Exhibit 99.1

 

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American Financial Group, Inc. Announces Fourth Quarter and Full Year Results

 

    Net earnings of $1.84 per share in the fourth quarter and $5.28 per share for the full year
    Fourth quarter core net operating earnings per share of $2.20; up 11% from 2016
    Core net operating earnings per share of $6.55 for the full year; up 9% from 2016
    Full year 2017 ROE of 10.3%; 2017 core operating ROE of 12.7%
    Full year 2018 core net operating earnings guidance between $7.90—$8.40 per share

CINCINNATI – January 31, 2018 – American Financial Group, Inc. (NYSE: AFG) today reported 2017 fourth quarter net earnings attributable to shareholders of $166 million ($1.84 per share) compared to $385 million ($4.33 per share) for the 2016 fourth quarter. Results for the fourth quarter of 2017 include an $83 million ($0.92 per share) write-down of the company’s net deferred tax asset due to the impact of a lower U.S. corporate tax rate and a previously announced loss on early retirement of debt of $26 million ($0.29 per share). These items were partially offset by $74 million ($0.81 per share) in

non-core income from the reinsurance to close transaction involving Neon’s 2015 and prior years of account and tax benefits from restructuring Neon, as well as net realized gains of $4 million ($0.04 per share). Comparatively, net earnings in the 2016 fourth quarter included $209 million ($2.35 per share) in non-core items. Details may be found in the accompanying table. Net earnings attributable to shareholders for the year were $5.28 per share, compared to $7.33 per share in 2016. Book value per share was $60.38 per share at December 31, 2017. AFG paid cash dividends of $2.35 per share during the quarter, which included a $2.00 per share special dividend. Return on equity was 10.3% and 14.8% for 2017 and 2016, respectively.

Core net operating earnings were $197 million ($2.20 per share) for the 2017 fourth quarter, compared to $176 million ($1.98 per share) in the 2016 fourth quarter. The $2.20 per share established an all-time high for AFG’s quarterly core EPS. The improved results were attributable to significantly higher underwriting profit in our Property and Casualty (“P&C”) Insurance Segment, which was partially offset by the impact of fair value accounting in our Annuity Segment. Included within AFG’s core P&C Insurance Segment results was a $0.28 per share impact of the Neon reinsurance to close transaction. Book value per share, excluding unrealized gains related to fixed maturities, was $53.51 per share at December 31, 2017. For the twelve months ended December 31, 2017, AFG’s growth in adjusted book value per share plus dividends was 9.8%. Core net operating earnings for the fourth quarters of 2017 and 2016 generated annualized returns on equity of 17.2% and 15.7%, respectively. Core operating return on equity was 12.7% and 12.2% for 2017 and 2016, respectively.

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 table below identifies such items and reconciles net earnings attributable to shareholders to core net operating earnings, a non-GAAP financial measure. AFG believes that its core net operating earnings provides management, financial analysts, rating agencies and investors with an understanding of the results from the ongoing operations of the Company by excluding the impact of net realized gains and losses and other special items that are not necessarily indicative of operating trends. AFG’s management uses core net operating earnings to evaluate financial performance against historical results because it believes this provides a more comparable measure of its continuing business. Core net operating earnings is also used by AFG’s management as a basis for strategic planning and forecasting.

 

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The following information was filed by American Financial Group Inc (AFG) on Thursday, February 1, 2018 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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