10-QPeriod: Q1 FY2015

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2015

Filed May 4, 2015For Securities:AIG

Summary

American International Group, Inc. (AIG) reported solid financial results for the first quarter ended March 31, 2015. The company demonstrated improved underwriting performance in its Commercial Insurance segment, driven by better results in Property Casualty and Mortgage Guaranty, which offset a slight decrease in net investment income. The Consumer Insurance segment, however, saw a decline in pre-tax operating income primarily due to lower net investment income and increased operating expenses, despite growth in policy fees driven by higher assets under management. Overall, AIG's net income attributable to AIG increased significantly to $2.47 billion, or $1.78 per diluted share, compared to $1.61 billion, or $1.09 per diluted share, in the prior year's first quarter. This improvement was largely driven by substantial net realized capital gains, which more than compensated for a decline in net investment income across the company. The company also continued its capital return initiatives, repurchasing approximately $1.4 billion of its common stock during the quarter and maintaining its dividend payment. AIG's liquidity and capital position remained robust, with strong cash flows from operations and a significant available capacity under its credit facilities.

Financial Highlights

32 data points
Beta

Revenue

$15.97B

Net Income

$2.47B

15.4% Net Margin

EPS (Diluted)

$1.78

Total Assets

$520.70B

Cash & Equivalents

$1.82B

Free Cash Flow

$388.00M

Financial Statements
Beta
Revenue$15.97B
SG&A Expenses$2.95B
Operating Income$2.47B
Interest Expense$340.00M
Net Income$2.47B
EPS (Basic)$1.81
EPS (Diluted)$1.78
Shares Outstanding (Basic)1.37B
Shares Outstanding (Diluted)1.39B

Key Highlights

  • 1Net income attributable to AIG increased to $2.47 billion ($1.78 per diluted share) from $1.61 billion ($1.09 per diluted share) in the prior year.
  • 2Commercial Insurance pre-tax operating income grew 3% to $1.46 billion, driven by improved underwriting results in Property Casualty.
  • 3Consumer Insurance pre-tax operating income decreased 19% to $945 million, primarily due to lower net investment income and higher operating expenses.
  • 4Net investment income decreased 9% to $3.84 billion, reflecting lower reinvestment yields and reduced income from alternative investments.
  • 5Net realized capital gains were $1.34 billion in Q1 2015, a significant increase from a net loss of $152 million in Q1 2014.
  • 6AIG repurchased approximately 29 million shares of common stock for $1.4 billion during the quarter.
  • 7Total assets increased to $520.7 billion from $515.6 billion at year-end 2014.

Frequently Asked Questions

AIG reported a significant increase in net income attributable to AIG to $2.47 billion ($1.78 per diluted share) compared to $1.61 billion ($1.09 per diluted share) in the first quarter of 2014. This was primarily driven by higher net realized capital gains and improved underwriting results in the Commercial Insurance segment, partially offset by lower net investment income and increased expenses in the Consumer Insurance segment.

The Commercial Insurance segment showed improved pre-tax operating income, growing 3% to $1.46 billion, mainly due to better underwriting performance in Property Casualty. The Consumer Insurance segment's pre-tax operating income declined by 19% to $945 million, largely impacted by lower net investment income and increased operating expenses, although policy fees grew due to higher assets under management.

AIG continued to return capital to shareholders in the first quarter of 2015 by repurchasing approximately $1.4 billion of its common stock. The Board of Directors also authorized an additional $3.5 billion increase to the share repurchase program. AIG also declared a cash dividend of $0.125 per share, consistent with the prior year.

AIG maintained a strong liquidity and capital position. Total assets stood at $520.7 billion, with total AIG shareholders' equity at $108.0 billion. AIG Parent had approximately $15.8 billion in liquidity sources, including cash, short-term investments, unencumbered fixed maturity securities, and available capacity under its credit facilities.