3. SEGMENT INFORMATION
We report the results of our operations consistent with the manner in which AIG's chief operating decision makers review the business to assess performance and to allocate resources through two reportable segments: AIG Property Casualty and AIG Life and Retirement. We evaluate performance based on revenues and pre-tax income (loss), excluding results from discontinued operations, because we believe this provides more meaningful information on how our operations are performing. Prior to the fourth quarter of 2012, we also presented Aircraft Leasing as a reportable segment, which included the results of ILFC. As a result of the proposed sale of ILFC discussed in Note 4, Aircraft Leasing is no longer presented as a reportable segment in all periods presented.
In the fourth quarter of 2013, to reduce investment concentration, we transferred the holdings of investments in life settlements from AIG Property Casualty operations to AIG's Other Operations. AIG Property Casualty has retained debt instruments associated with the investments in life settlements, repayment of which is expected to result from cash flows from the investments in life settlements. To align our segment reporting with this change, the results of the investments in life settlements, including investment income and impairment losses, were reclassified to AIG's Other Operations for all periods presented.
AIG Property Casualty
The AIG Property Casualty segment is presented as two operating segments — Commercial Insurance and Consumer Insurance, in addition to an AIG Property Casualty Other category.
Our property and casualty operations are conducted through multiple-line companies writing substantially all commercial and consumer lines both domestically and abroad. AIG Property Casualty offers its products through a diverse, multi-channel distribution network that includes agents, wholesalers, global and local brokers, and direct-to-consumer platforms.
Investment income is allocated to the Commercial Insurance and Consumer Insurance operating segments based on an internal investment income allocation model. The model estimates investable funds based primarily on loss reserves and allocated capital. Commencing in the first quarter of 2013, AIG Property Casualty began applying similar duration and risk-free yields (plus a liquidity premium) to the allocated capital of Commercial Insurance and Consumer Insurance as is applied to reserves.
AIG Life and Retirement
In 2012, AIG Life and Retirement announced several key organizational structure and management changes intended to better serve the organization's distribution partners and customers. Key aspects of the new structure include distinct product manufacturing divisions, shared annuity and life operations platforms and a unified all-channel distribution organization with access to all AIG Life and Retirement products.
AIG Life and Retirement fully implemented these changes during the first quarter of 2013 and now presents its operating results in the following two operating segments:
Retail — product lines include Life Insurance and Accident and Health (A&H), Fixed Annuities, Retirement Income Solutions (including variable and index annuities), Brokerage Services and Retail Mutual Funds.
Institutional — product lines include Group Retirement, Group Benefits and Institutional Markets. The Institutional Markets product line consists of stable value wrap products, structured settlement and terminal funding annuities, high net worth products, guaranteed investment contracts (GICs), and corporate- and bank-owned life insurance.
Prior period amounts have been revised to reflect the new structure, which did not affect previously reported pre-tax income from continuing operations for AIG Life and Retirement. Prior to the first quarter of 2013, AIG Life and Retirement was presented as two operating segments: Life Insurance and Retirement Services.
AIG Other Operations
Our Other Operations include results from:
The following table presents AIG's continuing operations by reportable segment:
| (in millions) |
Total Revenues |
Other-Than- Temporary Impairment Charges* |
Net Loss on Sale of Properties and Divested Businesses |
Interest Expense |
Depreciation and Amortization |
Pre-Tax Income (Loss) from Continuing Operations |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2013 |
|||||||||||||||||||
|
AIG Property Casualty |
|||||||||||||||||||
|
Commercial Insurance |
$ | 23,137 | $ | – | $ | – | $ | 7 | $ | 2,393 | $ | 2,398 | |||||||
|
Consumer Insurance |
13,601 | – | – | 6 | 2,133 | 317 | |||||||||||||
|
Other |
2,971 | 53 | – | 1 | 1 | 2,418 | |||||||||||||
|
Total AIG Property Casualty |
39,709 | 53 | – | 14 | 4,527 | 5,133 | |||||||||||||
|
AIG Life and Retirement |
|||||||||||||||||||
|
Retail |
12,715 | 130 | – | 3 | (76 | ) | 4,363 | ||||||||||||
|
Institutional |
7,875 | 142 | – | 2 | (58 | ) | 2,142 | ||||||||||||
|
Total AIG Life and Retirement |
20,590 | 272 | – | 5 | (134 | ) | 6,505 | ||||||||||||
|
Other Operations |
|||||||||||||||||||
|
Mortgage Guaranty |
949 | – | – | – | 50 | 213 | |||||||||||||
|
Global Capital Markets |
833 | – | – | – | – | 625 | |||||||||||||
|
Direct Investment book |
1,937 | 3 | – | 353 | (80 | ) | 1,544 | ||||||||||||
|
Corporate & Other |
792 | (1 | ) | 48 | 2,112 | 300 | (4,706 | ) | |||||||||||
|
Aircraft Leasing |
4,420 | – | – | – | 76 | (129 | ) | ||||||||||||
|
Consolidation and elimination |
(38 | ) | – | – | (14 | ) | – | 4 | |||||||||||
|
Total Other Operations |
8,893 | 2 | 48 | 2,451 | 346 | (2,449 | ) | ||||||||||||
|
AIG Consolidation and elimination |
(514 | ) | – | – | (328 | ) | (26 | ) | 179 | ||||||||||
|
Total AIG Consolidated |
$ | 68,678 | $ | 327 | $ | 48 | $ | 2,142 | $ | 4,713 | $ | 9,368 | |||||||
|
2012 |
|||||||||||||||||||
|
AIG Property Casualty |
|||||||||||||||||||
|
Commercial Insurance |
$ | 23,569 | $ | – | $ | – | $ | 5 | $ | 2,736 | $ | 877 | |||||||
|
Consumer Insurance |
14,403 | – | – | 4 | 2,121 | 292 | |||||||||||||
|
Other |
1,982 | 378 | – | 1 | (1 | ) | 854 | ||||||||||||
|
Total AIG Property Casualty |
39,954 | 378 | – | 10 | 4,856 | 2,023 | |||||||||||||
|
AIG Life and Retirement |
|||||||||||||||||||
|
Retail |
10,471 | 469 | – | – | 159 | 2,068 | |||||||||||||
|
Institutional |
7,174 | 255 | – | – | 54 | 1,712 | |||||||||||||
|
Total AIG Life and Retirement |
17,645 | 724 | – | – | 213 | 3,780 | |||||||||||||
|
Other Operations |
|||||||||||||||||||
|
Mortgage Guaranty |
867 | – | – | – | 44 | 15 | |||||||||||||
|
Global Capital Markets |
745 | – | – | – | – | 553 | |||||||||||||
|
Direct Investment book |
2,024 | 60 | – | 369 | (121 | ) | 1,632 | ||||||||||||
|
Retained Interests |
4,957 | – | – | – | – | 4,957 | |||||||||||||
|
Corporate & Other |
1,522 | 5 | 6,717 | 2,264 | 317 | (10,186 | ) | ||||||||||||
|
Aircraft Leasing |
4,500 | – | – | – | 2,042 | 339 | |||||||||||||
|
Consolidation and elimination |
(52 | ) | – | – | (27 | ) | – | – | |||||||||||
|
Total Other Operations |
14,563 | 65 | 6,717 | 2,606 | 2,282 | (2,690 | ) | ||||||||||||
|
AIG Consolidation and elimination |
(1,141 | ) | – | 19 | (297 | ) | (2 | ) | (222 | ) | |||||||||
|
Total AIG Consolidated |
$ | 71,021 | $ | 1,167 | $ | 6,736 | $ | 2,319 | $ | 7,349 | $ | 2,891 | |||||||
|
2011 |
|||||||||||||||||||
|
AIG Property Casualty |
|||||||||||||||||||
|
Commercial Insurance |
$ | 24,921 | $ | – | $ | – | $ | 3 | $ | 2,865 | $ | 1,269 | |||||||
|
Consumer Insurance |
14,109 | – | – | 4 | 1,836 | (44 | ) | ||||||||||||
|
Other |
1,947 | 274 | – | – | – | 875 | |||||||||||||
|
Total AIG Property Casualty |
40,977 | 274 | – | 7 | 4,701 | 2,100 | |||||||||||||
|
AIG Life and Retirement |
|||||||||||||||||||
|
Retail |
10,079 | 612 | – | – | 515 | 1,382 | |||||||||||||
|
Institutional |
6,084 | 365 | – | – | 176 | 1,574 | |||||||||||||
|
Total AIG Life and Retirement |
16,163 | 977 | – | – | 691 | 2,956 | |||||||||||||
|
Other Operations |
|||||||||||||||||||
|
Mortgage Guaranty |
944 | – | – | – | 44 | (77 | ) | ||||||||||||
|
Global Capital Markets |
266 | – | – | – | – | (7 | ) | ||||||||||||
|
Direct Investment book |
1,004 | 25 | – | 367 | (218 | ) | 622 | ||||||||||||
|
Retained Interests |
486 | – | – | – | – | 486 | |||||||||||||
|
Corporate & Other |
1,405 | 4 | 74 | 2,388 | 206 | (6,007 | ) | ||||||||||||
|
Aircraft Leasing |
4,457 | – | – | – | 1,948 | (1,005 | ) | ||||||||||||
|
Consolidation and elimination |
(36 | ) | – | – | (20 | ) | – | – | |||||||||||
|
Total Other Operations |
8,526 | 29 | 74 | 2,735 | 1,980 | (5,988 | ) | ||||||||||||
|
AIG Consolidation and elimination |
(561 | ) | – | – | (298 | ) | – | 31 | |||||||||||
|
Total AIG Consolidated |
$ | 65,105 | $ | 1,280 | $ | 74 | $ | 2,444 | $ | 7,372 | $ | (901 | ) | ||||||
* Included in Total revenues presented above.
The following table presents AIG's year-end identifiable assets and capital expenditures by reportable segment:
| |
|
|
|
|
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
Year-End Identifiable Assets | Capital Expenditures | |||||||||||
| (in millions) |
2013 |
2012 |
2013 |
2012 |
|||||||||
|
AIG Property Casualty |
|
|
|
|
|
|
|||||||
|
Commercial Insurance |
$ |
|
(a) |
$ | (a) |
$ |
|
(a) |
$ | (a) | |||
|
Consumer Insurance |
|
|
(a) |
(a) |
|
|
(a) |
(a) | |||||
|
Other |
|
|
(a) |
(a) |
|
|
(a) |
(a) | |||||
|
Total AIG Property Casualty |
$ |
167,874 |
|
$ | 178,726 |
$ |
349 |
|
$ | 321 | |||
|
AIG Life and Retirement |
|
|
|
|
|
|
|||||||
|
Retail |
|
161,098 |
|
157,855 |
|
35 |
|
45 | |||||
|
Institutional |
|
123,952 |
|
124,588 |
|
27 |
|
15 | |||||
|
Consolidation and Elimination |
|
(1,593 |
) |
(6,769 | ) |
|
– |
|
– | ||||
|
Total AIG Life and Retirement |
$ |
283,457 |
|
$ | 275,674 |
$ |
62 |
|
$ | 60 | |||
|
Other Operations |
|
|
|
|
|
|
|||||||
|
Mortgage Guaranty |
|
4,361 |
|
5,270 |
|
25 |
|
11 | |||||
|
Global Capital Markets |
|
6,406 |
|
7,050 |
|
– |
|
– | |||||
|
Direct Investment book |
|
23,541 |
|
28,528 |
|
– |
|
– | |||||
|
Corporate & Other |
|
88,270 |
|
91,772 |
|
413 |
|
680 | |||||
|
Aircraft Leasing(b) |
|
39,313 |
|
39,812 |
|
1,883 |
|
1,779 | |||||
|
Consolidation and Elimination |
|
33,992 |
|
23,431 |
|
– |
|
– | |||||
|
Total Other Operations |
$ |
195,883 |
|
$ | 195,863 |
$ |
2,321 |
|
$ | 2,470 | |||
|
AIG Consolidation and Elimination |
|
(105,885 |
) |
(101,630 | ) |
|
– |
|
– | ||||
|
Total Assets |
$ |
541,329 |
|
$ | 548,633 |
$ |
2,732 |
|
$ | 2,851 | |||
(a) AIG Property Casualty manages its assets on an aggregate basis and does not allocate its assets, other than goodwill, between its operating segments.
(b) 2013 and 2012 include Aircraft Leasing assets classified as assets held-for-sale on the Consolidated Balance Sheets.
The following table presents AIG's consolidated operations and long-lived assets by major geographic area:
| |
|
|
|
|
|
|
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
Total Revenues* | Real Estate and Other Fixed Assets, Net of Accumulated Depreciation |
|||||||||||||||||
| (in millions) |
2013 |
2012 |
2011 |
2013 |
2012 |
2011 |
|||||||||||||
|
U.S. |
$ |
46,031 |
$ | 47,354 | $ | 41,082 |
$ |
1,606 |
$ | 1,391 | $ | 1,330 | |||||||
|
Asia Pacific |
|
8,742 |
9,429 | 8,119 |
|
448 |
516 | 591 | |||||||||||
|
Other Foreign |
|
13,905 |
14,238 | 15,904 |
|
261 |
306 | 386 | |||||||||||
|
Consolidated |
$ |
68,678 |
$ | 71,021 | $ | 65,105 |
$ |
2,315 |
$ | 2,213 | $ | 2,307 | |||||||
* Revenues are generally reported according to the geographic location of the reporting unit.