Allstate 2014 Annual Report Download - page 175

Within the equity portfolio, the losses were primarily concentrated in the energy, financial services and consumer
goods sectors. The unrealized losses were company and sector specific. As of December 31, 2014, we have the intent
and ability to hold our equity securities with unrealized losses until recovery.
Global oil prices have declined significantly in recent months. Within the energy sector outlined above, we continue
to monitor the impact to our investment portfolio for those companies that may be adversely affected, both directly and
indirectly. If oil prices continue to decline or remain at depressed levels for an extended period, certain issuers and
investments may come under pressure.
Net investment income The following table presents net investment income for the years ended December 31.
($ in millions) 2014 2013 2012
Fixed income securities $ 2,447 $ 2,921 $ 3,234
Equity securities 117 149 127
Mortgage loans 265 372 374
Limited partnership interests 614 541 348
Short-term investments 7 5 6
Other 170 161 132
Investment income, before expense 3,620 4,149 4,221
Investment expense (161) (206) (211)
Net investment income $ 3,459 $ 3,943 $ 4,010
Net investment income decreased 12.3% or $484 million in 2014 compared to 2013, after decreasing 1.7% or
$67 million in 2013 compared to 2012. The 2014 decrease was primarily due to lower average investment balances
relating to the sale of LBL on April 1, 2014, lower fixed income yields and equity dividends, partially offset by higher
limited partnership income. Net investment income in 2014 includes $114 million related to prepayment fee income and
litigation proceeds compared to $139 million in 2013. These items may vary significantly from period to period and may
not recur. Higher EMA limited partnership income resulted from favorable equity and real estate valuations which
increased the carrying value of the partnerships. The 2013 decrease was primarily due to lower average investment
balances and lower fixed income yields, partially offset by higher limited partnership income and equity dividends, as
well as prepayment fee income and litigation proceeds which together increased 2013 income by a total of $68 million.
Realized capital gains and losses The following table presents the components of realized capital gains and
losses and the related tax effect for the years ended December 31.
($ in millions) 2014 2013 2012
Impairment write-downs $ (32) $ (72) $ (185)
Change in intent write-downs (213) (143) (48)
Net other-than-temporary impairment losses
recognized in earnings (245) (215) (233)
Sales 975 819 536
Valuation and settlements of derivative
instruments (36) (10) 24
Realized capital gains and losses, pre-tax 694 594 327
Income tax expense (243) (209) (111)
Realized capital gains and losses, after-tax $ 451 $ 385 $ 216
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