SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 


 

FORM 11-K

 

(Mark One):

 

ý

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No fee required, effective October 7, 1996]

 

 

 

For the fiscal year ended December 31, 2003

 

 

 

OR

 

 

o

TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED].

 

For the transition period from               to              

 

Commission file number 1-11840

 

 

THE SAVINGS AND PROFIT SHARING FUND OF

ALLSTATE EMPLOYEES

 

THE ALLSTATE CORPORATION

2775 SANDERS ROAD STE. E-5

NORTHBROOK, ILLINOIS 60062-6127

 

 



 

The Savings and
Profit Sharing Fund of
Allstate Employees

 

Financial Statements for the
Years Ended December 31, 2003 and 2002,
Supplemental Schedule for the
Year Ended December 31, 2003 and
Independent Auditors’ Report

 



 

THE SAVINGS AND PROFIT SHARING FUND OF
ALLSTATE EMPLOYEES

 

TABLE OF CONTENTS

 

 

Page

 

 

INDEPENDENT AUDITORS’ REPORT

1

 

 

FINANCIAL STATEMENTS:

 

 

 

Statements of Net Assets Available for Benefits, December 31, 2003 and 2002

2-3

 

 

Statements of Changes in Net Assets Available for Benefits, Years Ended December 31, 2003 and 2002

4-5

 

 

Notes to Financial Statements

 

 

 

SUPPLEMENTAL SCHEDULE: *

 

 

 

Form 5500: Schedule H, Part IV, Line 4i—Schedule of Assets (Held at End of Year) at December 31, 2003

11

 

 

SIGNATURE

12

 

 

EXHIBIT INDEX

 

 

 

23  Consent of Deloitte & Touche LLP

 

 


* All other supplemental schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

 



 

Deloitte & Touche LLP

180 North Stetson Avenue

Chicago, IL 60601-6779

USA

 

 

 

Tel: +1 312 946 3000

 

Fax: +1 312 946 2600
www.deloitte.com

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Trustees and Participants of

The Savings and Profit Sharing Fund of Allstate Employees:

 

We have audited the accompanying financial statements of The Savings and Profit Sharing Fund of Allstate Employees (the “Fund”) as of December 31, 2003 and 2002, and for the years then ended, listed in the table of contents. These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Fund as of December 31, 2003 and 2002, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule listed in the table of contents is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplementary information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for the purpose of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of the individual funds. The supplemental schedule and supplementary information are the responsibility of the Fund’s management. Such supplemental schedule and supplementary information have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.

 

 

/s/ Deloitte & Touche LLP

 

 

Chicago, Illinois

April 30, 2004

 



 

THE SAVINGS AND PROFIT SHARING FUND OF
ALLSTATE EMPLOYEES

 

STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2003

(Dollars in thousands)

 

 

 

Supplementary Information

 

 

 

 

 

Participant-
Directed
Funds

 

Allstate
Stock
Fund

 

ESOP
Company
Shares
Unallocated

 

Total

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS—At fair value:

 

 

 

 

 

 

 

 

 

The Allstate Corporation common stock

 

$

 

$

757,267

 

$

674,660

 

$

1,431,927

 

Interest in registered investment company,

 

 

 

 

 

 

 

 

 

State Street Global Advisors (SSgA):

 

 

 

 

 

 

 

 

 

SSgA Short Term Investment Fund

 

379,982

 

 

 

 

 

379,982

 

SSgA Bond Market Index Fund Series A

 

143,843

 

 

 

 

 

143,843

 

SSgA Allstate Balanced Fund

 

549,600

 

 

 

 

 

549,600

 

SSgA S&P 500 Flagship Fund Series A

 

583,301

 

 

 

 

 

583,301

 

SSgA Daily EAFE Fund Series T

 

87,095

 

 

 

 

 

87,095

 

SSgA Russell 2000 Fund Series A

 

241,488

 

 

 

 

 

241,488

 

Collective short-term investment fund

 

 

 

1,002

 

 

 

1,002

 

Participant notes receivable

 

83,782

 

 

 

 

 

83,782

 

 

 

 

 

 

 

 

 

 

 

Total investments

 

2,069,091

 

758,269

 

674,660

 

3,502,020

 

 

 

 

 

 

 

 

 

 

 

RECEIVABLES:

 

 

 

 

 

 

 

 

 

Dividends and interest

 

360

 

4,263

 

3,768

 

8,391

 

Employer contributions

 

 

 

 

 

20,427

 

20,427

 

Employee contributions

 

9,430

 

861

 

 

 

10,291

 

Other

 

 

 

2,409

 

 

 

2,409

 

Interfund

 

 

 

124,590

 

 

 

124,590

 

 

 

 

 

 

 

 

 

 

 

Total receivables

 

9,790

 

132,123

 

24,195

 

166,108

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

2,078,881

 

890,392

 

698,855

 

3,668,128

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ESOP LOAN (Notes 1 and 3)

 

 

 

 

 

94,469

 

94,469

 

 

 

 

 

 

 

 

 

 

 

PAYABLES:

 

 

 

 

 

 

 

 

 

Other

 

471

 

82

 

 

 

553

 

Interfund

 

 

 

 

 

124,590

 

124,590

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

471

 

82

 

219,059

 

219,612

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS AVAILABLE FOR BENEFITS

 

$

2,078,410

 

$

890,310

 

$

479,796

 

$

3,448,516

 

 

See notes to financial statements.

 

2



 

THE SAVINGS AND PROFIT SHARING FUND OF
ALLSTATE EMPLOYEES

 

STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002

(Dollars in thousands)

 

 

 

Supplementary Information

 

 

 

 

 

Participant-
Directed
Funds

 

Allstate
Stock
Fund

 

ESOP
Company
Shares
Unallocated

 

Total

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS—At fair value:

 

 

 

 

 

 

 

 

 

The Allstate Corporation common stock

 

$

 

$

648,515

 

$

700,119

 

$

1,348,634

 

Interest in registered investment company,

 

 

 

 

 

 

 

 

 

State Street Global Advisors (SSgA):

 

 

 

 

 

 

 

 

 

SSgA Short Term Investment Fund

 

394,235

 

 

 

 

 

394,235

 

SSgA Bond Market Index Fund Series A

 

199,008

 

 

 

 

 

199,008

 

SSgA Allstate Balanced Fund

 

491,079

 

 

 

 

 

491,079

 

SSgA S&P 500 Flagship Fund Series A

 

392,090

 

 

 

 

 

392,090

 

SSgA Daily EAFE Fund Series A

 

36,033

 

 

 

 

 

36,033

 

SSgA Russell 2000 Fund Series A

 

91,912

 

 

 

 

 

91,912

 

Collective short-term investment fund

 

 

 

4,128

 

 

 

4,128

 

Participant notes receivable

 

77,950

 

 

 

 

 

77,950

 

 

 

 

 

 

 

 

 

 

 

Total investments

 

1,682,307

 

652,643

 

700,119

 

3,035,069

 

 

 

 

 

 

 

 

 

 

 

RECEIVABLES:

 

 

 

 

 

 

 

 

 

Dividends and interest

 

530

 

3,652

 

3,982

 

8,164

 

Employer contributions

 

 

 

 

 

27,008

 

27,008

 

Interfund

 

 

 

120,025

 

 

 

120,025

 

 

 

 

 

 

 

 

 

 

 

Total receivables

 

530

 

123,677

 

30,990

 

155,197

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

1,682,837

 

776,320

 

731,109

 

3,190,266

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ESOP LOAN (Notes 1 and 3)

 

 

 

 

 

128,368

 

128,368

 

 

 

 

 

 

 

 

 

 

 

PAYABLES:

 

 

 

 

 

 

 

 

 

Other

 

478

 

106

 

 

 

584

 

Interfund

 

 

 

 

 

120,025

 

120,025

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

478

 

106

 

248,393

 

248,977

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS AVAILABLE FOR BENEFITS

 

$

1,682,359

 

$

776,214

 

$

482,716

 

$

2,941,289

 

 

See notes to financial statements.

 

3



 

THE SAVINGS AND PROFIT SHARING FUND OF
ALLSTATE EMPLOYEES

 

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR
ENDED DECEMBER 31, 2003

(Dollars in thousands)

 

 

 

Supplementary Information

 

 

 

 

 

Participant-
Directed
Funds

 

Allstate
Stock
Fund

 

ESOP
Company
Shares
Unallocated

 

Total

 

ADDITIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME:

 

 

 

 

 

 

 

 

 

Net appreciation in fair value of investments

 

$

278,134

 

$

107,535

 

$

94,565

 

$

480,234

 

Interest

 

9,183

 

55

 

29

 

9,267

 

Dividends

 

 

 

18,173

 

14,585

 

32,758

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

287,317

 

125,763

 

109,179

 

522,259

 

 

 

 

 

 

 

 

 

 

 

CONTRIBUTIONS:

 

 

 

 

 

 

 

 

 

Participants

 

149,686

 

16,100

 

 

 

165,786

 

Employer—ESOP loan debt service

 

 

 

 

 

20,427

 

20,427

 

Employer—cash matched on participant deposits

 

 

 

250

 

 

 

250

 

 

 

 

 

 

 

 

 

 

 

Total contributions

 

149,686

 

16,350

 

20,427

 

186,463

 

 

 

 

 

 

 

 

 

 

 

ALLOCATION OF COMPANY SHARES:

 

 

 

 

 

 

 

 

 

Shares matched on participant deposits at fair value

 

 

 

124,590

 

(124,590

)

 

 

 

 

 

 

 

 

 

 

 

 

Total allocation of Company shares

 

 

124,590

 

(124,590

 

 

 

 

 

 

 

 

 

 

 

Total additions

 

437,003

 

266,703

 

5,016

 

708,722

 

 

 

 

 

 

 

 

 

 

 

DEDUCTIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BENEFITS PAID TO PARTICIPANTS

 

126,947

 

62,242

 

 

 

189,189

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

7,937

 

7,937

 

 

 

 

 

 

 

 

 

 

 

ADMINISTRATIVE EXPENSE

 

3,210

 

1,159

 

 

 

4,369

 

 

 

 

 

 

 

 

 

 

 

Total deductions

 

130,157

 

63,401

 

7,937

 

201,495

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE)

 

306,846

 

203,302

 

(2,921

)

507,227

 

 

 

 

 

 

 

 

 

 

 

INTERFUND TRANSFERS

 

89,206

 

(89,206

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS AVAILABLE FOR BENEFITS:

 

 

 

 

 

 

 

 

 

Beginning of year

 

1,682,359

 

776,214

 

482,716

 

2,941,289

 

 

 

 

 

 

 

 

 

 

 

End of year

 

$

2,078,411

 

$

890,310

 

$

479,795

 

$

3,448,516

 

 

See notes to financial statements.

 

4



 

THE SAVINGS AND PROFIT SHARING FUND OF
ALLSTATE EMPLOYEES

 

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2002

(Dollars in thousands)

 

 

 

Supplementary Information

 

 

 

 

 

Participant-
Directed
Funds

 

Allstate
Stock
Fund

 

ESOP
Company
Shares
Unallocated

 

Total

 

ADDITIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME (LOSS):

 

 

 

 

 

 

 

 

 

Net appreciation (depreciation) in fair value of investments

 

$

(177,911

)

$

66,414

 

$

62,271

 

$

(49,226

)

Interest

 

12,300

 

156

 

90

 

12,546

 

Dividends

 

464

 

15,582

 

15,899

 

31,945

 

 

 

 

 

 

 

 

 

 

 

Net investment income (loss)

 

(165,147

)

82,152

 

78,260

 

(4,735

)

 

 

 

 

 

 

 

 

 

 

CONTRIBUTIONS:

 

 

 

 

 

 

 

 

 

Participants

 

137,340

 

12,933

 

 

 

150,273

 

Employer—ESOP loan debt service

 

 

 

 

 

27,008

 

27,008

 

Employer—cash matched on participant deposits

 

 

 

254

 

 

 

254

 

 

 

 

 

 

 

 

 

 

 

Total contributions

 

137,340

 

13,187

 

27,008

 

177,535

 

 

 

 

 

 

 

 

 

 

 

ALLOCATION OF COMPANY SHARES:

 

 

 

 

 

 

 

 

 

Shares matched on participant deposits at fair value

 

 

 

120,025

 

(120,025

)

 

 

Shares allocated in lieu of dividends at fair value

 

 

 

2,317

 

(2,317

)

 

 

 

 

 

 

 

 

 

 

 

 

Total allocation of Company shares

 

 

122,342

 

(122,342

)

 

 

 

 

 

 

 

 

 

 

 

Total additions

 

(27,807

)

217,681

 

(17,074

)

172,800

 

 

 

 

 

 

 

 

 

 

 

DEDUCTIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BENEFITS PAID TO PARTICIPANTS

 

301,621

 

107,105

 

 

 

408,726

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

10,479

 

10,479

 

 

 

 

 

 

 

 

 

 

 

ADMINISTRATIVE EXPENSE

 

3,184

 

1,107

 

 

 

4,291

 

 

 

 

 

 

 

 

 

 

 

Total deductions

 

304,805

 

108,212

 

10,479

 

423,496

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE)

 

(332,612

)

109,469

 

(27,553

)

(250,696

)

 

 

 

 

 

 

 

 

 

 

INTERFUND TRANSFERS

 

40,864

 

(43,181

2,317

 

 

 

 

 

 

 

 

 

 

 

 

 

NET ASSETS AVAILABLE FOR BENEFITS:

 

 

 

 

 

 

 

 

 

Beginning of year

 

1,974,107

 

709,926

 

507,952

 

3,191,985

 

 

 

 

 

 

 

 

 

 

 

End of year

 

$

1,682,359

 

$

776,214

 

$

482,716

 

$

2,941,289

 

 

See notes to financial statements.

 

5



 

THE SAVINGS AND PROFIT SHARING FUND OF ALLSTATE EMPLOYEES

 

NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2003 AND 2002

 

 

1.                                      DESCRIPTION OF PLAN

 

The following description of The Savings and Profit Sharing Fund of Allstate Employees (the “Fund”) provides only general information. Participants should refer to the plan document for a more complete description of the Fund’s provisions.

 

GeneralThe Fund covers all full-time and regular part-time employees of The Allstate Corporation (the “Company”) and designated affiliates of the Company. Employees must be at least 18 years of age to participate.

 

The Fund is a defined contribution plan consisting of a profit sharing and stock bonus plan containing a cash or deferred arrangement which is intended to meet the requirements of Sections 401 (a) and 401(k) of the Internal Revenue Code of 1986 (the “Code”). The stock bonus portion of the Fund includes a leveraged and a non-leveraged employee stock ownership plan (“ESOP”) which is intended to meet the requirements of Section 409 and Section 4975(e)(7) of the Code. The Fund is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

 

Administration—The Fund is administered by an Administrative Committee. Investment transactions are authorized by the Fund’s Investment Committee. Members of the Administrative and Investment Committees are appointed by the Profit Sharing Committee. Members of the Profit Sharing Committee are appointed by the Company.

 

Trustee of the Fund—The Northern Trust Company holds Fund assets as trustee under The Savings and Profit Sharing Fund of Allstate Employees Trust.

 

Contributions—Each year, employees may contribute up to 50 percent of eligible annual compensation through a combination of pre-tax and after-tax deposits, subject to Internal Revenue Code limitations, Participants age 50 or older have the option to make additional before-tax contributions (“Catch-Up” Contributions). Employees may also rollover amounts representing distributions from other qualified defined benefit or defined contribution plans. The Company contributes, at its discretion, from 50 percent to 150 percent of the first 5 percent of eligible compensation that a participant contributes on a pre-tax basis to the Fund. All employer contributions are invested in Company stock. However, participants can transfer all or part of their Company Contributions to any investment option within the Fund at any time. During the years ended December 31, 2003 and 2002, the Company matching contributions were 150 percent.

 

Participant Accounts—Individual accounts are maintained for each fund participant. Each participant’s account is credited with the participant’s contribution, allocations of the Company’s contribution and Fund earnings, and is charged with an allocation of administrative expenses and Fund losses. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

 

6



 

VestingParticipants are immediately vested in their contributions and the Company’s contributions plus earnings thereon.

 

Investment OptionsUpon enrollment in the Fund, a participant may direct employee contributions to any or all of the seven investment options listed below. Participants may change their investment elections at any time.

 

Allstate Stock Fund—Funds are invested in Company common stock with a portion of the fund invested in short-term securities to provide liquidity to process transactions.

 

Money Market Fund—The fund, managed by State Street Global Advisors (“SSgA”), a registered investment company, invests in shares of a commingled trust that invests in short-term securities.

 

Bond Fund—The fund, managed by SSgA, invests in shares of a commingled trust that invests in the broad domestic bond market and also in U.S. government and agency, corporate, mortgage-backed, and asset-backed debt securities.

 

Balanced Fund—The fund, managed by SSgA, invests in shares of a commingled trust that invests in a diversified portfolio of stocks and debt securities.

 

S&P 500 Fund—The fund, managed by SSgA, invests in shares of a commingled trust that invests in a diversified portfolio of stocks of large, established companies.

 

International Equity Fund—The fund, managed by SSgA, invests in shares of a commingled trust that invests in a diversified portfolio of stocks in developed markets within Europe, Australia and the Far East. Effective April 24, 2003, the fund, which was invested in the SSgA Daily EAFE Securities Lending Fund Series A, was replaced with a new fund, the SSgA Daily EAFE Securities Lending Fund Series T.

 

Russell 2000 Fund—The fund, managed by SSgA, invests in shares of a commingled trust that invests in a diversified portfolio of stocks that represents the smallest two-thirds of the 3,000 largest U.S. companies.

 

Participant Notes ReceivableParticipants may borrow from their account balance. The loan amount must be at least $1,000 up to a maximum equal to the lesser of: (i) 50 percent of their account value, (ii) 100 percent of their pre-tax, after-tax and rollover account balances, or (iii) $50,000. Loan transactions are treated as a proportional transfer from/to the investment funds and to/from the Loan Fund. Loan terms range from 6 to 48 months for a general-purpose loan and 49 to 180 months for a primary residence loan. Loans are secured by the participant’s account balance and bear interest at the prime rate. Principal and interest are paid ratably through payroll deductions.

 

Employee Stock Ownership Plan—The Company established a leveraged ESOP effective June 30, 1995, through a split of the employee stock ownership plan of The Savings and Profit Sharing Fund of Sears Employees (the “Prior Plan”) by acquiring 50 percent of the unallocated shares and assuming 50 percent of the related loan of the Prior Plan. The resulting ESOP loan (the “ESOP Loan”) bears interest at 7.9 percent.

 

The borrowing is to be repaid through the year 2019 or earlier if the Company elects to make additional contributions for principal prepayments on the ESOP Loan. As the Fund makes each payment of principal and interest, a proportional percentage of unallocated shares are allocated to eligible employees’ accounts in accordance with applicable regulations under the Code.

 

7



 

ESOP shares not yet allocated to participants are held in a suspense account. The majority of these shares serve as collateral on the ESOP Loan. ESOP shares allocated to participants and other Company shares that were acquired with participant contributions are included in the Allstate Stock Fund and the lender has no rights against these shares.

 

Payment of Benefits—Upon termination of service, a participant is entitled to a complete withdrawal of his or her account balance. Partial withdrawals are also permitted under the Fund subject to restrictions.

 

2.                                      SUMMARY OF ACCOUNTING POLICIES

 

Basis of Accounting—The Fund financial statements are prepared under the accrual basis of accounting.

 

Use of Estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.

 

Investment Valuation and Income Recognition—Fund investments are stated at fair value. Shares of registered investment companies are valued at market prices that represent the net asset value of shares held by the Fund at year-end. Common stock held in the Allstate Stock Fund is valued at market price. Participant notes receivable are valued at cost which approximates fair value.

 

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis except for interest on participant notes, which is recorded when paid. The difference between cash and accrual basis for interest on participant notes is not material. Dividends are recorded on the ex-dividend date.

 

Benefits Paid to Participants and Participant Notes ReceivableBenefits paid to participants and participant notes receivable loans are recorded when funds are transferred out of the respective investment funds for payment to participants. Amounts allocated to accounts of persons who have elected to withdraw from the Fund, but have not yet been paid were immaterial at December 31, 2003 and 2002, respectively.

 

3.                                      ESOP LOAN

 

The ESOP loan agreement provides for the loan to be repaid through the year 2019 at an annual interest rate of 7.9 percent. There are no principal payments required on the loan during the next five years.

 

8



 

The following table presents additional information for the Fund’s investment in The Allstate Corporation common stock held in the Allstate Stock Fund and the ESOP Company Shares Unallocated at December 31:

 

 

 

2003

 

2002

 

 

 

 

 

ESOP
Company
Shares
Unallocated

 

 

 

ESOP
Company
Shares
Unallocated

 

 

 

Allstate
Stock
Fund

 

 

Allstate
Stock
Fund

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares

 

17,602,681

 

15,682,463

 

17,532,173

 

18,927,252

 

 

 

 

 

 

 

 

 

 

 

Cost

 

$

226,389

 

$

111,740

 

$

221,110

 

$

134,859

 

 

 

 

 

 

 

 

 

 

 

Fair value

 

$

757,267

 

$

674,660

 

$

648,515

 

$

700,119

 

 

4.                                      PLAN TERMINATION

 

Although it has not expressed any intent to do so, the Company has the right under the Fund to discontinue its contributions at any time and to terminate the Fund subject to provisions of ERISA.

 

5.                                      TAX STATUS

 

The Internal Revenue Service has determined and informed the Company by a letter, dated November 18, 2003, that the Fund and related trust were designed in accordance with applicable sections of the Code. The Plan Administrator and the Fund’s tax counsel believe that the Fund is currently designed and is being operated in compliance with the applicable requirements of the Code. Therefore, no provision for income taxes has been included in the Fund’s financial statements.

 

6.                                      INVESTMENTS

 

The Fund’s investments which exceeded 5 percent of net assets available for benefits as of December 31, 2003 and 2002, are as follows:

 

(Dollars in thousands)

 

2003

 

2002

 

 

 

 

 

 

 

Allstate Stock Fund (The Allstate Corporation common stock) *

 

$

757,267

 

$

648,515

 

ESOP Company Shares Unallocated

 

674,660

 

700,119

 

Money Market Fund (SSgA Short Term Investment Fund)

 

379,982

 

394,235

 

Bond Fund (SSgA Passive Bond Market Index Securities Lending Fund Series A)

 

 

**

199,008

 

Balanced Fund (SSgA Allstate Balanced Fund)

 

549,600

 

491,079

 

S&P 500 Fund (SSgA S&P 500 Flagship Fund Series A)

 

583,301

 

392,090

 

Russell 2000 Fund (SSgA Russell 2000 Index Securities Lending Fund Series A)

 

241,488

 

 

**

 


*          Partially non-participant-directed

**   Did not exceed 5% of net assets

 

9



 

During 2003 and 2002, the Fund’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:

 

(Dollars in thousands)

 

2003

 

2002

 

 

 

 

 

 

 

Allstate Stock Fund (The Allstate Corporation Common Stock)

 

$

107,535

 

$

66,414

 

ESOP Company Shares Unallocated

 

94,565

 

62,271

 

Bond Fund (SSgA Passive Bond Market Index Securities Lending Fund Series A)

 

7,118

 

15,834

 

Balanced Fund (SSgA Allstate Balanced Fund)

 

76,080

 

(38,249

)

S&P 500 Fund (SSgA S&P 500 Flagship Fund Series A)

 

120,557

 

(117,267

)

International Equity Fund (SSgA Daily EAFE Securities Lending Fund Series T) *

 

18,796

 

(7,206

)

Russell 2000 Fund (SSgA Russell 2000 Index Securities Lending Fund Series A)

 

55,583

 

(26,866

)

Sears Shares Fund (Sears, Roebuck and Co. Common Stock) **

 

 

 

6,397

 

Dean Witter Shares Fund (Morgan Stanley Dean, Witter & Co. Common Stock) **

 

 

 

(10,554

)

 

 

 

 

 

 

Total

 

$

480,234

 

$

(49,226

)

 


*          Effective April 24, 2003, the SSgA Daily EAFE Index Series A Fund held by the International Equity Fund was replaced with the SSgA Daily EAFE Series T Fund. The amount shown for 2002 reflects the performance of the Series A Fund. The amount shown for 2003 includes the performance of the Series A Fund through April 23, 2003, and the performance of the Series T Fund after that date.

 

**   Effective February 19, 2002, the Sears Shares Fund and the Dean Witter Shares Fund were discontinued.

 

7.                                      RELATED-PARTY TRANSACTIONS

 

The Fund invests in The Northern Trust Collective Short-Term Investment Fund, managed by The Northern Trust Company, the Trustee of the Fund. The Fund also invests in the common stock of The Allstate Corporation, the Fund’s sponsor.

 

* * * * * *

 

10



 

THE SAVINGS AND PROFIT SHARING FUND OF

ALLSTATE EMPLOYEES

 

FORM 5500, SCHEDULE H, PART IV, LINE 4i—

SCHEDULE OF ASSETS (HELD AT END OF YEAR)

DECEMBER 31, 2003

 

(a)

 

(b) Identity of issue, borrower,
lessor, or similar party

 

(c) Description of investment
including maturity date,
rate of interest, collateral,
par or maturity value

 

(d) Cost

 

(e) Current Value

 

 

 

 

 

 

 

 

 

 

 

*

 

The Allstate Corporation common stock

 

33,285,144 shares

 

$

338,128,720

 

$

1,431,926,895

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest in registered investment company, State Street Global Advisors (SSgA):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SSgA Short Term Investment Fund

 

379,982,185 shares

 

379,982,185

 

379,982,185

 

 

 

 

 

 

 

 

 

 

 

 

 

SSgA Passive Bond Market Index Securities Lending Fund Series A

 

9,320,451 shares

 

127,473,772

 

143,842,518

 

 

 

 

 

 

 

 

 

 

 

 

 

SSgA Allstate Balanced Fund

 

37,507,702 shares

 

405,069,218

 

549,600,363

 

 

 

 

 

 

 

 

 

 

 

 

 

SSgA S&P 500 Flagship Fund Series A

 

2,924,872 shares

 

513,414,075

 

583,301,325

 

 

 

 

 

 

 

 

 

 

 

 

 

SSgA EAFE Securities Lending Fund Series T

 

7,105,735 shares

 

69,868,796

 

87,094,994

 

 

 

 

 

 

 

 

 

 

 

 

 

SSgA Russell 2000 Index Securities Lending Fund Series A

 

13,793,008 shares

 

202,592,086

 

24l,487,989

 

 

 

 

 

 

 

 

 

 

 

*

 

The Northern Trust Collective Short-term Investment Fund

 

1,001,622 shares

 

1, 001,622

 

1,001,622

 

 

 

 

 

 

 

 

 

 

 

*

 

Participant loans

 

rates of interest from

 

 

 

 

 

 

 

 

 

4.0% to 9.25%,

 

 

 

 

 

 

 

 

 

maturing 2003 to 2018

 

83,782,330

 

83,782,330

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

$

2,121,312,804

 

$

3,502,020,221

 

 


*                               Permitted party-in-interest.

 

11



 

SIGNATURES

 

The Plan.                                            Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustees have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

THE SAVINGS AND PROFIT SHARING FUND OF ALLSTATE EMPLOYEES

 

 

 

 

 

 

 

By

/s/ CANDICE L. BEINLICH

 

 

 

Candice L. Beinlich

 

 

Plan Administrator

 

Date: June 25, 2004

 

12