Company Restructuring

6 Months Ended

Jun. 30, 2012

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.  The expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges, and totaled $10 million and $11 million during the three months ended June 30, 2012 and 2011, respectively, and $16 million and $20 million during the six months ended June 30, 2012 and 2011, respectively.

The following table presents changes in the restructuring liability during the six months ended June 30, 2012.

($ in millions)		Employee costs			Exit costs			Total liability
Balance as of December 31, 2011	$	5		$	5		$	10
Expense incurred		2			3			5
Payments applied against liability		(5	)		(3	)		(8	)
Balance as of June 30, 2012	$	2		$	5		$	7

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, 2012, the cumulative amount incurred to date for active programs totaled $77 million for employee costs and $49 million for exit costs.