10-QPeriod: Q1 FY2016

AMERICAN INTERNATIONAL GROUP, INC. Quarterly Report for Q1 Ended Mar 31, 2016

Filed May 2, 2016For Securities:AIG

Summary

American International Group, Inc. (AIG) reported a net loss of $183 million, or $(0.16) per diluted share, for the first quarter of 2016. This contrasts sharply with a net income of $2,468 million, or $1.78 per diluted share, in the prior year's first quarter. The significant decline was primarily driven by a substantial decrease in net investment income, particularly from alternative investments and lower reinvestment yields, alongside net realized capital losses compared to net realized capital gains in the prior year. The company also incurred restructuring and other costs amounting to $0.2 billion. Despite the net loss, the company's core operating segments showed mixed results. Commercial Insurance reported a pre-tax operating income of $889 million, down from $1,462 million in Q1 2015, largely due to lower net investment income. Consumer Insurance's pre-tax operating income also decreased to $788 million from $945 million, impacted by lower net investment income and higher deferred acquisition cost amortization. The company repurchased $3.5 billion of its common stock and $173 million in warrants during the quarter, signaling a commitment to returning capital to shareholders, while also paying a quarterly dividend of $0.32 per share.

Financial Highlights

35 data points
Beta

Revenue

$11.78B

Net Income

-$183.00M

-1.6% Net Margin

EPS (Diluted)

$-0.16

Total Assets

$502.78B

Cash & Equivalents

$1.50B

Free Cash Flow

-$968.00M

Financial Statements
Beta
Revenue$11.78B
SG&A Expenses$3.00B
Operating Income-$136.00M
Interest Expense$306.00M
Net Income-$183.00M
EPS (Basic)$-0.16
EPS (Diluted)$-0.16
Shares Outstanding (Basic)1.16B
Shares Outstanding (Diluted)1.16B

Key Highlights

  • 1Net loss of $183 million in Q1 2016, a significant decrease from a net income of $2,468 million in Q1 2015.
  • 2Diluted earnings per share were $(0.16) in Q1 2016, down from $1.78 in Q1 2015.
  • 3Net investment income decreased by 21% to $3,013 million, primarily due to lower income from alternative investments.
  • 4Net realized capital losses of $1,106 million in Q1 2016, compared to net realized capital gains of $1,341 million in Q1 2015.
  • 5Commercial Insurance pre-tax operating income declined to $889 million from $1,462 million.
  • 6Consumer Insurance pre-tax operating income decreased to $788 million from $945 million.
  • 7The company repurchased $3.5 billion of common stock and $173 million in warrants in Q1 2016.

Frequently Asked Questions

AIG reported a net loss of $183 million for the first quarter of 2016, compared to a net income of $2,468 million in the first quarter of 2015.

The significant year-over-year decline in profitability was primarily driven by a substantial decrease in net investment income, largely due to lower income from alternative investments and negative performance in hedge funds. Additionally, net realized capital losses in the current quarter versus gains in the prior year, and the incurrence of restructuring and other costs also contributed to the reduced net income.

Commercial Insurance reported pre-tax operating income of $889 million, down from $1,462 million in the prior year quarter. Consumer Insurance reported pre-tax operating income of $788 million, down from $945 million in the prior year quarter. Both segments were impacted by lower net investment income.

AIG repurchased approximately $3.5 billion of its common stock and $173 million in warrants during the first quarter of 2016. The company also declared and paid a quarterly dividend of $0.32 per share.