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ALL > SEC Filings for ALL > Form 10-Q on 30-Oct-2013All Recent SEC Filings

Show all filings for ALLSTATE CORP

Form 10-Q for ALLSTATE CORP


30-Oct-2013

Quarterly Report


Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30,
2013 AND 2012

OVERVIEW

The following discussion highlights significant factors influencing the consolidated financial position and results of operations of The Allstate Corporation (referred to in this document as "we," "our," "us," the "Company" or "Allstate"). It should be read in conjunction with the condensed consolidated financial statements and notes thereto found under Part I. Item 1. contained herein, and with the discussion, analysis, consolidated financial statements and notes thereto in Part I. Item 1. and Part II. Item 7. and Item 8. of The Allstate Corporation Annual Report on Form 10-K for 2012. Further analysis of our insurance segments is provided in the Property-Liability Operations (which includes the Allstate Protection and the Discontinued Lines and Coverages segments) and in the Allstate Financial Segment sections of Management's Discussion and Analysis ("MD&A"). The segments are consistent with the way in which we use financial information to evaluate business performance and to determine the allocation of resources.

Allstate is focused on the following priorities:

grow insurance premiums;

maintain auto profitability;

raise returns in homeowners and annuity businesses;

proactively manage investments; and

reduce our cost structure.

HIGHLIGHTS

Consolidated net income available to common shareholders was $310 million in the third quarter of 2013 compared to $723 million in the third quarter of 2012, and $1.45 billion in the first nine months of 2013 compared to $1.91 billion in the first nine months of 2012. Net income available to common shareholders per diluted common share was $0.66 in the third quarter of 2013 compared to $1.48 in the third quarter of 2012, and $3.07 in the first nine months of 2013 compared to $3.86 in the first nine months of 2012.

Property-Liability net income available to common shareholders was $656 million in the third quarter of 2013 compared to $639 million in the third quarter of 2012, and $1.89 billion in the first nine months of 2013 compared to $1.69 billion in the first nine months of 2012.

The Property-Liability combined ratio was 90.0 in the third quarter of 2013 compared to 90.2 in the third quarter of 2012 and 93.1 in the first nine months of 2013 compared to 93.4 in the first nine months of 2012.

Allstate Financial net loss available to common shareholders was $360 million in the third quarter of 2013 and $24 million in the first nine months of 2013 compared to net income available to common shareholders of $131 million in the third quarter of 2012 and $375 million in the first nine months of 2012.

On July 17, 2013, we entered into a definitive agreement with Resolution Life Holdings, Inc. to sell Lincoln Benefit Life Company ("LBL"), LBL's life insurance business generated through independent master brokerage agencies, and all of LBL's deferred fixed annuity and long-term care insurance business for $600 million subject to certain adjustments as of the closing date. The estimated loss on disposition of $475 million, after-tax, was recorded in third quarter 2013.

Total revenues were $8.47 billion in the third quarter of 2013 compared to $8.13 billion in the third quarter of 2012, and $25.72 billion in the first nine months of 2013 compared to $24.77 billion in the first nine months of 2012.

Property-Liability premiums earned totaled $6.97 billion in the third quarter of 2013, an increase of 4.1% from $6.70 billion in the third quarter of 2012, and $20.60 billion in the first nine months of 2013, an increase of 3.1% from $19.99 billion in the first nine months of 2012.

Investments totaled $80.48 billion as of September 30, 2013, decreasing from $97.28 billion as of December 31, 2012. Investments classified as held for sale totaled $12.24 billion as of September 30, 2013. Net investment income was $950 million in the third quarter 2013, an increase of 1.1% from $940 million in the third quarter of 2012, and $2.92 billion in the first nine months of 2013, a decrease of 2.0% from $2.98 billion in the first nine months of 2012.

Net realized capital losses were $41 million in the third quarter of 2013 compared to $72 million in the third quarter of 2012, and net realized capital gains were $452 million in the first nine months of 2013 compared to $123 million in the first nine months of 2012.

On August 8, 2013, we issued $800 million of 5.75% Fixed-to-Floating Rate Subordinated Debentures due 2053.


On September 30, 2013, we issued 15,400 shares of 6.75% Noncumulative Perpetual Preferred Stock for gross proceeds of $385 million.

Book value per diluted common share (ratio of common shareholders' equity to total common shares outstanding and dilutive potential common shares outstanding) was $43.49 as of September 30, 2013, an increase of 2.0% from $42.64 as of September 30, 2012 and an increase of 2.6% from $42.39 as of December 31, 2012.

For the twelve months ended September 30, 2013, return on the average of beginning and ending period common shareholders' equity was 9.0%, a decrease of 4.6 points from 13.6% for the twelve months ended September 30, 2012.

As of September 30, 2013, shareholders' equity was $20.78 billion. This total included $2.83 billion in deployable assets at the parent holding company level.

In July 2013, we announced changes to our employee pension and other postretirement benefit offerings. The pension and other postretirement benefit obligations were remeasured in third quarter 2013 resulting in a net $69 million increase to net income and a $658 million increase to accumulated other comprehensive income.

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