10-QPeriod: Q2 FY2014

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q2 Ended Jun 30, 2014

Filed August 4, 2014For Securities:AIG

Summary

AMERICAN INTERNATIONAL GROUP, INC. (AIG) reported a strong second quarter for 2014, driven by improved profitability in its Property Casualty segment and solid performance from its Life and Retirement division. The company saw a significant year-over-year increase in income from continuing operations, primarily due to lower catastrophe losses and favorable loss reserve development in Property Casualty, which offset an increase in severe losses. Life and Retirement benefited from higher fee income stemming from growth in assets under management, though net investment income was impacted by lower yields and strong prior-year alternative investment returns. The sale of International Lease Finance Corporation (ILFC) was completed, generating substantial cash proceeds and AerCap shares, contributing to a notable gain in "Other Operations." AIG also continued its capital return program, repurchasing shares and paying dividends, signaling management's confidence in the company's financial health and future prospects.

Financial Highlights

29 data points
Beta

Revenue

$16.14B

Net Income

$3.07B

19.0% Net Margin

EPS (Diluted)

$2.10

Total Assets

$529.11B

Cash & Equivalents

$1.83B

Free Cash Flow

$878.00M

Financial Statements
Beta
Revenue$16.14B
SG&A Expenses$3.71B
Operating Income$4.70B
Interest Expense$463.00M
Net Income$3.07B
EPS (Basic)$2.13
EPS (Diluted)$2.10
Shares Outstanding (Basic)1.44B
Shares Outstanding (Diluted)1.46B

Key Highlights

  • 1Total revenues for the quarter decreased by 13% year-over-year to $16.1 billion, impacted by the sale of ILFC and lower other income.
  • 2Income from continuing operations increased by 10% to $3.0 billion ($2.10 per diluted share) compared to the prior year quarter.
  • 3AIG Property Casualty reported a pre-tax operating income increase of 25% to $1.4 billion, driven by lower catastrophe losses and favorable loss reserve development.
  • 4AIG Life and Retirement's pre-tax operating income saw a slight increase of 3% to $1.2 billion, supported by higher fee income and growth in assets under management.
  • 5The company generated $1.64 billion in net cash from operating activities for the six months ended June 30, 2014.
  • 6AIG paid $0.125 per share in dividends for the quarter and repurchased approximately $1.9 billion of its common stock.
  • 7The sale of ILFC was completed, resulting in a gain of $2.2 billion for the quarter.

Frequently Asked Questions

AIG reported strong results with income from continuing operations increasing by 10% year-over-year to $3.0 billion, or $2.10 per diluted share. This was driven by improved performance in the Property Casualty segment and solid fee income from the Life and Retirement division, although total revenues saw a decrease due to the ILFC sale and lower other income.

The completion of the ILFC sale on May 14, 2014, contributed a significant gain of $2.2 billion to 'Other Operations' in the second quarter. It also provided AIG with net cash proceeds of approximately $2.4 billion and a 46% ownership stake in AerCap, which is accounted for under the equity method.

The Property Casualty segment's pre-tax operating income rose by 25% to $1.4 billion. This improvement was primarily due to lower catastrophe losses and favorable loss reserve development, which more than offset an increase in severe losses and a slight decrease in net investment income.

AIG continued its capital return strategy by paying a $0.125 per share dividend and repurchasing approximately $1.9 billion of its common stock during the first half of 2014. The company also increased its share repurchase authorization, signaling confidence in its financial position and commitment to enhancing shareholder value.