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American Financial Group, Inc. Announces Fourth Quarter and Full Year Results
Net earnings of $9.85 per share for the full year; fourth quarter net earnings of $2.31 per share
Fourth quarter earnings include ($0.64) per share related to Neon exit charges and $0.73 per share in other after-tax non-core items
Core net operating earnings per share of $8.62 for the full year; fourth quarter core net operating earnings per share of $2.22
Full year 2019 ROE of 17.1%; 2019 core operating ROE of 14.9%
Full year 2020 core net operating earnings guidance between $8.75 - $9.25 per share
CINCINNATI February 3, 2020 American Financial Group, Inc. (NYSE: AFG) today reported 2019 fourth quarter net earnings attributable to shareholders of $211 million ($2.31 per share) compared to a net loss of $29 million ($0.33 per share) for the 2018 fourth quarter. Net earnings for the 2019 fourth quarter includeafter-tax non-core items aggregating $8 million ($0.09 per share), comprised of $58 million ($0.64 per share) related to costs associated with plans to exit the Lloyds of London insurance market in 2020 (as announced previously), $51 million ($0.56 per share) in non-core net realized gains on securities, after-tax annuity non-core earnings of $19 million ($0.21 per share), and a loss on the early retirement of debt of $4 million ($0.04 per share). Comparatively, net earnings in the 2018 fourth quarter were adversely impacted by $188 million ($2.08 per share) in non-core after-tax net realized losses on securities. Net earnings attributable to shareholders for the year were $9.85 per share, compared to $5.85 per share in 2018. Other details may be found in the table below. Book value per share was $69.43 per share at December 31, 2019. AFG paid cash dividends of $2.25 per share during the quarter, which included a $1.80 per share special dividend. Return on equity was 17.1% and 10.9% for 2019 and 2018, respectively.
Core net operating earnings were $203 million ($2.22 per share) for the 2019 fourth quarter, compared to $159 million ($1.75 per share) in the 2018 fourth quarter. Higher core operating earnings in our Annuity Segment were partially offset by lower core operating earnings in our Property and Casualty (P&C) insurance operations. In connection with AFGs new definition of annuity core operating earnings, AFGs core net operating earnings for the fourth 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 $59.70 per share at December 31, 2019. For the twelve months ended December 31, 2019, AFGs growth in adjusted book value per share plus dividends was 17.8%. Core operating return on equity was 14.9% and 15.6% for 2019 and 2018, respectively.
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 twelve month periods ended December 31, 2019 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.
The following information was filed by American Financial Group Inc (AFG) on Tuesday, February 4, 2020 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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