SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 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 September 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)	$	604		$	3		$	607
Total revenues		12,716			3			12,719
Interest credited to policyholder account balances		1,134			12			1,146
Amortization of deferred acquisition costs		2,490			(950	)		1,540
Other acquisition and other insurance expenses		1,214			853			2,067
Total benefits, claims and expenses		17,074			(85	)		16,989
Loss from continuing operations before income tax benefit		(4,358	)		88			(4,270	)
Income tax benefit(b)		(634	)		(31	)		(665	)
Loss from continuing operations		(3,724	)		119			(3,605	)
Loss from discontinued operations, net of income tax expense(c)		(221	)		–			(221	)
Net loss		(3,945	)		119			(3,826	)
Net loss attributable to AIG		(4,109	)		119			(3,990	)
Net loss attributable to AIG common shareholders		(4,109	)		119			(3,990	)
Loss per share attributable to AIG common shareholders:
Basic:
Loss from continuing operations	$	(2.05	)	$	0.06		$	(1.99	)
Loss from discontinued operations	$	(0.11	)	$	–		$	(0.11	)
Diluted
Loss from continuing operations	$	(2.05	)	$	0.06		$	(1.99	)
Loss from discontinued operations	$	(0.11	)	$	–		$	(0.11	)

Nine Months Ended September 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)	$	(63	)	$	10		$	(53	)
Total revenues		46,828			10			46,838
Interest credited to policyholder account balances		3,349			17			3,366
Amortization of deferred acquisition costs		5,992			(1,899	)		4,093
Other acquisition and other insurance expenses		4,418			1,746			6,164
Total benefits, claims and expenses		50,760			(136	)		50,624
Loss from continuing operations before income tax benefit		(3,932	)		146			(3,786	)
Income tax benefit(b)		(1,122	)		(65	)		(1,187	)
Loss from continuing operations		(2,810	)		211			(2,599	)
Income from discontinued operations, net of income tax expense(c)		1,395			932			2,327
Net loss		(1,415	)		1,143			(272	)
Net loss attributable to AIG		(2,000	)		1,143			(857	)
Net loss attributable to AIG common shareholders		(2,812	)		1,143			(1,669	)
Income (loss) per share attributable to AIG common shareholders:
Basic:
Loss from continuing operations	$	(2.37	)	$	0.12		$	(2.25	)
Income from discontinued operations	$	0.78		$	0.52		$	1.30
Diluted
Loss from continuing operations	$	(2.37	)	$	0.12		$	(2.25	)
Income from discontinued operations	$	0.78		$	0.52		$	1.30

(a)     Includes $192 million and $110 million for the three and nine months ended September 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 each 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.

Nine Months Ended September 30, 2011 (in millions)	As Previously Reported			Effect of Change			As Currently Reported
Cash flows from operating activities:
Net loss	$	(1,415	)	$	1,143		$	(272	)
(Income) from discontinued operations		(1,395	)		(932	)		(2,327	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Noncash revenues, expenses, gains and losses included in income (loss):
Unrealized losses in earnings – net*		724			(10	)		714
Depreciation and other amortization		7,500			(1,882	)		5,618
Changes in operating assets and liabilities:
Capitalization of deferred policy acquisition costs		(5,856	)		1,746			(4,110	)
Current and deferred income taxes – net		(1,764	)		(65	)		(1,829	)
Total adjustments		(1,761	)		(211	)		(1,972	)

*         Includes $118 million for the nine months ended September 30, 2011 attributable to the effect of the reclassification of certain derivative activity discussed in Note 1 herein.