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ITEM 7 / RESULTS OF OPERATIONS.....................................................................................................................................................................................The following table summarizes the operations of each reportable segment. See also Note 3 to theConsolidated Financial Statements.Years Ended December 31,Percentage Change(in millions) 2012 2011 2010 2012 vs. 2011 2011 vs. 2010Total revenues:AIG Property Casualty $ 39,781 $ 40,722 $ 37,207 (2)% 9%AIG Life and Retirement 16,767 15,315 14,747 9 4Total reportable segments 56,548 56,037 51,954 1 8Other Operations 9,974 4,079 21,405 145 (81)Consolidation and eliminations (866) (304) (530) (185) 43Total 65,656 59,812 72,829 10 (18)Pre-tax income (loss):AIG Property Casualty 1,837 1,820 (93) 1 NMAIG Life and Retirement 3,780 2,956 2,701 28 9Total reportable segments 5,617 4,776 2,608 18 83Other Operations 3,899 (4,703) 17,611 NM NMConsolidation and eliminations (194) 43 28 NM 54Total 9,322 116 20,247 NM (99)A discussion of significant items affecting pre-tax segment income follows. Factors that affect operating income for aspecific business segment are discussed in the detailed business segment analysis.2012 and 2011 Pre-tax Income ComparisonAIG Property Casualty – Pre-tax income increased slightly in 2012 compared to 2011. The increase in pre-taxincome was the result of lower underwriting losses due to the impact of lower catastrophe losses, underwritingimprovements related to rate increases and enhanced risk selection, higher net investment income due to assetdiversification by reducing the concentration in tax-exempt municipal instruments and increasing investments inprivate placement debt and structured securities. These increases were partially offset by higher acquisition costs asa result of the change in business mix from Commercial Insurance to Consumer Insurance and higher generaloperating expenses and lower net realized capital gains.AIG Life and Retirement – Pre-tax income increased in 2012 compared to 2011, principally due to efforts to activelymanage net investment spreads. Results benefited from higher net investment income, lower interest credited, lowerreserves for death claims and the impact of more favorable separate account performance on DAC amortization andpolicyholder benefit reserves. These items were partially offset by significant proceeds from a legal settlement in2011, higher mortality costs and an increase in GIC reserves.Other Operations – Other Operations recorded pre-tax income in 2012 compared to a pre-tax loss in 2011 due tofair value and realized gains in our interest in AIA ordinary shares, and in our interest in ML III, partially offset by anincrease in estimated litigation liability, and a loss on extinguishment of debt of $3.3 billion in 2011 in connection withthe termination of the FRBNY Credit Facility...................................................................................................................................................................................................................................72 AIG 2012 Form 10-K