AIG 2010 Annual Report Download - page 8

6 AIG 2010 Annual Report
Robert H. Benmosche
February 24, 2011
Our people, many of whom have
worked for AIG for more than 10, 20,
even 30 years, have seen history unfold
around them. Their dedication to
always doing what is in the best inter-
est of AIG and our shareholders is the
foundation for how AIG will compete
and grow in the future. As we know
from our interaction with our custom-
ers, the key in the insurance business is
reputation.
2010 Financial Highlights
AIG posted income from continu-
ing operations before income taxes of
$17.9 billion, compared with a loss
of $14.3 billion in 2009. The improve-
ment of $32.2 billion compared to
2009 reects a gain of $17.8 billion
from sales of divested businesses in
2010, including a gain of $16.3 billion
from the proceeds of the AIA IPO
on October 29, 2010. AIG also had
a decline in interest expense on the
FRBNY credit facility, an improve-
ment of $2.7 billion in asset manage-
ment pre-tax earnings, and a reduction
in net realized capital losses of
$4.9 billion.
Our protability was offset by un-
derwriting losses at Chartis after the
$4.2 billion net reserve strengthening
charge in the fourth quarter. In addi-
tion, we saw a decline of $2.6 billion in
Financial Services’ pre-tax income, re-
ecting a reduction in unrealized mar-
ket valuation gains on the super senior
credit default swap portfolio in Capital
Markets of $820 million, as well as an
increase in ILFC impairment charges
of $1.6 billion. AIG also recorded a net
loss from discon-
tinued operations
of $2.1 billion in
2010, reecting
goodwill impair-
ment charges
of $4.6 billion
related to the
sales of ALICO,
AIG Star, and
AIG Edison.
In 2010, we
returned to the
nancial markets,
raising more
than $10 billion
at the corporate
and operating levels. We maintain solid
nancial resources to independently
support our ongoing operations and
future growth initiatives.
Looking Forward
AIG entered 2011 poised to emerge as
a company independent of government
support. We have worked hard to en-
hance our businesses and functions so
that the U.S. government – and the in-
vestment community – will have con-
dence in our ability to operate without
government nancial assistance. We
will look to maximize our opportuni-
ties to extend the reach of Chartis and
SunAmerica Financial Group. At the
same time, the signicant progress we
have made with oversight and controls
will enable us to grow with the right
checks and balances.
We have strong companies that offer
a powerful array of products and ser-
vices. Moreover, we are well positioned
to take advantage of global growth
trends – as well as the growing need
in the U.S. for life and retirement
products and services. Given our re-
markable people, an unparalleled sales
and distribution network, and a solid
nancial position, I am condent we
will take advantage of the many oppor-
tunities ahead as our industry grows.
I am proud of the accomplishments
of the entire AIG team, and I look
forward to building on our strengths
to deliver growth and increase share-
holder value in the future.
We have strong
companies that
offer a powerful
array of products
and services.
Moreover, we are
well positioned to
take advantage
of global growth
trends – as well
as the grow-
ing need in the
U.S. for life and
retirement prod-
ucts and services.
Letter to Shareholders