This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

American Financial Group, Inc. Announces 2012 Fourth Quarter And Full Year Results

American Financial Group, Inc. (NYSE/NASDAQ: AFG) today reported net earnings attributable to shareholders of $50 million ($0.54 per share) for the 2012 fourth quarter, compared to $109 million ($1.09 per share) for the 2011 fourth quarter. The fourth quarter 2012 results include a $99 million ($1.08 per share) after-tax charge to write-off deferred acquisition costs and strengthen reserves in AFG’s run-off long-term care operation. This non-core charge was partially offset by realized gains, the settlement of open tax years following a favorable decision in AFG’s tax case, and a gain resulting from a post-closing adjustment to the cash proceeds from the third quarter sale of AFG’s Medicare supplement and critical illness businesses. These and other non-core items are outlined in the table below. Book value per share, excluding appropriated retained earnings and unrealized gains on fixed maturities, increased by $3.89 to $42.52 per share during the year. Net earnings attributable to shareholders for the year were a record $5.09 per share, compared to $3.32 per share in 2011. Return on equity was 13% and 9% for 2012 and 2011, respectively.

Core net operating earnings for the 2012 and 2011 fourth quarter and full year periods are shown in the table below. 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 2012 and 2011 generated returns on equity of 8% and 10%, respectively.

During the fourth quarter of 2012, AFG repurchased $100 million of common stock at an average price per share of $38.77. Repurchases for the full year in 2012 were $415 million, at an average per share price that was approximately 90% of year end book value.

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.

In millions, except per share amounts

 

Three months ended

December 31,

  Twelve months ended

December 31,

2012   2011 2012   2011
Components of net earnings attributable to shareholders:
Core net operating earnings (a) $ 61 $ 106 $ 314 $ 363

Non-Core Items:

Gain on sale of Med supp & critical illness

13 - 114 -

Other realized gains

36 31 128 45

Long-term care reserve charge

(99 ) - (99 ) -

Special A&E charges (b)

- - (21 ) (38 )

AFG tax case and settlement of open tax years

39 - 67 -

Valuation allowance on deferred tax assets (c)

- (28 ) - (28 )

Other

  -     -     (15 )   -  
 

Net earnings attributable to shareholders

$ 50   $ 109   $ 488   $ 342  
 

Components of Earnings Per Share:

Core net operating earnings $ 0.67 $ 1.05 $ 3.27 $ 3.52

Non-Core Items:

Gain on sale of Med supp & critical illness

0.15 - 1.19 -

Other realized gains

0.37 0.32 1.34 0.45

Long-term care reserve charge

(1.08 ) - (1.03 ) -

Special A&E charges (b)

- - (0.22 ) (0.37 )

AFG tax case and settlement of open tax years

0.43 - 0.70 -

Valuation allowance on deferred tax assets (c)

- (0.28 ) - (0.28 )

Other

  -     -     (0.16 )   -  
 

Diluted Earnings Per Share

$ 0.54   $ 1.09   $ 5.09   $ 3.32  
 

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

1 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs