10-QPeriod: Q1 FY2009

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2009

Filed May 7, 2009For Securities:AIG

Summary

American International Group, Inc. (AIG) reported a net loss of $4.35 billion for the first quarter of 2009, a slight improvement from the $7.81 billion net loss in the first quarter of 2008. Total revenues saw a significant increase, driven by a substantial reduction in unrealized market valuation losses on the AIGFP super senior credit default swap portfolio and a decrease in net realized capital losses, although premiums and net investment income declined. The company's balance sheet shows total assets of $819.76 billion and total liabilities of $765.54 billion as of March 31, 2009. Shareholders' equity stood at $45.76 billion, a decrease from $52.71 billion at the end of 2008, reflecting the ongoing net losses. AIG's liquidity remains heavily reliant on government support, specifically the Federal Reserve Bank of New York (FRBNY) credit facility and commitments from the U.S. Department of the Treasury. The company has actively pursued asset dispositions to stabilize its financial position and manage its obligations. Despite ongoing efforts, the company's financial condition continues to be significantly impacted by challenging market conditions and the restructuring of its operations.

Financial Highlights

13 data points
Beta

Revenue

$13.31B

Net Income

-$4.35B

-32.7% Net Margin

Cash & Equivalents

$4.03B

Free Cash Flow

$3.77B

Financial Statements
Beta
Revenue$13.31B
SG&A Expenses$3.58B
Interest Expense$2.59B
Net Income-$4.35B
Shares Outstanding (Basic)135.25M
Shares Outstanding (Diluted)135.25M

Key Highlights

  • 1Net loss attributable to AIG was $4.35 billion for Q1 2009, an improvement from $7.81 billion in Q1 2008.
  • 2Total revenues increased to $20.46 billion in Q1 2009 from $14.03 billion in Q1 2008, primarily due to reduced losses on derivatives and realized capital losses.
  • 3Premiums and other considerations decreased by 9% to $18.82 billion, reflecting challenging market conditions and negative publicity.
  • 4Net investment income saw a significant decline of 54% to $2.28 billion due to lower investment yields and losses on partnership investments.
  • 5Interest expense more than doubled to $2.85 billion, largely driven by interest on the FRBNY Facility.
  • 6Restructuring expenses of $362 million were recognized in Q1 2009 as the company continued its divestiture and restructuring plans.
  • 7Total assets decreased to $819.76 billion as of March 31, 2009, from $860.42 billion as of December 31, 2008.
  • 8Total liabilities decreased to $765.54 billion as of March 31, 2009, from $797.69 billion as of December 31, 2008.
  • 9AIG shareholders' equity decreased to $45.76 billion as of March 31, 2009, from $52.71 billion as of December 31, 2008.

Frequently Asked Questions

AIG reported a net loss attributable to AIG of $4.35 billion, or $1.98 per diluted share, for the three months ended March 31, 2009.

Total revenues increased significantly by 46% to $20.46 billion for the three months ended March 31, 2009, compared to $14.03 billion for the same period in 2008. This increase was primarily driven by reduced unrealized market valuation losses on the AIGFP super senior credit default swap portfolio and lower net realized capital losses.

AIG's liquidity remains heavily dependent on government support. As of April 29, 2009, AIG had $42.6 billion outstanding under the FRBNY Facility with $17.4 billion of remaining borrowing capacity and $4.3 billion in accrued interest and fees. Additionally, AIG had $29.8 billion of available capacity under the Department of the Treasury Commitment. The company has not had access to traditional public debt markets for financing since late 2008.

AIG is actively pursuing asset dispositions as part of its restructuring plan. Through April 30, 2009, AIG had completed or contracted to sell nine operations, expecting total proceeds of $4.6 billion, with $2.2 billion in net cash proceeds. These plans are subject to market conditions and regulatory approvals.