Allstate (ALL)

Shareholders’ equity decreased in the first three months of 2009, due to a net loss, dividends paid to shareholders and increases in unrealized net capital losses on investments.

Share repurchases We suspended our $2.00 billion share repurchase program in October, 2008 and did not complete it by the target date of March 31, 2009.

In the first quarter of 2009, we revised our shareholder dividend to $0.20 from $0.41.

The $750 million of 7.20% Senior Notes due 2009 are scheduled to mature on December 1, 2009.  These Senior Notes are expected to be refinanced.

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Shareholders’ equity decreased in the first nine months of 2008, due to unrealized net capital losses on investments, share repurchases, dividends paid to shareholders, net loss and an increase in the net underfunded status of the pension and other post-retirement benefit obligation.

The increase in the net underfunded status of the pension and other post-retirement benefit obligation was the result of conforming our plan measurement date with our fiscal year-end reporting date as required by Financial Accounting Standards Board  Statement No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans (“SFAS No. 158).  We recorded a decrease of $13 million, after-tax, to beginning retained income representing the net periodic benefit cost for the period between October 31, 2007 and December 31, 2007 and a decrease of $80 million, after-tax, to beginning net funded status of pension and other postretirement benefit obligations to reflect changes in the fair value of plan assets and the benefit obligations between October 31, 2007 and January 1, 2008 and for amortization of actuarial gains and losses and prior service costs between October 31, 2007 and December 31, 2007.  For further information on SFAS No. 158, see Note 1 to the Condensed Consolidated Financial Statements.

We completed our $4.00 billion share repurchase program that commenced in November 2006, and commenced a $2.00 billion share repurchase program.  We suspended the share repurchase program in October 2008 and do not plan to complete it by the target date of March 31, 2009.  We will re-evaluate this program as market conditions develop in 2009.  The number of shares repurchased under the program was 9.9 million shares for $449 million during the three months ended September 30, 2008, and 22.5 million shares for $1.07 billion for the nine months ended September 30, 2008.

The $750 million of 7.20% Senior Notes due 2009 are scheduled to mature on December 1, 2009.  These Senior Notes are expected to be refinanced or repaid from available capital.

Shareholders’ equity decreased in the first six months of 2008, due to unrealized net capital losses on investments, share repurchases, dividends paid to shareholders and an increase in the net underfunded status of the pension and other post-retirement benefit obligation partially offset by net income.

The increase in the net underfunded status of the pension and other post-retirement benefit obligation was the result of conforming our plan measurement date with our fiscal year-end reporting date as required by SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans.  We recorded a decrease of $13 million, after-tax, to beginning retained income representing the net periodic benefit cost for the period between October 31, 2007 and December 31, 2007 and a decrease of $80 million, after-tax, to beginning net funded status of pension and other postretirement benefit obligations to reflect changes in the fair value of plan assets and the benefit obligations between October 31, 2007 and January 1, 2008 and for amortization of actuarial gains and losses and prior service costs between October 31, 2007 and December 31, 2007.  For further information on SFAS No. 158, see Note 1 to the Condensed Consolidated Financial Statements.

We completed our $4.00 billion share repurchase program that commenced in November 2006, and commenced a $2.00 billion share repurchase program that is expected to be completed by March 31, 2009.  During the first six months of 2008, we repurchased 17.5 million shares for $858 million; $1.38 billion remains of the $2 billion share repurchase program.

Shareholders’ equity decreased in the first quarter of 2008, due to unrealized net capital losses on investments, share repurchases, dividends paid to shareholders and an increase in the net underfunded status of the pension and other post-retirement benefit obligation partially offset by net income.  The increase in the net underfunded status of

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Shareholders’ equity declined in the first nine months of 2007, due to share repurchases, decreases in unrealized net capital gains on investments and dividends paid to shareholders, partially offset by net income. As of September 30, 2007, our $4.00 billion share repurchase program, which commenced in November 2006, had $820 million remaining and is expected to be completed by March 31, 2008. The current $4.00 billion program was increased from $3.00 billion in May 2007, reflecting the amount of proceeds received from our issuance of $1.00 billion of junior subordinated securities as described below. Share repurchases during the second and third quarter of 2007 included an accelerated stock repurchase agreement which commenced on June 27, 2007 and settled on August 14, 2007 totaling $500 million. Our accelerated stock repurchase program was completed using available funds including the issuance of $1 billion of junior subordinated securities during the second quarter of 2007.

Debt increased in the first nine months 2007, due to increases in long-term debt and decreases in short term debt. In May 2007, we issued $500 million of Series A 6.50% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 and $500 million of Series B 6.125% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (together the “Debentures”), utilizing the registration statement filed with the Securities and Exchange Commission (“SEC”) in May 2006. These securities will be treated in part as equity by Moody’s and S&P in their assessment of the Company’s credit rating. Series A will be considered 100% equity by S&P until 2037, and 75% equity by Moody’s until 2017 and 50% equity until 2037. Series B will be considered 100% and 75% equity by S&P and Moody’s, respectively, until 2017. For further information on the issuance, see Note 11 to the Condensed Consolidated Financial Statements.

Shareholders’ equity declined in the first six months of 2007, due to share repurchases, decreases in unrealized net capital gains on investments and dividends paid to shareholders, partially offset by net income.  As of June 30, 2007, our $4.00 billion share repurchase program, which commenced in November 2006, had $1.59 billion remaining and is expected to be completed by March 31, 2008. The current $4.00 billion program was increased from $3.00 billion in May 2007, reflecting the amount of proceeds received from our issuance of $1.00 billion of junior subordinated securities as described below.  Share repurchases during the second quarter of 2007 included an accelerated stock repurchase agreement which commenced on June 27, 2007 and will settle the total shares repurchased in up to four months totaling $500 million.  Our accelerated stock repurchase program will be completed using available funds including the issuance of $1 billion of junior subordinated securities during the second quarter of 2007.

Debt increased in the first six months 2007, due to increases in long-term debt and decreases in short term debt.  In May 2007, we issued $500,000,000 of Series A 6.50% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 and $500,000,000 of Series B 6.125% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (together the “Debentures”), utilizing the registration statement filed with the Securities and Exchange Commission (“SEC”) in May 2006.  These securities will be treated in part as equity by Moody’s and S&P in their assessment of the Company’s credit rating.  Series A will be considered 100% equity by S&P until 2037, and 75% equity by Moody’s until 2017 and 50% equity until 2037.  Series B will be considered 100% and 75% equity by S&P and Moody’s, respectively, until 2017.  For further information on the issuance, see Note 11 to the Condensed Consolidated Financial Statements.

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