American International Group, Inc. (NYSE:AIG) Q1 2016 Earnings Conference Call - Final Transcript

May 03, 2016 • 08:00 am ET


American International Group, Inc. (NYSE:AIG) Q1 2016 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Please stand by. We're about to begin. Good day and welcome to the AIG's First Quarter Financial Results Earnings Conference. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Ms. Liz Werner. Please go ahead.

Elizabeth A. Werner

Thank you, Jennifer, and before we get started this morning, I'd like to remind you that today's presentation may contain certain forward-looking statements which are based on management's current expectations and are subject to uncertainty and changes in circumstances. Any forward-looking statements are not guarantees of future performance or events. Actual performance and events may differ, possibly materially, from such forward-looking statements.

Factors that could cause include the factors described in our first quarter Form 10-Q and our 2015 Form 10-K under Management's Discussion and Analysis of Financial Condition and Results of Operations and under Risk Factors. AIG is not under any obligation and expressly disclaims any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise.

Today's presentation may contain non-GAAP financial measures. A reconciliation of such measures to the most comparable GAAP figures is included in our financial supplement and is available on our website, Nothing in today's presentation or in any oral statements made in connection with this presentation is intended to constitute nor shall it be deemed to constitute any offer of any securities for sale or the solicitation of an offer to purchase any securities in any jurisdiction.

This morning, I am joined by the members of our senior management team including our CEO, Peter Hancock; our CFO, Sid Sankaran; Head of Commercial, Rob Schimek; Head of Consumer, Kevin Hogan; and our Chief Investment Officer, Doug Dachille. And so, we will all be available during Q&A.

And at this time, I'd like to lead off the prepared remarks with Peter.

Peter Hancock

Thank you, Liz, and good morning, everyone. I'm happy to report the tangible progress we're making as we deliver on our strategic plan. Across AIG, we're working hard to execute on a transformation that will lead to improved profitability and will best serve all our stakeholders. As we've been repositioning the company, the support of our brokers, clients and employees has been greatly appreciated and is essential to our success.

In the first quarter, we reported $0.65 of operating earnings per share, including market-related losses of $0.48 largely due to hedge funds. Our market-sensitive assets continue to decline, and Sid will speak to our progress to further reduce these asset exposures.

We're off to a solid start to the year and in the quarter, we reduced expenses by 5% and returned $4 billion of capital to shareholders. As you can see on slide three and later in the presentation, our organizational improvements are proceeding on plan, and we're on target to reach our $1.6 billion in gross expense reduction by 2017. The steady pace of capital return continued throughout the quarter. Our strong capital and leverage ratios, attractive free cash flows, and risk management discipline allow