Income Taxes (Tables)

9 Months Ended

Sep. 30, 2020

Reconciliation of income taxes at the statutory rate and income taxes shown in the Statement of Earnings

The following is a reconciliation of income taxes at the statutory rate of 21% to the provision for income taxes as shown in AFG’s Statement of Earnings (dollars in millions):


	Three months ended September 30,								Nine months ended September 30,
	2020				2019				2020				2019
	Amount		% of EBT		Amount		% of EBT		Amount		% of EBT		Amount		% of EBT
Earnings (loss) before income taxes (“EBT”)	$	134			$	177			$	(36)			$	849

Income taxes at statutory rate	$	28	21	%	$	37	21	%	$	(8)	21	%	$	178	21	%
Effect of:
Pending sale of Neon	(73)		(54	%)	—		—	%	(73)		203	%	—		—	%
Tax exempt interest	(3)		(2	%)	(4)		(2	%)	(9)		25	%	(11)		(1	%)
Stock-based compensation	—		—	%	(2)		(1	%)	(4)		11	%	(6)		(1	%)
Dividends received deduction	(1)		(1	%)	(1)		(1	%)	(2)		6	%	(3)		—	%
Adjustment to prior year taxes	(1)		(1	%)	(3)		(2	%)	(1)		3	%	(3)		—	%
Employee Stock Ownership Plan dividends paid deduction	(1)		(1	%)	—		—	%	(1)		3	%	(1)		—	%
Change in valuation allowance	20		15	%	4		2	%	31		(86	%)	7		1	%
Nondeductible expenses	2		1	%	2		1	%	4		(11	%)	6		1	%

Foreign operations	(4)		(3	%)	—		—	%	(3)		8	%	—		—	%
Other	3		3	%	1		1	%	3		(8	%)	4		(1	%)
Provision (credit) for income taxes as shown in the statement of earnings	$	(30)	(22	%)	$	34	19	%	$	(63)	175	%	$	171	20	%