SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2012

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of amounts previously reported, effect of change due to retrospective adoption of standard and the adjusted amounts reflected in consolidated financial statements

December 31, 2011 (in millions)	As Previously Reported		Effect of Change			As Currently Reported
Balance Sheet:
Current and deferred income taxes	$	16,084	$	1,718		$	17,802
Deferred policy acquisition costs		14,026		(5,089	)		8,937
Other assets		12,824		(42	)		12,782
Total assets		555,773		(3,413	)		552,360
Retained earnings		14,332		(3,558	)		10,774
Accumulated other comprehensive income		5,008		145			5,153
Total AIG shareholders' equity		104,951		(3,413	)		101,538

Three Months Ended June 30, 2011 (dollars in millions, except per share data)	As Previously Reported			Effect of Change			As Currently Reported
Statement of Operations:
Total net realized capital gains(a)	$	71		$	4		$	75
Total revenues		16,676			4			16,680
Interest credited to policyholder account balances		1,110			4			1,114
Amortization of deferred acquisition costs		1,786			(464	)		1,322
Other acquisition and other insurance expenses		1,653			476			2,129
Total benefits, claims and expenses		14,870			16			14,886
Income (loss) from continuing operations before income tax benefit		1,806			(12	)		1,794
Income tax benefit(b)		(288	)		(8	)		(296	)
Income (loss) from continuing operations		2,094			(4	)		2,090
Income (loss) from discontinued operations, net of income tax expense(c)		(37	)		-			(37	)
Net income		2,057			(4	)		2,053
Net income attributable to AIG		1,840			(4	)		1,836
Net income (loss) attributable to AIG common shareholders		1,840			(4	)		1,836
Income (loss) per share attributable to AIG common shareholders:
Basic:
Income (loss) from continuing operations	$	1.03		$	-		$	1.03
Income (loss) from discontinued operations	$	(0.03	)	$	-		$	(0.03	)
Diluted
Income (loss) from continuing operations	$	1.03		$	-		$	1.03
Income (loss) from discontinued operations	$	(0.03	)	$	-		$	(0.03	)

Six Months Ended June 30, 2011 (dollars in millions, except per share data)	As Previously Reported			Effect of Change			As Currently Reported
Statement of Operations:
Total net realized capital losses(a)	$	(667	)	$	7		$	(660	)
Total revenues		34,112			7			34,119
Interest credited to policyholder account balances		2,215			5			2,220
Amortization of deferred acquisition costs		3,502			(949	)		2,553
Other acquisition and other insurance expenses		3,204			893			4,097
Total benefits, claims and expenses		33,686			(51	)		33,635
Income (loss) from continuing operations before income tax benefit		426			58			484
Income tax benefit(b)		(488	)		(34	)		(522	)
Income (loss) from continuing operations		914			92			1,006
Income (loss) from discontinued operations, net of income tax expense(c)		1,616			932			2,548
Net income		2,530			1,024			3,554
Net income attributable to AIG		2,109			1,024			3,133
Net income (loss) attributable to AIG common shareholders		1,297			1,024			2,321
Income (loss) per share attributable to AIG common shareholders:
Basic:
Income (loss) from continuing operations	$	(0.18	)	$	0.06		$	(0.12	)
Income from discontinued operations	$	0.94		$	0.55		$	1.49
Diluted
Income (loss) from continuing operations	$	(0.18	)	$	0.06		$	(0.12	)
Income from discontinued operations	$	0.94		$	0.55		$	1.49

(a)

Includes $5 million and $(82) million for the three and six months ended June 30, 2011, respectively, attributable to the effect of the reclassification of certain derivative activity discussed in Note 1 herein.

(b)

Includes a change in the deferred tax asset valuation allowance for the period.

(c)

Represents the results of Nan Shan Life Insurance Company, Ltd. (Nan Shan) and the results of AIG Star Life Insurance Co. Ltd. (AIG Star) and AIG Edison Life Insurance Company (AIG Edison) through the date of their disposition, and the gain on the sale of AIG Star and AIG Edison, which were sold in the first quarter of 2011.

Six Months Ended June 30, 2011 (in millions)	As Previously Reported			Effect of Change			As Currently Reported
Cash flows from operating activities:
Net income	$	2,530		$	1,024		$	3,554
Income from discontinued operations		(1,616	)		(932	)		(2,548	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Noncash revenues, expenses, gains and losses included in income (loss):
Unrealized gains in earnings – net*		(2,466	)		(7	)		(2,473	)
Depreciation and other amortization		4,529			(944	)		3,585
Changes in operating assets and liabilities:
Capitalization of deferred policy acquisition costs		(3,554	)		893			(2,661	)
Current and deferred income taxes – net		(1,034	)		(34	)		(1,068	)
Total adjustments		(7,126	)		(92	)		(7,218	)

*

Includes $73 million for the six months ended June 30, 2011 attributable to the effect of the reclassification of certain derivative activity discussed in Note 1 herein.