Shareholders' Equity

3 Months Ended

Mar. 31, 2021

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 (Loss)
	AOCI Beginning Balance		Pretax		Tax		Net of tax		Attributable to noncontrolling interests		Attributable to shareholders		AOCI Ending Balance
Three months ended March 31, 2021
Net unrealized gains (losses) on securities:
Unrealized holding losses on securities arising during the period			$	(355)	$	74	$	(281)	$	—	$	(281)
Reclassification adjustment for realized (gains) losses included in net earnings (*)			(14)		3		(11)		—		(11)
Total net unrealized gains (losses) on securities	$	1,255	(369)		77		(292)		—		(292)		$	963
Net unrealized gains (losses) on cash flow hedges	41		(17)		3		(14)		—		(14)		27
Foreign currency translation adjustments	(16)		—		—		—		—		—		(16)
Pension and other postretirement plans adjustments	(7)		—		—		—		—		—		(7)
Total	$	1,273	$	(386)	$	80	$	(306)	$	—	$	(306)	$	967
Three months ended March 31, 2020
Net unrealized gains (losses) on securities:
Unrealized holding losses on securities arising during the period			$	(1,095)	$	230	$	(865)	$	—	$	(865)
Reclassification adjustment for realized (gains) losses included in net earnings (*)			24		(5)		19		—		19
Total net unrealized gains (losses) on securities	$	862	(1,071)		225		(846)		—		(846)		$	16
Net unrealized gains on cash flow hedges	17		34		(7)		27		—		27		44
Foreign currency translation adjustments	(9)		(10)		—		(10)		(2)		(12)		(21)
Pension and other postretirement plans adjustments	(7)		—		—		—		—		—		(7)
Total	$	863	$	(1,047)	$	218	$	(829)	$	(2)	$	(831)	$	32

(*)The reclassification adjustment out of net unrealized gains (losses) on securities affected the following lines in AFG’s Statement of Earnings:

OCI component	Affected line in the statement of earnings
Pretax - continuing operations	Realized gains (losses) on securities
Pretax - discontinued operations	Net earnings (loss) from discontinued operations
Tax - continuing operations	Provision (credit) for income taxes
Tax - discontinued operations	Net earnings (loss) from discontinued operations

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 three months of 2021, AFG issued 207,020 shares of restricted Common Stock (fair value of $111.13 per share) under the Stock Incentive Plan.

Total compensation expense related to stock incentive plans of AFG and its subsidiaries was $5 million in both the first three months of 2021 and 2020.