Condensed Consolidating Information

12 Months Ended

Dec. 31, 2011

Condensed Consolidating Information [Abstract]

Condensed Consolidating Information

Q. Condensed Consolidating Information

AFG has guaranteed all of the outstanding public debt of GAFRI and GAFRI’s wholly-owned subsidiary, AAG Holding Company, Inc. In addition, GAFRI guarantees AAG Holding’s public debt. The AFG and GAFRI guarantees are full and unconditional and joint and several. Condensed consolidating financial statements for AFG are as follows:

CONDENSED CONSOLIDATING BALANCE SHEET
(In millions)

					AAG		All Other		Consol.
	AFG		GAFRI		Holding		Subs		Entries			Consolidated
DECEMBER 31, 2011
Assets:
Cash and investments	$	456	$	32	$	—	$	25,090	$	(1	)	$	25,577
Recoverables from reinsurers and prepaid reinsurance premiums		—		—		—		3,351		—			3,351
Agents’ balances and premiums receivable		—		—		—		565		—			565
Deferred policy acquisition costs		—		—		—		1,105		—			1,105
Assets of managed investment entities		—		—		—		3,058		—			3,058
Other assets		105		5		5		2,309		(38	)		2,386
Investment in subsidiaries and affiliates		4,866		2,055		2,146		643		(9,710	)		—
Total assets	$	5,427	$	2,092	$	2,151	$	36,121	$	(9,749	)	$	36,042
Liabilities and Equity:
Unpaid losses and loss adjustment expenses and unearned premiums	$	—	$	—	$	—	$	8,004	$	—		$	8,004
Annuity, life, accident and health benefits and reserves		—		—		—		17,148		(1	)		17,147
Liabilities of managed investment entities		—		—		—		2,787		—			2,787
Long-term debt		600		—		220		115		(1	)		934
Other liabilities		282		20		109		2,266		(198	)		2,479
Total liabilities		882		20		329		30,320		(200	)		31,351
Total shareholders’ equity		4,545		2,072		1,822		5,655		(9,549	)		4,545
Noncontrolling interests		—		—		—		146		—			146
Total liabilities and equity	$	5,427	$	2,092	$	2,151	$	36,121	$	(9,749	)	$	36,042
DECEMBER 31, 2010
Assets:
Cash and investments	$	412	$	33	$	—	$	22,228	$	(3	)	$	22,670
Recoverables from reinsurers and prepaid reinsurance premiums		—		—		—		3,386		—			3,386
Agents’ balances and premiums receivable		—		—		—		535		—			535
Deferred policy acquisition costs		—		—		—		1,244		—			1,244
Assets of managed investment entities		—		—		—		2,537		—			2,537
Other assets		36		6		5		2,050		(15	)		2,082
Investment in subsidiaries and affiliates		4,816		1,899		1,996		671		(9,382	)		—
Total assets	$	5,264	$	1,938	$	2,001	$	32,651	$	(9,400	)	$	32,454
Liabilities and Equity:
Unpaid losses and loss adjustment expenses and unearned premiums	$	—	$	—	$	—	$	7,947	$	—		$	7,947
Annuity, life, accident and health benefits and reserves		—		—		—		14,556		(1	)		14,555
Liabilities of managed investment entities		—		—		—		2,323		—			2,323
Long-term debt		600		1		219		133		(1	)		952
Other liabilities		194		19		110		1,888		(154	)		2,057
Total liabilities		794		20		329		26,847		(156	)		27,834
Total shareholders’ equity		4,470		1,918		1,672		5,654		(9,244	)		4,470
Noncontrolling interests		—		—		—		150		—			150
Total liabilities and equity	$	5,264	$	1,938	$	2,001	$	32,651	$	(9,400	)	$	32,454

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS
(In millions)

						AAG		All Other			Consol.
	AFG		GAFRI			Holding		Subs			Entries			Consolidated
FOR THE YEAR ENDED DECEMBER 31, 2011
Revenues:
Property and casualty insurance premiums	$	—	$	—		$	—	$	2,759		$	—		$	2,759
Life, accident and health premiums		—		—			—		430			—			430
Realized gains (losses)		—		(1	)		—		75			(1	)		73
Income of managed investment entities		—		—			—		72			—			72
Investment and other income		2		11			—		1,430			(27	)		1,416
Equity in earnings of subsidiaries		710		189			216		—			(1,115	)		—
Total revenues		712		199			216		4,766			(1,143	)		4,750
Costs and Expenses:
Insurance benefits and expenses		—		—			—		3,671			—			3,671
Interest charges on borrowed money		64		—			25		16			(20	)		85
Expenses of managed investment entities		—		—			—		71			—			71
Other operating and general expenses		65		15			5		284			(6	)		363
Total costs and expenses		129		15			30		4,042			(26	)		4,190
Operating earnings before income taxes		583		184			186		724			(1,117	)		560
Provision (credit) for income taxes		240		62			64		283			(409	)		240
Net earnings, including noncontrolling interests		343		122			122		441			(708	)		320
Less: Net earnings (loss) attributable to noncontrolling interests		—		—			—		(23	)		—			(23	)
Net Earnings Attributable to Shareholders	$	343	$	122		$	122	$	464		$	(708	)	$	343
FOR THE YEAR ENDED DECEMBER 31, 2010
Revenues:
Property and casualty insurance premiums	$	—	$	—		$	—	$	2,550		$	—		$	2,550
Life, accident and health premiums		—		—			—		451			—			451
Realized gains (losses)		—		(2	)		—		90			—			88
Income of managed investment entities		—		—			—		23			—			23
Investment and other income		4		11			—		1,392			(22	)		1,385
Equity in earnings of subsidiaries		850		195			242		—			(1,287	)		—
Total revenues		854		204			242		4,506			(1,309	)		4,497
Costs and Expenses:
Insurance benefits and expenses		—		—			—		3,297			—			3,297
Interest charges on borrowed money		58		—			25		17			(22	)		78
Expenses of managed investment entities		—		—			—		55			—			55
Other operating and general expenses		51		16			5		306			—			378
Total costs and expenses		109		16			30		3,675			(22	)		3,808
Operating earnings before income taxes		745		188			212		831			(1,287	)		689
Provision (credit) for income taxes		266		72			72		314			(458	)		266
Net earnings, including noncontrolling interests		479		116			140		517			(829	)		423
Less: Net earnings (loss) attributable to noncontrolling interests		—		—			—		(56	)		—			(56	)
Net Earnings Attributable to Shareholders	$	479	$	116		$	140	$	573		$	(829	)	$	479

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS
(In millions)

						AAG		All Other		Consol.
	AFG		GAFRI			Holding		Subs		Entries			Consolidated
FOR THE YEAR ENDED DECEMBER 31, 2009
Revenues:
Property and casualty insurance premiums	$	—	$	—		$	—	$	2,412	$	—		$	2,412
Life, accident and health premiums		—		—			—		444		—			444
Realized gains (losses)		—		(7	)		—		44		1			38
Investment and other income		2		10			—		1,437		(23	)		1,426
Equity in earnings of subsidiaries		896		73			115		—		(1,084	)		—
Total revenues		898		76			115		4,337		(1,106	)		4,320
Costs and Expenses:
Insurance benefits and expenses		—		—			—		2,978		—			2,978
Interest charges on borrowed money		50		—			25		15		(23	)		67
Other operating and general expenses		47		20			6		391		(1	)		463
Total costs and expenses		97		20			31		3,384		(24	)		3,508
Operating earnings before income taxes		801		56			84		953		(1,082	)		812
Provision (credit) for income taxes		282		17			26		327		(370	)		282
Net earnings, including noncontrolling interests		519		39			58		626		(712	)		530
Less: Net earnings (loss) attributable to noncontrolling interests		—		—			—		11		—			11
Net Earnings Attributable to Shareholders	$	519	$	39		$	58	$	615	$	(712	)	$	519

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In millions)

							AAG			All Other			Consol.
	AFG			GAFRI			Holding			Subs			Entries			Consolidated
FOR THE YEAR ENDED DECEMBER 31, 2011
Operating Activities:
Net earnings, including noncontrolling interests	$	343		$	122		$	122		$	441		$	(708	)	$	320
Adjustments:
Equity in net earnings of subsidiaries		(440	)		(124	)		(142	)		—			706			—
Dividends from subsidiaries		542			3			38			—			(583	)		—
Other operating activities, net		17			(1	)		2			327			2			347
Net cash provided by (used in) operating activities		462			—			20			768			(583	)		667
Investing Activities:
Purchases of investments, property and equipment		(54	)		—			—			(5,940	)		—			(5,994	)
Returns of capital from (capital contributions to) subsidiaries		(27	)		14			(1	)		—			14			—
Proceeds from maturities and redemptions of investments		4			9			—			2,230			—			2,243
Proceeds from sales of investments, property and equipment		5			—			—			1,489			—			1,494
Managed investment entities:
Purchases of investments		—			—			—			(1,563	)		—			(1,563	)
Proceeds from sales and redemptions of investments		—			—			—			1,391			—			1,391
Other investing activities, net		—			—			—			(10	)		—			(10	)
Net cash provided by (used in) investing activities		(72	)		23			(1	)		(2,403	)		14			(2,439	)
Financing Activities:
Annuity receipts		—			—			—			3,326			—			3,326
Annuity surrenders, benefits and withdrawals		—			—			—			(1,321	)		—			(1,321	)
Net transfers from (to) variable annuity assets		—			—			—			39			—			39
Additional long-term borrowings		—			—			—			2			—			2
Reductions of long-term debt		—			—			—			(20	)		—			(20	)
Issuances of managed investment entities’ liabilities		—			—			—			394			—			394
Retirement of managed investment entities’ liabilities		—			—			—			(66	)		—			(66	)
Issuances of Common Stock		37			—			—			2			—			39
Capital contributions from (returns of capital to) parent		—			16			(19	)		(143	)		146			—
Repurchases of Common Stock		(315	)		—			—			—			—			(315	)
Cash dividends paid		(67	)		(40	)		—			(383	)		423			(67	)
Other financing activities, net		—			—			—			(14	)		—			(14	)
Net cash provided by (used in) financing activities		(345	)		(24	)		(19	)		1,816			569			1,997
Net change in cash and cash equivalents		45			(1	)		—			181			—			225
Cash and cash equivalents at beginning of year		370			20			—			709			—			1,099
Cash and cash equivalents at end of year	$	415		$	19		$	—		$	890		$	—		$	1,324

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In millions)

							AAG			All Other			Consol.
	AFG			GAFRI			Holding			Subs			Entries			Consolidated
FOR THE YEAR ENDED DECEMBER 31, 2010
Operating Activities:
Net earnings, including noncontrolling interests	$	479		$	116		$	140		$	517		$	(829	)	$	423
Adjustments:
Equity in net earnings of subsidiaries		(548	)		(121	)		(159	)		—			828			—
Dividends from subsidiaries		550			—			16			—			(566	)		—
Other operating activities, net		—			(2	)		1			441			1			441
Net cash provided by (used in) operating activities		481			(7	)		(2	)		958			(566	)		864
Investing Activities:
Purchases of investments, property and equipment		(13	)		(5	)		—			(5,417	)		—			(5,435	)
Purchase of subsidiaries		—			—			—			(128	)		—			(128	)
Capital contributions to subsidiaries		(97	)		(7	)		(5	)		—			109			—
Proceeds from maturities and redemptions of investments		—			11			—			2,141			—			2,152
Proceeds from sales of investments, property and equipment		—			—			—			1,593			—			1,593
Managed investment entities:
Purchases of investments		—			—			—			(1,008	)		—			(1,008	)
Proceeds from sales and redemptions of investments		—			—			—			1,018			—			1,018
Other investing activities, net		—			—			—			103			—			103
Net cash provided by (used in) investing activities		(110	)		(1	)		(5	)		(1,698	)		109			(1,705	)
Financing Activities:
Annuity receipts		—			—			—			2,282			—			2,282
Annuity surrenders, benefits and withdrawals		—			—			—			(1,221	)		—			(1,221	)
Net transfers from (to) variable annuity assets		—			—			—			7			—			7
Additional long-term borrowings		128			—			—			31			—			159
Reductions of long-term debt		—			—			—			(39	)		—			(39	)
Retirement of managed investment entities’ liabilities		—			—			—			(45	)		—			(45	)
Issuances of Common Stock		31			—			—			1			—			32
Capital contributions from parent		—			16			7			86			(109	)		—
Repurchases of Common Stock		(292	)		—			—			—			—			(292	)
Cash dividends paid		(63	)		—			—			(566	)		566			(63	)
Other financing activities, net		(2	)		—			—			2			—			—
Net cash provided by (used in) financing activities		(198	)		16			7			538			457			820
Net change in cash and cash equivalents		173			8			—			(202	)		—			(21	)
Cash and cash equivalents at beginning of year		197			12			—			911			—			1,120
Cash and cash equivalents at end of year	$	370		$	20		$	—		$	709		$	—		$	1,099

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In millions)

							AAG			All Other			Consol.
	AFG			GAFRI			Holding			Subs			Entries			Consolidated
FOR THE YEAR ENDED DECEMBER 31, 2009
Operating Activities:
Net earnings, including noncontrolling interests	$	519		$	39		$	58		$	626		$	(712	)	$	530
Adjustments:
Equity in net earnings of subsidiaries		(583	)		(51	)		(79	)		—			713			—
Dividends from subsidiaries		636			3			—			—			(639	)		—
Other operating activities, net		14			4			(3	)		371			(1	)		385
Net cash provided by (used in) operating activities		586			(5	)		(24	)		997			(639	)		915
Investing Activities:
Purchases of investments, property and equipment		(14	)		(15	)		—			(4,991	)		—			(5,020	)
Purchase of subsidiaries		—			—			—			(5	)		—			(5	)
Capital contributions to subsidiaries		(170	)		(141	)		(116	)		—			427			—
Proceeds from maturities and redemptions of investments		1			2			—			1,942			—			1,945
Proceeds from sales of investments, property and equipment		15			1			—			2,319			—			2,335
Other investing activities, net		—			—			—			(38	)		—			(38	)
Net cash provided by (used in) investing activities		(168	)		(153	)		(116	)		(773	)		427			(783	)
Financing Activities:
Annuity receipts		—			—			—			1,434			—			1,434
Annuity surrenders, benefits and withdrawals		—			—			—			(1,273	)		—			(1,273	)
Net transfers from (to) variable annuity assets		—			—			—			(10	)		—			(10	)
Additional long-term borrowings		522			—			—			59			—			581
Reductions of long-term debt		(776	)		—			—			(9	)		—			(785	)
Issuances of Common Stock		14			—			—			1			—			15
Capital contributions from parent		—			168			140			119			(427	)		—
Repurchases of Common Stock		(81	)		—			—			—			—			(81	)
Cash dividends paid		(60	)		—			—			(639	)		639			(60	)
Other financing activities, net		—			—			—			(97	)		—			(97	)
Net cash provided by (used in) financing activities		(381	)		168			140			(415	)		212			(276	)
Net change in cash and cash equivalents		37			10			—			(191	)		—			(144	)
Cash and cash equivalents at beginning of year		160			2			—			1,102			—			1,264
Cash and cash equivalents at end of year	$	197		$	12		$	—		$	911		$	—		$	1,120