Company: AFGC
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001042046-25-000020
Chunk: 119

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 2
Chunk 119
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(1)304 Provision for income taxes62 — — 62 Net earnings$242 $1 $(1)$242 

(a)Includes income of $2 million in the first three months of 2025 and $14 million in the first three months of 2024, representing the change in fair value of AFG’s CLO investments and $3 million in both the first three months of 2025 and 2024, in CLO management fees earned.

(b)Elimination of the change in fair value of AFG’s investments in the CLOs, including $8 million and $9 million in the first three months of 2025 and 2024, respectively, in distributions recorded as interest expense by the CLOs.

(c)Elimination of management fees earned by AFG.

37

Table of ContentsAMERICAN FINANCIAL GROUP, INC. 10-QManagement’s Discussion and Analysis of Financial Condition and Results of Operations — Continued

RESULTS OF OPERATIONS

General

AFG’s net earnings, determined in accordance with GAAP, include certain items that may not be indicative of its ongoing core operations. Core net operating earnings excludes realized gains (losses) on securities because such gains and losses are influenced significantly by financial markets, interest rates and the timing of sales. In addition, special charges related to coverage that AFG no longer writes, such as asbestos and environmental exposures, are excluded from core earnings.

The following table (in millions, except per share amounts) identifies non-core items and reconciles net earnings to core net operating earnings, a non-GAAP financial measure. AFG believes core net operating earnings is a useful tool for investors and analysts in analyzing ongoing operating trends and for management to evaluate financial performance against historical results because it believes this provides a more comparable measure of its continuing business.

Three months ended March 31,20252024Components of net earnings:Core operating earnings before income taxes$194 $290 Pretax non-core item:Realized gains on securities3 14 Earnings before income taxes197 304 Provision for income taxes:Core operating earnings42 59 Non-core item:Realized gains on securities1 3 Total provision for income taxes43 62 Net earnings$154 $242 Net earnings:Core net operating earnings$152 $231 Realized gains on securities2 11 Net earnings$154 $242 Diluted