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AIG's SEC Filing Shows Financials Without Sale of Alico and AIA

Source: WSJ

Posted on 17 Nov 2010

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In preparation of wooing private investors for the first time since American International Group Inc. (AIG) received government funding to prevent its collapse, the insurer disclosed details of what its financial statements would have looked like excluding the units that it's selling and after converting the U.S. government's stake to common stock.

AIG provided figures for the nine-month period ended Sept. 30 in a filing with the Securities and Exchange Commission on Tuesday, contrasting where the insurer stood at the end of the third quarter with a scenario that calculates the effect of a plan to repay its U.S. government bailout and removes the interest payments that will be eliminated with the repayment.

AIG said income from continuing operations would have been $4.3 billion, or $2.38 per share, in the nine months ended Sept. 30 when the two asset sales and the conversion of the government's preferred stake are taken into account. That compares with the $1.1 billion, or $1.63 a share, the company actually earned in that time.

"Historical" total revenue was $55.6 billion, while pro-forma revenue totaled $45 billion. Unadjusted shareholder equity was $80.8 billion, compared with a pro-forma $90.9 billion.

The plans include the initial public offering of 67% of AIA Group Ltd., the sale of American Life Insurance Co. to MetLife Inc., a plan to exchange some equity units for common stock, and the conversion of the government stake. The conversion of $49.1 billion of preferred shares the Treasury holds in AIG into common stock would increase the government's ownership stake in the company to 92.1% from 79.8%. The government would then sell those shares off over time.

Tuesday's filing says the company was providing the adjusted financial statements "in connection with its plans to re-access the capital markets." The insurer said in September it hopes to complete a $2.5 billion equity offering and a small debt sale by March 2011 to test investor confidence in its turnaround plan.

Chief Executive Robert Benmosche said earlier this month the company also wants to meet with analysts and plans to restart its quarterly conference call, which it abandoned early last year