10-QPeriod: Q3 FY2009

ALLSTATE CORP Quarterly Report for Q3 Ended Sep 30, 2009

Filed November 4, 2009For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

The Allstate Corporation reported a net income of $221 million ($0.41 per diluted share) for the third quarter of 2009, a significant improvement from a net loss of $923 million ($1.70 per diluted share) in the same period of the prior year. For the nine months ended September 30, 2009, the company reported a net income of $336 million ($0.62 per diluted share), compared to a net loss of $550 million ($1.00 per diluted share) in the prior year. This turnaround was primarily driven by a substantial improvement in the Property-Liability segment, which moved from a net loss of $661 million in Q3 2008 to a net income of $314 million in Q3 2009. This was largely due to a significant reduction in catastrophe losses and a favorable combined ratio of 94.7% in Q3 2009, compared to 112.7% in Q3 2008. While Allstate Financial continued to report net losses, these losses narrowed considerably year-over-year. The company's investment portfolio showed signs of recovery, with total investments increasing and unrealized net capital losses significantly decreasing. The company also demonstrated strong liquidity management and an improved capital position.

Financial Highlights

36 data points
Beta

Revenue

$7.58B

Net Income

$221.00M

2.9% Net Margin

EPS (Diluted)

$0.41

Total Assets

$135.50B

Cash & Equivalents

$727.00M

Free Cash Flow

$994.00M

Financial Statements
Beta
Revenue$7.58B
Interest Expense$106.00M
Net Income$221.00M
EPS (Basic)$0.41
EPS (Diluted)$0.41
Shares Outstanding (Basic)539.90M
Shares Outstanding (Diluted)541.50M

Key Highlights

  • 1Allstate reported a net income of $221 million in Q3 2009, a significant improvement from a net loss of $923 million in Q3 2008.
  • 2Property-Liability segment's combined ratio improved to 94.7% in Q3 2009 from 112.7% in Q3 2008.
  • 3Net realized capital losses decreased significantly to $519 million in Q3 2009 from $1.29 billion in Q3 2008.
  • 4Total investments increased to $100.63 billion as of September 30, 2009, from $95.99 billion as of December 31, 2008.
  • 5Shareholders' equity increased to $17.51 billion as of September 30, 2009, from $12.64 billion as of December 31, 2008.
  • 6The company maintained strong liquidity, with $32.96 billion in cash and highly liquid investments at September 30, 2009.
  • 7Allstate Financial's net loss narrowed to $38 million in Q3 2009 from $196 million in Q3 2008.

Frequently Asked Questions

The primary driver was the significant turnaround in the Property-Liability segment, particularly driven by a substantial reduction in catastrophe losses and a lower combined ratio, indicating improved underwriting profitability compared to the prior year's third quarter.

The investment portfolio showed signs of recovery. Total investments increased, and significantly, unrealized net capital losses decreased substantially, reflecting improved market conditions and the company's portfolio management strategies. Net investment income, however, declined due to lower yields and reduced investment balances.

The company's $2.00 billion share repurchase program was suspended in October 2008 and expired on March 31, 2009, with no new program authorized. Dividend payments were reduced to $0.20 per share per quarter starting in the second quarter of 2009, compared to $0.41 in the prior year's comparable quarter.

Yes, the Allstate Financial segment continued to report net losses, but these losses narrowed significantly in the third quarter and first nine months of 2009 compared to the same periods in 2008, indicating an improving trend in that segment's profitability.