EQUITY

3 Months Ended

Mar. 31, 2014

EQUITY

EQUITY

11.EQUITY

Shares Outstanding

The following table presents a rollforward of outstanding shares:

	Common	Treasury	Common Stock
	Stock Issued	Stock	Outstanding
Three Months Ended March 31, 2014
Shares, beginning of year	1,906,645,689	(442,582,366)	1,464,063,323
Shares issued	9,951	-	9,951
Shares repurchased	-	(17,425,487)	(17,425,487)
Shares, end of period	1,906,655,640	(460,007,853)	1,446,647,787

Dividends

Payment of future dividends to our shareholders and repurchases of AIG Common Stock depends in part on the regulatory framework that we are currently subject to and that will ultimately be applicable to us, including as a non-bank systemically important financial institution under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and a global systemically important insurer. In addition, 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 therefor. In considering whether to pay a dividend 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 core 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.

On March 25, 2014, AIG paid a dividend of $0.125per share on AIG Common Stock to shareholders of record on March 11, 2014.

See Note 19to the Consolidated Financial Statements in the 2013 Annual Report for a discussion of restrictions on payments of dividends to AIG Parent by its subsidiaries.

Repurchase of AIG Common Stock

On August 1, 2013, our Board of Directors authorized the repurchase of shares of AIG Common Stock, with an aggregate purchase price of up to $1.0billion, from time to time in the open market, private purchases, through forward, derivative, accelerated repurchase or automatic repurchase transactions or otherwise.

On February 13, 2014, our Board of Directors authorized an increase to the August 1, 2013 repurchase authorization of AIG Common Stock by $1.0 billion, resulting in an aggregate remaining authorization at such time of approximately $1.4 billion of AIG Common Stock. During the three months ended March 31,2014, we repurchased approximately 17.4 million shares of AIG Common Stock for an aggregate purchase price of approximately $867 million pursuant to this authorization, resulting in a remaining authorization of approximately $537 million at March 31, 2014. The timing of any future repurchases will depend on market conditions, our financial condition, results of operations, liquidity and other factors.

Accumulated Other Comprehensive Income

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

		Unrealized Appreciation
		(Depreciation) of Fixed
		Maturity Investments		Unrealized Appreciation (Depreciation) of All Other Investments		Foreign Currency Translation Adjustments		Change in Retirement Plan Liabilities Adjustment
		on Which Other-Than-
		Temporary Credit
(in millions)		investments								Total
Balance, December 31, 2013, net of tax	$	936	$	6,789	$	(952)	$	(413)	$	6,360
Change in unrealized appreciation of investments		136		3,803		-		-		3,939
Change in deferred acquisition costs adjustment and other		32		(256)		-		-		(224)
Change in future policy benefits		(87)		(588)		-		-		(675)
Change in foreign currency translation adjustments		-		-		(102)		-		(102)
Net actuarial gain		-		-		-		14		14
Prior service cost		-		-		-		(12)		(12)
Change in deferred tax asset (liability)		8		(174)		(56)		7		(215)
Total other comprehensive income (loss)		89		2,785		(158)		9		2,725
Noncontrolling interests		-		-		-		-		-
Balance, March 31, 2014, net of tax	$	1,025	$	9,574	$	(1,110)	$	(404)	$	9,085
Balance, December 31, 2012, net of tax	$	575	$	13,446	$	(403)	$	(1,044)	$	12,574
Change in unrealized appreciation (depreciation) of investments		414		(1,607)		-		-		(1,193)
Change in deferred acquisition costs adjustment and other		(2)		(309)		-		-		(311)
Change in future policy benefits		13		411		-		-		424
Change in foreign currency translation adjustments		-		-		(293)		-		(293)
Net actuarial gain		-		-		-		57		57
Prior service cost		-		-		-		(14)		(14)
Change in deferred tax asset (liability)		(143)		717		20		1		595
Total other comprehensive income (loss)		282		(788)		(273)		44		(735)
Noncontrolling interests		-		(1)		1		-		-
Balance, March 31, 2013, net of tax	$	857	$	12,659	$	(677)	$	(1,000)	$	11,839

The following table presents the other comprehensive income reclassification adjustments for the three month periods ended March 31,2014 and 2013:

		Unrealized Appreciation
		(Depreciation) of Fixed
		Maturity Investments		Unrealized				Change in
		on Which Other-Than-		Appreciation		Foreign		Retirement
		Temporary Credit		(Depreciation)		Currency		Plan
		Impairments Were		of All Other		Translation		Liabilities
(in millions)		Recognized		Investments		Adjustments		Adjustment		Total
March 31, 2014
Unrealized change arising during period	$	89	$	3,188	$	(102)	$	1	$	3,176
Less: Reclassification adjustments
included in net income		8		229		-		(1)		236
Total other comprehensive income (loss),
before income tax expense (benefit)		81		2,959		(102)		2		2,940
Less: Income tax expense (benefit)		(8)		174		56		(7)		215
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	89	$	2,785	$	(158)	$	9	$	2,725
March 31, 2013
Unrealized change arising during period	$	474	$	(1,278)	$	(293)	$	18	$	(1,079)
Less: Reclassification adjustments
included in net income		49		227		-		(25)		251
Total other comprehensive income (loss),
before income tax expense (benefit)		425		(1,505)		(293)		43		(1,330)
Less: Income tax expense (benefit)		143		(717)		(20)		(1)		(595)
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	282	$	(788)	$	(273)	$	44	$	(735)

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
	Three Months Ended March 31,					Affected Line Item in the
(in millions)			2014		2013	Consolidated Statements of Income
Unrealized appreciation (depreciation) of fixed maturity investments on which other-than-temporary credit impairments were recognized
Investments		$	8	$	49	Other realized capital gains
Total			8		49
Unrealized appreciation (depreciation) of
all other investments
Investments			204		286	Other realized capital gains
Deferred acquisition costs adjustment			35		43	Amortization of deferred acquisition costs
Future policy benefits			(10)		(102)	Policyholder benefits and claims incurred
Total			229		227
Change in retirement plan liabilities adjustment
Prior-service costs			12		12	*
Actuarial gains/(losses)			(13)		(37)	*
Total			(1)		(25)
Total reclassifications for the period		$	236	$	251

* 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.