Company: AFGC
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001042046-25-000011
Chunk: 170

Company: AMERICAN FINANCIAL GROUP INC
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 170
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c) 230 Interest charges on borrowed money and other expenses340 — — 340 Total costs and expenses5,687 265 (35)5,917 Earnings before income taxes1,123 1 (1)1,123 Provision for income taxes225 — — 225 Net earnings$898 $1 $(1)$898 

(a)Includes a loss of $10 million representing the change in fair value of AFG’s CLO investments and $17 million of income in CLO management fees earned.

(b)Elimination of the change in fair value of AFG’s investments in the CLOs, including $18 million in distributions recorded as interest expense by the CLOs.

(c)Elimination of management fees earned by AFG.

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.

47

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 December 31,Year ended December 31,20242023202420232022Components of net earnings:Core operating earnings before income taxes$330 $304 $1,138 $1,127 $1,248 Pretax non-core items:Realized gains (losses) on securities(10)31 — (36)(116)Realized loss on subsidiary— — — (4)— Special A&E charges— — (14)(15)— Gain (loss) on retirement of debt— — — 1 (9)Other— — — — — Earnings before income taxes320 335 1,124 1,073 1,123