Let me start by saying good morning. My name is Steve Miller. I am Chairman of the AIG Board of Directors, and it's my pleasure to welcome you to our Annual Meeting for 2012. Joining me here on the dais will be Bob Benmosche, AIG's President and Chief Executive Officer. This meeting is also being webcast, and we welcome those listening from beyond the premises here at 180 Maiden Lane. We are first going to conduct the meeting's official business. Bob will tell you more about the important developments at AIG over the past year and what he sees for AIG going forward. Following that, we will welcome questions and comments from shareholders who are in attendance. I hereby call to order the 2012 Annual Meeting of the American International Group Incorporated.
You've been provided with the procedures we are going to follow. I will ask everyone to adhere to them. First, I'd like to introduce the 12 nominees for the board of directors, which includes Bob and myself, and all of whom are currently serving as directors of the board. The nominees are seated in the front row, and I'd like them to stand as I read their names. Robert H. Benmosche, W. Don Cornwell, John H. Fitzpatrick, Laurette T. Koellner, Christopher S. Lynch, Arthur C. Martinez, George L. Miles Jr., Henry S. Miller, Suzanne Nora Johnson, Ronald A. Rittenmeyer, and Douglas M. Steenland. I would like to acknowledge the presence of Matt Pendo and Jesse Saglio from the U.S. Department of the Treasury. Matt and Jesse. A certified list of shareholders is available for inspection.
Copies of the AIG annual report, which includes the Form 10-K for the year 2011, the proxy statement, and the Form 10-Q for the first quarter of 2012, are also available. I will now call upon AIG's Secretary, Mr. Jeffrey A. Wellingham, to present the affidavit of notice of this meeting and other formalities. Jeff?
Thank you. I now submit the affidavit of Broadridge Financial Solutions certifying that each stockholder of record at the close of business as of March 21, 2012, was mailed a notice of availability of proxy materials mailed on April 5th, 2012, or a package containing our annual report, notice of this meeting, a proxy statement, a proxy card, and a return envelope mailed commencing on April 5th, 2012. I'd like to remind everybody that the remarks made today may contain forward-looking statements concerning future performance, events, plans, or objectives. These forward-looking statements are not guarantees of future performance or events. Actual results and events may differ, possibly materially, from those anticipated in any such forward-looking statements. Factors that could cause such differences include the factors described under Management's Discussion and Analysis and Risk Factors in our 10-K and subsequent 10-Qs.
AIG is not under any obligation and expressly disclaims any obligation to update any forward-looking statements. The information provided today may also include non-GAAP financial measures. The reconciliations of such measures to the comparable GAAP figures are included in our annual report to shareholders and in our 2011 and first quarter 2012 financial supplements, which are available on our website. Peter Descovich has been sworn in as our Inspector of Election, and he advises that a quorum is present. Mr. Chairman?
Thank you very much, Jeff. Proceeding to the official business of today's meeting, I will present the list of proposals that are under consideration today. After the list has been presented, if any shareholder wants to comment or ask a question about any of these proposals, a microphone can be brought to you, and I will recognize you. The first proposal is the election to the AIG board of the 12 nominees I introduced at the start of the meeting to serve as directors until the next annual election and until their successors are elected and qualified. One nominee, by the way, that was named in the proxy statement, Donald H. Layton, is not standing for election. The second proposal is a non-binding shareholder resolution to approve executive compensation as set forth in the proxy statement.
The third proposal is the ratification of the selection of PricewaterhouseCoopers LLP, as AIG's independent registered public accounting firm for 2012, as set forth in the proxy statement. Are there any questions or comments on any of these proposals? If so, please raise your hand and wait to be recognized. There will be time later, I would remind you, for general questions apart from questions about these specific proposals. Questions and comments at this point are limited to the proposals just mentioned. I remind you of the procedures we're going to follow and ask that you work to adhere them. I don't see any hands raised, we will therefore now proceed to vote on the three proposals that have been properly presented to the meeting. The polls are now open.
If anyone wishes to vote now, please raise your hand and we will have a ballot brought to you. You of course may already have voted by sending in your proxy. Has everyone voted who wishes to vote? If so, I declare the polls closed and I ask that the ballots be delivered to the Inspector of Elections. Well, okay. Thank you. In 2011, AIG made remarkable progress towards achieving our goal of repaying the American taxpayer. We have continued our work to create a strong company focused on business fundamentals and have taken significant steps to complete the work needed to stabilize and de-risk our business.
As a board, we feel a great sense of responsibility to live up to the expectations that have been set for us, and which we have set for ourselves, of ensuring that AIG moves forward independent of U.S. government assistance and delivers on our commitments to our shareholders, our clients, and our employees. 2011 saw us deliver on many of our promises, including further paying down the government's interest in the company. These results would not have been possible without the determination and hard work of our employees and the support of our long-term shareholders, our customers, and our partners. I want to thank all of you for your dedication to AIG. Turning back to the official business of the meeting, I now have the report of the Inspector of Election.
He certifies that each of the director nominees standing for election has been elected by a majority of the votes cast, that the proposals to approve the non-binding resolution regarding executive compensation and to ratify the selection of independent auditors were adopted. Later today, we will issue a press release with the specific results. With the official business of the meeting concluded, I will now turn the floor over to Bob for his remarks. We'll follow then with questions and answers from the floor. I remind you again of the procedures we're going to follow with the Q&A. I ask you again to adhere to them. Please raise your hand at that time, wait to be recognized and for a microphone to be brought to you, and direct your questions to me. Please wait for a microphone as this meeting is being webcast.
With that, I will turn it over to Bob to give us his outlook. Thank you.
Thank you very much, Steve. It's good to be with everybody. You know, it's been an incredible year. It's hard to believe 12 months have passed. We were here a year ago talking about having just completed the restructuring with the U.S. government, the Federal Reserve, and the U.S. Treasury. We talked about that we are now a strong and independent company of AIG. We talked about one more hurdle that had to be achieved after that shareholder meeting. That was to demonstrate that AIG was strong enough and vibrant enough that we could access the capital markets. We could actually sell 100 million shares of AIG to the public and be able to raise about $3 billion of capital. That was to prove that we had access to the unsecured debt markets as well as the equity markets.
That was the last hurdle to really demonstrating we are a strong and independent company, and that was achieved, as you remember, at a $29 stock price. Since then, we have continued to perform well. We have had a tough year. We actually had a profit in 2011 in spite of the fact we had record catastrophes. As you know, Japan started the year off putting us in a deep hole. In addition to that, we had to take the last amortization of our commitment fee to the Federal Reserve, which is about $3.3 billion. You take that commitment fee that had to be accelerated, the amortization, plus catastrophes, plus some write-downs on airplanes, we still made a profit in 2011, which meant as we got into 2012, we were feeling pretty strong.
You can see our results in the first quarter continue that pattern of strong operating results of all of our insurance companies all earning a profit in the first quarter of this year. Because of our momentum that we are gaining, one of the challenges we had as an organization is can we show that the price that we started at $29, the break-even for the U.S. government, could in fact that be a ceiling or a floor for this company? In March, we set out to sell more shares to support the U.S. Treasury, help them selling their shares, and again, we priced at 29, but what happened is this time the stock traded up, as you all saw. In fact, we did it again, and we were able to see again the stock is holding above the $30.50.
Even though the markets are pretty difficult right now. When one talks about AIG and our performance, the reality, unfortunately, is the value of our shares. That is one measure that the public will look at. I thought it was important to actually summarize from this meeting back to the prior meeting, how did AIG perform as a stock relative to all of the other big financial companies, insurance companies, investment companies, as well as banks? If we could, I need my little clicker here.
It is already on.
It's already on, good. Oh, my goodness. Look who's at the top of the list. How did this happen? I actually didn't get to see this slide ahead of time. Boy, I'm really surprised here. As you can see, look at how well our stock performance has done relative to all the other institutions. When they talk about AIG for 2012, in fact, I was surprised because I was on CNBC, and they said that we actually even outperformed in 2012 Apple, which kind of surprised me. We've had this very strong stock performance, which reflects the quality of the organization, the quality of our earnings, and where we're at. As you can see, we're feeling pretty good against all of our competitors, and we feel we're poised well for the future. What's going to happen? We're still working towards de-risking the company.
We are working hard on an IPO for our aircraft leasing company, which we're still not sure when we'll do, but we'll see what the markets say for us. That will help, again, de-risk the overall organization. You see that the Federal Reserve is now selling ML3, Maiden Lane III. As that proceeds, we have approximately $7 billion that can come back to the company from that. That would be liquidity we could use in overall managing of the organization. We still have our shares of AIA, which will be liquidated after September 4th when the lockup is over. We have a lot of non-core assets that are creating volatility to our earnings that will be monetized, which will give us an opportunity to think about how we want to handle capital management as we go forward.
That, along with good, strong operating performance, says 2012 should be a pretty good year for our company. We're in great shape. We appreciate your shareholder ownership of this company, your confidence in this company, and we're going to live up to it. What I'd like to do now is open it up for questions. If any of you have any questions or concerns for myself or for Steve, love to handle any questions you have. Please raise your hand. We have microphones. Be glad to answer any questions.
Again, please, if you have a question, fine, but wait for the microphone so that we can make sure those on webcast are able to hear it. I see a question back there.
My name is Leonard Lanzone. I am a shareholder. I notice in your 10-Q, beginning on page 48, you've got about 17 pages of litigation notes. I wonder if you will tell me your expenditures for outside legal services in 2011.
This came up last year, I don't believe we go through and identify that as a number that we go public with. Right?
Yeah.
I will tell you that we are working very hard to work that list down. We also do very strong competitive bidding on legal costs, it's not a free for all. You may think it's a feeding frenzy on this company. It is not. We are going to deal with it as cost effective as we can.
What about in 2010? What about 2010?
I can tell you that our legal expenses are coming down dramatically, and we're finding ways to be much more effective at that. Yeah, we're getting stuff off the agenda, and we're moving through this as quickly as we can.
Do Matt and Jesse, the U.S. government representatives, know that number?
I don't know if we specifically give them that number. Anything else? I turn it back to you, Steve.
Okay
as we close the meeting. Again, thank you all for your support.
Again, thank you. With that brings the meeting to a close. Thank you all very much for your attention.