Exhibit 99.1

 

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American Financial Group, Inc. Announces Record Second Quarter Results

 

   

Net earnings per share of $2.31, a second quarter record for AFG, includes $0.27 per share in realized gains on securities

 

   

Core net operating earnings $2.04 per share, also a second quarter record and an increase of 27% from the prior year period

 

   

Second quarter annualized ROE of 17.1%; annualized core operating ROE of 15.1%

 

   

Full year 2018 core net operating earnings guidance increased to $8.10 - $8.60 per share

CINCINNATI – August 1, 2018 – American Financial Group, Inc. (NYSE: AFG) today reported 2018 second quarter net earnings attributable to shareholders of $210 million ($2.31 per share) compared to $145 million ($1.61 per share) for the 2017 second quarter. The $2.31 per share is a record for AFG’s second quarter. Net earnings for the quarter include $25 million ($0.27 per share) in

after-tax net realized gains on securities. By comparison, net earnings in the 2017 second quarter include $5 million ($0.05 per share) in after-tax net realized gains on securities and expenses of $5 million ($0.05 per share) related to the redemption of AFG’s 6.375% Senior Notes. The change in the federal corporate tax rate from 35% to 21%, enacted by the Tax Cuts and Jobs Act of 2017 and effective January 1, 2018, contributed to a lower effective tax rate in 2018 as compared to 2017. Details may be found in the table below. Book value per share was $57.08 per share at June 30, 2018. AFG paid cash dividends of $1.85 per share during the quarter, which included a $1.50 per share special dividend. Annualized return on equity was 17.1% and 12.3% for the second quarters of 2018 and 2017, respectively.

Core net operating earnings were $185 million ($2.04 per share) for the 2018 second quarter, compared to $145 million ($1.61 per share) in the 2017 second quarter. The $2.04 per share represents a 27% increase over the prior year period, and a record second quarter for AFG core earnings per share. The improved results were attributable to higher earnings in our Specialty Property and Casualty (“P&C”) Insurance operations and our Annuity Segment, as well as the benefit of the lower corporate income tax rate. Book value per share, excluding unrealized gains related to fixed maturities, was $55.24 per share at June 30, 2018. Core net operating earnings for the second quarters of 2018 and 2017 generated annualized returns on equity of 15.1% and 12.3%, 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, ratings 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 on Thursday, August 2, 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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