THE ALLSTATE CORPORATION AND SUBSIDIARIES

SCHEDULE II —

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

STATEMENTS OF OPERATIONS



($ in millions)	Year Ended December 31,
	2015			2014			2013
Revenues
Investment income, less investment expense	$	8		$	3		$	3
Other income	66			67			42
	74			70			45

Expenses
Interest expense	292			321			366
Loss on extinguishment of debt	—			1			491
Pension and other postretirement benefit expense	(15		)	41			(184		)
Other operating expenses	34			38			30
	311			401			703

Loss from operations before income tax benefit and equity in net income of subsidiaries	(237		)	(331		)	(658		)

Income tax benefit	(108		)	(142		)	(251		)
Loss before equity in net income of subsidiaries	(129		)	(189		)	(407		)

Equity in net income of subsidiaries	2,300			3,039			2,687
Net income	2,171			2,850			2,280

Preferred stock dividends	116			104			17

Net income applicable to common shareholders	2,055			2,746			2,263

Other comprehensive (loss) income, after-tax
Changes in:
Unrealized net capital gains and losses	(1,306		)	280			(1,188		)
Unrealized foreign currency translation adjustments	(58		)	(40		)	(32		)
Unrecognized pension and other postretirement benefit cost	48			(725		)	1,091
Other comprehensive loss, after-tax	(1,316		)	(485		)	(129		)
Comprehensive income	$	855		$	2,365		$	2,151

See accompanying notes to condensed financial information and notes to consolidated financial statements.

THE ALLSTATE CORPORATION AND SUBSIDIARIES

SCHEDULE II (CONTINUED) —

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

STATEMENTS OF FINANCIAL POSITION



($ in millions, except par value data)	December 31,
	2015			2014
Assets
Investments in subsidiaries	$	25,047		$	26,362
Fixed income securities, at fair value (amortized cost $485 and $878)	485			880
Short-term investments, at fair value (amortized cost $277 and $673)	277			673
Cash	4			155
Receivable from subsidiaries	339			342
Deferred income taxes	302			352
Other assets	133			167
Total assets	$	26,587		$	28,931

Liabilities
Long-term debt	$	5,124		$	5,140
Pension and other postretirement benefit obligations	948			977
Deferred compensation	259			263
Dividends payable to shareholders	150			155
Deferred income taxes	—			—
Other liabilities	81			92
Total liabilities	6,562			6,627

Shareholders’ equity
Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 72.2 thousand issued and outstanding, and $1,805 aggregate liquidation preference	1,746			1,746
Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 381 million and 418 million shares outstanding	9			9
Additional capital paid-in	3,245			3,199
Retained income	39,413			37,842
Deferred ESOP expense	(13		)	(23		)
Treasury stock, at cost (519 million and 482 million shares)	(23,620		)	(21,030		)
Accumulated other comprehensive income:
Unrealized net capital gains and losses	620			1,926
Unrealized foreign currency translation adjustments	(60		)	(2		)
Unrealized pension and other postretirement benefit cost	(1,315		)	(1,363		)
Total accumulated other comprehensive (loss) income	(755		)	561
Total shareholders’ equity	20,025			22,304
Total liabilities and shareholders’ equity	$	26,587		$	28,931

See accompanying notes to condensed financial information and notes to consolidated financial statements.

THE ALLSTATE CORPORATION AND SUBSIDIARIES

SCHEDULE II (CONTINUED) —

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

STATEMENTS OF CASH FLOWS



($ in millions)	Year Ended December 31,
	2015			2014			2013
Cash flows from operating activities
Net income	$	2,171		$	2,850		$	2,280
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net income of subsidiaries	(2,300		)	(3,039		)	(2,687		)
Dividends received from subsidiaries	2,300			2,497			1,992
Loss on extinguishment of debt	—			1			491
Changes in:
Pension and other postretirement benefits	(15		)	41			(184		)
Income taxes	77			(158		)	113
Operating assets and liabilities	26			(29		)	25
Net cash provided by operating activities	2,259			2,163			2,030

Cash flows from investing activities
Proceeds from sales of investments	399			351			—
Investment purchases	(4		)	(1,174		)	(156		)
Investment collections	—			155			200
Return of capital from subsidiaries	50			1,200			37
Change in short-term investments, net	397			(88		)	(450		)
Net cash provided by (used in) investing activities	842			444			(369		)

Cash flows from financing activities
Proceeds from issuance of long-term debt	—			—			2,271
Repayment of long-term debt	(20		)	(962		)	(2,627		)
Proceeds from issuance of preferred stock	—			965			781
Dividends paid on common stock	(483		)	(477		)	(352		)
Dividends paid on preferred stock	(116		)	(87		)	(6		)
Treasury stock purchases	(2,808		)	(2,301		)	(1,834		)
Shares reissued under equity incentive plans, net	130			266			170
Excess tax benefits on share-based payment arrangements	45			41			38
Other	—			(2		)	(1		)
Net cash used in financing activities	(3,252		)	(2,557		)	(1,560		)

Net (decrease) increase in cash	(151		)	50			101
Cash at beginning of year	155			105			4
Cash at end of year	$	4		$	155		$	105

See accompanying notes to condensed financial information and notes to consolidated financial statements.

THE ALLSTATE CORPORATION AND SUBSIDIARIES

SCHEDULE II (CONTINUED) —

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

NOTES TO CONDENSED FINANCIAL INFORMATION

1. General

The financial statements of the Registrant should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8. The long-term debt presented in Note 12 “Capital Structure” are direct obligations of the Registrant. A majority of the pension and other postretirement benefits plans presented in Note 17 “Benefit Plans” are direct obligations of the Registrant.

Participating subsidiaries fund the pension plans contributions under a master services cost sharing agreement. In addition, as a result of joint and several pension liability rules under the Internal Revenue Code and the Employee Retirement Income Security Act of 1974, as amended, many liabilities that arise in connection with pension plans are joint and several across all members of a controlled group of entities.

2. Supplemental Disclosures of Cash Flow Information

The Registrant paid $289 million, $332 million and $359 million of interest on debt in 2015, 2014 and 2013, respectively.