11. EQUITY

Shares Outstanding

The following table presents a rollforward of outstanding shares:





Nine Months Ended September 30, 2013
Shares, beginning of year	1,906,611,680	(430,289,745	)	1,476,321,935
Shares issued	21,749	23,984		45,733
Shares repurchased	–	(4,023,946	)	(4,023,946	)

Shares, end of period	1,906,633,429	(434,289,707	)	1,472,343,722

Dividends and Repurchase of AIG Common Stock

Payment of future dividends to our shareholders depends in part on the regulatory framework that we are currently subject to and that will ultimately be applicable to us, including as a savings and loan holding company, a 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 will be payable on AIG Common Stock only when, as and if declared by our Board of Directors in its discretion, from funds legally available therefor. In considering whether to pay a dividend or purchase shares of AIG Common Stock, our Board of Directors will take into account such matters as the performance of our businesses, our consolidated financial condition, results of operations and liquidity, available capital, the existence of investment opportunities, contractual, legal and regulatory restrictions on the payment of dividends by our subsidiaries, rating agency considerations, including the potential effect on our debt ratings, and such other factors as our Board of Directors may deem relevant.

On September 26, 2013, AIG paid a dividend of $0.10 per share on AIG Common Stock. On October 31, 2013, our Board of Directors declared a cash dividend of $0.10 per share on AIG Common Stock. See Note 17 herein for further discussion.

On August 1, 2013, our Board of Directors authorized the repurchase of shares of AIG Common Stock, with an aggregate purchase price of up to $1.0 billion, from time to time in the open market, private purchases, through forward, derivative, accelerated repurchase or automatic repurchase transactions or otherwise. The timing of such repurchases will depend on market conditions, our financial condition, results of operations, liquidity and other factors. For the three- and nine-month periods ended September 30, 2013, we repurchased approximately four million shares of AIG Common Stock for an aggregate purchase price of approximately $192 million pursuant to this authorization.

See Note 20 to the Consolidated Financial Statements in the 2012 Annual Report for a discussion of restrictions on payments of dividends to AIG Parent by its subsidiaries.

Accumulated Other Comprehensive Income

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

(in millions)	Unrealized Appreciation (Depreciation) of Fixed Maturity Investments on Which Other-Than- Temporary Credit Impairments Were Recognized			Unrealized Appreciation (Depreciation) of All Other Investments			Foreign Currency Translation Adjustments			Net Derivative Gains (Losses) Arising from Cash Flow Hedging Activities		Change in Retirement Plan Liabilities Adjustment			Total



Balance, December 31, 2012, net of tax	$	575		$	13,446		$	(403	)	$	–	$	(1,044	)	$	12,574

Change in unrealized appreciation (depreciation) of investments		314			(13,048	)		–			–		–			(12,734	)
Change in deferred acquisition costs adjustment and other		(108	)		939			–			–		–			831
Change in future policy benefits		80			2,727			–			–		–			2,807
Change in foreign currency translation adjustments		–			–			(709	)		–		–			(709	)
Net actuarial gain		–			–			–			–		94			94
Prior service cost		–			–			–			–		(39	)		(39	)
Change in deferred tax asset (liability)		(114	)		3,714			82			–		(20	)		3,662

Total other comprehensive income (loss)		172			(5,668	)		(627	)		–		35			(6,088	)
Noncontrolling interests		–			(16	)		(7	)		–		–			(23	)

Balance, September 30, 2013, net of tax	$	747		$	7,794		$	(1,023	)	$	–	$	(1,009	)	$	6,509

The following table presents the other comprehensive income reclassification adjustments for the three- and nine-month periods ended September 30, 2013 and 2012:

(in millions)	Unrealized Appreciation (Depreciation) of Fixed Maturity Investments on Which Other-Than- Temporary Credit Impairments Were Recognized			Unrealized Appreciation (Depreciation) of All Other Investments			Foreign Currency Translation Adjustments			Net Derivative Gains (Losses) Arising from Cash Flow Hedging Activities			Change in Retirement Plan Liabilities Adjustment			Total



Three Months Ended September 30, 2013
Unrealized change arising during period	$	(30	)	$	(652	)	$	(143	)	$	–		$	(44	)	$	(869	)
Less: Reclassification adjustments included in net income		1			219			–			–			(22	)		198

Total other comprehensive loss, before income tax expense (benefit)		(31	)		(871	)		(143	)		–			(22	)		(1,067	)
Less: Income tax expense (benefit)		(8	)		(437	)		(94	)		–			4			(535	)

Total other comprehensive loss, net of income tax expense (benefit)	$	(23	)	$	(434	)	$	(49	)	$	–		$	(26	)	$	(532	)

Three Months Ended September 30, 2012
Unrealized change arising during period	$	922		$	3,600		$	258		$	(1	)	$	1		$	4,780
Less: Reclassification adjustments included in net income		16			198			–			(4	)		(19	)		191

Total other comprehensive income, before income tax expense		906			3,402			258			3			20			4,589
Less: Income tax expense (benefit)		409			1,071			18			1			(9	)		1,490

Total other comprehensive income, net of income tax expense (benefit)	$	497		$	2,331		$	240		$	2		$	29		$	3,099

Nine Months Ended September 30, 2013
Unrealized change arising during period	$	342		$	(8,784	)	$	(709	)	$	–		$	(18	)	$	(9,169	)
Less: Reclassification adjustments included in net income		56			598			–			–			(73	)		581

Total other comprehensive income (loss), before income tax expense (benefit)		286			(9,382	)		(709	)		–			55			(9,750	)
Less: Income tax expense (benefit)		114			(3,714	)		(82	)		–			20			(3,662	)

Total other comprehensive income (loss), net of income tax expense (benefit)	$	172		$	(5,668	)	$	(627	)	$	–		$	35		$	(6,088	)

Nine Months Ended September 30, 2012
Unrealized change arising during period	$	1,949		$	8,072		$	(167	)	$	(2	)	$	5		$	9,857
Less: Reclassification adjustments included in net income		12			1,475			–			(13	)		(61	)		1,413

Total other comprehensive income (loss), before income tax expense (benefit)		1,937			6,597			(167	)		11			66			8,444
Less: Income tax expense (benefit)		810			1,980			(71	)		(14	)		5			2,710

Total other comprehensive income (loss), net of income tax expense (benefit)	$	1,127		$	4,617		$	(96	)	$	25		$	61		$	5,734

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


(in millions)	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013			Affected Line Item in the Condensed Consolidated Statements of Income

Unrealized appreciation (depreciation) of fixed maturity investments on which other-than-temporary credit impairments were recognized
Investments	$	1		$	56		Other realized capital gains

Total		1			56

Unrealized appreciation (depreciation) of all other investments
Investments		501			2,093		Other realized capital gains
Deferred acquisition costs adjustment		(39	)		(33	)	Amortization of deferred acquisition costs
Future policy benefits		(243	)		(1,462	)	Policyholder benefits and claims incurred

Total		219			598

Change in retirement plan liabilities adjustment
Prior-service costs		13			35		*
Actuarial gains/(losses)		(35	)		(108	)	*

Total		(22	)		(73	)

Total reclassifications for the period	$	198		$	581

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