Exhibit 99
Jefferson Pilot Reports 35 Percent Increase in Fourth-Quarter Earnings Per
Share Before Realized Investment Losses, 78 Percent Increase in Net Income Per
Share
GREENSBORO, N.C., Feb. 2 /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 fourth quarter of
2003. Jefferson Pilot earned $1.01 per share before realized investment
losses in the quarter, up 35 percent from fourth-quarter 2002 earnings of
$0.75 before realized investment losses. Net income per share for the fourth
quarter of 2003 increased 78 percent to $0.82, including net realized
investment losses of $0.19 per share, versus net income per share of $0.46 in
the fourth quarter of 2002, which included net realized investment losses of
$0.29.
For the year 2003, Jefferson Pilot's earnings before realized investment
losses increased 17 percent to $3.66 per share from $3.14 per share in 2002.
Net income per share for 2003 including realized investment losses of $0.22
per share was $3.44, up 13 percent from $3.04, including realized investment
losses of $0.10, for 2002.
Results for the fourth quarter of 2002 and year 2002 included a litigation
accrual of $0.11 per share.
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 excellent results for the fourth quarter reflected
robust earnings performance across all of the company's business segments.
Earnings from Jefferson Pilot's Individual Products business increased 8
percent in the fourth quarter to $80.4 million from $74.7 million in the
fourth quarter of 2002. For the year, Individual Product earnings were up 6
percent to $309.4 million from $293.1 million in 2002. With Jefferson Pilot's
product line positioned competitively across a broad range of needs, life
insurance sales results were good. For the quarter, individual market life
insurance sales increased over a strong performance a year ago, and sales grew
7 percent for the year to a record $215.6 million of annualized new premiums.
Evidence of the steady growth of Jefferson Pilot's individual life business is
also apparent in policyholder fund balance growth of better than eight percent
for the quarter and seven percent for the year.
Earnings from the Annuity and Investment Products segment increased 8
percent in the quarter to $22.3 million from $20.7 million a year earlier.
For the year, AIP segment earnings were up 6 percent to $85.0 million from
$80.3 million for 2002. Fourth-quarter fixed annuity sales of $321 million
were up sharply from the prior-year level, reflecting good market acceptance
of Jefferson Pilot's products, including new equity indexed products. Driven
by higher sales and continuing low surrender levels, fund balance growth was
solid in this segment also, with average fixed annuity fund balances rising 8
percent for the year to $8.4 billion from $7.8 billion in 2002.
The Benefit Partners group insurance segment produced a 26 percent
increase in earnings to $16.2 million in the fourth quarter, up from $12.8
million in the fourth quarter last year. For the year to date, Benefit
Partners' earnings grew 7 percent to $50.7 million versus $47.5 million in
2002. Benefit Partners' fourth-quarter results reflected good loss experience.
Driven particularly by improvement in group life insurance claims, the overall
loss ratio for group life, disability, and dental lines was significantly
lower than in recent quarters. Group insurance sales were down slightly for
the quarter, but increased a solid 10 percent for the year.
Jefferson-Pilot Communications completed 2003 with excellent fourth-
quarter performance. Earnings increased 18 percent to $15.4 million from $13.0
million in the final quarter of 2002, while broadcast cash flow was up 8
percent to $29.1 million from $27.0 million a year ago. For the year,
Communications earnings grew 14 percent to $45.4 million from $39.8 million,
and broadcast cash flow rose 8 percent to $91.6 million from $84.7 million in
2002. These strong gains were achieved despite modest growth in broadcast
advertising in our markets, demonstrating again Jefferson Pilot's commitment
to disciplined and effective expense management and success in gaining market
share.
The Corporate and Other segment reported fourth-quarter earnings before
realized investment losses of $9.8 million, compared to a loss of $12.6
million in the 2002 quarter. Segment results in the fourth quarter of 2002
included a litigation accrual of $15.0 million. For the year, segment earnings
before realized investment losses were $32.1 million compared to $4.4 million
in 2002. Realized investment losses declined to $27.8 million from $42.1
million for the quarter, and were $30.9 million for the year compared to net
realized losses of $14.9 million in 2002, which included significant stock
gains.
During the fourth quarter, Jefferson Pilot bought 1,078,600 of its shares
in the open market for a total investment of $52.1 million, bringing 2003
share buybacks to a total of 3,578,600 shares at a cost of $154.4 million.
Stockholders' equity per share grew 9 percent to $27.07 at the end of 2003
from $24.79 at year-end 2002.
Summarizing the quarter and year, Jefferson Pilot CEO David A. Stonecipher
said "We are extremely pleased that Jefferson Pilot once again produced such
strong results for its shareholders. We are particularly pleased with the
pattern of earnings, with each of our businesses recording excellent progress.
Premier Partnering continues as the cornerstone of our individual life
insurance business and remains a powerful platform for growth as we build our
key distribution channels. Both our Annuity and Investment Products and our
Benefit Partners' business showed strong and healthy progress. Communications'
earnings performance was truly excellent in a challenging market, and
Communications continued to produce industry-leading profitability. Across our
operations, the common themes of operational excellence and unexcelled
attention to expense management allowed Jefferson Pilot to turn in another
year of strong progress in profitability. We achieved that while maintaining
our strong balance sheet and financial flexibility, as demonstrated by
Standard & Poor's recent reaffirmation of Jefferson Pilot's top-tier financial
strength ratings. Our shareholders are clearly benefiting, as are our
policyholders and clients, from that strong and stable record."
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; any failure to complete successfully the
integration of our recently announced group acquisition; 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 Year Ended
Dec 31, 2003 Dec 31, 2002 Dec 31, 2003 Dec 31, 2002
Basic earnings per
share available to
common stockholders,
before losses
from sale of
investments $1.02 $0.76 $3.69 $3.17
Losses from sale of
investments, net
of income taxes (0.20) (0.29) (0.22) (0.10)
Basic earnings per
share available to
common stockholders $0.82 $0.47 $3.47 $3.07
Diluted earnings
per share
available to
common stockholders,
before losses
from sale of
investments $1.01 $0.75 $3.66 $3.14
Losses from sale of
investments, net
of income taxes (0.19) (0.29) (0.22) (0.10)
Diluted earnings
per share
available to
common stockholders $0.82 $0.46 $3.44 $3.04
(Dollars in thousands)
Income available to
common stockholders,
before losses from
sale of investments $144,151 $108,679 $522,553 $465,124
Losses from sale of
investments, net
of income taxes (27,830) (42,073) (30,942) (14,917)
Net income
available to
common
stockholders $116,321 $66,606 $491,611 $450,207
Average number of
shares outstanding 140,997,195 143,372,706 141,795,065 146,846,698
Average number of
shares outstanding
- assuming
dilution 142,253,286 144,326,570 142,867,215 148,222,342
Jefferson-Pilot Corporation and Subsidiaries
(Unaudited)
Consolidated Balance Sheets (In
Thousands) Dec 31, 2003 Dec 31, 2002
Assets:
Cash and investments(1) $25,823,574 $24,354,699
Accrued investment income 326,073 302,344
Due from reinsurers 1,340,395 1,375,341
Deferred policy acquisition costs 1,771,174 1,524,819
Value of insurance in force 459,270 502,498
Goodwill, net 311,894 311,894
Other assets(1) 498,428 462,471
Separate account assets 2,165,524 1,784,821
$32,696,332 $30,618,887
Liabilities:
Policy liabilities $24,369,234 $23,132,411
Debt:
Commercial paper borrowings 654,232 453,442
Obligations under repurchase
agreements 400,590 499,227
Junior subordinated debentures(1) 309,279 309,279
Income tax liabilities 471,922 430,795
Accrued expenses and other
liabilities(1) 519,654 468,940
Separate account liabilities 2,165,524 1,784,821
28,890,435 27,078,915
Stockholders' equity:
Common stock and paid in capital 175,762 180,120
Retained earnings 2,946,869 2,749,823
Accumulated other comprehensive
income - net unrealized gains on
securities 683,266 610,029
3,805,897 3,539,972
$32,696,332 $30,618,887
Components of Equity (Dollars in
thousands except share amounts)
Common stock and paid in capital $175,762 $180,120
Retained earnings 2,946,869 2,749,823
Net unrealized gains
Bonds, net of DAC, VOBA and taxes 390,230 370,399
Equities, net of taxes 293,036 239,630
Total unrealized gains 683,266 610,029
Stockholders' equity $3,805,897 $3,539,972
Shares Outstanding 140,610,540 142,798,768
Per share $27.07 $24.79
Per share excluding unrealized gains $22.21 $20.52
(1) Prior amounts have been restated to conform to current year
presentation for the adoption of FIN 46.
Jefferson-Pilot Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
Three Months Ended Year Ended
(Dollars in
thousands except
share amounts) Dec 31, 2003 Dec 31, 2002 Dec 31, 2003 Dec 31, 2002
Revenue:
Premiums and
other
considerations $243,303 $212,005 $950,708 $841,142
UL & investment
product charges 190,070 189,445 768,394 722,944
Investment
income, net of
expenses(1) 418,891 416,026 1,656,949 1,634,820
Realized
investment
losses (42,814) (63,799) (46,795) (22,020)
Communications
sales 63,792 61,844 216,298 209,801
Broker-dealer
concessions and
other 28,367 23,991 104,788 104,726
Total Revenue 901,609 839,512 3,650,342 3,491,413
Benefits and
Expenses:
Insurance and
annuity
benefits 519,960 504,716 2,081,574 1,998,780
Insurance
commissions,
net of
deferrals 27,537 23,359 108,463 114,735
General and
administrative
expenses, net
of deferrals 40,754 64,725 149,193 167,339
Insurance taxes,
licenses and
fees 14,309 19,765 73,216 78,240
Amortization of
policy
acquisition
costs and
value of
business
acquired 86,880 82,109 341,445 285,795
Interest
expense(1) 8,432 9,125 33,857 35,936
Communications
operations 34,664 34,881 125,072 125,634
Total
Benefits
and Expenses 732,536 738,680 2,912,820 2,806,459
Income before
taxes 169,073 100,832 737,522 684,954
Income taxes 52,752 34,226 245,911 234,747
Net income
available to
common
stockholders $116,321 66,606 491,611 450,207
Average number
of shares
outstanding 140,997,195 143,372,706 141,795,065 146,846,698
Average number
of shares
outstanding -
assuming
dilution 142,253,286 144,326,570 142,867,215 148,222,342
Earnings Per
Share
Income before
losses from
sale of
investments $1.02 $0.76 $3.69 $3.17
Losses from sale
of investments,
net of income
taxes (0.20) (0.29) (0.22) (0.10)
Earnings Per
Share $0.82 $0.47 $3.47 $3.07
Income before
losses from
sale of
investments -
assuming
dilution $1.01 $0.75 $3.66 $3.14
Earnings Per
Share -
Assuming
Dilution $0.82 $0.46 $3.44 $3.04
(1) Prior year amounts have been restated to conform to current year
presentation for the adoption of FIN 46.
Jefferson-Pilot Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended Year Ended
Dec 31, Dec 31, Dec 31, Dec 31,
(In Thousands) 2003 2002 2003 2002
Cash Flows from Operating
Activities:
Net income (1) $116,321 $66,606 $491,611 $450,207
Adjustments to reconcile net
income to net cash
provided by operating
activities:
Change in policy
liabilities 24,342 61,756 120,974 102,640
Net amount credited to
policyholder accounts 27,258 39,997 96,580 165,059
Net deferral of policy
acquisition costs (74,325) (64,349) (221,118) (276,831)
Net amortization of value
of business acquired 14,996 14,657 52,210 76,466
Other (13,681) (12,982) (3,092) (114,052)
Net cash provided by
operations 94,911 105,685 537,165 403,489
Cash Flows from Investing
Activities:
Securities and loans purchased
and sold (555,835) (455,339) (1,397,914) (1,569,053)
Other investing activities (21,727) (20,181) (22,246) (29,945)
Net cash used in investing
activities (577,562) (475,520) (1,420,160) (1,598,998)
Cash Flows from Financing
Activities:
Policyholder contract deposits 743,037 677,621 2,525,443 2,867,304
Policyholder contract
withdrawals (361,482) (401,008) (1,443,897) (1,463,451)
Net borrowings (repayments) 200,880 178,214 102,153 213,918
Net repurchase of common
shares (35,190) (25,094) (122,092) (326,006)
Cash dividends to common and
preferred stockholders (1) (46,624) (43,430) (183,352) (173,544)
Other 4,697 422 9,731 4,601
Net cash provided by financing
activities 505,318 386,725 887,986 1,122,822
Increase (decrease) in cash
and cash equivalents 22,667 16,890 4,991 (72,687)
Cash and cash equivalents at
beginning of period 49,101 49,887 66,777 139,464
Cash and cash equivalents at
end of period $71,768 $66,777 $71,768 $66,777
Supplemental Cash Flow
Information:
Income taxes paid $43,091 $47,318 $235,791 $221,778
Interest paid on borrowed
money (1) $2,574 $2,665 $37,291 $45,241
(1) Prior amounts have been restated to conform to current year
presentation for the adoption of FIN 46.
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 Year Ended
Dec 31 Dec 31
2003 2002 2003 2002
Life premiums and
other
considerations $43,456 $42,897 $170,867 $180,586
UL and investment
product charges 187,311 186,762 759,460 710,740
Investment
income, net of
expenses 230,340 233,105 914,394 923,645
Other income 1,776 1,503 6,449 6,654
Total revenues 462,883 464,267 1,851,170 1,821,625
Policy benefits 262,247 268,095 1,062,987 1,073,830
Expenses 78,912 81,216 315,862 296,882
Total benefits
and expenses 341,159 349,311 1,378,849 1,370,712
Reportable
segment results
before income
taxes 121,724 114,956 472,321 450,913
Provision for
income taxes 41,279 40,234 162,930 157,819
Reportable
segment results $80,445 $74,722 $309,391 $293,094
Operating Measures
Annualized
equivalent life
insurance
premiums:
-Individual
Markets
Excl.
Community
Banks and
BOLI $61,408 $60,191 $215,613 $202,328
-Community
Banks and
BOLI 2,189 8,470 9,462 58,003
$63,597 $68,661 $225,075 $260,331
Average UL
policyholder
fund balances $10,823,708 $10,174,141 $10,584,670 $9,874,810
Average VUL
separate account
assets 1,384,892 1,085,865 1,233,520 1,211,297
Total $12,208,600 $11,260,006 $11,818,190 $11,086,107
Average Face
Amount of
Insurance In
Force:
- Total $165,787,000 $162,933,000 $164,963,000 $161,841,000
- UL-Type
Contracts $124,981,000 $121,283,000 $123,848,000 $120,229,000
Average assets $17,540,855 $16,531,675 $17,128,161 $16,351,810
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 Year Ended
Dec 31 Dec 31
2003 2002 2003 2002
Investment product
charges and premiums $2,637 $2,742 $8,788 $12,247
Investment income, net
of expenses 148,183 150,247 586,639 576,806
Broker-dealer
concessions and other 26,563 22,105 98,332 97,312
Total revenues 177,383 175,094 693,759 686,365
Policy benefits
(including interest
credited) 108,116 111,002 416,586 424,741
Expenses 35,102 32,243 146,556 138,055
Total benefits and
expenses 143,218 143,245 563,142 562,796
Reportable segment
results before income
taxes 34,165 31,849 130,617 123,569
Provision for income
taxes 11,856 11,147 45,595 43,249
Reportable segment
results $22,309 $20,702 $85,022 $80,320
Operating Measures
Fixed annuity premium
sales $320,989 $187,440 $756,444 $994,487
Variable annuity premium
sales 0 1,279 1,843 9,717
Total $320,989 $188,719 $758,287 $1,004,204
Investment product sales $1,054,345 $632,853 $3,258,228 $2,904,088
Average Fund Balances :
Fixed annuity $8,611,290 $8,127,981 $8,400,286 $7,809,916
Variable annuity 346,699 351,830 340,372 480,819
Total annuity $8,957,989 $8,479,811 $8,740,658 $8,290,735
Effective investment
spreads for fixed
annuities 1.83% 1.86% 1.88% 1.83%
Fixed annuity surrenders
as a % of beginning
fund balance 9.1% 9.7% 8.4% 9.5%
Fixed annuity general
and administrative
expenses as a % of
average invested assets 0.19% 0.21% 0.16% 0.21%
Average assets $9,761,055 $9,323,584 $9,537,151 $9,064,212
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 Year Ended
Dec 31 Dec 31
2003 2002 2003 2002
Premiums and other
considerations $192,592 $162,643 $756,019 $638,140
Investment income, net of
expenses 15,487 15,679 63,762 60,204
Total revenues 208,079 178,322 819,781 698,344
Policy benefits 142,397 119,140 576,283 477,933
Expenses 40,755 39,440 165,570 147,346
Total benefits and expenses 183,152 158,580 741,853 625,279
Reportable segment results
before income taxes 24,927 19,742 77,928 73,065
Provision for income taxes 8,725 6,912 27,275 25,575
Reportable segment results $16,202 $12,830 $50,653 $47,490
Operating Measures
Life, Disability and Dental:
Annualized sales $48,753 $50,940 $200,007 $181,875
Loss Ratio 71.8% 71.0% 73.7% 73.0%
Total expenses, % of premiums 21.2% 24.3% 21.9% 23.2%
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 Year Ended
Dec 31 Dec 31
2003 2002 2003 2002
Communications sales $63,792 $61,844 $216,673 $210,350
Operating costs and expenses 34,664 34,881 125,072 125,634
Broadcast cash flow 29,128 26,963 91,601 84,716
Depreciation and amortization 2,273 2,371 8,457 8,083
Corporate general and
administrative expenses 2,090 2,244 6,432 7,695
Net interest expense and other 468 594 2,131 2,859
Reportable segment results before
income taxes 24,297 21,754 74,581 66,079
Provision for income taxes 8,906 8,733 29,187 26,249
Reportable segment results $15,391 $13,021 $45,394 $39,830
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 Year Ended
Dec 31 Dec 31
2003 2002 2003 2002
Earnings on investments and
other income(1) $25,378 $17,965 $93,918 $77,212
Interest expense on debt(1) (8,432) (9,127) (33,857) (35,918)
Operating expenses (10,171) (32,510) (31,190) (47,948)
Provision for income taxes 3,028 11,076 3,222 11,044
Reportable segment results 9,803 (12,596) 32,093 4,390
Realized investment losses, net (27,830) (42,073) (30,942) (14,917)
Reportable segment results,
including net realized losses $(18,027) $(54,669) $1,151 $(10,527)
(1) Prior year amounts have been restated to conform to current year
presentation for the adoption of FIN 46.
Assets by Segment (In Millions)
Individual Products $17,717 $16,671
Annuity and Investment Products 9,941 9,397
Benefit Partners 1,079 909
Communications 210 204
Corporate and Other 3,749 3,438
Total Assets $32,696 $30,619
Jefferson-Pilot Corporation and Subsidiaries
Quarterly Financial Results by Business Segment
(Unaudited)
Dec 31, Sept 30, June 30, Mar 31,
(In millions) 2003 2003 2003 2003
Revenues
Individual $462.9 $464.9 $457.6 $465.8
AIP 177.4 173.7 172.9 169.7
Benefit Partners 208.1 206.2 207.8 197.7
Communications 63.3 51.2 50.1 49.9
Corporate and Other 32.7 30.1 28.2 27.0
Realized investment gains (losses) (42.8) (5.1) 20.2 (19.1)
Total revenues $901.6 $921.0 $936.8 $891.0
Reportable Segment Results
Individual $80.4 $78.6 $74.3 $76.0
AIP 22.3 20.0 21.5 21.2
Benefit Partners 16.2 10.0 12.5 11.9
Communications 15.4 11.4 11.6 7.1
Corporate and Other 9.8 10.0 7.1 5.3
Total Reportable Segment Results 144.1 130.0 127.0 121.5
Realized gains (losses), net of tax (27.8) (3.9) 13.1 (12.4)
Reportable Segment Results
including Realized Gains (Losses) $116.3 $126.1 $140.1 $109.1
Earnings Per Share
Income before gains (losses) from
sale of investments $1.02 $0.92 $0.90 $0.85
Earnings Per Share $0.82 $0.89 $0.99 $0.76
Income before gains (losses) from
sale of investments -
assuming dilution $1.01 $0.91 $0.89 $0.85
Earnings Per Share - assuming
dilution $0.82 $0.88 $0.98 $0.76
Jefferson-Pilot Corporation and Subsidiaries
Quarterly Financial Results by Business Segment
(Unaudited)
Dec 31, Sept 30, June 30, Mar 31, Dec 31,
(In millions) 2002 2002 2002 2002 2001
Revenues
Individual $464.3 $459.2 $451.0 $447.2 $441.7
AIP 175.1 170.5 171.1 169.7 170.8
Benefit Partners 178.3 180.0 176.6 163.4 158.1
Communications 61.2 49.2 49.2 47.9 53.1
Corporate and Other 24.4 21.0 28.1 26.0 28.8
Realized investment gains
(losses) (63.8) 3.8 4.4 33.6 (45.1)
Total revenues $839.5 $883.7 $880.4 $887.8 $807.4
Reportable Segment Results
Individual $74.7 $73.9 $74.8 $69.7 $78.6
AIP 20.7 18.9 19.3 21.4 19.3
Benefit Partners 12.8 9.2 12.5 12.9 11.5
Communications 13.0 9.8 10.5 6.5 9.9
Corporate and Other (12.5) 4.6 5.4 7.2 5.3
Total Reportable Segment Results 108.7 116.4 122.5 117.7 124.6
Realized gains (losses), net of
tax (42.1) 2.4 2.8 21.9 (28.2)
Reportable Segment Results
including Realized Gains
(Losses) $66.6 $118.8 $125.3 $139.6 $96.4
Earnings Per Share
Income before gains (losses)
from sale of investments $0.76 $0.81 $0.82 $0.78 $0.83
Earnings Per Share $0.47 $0.82 $0.84 $0.93 $0.64
Income before gains (losses)
from sale of investments -
assuming dilution $0.75 $0.80 $0.81 $0.78 $0.82
Earnings Per Share - assuming
dilution $0.46 $0.81 $0.83 $0.92 $0.64
Jefferson-Pilot Corporation and Subsidiaries
Investment Summary (Unaudited)
(in Thousands)
December 31, 2003 December 31, 2002
Allocation of Invested Assets Amount Percent Amount Percent
Cash and cash equivalents $71,768 0.3% $66,777 0.3%
Bonds 20,443,770 79.2% 19,476,765 80.0%
Preferred stocks 16,463 0.1% 25,937 0.1%
Common stocks, unaffiliated 753,958 2.9% 406,956 1.7%
Mortgages loans (net) 3,472,340 13.4% 3,294,258 13.5%
Real estate (net) 131,600 0.5% 132,927 0.5%
Policy loans and other 933,675 3.6% 951,079 3.9%
Invested assets $25,823,574 100.0% $24,354,699 100.0%
December 31, 2003 December 31, 2002
Bond Portfolio Amount Percent Amount Percent
U.S. Government $267,847 1.3% $367,349 1.9%
Mortgage-backed 2,904,444 14.2% 5,386,570 27.7%
Private placements 4,504,954 22.0% 4,073,829 20.9%
Public - corporates 12,766,525 62.5% 9,649,017 49.5%
Total bonds $20,443,770 100.0% $19,476,765 100.0%
Yield to maturity 6.33% 6.94%
Average life 7.36 yrs 6.22 yrs
Duration 5.08 4.00
Average Quality A2 A1
December 31, 2003 December 31, 2002
Bond Portfolio Quality Amount Percent Amount Percent
NAIC Rating S&P
Equivalent
1 AAA - A $11,707,882 57.3% $12,354,785 63.4%
2 BBB 7,284,384 35.6% 5,837,437 30.0%
3-6 BB and lower 1,451,504 7.1% 1,284,543 6.6%
Total Bonds $20,443,770 100.0% $19,476,765 100.0%
Fixed Maturity Securities Unrealized
Gains (Losses) December 31, 2003 December 31, 2002
Gross unrealized gains $1,179,211 $1,350,428
Gross unrealized (losses) (126,275) (287,424)
Net unrealized gains (losses) $1,052,936 $1,063,004
Mortgage Loan Portfolio December 31, 2003 December 31, 2002
Yield to maturity 7.63% 7.90%
Average maturity 6.99 7.14
Total delinquent loans and loans in
foreclosure at amortized cost $10,984 $11,931
Delinquent loans as a percent of
total ML 0.32% 0.36%
Net book value of real estate
acquired in satisfaction of mortgage
indebtedness $6,276 $3,400
Fourth Quarter Fourth Quarter
Realized Investment Gains/(Losses) 2003 2002
Stock gains $- $4,211
Stock losses - (1,135)
Bond gains 13,299 10,353
Bond losses from sales and calls (16,070) (9,575)
Bond losses from writedowns (38,863) (60,558)
Other gains and losses (net) (2,419) (4,315)
Total pretax losses (44,053) (61,019)
DAC amortization 1,239 (2,780)
Tax 14,984 21,726
Total losses after tax and DAC
amortization $(27,830) $(42,073)
Jefferson-Pilot Corporation and Subsidiaries
Insurance Segments Expense Analysis
(In Thousands)
Three Months Ended Year Ended
Dec 31 Dec 31
2003 2002 2003 2002
Individual Products
Commissions $83,370 $73,923 $295,585 $270,534
General and administrative
expenses 31,738 33,280 123,200 126,687
Taxes, licenses and fees 9,558 13,109 50,293 55,366
Total commissions and
expenses incurred 124,666 120,312 469,078 452,587
Less commissions and expenses
capitalized (97,251) (90,639) (348,495) (323,171)
Amortization of DAC and VOBA 51,497 51,543 195,279 167,466
Net expense $78,912 $81,216 $315,862 $296,882
Annuity and Investment Products
Commissions - insurance companies $15,087 $11,856 $36,730 $52,960
Commissions - broker/dealer 21,312 17,667 80,574 80,643
General and administrative
expenses 7,516 8,614 27,106 30,977
Taxes, licenses and fees 916 787 3,188 3,071
Total commissions and
expenses incurred 44,831 38,924 147,598 167,651
Less commissions and expenses
capitalized (19,799) (14,607) (47,246) (67,139)
Amortization of DAC and VOBA 10,070 7,926 46,204 37,543
Net expense $35,102 $32,243 $146,556 $138,055
Benefit Partners
Commissions $21,079 $19,774 $85,264 $74,743
General and administrative
expenses 19,721 18,912 75,624 69,636
Taxes, licenses and fees 3,804 4,507 19,188 17,886
Total commissions and
expenses incurred 44,604 43,193 180,076 162,265
Less commissions and expenses
capitalized (29,156) (26,395) (114,451) (95,687)
Amortization of DAC and VOBA 25,307 22,642 99,945 80,768
Net expense $40,755 $39,440 $165,570 $147,346
Jefferson-Pilot Corporation and Subsidiaries
DAC and VOBA Balance Sheet Analysis
(In Thousands)
Three Months Ended Year Ended
Dec 31 Dec 31
2003 2002 2003 2002
Balance, beginning of
period $2,111,305 $1,999,932 $2,027,317 $2,069,570
Amount capitalized 146,208 131,805 510,353 486,160
Amortization expense (86,880) (82,109) (341,445) (285,795)
Adjustment for capital
gains and losses 1,239 (2,780) 14,411 (4,906)
Adjustment for FAS 115 58,572 (19,531) 19,808 (237,712)
Balance, end of period $2,230,444 $2,027,317 $2,230,444 $2,027,317
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)
Cash
High Low Close Dividend
4Q03 50.72 44.55 50.65 0.330
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- 02/02/2004
/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
SU: ERN