Exhibit 99
Jefferson Pilot Reports 14 Percent Increase in Third-Quarter
Earnings Per Share Before Realized Investment Gains,
9 Percent Increase in Net Income Per Share
GREENSBORO, N.C., Oct. 27 /PRNewswire-FirstCall/ -- Jefferson-Pilot
Corporation (NYSE: JP), parent of the Jefferson Pilot Financial companies and
one of the nation's leading providers of universal and variable universal life
insurance and annuities, today reported results for the third quarter of 2003.
Jefferson Pilot earned $0.91 per share before realized investment gains in the
quarter, up 14 percent from third-quarter 2002 earnings before realized gains
of $0.80. Net income per share for the third quarter of 2003 increased
9 percent to $0.88, including net realized investment losses of $0.03 per
share, versus net income per share of $0.81 in the third quarter of 2002,
including net realized investment gains of $0.01.
For the first nine months of 2003, Jefferson Pilot's earnings before
realized investment gains increased 11 percent to $2.64 per share from $2.38
per share for the first three quarters of 2002. 2003 year-to-date net income
per share including realized investment losses of $0.02 per share was $2.62,
versus $2.57 including realized investment gains of $0.19 for the same period
last year.
In addition to net income, the company considers earnings before realized
investment gains and losses (or "reportable segment results"), a non-GAAP
financial measure, to be an important indicator of financial performance. We
believe that the combined presentation and discussion of earnings before
realized investment gains and losses, together with net income, provides
relevant and useful information. Earnings before realized investment gains
and losses differs from net income in that it excludes net after-tax realized
investment gains and losses.
All per-share results are on a diluted basis.
Jefferson Pilot's results for the third quarter reflected good asset
growth, continuing robust profitability, and improving investment performance.
Stockholders' equity per share grew 9 percent to $27.00 from $24.79 at year-
end 2002. Because of its strong profitability and capital resources,
Jefferson Pilot was able to continue buying its common stock, retiring one
million shares in the third quarter.
Earnings from Jefferson Pilot's Individual Products business increased
6 percent in the third quarter to $78.6 million from $73.9 million in the
third quarter of 2002. Year-to-date, Individual Product earnings were up
5 percent to $228.9 million from $218.4 million in the first nine months of
2002. Year-to-date, individual market life insurance sales are up 8%,
demonstrating the continuing success of the Premier Partnering strategy.
Third quarter sales were off from the prior year, in part reflecting a lag in
paid sales caused by new universal life product introductions. The new and
comprehensive series of UL products -- two in the market currently and the
last to be issued in early November -- are responsive to regulatory
requirements and shifting consumer preferences, and will position Jefferson
Pilot competitively across a broad range of needs.
Earnings from the Annuity and Investment Products segment increased 5
percent in the quarter to $20.0 million from $18.9 million a year earlier.
Year to date, segment earnings were also up 5 percent to $62.7 million from
$59.6 million for the comparable period of 2002. Fixed annuity fund balance
growth was solid in the quarter, rising 7 percent to $8.4 billion from
$7.9 billion a year earlier. Third-quarter fixed annuity sales of
$187.8 million, while below third-quarter 2002 sales, showed solid growth
compared to the second quarter of 2003, reflecting good market acceptance of
Jefferson Pilot's new equity indexed products.
The Benefit Partners group insurance segment earned $10.0 million in the
third quarter, 9 percent above third-quarter results last year. Benefit
Partners' earnings for the quarter were reduced by a $2.3 million reserve
charge related to a closed block of medical insurance. Year-to-date, Benefit
Partners' earnings totaled $34.5 million, including the medical reserve,
versus $34.7 million for the first nine months of 2002. Benefit Partners'
results reflected solid fundamentals in dental, long-term and short-term
disability results, and modest improvement in group life results. Group life
loss ratios improved in the third quarter from the first half of the year,
reflecting adjustments of policy terms and underwriting in the segments of the
life business where loss ratios have been somewhat higher then expected.
Year-to-date, total sales are up 16 %, while sales were flat in the third
quarter. Third quarter sales results are expected to compare favorably to
industry results.
Jefferson-Pilot Communications' third-quarter results were excellent, with
earnings increasing 17 percent to $11.4 million from $9.8 million in the third
quarter of 2002. Nine-month Communications earnings grew 12 percent to
$30.0 million from $26.8 million. Broadcast cash flow for the quarter grew
14 percent to $23.6 million from $20.6 million in the year-earlier quarter,
and increased 8 percent to $62.5 million from $57.8 million for the first nine
months.
The Corporate and Other segment benefited in the quarter from higher
income from equity investments and lower interest expense. Third-quarter
earnings before realized investment gains and losses in the segment increased
to $10.0 million from $4.5 million in the third quarter last year. Realized
net investment losses for the quarter totaled $3.9 million, reflecting
$14.3 million of net realized investment losses and a $10.4 DAC offset. Bond
write-downs were dramatically lower than in the prior-year quarter, a result
of continuing improvement in the corporate credit environment as well as
proactive portfolio management. Total segment earnings were $6.1 million for
the quarter, compared to $7.0 million for the third quarter a year ago. For
the nine months, segment earnings before realized investment gains and losses
were $22.3 million, versus $17.0 million last year, and total segment earnings
amounted to $19.2 million versus $44.1 million.
During the third quarter, Jefferson Pilot bought 1,000,000 of its shares
in the open market for a total investment of $43.7 million, bringing year-to-
date purchases to a total of 2,500,000 shares at a cost of $102.3 million.
Commenting on the quarter, Jefferson Pilot CEO David A. Stonecipher said
"Jefferson Pilot produced excellent results in the third quarter, with
earnings increasing in each of our business segments. Premier Partnering is
continuing to strengthen our individual life insurance business and to build
our key distribution channels. Our Benefit Partners business showed progress.
Communications' earnings not only were excellent but also exceeded
broadcasting industry norms, as our properties have continued to excel
competitively and increase their market share. Throughout our operations, our
proven ability to execute our business plans as efficiently as possible is a
compelling competitive advantage, as is Jefferson Pilot's strong balance sheet
and financial flexibility. And, while we strive to build each of our
businesses aggressively, we always remain vigilant about profitability -- as
we demonstrated again this quarter -- with a view toward maintaining Jefferson
Pilot's long and dependable record of performance for shareholders."
Jefferson-Pilot Corporation, a holding company, is one of the nation's
largest shareholder-owned life insurance companies. Jefferson Pilot's life
insurance and annuity companies, principally Jefferson-Pilot Life Insurance
Company, Jefferson Pilot Financial Insurance Company, and Jefferson Pilot
LifeAmerica Insurance Company, together known as Jefferson Pilot Financial,
offer full lines of individual and group life insurance products as well as
annuity and investment products. Jefferson-Pilot Communications Company owns
and operates three network television stations and 17 radio stations, and
produces and syndicates sports programming. Additional information on
Jefferson-Pilot can be found at www.jpfinancial.com.
In this release, the terms "operating earnings," "earnings," "segment
earnings," "earned," and "earnings before realized investment gains or
losses," refer to all elements of net income available to common stockholders
except realized gains or losses on sales, write-downs, or impairments of
investments ("realized investment gains or losses"). Realized investment
gains or losses, as defined, are net of related income taxes, and are reported
in the Corporate and Other segment.
This release includes forward-looking statements, and any forward-looking
statements may turn out to be wrong. They can be affected by inaccurate
assumptions or by known or unknown risks and uncertainties that could affect
our actual results significantly. These risks and uncertainties include,
among others, general economic conditions, the impact on the economy of any
further terrorist activities or any U.S. military engagements, and interest
rate levels, changes and fluctuations, all of which can impact our sales,
investments, and earnings; competitive factors, including pricing pressures,
technological developments, new product offerings, and the emergence of new
competitors; changes in federal and state taxes; changes in the regulation of
the financial services industry; or changes in other laws and regulations and
their impact. We undertake no obligation to publicly correct or update any
forward-looking statements. Readers are advised to consult any further
disclosures we make on related subjects in our press releases and filings with
the SEC; in particular, see the section entitled "External Trends and Forward
Looking Information," and other sections it may reference, in our most recent
10-K report to the SEC, as it may be updated in our subsequent 10-Q and 8-K
reports.
Jefferson-Pilot Corporation and Subsidiaries
2003 Report
Three Months Ended Nine Months Ended
Sept 30, 2003 Sept 30, 2002 Sept 30, 2003 Sept 30, 2002
Basic earnings per
share available to
common stockholders,
before gains (losses)
from sale of
investments $ 0.92 $ 0.81 $ 2.66 $ 2.40
Gains (losses) from
sale of investments,
net of income taxes (0.03) 0.01 (0.02) 0.19
Basic earnings per
share available to
common
stockholders $ 0.89 $ 0.82 $ 2.64 $ 2.59
Diluted earnings
per share available to
common stockholders,
before gains
(losses) from sale of
investments $ 0.91 $ 0.80 $ 2.64 $ 2.38
Gains (losses) from
sale of investments, net
of income taxes (0.03) 0.01 (0.02) 0.19
Diluted earnings
per share available to
common
stockholders $ 0.88 $ 0.81 $ 2.62 $ 2.57
(Dollars in thousands)
Income available to
common stockholders,
before gains (losses)
from sale of
investments $129,938 $116,308 $378,402 $356,445
Gains (losses) from
sale of investments,
net of income
taxes (3,862) 2,448 (3,112) 27,156
Net income available to
common
stockholders $126,076 $118,756 $375,290 $383,601
Average number of
shares
outstanding 141,365,238 144,641,968 142,063,945 148,017,421
Average number of
shares outstanding
- assuming
dilution 142,522,449 145,822,346 143,074,780 149,533,658
Jefferson-Pilot Corporation and Subsidiaries
(Unaudited)
Consolidated Balance Sheets (In
Thousands) Sept 30, 2003 Dec 31, 2002
Assets:
Cash and investments $ 25,391,803 $ 24,345,420
Accrued investment income 313,625 302,344
Due from reinsurers 1,347,760 1,375,341
Deferred policy acquisition costs 1,656,909 1,524,819
Value of insurance in force 454,396 502,498
Goodwill, net 311,894 311,894
Other assets 535,143 462,157
Separate account assets 1,974,818 1,784,821
$ 31,986,348 $ 30,609,294
Liabilities:
Policy liabilities $ 23,950,343 $ 23,132,411
Debt:
Commercial paper borrowings 486,841 453,442
Obligations under repurchase
agreements 367,101 499,227
Capital Securities (1) 300,000 0
Income tax liabilities 499,340 430,795
Accrued expenses and other
liabilities 598,817 468,626
Separate account liabilities 1,974,818 1,784,821
28,177,260 26,769,322
Capital Securities (1) 0 300,000
Stockholders' equity:
Common stock and paid in capital 176,318 180,120
Retained earnings 2,906,963 2,749,823
Accumulated other comprehensive
income - net unrealized gains on
securities 725,807 610,029
3,809,088 3,539,972
$ 31,986,348 $ 30,609,294
Components of Equity (Dollars in
thousands except share amounts)
Common stock and paid in capital $ 176,318 $ 180,120
Retained earnings 2,906,963 2,749,823
Net unrealized gains
Bonds, net of DAC, VOBA and taxes 462,027 370,399
Equities, net of taxes 263,780 239,630
Total unrealized gains 725,807 610,029
Stockholders' equity $ 3,809,088 $ 3,539,972
Shares Outstanding 141,055,347 142,798,768
Per share $ 27.00 $ 24.79
Per share excluding unrealized gains $ 21.86 $ 20.52
(1) In July 2003, the Company adopted Statement of Financial Accounting
Standards No. 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity". This statement
requires the Capital Securities to be classified as a liability in the
current period. Restatement of prior periods is not permitted.
Jefferson-Pilot Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
Three Months Ended Nine Months Ended
(Dollars in
thousands except
share amounts) Sept 30, 2003 Sept 30, 2002 Sept 30, 2003 Sept 30, 2002
Revenue:
Premiums and
other
considerations $ 237,629 $ 215,038 $ 707,405 $ 629,137
UL & investment
product charges 195,339 184,489 578,324 533,499
Investment
income, net of
expenses 413,075 406,197 1,237,488 1,218,224
Realized
investment
gains (losses) (5,135) 3,767 (3,981) 41,779
Communications
sales 51,729 49,891 152,506 147,957
Broker-dealer
concessions and
other 28,206 24,141 76,421 80,735
Total Revenue 920,843 883,523 2,748,163 2,651,331
Benefits and
Expenses:
Insurance and
annuity
benefits 516,474 513,400 1,561,614 1,494,064
Insurance
commissions,
net of
deferrals 31,333 28,081 80,926 91,376
General and
administrative
expenses, net
of deferrals 38,566 33,664 108,439 102,614
Insurance taxes,
licenses and
fees 19,298 18,905 58,907 58,475
Amortization of
policy acquisition
costs and value of
business acquired 91,375 71,357 254,565 203,686
Interest
expense (1) 7,969 2,843 12,572 7,817
Communications
operations 28,127 29,251 90,408 90,753
Total Benefits
and Expenses 733,142 697,501 2,167,431 2,048,785
Income before
taxes 187,701 186,022 580,732 602,546
Income taxes 61,625 61,125 193,159 200,521
Net income 126,076 124,897 387,573 402,025
Dividends on
Capital
Securities (1) 0 (6,141) (12,283) (18,424)
Net income
available to
common
stockholders $ 126,076 $ 118,756 $ 375,290 $ 383,601
Average number
of shares
outstanding 141,365,238 144,641,968 142,063,945 148,017,421
Average number
of shares
outstanding -
assuming
dilution 142,522,449 145,822,346 143,074,780 149,533,658
Earnings Per Share
Income before
gains (losses)
from sale of
investments $ 0.92 $ 0.81 $ 2.66 $ 2.40
Gains (losses)
from sale of
investments,
net of income
taxes (0.03) 0.01 (0.02) 0.19
Earnings Per
Share $ 0.89 $ 0.82 $ 2.64 $ 2.59
Income before
gains (losses)
from sale of
investments -
assuming
dilution $ 0.91 $ 0.80 $ 2.64 $ 2.38
Earnings Per
Share -
Assuming
Dilution $ 0.88 $ 0.81 $ 2.62 $ 2.57
(1) In July 2003, the Company adopted Statement of Financial Accounting
Standards No. 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity". This statement
requires payments to the holders of the Capital Securities to be
classified as interest expense beginning July 1, 2003. Restatement of
prior periods is not permitted.
Jefferson-Pilot Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended Nine Months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
(In Thousands) 2003 2002 2003 2002
Cash Flows from Operating
Activities:
Net income (1) $126,076 $124,897 $387,573 $402,025
Adjustments to reconcile net
income to net cash provided by operating
activities:
Change in policy
liabilities 3,390 18,173 96,632 40,884
Net amount credited to
policyholder accounts 21,330 40,473 69,322 125,062
Net deferral of policy
acquisition costs (28,509) (73,847) (146,793) (212,482)
Net amortization of value
of business acquired 6,333 22,105 37,214 61,809
Other 105,492 77,121 10,589 (101,070)
Net cash provided by
operations 234,112 208,922 454,537 316,228
Cash Flows from Investing
Activities:
Securities and loans purchased
and sold (365,601) (469,358) (842,079) (1,113,714)
Other investing activities (2,115) (699) (519) (9,764)
Net cash used in investing
activities (367,716) (470,057) (842,598) (1,123,478)
Cash Flows from Financing
Activities:
Policyholder contract deposits 599,170 837,515 1,782,406 2,189,683
Policyholder contract
withdrawals (334,063) (377,661) (1,082,415) (1,062,443)
Net borrowings (repayments) (49,988) 54,514 (98,727) 35,704
Net repurchase of common
shares (41,079) (188,716) (86,902) (300,912)
Cash dividends to common and
preferred stockholders (1) (46,584) (49,822) (149,011) (148,538)
Other 3,191 629 5,034 4,179
Net cash provided by financing
activities 130,647 276,459 370,385 717,673
Increase (decrease) in cash
and cash equivalents (2,957) 15,324 (17,676) (89,577)
Cash and cash equivalents at
beginning of period 52,058 34,563 66,777 139,464
Cash and cash equivalents at
end of period $ 49,101 $ 49,887 $ 49,101 $ 49,887
Supplemental Cash Flow
Information:
Income taxes paid $ 18,800 $ 53,340 $192,700 $174,460
Interest paid on borrowed
money (1) $ 14,484 $ 3,279 $ 21,674 $ 17,251
(1) In July 2003, the Company adopted Statement of Financial Accounting
Standards No. 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity". Effective
July 1, 2003, payments to the holders of Capital Securities are
included in operating activities, whereas they were previously
included in financing activities. Restatement of prior periods is not
permitted.
Jefferson-Pilot Corporation and Subsidiaries
Business Segment Results
(Unaudited)
Individual Products (In Thousands)
The Individual Products distribution system offers a wide array of life
insurance products to individuals and employers through captive agents (career
and home service agency forces), independent agents (recruited through
independent marketing organizations and a regional marketing network) and
financial institutions. Reportable segment results were:
Three Months Ended Nine Months Ended
Sept 30 Sept 30
2003 2002 2003 2002
Life premiums and
other
considerations $ 41,236 $ 44,875 $ 127,411 $ 137,689
UL and investment
product charges 193,900 181,413 572,149 523,978
Investment
income, net of
expenses 228,002 231,342 684,054 690,540
Other income 1,721 1,559 4,673 5,151
Total revenues 464,859 459,189 1,388,287 1,357,358
Policy benefits 259,978 269,557 800,740 805,735
Expenses 85,565 75,975 236,950 215,666
Total benefits
and expenses 345,543 345,532 1,037,690 1,021,401
Reportable
segment results
before income
taxes 119,316 113,657 350,597 335,957
Provision for
income taxes 40,703 39,780 121,651 117,585
Reportable
segment results $ 78,613 $ 73,877 $ 228,946 $ 218,372
Operating Measures
Annualized equivalent
life insurance premiums:
-Individual Markets
Excl. Community Banks
and BOLI $ 48,523 $ 51,726 $ 154,205 $ 142,137
-Community Banks and
BOLI 2,153 7,348 7,273 49,533
$ 50,676 $ 59,074 $ 161,478 $ 191,670
Average UL
policyholder
fund balances $10,657,827 $9,989,816 $10,505,310 $9,775,309
Average VUL
separate account
assets 1,277,027 1,137,553 1,183,063 1,253,107
Total $11,934,854 $11,127,369 $11,688,373 $11,028,416
Average Face
Amount of
Insurance In
Force:
- Total $164,669,000 $161,863,000 $164,231,000 $160,669,000
- UL-Type
Contracts $123,497,000 $120,168,000 $122,871,000 $119,154,000
Average assets $17,244,613 $16,355,557 $16,990,596 $16,291,855
Jefferson-Pilot Corporation and Subsidiaries
Business Segment Results
(Unaudited)
Annuity and Investment Products (In Thousands)
Annuity and Investment Products (referred to as AIP) offers fixed and
variable annuities and investment products through proprietary and independent
agents, financial institutions, investment professionals and broker-dealers.
Reportable segment results were:
Three Months Ended Nine Months Ended
Sept 30 Sept 30
2003 2002 2003 2002
Investment product
charges and premiums $ 1,645 $ 2,907 $ 6,151 $ 9,505
Investment income, net
of expenses 145,591 145,043 438,456 426,559
Broker-dealer
concessions and other 26,489 22,585 71,769 75,207
Total revenues 173,725 170,535 516,376 511,271
Policy benefits
(including interest
credited) 101,203 110,180 308,470 313,739
Expenses 41,906 31,228 111,454 105,812
Total benefits and
expenses 143,109 141,408 419,924 419,551
Reportable segment
results before income
taxes 30,616 29,127 96,452 91,720
Provision for income
taxes 10,644 10,194 33,739 32,102
Reportable segment
results $ 19,972 $ 18,933 $ 62,713 $ 59,618
Operating Measures
Fixed annuity premium
sales $187,780 $365,300 $435,455 $807,047
Variable annuity premium
sales 213 1,510 1,843 8,438
Total $187,993 $366,810 $437,298 $815,485
Investment product sales $926,296 $754,358 $2,203,883 $2,271,235
Average Fund Balances:
Fixed annuity $8,428,312 $7,905,171 $8,329,951 $7,703,895
Variable annuity 343,529 385,896 338,263 444,523
Total annuity $8,771,841 $8,291,067 $8,668,214 $8,148,418
Effective investment
spreads for fixed
annuities 1.94% 1.81% 1.90% 1.82%
Fixed annuity surrenders
as a % of beginning
fund balance 8.5% 8.5% 8.1% 9.3%
Fixed annuity general
and administrative
expenses as a % of average
invested assets 0.15% 0.20% 0.16% 0.21%
Average assets $9,534,079 $9,135,735 $9,462,517 $8,977,755
Jefferson-Pilot Corporation and Subsidiaries
Business Segment Results
(Unaudited)
Benefit Partners (In Thousands)
Benefit Partners offers group non-medical products such as term life,
disability and dental insurance to the employer marketplace. These non-
medical products are marketed primarily through a national distribution
system of regional group offices. These offices develop business through
employee benefit firms, brokers, third party administrators and other employee
benefit providers. Reportable segment results were:
Three Months Ended Nine Months Ended
Sept 30 Sept 30
2003 2002 2003 2002
Premiums and other
considerations $190,313 $165,094 $563,427 $475,497
Investment income, net of
expenses 15,879 14,938 48,275 44,525
Total revenues 206,192 180,032 611,702 520,022
Policy benefits 148,397 128,726 433,886 358,793
Expenses 42,368 37,120 124,815 107,906
Total benefits and expenses 190,765 165,846 558,701 466,699
Reportable segment results
before income taxes 15,427 14,186 53,001 53,323
Provision for income taxes 5,399 4,965 18,550 18,663
Reportable segment results $10,028 $9,221 $34,451 $34,660
Operating Measures
Life, Disability and Dental:
Annualized sales $38,530 $38,383 $151,254 $130,935
Loss Ratio 74.3% 76.1% 74.3% 73.7%
Total expenses, % of premiums 22.3% 22.5% 22.2% 22.8%
Jefferson-Pilot Corporation and Subsidiaries
Business Segment Results
(Unaudited)
Communications (In Thousands)
Jefferson-Pilot Communications Company operates television and radio
broadcast properties and produces syndicated sports and entertainment
programming. Reportable segment results were:
Three Months Ended Nine Months Ended
Sept 30 Sept 30
2003 2002 2003 2002
Communications sales $51,729 $49,891 $152,881 $148,506
Operating costs and expenses 28,127 29,251 90,408 90,753
Broadcast cash flow 23,602 20,640 62,473 57,753
Depreciation and amortization 1,994 1,924 6,184 5,712
Corporate general and
administrative expenses 1,697 2,260 4,342 5,451
Net interest expense and other 514 717 1,663 2,265
Reportable segment results before
income taxes 19,397 15,739 50,284 44,325
Provision for income taxes 8,031 5,986 20,281 17,516
Reportable segment results $11,366 $9,753 $30,003 $26,809
Corporate and Other (In Thousands)
Activities of the parent company and passive investment affiliates,
surplus of the life insurance subsidiaries not otherwise allocated to the
reportable segments including earnings thereon, financing expenses on
corporate debt and debt securities including capital securities, and federal
and state income taxes not otherwise allocated to business segments are
reported in the "Corporate and Other" category. Reportable segment results
were:
Three Months Ended Nine Months Ended
Sept 30 Sept 30
2003 2002 2003 2002
Earnings on investments and other
income $24,117 $15,588 $67,970 $58,677
Interest expense on debt, Capital
Securities and Exchangeable
Securities (1) (7,969) (2,835) (12,572) (7,797)
Operating expenses (8,065) (3,207) (21,019) (15,438)
Provision for income taxes 1,877 1,119 194 (32)
9,960 10,665 34,573 35,410
Dividends on Capital Securities (1) -- (6,141) (12,283) (18,424)
Reportable segment results 9,960 4,524 22,290 16,986
Realized investment gains
(losses), net (3,862) 2,448 (3,112) 27,156
Reportable segment results,
including net realized gains
(losses) $6,098 $6,972 $19,178 $44,142
(1) In July 2003, the Company adopted Statement of Financial
Accounting Standards No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity."
This statement requires payments to the holders of the Capital
Securities to be classified as interest expense beginning
July 1, 2003. Restatement of prior periods is not permitted.
Assets by Segment (In Millions)
Individual Products $17,365 $16,392
Annuity and Investment Products 9,581 9,250
Benefit Partners 1,032 878
Communications 202 199
Corporate and Other 3,806 3,270
Total Assets $31,986 $29,989
Jefferson-Pilot Corporation and Subsidiaries
Quarterly Financial Results by Business Segment
(Unaudited)
Sept 30, June 30, Mar 31,
(In millions) 2003 2003 2003
Revenues
Individual $ 464.9 $ 457.6 $ 465.8
AIP 173.7 172.9 169.7
Benefit Partners 206.2 207.8 197.7
Communications 51.2 50.1 49.9
Corporate and Other 29.9 27.9 26.8
Realized investment gains (losses) (5.1) 20.2 (19.1)
Total revenues $ 920.8 $ 936.5 $ 890.8
Reportable Segment Results
Individual $ 78.6 $ 74.3 $ 76.0
AIP 20.0 21.5 21.2
Benefit Partners 10.0 12.5 11.9
Communications 11.4 11.6 7.1
Corporate and Other 10.0 13.2 11.4
130.0 133.1 127.6
Preferred stock dividends -- (6.1) (6.1)
Total Reportable Segment Results 130.0 127.0 121.5
Realized gains (losses), net of tax (3.9) 13.1 (12.4)
Reportable Segment Results
including Realized Gains (Losses) $ 126.1 $ 140.1 $ 109.1
Earnings Per Share
Income before gains (losses) from
sale of investments $ 0.92 $ 0.90 $ 0.85
Earnings Per Share $ 0.89 $ 0.99 $ 0.76
Income before gains (losses) from
sale of investments - assuming
dilution $ 0.91 $ 0.89 $ 0.85
Earnings Per Share - assuming
dilution $ 0.88 $ 0.98 $ 0.76
The following classification will now be utilized to examine individual
product operation measures. Sequential data has been provided for comparative
purposes.
Sept 30, June 30, Mar 31,
(In thousands) 2003 2003 2003
Annualized equivalent life insurance
premiums:
Individual Markets Excluding
Community Banks and BOLI $ 48,523 $ 49,360 $ 56,031
Community Banks and BOLI 2,153 -- 5,411
$ 50,676 $ 49,360 $ 61,442
Jefferson-Pilot Corporation and Subsidiaries
Quarterly Financial Results by Business Segment
(Unaudited)
Dec 31, Sept 30, June 30,
(In millions) 2002 2002 2002
Revenues
Individual $ 464.3 $ 459.2 $ 451.0
AIP 175.1 170.5 171.1
Benefit Partners 178.3 180.0 176.6
Communications 61.2 49.2 49.2
Corporate and Other 24.2 20.8 27.9
Realized investment gains (losses) (63.8) 3.8 4.4
Total revenues $ 839.3 $ 883.5 $ 880.2
Reportable Segment Results
Individual $ 74.7 $ 73.9 $ 74.8
AIP 20.7 18.9 19.3
Benefit Partners 12.8 9.2 12.5
Communications 13.0 9.8 10.5
Corporate and Other (6.4) 10.7 11.5
114.8 122.5 128.6
Preferred stock dividends (6.1) (6.1) (6.1)
Total Reportable Segment Results 108.7 116.4 122.5
Realized gains (losses), net of tax (42.1) 2.4 2.8
Reportable Segment Results
including Realized Gains (Losses) $ 66.6 $ 118.8 $ 125.3
Earnings Per Share
Income before gains (losses) from
sale of investments $ 0.76 $ 0.81 $ 0.82
Earnings Per Share $ 0.47 $ 0.82 $ 0.84
Income before gains (losses) from
sale of investments - assuming
dilution $ 0.75 $ 0.80 $ 0.81
Earnings Per Share - assuming
dilution $ 0.46 $ 0.81 $ 0.83
The following classification will now be utilized to examine individual
product operation measures. Sequential data has been provided for comparative
purposes.
Dec 31, Sept 30, June 30,
(In thousands) 2002 2002 2002
Annualized equivalent life insurance
premiums:
Individual Markets Excluding
Community Banks and BOLI $ 60,190 $ 51,726 $ 51,647
Community Banks and BOLI 8,470 7,350 19,592
$ 68,660 $ 59,076 $ 71,239
Jefferson-Pilot Corporation and Subsidiaries
Quarterly Financial Results by Business Segment
(Unaudited)
Mar 31, Dec 31, Sept 30,
(In millions) 2002 2001 2001
Revenues
Individual $ 447.2 $ 441.7 $ 428.8
AIP 169.7 170.8 158.7
Benefit Partners 163.4 158.1 156.7
Communications 47.9 53.1 45.3
Corporate and Other 25.8 28.6 38.1
Realized investment gains (losses) 33.6 (45.1) 24.2
Total revenues $ 887.6 $ 807.2 $ 851.8
Reportable Segment Results
Individual $ 69.7 $ 78.6 $ 70.0
AIP 21.4 19.3 17.3
Benefit Partners 12.9 11.5 12.0
Communications 6.5 9.9 8.2
Corporate and Other 13.3 11.4 16.4
123.8 130.7 123.9
Preferred stock dividends (6.1) (6.1) (6.1)
Total Reportable Segment Results 117.7 124.6 117.8
Realized gains (losses), net of tax 21.9 (28.2) 15.8
Reportable Segment Results
including Realized Gains (Losses) $ 139.6 $ 96.4 $ 133.6
Earnings Per Share
Income before gains (losses) from
sale of investments $ 0.78 $ 0.83 $ 0.78
Earnings Per Share $ 0.93 $ 0.64 $ 0.88
Income before gains (losses) from
sale of investments -
assuming dilution $ 0.78 $ 0.82 $ 0.77
Earnings Per Share - assuming
dilution $ 0.92 $ 0.64 $ 0.87
The following classification will now be utilized to examine individual
product operation measures. Sequential data has been provided for comparative
purposes.
Mar 31, Dec 31, Sept 30,
(In thousands) 2002 2001 2001
Annualized equivalent life insurance
premiums:
Individual Markets Excluding
Community Banks and BOLI $ 38,766 $ 42,244 $ 34,580
Community Banks and BOLI 22,591 25,057 15,866
$ 61,357 $ 67,301 $ 50,446
Jefferson-Pilot Corporation and Subsidiaries
Investment Summary (Unaudited)
(in Thousands)
September 30, 2003 December 31, 2002
Allocation of Invested Assets Amount Percent Amount Percent
Cash and cash equivalents $49,101 0.2% $66,777 0.3%
Bonds 20,222,628 79.6% 19,476,765 80.0%
Preferred stocks 22,633 0.1% 25,937 0.1%
Common stocks, unaffiliated 711,916 2.8% 406,956 1.7%
Mortgages loans (net) 3,346,893 13.2% 3,294,258 13.5%
Real estate (net) 131,722 0.5% 132,927 0.5%
Policy loans and other 906,910 3.6% 941,800 3.9%
Invested assets $25,391,803 100.0% $24,345,420 100.0%
September 30, 2003 December 31, 2002
Bond Portfolio Amount Percent Amount Percent
U.S. Government $272,252 1.4% $367,349 1.9%
Mortgage-backed 3,640,518 18.0% 5,386,570 27.7%
Private placements 4,410,829 21.8% 4,073,829 20.9%
Public - corporates 11,899,029 58.8% 9,649,017 49.5%
Total bonds $20,222,628 100.0% $19,476,765 100.0%
Yield to maturity 6.44% 6.94%
Average life 6.76 yrs 6.22 yrs
Duration 4.79 4.00
Average Quality A2 A1
September 30, 2003 December 31, 2002
Bond Portfolio Quality Amount Percent Amount Percent
NAIC Rating S&P
Equivalent
1 AAA - A $11,862,948 58.7% $12,354,785 63.4%
2 BBB 6,903,685 34.1% 5,837,437 30.0%
3-6 BB and lower 1,455,995 7.2% 1,284,543 6.6%
Total Bonds $20,222,628 100.0% $19,476,765 100.0%
Fixed Maturity Securities
Unrealized Gains (Losses) September 30, 2003 December 31, 2002
Gross unrealized gains $1,394,322 $1,350,428
Gross unrealized (losses) (134,051) (287,424)
Net unrealized gains (losses) $1,260,271 $1,063,004
Mortgage Loan Portfolio September 30, 2003 December 31, 2002
Yield to maturity 7.73% 7.90%
Average maturity 6.87 7.14
Total delinquent loans and
loans in foreclosure
at amortized cost $6,402 $11,931
Delinquent loans as a percent of
total ML 0.19% 0.36%
Net book value of real estate
acquired in satisfaction of mortgage
indebtedness $3,400 $3,400
Realized Investment
Gains/(Losses) Third Quarter 2003 Third Quarter 2002
Stock gains $ -- $ 63,393
Stock losses -- --
Bond gains 7,923 8,703
Bond losses from sales and calls (13,253) (15,241)
Bond losses from writedowns (14,913) (49,817)
Other gains and losses (net) (982) (908)
Total pretax gains (losses) (21,225) 6,130
DAC amortization 16,092 (2,364)
Tax 1,271 (1,318)
Total gains (losses) after tax
and DAC amortization $(3,862) $2,448
Jefferson-Pilot Corporation and Subsidiaries
Insurance Segments Expense Analysis
(In Thousands)
Three Months Ended Nine Months Ended
Sept 30 Sept 30
2003 2002 2003 2002
Individual Products
Commissions $66,616 $66,135 $212,215 $196,611
General and
administrative expenses 28,672 30,636 91,462 93,407
Taxes, licenses and fees 13,326 13,652 40,735 42,257
Total commissions and
expenses incurred 108,614 110,423 344,412 332,275
Less commissions and
expenses capitalized (76,521) (76,165) (251,244) (232,532)
Amortization of DAC and
VOBA 53,472 41,717 143,782 115,923
Net expense $85,565 $75,975 $236,950 $215,666
Annuity and Investment
Products
Commissions - insurance
companies $8,634 $17,976 $21,643 $41,104
Commissions -
broker/dealer 22,001 18,506 59,262 62,976
General and
administrative expenses 6,883 8,063 19,590 22,363
Taxes, licenses and fees 757 753 2,272 2,284
Total commissions and
expenses incurred 38,275 45,298 102,767 128,727
Less commissions and
expenses capitalized (8,899) (22,725) (27,447) (52,532)
Amortization of DAC and
VOBA 12,530 8,655 36,134 29,617
Net expense $41,906 $31,228 $111,454 $105,812
Benefit Partners
Commissions $21,825 $18,832 $64,185 $54,969
General and
administrative expenses 18,247 17,165 55,903 50,724
Taxes, licenses and fees 5,060 4,355 15,384 13,379
Total commissions and
expenses incurred 45,132 40,352 135,472 119,072
Less commissions and
expenses capitalized (28,134) (24,207) (85,295) (69,292)
Amortization of DAC and
VOBA 25,370 20,975 74,638 58,126
Net expense $42,368 $37,120 $124,815 $107,906
Jefferson-Pilot Corporation and Subsidiaries
DAC and VOBA Balance Sheet Analysis
(In Thousands)
Three Months Ended Nine Months Ended
Sept 30 Sept 30
2003 2002 2003 2002
Balance, beginning of
period $2,006,760 $2,070,525 $2,027,317 $2,069,570
Amount capitalized 113,552 123,094 364,145 354,355
Amortization expense (91,375) (71,357) (254,565) (203,686)
Adjustment for capital
gains and losses 16,092 (2,364) 13,172 (2,126)
Adjustment for FAS 115 66,276 (119,966) (38,764) (218,181)
Balance, end of period $2,111,305 $1,999,932 $2,111,305 $1,999,932
Jefferson-Pilot Corporation and Subsidiaries
Shareholder Information
Listed NYSE: JP
Composite Stock Price and Dividends (Adjusted for 50% stock dividend
effected 04/09/01 and 04/13/98)
High Low Close Cash Dividend
3Q03 46.57 41.21 44.38 0.330
2Q03 43.20 38.34 41.46 0.330
1Q03 40.93 35.75 38.48 0.303
2002 53.00 36.35 38.11 1.184
2001 49.67 38.00 46.27 1.072
2000 50.59 33.25 49.83 0.960
1999 53.09 40.79 45.50 0.857
1998 52.25 32.45 50.00 0.770
Transfer Agent and Dividend Reinvestment Agent
Wachovia Bank Phone: 800/829-8432
Dividend Reinvestment Service Fax: 704/590-7618
1525 West W.T. Harris Blvd., 3C3 Email: equityservices@wachovia.com
Charlotte, NC 28288-1153
Investor Relations
Jefferson-Pilot Corporation Phone: 336/691-3379
Investor Relations - Dept. 3607
P.O. Box 21008
Greensboro, NC 27420
investor.relations@jpfinancial.com
Corporate Website
www.jpfinancial.com
SOURCE Jefferson-Pilot Corporation
-0- 10/27/2003
/CONTACT: John T. Still, III of Jefferson-Pilot Corporation,
+1-336-691-3382/
/Web site: http://www.jpfinancial.com /
(JP)
CO: Jefferson-Pilot Corporation
ST: North Carolina
IN: INS PUB SPT RAD
SU: ERN