AIG 2007 Annual Report Download - page 234

American International Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements Continued
13. Preferred Shareholders’ Equity in Subsidiary 14. Shareholders’ Equity and Earnings Per
Companies Share
At December 31, 2007, preferred shareholders’ equity in subsidi- Shareholders’ Equity
ary companies represents preferred stocks issued by ILFC, a AIG parent depends on its subsidiaries for cash flow in the form
wholly owned subsidiary of AIG. of loans, advances, reimbursement for shared expenses, and
At December 31, 2007, the preferred stock consists of dividends. AIG’s insurance subsidiaries are subject to regulatory
1,000 shares of market auction preferred stock (MAPS) in two restrictions on the amount of dividends that can be remitted to
series (Series A and B) of 500 shares each. Each of the MAPS AIG parent. These restrictions vary by jurisdiction. For example,
shares has a liquidation value of $100,000 per share and is not unless permitted by the New York Superintendent of Insurance,
convertible. The dividend rate, other than the initial rate, for each general insurance companies domiciled in New York may not pay
dividend period for each series is reset approximately every seven dividends to shareholders that, in any twelve-month period, exceed
weeks (49 days) on the basis of orders placed in an auction. the lesser of ten percent of such company’s statutory policyhold-
During 2006, ILFC extended each of the MAPS dividend periods ers’ surplus or 100 percent of its ‘‘adjusted net investment
for three years. At December 31, 2007, the dividend rate for income,’’ as defined. Generally, less severe restrictions applicable
Series A MAPS was 4.70 percent and the dividend rate for to both general and life insurance companies exist in most of the
Series B MAPS was 5.59 percent. other states in which AIG’s insurance subsidiaries are domiciled.
Certain foreign jurisdictions have restrictions that could delay or
limit the remittance of dividends. There are also various local
restrictions limiting cash loans and advances to AIG by its
subsidiaries. Largely as a result of these restrictions, approxi-
mately 81 percent of the aggregate equity of AIG’s consolidated
subsidiaries was restricted from immediate transfer to AIG parent
at December 31, 2007.
Dividends declared per common share were $0.77, $0.65, and
$0.63 in 2007, 2006, and 2005, respectively.
During 2007 and 2005, AIG repurchased 76 million and
2 million shares of its common stock, respectively, at a total cost
of $5.1 billion and $165 million, respectively. The average price
paid per share for repurchased shares was $66.84 and $66.46 in
2007 and 2005, respectively. During 2006, AIG did not purchase
any shares of its common stock under its existing share
repurchase authorization.
At December 31, 2007, there were 6,000,000 shares of AIG’s
$5 par value serial preferred stock authorized, issuable in series,
none of which were outstanding.
180 AIG 2007 Form 10-K