NU Online News Service, July 27, 1:05 p.m. – American General Corp., Houston, is reporting a net loss of $312 million for the second quarter on $6.1 billion in revenue, compared with $94 million in net income on $5.7 billion in revenue for the second quarter of 2000.
Operating earnings increased to $360 million, from $325 million.
American General, company that sells life insurance, asset management products and consumer loans, backed out of an acquisition agreement with Prudential P.L.C., London, during the quarter, and agreed to be acquired by American International Group Inc., New York.
The net earnings figures include $425 million in charges related to the break-up with the British Prudential (which has no connection with Prudential Insurance Company of America) and $49 million in charges related to an accounting change, American General says.
The net figures also include $198 million in charges related to problems with bonds in the company investment portfolio, and efforts to optimize the company tax position in preparation for the AIG acquisition, American General says.
Despite the recent weakness in the U.S. economy, the asset management business increased operating earnings to $187 million on $1.8 billion in net annuity flows, up from $166 million on $1.2 billion in net annuity flows for to second quarter of 2000, and total annuity deposits increased 12%, to $2.7 billion.
