10-QPeriod: Q3 FY2011

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q3 Ended Sep 30, 2011

Filed November 3, 2011For Securities:AIG

Summary

For the third quarter of 2011, AMERICAN INTERNATIONAL GROUP, INC. (AIG) reported a significant net loss of $4.1 billion, primarily driven by substantial decreases in net investment income and realized capital gains, as well as higher aircraft leasing expenses and ongoing restructuring efforts. Despite a material reduction in interest expense following the repayment of the FRBNY Credit Facility and lower premiums due to divestitures, the company's financial performance was impacted by several factors including substantial catastrophe losses within Chartis, increased impairment charges and fair value adjustments on aircraft leasing, and negative fair value adjustments on investments. The company continues to make progress on its asset disposition plan and recapitalization efforts, which are aimed at strengthening its financial position. AIG remains focused on managing its capital, growing its core businesses, and deleveraging its balance sheet.

Financial Highlights

25 data points
Beta

Revenue

$11.61B

Net Income

-$3.99B

-34.4% Net Margin

Total Assets

$544.26B

Cash & Equivalents

$1.54B

Free Cash Flow

$2.34B

Financial Statements
Beta
Revenue$11.61B
SG&A Expenses$2.07B
Operating Income-$3.17B
Interest Expense$970.00M
Net Income-$3.99B
Shares Outstanding (Basic)1.90B
Shares Outstanding (Diluted)1.90B

Key Highlights

  • 1Net loss attributable to AIG common shareholders was $(4,109) million, or $(2.16) per diluted share.
  • 2Total revenues decreased by 35% to $12,716 million, primarily due to the deconsolidation of AIA and lower net investment income.
  • 3Chartis reported a pre-tax loss of $4,358 million for continuing operations, impacted by significant catastrophe losses and increased aircraft leasing expenses.
  • 4SunAmerica's pre-tax income decreased significantly due to lower net investment income and higher amortization of deferred acquisition costs.
  • 5AIG substantially completed its recapitalization and asset disposition plan, including the repayment of the FRBNY Credit Facility and the sale of several subsidiaries.
  • 6The company's liquidity remains adequate, with AIG Parent holding $15.3 billion in liquidity sources.
  • 7AIG's credit ratings were stable as of October 28, 2011, with senior long-term debt rated 'Baa1' by Moody's, 'A-' by S&P, and 'BBB' by Fitch.

Frequently Asked Questions

AIG reported a net loss attributable to AIG common shareholders of $4.1 billion for the third quarter of 2011. Total revenues decreased by 35% year-over-year to $12.7 billion. The company experienced significant catastrophe losses in its Chartis segment, higher impairment charges in its Aircraft Leasing segment, and lower net investment income across various segments.

The significant loss was primarily driven by a substantial decrease in net investment income, largely due to negative fair value adjustments on investments like AIA securities and the Maiden Lane Interests, coupled with higher aircraft leasing expenses including impairment charges and fair value adjustments. Catastrophe losses in the Chartis segment also contributed to the overall loss.

AIG completed its recapitalization plan in January 2011, which included repaying the FRBNY Credit Facility and exchanging preferred stock for common stock. Additionally, the company made significant progress on its asset disposition plan, completing several key sales of subsidiaries and businesses during 2011.

AIG Parent maintained approximately $15.3 billion in liquidity sources as of September 30, 2011, comprising cash, short-term investments, and available capacity under its credit facilities. The company believes it has sufficient liquidity to meet future requirements and obligations.