AMERICAN INTERNATIONAL GROUP INC

We may redeem the Series A Preferred Stock at our option, (a) in whole, but not in part, at any time prior to March 15, 2024, within 90 days after the occurrence of a “Rating Agency Event,” at a redemption price equal to $25,500 per share of the Series A Preferred Stock (equivalent to $25.50 per Depositary Share), plus an amount equal to any dividends per share that have been declared but not paid prior to the redemption date (but no amount due in respect of any dividends that have not been declared prior to such date), or (b) (i) in whole, but not in part, at any time prior to March 15, 2024, within 90 days after the occurrence of a “Regulatory Capital Event,” or (ii) in whole or in part, from time to time, on or after March 15, 2024, in each case, at a redemption price equal to $25,000 per share of the Series A Preferred Stock (equivalent to $25.00 per Depositary Share), plus an amount equal to any dividends per share that have been declared but not paid prior to the redemption date (but no amount due in respect of any dividends that have not been declared prior to such date).

We did not repurchase any shares of AIG Common Stock during the three months ended March 31, 2019. The timing of any future repurchases will depend on market conditions, our business and strategic plans, financial condition, results of operations, liquidity and other factors. The repurchase of AIG Common Stock is also subject to the terms of AIG’s outstanding Series A Preferred Stock, pursuant to which AIG may not (other than in limited circumstances) purchase, redeem or otherwise acquire AIG Common Stock unless the full dividends for the latest completed dividend period on all outstanding shares of Series A Preferred Stock have been declared and paid or provided for.      

(b)  Noncontrolling interests is primarily due to the 19.9 percent investment in Fortitude Holdings by an affiliate of The Carlyle Group L.P. (Carlyle), which occurred in the fourth quarter of 2018. Carlyle is allocated 19.9 percent of Fortitude Holdings’ standalone financial results. Fortitude Holdings’ results are mostly eliminated in AIG’s consolidated income from continuing operations given that its results arise from intercompany transactions. Noncontrolling interests is calculated based on the standalone financial results of Fortitude Holdings. The most significant component of Fortitude Holdings’ standalone results concerns gains related to the change in fair value of embedded derivatives, which moved materially in the quarter due to lower rates and tightening credit spreads, and which are recorded in net realized capital gains and losses of Fortitude Holdings. In accordance with AIG's adjusted after-tax income definition, realized capital gains and losses are excluded from noncontrolling interests.

Adjusted pre-tax income increased due to lower Variable Annuity DAC/SIA amortization and reserves from higher equity market performance, lower Fixed Annuity DAC amortization and reserves from policyholders reaching the end of the surrender charge period, higher base investment spread income primarily due to growth in Index Annuity assets from increased sales, and higher gains on securities for which the fair value option was elected due to tightening spreads and lower rates. Partially offsetting these increases were lower returns on alternative investments,  lower fee income and advisory fees, net of expenses, primarily driven by lower Variable Annuity AUM due to the equity market decline at the end of 2018, as well as prior year non-recurring payments on structured securities, and higher Index Annuity DAC amortization and reserves mostly driven by sales growth.

In the first quarter of 2019, we recognized favorable prior year loss reserve development of $74 million. For North America, the favorable development was primarily driven by amortization of the deferred gain from the adverse development reinsurance agreement with NICO, favorable development in U.S. Property and Special Risks driven by favorable catastrophe activity, offset by adverse development in Excess Casualty.  For International, the favorable development was driven by Europe and Japan Personal Insurance and Europe Property and Special Risks offset by adverse development in Europe Casualty and Financial Lines.