UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 23, 2003
AMERICAN INTERNATIONAL GROUP, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-8787 13-2592361
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
70 Pine Street
New York, New York 10270
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (212) 770-7000
------------------------------------------
(Former name or Former Address, if Changed Since Last Report)
Item 12. Results of Operations and Financial Condition.
On October 23, 2003, American International Group, Inc. issued a press
release announcing its results for the quarter ended September 30, 2003. A copy
of the press release is attached as Exhibit 99.1 to this Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
AMERICAN INTERNATIONAL GROUP, INC.
(Registrant)
Date: October 23, 2003 By /s/ KATHLEEN E. SHANNON
------------------------------------
Name: Kathleen E. Shannon
Title: Senior Vice President
and Secretary
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release of American International
Group, Inc. dated October 23, 2003.
EXHIBIT 99.1
NEWS [AIG LOGO] AMERICAN INTERNATIONAL GROUP, INC.
70 PINE STREET NEW YORK, NY 10270
Contact: Charlene Hamrah (Investment Community)
(212)770-7074
Joe Norton (News Media)
(212)770-3144
AIG REPORTS THIRD QUARTER 2003 NET INCOME ROSE 26.9 PERCENT
TO $2.34 BILLION; NET INCOME EXCLUDING REALIZED CAPITAL LOSSES
INCREASED 15.4 PERCENT TO $2.58 BILLION
NEW YORK, NY, October 23, 2003 - American International Group, Inc. (AIG)
today reported that its net income for the third quarter of 2003 increased 26.9
percent to $2.34 billion, compared to $1.84 billion in the third quarter of
2002. For the first nine months of 2003, net income totaled $6.57 billion, an
increase of 16.8 percent compared to $5.62 billion in the same period of 2002.
Net income excluding realized capital losses increased 15.4 percent to $2.58
billion in the third quarter of 2003, and 13.5 percent to $7.46 billion for the
first nine months of 2003.
Following is a summary table of third quarter and nine months information
(in millions, except per share amounts):
THIRD QUARTER
PER SHARE
---------
2003 2002 Change 2003 2002 Change
-------- -------- ------ ----- ------ ------
Net income $2,336.5 $1,841.2 26.9% $ 0.89 $ 0.70 27.1%
Realized capital losses,
net of tax $ 241.6 $ 392.6 -- $ 0.09 $ 0.15 --
Net income, excluding realized
capital losses, net of tax $2,578.1 $2,233.8 15.4% $ 0.98 $ 0.85 15.3%
Average shares outstanding 2,627.6 2,634.0
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NINE MONTHS
PER SHARE
---------
2003 2002 Change 2003 2002 Change
-------- -------- ------ ------- ------ ------
Net income $6,566.9 $5,622.7 16.8% $ 2.50 $ 2.13 17.4%
Realized capital losses,
net of tax $ 897.8 $ 955.2 -- $ 0.34 $ 0.37 --
Net income, excluding realized
capital losses, net of tax $7,464.7 $6,577.9 13.5% $ 2.84 $ 2.50 13.6%
Average shares outstanding 2,627.7 2,635.3
Highlights of the third quarter of 2003 include:
- - Capital funds (shareholders' equity) at September 30, 2003 of
approximately $68 billion, including record retained earnings of $58
billion.
- - Record consolidated assets at September 30, 2003 of approximately $645
billion, an increase of approximately $25 billion over June 30, 2003.
- - Pretax catastrophe losses of $72.5 million for the third quarter of 2003,
or $0.02 per share, net of tax, compared to $40 million in the third
quarter 2002, or $0.01 per share, net of tax.
- - Record General Insurance net premiums written of $8.97 billion, an
increase of 26.5 percent over the third quarter of 2002.
- - Record General Insurance pretax operating income of $1.24 billion,
including $74.7 million of realized capital losses.
- - General Insurance combined ratio of 93.05 for the third quarter of 2003.
- - Record General Insurance cash flow of $3.58 billion and $9.49 billion in
the third quarter and the first nine months of 2003, respectively.
- - General Insurance net loss and loss adjustment reserves totaling $35.09
billion as of September 30, 2003, an increase of $2.00 billion and $4.74
billion for the third quarter and nine months, respectively. This includes
$415 million in reserves related to the GE personal lines business
acquired in the third quarter.
- - Life Insurance GAAP premiums of $5.43 billion, up 6.7 percent over the
third quarter of 2002.
- - Life insurance premiums, deposits and other considerations of $13.08
billion, up 9.5 percent over the third quarter of 2002, or $9.82 billion
when guaranteed investment contracts are excluded, an increase of 16.6
percent.
- - Life Insurance pretax operating income of $1.44 billion, including $259.7
million of realized capital losses.
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Income before income taxes and minority interest in the third quarter of
2003 increased 28.4 percent. Following is a summary table of third quarter and
nine months information (in millions):
THIRD QUARTER NINE MONTHS
------------- -----------
2003 2002 Change 2003 2002 Change
-------- -------- -------- -------- -------- --------
Income before income taxes
and minority interest $3,503.5 $2,728.4 28.4% $9,857.8 $8,454.8 16.6%
Pretax realized capital
losses $ 359.3 $ 595.6 -- $1,347.8 $1,456.9 --
The following table outlines the impact of foreign exchange on
property-casualty and life insurance premiums for the third quarter 2003:
GENERAL INSURANCE NET PREMIUMS WRITTEN
----------------- --------------------
WORLDWIDE FOREIGN GENERAL
--------- ---------------
Growth in Original Currency 25.3% 17.3%
Foreign Exchange Impact 1.2 4.7
Growth as Reported in U.S.$ 26.5% 22.0%
LIFE INSURANCE PREMIUMS, DEPOSITS AND
GAAP PREMIUMS OTHER CONSIDERATIONS
TOTAL TOTAL EXCLUDING GICS*
WORLDWIDE FOREIGN WORLDWIDE FOREIGN WORLDWIDE FOREIGN
--------- ------- --------- ------- --------- -------
Growth in Original Currency 6.2% 8.1% 9.0% (9.4)% 16.4% 13.6%
Foreign Exchange Impact 0.5 0.7 0.5 1.0 0.2 0.5
Growth as Reported in U.S.$ 6.7% 8.8% 9.5% (8.4)% 16.6% 14.1%
* Guaranteed investment contracts and related products (GICs) are
issued when interest rate spreads are advantageous and, therefore,
the level of GICs issued in any reporting period may fluctuate
substantially.
Commenting on third quarter results, AIG Chairman M. R. Greenberg said
"AIG had a very good quarter with record General Insurance pretax operating
income, strong Life Insurance and Financial Services results and continuing
improvement in Retirement Services & Asset Management.
"GENERAL INSURANCE OPERATING INCOME IN THE THIRD QUARTER OF 2003 INCREASED
47.4 PERCENT OVER A YEAR AGO TO $1.24 BILLION, INCLUDING REALIZED CAPITAL LOSSES
OF $74.7 MILLION. Excluding realized capital losses, operating income rose 25.0
percent. Net premiums written were a record $8.97 billion, up 26.5 percent over
a year ago. The
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General Insurance combined ratio was 93.05 (including 0.87 points for
catastrophe losses) compared to 94.54 (including 0.65 points for catastrophe
losses) a year ago. Benefiting from investments in technology, the General
Insurance expense ratio further improved to 19.40 from 20.16 a year ago. Looking
ahead, we are reasonably confident that rates in many of the classes of business
that AIG specializes in will remain firm for the rest of this year and well into
next year. As important as the overall rate environment, risk selection is
critical. We pay careful attention to the pricing of specific risks, and there
are certain risks we will refuse to write regardless of pricing. For example, in
certain states and counties, the legal and tort systems are unfair and distorted
and, consequently, we monitor our exposures there extremely carefully.
"In the United States, the Domestic Brokerage Group had record net
premiums written in the third quarter of 2003 of $5.13 billion, up 31.6 percent
over the third quarter of 2002. The combined ratio was 94.78 compared to 96.47
in the third quarter of 2002. Underwriting and cash flow in the Domestic
Brokerage Group were both very strong. In some classes of business, such as
property and certain middle market coverages, rates have flattened out but at an
adequate level. Property rates were not impacted by Hurricane Isabel.
"HSB Group, Inc. had another excellent quarter. Underwriting results were
strong even after the impact of claims resulting from the August power outages
and Hurricane Isabel.
"Domestic Personal Lines had a good quarter, with a combined ratio of
97.20 compared to 105.22 in the third quarter 2002. Net premiums written were
$919.2 million, compared to $835.5 million a year ago. In the third quarter, we
closed on our purchase of GE's personal lines business, which will enhance our
market penetration and provide additional claims management and service
capabilities.
"United Guaranty Corporation, AIG's mortgage guaranty insurance operation,
had another good quarter. The combined ratio was 57.58. Premium volume was
impacted by a high level of refinancings, which, going forward, should diminish
as a result of the upward movement of interest rates.
"Our Foreign General operations had excellent results in all regions. Net
premiums written in the third quarter of 2003 were $1.87 billion, up 17.3
percent in original currency and 22.0 percent in U.S. dollars. The combined
ratio was an outstanding 88.31.
"Operating results were excellent in Japan, with rates of growth
significantly stronger than the overall industry. Southeast Asia had
double-digit premium growth in original currency as well as in U.S. dollars. The
U.K. and Europe had excellent growth as a result of both rate increases and new
business. The flight to quality has accelerated in Europe, especially in the
commercial market. While competition has increased in the energy sector, rates
continue to be adequate.
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"Transatlantic Holdings, Inc., a majority-owned AIG subsidiary, had net
premiums written in the third quarter of 2003 of $901.3 million, up 31.1
percent. The combined ratio in the third quarter of 2003 was 96.16 compared to
98.03 a year ago.
"NEW CASH FLOW FOR INVESTMENT FROM GENERAL INSURANCE OPERATIONS IN THE
THIRD QUARTER WAS A RECORD $3.58 BILLION COMPARED TO $2.50 BILLION LAST YEAR.
FOR THE FIRST NINE MONTHS OF 2003 CASH FLOW WAS A RECORD $9.49 BILLION, COMPARED
TO $5.29 BILLION IN THE FIRST NINE MONTHS OF 2002.
"WE ADDED $2.00 BILLION AND $4.74 BILLION TO AIG'S GENERAL INSURANCE NET
LOSS AND LOSS ADJUSTMENT RESERVES FOR THE QUARTER AND NINE MONTHS, RESPECTIVELY,
bringing the total of those reserves to $35.09 billion at September 30, 2003.
This includes $415 million in reserves related to the GE personal lines business
acquired in the third quarter.
"WORLDWIDE LIFE INSURANCE OPERATING INCOME IN THE THIRD QUARTER OF 2003
WAS $1.44 BILLION, INCLUDING $259.7 MILLION IN REALIZED CAPITAL LOSSES, COMPARED
TO $1.25 BILLION, INCLUDING $261.8 MILLION IN REALIZED CAPITAL LOSSES, A YEAR
AGO. Operating income excluding realized capital losses increased 12.4 percent.
GAAP premiums were $5.43 billion, an increase of 6.7 percent over the third
quarter of 2002. Excluding GICs, GAAP premiums increased 7.1 percent over third
quarter of 2002. Premiums, deposits and other considerations rose 9.5 percent in
the third quarter or 16.6 percent excluding GICs.
"In the foreign life business, our acquisition of GE Edison in Japan,
which is now doing business as AIG Edison, was completed in August. Results from
this acquisition will be consolidated in fourth quarter Life Insurance results.
Integration plans are moving ahead.
"We are providing new information in the supplementary earnings data on
first year foreign life premiums as well as certain growth metrics for domestic
life. Overall, first year premiums were strong in our foreign life operations in
the third quarter, up 23.4 percent over third quarter 2002.
"Our life business in China continues to grow rapidly. We achieved 38
percent premium growth in the third quarter of 2003 compared to a year ago.
Elsewhere in Asia the life business also was very satisfactory.
"The Domestic Life Insurance business, principally AIG American General,
had solid top and bottom line growth. Domestic Life operating income in the
third quarter of 2003 was $470.4 million, including realized capital losses of
$260.0 million. Excluding realized capital losses and guaranteed investment
contracts, operating income increased 12.0 percent in the quarter. AIG's profit
center structure has taken hold very well at AIG American General. Two new
profit centers have been launched to serve the middle income and voluntary
employee benefits markets, further expanding our unrivaled distribution
platform.
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"Universal life and term life products had record quarterly sales.
Structured settlements had good growth, benefiting from cross marketing efforts.
"The home services business that serves the moderate and middle income
markets continues to have very strong cash flow; premiums, deposits and other
considerations increased by 22.1 percent in the third quarter. This business is
in transition to become a multi-product distribution channel targeting this
underserved market. Our goal is to achieve double digit income growth by
introducing new products including critical illness, cancer, and accidental
death and dismemberment policies as well as fixed annuities. We are recruiting
new agents and training our agency force to market these products. In addition,
we are expanding into new states.
"The fixed annuity business primarily sold through the bank distribution
channel by AIG Annuity Insurance Company had excellent results -- strong
top-line growth and strong bottom-line growth as a result of the widening of
interest rate spreads.
"FINANCIAL SERVICES HAD GOOD RESULTS ACROSS ITS OPERATIONS. OPERATING
INCOME GREW 10.1 PERCENT TO $608.3 MILLION IN THE THIRD QUARTER OF 2003,
COMPARED TO $552.5 MILLION IN THE THIRD QUARTER OF 2002.
"During the quarter, we combined the operations of AIG Trading Group Inc.
and AIG Financial Products Corp. (AIGFP) into a Capital Markets reporting unit.
This combination is resulting in significantly greater efficiencies and product
synergies in areas including energy, commodities and foreign exchange. Capital
Markets reported operating income of $240.6 million in the third quarter of
2003, an increase of 17.7 percent over the third quarter 2002. AIGFP's interest
rate, currency and credit derivative segments again contributed to this strong
growth.
"International Lease Finance Corporation (ILFC) reported operating income
of $190.5 million in the third quarter of 2003, versus $207.3 million a year
ago. Third quarter results were impacted by the concessions made on some leases
renegotiated during the year. However, ILFC will benefit from the improving
business climate in the airline industry. At the end of the third quarter, all
aircraft were leased, including all new aircraft to be delivered in 2003 and
2004. Subsequent to the close of the third quarter, two small European carriers
that are customers of ILFC filed for bankruptcy. However, we are reasonably
confident an agreement will be reached with the carriers, or the aircraft will
be redeployed elsewhere as we have done in the past. At the conclusion of the
third quarter, ILFC entered into a securitization of a portfolio of 28 aircraft.
Certain of our life insurance and retirement services businesses purchased a
large share of this securitization. These businesses will achieve attractive
investment income returns from an asset class managed by the industry's premier
aircraft lessor, while ILFC benefits from a further diversification of its
funding base.
"Both U.S. and foreign consumer finance business had a very good quarter.
Operating income is up 20.5 percent to $173.6 million. American General Finance,
Inc. (AGF) had an outstanding quarter. The quality of the loan portfolio is good
and demand is strong. AGF is opening new branches. This business is achieving an
excellent return on
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equity. Our international consumer finance business also is achieving good
results. Performance was substantially better in Hong Kong, in line with the
up-tick in Hong Kong's economy.
"RETIREMENT SERVICES & ASSET MANAGEMENT had a much improved quarter, as a
result of the upturn in the stock market and greater optimism for the economic
outlook. OPERATING INCOME INCREASED 45.7 PERCENT IN THE THIRD QUARTER TO $332.5
MILLION. The Group Retirement Services business, led by AIG VALIC in the United
States, earned $230.3 million in the third quarter of 2003, compared to $161.0
million a year ago. Operating income in the individual variable annuity, mutual
fund and broker-dealer businesses was $17.7 million in the third quarter of 2003
compared to $7.0 million in third quarter of 2002. The institutional asset
management business continues to increase the amount of assets it manages for
third parties. At September 30, 2003, AIG's third party assets under management,
including institutional accounts and retail mutual funds, totaled over $45
billion.
"AIG had pretax realized capital losses of $359.3 million in the third
quarter of 2003, compared to losses of $595.6 million in the third quarter of
2002.
"AIG has a large number of promising growth initiatives underway around
the world. In addition to the purchase of GE's Japan life and U.S. personal auto
insurance businesses, AIG has entered into cooperative agreements in Russia to
identify investment opportunities, improve homeowners insurance and provide
financing alternatives for Russian home buyers. We also entered into a
cooperative agreement with the People's Insurance Company of China (PICC) that
will enable AIG to market its accident and health products through the PICC's
4,300 branch offices. We will provide training to PICC's agents and expect to
sell an extended portfolio of products that we do not currently distribute
through our life branches or property-casualty operations in China. We have a
long-term relationship with the PICC, which has over 70 percent of the non-life
market in China. These initiatives, combined with strong growth in our
established businesses and accelerated cross-selling of products and services to
our customers around the world, will contribute to our future success."
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# # # #
AIG is the world's leading international insurance and financial services
organization, with operations in approximately 130 countries and jurisdictions.
AIG member companies serve commercial, institutional and individual customers
through the most extensive worldwide property-casualty and life insurance
networks of any insurer. In the United States, AIG companies are the largest
underwriters of commercial and industrial insurance and AIG American General is
a top-ranked life insurer. AIG's global businesses also include financial
services, retirement services and asset management. AIG's financial services
businesses include aircraft leasing, financial products, trading and market
making. AIG's growing global consumer finance business is led in the United
States by American General Finance. AIG also has one of the largest U.S.
retirement services businesses through AIG SunAmerica and AIG VALIC, and is a
leader in asset management for the individual and institutional markets, with
specialized investment management capabilities in equities, fixed income,
alternative investments and real estate. AIG's common stock is listed on the New
York Stock Exchange, as well as the stock exchanges in London, Paris,
Switzerland and Tokyo.
# # # #
A conference call for the investment community will be held today at 9:00
a.m. EDT. The call will be broadcast live on the Internet at:
www.aigwebcast.com
The call will be archived at the same URL through Friday, October 31, 2003.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. Please refer to
the AIG Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 and
its past and future filings and reports filed with the Securities and Exchange
Commission for a description of the business environment in which AIG operates
and the important factors that may affect its business. AIG is not under any
obligation to (and expressly disclaims any such obligation to) update or alter
its forward-looking statements whether as a result of new information, future
events or otherwise.
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COMMENT ON REGULATION G
This press release, including the financial highlights and supplementary
earnings data, includes certain non-GAAP financial measures. The reconciliations
of such measures to the most comparable GAAP figures in accordance with
Regulation G are included herein.
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 of net income and operating
income, AIG shows both net income and operating income exclusive of realized
capital gains (losses).
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 created 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 quarterly business performance.
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 incorrect or misleading assumptions and conclusions. 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.
AIG presents life production (premiums, deposits and other
considerations), net premiums written and combined ratios 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 THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------- ------------------------------------------
2003 2002 CHANGE 2003 2002 CHANGE
------------ ------------ ------------ ------------ ------------ ------------
GENERAL INSURANCE OPERATIONS:
Net Premiums Written $ 26,052,589 $ 20,201,733 29.0% $ 8,965,455 $ 7,084,793 26.5%
Net Premiums Earned 23,331,101 17,561,487 32.9 8,289,994 6,195,796 33.8
Underwriting Profit 1,669,578 1,116,596 49.5 573,192 390,661 46.7
Net Investment Income 2,257,238 2,086,415 8.2 741,897 661,002 12.2
Income before Realized
Capital Gains (Losses) 3,926,816 3,203,011 22.6 1,315,089 1,051,663 25.0
Realized Capital Gains (Losses) (330,725) (492,157) -- (74,748) (210,297) --
OPERATING INCOME $ 3,596,091 $ 2,710,854 32.7% $ 1,240,341 $ 841,366 47.4%
------------ ------------ ------------ ------------ ------------ ------------
Loss Ratio 73.87 74.54 73.65 74.38
Expense Ratio 18.94 20.23 19.40 20.16
Combined Ratio 92.81 94.77 93.05 94.54
------------ ------------ ------------ ------------ ------------ ------------
LIFE INSURANCE OPERATIONS:
GAAP Premiums $ 16,562,862 $ 15,030,830 10.2% $ 5,429,534 $ 5,087,819 6.7%
Net Investment Income 10,057,117 9,128,779 10.2 3,362,007 3,179,455 5.7
Income before Realized
Capital Gains (Losses) 4,976,801 4,400,510 13.1 1,704,614 1,516,745 12.4
Realized Capital Gains (Losses) (775,818) (601,209) -- (259,746) (261,798) --
OPERATING INCOME 4,200,983 3,799,301 10.6 1,444,868 1,254,947 15.1
FINANCIAL SERVICES OPERATING INCOME 1,761,717 1,568,421 12.3 608,346 552,493 10.1
RETIREMENT SERVICES & ASSET MANAGEMENT
OPERATING INCOME 916,935 808,116 13.5 332,457 228,223 45.7
Other Realized Capital Gains (Losses) (241,217) (363,500) -- (24,851) (123,461) --
Other Income (Deductions) - net (376,699) (68,423) -- (97,674) (25,207) --
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST 9,857,810 8,454,769 16.6 3,503,487 2,728,361 28.4
Income Taxes 3,004,488 2,581,087 -- 1,068,372 817,443 --
INCOME BEFORE MINORITY INTEREST 6,853,322 5,873,682 16.7 2,435,115 1,910,918 27.4
Minority Interest, after-tax --
Income before Realized Capital
Gains (Losses) (283,828) (246,208) -- (94,074) (67,529) --
Minority Interest, after-tax --
Realized Capital Gains (Losses) (2,593) (4,784) -- (4,550) (2,194) --
NET INCOME 6,566,901 5,622,690 16.8 2,336,491 1,841,195 26.9
REALIZED CAPITAL GAINS (LOSSES),
NET OF TAX (897,835) (955,235) -- (241,582) (392,646) --
NET INCOME, EXCLUDING REALIZED CAPITAL
GAINS (LOSSES), NET OF TAX $ 7,464,736 $ 6,577,925 13.5% $ 2,578,073 $ 2,233,841 15.4%
------------ ------------ ------------ ------------ ------------ ------------
PER SHARE - DILUTED:
NET INCOME $ 2.50 $ 2.13 17.4% $ 0.89 $ 0.70 27.1%
REALIZED CAPITAL GAINS (LOSSES),
NET OF TAX (0.34) (0.37) -- (0.09) (0.15) --
NET INCOME, EXCLUDING REALIZED CAPITAL
GAINS (LOSSES), NET OF TAX $ 2.84 $ 2.50 13.6% $ 0.98 $ 0.85 15.3%
------------ ------------ ------------ ------------ ------------ ------------
AVERAGE DILUTED COMMON
SHARES OUTSTANDING 2,627,740 2,635,342 2,627,557 2,634,040
* Including reconciliation in accordance with Regulation G.
AMERICAN INTERNATIONAL GROUP, INC.
PRETAX OPERATING INCOME
(IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
2003 2002 CHANGE 2003 2002 CHANGE
------------ ----------- ------- ----------- ----------- ------
GENERAL INSURANCE:
Domestic Brokerage Group $ 2,017,553 $ 1,586,730 27.2% $ 630,050 $ 543,992 15.8%
Personal Lines 172,913 101,129 71.0 74,861 15,142 394.4
Mortgage Guaranty 319,167 331,718 (3.8) 100,590 95,294 5.6
Transatlantic Holdings 276,509 220,509 25.4 100,683 74,877 34.5
Foreign General (a) 1,135,522 945,878 20.0 407,187 316,676 28.6
Intercompany Adjustments 5,152 17,047 -- 1,718 5,682 --
Realized Capital Gains (Losses) (330,725) (492,157) -- (74,748) (210,297) --
LIFE INSURANCE:
Domestic
Life Insurance (b) 595,679 529,554 12.5 205,437 188,353 9.1
Individual Fixed Annuities 524,292 387,122 35.4 166,294 141,881 17.2
Individual Fixed Annuities - Runoff (c) 109,434 145,931 (25.0) 39,648 57,509 (31.1)
Home Service 298,622 285,471 4.6 96,455 92,247 4.6
Group Life/Health 87,910 76,749 14.5 29,938 25,890 15.6
Pension and Investment Products 146,679 90,218 62.6 62,389 29,792 109.4
Intercompany Adjustments (215) (177) -- (88) (64) --
Guaranteed Investment Contracts 386,847 484,957 (20.2) 130,335 156,404 (16.7)
Realized Capital Gains (Losses) (446,242) (571,452) -- (260,045) (222,143) --
Foreign
Life Insurance 2,041,730 1,779,546 14.7 697,293 606,200 15.0
Personal Accident 608,349 482,659 26.0 211,212 169,250 24.8
Group Products 149,554 118,352 26.4 54,729 42,139 29.9
Intercompany Adjustments (10,438) (8,600) -- (4,267) (3,085) --
Guaranteed Investment Contracts 38,358 28,728 33.5 15,239 10,229 49.0
Realized Capital Gains (Losses) (329,576) (29,757) -- 299 (39,655) --
FINANCIAL SERVICES:
Aircraft Finance 548,357 588,022 (6.7) 190,472 207,260 (8.1)
Capital Markets 728,663 592,085 23.1 240,642 204,530 17.7
Consumer Finance 488,553 409,290 19.4 173,592 144,008 20.5
Other (d) (3,856) (20,976) -- 3,640 (3,305) --
RETIREMENT SERVICES & ASSET MANAGEMENT (e):
AIG VALIC (f) 675,491 571,611 18.2 230,250 161,004 43.0
AIG SunAmerica (g) 22,920 57,239 (60.0) 17,657 7,026 151.3
Other Asset Management and
Annuity Operations (h) 218,524 179,266 21.9 84,550 60,193 40.5
Other Realized Capital Gains (Losses) (241,217) (363,500) -- (24,851) (123,461) --
Other Income (Deductions) - net (376,699) (68,423) -- (97,674) (25,207) --
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST 9,857,810 8,454,769 16.6 3,503,487 2,728,361 28.4
INCOME BEFORE INCOME TAXES,
MINORITY INTEREST AND REALIZED
CAPITAL GAINS (LOSSES) $ 11,205,570 $ 9,911,635 13.1% $ 3,862,832 $ 3,323,917 16.2%
(a) Foreign General insurance excludes the foreign operations of Transatlantic
Holdings, Inc.
(b) Includes Universal Life, Term Life, Whole Life and Variable Universal Life
type products.
(c) Represents runoff annuity business largely sold through discontinued
distribution channels.
(d) Includes Other Financial Services Companies and Intercompany
Reclassifications.
(e) At September 30, 2003, AIG's third party assets under management,
including mutual funds and institutional accounts, totaled over $45
billion.
(f) Reflects the sale of variable annuity products with fixed annuity options.
(g) Includes variable annuity (separate account only), mutual fund and
broker-dealer operations.
(h) Includes AIG Global Investment Group, John McStay Investment Counsel, L.P.
and certain overseas variable annuity operations.
AMERICAN INTERNATIONAL GROUP, INC.
SUPPLEMENTARY EARNINGS DATA
(IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
2003 2002 Change 2003 2002 Change
------------ ----------- ---- ---------- ----------- ------
GENERAL INSURANCE OPERATIONS:
NET PREMIUMS WRITTEN
Domestic Brokerage Group $ 14,733,497 $11,029,583 33.6% $ 5,130,155 $ 3,898,774 31.6%
Personal Lines 2,703,786 2,368,755 14.1 919,174 835,541 10.0
Mortgage Guaranty 390,012 381,347 2.3 148,525 132,994 11.7
Transatlantic Holdings 2,472,186 1,842,788 34.2 901,255 687,207 31.1
Foreign General (a)(b) 5,753,108 4,579,260 25.6 1,866,346 1,530,277 22.0
------------ ----------- ----------- -----------
TOTAL 26,052,589 20,201,733 29.0 8,965,455 7,084,793 26.5
OPERATING INCOME
Domestic Brokerage Group 2,017,553 1,586,730 27.2 630,050 543,992 15.8
Personal Lines 172,913 101,129 71.0 74,861 15,142 394.4
Mortgage Guaranty 319,167 331,718 (3.8) 100,590 95,294 5.6
Transatlantic Holdings 276,509 220,509 25.4 100,683 74,877 34.5
Foreign General (a) 1,135,522 945,878 20.0 407,187 316,676 28.6
Intercompany Adjustments 5,152 17,047 -- 1,718 5,682 --
------------ ----------- ----------- -----------
TOTAL BEFORE REALIZED CAPITAL
GAINS (LOSSES) 3,926,816 3,203,011 22.6 1,315,089 1,051,663 25.0
Realized Capital Gains (Losses) (330,725) (492,157) -- (74,748) (210,297) --
OPERATING INCOME $ 3,596,091 $ 2,710,854 32.7% $ 1,240,341 $ 841,366 47.4%
------------ ----------- ---- ---------- ----------- ------
COMBINED RATIO:
Domestic Brokerage Group 94.66 97.10 94.78 96.47
Personal Lines 97.90 102.04 97.20 105.22
Mortgage Guaranty 46.57 39.93 57.58 48.30
Transatlantic Holdings 96.59 98.13 96.16 98.03
Foreign General (a) 87.81 89.55 88.31 88.74
TOTAL 92.81 94.77 93.05 94.54
------------ ----------- ---- ---------- ----------- ------
Losses and Loss Expenses Paid $ 12,492,119 $11,944,895 4.6% $ 4,101,797 $ 3,967,224 3.4%
Change in Loss and
Loss Expense Reserve (c) 4,741,598 1,146,050 313.7 2,003,637 641,078 212.5
------------ ----------- ----------- -----------
Losses and Loss Expenses Incurred 17,233,717 13,090,945 31.6 6,105,434 4,608,302 32.5
Net Loss and Loss Expense Reserve (c) 35,091,537 27,041,562 29.8
UNDERWRITING PROFIT $ 1,669,578 $ 1,116,596 49.5% $ 573,192 $ 390,661 46.7%
(a) Foreign General insurance excludes the foreign operations of Transatlantic
Holdings, Inc.
(b) The growth in Foreign General net premiums written in original currency
was 17.3 percent and 19.7 percent for the third quarter and nine months
2003, respectively.
(c) Includes $415 million in reserves related to GE personal lines business
acquired in the third quarter 2003.
SUPPLEMENTARY EARNINGS DATA - PAGE 2
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
2003 2002 Change 2003 2002 Change
------------ ----------- ---- ----------- ----------- ------
LIFE INSURANCE OPERATIONS:
GAAP PREMIUMS
DOMESTIC
Life Insurance $ 1,314,112 $ 1,197,718 9.7% $ 476,331 $ 389,375 22.3%
Individual Fixed Annuities 40,014 27,635 44.8 16,758 8,984 86.5
Individual Fixed Annuities - Runoff (a) 1,823 6,094 (70.1) 234 2,094 (88.8)
Home Service 625,160 641,563 (2.6) 207,198 210,937 (1.8)
Group Life/Health 764,441 729,000 4.9 252,557 250,852 0.7
Pension and Investment Products 1,051,240 881,148 19.3 306,303 387,628 (21.0)
------------ ----------- ----------- -----------
TOTAL EXCLUDING GICS 3,796,790 3,483,158 9.0 1,259,381 1,249,870 0.8
Guaranteed Investment Contracts 14,073 34,382 (59.1) 3,245 8,323 (61.0)
------------ ----------- ----------- -----------
TOTAL 3,810,863 3,517,540 8.3 1,262,626 1,258,193 0.4
FOREIGN
Life Insurance 9,536,685 8,753,736 8.9 3,078,222 2,874,995 7.1
Personal Accident 2,186,005 1,823,068 19.9 746,818 655,226 14.0
Group Products 944,799 849,672 11.2 311,770 260,588 19.6
------------ ----------- ----------- -----------
TOTAL EXCLUDING GICS 12,667,489 11,426,476 10.9 4,136,810 3,790,809 9.1
Guaranteed Investment Contracts 84,510 86,814 (2.7) 30,098 38,817 (22.5)
------------ ----------- ----------- -----------
TOTAL 12,751,999 11,513,290 10.8 4,166,908 3,829,626 8.8
TOTAL GAAP PREMIUMS
EXCLUDING GICS 16,464,279 14,909,634 10.4 5,396,191 5,040,679 7.1
TOTAL GAAP PREMIUMS 16,562,862 15,030,830 10.2 5,429,534 5,087,819 6.7
------------ ----------- ---- ----------- ----------- ------
PREMIUMS, DEPOSITS AND OTHER
CONSIDERATIONS (b)
DOMESTIC
Life Insurance 2,001,279 1,781,780 12.3 700,791 509,866 37.4
Individual Fixed Annuities 8,206,400 6,771,298 21.2 3,273,206 2,484,997 31.7
Individual Fixed Annuities - Runoff (a) 167,804 1,224,319 (86.3) 43,703 190,021 (77.0)
Home Service 731,748 632,141 15.8 247,189 202,395 22.1
Group Life/Health 772,121 740,221 4.3 264,286 261,074 1.2
Pension and Investment Products 1,329,949 1,385,273 (4.0) 432,605 514,514 (15.9)
------------ ----------- ----------- -----------
TOTAL EXCLUDING GICS 13,209,301 12,535,032 5.4 4,961,780 4,162,867 19.2
Guaranteed Investment Contracts 6,487,403 7,962,356 (18.5) 2,705,499 1,872,968 44.4
------------ ----------- ----------- -----------
TOTAL 19,696,704 20,497,388 (3.9) 7,667,279 6,035,835 27.0
FOREIGN
Life Insurance 10,954,087 9,822,335 11.5 3,645,709 3,312,199 10.1
Personal Accident 2,186,288 1,828,031 19.6 745,084 653,473 14.0
Group Products 1,547,272 1,211,034 27.8 464,445 289,088 60.7
------------ ----------- ----------- -----------
TOTAL EXCLUDING GICS (c) 14,687,647 12,861,400 14.2 4,855,238 4,254,760 14.1
Guaranteed Investment Contracts 3,289,558 4,684,163 (29.8) 558,468 1,652,792 (66.2)
------------ ----------- ----------- -----------
TOTAL (c) 17,977,205 17,545,563 2.5 5,413,706 5,907,552 (8.4)
TOTAL PREMIUMS, DEPOSITS AND OTHER
CONSIDERATIONS EXCLUDING GICS 27,896,948 25,396,432 9.8 9,817,018 8,417,627 16.6
TOTAL PREMIUMS, DEPOSITS AND OTHER
CONSIDERATIONS $ 37,673,909 $38,042,951 (1.0)% $13,080,985 $11,943,387 9.5%
(a) Represents runoff annuity business largely sold through discontinued
distribution channels.
(b) Premiums, deposits and other considerations represent aggregate business
activity during the respective periods presented on a non-GAAP basis.
(c) Foreign premiums, deposits and other considerations declined 9.4 percent
in the third quarter and 0.8 percent for the nine months in original
currency. Excluding guaranteed investment contracts the premium growth in
original currency was 13.6 percent in the third quarter and 12.3 percent
for the nine months.
SUPPLEMENTARY EARNINGS DATA - PAGE 3
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
2003 2002 Change 2003 2002 Change
------------ ----------- ---- ----------- ----------- ------
LIFE INSURANCE OPERATIONS:
NET INVESTMENT INCOME
DOMESTIC
Life Insurance $ 965,940 $ 945,349 2.2% $ 348,041 $ 312,286 11.4%
Individual Fixed Annuities 2,156,436 1,850,638 16.5 739,159 648,301 14.0
Individual Fixed Annuities - Runoff (a) 528,254 541,587 (2.5) 147,054 179,191 (17.9)
Home Service 510,721 508,220 0.5 171,406 172,469 (0.6)
Group Life/Health 87,240 80,482 8.4 30,417 27,820 9.3
Pension and Investment Products 716,475 603,032 18.8 263,611 219,464 20.1
Intercompany Adjustments (215) (177) -- (88) (64) --
------------ ----------- ----------- -----------
TOTAL EXCLUDING GICS 4,964,851 4,529,131 9.6 1,699,600 1,559,467 9.0
Guaranteed Investment Contracts 1,627,836 1,622,455 0.3 544,788 566,736 (3.9)
------------ ----------- ----------- -----------
TOTAL 6,592,687 6,151,586 7.2 2,244,388 2,126,203 5.6
FOREIGN
Life Insurance 2,820,299 2,453,797 14.9 910,199 876,546 3.8
Personal Accident 118,478 104,153 13.8 42,067 37,690 11.6
Group Products 248,538 172,391 44.2 79,434 50,397 57.6
Intercompany Adjustments (10,438) (8,600) -- (4,267) (3,085) --
------------ ----------- ----------- -----------
TOTAL EXCLUDING GICS 3,176,877 2,721,741 16.7 1,027,433 961,548 6.9
Guaranteed Investment Contracts 287,553 255,452 12.6 90,186 91,704 (1.7)
------------ ----------- ----------- -----------
TOTAL 3,464,430 2,977,193 16.4 1,117,619 1,053,252 6.1
TOTAL NET INVESTMENT INCOME
EXCLUDING GICS 8,141,728 7,250,872 12.3 2,727,033 2,521,015 8.2
TOTAL NET INVESTMENT INCOME 10,057,117 9,128,779 10.2 3,362,007 3,179,455 5.7
------------ ----------- ---- ----------- ----------- ------
OPERATING INCOME
DOMESTIC
Life Insurance 595,679 529,554 12.5 205,437 188,353 9.1
Individual Fixed Annuities 524,292 387,122 35.4 166,294 141,881 17.2
Individual Fixed Annuities - Runoff (a) 109,434 145,931 (25.0) 39,648 57,509 (31.1)
Home Service 298,622 285,471 4.6 96,455 92,247 4.6
Group Life/Health 87,910 76,749 14.5 29,938 25,890 15.6
Pension and Investment Products 146,679 90,218 62.6 62,389 29,792 109.4
Intercompany Adjustments (215) (177) -- (88) (64) --
------------ ----------- ----------- -----------
TOTAL EXCLUDING GICS 1,762,401 1,514,868 16.3 600,073 535,608 12.0
Guaranteed Investment Contracts 386,847 484,957 (20.2) 130,335 156,404 (16.7)
------------ ----------- ----------- -----------
TOTAL DOMESTIC BEFORE REALIZED
CAPITAL GAINS (LOSSES) 2,149,248 1,999,825 7.5 730,408 692,012 5.5
Realized Capital Gains (Losses) (446,242) (571,452) -- (260,045) (222,143) --
------------ ----------- ----------- -----------
DOMESTIC OPERATING INCOME 1,703,006 1,428,373 19.2 470,363 469,869 0.1
FOREIGN
Life Insurance 2,041,730 1,779,546 14.7 697,293 606,200 15.0
Personal Accident 608,349 482,659 26.0 211,212 169,250 24.8
Group Products 149,554 118,352 26.4 54,729 42,139 29.9
Intercompany Adjustments (10,438) (8,600) -- (4,267) (3,085) --
------------ ----------- ----------- -----------
TOTAL EXCLUDING GICS 2,789,195 2,371,957 17.6 958,967 814,504 17.7
Guaranteed Investment Contracts 38,358 28,728 33.5 15,239 10,229 49.0
------------ ----------- ----------- -----------
TOTAL FOREIGN BEFORE REALIZED
CAPITAL GAINS (LOSSES) 2,827,553 2,400,685 17.8 974,206 824,733 18.1
Realized Capital Gains (Losses) (329,576) (29,757) -- 299 (39,655) --
------------ ----------- ----------- -----------
FOREIGN OPERATING INCOME 2,497,977 2,370,928 5.4 974,505 785,078 24.1
WORLDWIDE LIFE BEFORE REALIZED CAPITAL
GAINS (LOSSES) EXCLUDING GICS 4,551,596 3,886,825 17.1 1,559,040 1,350,112 15.5
WORLDWIDE LIFE BEFORE REALIZED CAPITAL
GAINS (LOSSES) 4,976,801 4,400,510 13.1 1,704,614 1,516,745 12.4
Realized Capital Gains (Losses) (775,818) (601,209) -- (259,746) (261,798) --
------------ ----------- ----------- -----------
WORLDWIDE OPERATING INCOME $ 4,200,983 $ 3,799,301 10.6% $ 1,444,868 $ 1,254,947 15.1%
(a) Represents runoff annuity business largely sold through discontinued
distribution channels.
SUPPLEMENTARY EARNINGS DATA - PAGE 4
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
2003 2002 Change 2003 2002 Change
------------ ----------- ---- ----------- ----------- ------
LIFE INSURANCE OPERATIONS:
DOMESTIC - OTHER DATA
LIFE INSURANCE
Periodic Premium Sales (a):
- Individual/Retail $ 257,140 $ 213,610 20.4% $ 86,470 $ 57,530 50.3%
- Institutional Markets 58,140 45,010 29.2 21,400 3,590 496.1
------------ ----------- ----------- -----------
Total Periodic Sales 315,280 258,620 21.9 107,870 61,120 76.5
Unscheduled & Single Deposits 292,000 266,100 9.7 122,660 55,660 120.4
Life Insurance Reserves 18,910,064 17,229,796 9.8
INDIVIDUAL FIXED ANNUITIES
Annuity Reserves 56,020,851 46,760,189 19.8
HOME SERVICE
Product Sales - Life/A&H (a) 83,449 72,620 14.9 28,899 24,590 17.5
Product Sales - Fixed Annuity 90,433 -- -- 31,433 -- --
Total Insurance Reserves 7,011,640 6,892,000 1.7
GROUP PRODUCTS
Annualized Earned Premium 1,253,143 1,135,041 10.4
PENSION & INVESTMENT CONTRACTS
Insurance Reserves 16,741,292 14,487,757 15.6
GUARANTEED INVESTMENT CONTRACTS
GIC Reserves 39,232,024 35,654,819 10.0
------------ ----------- ---- ----------- ----------- ------
FOREIGN - FIRST YEAR PREMIUMS
LIFE INSURANCE
Japan 411,784 320,629 28.4 139,824 110,112 27.0
China 54,584 37,575 45.3 21,057 15,656 34.5
Asia excluding Japan and China 1,275,497 1,086,825 17.4 381,759 333,324 14.5
All Other Regions 139,077 111,808 24.4 50,328 40,612 23.9
------------ ----------- ----------- -----------
TOTAL 1,880,942 1,556,837 20.8 592,968 499,704 18.7
PERSONAL ACCIDENT
Japan 315,437 215,766 46.2 114,371 83,348 37.2
China 22,897 15,959 43.5 8,651 5,757 50.3
Asia excluding Japan and China 143,484 121,898 17.7 47,163 47,094 0.1
All Other Regions 69,309 48,797 42.0 23,861 19,591 21.8
------------ ----------- ----------- -----------
TOTAL 551,127 402,420 37.0 194,046 155,790 24.6
GROUP PRODUCTS
Japan 18,514 16,464 12.5 6,478 8,043 (19.5)
Asia excluding Japan and China 37,287 33,307 11.9 13,452 11,300 19.0
All Other Regions 407,127 240,253 69.5 105,147 63,527 65.5
------------ ----------- ----------- -----------
TOTAL 462,928 290,024 59.6 125,077 82,870 50.9
INVESTMENT CONTRACTS
Japan 13,013 16,974 (23.3) 5,481 4,469 22.6
All Other Regions 3,731 5,457 (31.6) 1,261 1,852 (31.9)
------------ ----------- ----------- -----------
TOTAL 16,744 22,431 (25.4) 6,742 6,321 6.7
TOTAL FIRST YEAR PREMIUMS
Japan 758,748 569,833 33.2 266,154 205,972 29.2
China 77,481 53,534 44.7 29,708 21,413 38.7
Asia excluding Japan and China 1,456,268 1,242,030 17.2 442,374 391,718 12.9
All Other Regions 619,244 406,315 52.4 180,597 125,582 43.8
------------ ----------- ----------- -----------
TOTAL $ 2,911,741 $ 2,271,712 28.2% $ 918,833 $ 744,685 23.4%
(a) Life Insurance sales represent premiums from new sales that are expected
to be collected over a one year period.
SUPPLEMENTARY EARNINGS DATA - PAGE 5
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
2003 2002 Change 2003 2002 Change
------------ ----------- ---- ----------- ----------- ------
FINANCIAL SERVICES:
REVENUES
Aircraft Finance $ 2,271,892 $ 2,095,458 8.4% $ 785,034 $ 728,876 7.7%
Capital Markets 1,242,324 1,034,857 20.0 434,229 382,534 13.5
Consumer Finance 1,957,482 1,838,072 6.5 664,677 611,583 8.7
Other 24,013 (7,709) -- 1,940 (2,846) --
------------ ----------- ----------- -----------
TOTAL 5,495,711 4,960,678 10.8 1,885,880 1,720,147 9.6
OPERATING INCOME
Aircraft Finance 548,357 588,022 (6.7) 190,472 207,260 (8.1)
Capital Markets 728,663 592,085 23.1 240,642 204,530 17.7
Consumer Finance 488,553 409,290 19.4 173,592 144,008 20.5
Other (a) (3,856) (20,976) -- 3,640 (3,305) --
------------ ----------- ----------- -----------
TOTAL 1,761,717 1,568,421 12.3 608,346 552,493 10.1
------------ ----------- ---- ----------- ----------- ------
RETIREMENT SERVICES & ASSET MANAGEMENT (b):
OPERATING INCOME
AIG VALIC (c) 675,491 571,611 18.2 230,250 161,004 43.0
AIG SunAmerica (d) 22,920 57,239 (60.0) 17,657 7,026 151.3
Other Asset Management and
Annuity Operations (e) 218,524 179,266 21.9 84,550 60,193 40.5
------------ ----------- ----------- -----------
TOTAL 916,935 808,116 13.5 332,457 228,223 45.7
VARIABLE ANNUITY NET SALES
Sales
AIG VALIC 4,004,615 3,760,980 6.5 1,504,783 1,239,257 21.4
AIG SunAmerica 2,485,438 2,203,954 12.8 915,906 700,865 30.7
Surrenders
AIG VALIC 1,774,625 1,922,801 (7.7) 640,966 639,277 0.3
AIG SunAmerica 1,628,304 1,696,910 (4.0) 553,918 638,535 (13.3)
Net Sales
AIG VALIC 2,229,990 1,838,179 21.3 863,817 599,980 44.0
AIG SunAmerica 857,134 507,044 69.0 361,988 62,330 480.8
------------ ----------- ----------- -----------
TOTAL NET SALES $ 3,087,124 $ 2,345,223 31.6% $ 1,225,805 $ 662,310 85.1%
EFFECTIVE TAX RATES:
Net Income 30.48% 30.53% 30.49% 29.96%
Realized Capital Gains (Losses) 33.58% 34.76% 34.04% 34.44%
(a) Includes Other Financial Services Companies and Intercompany
Reclassifications.
(b) At September 30, 2003, AIG's third party assets under management,
including mutual funds and institutional accounts, totaled over $45
billion.
(c) Reflects the sale of variable annuity products with fixed annuity options.
(d) Includes variable annuity (separate account only), mutual fund and
broker-dealer operations.
(e) Includes AIG Global Investment Group, John McStay Investment Counsel, L.P.
and certain overseas variable annuity operations.
