10-Q 1 a14-14618_110q.htm 10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 10-Q

 

/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2014

 

OR

 

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______ to ______

 

Commission file number 1-11840

 

THE ALLSTATE CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

36-3871531

 

 

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

2775 Sanders Road, Northbrook, Illinois

60062

 

 

(Address of principal executive offices)

(Zip Code)

 

 

(847) 402-5000

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

 

Yes   X  

No ___

 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

 

Yes   X  

No ___

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,”  “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

  X  

Accelerated filer

____

 

 

 

 

Non-accelerated filer

        (Do not check if a smaller reporting company)

Smaller reporting company

____

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

 

Yes        

No   X  

 

 

As of July 16, 2014, the registrant had 433,400,209 common shares, $.01 par value, outstanding.

 



 

THE ALLSTATE CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

June 30, 2014

 

PART I

FINANCIAL INFORMATION

PAGE

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Condensed Consolidated Statements of Operations for the Three-Month and Six-Month Periods Ended June 30, 2014 and 2013 (unaudited)

1

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the Three-Month and Six-Month Periods Ended June 30, 2014 and 2013 (unaudited)

2

 

 

 

 

Condensed Consolidated Statements of Financial Position as of June 30, 2014 (unaudited) and December 31, 2013

3

 

 

 

 

Condensed Consolidated Statements of Shareholders’ Equity for the Six-Month Periods Ended June 30, 2014 and 2013 (unaudited)

4

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Six-Month Periods Ended June 30, 2014 and 2013 (unaudited)

5

 

 

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

6

 

 

 

 

Report of Independent Registered Public Accounting Firm

48

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

 

 

  Highlights

49

 

  Consolidated Net Income

50

 

  Property-Liability Highlights

51

 

  Allstate Protection Segment

54

 

  Discontinued Lines and Coverages Segment

66

 

  Property-Liability Investment Results

67

 

  Allstate Financial Highlights

68

 

  Allstate Financial Segment

68

 

  Investments Highlights

76

 

  Investments

76

 

  Capital Resources and Liquidity Highlights

83

 

  Capital Resources and Liquidity

83

 

 

 

Item 4.

Controls and Procedures

87

 

 

 

PART II

OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

88

 

 

 

Item 1A.

Risk Factors

88

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

89

 

 

 

Item 6.

Exhibits

89

 



 

PART I.  FINANCIAL INFORMATION

 

ITEM I.  FINANCIAL INFORMATION

 

THE ALLSTATE CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

($ in millions, except per share data)

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

(unaudited)

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Property-liability insurance premiums

$

7,204

 

$

6,862

 

$

14,268

 

$

13,632

 

Life and annuity premiums and contract charges

 

518

 

 

579

 

 

1,125

 

 

1,158

 

Net investment income

 

898

 

 

984

 

 

1,857

 

 

1,967

 

Realized capital gains and losses:

 

 

 

 

 

 

 

 

 

 

 

 

Total other-than-temporary impairment losses

 

(44

)

 

(55

)

 

(124

)

 

(82

)

Portion of loss recognized in other comprehensive income

 

(1

)

 

(5

)

 

(2

)

 

(15

)

Net other-than-temporary impairment losses recognized in earnings

 

(45

)

 

(60

)

 

(126

)

 

(97

)

Sales and other realized capital gains and losses

 

285

 

 

422

 

 

420

 

 

590

 

Total realized capital gains and losses

 

240

 

 

362

 

 

294

 

 

493

 

 

 

8,860

 

 

8,787

 

 

17,544

 

 

17,250

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

Property-liability insurance claims and claims expense

 

5,142

 

 

4,741

 

 

9,901

 

 

9,201

 

Life and annuity contract benefits

 

413

 

 

471

 

 

901

 

 

929

 

Interest credited to contractholder funds

 

212

 

 

311

 

 

519

 

 

656

 

Amortization of deferred policy acquisition costs

 

1,035

 

 

961

 

 

2,070

 

 

1,907

 

Operating costs and expenses

 

1,023

 

 

1,090

 

 

2,117

 

 

2,192

 

Restructuring and related charges

 

4

 

 

20

 

 

10

 

 

46

 

Loss on extinguishment of debt

 

1

 

 

480

 

 

1

 

 

480

 

Interest expense

 

84

 

 

99

 

 

171

 

 

197

 

 

 

7,914

 

 

8,173

 

 

15,690

 

 

15,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on disposition of operations

 

9

 

 

--

 

 

(50

)

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations before income tax expense

 

955

 

 

614

 

 

1,804

 

 

1,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

310

 

 

180

 

 

559

 

 

501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

645

 

 

434

 

 

1,245

 

 

1,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock dividends

 

31

 

 

--

 

 

44

 

 

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders

$

614

 

$

434

 

$

1,201

 

$

1,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders per common share - Basic

$

1.41

 

$

0.93

 

$

2.73

 

$

2.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - Basic

 

434.3

 

 

468.3

 

 

440.4

 

 

471.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders per common share - Diluted

$

1.39

 

$

0.92

 

$

2.69

 

$

2.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - Diluted

 

440.7

 

 

473.8

 

 

446.8

 

 

477.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

$

0.28

 

$

0.25

 

$

0.56

 

$

0.50

 

 

See notes to condensed consolidated financial statements.

 

1



 

THE ALLSTATE CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

($ in millions)

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

2014

 

2013

 

2014

 

2013

 

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

645

 

$

434

 

$

1,245

 

$

1,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), after-tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized net capital gains and losses

 

59

 

 

(1,254

)

 

504

 

 

(1,183

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized foreign currency translation adjustments

 

13

 

 

(21

)

 

(3

)

 

(33

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrecognized pension and other postretirement benefit cost

 

8

 

 

46

 

 

19

 

 

91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), after-tax

 

80

 

 

(1,229

)

 

520

 

 

(1,125

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss)

$

725

 

$

(795

)

$

1,765

 

$

18

 

 

See notes to condensed consolidated financial statements.

 

2



 

THE ALLSTATE CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

($ in millions, except par value data)

 

June 30,
2014

 

December 31,
2013

 

 

 

 

 

 

Assets

 

(unaudited)

 

 

 

Investments

 

 

 

 

 

 

Fixed income securities, at fair value (amortized cost $59,447 and $59,008)

$

62,634

 

$

60,910

 

Equity securities, at fair value (cost $4,658 and $4,473)

 

5,394

 

 

5,097

 

Mortgage loans

 

4,174

 

 

4,721

 

Limited partnership interests

 

4,309

 

 

4,967

 

Short-term, at fair value (amortized cost $2,914 and $2,393)

 

2,914

 

 

2,393

 

Other

 

3,138

 

 

3,067

 

Total investments

 

82,563

 

 

81,155

 

Cash

 

889

 

 

675

 

Premium installment receivables, net

 

5,384

 

 

5,237

 

Deferred policy acquisition costs

 

3,377

 

 

3,372

 

Reinsurance recoverables, net

 

7,500

 

 

7,621

 

Accrued investment income

 

611

 

 

624

 

Property and equipment, net

 

990

 

 

1,024

 

Goodwill

 

1,219

 

 

1,243

 

Other assets

 

2,920

 

 

1,937

 

Separate Accounts

 

4,780

 

 

5,039

 

Assets held for sale

 

--

 

 

15,593

 

Total assets

$

110,233

 

$

123,520

 

Liabilities

 

 

 

 

 

 

Reserve for property-liability insurance claims and claims expense

$

22,317

 

$

21,857

 

Reserve for life-contingent contract benefits

 

12,688

 

 

12,386

 

Contractholder funds

 

23,472

 

 

24,304

 

Unearned premiums

 

11,217

 

 

10,932

 

Claim payments outstanding

 

851

 

 

631

 

Deferred income taxes

 

1,146

 

 

635

 

Other liabilities and accrued expenses

 

5,044

 

 

5,156

 

Long-term debt

 

5,846

 

 

6,201

 

Separate Accounts

 

4,780

 

 

5,039

 

Liabilities held for sale

 

--

 

 

14,899

 

Total liabilities

 

87,361

 

 

102,040

 

Commitments and Contingent Liabilities (Note 12)

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 72.2 thousand and 32.3 thousand shares issued and outstanding, $1,805 and $807.5 aggregate liquidation preference

 

1,746

 

 

780

 

Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 434 million and 449 million shares outstanding

 

9

 

 

9

 

Additional capital paid-in

 

3,035

 

 

3,143

 

Retained income

 

36,532

 

 

35,580

 

Deferred ESOP expense

 

(31

)

 

(31

)

Treasury stock, at cost (466 million and 451 million shares)

 

(19,985

)

 

(19,047

)

Accumulated other comprehensive income:

 

 

 

 

 

 

Unrealized net capital gains and losses:

 

 

 

 

 

 

Unrealized net capital gains and losses on fixed income securities with OTTI

 

72

 

 

50

 

Other unrealized net capital gains and losses

 

2,461

 

 

1,698

 

Unrealized adjustment to DAC, DSI and insurance reserves

 

(383

)

 

(102

)

Total unrealized net capital gains and losses

 

2,150

 

 

1,646

 

Unrealized foreign currency translation adjustments

 

35

 

 

38

 

Unrecognized pension and other postretirement benefit cost

 

(619

)

 

(638

)

Total accumulated other comprehensive income

 

1,566

 

 

1,046

 

Total shareholders’ equity

 

22,872

 

 

21,480

 

Total liabilities and shareholders’ equity

$

110,233

 

$

123,520

 

 

See notes to condensed consolidated financial statements.

 

3



 

THE ALLSTATE CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

 

($ in millions)

 

Six months ended
June 30,

 

 

2014

 

2013

Preferred stock par value

 

(unaudited)

Balance, beginning of period

$

--

 

$

--

 

Preferred stock issuance

 

--

 

 

--

 

Balance, end of period

 

--

 

 

--

 

 

 

 

 

 

 

 

Preferred stock additional capital paid-in

 

 

 

 

 

 

Balance, beginning of period

 

780

 

 

--

 

Preferred stock issuance

 

966

 

 

278

 

Balance, end of period

 

1,746

 

 

278

 

 

 

 

 

 

 

 

Common stock

 

9

 

 

9

 

 

 

 

 

 

 

 

Additional capital paid-in

 

 

 

 

 

 

Balance, beginning of period

 

3,143

 

 

3,162

 

Forward contract on accelerated share repurchase agreement

 

(113

)

 

--

 

Equity incentive plans activity

 

5

 

 

(57

)

Balance, end of period

 

3,035

 

 

3,105

 

 

 

 

 

 

 

 

Retained income

 

 

 

 

 

 

Balance, beginning of period

 

35,580

 

 

33,783

 

Net income

 

1,245

 

 

1,143

 

Dividends on common stock

 

(249

)

 

(235

)

Dividends on preferred stock

 

(44

)

 

--

 

Balance, end of period

 

36,532

 

 

34,691

 

 

 

 

 

 

 

 

Deferred ESOP expense

 

 

 

 

 

 

Balance, beginning of period

 

(31

)

 

(41

)

Payments

 

--

 

 

2

 

Balance, end of period

 

(31

)

 

(39

)

 

 

 

 

 

 

 

Treasury stock

 

 

 

 

 

 

Balance, beginning of period

 

(19,047

)

 

(17,508

)

Shares acquired

 

(1,129

)

 

(905

)

Shares reissued under equity incentive plans, net

 

191

 

 

188

 

Balance, end of period

 

(19,985

)

 

(18,225

)

 

 

 

 

 

 

 

Accumulated other comprehensive income

 

 

 

 

 

 

Balance, beginning of period

 

1,046

 

 

1,175

 

Change in unrealized net capital gains and losses

 

504

 

 

(1,183

)

Change in unrealized foreign currency translation adjustments

 

(3

)

 

(33

)

Change in unrecognized pension and other postretirement benefit cost

 

19

 

 

91

 

Balance, end of period

 

1,566

 

 

50

 

Total shareholders’ equity

$

22,872

 

$

19,869

 

 

See notes to condensed consolidated financial statements.

 

4



 

THE ALLSTATE CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

($ in millions)

 

Six months ended
June 30,

 

 

2014

 

2013

Cash flows from operating activities

 

(unaudited)

Net income

$

1,245

 

$

1,143

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation, amortization and other non-cash items

 

189

 

 

180

 

Realized capital gains and losses

 

(294

)

 

(493

)

Loss on extinguishment of debt

 

1

 

 

480

 

Loss (gain) on disposition of operations

 

50

 

 

(2

)

Interest credited to contractholder funds

 

519

 

 

656

 

Changes in:

 

 

 

 

 

 

Policy benefits and other insurance reserves

 

103

 

 

(607

)

Unearned premiums

 

287

 

 

165

 

Deferred policy acquisition costs

 

(77

)

 

(107

)

Premium installment receivables, net

 

(152

)

 

(81

)

Reinsurance recoverables, net

 

(39

)

 

327

 

Income taxes

 

(195

)

 

283

 

Other operating assets and liabilities

 

(436

)

 

(391

)

Net cash provided by operating activities

 

1,201

 

 

1,553

 

Cash flows from investing activities

 

 

 

 

 

 

Proceeds from sales

 

 

 

 

 

 

Fixed income securities

 

14,205

 

 

10,461

 

Equity securities

 

2,744

 

 

1,742

 

Limited partnership interests

 

802

 

 

438

 

Mortgage loans

 

10

 

 

20

 

Other investments

 

81

 

 

38

 

Investment collections

 

 

 

 

 

 

Fixed income securities

 

1,730

 

 

3,658

 

Mortgage loans

 

726

 

 

475

 

Other investments

 

107

 

 

171

 

Investment purchases

 

 

 

 

 

 

Fixed income securities

 

(15,802

)

 

(10,637

)

Equity securities

 

(2,668

)

 

(2,010

)

Limited partnership interests

 

(653

)

 

(477

)

Mortgage loans

 

(109

)

 

(314

)

Other investments

 

(395

)

 

(538

)

Change in short-term investments, net

 

(60

)

 

(423

)

Change in other investments, net

 

49

 

 

91

 

Purchases of property and equipment, net

 

(124

)

 

(43

)

Disposition of operations

 

378

 

 

--

 

Net cash provided by investing activities

 

1,021

 

 

2,652

 

Cash flows from financing activities

 

 

 

 

 

 

Change in short-term debt

 

--

 

 

500

 

Proceeds from issuance of long-term debt

 

--

 

 

1,481

 

Repayments of long-term debt

 

(355

)

 

(2,540

)

Proceeds from issuance of preferred stock

 

965

 

 

278

 

Contractholder fund deposits

 

666

 

 

1,119

 

Contractholder fund withdrawals

 

(1,922

)

 

(4,273

)

Dividends paid on common stock

 

(238

)

 

(119

)

Dividends paid on preferred stock

 

(25

)

 

--

 

Treasury stock purchases

 

(1,257

)

 

(897

)

Shares reissued under equity incentive plans, net

 

149

 

 

60

 

Excess tax benefits on share-based payment arrangements

 

18

 

 

29

 

Other

 

(9

)

 

(15

)

Net cash used in financing activities

 

(2,008

)

 

(4,377

)

Net increase (decrease) in cash

 

214

 

 

(172

)

Cash at beginning of period

 

675

 

 

806

 

Cash at end of period

$

889

 

$

634

 

 

See notes to condensed consolidated financial statements.

 

5



 

THE ALLSTATE CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1.  General

 

Basis of presentation

 

The accompanying condensed consolidated financial statements include the accounts of The Allstate Corporation (the “Corporation”) and its wholly owned subsidiaries, primarily Allstate Insurance Company (“AIC”), a property-liability insurance company with various property-liability and life and investment subsidiaries, including Allstate Life Insurance Company (“ALIC”) (collectively referred to as the “Company” or “Allstate”).

 

The condensed consolidated financial statements and notes as of June 30, 2014 and for the three-month and six-month periods ended June 30, 2014 and 2013 are unaudited.  The condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods.  These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.  The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.  All significant intercompany accounts and transactions have been eliminated.

 

Pending accounting standards

 

Accounting for Investments in Qualified Affordable Housing Projects

 

In January 2014, the Financial Accounting Standards Board (“FASB”) issued guidance which allows entities that invest in certain qualified affordable housing projects through limited liability entities the option to account for these investments using the proportional amortization method if certain conditions are met.  Under the proportional amortization method, the entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense or benefit.  The guidance is effective for reporting periods beginning after December 15, 2014 and is to be applied retrospectively.  Early adoption is permitted.  The impact of adoption is not expected to be material to the Company’s results of operations and financial position.

 

Revenue from Contracts with Customers

 

In May 2014, the FASB issued guidance which revises the criteria for revenue recognition.  Insurance contracts are excluded from the scope of the new guidance.  Under the guidance, the transaction price is attributed to underlying performance obligations in the contract and revenue is recognized as the entity satisfies the performance obligations and transfers control of a good or service to the customer.  Incremental costs of obtaining a contract may be capitalized to the extent the entity expects to recover those costs.  The guidance is effective for reporting periods beginning after December 15, 2016 and is to be applied retrospectively.  The Company is in the process of evaluating the impact of adoption, which is not expected to be material to the Company’s results of operations and financial position.

 

Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

 

In June 2014, the FASB issued guidance which clarifies that a performance target that affects vesting and could be achieved after the requisite service period should be treated as a performance condition and should not be reflected in estimating the grant-date fair value of the award.  Compensation costs should reflect the amount attributable to the periods for which the requisite service has been rendered.  Total compensation expense recognized during and after the requisite service period (which may differ from the vesting period) should reflect the number of awards that are expected to vest and should be adjusted to reflect the number of awards that ultimately vest.  The guidance is effective for reporting periods beginning after December 15, 2015 and may be applied either prospectively or retrospectively.  Early adoption is permitted.  The Company’s existing accounting policy for performance targets that affect the vesting of share-based payment awards is consistent with the proposed guidance and as such the impact of adoption is not expected to affect the Company’s results of operations or financial position.

 

6



 

2.  Earnings per Common Share

 

Basic earnings per common share is computed using the weighted average number of common shares outstanding, including unvested participating restricted stock units.  Diluted earnings per common share is computed using the weighted average number of common and dilutive potential common shares outstanding.  For the Company, dilutive potential common shares consist of outstanding stock options and unvested non-participating restricted stock units and contingently issuable performance stock awards.

 

The computation of basic and diluted earnings per common share is presented in the following table.

 

($ in millions, except per share data)

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

Net income

$

645

$

434

$

1,245

$

1,143

 

Less: Preferred stock dividends

 

31

 

--

 

44

 

--

 

Net income available to common shareholders

 

614

 

434

 

1,201

 

1,143

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

434.3

 

468.3

 

440.4

 

471.9

 

Effect of dilutive potential common shares:

 

 

 

 

 

 

 

 

 

Stock options

 

4.8

 

3.9

 

4.6

 

3.8

 

Restricted stock units (non-participating) and performance stock awards

 

1.6

 

1.6

 

1.8

 

1.6

 

Weighted average common and dilutive potential common shares outstanding

 

440.7

 

473.8

 

446.8

 

477.3

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - Basic

$

1.41

$

0.93

$

2.73

$

2.42

 

Earnings per common share - Diluted

$

1.39

$

0.92

$

2.69

$

2.39

 

 

The effect of dilutive potential common shares does not include the effect of options with an anti-dilutive effect on earnings per common share because their exercise prices exceed the average market price of Allstate common shares during the period or for which the unrecognized compensation cost would have an anti-dilutive effect.  Options to purchase 4.5 million and 13.5 million Allstate common shares, with exercise prices ranging from $48.46 to $62.42 and $39.95 to $62.42, were outstanding for the three-month periods ended June 30, 2014 and 2013, respectively, but were not included in the computation of diluted earnings per common share in those periods.  Options to purchase 4.6 million and 13.7 million Allstate common shares, with exercise prices ranging from $45.61 to $62.42 and $39.05 to $62.42, were outstanding for the six-month periods ended June 30, 2014 and 2013, respectively, but were not included in the computation of diluted earnings per common share in those periods.

 

7



 

3.  Disposition

 

On April 1, 2014, the Company completed the sale of Lincoln Benefit Life Company (“LBL”), LBL’s life insurance business generated through independent master brokerage agencies, and all of LBL’s deferred fixed annuity and long-term care insurance business to Resolution Life Holdings, Inc.  The gross sale price was $797 million, representing $596 million of cash and the retention of tax benefits.  The loss on disposition increased by $11 million, pre-tax, ($13 million, after-tax) and $72 million, pre-tax, ($31 million, after-tax) in the three months and six months ended June 30, 2014, respectively.  The loss on disposition in the three months ended June 30, 2014 included a $22 million, pre-tax, reduction in goodwill.

 

In conjunction with the sale, the Company was required to establish a trust relating to the business that LBL continues to cede to ALIC.  This trust is required to have assets greater than or equal to the statutory reserves ceded by LBL to ALIC, measured on a monthly basis.  As of June 30, 2014, the trust holds $5.36 billion of investments.

 

The following table summarizes the assets and liabilities classified as held for sale as of December 31, 2013.

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

Investments

 

 

 

Fixed income securities

$

10,167

 

Mortgage loans

 

1,367

 

Short-term investments

 

160

 

Other investments

 

289

 

Total investments

 

11,983

 

Cash

 

--

 

Deferred policy acquisition costs

 

743

 

Reinsurance recoverables, net

 

1,660

 

Accrued investment income

 

109

 

Other assets

 

79

 

Separate Accounts

 

1,701

 

Assets held for sale

 

16,275

 

Less: Loss accrual

 

(682

)

Total assets held for sale

$

15,593

 

Liabilities

 

 

 

Reserve for life-contingent contract benefits

$

1,894

 

Contractholder funds

 

10,945

 

Unearned premiums

 

12

 

Deferred income taxes

 

151

 

Other liabilities and accrued expenses

 

196

 

Separate Accounts

 

1,701

 

Total liabilities held for sale

$

14,899

 

 

Included in shareholders’ equity was $85 million of accumulated other comprehensive income related to assets held for sale as of December 31, 2013.

 

4.  Supplemental Cash Flow Information

 

Non-cash modifications of certain mortgage loans, fixed income securities, limited partnership interests and other investments, as well as mergers completed with equity securities, totaled $86 million and $203 million for the six months ended June 30, 2014 and 2013, respectively.  Non-cash financing activities include $45 million and $92 million related to the issuance of Allstate common shares for vested restricted stock units for the six months ended June 30, 2014 and 2013, respectively.

 

8



 

Liabilities for collateral received in conjunction with the Company’s securities lending program and over-the-counter (“OTC”) and cleared derivatives 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 Condensed Consolidated Statements of Cash Flows along with the activities resulting from management of the proceeds, which are as follows:

 

($ in millions)

 

Six months ended
June 30,

 

 

 

2014

 

2013

 

Net change in proceeds managed

 

 

 

 

 

Net change in short-term investments

$

(284)

$

113

 

Operating cash flow (used) provided

 

(284)

 

113

 

Net change in cash

 

1

 

3

 

Net change in proceeds managed

$

(283)

$

116

 

 

 

 

 

 

 

Net change in liabilities

 

 

 

 

 

Liabilities for collateral, beginning of period

$

(624)

$

(808)

 

Liabilities for collateral, end of period

 

(907)

 

(692)

 

Operating cash flow provided (used)

$

283

$

(116)

 

 

5.  Investments

 

Fair values

 

The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows:

 

($ in millions)

 

Amortized

 

Gross unrealized

 

Fair

 

 

 

cost

 

Gains

 

Losses

 

value

 

June 30, 2014

 

 

 

 

 

 

 

 

 

U.S. government and agencies

$

4,707

$

147

$

(1)

$

4,853

 

Municipal

 

8,009

 

572

 

(20)

 

8,561

 

Corporate

 

39,282

 

2,283

 

(98)

 

41,467

 

Foreign government

 

1,569

 

108

 

(1)

 

1,676

 

Asset-backed securities (“ABS”)

 

3,903

 

68

 

(28)

 

3,943

 

Residential mortgage-backed securities (“RMBS”)

 

1,263

 

117

 

(18)

 

1,362

 

Commercial mortgage-backed securities (“CMBS”)

 

692

 

57

 

(3)

 

746

 

Redeemable preferred stock

 

22

 

4

 

--

 

26

 

Total fixed income securities

$

59,447

$

3,356

$

(169)

$

62,634

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

 

 

 

 

 

 

 

 

U.S. government and agencies

$

2,791

$

129

$

(7)

$

2,913

 

Municipal

 

8,446

 

364

 

(87)

 

8,723

 

Corporate

 

39,331

 

1,659

 

(387)

 

40,603

 

Foreign government

 

1,736

 

99

 

(11)

 

1,824

 

ABS

 

4,491

 

71

 

(44)

 

4,518

 

RMBS

 

1,403

 

101

 

(30)

 

1,474

 

CMBS

 

788

 

48

 

(7)

 

829

 

Redeemable preferred stock

 

22

 

4

 

--

 

26

 

Total fixed income securities

$

59,008

$

2,475

$

(573)

$

60,910

 

 

9



 

Scheduled maturities

 

The scheduled maturities for fixed income securities are as follows as of June 30, 2014:

 

($ in millions)

 

Amortized
cost

 

Fair
value

 

Due in one year or less

$

3,272

$

3,316

 

Due after one year through five years

 

25,728

 

26,606

 

Due after five years through ten years

 

16,257

 

17,225

 

Due after ten years

 

8,332

 

9,436

 

 

 

53,589

 

56,583

 

ABS, RMBS and CMBS

 

5,858

 

6,051

 

Total

$

59,447

$

62,634

 

 

Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers.  ABS, RMBS and CMBS are shown separately because of the potential for prepayment of principal prior to contractual maturity dates.

 

Net investment income

 

Net investment income is as follows:

 

($ in millions)

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

2014

 

2013

 

2014

 

2013

Fixed income securities

$

584

$

740

$

1,289

$

1,502

Equity securities

 

35

 

39

 

63

 

64

Mortgage loans

 

71

 

93

 

152

 

191

Limited partnership interests

 

195

 

126

 

337

 

233

Short-term investments

 

3

 

1

 

4

 

3

Other

 

44

 

39

 

86

 

76

Investment income, before expense

 

932

 

1,038

 

1,931

 

2,069

Investment expense

 

(34)

 

(54)

 

(74)

 

(102)

Net investment income

$

898

$

984

$

1,857

$

1,967

 

Realized capital gains and losses

 

Realized capital gains and losses by asset type are as follows:

 

($ in millions)

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

2014

 

2013

 

2014

 

2013

Fixed income securities

$

62

$

79

$

98

$

151

Equity securities

 

239

 

283

 

261

 

312

Mortgage loans

 

(2)

 

(6)

 

1

 

25

Limited partnership interests

 

(51)

 

(8)

 

(49)

 

(3)

Derivatives

 

(7)

 

14

 

(19)

 

10

Other

 

(1)

 

--

 

2

 

(2)

Realized capital gains and losses

$

240

$

362

$

294

$

493

 

10



 

Realized capital gains and losses by transaction type are as follows:

 

($ in millions)

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

2014

 

2013

 

2014

 

2013

Impairment write-downs

$

(6)

$

(33)

$

(22)

$

(43)

Change in intent write-downs

 

(39)

 

(27)

 

(104)

 

(54)

Net other-than-temporary impairment losses recognized in earnings

 

(45)

 

(60)

 

(126)

 

(97)

Sales

 

290

 

408

 

437

 

580

Valuation and settlements of derivative instruments

 

(5)

 

14

 

(17)

 

10

Realized capital gains and losses

$

240

$

362

$

294

$

493

 

Gross gains of $347 million and $468 million and gross losses of $27 million and $63 million were realized on sales of fixed income and equity securities during the three months ended June 30, 2014 and 2013, respectively.  Gross gains of $513 million and $651 million and gross losses of $63 million and $84 million were realized on sales of fixed income and equity securities during the six months ended June 30, 2014 and 2013, respectively.

 

Other-than-temporary impairment losses by asset type are as follows:

 

($ in millions)

 

Three months ended
June 30, 2014

 

Six months ended
June 30, 2014

 

 

Gross

 

Included
 in OCI

 

Net

 

Gross

 

Included
in OCI

 

Net

Fixed income securities:

 

 

 

 

 

 

 

 

 

 

 

 

Municipal

$

(1)

$

--

$

(1)

$

(6)

$

--

$

(6)

ABS

 

(2)

 

--

 

(2)

 

(3)

 

--

 

(3)

RMBS

 

6

 

(1)

 

5

 

6

 

(2)

 

4

Total fixed income securities

 

3

 

(1)

 

2

 

(3)

 

(2)

 

(5)

Equity securities

 

(21)

 

--

 

(21)

 

(86)

 

--

 

(86)

Mortgage loans

 

--

 

--

 

--

 

4

 

--

 

4

Limited partnership interests

 

(26)

 

--

 

(26)

 

(39)

 

--

 

(39)

Other-than-temporary impairment losses

$

(44)

$

(1)

$

(45)

$

(124)

$

(2)

$

(126)

 

 

 

Three months ended
June 30, 2013

 

Six months ended
June 30, 2013

 

 

Gross

 

Included
in OCI

 

Net

 

Gross

 

Included
in OCI

 

Net

Fixed income securities:

 

 

 

 

 

 

 

 

 

 

 

 

Municipal

$

(4)

$

(3)

$

(7)

$

(17)

$

(5)

$

(22)

ABS

 

--

 

(1)

 

(1)

 

--

 

(1)

 

(1)

RMBS

 

(1)

 

(1)

 

(2)

 

(1)

 

(2)

 

(3)

CMBS

 

(1)

 

--

 

(1)

 

(20)

 

(7)

 

(27)

Total fixed income securities

 

(6)

 

(5)

 

(11)

 

(38)

 

(15)

 

(53)

Equity securities

 

(32)

 

--

 

(32)

 

(51)

 

--

 

(51)

Mortgage loans

 

(9)

 

--

 

(9)

 

17

 

--

 

17

Limited partnership interests

 

(8)

 

--

 

(8)

 

(8)

 

--

 

(8)

Other

 

--

 

--

 

--

 

(2)

 

--

 

(2)

Other-than-temporary impairment losses

$

(55)

$

(5)

$

(60)

$

(82)

$

(15)

$

(97)

 

11



 

The total amount of other-than-temporary impairment losses included in accumulated other comprehensive income at the time of impairment for fixed income securities, which were not included in earnings, are presented in the following table.  The amounts exclude $248 million and $260 million as of June 30, 2014 and December 31, 2013, respectively, of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date.

 

($ in millions)

 

June 30,
2014

 

December 31,
2013

Municipal

$

(9)

$

(9)

ABS

 

(10)

 

(10)

RMBS

 

(114)

 

(152)

CMBS

 

(5)

 

(12)

Total

$

(138)

$

(183)

 

Rollforwards of the cumulative credit losses recognized in earnings for fixed income securities held as of the end of the period are as follows:

 

($ in millions)

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

2014

 

2013

 

2014

 

2013

Beginning balance

$

(493)

$

(600)

$

(513)

$

(617)

Additional credit loss for securities previously other-than-temporarily impaired

 

4

 

(10)

 

(1)

 

(24)

Additional credit loss for securities not previously other-than-temporarily impaired

 

(2)

 

(1)

 

(3)

 

(17)

Reduction in credit loss for securities disposed or collected

 

7

 

46

 

33

 

93

Reduction in credit loss for securities the Company has made the decision to sell or more likely than not will be required to sell

 

--

 

--

 

--

 

--

Change in credit loss due to accretion of increase in cash flows

 

1

 

1

 

1

 

1

Reduction in credit loss for securities sold in LBL disposition

 

59

 

--

 

59

 

--

Ending balance

$

(424)

$

(564)

$

(424)

$

(564)

 

The Company uses its best estimate of future cash flows expected to be collected from the fixed income security, discounted at the security’s original or current effective rate, as appropriate, to calculate a recovery value and determine whether a credit loss exists.  The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security.  All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of cash flows expected to be collected.  That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, foreign exchange rates, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, vintage, geographic concentration, available reserves or escrows, current subordination levels, third party guarantees and other credit enhancements.  Other information, such as industry analyst reports and forecasts, sector credit ratings, financial condition of the bond insurer for insured fixed income securities, and other market data relevant to the realizability of contractual cash flows, may also be considered.  The estimated fair value of collateral will be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement.  If the estimated recovery value is less than the amortized cost of the security, a credit loss exists and an other-than-temporary impairment for the difference between the estimated recovery value and amortized cost is recorded in earnings.  The portion of the unrealized loss related to factors other than credit remains classified in accumulated other comprehensive income.  If the Company determines that the fixed income security does not have sufficient cash flow or other information to estimate a recovery value for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded in earnings.

 

12



 

Unrealized net capital gains and losses

 

Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows:

 

($ in millions)

 

Fair

 

Gross unrealized

 

Unrealized net

June 30, 2014

 

value

 

Gains

 

Losses

 

gains (losses)

Fixed income securities

$

62,634

$

3,356

$

(169)

 

$

3,187

Equity securities

 

5,394

 

745

 

(9)

 

736

Short-term investments

 

2,914

 

--

 

--

 

--

Derivative instruments (1)

 

(15)

 

1

 

(20)

 

(19)

Equity method (“EMA”) limited partnerships (2)

 

 

 

 

 

 

 

 

(5)

Unrealized net capital gains and losses, pre-tax

 

 

 

 

 

 

 

 

3,899

Amounts recognized for:

 

 

 

 

 

 

 

 

Insurance reserves (3)

 

 

 

 

 

 

 

(399)

DAC and DSI (4)

 

 

 

 

 

 

 

 

(189)

Amounts recognized

 

 

 

 

 

 

 

 

(588)

Deferred income taxes

 

 

 

 

 

 

 

 

(1,161)

Unrealized net capital gains and losses, after-tax

 

 

 

 

 

 

 

$

2,150

 

 

 

 

(1)

Included in the fair value of derivative instruments are $1 million classified as assets and $16 million classified as liabilities.

(2)

Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ other comprehensive income.  Fair value and gross unrealized gains and losses are not applicable.

(3)

The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency.  Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to annuity buy-outs and certain payout annuities with life contingencies.

(4)

The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.

 

($ in millions)

 

Fair

 

Gross unrealized

 

Unrealized net

December 31, 2013

 

value

 

Gains

 

Losses

 

gains (losses)

Fixed income securities

$

60,910

$

2,475

$

(573)

 

$

1,902

Equity securities

 

5,097

 

658

 

(34)

 

624

Short-term investments

 

2,393

 

--

 

--

 

--

Derivative instruments (1)

 

(13)

 

1

 

(19)

 

(18)

EMA limited partnerships

 

 

 

 

 

 

 

(3)

Investments classified as held for sale

 

 

 

 

 

 

 

 

190

Unrealized net capital gains and losses, pre-tax

 

 

 

 

 

 

 

 

2,695

Amounts recognized for:

 

 

 

 

 

 

 

 

Insurance reserves

 

 

 

 

 

 

 

--

DAC and DSI

 

 

 

 

 

 

 

 

(158)

Amounts recognized

 

 

 

 

 

 

 

 

(158)

Deferred income taxes

 

 

 

 

 

 

 

 

(891)

Unrealized net capital gains and losses, after-tax

 

 

 

 

 

 

 

$

1,646

 

 

 

 

(1)

Included in the fair value of derivative instruments are $1 million classified as assets and $14 million classified as liabilities.

 

13



 

Change in unrealized net capital gains and losses

 

The change in unrealized net capital gains and losses for the six months ended June 30, 2014 is as follows:

 

($ in millions)

 

 

 

Fixed income securities

$

1,285

 

Equity securities

 

112

 

Derivative instruments

 

(1)

 

EMA limited partnerships

 

(2)

 

Investments classified as held for sale

 

(190)

 

Total

 

1,204

 

Amounts recognized for:

 

 

 

Insurance reserves

 

(399)

 

DAC and DSI

 

(31)

 

Amounts recognized

 

(430)

 

Deferred income taxes

 

(270)

 

Increase in unrealized net capital gains and losses, after-tax

$

504

 

 

Portfolio monitoring

 

The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income and equity security whose carrying value may be other-than-temporarily impaired.

 

For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes.  If a security meets either of these criteria, the security’s decline in fair value is considered other than temporary and is recorded in earnings.

 

If the Company has not made the decision to sell the fixed income security and it is not more likely than not the Company will be required to sell the fixed income security before recovery of its amortized cost basis, the Company evaluates whether it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security.  The Company calculates the estimated recovery value by discounting the best estimate of future cash flows at the security’s original or current effective rate, as appropriate, and compares this to the amortized cost of the security.  If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, the credit loss component of the impairment is recorded in earnings, with the remaining amount of the unrealized loss related to other factors recognized in other comprehensive income.

 

For equity securities, the Company considers various factors, including whether it has the intent and ability to hold the equity security for a period of time sufficient to recover its cost basis.  Where the Company lacks the intent and ability to hold to recovery, or believes the recovery period is extended, the equity security’s decline in fair value is considered other than temporary and is recorded in earnings.

 

For fixed income and equity securities managed by third parties, either the Company has contractually retained its decision making authority as it pertains to selling securities that are in an unrealized loss position or it recognizes any unrealized loss at the end of the period through a charge to earnings.

 

The Company’s portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost (for fixed income securities) or cost (for equity securities) is below established thresholds.  The process also includes the monitoring of other impairment indicators such as ratings, ratings downgrades and payment defaults.  The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential other-than-temporary impairment using all reasonably available information relevant to the collectability or recovery of the security.  Inherent in the Company’s evaluation of other-than-temporary impairment for these fixed income and equity securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer.  Some of the factors that may be considered in evaluating whether a decline in fair value is other than temporary are: 1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; 2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and 3) the length of time and extent to which the fair value has been less than amortized cost or cost.

 

14



 

The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position.

 

($ in millions)

 

Less than 12 months

 

12 months or more

 

Total

 

 

 

Number

 

Fair

 

Unrealized

 

Number

 

Fair

 

Unrealized

 

unrealized

 

 

 

of issues

 

value

 

losses

 

of issues

 

value

 

losses

 

losses

 

June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed income securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

24

$

200

$

(1)

 

3

$

22

$

-- 

$

(1

)

Municipal

 

87

 

398

 

(1)

 

53

 

303

 

(19)

 

(20

)

Corporate

 

120

 

1,453

 

(10)

 

190

 

2,121

 

(88)

 

(98

)

Foreign government

 

2

 

28

 

-- 

 

2

 

26

 

(1)

 

(1

)

ABS

 

30

 

565

 

(3)

 

31

 

393

 

(25)

 

(28

)

RMBS

 

89

 

71

 

(1)

 

194

 

239

 

(17)

 

(18

)

CMBS

 

6

 

9

 

-- 

 

5

 

43

 

(3)

 

(3

)

Total fixed income securities

 

358

 

2,724

 

(16)

 

478

 

3,147

 

(153)

 

(169

)

Equity securities

 

22

 

171

 

(6)

 

1

 

102

 

(3)

 

(9

)

Total fixed income and equity securities

 

380

$

2,895

$

(22)

 

479

$

3,249

$

(156)

$

(178

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment grade fixed income securities

 

287

$

2,238

$

(8)

 

386

$

2,620

$

(97)

$

(105

)

Below investment grade fixed income securities

 

71

 

486

 

(8)

 

92

 

527

 

(56)

 

(64

)

Total fixed income securities

 

358

$

2,724

$

(16)

 

478

$

3,147

$

(153)

$

(169

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed income securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

22

$

700

$

(7)

 

-- 

$

-- 

$

-- 

$

(7

)

Municipal

 

315

 

2,065

 

(41)

 

38

 

208

 

(46)

 

(87

)

Corporate

 

796

 

10,375

 

(308)

 

54

 

550

 

(79)