Company will also expense stock option costs
NORTHBROOK, Ill., Aug. 13, 2002 — The Allstate Corporation (NYSE: ALL) announced today that Edward M. Liddy and Casey J. Sylla, as chief executive officer and chief financial officer for the corporation, respectively, signed and submitted certifications to the U.S. Securities and Exchange Commission in accordance with the commission’s order issued June 27, 2002.
The certificates state that Allstate’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 and its Quarterly Reports on Form 10-Q for the fiscal periods ended March 31 and June 30, 2002 did not contain any misstatements or omissions of material fact as of the end of the periods covered by such reports.
The company also announced that, in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 123, it would begin expensing the fair value of all stock options granted on or after January 1, 2003. This change in accounting practice also will be effective January 1, 2003.
Allstate estimates the initial impact of adopting SFAS No. 123 for 2003 will be approximately $11 million after-tax ($.02 per diluted share). Assuming the continuation of historical trends related to the number and vesting period of stock options granted, the annual expense would grow to approximately $.07 per diluted share by 2006 as options vest.
“In this current climate, Allstate believes expensing stock options going forward is in the best interest of shareholders and investors,” said Allstate Chairman, President and CEO Edward M. Liddy. “We believe that stock options are valuable to align behavior, but we have been a modest user. My hope is that other companies within our industry will agree that it is important for investors to be able to compare company cost structures in a consistent manner and that more will agree to adopt this accounting practice.”
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 AllstateР’В®” 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 DeerbrookР’В® 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.
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