Income Taxes

The following is a reconciliation of income taxes at the statutory rate of 35% to the provision for income taxes as shown in the Statement of Earnings (dollars in millions):



	Three months ended September 30,										Nine months ended September 30,
	2015					2014					2015					2014
	Amount			% of EBT		Amount			% of EBT		Amount			% of EBT		Amount			% of EBT
Earnings before income taxes (“EBT”)	$	99				$	145				$	355				$	436

Income taxes at statutory rate	$	34		35	%	$	51		35	%	$	124		35	%	$	153		35	%
Effect of:
Tax exempt interest	(6		)	(6	%)	(6		)	(4	%)	(20		)	(6	%)	(18		)	(4	%)
Change in valuation allowance	8			8	%	(1		)	(1	%)	8			2	%	2			1	%
Losses of managed investment entities	—			—	%	10			7	%	—			—	%	16			4	%
Subsidiaries not in AFG’s tax return	—			—	%	1			1	%	2			1	%	—			—	%
Other	(3		)	(4	%)	(1		)	(1	%)	1			—	%	2			—	%
Provision for income taxes as shown in the Statement of Earnings	$	33		33	%	$	54		37	%	$	115		32	%	$	155		36	%

During the first nine months of 2015, there were no material changes to AFG’s liability for uncertain tax positions.