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Discontinued Operations | 3 Months Ended
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Mar. 31, 2021
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations Annuity Business On January 27, 2021, AFG announced that it entered into a definitive agreement to sell its Annuity business to Massachusetts Mutual Life Insurance Company (“MassMutual”). Under the terms of the agreement, which is expected to close in the second quarter of 2021. MassMutual will acquire Great American Life Insurance Company (“GALIC”) and its two insurance subsidiaries, Annuity Investors Life Insurance Company and Manhattan National Life Insurance Company. In addition to AFG’s annuity operations, these subsidiaries include AFG’s run-off life and long-term care operations. Prior to the sale, AFG will acquire approximately $460 million in investments accounted for using the equity method and approximately $100 million of directly owned real estate from GALIC (based on March 31, 2021 values). Beginning with the first quarter of 2021, the results of the Annuity business to be sold are reported as discontinued operations in accordance with generally accepted accounting principles, which included adjusting prior period results to reflect these operations as discontinued. Details of the assets and liabilities of the Annuity subsidiaries to be sold were as follows (in millions):
| March 31, 2021 |  | December 31, 2020
Assets of businesses to be sold: |  |  |
Cash and cash equivalents | $ | 636 |  |  | $ | 1,145 |
Fixed maturities, available for sale | 34,754 |  |  | 34,123 |
Fixed maturities, trading at fair value | 40 |  |  | 42 |
Equity securities | 624 |  |  | 774 |
Investments accounted for using the equity method | 671 |  |  | 646 |
Mortgage loans | 1,244 |  |  | 1,251 |
Policy loans | 148 |  |  | 151 |
Equity index call options | 813 |  |  | 825 |
Other investments | 180 |  |  | 199 |
Total cash and investments | 39,110 |  |  | 39,156 |
Recoverables from reinsurers | 6,797 |  |  | 6,804 |
Agents’ balances and premiums receivable | 3 |  |  | 2 |
Deferred policy acquisition costs | 531 |  |  | 302 |
Variable annuity assets (separate accounts) | 666 |  |  | 664 |
Other assets | 1,032 |  |  | 957 |
Total assets of discontinued annuity operations | 48,139 |  |  | 47,885 |
Liabilities of businesses to be sold: |  |  |
Annuity benefits accumulated | 42,880 |  |  | 42,573 |
Life, accident and health reserves | 601 |  |  | 607 |
Variable annuity liabilities (separate accounts) | 666 |  |  | 664 |
Other liabilities | 746 |  |  | 614 |
Total liabilities of discontinued annuity operations | 44,893 |  |  | 44,458 |
Receivable from AFG for real estate-related investments | 567 |  |  | 537 |
Reclassify AOCI | (801) |  |  | (1,071) |
Net investment in annuity businesses to be sold, excluding AOCI | $ | 3,012 |  |  | $ | 2,893 |
Details of the results of operations for the discontinued annuity operations were (in millions):
| Three months ended March 31,
| 2021 |  | 2020
Net investment income | $ | 447 |  |  | $ | 415 |
Realized gains (losses) on securities | 81 |  |  | (223) |
Other income | 32 |  |  | 33 |
Total revenues | 560 |  |  | 225 |
Annuity benefits | 161 |  |  | 276 |
Annuity and supplemental insurance acquisition expenses | 112 |  |  | 113 |
Other expenses | 46 |  |  | 39 |
Total costs and expenses | 319 |  |  | 428 |
Earnings (loss) before income taxes from discontinued operations | 241 |  |  | (203) |
Provision (credit) for income taxes on operations | 48 |  |  | (43) |
Tax liabilities triggered by pending sale | 41 |  |  | — |
Net earnings (loss) from discontinued operations | $ | 152 |  |  | $ | (160) |
Net investment income in the table above excludes $29 million in first three months of 2021 and $12 million in first three months of 2020, respectively, related to the real estate-related entities that AFG will acquire from the discontinued annuity operations prior to the completion of the sale. Summarized cash flows for the discontinued annuity operations were (in millions):
| Three months ended March 31,
| 2021 |  | 2020
Net cash provided by operating activities | $ | 209 |  |  | $ | 265 |
Net cash used in investing activities | (734) |  |  | (1,244) |
Net cash provided by financing activities | 16 |  |  | 612 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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