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TheStreet Open House

AIG Reports Third Quarter 2013 Net Income Attributable To AIG Of $2.2 Billion And Diluted Earnings Per Share Of $1.46

AIG Life and Retirement premiums and deposits include amounts received on traditional life insurance policies, group benefit policies and deposits on life-contingent payout annuities, as well as deposits received on universal life, investment-type annuity contracts, guaranteed investment contracts and mutual funds.

Other Operations pre-tax operating income (loss) is pre-tax income (loss) excluding certain legal reserves (settlements) related to legacy crisis matters described above, (gain) loss on extinguishment of debt, net realized capital (gains) losses, net loss (gain) on sale of divested businesses and properties, and income from divested businesses.

Results from discontinued operations are excluded from all of these measures.

American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.

Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig |Twitter: @AIG_LatestNews | LinkedIn: http://www.linkedin.com/company/aig |

AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries, and coverage is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.

 
American International Group, Inc.
Financial Highlights*
(in millions, except share data)
  Three Months Ended

September 30,

    Nine Months Ended

September 30,

    % Inc.     % Inc.
  2013       2012     (Dec.)       2013       2012     (Dec.)
AIG Property Casualty Operations:
Net premiums written $ 8,660   $ 8,712   (0.6 ) % $ 26,360   $ 26,627   (1.0 ) %
Net premiums earned 8,427 8,752 (3.7 ) 25,332 26,260 (3.5 )
Claims and claims adjustment expenses incurred 5,669 6,252 (9.3 ) 16,761 18,240 (8.1 )
Acquisition expenses 1,664 1,709 (2.6 ) 5,023 5,199 (3.4 )
General operating expenses 1,229   1,232   (0.2 ) 3,677   3,659   0.5
Underwriting loss (135 ) (441 ) 69.4 (129 ) (838 ) 84.6
Net investment income     1,179       1,227     (3.9 )         3,847       3,603     6.8    
Pre-tax operating income     1,044       786     32.8           3,718       2,765     34.5    
Net realized capital gains (losses) (a) (12 ) 161 NM 73 49 49.0
Other income (expense) - net (3 ) 2   NM 10   6   66.7
Pre-tax Income $ 1,029   $ 949   8.4 $ 3,801   $ 2,820   34.8

 

                                     
Loss ratio 67.3 71.4 66.2 69.5
Acquisition ratio 19.7 19.5 19.8 19.8
General operating expense ratio 14.6   14.1   14.5   13.9  
Combined ratio     101.6       105.0               100.5       103.2        
 
AIG Life and Retirement Operations:
Premiums $ 721 $ 584 23.5 $ 1,990 $ 1,830 8.7
Policy fees 645 580 11.2 1,883 1,731 8.8
Net investment income 2,467 2,597 (5.0 ) 7,981 8,003 (0.3 )
Other income 443   319   38.9 1,255   935   34.2
Total revenues 4,276 4,080 4.8 13,109 12,499 4.9
Benefits and expenses     3,132       3,254     (3.7 )         9,420       9,429     (0.1 )  
Pre-tax operating income     1,144       826     38.5           3,689       3,070     20.2    
Legal settlements - - NM 467 - NM

Changes in fair value of fixed maturity securities designated to hedge living benefit liabilities, net of interest expense

(30 ) (3 ) NM (128 ) 48 NM

Change in benefit reserves and DAC, VOBA and SIA related to net realized capital gains (losses)

(271 ) (604 ) 55.1 (1,482 ) (1,120 ) (32.3 )
Net realized capital gains (a) 398   670   (40.6 ) 1,984   530   274.3
Pre-tax Income $ 1,241   $ 889   39.6 $ 4,530   $ 2,528   79.2
                                       
Other operations, pre-tax operating income (loss)     (540 )     854     NM           (493 )     3,864     NM    

Other operations, pre-tax income (loss) before net realized capital gains (losses)

(1,021 ) 844 NM (1,376 ) 3,108 NM
Other operations, net realized capital gains (losses) (a) (104 ) 47 NM 107 403 (73.4 )

Consolidation and elimination adjustments related to pre-tax operating income (loss)

62 52 19.2 115 (9 ) NM

Consolidation and elimination adjustments related to non-operating income (loss), including net realized capital gains (losses) (a)

(28 ) (223 ) 87.4 (19 ) (157 ) 87.9
Income from continuing operations before income tax expense 1,179 2,558 (53.9 ) 7,158 8,693 (17.7 )
Income tax expense (benefit) (993 ) 734   NM 123   1,324   (90.7 )
Income from continuing operations 2,172 1,824 19.1 7,035 7,369 (4.5 )
Income (loss) from discontinued operations, net of income tax expense (42 ) 37   NM 84   280   (70.0 )
Net income 2,130   1,861   14.5 7,119   7,649   (6.9 )

Less: Net income from continuing operations attributable to noncontrolling interests:

Nonvoting, callable, junior and senior preferred interests - - NM - 208 NM
Other (40 ) 5   NM 12   45   (73.3 )

Total net income (loss) from continuing operations attributable to noncontrolling interests

(40 ) 5   NM 12   253   (95.3 )
Net income attributable to AIG $ 2,170   $ 1,856   16.9 % $ 7,107   $ 7,396   (3.9 ) %
 
Financial Highlights -continued              
 
Three Months Ended September 30, Nine Months Ended September 30,
% Inc. % Inc.
  2013       2012     (Dec.)       2013       2012     (Dec.)
 
Net income attributable to AIG $ 2,170 $ 1,856 16.9 % $ 7,107 $ 7,396 (3.9 ) %

Adjustments to arrive at after-tax operating income attributable to AIG (amounts are net of tax):

Income (loss) from discontinued operations, net of income tax expense 42 (37 ) NM (84 ) (280 ) 70.0
Net loss on sale of divested businesses - - NM 31 2 NM
Uncertain tax positions and other tax adjustments 36 12 200.0 726 343 111.7
Legal reserves (settlements) related to legacy crisis matters 260 5 NM (61 ) 482 NM
Deferred income tax valuation allowance releases (1,159 ) (219 ) (429.2 ) (2,697 ) (1,795 ) (50.3 )

Changes in fair value of AIG Life and Retirement fixed maturity securities designated to hedge living benefit liabilities, net of interest expense

19 2 NM 83 (31 ) NM

Changes in benefit reserves and DAC, VOBA and SIA related to net realized capital gains

176 393 (55.2 ) 1,065 729 46.1
Loss on extinguishment of debt 52 - NM 298 6 NM
Net realized capital gains (175 ) (386 ) 54.7 (1,410 ) (489 ) (188.3 )

Non-qualifying derivative hedging gains, excluding net realized capital gains

-   (5 ) NM -   (18 ) NM
After-tax operating income attributable to AIG $ 1,421   $ 1,621   (12.3 ) $ 5,058   $ 6,345   (20.3 )
 
Income (loss) per common share:
 
Basic
Income from continuing operations $ 1.50 $ 1.11 35.1 $ 4.76 $ 4.05 17.5
Income (loss) from discontinued operations (0.03 ) 0.02   NM 0.06   0.16   (62.5 )
Net income attributable to AIG $ 1.47   $ 1.13   30.1 $ 4.82   $ 4.21   14.5
 
Diluted
Income from continuing operations $ 1.49 $ 1.11 34.2 $ 4.74 $ 4.05 17.0
Income (loss) from discontinued operations (0.03 ) 0.02   NM 0.06   0.16   (62.5 )
Net income attributable to AIG $ 1.46   $ 1.13   29.2 $ 4.80   $ 4.21   14.0
After-tax operating income attributable to AIG per diluted share $ 0.96 $ 0.99 (3.0 ) % $ 3.41 $ 3.61 (5.5 )
 
 
Weighted average shares outstanding:
Basic 1,475.1 1,642.5 1,476.0 1,758.0
Diluted 1,485.3 1,642.5 1,481.4 1,758.0
 
Book value per common share (b) $ 67.10 $ 68.87 (2.6 )

Book value per common share excluding accumulated other comprehensive income (c)

$ 62.68 $ 60.59 3.4 %
 
 
Return on equity (d) 8.8 % 7.2 % 9.6 % 9.6 %
Return on equity, excluding AOCI (e) 9.5 % 8.0 % 10.7 % 10.5 %
Return on equity - after-tax operating income (f) 6.2 % 7.0 % 7.6 % 9.0 %

 

Financial highlights - notes

*

   

Including reconciliation in accordance with Regulation G.

(a)

Includes gains (losses) from hedging activities that did not qualify for hedge accounting treatment, including the related foreign exchange gains and losses.

(b)

Represents total AIG shareholders' equity divided by common shares outstanding.

(c)

Represents total AIG shareholders' equity, excluding AOCI divided by shares outstanding.

(d)

Computed as Actual or Annualized net income (loss) attributable to AIG divided by average AIG shareholders' equity. Equity includes deferred tax assets.

(e)

Computed as Actual or Annualized net income (loss) attributable to AIG divided by average AIG shareholders' equity, excluding AOCI. Equity includes deferred tax assets.

(f)

Computed as Actual or Annualized after-tax operating income divided by average AIG shareholders' equity, excluding AOCI. Equity includes deferred tax assets.





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