Insurer American International Group (AIG) has come along way since 2008 when it was bailed out by the federal government. On Thursday, the New York-based insurer reported a $1.8 billion, or $1 per share, profit for the second quarter, up from a net loss of $2.7 billion, or $19.57 per share, a year earlier. While last year's net loss was largely tied to a $3.3 billion noncash goodwill impairment charged tied to discontinued operations, AIG's 2011 second-quarter earnings shows the insurance giant reaching a turning point in the aftermath of the 2008 bailout. The firm's financial services segment reported an operating loss of $146 million, while AIG's parent and other operations posted operating income of $344 million, up from an operating loss of $131 million a year earlier. Those gains included $13 million in operating income from the Mortgage Guaranty operations and income of $1.5 billion from AIG's holding of AIA shares. This all occurred at the same time the value of the company's holdings in the Maiden Lane III portfolio at the Fed fell $667 million from larger spreads on the underlying multisector CDO portfolio, AIG reported. The company's executive leadership team lauded the recent second-quarter report as proof the firm has "achieved a significant recapitalization milestone" through an $8.7 billion common stock offering in 2Q, which included the issuance and sale of 100 million shares by AIG and 200 million shares by the U.S. Treasury. "Our continued improving operating results should provide a catalyst for the U.S. Treasury to sell its shares at a profit for the taxpayers," said Robert H. Benmosche, AIG president and CEO. "Now that we have fully repaid our debt to the Federal Reserve, we are on the right path to demonstrate AIG's long-term value as an investment-grade company independent of government support." Write to Kerri Panchuk.