10-QPeriod: Q2 FY2011

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q2 Ended Jun 30, 2011

Filed August 4, 2011For Securities:AIG

Summary

American International Group, Inc. (AIG) reported improved financial results for the second quarter and first half of 2011, largely driven by the successful completion of its recapitalization and significant progress in its asset disposition plan. The company repaid its Federal Reserve Bank of New York credit facility and reduced its outstanding debt. Revenue saw a decrease primarily due to the deconsolidation of AIA, but excluding this impact, premiums grew, particularly in the Chartis segment, which also benefited from the acquisition of Fuji. SunAmerica also showed growth in its annuity and mutual fund businesses. Financial Services, particularly ILFC, experienced a challenging period with lower revenues and increased expenses, although strategic initiatives aim to improve this segment's performance. AIG reported a substantial net income attributable to AIG shareholders for the period, a significant turnaround from the prior year's loss, reflecting the ongoing recovery and strategic repositioning of the company. The company continues to focus on strengthening its businesses, managing capital, and investing for growth.

Financial Highlights

25 data points
Beta

Revenue

$15.55B

Net Income

$1.84B

11.8% Net Margin

Total Assets

$616.80B

Cash & Equivalents

$2.59B

Free Cash Flow

$1.77B

Financial Statements
Beta
Revenue$15.55B
SG&A Expenses$2.13B
Operating Income$604.00M
Interest Expense$1.00B
Net Income$1.84B
Shares Outstanding (Basic)1.84B
Shares Outstanding (Diluted)1.84B

Key Highlights

  • 1AIG completed its recapitalization and repaid its FRBNY Credit Facility in January 2011, significantly reducing its debt burden.
  • 2Net income attributable to AIG shareholders was $1.84 billion for the quarter and $2.11 billion for the six months ended June 30, 2011, a substantial improvement from the prior year.
  • 3Chartis, the property and casualty insurance segment, saw an increase in net premiums written, driven by growth in both consumer and commercial lines, bolstered by the acquisition of Fuji.
  • 4SunAmerica reported improved pre-tax income, driven by growth in fixed annuity sales and stronger performance in variable annuity and mutual fund businesses.
  • 5The company made significant progress in its asset disposition plan, completing the sale of its Japan-based life insurance subsidiaries (AIG Star and AIG Edison).
  • 6ILFC, the aircraft leasing business within Financial Services, experienced lower revenues and a loss on extinguishment of debt, but improved its liquidity position through new credit facilities and debt issuance.
  • 7The company is actively managing its investment portfolio, with a strategy to deploy excess cash into higher-yielding securities while managing credit and liquidity risks.

Frequently Asked Questions

AIG reported a net income attributable to AIG shareholders of $1.84 billion for the quarter ended June 30, 2011, a significant improvement from a net loss of $2.66 billion in the same period of 2010. Total revenues decreased by 9% to $16.68 billion, primarily due to the deconsolidation of AIA, but excluding this impact, revenues showed growth.

AIG substantially completed its recapitalization plan, including repaying the outstanding balance of the FRBNY Credit Facility and terminating it in January 2011. They also completed several asset dispositions, including the sale of Japanese life insurance subsidiaries (AIG Star and AIG Edison) and the MetLife securities.

The Chartis segment showed growth in net premiums written and improved pre-tax income, driven by business mix changes and the acquisition of Fuji. SunAmerica reported higher pre-tax income, with growth in annuity and mutual fund sales. Financial Services, particularly ILFC, faced challenges with lower revenues and expenses related to aircraft sales and debt extinguishment, though liquidity improved. Other Operations, including Parent & Other, showed improved results primarily due to fair value gains on AIA shares and reduced interest expenses, partially offset by a loss on debt extinguishment.

AIG's priorities include strengthening and growing its businesses, managing capital efficiently, optimizing investment income, and restructuring operations. The company expects moderate growth in Chartis U.S. premiums and continued growth in Chartis International, while ILFC is exploring strategic alternatives. SunAmerica anticipates continued improvement in annuity sales.