EQUITY

6 Months Ended

Jun. 30, 2016

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, 2016
Shares, beginning of year	1,906,671,492	(712,754,875)	1,193,916,617
Shares issued	-	2,017,200	2,017,200
Shares repurchased	-	(113,244,455)	(113,244,455)
Shares, end of period	1,906,671,492	(823,982,130)	1,082,689,362

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 28, 2016, we paid a dividend of $0.32 per share on AIG Common Stock to shareholders of record on March 14, 2016. On June 27, 2016, we paid a dividend of $0.32 per share on AIG Common Stock to shareholders of record onJune 13, 2016.

See Note 18 to the Consolidated Financial Statements in the 2015 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 February 11, 2016, our Board of Directors authorized an additional increase of $5.0billion to its previous share repurchase authorization. As of June 30,2016, approximately $1.8 billion remained under our share repurchase authorization. Sharesmay be repurchased from time to time in the open market, private purchases, through forward, derivative, accelerated repurchase or automatic repurchase transactions or otherwise (including through the purchase of warrants). 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 113 million shares of AIG Common Stock in the six-month period ended June 30,2016 for an aggregate purchase price of approximately $6.2 billion, and we repurchased 15 million warrants to purchase shares of AIG Common Stock for an aggregate purchase price of $263 million.

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, 2015, net of tax	$	696	$	5,566	$	(2,879)	$	(846)	$	2,537
Change in unrealized appreciation (depreciation) of investments		(491)		9,499		-		-		9,008
Change in deferred policy acquisition costs adjustment and other		(8)		(682)		-		-		(690)
Change in future policy benefits		-		(1,583)		-		-		(1,583)
Change in foreign currency translation adjustments		-		-		158		-		158
Change in net actuarial loss		-		-		-		11		11
Change in prior service cost		-		-		-		(13)		(13)
Change in deferred tax asset (liability)		172		(1,398)		63		(6)		(1,169)
Total other comprehensive income (loss)		(327)		5,836		221		(8)		5,722
Noncontrolling interests		-		-		-		-		-
Balance, June 30, 2016, net of tax	$	369	$	11,402	$	(2,658)	$	(854)	$	8,259
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 policy acquisition costs adjustment and other		(9)		495		-		-		486
Change in future policy benefits		92		804		-		-		896
Change in foreign currency translation adjustments		-		-		(684)		-		(684)
Change in net actuarial loss		-		-		-		91		91
Change in prior service credit		-		-		-		(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

The following table presents the other comprehensive income reclassification adjustments for the three-month periods ended June 30,2016 and 2015, 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, 2016
Unrealized change arising during period	$	59	$	4,277	$	290	$	(11)	$	4,615
Less: Reclassification adjustments
included in net income		25		1,038		-		(4)		1,059
Total other comprehensive income (loss),
before income tax expense (benefit)		34		3,239		290		(7)		3,556
Less: Income tax expense (benefit)		12		830		(23)		3		822
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	22	$	2,409	$	313	$	(10)	$	2,734
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)
Six Months Ended June 30, 2016
Unrealized change arising during period	$	(399)	$	7,917	$	158	$	(10)	$	7,666
Less: Reclassification adjustments
included in net income		100		683		-		(8)		775
Total other comprehensive income (loss),
before income tax expense (benefit)		(499)		7,234		158		(2)		6,891
Less: Income tax expense (benefit)		(172)		1,398		(63)		6		1,169
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	(327)	$	5,836	$	221	$	(8)	$	5,722
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)

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)		2016		2015
Unrealized appreciation (depreciation) of fixed maturity investments on which other-than-temporary credit impairments were taken
Investments		$	25	$	46		Other realized capital gains
Total			25		46
Unrealized appreciation (depreciation) of all other investments
Investments			1,074		112		Other realized capital gains
Deferred acquisition costs adjustment			(36)		(30)		Amortization of deferred policy acquisition costs
Future policy benefits			-		17		Policyholder benefits and losses incurred
Total			1,038		99
Change in retirement plan liabilities adjustment
Prior - service cost			5		11		*
Actuarial losses			(9)		(34)		*
Total			(4)		(23)
Total reclassifications for the period		$	1,059	$	122
	Amount Reclassified from Accumulated Other Comprehensive Income					Affected Line Item in the Condensed Consolidated Statements of Income
	Six Months Ended June 30,
(in millions)		2016		2015
Unrealized appreciation (depreciation) of fixed maturity investments on which other-than-temporary credit impairments were taken
Investments		$	100	$	55		Other realized capital gains
Total			100		55
Unrealized appreciation (depreciation) of all other investments
Investments			661		624		Other realized capital gains
Deferred acquisition costs adjustment			22		(65)		Amortization of deferred policy acquisition costs
Future policy benefits			-		17		Policyholder benefits and losses incurred
Total			683		576
Change in retirement plan liabilities adjustment
Prior - service cost			9		23		*
Actuarial losses			(17)		(70)		*
Total			(8)		(47)		-
Total reclassifications for the period		$	775	$	584		-

* 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.