Fourth-quarter net income of $11.2 billion, or $16.60 a share, compares with a loss of $8.87 billion, or $65.51, a year earlier, the New York insurer said in a regulatory filing Thursday.
The fourth-quarter results included $17.6 billion of gains from divested businesses. AIG posted an after-tax operating loss of $2.2 billion.
It raised almost $37 billion last year by selling American Life Insurance Co. to MetLife Inc. and divesting a majority stake in AIA Group Ltd. in a public offering.
The company is adding to reserves, hiring risk managers and settling lawsuits and regulatory probes as it prepares to return to private ownership.
The Treasury Department accumulated 92% of AIG's stock in return for the bailout funding and plans to divest its holdings.
"Some of the transactions resulted in larger gains than expected," said Jonathan Hatcher, an analyst at Jefferies Group Inc. The gains boosted capital and should make the company "feel a little bit more comfortable with the reserve additions that they needed," he said.
Shareholders' equity rose to $85.3 billion at Dec. 31, from $80.8 billion three months before. AIG booked gains on asset sales, including on Hong Kong-based AIA and Alico, which operates in countries from Chile to Poland and Japan.
"The initial response has been positive," Clark Troy, an analyst at Aite Group, said of the results. "They're absolutely trying to put their best foot forward, and the Street in time will tell whether or not they've been successful."
AIG earned $7.8 billion for the year, compared with a loss of $10.9 billion in 2009.
It was forced to bolster reserves in the fourth quarters of 2010 and 2009 after determining it had set aside insufficient funds to cover potential claims on casualty policies sold in previous years.
Competitors such as Travelers Cos. and Chubb Corp. booked profits after finding that they had set aside more than needed.
Investment income rose 10%, to $5.46 billion, as alternative assets, including private-equity and hedge-fund holdings, generated $650 million.
Buyout funds earned $419 million, and hedge funds gained $231 million. AIG had $18.8 billion in partnership assets at Dec. 31, compared to $18.5 billion at Sept. 30.
This story has been reprinted with permission from
