Allstate 2014 Annual Report Download - page 272

The tax benefit realized in 2014, 2013 and 2012 related to tax deductions from stock option exercises and included
in shareholders’ equity was $23 million, $12 million and $8 million, respectively. The tax benefit realized in 2014, 2013
and 2012 related to all stock-based compensation and recorded directly to shareholders’ equity was $32 million,
$30 million and $6 million, respectively.
19. Reporting Segments
Allstate management is organized around products and services, and this structure is considered in the
identification of its four reportable segments. These segments and their respective operations are as follows:
Allstate Protection principally sells private passenger auto and homeowners insurance in the United States and
Canada. Revenues from external customers generated outside the United States were $1.08 billion, $1.06 billion and
$992 million in 2014, 2013 and 2012, respectively. The Company evaluates the results of this segment based upon
underwriting results.
Discontinued Lines and Coverages consists of property-liability business no longer written by Allstate, including
results from asbestos, environmental and other discontinued lines claims, and certain commercial and other businesses
in run-off. This segment also includes the historical results of the commercial and reinsurance businesses sold in 1996.
The Company evaluates the results of this segment based upon underwriting results.
Allstate Financial sells traditional, interest-sensitive and variable life insurance and voluntary accident and health
insurance products. Allstate Financial previously offered and continues to have in force fixed annuities such as deferred
and immediate annuities, and institutional products consisting of funding agreements sold to unaffiliated trusts that use
them to back medium-term notes. Allstate Financial had no revenues from external customers generated outside the
United States in 2014, 2013 or 2012. The Company evaluates the results of this segment based upon operating income.
Corporate and Other comprises holding company activities and certain non-insurance operations.
Allstate Protection and Discontinued Lines and Coverages comprise Property-Liability. The Company does not
allocate Property-Liability investment income, realized capital gains and losses, or assets to the Allstate Protection and
Discontinued Lines and Coverages segments. Management reviews assets at the Property-Liability, Allstate Financial,
and Corporate and Other levels for decision-making purposes. Allstate Protection and Allstate Financial performance
and resources are managed by committees of senior officers of the respective segments.
The accounting policies of the reportable segments are the same as those described in Note 2. The effects of certain
inter-segment transactions are excluded from segment performance evaluation and therefore are eliminated in the
segment results.
Measuring segment profit or loss
The measure of segment profit or loss used by Allstate’s management in evaluating performance is underwriting
income for the Allstate Protection and Discontinued Lines and Coverages segments and operating income for the
Allstate Financial and Corporate and Other segments. A reconciliation of these measures to net income is provided
below.
Underwriting income is calculated as premiums earned, less claims and claims expenses (‘‘losses’’), amortization of
DAC, operating costs and expenses, and restructuring and related charges as determined using GAAP.
Operating income is net income available to common shareholders, excluding:
• realized capital gains and losses, after-tax, except for periodic settlements and accruals on non-hedge
derivative instruments, which are reported with realized capital gains and losses but included in operating
income,
• valuation changes on embedded derivatives that are not hedged, after-tax,
• amortization of DAC and DSI, to the extent they resulted from the recognition of certain realized capital gains
and losses or valuation changes on embedded derivatives that are not hedged, after-tax,
• amortization of purchased intangible assets, after-tax,
• gain (loss) on disposition of operations, after-tax, and
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