EQUITY

6 Months Ended

Jun. 30, 2015

EQUITY

EQUITY

10.EQUITY

Shares Outstanding

The following table presents a rollforward of outstanding shares:

	Common	Treasury	Common Stock
	Stock Issued	Stock	Outstanding
Six Months Ended June 30, 2015
Shares, beginning of year	1,906,671,492	(530,744,521)	1,375,926,971
Shares issued	-	27,089	27,089
Shares repurchased	-	(68,505,540)	(68,505,540)
Shares, end of period	1,906,671,492	(599,222,972)	1,307,448,520

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 nonbank 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 for this purpose. 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 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 26,2015, AIG paid a dividend of $0.125 per share on AIG Common Stock to shareholders of record on March 12, 2015. On June 25, 2015,AIG paid a dividend of $0.125 per share on AIG Common Stock to shareholders of record on June 11, 2015.

See Note 20 to the Consolidated Financial Statements in the 2014 Annual Report for a discussion of restrictions on payments of dividends to AIG Parent by its subsidiaries.

Repurchase of AIG Common Stock

Our Board of Directors has authorized the repurchase of shares of AIG Common Stock through a series of actions. On April 30, 2015, our Board of Directors authorized an additional increase of $3.5 billion to its previous repurchase authorization, resulting in an aggregate remaining authorization on such date of approximately $3.8 billion. 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 Exchange Act Rule 10b5-1 repurchase plans.

We repurchased approximately 69 million shares of AIG Common Stock during the six-month period ended June 30,2015, for an aggregate purchase price of approximately $3.7 billion. As of June 30,2015, approximately $2.3billion remained under our repurchase authorization.

The total number of shares of AIG Common Stock repurchased in the first quarter of 2015 includes (but the aggregate purchase price does not include) approximately 3.5 million shares of AIG Common Stock received in January 2015 upon the settlement of an accelerated share repurchase agreement executed in the fourth quarter of 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 on Which Other-Than- Temporary Credit Impairments Were Taken
				Unrealized Appreciation (Depreciation) of All Other Investments		Foreign Currency Translation Adjustments		Retirement Plan Liabilities Adjustment
(in millions)										Total
Balance, December 31, 2014, net of tax	$	1,043	$	12,327	$	(1,784)	$	(969)	$	10,617
Change in unrealized depreciation of investments		(195)		(4,843)		-		-		(5,038)
Change in deferred acquisition costs adjustment and other		(9)		495		-		-		486
Change in future policy benefits		92		804		-		-		896
Change in foreign currency translation adjustments		-		-		(684)		-		(684)
Net actuarial gain		-		-		-		91		91
Prior service cost		-		-		-		(23)		(23)
Change in deferred tax asset (liability)		4		1,092		188		(12)		1,272
Total other comprehensive income (loss)		(108)		(2,452)		(496)		56		(3,000)
Noncontrolling interests		-		-		(3)		-		(3)
Balance, June 30, 2015, net of tax	$	935	$	9,875	$	(2,277)	$	(913)	$	7,620
Balance, December 31, 2013, net of tax	$	936	$	6,789	$	(952)	$	(413)	$	6,360
Change in unrealized appreciation of investments		199		7,517		-		-		7,716
Change in deferred acquisition costs adjustment and other		36		(629)		-		-		(593)
Change in future policy benefits		(143)		(1,185)		-		-		(1,328)
Change in foreign currency translation adjustments		-		-		(29)		-		(29)
Net actuarial gain		-		-		-		37		37
Prior service cost		-		-		-		(24)		(24)
Change in deferred tax asset (liability)		23		(563)		(82)		(6)		(628)
Total other comprehensive income (loss)		115		5,140		(111)		7		5,151
Noncontrolling interests		-		-		-		-		-
Balance, June 30, 2014, net of tax	$	1,051	$	11,929	$	(1,063)	$	(406)	$	11,511

The following table presents the other comprehensive income reclassification adjustments for the three- and six-month periods ended June 30,2015 and 2014, respectively:

		Unrealized Appreciation (Depreciation) of Fixed Maturity Investments on Which Other-Than- Temporary Credit Impairments Were Taken
				Unrealized Appreciation (Depreciation) of All Other Investments		Foreign Currency Translation Adjustments		Retirement Plan Liabilities Adjustment
(in millions)										Total
Three Months Ended June 30, 2015
Unrealized change arising during period	$	35	$	(4,475)	$	(52)	$	14	$	(4,478)
Less: Reclassification adjustments
included in net income		46		99		-		(23)		122
Total other comprehensive income (loss),
before income tax expense (benefit)		(11)		(4,574)		(52)		37		(4,600)
Less: Income tax expense (benefit)		25		(1,583)		(15)		10		(1,563)
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	(36)	$	(2,991)	$	(37)	$	27	$	(3,037)
Three Months Ended June 30, 2014
Unrealized change arising during period	$	21	$	2,909	$	73	$	10	$	3,013
Less: Reclassification adjustments
included in net income		10		165		-		(1)		174
Total other comprehensive income (loss),
before income tax expense		11		2,744		73		11		2,839
Less: Income tax expense (benefit)		(15)		389		26		13		413
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	26	$	2,355	$	47	$	(2)	$	2,426
Six Months Ended June 30, 2015
Unrealized change arising during period	$	(57)	$	(2,968)	$	(684)	$	21	$	(3,688)
Less: Reclassification adjustments
included in net income		55		576		-		(47)		584
Total other comprehensive income (loss),
before income tax expense (benefit)		(112)		(3,544)		(684)		68		(4,272)
Less: Income tax expense (benefit)		(4)		(1,092)		(188)		12		(1,272)
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	(108)	$	(2,452)	$	(496)	$	56	$	(3,000)
Six Months Ended June 30, 2014
Unrealized change arising during period	$	110	$	6,097	$	(29)	$	11	$	6,189
Less: Reclassification adjustments
included in net income		18		394		-		(2)		410
Total other comprehensive income (loss),
before income tax expense (benefit)		92		5,703		(29)		13		5,779
Less: Income tax expense (benefit)		(23)		563		82		6		628
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	115	$	5,140	$	(111)	$	7	$	5,151

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					Affected Line Item in the Condensed Consolidated Statements of Income
	Three Months Ended June 30,
(in millions)		2015		2014
Unrealized appreciation (depreciation) of fixed maturity investments on which other-than-temporary credit impairments were taken
Investments		$	46	$	10		Other realized capital gains
Total			46		10
Unrealized appreciation (depreciation) of all other investments
Investments			112		207		Other realized capital gains
Deferred acquisition costs adjustment			(30)		(30)		Amortization of deferred policy acquisition costs
Future policy benefits			17		(12)		Policyholder benefits and losses incurred
Total			99		165
Change in retirement plan liabilities adjustment
Prior - service cost			11		12		*
Actuarial losses			(34)		(13)		*
Total			(23)		(1)
Total reclassifications for the period		$	122	$	174
	Amount Reclassified from Accumulated Other Comprehensive Income					Affected Line Item in the Condensed Consolidated Statements of Income
	Six Months Ended June 30,
(in millions)		2015		2014
Unrealized appreciation (depreciation) of fixed maturity investments on which other-than-temporary credit impairments were taken
Investments		$	55	$	18		Other realized capital gains
Total			55		18
Unrealized appreciation (depreciation) of all other investments
Investments			624		411		Other realized capital gains
Deferred acquisition costs adjustment			(65)		5		Amortization of deferred policy acquisition costs
Future policy benefits			17		(22)		Policyholder benefits and losses incurred
Total			576		394
Change in retirement plan liabilities adjustment
Prior - service cost			23		24		*
Actuarial losses			(70)		(26)		*
Total			(47)		(2)		-
Total reclassifications for the period		$	584	$	410		-

* These Accumulated other comprehensive income components are included in the computation of net periodic pension cost. See Note 12 to the Condensed Consolidated Financial Statements.