American International Group, Inc. (AIG) reports a first-quarter loss of $4.35bn, or $1.98 per share, driven in part by a number of restructuring charges, the company said late last week. Additional hits to AIG's balance sheet comes in the form of unwinding credit default swaps programs and risky investments in debt obligations backed by residential properties. First quarter's loss is far narrower than the record $61.7bn Q408 loss, which marked the largest quarterly loss in the company's history. But company executives said in a conference call Thursday there will be additional restructuring costs in the future as AIG continues to unwind financial products. AIG reported a $1.9bn pre-tax charge for restructuring costs in Q1, primarily related to this wind down. Since December 31, 2007, the notional amount on AIGFP’s derivative portfolio has been reduced by more than 40% from approximately $2.7trn at December 31, 2007 to about $1.5trn at March 31, 2009. AIG chairman and CEO Edward Liddy said first quarter 2009 results reflect the company's efforts, with the ongoing support of the Federal Reserve and Treasury, to execute the company's plans "designed to maximize the value of core businesses and repay taxpayers." After AIG's initial government rescue in September, the Treasury agreed in March to exchange an existing $40bn in preferred shares for new preferred shares under revised terms that will "more closely resemble common equity and thus improve the quality of AIG’s equity….” The Treasury also promised up to $30bn in exchange for non-cumulative preferred stock through a new and upcoming equity capital facility, of which the company has yet to tap. First quarter operating income at AIG's general-insurance business dropped 72%, while general-insurance net premiums fell 18%. Life-insurance and retirement-services profits decreased to $1.2bn. Write to Kelly Curran.