American Financial Group, Inc. Announces Third Quarter Results
-
Third quarter core net operating earnings of
$1.38 per share; includes$0.16 per share unfavorable impact of fair value accounting for fixed-indexed annuities - Third quarter annualized core operating ROE of 11.6%
-
Net earnings of
$0.71 per share; includes$0.58 per share A&E reserve strengthening and other non-core items -
Announced special cash dividend of
$1.00 per share, payableDecember 24, 2015 -
Full year 2015 core net operating earnings guidance increased to
$5.30 - $5.60 per share
Core net operating earnings were
During the third quarter of 2015, AFG repurchased approximately 512,000
shares of common stock for
The Company also announced today that it declared a special cash
dividend of
AFG’s net earnings attributable to shareholders, determined in accordance with U.S. generally accepted accounting principles (“GAAP”), include certain items that may not be indicative of its ongoing core operations. The following table identifies such items and reconciles net earnings attributable to shareholders to core net operating earnings, a non-GAAP financial measure that AFG believes is a useful tool for investors and analysts in analyzing ongoing operating trends.
Three months ended | Nine months ended | |||||||||||||||
In millions, except per share amounts | September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Components of net earnings attributable to shareholders: | ||||||||||||||||
Core net operating earnings(a) |
$ | 123 | $ | 127 | $ | 350 | $ | 317 | ||||||||
Non-Core Items: |
||||||||||||||||
Loss on sale of long-term care business |
- |
- |
(105 |
) |
- |
|||||||||||
Gain on sale of hotel property |
- |
- |
26 |
- |
||||||||||||
Other realized gains (losses) |
(6 |
) |
8 |
6 |
27 |
|||||||||||
Special A&E charges(b) |
(52 |
) |
(19 |
) |
(52 |
) |
(19 |
) |
||||||||
Loss on early retirement of debt |
(2 |
) |
- |
(2 |
) |
- |
||||||||||
Net earnings attributable to shareholders | $ | 63 | $ | 116 | $ | 223 | $ | 325 | ||||||||
Components of Earnings per Share: | ||||||||||||||||
Core net operating earnings(a) |
$ | 1.38 | $ | 1.40 | $ | 3.92 | $ | 3.47 | ||||||||
Non-Core Items: |
||||||||||||||||
Loss on sale of long-term care business |
- | - | (1.18 | ) | - | |||||||||||
Gain on sale of hotel property |
- | - | 0.29 | - | ||||||||||||
Other realized gains (losses) |
(0.06 | ) | 0.09 | 0.07 | 0.30 | |||||||||||
Special A&E charges(b) |
(0.58 | ) | (0.21 | ) | (0.58 | ) | (0.21 | ) | ||||||||
Loss on early retirement of debt |
(0.03 | ) | - | (0.03 | ) | - | ||||||||||
Diluted Earnings Per Share | $ | 0.71 | $ | 1.28 | $ | 2.49 | $ | 3.56 | ||||||||
Footnote (a) and (b) are contained in the accompanying Notes to Financial Schedules at the end of this release. |
“Returning capital to shareholders in the form of a
“Based on results for the first nine months of 2015, we now estimate
that AFG’s core net operating earnings will be in the range of
The Specialty P&C insurance operations generated an underwriting profit
of
Gross and net written premiums were up 6%, respectively, for the third quarter of 2015, when compared to the same period in 2014. Each of our Specialty P&C groups reported growth during the quarter. Further details of AFG’s Specialty P&C operations may be found in the accompanying schedules.
The
Gross and net written premiums for the third quarter of 2015 were 7% and 9% higher, respectively, than the comparable 2014 period. The increases in gross and net written premiums were due primarily to growth in our transportation businesses as a result of new accounts and organic growth in several product lines as well as higher premiums in our agricultural businesses. Pricing in this group was up approximately 4% on average for the quarter, and includes a 5% increase in National Interstate’s renewal rates.
The
Gross and net written premiums increased 4% and 2%, respectively, for
the third quarter of 2015 when compared to the same prior year period.
The majority of businesses in this group reported growth, particularly
our excess and surplus businesses. This growth was partially offset by
lower premiums in our general liability business, primarily the result
of competitive market conditions, re-underwriting efforts within the
The
Gross and net written premiums increased 4% and 13%, respectively, in the 2015 third quarter when compared to the same 2014 period. Growth and higher retentions in our financial institutions business were the primary drivers of the increase. Renewal pricing for this group was flat for the third quarter.
Mr. Lindner continued, “Pricing across our entire P&C group was flat for the quarter, and was impacted by price softening in our workers’ comp businesses. Based on results in our P&C book of business during the first nine months of 2015, we continue to expect an overall 2015 calendar year combined ratio in the 92% to 94% range. We now estimate net written premium growth for the full year of 2015 to be between 6% and 8%, an increase from the range of 4% to 8% estimated previously.”
Annuity Segment
AFG's annuity operations contributed
Components of Core Annuity Operating Earnings Before Income Taxes |
|||||||||||||||||||||||
In millions |
Three months ended |
Pct. |
Nine months ended |
Pct. |
|||||||||||||||||||
September 30, |
Change |
September 30, |
Change |
||||||||||||||||||||
2015 |
2014 |
2015 |
2014 |
||||||||||||||||||||
Annuity earnings before fair value accounting for FIAs |
$ |
89 |
$ |
87 |
2 |
% |
$ | 258 | $ | 269 | (4 | %) | |||||||||||
Impact of fair value accounting for FIAs |
(22 |
) |
(1 |
) |
nm |
(28 |
) |
(26 |
) |
nm |
|||||||||||||
Core Pretax Annuity Operating Earnings |
$ |
67 |
$ |
86 |
(22 |
%) |
$ |
230 |
$ |
243 |
(5 |
%) |
|||||||||||
Annuity Earnings Before Fair Value Accounting for FIAs - AFG’s 2015 earnings continued to benefit from growth in annuity assets, as well the ability to maintain net interest spreads year-over-year. AFG’s quarterly average annuity investments and reserves grew approximately 13% year-over-year; the benefit of this growth was partially offset by the impact that the significant decrease in the stock market in the third quarter had on certain AFG annuity reserves.
Impact of Fair Value Accounting for FIAs - Variances from expectations of certain items (such as projected interest rates, option costs and surrenders), as well as changes in the stock market, have an impact on the accounting for FIAs; these accounting adjustments are recognized through AFG’s reported core earnings. Many of these adjustments are not economic in nature, but rather impact the timing of reported results.
In the third quarter of 2015, the significant stock market decrease resulted in a large unfavorable impact on annuity earnings. In addition, interest rates decreased during the quarter, compared to the expectation that they would rise; this also had a negative impact on annuity earnings. In the third quarter of 2014, changes in the stock market and interest rates were much more moderate, resulting in a minor impact on annuity earnings.
The Annuity Segment reported record third quarter annuity premiums of
Mr. Lindner continued, “As we saw in the third quarter, significant
changes in the stock market and/or interest rates, as compared to our
expectations, can lead to significant positive or negative impacts on
the Annuity Segment’s results, due to the impact of fair value
accounting. As a result, based on where interest rates and the stock
market are today, we now expect that full year 2015 core pretax annuity
operating earnings will be
“However, our continued investment outperformance has resulted in higher
earned spreads than we had anticipated. As a result, we expect full year
2015 core pretax annuity operating earnings before
fair value accounting will be higher than previously announced;
accordingly, we are raising that guidance (earnings before fair value
accounting) by
“These earnings expectations do not reflect any potential earnings impact from our annual fourth quarter review (“unlocking”) of the major actuarial assumptions in our fixed annuity business. Since our net interest spreads are higher than previously projected, we currently believe that unlocking will likely have a positive impact on earnings.”
Run-off Long-Term Care and Life Segment
AFG’s Run-off Long-term Care and Life Segment reported positive core pretax operating earnings in the third quarters of 2015 and 2014.
As previously announced, AFG reached a definitive agreement to sell the
legal entities containing its run-off long-term care insurance business
and certain life and annuity blocks to
The transaction will result in the disposition of substantially all of AFG’s Long-term Care business and is expected to close prior to year-end, subject to customary conditions, including receipt of required regulatory approvals.
A&E Reserves
During the third quarter of 2015, AFG completed a comprehensive external
study of its asbestos and environmental exposures relating to the
run-off operations of its P&C group and its exposures related to former
railroad and manufacturing operations and sites. This year’s
comprehensive external study resulted in non-core after-tax special
charges of
The P&C group’s asbestos reserves were increased by
As the overall industry exposure to asbestos has matured, the focus of litigation has shifted to smaller companies and companies with ancillary exposures. AFG’s insureds with these exposures have been the driver of our P&C asbestos reserve increases in recent years; AFG has seen increased estimates for indemnity and defense compared to prior studies. The increase in P&C environmental reserves was attributed primarily to AFG’s increased defense costs and a number of claims where the estimated costs of remediation have increased. As in past years, there were no new or emerging broad industry trends that were identified in this study.
In addition, the study encompassed reserves for asbestos and
environmental exposures of our former railroad and manufacturing
operations. As a result of the study, AFG increased its reserve for
these asbestos and environmental exposures by
Investments
AFG recorded third quarter 2015 net realized losses of
For the nine months ended
More information about the components of our investment portfolio may be found in our Quarterly Investor Supplement, which is posted on our website.
About
Forward Looking Statements
This press release contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this press release not dealing with historical results are forward-looking and are based on estimates, assumptions and projections. Examples of such forward-looking statements include statements relating to: the Company’s expectations concerning market and other conditions and their effect on future premiums, revenues, earnings and investment activities; recoverability of asset values; expected losses and the adequacy of reserves for long-term care, asbestos, environmental pollution and mass tort claims; rate changes; and improved loss experience.
Actual results and/or financial condition could differ materially from
those contained in or implied by such forward-looking statements for a
variety of reasons including but not limited to: changes in financial,
political and economic conditions, including changes in interest and
inflation rates, currency fluctuations and extended economic recessions
or expansions in the U.S. and/or abroad; performance of securities
markets; AFG’s ability to estimate accurately the likelihood, magnitude
and timing of any losses in connection with investments in the
non-agency residential mortgage market; new legislation or declines in
credit quality or credit ratings that could have a material impact on
the valuation of securities in AFG’s investment portfolio; the
availability of capital; the possibility that the pending sale of AFG’s
run-off long-term care business is not consummated; regulatory actions
(including changes in statutory accounting rules); changes in the legal
environment affecting AFG or its customers; tax law and accounting
changes; levels of natural catastrophes and severe weather, terrorist
activities (including any nuclear, biological, chemical or radiological
events), incidents of war or losses resulting from civil unrest and
other major losses; development of insurance loss reserves and
establishment of other reserves, particularly with respect to amounts
associated with asbestos and environmental claims and AFG’s run-off
long-term care business; availability of reinsurance and ability of
reinsurers to pay their obligations; trends in persistency, mortality
and morbidity; competitive pressures, including those in the annuity
distribution channels, the ability to obtain adequate rates and policy
terms; changes in AFG’s credit ratings or the financial strength ratings
assigned by major ratings agencies to our operating subsidiaries; and
other factors identified in our filings with the
The forward-looking statements herein are made only as of the date of this press release. The Company assumes no obligation to publicly update any forward-looking statements.
Conference Call
The Company will hold a conference call to discuss 2015 third quarter
results at
A replay will be available two hours following the completion of the
call and will remain available until
The conference call and accompanying webcast slides will also be broadcast live over the Internet. To listen to the call via the Internet, go to the Investor Relations page on AFG’s website, www.AFGinc.com, and follow the instructions at the Webcasts and Presentations link.
The archived webcast will be available immediately after the call via
the same link on the Investor Relations page until
(Financial summaries follow)
This earnings release and AFG’s Quarterly Investor Supplement are available in the Investor Relations section of AFG’s website: www.AFGinc.com.
AMERICAN FINANCIAL GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||
SUMMARY OF EARNINGS AND SELECTED BALANCE SHEET DATA | ||||||||||||||||
(In Millions, Except Per Share Data) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues | ||||||||||||||||
P&C insurance net earned premiums | $ | 1,173 | $ | 1,132 | $ | 3,104 | $ | 2,817 | ||||||||
Life, accident & health net earned premiums | 28 | 27 | 80 | 82 | ||||||||||||
Net investment income | 425 | 377 | 1,217 | 1,117 | ||||||||||||
Realized gains (losses) on: | ||||||||||||||||
Securities | (16 | ) | 13 | 2 | 44 | |||||||||||
Subsidiaries | 5 | - | (157 | ) | - | |||||||||||
Income (loss) of managed investment entities: | ||||||||||||||||
Investment income | 40 | 29 | 112 | 84 | ||||||||||||
Loss on change in fair value of assets/liabilities |
(11 | ) | (25 | ) | (16 | ) | (35 | ) | ||||||||
Other income | 40 | 28 | 177 | 75 | ||||||||||||
Total revenues | 1,684 | 1,581 | 4,519 | 4,184 | ||||||||||||
Costs and expenses |
||||||||||||||||
P&C insurance losses & expenses | 1,161 | 1,086 | 2,989 | 2,684 | ||||||||||||
Annuity, life, accident & health benefits & expenses | 285 | 240 | 787 | 732 | ||||||||||||
Interest charges on borrowed money | 18 | 18 | 57 | 53 | ||||||||||||
Expenses of managed investment entities | 28 | 19 | 80 | 60 | ||||||||||||
Other expenses | 93 | 73 | 251 | 219 | ||||||||||||
Total costs and expenses | 1,585 | 1,436 | 4,164 | 3,748 | ||||||||||||
Earnings before income taxes |
99 |
145 |
355 |
436 |
||||||||||||
Provision for income taxes(c) | 33 | 54 | 115 | 155 | ||||||||||||
Net earnings including noncontrolling interests |
66 | 91 | 240 | 281 | ||||||||||||
Less: Net earnings (loss) attributable to noncontrolling interests |
3 |
(25 |
) |
17 |
(44 |
) |
||||||||||
Net earnings attributable to shareholders | $ | 63 | $ | 116 | $ | 223 | $ | 325 | ||||||||
Diluted Earnings per Common Share | $ | 0.71 | $ | 1.28 | $ | 2.49 | $ | 3.56 | ||||||||
Average number of diluted shares | 89.3 | 90.9 | 89.4 | 91.4 | ||||||||||||
September 30, | December 31, | |||||
Selected Balance Sheet Data: |
2015 | 2014 | ||||
Total cash and investments | $ | 38,132 | $ | 36,210 | ||
Long-term debt | $ | 880 | $ | 1,061 | ||
Shareholders’ equity(d) | $ | 4,724 | $ | 4,879 | ||
Shareholders’ equity (excluding appropriated retained earnings and unrealized gains/losses on fixed maturities)(d) |
$ |
4,279 |
$ |
4,277 |
||
Book Value Per Share: | ||||||
Excluding appropriated retained earnings | $ | 54.10 | $ | 55.65 | ||
Excluding appropriated retained earnings and unrealized gains/losses on fixed maturities |
$ | 49.01 | $ | 48.76 | ||
Common Shares Outstanding |
87.3 |
87.7 |
||||
Footnotes (c) and (d) are contained in the accompanying Notes to Financial Schedules at the end of this release. |
AMERICAN FINANCIAL GROUP, INC. | ||||||||||||||||||||||
SPECIALTY P&C OPERATIONS | ||||||||||||||||||||||
(Dollars in Millions) | ||||||||||||||||||||||
Three months ended | Pct. | Nine months ended | Pct. | |||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Gross written premiums | $ | 1,962 | $ | 1,859 | 6 | % | $ | 4,476 | $ | 4,174 | 7 | % | ||||||||||
Net written premiums | $ | 1,319 | $ | 1,242 | 6 | % | $ | 3,271 | $ | 2,995 | 9 | % | ||||||||||
Ratios (GAAP): | ||||||||||||||||||||||
Loss & LAE ratio | 64.5 | % | 67.1 | % | 62.2 | % | 63.6 | % | ||||||||||||||
Underwriting expense ratio | 28.4 | % | 26.7 | % | 31.5 | % | 30.8 | % | ||||||||||||||
Specialty Combined Ratio | 92.9 | % | 93.8 | % | 93.7 | % | 94.4 | % | ||||||||||||||
Combined Ratio (Including A&E) |
98.7 |
% |
96.0 |
% |
96.0 |
% |
95.2 |
% |
||||||||||||||
Supplemental Information:(e) |
||||||||||||||||||||||
Gross Written Premiums: | ||||||||||||||||||||||
Property & Transportation | $ | 1,064 | $ | 995 | 7 | % | $ | 1,940 | $ | 1,860 | 4 | % | ||||||||||
Specialty Casualty | 734 | 707 | 4 | % | 2,078 | 1,869 | 11 | % | ||||||||||||||
Specialty Financial | 164 | 157 | 4 | % | 458 | 445 | 3 | % | ||||||||||||||
$ | 1,962 | $ | 1,859 | 6 | % | $ | 4,476 | $ | 4,174 | 7 | % | |||||||||||
Net Written Premiums: | ||||||||||||||||||||||
Property & Transportation | $ | 608 | $ | 556 | 9 | % | $ | 1,258 | $ | 1,193 | 5 | % | ||||||||||
Specialty Casualty | 545 | 536 | 2 | % | 1,549 | 1,366 | 13 | % | ||||||||||||||
Specialty Financial | 137 | 121 | 13 | % | 388 | 357 | 9 | % | ||||||||||||||
Other | 29 | 29 | - | 76 | 79 | (4 | %) | |||||||||||||||
$ | 1,319 | $ | 1,242 | 6 | % | $ | 3,271 | $ | 2,995 | 9 | % | |||||||||||
Combined Ratio (GAAP): | ||||||||||||||||||||||
Property & Transportation | 96.2 | % | 97.8 | % | 98.7 | % | 100.1 | % | ||||||||||||||
Specialty Casualty | 93.8 | % | 93.3 | % | 93.6 | % | 92.1 | % | ||||||||||||||
Specialty Financial | 80.6 | % | 81.6 | % | 81.0 | % | 86.7 | % | ||||||||||||||
Aggregate Specialty Group | 92.9 | % | 93.8 | % | 93.7 | % | 94.4 | % | ||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Reserve Development (Favorable)/Adverse: | ||||||||||||||||
Property & Transportation | $ | (2 | ) | $ | (5 | ) | $ | 7 | $ | 13 | ||||||
Specialty Casualty | 3 | 7 | (4 | ) | (21 | ) | ||||||||||
Specialty Financial | (8 | ) | (10 | ) | (25 | ) | (13 | ) | ||||||||
Other | (7 | ) | (3 | ) | (10 | ) | (8 | ) | ||||||||
Aggregate Specialty Group Excluding A&E | (14 | ) | (11 | ) | (32 | ) | (29 | ) | ||||||||
Special A&E Reserve Charge - P&C Run-off | 67 | 24 | 67 | 24 | ||||||||||||
Other | 2 | - | 3 | 1 | ||||||||||||
Total Reserve Development Including A&E | $ | 55 | $ | 13 | $ | 38 | $ | (4 | ) | |||||||
Points on Combined Ratio: |
||||||||||||||||
Property & Transportation | (0.4 | ) | (0.9 | ) | 0.5 | 1.2 | ||||||||||
Specialty Casualty | 0.6 | 1.3 | (0.2 | ) | (1.7 | ) | ||||||||||
Specialty Financial | (5.8 | ) | (9.0 | ) | (6.5 | ) | (3.9 | ) | ||||||||
Aggregate Specialty Group | (1.2 | ) | (1.0 | ) | (1.0 | ) | (1.0 | ) | ||||||||
Footnote (e) is contained in the accompanying Notes to Financial Schedules at the end of this release. |
|
||||||||||||||||||||||
AMERICAN FINANCIAL GROUP, INC. | ||||||||||||||||||||||
ANNUITY SEGMENT | ||||||||||||||||||||||
(Dollars in Millions) |
||||||||||||||||||||||
Components of Statutory Premiums |
||||||||||||||||||||||
Three months ended | Pct. | Nine months ended | Pct. | |||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Annuity Premiums: |
||||||||||||||||||||||
Financial Institutions | ||||||||||||||||||||||
Single Premium | $ | 625 | $ | 395 | 58 | % | $ | 1,436 | $ | 1,334 | 8 | % | ||||||||||
Retail Single Premium | 639 | 357 | 79 | % | 1,422 | 1,210 | 18 | % | ||||||||||||||
Education Market - 403(b) | 47 | 46 | 2 | % | 143 | 145 | (1 | %) | ||||||||||||||
Variable Annuities | 10 | 11 | (9 | %) | 32 | 36 | (11 | %) | ||||||||||||||
Total Annuity Premiums | $ | 1,321 | $ | 809 | 63 | % | $ | 3,033 | $ | 2,725 | 11 | % | ||||||||||
Components of Core Operating Earnings Before Income Taxes |
||||||||||||||||||||||
Three months ended | Pct. | Nine months ended | Pct. | |||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||
Net investment income | $ | 317 | $ | 287 | 10 | % | $ | 915 | $ | 851 | 8 | % | ||||||||||
Other income | 22 | 20 | 10 | % | 68 | 57 | 19 | % | ||||||||||||||
Total revenues |
339 | 307 | 10 | % | 983 | 908 | 8 | % | ||||||||||||||
Costs and Expenses: | ||||||||||||||||||||||
Annuity benefits |
208 | 157 | 32 | % | 543 | 491 | 11 | % | ||||||||||||||
Acquisition expenses | 42 | 41 | 2 | % | 136 | 109 | 25 | % | ||||||||||||||
Other expenses | 22 | 23 | (4 | %) | 74 | 65 | 14 | % | ||||||||||||||
Total costs and expenses | 272 | 221 | 23 | % | 753 | 665 | 13 | % | ||||||||||||||
Core operating earnings before income taxes |
$ | 67 | $ | 86 | (22 | %) | $ | 230 | $ | 243 | (5 | %) | ||||||||||
Supplemental Fixed Annuity Information |
||||||||||||||||||||||
Three months ended | Pct. | Nine months ended | Pct. | |||||||||||||||||||
September 30, | Change | September 30, | Change | |||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Core operating earnings before impact of fair value accounting on FIAs |
$ | 89 | $ | 87 |
2 |
% |
$ | 258 | $ | 269 |
(4 |
%) |
||||||||||
Impact of fair value accounting |
(22 | ) | (1 | ) |
nm |
(28 | ) | (26 | ) |
nm |
||||||||||||
|
||||||||||||||||||||||
Core operating earnings before income taxes |
$ | 67 | $ | 86 | (22 | %) | $ | 230 | $ | 243 | (5 | %) | ||||||||||
Average Fixed Annuity Reserves* | $ | 25,316 | $ | 22,475 | 13 | % | $ | 24,514 | $ | 21,790 | 13 | % | ||||||||||
Net Interest Spread* | 2.80 | % | 2.77 | % | 2.75 | % | 2.83 | % | ||||||||||||||
Net Spread Earned Before Impact of Fair Value Accounting* |
1.37 | % | 1.50 | % | 1.36 | % | 1.57 | % | ||||||||||||||
Net Spread Earned After Impact of Fair Value Accounting* |
1.02 | % | 1.48 | % | 1.21 | % | 1.41 | % |
* Excludes fixed annuity portion of variable annuity business. |
Notes to Financial
Schedules
a) Components of core net operating earnings (in millions):
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Core Operating Earnings before Income Taxes: |
||||||||||||||||
P&C insurance segment | $ | 153 | $ | 130 | $ | 403 | $ | 335 | ||||||||
Annuity segment, before impact of fair value accounting |
89 | 87 | 258 | 269 | ||||||||||||
Impact of fair value accounting | (22 | ) | (1 | ) | (28 | ) | (26 | ) | ||||||||
Run-off long-term care and life segment | 6 | 1 | 14 | (3 | ) | |||||||||||
Interest & other corporate expense | (37 | ) | (30 | ) | (117 | ) | (108 | ) | ||||||||
Core operating earnings before income taxes | 189 | 187 | 530 | 467 | ||||||||||||
Related income taxes | 66 | 60 | 180 | 150 | ||||||||||||
Core net operating earnings | $ | 123 | $ | 127 | $ | 350 | $ | 317 | ||||||||
b) Reflects the following effects of special A&E charges during the third quarter and first nine months of 2015 and 2014 (dollars in millions, except per share amounts):
Pretax | After-tax | EPS | ||||||||||||||||||||||
A&E Charges: | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
P&C insurance run-off operations | ||||||||||||||||||||||||
Asbestos | $ | 25 | $ | 4 | $ | 17 | $ | 3 | ||||||||||||||||
Environmental | 42 | 20 | 27 | 12 | ||||||||||||||||||||
$ | 67 | $ | 24 | $ | 44 | $ | 15 | $ | 0.49 | $ | 0.17 | |||||||||||||
Former railroad & manufacturing operations | ||||||||||||||||||||||||
Asbestos | $ | 1 | $ | - | $ | - | $ | - | ||||||||||||||||
Environmental | 11 | 6 | 8 | 4 | ||||||||||||||||||||
$ | 12 | $ | 6 | $ | 8 | $ | 4 | $ | 0.09 | $ | 0.04 | |||||||||||||
Total A&E | $ | 79 | $ | 30 | $ | 52 | $ | 19 | $ | 0.58 | $ | 0.21 |
c) Earnings before income taxes include
d) Shareholders’ Equity at
e) Supplemental Notes:
- Property & Transportation includes primarily physical damage and liability coverage for buses, trucks and recreational vehicles, inland and ocean marine, agricultural-related products and other property coverages.
- Specialty Casualty includes primarily excess and surplus, general liability, executive liability, professional liability, umbrella and excess liability, specialty coverages in targeted markets, customized programs for small to mid-sized businesses and workers’ compensation insurance.
- Specialty Financial includes risk management insurance programs for leasing and financing institutions (including collateral and lender-placed mortgage property insurance), surety and fidelity products and trade credit insurance.
- Other includes an internal reinsurance facility.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151103006926/en/
Source:
American Financial Group, Inc.
Diane P. Weidner, 513-369-5713
Asst.
Vice President – Investor Relations
or
Websites:
www.AFGinc.com
www.GreatAmericanInsuranceGroup.com