Supplemental Cash Flow Information

Non-cash investing activities include $51 million, $117 million and $96 million related to mergers and exchanges completed with equity securities and modifications of certain mortgage loans, fixed income securities and other investments in 2017, 2016 and 2015, respectively, and a $44 million obligation to fund a limited partnership investment in 2015. Non-cash financing activities also include $34 million related to debt acquired in conjunction with the purchase of an investment in 2016.

In 2017, the Company redeemed $325 million of surplus notes due to Kennett Capital, Inc. (“Kennett”), an unconsolidated affiliate of ALIC. In connection with the redemption, the related $325 million of notes due from Kennett (recorded as other investments) were terminated. In 2016, the Company transferred to Kennett a $50 million surplus note issued by a consolidated subsidiary in exchange for a note receivable with a principal sum equal to that of the surplus note. In 2015, the Company paid dividends to AIC of $103 million, including $86 million in the form of investment securities.

Liabilities for collateral received in conjunction with the Company’s securities lending program were $539 million, $545 million and $539 million as of December 31, 2017, 2016 and 2015, respectively, and are reported in other liabilities and accrued expenses. Obligations to return cash collateral for over-the-counter (“OTC”) and cleared derivatives were $3 million, $5 million and $11 million as of December 31, 2017, 2016 and 2015, respectively, and are reported in other liabilities and accrued expenses or other investments. The accompanying cash flows are included in cash flows from operating activities in the Consolidated Statements of Cash Flows along with the activities resulting from management of the proceeds, which for the years ended December 31 are as follows:



($ in millions)	2017			2016			2015
Net change in proceeds managed
Net change in fixed income securities	$	149		$	(277	)	$	—
Net change in short-term investments	(142		)	277			(41		)
Operating cash flow provided (used)	7			—			(41		)
Net change in cash	1			—			1
Net change in proceeds managed	$	8		$	—		$	(40	)

Net change in liabilities
Liabilities for collateral, beginning of year	$	(550	)	$	(550	)	$	(510	)
Liabilities for collateral, end of year	(542		)	(550		)	(550		)
Operating cash flow (used) provided	$	(8	)	$	—		$	40