On February20, 2018, State Auto Financial Corporation (the "Company") issued a press release disclosing the Company’s results of operations for the three-month period and fiscal year ended December31, 2017 (the “Release"). The full text of the Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The Release included a non-GAAP financial measure, net income from operations per diluted share. Net income from operations differs from GAAP net income only by the exclusion of realized capital gains (losses), net of applicable taxes, on investment activity for the periods being reported. For the three-month periods ended December31, 2017 and 2016, GAAP net loss was $(0.14) per diluted share while net income was $0.77 per diluted share for the same respective period. Net loss from operations was $(0.46) per diluted share in 2017 while net income was $0.46 per diluted share for the same respective period. For the three-month periods ended December31, 2017 and 2016, realized capital gains, net of applicable taxes, impacted GAAP net (loss) income per diluted share by $0.32 and $0.31, respectively. For the fiscal years ended December31, 2017 and 2016, GAAP net loss was $(0.25) per diluted share while net income was $0.50 per diluted share for the same respective period. For the fiscal years ended December31, 2017 and 2016, net loss from operations per diluted share were $(1.26) and $(0.07), respectively. For the fiscal years ended December31, 2017 and 2016, realized capital gains, net of applicable taxes, impacted GAAP net (loss) income per diluted share by $1.01 and $0.57, respectively.

Management uses net income (loss) from operations because it believes this calculation better indicates the Company’s operating performance than GAAP net income (loss) in that net income (loss) from operations excludes the sometimes volatile realized capital gains/losses, net of applicable federal income taxes, that can produce inconsistent results.

State Auto Financial CORP Exhibit
EX-99.01 2 a2017year-endpressreleasex.htm PRESS RELEASE Exhibit State Auto Financial reports fourth quarter and year end 2017 results•Quarterly loss of $0.14 per share•Quarterly GAAP combined ratio of 100.9 •Return on equity of (1.2)% •Book value per share of $20.76 COLUMBUS,…
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About STATE AUTO FINANCIAL CORPORATION (NASDAQ:STFC)

State Auto Financial Corporation (State Auto Financial) is a property and casualty insurance holding company. The Company is engaged in writing personal, business and specialty insurance. Its segments include personal insurance, business insurance, specialty insurance and investment operations. Its personal insurance, business insurance and specialty insurance are known as insurance segments of the Company. It writes standard insurance covering personal exposures to individuals in the personal insurance segment. The Company writes insurance covering small-to-medium sized commercial exposures in the business insurance segment. The specialty insurance segment offers commercial coverages requiring product underwriting, claims handling and/or risk management services through a distribution channel of retail agents and wholesale brokers, which include program administrators and other sources. Its investment portfolio is managed by its subsidiary, Stateco Financial Services, Inc.