Quarterly Operating Results (Unaudited)

12 Months Ended

Dec. 31, 2011

Quarterly Financial Information Disclosure [Abstract]

Quarterly Operating Results (Unaudited)

N. Quarterly Operating Results (Unaudited)

The operations of certain AFG business segments are seasonal in nature. While insurance premiums are recognized on a relatively level basis, claim losses related to adverse weather (snow, hail, hurricanes, tornadoes, etc.) may be seasonal. The profitability of AFG’s crop insurance business is primarily recognized during the second half of the year as crop prices and yields are determined. Quarterly results necessarily rely heavily on estimates. These estimates and certain other factors, such as the discretionary sales of assets, cause the quarterly results not to be necessarily indicative of results for longer periods of time.

The following are quarterly results of consolidated operations for the two years ended December 31, 2011 (in millions, except per share amounts). Quarterly earnings per share do not add to year-to-date amounts due to changes in shares outstanding.

	1st		2nd		3rd		4th		Total
	Quarter		Quarter		Quarter		Quarter		Year
2011
Revenues	$	1,039	$	1,093	$	1,335	$	1,283	$	4,750
Net earnings, including noncontrolling interests		49		37		107		127		320
Net earnings attributable to shareholders		83		55		96		109		343
Earnings attributable to shareholders per common share:
Basic	$	.80	$	.53	$	.96	$	1.11	$	3.39
Diluted		.79		.52		.94		1.10		3.33
Average number of Common Shares:
Basic		104.6		102.7		99.7		98.2		101.3
Diluted		106.2		104.4		101.3		99.8		102.9
2010
Revenues	$	1,034	$	1,052	$	1,255	$	1,156	$	4,497
Net earnings, including noncontrolling interests		88		100		126		109		423
Net earnings attributable to shareholders		106		108		132		133		479
Earnings attributable to shareholders per common share:
Basic	$	.94	$	.98	$	1.22	$	1.24	$	4.38
Diluted		.93		.97		1.21		1.23		4.33
Average number of Common Shares:
Basic		112.0		110.2		108.2		106.7		109.2
Diluted		113.1		111.8		109.5		108.1		110.5

Pretax realized gains on securities (including other-than-temporary impairments) and favorable (unfavorable) prior year development of AFG’s liability for losses and loss adjustment expenses (“LAE”) were as follows (in millions):

	1st		2nd			3rd		4th		Total
	Quarter		Quarter			Quarter		Quarter		Year
Realized Gains on Securities
2011	$	—	$	19		$	8	$	49	$	76
2010		4		11			57		29		101
Prior Year Development Favorable (Unfavorable)
2011	$	21	$	(13	)	$	34	$	27	$	69
2010		39		57			14		48		158

Unfavorable prior year development (in the table above) for the second quarter of 2011 includes pretax special charges of $50 million to strengthen property and casualty insurance reserves for asbestos and environmental exposures. Results for the second quarter of 2011 also include pretax special charges of $9 million to strengthen reserves for asbestos and environmental exposures related to AFG’s railroad and manufacturing operations, pretax catastrophe losses of $23 million primarily from tornadoes and pretax realized gains of $33 million from the sales of a portion of AFG’s investment in Verisk Analytics, Inc. (“Verisk”). The 2011 fourth quarter includes a $34 million special charge for a valuation allowance against deferred tax assets and $40 million of pretax realized gains on sales of Verisk.

Results for 2010 include pretax catastrophe losses of $34 million in the second quarter, primarily from hailstorms in Oklahoma. Results for the third quarter of 2010 include a pretax gain of $26 million from the sale of Verisk and $39 million in adverse reserve development related to Marketform, primarily its run-off Italian public hospital medical malpractice business.