Income Taxes

3 Months Ended

Mar. 31, 2021

The following is a reconciliation of income taxes on continuing operations 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 March 31,
		2021	2020
			Amount		% of EBT		Amount		% of EBT
Earnings (loss) from continuing operations before income taxes (“EBT”)			$	335			$	(185)

Income taxes at statutory rate			$	70	21	%	$	(39)	21	%
Effect of:

Tax exempt interest			(2)		(1	%)	(2)		1	%
Stock-based compensation			(2)		(1	%)	(3)		2	%
Dividends received deduction			—		—	%	(1)		1	%


Foreign operations			(1)		—	%	1		(1	%)
Nondeductible expenses			2		1	%	1		(1	%)
Change in valuation allowance			—		—	%	2		(1	%)

Other			1		—	%	—		—	%
Provision (credit) for income taxes as shown in the statement of earnings			$	68	20	%	$	(41)	22	%

Approximately $27 million of AFG’s net operating loss carryforwards (“NOL”) subject to separate return limitation year (“SRLY”) tax rules will expire unutilized at December 31, 2021. Since AFG maintains a full valuation allowance against its SRLY NOLs, the expiration of these loss carryforwards will be offset by a corresponding reduction in the valuation allowance and will have no overall impact on AFG’s income tax expense or results of operations.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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