 2012
Net income attributable to AIG $7,529 $ 9,085 $3,438
Uncertain tax positions and other tax adjustments 59 791 543
Deferred income tax valuation allowance releases (181) (3,237) (1,911)
Changes in fair value of fixed maturity securities designated to hedge living
benefit liabilities, net of interest expense (169) 105 (24)
Changes in benefit reserves and DAC, VOBA and SIA
related to net realized capital gains (losses) 141 1,148 789
Other (income) expense - net - 47 -
Loss on extinguishment of debt 1,483 423 21
Net realized capital gains (470) (1,285) (687)
(Income) loss from discontinued operations 50 (84) (1)
(Income) loss from divested businesses, including gain on the sale of ILFC (1,462) 117 4,039
Legal reserves (settlements) related to legacy crisis matters (350) (460) 353
Non-qualifying derivative hedging (gains) losses, excluding net realized capital
gains - -(18)
After-tax operating income attributable to AIG $6,630 $ 6,650 $6,542
Weighted average diluted shares outstanding 1,447,553,652 1,481,206,797 1,687,226,641
Income per common share attributable to AIG (diluted) $5.20 $ 6.13 $2.04
After-tax operating income per common share attributable
to AIG (diluted) $4.58 $ 4.49 $3.88
After-tax operating income attributable to AIG for 2014 was essentially flat compared to 2013, primarily due to higher income
tax expense, partially offset by an increase in income from insurance operations.
After-tax operating income attributable to AIG increased in 2013 compared to 2012, primarily due to increases in income from
insurance operations, lower income tax expense and noncontrolling interests, partially offset by fair value gains on AIG’s
previously held interests in AIA ordinary shares, Maiden Lane II LLC (ML II), and ML III.
For the year ended December 31, 2014, the effective tax rate on pre-tax operating income was 30.9 percent. The significant
factors that contributed to the difference from the statutory rate included tax benefits resulting from tax exempt interest income
and other permanent tax items, and the impact of discrete tax benefits.
For the year ended December 31, 2013, the effective tax rate on pre-tax operating income was 28.8 percent. The significant
factors that contributed to the difference from the statutory rate included tax benefits resulting from tax exempt interest income
and other permanent tax items, and the impact of discrete tax benefits.
For the year ended December 31, 2012, the effective tax rate on pre-tax operating income was 31.6 percent. The difference
from the statutory rate was primarily due to tax exempt interest income and other permanent tax items.