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American Financial Group, Inc. Announces Second Quarter Results
Net earnings per share of $2.31 include $0.48 per share in realized gains on securities and ($0.29) per share related to newly-reclassified Annuity non-core items
Core net operating earnings of $2.12 per share
Second quarter annualized ROE of 16.0%; annualized core operating ROE of 14.7%
Full year 2019 core net operating earnings guidance revised to a narrowed range of $8.40 - $8.80 per share
CINCINNATI August 6, 2019 American Financial Group, Inc. (NYSE: AFG) today reported 2019 second quarter net earnings attributable to shareholders of $210 million ($2.31 per share), unchanged from the 2018 second quarter. Net earnings for the quarter include $45 million ($0.48 per share) inafter-tax net realized gains on securities, including $29 million ($0.32 per share) in holding gains to adjust equity securities to fair value. By comparison, net earnings in the 2018 second quarter included $25 million ($0.27 per share) in after-tax net realized gains on securities. Net earnings for the second quarter of 2019 included a negative impact of $27 million ($0.29 per share) for annuity non-core items, including the impact of fair value accounting for fixed-indexed annuities (FIAs) and other items related to changes in the stock market and interest rates. Other details may be found in the table below. Book value per share was $67.72 per share at June 30, 2019. AFG paid cash dividends of $1.90 per share during the quarter, which included a $1.50 per share special dividend. Annualized return on equity was 16.0% and 17.1% for the second quarters of 2019 and 2018, respectively.
As previously announced, beginning with the second quarter of 2019, AFG changed the way it defines annuity core operating earnings to exclude the impact of items that are not necessarily indicative of operating trends. Core net operating earnings for periods prior to the change have not been adjusted, however results for the three and six month periods ended June 30, 2018 are reconciled to historically reported Annuity Segment core operating earnings on page 5 of this release. As a result, reported core net operating earnings for periods beginning with the second quarter of 2019 are not directly comparable to prior year periods.
Core net operating earnings were $192 million ($2.12 per share) for the 2019 second quarter, compared to $185 million ($2.04 per share) in the 2018 second quarter. Higher reported core operating earnings in our Annuity Segment were offset by lower operating earnings in our Specialty Property and Casualty (P&C) Insurance operations. Holding company expenses were $7 million lower year-over-year and reflect a normal run rate in the 2019 second quarter. In connection with AFGs new definition of annuity core operating earnings, AFGs core net operating earnings for the second quarter of 2019 exclude the impact of items that are not necessarily indicative of operating trends, and include an expense for the amortization of FIA option costs, which AFG believes better reflects the cost of funds for FIAs and AFGs evaluation of the financial performance of its Annuity business. Book value per share, excluding unrealized gains related to fixed maturities, was $58.49 per share at June 30, 2019. Core net operating earnings for the second quarters of 2019 and 2018 generated annualized returns on equity of 14.7% and 15.1%, respectively.
The following information was filed by American Financial Group Inc (AFG) on Wednesday, August 7, 2019 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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