American International Group Inc. said early Wednesday it will again restate its financial results, this time through 2002, as part of a prolonged internal probe of the insurance company’s accounting practices.
In late May, the company restated five years of results and cut shareholders’ equity by $2.26 billion.
Further investigation by PricewaterhouseCoopers LLP uncovered the additional errors, AIG spokesman Chris Winans said. AIG, one of the world’s largest insurers, said the errors had caused it to understate previous consolidated results by $500 million, forcing the restatement of its 2002, 2003 and 2004 fiscal years.
“It’s a reflection of continued deeper due diligence,” Winans said of the new restatement. “We’re in the process of remediating our internal controls weaknesses.”
The company also will restate some financial data for 2001 and 2000 and quarterly financial information for 2004 and the first two quarters of 2005. “AIG’s prior financial statements for those periods should therefore no longer be relied upon,” AIG said in a statement.
AIG estimates its net income for the quarter ended Sept. 30 will be $1.7 billion, and about $10.1 billion for the first nine months of 2005. Adjusted net income, including substantial losses from hurricanes, will be $1.8 billion for the quarter and $8.3 billion for the first three quarters of 2005.
The company estimates its losses from claims due to Hurricanes Katrina and Rita will be $1.6 billion, or $1.23 per share.
The accounting issues surfaced in the spring, as federal and state regulators began investigating the industry’s accounting practices and certain transactions AIG conducted with other insurers.
Those probes led to the ouster of former Chairman and CEO Maurice “Hank” Greenberg, and a civil lawsuit by New York Attorney General Eliot Spitzer in May. The suit against AIG and Greenberg alleged “deception and fraud” in the accounting as a way to boost the company’s financial results and stock price.
The company plans to release its quarterly income report Monday evening, and discuss the results Tuesday with analysts.