Company Restructuring

6 Months Ended

Jun. 30, 2011

Company Restructuring

Company Restructuring

9.  Company Restructuring

The Company undertakes various programs to reduce expenses.  These programs generally involve a reduction in staffing levels, and in certain cases, office closures.  Restructuring and related charges include employee termination and relocation benefits, and post-exit rent expenses in connection with these programs, and non-cash charges resulting from pension benefit payments made to agents in connection with the 1999 reorganization of Allstate’s multiple agency programs to a single exclusive agency program.  In the six months ended June 30, 2011, restructuring programs primarily relate to Allstate Protection’s field claim office consolidations and reorganization of technology shared services.  The expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges, and totaled $11 million and $13 million during the three months ended June 30, 2011 and 2010, respectively, and $20 million and $24 million for the six months ended June 30, 2011 and 2010, respectively.

The following table presents changes in the restructuring liability during the six months ended June 30, 2011.

($ in millions)		Employee costs		Exit costs		Total liability
Balance as of December 31, 2010	$	13	$	3	$	16
Expense incurred		14		5		19
Adjustments to liability		(9)		--		(9)
Payments applied against liability		(9)		(2)		(11)
Balance as of June 30, 2011	$	9	$	6	$	15

The payments applied against the liability for employee costs primarily reflect severance costs, and the payments for exit costs generally consist of post-exit rent expenses and contract termination penalties.  As of June 30, 2011, the cumulative amount incurred to date for active programs totaled $103 million for employee costs and $45 million for exit costs.