AMERICAN INTERNATIONAL GROUP INC
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Consolidated Results of Operations
The following section provides a comparative discussion of our consolidated results of operations on a reported basis for the three and nine months ended September 30, 2024 and 2023. Factors that relate primarily to a specific business are discussed in more detail within the business segment operations section.
For information regarding the critical accounting estimates that affect our results of operations, see Critical Accounting Estimates above and Part II, Item 7. MD&A – Critical Accounting Estimates in the 2023 Annual Report.
The following table presents our consolidated results of operations and other key financial metrics:
| Three Months EndedSeptember 30, · PercentageChange · Nine Months EndedSeptember 30, · PercentageChange | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions) · 2024 · 2023 · 2024 · 2023 | |||||||||||
| Revenues: | |||||||||||
| Premiums | $5,945 | $6,543 | (9) | % | $17,564 | $19,533 | (10) | % | |||
| Net investment income: | |||||||||||
| Net investment income - excluding Fortitude Re funds withheld assets | 922 | 827 | 11 | 2,819 | 2,431 | 16 | |||||
| Net investment income - Fortitude Re funds withheld assets | 51 | 29 | 76 | 123 | 106 | 16 | |||||
| Total net investment income | 973 | 856 | 14 | 2,942 | 2,537 | 16 | |||||
| Net realized gains (losses): | |||||||||||
| Net realized gains (losses) - excluding Fortitude Re funds withheld assets and embedded derivative | 8 | (189) | NM | (238) | (571) | 58 | |||||
| Net realized losses on Fortitude Re funds withheld assets | (18) | (3) | NM | (38) | (64) | 41 | |||||
| Net realized gains (losses) on Fortitude Re funds withheld embedded derivative | (157) | 57 | NM | (158) | (25) | NM | |||||
| Total net realized losses | (167) | (135) | (24) | (434) | (660) | 34 | |||||
| 66 | AIG | Third Quarter 2024 Form 10-Q |
| Three Months EndedSeptember 30, · PercentageChange · Nine Months EndedSeptember 30, · PercentageChange | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions) · 2024 · 2023 · 2024 · 2023 | |||||||||||
| Other income | — | 3 | NM | 2 | 2 | — | |||||
| Total revenues | 6,751 | 7,267 | (7) | 20,074 | 21,412 | (6) | |||||
| Benefits, losses and expenses: | |||||||||||
| Losses and loss adjustment expenses incurred | 3,773 | 3,876 | (3) | 10,753 | 11,759 | (9) | |||||
| Amortization of deferred policy acquisition costs | 863 | 922 | (6) | 2,543 | 2,894 | (12) | |||||
| General operating and other expenses | 1,346 | 1,311 | 3 | 4,194 | 4,048 | 4 | |||||
| Interest expense | 112 | 138 | (19) | 353 | 391 | (10) | |||||
| Loss on extinguishment of debt | — | 21 | NM | 1 | 21 | (95) | |||||
| Net (gain) loss on divestitures and other | 8 | (101) | NM | (94) | (89) | (6) | |||||
| Total benefits, losses and expenses | 6,102 | 6,167 | (1) | 17,750 | 19,024 | (7) | |||||
| Income from continuing operations before income tax expense | 649 | 1,100 | (41) | 2,324 | 2,388 | (3) | |||||
| Income tax expense | 168 | 399 | (58) | 571 | 509 | 12 | |||||
| Income from continuing operations | 481 | 701 | (31) | 1,753 | 1,879 | (7) | |||||
| Income (loss) from discontinued operations, net of income taxes | (24) | 2,046 | NM | (3,580) | 2,472 | NM | |||||
| Net income (loss) | 457 | 2,747 | (83) | (1,827) | 4,351 | NM | |||||
| Less: Net income (loss) attributable to noncontrolling interests | (2) | 720 | NM | 475 | 801 | (41) | |||||
| Net income (loss) attributable to AIG | 459 | 2,027 | (77) | (2,302) | 3,550 | NM | |||||
| Less: Dividends on preferred stock and preferred stock redemption premiums | — | 7 | NM | 22 | 22 | — | |||||
| Net income (loss) attributable to AIG common shareholders | $459 | $2,020 | (77) | % | $(2,324) | $3,528 | NM | % | |||
| (in millions, except per share data) | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Balance sheet data: | ||
| Total assets | $169,449 | $539,306 |
| Long-term debt | 9,892 | 10,375 |
| Debt of consolidated investment entities | 162 | 231 |
| Total AIG shareholders’ equity | 45,039 | 45,351 |
| Book value per share | 71.46 | 65.14 |
| Adjusted book value per share | 73.90 | 78.50 |
| Tangible book value per share | 65.37 | 59.60 |
| Core operating book value per share | 54.68 | 52.74 |
NET INCOME (LOSS) ATTRIBUTABLE TO AIG COMMON SHAREHOLDERS
Three Months Ended September 30, 2024 and 2023 Comparison
Net income (loss) attributable to AIG common shareholders decreased $1.6 billion due to the following:
a decrease in Income (loss) from discontinued operations, net of income taxes of $2.1 billion primarily as a result of the inclusion of Corebridge net income in 2023; and
a decrease in underwriting income driven by unfavorable prior year loss reserve development of $187 million which does not reflect the benefit of recoveries under a retroactive adverse development cover, as well as the sale of AIG Re and the impact of mix change, partially offset by portfolio growth.
The decrease in Net income (loss) attributable to AIG common shareholders was partially offset by the following, on a pre-tax basis:
an increase in Net realized gains excluding Fortitude Re funds withheld assets and embedded derivative of $197 million, primarily driven by a $95 million increase in foreign exchange gains and lower losses on sales of securities of $86 million and higher derivative and hedge activity gains of $27 million, partially offset by lower sales on alternative investments of $43 million;
an increase in Net investment income of $117 million primarily driven by dividends received from Corebridge of $65 million, an increase in the fair value of equity securities of $29 million, an increase in the fair value of fixed maturity securities where we elected the fair value option of $25 million as a result of the higher interest rate environment and higher returns on our alternative investments of $23 million, partially offset by changes in Corebridge stock price of $(35) million;
a decrease in income attributable to noncontrolling interest of $722 million primarily driven by the deconsolidation of Corebridge; and
a decrease in income tax expense of $231 million as a result of lower income from continuing operations.
| AIG | Third Quarter 2024 Form 10-Q | 67 |
|---|
Nine Months Ended September 30, 2024 and 2023 Comparison
Net income (loss) attributable to AIG common shareholders decreased $5.9 billion due to the following:
a decrease in Income (loss) from discontinued operations, net of income taxes of $6.1 billion primarily as a result of the loss on deconsolidation of Corebridge of $4.7 billion and Corebridge net income in 2023;
a decrease in underwriting income driven by unfavorable prior year reserve development of $79 million, which does not reflect the benefit of recoveries under a retroactive adverse development cover, as well as the sales of AIG Re and Crop Risk Services, partially offset by improved portfolio performance and growth; and
an increase in income tax expense of $62 million as a result of prior year discrete items.
The decrease in Net income (loss) attributable to AIG common shareholders was partially offset by the following, on a pre-tax basis:
an increase in Net investment income of $405 million primarily driven by dividends received from Corebridge of $133 million and changes in its stock price of $30 million, higher income on available for sale fixed maturity securities of $144 million and an increase in the fair value of equity securities of $51 million, partially offset by lower returns on our alternative investments of $30 million;
an increase in Net realized gains excluding Fortitude Re funds withheld assets and embedded derivative of $333 million, primarily driven by a $232 million decrease in losses from sales of securities, lower derivative and hedge activity losses of $71 million and a $51 million increase in foreign exchange gains, partially offset by lower sales on alternative investments of $30 million; and
a decrease in net income attributable to noncontrolling interest of $326 million primarily driven by the deconsolidation of Corebridge.
INCOME TAX EXPENSE ANALYSIS
For the three months ended September 30, 2024 and 2023, the effective tax rate on income (loss) from continuing operations was 25.9 percent and 36.3 percent, respectively. For the nine months ended September 30, 2024 and 2023, the effective tax rate on income (loss) from continuing operations was 24.6 percent and 21.3 percent, respectively.
For additional information, see Note 16 to the Condensed Consolidated Financial Statements.
NON-GAAP RECONCILIATIONS
The following table presents reconciliations of Book value per share to Adjusted book value per share, Tangible book value per share and Core operating book value per share, which are non-GAAP measures. For additional information, see Use of Non-GAAP Measures.
| September 30, | December 31, | |
|---|---|---|
| (in millions, except per share data) | 2024 | 2023 |
| Total AIG shareholders' equity | $45,039 | $45,351 |
| Preferred equity | — | 485 |
| Total AIG common shareholders' equity | 45,039 | 44,866 |
| Less: Investments related AOCI | (2,074) | (10,994) |
| Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets | (531) | (1,791) |
| Subtotal: Investments AOCI | (1,543) | (9,203) |
| Adjusted common shareholders' equity | $46,582 | $54,069 |
| Total AIG common shareholders' equity | $45,039 | $44,866 |
| Less Intangible Assets: | ||
| Goodwill | 3,453 | 3,422 |
| Value of distribution channel acquired | 132 | 145 |
| Other intangibles | 249 | 249 |
| Total intangibles assets | 3,834 | 3,816 |
| AIG tangible common shareholders' equity | $41,205 | $41,050 |
| Total AIG common shareholders' equity | $45,039 | $44,866 |
| Less: AIG's ownership interest in Corebridge | 8,143 | 6,738 |
| Less: Investments related AOCI - AIG | (2,074) | (3,084) |
| Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets - AIG | (531) | (573) |
| Subtotal: Investments AOCI - AIG | (1,543) | (2,511) |
| Less: Deferred tax assets | 3,975 | 4,313 |
| AIG core operating shareholders' equity | $34,464 | $36,326 |
| 68 | AIG | Third Quarter 2024 Form 10-Q |
| September 30, | December 31, | |
|---|---|---|
| (in millions, except per share data) | 2024 | 2023 |
| Total common shares outstanding | 630.3 | 688.8 |
| Book value per share | $71.46 | $65.14 |
| Adjusted book value per share | 73.90 | 78.50 |
| Tangible book value per share | 65.37 | 59.60 |
| Core operating book value per share | 54.68 | 52.74 |
The following table presents reconciliations of Return on equity to Adjusted return on equity, Tangible return on equity and Core operating return on equity, which are non-GAAP measures. For additional information, see Use of Non-GAAP Measures.
| Three Months EndedSeptember 30, · Nine Months EndedSeptember 30, · Year EndedDecember 31, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in millions) · 2024 · 2023 · 2024 · 2023 · 2023 | ||||||||||
| Actual or annualized net income (loss) attributable to AIG common shareholders | $1,836 | $8,080 | $(3,099) | $4,704 | $3,614 | |||||
| Actual or annualized adjusted after-tax income attributable to AIG common shareholders | $3,192 | $2,984 | $3,255 | $3,048 | $3,181 | |||||
| Average AIG common shareholders' equity | $44,742 | $40,734 | $44,434 | $41,196 | $41,930 | |||||
| Less: Average investments AOCI | (2,194) | (16,091) | (5,864) | (16,244) | (14,836) | |||||
| Average AIG adjusted common shareholders' equity | $46,936 | $56,825 | $50,298 | $57,440 | $56,766 | |||||
| Average AIG common shareholders' equity | $44,742 | $40,734 | $44,434 | $41,196 | $41,930 | |||||
| Less: Average intangibles | 3,813 | 3,824 | 3,811 | 4,134 | 4,070 | |||||
| Average AIG tangible common shareholders' equity | $40,929 | $36,910 | $40,623 | $37,062 | $37,860 | |||||
| Average AIG common shareholders' equity | $44,742 | $40,734 | $44,434 | $41,196 | $41,930 | |||||
| Less: Average AIG's ownership interest in Corebridge | 8,355 | 6,591 | 7,510 | 7,536 | 7,376 | |||||
| Less: Average Investments AOCI - AIG | (2,194) | (4,495) | (2,387) | (3,440) | (3,254) | |||||
| Less: Average deferred tax assets | 4,017 | 4,119 | 4,125 | 4,325 | 4,322 | |||||
| Average AIG core operating shareholders' equity | $34,564 | $34,519 | $35,186 | $32,775 | $33,486 | |||||
| Return on equity | 4.1 | % | 19.8 | % | (7.0) | % | 11.4 | % | 8.6 | % |
| Adjusted return on equity | 6.8 | 5.3 | 6.5 | 5.3 | 5.6 | |||||
| Return on tangible equity | 7.8 | 8.1 | 8.0 | 8.2 | 8.4 | |||||
| Core operating return on equity | 9.2 | 8.6 | 9.3 | 9.3 | 9.5 | |||||
The following table presents a reconciliation of revenues to adjusted revenues
| Three Months EndedSeptember 30, | Nine Months EndedSeptember 30, | |||
|---|---|---|---|---|
| (in millions) | 2024 | 2023 | 2024 | 2023 |
| Revenues | $6,751 | $7,267 | $20,074 | $21,412 |
| Changes in the fair values of equity securities and AIG's investment in Corebridge | (25) | (31) | (172) | (93) |
| Other (income) expense - net | 1 | (17) | (16) | (40) |
| Net investment income on Fortitude Re funds withheld assets | (51) | (29) | (123) | (106) |
| Net realized losses on Fortitude Re funds withheld assets | 18 | 3 | 38 | 64 |
| Net realized (gains) losses on Fortitude Re funds withheld embedded derivative | 157 | (57) | 158 | 25 |
| Net realized (gains) losses(a) | (8) | 191 | 232 | 577 |
| Non-operating litigation reserves and settlements | — | — | — | (1) |
| Net impact from elimination of international reporting lag(b) | — | — | — | (4) |
| Adjusted revenues | $6,843 | $7,327 | $20,191 | $21,834 |
(a)Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets.
(b)For additional information, see Note 1 to the Consolidated Financial Statements in the 2023 Annual Report.
| AIG | Third Quarter 2024 Form 10-Q | 69 |
|---|
The following table presents a reconciliation of pre-tax income (loss)/net income (loss) attributable to AIG to adjusted pre-tax income (loss)/adjusted after-tax income (loss) attributable to AIG:
| Three Months Ended September 30, · 2024 · 2023 | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions, except per common share data) · Pre-tax · Total Tax(Benefit)Charge · Non-controllingInterests(c) · AfterTax · Pre-tax · Total Tax(Benefit)Charge · Non-controllingInterests(c) · AfterTax | ||||||||||||||||||
| Pre-tax income/net income, including noncontrolling interests | $649 | $168 | $— | $457 | $1,100 | $399 | $— | $2,747 | ||||||||||
| Noncontrolling interests | 2 | 2 | (720) | (720) | ||||||||||||||
| Pre-tax income/net income attributable to AIG - including discontinued operations | $649 | $168 | $2 | $459 | $1,100 | $399 | $(720) | $2,027 | ||||||||||
| Dividends on preferred stock and preferred stock redemption premiums | — | 7 | ||||||||||||||||
| Net income attributable to AIG common shareholders | $459 | $2,020 | ||||||||||||||||
| Changes in uncertain tax positions and other tax adjustments | 3 | — | (3) | (57) | — | 57 | ||||||||||||
| Deferred income tax valuation allowance (releases) charges | 9 | — | (9) | (5) | — | 5 | ||||||||||||
| Changes in the fair values of equity securities and AIG's investment in Corebridge | (25) | (5) | — | (20) | (31) | (6) | — | (25) | ||||||||||
| Loss on extinguishment of debt and preferred stock redemption premiums | — | — | — | — | 21 | 4 | — | 17 | ||||||||||
| Net investment income on Fortitude Re funds withheld assets | (51) | (11) | — | (40) | (29) | (6) | — | (23) | ||||||||||
| Net realized losses on Fortitude Re funds withheld assets | 18 | 4 | — | 14 | 3 | — | — | 3 | ||||||||||
| Net realized (gains) losses on Fortitude Re funds withheld embedded derivative | 157 | 33 | — | 124 | (57) | (12) | — | (45) | ||||||||||
| Net realized (gains) losses(a) | (7) | (27) | — | 20 | 190 | 42 | — | 148 | ||||||||||
| (Income) loss from discontinued operations | 24 | (2,046) | ||||||||||||||||
| Net gain on divestitures and other | 8 | 28 | — | (20) | (101) | (21) | — | (80) | ||||||||||
| Unfavorable (favorable) prior year development and related amortization changes ceded under retroactive reinsurance agreements | 126 | 27 | — | 99 | (75) | (16) | — | (59) | ||||||||||
| Net loss reserve discount charge | 29 | 6 | — | 23 | 5 | 1 | — | 4 | ||||||||||
| Pension expense related to lump sum payments to former employees | — | — | — | — | 8 | 2 | — | 6 | ||||||||||
| Integration and transaction costs associated with acquiring or divesting businesses | 22 | 5 | — | 17 | 2 | — | — | 2 | ||||||||||
| Restructuring and other costs | 137 | 28 | — | 109 | 49 | 10 | — | 39 | ||||||||||
| Non-recurring costs related to regulatory or accounting changes | 4 | 1 | — | 3 | 4 | 1 | — | 3 | ||||||||||
| Noncontrolling interests(c) | (2) | (2) | 720 | 720 | ||||||||||||||
| Adjusted pre-tax income/Adjusted after-tax income attributable to AIG common shareholders | $1,067 | $269 | $— | $798 | $1,089 | $336 | $— | $746 | ||||||||||
| Weighted average diluted shares outstanding | 647.4 | 718.7 | ||||||||||||||||
| Income per common share attributable to AIG common shareholders (diluted) | $0.71 | $2.81 | ||||||||||||||||
| Adjusted after-tax income per common share attributable to AIG common shareholders (diluted) | $1.23 | $1.04 | ||||||||||||||||
| Nine Months Ended September 30, · 2024 · 2023 | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions, except per common share data) · Pre-tax · Total Tax(Benefit)Charge · Non-controllingInterests(c) · AfterTax · Pre-tax · Total Tax(Benefit)Charge · Non-controllingInterests(c) · AfterTax | ||||||||||||||||||
| Pre-tax income/net income (loss), including noncontrolling interests | $2,324 | $571 | $— | $(1,827) | $2,388 | $509 | $— | $4,351 | ||||||||||
| Noncontrolling interests | (475) | (475) | (801) | (801) | ||||||||||||||
| Pre-tax income/net income (loss) attributable to AIG - including discontinued operations | $2,324 | $571 | $(475) | $(2,302) | $2,388 | $509 | $(801) | $3,550 | ||||||||||
| Dividends on preferred stock and preferred stock redemption premiums | 22 | 22 | ||||||||||||||||
| Net income (loss) attributable to AIG common shareholders | $(2,324) | $3,528 | ||||||||||||||||
| Changes in uncertain tax positions and other tax adjustments | 8 | — | (8) | 175 | — | (175) | ||||||||||||
| Deferred income tax valuation allowance (releases) charges | 15 | — | (15) | (51) | — | 51 | ||||||||||||
| Changes in the fair values of equity securities and AIG's investment in Corebridge | (172) | (36) | — | (136) | (93) | (19) | — | (74) | ||||||||||
| Loss on extinguishment of debt and preferred stock redemption premiums | 1 | — | — | 16 | 21 | 4 | — | 17 | ||||||||||
| Net investment income on Fortitude Re funds withheld assets | (123) | (26) | — | (97) | (106) | (22) | — | (84) | ||||||||||
| Net realized losses on Fortitude Re funds withheld assets | 38 | 8 | — | 30 | 64 | 13 | — | 51 | ||||||||||
| Net realized losses on Fortitude Re funds withheld embedded derivative | 158 | 33 | — | 125 | 25 | 5 | — | 20 | ||||||||||
| Net realized losses(a) | 234 | 28 | — | 206 | 573 | 131 | — | 442 | ||||||||||
| (Income) loss from discontinued operations | 3,580 | (2,472) | ||||||||||||||||
| Net gain on divestitures and other | (94) | 12 | — | (106) | (89) | (19) | — | (70) | ||||||||||
| Unfavorable (favorable) prior year development and related amortization changes ceded under retroactive reinsurance agreements | 66 | 14 | — | 52 | (112) | (24) | — | (88) | ||||||||||
| Net loss reserve discount charge | 131 | 27 | — | 104 | 85 | 18 | — | 67 | ||||||||||
| Pension expense related to lump sum payments to former employees | — | — | — | — | 62 | 13 | — | 49 | ||||||||||
| Integration and transaction costs associated with acquiring or divesting businesses | 37 | 8 | — | 29 | 10 | 2 | — | 8 | ||||||||||
| Restructuring and other costs(d) | 630 | 132 | — | 498 | 264 | 55 | — | 209 | ||||||||||
| Non-recurring costs related to regulatory or accounting changes | 15 | 3 | — | 12 | 19 | 4 | — | 15 | ||||||||||
| Net impact from elimination of international reporting lag(b) | — | — | — | — | (12) | (3) | — | (9) | ||||||||||
| Noncontrolling interests(c) | 475 | 475 | 801 | 801 | ||||||||||||||
| Adjusted pre-tax income (loss)/Adjusted after-tax income (loss) attributable to AIG common shareholders | $3,245 | $797 | $— | $2,441 | $3,099 | $791 | $— | $2,286 | ||||||||||
| 70 | AIG | Third Quarter 2024 Form 10-Q |
| Nine Months Ended September 30, | 2024 | 2023 |
|---|---|---|
| (in millions, except per common share data) · Pre-tax · Total Tax(Benefit)Charge · Non-controllingInterests(c) · AfterTax · Pre-tax · Total Tax(Benefit)Charge · Non-controllingInterests(c) · AfterTax | ||
| Weighted average diluted shares outstanding | 667.4 | 731.0 |
| Income (loss) per common share attributable to AIG common shareholders (diluted) | $(3.48) | $4.83 |
| Adjusted after-tax income per common share attributable to AIG common shareholders (diluted) | $3.66 | $3.13 |
(a)Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication and net realized gains and losses on Fortitude Re funds withheld assets.
(b)For additional information, see Note 1 to the Consolidated Financial Statements in the 2023 Annual Report.
(c)Noncontrolling interest primarily relates to Corebridge and is the portion of Corebridge earnings that AIG did not own. Corebridge is consolidated until June 9, 2024. The historical results of Corebridge owned by AIG are reflected in the Income (loss) from discontinued operations, net of income taxes.
(d)In the three and nine months ended September 30, 2024, Restructuring and other costs increased primarily as a result of employee-related costs, including severance, and real estate impairment charges.
PRE-TAX INCOME (LOSS) COMPARISON
Pre-tax income was $649 million and $1.1 billion in the three months ended September 30, 2024 and 2023, respectively. Pre-tax income was $2.3 billion and $2.4 billion in the nine months ended September 30, 2024 and 2023, respectively.
For the main drivers impacting AIG’s results of operations, see – Net Income (Loss) Attributable to AIG Common Shareholders above.
ADJUSTED PRE-TAX INCOME (LOSS) COMPARISON
Adjusted pre-tax income was $1.1 billion and $1.1 billion in the three months ended September 30, 2024 and 2023, respectively. Adjusted pre-tax income was $3.2 billion and $3.1 billion in the nine months ended September 30, 2024 and 2023, respectively.
For the main drivers impacting AIG’s adjusted pre-tax income (loss), see Business Segment Operations.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.