American International Group, Inc.

Transcription

1 Financial Supplement First Quarter 2012 This report should be read in conjunction with AIG s Report on Form 10-Q for the quarter ended March 31, 2012 filed with the Securities and Exchange Commission. All financial information in this document is unaudited.

2 Financial Supplement Contact: Liz Werner Investor Relations (212) Table of Contents. Page(s) Cautionary Statement Regarding Forward-Looking Information... 1 Non-GAAP Financial Measures... 2 Consolidated Results Consolidated Statement of Operations Consolidated Statement of Segment Operations Condensed Balance Sheets Debt and Capital Chartis Chartis Operating Statistics Chartis - Operating Statistics by Business Chartis - Operating Statistics (U.S. & International) Worldwide Net Premiums Written by Line of Business & Region Net Premiums Written by Line of Business Chartis Notes SunAmerica Financial Group SunAmerica Financial Group Operating Statistics Domestic Life Insurance (American General) Operating Statistics Domestic Life Insurance (American General) Sales, Deposits and In Force Domestic Life Insurance (American General) Other Data Domestic Retirement Services Operating Statistics Domestic Retirement Services Product Statistics Domestic Retirement Services Account Value Rollforward Domestic Retirement Services Spread Information Domestic Retirement Services Group Retirement Products (VALIC) Domestic Retirement Services Individual Variable Annuities (SunAmerica Retirement markets) Guaranteed Benefits SunAmerica Financial Group Notes Aircraft Leasing Aircraft Leasing Operating Statistics Other Other Operations Mortgage Guaranty Operating Statistics Parent Company Financial Statements Investment Information Other Invested Assets by Segment Realized Capital Gains (Losses) Return on Average Partnership and Mutual Funds Assets by Segment... 45

3 Cautionary Statement Regarding Forward-Looking Information This Financial Supplement includes, and officers and representatives of American International Group, Inc. (AIG) may from time to time make, projections, goals, assumptions and statements that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These projections, goals, assumptions and statements are not historical facts but instead represent only AIG s belief regarding future events, many of which, by their nature, are inherently uncertain and outside AIG s control. These projections, goals, assumptions and statements include statements preceded by, followed by or including words such as believe, anticipate, expect, intend, plan, view, target or estimate. These projections, goals, assumptions and statements may address, among other things: the timing of the disposition of the ownership position of the United States Department of the Treasury (the Department of the Treasury) in AIG; the cash flow projections and fair value for AIG s interest in Maiden Lane III LLC (ML III); the monetization of AIG s interests in International Lease Finance Corporation (ILFC); AIG s exposures to subprime mortgages, monoline insurers, the residential and commercial real estate markets, state and municipal bond issuers and sovereign bond issuers; AIG s exposure to European governments and European financial institutions; AIG s strategy for risk management; AIG s ability to retain and motivate its employees; AIG s generation of deployable capital; AIG s return on equity and earnings per share long-term aspirational goals; AIG s strategies to grow net investment income, efficiently manage capital and reduce expenses; AIG s strategies for customer retention, growth, product development, market position, financial results and reserves; and the revenues and combined ratios of AIG s subsidiaries. It is possible that AIG s actual results and financial condition will differ, possibly materially, from the results and financial condition indicated in these projections, goals, assumptions and statements. Factors that could cause AIG s actual results to differ, possibly materially, from those in the specific projections, goals, assumptions and statements include: actions by credit rating agencies; changes in market conditions; the occurrence of catastrophic events; significant legal proceedings; concentrations in AIG s investment portfolios, including its municipal bond portfolio; judgments concerning casualty insurance underwriting and reserves; judgments concerning the recognition of deferred tax assets; judgments concerning deferred policy acquisition costs (DAC) recoverability; judgments concerning the recoverability of aircraft values in ILFC s fleet; and such other factors as are discussed throughout Part I Item 2. Management s Discussion and Analysis of Financial Condition and Results of Operations in AIG s Report on Form 10-Q for the quarter ended March 31, 2012, and in Part I Item 1A. Risk Factors and discussed throughout Part II Item 7. Management s Discussion and Analysis of Financial Condition and Results of Operations in AIG s Annual Report on Form 10-K for the year ended December 31, 2011, as amended by Amendment No. 1 and Amendment No. 2 on Form 10-K/A filed on February 27, 2012 and March 30, 2012, respectively. AIG is not under any obligation (and expressly disclaims any obligation) to update or alter any projections, goals, assumptions or other statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. 1

4 Non-GAAP Financial Measures Throughout this financial supplement, AIG presents its operations in the way it believes will be most meaningful and representative of ongoing operations as well as most transparent. That presentation includes the use of certain non-gaap financial measures. The reconciliations of such measures to the most comparable GAAP measures in accordance with Regulation G are included within the relevant tables. AIG believes that After-tax operating income (loss) permits a better assessment and enhanced understanding of the operating performance of its businesses by highlighting the results from ongoing operations and the underlying profitability of its businesses. After-tax operating income (loss) excludes net income (loss) from discontinued operations, net gain (loss) on sale of divested businesses, net income (loss) from divested businesses, deferred income tax valuation allowance charges and releases, amortization of the Federal Reserve Bank of New York (FRBNY) prepaid commitment fee asset, changes in fair value of SunAmerica Financial Group s (SunAmerica) fixed income securities designated to hedge living benefit liabilities, SunAmerica increased benefit reserves and benefit (amortization) of deferred policy acquisition costs (DAC), value of business acquired (VOBA), and sales inducement assets (SIA) related to net realized capital gains (losses), net realized capital gains (losses) and non-qualifying derivative hedging activities, excluding net realized capital gains (losses). See page 6 for the reconciliation of Net income (loss) attributable to AIG to After-tax operating income (loss). Additionally, in some cases, revenues, net income, operating income and related rates of performance are shown exclusive of the effect of tax benefits not obtained for losses incurred, the recognition of other-than-temporary impairments, partnership income, other enhancements to income, credit valuation adjustments, unrealized market valuation gains (losses), the effect of catastrophe-related losses and prior year loss development, asbestos losses, returned or additional premiums related to prior year development, foreign exchange rates and aircraft impairments. In all such instances, AIG believes that excluding these items permits investors to better assess the operating performance of each of AIG s underlying businesses by highlighting the results from ongoing operations and the underlying profitability of its businesses. AIG believes that providing information in a non-gaap manner is more useful to investors and analysts and more meaningful than the GAAP presentation. When such measures are disclosed, reconciliations to GAAP pre-tax income are provided. 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 underlying business performance for such period. Life and retirement services production (premiums, deposits and other considerations and life insurance CPPE sales) is a non-gaap measure which includes life insurance premiums, deposits on annuity contracts and mutual funds. AIG uses this measure because it is a standard measure of performance used in the insurance industry and thus allows for more meaningful comparisons with AIG s insurance competitors. During the first quarter of 2012, AIG revised its definition of After-tax operating income (loss) to exclude changes in the fair value of SunAmerica s fixed income securities designated to hedge living benefit liabilities and increased benefit reserves related to net realized capital gains (losses). AIG believes that this revised measure of After-tax operating income (loss) permits a better assessment and enhanced understanding of the operating performance of its SunAmerica business by excluding from operating results the volatility associated with these hedging and capital gains taking activities. AIG believes this revised definition of After-tax operating income (loss) is a better measure of how AIG assesses the operating performance of SunAmerica Financial Group s operations. 2

5 Consolidated Statement of Operations (in millions, except per share data) 1Q12 4Q11 3Q11 2Q11 1Q11 Revenues: Premiums $ 9,461 $ 9,781 $ 9,829 $ 9,898 $ 9,482 Policy fees Net investment income 7,105 4, ,464 5,569 Net realized capital gains (losses): (1) Total other-than-temporary impairments on available for sale securities (168) (324) (493) (181) (218) Portion of other-than-temporary impairments on available for sale fixed maturity securities recognized in Accumulated other comprehensive income (loss) (285) Net other-than-temporary impairments on available for sale securities recognized in net income (loss) (453) (286) (422) (125) (215) Other realized capital gains (losses) (433) Total net realized capital gains (losses) (page 44) (303) (648) Aircraft leasing revenue 1,156 1,089 1,129 1,134 1,156 Other income ,196 Total revenues 18,443 17,419 12,719 16,680 17,439 Benefits, claims and expenses: Policyholder benefits and claims incurred 7,102 8,072 8,333 8,086 8,959 Interest credited to policyholder account balances 1,069 1,101 1,146 1,114 1,106 Amortization of deferred acquisition costs 1,347 1,393 1,540 1,322 1,231 Other acquisition and insurance expenses 2,258 2,294 2,067 2,129 1,968 Interest expense ,061 Aircraft leasing expenses , Net loss (gain) on extinguishment of debt (2) 21 (484) ,313 Other expenses Total benefits, claims and expenses 13,859 14,534 16,989 14,886 18,749 Income (loss) from continuing operations before income tax expense (benefit) 4,584 2,885 (4,270) 1,794 (1,310) Income tax expense (benefit) 1,148 (18,577) (665) (296) (226) Income (loss) from continuing operations 3,436 21,462 (3,605) 2,090 (1,084) Income (loss) from discontinued operations, net of income tax expense (benefit) (221) (37) 2,585 Net income (loss) 3,449 21,602 (3,826) 2,053 1,501 Less: Net income (loss) from continuing operations attributable to noncontrolling interests: Noncontrolling nonvoting, callable, junior and senior preferred interests Other (55) Total net income from continuing operations attributable to noncontrolling interests Net income from discontinued operations attributable to noncontrolling interests Total net income attributable to noncontrolling interests Net income (loss) attributable to AIG $ 3,208 $ 21,479 $ (3,990) $ 1,836 $ 1,297 Net income (loss) attributable to AIG common shareholders $ 3,208 $ 21,479 $ (3,990) $ 1,836 $ 485 Income (loss) per common share attributable to AIG common shareholders: Basic: Income (loss) from continuing operations $ 1.70 $ $ (1.99) $ 1.03 $ (1.34) Income (loss) from discontinued operations $ 0.01 $ 0.07 $ (0.11) $ (0.03) $ 1.65 Diluted: Income (loss) from continuing operations $ 1.70 $ $ (1.99) $ 1.03 $ (1.34) Income (loss) from discontinued operations $ 0.01 $ 0.07 $ (0.11) $ (0.03) $ 1.65 Weighted average shares outstanding: Basic 1, , , , ,557.7 Diluted 1, , , , ,557.7 Notes: (1) Includes gains (losses) from hedging activities that did not qualify for hedge accounting, including the related foreign exchange gains, and losses and other-than-temporary impairment charges. (2) Includes a $3.3 billion charge in 1Q11, primarily consisting of the accelerated amortization of the prepaid commitment fee asset resulting from the termination of the FRBNY Credit Facility on January 14, In the fourth quarter of 2011, as a result of the exchange of specified series of its outstanding Junior Subordinated Debentures for senior notes pursuant to its offer to exchange, AIG recognized a $484 million gain. 3

6 Consolidated Statement of Segment Operations (in millions, except per share data) 1Q12 4Q11 3Q11 2Q11 1Q11 Chartis Net premiums written $ 8,820 $ 7,848 $ 8,659 $ 9,167 $ 9,166 Net premiums earned 8,688 8,962 9,043 9,033 8,651 Claims and claims adjustment expenses incurred 5,909 6,675 6,838 6,680 7,756 Underwriting expenses 2,959 2,923 2,737 2,712 2,498 Underwriting loss (180) (636) (532) (359) (1,603) Net investment income 1,223 1,003 1,024 1,142 1,179 Operating income (loss) 1, (424) Net realized capital gains (losses) (135) Other income (loss) 2 (4) (1) - - Pre-tax income (loss) (374) SunAmerica Financial Group Premiums Policy fees Net investment income 2,885 2,372 2,295 2,461 2,754 Other income (1) Total revenues 4,181 3,901 3,544 3,805 4,059 Benefits and expenses 2,870 2,989 3,073 3,082 2,888 Operating income 1, ,171 Change in fair value of fixed income securities designated to hedge living benefit liabilities, net of interest expense (19) Increased benefit reserves and benefit (amortization) of DAC, VOBA and SIA related to net realized capital gains (losses) 36 (132) (163) (48) 16 Net realized capital gains (losses) (466) (220) Pre-tax income Aircraft Leasing Revenues 1,153 1,048 1,129 1,134 1,156 Expenses 1, ,446 1,048 1,039 Operating income (loss) (1,317) Net realized capital gains (losses) 1 (2) (12) 1 3 Pre-tax income (loss) (1,329) Other operations, operating income (loss) 2, (4,242) 114 2,137 Other operations pre-tax income (loss) before net realized capital gains (losses) 2, (4,244) 112 (1,562) Other operations, net realized capital gains (losses) (25) (435) Consolidation and elimination adjustments (44) (78) (26) Income (loss) from continuing operations before income tax expense 4,584 2,885 (4,270) 1,794 (1,310) Income tax expense (benefit) (2) 1,148 (18,577) (665) (296) (226) Income (loss) from continuing operations 3,436 21,462 (3,605) 2,090 (1,084) Income (loss) from discontinued operations, net of tax (221) (37) 2,585 Net income (loss) 3,449 21,602 (3,826) 2,053 1,501 Less: Net income (loss) from continuing operations attributable to noncontrolling interests: Noncontrolling nonvoting, callable, junior and senior preferred interests Other (55) Total net income from continuing operations attributable to noncontrolling interests Net income from discontinued operations attributable to noncontrolling interests Total net income attributable to noncontrolling interests Net income (loss) attributable to AIG $ 3,208 $ 21,479 $ (3,990) $ 1,836 $ 1,297 Income (loss) per common share attributable to AIG common shareholders - diluted: Income (loss) from continuing operations $ 1.70 $ $ (1.99) $ 1.03 $ (1.34) Income (loss) from discontinued operations $ 0.01 $ 0.07 $ (0.11) $ (0.03) $ 1.65 Effective tax rates (page 6): Income (loss) from continuing operations 25.0% N/M 15.6% (16.5)% 17.3% See Accompanying Notes on Page 5 4

7 Consolidated Statement of Segment Operations Notes (1) Other income in 4Q11 represents revenue recorded pursuant to legal settlements. (2) Reflects valuation allowance release of $19.5 billion in 4Q11 as the cumulative positive evidence outweighed the historical negative evidence regarding the likelihood that the deferred tax asset for AIG s U.S. consolidated income tax group (other than life-insurance-business capital loss carryforwards) will be realized. Return on equity computations (ROE): 1Q12 4Q11 3Q11 2Q11 1Q11 Annualized Net income (loss) attributable to AIG $ 12,832 $ 85,916 $ (15,960) $ 7,344 $ 5,188 Annualized After-tax operating income (loss) attributable to AIG $ 12,388 $ 6,356 $ (11,984) $ 4,960 $ 8,356 Average AIG Shareholders' equity $ 102,495 $ 91,225 $ 84,076 $ 83,444 $ 79,252 Less: Average AOCI 6,013 5,551 7,480 7,941 7,207 Average AIG Shareholders' equity, excluding AOCI $ 96,482 $ 85,674 $ 76,596 $ 75,503 $ 72,045 ROE (a) 12.5% N/M N/M 8.8% 6.5% ROE excluding AOCI (b) 13.3% N/M N/M 9.7% 7.2% ROE - After-tax operating income (c) 12.8% 7.4% N/M 6.6% 11.6% N/M - Not meaningful (a) Computed as Annualized Net income (loss) attributable to AIG divided by Average AIG Shareholders' equity. (b) Computed as Annualized Net income (loss) attributable to AIG divided by Average AIG Shareholders' equity, excluding AOCI. (c) Computed as Annualized After-tax operating income (loss) divided by Average AIG Shareholders' equity, excluding AOCI. Book Value per Common Share computations: (dollars in millions, except share amounts) (2 3) (2) Book Value Per Share, (1) Total AIG Shareholders' (3) (1 3) Excluding Accumulated Total AIG Equity, Excluding Total Common Book Value Other Comprehensive Shareholders' Accumulated Other Shares Per Share Income (Loss) Equity Comprehensive Income (Loss) Outstanding December 31, 2011 $ $ $ 101,538 $ 96,385 1,896,821,482 March 31, ,451 96,578 1,793,447,313 5

8 After-tax Operating Income (Loss) Attributable to AIG (in millions, except share data) 1Q12 4Q11 3Q11 2Q11 1Q11 Net income (loss) attributable to AIG $ 3,208 $ 21,479 $ (3,990) $ 1,836 $ 1,297 Adjustments to arrive at After-tax operating income (loss) attributable to AIG (amounts net of tax): Net income (loss) from discontinued operations (221) (49) 2,578 Net gain (loss) on sale of divested businesses (2) 1 (1) (1) (47) Net income (loss) from divested businesses Deferred income tax valuation allowance (charge)/release ,410 (1,162) 588 (529) Amortization of FRBNY prepaid commitment fee asset (2,358) Changes in fair value of SunAmerica's fixed income securities designated to hedge living benefit liabilities (19) SunAmerica increased benefit reserves and benefit (amortization) of DAC, VOBA and SIA related to net realized capital gains (losses) 36 (83) (102) (28) 11 Net realized capital gains (losses) (239) (384) Non-qualifying derivative hedging activities, excluding net realized capital gains (losses) (69) After-tax operating income (loss) attributable to AIG $ 3,097 $ 1,589 $ (2,996) $ 1,240 $ 2,089 After-tax operating income (loss) attributable to AIG per diluted share $ 1.65 $ 0.84 $ (1.58) $ 0.68 $ 1.34 Effective tax rates on After-tax operating income (loss) attributable to AIG: 30.8% 24.2% 41.1% 15.4% 26.8% Return on equity - After-tax operating income (loss) (page 5) 12.8% 7.4% N/M 6.6% 11.6% The reconciliation of income attributable to AIG from continuing operations to After-tax operating income (loss) and calculation of the effective tax rates is presented below (gains are negative and losses are positive). Three Months Ended March 31, 2012 Income (loss) Income Tax Net Noncontrolling Net Income (loss) Effective Before Tax (Expense) Benefit Income (loss) Interests attributable to AIG Tax Rate (1) Income (loss) from continuing operations $ 4,584 $ (1,148) $ 3,436 $ (241) $ 3, % Net gains / losses on sale of divested business 3 (1) 2-2 Deferred income tax valuation allowance charge - (289) (289) - (289) Changes in fair value of SunAmerica's fixed income securities designated to hedge living benefit liabilities Net realized capital gains (losses), net of SunAmerica offsets 267 (64) (2) Non-qualifying derivative hedging gains (losses) (50) 17 (33) - (33) After-tax operating income (loss) $ 4,823 $ (1,485) $ 3,338 $ (241) $ 3, % (1) Effective tax rates are calculated based on Income (loss) from continuing operations before tax. (2) Includes tax effect of pre-tax losses that are not deductible for tax purposes. 6

9 Condensed Consolidated Balance Sheets (in millions) March 31, 2012 December 31, 2011 September 30, 2011 June 30, 2011 March 31, 2011 Assets: Investments: Fixed maturity securities Bonds available for sale, at fair value $ 266,362 $ 263,981 $ 259,829 $ 249,360 $ 238,315 Bonds trading securities, at fair value 24,481 24,364 24,654 26,968 27,309 Equity securities Common and preferred stock available for sale, at fair value 3,026 3,624 3,209 4,128 3,873 Common and preferred stock trading, at fair value Mortgage and other loans receivable, net of allowance 19,519 19,489 19,279 19,253 19,691 Flight equipment primarily under operating leases, net of accumulated depreciation 35,452 35,539 35,758 37,688 38,100 Other invested assets (page 43) 37,209 40,744 41,131 43,763 42,900 Short-term investments 20,789 22,572 29,098 30,489 38,872 Total investments 406, , , , ,223 Cash 1,315 1,474 1,542 2,590 1,801 Premiums and other receivables, net of allowance 15,648 14,721 15,590 16,629 17,509 Reinsurance assets, net of allowance 28,257 27,211 30,411 31,675 30,177 Current and deferred income taxes 15,955 17, Deferred policy acquisition costs 8,753 8,937 9,044 9,280 9,390 Other assets 21,489 20,389 21,264 21,815 22,605 Separate account assets, at fair value 56,025 51,388 48,112 56,104 56,470 Assets held for sale ,521 57,792 Total assets $ 554,403 $ 552,360 $ 539,069 $ 610,427 $ 604,967 Liabilities: Liability for unpaid claims and claims adjustment expense $ 89,785 $ 91,145 $ 93,782 $ 94,932 $ 94,978 Unearned premiums 25,034 23,465 25,951 26,196 26,337 Future policy benefits for life and accident and health insurance contracts 34,493 34,317 33,600 31,689 31,493 Policyholder contract deposits 126, , , , ,775 Other policyholder funds 6,561 6,691 6,655 6,641 6,769 Current and deferred income taxes - - 1,544 1,284 1,864 Other liabilities 35,568 32,287 34,991 34,579 36,668 Long-term debt (page 10) 76,096 75,253 77,389 79,461 82,166 Separate account liabilities 56,025 51,388 48,112 56,104 56,470 Liabilities held for sale ,272 53,379 Total liabilities $ 449,938 $ 441,444 $ 447,979 $ 510,662 $ 512,899 Redeemable noncontrolling nonvoting, callable, junior preferred interests held by Department of Treasury - 8,427 9,303 11,465 11,324 Other redeemable noncontrolling interests Total redeemable noncontrolling interests 121 8,523 9,408 11,576 11,602 AIG shareholders' equity: Preferred stock Common stock 4,766 4,766 4,764 4,761 4,508 Treasury stock, at cost (3,942) (942) (872) (872) (873) Additional paid-in capital 81,772 81,787 81,776 81,056 77,697 Accumulated earnings (deficit) 13,982 10,774 (10,705) (6,716) (8,555) Accumulated other comprehensive income (loss) 6,873 5,153 5,948 9,012 6,870 Total AIG shareholders' equity 103, ,538 80,911 87,241 79,647 Non-redeemable noncontrolling interests Total equity 104, ,393 81,682 88,189 80,466 Total liabilities and equity $ 554,403 $ 552,360 $ 539,069 $ 610,427 $ 604,967 7

10 Condensed Consolidating Segment Balance Sheet March 31, 2012 (in millions) SunAmerica Other Consolidation Chartis Financial Group Aircraft Leasing UGC Operations (4) & Eliminations (1) AIG Inc. Assets: Investments: Fixed maturity securities Bonds available for sale, at fair value $ 103,487 $ 156,886 $ - $ 2,937 $ 3,052 $ - $ 266,362 Bonds trading securities, at fair value (2) ,436-24,481 Equity securities Common and preferred stock available for sale, at fair value 2, ,026 Common and preferred stock trading, at fair value Mortgage and other loans receivable, net of allowance 2,778 21, ,143 (9,196) 19,519 Flight equipment primarily under operating leases, net of accumulated depreciation , ,452 Other invested assets (3) (page 43) 12,405 12, , ,209 Short-term investments 5,768 3,560 2, ,357 (2,050) 20,789 Total investments 127, ,231 37,832 3,777 52,421 (10,717) 406,961 Cash ,315 Premiums and other receivables, net of allowance 12,633 1, ,428 (932) 15,648 Reinsurance assets, net of allowance 26,679 1, ,257 Current and deferred income taxes 4,257 1,884 (60) (61) 21,237 (11,302) 15,955 Deferred policy acquisition costs 2,406 6, ,753 Other assets 6,734 3,673 1, ,692 (87,146) 21,489 Separate account assets, at fair value - 56, ,025 Total assets $ 181,016 $ 266,999 $ 39,497 $ 4,016 $ 172,938 $ (110,063) $ 554,403 Liabilities: Liability for unpaid claims and claims adjustment expense $ 87,154 $ - $ - $ 975 $ 1,818 $ (162) $ 89,785 Unearned premiums 24, ,034 Future policy benefits for life and accident and health insurance contracts 3,495 30, (25) 34,493 Policyholder contract deposits - 126, (90) 126,376 Other policyholder funds 4,067 2, ,561 Other liabilities 12,541 14,941 7, ,736 (16,176) 35,568 Long-term debt (page 10) 257 1,775 (6) 24,657-58,135 (8,728) 76,096 Separate account liabilities - 56, ,025 Total liabilities $ 132,295 $ 232,425 $ 31,813 $ 1,562 $ 77,024 $ (25,181) $ 449,938 Redeemable noncontrolling interests AIG shareholders' equity: Preferred stock (1) - - Common stock , ,346 (15,843) 4,766 Treasury stock, at cost (3,942) - (3,942) Additional paid-in capital 22,005 40,754 1,244 1,510 64,180 (47,921) 81,772 Accumulated earnings (deficit) 22,576 (11,935) 5, ,834 (13,645) 13,982 Accumulated other comprehensive income (loss) (5) 3,880 5,650 (19) 94 5,281 (8,013) 6,873 Total AIG shareholders' equity 48,568 34,569 7,584 2,454 95,698 (85,422) 103,451 Non-redeemable noncontrolling interests Total equity 48,692 34,574 7,684 2,454 95,914 (84,974) 104,344 Total liabilities and equity $ 181,016 $ 266,999 $ 39,497 $ 4,016 $ 172,938 $ (110,063) $ 554,403 Notes: (1) Segment amounts are presented on an AIG stand alone basis prior to intercompany eliminations. (2) Includes interest in ML III of $6.9 billion, reported in Other Operations. (3) Includes AIG's 19% interest in AIA with a total carrying value of $8.2 billion and reported in Other Operations. (4) Primarily represents AIG Parent Company (including the tax valuation allowance), Global Capital Markets, Direct Investment book and SAFG, Inc. (a non-operating holding company), and the AIA SPV. (5) For U.S. tax purposes, SunAmerica has approximately $10.9 billion of gross unrealized gains in its available for sale portfolio which, if realized, can be used to reduce a portion of gross capital loss carryforward totaling $19.7 billion. (6) Consists primarily of intercompany debt which is eliminated in consolidation. 8

11 Condensed Consolidating Segment Balance Sheet December 31, 2011 (in millions) SunAmerica Other Consolidation Chartis Financial Group Aircraft Leasing UGC Operations (4) & Eliminations (1) AIG Inc. Assets: Investments: Fixed maturity securities Bonds available for sale, at fair value $ 103,831 $ 154,912 $ - $ 3,027 $ 2,211 $ - $ 263,981 Bonds trading securities, at fair value (2) 88 1, ,692-24,364 Equity securities Common and preferred stock available for sale, at fair value 2, ,624 Common and preferred stock trading, at fair value Mortgage and other loans receivable, net of allowance 2,598 21, ,026 (10,429) 19,489 Flight equipment primarily under operating leases, net of accumulated depreciation , ,539 Other invested assets (3) (page 43) 12,279 12, , ,744 Short-term investments 4,660 3,301 1,910 1,010 11,691-22,572 Total investments 126, ,725 37,540 4,041 58,686 (9,905) 410,438 Cash ,474 Premiums and other receivables, net of allowance 11,254 1, ,881 (890) 14,721 Reinsurance assets, net of allowance 25,538 1, ,211 Current and deferred income taxes 4,305 2,289 (158) (55) 20,794 (9,373) 17,802 Deferred policy acquisition costs 2,375 6, ,937 Other assets 7,211 3,658 1, ,293 (97,231) 20,389 Separate account assets, at fair value - 51, ,388 Total assets $ 177,707 $ 260,752 $ 39,038 $ 4,323 $ 187,904 $ (117,364) $ 552,360 Liabilities: Liability for unpaid claims and claims adjustment expense $ 88,211 $ - $ - $ 1,414 $ 1,691 $ (171) $ 91,145 Unearned premiums 23, ,465 Future policy benefits for life and accident and health insurance contracts 3,474 30, (25) 34,317 Policyholder contract deposits - 126, (78) 126,898 Other policyholder funds 4,180 2, ,691 Other liabilities 10,623 13,219 7, ,329 (13,224) 32,287 Long-term debt (page 10) 566 1,911 (6) 24,385-58,342 (9,951) 75,253 Separate account liabilities - 51, ,388 Total liabilities $ 130,290 $ 226,571 $ 31,431 $ 1,898 $ 74,703 $ (23,449) $ 441,444 Redeemable noncontrolling nonvoting, callable, junior preferred interests held by Department of Treasury ,427 8,427 Other redeemable noncontrolling interests Total redeemable noncontrolling interests ,494 8,523 AIG shareholders' equity: Preferred stock ,426 (8,427) - Common stock , ,345 (15,843) 4,766 Treasury stock, at cost (942) - (942) Additional paid-in capital 21,807 40,753 1,244 1,510 71,757 (55,284) 81,787 Accumulated earnings (deficit) 22,387 (11,398) 5, ,322 (14,587) 10,774 Accumulated other comprehensive income (loss) (5) 2,956 4,718 (22) 93 6,139 (8,731) 5,153 Total AIG shareholders' equity 47,258 34,173 7,507 2, ,047 (102,872) 101,538 Non-redeemable noncontrolling interests Total equity 47,388 34,181 7,607 2, ,201 (102,409) 102,393 Total liabilities and equity $ 177,707 $ 260,752 $ 39,038 $ 4,323 $ 187,904 $ (117,364) $ 552,360 Notes: (1) Segment amounts are presented on an AIG stand alone basis prior to intercompany eliminations. (2) Includes interest in Maiden Lane II LLC (ML II) of $1.3 billion reported in SunAmerica and interest in ML III of $5.7 billion, reported in Other Operations. (3) Includes AIG's 33% interest in AIA with a total carrying value of $12.4 billion and reported in Other Operations. (4) Primarily represents AIG Parent (including the tax valuation allowance), Global Capital Markets, Direct Investment book, SAFG, Inc. (a non-operating holding company), and the AIA SPV. (5) For U.S. tax purposes, SunAmerica has approximately $11.0 billion of gross unrealized gains in its available for sale portfolio which, if realized, can be used to reduce a portion of gross capital loss carryforward totaling $20.7 billion. (6) Consists primarily of intercompany debt which is eliminated in consolidation. 9

12 Debt and Capital Debt and Hybrid Capital Interest Expense Financial debt: March 31, Dec. 31, Inc. Three Months Ended (Dec.) March 31, 2012 March 31, 2011 AIG notes and bonds payable $ 12,797 $ 12, % $ 179 $ 151 AIG loans and mortgage payable (4.7) 1 1 SAFG, Inc. notes and bonds payable Liabilities connected to trust preferred stock 1,339 1, Total 14,657 14, Operating debt: MIP notes payable 10,853 10, Series AIGFP matched notes and bonds payable 3,702 3,807 (2.8) Other AIG borrowings supported by assets (b) 10,579 10,766 (1.7) - - ILFC borrowings 24,637 24, Other subsidiaries Borrowings of consolidated investments 1,839 1,853 (0.8) Total 52,030 51, Hybrid - debt securities: Junior subordinated debt (c) 9,409 9, Total $ 76,096 $ 75, % $ 953 $ 1,061 (a) AIG capitalization: Total equity $ 104,344 $ 102, % Hybrid - debt securities (c) 9,409 9, Total consolidated equity and hybrid capital 113, , Financial debt 14,657 14, Total capital $ 128,410 $ 126, % Ratios: Total equity / Total capital 81.3% 81.1% Hybrid - debt securities / Total capital 7.3% 7.4% Financial debt / Total capital 11.4% 11.6% Notes: (a) In 1Q11 includes $72 million associated with the FRBNY Credit Facility which was repaid in full on January 14, 2011 following AIG's recapitalization, $22 million related to equity units and $(2) million related to discontinued operations. (b) Borrowings are carried at fair value with fair value adjustments reported in Other income (loss) on the Consolidated Statement of Operations. Contractual interest payments amounted to $93 million for the three months ended March 31, 2012 and $401 million for the twelve months ended December 31, (c) The junior subordinated debentures receive hybrid equity treatment from the major rating agencies under their current policies but are recorded as long-term borrowings on the Consolidated Balance Sheet. 10

13 Chartis Operating Statistics 1Q12 4Q11 3Q11 2Q11 1Q11 Net premiums written $ 8,820 $ 7,848 $ 8,659 $ 9,167 $ 9,166 Net premiums earned 8,688 8,962 9,043 9,033 8,651 Claims and claims adjustment expenses incurred (1) 5,909 6,675 6,838 6,680 7,756 Underwriting expenses 2,959 2,923 2,737 2,712 2,498 Underwriting loss (180) (636) (532) (359) (1,603) Net investment income (2) Interest and dividends Alternative investments 130 (86) Mutual funds 8 (4) (15) 5 45 Other investment income (3) Investment expense (36) (56) (57) (50) (62) Total 1,223 1,003 1,024 1,142 1,179 Operating income (loss) before net realized capital gains (losses) and other income (loss) 1, (424) Net realized capital gains (losses) (135) Other income (loss) 2 (4) (1) - - Pre-tax income (loss) $ 910 $ 817 $ 551 $ 826 $ (374) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Foreign exchange effect on worldwide premium: Change in net premiums written Increase / (decrease) in original currency (4) (4.5)% 1.7 % (3.5) % 13.6 % 18.7 % Foreign exchange effect Increase / (decrease) as reported in US $ (3.7)% 3.6 % 0.7 % 17.6 % 19.9 % Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 80 $ 478 $ 605 $ 525 $ 1,688 Reinstatement premium related to catastrophes - (11) (31) Net prior year adverse (favorable) loss development (5) 66 (13) Returned / (additional) premium related to prior year development (6) (19) (25) (91) (37) Net loss and loss expense reserve (at period end) $ 67,313 $ 67,979 $ 69,033 $ 68,845 $ 70,201 See Accompanying Notes on Page 21 11

14 Chartis Commercial Operating Statistics 1Q12 4Q11 3Q11 2Q11 1Q11 Net premiums written $ 5,223 $ 4,422 $ 5,179 $ 5,723 $ 5,724 Net premiums earned 5,188 5,371 5,595 5,617 5,282 Claims and claims adjustment expenses incurred 3,846 4,508 4,638 4,498 5,206 Underwriting expenses 1,518 1,436 1,359 1,310 1,244 Underwriting loss (176) (573) (402) (191) (1,168) Net investment income (2) Operating income (loss) $ 565 $ 264 $ 405 $ 629 $ (384) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 76 $ 443 $ 483 $ 456 $ 1,199 Reinstatement premium related to catastrophes - (11) (31) Net prior year adverse (favorable) loss development (5) 48 (74) 22 (43) (17) Returned / (additional) premium related to prior year development (6) (19) (25) (91) (37) Net loss and loss expense reserve (at period end) $ 57,530 $ 58,549 $ 59,079 $ 59,152 $ 58,925 See Accompanying Notes on Page 21 12

15 Chartis Consumer Operating Statistics 1Q12 4Q11 3Q11 2Q11 1Q11 Net premiums written $ 3,597 $ 3,427 $ 3,479 $ 3,439 $ 3,417 Net premiums earned 3,496 3,581 3,435 3,393 3,346 Claims and claims adjustment expenses incurred 2,030 2,128 2,173 2,102 2,497 Underwriting expenses 1,348 1,411 1,329 1,321 1,192 Underwriting profit (loss) (67) (30) (343) Net investment income (2) Operating income (loss) $ 234 $ 131 $ 21 $ 59 $ (255) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 4 $ 35 $ 122 $ 69 $ 489 Net prior year adverse (favorable) loss development (5) (14) Net loss and loss expense reserve (at period end) $ 5,542 $ 5,438 $ 5,937 $ 5,671 $ 5,595 See Accompanying Notes on Page 21 13

16 Chartis Other Operating Statistics 1Q12 4Q11 3Q11 2Q11 1Q11 Net premiums written $ - $ (1) $ 1 $ 5 $ 25 Net premiums earned Claims and claims adjustment expenses incurred Underwriting expenses Underwriting loss (122) (105) (63) (138) (92) Net investment income (2) Operating income (loss), before net realized capital gains (losses), and other income (loss) 244 (28) Net realized capital gains (losses) (135) Other income (loss) 2 (4) (1) - - Pre-tax income $ 111 $ 422 $ 125 $ 138 $ 265 Pre-tax catastrophe-related losses and prior year loss reserve development: Net prior year adverse (favorable) loss development (5) $ 32 $ 33 $ 12 $ 15 $ 40 Net loss and loss expense reserve (at period end) $ 4,241 $ 3,992 $ 4,017 $ 4,022 $ 5,681 See Accompanying Notes on Page 21 14

17 Chartis U.S. Operating Statistics 1Q12 4Q11 3Q11 2Q11 1Q11 Net premiums written $ 3,879 $ 3,828 $ 4,359 $ 4,957 $ 4,128 Net premiums earned 4,417 4,492 4,616 4,689 4,482 Claims and claims adjustment expenses incurred 3,626 3,770 4,110 3,940 4,103 Underwriting expenses 1,189 1,096 1,033 1, Underwriting loss (398) (374) (527) (289) (600) Net investment income Interest and dividends Alternative investments 139 (87) Other investment income (3) Investment expense (23) (44) (38) (39) (45) Total Operating income before net realized capital gains (losses) and other loss Net realized capital gains (losses) (164) Other income (loss) 2 (4) (1) - - Pre-tax income $ 406 $ 394 $ 276 $ 657 $ 340 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 79 $ 191 $ 480 $ 397 $ 529 Reinstatement premium related to catastrophes - 1 (4) 1 (4) Net prior year adverse (favorable) loss development (5) Returned / (additional) premium related to prior year development (6) (19) (25) (91) (37) See Accompanying Notes on Page 21 15

18 Chartis U.S. - Operating Statistics by Business Commercial Insurance 1Q12 4Q11 3Q11 2Q11 1Q11 Net premiums written $ 2,984 $ 3,113 $ 3,506 $ 4,156 $ 3,326 Net premiums earned 3,536 3,648 3,771 3,819 3,657 Claims and claims adjustment expenses incurred 3,048 3,172 3,478 3,342 3,546 Underwriting expenses Underwriting loss (379) (329) (474) (281) (592) Net investment income Operating income $ 238 $ 370 $ 194 $ 399 $ 62 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Consumer Insurance Net premiums written $ 895 $ 716 $ 852 $ 796 $ 777 Net premiums earned Claims and claims adjustment expenses incurred Underwriting expenses Underwriting profit (loss) (23) Net investment income Operating income $ 88 $ 39 $ 2 $ 77 $ 53 Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Chartis Other U.S Net premiums written $ - $ (1) $ 1 $ 5 $ 25 Net premiums earned Claims and claims adjustment expenses incurred Underwriting expenses Underwriting loss (66) (61) (30) (60) (36) Net investment income Operating income (loss) before net realized capital gains (losses) and other income (loss) 242 (54) Net realized capital gains (losses) (164) Other income (loss) 2 (4) (1) - - Pre-tax income (loss) $ 80 $ (15) $ 80 $ 181 $ 225 Total Chartis U.S. Net premiums written $ 3,879 $ 3,828 $ 4,359 $ 4,957 $ 4,128 Net premiums earned 4,417 4,492 4,616 4,689 4,482 Claims and claims adjustment expenses incurred 3,626 3,770 4,110 3,940 4,103 Underwriting expenses 1,189 1,096 1,033 1, Underwriting loss (398) (374) (527) (289) (600) Net investment income Operating income before net realized capital gains (losses) and other income (loss) Net realized capital gains (losses) (164) Other income (loss) 2 (4) (1) - - Pre-tax income $ 406 $ 394 $ 276 $ 657 $ 340 See Accompanying Notes on Page 21 16

19 Chartis International Operating Statistics 1Q12 4Q11 3Q11 2Q11 1Q11 Net premiums written $ 4,941 $ 4,020 $ 4,300 $ 4,210 $ 5,038 Net premiums earned 4,271 4,470 4,427 4,344 4,169 Claims and claims adjustment expenses incurred (1) 2,283 2,905 2,728 2,740 3,653 Underwriting expenses 1,770 1,827 1,704 1,674 1,519 Underwriting profit (loss) 218 (262) (5) (70) (1,003) Net investment income Interest and dividends Alternative investments (9) Mutual funds 8 (4) (15) 5 45 Other investment income (3) Investment expense (13) (12) (19) (11) (17) Total Operating income (loss), before net realized capital gains (losses) (698) Net realized capital gains (losses) (49) (16) Pre-tax income (loss) $ 504 $ 423 $ 275 $ 169 $ (714) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Foreign exchange effect on Chartis International's premium: Change in net premiums written Increase / (decrease) in original currency (4) (3.2)% 7.8 % 2.1 % 27.7 % 28.1 % Foreign exchange effect Increase / (decrease) as reported in US $ (1.8)% 11.8 % 11.5 % 37.9 % 30.6 % Pre-tax catastrophe-related losses and prior year loss reserve development: Pre-tax catastrophe-related losses $ 1 $ 287 $ 125 $ 128 $ 1,159 Reinstatement premium related to catastrophes - (12) (27) Net prior year adverse (favorable) loss development (5) (109) (84) 17 (4) (50) See Accompanying Notes on Page 21 17

20 Chartis International - Operating Statistics by Business Commercial Insurance 1Q12 4Q11 3Q11 2Q11 1Q11 Net premiums written $ 2,239 $ 1,309 $ 1,673 $ 1,567 $ 2,398 Net premiums earned 1,652 1,723 1,824 1,798 1,625 Claims and claims adjustment expenses incurred 798 1,336 1,160 1,156 1,660 Underwriting expenses Underwriting profit (loss) 203 (244) (576) Net investment income Operating income (loss) $ 327 $ (106) $ 211 $ 230 $ (446) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Consumer Insurance Net premiums written $ 2,702 $ 2,711 $ 2,627 $ 2,643 $ 2,640 Net premiums earned 2,616 2,746 2,603 2,546 2,545 Claims and claims adjustment expenses incurred 1,484 1,568 1,562 1,560 1,980 Underwriting expenses 1,061 1,152 1,085 1, Underwriting profit (loss) (44) (82) (371) Net investment income Operating income (loss) $ 146 $ 92 $ 19 $ (18) $ (308) Underwriting ratios: Loss ratio Expense ratio Combined ratio Combined ratio excluding significant current year catastrophe-related losses Combined ratio excluding significant current year catastrophe-related losses and prior year loss development Chartis Other Int'l Net premiums written $ - $ - $ - $ - $ - Net premiums earned (1) Claims and claims adjustment expenses incurred Underwriting expenses Underwriting loss (56) (44) (33) (78) (56) Net investment income Operating income before net realized capital gains (losses) Net realized capital gains (losses) (49) (16) Pre-tax income (loss) $ 31 $ 437 $ 45 $ (43) $ 40 Total Chartis Int'l Net premiums written $ 4,941 $ 4,020 $ 4,300 $ 4,210 $ 5,038 Net premiums earned 4,271 4,470 4,427 4,344 4,169 Claims and claims adjustment expenses incurred 2,283 2,905 2,728 2,740 3,653 Underwriting expenses 1,770 1,827 1,704 1,674 1,519 Underwriting profit (loss) 218 (262) (5) (70) (1,003) Net investment income Operating income (loss) before net realized capital gains (losses) (698) Net realized capital gains (losses) (49) (16) Pre-tax income (loss) $ 504 $ 423 $ 275 $ 169 $ (714) See Accompanying Notes on Page 21 18

21 Chartis Worldwide Net Premiums Written (NPW) by Line of Business & Region 1Q11 Worldwide NPW by Line of Business = $9,166 Commercial 63% and Consumer 37% 1Q12 Worldwide NPW by Line of Business = $8,820 Commercial 59% and Consumer 41% 11% 10% A&H 19% Personal Lines 11% 11% A&H 21% Personal Lines 11% 19% Casualty Financial Lines 10% 20% Casualty Financial Lines 30% Property 27% Property Specialty Specialty 1Q11 Worldwide NPW by Region 1Q12 Worldwide NPW by Region 27% 47% The Americas Asia Pacific 25% 47% The Americas Asia Pacific 26% EMEA 28% EMEA 1 19

22 Chartis U.S. and International Net Premiums Written (NPW) by Line of Business 1Q11 U.S. NPW by Line of Business = $4,128 1Q12 U.S. NPW by Line of Business = $3,879 9% 14% 11% A&H 9% 10% 47% Personal Lines Casualty Financial Lines Property 11% 12% 11% A&H 11% 12% 43% Personal Lines Casualty Financial Lines Property Specialty Specialty 1Q11 International NPW by Line of Business = $5,038 1Q12 International NPW by Line of Business = $4,941 10% A&H 11% A&H 13% 28% Personal Lines 11% 28% Personal Lines 8% Casualty Financial Lines 9% Casualty Financial Lines 16% 25% Property 14% 27% Property Specialty Specialty 2 20