Exhibit 99.1

American Financial Group, Inc. Announces

2011 Fourth Quarter and Full Year Results

 

   

Adjusted book value per share $40.23; growth of 7% in 2011

 

   

Twelve months core net operating earnings $3.53 per share

 

   

Repurchased 1.5 million shares during the quarter

 

   

Signs of strengthening rate environment

 

   

Full year 2012 core net operating earnings guidance between $3.30—$3.70 per share

Cincinnati, Ohio – February 1, 2012 – American Financial Group, Inc. (NYSE/NASDAQ: AFG) today reported net earnings attributable to shareholders of $109 million ($1.10 per share) for the 2011 fourth quarter, compared to $133 million ($1.23 per share) for the 2010 fourth quarter. Book value per share, excluding appropriated retained earnings and unrealized gains (losses) on fixed maturities, increased by $1.14 to $40.23 per share during the quarter. Net earnings attributable to shareholders for the year were $343 million ($3.33 per share), compared to $479 million ($4.33 per share) in 2010. The 2011 results include the following non-core items: net realized gains of $45 million, a charge for a valuation allowance on deferred tax assets of $28 million and a second quarter net reserve strengthening of $38 million related to the Company’s asbestos and environmental exposures. The 2010 results include $46 million in net realized gains. Per share results reflect the impact of share repurchases in 2010 and 2011.

Core net operating earnings were $106 million ($1.06 per share) for the 2011 fourth quarter compared to $111 million ($1.03 per share) in the 2010 fourth quarter. Core net operating earnings were $364 million ($3.53 per share) for the full year in 2011, down from $433 million ($3.92 per share) reported for 2010. Improved results in the Company’s fixed annuity operations were more than offset by lower underwriting profit and lower investment income in our specialty property and casualty (“P&C”) insurance operations. Core net operating earnings for 2011 and 2010 generated returns on equity of 9% and 11%, respectively.

During the fourth quarter of 2011, AFG repurchased 1.5 million shares of common stock at an average price per share of $35.16. Repurchases for the full year in 2011 totaled 9.3 million shares at an average price per share of $33.93.

AFG’s net earnings attributable to shareholders, determined in accordance with 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.

 

September 30, September 30, September 30, September 30,

In millions, except per share amounts

     Three months ended
December  31,
       Twelve months ended
December  31,
 
       2011      2010        2011      2010  

Components of net earnings attributable to shareholders:

               

Core net operating earnings(a)

     $ 106       $ 111         $ 364       $ 433   

Realized gains

       31         22           45         46   

Special A&E Charge(b)

       —           —             (38      —     

Valuation Allowance on Deferred Tax Assets(c)

       (28      —             (28      —     
    

 

 

    

 

 

      

 

 

    

 

 

 

Net earnings attributable to shareholders

     $ 109       $ 133         $ 343       $ 479   
    

 

 

    

 

 

      

 

 

    

 

 

 

Components of Earnings Per Share:

               

Core net operating earnings

     $ 1.06       $ 1.03         $ 3.53       $ 3.92   

Realized gains

       .32         .20           .45         .41   

Special A&E Charge(b)

       —           —             (.37      —     

Valuation Allowance on Deferred Tax Assets(c)

       (.28      —             (.28      —     
    

 

 

    

 

 

      

 

 

    

 

 

 

Diluted Earnings Per Share

     $ 1.10       $ 1.23         $ 3.33       $ 4.33   
    

 

 

    

 

 

      

 

 

    

 

 

 

Footnotes (a), (b) and (c) are contained in the accompanying Notes to Financial Schedules at the end of this release.


The following information was filed by American Financial Group Inc (AFG) on Thursday, February 2, 2012 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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