Supplemental Cash Flow Information

Non-cash investing activities include $43 million, $51 million and $117 million related to mergers and exchanges completed with equity securities, fixed income securities and limited partnerships, and modifications of certain mortgage loans and other investments in 2018, 2017 and 2016, respectively. Non-cash financing activities also included $34 million related to debt acquired in conjunction with the purchase of an investment in 2016.

The Company had two non-cash financing activities related to surplus note transactions. 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 extinguished. 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.

Liabilities for collateral received in conjunction with the Company’s securities lending program were $517 million, $539 million and $545 million as of December 31, 2018, 2017 and 2016, respectively, and are reported in other liabilities and accrued expenses. Obligations to return cash collateral for over-the-counter (“OTC”) and cleared derivatives were $8 million, $3 million and $5 million as of December 31, 2018, 2017 and 2016, 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)	2018			2017			2016
Net change in proceeds managed
Net change in fixed income securities	$	94		$	149		$	(277	)
Net change in short-term investments	(77		)	(142		)	277
Operating cash flow provided	17			7			—
Net change in cash	—			1			—
Net change in proceeds managed	$	17		$	8		$	—

Net change in liabilities
Liabilities for collateral, beginning of year	$	(542	)	$	(550	)	$	(550	)
Liabilities for collateral, end of year	(525		)	(542		)	(550		)
Operating cash flow (used) provided	$	(17	)	$	(8	)	$	—