EQUITY

6 Months Ended

Jun. 30, 2013

EQUITY

EQUITY

11. EQUITY

Shares Outstanding

The following table presents a rollforward of outstanding shares:

	Common Stock Issued		Treasury Stock			Outstanding Shares
Six Months Ended June 30, 2013
Shares, beginning of year		1,906,611,680		(430,289,745	)		1,476,321,935
Issuances		2,092		23,984			26,076
Shares, end of period		1,906,613,772		(430,265,761	)		1,476,348,011

Dividends and Repurchases of AIG Common Stock

Payment of future dividends to our shareholders depends in part on the regulatory framework that we are currently subject to and that will ultimately be applicable to us, including as a savings and loan holding company and a systemically important financial institution under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). In addition, dividends will be payable on AIG Common Stock only when, as and if declared by our Board of Directors in its discretion, from funds legally available therefor. In considering whether to pay a dividend or purchase shares of AIG Common Stock, our Board of Directors will take into account such matters as the performance of our businesses, our consolidated financial condition, results of operations and liquidity, available capital, the existence of investment opportunities, contractual, legal and regulatory restrictions on the payment of dividends by our subsidiaries, rating agency considerations, including the potential effect on our debt ratings, and such other factors as our Board of Directors may deem relevant. We did not pay any cash dividends in the first half of 2013.

See Note 20 to the Consolidated Financial Statements in the 2012 Annual Report for a discussion of restrictions on payments of dividends to AIG Parent by its subsidiaries.

On August 1, 2013, our Board of Directors declared a cash dividend on AIG Common Stock and authorized the repurchase of AIG Common Stock. See Note 17 herein for further discussion.

Accumulated Other Comprehensive Income

The following table presents a rollforward of Accumulated other comprehensive income:

(in millions)	Unrealized Appreciation (Depreciation) of Fixed Maturity Investments on Which Other-Than- Temporary Credit Impairments Were Recognized			Unrealized Appreciation (Depreciation) of All Other Investments			Foreign Currency Translation Adjustments			Net Derivative Gains (Losses) Arising from Cash Flow Hedging Activities		Change in Retirement Plan Liabilities Adjustment			Total
Balance, December 31, 2012, net of tax	$	575		$	13,446		$	(403	)	$	–	$	(1,044	)	$	12,574
Change in unrealized appreciation (depreciation) of investments		355			(11,632	)		–			–		–			(11,277	)
Change in deferred acquisition costs adjustment and other		(87	)		630			–			–		–			543
Change in future policy benefits		49			2,491			–			–		–			2,540
Change in foreign currency translation adjustments		–			–			(566	)		–		–			(566	)
Net actuarial gain		–			–			–			–		104			104
Prior service credit		–			–			–			–		(27	)		(27	)
Change in deferred tax asset (liability)		(122	)		3,277			(12	)		–		(16	)		3,127
Total other comprehensive income (loss)		195			(5,234	)		(578	)		–		61			(5,556	)
Noncontrolling interests		–			(16	)		(5	)		–		–			(21	)
Balance, June 30, 2013, net of tax	$	770		$	8,228		$	(976	)	$	–	$	(983	)	$	7,039

The following table presents the other comprehensive income reclassification adjustments for the three- and six-month periods ended June 30, 2013 and 2012:

(in millions)	Unrealized Appreciation (Depreciation) of Fixed Maturity Investments on Which Other-Than- Temporary Credit Impairments Were Recognized			Unrealized Appreciation (Depreciation) of All Other Investments			Foreign Currency Translation Adjustments			Net Derivative Gains (Losses) Arising from Cash Flow Hedging Activities			Change in Retirement Plan Liabilities Adjustment			Total
Three Months Ended June 30, 2013
Unrealized change arising during period	$	(102	)	$	(6,854	)	$	(273	)	$	–		$	8		$	(7,221	)
Less: Reclassification adjustments included in net income		6			152			–			–			(26	)		132
Total other comprehensive income (loss), before income tax expense (benefit)		(108	)		(7,006	)		(273	)		–			34			(7,353	)
Less: Income tax expense (benefit)		(21	)		(2,560	)		32			–			17			(2,532	)
Total other comprehensive income (loss), net of income tax expense (benefit)	$	(87	)	$	(4,446	)	$	(305	)	$	–		$	17		$	(4,821	)
Three Months Ended June 30, 2012
Unrealized change arising during period	$	26		$	2,149		$	(512	)	$	–		$	4		$	1,667
Less: Reclassification adjustments included in net income		(2	)		317			–			(4	)		(13	)		298
Total other comprehensive income (loss), before income tax expense (benefit)		28			1,832			(512	)		4			17			1,369
Less: Income tax expense (benefit)		11			527			(85	)		3			3			459
Total other comprehensive income (loss), net of income tax expense (benefit)	$	17		$	1,305		$	(427	)	$	1		$	14		$	910

(in millions)	Unrealized Appreciation (Depreciation) of Fixed Maturity Investments on Which Other-Than- Temporary Credit Impairments Were Recognized			Unrealized Appreciation (Depreciation) of All Other Investments			Foreign Currency Translation Adjustments			Net Derivative Gains (Losses) Arising from Cash Flow Hedging Activities			Change in Retirement Plan Liabilities Adjustment			Total
Six Months Ended June 30, 2013
Unrealized change arising during period	$	372		$	(8,132	)	$	(566	)	$	–		$	26		$	(8,300	)
Less: Reclassification adjustments included in net income		55			379			–			–			(51	)		383
Total other comprehensive income (loss), before income tax expense (benefit)		317			(8,511	)		(566	)		–			77			(8,683	)
Less: Income tax expense (benefit)		122			(3,277	)		12			–			16			(3,127	)
Total other comprehensive income (loss), net of income tax expense (benefit)	$	195		$	(5,234	)	$	(578	)	$	–		$	61		$	(5,556	)
Six Months Ended June 30, 2012
Unrealized change arising during period	$	1,027		$	4,472		$	(425	)	$	(1	)	$	4		$	5,077
Less: Reclassification adjustments included in net income		(4	)		1,277			–			(9	)		(42	)		1,222
Total other comprehensive income (loss), before income tax expense (benefit)		1,031			3,195			(425	)		8			46			3,855
Less: Income tax expense (benefit)		401			909			(89	)		(15	)		14			1,220
Total other comprehensive income (loss), net of income tax expense (benefit)	$	630		$	2,286		$	(336	)	$	23		$	32		$	2,635

The following table presents the effect of the reclassification of significant items out of Accumulated other comprehensive income on the respective line items in the Condensed Consolidated Statements of Income:

	Amount Reclassified from Accumulated Other Comprehensive Income
(in millions)	Three Months Ended June 30, 2013			Six Months Ended June 30, 2013			Affected Line Item in the Condensed Consolidated Statements of Income
Unrealized appreciation (depreciation) of fixed maturity investments on which other-than-temporary credit impairments were recognized
Investments	$	6		$	55		Other realized capital gains
Total		6			55
Unrealized appreciation (depreciation) of all other investments
Investments		1,306			1,592		Other realized capital gains
Deferred acquisition costs adjustment		(37	)		6		Amortization of deferred acquisition costs
Future policy benefits		(1,117	)		(1,219	)	Policyholder benefits and claims incurred
Total		152			379
Change in retirement plan liabilities adjustment
Prior-service costs		10			22		*
Actuarial gains/(losses)		(36	)		(73	)	*
Total		(26	)		(51	)
Total reclassifications for the period	$	132		$	383

*     These Accumulated other comprehensive income components are included in the computation of net periodic pension cost. See Note 14 to the Condensed Consolidated Financial Statements.