Allstate 2013 Annual Report Download - page 186

direct exposure to non-EU countries total $885 million, with net unrealized capital gains of $78 million. The large
majority of these investments are in multinational public companies with global revenue sources that are well diversified
across region and sector, including a higher allocation to energy, capital goods, non-cyclical consumer goods and
communications sectors. We also have additional indirect and diversified exposures through investments in
multinational equity funds and limited partnership interests that invest in Europe. We estimate these indirect exposures
do not exceed 1% of total investments.
Net investment income The following table presents net investment income for the years ended December 31.
($ in millions) 2012 2011 2010
Fixed income securities $ 3,234 $ 3,484 $ 3,737
Equity securities 127 122 90
Mortgage loans 374 359 385
Limited partnership interests (1) 348 88 40
Short-term investments 6 6 8
Other 132 95 19
Investment income, before expense 4,221 4,154 4,279
Investment expense (211) (183) (177)
Net investment income $ 4,010 $ 3,971 $ 4,102
(1) Income from EMA limited partnerships is reported in net investment income in 2012 and realized capital gains and losses in 2011 and
2010.
Net investment income increased 1.0% or $39 million in 2012 compared to 2011, after decreasing 3.2% or
$131 million in 2011 compared to 2010. The 2012 increase was primarily due to income from limited partnerships,
partially offset by lower average investment balances and lower fixed income yields. The 2011 decline was primarily due
to lower average investment balances, partially offset by higher yields.
Realized capital gains and losses The following table presents the components of realized capital gains and
losses and the related tax effect for the years ended December 31.
($ in millions) 2012 2011 2010
Impairment write-downs $ (185) $ (496) $ (797)
Change in intent write-downs (48) (100) (204)
Net other-than-temporary impairment losses
recognized in earnings (233) (596) (1,001)
Sales 536 1,336 686
Valuation of derivative instruments (11) (291) (427)
Settlements of derivative instruments 35 (105) (174)
EMA limited partnership income (1) — 159 89
Realized capital gains and losses, pre-tax 327 503 (827)
Income tax (expense) benefit (111) (179) 290
Realized capital gains and losses, after-tax $ 216 $ 324 $ (537)
(1) Income from EMA limited partnerships is reported in net investment income in 2012 and realized capital gains and losses in 2011 and
2010.
Impairment write-downs for the years ended December 31 are presented in the following table.
($ in millions) 2012 2011 2010
Fixed income securities $ (108) $ (302) $ (626)
Equity securities (63) (131) (57)
Mortgage loans 5 (37) (65)
Limited partnership interests (8) (6) (46)
Other investments (11) (20) (3)
Impairment write-downs $ (185) $ (496) $ (797)
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