Company Restructuring

6 Months Ended

Jun. 30, 2013

10. 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 $20 million and $10 million during the three months ended June 30, 2013 and 2012, respectively, and $46 million and $16 million during the six months ended June 30, 2013 and 2012, respectively. Restructuring and related charges in the three months and six months ended June 30, 2013 primarily related to the technology organization, which is fundamentally changing its organizational structure leveraging centralization, global sourcing, automation and changes to oversight to meet contemporary business needs; consolidation of certain call centers; and consolidation of certain Protection claim offices that serve Encompass customers.

The following table presents changes in the restructuring liability during the six months ended June 30, 2013.

($ in millions)		Employee costs			Exit costs			Total liability
Balance as of December 31, 2012	$	6		$	3		$	9
Expense incurred		34			3			37
Payments applied against liability		(6	)		(3	)		(9	)
Balance as of June 30, 2013	$	34		$	3		$	37

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, 2013, the cumulative amount incurred to date for active programs totaled $106 million for employee costs and $52 million for exit costs.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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