2007 Annual Report - AIG.com

American International Group, Inc. and Subsidiaries
Consolidated Statement of Shareholders’ Equity
Years Ended December 31,
Amounts
Shares
(in millions, except share and per share data) 2007 2006 2005 2007 2006 2005
Common stock:
Balance, beginning and end of year $ 6,878 $ 6,878 $ 6,878 2,751,327,476 2,751,327,476 2,751,327,476
Additional paid-in capital:
Balance, beginning of year 2,590 2,339 2,094
Excess of cost over proceeds
of common stock issued under stock
plans (98) (128) (91)
Other 356 379 336
Balance, end of year 2,848 2,590 2,339
Payments advanced to purchase shares:
Balance, beginning of year — — —
Payments advanced (6,000) — —
Shares purchased 5,088 — —
Balance, end of year (912) — —
Retained earnings:
Balance, beginning of year 84,996 72,330 63,468
Cumulative effect of accounting
changes, net of tax (203) 308 —
Adjusted balance, beginning of year 84,793 72,638 63,468
Net income 6,200 14,048 10,477
Dividends to common shareholders
($0.77,$0.65 and $0.63 per share,
respectively) (1,964) (1,690) (1,615)
Balance, end of year 89,029 84,996 72,330
Accumulated other comprehensive
income (loss):
Unrealized appreciation (depreciation) of
investments, net of tax:
Balance, beginning of year 10,083 8,348 10,326
Unrealized appreciation
(depreciation) of investments, net of
reclassification adjustments (8,046) 2,574 (3,577)
Income tax benefit (expense) 2,338 (839) 1,599
Balance, end of year 4,375 10,083 8,348
Foreign currency translation adjustments,
net of tax:
Balance, beginning of year (305) (1,241) (701)
Translation adjustment 1,325 1,283 (926)
Income tax benefit (expense) (140) (347) 386
Balance, end of year 880 (305) (1,241)
Net derivative gains (losses) arising from
cash flow hedging activities:
Balance, beginning of year (27) (25) (53)
Net deferred gains on cash flow
hedges, net of reclassification
adjustments (133) 13 35
Deferred income tax expense 73 (15) (7)
Balance, end of year (87) (27) (25)
Retirement plan liabilities adjustment, net
of taxes:
Balance, beginning of year (641) (115) (128)
Net actuarial loss 197 — —
Prior service credit (24) — —
Minimum pension liability adjustment — 80 81
Deferred income tax benefit (expense) (57) (74) (68)
Adjustment to initially apply FAS 158,
net of tax — (532) —
Balance, end of year (525) (641) (115)
Accumulated other comprehensive income
(loss), end of year 4,643 9,110 6,967
Treasury stock, at cost:
Balance, beginning of year (1,897) (2,197) (2,211) (150,131,273) (154,680,704) (154,904,286)
Cost of shares acquired (5,104) (20) (176) (76,519,859) (288,365) (2,654,272)
Issued under stock plans 305 291 173 4,958,345 4,579,913 2,625,227
Other 11 29 17 (50,634) 257,883 252,627
Balance, end of year (6,685) (1,897) (2,197) (221,743,421) (150,131,273) (154,680,704)
Total shareholders’ equity, end of year $95,801 $101,677 $86,317
See Accompanying Notes to Consolidated Financial Statements.
AIG 2007 Form 10-K 133