American International Group, Inc. New · NYSE:AIG
American International Group, Inc. New — American International Group — Q3 2011 Earnings Presentation
25 slides from American International Group, Inc. New's earnings presentation, Nov 4, 2011
Slide 1: American International Group, Inc. Third Quarter 2011 Results
AIG F American International Group, Inc. Third Quarter 2011 Results Conference Call Presentation November 4 , 2011 1
Slide 2: Cautionary Statement Regarding Projections and Other Information About Future Events
Cautionary Statement Regarding Projections and Other Information About Future Events It should be noted that this document and the remarks made on the conference call may include projections, goals, assumptions and statements which may constitute “forward-looking statements” within the meaning of th
Slide 3: Agenda
Agenda 1. Overview – Robert H. Benmosche 2. Financial Overview – David L. Herzog 1. Consolidated Results 2. Chartis Results 3. SunAmerica Financial Group Results 4. Tax 3. Q&A 3
Slide 4: Overview
Overview Robert H. Benmosche President and Chief Executive Officer 4
Slide 5: Highlights of the Quarter
Highlights of the Quarter Macro environment pressure across investments and operating businesses Core insurance operations positioned for longer term horizon Volatility of AIA and Maiden Lane III interests Positive pricing trends Continued shift in mix of business to higher margin lines Initiatives
Slide 6: Financial Overview
Financial Overview David L. Herzog Executive Vice President and Chief Financial Officer 6
Slide 7: Earnings Highlights
Earnings Highlights Third Quarter Year-to-Date ($ millions, except earnings per share) 2011 2010 Change 2011 2010 Change Revenues 12,716 19,455 (34.6%) 46,828 56,324 (16.9%) 1 Income (loss) from continuing operations (3,724) (180) NM (2,810) 2,404 (216.9%) Income (loss) from discontinued operations,
Slide 8: 3Q 2011 Macroeconomic Drivers
3Q 2011 Macroeconomic Drivers Substantial negative impacts on results driven by macroeconomic drivers including declining equity markets, widening credit spreads, declining interest rates, and other factors. Pre-tax Notable Items ($ in billions) P&L Impact AIA Fair Value ($2.3) ILFC Fleet Review (1.
Slide 9: ILFC Impairment
ILFC Impairment Key judgments were made as part of the September 30, 2011 impairment assessment including the following: Expected Aircraft Holding Period Future Lease Rates and Term Net Overhauls and Future Top-up Obligations Residual Value Fair Value Assumptions Impairment Analysis1 Planes Impaired
Slide 10: Consolidated Performance
Consolidated Performance Third Quarter Year-to-Date ($ millions) 2011 2010 Change 2011 2010 Change Continuing insurance pre-tax operating income: Chartis $442 $1,072 (58.8%) $768 $2,906 (73.6%) SunAmerica 444 1,028 (56.8%) 2,330 3,005 (22.5%) Sub-Total - Continuing Insurance 886 2,100 (57.8%) 3,098
Slide 11: After-Tax Operating Income Reconciliation
After-Tax Operating Income Reconciliation Third Quarter Year-to-Date ($ millions, except earnings per share) 2011 2010 Change 2011 2010 Change After-tax operating income (loss) attrib. to AIG ($3,038) ($114) 2,564.9% $268 $1,316 (79.6%) Restructuring: Net Income from divested businesses (mainly AIA)
Slide 12: 3Q 2011 Capital Structure
3Q 2011 Capital Structure ($ in billions) $161.6 FRBNY Facility Senior Debt¹ $21.0 Junior Subordinated Debt $13.0 $121.4 Redeemable NCI attri. to AIA/ALICO SPVs² $11.7 $0.4 $2.2 $13.4 Redeemable 3rd Party NCI $11.8 $23.0 ($ in billions) Equity Units $9.3 $0.1 Series C Preferred $41.6 Series E Prefer
Slide 13: Chartis Results
Chartis Results 13
Slide 14: Chartis: Operating Income
Chartis: Operating Income Chartis reported operating income of $442 million for the third quarter. Third Quarter Year-to-Date ($ millions) 2011 2010 Change 2011 2010 Change Net premiums written $8,659 $8,598 0.7% 26,992 24,034 12.3% Net premiums earned 9,043 8,597 5.2% 26,727 23,971 11.5% Claims and
Slide 15: Chartis: Premiums
Chartis: Premiums Chartis premiums increased 0.7% and included a 4.2% increase from foreign exchange. Growth continues in the international regions and the Consumer Insurance business. Third Quarter Year-to-Date NPW ($ millions) 2011 2010 Change 2011 2010 Change U.S. Commercial $3,543 $3,853 (8.0%)
Slide 16: Chartis: Investments
Chartis: Investments Quarterly net investment income increased 1.7% driven by a relatively stable yield on an increased investment balance. Third Quarter Year-to-Date ($ millions) 2011 2010 Change 2011 2010 Change Interest and dividend $970 $873 11.1% 2,779 2,568 8.2% Partnership income 55 16 243.8%
Slide 17: SunAmerica Financial Group Results
SunAmerica Financial Group Results 17
Slide 18: SunAmerica: Operating Income
SunAmerica: Operating Income SunAmerica reported operating income of $444 million in the third quarter of 2011. Variable Annuity benefits and DAC amortization increased due to the weak equity markets. Third Quarter Year-to-Date ($ millions) 2011 2010 Change 2011 2010 Change Premiums, deposits and ot
Slide 19: SunAmerica: Premiums, Deposits and Other Considerations
SunAmerica: Premiums, Deposits and Other Considerations SunAmerica Premiums, Deposits and Other Considerations increased 29.5% in the third quarter driven by retirement services products. Life insurance sales increased 14.0% over the prior period. Third Quarter Year-to-Date ($ millions) 2011 2010 Ch
Slide 20: SunAmerica: Investments
SunAmerica: Investments SAFG third quarter net investment income declined 13.6% over the prior period primarily driven by a lower fair market valuation of the Maiden Lane II investment and lower partnership income. A prolonged low interest rate environment would continue to pressure base yields. Thi
Slide 21: SunAmerica: Net Investment Spreads
SunAmerica: Net Investment Spreads While spreads narrowed, net spread rate excluding partnerships and other enhancements increased in the third quarter. 9 Months 2010 to 9 Months 2011 Change in Net Spreads VALIC Western National 3.00% 3.00% 2.50% 2.50% 2.06% 2.10% 0.15% 0.15% 2.00% 0.15% 1.75% 2.00%
Slide 22: Tax
Tax 22
Slide 23: Group Deferred Tax Asset Overview
Group Deferred Tax Asset Overview AIG has substantial tax attribute carry forwards that are available under U.S. tax law to offset future U.S. federal income tax obligations. As of 12/31/10 Origin / Gross Deferred ($ in billions) Type Source Attributes Tax Asset Utilization / Limitations • AIG FP •
Slide 24: Effective Tax Rate
Effective Tax Rate Q3 2011 effective tax rate from continuing operations – 14.5% – Lower than 35% primarily due to tax exempt income, investments in partnerships, partially offset by an increase in the valuation allowance attributable to continuing operations Q3 2011 effective tax rate for computing
Slide 25: Q&A
Q&A 25
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