Certain statements made during this call, as well as included in this document, are not historical facts and may be considered "forward-looking statements" and are based on estimates, assumptions and projections which management believes are reasonable, but by their nature subject to risks and uncertainties. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements.
The reasons which could cause actual results and/or financial condition to differ materially from those suggested by such forward-looking statements include, but are not limited to, those discussed or identified from time-to-time in AFG's filings with the Securities and Exchange Commission, including the annual report on Form 10-K and the quarterly reports on Form 10-Q. We do not promise to update such forward-looking statements to reflect actual results or changes in assumptions or other factors that could affect these statements.
Core net operating earnings is a non-GAAP financial measure which sets aside items that are generally not considered to be part of ongoing operations, such as discontinued operations, net realized gains and losses, and certain nonrecurring items. AFG believes that this non-GAAP measure is a useful tool for investors and analysts in analyzing ongoing operating trends of AFG.
2
Consolidated Results
Dollars in millions, except per share data
P&C Insurance Segment
Real estate entities and other acquired from Annuity operations
Interest & other corporate expenses
Pretax Core Operating Earnings
Related income taxes
Core Net Operating Earnings
Average number of diluted shares2
Core Net Operating Earnings per Share
Annualized Core Operating Return on Equity
Three Months Ended
June 30,
2021 20201
$
288
$
116
22
1
(58)
(43)
252
74
47
14
$
205
$
60
85.6
90.0
$
2.39
$
0.67
14.7% 4.8%
On May 28, 2021, AFG completed the sale of its Annuity business to MassMutual. The results of AFG's Annuity operations are reported as discontinued operations beginning with the first quarter of 2021 and through the date of sale, in accordance with GAAP, which included adjusting prior period results to reflect these operations as discontinued.
Because AFG had a net loss for the six months ended June 30, 2020, the impact of potential dilutive options (weighted
average of 0.59 million shares) was excluded from AFG's fully diluted earnings per share calculation. However, for the non-
GAAP measure of core net operating earnings, the Company believes it is most appropriate to use the fully diluted share data
3
that would have been used if AFG had net earnings for the six months ended June 30, 2020.
Consolidated Results (continued)
Dollars in millions, except per share data
Three Months Ended
June 30, 2021
(Per Share)
Core Net Operating Earnings
$
205
$
2.39
Non-core Items
After-tax net realized gains on securities1
34
0.40
Other
1
0.02
Net Earnings from continuing operations
$
240
$
2.81
Discontinued annuity operations
762
8.89
Net Earnings Attributable to Shareholders
$
1,002
$
11.70
1 Included in this amount is $29 million ($0.34 per share) in after-tax net gains to adjust equity securities that
the Company continued to own at June 30, 2021, to fair value.
4
2021 Expectations
AFG's 2021 core net operating earnings guidance $8.40 to $9.20 per share,
an increase from previous guidance of $7.00 to $8.00 per share
Excludes earnings from our discontinued annuity operations that were sold to MassMutual, which were classified as discontinued operations effective January 1, 2021.
Assumes zero earnings on $2.2 billion in parent company cash. Accordingly, AFG's ultimate results for 2021 will be impacted by the deployment of this capital.
The above guidance reflects a normal crop year and an annualized return of approximately 8% on alternative investments over the remaining two quarters of 2021.
5
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American Financial Group Inc. published this content on 04 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2021 15:25:13 UTC.
American Financial Group, Inc. is an insurance holding company. The Company is engaged in property and casualty insurance, focusing on specialized commercial products for businesses. The Company operates through two segments: Property and casualty insurance and Other. Property and casualty insurance business includes specialty sub-segments: Property and transportation, which includes physical damage and liability coverage for buses and trucks and other specialty transportation niches, inland and ocean marine, agricultural-related products and other commercial property coverages; Specialty casualty, which includes primarily excess and surplus, executive and professional liability, general liability, umbrella and excess liability, and Specialty financial, which includes risk management insurance programs for lending and leasing institutions (including equipment leasing and collateral and lender-placed mortgage property insurance), fidelity and surety products and trade credit insurance.