Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

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 June 30,								Six months ended June 30,
	2021				2020				2021				2020
	Amount		% of EBT		Amount		% of EBT		Amount		% of EBT		Amount		% of EBT
Earnings (loss) from continuing operations before income taxes (“EBT”)	$	288			$	140			$	623			$	(45)
Income taxes at statutory rate	$	61	21	%	$	30	21	%	$	131	21	%	$	(9)	21	%
Effect of:
Stock-based compensation	(8)		(3	%)	—		—	%	(10)		(2	%)	(3)		7	%
Employee stock ownership plan dividend paid deduction	(8)		(3	%)	—		—	%	(8)		(1	%)	—		—	%
Tax exempt interest	(2)		(1	%)	(3)		(2	%)	(4)		(1	%)	(5)		11	%
Dividends received deduction	(1)		—	%	—		—	%	(1)		—	%	(1)		2	%
Foreign operations	(1)		—	%	—		—	%	(2)		—	%	1		(2	%)
Nondeductible expenses	2		1	%	1		1	%	4		1	%	2		(4	%)
Change in valuation allowance	3		1	%	9		6	%	3		—	%	11		(25	%)
Other	2		1	%	—		—	%	3		1	%	—		(1	%)
Provision (credit) for income taxes as shown in the statement of earnings	$	48	17	%	$	37	26	%	$	116	19	%	$	(4)	9	%

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.