Allstate 2013 Annual Report Download - page 194

Protection reporting unit and relatively less for the Allstate Financial reporting unit. The results of this analysis are
consistent with both the relative operating performance of the individual reporting units as well as their respective
industry sector’s performance. Specifically, spread-based products, which are a material component of the Allstate
Financial reporting unit, are experiencing the continued impacts of the historically low interest rate environment which
has depressed operating margins. In contrast, underwriting results from the Allstate Protection business have benefitted
by the general presence of stable to higher premium rates and stable loss costs.
Goodwill impairment evaluations indicated no impairment as of December 31, 2012 and no reporting unit was at
risk of having its carrying value including goodwill exceed its fair value.
CAPITAL RESOURCES AND LIQUIDITY 2012 HIGHLIGHTS
• Shareholders’ equity as of December 31, 2012 was $20.58 billion, an increase of 12.5% from $18.30 billion as of
December 31, 2011.
• On January 3, 2012, April 2, 2012, July 2, 2012, October 1, 2012 and December 31, 2012, we paid shareholder
dividends of $0.21, $0.22, $0.22, $0.22 and $0.22, respectively. On February 6, 2013, we declared a quarterly
shareholder dividend of $0.25 payable on April 1, 2013.
• In November 2012, we completed a $1.00 billion share repurchase program that commenced in November 2011. In
December 2012, we commenced a new $1.00 billion share repurchase program that is expected to be completed by
December 31, 2013, and as of December 31, 2012, had $984 million remaining. In February 2013, an additional
$1 billion share repurchase program was authorized and is expected to be completed by March 31, 2014. Our
repurchase programs may utilize an accelerated repurchase program. During 2012, we repurchased 26.7 million
common shares for $910 million.
CAPITAL RESOURCES AND LIQUIDITY
Capital resources consist of shareholders’ equity and debt, representing funds deployed or available to be deployed
to support business operations or for general corporate purposes. The following table summarizes our capital resources
as of December 31.
($ in millions) 2012 2011 2010
Common stock, retained income and other
shareholders’ equity items $ 19,405 $ 18,269 $ 18,789
Accumulated other comprehensive income (loss) 1,175 29 (172)
Total shareholders’ equity 20,580 18,298 18,617
Debt 6,057 5,908 5,908
Total capital resources $ 26,637 $ 24,206 $ 24,525
Ratio of debt to shareholders’ equity 29.4% 32.3% 31.7%
Ratio of debt to capital resources 22.7% 24.4% 24.1%
Shareholders’ equity increased in 2012, primarily due to net income and increased unrealized net capital gains on
investments, partially offset by share repurchases and dividends paid to shareholders. Shareholders’ equity decreased in
2011, primarily due to share repurchases and dividends paid to shareholders, partially offset by net income and
increased unrealized net capital gains on investments.
Debt The debt balance increased in 2012 due to increases in long-term debt. On January 11, 2012, we issued
$500 million of 5.20% Senior Notes due 2042, utilizing the registration statement filed with the Securities and
Exchange Commission on May 8, 2009. The proceeds of this issuance were used for general corporate purposes,
including the repayment of $350 million of 6.125% Senior Notes on February 15, 2012.
On January 10, 2013, we issued $500 million of 5.10% Fixed-to-Floating Rate Subordinated Debentures due 2053,
utilizing the registration statement filed with the Securities and Exchange Commission on April 30, 2012. The proceeds
of this issuance will be used for general corporate purposes, including the repurchase of our common stock through
open market purchases from time to time or through an accelerated repurchase program. The next debt maturity is on
June 15, 2013 when $250 million of 7.50% Debentures are due, which is expected to be refinanced or repaid from
available capital. For further information on outstanding debt, see Note 12 of the consolidated financial statements. As
of December 31, 2012 and 2011, there were no outstanding commercial paper borrowings.
Share repurchases In November 2012, we completed our $1.00 billion share repurchase program that commenced
in November 2011. In December 2012, we commenced a new $1.00 billion share repurchase program that is expected to
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