Company Restructuring

9 Months Ended

Sep. 30, 2014

Company Restructuring

Company Restructuring

11.  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 $3 million and $13 million during the three months ended September 30, 2014 and 2013, respectively, and $13 million and $59 million during the nine months ended September 30, 2014 and 2013, respectively.

The following table presents changes in the restructuring liability during the nine months ended September 30, 2014.

($ in millions)		Employee costs		Exit costs		Total liability
Balance as of December 31, 2013	$	21	$	3	$	24
Expense incurred		3		1		4
Adjustments to liability		(5)		1		(4)
Payments applied against liability		(12)		(3)		(15)
Balance as of September 30, 2014	$	7	$	2	$	9

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 September 30, 2014, the cumulative amount incurred to date for active programs totaled $93 million for employee costs and $56 million for exit costs.