XML 31 R18.htm IDEA: XBRL DOCUMENT v3.7.0.1
Shareholders' Equity
 6 Months Ended
Jun. 30, 2017
Stockholders' Equity Note [Abstract]  
Shareholders' Equity
Shareholders’ Equity

AFG is authorized to issue 12.5 million shares of Voting Preferred Stock and 12.5 million shares of Nonvoting Preferred Stock, each without par value.

Accumulated Other Comprehensive Income, Net of Tax (“AOCI”)   Comprehensive income is defined as all changes in shareholders’ equity except those arising from transactions with shareholders. Comprehensive income includes net earnings and other comprehensive income, which consists primarily of changes in net unrealized gains or losses on available for sale securities.

The progression of the components of accumulated other comprehensive income follows (in millions): 
 
 
 
Other Comprehensive Income
 
 
 
AOCI
Beginning
Balance
 
Pretax
 
Tax
 
Net
of
tax
 
Attributable to
noncontrolling
interests
 
Attributable to
shareholders
 
AOCI
Ending
Balance
Quarter ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains on securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding gains on securities arising during the period
 
 
$
178

 
$
(63
)
 
$
115

 
$
—

 
$
115

 


Reclassification adjustment for realized (gains) losses included in net earnings (a)
 
 
(8
)
 
3

 
(5
)
 
—

 
(5
)
 


Total net unrealized gains on securities (b)
$
529

 
170

 
(60
)
 
110

 
—

 
110

 
$
639

Net unrealized gains (losses) on cash flow hedges
(8
)
 
4

 
(2
)
 
2

 
—

 
2

 
(6
)
Foreign currency translation adjustments
(15
)
 
3

 
1

 
4

 
—

 
4

 
(11
)
Pension and other postretirement plans adjustments
(7
)
 
—

 
—

 
—

 
—

 
—

 
(7
)
Total
$
499

 
$
177

 
$
(61
)
 
$
116

 
$
—

 
$
116

 
$
615

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter ended June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains on securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding gains on securities arising during the period
 
 
$
326

 
$
(113
)
 
$
213

 
$
(4
)
 
$
209

 
 
Reclassification adjustment for realized (gains) losses included in net earnings (a)
 
 
16

 
(6
)
 
10

 
—

 
10

 
 
Total net unrealized gains on securities
$
466

 
342

 
(119
)
 
223

 
(4
)
 
219

 
$
685

Net unrealized gains on cash flow hedges
4

 
2

 
(1
)
 
1

 
—

 
1

 
5

Foreign currency translation adjustments
(16
)
 
1

 
—

 
1

 
—

 
1

 
(15
)
Pension and other postretirement plans adjustments
(6
)
 
—

 
—

 
—

 
—

 
—

 
(6
)
Total
$
448

 
$
345

 
$
(120
)
 
$
225

 
$
(4
)
 
$
221

 
$
669

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains on securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding gains on securities arising during the period
 
 
$
369

 
$
(129
)
 
$
240

 
$
—

 
$
240

 


Reclassification adjustment for realized (gains) losses included in net earnings (a)
 
 
(8
)
 
3

 
(5
)
 
—

 
(5
)
 


Total net unrealized gains on securities (b)
$
404

 
361

 
(126
)
 
235

 
—

 
235

 
$
639

Net unrealized gains (losses) on cash flow hedges
(7
)
 
2

 
(1
)
 
1

 
—

 
1

 
(6
)
Foreign currency translation adjustments
(15
)
 
3

 
1

 
4

 
—

 
4

 
(11
)
Pension and other postretirement plans adjustments
(7
)
 
—

 
—

 
—

 
—

 
—

 
(7
)
Total
$
375

 
$
366

 
$
(126
)
 
$
240

 
$
—

 
$
240

 
$
615

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gains on securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding gains on securities arising during the period
 
 
$
518

 
$
(180
)
 
$
338

 
$
(5
)
 
$
333

 
 
Reclassification adjustment for realized (gains) losses included in net earnings (a)
 
 
34

 
(13
)
 
21

 
(1
)
 
20

 
 
Total net unrealized gains on securities
$
332

 
552

 
(193
)
 
359

 
(6
)
 
353

 
$
685

Net unrealized gains on cash flow hedges
1

 
7

 
(3
)
 
4

 
—

 
4

 
5

Foreign currency translation adjustments
(22
)
 
4

 
3

 
7

 
—

 
7

 
(15
)
Pension and other postretirement plans adjustments
(7
)
 
1

 
—

 
1

 
—

 
1

 
(6
)
Total
$
304

 
$
564

 
$
(193
)
 
$
371

 
$
(6
)
 
$
365

 
$
669


(a)
The reclassification adjustment out of net unrealized gains on securities affected the following lines in AFG’s Statement of Earnings:
 
OCI component
 
Affected line in the statement of earnings
 
 
Pretax
 
Realized gains (losses) on securities
 
 
Tax
 
Provision for income taxes
 
 
Attributable to noncontrolling interests
 
Net earnings (loss) attributable to noncontrolling interests
 

(b)
Includes net unrealized gains of $56 million at June 30, 2017 compared to $52 million at both March 31, 2017 and December 31, 2016 related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings.

Stock Incentive Plans   Under AFG’s stock incentive plans, employees of AFG and its subsidiaries are eligible to receive equity awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units and stock awards. In the first six months of 2017, AFG issued 232,250 shares of restricted Common Stock (fair value of $94.44 per share) under the Stock Incentive Plan. In addition, AFG issued 47,826 shares of Common Stock (fair value of $96.13 per share) in the first quarter of 2017 under the Equity Bonus Plan. AFG did not grant any stock options in the first six months of 2017.

Total compensation expense related to stock incentive plans of AFG and its subsidiaries was $6 million in both the second quarters of 2017 and 2016 and $17 million and $14 million in the first six months of 2017 and 2016, respectively.