EQUITY

9 Months Ended

Sep. 30, 2021

EQUITY

EQUITY

12. Equity

Shares Outstanding

Preferred Stock

On March 14, 2019, we issued 20,000 shares of Series A 5.85% Non-Cumulative Perpetual Preferred Stock (Series A Preferred Stock) (equivalent to 20,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of Series A Preferred Stock), $5.00 par value and $25,000 liquidation preference per share (equivalent to $25 per Depositary Share). After underwriting discounts and expenses, we received net proceeds of approximately $485 million.

The following table presents declaration date, record date, payment date and dividends paid per preferred share and per depository share on the Series A Preferred Stock in the nine months ended September 30, 2021 and 2020:

			Dividends Paid
Declaration Date	Record Date	Payment Date		Per Preferred Share		Per Depositary Share
August 5, 2021	August 31, 2021	September 15, 2021	$	365.625	$	0.365625
May 6, 2021	May 31, 2021	June 15, 2021		365.625		0.365625
February 16, 2021	February 26, 2021	March 15, 2021		365.625		0.365625
August 3, 2020	August 31, 2020	September 15, 2020	$	365.625	$	0.365625
May 4, 2020	May 29, 2020	June 15, 2020		365.625		0.365625
February 12, 2020	February 28, 2020	March 16, 2020		365.625		0.365625

Common Stock

The following table presents a rollforward of outstanding shares:

Nine Months Ended September 30, 2021	Common	Treasury	Common Stock
	Stock Issued	Stock	Outstanding
Shares, beginning of year	1,906,671,492	(1,045,113,443)	861,558,049
Shares issued	-	6,532,595	6,532,595
Shares repurchased	-	(32,294,593)	(32,294,593)
Shares, end of period	1,906,671,492	(1,070,875,441)	835,796,051

Dividends

Dividends are payable on AIG Common Stock only when, as and if declared by our Board of Directors in its discretion, from funds legally available for this purpose. In considering whether to pay a dividend on or purchase shares of AIG Common Stock, our Board of Directors considers a number of factors, including, but not limited to: the capital resources available to support our insurance operations and business strategies, AIG’s funding capacity and capital resources in comparison to internal benchmarks, expectations for capital generation, rating agency expectations for capital, regulatory standards for capital and capital distributions, and such other factors as our Board of Directors may deem relevant. The payment of dividends is also subject to the terms of AIG’s outstanding Series A Preferred Stock, pursuant to which no dividends may be declared or paid on any AIG Common Stock unless the full dividends for the latest completed dividend period on all outstanding shares of Series A Preferred Stock have been declared and paid or provided for.

The following table presents declaration date, record date, payment date and dividends paid per common share on AIG Common Stock in the nine months ended September 30, 2021 and 2020:

				Dividends Paid
Declaration Date	Record Date	Payment Date		Per Common Share
August 5, 2021	September 16, 2021	September 30, 2021	$	0.32
May 6, 2021	June 15, 2021	June 29, 2021		0.32
February 16, 2021	March 16, 2021	March 30, 2021		0.32
August 3, 2020	September 17, 2020	September 30, 2020	$	0.32
May 4, 2020	June 15, 2020	June 29, 2020		0.32
February 12, 2020	March 16, 2020	March 30, 2020		0.32

For a discussion of restrictions on payments of dividends to AIG Parent by its subsidiaries see Note 19 to the Consolidated Financial Statements in the 2020 Annual Report.

Repurchase of AIG Common Stock

The following table presents repurchases of AIG Common Stock:

Nine Months Ended September 30,
(in millions)		2021		2020
Aggregate repurchases of common stock	$	1,651	$	500
Total number of common shares repurchased		32		12
Aggregate repurchases of warrants	$	-	$	-
Total number of warrants repurchased		-		-

Shares may be repurchased from time to time in the open market, private purchases, through forward, derivative, accelerated repurchase or automatic repurchase transactions or otherwise. Certain of our share repurchases have been and may from time to time be effected through Securities Exchange Act of 1934 (Exchange Act) Rule 10b5-1 repurchase plans.

Our warrants to purchase shares of AIG Common Stock expired on January 19, 2021. In August 2021, we executed an accelerated stock repurchase (ASR) agreement with a third-party financial institution. The total number of shares of AIG Common Stock repurchased in the nine months ended September 30, 2021, and the aggregate purchase price of those shares, reflect our payment of $1.0 billion in the aggregate under the ASR agreement and the receipt of approximately 18 million shares of AIG Common Stock in the aggregate. In February 2020, we executed an ASR agreement with a third-party financial institution. The total number of shares of AIG Common Stock repurchased in the nine months ended September 30, 2020, and the aggregate purchase price of those shares, reflect our payment of $500 million in the aggregate under the ASR agreement and the receipt of approximately 12 million shares of AIG Common Stock in the aggregate.

Additionally, in the nine months ended September 30, 2021, we repurchased approximately 14 million shares of AIG Common Stock for an aggregate purchase price of approximately $651 million pursuant to Exchange Act Rule 10b5-1 repurchase plans. Approximately $92 million of these share repurchases were funded with proceeds received from warrant exercises that occurred prior to the expiration of warrants to purchase shares of AIG Common Stock on January 19, 2021.

The timing of any future repurchases will depend on market conditions, our business and strategic plans, financial condition, results of operations, liquidity and other factors. The repurchase of AIG Common Stock is also subject to the terms of AIG’s outstanding Series A Preferred Stock, pursuant to which AIG may not (other than in limited circumstances) purchase, redeem or otherwise acquire AIG Common Stock unless the full dividends for the latest completed dividend period on all outstanding shares of Series A Preferred Stock have been declared and paid or provided for.

Accumulated Other Comprehensive INCOME

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

										Fair Value of
		Unrealized Appreciation		Unrealized						Liabilities Under
		(Depreciation) of Fixed		Appreciation		Foreign		Retirement		Fair Value Option
		Maturity Securities on		(Depreciation)		Currency		Plan		Attributable to
		Which Allowance for		of All Other		Translation		Liabilities		Changes in
(in millions)		Credit Losses Was Taken		Investments		Adjustments		Adjustment		Own Credit Risk		Total
Balance, June 30, 2021, net of tax	$	(58)	$	13,605	$	(2,128)	$	(1,217)	$	7	$	10,209
Change in unrealized appreciation (depreciation)
of investments		21		(2,086)		-		-		-		(2,065)
Change in deferred policy acquisition costs
adjustment and other		(6)		138		-		-		-		132
Change in future policy benefits		-		72		-		-		-		72
Change in foreign currency translation adjustments		-		-		(132)		-		-		(132)
Change in net actuarial loss		-		-		-		40		-		40
Change in prior service cost		-		-		-		1		-		1
Change in deferred tax asset (liability)		(3)		366		(3)		(10)		-		350
Change in fair value of liabilities under fair value
option attributable to changes in own credit risk		-		-		-		-		-		-
Total other comprehensive income (loss)		12		(1,510)		(135)		31		-		(1,602)
Noncontrolling interests		-		1		-		-		-		1
Balance, September 30, 2021, net of tax	$	(46)	$	12,094	$	(2,263)	$	(1,186)	$	7	$	8,606

Balance, June 30, 2020, net of tax	$	(233)	$	13,281	$	(2,767)	$	(1,120)	$	8	$	9,169
Change in unrealized appreciation
of investments		101		2,273		-		-		-		2,374
Change in deferred policy acquisition costs
adjustment and other		(5)		(296)		-		-		-		(301)
Change in future policy benefits		-		(147)		-		-		-		(147)
Change in foreign currency translation adjustments		-		-		297		-		-		297
Change in net actuarial loss		-		-		-		2		-		2
Change in prior service cost		-		-		-		-		-		-
Change in deferred tax asset (liability)		(17)		(445)		55		(3)		-		(410)
Change in fair value of liabilities under fair value
option attributable to changes in own credit risk		-		-		-		-		1		1
Total other comprehensive income (loss)		79		1,385		352		(1)		1		1,816
Noncontrolling interests		-		2		5		-		-		7
Balance, September 30, 2020, net of tax	$	(154)	$	14,664	$	(2,420)	$	(1,121)	$	9	$	10,978

										Fair Value of
		Unrealized Appreciation		Unrealized						Liabilities Under
		(Depreciation) of Fixed		Appreciation		Foreign		Retirement		Fair Value Option
		Maturity Securities on		(Depreciation)		Currency		Plan		Attributable to
		Which Allowance for		of All Other		Translation		Liabilities		Changes in
(in millions)		Credit Losses Was Taken		Investments		Adjustments		Adjustment		Own Credit Risk		Total
Balance, December 31, 2020, net of tax	$	(95)	$	17,093	$	(2,267)	$	(1,228)	$	8	$	13,511
Change in unrealized appreciation (depreciation)
of investments		72		(7,940)		-		-		-		(7,868)
Change in deferred policy acquisition costs
adjustment and other		(10)		840		-		-		-		830
Change in future policy benefits		-		839		-		-		-		839
Change in foreign currency translation adjustments		-		-		63		-		-		63
Change in net actuarial loss		-		-		-		51		-		51
Change in prior service cost		-		-		-		5		-		5
Change in deferred tax asset (liability)		(13)		1,262		(59)		(14)		-		1,176
Change in fair value of liabilities under fair value
option attributable to changes in own credit risk		-		-		-		-		(1)		(1)
Total other comprehensive income (loss)		49		(4,999)		4		42		(1)		(4,905)
Noncontrolling interests		-		-		-		-		-		-
Balance, September 30, 2021, net of tax	$	(46)	$	12,094	$	(2,263)	$	(1,186)	$	7	$	8,606

Balance, December 31, 2019, net of tax	$	-	$	8,722	$	(2,625)	$	(1,122)	$	7	$	4,982
Change in unrealized appreciation (depreciation)
of investments		(212)		6,088		-		-		-		5,876
Change in deferred policy acquisition costs
adjustment and other		14		(655)		-		-		-		(641)
Change in future policy benefits		-		2,187		-		-		-		2,187
Change in foreign currency translation adjustments		-		-		169		-		-		169
Change in net actuarial loss		-		-		-		18		-		18
Change in prior service credit		-		-		-		(1)		-		(1)
Change in deferred tax asset (liability)		44		(1,695)		37		(16)		-		(1,630)
Change in fair value of liabilities under fair value
option attributable to changes in own credit risk		-		-		-		-		2		2
Total other comprehensive income (loss)		(154)		5,925		206		1		2		5,980
Noncontrolling interests		-		(17)		1		-		-		(16)
Balance, September 30, 2020, net of tax	$	(154)	$	14,664	$	(2,420)	$	(1,121)	$	9	$	10,978

The following table presents the other comprehensive income (loss) reclassification adjustments for the three- and nine-month periods ended September 30, 2021 and 2020, respectively:

										Fair Value of
		Unrealized Appreciation		Unrealized						Liabilities Under
		(Depreciation) of Fixed		Appreciation		Foreign		Retirement		Fair Value Option
		Maturity Securities on		(Depreciation)		Currency		Plan		Attributable to
		Which Allowance for		of All Other		Translation		Liabilities		Changes in
(in millions)		Credit Losses Was Taken		Investments		Adjustments		Adjustment		Own Credit Risk		Total
Three Months Ended September 30, 2021
Unrealized change arising during period	$	21	$	(1,657)	$	(132)	$	30	$	-	$	(1,738)
Less: Reclassification adjustments
included in net income		6		219		-		(11)		-		214
Total other comprehensive income (loss),
before income tax expense (benefit)		15		(1,876)		(132)		41		-		(1,952)
Less: Income tax expense (benefit)		3		(366)		3		10		-		(350)
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	12	$	(1,510)	$	(135)	$	31	$	-	$	(1,602)
Three Months Ended September 30, 2020
Unrealized change arising during period	$	99	$	2,002	$	297	$	(9)	$	1	$	2,390
Less: Reclassification adjustments
included in net income		3		172		-		(11)		-		164
Total other comprehensive income (loss),
before income tax expense (benefit)		96		1,830		297		2		1		2,226
Less: Income tax expense (benefit)		17		445		(55)		3		-		410
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	79	$	1,385	$	352	$	(1)	$	1	$	1,816
Nine Months Ended September 30, 2021
Unrealized change arising during period	$	62	$	(5,512)	$	63	$	22	$	(1)	$	(5,366)
Less: Reclassification adjustments
included in net income		-		749		-		(34)		-		715
Total other comprehensive income (loss),
before income tax expense (benefit)		62		(6,261)		63		56		(1)		(6,081)
Less: Income tax expense (benefit)		13		(1,262)		59		14		-		(1,176)
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	49	$	(4,999)	$	4	$	42	$	(1)	$	(4,905)
Nine Months Ended September 30, 2020
Unrealized change arising during period	$	(198)	$	8,158	$	169	$	(15)	$	2	$	8,116
Less: Reclassification adjustments
included in net income		-		538		-		(32)		-		506
Total other comprehensive income (loss),
before income tax expense (benefit)		(198)		7,620		169		17		2		7,610
Less: Income tax expense (benefit)		(44)		1,695		(37)		16		-		1,630
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	(154)	$	5,925	$	206	$	1	$	2	$	5,980

The following table presents the effect of the reclassification of significant items out of AOCI on the respective line items in the Condensed Consolidated Statements of Income (Loss):

	Amount Reclassified from AOCI					Affected Line Item in the
	Three Months Ended September 30,					Condensed Consolidated
(in millions)		2021		2020		Statements of Income (Loss)
Unrealized appreciation (depreciation) of fixed maturity
securities on which allowance for credit losses was taken
Investments		$	6	$	3	Net realized gains
Total			6		3
Unrealized appreciation (depreciation) of all other
investments
Investments			219		172	Net realized gains
Total			219		172
Change in retirement plan liabilities adjustment
Prior-service credit			(1)		-	*
Actuarial losses			(10)		(11)	*
Total			(11)		(11)
Total reclassifications for the period		$	214	$	164
	Amount Reclassified from AOCI					Affected Line Item in the
	Nine Months Ended September 30,					Condensed Consolidated
(in millions)		2021		2020		Statements of Income (Loss)
Unrealized appreciation (depreciation) of fixed maturity
securities on which allowance for credit losses was taken
Investments		$	-	$	-	Net realized gains
Total			-		-
Unrealized appreciation (depreciation) of all other
investments
Investments			749		538	Net realized gains
Total			749		538
Change in retirement plan liabilities adjustment
Prior-service credit			(3)		(1)	*
Actuarial losses			(31)		(31)	*
Total			(34)		(32)
Total reclassifications for the period		$	715	$	506

*These AOCI components are included in the computation of net periodic pension cost. For additional information see Note 14 to the Condensed Consolidated Financial Statements.