AIG 2010 Annual Report Download - page 349

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Equity Units and settled the respective stock purchase contract at its final stock purchase date with the proceeds
from subordinated debentures. The execution of the Exchange Offer resulted in a loss on the extinguishment of
the subordinated debentures of approximately $104 million and an increase to equity of approximately $3.7 billion.
Following the completion of the exchange offer, a total of 28,925,400 Equity Units remained outstanding. In
addition, the remaining debentures continue to be subject to remarketing. The trading market for the Equity Units
that remain outstanding after the Exchange Offer is expected to be more limited. AIG may, to the extent
permitted by applicable law, after the settlement date of the Exchange Offer, purchase Equity Units and the
subordinated debentures in a remarketing, in the open market, in privately negotiated transactions or otherwise.
Accumulated Other Comprehensive Income (Loss)
A rollforward of Accumulated other comprehensive income (loss) is as follows:
Unrealized Appreciation Net Derivative
(Depreciation) of Fixed Unrealized Gains (losses)
Maturity Investments Appreciation Foreign Arising from Retirement
on Which Other-Than- (Depreciation) Currency Cash Flow Plan
Temporary Credit of All Other Translation Hedging Liabilities
(in millions) Impairments Were Taken Investments Adjustments Activities Adjustment Total
Balance, January 1, 2008, net of tax $ - $ 4,375 $ 880 $ (87) $ (525) $ 4,643
Cumulative effect of change in accounting principle,
net of tax - (105) - - - (105)
Unrealized depreciation of investments - (13,966) - - - (13,966)
Net changes in foreign currency translation
adjustments - - (1,398) - - (1,398)
Net losses on cash flow hedges - - - (156) - (156)
Net actuarial loss - - - - (1,313) (1,313)
Prior service cost - - - - (12) (12)
Deferred tax asset - 4,948 356 52 352 5,708
Total other comprehensive loss - (9,123) (1,042) (104) (973) (11,242)
Noncontrolling interests - (296) 25 - - (271)
Balance, December 31, 2008, net of tax $ - $ (4,452) $ (187) $(191) $(1,498) $ (6,328)
Adjustment on April 1, 2009*(599) 599 - - - -
Unrealized appreciation of investments 2,048 27,891 - - - 29,939
Net changes in foreign currency translation
adjustments - - 2,932 - - 2,932
Net gains on cash flow hedges - - - 95 - 95
Net actuarial gain - - - - 397 397
Prior service cost - - - - (27) (27)
Deferred tax liability (724) (9,802) (1,005) (32) (16) (11,579)
Total other comprehensive income 1,324 18,089 1,927 63 354 21,757
Cumulative effect of change in accounting principle,
net of tax (2,537) (6,811) - - - (9,348)
Noncontrolling interests (2) 280 110 - - 388
Balance, December 31, 2009, net of tax $(1,810) $ 7,145 $ 1,630 $(128) $(1,144) $ 5,693
Unrealized appreciation of investments 2,522 3,640 - - - 6,162
Net changes in foreign currency translation
adjustments - - (1,873) - - (1,873)
Net gains on cash flow hedges - - - 111 - 111
Net actuarial gain - - - - 303 303
Prior service cost - - - - (4) (4)
Deferred tax asset (liability) (1,293) (1,529) 621 (17) (24) (2,242)
Total other comprehensive income (loss) 1,229 2,111 (1,252) 94 275 2,457
Cumulative effect of change in accounting principle,
net of tax (76) (269) - - - (345)
Noncontrolling interests 2 99 80 - - 181
Balance, December 31, 2010, net of tax $ (659) $ 8,888 $ 298 $ (34) $ (869) $ 7,624
* Adjustment to reflect adoption of the new other-than-temporary impairment accounting standard.
As a result of divestitures in 2010, $2.1 billion of Foreign currency cumulative translation adjustment and
$6.0 billion of Unrealized appreciation of investments were transferred to earnings as net gain on sale.
AIG 2010 Form 10-K 333