Summary
American International Group, Inc. (AIG) filed its 10-Q for the period ending June 30, 2009, revealing a company in the midst of significant restructuring and financial stabilization efforts. While the company reported a net income of $1.822 billion attributable to AIG for the second quarter of 2009, this was largely driven by an $1.8 billion decrease in the deferred tax valuation allowance, partially offset by operational losses and restructuring charges. The company's financial health remains heavily reliant on the ongoing support from the U.S. government, specifically through the Federal Reserve Bank of New York (FRBNY) credit facility and the Department of the Treasury. Key financial movements during the quarter include a decrease in total assets to $830.4 billion from $860.4 billion at year-end 2008, and a reduction in total liabilities to $767.2 billion from $797.7 billion. AIG is actively pursuing asset dispositions, including agreements to sell its American International Assurance Company, Limited (AIA) and American Life Insurance Company (ALICO) businesses, which are expected to reduce the FRBNY credit facility balance by $25 billion. The company is also managing ongoing restructuring and separation activities, incurring significant related expenses. Despite these efforts, the company's future financial performance remains subject to substantial risks and uncertainties, including potential further market deteriorations, the successful completion of asset dispositions, and the impact of ongoing litigation and regulatory reviews. Management's assessment of the going concern basis of accounting relies heavily on the continued commitment of U.S. government support and the successful execution of its restructuring and asset disposition plans.
Financial Highlights
27 data points| Revenue | $23.92B |
| SG&A Expenses | $4.48B |
| Interest Expense | $2.55B |
| Net Income | $1.82B |
| EPS (Basic) | $2.30 |
| EPS (Diluted) | $2.30 |
| Shares Outstanding (Basic) | 135.28M |
| Shares Outstanding (Diluted) | 135.34M |
Key Highlights
- 1AIG reported a net income of $1.822 billion in Q2 2009, primarily due to a significant reduction in deferred tax valuation allowance.
- 2Total assets decreased to $830.4 billion, while total liabilities decreased to $767.2 billion, reflecting ongoing restructuring and asset dispositions.
- 3The company is undertaking significant asset dispositions, including planned sales of AIA and ALICO, to reduce its reliance on the FRBNY credit facility, which stood at $40 billion in net borrowings at July 29, 2009.
- 4Restructuring and separation expenses totaled $343 million in Q2 2009, with significant additional costs anticipated from planned transactions.
- 5The company's financial stability continues to be heavily dependent on substantial government support and the successful execution of its asset disposition and restructuring plans.
- 6AIGFP's super senior credit default swap portfolio showed a significant reduction in unrealized market valuation losses in Q2 2009 compared to the prior year, moving from a $5.6 billion loss to a $636 million gain, primarily due to portfolio wind-downs and market improvements.
- 7The company is actively managing its investment portfolio, with $353.7 billion in bonds available for sale and $22.5 billion in equity securities available for sale at June 30, 2009, facing ongoing challenges with impairments, particularly in mortgage-backed securities.