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Shareholders' Equity | 12 Months Ended
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Dec. 31, 2019
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. 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. At December 31, 2019, there were 4.5 million shares of AFG Common Stock reserved for issuance under AFG’s stock incentive plans. The restricted Common Stock that AFG has granted generally vests over a four-year period. Data relating to grants of restricted stock is presented below:
| Shares |  | Average Grant Date Fair Value
Outstanding at January 1, 2019 | 865,930 |  |  | $ | 84.06 |
Granted | 232,635 |  |  | $ | 99.28 |
Vested | (167,326 | ) |  | $ | 66.10 |
Forfeited | (11,304 | ) |  | $ | 90.26 |
Outstanding at December 31, 2019 | 919,935 |  |  | $ | 91.10 |
The total fair value of restricted stock that vested during 2019, 2018 and 2017 was $11 million, $10 million and $14 million, respectively. AFG issued 45,804 shares (fair value of $115.49 per share) in the first quarter of 2018 under its Equity Bonus Plan. AFG has not granted any stock options since 2015. Options granted in prior years have an exercise price equal to the market price of AFG Common Stock at the date of grant. Options generally become exercisable at the rate of 20% per year commencing one year after grant and expire ten years after the date of grant. Data for stock options issued under AFG’s stock incentive plans is presented below:
| Shares |  | Average Exercise Price |  | Average Remaining Contractual Term |  | Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2019 | 2,667,442 |  |  | $ | 48.20 |  |  |  |  |
Exercised | (747,167 | ) |  | $ | 41.13 |  |  |  |  |
Forfeited/Cancelled | (2,485 | ) |  | $ | 61.88 |  |  |  |  |
Outstanding at December 31, 2019 | 1,917,790 |  |  | $ | 50.93 |  |  | 3.7 years |  | $ | 113 |
Options exercisable at December 31, 2019 | 1,779,941 |  |  | $ | 50.13 |  |  | 3.6 years |  | $ | 107 |
The total intrinsic value of options exercised during 2019, 2018 and 2017 was $46 million, $57 million and $65 million, respectively. During 2019, 2018 and 2017, AFG received $31 million, $29 million and $34 million, respectively, in cash from the exercise of stock options. The total tax benefit related to the exercises was $8 million, $9 million and $18 million during those years, respectively. Total compensation expense related to stock incentive plans of AFG and its subsidiaries was $23 million for 2019 and 2018 and $30 million for 2017. AFG’s provision for income tax includes tax benefits of $13 million in 2019 and 2018 and $27 million in 2017 related to AFG’s stock incentive plans. At December 31, 2019, there was $36 million of unrecognized compensation expense related to restricted stock awards, which is expected to be recognized over a weighted average of 2.4 years. At December 31, 2019, there was less than $1 million of unrecognized compensation expense related to unvested stock options, which will be recognized in the first quarter of 2020. 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 |  | Other (c) |  | AOCI Ending Balance
Year ended December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net unrealized gains on securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized holding gains on securities arising during the period |  |  | $ | 997 |  |  | $ | (209 | ) |  | $ | 788 |  |  | $ | — |  |  | $ | 788 |  |  |  |  |
Reclassification adjustment for realized (gains) losses included in net earnings (a) |  |  | (11 | ) |  | 2 |  |  | (9 | ) |  | — |  |  | (9 | ) |  |  |  |
Total net unrealized gains on securities (b) | $ | 83 |  |  | 986 |  |  | (207 | ) |  | 779 |  |  | — |  |  | 779 |  |  | $ | — |  |  | $ | 862 |
Net unrealized gains (losses) on cash flow hedges | (11 | ) |  | 36 |  |  | (8 | ) |  | 28 |  |  | — |  |  | 28 |  |  | — |  |  | 17 |
Foreign currency translation adjustments | (16 | ) |  | 7 |  |  | — |  |  | 7 |  |  | — |  |  | 7 |  |  | — |  |  | (9 | )
Pension and other postretirement plans adjustments | (8 | ) |  | 1 |  |  | — |  |  | 1 |  |  | — |  |  | 1 |  |  | — |  |  | (7 | )
Total | $ | 48 |  |  | $ | 1,030 |  |  | $ | (215 | ) |  | $ | 815 |  |  | $ | — |  |  | $ | 815 |  |  | $ | — |  |  | $ | 863 |
Year ended December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net unrealized gains (losses) on securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized holding losses on securities arising during the period |  |  | $ | (689 | ) |  | $ | 145 |  |  | $ | (544 | ) |  | $ | — |  |  | $ | (544 | ) |  |  |  |
Reclassification adjustment for realized (gains) losses included in net earnings (a) |  |  | 10 |  |  | (2 | ) |  | 8 |  |  | — |  |  | 8 |  |  |  |  |
Total net unrealized gains (losses) on securities (b) | $ | 840 |  |  | (679 | ) |  | 143 |  |  | (536 | ) |  | — |  |  | (536 | ) |  | $ | (221 | ) |  | $ | 83 |
Net unrealized gains (losses) on cash flow hedges | (13 | ) |  | 2 |  |  | — |  |  | 2 |  |  | — |  |  | 2 |  |  | — |  |  | (11 | )
Foreign currency translation adjustments | (6 | ) |  | (9 | ) |  | (1 | ) |  | (10 | ) |  | — |  |  | (10 | ) |  | — |  |  | (16 | )
Pension and other postretirement plans adjustments | (8 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (8 | )
Total | $ | 813 |  |  | $ | (686 | ) |  | $ | 142 |  |  | $ | (544 | ) |  | $ | — |  |  | $ | (544 | ) |  | $ | (221 | ) |  | $ | 48 |
Year ended December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net unrealized gains on securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized holding gains on securities arising during the period |  |  | $ | 456 |  |  | $ | (159 | ) |  | $ | 297 |  |  | $ | — |  |  | $ | 297 |  |  |  |  |
Reclassification adjustment for realized (gains) losses included in net earnings (a) |  |  | (15 | ) |  | 5 |  |  | (10 | ) |  | — |  |  | (10 | ) |  |  |  |
Total net unrealized gains on securities (b) | $ | 404 |  |  | 441 |  |  | (154 | ) |  | 287 |  |  | — |  |  | 287 |  |  | $ | 149 |  |  | $ | 840 |
Net unrealized losses on cash flow hedges | (7 | ) |  | (6 | ) |  | 2 |  |  | (4 | ) |  | — |  |  | (4 | ) |  | (2 | ) |  | (13 | )
Foreign currency translation adjustments | (15 | ) |  | 9 |  |  | 3 |  |  | 12 |  |  | — |  |  | 12 |  |  | (3 | ) |  | (6 | )
Pension and other postretirement plans adjustments | (7 | ) |  | 1 |  |  | — |  |  | 1 |  |  | — |  |  | 1 |  |  | (2 | ) |  | (8 | )
Total | $ | 375 |  |  | $ | 445 |  |  | $ | (149 | ) |  | $ | 296 |  |  | $ | — |  |  | $ | 296 |  |  | $ | 142 |  |  | $ | 813 |
(a) 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 |  | Realized gains (losses) on securities |
| Tax |  | Provision for income taxes |
(b) | Includes net unrealized gains of $55 million at December 31, 2019 compared to $58 million and $68 million at December 31, 2018 and 2017, related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings.
(c) On January 1, 2018, AFG adopted new guidance that requires all equity securities other than those accounted for under the equity method to be reported at fair value with holding gains and losses recognized in net earnings. At the date of adoption, the $221 million net unrealized gain on equity securities classified as available for sale (with unrealized holding gains and losses reported in AOCI) under the prior guidance was reclassified from AOCI to retained earnings as the cumulative effect of an accounting change. Other also includes the December 2017 reclassification of $145 million stranded in AOCI from accounting for the Tax Cuts and Jobs Act of 2017 to retained earnings (see Note A — “Accounting Policies — Income Taxes”) and the impact on AOCI of the December 2017 sale of redeemable noncontrolling interests in Neon.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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