This is within the range I was quoting in an earlier thread. That's consistent with other settlements over the past few years. Those who were expecting $11B were, let's say, optimistic. Nevertheless, this is good news. It adds @ $.45/shr in cash, will save a few million more in legal costs and give AIG more focus on their core businesses. Gotta love that. One question: Does anybody know if AIG has already made any claims to this settlement on the balance sheet? (I don't think so, but...) Or does this half-buck flow directly to book value? (Let's hope.) Pre-market has been quiet so far, But I'm expecting the market will be kind to AIG today. Knock on wood.
I don't think the settlement was on the balance sheet, so it should be recorded with income in q2. I'm not an accountant but I don't think you can count expected legal income on your balance sheet, only costs. The street only seems to care about core earnings, so I don't think they'll care about this. But it seems to me that's more cash for buybacks in the future.