15. DISCONTINUED OPERATIONS
The results of operations for the following sales are presented as discontinued operations through the date of disposition in the Consolidated Statement of Operations for the three and nine months ended September 30, 2011:
See Note 9 herein for a discussion of guarantees and indemnifications associated with sales of businesses.
- •
- AIG Star and AIG Edison Sale – On September 30, 2010, AIG entered into a definitive agreement with Prudential Financial, Inc. for the sale of its Japan-based insurance subsidiaries, AIG Star and AIG Edison, for total consideration of $4.8 billion, including the assumption of certain outstanding debt totaling $0.6 billion owed by AIG Star and AIG Edison. The transaction closed on February 1, 2011 and AIG recognized a pre-tax gain of $3.5 billion on the sale that is reflected in Income (loss) from discontinued operations in the Consolidated Statement of Operations.
- •
- Nan Shan Sale – On January 12, 2011, AIG entered into an agreement to sell its 97.57 percent interest in Nan Shan Life Insurance Company, Ltd. to a Taiwan-based consortium; the transaction closed on August 18, 2011. AIG recorded a pre-tax gain of $60 million and a pre-tax loss of $1.0 billion on the sale for the three- and nine-month periods ended September 30, 2011, respectively, largely offsetting Nan Shan's operating results for the periods, which are both reflected in Income (loss) from discontinued operations in the Consolidated Statement of Operations. The net proceeds from the transaction were used in 2011 to pay down a portion of the liquidation preference of the Department of the Treasury's AIA SPV Preferred Interests.
The following table summarizes income (loss) from discontinued operations:
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Three Months Ended
September 30, 2011
|
|
Nine Months Ended
September 30, 2011
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
Premiums |
|
$ |
915 |
|
$ |
5,012 |
|
Net investment income |
|
|
423 |
|
|
1,632 |
|
Net realized capital gains (losses) |
|
|
(120 |
) |
|
844 |
|
Other income |
|
|
– |
|
|
5 |
|
|
|
Total revenues |
|
|
1,218 |
|
|
7,493 |
|
|
|
Benefits, claims and expenses |
|
|
1,228 |
|
|
6,324 |
|
Interest expense allocation |
|
|
– |
|
|
2 |
|
|
|
Income (loss) from discontinued operations |
|
|
(10 |
) |
|
1,167 |
|
|
|
Gain on sales |
|
|
32 |
|
|
2,341 |
|
|
|
Income from discontinued operations, before tax income tax expense |
|
|
22 |
|
|
3,508 |
|
|
|
Income tax expense |
|
|
243 |
|
|
1,181 |
|
|
|
Income (loss) from discontinued operations, net of income tax |
|
$ |
(221 |
) |
$ |
2,327 |
|
|
|
|