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AIG FILES 2005 ANNUAL REPORT ON FORM 10-K AND 2004 FORM 10-K/A
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NEW YORK--March 16, 2006--American International Group, Inc. (AIG) announced today that it has filed its Annual Report on Form 10-K for the year ended December 31, 2005 with the Securities and Exchange Commission.

Net income for the full year 2005 was $10.48 billion or $3.99 per diluted share, compared to $9.84 billion or $3.73 per diluted share in the full year 2004. Fourth quarter 2005 net income was $444 million or $0.17 per diluted share, compared to $1.61 billion or $0.62 per diluted share in the fourth quarter of 2004. At December 31, 2005, consolidated assets were $853.37 billion and shareholders' equity was $86.32 billion.

Full year and fourth quarter 2005 results include a $1.15 billion after-tax charge resulting from the previously announced settlements with the United States Department of Justice, the Securities and Exchange Commission, the Office of the New York Attorney General and the New York State Department of Insurance in connection with the accounting, financial reporting and insurance brokerage practices of AIG and its subsidiaries, as well as claims relating to the underpayment of certain workers compensation premium taxes and other assessments.

In addition, full year and fourth quarter 2005 results include a $1.19 billion after-tax charge related to an increase of approximately $1.82 billion to AIG's net reserve for losses and loss expenses. The reserve increase followed the completion of an independent, comprehensive review of the loss reserves of AIG's principal property-casualty insurance operations conducted by Milliman, Inc. and AIG's own actuarial analysis.

Full year 2005 results include after-tax net catastrophe related losses of $2.11 billion. Fourth quarter 2005 results include approximately $390 million after-tax net losses arising from Hurricane Wilma, including net reinstatement premium costs, as well as approximately $150 million after-tax net losses relating to adverse development from third quarter 2005 catastrophe events, primarily Hurricane Katrina. Full year and fourth quarter 2004 results include after-tax net catastrophe related losses of $729 million and $217 million, respectively.

Additionally, AIG today filed its 2004 Annual Report on Form 10-K/A restating its consolidated financial statements for the years ended December 31, 2004, 2003 and 2002, along with affected Selected Consolidated Financial Data for 2001 and 2000 and quarterly financial information for 2004 and 2003. As previously announced, the restatement addresses the correction of certain errors, the preponderance of which were identified during the ongoing remediation of previously disclosed material weaknesses in internal control. The restatement also includes adjustments in addition to those previously announced, principally relating to remediation efforts with respect to reconciliation of certain balance sheet accounts in the Domestic Brokerage Group.


                             TWELVE MONTHS
                 (in millions, except per share data)


                                                 Per Diluted Share (a)
                                                ----------------------
                                 2004                   2004
                        2005  (Restated) Change 2005 (Restated) Change
----------------------------------------------------------------------
Net income             $10,477    $9,839   6.5% $3.99    $3.73   7.0%

Realized capital gains
 (losses), including
 pricing gains
 (losses), net of tax      201        85     -   0.07     0.03     -

FAS 133 gains (losses),
 excluding realized
 capital gains
 (losses), net of tax
 (b)                     1,530       315     -   0.59     0.12     -

Cumulative effect of an
 accounting change, net
 of tax (c)                  -      (144)    -      -    (0.06)    -

Adjusted net income (d)  8,746     9,583 (8.7)%  3.33     3.64 (8.5)%

Effect of settlement
 charge, net of tax (e)  1,147        53     -   0.44     0.02     -

 Effect of General
  Insurance reserve
  charge, net of tax
  (f)                    1,186       553     -   0.45     0.21     -

Effect of catastrophe
 related losses, net of
 tax                    $2,109      $729     -  $0.80    $0.27     -

Average shares
 outstanding                                    2,627    2,637
----------------------------------------------------------------------


                            FOURTH QUARTER
                 (in millions, except per share data)

                                                Per Diluted Share (a)
                                               -----------------------
                                2004                    2004
                        2005 (Restated) Change  2005 (Restated) Change
----------------------------------------------------------------------
Net income              $444    $1,612 (72.5)% $0.17     $0.62 (72.6)%

Realized capital gains
 (losses), including
 pricing gains
 (losses), net of tax    182       123      -   0.07      0.05      -

FAS 133 gains (losses),
 excluding realized
 capital gains
 (losses), net of tax
 (b)                    (114)     (240)     -  (0.04)    (0.09)     -

Adjusted net income (d)  376     1,729 (78.3)%  0.14      0.66 (78.8)%

Effect of settlement
 charge, net of tax (e)1,147        53      -   0.44      0.02      -
                                            -
  Effect of General
   Insurance reserve
   charge, net of tax
   (f)                 1,186       553      -   0.45      0.21      -

Effect of catastrophe
 related losses, net of
 tax                    $540      $217      -  $0.20     $0.08      -

Average shares
 outstanding                                   2,626     2,632
----------------------------------------------------------------------

(a) Assumes conversion of contingently convertible bonds due to the
    adoption of EITF Issue No. 04-8 "Accounting Issues Related to
    Certain Features of Contingently Convertible Debt and the Effect
    on Diluted Earnings per Share" of $3 million and $11 million, net
    of tax, for both the fourth quarter and twelve months 2005 and
    2004, respectively.

(b) Includes the effect of hedging activities that do not qualify
    for hedge accounting treatment under FAS 133, including the
    related foreign exchange gains and losses.

(c) Represents the cumulative effect of an accounting change, net
    of tax, related to SOP 03-1 "Accounting and Reporting by Insurance
    Enterprises for Certain Nontraditional Long-Duration Contracts and
    for Separate Accounts".

(d) Excludes realized capital gains (losses) which includes pricing
    net investment gains, cumulative effect of an accounting change
    and FAS 133, net of tax.

(e) Full year and fourth quarter 2004 includes the after-tax charge
    related to a settlement with the SEC, DOJ and the U.S. Attorney
    for the Southern District of Indiana with respect to issues
    arising from certain transactions with Brightpoint, Inc., the PNC
    Financial Services Group, Inc. and related matters.

(f) Full year and fourth quarter 2004 includes an after-tax charge
    related to an increase of $850 million to net loss reserves
    reflecting a change in estimates for asbestos and environmental
    exposures.

Commenting on full year and fourth quarter 2005 results, AIG President and CEO Martin J. Sullivan said, "In what was a most challenging year for the company, AIG demonstrated its true resilience by generating net income of $10.48 billion for the full year and $444 million for the fourth quarter, after taking charges to settle legal and regulatory issues, increasing general insurance loss reserves and sustaining record catastrophe losses, all while initiating significant change throughout the organization. These results are a testament to AIG's diversified portfolio of market-leading businesses and the commitment of our 97,000 employees who, throughout this challenging year, remained focused on executing the strategies we have in place.

"AIG is financially strong, and our major business units remain focused on our strategic objectives. Our tradition of entrepreneurship and innovation will enable AIG to continue to perform successfully, enter new markets, develop new products and meet our clients' needs. There is every reason for us to be optimistic about our future. AIG today is a better company for all that we have been through.

"The settlement with Federal and New York authorities reached in February was an important step forward in resolving the legal and regulatory issues facing AIG and will allow us to focus intently on our business going forward."

General Insurance reported a fourth quarter 2005 operating loss before realized capital gains of $1.16 billion and a combined ratio of 121.39. These results include catastrophe losses ($775 million), the general insurance loss reserve charge ($1.824 billion) and adjustments to Domestic Brokerage Group balance sheet accounts ($291 million). The effect of these three items on the fourth quarter combined ratio was 28.10 points. General insurance cash flow remains strong at $2.65 billion and $12.03 billion for the fourth quarter and full year 2005, respectively.

Domestic Brokerage Group net premiums written in the fourth quarter of 2005 reflect generally improving renewal retention rates, higher property rates and increased submission activity in the aftermath of the hurricanes and a modest decline in rates in some of the casualty classes. Personal Lines premium growth was driven by strong performance by Agency Auto and the Private Client Group, which offset a sharp decline in the assigned risk market. United Guaranty experienced increased new business production, improved persistency and growth in its international operations in the fourth quarter of 2005. Foreign General experienced solid premium growth in most regions, particularly in its personal accident, energy and personal lines portfolios, but was affected by softening commercial market conditions in the United Kingdom.

Life Insurance & Retirement Services fourth quarter 2005 operating income before realized capital gains (losses) and including pricing net investment gains increased 19.8 percent to $2.33 billion.

In Foreign Life & Retirement Services, strong growth in accident and health and group products was offset somewhat by slower life insurance sales as sales shifted from traditional life insurance to investment oriented products. Foreign fixed annuity sales slowed due to the interest rate environment and the depreciating yen, while variable annuity results were aided by a stronger Japanese equity market and increased production in the UK/Ireland region.

In the Domestic Life Insurance & Retirement Services segment, life insurance continued to demonstrate solid growth, with periodic retail sales increasing 17.1 percent and 14.8 percent for the quarter and the year, respectively. The individual fixed annuity business continues to be adversely affected by the interest rate environment; however, individual variable annuity deposits have been aided by the well-received new guaranteed minimum withdrawal benefit feature introduced late in the fourth quarter.

Fourth quarter 2005 Financial Services operating income before the effect of FAS 133 was $553 million, a decline of 14.9 percent compared to fourth quarter 2004. International Lease Finance Corporation continued to see improvements in lease rates and an increase in demand for its modern fuel efficient aircraft, offset by higher interest rates and other leasing related reserves. Results from Capital Markets operations were adversely affected by the reduction in volume of its investor based structured notes business due to AIG's inability to fully access the capital markets. These trends continued into the first quarter of 2006. Consumer Finance receivable growth continued to be strong in the United States, Argentina and Poland. However, operating income growth moderated as rising U.S. interest rates increased funding costs and slowed real estate refinancing opportunities. In Taiwan, the credit card business increased its loan loss provision.

Asset Management results in the fourth quarter 2005, before the effect of FIN46R and FAS 133, totaled $477 million compared to $480 million in fourth quarter 2004. This included growth in institutional assets under management and the associated fee revenue, as well as gains on real estate investments and private equity partnership fees, offset by the run-off of the existing Guaranteed Investment Contract portfolio and the delay in initiating AIG's matched investment program.

Additional supplementary financial data is available in the Investor Information section of www.aigcorporate.com.

A conference call for the investment community will be held tomorrow, Friday, March 17, 2006 at 8:30 a.m. EST. The call will be broadcast live on the Internet at www.aigwebcast.com. A replay will be archived at the same URL through Friday, March 31, 2006.

It should be noted that the remarks made in this press release or on the conference call may contain projections concerning financial information and statements concerning future economic performance and events, plans and objectives relating to management, operations, products and services, and assumptions underlying these projections and statements. Please refer to AIG's Annual Report on Form 10-K for the period ended December 31, 2005 and AIG's past and future filings with the Securities and Exchange Commission for a description of the business environment in which AIG operates and the factors that may affect its business. AIG is not under any obligation (and expressly disclaims any such obligation) to update or alter its projections and other statements whether as a result of new information, future events or otherwise.

American International Group, Inc. (AIG), world leaders in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed in the U.S. on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.

Comment on Regulation G

This press release, including the financial highlights, includes certain non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP figures in accordance with Regulation G are included within the relevant tables or in the Fourth Quarter 2005 Supplementary Financial Data available in the Investor Information section of AIG's corporate website, www.aigcorporate.com.

Throughout this press release, AIG presents its operations in the way it believes will be most meaningful and useful, as well as most transparent, to the investing public and others who use AIG's financial information in evaluating the performance of AIG. That presentation includes the use of certain non-GAAP measures. In addition to the GAAP presentations, in some cases, revenues, net income, operating income and related rates of performance are shown exclusive of realized capital gains (losses), cumulative effect of an accounting change in 2004, the effect of FIN46R, the effect of FAS 133 and the effect of the catastrophe related losses, settlement charges and the general insurance reserve charge.

Although the investment of premiums to generate investment income (or loss) and realized capital gains or losses is an integral part of both life and general insurance operations, the determination to realize capital gains or losses is independent of the insurance underwriting process. Moreover, under applicable GAAP accounting requirements, losses can be recorded as the result of other than temporary declines in value without actual realization. In sum, investment income and realized capital gains or losses for any particular period are not indicative of business performance for such period.

AIG believes that a major part of the discipline of a successful general insurance company is to produce an underwriting profit, and it evaluates the performance of and manages its operations on that basis. Providing only a GAAP presentation of net income and operating income makes it much more difficult for users of AIG's financial information to evaluate AIG's success or failure in its basic business, that of insurance underwriting, and may, in AIG's opinion, lead to a less meaningful presentation of AIG's operations. The equity analysts who follow AIG exclude the realized capital transactions in their analyses for the same reason, and consistently request that AIG provide the non-GAAP information.

Life and retirement services production (premiums, deposits and other considerations), gross premiums written, net premiums written and combined ratios are presented in accordance with accounting principles prescribed or permitted by insurance regulatory authorities because these are standard measures of performance used in the insurance industry and thus allow for more meaningful comparisons with AIG's insurance competitors.


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


                                       Three Months Ended December 31,
                                          2005       2004(a)
                                                   (Restated)  Change
                                       ----------- ----------- -------
General Insurance Operations:

   Net Premiums Written                $   10,126  $   10,078    0.5 %
   Net Premiums Earned                     10,303      10,165    1.4
   Underwriting Loss                       (2,130)     (1,129)     -
   Net Investment Income                      969         753   28.7 %
   Income before Realized Capital
        Gains (Losses)                     (1,161)       (376)     -
   Realized Capital Gains (Losses)             86          46      -
   Operating Income (Loss)             $   (1,075) $     (330)     -

----------------------------------------------------------------------
        Loss Ratio                          94.43       86.52
        Expense Ratio                       26.96       23.54
        Combined Ratio                     121.39      110.06
             Excluding Catastrophe
             Related Losses                113.86      106.93
             Excluding Catastrophe
             Related Losses and
             Reserve Charge                 96.16       98.57
----------------------------------------------------------------------

Life Insurance & Retirement Services Operations:

   GAAP Premiums                       $    7,447  $    7,025    6.0 %
   Net Investment Income                    4,983       4,062   22.7
   Pricing Net Investment Gains (b)            75          49   53.1
   Income before Realized Capital
        Gains (Losses)                      2,332       1,946   19.8
   Realized Capital Gains (Losses)(b)        (169)        290      -
   Operating Income                         2,163       2,236   (3.3)

Financial Services Operations:
   Operating Income excluding FAS 133         553         650  (14.9)
   FAS 133(c)                                 240        (740)     -
   Operating Income (Loss)                    793         (90)     -

Asset Management Operations:
   Operating Income excluding FIN46R
        and FAS 133                           477         480   (0.6)
   FIN46R (d)                                  72          48      -
   FAS 133 (c)                                 22          72      -
   Operating Income                           571         600   (4.8)

Other Realized Capital
   Gains (Losses)                             260        (266)     -

Other Income (Deductions) - net            (2,396)        148      -

Income before Income Taxes, Minority
   Interest and Cumulative Effect of
   an Accounting Change                       316       2,298  (86.2)

Income Taxes (Benefits)                      (279)        548      -

Income before Minority Interest
   and Cumulative Effect of
   an Accounting Change                       595       1,750  (66.0)

Minority Interest, after-tax :
   Income before Realized Capital
   Gains (Losses)                            (152)       (130)     -

   Realized Capital Gains (Losses)              1          (8)     -

Income before Cumulative Effect of
   an Accounting Change                       444       1,612  (72.5)

Cumulative Effect of an Accounting
   Change, net of tax (e)                       -           -      -

Net Income                             $      444  $    1,612  (72.5)%


                                      Twelve Months Ended December 31,
                                          2005       2004(a)
                                                   (Restated)  Change
                                       ----------- ----------- -------
General Insurance Operations:

   Net Premiums Written                $   41,872  $   40,623    3.1 %
   Net Premiums Earned                     40,809      38,537    5.9
   Underwriting Loss                       (2,050)       (247)     -
   Net Investment Income                    4,031       3,196   26.1
   Income before Realized Capital
        Gains (Losses)                      1,981       2,949  (32.8)
   Realized Capital Gains (Losses)            334         228      -
   Operating Income (Loss)             $    2,315  $    3,177  (27.1)%

----------------------------------------------------------------------
        Loss Ratio                          81.09       78.78
        Expense Ratio                       23.60       21.52
        Combined Ratio                     104.69      100.30
             Excluding Catastrophe
             Related Losses                 97.63       97.56
             Excluding Catastrophe
             Related Losses and
             Reserve Charge                 93.19       95.35
----------------------------------------------------------------------

Life Insurance & Retirement Services Operations:

   GAAP Premiums                       $   29,400  $   28,088    4.7 %
   Net Investment Income                   18,134      15,269   18.8
   Pricing Net Investment Gains (b)           344         225   52.9
   Income before Realized Capital
        Gains (Losses)                      9,406       8,105   16.1
   Realized Capital Gains (Losses) (b)       (562)       (182)     -
   Operating Income                         8,844       7,923   11.6

Financial Services Operations:
   Operating Income excluding FAS 133       2,296       2,329   (1.4)
   FAS 133(c)                               1,980        (149)     -
   Operating Income                         4,276       2,180   96.1

Asset Management Operations:
   Operating Income excluding FIN46R
        and FAS 133                         1,843       1,617   14.0
   FIN46R (d)                                 261         195      -
   FAS 133(c)                                 149         313      -
   Operating Income                         2,253       2,125    6.0

Other Realized Capital
   Gains (Losses)                             225        (227)     -

Other Income (Deductions) - net            (2,700)       (333)     -

Income before Income Taxes, Minority
   Interest and Cumulative Effect of
   an Accounting Change                    15,213      14,845    2.5

Income Taxes (Benefits)                     4,258       4,407      -

Income before Minority Interest
   and Cumulative Effect of
   an Accounting Change                    10,955      10,438    5.0

Minority Interest, after-tax :
   Income before Realized Capital
   Gains (Losses)                            (465)       (440)     -

   Realized Capital Gains (Losses)            (13)        (15)     -

Income before Cumulative Effect of
   an Accounting Change                    10,477       9,983    4.9

Cumulative Effect of an Accounting
   Change, net of tax (e)                       -        (144)     -

Net Income                             $   10,477  $    9,839    6.5 %


                                       Three Months Ended December 31,
                                          2005       2004(a)
                                                   (Restated)  Change
                                       ----------- ----------- -------

Net Income                             $      444  $     1,612 (72.5)%

Realized Capital Gains (Losses),
   including Pricing Gains(Losses),
   net of tax                                 182          123     -

FAS 133 Gains (Losses), excluding
   Realized Capital Gains
   (Losses), net of tax                      (114)        (240)    -

Cumulative Effect of an Accounting
   Change, net of tax (e)                       -            -     -

Adjusted Net Income (f)                       376        1,729 (78.3)

Effect of Settlement Charge,
   net of tax                               1,147           53     -

Effect of General Insurance
   Reserve Charge, net of tax               1,186          553     -

Effect of Catastrophe Related
   Losses, net of tax                         540          217     -

Per Share - Diluted (g):

Net Income                                   0.17         0.62 (72.6)

Realized Capital Gains (Losses),
   including Pricing Gains(Losses),
   net of tax                                0.07         0.05     -

FAS 133 Gains (Losses), excluding
   Realized Capital Gains
   (Losses), net of tax                     (0.04)       (0.09)    -

Cumulative Effect of an Accounting
   Change, net of tax (e)                       -            -     -

Adjusted Net Income (f)                      0.14         0.66 (78.8)%

Effect of Settlement Charge,
   net of tax                                0.44         0.02     -

Effect of General Insurance
   Reserve Charge, net of tax                0.45         0.21     -

Effect of Catastrophe Related
   Losses, net of tax                  $     0.20  $      0.08     -

Average Diluted Common
   Shares Outstanding (g)                   2,626        2,632


                                      Twelve Months Ended December 31,
                                           2005      2004(a)
                                                   (Restated)  Change
                                       ----------- ----------- -------

Net Income                             $    10,477 $     9,839   6.5 %

Realized Capital Gains (Losses),
   including Pricing Gains (Losses),
   net of tax                                  201          85     -

FAS 133 Gains (Losses), excluding
   Realized Capital Gains
   (Losses), net of tax                      1,530         315     -

Cumulative Effect of an Accounting
   Change, net of tax (e)                        -        (144)    -

Adjusted Net Income (f)                      8,746       9,583  (8.7)

Effect of Settlement Charge,
   net of tax                                1,147          53     -

Effect of General Insurance
   Reserve Charge, net of tax                1,186         553     -

Effect of Catastrophe Related
   Losses, net of tax                        2,109         729     -

Per Share - Diluted (g):

Net Income                                    3.99        3.73   7.0

Realized Capital Gains (Losses),
   including Pricing Gains (Losses),
   net of tax                                 0.07        0.03     -

FAS 133 Gains (Losses), excluding
   Realized Capital Gains
   (Losses), net of tax                       0.59        0.12     -

Cumulative Effect of an Accounting
   Change, net of tax (e)                        -       (0.06)    -

Adjusted Net Income (f)                       3.33        3.64  (8.5)%

Effect of Settlement Charge,
   net of tax                                 0.44        0.02     -

Effect of General Insurance
   Reserve Charge, net of tax                 0.45        0.21     -

Effect of Catastrophe Related
   Losses, net of tax                  $      0.80 $      0.27     -

Average Diluted Common
   Shares Outstanding (g)                    2,627       2,637


* Including reconciliation in accordance with Regulation G.

(a) Certain accounts have been reclassified in 2004 to conform to the
    2005 presentation.

(b) For purposes of this presentation, pricing net investment gains
    are segregated out of total realized capital gains (losses). They
    represent certain amounts of realized capital gains where gains
    are an inherent element in pricing certain life products in some
    foreign countries.

(c) Includes the effect of hedging activities that do not qualify for
    hedge accounting treatment under FAS 133 "Accounting for
    Derivative Instruments and Hedging Activities", including the
    related foreign exchange gains and losses.

(d) Includes the results of certain AIG managed private equity and
    real estate funds that are consolidated effective December 31,
    2003 pursuant to FIN46R, "Consolidation of Variable Interest
    Entities".

(e) Represents the cumulative effect of an accounting change, net of
    tax, related to SOP 03-1 "Accounting and Reporting by Insurance
    Enterprises for Certain Nontraditional Long-Duration Contracts and
    for Separate Accounts".

(f) Adjusted net income excludes realized capital gains (losses) which
    includes pricing net investment gains, cumulative effect of an
    accounting change and FAS 133 "Accounting for Derivative
    Instruments and Hedging Activities", net of tax.

(g) Assumes conversion of contingently convertible bonds due to the
    adoption of EITF Issue No. 04-8 "Accounting Issues Related to
    Certain Features of Contingently Convertible Debt and the Effect
    on Diluted Earnings per Share" of $3 million and $11 million, net
    of tax, for both the fourth quarter and twelve months 2005 and
    2004, respectively.

CONTACT:
American International Group, Inc.
Investment Community:
Charlene Hamrah, 212-770-7074

News Media:
Joe Norton, 212-770-3144