American Financial Group Announces Environmental Clean-up Settlement Relating to a Former Railroad Subsidiary's Site
09 11월 2004 - 8:10AM
PR Newswire (US)
American Financial Group Announces Environmental Clean-up
Settlement Relating to a Former Railroad Subsidiary's Site
CINCINNATI, Nov. 8 /PRNewswire-FirstCall/ -- American Financial
Group, Inc. (NYSE:AFG) announced today the settlement of litigation
over the allocation of environmental cleanup costs at a site that
was part of the historical operations of a subsidiary's railroad
predecessor. This settlement resolves the largest of the
subsidiary's outstanding environmental exposures. Based on the
settlement, the Company has recorded an after-tax charge of $33.8
million ($.45 per share) to increase the subsidiary's reserves for
environmental exposures. The charge has been recorded in the third
quarter of 2004 as required under generally accepted accounting
principles. Previously announced net earnings for the quarter and
nine-months ended September 30, 2004 have been reduced to $138.2
million and $267.3 million ($1.85 and $3.58 per share),
respectively. As shown in the attached summary of earnings, core
earnings from insurance operations for those periods did not
change. Although management has been advised by counsel that the
Company should be able to recover a significant amount of these
costs from a financially viable third-party, no recovery asset has
been recorded at this time. Through the operations of the Great
American Insurance Group, AFG is engaged primarily in property and
casualty insurance, focusing on specialized commercial products for
businesses, and in the sale of retirement annuities, supplemental
insurance and life products. AMERICAN FINANCIAL GROUP, INC. AND
SUBSIDIARIES SUMMARY OF EARNINGS (In Millions, Except Per Share
Data) Three months ended Nine months ended September 30, September
30, 2004 2003 2004 2003 Operating revenues $ 926.6 $ 826.5 $2,656.0
$2,455.4 Costs and expenses 867.2 754.4 2,433.6 2,304.7 59.4 72.1
222.4 150.7 Related income taxes 19.7 25.1 73.6 49.7 Earnings from
consolidated Insurance operations (a) 39.7 47.0 148.8 101.0 Net
investee earnings from Infinity - 3.8 - 8.3 Core earnings from
insurance operations (a) 39.7 50.8 148.8 109.3 Other items, net of
tax: Special tax benefits (b) - - - 5.5 Realized investment gains
(losses) 140.2(c) 13.9 163.4(c) 6.2 Litigation charges (d) (33.8)
(23.1) (33.8) (23.1) Discontinued operations (e) (1.0) .4 (.8) 1.3
Other (3.1) (.4) (4.7) (2.0) Cumulative effect of accounting
Changes (f) (3.8) - (5.6) - Net earnings $ 138.2 $41.6 $267.3 $97.2
Diluted Earnings (Loss) per Common Share: Core from insurance
operations(a) $.53 $.72 $2.00 $1.56 Special tax benefits(b) - - -
.08 Realized investment gains (losses) 1.87 (c) .20 2.19(c) .09
Litigation charges (d) (.45) (.33) (.46) (.33) Discontinued
operations (e) (.01) .01 (.01) .02 Other (.04) (.01) (.06) (.03)
Cumulative effect of accounting Changes(f) (.05) - (.08) - Net
earnings $1.85 $.59 $3.58 $1.39 Average number of Diluted Shares
74.8 70.0 74.6 69.8 a) Reflects (a) 2004 3rd quarter losses of
$22.8 million ($.30 per share) from four hurricanes, and (b) 2003
2nd quarter charges of $28.5 million ($.41 per share) for an
arbitration decision relating to a 1995 property claim arising from
a discontinued business and $6.7 million ($.10 per share) for a
reduction in estimated future profitability of in-force fixed
annuities. b) Reflects tax benefits in 2003 relating to the
Company's basis in Infinity Stock. c) Includes $134 million ($1.80
per share) gain on the Provident Financial Group investment related
to the merger with National City. d) Includes a 2004 charge for the
settlement of environmental litigation and a 2003 charge for the
settlement of litigation in the California workers' compensation
business. e) Represents operating results related to the planned
disposal of Transport Insurance Company. f) Reflects the
implementation of an accounting change in the third quarter related
to utilizing the equity method of accounting for investments in
limited liability companies as required by EITF 03-16, and in the
first quarter related to long duration contracts mandated by
Statement of Position 03-1. September 30, December 31, 2004 2003
Selected Balance Sheet Data: Total Cash and Investments $15,503
$13,828 Long-term Debt $ 1,031 $837 Payable to Subsidiary Trusts
(Issuers of Preferred Securities) $78 $265 Shareholders' Equity $
2,260 $ 2,076 Book Value Per Share $ 30.68 $28.42 Common Shares
Outstanding 73.7 73.1 DATASOURCE: American Financial Group, Inc.
CONTACT: Anne N. Watson, Vice President-Investor Relations of
American Financial Group, Inc., +1-513-579-6652 Web site:
http://www.afginc.com/ http://www.greatamericaninsurance.com/
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