Cincinnati Financial 10-K 2020-12-31

Filed 2021-02-25. 1 sections, 871K characters. Original on sec.gov · Markdown · JSON

What changed since the 2019-12-31 10-KNew, removed and reworded risk factor headings, then every item sentence by sentence.

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United States Securities and Exchange Commission

Washington, D.C. 20549

Form 10-K

☑ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended December 31, 2020.

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from _____________________ to _____________________.

Commission file number 000-04604

Cincinnati Financial Corporation

(Exact name of registrant as specified in its charter)

Ohio31-0746871
(State of incorporation)(I.R.S. Employer Identification No.)

6200 S. Gilmore Road

Fairfield, Ohio 45014-5141

(Address of principal executive offices) (Zip Code)

(513) 870-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $2.00 parCINFNasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 if Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Cincinnati Financial Corporation - 2020 10-K - Page 1

Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The aggregate market value of voting stock held by nonaffiliates of the Registrant based on the closing price of $64.03 per share as reported on Nasdaq Global Select Market on June 30, 2020, was $9,621,748,017.

As of February 19, 2021, there were 161,201,922 shares of common stock outstanding.

Document Incorporated by Reference

Portions of the definitive Proxy Statement for Cincinnati Financial Corporation’s Annual Meeting of Shareholders to be held on May 8, 2021, are incorporated by reference into Part III of this Form 10-K.

Cincinnati Financial Corporation - 2020 10-K - Page 2

2020 A****NNUAL R****EPORT ON F****ORM 10-K

T****ABLE OF C****ONTENTS

Part I4
Item 1.Business4
Cincinnati Financial Corporation – Introduction4
Our Business and Our Strategy5
Our Segments16
Other29
Regulation30
Item 1A.Risk Factors34
Item 1B.Unresolved Staff Comments45
Item 2.Properties45
Item 3.Legal Proceedings45
Item 4.Mine Safety Disclosures45
Part II46
Item 5.Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities46
Item 6Selected Financial Data48
Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations49
Introduction49
Executive Summary50
Critical Accounting Estimates56
Recent Accounting Pronouncements63
Financial Results64
Liquidity and Capital Resources99
Safe Harbor Statement115
Item 7A.Quantitative and Qualitative Disclosures About Market Risk118
Item 8.Financial Statements and Supplementary Data124
Responsibility for Financial Statements124
Management’s Annual Report on Internal Control Over Financial Reporting125
Report of Independent Registered Public Accounting Firm126
Consolidated Balance Sheets128
Consolidated Statements of Income129
Consolidated Statements of Comprehensive Income130
Consolidated Statements of Shareholders’ Equity131
Consolidated Statements of Cash Flows[132](#i9e7c265e17224890b9ef13144

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