Good day, ladies and gentlemen, and welcome to the American Financial Group 2014 Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a remainder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Diane Weidner. You may begin.

Thank you. Good morning, and welcome to American Financial Group’s third quarter 2014 earnings results conference call. I’m joined this morning by Carl Lindner III and Craig Lindner, Co-CEOs of American Financial Group; and Jeff Consolino, AFG’s Chief Financial Officer. If you are viewing the webcast from our website, you can follow along with the slide presentation if you’d like. Certain statements made during this call are not historical facts and may be considered forward-looking statements, and are based on estimates, assumptions and projections, which management believes are reasonable, but by their nature subject to risks and uncertainties. The factors which could cause actual results and/or financial conditions to differ materially from those suggested by such forward-looking statements include, but are not limited to those discussed or identified from time-to-time in AFG’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K and quarterly reports on Form 10-Q. We do not promise to update such forward-looking statements to reflect actual results or changes and assumptions or other factors that could affect these statements. Core net operating earnings is a non-GAAP financial measure, which sets aside significant items that are generally not considered to be part of ongoing operations, such as net realized gains and losses, discontinued operations and certain non-recurring items. AFG believes this non-GAAP measure as a useful tool for analysts and investors in analyzing ongoing operating trends and will be discussed for various periods during this call. A reconciliation of net earnings attributable to shareholders to core net operating earnings is included in our earnings release. If you are reading a transcript of this call, please note that it may not be authorized or reviewed for accuracy, plus it may contain factual or transcription errors that could materially alter the intent or meaning of our statements. Now, I’m pleased to turn the call over to Carl Lindner III to discuss our results.

Good morning. We released our 2014 third quarter results yesterday afternoon. I am assuming that our participants have reviewed our earnings release and the investor supplement posted on our website. We’re pleased to report core net operating earnings per share of $1.40 per share, a 32% increase from the comparable prior year period. These results reflect solid Property and Casualty operating earnings and continued strong profitability in our Annuity segment, and set new AFG records for the third quarter and nine month core operating earnings per share. Annualized core operating return on equity was 12.3% for the 2014 third quarter, compared to 10% for the third quarter of 2013. Net earnings per diluted share were $1.28 and included $0.09 per share of realized gains and a charge of $0.21 per share related to the strengthening of our A&E reserves. Annualized return on equity was 11.1%. Adjusted book value per share was $48.59 at September 30, 2014, up 6% from year-end 2013. Based on the results for the first nine months of this year, we continue to expect AFG’s 2014 core operating earnings per share to be in the range of $4.50 to $4.90. Craig and I will discuss our guidance for each segment of our business a little later in the call. During the third quarter, we repurchased 1.4 million AFG common shares for $83 million at an average price per share of $57.37. We were pleased with the market’s response to our September hybrid debt offering. Proceeds from the issuance of $150 million of 6.25% 40-year debentures provide equity credit to AFG and will be used for general corporate purposes, which may include the repurchase of common stock or the redemption of higher-yielding debt that becomes callable next September. We also continued to grow our businesses. We achieved year-over-year…

Thank you, Carl. The Annuity segment reported core pre-tax operating earnings of $86 million end of 2014 third quarter, compared to $78 million in the comparable 2013 period, a 10% increase as shown on Slide 7. Interest rate and stock market fluctuations have an impact on the accounting for fixed indexed annuities and these accounting adjustments are recognized through AFG’s core earnings. On this slide, you will see that the fair value accounting related to fixed indexed annuities had a minor impact on our third quarter results in 2014 and no material impact on 2013 third quarter results. Annuity premiums were $809 million in the third quarter of 2014, a decrease of 31% from the comparable prior year period. Our disciplined approach to product pricing and a declining interest rate environment, along with increased levels of competition, resulted in lower premiums across all single premium product lines during the 2014 third quarter. In contrast, a rising interest rate environment in 2013 resulted in nearly $1.2 billion in annuity premiums in the 2013 third quarter, which was a record for us. Turning to Slide 8, you will see that AFG’s 2014 earnings continued to benefit from growth in annuity assets. AFG’s quarterly average annuity investments have grown by 16% year-over-year. The impact of the growth in annuity assets was offset by the run-off of higher yielding investments as shown by the 12 basis point decline in net interest spread. Our net spread earned during the 2014 third quarter was 148 basis points, only two basis points lower than the comparable prior year period. Additional information about the components of these spreads for AFG’s fixed annuity operations can be found in AFG’s Quarterly Investor Supplement posted on our website. Please turn to Slide 9 for an overview of the 2014 outlook for…

Thank you, Craig. Good morning everyone. I am starting on Slide 12. Core net operating earnings per share in this quarter were $1.40. This is up 32% from a year ago. The $1.40 core pre-tax operating earnings in the quarter of $187 million, as you can see on the slide. Compare that to the $148 million reported in the year-ago quarter, this is an increase of $39 million year-over-year. When you do the math on the components in the $39 million, our P&C segment gave us $17 million of this increase; the Annuity segment gave us $8 million; the positive reversal in the run-off long-term care and life segment yielded a $5 million swing in core pre-tax operating earnings, as the segment flicks from a loss a year-ago to a modest profits. Add in a decrease of $9 million in other expenses and that totals to $39 million left to core pre-tax operating earnings in the quarter. As to what drove that pick up. P&C core pre-tax operating earnings rose by $17 million, not only due to the $8 million in increased underwriting profits, but also an additional $11 million of segment net investment income as the average P&C invested assets grew by $1.5 billion year-over-year, thanks to Summit acquisition and operating cash flow. You can see on Page 4 of the Investor Supplement that the movement in our expenses for the P&C segment was adverse by about $2 million in the quarter. This is primarily the amortization of Summit’s acquisition intangibles, which rounded about $7 million per year. Put these items together and that’s your $17 million improvement in the P&C segment core pre-tax. I also noted that the other expense $9 million improvement to $13 million. This is largely the result of a third-party fee income paid this…

(Operator Instructions) Our first question comes from the line of Amit Kumar of Macquarie. Your line is now open. Chris [ph] – Macquarie Securities: Hi guys, this is actually Chris [ph] on today. Congrats on the quarter. So two quick questions on the crop book. So you said sort of that the midpoint of your guidance assumes breakeven on the crop business. Given the way corn and soybeans have rallied so far in October, how do you sort of thing that your book going to the fourth quarter?

This is Carl. As of, I think of October 27 when you look at the average, the discovery period in October, the corn has – September 14 corn futures is down about 25% and the soybean contract is down 16% which is still significant. The rally has helped some but it’s kind of come in the little too late to really move that 30-day average, which is kind of with the scope of – that’s what the discovery prices for settlement claims, your determining claims [indiscernible]. I think the big thing in our case is, yes, we understand that the perspective yields seem to be pretty strong, but until we get through and settle all the claims, these are pretty big price declines. And I think the other difference with us is we get quite a bit of hail damage from the spring swamps versus the previous year. Do you get all that? Chris [ph] – Macquarie Securities: Yes, got it. Thanks, that’s very helpful. So yourself sort of seeing it as a breakeven is what you’re saying?

Yes. Chris [ph] – Macquarie Securities: Okay.

That’s at the breakeven and it should be at the midpoint of our guidance range and also midpoint of Specialty Property and Transportation and overall Property and Casualty combined ratio ranges. Chris [ph] – Macquarie Securities: Yes, got it. Thanks. That’s very helpful. And this is sort of follow-up on that. Can you remind us on where your reinsurance protection kicks in from the crop book?

Stop loss cover kicks in I think at around 100% [indiscernible]. Chris [ph] – Macquarie Securities: All right, great. Thanks. That’s all I have for today. Good luck in the future.

Thanks.

Thank you. Our next question comes from the line of Ryan Byrnes of Janney Capital. Your line is now open. Ryan Byrnes – Janney Capital Markets: Great. Good morning everybody or afternoon I guess now. I just had a question about that $64 million recognition margin for the long-term care block. I am imagining that is not included in book value, but can you just confirm to that does not and...

Yes, that is not included in book value, no. Ryan Byrnes – Janney Capital Markets: Okay. And then…

Margin that exists is we’re doing the actuarial review and putting new assumptions in place potentially related to future reinvestment rates. That’s the margin that exists before we would have any kind of a loss recognition charge. Ryan Byrnes – Janney Capital Markets: Okay, great. And then what kind of rate increases are you guys getting in that block? I’m just trying to figure out what kind of persistency you’re getting on renewals and what kind of rate increases you guys are trying to push through with state regulators right now?

It varies state by state. Some states are a lot more willing to get rate increase, significant rate increases than others, I don’t know off the top of my head, I can’t tell you what the average has been recently. On average, they are significant but not enough to make up for decline on interest rates and so forth versus what was priced into the products. Ryan Byrnes – Janney Capital Markets: Okay, great. And then my last one, again, it’s sticking with the annuity side of the house. If interest rates stay in this mid 2% range, should we think on that as a headwind for growth into next year as well, both on sales and in earnings perspective?

I mean if they would truly stay at these rate levels and not move, I think that would be a headwind. I mean sort of things we do – we’re going to be disciplined in the pricing. There are other things that we can do in that kind of environment to help with the profitability. Obviously we would need to adjust some of the credit rates if rates don’t move up in the future. So there are certain things we can do to try to maintain spreads, but we certainly would rather see a rising interest rate environment, a gradually rising interest rate environment would be ideal for us. Ryan Byrnes – Janney Capital Markets: Okay, great. Thanks for the answer guys.

Thank you. (Operator Instructions) Our next question comes from the line Jay Cohen of Bank of America Merrill Lynch. Your line is now open. Jay Cohen – Bank of America Merrill Lynch: Yes, thank you. Two questions. You did have some adverse reserve development in the casualty book, and I’m wondering if you could talk more about that, what gave rise to that and what specific lines of business? And then secondly, I think Jeff or someone mentioned you have callable debt next year. Can you talk about what the date is when you can call it and what the interest rate is on that debt?

Hi Jay, this is Jeff. The callable debt becomes callable in September of 2015. And it’s at a comparable interest rate to the hybrid that we issued. And so what we said in the use of proceeds for the hybrid was that we would use the proceeds of the hybrid to redeem that debt unless we’ll use it for other corporate purposes in the interim. So at the very least, we’re viewing that as taking out a dense security and improving our capital structure at no additional costs because of the equity feature of the hybrid and to the extent that we surprise ourselves and find a way to deploy the capital at a higher return, and then we’ll use the capital for that purpose. Jay Cohen – Bank of America Merrill Lynch: Got it.

As for the adverse developments, I don’t think there is really much to add in the Specialty Casualty segment, beyond what Carl said. This was a liability book of business in our Specialty Casualty segment. We chose to tweak our actuarial assumptions, which resulted in some reserve addition, but as Carl said, the accident year results for that business is still very favorable, so still running well. We just took a slightly more conservative stance in the quarter as it relates to the reserves.

Yes, and that subsidiary is outstanding results. Jay Cohen – Bank of America Merrill Lynch: I didn’t hear that last bit, sorry.

Yes, that – our Mid-Continent subsidiary has had outstanding underwriting profitability across the last five to seven years and it’s just a little less outstanding. Think of it that way. Jay Cohen – Bank of America Merrill Lynch: Got it. Thank you very much.

Thank you. Our next question comes from the line of Paul Sarran with Mesirow Financial. Your line is now open. Paul Sarran – Mesirow Financial: Hi. Just wanted to ask about the guidance for the full-year. It implies, I think if the math is right around $1.03 to $1.43 for the fourth quarter whereas I think the street estimates are on the $1.54, and you did a $1.40 this quarter. So I know you lowered annuity earnings guidance. So that accounts for a little bit of it, and you the new sub-debt which is worth a couple of pennies, but is there anything else that kind of helps bridge that difference that you could touch on?

Hi sure, this is Jeff Consolino. The major difference that you would have seen relative to fourth quarters for AFG that you haven’t touched on is crop. We tend to recognize the bulk of our crop profitability late in the year and in the fourth quarter now we’re saying that our expectation, based on currently available information is that, we’ll be breakeven. So that’s the major difference in the numbers you talked about the $1.03 to $1.43. Paul Sarran – Mesirow Financial: Okay. Have you said where that crop book has been booked year-to-date or for this quarter?

We haven’t booked any profit year-to-date. We generally – we’re probably pretty conservative in how we look at that business. Generally, we book most of that profit G&A [ph] when you look in years passed in the fourth quarter, because the reality is until you see what claims you get and what the fall discovery prices are for corn and soybeans, you don’t have a very complete picture, you can guess on that. So we’re generally more conservative. So usually we’ll report something in the third quarter a little bit if we think it’s a great year, but most of the times it’s really left to where we really get a good feel even early on into the following year if you probably get the best field where you’re at. So its year-end earnings that we can reflect most accurately in our crop hail profitability. Paul Sarran – Mesirow Financial: Okay. So I was just trying to understand if it comes in at breakeven as you’re guiding to, there wouldn’t be a catch-up charge to refer profits from earlier in the year which just sounds like there is not, so that’s fine. One question on the long-term care, actuarial review. Do you have any sensitivities you can provide around interest rates or other assumptions. And in particular, do you know what kind of an average lapse rates assumption you have built into reserves right now?

If you go to our 10-K, you will see assumptions that were used at the – when we did the last study at the end of 2012. There is a sensitivity table also on the impact of changes and assumptions related to morbidity lapses, interest rates, rate increases and so forth. So I think you can get the information you need there. I will make one point to you though, is we are looking at putting to assumptions in place related to reinvestment rates. The table that you see in the 10-K assumes that when interest rates decline, which they have, if we look at where interest rates are today versus where they were at the end of the year, say 2013, the 10-year treasury rates have declined by about 70 basis points. The sensitivity table that you see related to interest rates assumes that those rates stayed down forever basically. So in other words, the ultimate reinvestment rate would be 70 basis points lower than what was put in place when this calculation was done. We think it’s probably more appropriate to have a reversion to, I mean at some point down the road which would make these numbers a bit smaller than what’s reflected in the table. The other thing that I mentioned to you is even though rates have declined this year, we’ve been able to outperform the assumed reinvestment rates so far year-to-date. So anyway long way of saying, as it relates to impact of change in interest rates, we’re going to be taking a hard look at that between now and year-end and the numbers could be different than what you might calculate if you just look at the table in the 10-K. Paul Sarran – Mesirow Financial: Okay. I will take a look at that. I appreciate that. Any comments on lapse rates on the book?

Yes, let me see if I can put my hands on that. I know there is something – some disclosure in the 10-K I believe related to that. Let me see if I can put my hands on that. I do not have that here. I can tell you that was one of the adjustments in the – when we did the review back at the end of 2012, was to assume far lower lapse rates than what had been assumed before that. I believe that is disclosed in the 10-K though. Paul Sarran – Mesirow Financial: Okay. And sorry for taking up too much time, and if I could sneak one more question. And was there anything that prompted you to revisit the reserves this year or this quarter?

Yes, that’s something we do every – I mean we do an internal review throughout the year, but typically we do an external review every couple of years. Paul Sarran – Mesirow Financial: Okay, good. Thanks.

Thank you. (Operator Instructions) One moment for our question. And I am showing no further questions at this time. I’d like to hand the call over to Diane Weidner for any closing remarks.

Thank you for joining us this morning for discussion about AFG’s third quarter results. This concludes our call for today. Thank you.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program. You may all disconnect. Have a great day everyone.