EQUITY

9 Months Ended

Sep. 30, 2018

12. Equity

Shares Outstanding

The following table presents a rollforward of outstanding shares:

Nine Months Ended September 30, 2018	Common	Treasury	Common Stock
	Stock Issued	Stock	Outstanding
Shares, beginning of year	1,906,671,492	(1,007,626,835)	899,044,657
Shares issued	-	4,055,727	4,055,727
Shares repurchased	-	(18,452,857)	(18,452,857)
Shares, end of period	1,906,671,492	(1,022,023,965)	884,647,527

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 following table presents declaration date, record date, payment date and dividends paid per share on AIG Common Stock:

				Dividends Paid
Declaration Date	Record Date	Payment Date		Per Share
August 2, 2018	September 17, 2018	September 28, 2018	$	0.32
May 2, 2018	June 14, 2018	June 28, 2018		0.32
February 8, 2018	March 15, 2018	March 29, 2018		0.32
August 2, 2017	September 15, 2017	September 29, 2017		0.32
May 3, 2017	June 14, 2017	June 28, 2017		0.32
February 14, 2017	March 15, 2017	March 29, 2017		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 2017 Annual Report.

Repurchase of AIG Common Stock

The following table presents repurchases of AIG Common Stock and warrants to purchase shares of AIG Common Stock:

Nine Months Ended September 30,
(in millions)		2018		2017
Aggregate repurchases of common stock	$	994	$	6,275
Total number of common shares repurchased		18		100
Aggregate repurchases of warrants	$	6	$	3
Total number of warrants repurchased^*		-		-

* For the nine-month periods ended September 30, 2018 and 2017, we repurchased 366,253 and 185,000 warrants to purchase shares of AIG Common Stock, respectively.

Our Board of Directors has authorized the repurchase of shares of AIG Common Stock and warrants to purchase shares of AIG Common Stock through a series of actions. On May 3, 2017, our Board of Directors authorized an additional increase of $2.5 billion to its previous share repurchase authorization. As of September 30, 2018, approximately $1.3 billion remained under our share repurchase authorization. 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 (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.

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.

Accumulated Other Comprehensive Income

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

		Unrealized Appreciation								Fair Value of
		(Depreciation) of Fixed		Unrealized						Liabilities Under
		Maturity Securities on		Appreciation		Foreign		Retirement		Fair Value Option
		Which Other-Than-		(Depreciation)		Currency		Plan		Attributable to
		Temporary Credit		of All Other		Translation		Liabilities		Changes in
(in millions)		Impairments Were Taken		Investments		Adjustments		Adjustment		Own Credit Risk		Total
Balance, June 30, 2018, net of tax	$	(234)	$	3,944	$	(2,426)	$	(1,062)	$	8	$	230
Cumulative effect of change in
accounting principles		-		-		-		-		-		-
Change in unrealized appreciation (depreciation)
of investments		350		(1,301)		-		-		-		(951)
Change in deferred policy acquisition costs
adjustment and other		(205)		216		-		-		-		11
Change in future policy benefits		-		340		-		-		-		340
Change in foreign currency translation adjustments		-		-		(131)		-		-		(131)
Change in net actuarial loss		-		-		-		16		-		16
Change in prior service cost		-		-		-		-		-		-
Change in deferred tax asset (liability)		(38)		(13)		2		(2)		-		(51)
Change in fair value of liabilities under fair value
option attributable to changes in own credit risk		-		-		-		-		-		-
Total other comprehensive income (loss)		107		(758)		(129)		14		-		(766)
Noncontrolling interests		-		-		-		-		-		-
Balance, September 30, 2018, net of tax	$	(127)	$	3,186	$	(2,555)	$	(1,048)	$	8	$	(536)

Balance, December 31, 2017, net of tax	$	793	$	7,693	$	(2,090)	$	(931)	$	-	$	5,465
Cumulative effect of change in
accounting principles		169		(285)		(284)		(183)		7		(576)
Change in unrealized depreciation of investments		(1,258)		(7,659)		-		-		-		(8,917)
Change in deferred policy acquisition costs
adjustment and other		(91)		1,121		-		-		-		1,030
Change in future policy benefits		-		1,464		-		-		-		1,464
Change in foreign currency translation adjustments		-		-		(154)		-		-		(154)
Change in net actuarial loss		-		-		-		54		-		54
Change in prior service credit		-		-		-		(2)		-		(2)
Change in deferred tax asset (liability)		260		852		(27)		14		-		1,099
Change in fair value of liabilities under fair value
option attributable to changes in own credit risk		-		-		-		-		1		1
Total other comprehensive income (loss)		(1,089)		(4,222)		(181)		66		1		(5,425)
Noncontrolling interests		-		-		-		-		-		-
Balance, September 30, 2018, net of tax	$	(127)	$	3,186	$	(2,555)	$	(1,048)	$	8	$	(536)

		Unrealized Appreciation								Fair Value of
		(Depreciation) of Fixed		Unrealized						Liabilities Under
		Maturity Securities on		Appreciation		Foreign		Retirement		Fair Value Option
		Which Other-Than-		(Depreciation)		Currency		Plan		Attributable to
		Temporary Credit		of All Other		Translation		Liabilities		Changes in
(in millions)		Impairments Were Taken		Investments		Adjustments		Adjustment		Own Credit Risk		Total
Balance, June 30, 2017, net of tax	$	659	$	7,753	$	(2,507)	$	(943)	$	-	$	4,962
Change in unrealized appreciation of investments		223		855		-		-		-		1,078
Change in deferred policy acquisition costs
adjustment and other		(73)		(271)		-		-		-		(344)
Change in future policy benefits		-		114		-		-		-		114
Change in foreign currency translation adjustments		-		-		328		-		-		328
Change in net actuarial loss		-		-		-		96		-		96
Change in prior service cost		-		-		-		-		-		-
Change in deferred tax liability		(53)		(206)		(3)		(33)		-		(295)
Total other comprehensive income		97		492		325		63		-		977
Noncontrolling interests		-		-		-		-		-		-
Balance, September 30, 2017, net of tax	$	756	$	8,245	$	(2,182)	$	(880)	$	-	$	5,939

Balance, December 31, 2016, net of tax	$	426	$	6,405	$	(2,629)	$	(972)	$	-	$	3,230
Change in unrealized appreciation of investments		564		3,693		-		-		-		4,257
Change in deferred policy acquisition costs
adjustment and other^*		(56)		(1,269)		-		-		-		(1,325)
Change in future policy benefits		-		(425)		-		-		-		(425)
Change in foreign currency translation adjustments		-		-		474		-		-		474
Change in net actuarial loss		-		-		-		134		-		134
Change in prior service cost		-		-		-		6		-		6
Change in deferred tax liability		(178)		(159)		(27)		(48)		-		(412)
Total other comprehensive income		330		1,840		447		92		-		2,709
Noncontrolling interests		-		-		-		-		-		-
Balance, September 30, 2017, net of tax	$	756	$	8,245	$	(2,182)	$	(880)	$	-	$	5,939

* Includes net unrealized gains attributable to businesses held for sale.

The following table presents the other comprehensive income reclassification adjustments for the three- and nine-month periods ended September 30, 2018 and 2017, respectively:

		Unrealized Appreciation
		(Depreciation) of Fixed								Fair Value of
		Maturity Investments		Unrealized						Liabilities Under
		on Which Other-Than-		Appreciation		Foreign		Retirement		Fair Value Option
		Temporary Credit		(Depreciation)		Currency		Plan		Attributable to
		Impairments Were		of All Other		Translation		Liabilities		Changes in
(in millions)		Recognized		Investments		Adjustments		Adjustment		Own Credit Risk		Total
Three Months Ended September 30, 2018
Unrealized change arising during period	$	146	$	(705)	$	(131)	$	7	$	-	$	(683)
Less: Reclassification adjustments
included in net income		1		40		-		(9)		-		32
Total other comprehensive income (loss),
before income tax expense (benefit)		145		(745)		(131)		16		-		(715)
Less: Income tax expense (benefit)		38		13		(2)		2		-		51
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	107	$	(758)	$	(129)	$	14	$	-	$	(766)
Three Months Ended September 30, 2017
Unrealized change arising during period	$	160	$	831	$	328	$	38	$	-	$	1,357
Less: Reclassification adjustments
included in net income		10		133		-		(58)		-		85
Total other comprehensive income,
before income tax expense		150		698		328		96		-		1,272
Less: Income tax expense		53		206		3		33		-		295
Total other comprehensive income,
net of income tax expense	$	97	$	492	$	325	$	63	$	-	$	977
Nine Months Ended September 30, 2018
Unrealized change arising during period	$	(1,344)	$	(5,055)	$	(154)	$	26	$	1	$	(6,526)
Less: Reclassification adjustments
included in net income		5		19		-		(26)		-		(2)
Total other comprehensive income (loss),
before income tax expense (benefit)		(1,349)		(5,074)		(154)		52		1		(6,524)
Less: Income tax expense (benefit)		(260)		(852)		27		(14)		-		(1,099)
Total other comprehensive income (loss),
net of income tax expense (benefit)	$	(1,089)	$	(4,222)	$	(181)	$	66	$	1	$	(5,425)
Nine Months Ended September 30, 2017
Unrealized change arising during period	$	553	$	2,610	$	474	$	62	$	-	$	3,699
Less: Reclassification adjustments
included in net income		45		611		-		(78)		-		578
Total other comprehensive income,
before income tax expense		508		1,999		474		140		-		3,121
Less: Income tax expense		178		159		27		48		-		412
Total other comprehensive income,
net of income tax expense	$	330	$	1,840	$	447	$	92	$	-	$	2,709

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 September 30,
(in millions)		2018		2017
Unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken

Investments		$	1	$	10		Other realized capital gains
Total			1		10
Unrealized appreciation (depreciation) of all other investments
Investments			10		48		Other realized capital gains
Deferred acquisition costs adjustment			30		85		Amortization of deferred policy acquisition costs
Future policy benefits			-		-		Policyholder benefits and losses incurred
Total			40		133
Change in retirement plan liabilities adjustment
Prior-service credit			-		-		*
Actuarial losses			(9)		(58)		*
Total			(9)		(58)
Total reclassifications for the period		$	32	$	85
	Amount Reclassified from Accumulated Other Comprehensive Income					Affected Line Item in the Condensed Consolidated Statements of Income

	Nine Months Ended September 30,
(in millions)		2018		2017
Unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken

Investments		$	5	$	45		Other realized capital gains
Total			5		45
Unrealized appreciation (depreciation) of all other investments
Investments			19		415		Other realized capital gains
Deferred acquisition costs adjustment			-		196		Amortization of deferred policy acquisition costs
Future policy benefits			-		-		Policyholder benefits and losses incurred
Total			19		611
Change in retirement plan liabilities adjustment
Prior-service credit			1		1		*
Actuarial losses			(27)		(79)		*
Total			(26)		(78)
Total reclassifications for the period		$	(2)	$	578

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