First quarter 2008 aircraft leasing operating income was $272 million, a 40.9% increase compared to the first quarter of 2007. These results reflect revenue growth from ILFC's larger aircraft fleet, higher lease rates and utilization, an increase in aircraft sales and lower interest expense.

Capital markets reported an $8.85 billion operating loss in the first quarter of 2008, primarily due to $9.11 billion of unrealized market valuation losses related to AIGFP's super senior credit default swap portfolio.

American General Finance, Inc. reported operating income of $11 million in the first quarter of 2008 compared to $50 million in the first quarter of 2007, due to reduced residential mortgage origination volumes, lower revenues from mortgage banking activities and an increase in the allowance for loan losses. First quarter 2007 results included a $128 million charge related to the Office of Thrift Supervision's Supervisory Agreement and a $65 million recovery from a favorable out of court settlement.

AGF's net finance receivables increased $2.2 billion compared to the first quarter of 2007, and included the purchase of $1.5 billion of finance receivables from Equity One, Inc. in the first quarter of 2008.

AIG Consumer Finance Group, Inc. reported first quarter 2008 operating income of $11 million compared to $21 million in the first quarter of 2007. Revenues increased 43.0% on loan growth, particularly in Poland and Latin America, as well as on revenues from recently acquired business in India and Thailand.

Asset management revenues declined

Asset Management first quarter 2008 operating income before net realized capital gains was $154 million, compared to $778 million in the first quarter of 2007. Guaranteed Investment Contract (GIC) operating income declined due to significantly lower returns on partnership investments. Partnership income in the first quarter of 2008 was $45 million compared to $462 million in the first quarter of 2007.

Institutional asset management reported $5 million in first quarter 2008 operating income compared to $97 million in the first quarter of 2007. These results reflect lower carried interest revenues, increased depreciation and amortization expense due to additional real estate investments acquired in late 2007 and operating losses of certain consolidated private equity investments.

Higher borrowing at parent level lowers other revenues

The first quarter 2008 operating loss from Other Operations, before net realized capital gains (losses) and consolidation and elimination adjustments, was $503 million compared to a $421 million loss in the first quarter of 2007. These results reflect higher interest expense resulting from increased parent company borrowings and a decline in equity earnings in partially owned companies, offset by lower unallocated corporate expenses.

Book value per share at March 31, 2008 was $31.93. AIG stock is trading near its 10-year low and fell 10% or $3.88 to $40.27.