-- At 5:30 on February 29, 2008, the New York Stock Exchange after the close of one and a half hours, American International Group, Inc. (AIG) has announced its 2007 fourth quarter and full year performance.
Data show that, AIG in the 2007 fourth quarter net loss of (Net Loss) amounted to 5.29 billion U.S. dollars, or loss per share of 2.08 U.S. dollars, compared with the same period in 2006 earnings for 3.44 billion U.S. dollars, or 1.31 U.S. dollars per share, after adjustment for 2007 In the fourth quarter net loss of 3.2 billion U.S. dollars, or loss per share of 1.25 U.S. dollars.
AIG, AIG subsidiaries and the loss of AIG Financial Products Corp. (AIGFP) the sale of the super-senior credit default swaps product (super senior credit default swap, CDS) related to the product used for mortgage bonds (CDOs) to provide credit The protection of the contract.
AIG for the fourth quarter of such products from the pre-tax write-down (Write-Down) up to 11.12 billion U.S. dollars (in 2007 the year of such write-down for 11.47 billion U.S. dollars). AIG but that does not mean that these floating loss is possible after the actual loss.
"This is the AIG from the 1969 initial public offering, the biggest quarterly loss." AIG spokesman Chris Wennan (Chris Winans) said.
Performance well below Wall Street expectations
Obviously, AIG announced the above Wall Street expectations even worse.
February 29, AIG does not report earnings before the market opened to the practice, but deliberately wait until the closing and investor conference call postponed to next morning.
"If AIG announced fourth-quarter loss of huge, and I would not be surprised." AIG announced before the performance, Morningstar (Morningstar), Lens analyst Matt (Matt Nellans) in a telephone interview with this reporter said.
The challenge in the market sentiment, local time on February 28 AIG shares fell 4.02 percent, to close at 50.15 U.S. dollars.
Earlier, market research company Thomson Financial institutions Most analysts had predicted AIG fourth-quarter profit of 60 cents a share. But AIG in the fourth quarter net loss per share amounted to 2.08 U.S. dollars.
AIG, in its 2007 annual report mentioned that it hoped the majority of write-down in the future be saved, but there is still a small part of the company had to be included in the loss. 2007 fourth quarter, AIG issued a total of 2.63 billion U.S. dollars in mind has achieved a pre-tax net loss of assets, including AIGFP and doubtful debts related to the debt amounted to 643 million U.S. dollars.
By the fourth-quarter loss drag, AIG2007 sharp drop in performance. The report shows that, AIG2007 in net income (Net Income) for 6.2 billion U.S. dollars, or 2.39 U.S. dollars per share, while AIG in 2006 net income of 14.05 billion U.S. dollars, or earnings per share 5.36 U.S. dollars.
Trouble from the CDS
Its 2007 fourth quarter Bulletin, Jukui root cause lies in AIG's sale of a subsidiary of AIGFP called super-senior credit default swaps (super senior credit default swap, CDS) product, the product of CDOs (mortgage Notes) to provide credit default swaps.
As at September 30, the product of the total 513 billion U.S. dollars CDOs provide security, according to the level of the CDOs reached 63 billion U.S. dollars.
Earlier, AIG in November 2007 announced third-quarter earnings in that quarter for the reduction of CDS's pre-tax for 352 million U.S. dollars. After the December, Sullivan personally come forward, saying in October, November 2 in the CDS in the market value of 1.1 billion U.S. dollars loss of only about loss "is still within the controllable range."
However, with the loan-to-crisis intensified, AIG since the fresh start to his words.
February 11, 2008, AIG to the U.S. Securities and Exchange Commission (SEC) in the documents submitted to Yukui that will guarantee the loss from the previously announced 1.1 billion U.S. dollars, revised to 4.88 billion U.S. dollars. This involves only loss in October 2007 and November. In that document, AIG external audit bodies of PricewaterhouseCoopers, said the company internal audit of "substantial weaknesses", the credit default swaps (Credit Default Swaps, CDS) product difficult to accurately valuation.
News on that day, AIG shares plummeted 11.7 percent, to 44.74 U.S. dollars, the record since October 19, 1987 Black Monday crash of Wall Street's biggest one-day decline.
Unpredictable future losses
AIG CEO Martin Sullivan (Martin Sullivan) do not hide the concern of 2008, "We expect the U.S. housing market remains in the doldrums, the uncertainty of the credit market is also likely to continue. Continued deterioration of market transactions, it is possible AIG announced that more did not realize the market valuation losses and impairment expenses (impairment charges) ".
Sullivan has aroused a reflection of some of the concerns. Research institutions Gradient Analytics, an analyst at the East Vickery (Donn Vickrey) in an interview with The Associated Press said, AIG management is facing pressure.
"Although AIG to reduce its CDS product amounted to 11.12 billion U.S. dollars, but this is only the market pricing method is not realized losses so far, nowhere near the actual loss of huge reduction. However, investors should not be overlooked this Unrealized losses, because it represents AIG may have a worse situation. CDOs as the insurers, if CDOs genuine buyers to bring the actual loss, then, AIG needs to spend money on compensation for their loss of some investors. "Morningstar Lens analyst Matt, told reporters.
AIG after the announcement of results, the international rating agency Fitch (Fitch Ratings) said that AIG and its subsidiaries will maintain the debt ratings outlook to negative. Since February 11, AIG disclosed loan losses, Moody's, Fitch universal standard three rating agencies will be AIG's rating to that level.
AIG reporters yesterday in connection with the Chinese people, he said that there is no further information on the annual report and comment.
Data show that, AIG in the 2007 fourth quarter net loss of (Net Loss) amounted to 5.29 billion U.S. dollars, or loss per share of 2.08 U.S. dollars, compared with the same period in 2006 earnings for 3.44 billion U.S. dollars, or 1.31 U.S. dollars per share, after adjustment for 2007 In the fourth quarter net loss of 3.2 billion U.S. dollars, or loss per share of 1.25 U.S. dollars.
AIG, AIG subsidiaries and the loss of AIG Financial Products Corp. (AIGFP) the sale of the super-senior credit default swaps product (super senior credit default swap, CDS) related to the product used for mortgage bonds (CDOs) to provide credit The protection of the contract.
AIG for the fourth quarter of such products from the pre-tax write-down (Write-Down) up to 11.12 billion U.S. dollars (in 2007 the year of such write-down for 11.47 billion U.S. dollars). AIG but that does not mean that these floating loss is possible after the actual loss.
"This is the AIG from the 1969 initial public offering, the biggest quarterly loss." AIG spokesman Chris Wennan (Chris Winans) said.
Performance well below Wall Street expectations
Obviously, AIG announced the above Wall Street expectations even worse.
February 29, AIG does not report earnings before the market opened to the practice, but deliberately wait until the closing and investor conference call postponed to next morning.
"If AIG announced fourth-quarter loss of huge, and I would not be surprised." AIG announced before the performance, Morningstar (Morningstar), Lens analyst Matt (Matt Nellans) in a telephone interview with this reporter said.
The challenge in the market sentiment, local time on February 28 AIG shares fell 4.02 percent, to close at 50.15 U.S. dollars.
Earlier, market research company Thomson Financial institutions Most analysts had predicted AIG fourth-quarter profit of 60 cents a share. But AIG in the fourth quarter net loss per share amounted to 2.08 U.S. dollars.
AIG, in its 2007 annual report mentioned that it hoped the majority of write-down in the future be saved, but there is still a small part of the company had to be included in the loss. 2007 fourth quarter, AIG issued a total of 2.63 billion U.S. dollars in mind has achieved a pre-tax net loss of assets, including AIGFP and doubtful debts related to the debt amounted to 643 million U.S. dollars.
By the fourth-quarter loss drag, AIG2007 sharp drop in performance. The report shows that, AIG2007 in net income (Net Income) for 6.2 billion U.S. dollars, or 2.39 U.S. dollars per share, while AIG in 2006 net income of 14.05 billion U.S. dollars, or earnings per share 5.36 U.S. dollars.
Trouble from the CDS
Its 2007 fourth quarter Bulletin, Jukui root cause lies in AIG's sale of a subsidiary of AIGFP called super-senior credit default swaps (super senior credit default swap, CDS) product, the product of CDOs (mortgage Notes) to provide credit default swaps.
As at September 30, the product of the total 513 billion U.S. dollars CDOs provide security, according to the level of the CDOs reached 63 billion U.S. dollars.
Earlier, AIG in November 2007 announced third-quarter earnings in that quarter for the reduction of CDS's pre-tax for 352 million U.S. dollars. After the December, Sullivan personally come forward, saying in October, November 2 in the CDS in the market value of 1.1 billion U.S. dollars loss of only about loss "is still within the controllable range."
However, with the loan-to-crisis intensified, AIG since the fresh start to his words.
February 11, 2008, AIG to the U.S. Securities and Exchange Commission (SEC) in the documents submitted to Yukui that will guarantee the loss from the previously announced 1.1 billion U.S. dollars, revised to 4.88 billion U.S. dollars. This involves only loss in October 2007 and November. In that document, AIG external audit bodies of PricewaterhouseCoopers, said the company internal audit of "substantial weaknesses", the credit default swaps (Credit Default Swaps, CDS) product difficult to accurately valuation.
News on that day, AIG shares plummeted 11.7 percent, to 44.74 U.S. dollars, the record since October 19, 1987 Black Monday crash of Wall Street's biggest one-day decline.
Unpredictable future losses
AIG CEO Martin Sullivan (Martin Sullivan) do not hide the concern of 2008, "We expect the U.S. housing market remains in the doldrums, the uncertainty of the credit market is also likely to continue. Continued deterioration of market transactions, it is possible AIG announced that more did not realize the market valuation losses and impairment expenses (impairment charges) ".
Sullivan has aroused a reflection of some of the concerns. Research institutions Gradient Analytics, an analyst at the East Vickery (Donn Vickrey) in an interview with The Associated Press said, AIG management is facing pressure.
"Although AIG to reduce its CDS product amounted to 11.12 billion U.S. dollars, but this is only the market pricing method is not realized losses so far, nowhere near the actual loss of huge reduction. However, investors should not be overlooked this Unrealized losses, because it represents AIG may have a worse situation. CDOs as the insurers, if CDOs genuine buyers to bring the actual loss, then, AIG needs to spend money on compensation for their loss of some investors. "Morningstar Lens analyst Matt, told reporters.
AIG after the announcement of results, the international rating agency Fitch (Fitch Ratings) said that AIG and its subsidiaries will maintain the debt ratings outlook to negative. Since February 11, AIG disclosed loan losses, Moody's, Fitch universal standard three rating agencies will be AIG's rating to that level.
AIG reporters yesterday in connection with the Chinese people, he said that there is no further information on the annual report and comment.
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