Good morning. My name is Tina and I will be your conference operator today. At this time I would like to welcome everyone to the American Financial Group’s 2012 Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. Mr. Jensen, you may begin your conference.

Good morning. Thank you and welcome to American Financial Group’s second quarter 2012 earnings results conference call. I’m joined this morning by Carl Lindner III and Craig Lindner, co-CEOs of American Financial Group. If you are viewing the webcast from our website, follow our 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. 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 or to reflect actual results or changes in 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 the ongoing operations, such as net realized gains or losses on investments, and the usual unlocking charges, effect of certain accounting changes, discontinued operations, special asbestos and environmental charges, and certain other non-recurring items. AFG believes this non-GAAP measure to be a useful tool for analysts and investors in analyzing ongoing operation 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. Now I’m pleased to turn the call over to Carl Lindner III to discuss our results.

Good morning. And thank you for joining us. We released our 2012 second quarter results yesterday afternoon and are pleased with another quarter of strong operating earnings in our Specialty, Property and Casualty and annuity and supplemental businesses. I am assuming that the participants on today’s call reviewed our earnings release and supplemental materials posted on the website. I’m going to review a few highlights and focus today’s discussion on key issues. I will also briefly discuss our outlook for the remainder of 2012. Now let’s start by looking at our second quarter results summarized on slides three and four of the webcast. Net earnings were $1.01 per share for the quarter including realized gains of $0.10 per share, core net operating earnings for the quarter were $90 million or $0.91 per shares compared to the prior year’s result of $74 million or $0.72 per share. Record profit in our annuity and supplemental group and approved underwriting results in our Specialty, Property and Casualty operations were offset somewhat by lower Property and Casualty investment income. While both periods reflect the effect of share repurchases. Annualize core operating return on equity was approximately 9%. Our capital adequacy, financial condition and liquidity remain strong in our key areas of focus for us. We maintain sufficient capital in our insurance businesses to meet our commitments to the rating agencies in support of our current rating roles. Our excess capital was approximately $590 million at June 30th, 2012, which included cash at the parent company of approximately $484 million. As you know, in June, we issued $230 million of 6.375 debentures due 2042. The proceeds from this offering are included in our parent company cash balance at June 30th. In July, AFG use these proceeds to regain approximately $200 million of 7.5 and 7.25…

(Operator Instructions) Your first question comes from Amit Kumar, Macquarie. Amit Kumar – Macquarie: Thanks and good afternoon and congrats on the results. Maybe we can just start with the crop book and I know it’s been all about crop. Can you refresh us as to what the distribution is amongst various crops as well as the group one and group two and three states?

To start with, corn roughly is about half of the last year’s premium and soybeans is roughly 26%. So corn and soybeans represent the biggest part of the things. Revenue coverage today, is up towards 80%. As far as – I don’t think we’ve really disclosed our breakout with the group one and two states. Amit Kumar – Macquarie: Okay. And I guess the follow-up on your discussion on the quarter share and the stop-loss, can you sort of expand on that – where what sort of layers it attaches to what point so that we can lengthens the number ourselves?

Yes. For competitive reasons, we don’t disclose all the details. I can tell you that our attachment point for stop-loss coverage is 100% loss ratio. Amit Kumar – Macquarie: Got it.

And our stop-loss coverage program, you can think of it this way, covers us out to one and 250-year events. So taking a look at the conditions today and foreseeing in our major – and also looking at further deterioration potentially in crop conditions including worst-case estimates for losses and our key premium space, we’re kind of taking that into account in our $0.50 guidance estimate, Amit. And if you were to ask me where we’d stress test worst-case scenarios, the most would be states like Illinois, Indiana, Kansas, Iowa, Missouri, those would be states where there are size for us and the hardest hit areas. I would say though also there are favorable conditions in some other fairly large states like North and South Dakota that we write business in too. So our $0.50 really in our change in guidance, it takes into account current conditions and further deterioration even to the point of worst-case stress testing in some of our big premium states. Amit Kumar – Macquarie: I agree with that comment that it’s too early and it’s still a mixed picture based on actual ground testing of the yields, if you head to the crop fields, it’s a very mixed scenario. The only other question I had and I would reach you after this is the $0.50 is the absolute worst-case scenario. As of today, what would be the number?

Well, I think, a mix, we really tried to reflect current conditions. And then also stress test considering our core share, our code share agreement and are stop loss coverage. So, $0.50 is our best estimate in both situations today. Amit Kumar – Macquarie: Okay. That’s helpful. I’ll stop here and I will re-queue. Thanks.

Your next question comes from Ron Bobman with Capital Returns Management Ron Bobman – Capital Returns Management: Craig and Carl, Keith is the most senior big company executive to be reading the disclaimer at the beginning of a call. Don’t you have anyone else on the staff at a lower pay grade that can do that?

I think it’s a good question, Ron. Ron Bobman – Capital Returns Management: And I guess it’s because Carl and Craig answer all the questions and so it’s your chance to get a word in any event. The other thing that’s been amazing to hear these investors and research analysts talk about crop like they spend their weekdays in the fields. I wonder if Matt’s ever been in the field in any event. Following upon the Matt’s, Carl, it sounds like candidly that given where crops are now and the degree of the drought, it sounds like you’re sort of indicating as it relates to your book that we’re at a worst-case in effect, that conditions are so poorly, we’re close to, again as it relates to your exposures net of reinsurance, at a worst-case. Am I sort of hearing that right?

Well, I think what you’re hearing is, we have again, we have court share reinsurance and we also have stop loss coverage. Think of it as buying cap coverage on your – similar to buying cap cover on your property exposures as (inaudible). I think what we’re saying is when you look at our programs that we’re projecting $0.50 under current conditions, which would reflect the latest net mill report I think which came out yesterday or I think it was either yesterday, or day before, also Monday’s USDA, so we’ve looked at that. Those are what we consider to be current conditions. And now we’ve also tried to stress test some of our big states to see where that would take us. And because of the quota share and our stop loss reinsurance, the answer is the same. Ron Bobman – Capital Returns Management: You’re basically there, your attached, I guess?

Again, I think we are covered through our reinsurance programs often to one and 250 year events. A lot of Bermuda insurers might be real comparable to covered on normal CAD exposures up to one and 100 and one and 200 net. They’re kind of similar I guess what we’re saying is based off of our reinsurance coverage, we’re comfortable that out to one and 250 your event that our estimate again, it’s early, there’s – until you really get the crops, you really don’t know, but just your best estimate. Ron Bobman – Capital Returns Management: Okay.

And Ron just, the risk of speaking when I’m not supposed to, I think the way our reinsurance programs are structured, there is a range in which we don’t have up or down because of the nature of the program has stabilized during that range, so that’s what we’re saying. Ron Bobman – Capital Returns Management: Understood. Would you – Carl or Keith or Craig, would you hazard a guess, presumably the take-up rate for crop insurance for farmers to purchase next year, will be greater, because of the developments this year, would you hazard a guess as to some metrics as to the increase in, what I’m calling take-up rates, the purchase of coverage?

I’d have to be honest with you. Now I guess I probably couldn’t do that at this point. Yeah, when you look at futures prices, yeah, we have kind of tried to brainstorm out what the premiums might look like in the 2013 year. There were some changes to the program that’s probably are a little bit negative two premiums, but future prices for corn, when you look into next year of a teeny bit. All in all we priced – there’s not some big huge updraft on premiums. That’s an interesting thing to think about. If you’re take-up rate improves, so that may be the driving factor for if there is some updraft in premiums.

May have higher interest – hit hard this year. Ron Bobman – Capital Returns Management: Say that again, Keith? Sorry?

I just said that farmers may have a higher interest – get hit harder this year. Ron Bobman – Capital Returns Management: Exactly.

At the point, there is a farm Bill, if there is less direct type of relief to farmers and the crop insurance program continues to be the core risk management tool for farmers, I suppose, that could be a positive too. And that could have an impact on the take-up rate. Ron Bobman – Capital Returns Management: Okay. Thanks for help, guys, and best of luck.

Thanks.

(Operator Instructions). The next question comes from Ryan Byrnes with Jean McQueeney. Ryan Byrnes – Jean McQueeney: Good afternoon everybody. I’m going to unfortunately ask some more crop questions to you. I guess quickly, with the stop loss attaching at 100% loss ratio, and it ultimately maxes out for group one state, say, at 194% because that’s when the government kind of takes, puts the entire bill, does your stop loss cover you the entire distance there between that 100 loss ratios and the 194 or is the stop loss I guess stayed away a certain number?

If the stop loss is not tied to what the Federal Government’s maximum is for coverage, so it does not run away to the top as Carl said, it starts in the 100. Ryan Byrnes – Jean McQueeney: Okay. Great. And then quickly for clarification, is the stop loss on a state-by-state basis or is it a national program?

National program. Ryan Byrnes – Jean McQueeney: Okay. Great. Thanks. And I think that was all I had, guys. Thanks for the answers.

Your next question comes from Jay Cohen, Bank of America. Jay Cohen – Bank of America: Yeah, couple questions. First, on the guidance, in the property and transportation segment, the premium guidance was for I guess down 3% to 7%, but you were up in the first half modestly. So it sounds like there was obviously a drop off in the second half. Does that relate to some of the timing issues of winter wheat or the plantings, when things were being planted? Why the drop off in the second half?

Primarily, Jay, as you stated, it’s a timing issue in the crop, because we recognized more premiums in the first couple of quarters than we normally would. Jay Cohen – Bank of America: Got it. Okay. Second question, can you give us an update on the workers comp line? You seemed to have some positive things to say about it. First time we’ve heard much positive out of that line in a while, so just give us an update on what you’re seeing from a pricing standpoint and a claims standpoint as well?

Sure. In California outlook the market clearly is firming. We got 8% price increase last year; we’re getting 5% price increase this year, though we did get 8% in second quarter. So we’re seeing gradual improvement this year in renewal retention, which is a positive sign for us. We feel our reserves are adequate in that business. The industry, I think, last year was 130. We’re public; we’d estimate it was around 114 on an accident year basis. This year, we’re still working on our – on things. So we think probably in the 108 to 110 action at year. Clearly need to get 10% plus. We need to get double-digit rate increase in order to get us to a 100 combined ratio, which at 3.5% investment return is about a 12.5% return. That kind of gives you an idea of the dynamics. So we’ve got – the good news is our California comp business is improving nicely, but we still got a little bit farther to go. Frequency and severity seem to be stable last couple years in that – on the higher deductible business; the other part of our business, which is written under the Great American brand, we’re seeing very nice growth as there’s been turmoil in the workers comp market. We’re getting nice price increases in that business, and we’re seeing some good opportunities there. Jay Cohen – Bank of America: That’s great.

That business is profitable. Jay Cohen – Bank of America: Thank you.

Your next question comes from Amit Kumar, Macquarie. Amit Kumar – Macquarie: Now, the armchair farmer is back. Just – I guess just a comment around clientele, we do have a commodity team here and they just concluded an actual tour of the group states and some of these pictures are very interesting, how much they vary from one farm to another. So that was the comment. I guess just going back to the broader discussion on pricing as it relates to the previous question. There is this debate that pricing acceleration might be slowing for the industry and it’s not sustainable going forward. I’m just curious, maybe responding to what you are seeing for – maybe for July in terms of pricing sustainability, and how do you even think about pricing for the remainder of 2012? Do you think you’ll be able to maintain? Or I guess, we’ll soon start hitting plateaus?

Yeah, I’d say this and I’m pleased with our trends. We did see some sequential improvement in our specialty casualty – sorry, specialty property and transportation, from the first quarter to the second quarter. Earlier from the fourth quarter to the first quarter to the second quarter. First-quarter up from 2% to 4%. Specialty casualty, both quarters were about a 4% increase. I think that we’re going to continue to see pricing traction for the rest of this year. And possibly – and probably into the next year, with interest rates continuing to be as low as they are, it just puts pressure on everyone in the business again, to make a decent underwriting profit in order to get any type of return on equity, business-by-business. So I think that’s the big driver is the low interest rates. And if anybody’s going to earn any decent return, we’re going to have to continue to move pricing. I think – whether pricing is flattening out or whether it sequentially improving, that’s not the big deal to make. The big deal to me is whether you have a continuation moving forward the rest of the year and into next year. And I think that with low interest rates, where they are, that you’re going to continue to see that. Amit Kumar – Macquarie: Got it. That’s helpful. And the only other question I had is, you mentioned in the opening remarks and in the press release regarding the long-term care book, can you just refresh us on what sort of numbers are we talking about, I guess that range, what we could possibly see going forward? Once you – I guess do the studies and look at the numbers? And I know it’s probably a book value impact, it’s not an earnings impact, but just refresh us as to what those numbers might have ended up being?

Craig, do you want to...

Sure. Amit, this is Craig. Amit Kumar – Macquarie: Okay.

First of all, it’s too early for us to know to have any real clarity as to what the number is, but let me give you guidance on a piece that I think will be probably the biggest piece of the charge. And that is related to investments yields, the reinvestment rates. This block is a very long duration block, so it is sensitive to reinvestment rates. The last time we did our analysis and put assumptions in place, the 10-year treasury was at 2%. So the 10-year treasury has declined. The yield has declined by about 50 basis points or so since we did the last analysis. What I can tell you is every 10 basis point change in investment yields in all future periods has about a $10 million impact. Amit Kumar – Macquarie: Okay. $10 million.

Yes. Now, EMNR is doing a study related to other things that could affect any ultimate charge, related to claims. It’s a very immature block. And we wanted to tap into EMNR’s experience to give us some advice as to what they’ve seen on claim side and collapsation and so forth. Amit Kumar – Macquarie: Got it. Okay. Thanks. That’s all I had. Thanks for the answers and good luck for the future.

Thank you.

Thank you.

Your next comes from Gabe Schwab, Maxim Group. Gabe Schwab – Maxim Group: Hi. Good morning, guys. Any thoughts on – you mentioned on the underwriting of the new debentures that there is a chance you might retire some of the ASP, any further thoughts on that?

What we have retired so far are the, – held in American Annuity Group name which became Great American Financial Resources. We continue to look to ones that are held in AFG, but they have not made any tentative at this point. Gabe Schwab – Maxim Group: Thank you.

And there are no further questions at this time. Are there any closing remarks?

No. Thank you. Special appreciation to you for joining us once again and we look forward to reporting to you after the end of the third quarter. Thank you and have a good day.