1. NEWS
For Immediate Release
Contact: Michael Trevino
Media Relations
(847) 402-5600
Robert Block, Larry Moews, Phil Dorn
Investor Relations
(847) 402-2800
Allstate Reports 2002 Second Quarter Results
NORTHBROOK, Ill., July 18, 2002 -- The Allstate Corporation (NYSE: ALL) today
reported net income of $344 million ($0.48 per diluted share) for the second quarter of
2002 compared to $168 million ($0.23 per diluted share) for the second quarter of 2001.
Operating income was $453 million ($0.64 per diluted share), for the second quarter of
2002, compared to $230 million ($0.31 per diluted share) for the second quarter of 2001.
Excluding restructuring charges for the second quarter of 2002, operating income was
$476 million ($0.67 per diluted share) compared to $233 million ($0.32 per diluted share)
for the same period in 2001. Operating income is defined as net income before the after-
tax effects of realized capital gains and losses, gain (loss) on disposition of operations,
dividends on preferred securities of subsidiary trust and the cumulative effect of changes
in accounting principles.
“We had a very solid quarter and our performance improvement strategies are working,”
said Chairman, President and CEO Edward M. Liddy. “With two quarters behind us, we
now anticipate that operating income per diluted share for 2002 will be in the range of
$2.70 to $2.90 (excluding restructuring charges and assuming normal catastrophes) —
$.20 higher than the estimate we issued at the beginning of the year.
“The rate increases we have taken in our auto and homeowners lines continue to push
premium written growth over prior year levels. We also continue to see improvements in
loss frequencies in the auto and homeowners lines. Our underwriting strategies in
targeted areas are proving successful. And expense control efforts are also favorably
impacting margins.
“Catastrophe losses in the quarter were $288 million, an amount that is within the normal
experience for a second quarter, and includes the impact of the early season fires in
Colorado and Arizona. In the second quarter of 2001 we experienced $537 million in
catastrophe losses.
“We saw an encouraging 6.3% growth rate in written premium for the Allstate brand
standard auto line in the quarter over the prior year second quarter. In this line, the loss

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ratio for the quarter was 75.4 and we expect this ratio to improve in the second half of
2002.
“We strengthened our reserve position by $68 million after tax ($0.10 per diluted share)
for upward development of prior year claims, primarily in the homeowners line. Texas
water and mold claims remain a challenge, playing a prominent role in our reserve
actions this quarter. However, we remain on track to return the Allstate branded
homeowners line to acceptable levels of profitability by mid-2003.
“We are making good progress on controlling expenses. Excluding restructuring
charges, our expense ratio for the second quarter of 2002 was 22.4, a 1.2 point decline
from the second quarter of 2001 as expenses were flat with the prior year.
quot;Allstate Financial's operating income of $143 million for the second quarter of 2002 was
up 20.2% over the second quarter of 2001 due to increased investment and mortality
margins. Statutory premium and deposits, including Allstate Bank deposits, were up
13.2% over the second quarter of 2001.
“In the second quarter of 2002 compared to the second quarter of 2001, Allstate
Financial saw sales of fixed annuities rise 47% while variable annuity sales were down
22% reflecting a change in investing attitudes among consumers. It is clear that there is
considerable consumer interest in products that offer greater stability and guaranteed
returns and Allstate Financial’s broad product portfolio has allowed it to capitalize on
those changing consumer attitudes.
“We continue to be encouraged with the progress that our exclusive agents are making
in helping transform the company to a personal financial services company. Through the
first six months of 2002 our exclusive agents have more than doubled their sales of
Allstate Financial products compared to the same period in the prior year.
“Overall, Allstate Financial continues to perform well in the very difficult market
conditions in which we are operating.”

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Summary of results for the quarter and six months ended June 30, 2002:
Consolidated Highlights
Quarter Ended Six Months Ended
June 30 June 30
($ in millions, except per-share amounts) Est. Est.
2002 2001 Change 2002 2001 Change
$ $ % $ $ %
7,455 7,203 3.5 14,753 14,334 2.9
Consolidated Revenues
Operating Income Before Restructuring
476 233 104.3 977 790 23.7
Charges After-tax
Operating Income Per Share (Diluted)
.67 .32 109.4 1.37 1.08 26.9
Before Restructuring Charges After-tax
23 3 -- 36 8 --
Restructuring Charges After-tax
453 230 97.0 941 782 20.3
Operating Income
.64 .31 106.5 1.32 1.07 23.4
Operating Income Per Share (Diluted)
(107) (47) 127.7 (171) (80) 113.8
Realized Capital (Losses) Gains After-tax
Gain (Loss) on Disposition of Operations
-- (6) -- 5 (6) (183.3)
After-tax
Dividends on Preferred Securities of
(2) (9) (77.8) (5) (19) (73.7)
Subsidiary Trust(s) After-tax
Cumulative Effect of a Change in
-- -- -- (331) (9) --
Accounting Principle After-tax
344 168 104.8 439 668 (34.3)
Net Income
.48 .23 108.7 .62 .91 (31.9)
Net Income per share (Diluted)
Weighted Average Shares Outstanding
712.1 728.5 (2.3) 712.9 729.4 (2.3)
(Diluted)

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• The increase in second quarter 2002 consolidated revenues was due to increased
Property-Liability premiums earned, partially offset by higher realized capital losses as
compared to the same quarter in the prior year.
• The consolidated operating income increase in the second quarter of 2002 when
compared to the prior year quarter was due to:
- increased Property-Liability premiums earned
- lower catastrophe losses
- improved auto and homeowners loss frequencies
- increased Allstate Financial operating income
These factors were partly offset by:
- increased reserves for prior accident years in Property-Liability
- increased restructuring expenses
• Restructuring expenses incurred during the second quarter of 2002 totaled $35 million,
or $23 million after-tax and $0.03 per diluted share. Restructuring expenses for the first
six months of 2002 totaled $55 million, or $36 million after-tax and $0.05 per diluted
share. These expenses related to the previously announced realignment of the
company’s claim offices, Customer Information Centers and other back-office
operations.
• During the second quarter of 2002, Allstate purchased 4.1 million shares of its stock at
an average cost per share of $38.61 for an overall cost of $156 million. The total cost of
shares repurchased under its current $500 million repurchase program through June 30,
2002 is $296 million. The company intends to complete this repurchase program by
December 31, 2002.

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• The components of pre-tax realized capital gains (losses) were:
Est. Quarter Ended Quarter Ended
June 30, 2002 June 30, 2001
($ in millions) Property- Allstate Corporate Property- Allstate Corporate
Liability Financial and Other Total Liability Financial and Other Total
Valuation of
derivative $ (29) $ (16) $ -- $ (45) $ 10 $ 14 $ -- $ 24
instruments
Portfolio trading (58) 11 -- (47) 14 (26) (1) (13)
Investment (27) (32) (2) (61) (45) (37) -- (82)
write-downs
Realized
Capital Gains $(114) $(37) $ (2) $(153) $(21) $(49) $ (1) $ (71)
(Losses)
Est. Six Months Ended Six Months Ended
June 30, 2002 June 30, 2001
($ in millions) Property- Allstate Corporate Property- Allstate Corporate
Liability Financial and Other Total Liability Financial and Other Total
Valuation of
derivative $ (24) $ (26) $ -- $ (50) $ (27) $ (39) $ -- $ (66)
instruments
Portfolio trading (60) (40) (1) (101) 101 (21) 1 81
Investment (45) (58) (2) (105) (68) (69) -- (137)
write-downs
Realized
Capital Gains $(129) $(124) $ (3) $(256) $ 6 $ (129) $1 $(122)
(Losses)
• As of January 1, 2002, the company adopted Statement of Financial Accounting
Standard (“SFAS”) No. 142 “Goodwill and Other Intangible Assets.” As required by this
statement, the company ceased amortizing goodwill in the first quarter of 2002, and
completed its adoption of a fair value appraisal method for goodwill in the second quarter
of 2002.
Goodwill amortization recognized in the second quarter of 2001 totaled $13 million and
$26 million for the first six months of 2001.
The fair value appraisal of goodwill completed in the second quarter of 2002 resulted in
an impairment totaling $331 million after-tax. The impairment relates to goodwill arising

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from the company’s purchases of American Heritage Life Investment Corporation
(“AHL”) in 1999 and Pembridge Inc. in 1998 and is a result of adopting the fair value
appraisal method required by SFAS No. 142.
As required by SFAS No. 142, the impairment is recorded as the cumulative effect of a
change in accounting principle as of January 1, 2002 and therefore impacts the
previously released net income per diluted share for the first quarter of 2002 and net
income per diluted share for the six months ended June 30, 2002, by $0.46. The
previously released first quarter 2002 net income per diluted share was $0.60. The
revised first quarter 2002 net income per diluted share including the impact of this
impairment is $0.14. This impairment decreased the March 31, 2002 book value per
diluted share by $0.46. There is no impact of this impairment on operating income or net
income per diluted share for the second quarter of 2002.
Goodwill Impairment by Acquisition
($ in millions)
AHL $ 283
Pembridge, Inc. 48
Total impairment $ 331
• The net income for the six months ended June 30, 2001 includes a negative $9 million
after-tax effect related to the adoption of SFAS Nos. 133 and 138. These statements
comprise a single, integrated accounting framework for derivative instruments and
hedging activities, including specific methodologies for the valuation of derivative
securities.

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Property-Liability Business
Property-Liability Highlights
Quarter Ended Six Months Ended
June 30 June 30
($ in millions, except ratios) Est. Est.
2002 2001 Change 2002 2001 Change
$ $ % $ $ %
Property-Liability Premiums Written 6,042 5,728 5.5 11,758 11,168 5.3
Property-Liability Revenues 6,117 5,918 3.4 12,205 11,864 2.9
Operating Income before Restructuring
Charges 357 135 164.4 744 584 27.4
Restructuring Charges After-tax 22 1 -- 35 5 --
Operating Income 335 134 150.0 709 579 22.5
Realized Capital (Losses) Gains After-tax (68) (11) -- (80) 6 --
Gain (Loss) on Disposition of Operations -- (6) -- 5 (6) (183.3)
Cumulative Effect of a Change in
Accounting Principle After-tax -- -- -- (48) (3) --
Net Income 267 117 128.2 586 576 1.7
Catastrophe Losses 288 537 (46.4) 398 619 (35.7)
Combined Ratio before impacts of
catastrophes and restructuring charges 94.8 96.5 (1.7)pts 95.8 96.4 (0.6)pts
Impact of catastrophes 5.0 9.8 (4.8)pts 3.5 5.6 (2.1)pts
Impact of restructuring charges 0.6 -- 0.6pts 0.5 0.1 0.4 pts
Combined Ratio 100.4 106.3 (5.9)pts 99.8 102.1 (2.3) pts

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• Factors contributing to Property-Liability premium written growth in the second quarter of
2002 as compared to the same quarter in the prior year included:
- A 5.8% increase in Allstate brand premiums written
6.3% increase in standard auto
17.1% increase in homeowners
11.1% decrease in Allstate brand non-standard auto as a result of
profit improvement actions
• The following net rate changes have been approved for Property-Liability:
Quarter Ended Six Months Ended
June 30, 2002 June 30, 2002
Weighted Weighted
# of States Average # of States Average
Rate Rate
Change Change
(%) (%)
Allstate brand
Standard Auto 18 7.6 31 7.8
Non-standard Auto 15 11.2 32 10.4
Homeowners 15 21.6 36 20.6
Ivantage brand
Standard Auto (Encompass) 14 7.8 23 6.9
Non-standard Auto (Deerbrook) 14 14.1 20 9.5
Homeowners (Encompass) 14 8.9 22 16.0

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• Factors contributing to the increased Property-Liability loss costs in the second
quarter of 2002 when compared to the prior year quarter include:
- Reserve strengthening for upward development of prior year claims:
----Loss Ratio Impact---
$ in Mil. Ratio Pr. Yr. Variance
Auto $18 0.3 1.4
Homeowner 87 1.5 (1.0)*
Pre-tax Total $105 1.8 0.4
*Prior year strengthening in 2001 included $90 million for the Northridge
catastrophe.
These factors were partially offset by:
improved auto and homeowners frequency
decreased catastrophe losses
Incurred losses related to mold claims in Texas in the second quarter of
-
2002 were $103 million compared to $25 million in the second quarter of
2001. Strengthening of prior year reserves noted above that was related
to mold losses in Texas totaled $30 million.

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Allstate Financial Business
Allstate Financial Highlights
Quarter Ended Six Months Ended
June 30 June 30
Est. Est.
2002 2001 Change 2002 2001 Change
($ in millions) $ $ % $ $ %
Statutory Premiums and Deposits* 3,325 2,936 13.2 6,115 5,803 5.4
Allstate Financial GAAP Revenues 1,321 1,266 4.3 2,515 2,427 3.6
Operating Income before
Restructuring Charges 144 121 19.0 287 249 15.3
Restructuring Charges After tax 1 2 (50.0) 1 3 (66.7)
Operating Income 143 119 20.2 286 246 16.3
Realized Capital (Losses) Gains
After-tax (37) (35) 5.7 (89) (87) 2.3
Cumulative Effect of a Change in
Accounting Principle After-tax -- -- -- (283) (6) --
Net Income 106 84 26.2 (86) 153 (156.2)
Investments including Separate
Accounts 64,427 58,501 10.1 64,427 58,501 10.1
*Statutory premiums and deposits is a measure used by Allstate management to
analyze sales trends. Statutory premiums and deposits includes premiums on
insurance policies and premiums and deposits on annuities determined in conformity
with statutory accounting practices prescribed or permitted by the insurance
regulatory authorities of the states in which the Company’s insurance subsidiaries
are domiciled, and all other funds received from customers on deposit type products
which are treated as liabilities, including the deposits of Allstate Bank.

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• Factors contributing to the increase in Allstate Financial statutory premiums and deposits
during the second quarter of 2002 as compared to the same quarter in the prior year
included:
- an increase in the retail sales of fixed annuities
- growth in deposits of Allstate Bank
This increase was partly offset by:
- a decrease in variable annuity sales
• Factors contributing to the growth in Allstate Financial operating income in the second
quarter of 2002 when compared to the same quarter in the prior year included:
- an increase in investment and mortality margins
- a change in accounting eliminating the amortization of goodwill which
totaled $7 million in the second quarter of 2001 and $15 million for the
first six months of 2001.
This press release contains forward-looking statements about the profitability of
Allstate’s homeowners line of business, our loss ratio for Allstate standard auto, our
operating income for 2002 and rate changes in our Property-Liability business. These
statements are subject to the Private Securities Litigation Reform Act of 1995 and are
based on management’s estimates, assumptions and projections. Actual results may
differ materially from those projected in the forward-looking statements for a variety of
reasons. Projected weighted average rate changes in our Property-Liability business
may be lower than projected due to a decrease in the number of policies in force. Loss
costs in our Property-Liability business, including losses due to catastrophes such as
hurricanes and earthquakes, may exceed management’s projections. Competitive
pressures could lead to sales of Property-Liability products, including private passenger
auto and homeowners insurance, that are lower than projected by management, as we
increase prices and modify our underwriting practices. Investment income may not meet
management’s projections due to poor stock market performance or lower returns on the
fixed income portfolio due to worsening credit conditions. Readers are encouraged to
review the other risk factors facing Allstate that we disclose in our current, quarterly and
annual reports to the Securities and Exchange Commission on Forms 8-K, 10-Q and 10-
K. We undertake no obligation to publicly correct or update any forward-looking
statements. This press release contains unaudited financial information.
The supplemental operating information included in the tables above allows for
additional analysis of results of operations. The net effects of realized capital gains and
losses have been excluded due to the volatility between periods and because such data
is often excluded when evaluating the overall financial performance of insurers. After-tax
realized capital gains and losses are presented net of the effects of Allstate Financial’s
deferred policy acquisition cost amortization to the extent that such effects resulted from

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the recognition of realized capital gains and losses. Operating income should not be
considered as a substitute for any generally accepted accounting principles (quot;GAAPquot;)
measure of performance. The method of calculating operating income may be different
from the method used by other companies and therefore comparability may be limited.
The Allstate Corporation (NYSE: ALL) is the nation’s largest publicly held personal lines
insurer. Widely known through the “You’re In Good Hands With Allstate®” slogan,
Allstate provides insurance products to more than 14 million households and has
approximately 13,000 exclusive agents in the U.S. and Canada. Customers can access
Allstate products and services through Allstate agents, or in select states at allstate.com
and 1-800-Allstate. Encompasssm and Deerbrooksm Insurance brand property and
casualty products are sold exclusively through independent agents. Allstate Financial
Group includes the businesses that provide life insurance, retirement and investment
products, through Allstate agents, workplace marketing, independent agents, banks and
securities firms.
The Allstate Corporation prepares an interim investor supplement, containing standard
information that is not totally available at the time of the earnings release. The
supplement is posted to the company’s website and will be updated periodically over the
next 30 days, and can be accessed by going to the Allstate web site at allstate.com and
clicking on “About Allstate.” From there, go to the “Find Financial Information” button.
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