American Financial : 1st Quarter 2021 Earnings Presentation (printer friendly version)

Review of First Quarter 2021

May 5, 2021

Forward Looking Statements

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.

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Consolidated Results

Dollars in millions, except per share data

P&C Insurance Segment

Real estate entities and other to be acquired from Annuity Operations

Interest & Other Corporate Expenses

Core Pretax 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

March 31,

2021		20201
$ 288	$ 181
28	6
(58)	(34)
258	153
	52			28
$ 206	$ 125
86.6	91.1
$ 2.38	$ 1.36
14.7%	9.6%

1. On January 27, 2021 AFG announced that it entered into a definitive agreement to sell its Annuity business to MassMutual.
   The results of AFG's Annuity operations are reported as discontinued operations beginning with the first quarter of 2021, in accordance with GAAP, which included adjusting prior period results to reflect these operations as discontinued.
2. Because AFG had a net loss for the first quarter of 2020, the impact of potential dilutive options (weighted average of 0.84

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 that would have 3 been used if AFG had net earnings for the first quarter of 2020.

Consolidated Results (continued)

Dollars in millions, except per share data

		Three Months Ended
		March 31, 2021
			(Per Share)
Core Net Operating Earnings	$	206	$	2.38
Non-core Items
After-tax Net Realized Gains on Securities1		61		0.70
Net Earnings from Continuing Operations	$	267	$	3.08
Discontinued Annuity Operations		152		1.76
Net Earnings Attributable to Shareholders	$	419	$	4.84

1 Included in this amount is $53 million ($0.61 per share) in after-tax net gains to adjust equity securities that the Company continued to own at March 31, 2021, to fair value.

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2021 Expectations

AFG's 2021 core net operating earnings guidance $7.00 to $8.00 per share,

an increase from original guidance of $6.25 to $7.25 per share

• Excludes earnings from the annuity subsidiaries that will be sold to MassMutual, and which are classified as discontinued operations effective January 1, 2021.
• Assumes zero earnings on the cash proceeds from the sale of the annuity operations. Accordingly, AFG's ultimate results for 2021 will be impacted by the deployment of this capital.
• AFG parent is expected to have approximately $45.00 per share in cash immediately following the closing of the sale of the annuity business.

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