Allstate 2011 Annual Report Download - page 93

CONSOLIDATED NET INCOME (LOSS)
For the years ended December 31,
($ in millions)
2010 2009 2008
Revenues
Property-liability insurance premiums $ 25,957 $ 26,194 $ 26,967
Life and annuity premiums and contract charges 2,168 1,958 1,895
Net investment income 4,102 4,444 5,622
Realized capital gains and losses:
Total other-than-temporary impairment losses (937) (2,376) (3,735)
Portion of loss recognized in other comprehensive income (64) 457 —
Net other-than-temporary impairment losses recognized in
earnings (1,001) (1,919) (3,735)
Sales and other realized capital gains and losses 174 1,336 (1,355)
Total realized capital gains and losses (827) (583) (5,090)
Total revenues 31,400 32,013 29,394
Costs and expenses
Property-liability insurance claims and claims expense (18,951) (18,746) (20,064)
Life and annuity contract benefits (1,815) (1,617) (1,612)
Interest credited to contractholder funds (1,807) (2,126) (2,411)
Amortization of deferred policy acquisition costs (4,034) (4,754) (4,679)
Operating costs and expenses (3,281) (3,007) (3,273)
Restructuring and related charges (30) (130) (23)
Interest expense (367) (392) (351)
Total costs and expenses (30,285) (30,772) (32,413)
Gain (loss) on disposition of operations 11 7 (6)
Income tax (expense) benefit (198) (394) 1,346
Net income (loss) $ 928 $ 854 $ (1,679)
Property-Liability $ 1,054 $ 1,543 $ 228
Allstate Financial 58 (483) (1,721)
Corporate and Other (184) (206) (186)
Net income (loss) $ 928 $ 854 $ (1,679)
APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America (‘‘GAAP’’) requires management to adopt accounting policies and make estimates and assumptions
that affect amounts reported in the consolidated financial statements. The most critical estimates include those used in
determining:
• Fair value of financial assets
• Impairment of fixed income and equity securities
• Deferred policy acquisition costs amortization
• Reserve for property-liability insurance claims and claims expense estimation
• Reserve for life-contingent contract benefits estimation
In making these determinations, management makes subjective and complex judgments that frequently require
estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are
common in the insurance and financial services industries; others are specific to our businesses and operations. It is
reasonably likely that changes in these estimates could occur from period to period and result in a material impact on
our consolidated financial statements.
A brief summary of each of these critical accounting estimates follows. For a more detailed discussion of the effect
of these estimates on our consolidated financial statements, and the judgments and assumptions related to these
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MD&A