8-KOther EventsExhibits & Filings

ALLSTATE CORP 8-K Report, Corporate Update (May 16, 2019)

Filed May 16, 2019For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

This 8-K filing by ALLSTATE CORP (ALL) on May 16, 2019, primarily serves to inform investors about a change in accounting principle for recognizing actuarial gains and losses and expected return on plan assets for pension and other postretirement plans. The company adopted a new policy as of January 1, 2019, which recognizes these remeasurements immediately through earnings, referred to as pension and other postretirement remeasurement gains and losses. This change has been applied retrospectively. This filing revises previously issued financial statements, specifically impacting the selected financial data and Management's Discussion and Analysis sections of the company's 2018 Annual Report on Form 10-K. Investors should note that while the company has adjusted historical figures to reflect this new accounting method, the revised sections have not been updated for events or activities occurring after February 15, 2019.

Key Highlights

  • 1Allstate Corp has changed its accounting principle for pension and postretirement plan remeasurements.
  • 2The new principle recognizes actuarial gains/losses and expected returns on plan assets immediately in earnings.
  • 3This change impacts how pension and other postretirement remeasurement gains and losses are reported.
  • 4The accounting change has been applied retrospectively to previously issued financial statements.
  • 5Key financial metrics like Net Income, EPS, Return on Equity, and Combined Ratio have been restated for 2018, 2017, and 2016 under the new accounting principle.
  • 6The filing revises specific sections of the 2018 Form 10-K, including Selected Financial Data, MD&A, and Financial Statements.
  • 7Revised financial data shows a decrease in reported Net Income and Net Income per common share for prior periods (2018, 2017, 2016) compared to previously reported figures.

Frequently Asked Questions

The primary purpose of this 8-K filing is to officially disclose and implement a change in Allstate's accounting principle for recognizing actuarial gains and losses and expected return on plan assets related to its pension and other postretirement plans. This change affects how these specific financial components are reported in the company's financial statements.

Under the new accounting principle, remeasurement of pension and other postretirement benefit obligations and plan assets are recognized immediately through earnings. This means that fluctuations in actuarial assumptions and investment returns for these plans will directly impact reported net income on the Consolidated Statements of Operations in the period they occur, potentially leading to more volatility in reported earnings.

The change in accounting principle has been applied retrospectively. This means that Allstate has restated its financial results for prior periods (2018, 2017, and 2016) to align with the new accounting method. The filing provides a comparative table showing 'As adjusted' figures versus 'Previously reported' figures, indicating how net income, earnings per share, return on equity, and the combined ratio have been revised.

No, this filing is primarily an accounting adjustment and not an indicator of a change in Allstate's underlying business operations or performance. The company is refining how certain non-operational items (pension plan adjustments) are recognized. Investors should compare the 'As adjusted' figures to understand the historical financial picture under the new standard, but the core business performance should be assessed by looking at the operational metrics and trends disclosed in the MD&A and financial statements, read in conjunction with this filing and subsequent reports.