##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549





FORM 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|[X]        |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934    
|           |  | For the fiscal year ended December 31, 2004                                                 
|           |  | OR                                                                                          
|[  ]       |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|           |  | For the transition period
    from                to                                        

Commission File Number 1-5955


JEFFERSON-PILOT CORPORATION




|                                                                                 |  |                                                                                                           |  |                                                   
|-------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|North Carolina(State or Other Jurisdiction of
    Incorporation or Organization) |  | 100 North Greene Street,
    Greensboro, North Carolina 27401(Address of Principal
    Executive Offices) |  | 56-0896180(I.R.S. Employer
    Identification No.)

Registrants Telephone Number, Including Area Code:
336-691-3000


Securities registered pursuant to Section 12(b) of the
Act:


|                               |  |                                                 
|------------------------------ |  | ------------------------------------------------
|                               |  | Name of Exchange(s)                             
|Title of Each Class            |  | on Which Registered                             
|                               |  |                                                 
|Common Stock (Par Value $1.25) |  | New York, Midwest and
    Pacific Stock Exchange

Securities registered pursuant to Section 12(g) of the
Act: None


x o


o


x o




Documents Incorporated by Reference














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TABLE OF CONTENTS


|                                                                                              |  |                                                                                                                  |     |      |    | 
|--------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------- | --- | ---- | -- | 
|                                                                                              |  |                                                                                                                  |     | Page |   
|                                                                                              |  |                                                                                                                  |     |      |   
|PART I                                                                                       
|ITEM 1.                                                                                       |  | BUSINESS                                                                                                         |     |      | 1  | 
|ITEM 2.                                                                                       |  | PROPERTIES                                                                                                       |     |      | 5  | 
|ITEM 3.                                                                                       |  | LEGAL PROCEEDINGS                                                                                                |     |      | 5  | 
|ITEM 4.                                                                                       |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS                                                            |     |      | 5  | 
|                                                                                              |  | EXECUTIVE OFFICERS OF THE REGISTRANT                                                                             |     |      | 5  | 
|PART II                                                                                      
|ITEM 5.                                                                                       |  | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |     |      | 7  | 
|ITEM 6.                                                                                       |  | SELECTED FINANCIAL DATA                                                                                          |     |      | 8  | 
|ITEM 7.                                                                                       |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS                        |     |      | 11 | 
|ITEM 7A.                                                                                      |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                       |     |      | 48 | 
|ITEM 8.                                                                                       |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                      |     |      | 49 | 
|ITEM 9.                                                                                       |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE                         |     |      | 93 | 
|ITEM 9A.                                                                                      |  | CONTROLS AND PROCEDURES                                                                                          |     |      | 93 | 
|ITEM 9B.                                                                                      |  | OTHER INFORMATION                                                                                                |     |      | 93 | 
|PART III                                                                                     
|ITEM 10.                                                                                      |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                               |     |      | 94 | 
|ITEM 11.                                                                                      |  | EXECUTIVE COMPENSATION                                                                                           |     |      | 94 | 
|ITEM 12.                                                                                      |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    AND RELATED STOCKHOLDER MATTERS               |     |      | 94 | 
|ITEM 13.                                                                                      |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                   |     |      | 94 | 
|ITEM 14.                                                                                      |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                           |     |      | 95 | 
|PART IV                                                                                      
|ITEM 15.                                                                                      |  | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                       |     |      | 95 | 
|Undertakings                                                                                  |  |                                                                                                                  | 95  |     
|Signatures                                                                                    |  |                                                                                                                  | 96  |     
|List of Financial Statements and Financial Statement Schedules,
    followed by the Schedules |  |                                                                                                                  | F-1 |     
|List and Index of Exhibits, followed by Exhibits including
    certifications                 |  |                                                                                                                  | E-1 |     



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##### 



PART I




|        |         
|------- | --------
|Item 1. | Business

(a) General
Development of Business






| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | Jefferson-Pilot Life Insurance Company (JP Life),                                                                          
|
| | Jefferson Pilot Financial Insurance Company (JPFIC),                                                                       
|
| | Jefferson Pilot LifeAmerica Insurance Company (JPLA),                                                                      
|
| | Jefferson Pilot Securities Corporation, a non-clearing NASD
    registered broker/dealer (with its subsidiaries, JPSC), and
|
| | Jefferson-Pilot Communications Company (with its subsidiaries,
    JPCC).                                                  



















(b) Financial
Information About Industry Segments




1



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##### 



(c) Narrative
Description of Business




Revenues by Segment*


|                                |  |               |       |  |      |   |       |      |  |   |       | 
|------------------------------- |  | ------------- | ----- |  | ---- | - | ----- | ---- |  | - | ----- | 
|                                |  | 2004          |       |  | 2003 |   |       | 2002 | 
|                                |  |               |       |  |      |   |       |      | 
|                                |  | (In Millions) |      
|Individual Products             |  | $             | 1,780 |  |      | $ | 1,774 |      |  | $ | 1,737 | 
|Annuity and Investment Products |  |               | 718   |  |      |   | 694   |      |  |   | 686   | 
|Benefit Partners                |  |               | 1,202 |  |      |   | 820   |      |  |   | 698   | 
|Communications                  |  |               | 239   |  |      |   | 214   |      |  |   | 208   | 
|Corporate and Other             |  |               | 163   |  |      |   | 71    |      |  |   | 77    | 
|                                |  |               |       |  |      |   |       |      | 
|                                |  | $             | 4,102 |  |      | $ | 3,573 |      |  | $ | 3,406 | 
|                                |  |               |       |  |      |   |       |      | 

|  |                                                                                                                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Revenues include net investment income earned on assets backing
    insurance liabilities and line surplus for each reportable
    segment. Corporate and Other revenues include $41, ($47) and
    ($22) of realized gains (losses) for 2004, 2003 and 2002.



INSURANCE COMPANY SUBSIDIARIES












Individual Products.




Annuity and Investment Products.


2



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##### 



Benefit Partners.


Other Information Regarding Insurance Company Subsidiaries


Regulation.








Competition.




Employees.


COMMUNICATIONS




Television Operations




3



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##### 



Radio Operations




JP Sports




Other Information Regarding Communications Companies


Competition.


Employees.


Federal Regulation.




(d) Foreign
Operations




(e) Available
Information




(f) Risk Factors




4



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##### 





|         |           
|-------- | ----------
|Item  2. | Properties













|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

Thorn v.
Jefferson-Pilot Life Insurance Company




Environmental Proceedings.




|        |                                                          
|------- | ---------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Securities
    Holders



Executive Officers of the Registrant






5



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##### 















6



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##### 



PART II




|        |                                                                                                          
|------- | ---------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities

Market Information.


|               |  |      |       |  |      |  |       |      |  |  |       |  |  |      |       |  |     |  |       |      |  |  |       |  |  |      |       |  |     |  |       |  |  |  |       |  |  |  |       | 
|-------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---- | ----- |  | --- |  | ----- | ---- |  |  | ----- |  |  | ---- | ----- |  | --- |  | ----- |  |  |  | ----- |  |  |  | ----- | 
|               |  | 2004 |       |  | 2003 |  |       | 2002 |  |  | 2001  |  |  | 2000 |      
|               |  |      |       |  |      |  |       |      |  |  |       |  |  |      |      
|               |  | High |       |  | Low  |  |       | High |  |  | Low   |  |  | High |       |  | Low |  |       | High |  |  | Low   |  |  | High |       |  | Low | 
|               |  |      |       |  |      |  |       |      |  |  |       |  |  |      |       |  |     |  |       |      |  |  |       |  |  |      |       |  |     | 
|First Quarter  |  |      | 55.08 |  |      |  | 48.97 |      |  |  | 40.93 |  |  |      | 35.75 |  |     |  | 53.00 |      |  |  | 45.23 |  |  |      | 49.67 |  |     |  | 41.00 |  |  |  | 45.42 |  |  |  | 33.25 | 
|Second Quarter |  |      | 56.39 |  |      |  | 47.40 |      |  |  | 43.20 |  |  |      | 38.34 |  |     |  | 52.99 |      |  |  | 45.07 |  |  |      | 49.25 |  |     |  | 44.07 |  |  |  | 46.46 |  |  |  | 36.88 | 
|Third Quarter  |  |      | 50.20 |  |      |  | 47.01 |      |  |  | 46.57 |  |  |      | 41.21 |  |     |  | 47.50 |      |  |  | 36.75 |  |  |      | 49.00 |  |     |  | 38.00 |  |  |  | 47.21 |  |  |  | 37.83 | 
|Fourth Quarter |  |      | 52.64 |  |      |  | 46.56 |      |  |  | 50.72 |  |  |      | 44.55 |  |     |  | 45.21 |      |  |  | 36.35 |  |  |      | 46.90 |  |     |  | 41.15 |  |  |  | 50.58 |  |  |  | 39.33 | 

Holders.


Dividends.


Issuer Purchases of Equity Securities.


|                    |                   |           |   |   |                |   |                  |                     |  |                        |                     |   |  |  |           |  | 
|------------------- | ----------------- | --------- | - | - | -------------- | - | ---------------- | ------------------- |  | ---------------------- | ------------------- | - |  |  | --------- |  | 
|                    |                   | Total     |   |   |                |   | Total Number of  |                     |  | Maximum Number of      |                    
|                    |                   | Number of |   |   |                |   | Shares Purchased |                     |  | Shares that May Yet Be |                    
|                    |                   | Shares    |   |   | Average Price  |   |                  | as Part of Publicly |  |                        | Purchased Under the |  
|Period              |                   | Purchased |   |   | Paid per Share |   |                  | Announced Plans     |  |                        | Plans               |  
|                    |                   |           |   |   |                |   |                  |                     |  |                        |                     |  
|October 131, 2004  |                   |           | 0 |   |                | $ | 0.00             |                     |  |                        | 0                   |   |  |  | 4,071,000 | 
|November 130, 2004 |                   |           | 0 |   |                | $ | 0.00             |                     |  |                        | 0                   |   |  |  | 4,071,000 | 
|December 131, 2004 |                   |           | 0 |   |                | $ | 0.00             |                     |  |                        | 0                   |   |  |  | 4,071,000 | 
|                    |                   |           |   |   |                |   |                  |                     |  |                        |                     |  
|                    | Total for Quarter |           |   | 0 |                |   | $                | 0.00                |  |                        |                     | 0 |  |  |           |  | 
|                    |                   |           |   |   |                |   |                  |                     |  |                        |                     |  







| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | A Rabbi Trust buys shares with directors fee deferrals and
    with dividends received on shares held in the Trust. This
    arrangement is disclosed in our proxy statement. Trust purchases
    in the fourth quarter 2004 were: October, none; November, 3,549
    shares, average price $48.61; and December, 493 shares,
    average price $50.13.                                                                                                                                                                          
|
| | 2. | Under our stock option plans, an optionee may exercise options
    by certifying to JP that the optionee owns sufficient JP common
    shares to pay the exercise price for the option shares being
    exercised. We then issue to the optionee common shares equal to
    the spread (profit) on the exercise, less required
    withholding taxes if the optionee so designates. The number of
    shares so used to pay option exercise prices in fourth quarter
    2004 were: December, 80,460 shares, average price $52.26.

7



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##### 





|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

REVENUE BY SOURCES


|                                                                                                      |                |               |       |       |      |   |       |       |  |   |       |       |  |      |       |       |  |   |       |       | 
|----------------------------------------------------------------------------------------------------- | -------------- | ------------- | ----- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- |  | ---- | ----- | ----- |  | - | ----- | ----- | 
|                                                                                                      |                | 2004          |       |       | 2003 |   |       | 2002  |  |   | 2001  |       |  | 2000 |      
|                                                                                                      |                |               |       |       |      |   |       |       |  |   |       |       |  |      |      
|                                                                                                      |                | (In Millions) |      
|Individual Products                                                                                   |                | $             | 1,780 |       |      | $ | 1,774 |       |  | $ | 1,737 |       |  | $    | 1,682 |       |  | $ | 1,664 |      
|Annuities and Investment Products                                                                     |                |               | 718   |       |      |   | 694   |       |  |   | 686   |       |  |      | 647   |       |  |   | 629   |      
|Benefit Partners                                                                                      |                |               | 1,202 |       |      |   | 820   |       |  |   | 698   |       |  |      | 602   |       |  |   | 537   |      
|Communications                                                                                        |                |               | 239   |       |      |   | 214   |       |  |   | 208   |       |  |      | 195   |       |  |   | 206   |      
|Corporate and Other                                                                                   |                |               | 122   |       |      |   | 118   |       |  |   | 99    |       |  |      | 130   |       |  |   | 134   |      
|                                                                                                      |                |               |       |       |      |   |       |       |  |   |       |       |  |      |      
|Revenues before investment gains (losses) and cumulative
    effect of change in accounting principle |                |               | 4,061 |       |      |   | 3,620 |       |  |   | 3,428 |       |  |      | 3,256 |       |  |   | 3,170 |      
|Realized investment gains (losses)                                                                    |                |               | 41    |       |      |   | (47   | )     |  |   | (22   | )     |  |      | 66    |       |  |   | 102   |      
|Cumulative effect of change in accounting for derivative
    instruments (1)                          |                |               |      |       |      |   |      |       |  |   |      |       |  |      | 2     |       |  |   |      |      
|                                                                                                      |                |               |       |       |      |   |       |       |  |   |       |       |  |      |      
|                                                                                                      | Total Revenues |               | $     | 4,102 |      |   | $     | 3,573 |  |   | $     | 3,406 |  |      | $     | 3,324 |  |   | $     | 3,272 | 
|                                                                                                      |                |               |       |       |      |   |       |       |  |   |       |       |  |      |      

NET INCOME BY SOURCES


|                                                                                            |            |               |     |     |      |   |     |      |  |   |      |     |  |      |     |     |  |   |     |     | 
|------------------------------------------------------------------------------------------- | ---------- | ------------- | --- | --- | ---- | - | --- | ---- |  | - | ---- | --- |  | ---- | --- | --- |  | - | --- | --- | 
|                                                                                            |            | 2004          |     |     | 2003 |   |     | 2002 |  |   | 2001 |     |  | 2000 |    
|                                                                                            |            |               |     |     |      |   |     |      |  |   |      |     |  |      |    
|                                                                                            |            | (In Millions) |    
|Individual Products                                                                         |            | $             | 302 |     |      | $ | 309 |      |  | $ | 293  |     |  | $    | 295 |     |  | $ | 287 |    
|Annuities and Investment Products                                                           |            |               | 76  |     |      |   | 85  |      |  |   | 80   |     |  |      | 75  |     |  |   | 78  |    
|Benefit Partners                                                                            |            |               | 71  |     |      |   | 51  |      |  |   | 48   |     |  |      | 44  |     |  |   | 33  |    
|Communications                                                                              |            |               | 54  |     |      |   | 46  |      |  |   | 40   |     |  |      | 34  |     |  |   | 41  |    
|Corporate and Other                                                                         |            |               | 33  |     |      |   | 32  |      |  |   | 4    |     |  |      | 20  |     |  |   | 6   |    
|                                                                                            |            |               |     |     |      |   |     |      |  |   |      |     |  |      |    
|Total reportable segment results (3)                                                        |            |               | 536 |     |      |   | 523 |      |  |   | 465  |     |  |      | 468 |     |  |   | 445 |    
|Realized investment gains (losses), net of taxes                                            |            |               | 27  |     |      |   | (31 | )    |  |   | (15  | )   |  |      | 44  |     |  |   | 67  |    
|                                                                                            |            |               |     |     |      |   |     |      |  |   |      |     |  |      |    
|Income before cumulative effects of changes in accounting
    principles                    |            |               | 563 |     |      |   | 492 |      |  |   | 450  |     |  |      | 512 |     |  |   | 512 |    
|Cumulative effect of change in accounting for derivative
    instruments, net of taxes (1)  |            |               |    |     |      |   |    |      |  |   |     |     |  |      | 1   |     |  |   |    |    
|Cumulative effect of change in accounting for long-duration
    contracts, net of taxes (2) |            |               | (17 | )   |      |   |    |      |  |   |     |     |  |      |    |     |  |   |    |    
|                                                                                            |            |               |     |     |      |   |     |      |  |   |      |     |  |      |    
|                                                                                            | Net Income |               | $   | 546 |      |   | $   | 492  |  |   | $    | 450 |  |      | $   | 513 |  |   | $   | 512 | 
|                                                                                            |            |               |     |     |      |   |     |      |  |   |      |     |  |      |    






|    |                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Effective January 1, 2001, the Company adopted
    SFAS Statement No. 133, Accounting for
    Derivative Instruments and Hedging Activities, as
    amended.                                                                                                                                      
|   
|(2) | Effective January 1, 2004, the Company adopted
    SOP 03-1, Accounting and Reporting by Insurance
    Enterprises for Certain Nontraditional Long-Duration Contracts
    and for Separate Accounts.                                                                                              
|   
|(3) | Reportable segment results is a non-GAAP measure. See discussion
    in the MD&A under the section heading, Results by
    Business Segment. Effective January 1, 2002, the
    Company ceased amortization of goodwill as a result of the
    adoption of a new accounting standard (See Note 2).

8



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


SUMMARY OF SELECTED FINANCIAL DATA


|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |         |      |      |   |         |      |      | 
|--------------------------------------------------------------------------------------- | -------------- | ---------------------------------------------------- | ------- | ---- | ---- | - | ------- | ---- | ---- | - | ------- | ---- | ---- | ---- | ------- | ---- | ---- | - | ------- | ---- | ---- | 
|                                                                                        |                | 2004                                                 |         |      | 2003 |   |         | 2002 |      |   | 2001    |      |      | 2000 |        
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|                                                                                        |                | (In Millions Except Share and Per Share Information) |        
|Income before cumulative effects of changes in accounting
    principles                |                | $                                                    | 563     |      |      | $ | 492     |      |      | $ | 450     |      |      | $    | 512     |      |      | $ | 512     |     
|Cumulative effect of change in accounting for derivative
    instruments, net of taxes  |                |                                                      |        |      |      |   |        |      |      |   |        |      |      |      | 1       |      |      |   |        |     
|Cumulative effect of change in accounting for long-duration
    contracts, net of taxes |                |                                                      | (17     | )    |      |   |        |      |      |   |        |      |      |      |        |      |      |   |        |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Net income                                                                              |                | $                                                    | 546     |      |      | $ | 492     |      |      | $ | 450     |      |      | $    | 513     |      |      | $ | 512     |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Per share information:                                                                  |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |         |      |      |   |         |     
|Income before cumulative effects of changes in accounting
    principles                |                | $                                                    | 4.08    |      |      | $ | 3.47    |      |      | $ | 3.07    |      |      | $    | 3.37    |      |      | $ | 3.31    |     
|Cumulative effect of change in accounting for derivative
    instruments, net of taxes  |                |                                                      |        |      |      |   |        |      |      |   |        |      |      |      | 0.01    |      |      |   |        |     
|Cumulative effect of change in accounting for long-duration
    contracts, net of taxes |                |                                                      | (0.12   | )    |      |   |        |      |      |   |        |      |      |      |        |      |      |   |        |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Net income                                                                              |                | $                                                    | 3.96    |      |      | $ | 3.47    |      |      | $ | 3.07    |      |      | $    | 3.38    |      |      | $ | 3.31    |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Per share information  assuming dilution:                                              |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |         |      |      |   |         |     
|Income before cumulative effects of changes in accounting
    principles                |                | $                                                    | 4.04    |      |      | $ | 3.44    |      |      | $ | 3.04    |      |      | $    | 3.33    |      |      | $ | 3.28    |     
|Cumulative effect of change in accounting for derivative
    instruments, net of taxes  |                |                                                      |        |      |      |   |        |      |      |   |        |      |      |      | 0.01    |      |      |   |        |     
|Cumulative effect of change in accounting for long-duration
    contracts, net of taxes |                |                                                      | (0.12   | )    |      |   |        |      |      |   |        |      |      |      |        |      |      |   |        |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Net income                                                                              |                | $                                                    | 3.92    |      |      | $ | 3.44    |      |      | $ | 3.04    |      |      | $    | 3.34    |      |      | $ | 3.28    |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Cash dividends declared on common stock                                                 |                | $                                                    | 208     |      |      | $ | 187     |      |      | $ | 175     |      |      | $    | 166     |      |      | $ | 152     |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Cash dividends declared per common share                                                |                | $                                                    | 1.52    |      |      | $ | 1.32    |      |      | $ | 1.20    |      |      | $    | 1.12    |      |      | $ | 1.00    |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Cash dividends paid per common share:                                                   |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |         |      |      |   |         |     
|                                                                                        | First quarter  |                                                      | $       | 0.33 |      |   | $       | 0.30 |      |   | $       | 0.28 |      |      | $       | 0.25 |      |   | $       | 0.22 |     
|                                                                                        | Second quarter |                                                      |         | 0.38 |      |   |         | 0.33 |      |   |         | 0.30 |      |      |         | 0.28 |      |   |         | 0.25 |     
|                                                                                        | Third quarter  |                                                      |         | 0.38 |      |   |         | 0.33 |      |   |         | 0.30 |      |      |         | 0.28 |      |   |         | 0.25 |     
|                                                                                        | Fourth quarter |                                                      |         | 0.38 |      |   |         | 0.33 |      |   |         | 0.30 |      |      |         | 0.28 |      |   |         | 0.25 |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|                                                                                        |                | Total                                                |         | $    | 1.47 |   |         | $    | 1.29 |   |         | $    | 1.18 |      |         | $    | 1.07 |   |         | $    | 0.96 | 
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Average common shares outstanding (thousands)                                           |                |                                                      | 137,999 |      |      |   | 141,795 |      |      |   | 146,847 |      |      |      | 151,915 |      |      |   | 154,576 |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Total assets                                                                            |                | $                                                    | 35,105  |      |      | $ | 32,696  |      |      | $ | 30,619  |      |      | $    | 29,005  |      |      | $ | 27,331  |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Debt and junior subordinated debentures                                                 |                | $                                                    | 1,097   |      |      | $ | 963     |      |      | $ | 762     |      |      | $    | 756     |      |      | $ | 853     |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Stockholders equity                                                                    |                | $                                                    | 3,934   |      |      | $ | 3,806   |      |      | $ | 3,540   |      |      | $    | 3,391   |      |      | $ | 3,159   |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        
|Stockholders equity per share of common stock                                          |                | $                                                    | 28.75   |      |      | $ | 27.07   |      |      | $ | 24.79   |      |      | $    | 22.61   |      |      | $ | 20.47   |     
|                                                                                        |                |                                                      |         |      |      |   |         |      |      |   |         |      |      |      |        







9



---



##### 



SUPPLEMENTAL INFORMATION


|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |        |       |         |   |        |       |         | 
|--------------------------------------------------- | -------------- | ----------------------------- | ------- | ----- | ------- | - | ------- | ----- | ------- | - | ------ | ----- | ------- | ---- | ------ | ----- | ------- | - | ------ | ----- | ------- | 
|                                                    |                | 2004                          |         |       | 2003    |   |         | 2002  |         |   | 2001   |       |         | 2000 |       
|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |       
|                                                    |                | (In Millions)                 |        
|Life Insurance In Force (Excludes Annuities):       |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |        |       |         |   |        |      
|Traditional                                         |                | $                             | 37,649  |       |         | $ | 40,583  |       |         | $ | 41,570 |       |         | $    | 41,185 |       |         | $ | 43,083 |      
|Universal Life                                      |                |                               | 98,751  |       |         |   | 96,369  |       |         |   | 91,675 |       |         |      | 89,054 |       |         |   | 89,741 |      
|Variable Universal Life                             |                |                               | 29,331  |       |         |   | 29,547  |       |         |   | 30,327 |       |         |      | 28,650 |       |         |   | 23,884 |      
|Benefit Partners                                    |                |                               | 152,180 |       |         |   | 100,432 |       |         |   | 90,627 |       |         |      | 53,763 |       |         |   | 61,812 |      
|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |       
|                                                    |                | Total Life Insurance In Force |         | $     | 317,911 |   |         | $     | 266,931 |   |        | $     | 254,199 |      |        | $     | 212,652 |   |        | $     | 218,520 | 
|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |       
|Life Premiums on a SFAS 60 Basis:                   |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |        |       |         |   |        |      
|First Year Life (Note)                              |                | $                             | 757     |       |         | $ | 834     |       |         | $ | 821    |       |         | $    | 918    |       |         | $ | 517    |      
|Renewal and Other Life                              |                |                               | 1,228   |       |         |   | 1,106   |       |         |   | 1,059  |       |         |      | 1,061  |       |         |   | 1,062  |      
|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |       
|                                                    | Life Insurance |                               |         | 1,985 |         |   |         | 1,940 |         |   |        | 1,880 |         |      |        | 1,979 |         |   |        | 1,579 |        
|Accident and Health (including premium equivalents) |                |                               | 742     |       |         |   | 533     |       |         |   | 445    |       |         |      | 382    |       |         |   | 351    |      
|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |       
|                                                    |                | Total Life Insurance Premiums |         | $     | 2,727   |   |         | $     | 2,473   |   |        | $     | 2,325   |      |        | $     | 2,361   |   |        | $     | 1,930   | 
|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |       
|Annuity Premiums on a SFAS 60 Basis:                |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |        |       |         |   |        |      
|Fixed Annuity                                       |                | $                             | 1,265   |       |         | $ | 815     |       |         | $ | 1,051  |       |         | $    | 1,497  |       |         | $ | 1,273  |      
|Variable Annuity (including separate accounts)      |                |                               | 7       |       |         |   | 11      |       |         |   | 26     |       |         |      | 59     |       |         |   | 127    |      
|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |       
|                                                    |                | Total Annuity Premiums        |         | $     | 1,272   |   |         | $     | 826     |   |        | $     | 1,077   |      |        | $     | 1,556   |   |        | $     | 1,400   | 
|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |       
|Investment Product Sales                            |                | $                             | 4,780   |       |         | $ | 3,258   |       |         | $ | 2,904  |       |         | $    | 2,803  |       |         | $ | 3,677  |      
|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |       
|Communications Broadcast Cash Flow                  |                | $                             | 108     |       |         | $ | 92      |       |         | $ | 85     |       |         | $    | 74     |       |         | $ | 90     |      
|                                                    |                |                               |         |       |         |   |         |       |         |   |        |       |         |      |       



10



---



##### 





|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


MANAGEMENTS DISCUSSION AND ANALYSIS OF


FINANCIAL CONDITION AND RESULTS OF OPERATIONS




Company Profile




| |         
| | --------
| | Overview







Individual Products


11



---



##### 









Annuity and Investment Product (AIP)




Benefit Partners




12



---



##### 





Communications




Corporate and Other






| |                 
| | ----------------
| | Segment Revenues



|                    |  |            |    |   |      |  |    |      |  |  |    |  
|------------------- |  | ---------- | -- | - | ---- |  | -- | ---- |  |  | -- | -
|                    |  | Year Ended |   
|                    |  |            |   
|                    |  | 2004       |    |   | 2003 |  |    | 2002 | 
|                    |  |            |    |   |      |  |    |      | 
|Individual Products |  |            | 44 | % |      |  | 50 | %    |  |  | 52 | %
|AIP                 |  |            | 18 | % |      |  | 19 | %    |  |  | 20 | %
|Benefit Partners    |  |            | 29 | % |      |  | 22 | %    |  |  | 20 | %
|Communications      |  |            | 6  | % |      |  | 6  | %    |  |  | 6  | %
|Corporate and Other |  |            | 3  | % |      |  | 3  | %    |  |  | 2  | %

Critical Accounting Policies and Estimates




| |        
| | -------
| | General



13



---



##### 





| |                                        
| | ---------------------------------------
| | DAC, VOBA and Unearned Revenue Reserves











14



---



##### 





|                                                                                                                                         |  |                         |      |  |             |   |       |  
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ---- |  | ----------- | - | ----- | -
|                                                                                                                                         |  | One-time Effect on DAC, |     
|                                                                                                                                         |  | VOBA, Unearned          |     
|                                                                                                                                         |  | Revenue Reserves and    |     
|                                                                                                                                         |  | Secondary Guarantee     |     
|                                                                                                                                         |  | Benefit Reserves        |     
|                                                                                                                                         |  |                         |     
|                                                                                                                                         |  | Favorable               |      |  | Unfavorable |  
|Quantitative Change in Significant Assumptions                                                                                           |  | Change                  |      |  | Change      |  
|                                                                                                                                         |  |                         |      |  |             |  
|Estimated mortality improving (degrading) 0.5% per year for
    10 years from the current estimate                                       |  | $                       | 38.8 |  |             | $ | (40.7 | )
|Estimated interest spread increasing (decreasing) 2.5 basis
    points per year for 10 years from the current assumed spread             |  |                         | 28.6 |  |             |   | (36.0 | )
|Estimated policy lapse rates decreasing (increasing) 25%
    immediately and then increasing (decreasing) 2.5% per year
    for 10 years |  |                         | 34.0 |  |             |   | (32.6 | )
|Estimated long-term rate of return from VUL assets increasing
    (decreasing) 1.25% using mean reversion techniques                     |  |                         | 1.4  |  |             |   | (6.6  | )







|                                                                                                                                         |  |                        |      |  |             |   |       |  
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | ---- |  | ----------- | - | ----- | -
|                                                                                                                                         |  | One-time Effect on DAC |     
|                                                                                                                                         |  | and VOBA Amortization  |     
|                                                                                                                                         |  |                        |     
|                                                                                                                                         |  | Favorable              |      |  | Unfavorable |  
|Quantitative Change in Significant Assumptions                                                                                           |  | Change                 |      |  | Change      |  
|                                                                                                                                         |  |                        |      |  |             |  
|Estimated interest spread increasing (decreasing) 2.5 basis
    points per year for 10 years from the current assumed spread             |  | $                      | 9.9  |  |             | $ | (10.6 | )
|Estimated policy lapse rates decreasing (increasing) 50%
    immediately and then increasing (decreasing) 5.0% per year
    for 10 years |  |                        | 26.9 |  |             |   | (26.3 | )







| |            
| | -----------
| | Investments



15



---



##### 











| |                   
| | ------------------
| | Policy Liabilities







| |              
| | -------------
| | Pension Plans





16



---



##### 







| |         
| | --------
| | Goodwill

Goodwill and
Other Intangible Assets




| |           
| | ----------
| | Litigation



17



---



##### 



Results of Operations


|                                                                  |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |        |   |  |  |      |  
|----------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ----------------------- |  | - | -------- |  |  | ---- | ------ | - |  |  | ---- | -
|                                                                  |  |      |       |   |      |   |       | Favorable/(Unfavorable) | 
|                                                                  |  |      |       |   |      |   |       |                         | 
|                                                                  |  |      |       |   |      |   |       | 2004 vs.                |  |   | 2003 vs. | 
|                                                                  |  | 2004 |       |   | 2003 |   |       | 2002                    |  |   | 2003     |  |  | 2002 |       
|                                                                  |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |       
|Consolidated Summary of Income                                    |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |        |   |  |  |      |  
|Income before cumulative effect of change in accounting principle |  | $    | 562.7 |   |      | $ | 491.6 |                         |  | $ | 450.2    |  |  |      | 14.5   | % |  |  | 9.2  | %
|Cumulative effect of change in accounting principle               |  |      | (16.6 | ) |      |   |      |                         |  |   |         |  |  |      | (100.0 | ) |  |  |     |  
|                                                                  |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |       
|Net income                                                        |  | $    | 546.1 |   |      | $ | 491.6 |                         |  | $ | 450.2    |  |  |      | 11.1   | % |  |  | 9.2  | %
|                                                                  |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |       
|Consolidated Earnings Per Share                                   |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |        |   |  |  |      |  
|Basic:                                                            |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |        |   |  |  |      |  
|Income before cumulative effect of change in accounting principle |  | $    | 4.08  |   |      | $ | 3.47  |                         |  | $ | 3.07     |  |  |      | 17.6   | % |  |  | 13.0 | %
|Cumulative effect of change in accounting principle               |  |      | (0.12 | ) |      |   |      |                         |  |   |         |  |  |      | (100.0 | ) |  |  |     |  
|                                                                  |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |       
|Net income                                                        |  | $    | 3.96  |   |      | $ | 3.47  |                         |  | $ | 3.07     |  |  |      | 14.1   | % |  |  | 13.0 | %
|                                                                  |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |       
|Fully-diluted:                                                    |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |        |   |  |  |      |  
|Income before cumulative effect of change in accounting principle |  | $    | 4.04  |   |      | $ | 3.44  |                         |  | $ | 3.04     |  |  |      | 17.4   | % |  |  | 13.2 | %
|Cumulative effect of change in accounting principle               |  |      | (0.12 | ) |      |   |      |                         |  |   |         |  |  |      | (100.0 | ) |  |  |     |  
|                                                                  |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |       
|Net income                                                        |  | $    | 3.92  |   |      | $ | 3.44  |                         |  | $ | 3.04     |  |  |      | 14.0   | % |  |  | 13.2 | %
|                                                                  |  |      |       |   |      |   |       |                         |  |   |          |  |  |      |       

|                                                             |  |      |             |  |      |  |             |      |  |  |             | 
|------------------------------------------------------------ |  | ---- | ----------- |  | ---- |  | ----------- | ---- |  |  | ----------- | 
|                                                             |  | 2004 |             |  | 2003 |  |             | 2002 | 
|                                                             |  |      |             |  |      |  |             |      | 
|Average number of shares outstanding                         |  |      | 137,999,364 |  |      |  | 141,795,065 |      |  |  | 146,846,698 | 
|                                                             |  |      |             |  |      |  |             |      | 
|Average number of shares outstanding  assuming
    dilution |  |      | 139,213,034 |  |      |  | 142,867,215 |      |  |  | 148,222,342 | 
|                                                             |  |      |             |  |      |  |             |      | 







18



---



##### 



Results by Business Segment










| |                              
| | -----------------------------
| | Results by Reportable Segment

|                                                                          |  |      |       |   |      |   |       |               |  |   |          |   |  |      |        |    |  |  |        |  
|------------------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ------------- |  | - | -------- | - |  | ---- | ------ | -- |  |  | ------ | -
|                                                                          |  |      |       |   |      |   |       | Favorable/    | 
|                                                                          |  |      |       |   |      |   |       | (Unfavorable) | 
|                                                                          |  |      |       |   |      |   |       |               | 
|                                                                          |  |      |       |   |      |   |       | 2004 vs.      |  |   | 2003 vs. |  
|                                                                          |  | 2004 |       |   | 2003 |   |       | 2002          |  |   | 2003     |   |  | 2002 |       
|                                                                          |  |      |       |   |      |   |       |               |  |   |          |   |  |      |       
|Individual Products                                                       |  | $    | 302.0 |   |      | $ | 309.4 |               |  | $ | 293.1    |   |  |      | (2.4   | )% |  |  | 5.6    | %
|AIP                                                                       |  |      | 76.4  |   |      |   | 85.0  |               |  |   | 80.3     |   |  |      | (10.1  | )  |  |  | 5.9    |  
|Benefit Partners                                                          |  |      | 70.7  |   |      |   | 50.6  |               |  |   | 47.5     |   |  |      | 39.7   |    |  |  | 6.5    |  
|Communications                                                            |  |      | 54.4  |   |      |   | 45.4  |               |  |   | 39.8     |   |  |      | 19.8   |    |  |  | 14.1   |  
|Corporate and Other                                                       |  |      | 32.7  |   |      |   | 32.1  |               |  |   | 4.4      |   |  |      | 1.9    |    |  |  | 629.5  |  
|                                                                          |  |      |       |   |      |   |       |               |  |   |          |   |  |      |       
|Total reportable segment results                                          |  |      | 536.2 |   |      |   | 522.5 |               |  |   | 465.1    |   |  |      | 2.6    |    |  |  | 12.3   |  
|Realized investment gains (losses), net of taxes                          |  |      | 26.5  |   |      |   | (30.9 | )             |  |   | (14.9    | ) |  |      | 185.8  |    |  |  | (107.4 | )
|                                                                          |  |      |       |   |      |   |       |               |  |   |          |   |  |      |       
|Net income before cumulative effect of change in accounting
    principle |  |      | 562.7 |   |      |   | 491.6 |               |  |   | 450.2    |   |  |      | 14.5   |    |  |  | 9.2    |  
|Cumulative effect of change in accounting principle                       |  |      | (16.6 | ) |      |   |      |               |  |   |         |   |  |      | (100.0 | )  |  |  |       |  
|                                                                          |  |      |       |   |      |   |       |               |  |   |          |   |  |      |       
|Net Income                                                                |  | $    | 546.1 |   |      | $ | 491.6 |               |  | $ | 450.2    |   |  |      | 11.1   | %  |  |  | 9.2    | %
|                                                                          |  |      |       |   |      |   |       |               |  |   |          |   |  |      |       



| |               
| | --------------
| | Segment Assets



|                    |              |      |        |        |      |   |        |        | 
|------------------- | ------------ | ---- | ------ | ------ | ---- | - | ------ | ------ | 
|                    |              | 2004 |        |        | 2003 |  
|                    |              |      |        |        |      |  
|Individual Products |              | $    | 18,776 |        |      | $ | 17,717 |       
|AIP                 |              |      | 10,504 |        |      |   | 9,941  |       
|Benefit Partners    |              |      | 1,839  |        |      |   | 1,079  |       
|Communications      |              |      | 223    |        |      |   | 210    |       
|Corporate and Other |              |      | 3,763  |        |      |   | 3,749  |       
|                    |              |      |        |        |      |  
|                    | Total assets |      | $      | 35,105 |      |   | $      | 32,696 | 
|                    |              |      |        |        |      |  

19



---



##### 



Individual Products




(1)


|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      |  |       |      |  |  |       |      |  
|--------------------- | -------------------------------------------------- | ---------------------------- | - | ------ | ----- |  | - | ------------- | ----- |  | -------- | ------ | ----- | ---- |  | ----- | ---- |  |  | ----- | ---- | -
|                      |                                                    |                              |   |        |       |  |   | Favorable/    |      
|                      |                                                    |                              |   |        |       |  |   | (Unfavorable) |      
|                      |                                                    |                              |   |        |       |  |   |               |      
|                      |                                                    |                              |   |        |       |  |   | 2004 vs.      |       |  | 2003 vs. |       
|                      |                                                    | 2004                         |   |        | 2003  |  |   | 2002          |       |  | 2003     |        |       | 2002 | 
|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      | 
|UL-Type Products:     |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      |  |       |      |  |  |      
|                      | Net investment income                              |                              | $ | 746.6  |       |  | $ | 749.2         |       |  | $        | 744.1  |       |      |  | (0.3  | )%   |  |  | 0.7   | %   
|                      | Interest credited to policyholders                 |                              |   | (507.1 | )     |  |   | (515.4        | )     |  |          | (534.6 | )     |      |  | 1.6   |      |  |  | 3.6   |     
|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      | 
|                      |                                                    | Interest margin              |   |        | 239.5 |  |   |               | 233.8 |  |          |        | 209.5 |      |  |       | 2.4  |  |  |       | 11.6 |  
|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      | 
|                      | Product charge revenue:                            |                              |   |        |       |  |   |               |       |  |          |        |       |      |  |       |      |  |  |       |     
|                      |                                                    | Cost of insurance charges    |   |        | 539.1 |  |   |               | 511.9 |  |          |        | 478.9 |      |  |       | 5.3  |  |  |       | 6.9  |  
|                      |                                                    | Expense charges              |   |        | 148.8 |  |   |               | 141.6 |  |          |        | 115.4 |      |  |       | 5.1  |  |  |       | 22.7 |  
|                      |                                                    | Surrender charges            |   |        | 40.7  |  |   |               | 34.9  |  |          |        | 38.0  |      |  |       | 16.6 |  |  |       | (8.2 | )
|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      | 
|                      |                                                    | Total product charge revenue |   |        | 728.6 |  |   |               | 688.4 |  |          |        | 632.3 |      |  |       | 5.8  |  |  |       | 8.9  |  
|                      | Death benefits and other insurance benefits        |                              |   | (312.8 | )     |  |   | (272.4        | )     |  |          | (245.9 | )     |      |  | (14.8 | )    |  |  | (10.8 | )   
|                      | Expenses excluding amortization of DAC and VOBA    |                              |   | (97.0  | )     |  |   | (96.4         | )     |  |          | (101.7 | )     |      |  | (0.6  | )    |  |  | 5.2   |     
|                      | Amortization of DAC and VOBA                       |                              |   | (190.3 | )     |  |   | (179.0        | )     |  |          | (154.4 | )     |      |  | (6.3  | )    |  |  | (15.9 | )   
|                      | Miscellaneous income (expense)                     |                              |   | (0.8   | )     |  |   | (2.1          | )     |  |          | 0.1    |       |      |  | 61.9  |      |  |  |      |     
|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      | 
|                      | UL-type product income before taxes                |                              |   | 367.2  |       |  |   | 372.3         |       |  |          | 339.9  |       |      |  | (1.4  | )    |  |  | 9.5   |     
|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      | 
|Traditional Products: |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      |  |       |      |  |  |      
|                      | Premiums and other considerations                  |                              |   | 152.3  |       |  |   | 173.0         |       |  |          | 180.4  |       |      |  | (12.0 | )    |  |  | (4.1  | )   
|                      | Net investment income                              |                              |   | 153.7  |       |  |   | 165.2         |       |  |          | 179.5  |       |      |  | (7.0  | )    |  |  | (8.0  | )   
|                      | Benefits                                           |                              |   | (172.8 | )     |  |   | (197.8        | )     |  |          | (208.2 | )     |      |  | 12.6  |      |  |  | 5.0   |     
|                      | Expenses excluding amortization of DAC and VOBA    |                              |   | (25.3  | )     |  |   | (24.1         | )     |  |          | (27.6  | )     |      |  | (5.0  | )    |  |  | 12.7  |     
|                      | Amortization of DAC and VOBA                       |                              |   | (16.7  | )     |  |   | (16.3         | )     |  |          | (13.1  | )     |      |  | (2.5  | )    |  |  | (24.4 | )   
|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      | 
|                      | Traditional product income before taxes            |                              |   | 91.2   |       |  |   | 100.0         |       |  |          | 111.0  |       |      |  | (8.8  | )    |  |  | (9.9  | )   
|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      | 
|                      | Reportable segment results before income taxes (1) |                              |   | 458.4  |       |  |   | 472.3         |       |  |          | 450.9  |       |      |  | (2.9  | )    |  |  | 4.7   |     
|                      | Income taxes                                       |                              |   | (156.4 | )     |  |   | (162.9        | )     |  |          | (157.8 | )     |      |  | 4.0   |      |  |  | (3.2  | )   
|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      | 
|                      | Reportable segment results(1)                      |                              | $ | 302.0  |       |  | $ | 309.4         |       |  | $        | 293.1  |       |      |  | (2.4  | )%   |  |  | 5.6   | %   
|                      |                                                    |                              |   |        |       |  |   |               |       |  |          |        |       |      | 






|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|(1) | Reportable segment results is a non-GAAP measure. See Note 15
    for further discussion.

20



---



##### 





|                                                      |                  |      |        |         |      |   |        |               |  |   |          |         |  |      |      |     |   |  |       |     |  
|----------------------------------------------------- | ---------------- | ---- | ------ | ------- | ---- | - | ------ | ------------- |  | - | -------- | ------- |  | ---- | ---- | --- | - |  | ----- | --- | -
|                                                      |                  |      |        |         |      |   |        | Favorable/    | 
|                                                      |                  |      |        |         |      |   |        | (Unfavorable) | 
|                                                      |                  |      |        |         |      |   |        |               | 
|                                                      |                  |      |        |         |      |   |        | 2004 vs.      |  |   | 2003 vs. |        
|                                                      |                  | 2004 |        |         | 2003 |   |        | 2002          |  |   | 2003     |         |  | 2002 |     
|                                                      |                  |      |        |         |      |   |        |               |  |   |          |         |  |      |     
|Annualized life insurance premium sales:              |                  |      |        |         |      |   |        |               |  |   |          |         |  |      |      |     |   |  |       |    
|Individual Markets excluding Community Banks and BOLI |                  | $    | 211    |         |      | $ | 216    |               |  | $ | 202      |         |  |      | (2.3 | )%  |   |  | 6.9   | %  
|Community Banks and BOLI                              |                  | $    | 9      |         |      | $ | 9      |               |  | $ | 58       |         |  |      |     |     |   |  | (84.5 | )% 
|Average UL policyholder fund balances                 |                  | $    | 11,131 |         |      | $ | 10,585 |               |  | $ | 9,875    |         |  |      | 5.2  | %   |   |  | 7.2   | %  
|Average VUL separate account assets                   |                  |      | 1,535  |         |      |   | 1,233  |               |  |   | 1,211    |         |  |      | 24.5 |     |   |  | 1.8   |    
|                                                      |                  |      |        |         |      |   |        |               |  |   |          |         |  |      |     
|                                                      |                  | $    | 12,666 |         |      | $ | 11,818 |               |  | $ | 11,086   |         |  |      | 7.2  | %   |   |  | 6.6   | %  
|                                                      |                  |      |        |         |      |   |        |               |  |   |          |         |  |      |     
|Average face amount of insurance in force:            |                  |      |        |         |      |   |        |               |  |   |          |         |  |      |      |     |   |  |       |    
|                                                      | Total            |      | $      | 165,762 |      |   | $      | 164,963       |  |   | $        | 161,841 |  |      |      | 0.5 | % |  |       | 1.9 | %
|                                                      | UL-type policies |      | $      | 126,876 |      |   | $      | 123,848       |  |   | $        | 120,229 |  |      |      | 2.4 | % |  |       | 3.0 | %
|Average assets                                        |                  | $    | 18,292 |         |      | $ | 17,128 |               |  | $ | 16,352   |         |  |      | 6.8  | %   |   |  | 4.7   | %  







21



---



##### 













22



---



##### 





|                                                 |  |      |        |   |      |   |        |               |  |   |          |   |  |      |      |    |  |  |       |   
|------------------------------------------------ |  | ---- | ------ | - | ---- | - | ------ | ------------- |  | - | -------- | - |  | ---- | ---- | -- |  |  | ----- | --
|                                                 |  |      |        |   |      |   |        | Favorable/    | 
|                                                 |  |      |        |   |      |   |        | (Unfavorable) | 
|                                                 |  |      |        |   |      |   |        |               | 
|                                                 |  |      |        |   |      |   |        | 2004 vs.      |  |   | 2003 vs. |  
|                                                 |  | 2004 |        |   | 2003 |   |        | 2002          |  |   | 2003     |   |  | 2002 |     
|                                                 |  |      |        |   |      |   |        |               |  |   |          |   |  |      |     
|Commissions                                      |  | $    | 276.7  |   |      | $ | 295.5  |               |  | $ | 270.5    |   |  |      | 6.4  | %  |  |  | (9.2  | )%
|General and administrative  acquisition related |  |      | 79.0   |   |      |   | 80.9   |               |  |   | 81.5     |   |  |      | 2.3  |    |  |  | 0.7   |   
|General and administrative  maintenance related |  |      | 43.8   |   |      |   | 42.3   |               |  |   | 45.2     |   |  |      | (3.5 | )  |  |  | 6.4   |   
|Taxes, licenses and fees                         |  |      | 44.3   |   |      |   | 50.3   |               |  |   | 55.4     |   |  |      | 11.9 |    |  |  | 9.2   |   
|                                                 |  |      |        |   |      |   |        |               |  |   |          |   |  |      |     
|Total commissions and expenses incurred          |  |      | 443.8  |   |      |   | 469.0  |               |  |   | 452.6    |   |  |      | 5.4  |    |  |  | (3.6  | ) 
|Less commissions and expenses capitalized        |  |      | (321.5 | ) |      |   | (348.5 | )             |  |   | (323.2   | ) |  |      | (7.7 | )  |  |  | 7.8   |   
|                                                 |  |      |        |   |      |   |        |               |  |   |          |   |  |      |     
|Expenses excluding amortization of DAC and VOBA  |  |      | 122.3  |   |      |   | 120.5  |               |  |   | 129.4    |   |  |      | (1.5 | )  |  |  | 6.9   |   
|Amortization of DAC and VOBA                     |  |      | 207.0  |   |      |   | 195.3  |               |  |   | 167.5    |   |  |      | (6.0 | )  |  |  | (16.6 | ) 
|                                                 |  |      |        |   |      |   |        |               |  |   |          |   |  |      |     
|Total expense                                    |  | $    | 329.3  |   |      | $ | 315.8  |               |  | $ | 296.9    |   |  |      | (4.3 | )% |  |  | (6.4  | )%
|                                                 |  |      |        |   |      |   |        |               |  |   |          |   |  |      |     







23



---



##### 





Annuity and Investment Products




(1)


|                                                  |  |      |       |  |      |   |       |               |  |   |          |  |  |      |       |    |  |  |       |   
|------------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ------------- |  | - | -------- |  |  | ---- | ----- | -- |  |  | ----- | --
|                                                  |  |      |       |  |      |   |       | Favorable/    | 
|                                                  |  |      |       |  |      |   |       | (Unfavorable) | 
|                                                  |  |      |       |  |      |   |       |               | 
|                                                  |  |      |       |  |      |   |       | 2004 vs.      |  |   | 2003 vs. | 
|                                                  |  | 2004 |       |  | 2003 |   |       | 2002          |  |   | 2003     |  |  | 2002 |      
|                                                  |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      
|Investment product charges and premiums           |  | $    | 12.2  |  |      | $ | 8.8   |               |  | $ | 12.2     |  |  |      | 38.6  | %  |  |  | (27.9 | )%
|Net investment income                             |  |      | 592.9 |  |      |   | 586.6 |               |  |   | 576.8    |  |  |      | 1.1   |    |  |  | 1.7   |   
|Broker-dealer concessions and other               |  |      | 112.6 |  |      |   | 98.3  |               |  |   | 97.3     |  |  |      | 14.5  |    |  |  | 1.0   |   
|                                                  |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      
|Total revenues                                    |  |      | 717.7 |  |      |   | 693.7 |               |  |   | 686.3    |  |  |      | 3.5   |    |  |  | 1.1   |   
|                                                  |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      
|Policy benefits (including interest credited)     |  |      | 426.1 |  |      |   | 416.6 |               |  |   | 424.7    |  |  |      | (2.3  | )  |  |  | 1.9   |   
|Insurance expenses                                |  |      | 68.0  |  |      |   | 55.8  |               |  |   | 46.8     |  |  |      | (21.9 | )  |  |  | (19.2 | ) 
|Broker-dealer expenses                            |  |      | 107.2 |  |      |   | 90.7  |               |  |   | 91.3     |  |  |      | (18.2 | )  |  |  | 0.7   |   
|                                                  |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      
|Total benefits and expenses                       |  |      | 601.3 |  |      |   | 563.1 |               |  |   | 562.8    |  |  |      | (6.8  | )  |  |  | (0.1  | ) 
|                                                  |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      
|Reportable segment results before income taxes(1) |  |      | 116.4 |  |      |   | 130.6 |               |  |   | 123.5    |  |  |      | (10.9 | )  |  |  | 5.7   |   
|Income taxes                                      |  |      | 40.0  |  |      |   | 45.6  |               |  |   | 43.2     |  |  |      | 12.3  |    |  |  | (5.6  | ) 
|                                                  |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      
|Reportable segment results(1)                     |  | $    | 76.4  |  |      | $ | 85.0  |               |  | $ | 80.3     |  |  |      | (10.1 | )% |  |  | 5.9   | % 
|                                                  |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      






|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|(1) | Reportable segment results is a non-GAAP measure. See Note 15
    for further discussion.

24



---



##### 





|                                                                                    |  |      |        |   |      |   |       |               |  |   |          |   |  |      |       |   |  |  |       |   
|----------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ----- | ------------- |  | - | -------- | - |  | ---- | ----- | - |  |  | ----- | --
|                                                                                    |  |      |        |   |      |   |       | Favorable/    | 
|                                                                                    |  |      |        |   |      |   |       | (Unfavorable) | 
|                                                                                    |  |      |        |   |      |   |       |               | 
|                                                                                    |  |      |        |   |      |   |       | 2004 vs.      |  |   | 2003 vs. |  
|                                                                                    |  | 2004 |        |   | 2003 |   |       | 2002          |  |   | 2003     |   |  | 2002 |      
|                                                                                    |  |      |        |   |      |   |       |               |  |   |          |   |  |      |      
|Fixed annuity premium sales                                                         |  | $    | 1,217  |   |      | $ | 756   |               |  | $ | 994      |   |  |      | 61.0  | % |  |  | (23.9 | )%
|Variable annuity premium sales                                                      |  |      | 1      |   |      |   | 2     |               |  |   | 10       |   |  |      | (50.0 | ) |  |  | (80.0 | ) 
|                                                                                    |  |      |        |   |      |   |       |               |  |   |          |   |  |      |      
|                                                                                    |  | $    | 1,218  |   |      | $ | 758   |               |  | $ | 1,004    |   |  |      | 60.7  | % |  |  | (24.5 | )%
|                                                                                    |  |      |        |   |      |   |       |               |  |   |          |   |  |      |      
|Investment product sales                                                            |  | $    | 4,780  |   |      | $ | 3,258 |               |  | $ | 2,904    |   |  |      | 46.7  | % |  |  | 12.2  | % 
|                                                                                    |  |      |        |   |      |   |       |               |  |   |          |   |  |      |      
|Average fixed policyholder fund balances                                            |  | $    | 9,169  |   |      | $ | 8,400 |               |  | $ | 7,810    |   |  |      | 9.2   | % |  |  | 7.6   | % 
|Average separate account policyholder fund balances                                 |  |      | 332    |   |      |   | 340   |               |  |   | 481      |   |  |      | (2.4  | ) |  |  | (29.3 | ) 
|                                                                                    |  |      |        |   |      |   |       |               |  |   |          |   |  |      |      
|                                                                                    |  | $    | 9,501  |   |      | $ | 8,740 |               |  | $ | 8,291    |   |  |      | 8.7   | % |  |  | 5.4   | % 
|                                                                                    |  |      |        |   |      |   |       |               |  |   |          |   |  |      |      
|Average assets                                                                      |  | $    | 10,360 |   |      | $ | 9,537 |               |  | $ | 9,064    |   |  |      | 8.6   | % |  |  | 5.2   | % 
|Effective investment spreads for fixed annuities, including SFAS
    133 adjustment |  |      | 1.76   | % |      |   | 1.90  | %             |  |   | 1.82     | % |  |      |       |   |  |  |       |   
|Fixed annuity surrenders as a percentage of beginning fund
    balances             |  |      | 12.3   | % |      |   | 8.4   | %             |  |   | 9.5      | % |  |      |       |   |  |  |       |   



Accounting for Derivative Instruments and Hedging
Activities




25



---



##### 











26



---



##### 





|                                                 |                                 |      |       |      |      |   |       |               |  |   |          |      |  |      |        |       |   |  |       |       |  
|------------------------------------------------ | ------------------------------- | ---- | ----- | ---- | ---- | - | ----- | ------------- |  | - | -------- | ---- |  | ---- | ------ | ----- | - |  | ----- | ----- | -
|                                                 |                                 |      |       |      |      |   |       | Favorable/    | 
|                                                 |                                 |      |       |      |      |   |       | (Unfavorable) | 
|                                                 |                                 |      |       |      |      |   |       |               | 
|                                                 |                                 |      |       |      |      |   |       | 2004 vs.      |  |   | 2003 vs. |     
|                                                 |                                 | 2004 |       |      | 2003 |   |       | 2002          |  |   | 2003     |      |  | 2002 |       
|                                                 |                                 |      |       |      |      |   |       |               |  |   |          |      |  |      |       
|Insurance companies:                             |                                 |      |       |      |      |   |       |               |  |   |          |      |  |      |        |       |   |  |       |      
|Commissions                                      |                                 | $    | 76.2  |      |      | $ | 36.7  |               |  | $ | 53.0     |      |  |      | (107.6 | )%    |   |  | 30.8  | %    
|General and administrative  acquisition related |                                 |      | 14.8  |      |      |   | 12.6  |               |  |   | 15.4     |      |  |      | (17.5  | )     |   |  | 18.2  |      
|General and administrative  maintenance related |                                 |      | 6.5   |      |      |   | 5.6   |               |  |   | 6.2      |      |  |      | (16.1  | )     |   |  | 9.7   |      
|Taxes, licenses and fees                         |                                 |      | 2.8   |      |      |   | 1.9   |               |  |   | 1.8      |      |  |      | (47.4  | )     |   |  | (5.6  | )    
|                                                 |                                 |      |       |      |      |   |       |               |  |   |          |      |  |      |       
|Total commissions and expenses incurred          |                                 |      | 100.3 |      |      |   | 56.8  |               |  |   | 76.4     |      |  |      | (76.6  | )     |   |  | 25.7  |      
|Less commissions and expenses capitalized        |                                 |      | (85.4 | )    |      |   | (47.2 | )             |  |   | (67.1    | )    |  |      | 80.9   |       |   |  | (29.7 | )    
|Amortization of DAC and VOBA                     |                                 |      | 53.1  |      |      |   | 46.2  |               |  |   | 37.5     |      |  |      | (14.9  | )     |   |  | (23.2 | )    
|                                                 |                                 |      |       |      |      |   |       |               |  |   |          |      |  |      |       
|                                                 | Net expense-insurance companies |      |       | 68.0 |      |   |       | 55.8          |  |   |          | 46.8 |  |      |        | (21.9 | ) |  |       | (19.2 | )
|                                                 |                                 |      |       |      |      |   |       |               |  |   |          |      |  |      |       
|Broker/ Dealer:                                  |                                 |      |       |      |      |   |       |               |  |   |          |      |  |      |        |       |   |  |       |      
|Commissions                                      |                                 |      | 95.4  |      |      |   | 80.5  |               |  |   | 80.6     |      |  |      | (18.5  | )     |   |  | 0.1   |      
|Other                                            |                                 |      | 11.8  |      |      |   | 10.2  |               |  |   | 10.7     |      |  |      | (15.7  | )     |   |  | 4.7   |      
|                                                 |                                 |      |       |      |      |   |       |               |  |   |          |      |  |      |       
|Net expense  broker/dealer                      |                                 |      | 107.2 |      |      |   | 90.7  |               |  |   | 91.3     |      |  |      | (18.2  | )     |   |  | 0.7   |      
|                                                 |                                 |      |       |      |      |   |       |               |  |   |          |      |  |      |       
|Net expense                                      |                                 | $    | 175.2 |      |      | $ | 146.5 |               |  | $ | 138.1    |      |  |      | (19.6  | )%    |   |  | (6.1  | )%   
|                                                 |                                 |      |       |      |      |   |       |               |  |   |          |      |  |      |       





Benefit Partners




27



---



##### 



(1)


|                                                  |  |      |         |  |      |   |       |               |  |   |          |  |  |      |       |   |  |  |       |  
|------------------------------------------------- |  | ---- | ------- |  | ---- | - | ----- | ------------- |  | - | -------- |  |  | ---- | ----- | - |  |  | ----- | -
|                                                  |  |      |         |  |      |   |       | Favorable/    | 
|                                                  |  |      |         |  |      |   |       | (Unfavorable) | 
|                                                  |  |      |         |  |      |   |       |               | 
|                                                  |  |      |         |  |      |   |       | 2004 vs.      |  |   | 2003 vs. | 
|                                                  |  | 2004 |         |  | 2003 |   |       | 2002          |  |   | 2003     |  |  | 2002 |      
|                                                  |  |      |         |  |      |   |       |               |  |   |          |  |  |      |      
|Premiums and other considerations                 |  | $    | 1,113.2 |  |      | $ | 756.0 |               |  | $ | 638.1    |  |  |      | 47.2  | % |  |  | 18.5  | %
|Net investment income                             |  |      | 88.9    |  |      |   | 63.8  |               |  |   | 60.2     |  |  |      | 39.3  |   |  |  | 6.0   |  
|                                                  |  |      |         |  |      |   |       |               |  |   |          |  |  |      |      
|Total revenues                                    |  |      | 1,202.1 |  |      |   | 819.8 |               |  |   | 698.3    |  |  |      | 46.6  |   |  |  | 17.4  |  
|                                                  |  |      |         |  |      |   |       |               |  |   |          |  |  |      |      
|Policy benefits                                   |  |      | 840.7   |  |      |   | 576.3 |               |  |   | 477.9    |  |  |      | (45.9 | ) |  |  | (20.6 | )
|Expenses                                          |  |      | 252.6   |  |      |   | 165.6 |               |  |   | 147.3    |  |  |      | (52.5 | ) |  |  | (12.4 | )
|                                                  |  |      |         |  |      |   |       |               |  |   |          |  |  |      |      
|Total benefits and expenses                       |  |      | 1,093.3 |  |      |   | 741.9 |               |  |   | 625.2    |  |  |      | (47.4 | ) |  |  | (18.7 | )
|                                                  |  |      |         |  |      |   |       |               |  |   |          |  |  |      |      
|Reportable segment results before income taxes(1) |  |      | 108.8   |  |      |   | 77.9  |               |  |   | 73.1     |  |  |      | 39.7  |   |  |  | 6.6   |  
|Income taxes                                      |  |      | 38.1    |  |      |   | 27.3  |               |  |   | 25.6     |  |  |      | (39.6 | ) |  |  | (6.6  | )
|                                                  |  |      |         |  |      |   |       |               |  |   |          |  |  |      |      
|Reportable segment results(1)                     |  | $    | 70.7    |  |      | $ | 50.6  |               |  | $ | 47.5     |  |  |      | 39.7  |   |  |  | 6.5   | %
|                                                  |  |      |         |  |      |   |       |               |  |   |          |  |  |      |      






|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|(1) | Reportable segment results is a non-GAAP measure. See Note 15
    for further discussion.



|                                             |            |          |       |      |      |   |      |               |      |   |          |      |      |      |      |       |      |   |      |        |     |  
|-------------------------------------------- | ---------- | -------- | ----- | ---- | ---- | - | ---- | ------------- | ---- | - | -------- | ---- | ---- | ---- | ---- | ----- | ---- | - | ---- | ------ | --- | -
|                                             |            |          |       |      |      |   |      | Favorable/    |     
|                                             |            |          |       |      |      |   |      | (Unfavorable) |     
|                                             |            |          |       |      |      |   |      |               |     
|                                             |            |          |       |      |      |   |      | 2003 vs.      |      |   | 2004 vs. |     
|                                             |            | 2004     |       |      | 2003 |   |      | 2002          |      |   | 2002     |      |      | 2003 |     
|                                             |            |          |       |      |      |   |      |               |      |   |          |      |      |      |     
|Life, Disability and Dental annualized sales |            | $        | 203   |      |      | $ | 200  |               |      | $ | 182      |      |      |      | 1.5  | %     |      |   | 9.9  | %     
|Reportable segment results:                  |            |          |       |      |      |   |      |               |      |   |          |      |      |      |      |       |      |   |      |       
|                                             | Life       |          | $     | 30.4 |      |   | $    | 17.7          |      |   | $        | 19.8 |      |      |      | 71.8  | %    |   |      | (10.6  | )% 
|                                             | Disability |          |       | 35.6 |      |   |      | 28.2          |      |   |          | 20.6 |      |      |      | 26.2  |      |   |      | 36.9   |    
|                                             | Dental     |          |       | 4.0  |      |   |      | 5.2           |      |   |          | 4.1  |      |      |      | (23.1 | )    |   |      | 26.8   |    
|                                             | Other      |          |       | 0.7  |      |   |      | (0.5          | )    |   |          | 3.0  |      |      |      | 240.0 |      |   |      | (116.7 | )  
|                                             |            |          |       |      |      |   |      |               |      |   |          |      |      |      |     
|                                             |            | Total    |       | $    | 70.7 |   |      | $             | 50.6 |   |          | $    | 47.5 |      |      |       | 39.7 | % |      |        | 6.5 | %
|                                             |            |          |       |      |      |   |      |               |      |   |          |      |      |      |     
|Loss ratios:                                 |            |          |       |      |      |   |      |               |      |   |          |      |      |      |      |       |      |   |      |       
|                                             | Life       |          |       | 73.5 | %    |   |      | 77.5          | %    |   |          | 74.6 | %    |      |      |       |      |   |      |        |    
|                                             | Disability |          |       | 72.9 |      |   |      | 69.2          |      |   |          | 70.4 |      |      |      |       |      |   |      |        |    
|                                             | Dental     |          |       | 76.8 |      |   |      | 75.6          |      |   |          | 74.6 |      |      |      |       |      |   |      |        |    
|                                             |            | Combined |       |      | 73.7 | % |      |               | 73.7 | % |          |      | 73.0 | %    |      |       |      |   |      |        |     |  
|Total expenses as a % of premium income      |            |          | 22.7  | %    |      |   | 21.9 | %             |      |   | 23.2     | %    |      |      |      |       |      |   |      |       
|Average assets                               |            | $        | 1,683 |      |      | $ | 988  |               |      | $ | 851      |      |      |      | 70.3 | %     |      |   | 16.1 | %     





28



---



##### 







|                                          |  |      |       |   |      |   |        |               |  |   |          |   |  |      |       |    |  |  |       |   
|----------------------------------------- |  | ---- | ----- | - | ---- | - | ------ | ------------- |  | - | -------- | - |  | ---- | ----- | -- |  |  | ----- | --
|                                          |  |      |       |   |      |   |        | Favorable/    | 
|                                          |  |      |       |   |      |   |        | (Unfavorable) | 
|                                          |  |      |       |   |      |   |        |               | 
|                                          |  |      |       |   |      |   |        | 2004 vs.      |  |   | 2003 vs. |  
|                                          |  | 2004 |       |   | 2003 |   |        | 2002          |  |   | 2003     |   |  | 2002 |      
|                                          |  |      |       |   |      |   |        |               |  |   |          |   |  |      |      
|Commissions                               |  | $    | 125.1 |   |      | $ | 85.3   |               |  | $ | 74.7     |   |  |      | (46.7 | )% |  |  | (14.2 | )%
|General and administrative                |  |      | 112.2 |   |      |   | 75.6   |               |  |   | 69.6     |   |  |      | (48.4 | )  |  |  | (8.6  | ) 
|Taxes, licenses and fees                  |  |      | 26.0  |   |      |   | 19.2   |               |  |   | 17.9     |   |  |      | (35.4 | )  |  |  | (7.3  | ) 
|                                          |  |      |       |   |      |   |        |               |  |   |          |   |  |      |      
|Total commissions and expenses incurred   |  |      | 263.3 |   |      |   | 180.1  |               |  |   | 162.2    |   |  |      | (46.2 | )  |  |  | (11.0 | ) 
|Less commissions and expenses capitalized |  |      | (38.1 | ) |      |   | (114.4 | )             |  |   | (95.7    | ) |  |      | (66.7 | )  |  |  | 19.5  |   
|Amortization of DAC                       |  |      | 27.4  |   |      |   | 99.9   |               |  |   | 80.8     |   |  |      | 72.6  |    |  |  | (23.6 | ) 
|                                          |  |      |       |   |      |   |        |               |  |   |          |   |  |      |      
|Total expense                             |  | $    | 252.6 |   |      | $ | 165.6  |               |  | $ | 147.3    |   |  |      | (52.5 | )% |  |  | (12.4 | )%
|                                          |  |      |       |   |      |   |        |               |  |   |          |   |  |      |      







29



---



##### 





Communications


(1)


|                                              |  |      |       |  |      |   |       |               |  |   |          |  |  |      |       |   |  |  |       |  
|--------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ------------- |  | - | -------- |  |  | ---- | ----- | - |  |  | ----- | -
|                                              |  |      |       |  |      |   |       | Favorable/    | 
|                                              |  |      |       |  |      |   |       | (Unfavorable) | 
|                                              |  |      |       |  |      |   |       |               | 
|                                              |  |      |       |  |      |   |       | 2004 vs.      |  |   | 2003 vs. | 
|                                              |  | 2004 |       |  | 2003 |   |       | 2002          |  |   | 2003     |  |  | 2002 |      
|                                              |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      
|Communications revenues (net)                 |  | $    | 241.1 |  |      | $ | 216.7 |               |  | $ | 210.3    |  |  |      | 11.3  | % |  |  | 3.0   | %
|Cost of sales                                 |  |      | 47.8  |  |      |   | 45.8  |               |  |   | 44.2     |  |  |      | (4.4  | ) |  |  | (3.6  | )
|Operating expenses                            |  |      | 85.2  |  |      |   | 79.3  |               |  |   | 81.4     |  |  |      | (7.4  | ) |  |  | 2.6   |  
|                                              |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      
|Broadcast cash flow                           |  |      | 108.1 |  |      |   | 91.6  |               |  |   | 84.7     |  |  |      | 18.0  |   |  |  | 8.1   |  
|Depreciation and amortization                 |  |      | 8.8   |  |      |   | 8.4   |               |  |   | 8.1      |  |  |      | (4.8  | ) |  |  | (3.7  | )
|Corporate general and administrative expenses |  |      | 7.3   |  |      |   | 6.4   |               |  |   | 7.7      |  |  |      | (14.1 | ) |  |  | 16.9  |  
|Net interest expense                          |  |      | 2.1   |  |      |   | 2.2   |               |  |   | 2.9      |  |  |      | 4.5   |   |  |  | 24.1  |  
|                                              |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      
|Operating revenue before income taxes         |  |      | 89.9  |  |      |   | 74.6  |               |  |   | 66.0     |  |  |      | 20.5  |   |  |  | 13.0  |  
|Income taxes                                  |  |      | 35.5  |  |      |   | 29.2  |               |  |   | 26.2     |  |  |      | (21.6 | ) |  |  | (11.5 | )
|                                              |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      
|Reportable segment results(1)                 |  | $    | 54.4  |  |      | $ | 45.4  |               |  | $ | 39.8     |  |  |      | 19.8  | % |  |  | 14.1  | %
|                                              |  |      |       |  |      |   |       |               |  |   |          |  |  |      |      






|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|(1) | Reportable segment results is a Non-GAAP measure. See Note 15
    for further discussion.











30



---



##### 







Corporate and Other






|                                                                 |  |      |       |   |      |   |       |      |  |   |       |  
|---------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                                 |  | 2004 |       |   | 2003 |   |       | 2002 | 
|                                                                 |  |      |       |   |      |   |       |      | 
|Earnings on investments and other income                         |  | $    | 94.9  |   |      | $ | 93.9  |      |  | $ | 77.2  |  
|Interest expense on debt                                         |  |      | (48.1 | ) |      |   | (33.8 | )    |  |   | (35.9 | )
|Operating expenses                                               |  |      | (20.7 | ) |      |   | (31.2 | )    |  |   | (47.9 | )
|Income taxes                                                     |  |      | 6.6   |   |      |   | 3.2   |      |  |   | 11.0  |  
|                                                                 |  |      |       |   |      |   |       |      | 
|Total expenses                                                   |  |      | 62.2  |   |      |   | (61.8 | )    |  |   | (72.8 | )
|                                                                 |  |      |       |   |      |   |       |      | 
|Reportable segment results(1)                                    |  |      | 32.7  |   |      |   | 32.1  |      |  |   | 4.4   |  
|Realized investment gains (losses), net of taxes                 |  |      | 26.5  |   |      |   | (30.9 | )    |  |   | (14.9 | )
|                                                                 |  |      |       |   |      |   |       |      | 
|Reportable segment results, including realized gains (losses)(1) |  | $    | 59.2  |   |      | $ | 1.2   |      |  | $ | (10.5 | )
|                                                                 |  |      |       |   |      |   |       |      | 






|    |                                                                                          
|--- | -----------------------------------------------------------------------------------------
|(1) | Reportable segment results is a non-GAAP measure. See Note 15
    for further discussion.



31



---



##### 









|                                                 |  |      |       |   |      |   |       |      |  |   |        |  
|------------------------------------------------ |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ------ | -
|                                                 |  | 2004 |       |   | 2003 |   |       | 2002 | 
|                                                 |  |      |       |   |      |   |       |      | 
|Stock gains                                      |  | $    | 95.6  |   |      | $ | 13.8  |      |  | $ | 161.5  |  
|Stock losses                                     |  |      | (3.6  | ) |      |   |      |      |  |   | (1.1   | )
|Stock losses from writedowns                     |  |      | (1.1  | ) |      |   |      |      |  |   |       |  
|Bond gains                                       |  |      | 36.8  |   |      |   | 58.0  |      |  |   | 31.2   |  
|Bond losses from sales                           |  |      | (36.4 | ) |      |   | (34.0 | )    |  |   | (36.9  | )
|Bond losses from writedowns                      |  |      | (58.5 | ) |      |   | (94.8 | )    |  |   | (163.1 | )
|Other gains and losses (net)                     |  |      | 6.2   |   |      |   | (4.1  | )    |  |   | (8.7   | )
|                                                 |  |      |       |   |      |   |       |      | 
|Total pretax gains (losses)                      |  |      | 39.0  |   |      |   | (61.1 | )    |  |   | (17.1  | )
|DAC amortization                                 |  |      | 1.8   |   |      |   | 14.4  |      |  |   | (4.9   | )
|Income taxes                                     |  |      | (14.3 | ) |      |   | 15.8  |      |  |   | 7.1    |  
|                                                 |  |      |       |   |      |   |       |      | 
|Realized investment gains (losses), net of taxes |  | $    | 26.5  |   |      | $ | (30.9 | )    |  | $ | (14.9  | )
|                                                 |  |      |       |   |      |   |       |      | 







|                                                                                                     |       |      |       |       |      |          |       |       |  |  |      |     |  
|---------------------------------------------------------------------------------------------------- | ----- | ---- | ----- | ----- | ---- | -------- | ----- | ----- |  |  | ---- | --- | -
|                                                                                                     |       |      |       |       |      | 2004 vs. |      
|                                                                                                     |       | 2004 |       |       | 2003 |          |       | 2003  | 
|                                                                                                     |       |      |       |       |      |          |       |       | 
|Parent company, passive investment companies and Corporate line
    assets of insurance subsidiaries |       | $    | 1,195 |       |      | $        | 1,206 |       |  |  | (0.9 | )% 
|Unrealized gain on fixed interest investments                                                        |       |      | 629   |       |      |          | 612   |       |  |  | 2.8  |    
|Co-insurance receivables on acquired blocks                                                          |       |      | 929   |       |      |          | 980   |       |  |  | (5.2 | )  
|Employee benefit plan assets                                                                         |       |      | 397   |       |      |          | 369   |       |  |  | 7.6  |    
|Goodwill arising from insurance acquisitions                                                         |       |      | 270   |       |      |          | 270   |       |  |  |     |    
|Other                                                                                                |       |      | 343   |       |      |          | 312   |       |  |  | 14.7 |    
|                                                                                                     |       |      |       |       |      |          |       |       | 
|                                                                                                     | Total |      | $     | 3,763 |      |          | $     | 3,749 |  |  |      | 0.8 | %
|                                                                                                     |       |      |       |       |      |          |       |       | 



32



---



##### 





Capital Resources








|                  |  |        |     | 
|----------------- |  | ------ | --- | 
|Agency            |  | Rating |    
|                  |  |        |    
|Fitch             |  |        | F1+ | 
|Standard & Poors |  |        | A1+ | 









33



---



##### 













|                  |  |         |     |  |       |  |     |      |  |  |     | 
|----------------- |  | ------- | --- |  | ----- |  | --- | ---- |  |  | --- | 
|                  |  | JP Life |     |  | JPFIC |  |     | JPLA | 
|                  |  |         |     |  |       |  |     |      | 
|A.M. Best         |  |         | A++ |  |       |  | A++ |      |  |  | A++ | 
|Standard & Poors |  |         | AAA |  |       |  | AAA |      |  |  | AAA | 
|Fitch Ratings     |  |         | AA+ |  |       |  | AA+ |      |  |  | AA+ | 



Liquidity




34



---



##### 























| |                        
| | -----------------------
| | Contractual Obligations



35



---



##### 





|                               |                                     |                                  |       |          |           |   |       |           |  |   |       |       |  |       |        |        |  |   |        |        | 
|------------------------------ | ----------------------------------- | -------------------------------- | ----- | -------- | --------- | - | ----- | --------- |  | - | ----- | ----- |  | ----- | ------ | ------ |  | - | ------ | ------ | 
|                               |                                     | Estimated Payments Due by Period |      
|                               |                                     |                                  |      
|                               |                                     |                                  |       | 2010 and |           |   |      
|                               |                                     | 2005                             |       |          | 2006-2007 |   |       | 2008-2009 |  |   | After |       |  | Total |       
|                               |                                     |                                  |       |          |           |   |       |           |  |   |       |       |  |       |       
|Commercial paper borrowings    |                                     | $                                | 188   |          |           | $ |      |           |  | $ |      |       |  | $     |       |        |  | $ | 188    |       
|Reverse repurchase agreements  |                                     |                                  | 468   |          |           |   |      |           |  |   |      |       |  |       |       |        |  |   | 468    |       
|EXLs                           |                                     |                                  | 9     |          |           |   | 24    |           |  |   | 28    |       |  |       | 318    |        |  |   | 379    |       
|10-year term notes             |                                     |                                  | 14    |          |           |   | 29    |           |  |   | 29    |       |  |       | 357    |        |  |   | 429    |       
|Junior subordinated debentures |                                     |                                  | 25    |          |           |   | 51    |           |  |   | 51    |       |  |       | 1,223  |        |  |   | 1,350  |       
|Purchase obligations           |                                     |                                  | 69    |          |           |   | 109   |           |  |   | 90    |       |  |       | 69     |        |  |   | 337    |       
|                               |                                     |                                  |       |          |           |   |       |           |  |   |       |       |  |       |       
|                               | Total, excluding policy liabilities |                                  |       | 773      |           |   |       | 213       |  |   |       | 198   |  |       |        | 1,967  |  |   |        | 3,151  | 
|Policy liabilities, discounted |                                     |                                  | 3,195 |          |           |   | 5,795 |           |  |   | 4,370 |       |  |       | 18,218 |        |  |   | 31,578 |       
|                               |                                     |                                  |       |          |           |   |       |           |  |   |       |       |  |       |       
|                               | Total contractual obligations       |                                  | $     | 3,968    |           |   | $     | 6,008     |  |   | $     | 4,568 |  |       | $      | 20,185 |  |   | $      | 34,729 | 
|                               |                                     |                                  |       |          |           |   |       |           |  |   |       |       |  |       |       















| |                                               
| | ----------------------------------------------
| | Off Balance Sheet Arrangements and Commitments



36



---



##### 





Investments




| |                      
| | ---------------------
| | Portfolio Description







|                                |                       |              |        |        |              |  |      |      |       |   |        |        |        |  |      |      |       |  
|------------------------------- | --------------------- | ------------ | ------ | ------ | ------------ |  | ---- | ---- | ----- | - | ------ | ------ | ------ |  | ---- | ---- | ----- | -
|                                |                       | December 31, |        |        | December 31, | 
|                                |                       | 2004         |        |        | 2003         | 
|                                |                       |              |        |        |              | 
|Publicly-issued bonds           |                       | $            | 16,871 |        |              |  | 61.0 | %    |       | $ | 15,823 |        |        |  | 61.3 | %   
|Privately-placed bonds          |                       |              | 5,210  |        |              |  | 18.8 |      |       |   | 4,621  |        |        |  | 17.9 |     
|                                |                       |              |        |        |              |  |      |      |       |   |        |       
|                                | Total bonds           |              |        | 22,081 |              |  |      | 79.8 |       |   |        | 20,444 |        |  |      | 79.2 |      
|Redeemable preferred stock      |                       |              | 13     |        |              |  | 0.1  |      |       |   | 14     |        |        |  |     |     
|                                |                       |              |        |        |              |  |      |      |       |   |        |       
|                                | Total debt securities |              |        | 22,094 |              |  |      | 79.9 |       |   |        | 20,458 |        |  |      | 79.2 |      
|Mortgage loans on real property |                       |              | 3,667  |        |              |  | 13.3 |      |       |   | 3,472  |        |        |  | 13.4 |     
|Common stock                    |                       |              | 647    |        |              |  | 2.3  |      |       |   | 754    |        |        |  | 2.9  |     
|Non-redeemable preferred stock  |                       |              | 3      |        |              |  |     |      |       |   | 2      |        |        |  |     |     
|Policy loans                    |                       |              | 839    |        |              |  | 3.0  |      |       |   | 869    |        |        |  | 3.4  |     
|Real estate                     |                       |              | 125    |        |              |  | 0.5  |      |       |   | 132    |        |        |  | 0.5  |     
|Other                           |                       |              | 193    |        |              |  | 0.7  |      |       |   | 65     |        |        |  | 0.3  |     
|Cash and equivalents            |                       |              | 87     |        |              |  | 0.3  |      |       |   | 72     |        |        |  | 0.3  |     
|                                |                       |              |        |        |              |  |      |      |       |   |        |       
|                                |                       | Total        |        | $      | 27,655       |  |      |      | 100.0 | % |        | $      | 25,824 |  |      |      | 100.0 | %
|                                |                       |              |        |        |              |  |      |      |       |   |        |       

37



---



##### 





| |                            
| | ---------------------------
| | Unrealized Gains and Losses



|                                                                                                         |                              |           |        |        |            |   |       |            |  |   |       |     |   |          |        |        |  |   |        |        | 
|-------------------------------------------------------------------------------------------------------- | ---------------------------- | --------- | ------ | ------ | ---------- | - | ----- | ---------- |  | - | ----- | --- | - | -------- | ------ | ------ |  | - | ------ | ------ | 
|                                                                                                         |                              |           |        | Gross  |            |   | Gross |            |  |   |       |    
|                                                                                                         |                              | Amortized |        |        | Unrealized |   |       | Unrealized |  |   | Fair  |     |   | Carrying |       
|                                                                                                         |                              | Cost      |        |        | Gains      |   |       | Losses     |  |   | Value |     |   | Value    |       
|                                                                                                         |                              |           |        |        |            |   |       |            |  |   |       |     |   |          |       
|Available-for-sale, carried at fair value:                                                               |                              |           |        |        |            |   |       |            |  |   |       |     |   |          |        |        |  |   |        |       
|US Treasury obligations and direct obligations of US Government
    agencies                             |                              | $         | 253    |        |            | $ | 13    |            |  | $ |      |     |   | $        | 266    |        |  | $ | 266    |       
|Federal agency mortgage-backed securities (including
    collateralized mortgage obligations)            |                              |           | 1,610  |        |            |   | 64    |            |  |   | (4    | )   |   |          | 1,670  |        |  |   | 1,670  |       
|Obligations of states and political subdivisions                                                         |                              |           | 57     |        |            |   | 4     |            |  |   |      |     |   |          | 61     |        |  |   | 61     |       
|Corporate obligations                                                                                    |                              |           | 16,225 |        |            |   | 853   |            |  |   | (51   | )   |   |          | 17,027 |        |  |   | 17,027 |       
|Corporate private-labeled mortgage-backed securities (including
    collateralized mortgage obligations) |                              |           | 659    |        |            |   | 31    |            |  |   | (2    | )   |   |          | 688    |        |  |   | 688    |       
|Redeemable preferred stock                                                                               |                              |           | 12     |        |            |   | 1     |            |  |   |      |     |   |          | 13     |        |  |   | 13     |       
|                                                                                                         |                              |           |        |        |            |   |       |            |  |   |       |     |   |          |       
|                                                                                                         | Subtotal, debt securities    |           |        | 18,816 |            |   |       | 966        |  |   |       | (57 | ) |          |        | 19,725 |  |   |        | 19,725 | 
|Non-redeemable preferred stock                                                                           |                              |           | 2      |        |            |   | 1     |            |  |   |      |     |   |          | 3      |        |  |   | 3      |       
|Common stock                                                                                             |                              |           | 199    |        |            |   | 448   |            |  |   |      |     |   |          | 647    |        |  |   | 647    |       
|                                                                                                         |                              |           |        |        |            |   |       |            |  |   |       |     |   |          |       
|Securities available-for-sale                                                                            |                              |           | 19,017 |        |            |   | 1,415 |            |  |   | (57   | )   |   |          | 20,375 |        |  |   | 20,375 |       
|                                                                                                         |                              |           |        |        |            |   |       |            |  |   |       |     |   |          |       
|Held-to-maturity, carried at amortized cost:                                                             |                              |           |        |        |            |   |       |            |  |   |       |     |   |          |        |        |  |   |        |       
|Obligations of state and political subdivisions                                                          |                              |           | 6      |        |            |   | 1     |            |  |   |      |     |   |          | 7      |        |  |   | 6      |       
|Corporate obligations                                                                                    |                              |           | 2,363  |        |            |   | 153   |            |  |   | (9    | )   |   |          | 2,507  |        |  |   | 2,363  |       
|                                                                                                         |                              |           |        |        |            |   |       |            |  |   |       |     |   |          |       
|Debt securities held-to-maturity                                                                         |                              |           | 2,369  |        |            |   | 154   |            |  |   | (9    | )   |   |          | 2,514  |        |  |   | 2,369  |       
|                                                                                                         |                              |           |        |        |            |   |       |            |  |   |       |     |   |          |       
|                                                                                                         | Total AFS and HTM securities |           | $      | 21,386 |            |   | $     | 1,569      |  |   | $     | (66 | ) |          | $      | 22,889 |  |   | $      | 22,744 | 
|                                                                                                         |                              |           |        |        |            |   |       |            |  |   |       |     |   |          |       



38



---



##### 





|                                                                                 |                       |           |       |       |            |  |       |            |       |  |       |    |     |          |       |       |        |  |       |       |        | 
|-------------------------------------------------------------------------------- | --------------------- | --------- | ----- | ----- | ---------- |  | ----- | ---------- | ----- |  | ----- | -- | --- | -------- | ----- | ----- | ------ |  | ----- | ----- | ------ | 
|                                                                                 |                       |           |       | Gross |            |  | Gross |            |       |  |       |   
|                                                                                 |                       | Amortized |       |       | Unrealized |  |       | Unrealized |       |  | Fair  |    |     | Carrying |      
|                                                                                 |                       | Cost      |       |       | Gains      |  |       | Losses     |       |  | Value |    |     | Value    |      
|                                                                                 |                       |           |       |       |            |  |       |            |       |  |       |    |     |          |      
|Industrials                                                                      |                       |           |       |       |            |  |       |            |       |  |       |    |     |          |       |       |        |  |       |      
|                                                                                 | Basic Materials       |           | $     | 967   |            |  | $     | 51         |       |  | $     | (2 | )   |          | $     | 1,016 |        |  | $     | 1,007 |       
|                                                                                 | Capital Goods         |           |       | 1,330 |            |  |       | 73         |       |  |       | (5 | )   |          |       | 1,398 |        |  |       | 1,381 |       
|                                                                                 | Communications        |           |       | 1,348 |            |  |       | 73         |       |  |       | (3 | )   |          |       | 1,418 |        |  |       | 1,402 |       
|                                                                                 | Consumer, Cyclical    |           |       | 1,140 |            |  |       | 57         |       |  |       | (4 | )   |          |       | 1,193 |        |  |       | 1,181 |       
|                                                                                 | Consumer, Noncyclical |           |       | 2,318 |            |  |       | 133        |       |  |       | (6 | )   |          |       | 2,445 |        |  |       | 2,429 |       
|                                                                                 | Energy                |           |       | 1,401 |            |  |       | 69         |       |  |       | (3 | )   |          |       | 1,467 |        |  |       | 1,462 |       
|                                                                                 | Technology            |           |       | 347   |            |  |       | 8          |       |  |       | (2 | )   |          |       | 353   |        |  |       | 352   |       
|                                                                                 | Transportation        |           |       | 774   |            |  |       | 59         |       |  |       | (6 | )   |          |       | 827   |        |  |       | 823   |       
|                                                                                 | Other Industrials     |           |       | 700   |            |  |       | 36         |       |  |       | (1 | )   |          |       | 735   |        |  |       | 730   |       
|Utilities                                                                        |                       |           | 3,897 |       |            |  | 245   |            |       |  | (10   | )  |     |          | 4,132 |       |        |  | 4,099 |      
|Financials                                                                       |                       |           |       |       |            |  |       |            |       |  |       |    |     |          |       |       |        |  |       |      
|                                                                                 | Banks                 |           |       | 2,328 |            |  |       | 124        |       |  |       | (9 | )   |          |       | 2,443 |        |  |       | 2,427 |       
|                                                                                 | Insurance             |           |       | 803   |            |  |       | 27         |       |  |       | (3 | )   |          |       | 827   |        |  |       | 823   |       
|                                                                                 | Other Financials      |           |       | 1,563 |            |  |       | 70         |       |  |       | (6 | )   |          |       | 1,627 |        |  |       | 1,620 |       
|Mortgage-backed Securities (including Commercial Mortgage-backed
    Securities) |                       |           | 2,269 |       |            |  | 95    |            |       |  | (6    | )  |     |          | 2,358 |       |        |  | 2,358 |      
|                                                                                 |                       |           |       |       |            |  |       |            |       |  |       |    |     |          |      
|                                                                                 |                       | Total     |       | $     | 21,185     |  |       | $          | 1,120 |  |       | $  | (66 | )        |       | $     | 22,239 |  |       | $     | 22,094 | 
|                                                                                 |                       |           |       |       |            |  |       |            |       |  |       |    |     |          |      



| |                       
| | ----------------------
| | Credit Risk Management



|       |  |                    |  |           |        |  |       |   |        |          |  |   |          |  |  |  |       |  
|------ |  | ------------------ |  | --------- | ------ |  | ----- | - | ------ | -------- |  | - | -------- |  |  |  | ----- | -
|       |  | S&P or             |  |           |        |  |       |   |        | % of     | 
|SVO    |  | Equivalent         |  | Amortized |        |  | Fair  |   |        | Carrying |  |   | Carrying | 
|Rating |  | Designation        |  | Cost      |        |  | Value |   |        | Value    |  |   | Value    | 
|       |  |                    |  |           |        |  |       |   |        |          |  |   |          | 
|1      |  | AAA                |  | $         | 2,762  |  |       | $ | 2,869  |          |  | $ | 2,865    |  |  |  | 13.0  | %
|1      |  | AA                 |  |           | 1,990  |  |       |   | 2,097  |          |  |   | 2,085    |  |  |  | 9.4   |  
|1      |  | A                  |  |           | 7,183  |  |       |   | 7,591  |          |  |   | 7,527    |  |  |  | 34.1  |  
|2      |  | BBB                |  |           | 7,991  |  |       |   | 8,372  |          |  |   | 8,311    |  |  |  | 37.6  |  
|3      |  | BB                 |  |           | 800    |  |       |   | 834    |          |  |   | 832      |  |  |  | 3.8   |  
|4      |  | B                  |  |           | 377    |  |       |   | 390    |          |  |   | 390      |  |  |  | 1.8   |  
|5      |  | CCC and lower      |  |           | 61     |  |       |   | 64     |          |  |   | 62       |  |  |  | 0.2   |  
|6      |  | In or near default |  |           | 21     |  |       |   | 22     |          |  |   | 22       |  |  |  | 0.1   |  
|       |  |                    |  |           |        |  |       |   |        |          |  |   |          | 
|       |  | Total              |  | $         | 21,185 |  |       | $ | 22,239 |          |  | $ | 22,094   |  |  |  | 100.0 | %
|       |  |                    |  |           |        |  |       |   |        |          |  |   |          | 



39



---



##### 





|                             |  |                        |  |          |     | 
|---------------------------- |  | ---------------------- |  | -------- | --- | 
|                             |  |                        |  | Carrying |    
|Creditor                     |  | Sector                 |  | Value    |    
|                             |  |                        |  |          |    
|Wachovia                     |  | Financial Institutions |  | $        | 161 | 
|JP Morgan Chase              |  | Financial Institutions |  |          | 142 | 
|Weingarten Realty Investors  |  | Financial Institutions |  |          | 105 | 
|Goldman Sachs Group          |  | Financial Institutions |  |          | 104 | 
|Cargill Incorporated         |  | Consumer, Noncyclical  |  |          | 99  | 
|Citigroup Incorporated       |  | Financial Institutions |  |          | 97  | 
|Burlington Northern Santa Fe |  | Transportation         |  |          | 96  | 
|United Health Group Inc      |  | Consumer, Noncyclical  |  |          | 95  | 
|US Bancorp                   |  | Financial Institutions |  |          | 94  | 
|Anheuser-Busch Companies     |  | Consumer, Noncyclical  |  |          | 93  | 





|                          |  |                       |  |           |    |  |                |       |            |             |  |   |    |  
|------------------------- |  | --------------------- |  | --------- | -- |  | -------------- | ----- | ---------- | ----------- |  | - | -- | -
|                          |  |                       |  |           |    |  |                | Gross |           
|                          |  |                       |  | Amortized |    |  |                |       | Unrealized |            
|Creditor                  |  | Sector                |  | Cost      |    |  | Carrying Value |       |            | Gain/(Loss) | 
|                          |  |                       |  |           |    |  |                |       |            |             | 
|Ahold, Royal              |  | Consumer, Noncyclical |  | $         | 46 |  |                | $     | 50         |             |  | $ | 4  |  
|El Paso Corp              |  | Utilities             |  |           | 48 |  |                |       | 49         |             |  |   | 1  |  
|Nova Chem Ltd/ Nova Chem  |  | Basic Materials       |  |           | 37 |  |                |       | 37         |             |  |   |   |  
|Rite Aid Corp             |  | Consumer, Cyclical    |  |           | 33 |  |                |       | 34         |             |  |   | 1  |  
|Thomas & Betts Co         |  | Technology            |  |           | 31 |  |                |       | 32         |             |  |   | 1  |  
|Intl Telecom Satellite US |  | Communications        |  |           | 30 |  |                |       | 30         |             |  |   |   |  
|Qwest Communications Intl |  | Communications        |  |           | 28 |  |                |       | 29         |             |  |   | 1  |  
|Homer City Funding LLC    |  | Utilities             |  |           | 25 |  |                |       | 28         |             |  |   | 3  |  
|Williams Cos Inc          |  | Utilities             |  |           | 26 |  |                |       | 28         |             |  |   | 2  |  
|Allied Waste N America    |  | Capital Goods         |  |           | 27 |  |                |       | 24         |             |  |   | (3 | )







| |                  
| | -----------------
| | Impairment Review





| |   |                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------
| |  | current fair value of the security compared to amortized cost                                             
|
| |  | length of time the fair value was below amortized cost                                                    
|
| |  | industry factors or conditions related to a geographic area that
    are negatively affecting the security

40



---



##### 





| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | downgrades by a rating agency                                              
|
| |  | past due interest or principal payments or other violation of
    covenants
|
| |  | deterioration of the overall financial condition of the specific
    issuer







| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | fundamental analysis of the liquidity and financial condition of
    the specific issuer      
|
| |  | underlying valuation of assets specifically pledged to support
    the credit                 
|
| |  | time period in which the fair value has been significantly below
    amortized cost           
|
| |  | industry sector or geographic area applicable to the specific
    issuer                      
|
| |  | our ability and intent to retain the investment for a sufficient
    time to recover its value







|                                          |          |           |       |       |       |       |       |            |       |   |          |     |     |   |       |       |       | 
|----------------------------------------- | -------- | --------- | ----- | ----- | ----- | ----- | ----- | ---------- | ----- | - | -------- | --- | --- | - | ----- | ----- | ----- | 
|                                          |          |           |       |       |       | Gross |       |            |      
|                                          |          | Amortized |       |       | Fair  |       |       | Unrealized |       |   | Carrying |    
|                                          |          | Cost      |       |       | Value |       |       | Losses     |       |   | Value    |    
|                                          |          |           |       |       |       |       |       |            |       |   |          |    
|Due in one year or less                   |          | $         | 21    |       |       | $     | 19    |            |       | $ | (2       | )   |     | $ | 19    |      
|Due after one year through five years     |          |           | 772   |       |       |       | 765   |            |       |   | (7       | )   |     |   | 766   |      
|Due after five years through ten years    |          |           | 1,805 |       |       |       | 1,773 |            |       |   | (32      | )   |     |   | 1,779 |      
|Due after ten years through twenty years  |          |           | 961   |       |       |       | 943   |            |       |   | (18      | )   |     |   | 945   |      
|Due after twenty years                    |          |           | 107   |       |       |       | 105   |            |       |   | (2       | )   |     |   | 105   |      
|Amounts not due at a single maturity date |          |           | 250   |       |       |       | 245   |            |       |   | (5       | )   |     |   | 245   |      
|                                          |          |           |       |       |       |       |       |            |       |   |          |    
|                                          | Subtotal |           |       | 3,916 |       |       |       | 3,850      |       |   |          | (66 | )   |   |       | 3,859 |      
|Redeemable preferred stocks               |          |           | 4     |       |       |       | 4     |            |       |   |         |     |     |   | 4     |      
|                                          |          |           |       |       |       |       |       |            |       |   |          |    
|                                          |          | Total     |       | $     | 3,920 |       |       | $          | 3,854 |   |          | $   | (66 | ) |       | $     | 3,863 | 
|                                          |          |           |       |       |       |       |       |            |       |   |          |    

41



---



##### 





|       |  |                    |  |           |       |  |       |      |       |       |       |      |            |       |  |            |     |   |          |  |       |   |  |   |       | 
|------ |  | ------------------ |  | --------- | ----- |  | ----- | ---- | ----- | ----- | ----- | ---- | ---------- | ----- |  | ---------- | --- | - | -------- |  | ----- | - |  | - | ----- | 
|       |  |                    |  |           |       |  |       |      |       |       |       | % of |            |       | 
|       |  |                    |  |           |       |  |       | % of |       |       | Gross |      |            | Gross |  |            |    
|SVO    |  | S&P or Equivalent  |  | Amortized |       |  | Fair  |      |       | Fair  |       |      | Unrealized |       |  | Unrealized |     |   | Carrying | 
|Rating |  | Designation        |  | Cost      |       |  | Value |      |       | Value |       |      | Losses     |       |  | Losses     |     |   | Value    | 
|       |  |                    |  |           |       |  |       |      |       |       |       |      |            |       |  |            |     |   |          | 
|1      |  | AAA/ AA/ A         |  | $         | 2,103 |  |       | $    | 2,074 |       |       |      | 53.8%      |       |  | $          | (29 | ) |          |  | 43.9  | % |  | $ | 2,077 | 
|2      |  | BBB                |  |           | 1,548 |  |       |      | 1,523 |       |       |      | 39.5       |       |  |            | (25 | ) |          |  | 37.9  |   |  |   | 1,527 | 
|3      |  | BB                 |  |           | 134   |  |       |      | 127   |       |       |      | 3.3        |       |  |            | (7  | ) |          |  | 10.6  |   |  |   | 128   | 
|4      |  | B                  |  |           | 127   |  |       |      | 123   |       |       |      | 3.2        |       |  |            | (4  | ) |          |  | 6.1   |   |  |   | 124   | 
|5      |  | CCC and lower      |  |           | 7     |  |       |      | 6     |       |       |      | 0.2        |       |  |            | (1  | ) |          |  | 1.5   |   |  |   | 6     | 
|6      |  | In or near default |  |           | 1     |  |       |      | 1     |       |       |      | 0.0        |       |  |            |    |   |          |  | 0.0   |   |  |   | 1     | 
|       |  |                    |  |           |       |  |       |      |       |       |       |      |            |       |  |            |     |   |          | 
|       |  | Total              |  | $         | 3,920 |  |       | $    | 3,854 |       |       |      | 100.0%     |       |  | $          | (66 | ) |          |  | 100.0 | % |  | $ | 3,863 | 
|       |  |                    |  |           |       |  |       |      |       |       |       |      |            |       |  |            |     |   |          | 





|                   |       |       |       |       |            |      |       |            |   |  |          |       |   |   |       |       | 
|------------------ | ----- | ----- | ----- | ----- | ---------- | ---- | ----- | ---------- | - |  | -------- | ----- | - | - | ----- | ----- | 
|                   |       |       |       |       |            | % of |       |            |  
|                   |       |       |       | Gross |            |      | Gross |            |   | 
|                   |       | Fair  |       |       | Unrealized |      |       | Unrealized |   |  | Carrying |      
|                   |       | Value |       |       | Losses     |      |       | Losses     |   |  | Value    |      
|                   |       |       |       |       |            |      |       |            |   |  |          |      
|More than 1 year   |       | $     | 828   |       |            | $    | (29   | )          |   |  | 43.9     | %     |   | $ | 834   |      
|6 months  1 year  |       |       | 1,787 |       |            |      | (27   | )          |   |  | 40.9     |       |   |   | 1,790 |      
|Less than 6 months |       |       | 1,239 |       |            |      | (10   | )          |   |  | 15.2     |       |   |   | 1,239 |      
|                   |       |       |       |       |            |      |       |            |   |  |          |      
|                   | Total |       | $     | 3,854 |            |      | $     | (66        | ) |  |          | 100.0 | % |   | $     | 3,863 | 
|                   |       |       |       |       |            |      |       |            |   |  |          |      



Realized Losses 
Write Downs and Sales






2004




| |   |                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $10.1 write down on debt of a commercial cable equipment
    company, due to a likely bankruptcy filing following an adverse
    judicial ruling on a summary judgment motion. The value of
    assets may not exceed the cost of a bankruptcy filing or the
    costs of winding down the operations. This had no impact on
    other holdings in our portfolio.                                            
|
| |  | $17.5 write down on debt of a national passenger airline, due to
    high labor costs, increasing fuel prices, intense competition
    from low cost carriers, an inablility to access capital, and the
    lack of demand for older aircraft. We have been actively
    managing all of our exposures to the passenger airline industry,
    although this had no impact on other holdings in our portfolio.

42



---



##### 



2003




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $16.6 write down on debt of Dairy Holdings (a subsidiary of
    Parmalat). This issuer defaulted on this security and
    subsequently filed for bankruptcy protection. This is the only
    exposure we had to Parmalat. This security was sold for its
    written down value in 2003. This had no impact on other holdings
    in our portfolio.                                                                                                                    
|
| |  | $16.6 write down related to airline equipment trusts that were
    secured by passenger aircraft. Given the overall softness in the
    U.S. passenger airline industry, these securities became other
    than temporarily impaired. We sold these bonds at their book
    value after this write down. We have been actively managing all
    of our exposures to the passenger airline industry, although
    this had no impact on other holdings in our portfolio.
|
| |  | $15.0 write down of US Generating. This was an investment in a
    project finance security in the power generating industry. The
    lessee of this facility filed bankruptcy and rejected this
    lease. As a result, the investment became other than temporarily
    impaired. This had no impact on other holdings in our portfolio.                                                                                                                             
|
| |  | $11.0 write down on preferred stock of a financial marketing
    firm. The circumstances surrounding this other-than-temporary
    impairment do not impact any other securities in our portfolio.                                                                                                                                                                                                                                                                     



Mortgage-backed Securities




|                                                     |       |      |       |       |      |   |       |       | 
|---------------------------------------------------- | ----- | ---- | ----- | ----- | ---- | - | ----- | ----- | 
|                                                     |       | 2004 |       |       | 2003 |  
|                                                     |       |      |       |       |      |  
|Federal agency issued mortgage-backed securities     |       | $    | 1,670 |       |      | $ | 2,152 |      
|Corporate private-labeled mortgage-backed securities |       |      | 688   |       |      |   | 752   |      
|                                                     |       |      |       |       |      |  
|                                                     | Total |      | $     | 2,358 |      |   | $     | 2,904 | 
|                                                     |       |      |       |       |      |  





Mortgage Loans




43



---



##### 





Derivative Instruments




Market Risk Exposures














44



---



##### 













|                        |  |                                   |    |   |                     |   |     |  
|----------------------- |  | --------------------------------- | -- | - | ------------------- | - | --- | -
|                        |  | Estimated Incremental Single Year |   
|                        |  | Gain/(Loss) Based on:             |   
|                        |  |                                   |   
|Change in Interest Rate |  | Graded Quarterly Shift            |    |   | Instantaneous Shift |  
|                        |  |                                   |    |   |                     |  
|+300 basis points       |  | $                                 | (8 | ) |                     | $ | (16 | )
|+200 basis points       |  |                                   | (5 | ) |                     |   | (9  | )
|+100 basis points       |  |                                   | (3 | ) |                     |   | (3  | )
|- 100 basis points      |  |                                   | 3  |   |                     |   | 3   |  



45



---



##### 







|                         |                             |                        |     |     |  
|------------------------ | --------------------------- | ---------------------- | --- | --- | -
|                         |                             | Hypothetical Change in |    
|                         |                             | Fair Value from 10%    |    
|                         |                             | Market Decline         |    
|                         |                             |                        |    
|BankAmerica common stock |                             | $                      | (40 | )  
|Other equity securities  |                             |                        | (25 | )  
|                         |                             |                        |    
|                         | Total change in fair values |                        | $   | (65 | )
|                         |                             |                        |    



External Trends and Forward Looking Information








46



---



##### 



Regulatory and Legal
Environment








Environmental Liabilities




Accounting Pronouncements




Forward Looking Information










47



---



##### 





Item 7A.     Quantitative
and Qualitative Disclosures about Market Risk




48



---



##### 





|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

|                                                                                            |  |                                        |      |   |          |   |       |               |  |   |              |  |  |   |       | 
|------------------------------------------------------------------------------------------- |  | -------------------------------------- | ---- | - | -------- | - | ----- | ------------- |  | - | ------------ |  |  | - | ----- | 
|                                                                                            |  | Restated                               |      |   |          |   |       |               | 
|                                                                                            |  | March 31,                              |      |   | June 30, |   |       | September 30, |  |   | December 31, | 
|                                                                                            |  | 2004                                   |      |   | 2004     |   |       | 2004          |  |   | 2004         | 
|                                                                                            |  |                                        |      |   |          |   |       |               |  |   |              | 
|                                                                                            |  | (In Millions Except Share Information) |     
|Revenues, excluding realized investment gains                                               |  | $                                      | 961  |   |          | $ | 1,037 |               |  | $ | 999          |  |  | $ | 1,064 | 
|Realized investment gains                                                                   |  |                                        | 24   |   |          |   | 10    |               |  |   | 3            |  |  |   | 4     | 
|                                                                                            |  |                                        |      |   |          |   |       |               |  |   |              | 
|Total revenue                                                                               |  |                                        | 985  |   |          |   | 1,047 |               |  |   | 1,002        |  |  |   | 1,068 | 
|Benefits and expenses                                                                       |  |                                        | 770  |   |          |   | 836   |               |  |   | 800          |  |  |   | 856   | 
|Income taxes                                                                                |  |                                        | 74   |   |          |   | 69    |               |  |   | 68           |  |  |   | 66    | 
|                                                                                            |  |                                        |      |   |          |   |       |               |  |   |              | 
|Income before cumulative effect of change in accounting principle                           |  |                                        | 141  |   |          |   | 142   |               |  |   | 134          |  |  |   | 146   | 
|Cumulative effect of change in accounting for long-duration
    contracts, net of taxes (1) |  |                                        | (17  | ) |          |   |      |               |  |   |             |  |  |   |      | 
|                                                                                            |  |                                        |      |   |          |   |       |               |  |   |              | 
|Net income                                                                                  |  | $                                      | 124  |   |          | $ | 142   |               |  | $ | 134          |  |  | $ | 146   | 
|                                                                                            |  |                                        |      |   |          |   |       |               |  |   |              | 
|Per share                                                                                   |  | $                                      | 0.88 |   |          | $ | 1.03  |               |  | $ | 0.98         |  |  | $ | 1.07  | 
|                                                                                            |  |                                        |      |   |          |   |       |               |  |   |              | 
|Per share  assuming dilution                                                               |  | $                                      | 0.87 |   |          | $ | 1.02  |               |  | $ | 0.97         |  |  | $ | 1.06  | 
|                                                                                            |  |                                        |      |   |          |   |       |               |  |   |              | 

|                                                       |  |                                        |      |   |          |   |      |               |  |   |              |   |  |   |      |  
|------------------------------------------------------ |  | -------------------------------------- | ---- | - | -------- | - | ---- | ------------- |  | - | ------------ | - |  | - | ---- | -
|                                                       |  | March 31,                              |      |   | June 30, |   |      | September 30, |  |   | December 31, |  
|                                                       |  | 2003                                   |      |   | 2003     |   |      | 2003          |  |   | 2003         |  
|                                                       |  |                                        |      |   |          |   |      |               |  |   |              |  
|                                                       |  | (In Millions Except Share Information) |     
|Revenues, excluding realized investment gains (losses) |  | $                                      | 887  |   |          | $ | 897  |               |  | $ | 911          |   |  | $ | 925  |  
|Realized investment gains (losses)                     |  |                                        | (19  | ) |          |   | 20   |               |  |   | (5           | ) |  |   | (43  | )
|                                                       |  |                                        |      |   |          |   |      |               |  |   |              |  
|Total revenue                                          |  |                                        | 868  |   |          |   | 917  |               |  |   | 906          |   |  |   | 882  |  
|Benefits and expenses                                  |  |                                        | 701  |   |          |   | 703  |               |  |   | 718          |   |  |   | 713  |  
|Income taxes                                           |  |                                        | 58   |   |          |   | 74   |               |  |   | 62           |   |  |   | 52   |  
|                                                       |  |                                        |      |   |          |   |      |               |  |   |              |  
|Net income                                             |  | $                                      | 109  |   |          | $ | 140  |               |  | $ | 126          |   |  | $ | 117  |  
|                                                       |  |                                        |      |   |          |   |      |               |  |   |              |  
|Per share                                              |  | $                                      | 0.76 |   |          | $ | 0.99 |               |  | $ | 0.89         |   |  | $ | 0.82 |  
|                                                       |  |                                        |      |   |          |   |      |               |  |   |              |  
|Per share  assuming dilution                          |  | $                                      | 0.76 |   |          | $ | 0.98 |               |  | $ | 0.88         |   |  | $ | 0.82 |  
|                                                       |  |                                        |      |   |          |   |      |               |  |   |              |  






|    |                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In September 2004, the Company adopted new accounting guidance
    that resulted in the restatement of the previously reported
    cumulative effect from ($13) to ($17) (See Note 2).

49



---



##### 



REPORT OF MANAGEMENT ON THE CONSOLIDATED FINANCIAL STATEMENTS
AND


MANAGEMENTS ASSESSMENT OF INTERNAL CONTROL OVER
FINANCIAL REPORTING








Internal
Control  Integrated Framework.




|                                                                                                                                                               |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|/s/ Dennis R. Glass--------------------------------------------------------
    Dennis R. Glass
    President and
    Chief Executive Officer                  |  | 
|                                                                                                                                                              
|                                                                                                                                                              
|/s/ Theresa M. Stone--------------------------------------------------------
    Theresa M. Stone
    Executive Vice President and
    Chief Financial Officer |  | 

50



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##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


ON INTERNAL CONTROL OVER FINANCIAL REPORTING






Report of Management on the Consolidated
Financial Statements and Managements Assessment of
Internal Controls Over Financial Reporting














| |                      
| | ---------------------
| | -s- ERNST & YOUNG LLP





51



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##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














| |                      
| | ---------------------
| | -s- ERNST & YOUNG LLP





52



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


|                                                                 |                                                                                                                                                                                     |                                            |       |        |        |  |       |        |        | 
|---------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----- | ------ | ------ |  | ----- | ------ | ------ | 
|                                                                 |                                                                                                                                                                                     | December 31,                               |      
|                                                                 |                                                                                                                                                                                     |                                            |      
|                                                                 |                                                                                                                                                                                     | 2004                                       |       |        | 2003   | 
|                                                                 |                                                                                                                                                                                     |                                            |       |        |        | 
|                                                                 |                                                                                                                                                                                     | (Dollar Amounts in                         |      
|                                                                 |                                                                                                                                                                                     | Millions Except                            |      
|                                                                 |                                                                                                                                                                                     | Share Information)                         |      
|ASSETS                                                          
|Investments:                                                     |                                                                                                                                                                                     |                                            |       |        |        |  |       |       
|                                                                 | Debt securities available-for-sale, at fair value (amortized
    cost $18,816 and $16,819)                                                                                          |                                            | $     | 19,725 |        |  | $     | 17,706 |       
|                                                                 | Debt securities held-to-maturity, at amortized cost (fair value
    $2,514 and $2,918)                                                                                              |                                            |       | 2,369  |        |  |       | 2,752  |       
|                                                                 | Equity securities available-for-sale, at fair value (cost $201
    and $304)                                                                                                        |                                            |       | 650    |        |  |       | 756    |       
|                                                                 | Mortgage loans on real estate                                                                                                                                                       |                                            |       | 3,667  |        |  |       | 3,472  |       
|                                                                 | Policy loans                                                                                                                                                                        |                                            |       | 839    |        |  |       | 869    |       
|                                                                 | Real estate                                                                                                                                                                         |                                            |       | 125    |        |  |       | 132    |       
|                                                                 | Other investments                                                                                                                                                                   |                                            |       | 193    |        |  |       | 65     |       
|                                                                 |                                                                                                                                                                                     |                                            |       |        |        | 
|                                                                 |                                                                                                                                                                                     | Total investments                          |       |        | 27,568 |  |       |        | 25,752 | 
|Cash and cash equivalents                                        |                                                                                                                                                                                     |                                            | 87    |        |        |  | 72    |       
|Accrued investment income                                        |                                                                                                                                                                                     |                                            | 342   |        |        |  | 326   |       
|Due from reinsurers                                              |                                                                                                                                                                                     |                                            | 1,341 |        |        |  | 1,340 |       
|Deferred policy acquisition costs and value of business acquired |                                                                                                                                                                                     |                                            | 2,430 |        |        |  | 2,230 |       
|Goodwill                                                         |                                                                                                                                                                                     |                                            | 312   |        |        |  | 312   |       
|Assets held in separate accounts                                 |                                                                                                                                                                                     |                                            | 2,373 |        |        |  | 2,166 |       
|Other assets                                                     |                                                                                                                                                                                     |                                            | 652   |        |        |  | 498   |       
|                                                                 |                                                                                                                                                                                     |                                            |       |        |        | 
|                                                                 |                                                                                                                                                                                     | Total assets                               |       | $      | 35,105 |  |       | $      | 32,696 | 
|                                                                 |                                                                                                                                                                                     |                                            |       |        |        | 
|                                                                
|LIABILITIES AND STOCKHOLDERS EQUITY                            
|Policy liabilities:                                              |                                                                                                                                                                                     |                                            |       |        |        |  |       |       
|                                                                 | Future policy benefits                                                                                                                                                              |                                            | $     | 3,096  |        |  | $     | 2,674  |       
|                                                                 | Policyholder contract deposits                                                                                                                                                      |                                            |       | 21,694 |        |  |       | 20,642 |       
|                                                                 | Policy and contract claims                                                                                                                                                          |                                            |       | 232    |        |  |       | 165    |       
|                                                                 | Other                                                                                                                                                                               |                                            |       | 1,144  |        |  |       | 954    |       
|                                                                 |                                                                                                                                                                                     |                                            |       |        |        | 
|                                                                 |                                                                                                                                                                                     | Total policy liabilities                   |       |        | 26,166 |  |       |        | 24,435 | 
|Commercial paper and revolving credit borrowings                 |                                                                                                                                                                                     |                                            | 188   |        |        |  | 654   |       
|Securities sold under repurchase agreements                      |                                                                                                                                                                                     |                                            | 468   |        |        |  | 401   |       
|Notes payable                                                    |                                                                                                                                                                                     |                                            | 600   |        |        |  |      |       
|Junior subordinated debentures                                   |                                                                                                                                                                                     |                                            | 309   |        |        |  | 309   |       
|Currently payable (recoverable) income taxes                     |                                                                                                                                                                                     |                                            | 31    |        |        |  | (72   | )     
|Deferred income tax liabilities                                  |                                                                                                                                                                                     |                                            | 589   |        |        |  | 543   |       
|Liabilities related to separate accounts                         |                                                                                                                                                                                     |                                            | 2,373 |        |        |  | 2,166 |       
|Accounts payable, accruals and other liabilities                 |                                                                                                                                                                                     |                                            | 447   |        |        |  | 454   |       
|                                                                 |                                                                                                                                                                                     |                                            |       |        |        | 
|                                                                 |                                                                                                                                                                                     | Total liabilities                          |       |        | 31,171 |  |       |        | 28,890 | 
|                                                                 |                                                                                                                                                                                     |                                            |       |        |        | 
|Commitments and contingent liabilities                           |                                                                                                                                                                                     |                                            |       |        |        |  |       |       
|Stockholders Equity:                                            |                                                                                                                                                                                     |                                            |       |        |        |  |       |       
|                                                                 | Common stock and paid in capital, par value $1.25 per share:
    authorized 350,000,000 shares; issued and outstanding
    2004  136,819,214 shares; 2003 
    140,610,540 shares |                                            |       | 180    |        |  |       | 176    |       
|                                                                 | Retained earnings                                                                                                                                                                   |                                            |       | 3,071  |        |  |       | 2,947  |       
|                                                                 | Accumulated other comprehensive income                                                                                                                                              |                                            |       | 683    |        |  |       | 683    |       
|                                                                 |                                                                                                                                                                                     |                                            |       |        |        | 
|                                                                 |                                                                                                                                                                                     | Total stockholders equity                 |       |        | 3,934  |  |       |        | 3,806  | 
|                                                                 |                                                                                                                                                                                     |                                            |       |        |        | 
|                                                                 |                                                                                                                                                                                     | Total liabilities and stockholders equity |       | $      | 35,105 |  |       | $      | 32,696 | 
|                                                                 |                                                                                                                                                                                     |                                            |       |        |        | 



53



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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME


|                                                                                        |                             |                         |       |       |      |   |       |       |  |   |       |       | 
|--------------------------------------------------------------------------------------- | --------------------------- | ----------------------- | ----- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                                                                                        |                             | Year Ended December 31, |      
|                                                                                        |                             |                         |      
|                                                                                        |                             | 2004                    |       |       | 2003 |   |       | 2002  | 
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|                                                                                        |                             | (Dollar Amounts in      |      
|                                                                                        |                             | Millions Except         |      
|                                                                                        |                             | Share Information)      |      
|Revenue:                                                                                |                             |                         |       |       |      |   |       |       |  |   |       |      
|Premiums and other considerations                                                       |                             | $                       | 1,293 |       |      | $ | 951   |       |  | $ | 841   |      
|Universal life and investment product charges                                           |                             |                         | 732   |       |      |   | 691   |       |  |   | 638   |      
|Net investment income                                                                   |                             |                         | 1,672 |       |      |   | 1,657 |       |  |   | 1,634 |      
|Realized investment gains (losses)                                                      |                             |                         | 41    |       |      |   | (47   | )     |  |   | (22   | )    
|Communications sales                                                                    |                             |                         | 241   |       |      |   | 216   |       |  |   | 210   |      
|Broker-dealer concessions and other                                                     |                             |                         | 123   |       |      |   | 105   |       |  |   | 105   |      
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|                                                                                        | Total revenue               |                         |       | 4,102 |      |   |       | 3,573 |  |   |       | 3,406 | 
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|Benefits and Expenses:                                                                  |                             |                         |       |       |      |   |       |       |  |   |       |      
|Insurance and annuity benefits                                                          |                             |                         | 2,287 |       |      |   | 2,005 |       |  |   | 1,914 |      
|Insurance commissions, net of deferrals                                                 |                             |                         | 250   |       |      |   | 108   |       |  |   | 115   |      
|General and administrative expenses, net of deferrals                                   |                             |                         | 184   |       |      |   | 149   |       |  |   | 167   |      
|Insurance taxes, licenses and fees                                                      |                             |                         | 73    |       |      |   | 73    |       |  |   | 78    |      
|Amortization of policy acquisition costs and value of business
    acquired             |                             |                         | 287   |       |      |   | 341   |       |  |   | 286   |      
|Interest expense                                                                        |                             |                         | 48    |       |      |   | 34    |       |  |   | 36    |      
|Communications operations                                                               |                             |                         | 133   |       |      |   | 125   |       |  |   | 125   |      
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|                                                                                        | Total benefits and expenses |                         |       | 3,262 |      |   |       | 2,835 |  |   |       | 2,721 | 
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|Income before income taxes and cumulative effect of change in
    accounting principle  |                             |                         | 840   |       |      |   | 738   |       |  |   | 685   |      
|Income taxes                                                                            |                             |                         | 277   |       |      |   | 246   |       |  |   | 235   |      
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|Income before cumulative effect of change in accounting principle                       |                             |                         | 563   |       |      |   | 492   |       |  |   | 450   |      
|Cumulative effect of change in accounting for long-duration
    contracts, net of taxes |                             |                         | (17   | )     |      |   |      |       |  |   |      |      
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|Net income                                                                              |                             | $                       | 546   |       |      | $ | 492   |       |  | $ | 450   |      
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|Per Share Information:                                                                  |                             |                         |       |       |      |   |       |       |  |   |       |      
|Income before cumulative effect of change in accounting
    principle, net of taxes     |                             | $                       | 4.08  |       |      | $ | 3.47  |       |  | $ | 3.07  |      
|Cumulative effect of change in accounting for long-duration
    contracts, net of taxes |                             |                         | (0.12 | )     |      |   |      |       |  |   |      |      
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|Net income                                                                              |                             | $                       | 3.96  |       |      | $ | 3.47  |       |  | $ | 3.07  |      
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|Per Share Information  assuming dilution:                                              |                             |                         |       |       |      |   |       |       |  |   |       |      
|Income before cumulative effect of change in accounting
    principle, net of taxes     |                             | $                       | 4.04  |       |      | $ | 3.44  |       |  | $ | 3.04  |      
|Cumulative effect of change in accounting for long-duration
    contracts, net of taxes |                             |                         | (0.12 | )     |      |   |      |       |  |   |      |      
|                                                                                        |                             |                         |       |       |      |   |       |       | 
|Net income                                                                              |                             | $                       | 3.92  |       |      | $ | 3.44  |       |  | $ | 3.04  |      
|                                                                                        |                             |                         |       |       |      |   |       |       | 



54



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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


|                           |                                                                            |                                                       |     |     |                   |   |                   |        |   |               |        |     |   |   |       |      |  
|-------------------------- | -------------------------------------------------------------------------- | ----------------------------------------------------- | --- | --- | ----------------- | - | ----------------- | ------ | - | ------------- | ------ | --- | - | - | ----- | ---- | -
|                           |                                                                            | Common Stock                                          |     |     |                   |   | Accumulated Other |        |   | Total         |       
|                           |                                                                            | and                                                   |     |     |                   |   | Comprehensive     |        |   | Stockholders |       
|                           |                                                                            | Paid in Capital                                       |     |     | Retained Earnings |   |                   | Income |   |               | Equity |    
|                           |                                                                            |                                                       |     |     |                   |   |                   |        |   |               |        |    
|                           |                                                                            | (Dollar Amounts in Millions Except Share Information) |    
|Balance, January 1, 2002   |                                                                            | $                                                     | 188 |     |                   | $ | 2,789             |        |   | $             | 414    |     |   | $ | 3,391 |     
|                           | Net income                                                                 |                                                       |     |    |                   |   |                   | 450    |   |               |        |    |   |   |       | 450  |  
|                           | Change in fair value of derivative financial instruments, net of
    taxes |                                                       |     |    |                   |   |                   |       |   |               |        | 9   |   |   |       | 9    |  
|                           | Unrealized gain on available-for-sale securities, net of taxes             |                                                       |     |    |                   |   |                   |       |   |               |        | 187 |   |   |       | 187  |  
|                           |                                                                            |                                                       |     |     |                   |   |                   |        |   |               |        |    
|                           | Comprehensive income                                                       |                                                       |     |     |                   |   |                   |        |   |               |        |     |   |   |       | 646  |  
|                           | Common dividends declared $1.20 per share                                  |                                                       |     |    |                   |   |                   | (175   | ) |               |        |    |   |   |       | (175 | )
|                           | Common stock issued                                                        |                                                       |     | 22  |                   |   |                   |       |   |               |        |    |   |   |       | 22   |  
|                           | Common stock reacquired                                                    |                                                       |     | (30 | )                 |   |                   | (314   | ) |               |        |    |   |   |       | (344 | )
|                           |                                                                            |                                                       |     |     |                   |   |                   |        |   |               |        |    
|Balance, December 31, 2002 |                                                                            |                                                       | 180 |     |                   |   | 2,750             |        |   |               | 610    |     |   |   | 3,540 |     
|                           | Net income                                                                 |                                                       |     |    |                   |   |                   | 492    |   |               |        |    |   |   |       | 492  |  
|                           | Change in fair value of derivative financial instruments, net of
    taxes |                                                       |     |    |                   |   |                   |       |   |               |        | (5  | ) |   |       | (5   | )
|                           | Unrealized gain on available-for-sale securities, net of taxes             |                                                       |     |    |                   |   |                   |       |   |               |        | 78  |   |   |       | 78   |  
|                           |                                                                            |                                                       |     |     |                   |   |                   |        |   |               |        |    
|                           | Comprehensive income                                                       |                                                       |     |     |                   |   |                   |        |   |               |        |     |   |   |       | 565  |  
|                           | Common dividends declared $1.32 per share                                  |                                                       |     |    |                   |   |                   | (187   | ) |               |        |    |   |   |       | (187 | )
|                           | Common stock issued                                                        |                                                       |     | 43  |                   |   |                   |       |   |               |        |    |   |   |       | 43   |  
|                           | Common stock reacquired                                                    |                                                       |     | (47 | )                 |   |                   | (108   | ) |               |        |    |   |   |       | (155 | )
|                           |                                                                            |                                                       |     |     |                   |   |                   |        |   |               |        |    
|Balance, December 31, 2003 |                                                                            |                                                       | 176 |     |                   |   | 2,947             |        |   |               | 683    |     |   |   | 3,806 |     
|                           | Net income                                                                 |                                                       |     |    |                   |   |                   | 546    |   |               |        |    |   |   |       | 546  |  
|                           | Change in fair value of derivative financial instruments, net of
    taxes |                                                       |     |    |                   |   |                   |       |   |               |        | (3  | ) |   |       | (3   | )
|                           | Minimum pension liability, net of taxes                                    |                                                       |     |    |                   |   |                   |       |   |               |        | (9  | ) |   |       | (9   | )
|                           | Unrealized gain on available-for-sale securities, net of taxes             |                                                       |     |    |                   |   |                   |       |   |               |        | 12  |   |   |       | 12   |  
|                           |                                                                            |                                                       |     |     |                   |   |                   |        |   |               |        |    
|                           | Comprehensive income                                                       |                                                       |     |     |                   |   |                   |        |   |               |        |     |   |   |       | 546  |  
|                           | Common dividends declared $1.52 per share                                  |                                                       |     |    |                   |   |                   | (208   | ) |               |        |    |   |   |       | (208 | )
|                           | Common stock issued                                                        |                                                       |     | 64  |                   |   |                   |       |   |               |        |    |   |   |       | 64   |  
|                           | Common stock reacquired                                                    |                                                       |     | (60 | )                 |   |                   | (214   | ) |               |        |    |   |   |       | (274 | )
|                           |                                                                            |                                                       |     |     |                   |   |                   |        |   |               |        |    
|Balance, December 31, 2004 |                                                                            | $                                                     | 180 |     |                   | $ | 3,071             |        |   | $             | 683    |     |   | $ | 3,934 |     
|                           |                                                                            |                                                       |     |     |                   |   |                   |        |   |               |        |    



55



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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |        |   |        |        |        |  
|------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ---------------------------------------------------- | ------ | ------ | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | -
|                                                                                      |                                                                                     | Year Ended December 31,                              |       
|                                                                                      |                                                                                     |                                                      |       
|                                                                                      |                                                                                     | 2004                                                 |        |        | 2003   |   |        | 2002   |       
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       
|                                                                                      |                                                                                     | (Dollar Amounts in Millions)                         |       
|Cash Flows from Operating Activities                                                  |                                                                                     |                                                      |        |        |        |   |        |        |        |   |        |       
|Net income                                                                            |                                                                                     | $                                                    | 546    |        |        | $ | 492    |        |        | $ | 450    |       
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                                     |                                                      |        |        |        |   |        |        |        |   |        |       
|                                                                                      | Change in policy liabilities other than deposits                                    |                                                      |        | 251    |        |   |        | 121    |        |   |        | 103    |       
|                                                                                      | Credits to policyholder accounts, net                                               |                                                      |        | 78     |        |   |        | 96     |        |   |        | 165    |       
|                                                                                      | Deferral of policy acquisition costs and sales inducements, net
    of amortization |                                                      |        | (233   | )      |   |        | (221   | )      |   |        | (277   | )     
|                                                                                      | Change in receivables and asset accruals                                            |                                                      |        | (24    | )      |   |        | (40    | )      |   |        | 15     |       
|                                                                                      | Change in payables and expense accruals                                             |                                                      |        | 123    |        |   |        | 55     |        |   |        | (127   | )     
|                                                                                      | Realized investment losses (gains)                                                  |                                                      |        | (41    | )      |   |        | 47     |        |   |        | 22     |       
|                                                                                      | Depreciation and amortization                                                       |                                                      |        | 24     |        |   |        | (33    | )      |   |        | (23    | )     
|                                                                                      | Amortization of value of business acquired, net                                     |                                                      |        | (3     | )      |   |        | 52     |        |   |        | 77     |       
|                                                                                      | Group coinsurance assumed                                                           |                                                      |        | 329    |        |   |        |       |        |   |        |       |       
|                                                                                      | Other                                                                               |                                                      |        | (59    | )      |   |        | (32    | )      |   |        | (2     | )     
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       
|                                                                                      |                                                                                     | Net cash provided by operating activities            |        |        | 991    |   |        |        | 537    |   |        |        | 403    |  
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       
|Cash Flows from Investing Activities                                                  |                                                                                     |                                                      |        |        |        |   |        |        |        |   |        |       
|Securities available-for-sale:                                                        |                                                                                     |                                                      |        |        |        |   |        |        |        |   |        |       
|                                                                                      | Sales                                                                               |                                                      |        | 1,422  |        |   |        | 1,370  |        |   |        | 719    |       
|                                                                                      | Maturities, calls and redemptions                                                   |                                                      |        | 1,716  |        |   |        | 3,392  |        |   |        | 1,848  |       
|                                                                                      | Purchases                                                                           |                                                      |        | (4,994 | )      |   |        | (6,242 | )      |   |        | (4,214 | )     
|Securities held-to-maturity:                                                          |                                                                                     |                                                      |        |        |        |   |        |        |        |   |        |       
|                                                                                      | Sales                                                                               |                                                      |        | 39     |        |   |        | 31     |        |   |        | 86     |       
|                                                                                      | Maturities, calls and redemptions                                                   |                                                      |        | 361    |        |   |        | 527    |        |   |        | 425    |       
|                                                                                      | Purchases                                                                           |                                                      |        | (7     | )      |   |        | (299   | )      |   |        | (227   | )     
|Repayments of mortgage loans                                                          |                                                                                     |                                                      | 406    |        |        |   | 205    |        |        |   | 188    |       
|Mortgage loans originated                                                             |                                                                                     |                                                      | (587   | )      |        |   | (382   | )      |        |   | (394   | )     
|Increase (decrease) in policy loans, net                                              |                                                                                     |                                                      | (11    | )      |        |   | 7      |        |        |   | 2      |       
|Purchase of radio station assets                                                      |                                                                                     |                                                      | (18    | )      |        |   |       |        |        |   |       |       
|Other investing activities, net                                                       |                                                                                     |                                                      | (113   | )      |        |   | (29    | )      |        |   | (32    | )     
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       
|                                                                                      |                                                                                     | Net cash used in investing activities                |        |        | (1,786 | ) |        |        | (1,420 | ) |        |        | (1,599 | )
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       
|Cash Flows from Financing Activities                                                  |                                                                                     |                                                      |        |        |        |   |        |        |        |   |        |       
|Policyholder contract deposits                                                        |                                                                                     |                                                      | 2,906  |        |        |   | 2,525  |        |        |   | 2,867  |       
|Withdrawals of policyholder contract deposits                                         |                                                                                     |                                                      | (1,884 | )      |        |   | (1,444 | )      |        |   | (1,463 | )     
|Borrowings of notes payable                                                           |                                                                                     |                                                      | 600    |        |        |   |       |        |        |   |       |       
|Borrowings under short-term credit facilities                                         |                                                                                     |                                                      | 5,545  |        |        |   | 5,178  |        |        |   | 3,643  |       
|Repayments under short-term credit facilities                                         |                                                                                     |                                                      | (6,011 | )      |        |   | (4,977 | )      |        |   | (3,487 | )     
|Net proceeds (payments) from securities sold under
    repurchase agreements          |                                                                                     |                                                      | 67     |        |        |   | (98    | )      |        |   | 208    |       
|Cash dividends paid                                                                   |                                                                                     |                                                      | (203   | )      |        |   | (184   | )      |        |   | (173   | )     
|Common stock transactions, net                                                        |                                                                                     |                                                      | (210   | )      |        |   | (112   | )      |        |   | (321   | )     
|Other financing activities, net                                                       |                                                                                     |                                                      |       |        |        |   |       |        |        |   | (150   | )     
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       
|                                                                                      |                                                                                     | Net cash provided by financing activities            |        |        | 810    |   |        |        | 888    |   |        |        | 1,124  |  
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       
|                                                                                      |                                                                                     | Net increase (decrease) in cash and cash equivalents |        |        | 15     |   |        |        | 5      |   |        |        | (72    | )
|Cash and cash equivalents, beginning                                                  |                                                                                     |                                                      | 72     |        |        |   | 67     |        |        |   | 139    |       
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       
|Cash and cash equivalents, ending                                                     |                                                                                     | $                                                    | 87     |        |        | $ | 72     |        |        | $ | 67     |       
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       
|Supplemental Cash Flow Information                                                    |                                                                                     |                                                      |        |        |        |   |        |        |        |   |        |       
|Federal income taxes paid                                                             |                                                                                     | $                                                    | 83     |        |        | $ | 236    |        |        | $ | 222    |       
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       
|Interest paid                                                                         |                                                                                     | $                                                    | 46     |        |        | $ | 37     |        |        | $ | 45     |       
|                                                                                      |                                                                                     |                                                      |        |        |        |   |        |        |       



56



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollar amounts in millions, except share information)


December 31, 2004




|        |                     
|------- | --------------------
|NOTE 1. | NATURE OF OPERATIONS

Nature of Operations




Reinsurance Transaction








|        |                                
|------- | -------------------------------
|NOTE 2. | SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation






Principles of Consolidation




57



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin No. 51


Use of Estimates




Earnings Per Share




Debt and Equity Securities






Mortgage and Policy Loans




58



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Real Estate and Other Investments






Cash and Cash Equivalents




Reinsurance Balances and Transactions




Deferred Policy Acquisition Costs and Value of Business
Acquired










59



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








Goodwill




Separate Accounts




Film and Program Rights




60



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Property and Equipment




Future Policy Benefits and Other Policy Liabilities






Policyholder Contract Deposits




Policy and Contract Claims




Recognition of Revenue






61



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








Recognition of Benefits and Expenses




Income Taxes




Stock-Based Compensation


Accounting for Stock Issued to Employees Accounting for
Stock-Based Compensation ,




|                                                                                                                                                    |  |                         |      |  |      |   |      |      |  |   |      | 
|--------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ---- |  | ---- | - | ---- | ---- |  | - | ---- | 
|                                                                                                                                                    |  | Year Ended December 31, |     
|                                                                                                                                                    |  |                         |     
|                                                                                                                                                    |  | 2004                    |      |  | 2003 |   |      | 2002 | 
|                                                                                                                                                    |  |                         |      |  |      |   |      |      | 
|Net income, as reported                                                                                                                             |  | $                       | 546  |  |      | $ | 492  |      |  | $ | 450  | 
|Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    related tax effects |  |                         | 8    |  |      |   | 6    |      |  |   | 11   | 
|                                                                                                                                                    |  |                         |      |  |      |   |      |      | 
|Pro forma net income                                                                                                                                |  | $                       | 538  |  |      | $ | 486  |      |  | $ | 439  | 
|                                                                                                                                                    |  |                         |      |  |      |   |      |      | 
|Earnings per share, as reported                                                                                                                     |  | $                       | 3.96 |  |      | $ | 3.47 |      |  | $ | 3.07 | 
|Pro forma earnings per share                                                                                                                        |  | $                       | 3.90 |  |      | $ | 3.42 |      |  | $ | 2.99 | 
|Earnings per share  assuming dilution, as reported                                                                                                 |  | $                       | 3.92 |  |      | $ | 3.44 |      |  | $ | 3.04 | 
|Pro forma earnings per share  assuming dilution                                                                                                    |  | $                       | 3.86 |  |      | $ | 3.40 |      |  | $ | 2.96 | 



62



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


New Accounting Pronouncements


Share Based Payment


Accounting and Disclosure
Requirements Related to the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003


The
Meaning of Other-Than-Temporary Impairment and its Application
to Certain Investments Effective Date of
Paragraphs 1020 of EITF Issue No. 03-1,
The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments


Employers Disclosures about Pensions and Other
Postretirement Benefits


Accounting and
Reporting by Insurance Enterprises for Certain Nontraditional
Long-Duration Contracts and for Separate Accounts


63



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Situations
in Which Paragraphs 17(b) and 20 of FASB Statement No. 97,
Accounting and Reporting by Insurance Enterprises for Certain
Long-Duration Contracts and for Realized Gains and Losses from
the Sale of Investments, Permit or Require Accrual for an
Unearned Revenue Liability








|                                                                                                     |  |   |    |  
|---------------------------------------------------------------------------------------------------- |  | - | -- | -
|Balance, December 31, 2003                                                                           |  | $ |   |  
|Cumulative impact of adoption, including $30 reclassified from
    deferred policy acquisition costs |  |   | 68 |  
|Additional amounts deferred                                                                          |  |   | 15 |  
|Amortization                                                                                         |  |   | (7 | )
|                                                                                                     |  |   |   
|Balance, December 31, 2004                                                                           |  | $ | 76 |  
|                                                                                                     |  |   |   



64



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin No. 51


Business
Combinations Goodwill
and Other Intangible Assets


65



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|        |                                 
|------- | --------------------------------
|NOTE 3. | INCOME PER SHARE OF COMMON STOCK



|             |                                                                                                                                                             |                                            |   |             |           |  |   |             |           |  |   |             |           | 
|------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | - | ----------- | --------- |  | - | ----------- | --------- |  | - | ----------- | --------- | 
|             |                                                                                                                                                             | Year Ended December 31,                    |  
|             |                                                                                                                                                             |                                            |  
|             |                                                                                                                                                             | 2004                                       |   |             | 2003      |  |   | 2002        |          
|             |                                                                                                                                                             |                                            |   |             |           |  |   |             |          
|Numerator:   |                                                                                                                                                             |                                            |   |             |           |  |   |             |           |  |   |            
|             | Numerator for net income per share and net income per
    share  assuming dilution  Income before
    cumulative effect of change in accounting principle |                                            | $ | 563         |           |  | $ | 492         |           |  | $ | 450         |          
|             |                                                                                                                                                             |                                            |   |             |           |  |   |             |          
|Denominator: |                                                                                                                                                             |                                            |   |             |           |  |   |             |           |  |   |            
|             | Denominator for net income per share 
    weighted-average shares outstanding                                                                              |                                            |   | 137,999,364 |           |  |   | 141,795,065 |           |  |   | 146,846,698 |          
|             | Effect of dilutive securities:                                                                                                                              |                                            |   |             |           |  |   |             |           |  |   |             |          
|             |                                                                                                                                                             | Employee, director and agent stock options |   |             | 1,213,670 |  |   |             | 1,072,150 |  |   |             | 1,375,644 | 
|             |                                                                                                                                                             |                                            |   |             |           |  |   |             |          
|             | Denominator for net income per share  assuming
    dilution  adjusted weighted-average shares outstanding                                                 |                                            |   | 139,213,034 |           |  |   | 142,867,215 |           |  |   | 148,222,342 |          
|             |                                                                                                                                                             |                                            |   |             |           |  |   |             |          
|             | Income per share, before cumulative effect of change in
    accounting principle                                                                            |                                            | $ | 4.08        |           |  | $ | 3.47        |           |  | $ | 3.07        |          
|             |                                                                                                                                                             |                                            |   |             |           |  |   |             |          
|             | Income per share  assuming dilution, before
    cumulative effect of change in accounting principle                                                        |                                            | $ | 4.04        |           |  | $ | 3.44        |           |  | $ | 3.04        |          
|             |                                                                                                                                                             |                                            |   |             |           |  |   |             |          



66



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|        |            
|------- | -----------
|NOTE 4. | INVESTMENTS

Summary Cost and Fair Value Information




|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |   |  |   |        | 
|-------------------------------------------------------------------------------------------------------- |  | ----------------- | ------ |  | ---------- | - | ----- | ---------- |  | - | ----- | - |  | - | ------ | 
|                                                                                                         |  | December 31, 2004 |       
|                                                                                                         |  |                   |       
|                                                                                                         |  | Cost or           |        |  | Gross      |   |       | Gross      |  |   |      
|                                                                                                         |  | Amortized         |        |  | Unrealized |   |       | Unrealized |  |   | Fair  |  
|                                                                                                         |  | Cost              |        |  | Gains      |   |       | (Losses)   |  |   | Value |  
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  
|Available-for-sale, carried at fair value                                                                |  |                   |        |  |            |   |       |            |  |   |       |   |  |   |        | 
|U.S. Treasury obligations and direct obligations of
    U.S. Government agencies                         |  | $                 | 253    |  |            | $ | 13    |            |  | $ |      |   |  | $ | 266    | 
|Federal agency issued mortgage-backed securities (including
    collateralized mortgage obligations)     |  |                   | 1,610  |  |            |   | 64    |            |  |   | (4    | ) |  |   | 1,670  | 
|Obligations of states and political subdivisions                                                         |  |                   | 57     |  |            |   | 4     |            |  |   |      |   |  |   | 61     | 
|Corporate obligations                                                                                    |  |                   | 16,225 |  |            |   | 853   |            |  |   | (51   | ) |  |   | 17,027 | 
|Corporate private-labeled mortgage-backed securities (including
    collateralized mortgage obligations) |  |                   | 659    |  |            |   | 31    |            |  |   | (2    | ) |  |   | 688    | 
|Redeemable preferred stocks                                                                              |  |                   | 12     |  |            |   | 1     |            |  |   |      |   |  |   | 13     | 
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  
|Subtotal, debt securities                                                                                |  |                   | 18,816 |  |            |   | 966   |            |  |   | (57   | ) |  |   | 19,725 | 
|Equity securities                                                                                        |  |                   | 201    |  |            |   | 449   |            |  |   |      |   |  |   | 650    | 
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  
|Securities available-for-sale                                                                            |  | $                 | 19,017 |  |            | $ | 1,415 |            |  | $ | (57   | ) |  | $ | 20,375 | 
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  
|Held-to-maturity, carried at amortized cost                                                              |  |                   |        |  |            |   |       |            |  |   |       |   |  |   |        | 
|Obligations of state and political subdivisions                                                          |  | $                 | 6      |  |            | $ | 1     |            |  | $ |      |   |  | $ | 7      | 
|Corporate obligations                                                                                    |  |                   | 2,363  |  |            |   | 153   |            |  |   | (9    | ) |  |   | 2,507  | 
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  
|Debt securities held-to-maturity                                                                         |  | $                 | 2,369  |  |            | $ | 154   |            |  | $ | (9    | ) |  | $ | 2,514  | 
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  

|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |   |  |   |        | 
|-------------------------------------------------------------------------------------------------------- |  | ----------------- | ------ |  | ---------- | - | ----- | ---------- |  | - | ----- | - |  | - | ------ | 
|                                                                                                         |  | December 31, 2003 |       
|                                                                                                         |  |                   |       
|                                                                                                         |  | Cost or           |        |  | Gross      |   |       | Gross      |  |   |      
|                                                                                                         |  | Amortized         |        |  | Unrealized |   |       | Unrealized |  |   | Fair  |  
|                                                                                                         |  | Cost              |        |  | Gains      |   |       | (Losses)   |  |   | Value |  
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  
|Available-for-sale, carried at fair value                                                                |  |                   |        |  |            |   |       |            |  |   |       |   |  |   |        | 
|U.S. Treasury obligations and direct obligations of
    U.S. Government agencies                         |  | $                 | 247    |  |            | $ | 21    |            |  | $ |      |   |  | $ | 268    | 
|Federal agency issued mortgage-backed securities (including
    collateralized mortgage obligations)     |  |                   | 2,045  |  |            |   | 111   |            |  |   | (4    | ) |  |   | 2,152  | 
|Obligations of states and political subdivisions                                                         |  |                   | 211    |  |            |   | 4     |            |  |   | (2    | ) |  |   | 213    | 
|Corporate obligations                                                                                    |  |                   | 13,582 |  |            |   | 821   |            |  |   | (96   | ) |  |   | 14,307 | 
|Corporate private-labeled mortgage-backed securities (including
    collateralized mortgage obligations) |  |                   | 721    |  |            |   | 34    |            |  |   | (3    | ) |  |   | 752    | 
|Redeemable preferred stocks                                                                              |  |                   | 13     |  |            |   | 1     |            |  |   |      |   |  |   | 14     | 
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  
|Subtotal, debt securities                                                                                |  |                   | 16,819 |  |            |   | 992   |            |  |   | (105  | ) |  |   | 17,706 | 
|Equity securities                                                                                        |  |                   | 304    |  |            |   | 454   |            |  |   | (2    | ) |  |   | 756    | 
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  
|Securities available-for-sale                                                                            |  | $                 | 17,123 |  |            | $ | 1,446 |            |  | $ | (107  | ) |  | $ | 18,462 | 
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  
|Held-to-maturity, carried at amortized cost                                                              |  |                   |        |  |            |   |       |            |  |   |       |   |  |   |        | 
|Obligations of state and political subdivisions                                                          |  | $                 | 7      |  |            | $ | 1     |            |  | $ |      |   |  | $ | 8      | 
|Corporate obligations                                                                                    |  |                   | 2,745  |  |            |   | 186   |            |  |   | (21   | ) |  |   | 2,910  | 
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  
|Debt securities held-to-maturity                                                                         |  | $                 | 2,752  |  |            | $ | 187   |            |  | $ | (21   | ) |  | $ | 2,918  | 
|                                                                                                         |  |                   |        |  |            |   |       |            |  |   |       |  

67



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Contractual Maturities




|                                          |  |                    |        |  |                  |   |        |           |  |   |       |  |  |   |       | 
|----------------------------------------- |  | ------------------ | ------ |  | ---------------- | - | ------ | --------- |  | - | ----- |  |  | - | ----- | 
|                                          |  | Available-for-sale |        |  | Held-to-maturity |  
|                                          |  |                    |        |  |                  |  
|                                          |  | Amortized          |        |  | Fair             |   |        | Amortized |  |   | Fair  | 
|                                          |  | Cost               |        |  | Value            |   |        | Cost      |  |   | Value | 
|                                          |  |                    |        |  |                  |   |        |           |  |   |       | 
|Due in one year or less                   |  | $                  | 492    |  |                  | $ | 502    |           |  | $ | 193   |  |  | $ | 196   | 
|Due after one year through five years     |  |                    | 4,129  |  |                  |   | 4,331  |           |  |   | 774   |  |  |   | 812   | 
|Due after five years through ten years    |  |                    | 8,039  |  |                  |   | 8,367  |           |  |   | 933   |  |  |   | 995   | 
|Due after ten years through twenty years  |  |                    | 3,073  |  |                  |   | 3,232  |           |  |   | 378   |  |  |   | 406   | 
|Due after twenty years                    |  |                    | 2,994  |  |                  |   | 3,207  |           |  |   | 91    |  |  |   | 105   | 
|Amounts not due at a single maturity date |  |                    | 77     |  |                  |   | 73     |           |  |   |      |  |  |   |      | 
|                                          |  |                    |        |  |                  |   |        |           |  |   |       | 
|                                          |  |                    | 18,804 |  |                  |   | 19,712 |           |  |   | 2,369 |  |  |   | 2,514 | 
|Redeemable preferred stocks               |  |                    | 12     |  |                  |   | 13     |           |  |   |      |  |  |   |      | 
|                                          |  |                    |        |  |                  |   |        |           |  |   |       | 
|                                          |  | $                  | 18,816 |  |                  | $ | 19,725 |           |  | $ | 2,369 |  |  | $ | 2,514 | 
|                                          |  |                    |        |  |                  |   |        |           |  |   |       | 

Securities Lending




68



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Changes in Net Unrealized Gains on Securities




|                                                                                       |                                                                                        |                               |     |      |            |   |     |       |   |   |     |      |  
|-------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | ----------------------------- | --- | ---- | ---------- | - | --- | ----- | - | - | --- | ---- | -
|                                                                                       |                                                                                        | Net Unrealized Gains (Losses) |    
|                                                                                       |                                                                                        |                               |    
|                                                                                       |                                                                                        | Debt                          |     |      | Equity     |   |     |      
|                                                                                       |                                                                                        | Securities                    |     |      | Securities |   |     | Total |  
|                                                                                       |                                                                                        |                               |     |      |            |   |     |       |  
|Net unrealized gains on securities available-for-sale as of
    December 31, 2001      |                                                                                        | $                             | 108 |      |            | $ | 302 |       |   | $ | 410 |     
|Change during year ended December 31, 2002:                                            |                                                                                        |                               |     |      |            |   |     |       |   |   |     |     
|                                                                                       | Increase (decrease) in stated amount of securities                                     |                               |     | 650  |            |   |     | (119  | ) |   |     | 531  |  
|                                                                                       | Decrease in deferred policy acquisition costs and value of
    business acquired       |                               |     | (238 | )          |   |     |      |   |   |     | (238 | )
|                                                                                       | Decrease (increase) in deferred income tax liabilities                                 |                               |     | (144 | )          |   |     | 38    |   |   |     | (106 | )
|                                                                                       |                                                                                        |                               |     |      |            |   |     |       |  
|Increase (decrease) in net unrealized gains included in
    other comprehensive income |                                                                                        |                               | 268 |      |            |   | (81 | )     |   |   | 187 |     
|                                                                                       |                                                                                        |                               |     |      |            |   |     |       |  
|Net unrealized gains on securities available-for-sale as of
    December 31, 2002      |                                                                                        |                               | 376 |      |            |   | 221 |       |   |   | 597 |     
|Change during year ended December 31, 2003:                                            |                                                                                        |                               |     |      |            |   |     |       |   |   |     |     
|                                                                                       | Increase in stated amount of securities                                                |                               |     | 13   |            |   |     | 89    |   |   |     | 102  |  
|                                                                                       | Increase in deferred policy acquisition costs and value of
    business acquired       |                               |     | 20   |            |   |     |      |   |   |     | 20   |  
|                                                                                       | Increase in deferred income tax liabilities                                            |                               |     | (15  | )          |   |     | (29   | ) |   |     | (44  | )
|                                                                                       |                                                                                        |                               |     |      |            |   |     |       |  
|                                                                                       | Increase in net unrealized gains included in other
    comprehensive income            |                               |     | 18   |            |   |     | 60    |   |   |     | 78   |  
|                                                                                       |                                                                                        |                               |     |      |            |   |     |       |  
|Net unrealized gains on securities available-for-sale as of
    December 31, 2003      |                                                                                        |                               | 394 |      |            |   | 281 |       |   |   | 675 |     
|Change during year ended December 31, 2004:                                            |                                                                                        |                               |     |      |            |   |     |       |   |   |     |     
|                                                                                       | Increase (decrease) in stated amount of securities                                     |                               |     | 22   |            |   |     | (3    | ) |   |     | 19   |  
|                                                                                       | Increase in deferred policy acquisition costs and value of
    business acquired       |                               |     |     |            |   |     |      |   |   |     |     |  
|                                                                                       | Decrease (increase) in deferred income tax liabilities                                 |                               |     | (8   | )          |   |     | 1     |   |   |     | (7   | )
|                                                                                       |                                                                                        |                               |     |      |            |   |     |       |  
|                                                                                       | Increase (decrease) in net unrealized gains included in
    other comprehensive income |                               |     | 14   |            |   |     | (2    | ) |   |     | 12   |  
|                                                                                       |                                                                                        |                               |     |      |            |   |     |       |  
|Net unrealized gains on securities available-for-sale as of
    December 31, 2004      |                                                                                        | $                             | 408 |      |            | $ | 279 |       |   | $ | 687 |     
|                                                                                       |                                                                                        |                               |     |      |            |   |     |       |  

69



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Net Investment Income




|                                       |  |                         |       |   |      |   |       |      |  |   |       |  
|-------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                       |  | Year Ended December 31, |      
|                                       |  |                         |      
|                                       |  | 2004                    |       |   | 2003 |   |       | 2002 | 
|                                       |  |                         |       |   |      |   |       |      | 
|Interest on debt securities            |  | $                       | 1,298 |   |      | $ | 1,317 |      |  | $ | 1,325 |  
|Investment income on equity securities |  |                         | 29    |   |      |   | 25    |      |  |   | 18    |  
|Interest on mortgage loans             |  |                         | 262   |   |      |   | 256   |      |  |   | 250   |  
|Interest on policy loans               |  |                         | 51    |   |      |   | 50    |      |  |   | 52    |  
|Other investment income                |  |                         | 68    |   |      |   | 42    |      |  |   | 24    |  
|                                       |  |                         |       |   |      |   |       |      | 
|Gross investment income                |  |                         | 1,708 |   |      |   | 1,690 |      |  |   | 1,669 |  
|Investment expenses                    |  |                         | (36   | ) |      |   | (33   | )    |  |   | (35   | )
|                                       |  |                         |       |   |      |   |       |      | 
|Net investment income                  |  | $                       | 1,672 |   |      | $ | 1,657 |      |  | $ | 1,634 |  
|                                       |  |                         |       |   |      |   |       |      | 



Realized Gains and Losses




|                                                                                     |                  |                         |     |    |      |   |     |      |   |   |      |    |  
|------------------------------------------------------------------------------------ | ---------------- | ----------------------- | --- | -- | ---- | - | --- | ---- | - | - | ---- | -- | -
|                                                                                     |                  | Year Ended December 31, |    
|                                                                                     |                  |                         |    
|                                                                                     |                  | 2004                    |     |    | 2003 |   |     | 2002 |  
|                                                                                     |                  |                         |     |    |      |   |     |      |  
|Common stocks                                                                        |                  | $                       | 92  |    |      | $ | 14  |      |   | $ | 160  |   
|Debt securities                                                                      |                  |                         | (59 | )  |      |   | (71 | )    |   |   | (167 | ) 
|                                                                                     |                  |                         |     |    |      |   |     |      |  
|                                                                                     | Total securities |                         |     | 33 |      |   |     | (57  | ) |   |      | (7 | )
|Real estate                                                                          |                  |                         | (1  | )  |      |   |    |      |   |   | (2   | ) 
|Other                                                                                |                  |                         | 7   |    |      |   | (4  | )    |   |   | (8   | ) 
|Amortization of deferred policy acquisition costs and value of
    business acquired |                  |                         | 2   |    |      |   | 14  |      |   |   | (5   | ) 
|                                                                                     |                  |                         |     |    |      |   |     |      |  
|Realized investment gains (losses)                                                   |                  | $                       | 41  |    |      | $ | (47 | )    |   | $ | (22  | ) 
|                                                                                     |                  |                         |     |    |      |   |     |      |  





|                                            |        |                         |    |      |      |   |     |      |   |   |    |      |  
|------------------------------------------- | ------ | ----------------------- | -- | ---- | ---- | - | --- | ---- | - | - | -- | ---- | -
|                                            |        | Year Ended December 31, |   
|                                            |        |                         |   
|                                            |        | 2004                    |    |      | 2003 |   |     | 2002 |  
|                                            |        |                         |    |      |      |   |     |      |  
|Gross realized:                             |        |                         |    |      |      |   |     |      |   |   |    |     
|                                            | Gains  |                         | $  | 138  |      |   | $   | 71   |   |   | $  | 196  |  
|                                            | Losses |                         |    | (105 | )    |   |     | (128 | ) |   |    | (203 | )
|                                            |        |                         |    |      |      |   |     |      |  
|Realized gains (losses) on total securities |        | $                       | 33 |      |      | $ | (57 | )    |   | $ | (7 | )   
|                                            |        |                         |    |      |      |   |     |      |  

70



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                         |        |                         |    |      |      |   |     |      |   |   |   |      |  
|-------------------------------------------------------- | ------ | ----------------------- | -- | ---- | ---- | - | --- | ---- | - | - | - | ---- | -
|                                                         |        | Year Ended December 31, |   
|                                                         |        |                         |   
|                                                         |        | 2004                    |    |      | 2003 |   |     | 2002 |  
|                                                         |        |                         |    |      |      |   |     |      |  
|Gross realized:                                          |        |                         |    |      |      |   |     |      |   |   |   |     
|                                                         | Gains  |                         | $  | 133  |      |   | $   | 56   |   |   | $ | 191  |  
|                                                         | Losses |                         |    | (103 | )    |   |     | (105 | ) |   |   | (182 | )
|                                                         |        |                         |    |      |      |   |     |      |  
|Realized gains (losses) on available-for-sale securities |        | $                       | 30 |      |      | $ | (49 | )    |   | $ | 9 |     
|                                                         |        |                         |    |      |      |   |     |      |  

Investment Concentration Risk and Impairment














71



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                                         |  |           |       |       |            |   |     |       |       |   |            |  |  |       |     |   |            |   |       |  |  |   |     |  
|-------------------------------------------------------------------------------------------------------- |  | --------- | ----- | ----- | ---------- | - | --- | ----- | ----- | - | ---------- |  |  | ----- | --- | - | ---------- | - | ----- |  |  | - | --- | -
|                                                                                                         |  | Less than |       |       | 12 months  |   |     |      
|                                                                                                         |  | 12 months |       |       | or longer  |   |     | Total |      
|                                                                                                         |  |           |       |       |            |   |     |       |      
|                                                                                                         |  |           |       | Gross |            |   |     |       | Gross |   |            |  |  | Gross |    
|                                                                                                         |  | Fair      |       |       | Unrealized |   |     | Fair  |       |   | Unrealized |  |  | Fair  |     |   | Unrealized |  
|                                                                                                         |  | Value     |       |       | Losses     |   |     | Value |       |   | Losses     |  |  | Value |     |   | Losses     |  
|                                                                                                         |  |           |       |       |            |   |     |       |       |   |            |  |  |       |     |   |            |  
|U.S. Treasury obligations and direct obligations of U.S.
    Government agencies                         |  | $         | 14    |       |            | $ |    |       |       | $ | 56         |  |  | $     |    |   |            | $ | 70    |  |  | $ |    |  
|Federal agency issued mortgage-backed securities (including
    collateralized mortgage obligations)     |  |           | 149   |       |            |   | (2  | )     |       |   | 144        |  |  |       | (2  | ) |            |   | 293   |  |  |   | (4  | )
|Obligations of states and political subdivisions                                                         |  |           | 11    |       |            |   |    |       |       |   | 2          |  |  |       |    |   |            |   | 13    |  |  |   |    |  
|Corporate obligations                                                                                    |  |           | 1,590 |       |            |   | (38 | )     |       |   | 1,734      |  |  |       | (22 | ) |            |   | 3,324 |  |  |   | (60 | )
|Corporate private-labeled mortgage-backed securities (including
    collateralized mortgage obligations) |  |           | 132   |       |            |   | (2  | )     |       |   | 18         |  |  |       |    |   |            |   | 150   |  |  |   | (2  | )
|Redeemable preferred stock                                                                               |  |           |      |       |            |   |    |       |       |   | 4          |  |  |       |    |   |            |   | 4     |  |  |   |    |  
|                                                                                                         |  |           |       |       |            |   |     |       |       |   |            |  |  |       |     |   |            |  
|Total temporarily impaired securities                                                                    |  | $         | 1,896 |       |            | $ | (42 | )     |       | $ | 1,958      |  |  | $     | (24 | ) |            | $ | 3,854 |  |  | $ | (66 | )
|                                                                                                         |  |           |       |       |            |   |     |       |       |   |            |  |  |       |     |   |            |  





|        |  |           |       |  |       |   |       |            |  |   |            |   |  |  |       |  
|------- |  | --------- | ----- |  | ----- | - | ----- | ---------- |  | - | ---------- | - |  |  | ----- | -
|        |  | Amortized |       |  | Fair  |   |       | Unrealized |  |   |           
|        |  | Cost      |       |  | Value |   |       | Losses     |  |   | Percentage |  
|        |  |           |       |  |       |   |       |            |  |   |            |  
|90%-99% |  | $         | 3,875 |  |       | $ | 3,815 |            |  | $ | (60        | ) |  |  | 90.9  | %
|80%-89% |  |           | 45    |  |       |   | 39    |            |  |   | (6         | ) |  |  | 9.1   | %
|        |  |           |       |  |       |   |       |            |  |   |            |  
|        |  | $         | 3,920 |  |       | $ | 3,854 |            |  | $ | (66        | ) |  |  | 100.0 | %
|        |  |           |       |  |       |   |       |            |  |   |            |  



|        |                                 
|------- | --------------------------------
|NOTE 5. | DERIVATIVE FINANCIAL INSTRUMENTS

Accounting for Derivative Instruments and Hedging
Activities


72



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Cash Flow Hedging Strategy










Other Derivatives






73



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|        |                                                                     
|------- | --------------------------------------------------------------------
|NOTE 6. | DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS
    ACQUIRED

Deferred Policy Acquisition Costs




|                                                                                          |             |                         |       |     |      |   |       |      |  |   |       |     | 
|----------------------------------------------------------------------------------------- | ----------- | ----------------------- | ----- | --- | ---- | - | ----- | ---- |  | - | ----- | --- | 
|                                                                                          |             | Year Ended December 31, |      
|                                                                                          |             |                         |      
|                                                                                          |             | 2004                    |       |     | 2003 |   |       | 2002 | 
|                                                                                          |             |                         |       |     |      |   |       |      | 
|Beginning balance                                                                         |             | $                       | 1,771 |     |      | $ | 1,525 |      |  | $ | 1,410 |    
|Cumulative effect of change in accounting principle                                       |             |                         | (28   | )   |      |   |      |      |  |   |      |    
|Group coinsurance assumed                                                                 |             |                         | 37    |     |      |   |      |      |  |   |      |    
|Deferral:                                                                                 |             |                         |       |     |      |   |       |      |  |   |       |    
|                                                                                          | Commissions |                         |       | 319 |      |   |       | 381  |  |   |       | 357 | 
|                                                                                          | Other       |                         |       | 123 |      |   |       | 120  |  |   |       | 122 | 
|                                                                                          |             |                         |       |     |      |   |       |      | 
|                                                                                          |             |                         | 442   |     |      |   | 501   |      |  |   | 479   |    
|Amortization                                                                              |             |                         | (256  | )   |      |   | (280  | )    |  |   | (202  | )  
|Adjustment related to unrealized losses (gains) on debt
    securities available-for-sale |             |                         | (8    | )   |      |   | 19    |      |  |   | (159  | )  
|Adjustment related to realized losses (gains) on debt
    securities                      |             |                         |      |     |      |   | 6     |      |  |   | (3    | )  
|                                                                                          |             |                         |       |     |      |   |       |      | 
|Ending balance                                                                            |             | $                       | 1,958 |     |      | $ | 1,771 |      |  | $ | 1,525 |    
|                                                                                          |             |                         |       |     |      |   |       |      | 



Value of Business Acquired




|                                                                                          |  |                         |     |   |      |   |     |      |  |   |     |  
|----------------------------------------------------------------------------------------- |  | ----------------------- | --- | - | ---- | - | --- | ---- |  | - | --- | -
|                                                                                          |  | Year Ended December 31, |    
|                                                                                          |  |                         |    
|                                                                                          |  | 2004                    |     |   | 2003 |   |     | 2002 | 
|                                                                                          |  |                         |     |   |      |   |     |      | 
|Beginning balance                                                                         |  | $                       | 459 |   |      | $ | 502 |      |  | $ | 660 |  
|Cumulative effect of change in accounting principle                                       |  |                         | 30  |   |      |   |    |      |  |   |    |  
|Deferral of commissions and accretion of interest                                         |  |                         | 4   |   |      |   | 9   |      |  |   | 7   |  
|Amortization                                                                              |  |                         | (31 | ) |      |   | (61 | )    |  |   | (84 | )
|Adjustment related to unrealized losses (gains) on debt
    securities available-for-sale |  |                         | 8   |   |      |   | 1   |      |  |   | (79 | )
|Adjustment related to realized losses (gains) on debt
    securities                      |  |                         | 2   |   |      |   | 8   |      |  |   | (2  | )
|                                                                                          |  |                         |     |   |      |   |     |      | 
|Ending balance                                                                            |  | $                       | 472 |   |      | $ | 459 |      |  | $ | 502 |  
|                                                                                          |  |                         |     |   |      |   |     |      | 

74



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |  |              |      |  
|---- |  | ------------ | ---- | -
|     |  | Amortization |     
|Year |  | Percentage   |     
|     |  |              |     
|2005 |  |              | 10.6 | %
|2006 |  |              | 9.2  | %
|2007 |  |              | 7.9  | %
|2008 |  |              | 7.1  | %
|2009 |  |              | 6.5  | %





|        |                               
|------- | ------------------------------
|NOTE 7. | POLICY LIABILITIES INFORMATION

Interest Rate Assumptions






Mortality and Withdrawal Assumptions




75



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Accident and Health and Disability Insurance Liabilities
Activity




|                                         |              |                                        |                                |     |       |     |     |      |       |     |     |     |   |  | 
|---------------------------------------- | ------------ | -------------------------------------- | ------------------------------ | --- | ----- | --- | --- | ---- | ----- | --- | --- | --- | - |  | 
|                                         |              | 2004                                   |                                |     | 2003  |     |     | 2002 |      
|                                         |              |                                        |                                |     |       |     |     |      |      
|Balance as of January 1                  |              | $                                      | 630                            |     |       | $   | 564 |      |       | $   | 540 |    
|Less reinsurance recoverables            |              |                                        | 130                            |     |       |     | 132 |      |       |     | 135 |    
|                                         |              |                                        |                                |     |       |     |     |      |      
|Net balance as of January 1              |              |                                        | 500                            |     |       |     | 432 |      |       |     | 405 |    
|                                         |              |                                        |                                |     |       |     |     |      |      
|Reinsurance transaction (see Note 1)     |              |                                        | 253                            |     |       |     |    |      |       |     |    |    
|Amount incurred:                         |              |                                        |                                |     |       |     |     |      |       |     |     |    
|                                         | Current year |                                        |                                | 589 |       |     |     | 408  |       |     |     | 366 |  
|                                         | Prior years  |                                        |                                | (24 | )     |     |     | (1   | )     |     |     | (38 | )
|                                         |              |                                        |                                |     |       |     |     |      |      
|                                         |              |                                        | 565                            |     |       |     | 407 |      |       |     | 328 |    
|                                         |              |                                        |                                |     |       |     |     |      |      
|Less amount paid:                        |              |                                        |                                |     |       |     |     |      |       |     |     |    
|                                         | Current year |                                        |                                | 293 |       |     |     | 224  |       |     |     | 211 |  
|                                         | Prior years  |                                        |                                | 185 |       |     |     | 115  |       |     |     | 90  |  
|                                         |              |                                        |                                |     |       |     |     |      |      
|                                         |              |                                        | 478                            |     |       |     | 339 |      |       |     | 301 |    
|                                         |              |                                        |                                |     |       |     |     |      |      
|Net balance as of December 31            |              |                                        | 840                            |     |       |     | 500 |      |       |     | 432 |    
|Plus reinsurance recoverables            |              |                                        | 125                            |     |       |     | 130 |      |       |     | 132 |    
|                                         |              |                                        |                                |     |       |     |     |      |      
|Balance as of December 31                |              | $                                      | 965                            |     |       | $   | 630 |      |       | $   | 564 |    
|                                         |              |                                        |                                |     |       |     |     |      |      
|Balance as of December 31 included with: |              |                                        |                                |     |       |     |     |      |       |     |     |    
|                                         |              | Total future policy benefits           |                                | $   | 3,096 |     |     | $    | 2,674 |     |     |     |   | 
|                                         |              | Less: Other future policy benefits     |                                |     | 2,187 |     |     |      | 2,083 |     |     |     |   | 
|                                         |              |                                        |                                |     |       |     |     |      |      
|                                         |              |                                        | A&H future policy benefits     |     |       | 909 |     |      |       | 591 |     |     |   |  | 
|                                         |              |                                        |                                |     |       |     |     |      |      
|                                         |              | Total policy and contract claims       |                                |     | 232   |     |     |      | 165   |     |     |     |   | 
|                                         |              | Less: Other policy and contract claims |                                |     | 176   |     |     |      | 126   |     |     |     |   | 
|                                         |              |                                        |                                |     |       |     |     |      |      
|                                         |              |                                        | A&H policy and contract claims |     |       | 56  |     |      |       | 39  |     |     |   |  | 
|                                         |              |                                        |                                |     |       |     |     |      |      
|                                         |              |                                        | Total A&H reserves             |     | $     | 965 |     |      | $     | 630 |     |     |   |  | 
|                                         |              |                                        |                                |     |       |     |     |      |      





|        |     
|------- | ----
|NOTE 8. | DEBT

Commercial Paper and Revolving Credit Borrowings




76



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Notes Payable and Debentures






Maturities




|               |  |   |       | 
|-------------- |  | - | ----- | 
|2005           |  | $ | 956   | 
|2006  2009    |  |   |      | 
|2010 and after |  |   | 609   | 
|               |  |   |      
|Total          |  | $ | 1,565 | 
|               |  |   |      

Letter of Credit






|        |                     
|------- | --------------------
|NOTE 9. | STOCKHOLDERS EQUITY

Common Stock




|                                       |  |                         |             |   |      |  |             |      |  |  |             |  
|-------------------------------------- |  | ----------------------- | ----------- | - | ---- |  | ----------- | ---- |  |  | ----------- | -
|                                       |  | Year Ended December 31, |            
|                                       |  |                         |            
|                                       |  | 2004                    |             |   | 2003 |  |             | 2002 | 
|                                       |  |                         |             |   |      |  |             |      | 
|Shares outstanding, beginning          |  |                         | 140,610,540 |   |      |  | 142,798,768 |      |  |  | 150,006,582 |  
|Shares issued under stock option plans |  |                         | 1,576,874   |   |      |  | 1,390,372   |      |  |  | 673,486     |  
|Shares reacquired                      |  |                         | (5,368,200  | ) |      |  | (3,578,600  | )    |  |  | (7,881,300  | )
|                                       |  |                         |             |   |      |  |             |      | 
|Shares outstanding, ending             |  |                         | 136,819,214 |   |      |  | 140,610,540 |      |  |  | 142,798,768 |  
|                                       |  |                         |             |   |      |  |             |      | 

77



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Shareholders Rights Plan




Preferred Stock






|         |                      
|-------- | ---------------------
|NOTE 10. | STOCK INCENTIVE PLANS

Long Term Stock Incentive Plan






Non-Employee Directors Plan




78



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Summary Stock Option Activity




|                                                               |  |         |            |           |       |   |       |         |           |   |            |   |  |           |       |  |       |   |           |   |  |   |       | 
|-------------------------------------------------------------- |  | ------- | ---------- | --------- | ----- | - | ----- | ------- | --------- | - | ---------- | - |  | --------- | ----- |  | ----- | - | --------- | - |  | - | ----- | 
|                                                               |  | 2004    |            |           | 2003  |   |       | 2002    |          
|                                                               |  |         |            |           |       |   |       |         |          
|                                                               |  |         |            | Weighted- |       |   |       |         | Weighted- |   |            |   |  | Weighted- |      
|                                                               |  |         |            | Average   |       |   |       |         | Average   |   |            |   |  | Average   |      
|                                                               |  |         |            | Exercise  |       |   |       |         | Exercise  |   |            |   |  | Exercise  |      
|                                                               |  |         |            | Price Per |       |   |       |         | Price Per |   |            |   |  | Price Per |      
|                                                               |  | Options |            |           | Share |   |       | Options |           |   | Share      |   |  | Options   |       |  | Share |  
|                                                               |  |         |            |           |       |   |       |         |           |   |            |   |  |           |       |  |       |  
|Outstanding beginning of year                                  |  |         | 9,657,303  |           |       | $ | 38.80 |         |           |   | 9,952,806  |   |  | $         | 37.01 |  |       |   | 9,492,389 |   |  | $ | 34.82 | 
|Granted                                                        |  |         | 1,612,900  |           |       |   | 52.30 |         |           |   | 1,378,550  |   |  |           | 38.49 |  |       |   | 1,436,361 |   |  |   | 47.71 | 
|Exercised                                                      |  |         | (1,752,756 | )         |       |   | 32.54 |         |           |   | (1,525,590 | ) |  |           | 26.30 |  |       |   | (707,740  | ) |  |   | 26.63 | 
|Forfeited and expired                                          |  |         | (516,266   | )         |       |   | 45.07 |         |           |   | (148,463   | ) |  |           | 51.53 |  |       |   | (268,204  | ) |  |   | 44.15 | 
|                                                               |  |         |            |           |       |   |       |         |           |   |            |   |  |           |       |  |       |  
|Outstanding end of year                                        |  |         | 9,001,181  |           |       | $ | 42.08 |         |           |   | 9,657,303  |   |  | $         | 38.80 |  |       |   | 9,952,806 |   |  | $ | 37.01 | 
|                                                               |  |         |            |           |       |   |       |         |           |   |            |   |  |           |       |  |       |  
|Exercisable at end of year                                     |  |         | 7,444,427  |           |       | $ | 40.85 |         |           |   | 7,427,496  |   |  | $         | 37.54 |  |       |   | 7,576,734 |   |  | $ | 34.23 | 
|                                                               |  |         |            |           |       |   |       |         |           |   |            |   |  |           |       |  |       |  
|Weighted-average fair value of options granted during the year |  | $       | 10.84      |           |       |   |       |         |           | $ | 8.80       |   |  |           |       |  |       | $ | 10.73     |   |  |   |       | 
|                                                               |  |         |            |           |       |   |       |         |           |   |            |   |  |           |       |  |       |  



|                         |  |                     |           |           |                     |  |           |                |  |   |           |           |  |                |           |  |  |   |       | 
|------------------------ |  | ------------------- | --------- | --------- | ------------------- |  | --------- | -------------- |  | - | --------- | --------- |  | -------------- | --------- |  |  | - | ----- | 
|                         |  | Options Outstanding |           |           | Options Exercisable | 
|                         |  |                     |           |           |                     | 
|                         |  |                     |           | Weighted- |                     |  |           |                | 
|                         |  |                     |           | Average   |                     |  |           |                |  |   |          
|                         |  |                     |           | Remaining |                     |  | Weighted- |                |  |   |           | Weighted- | 
|                         |  | Number              |           |           | Contractual         |  |           | Average        |  |   | Number    |           |  | Average        |          
|Range of Exercise Prices |  | of Shares           |           |           | Life                |  |           | Exercise Price |  |   | of Shares |           |  | Exercise Price |          
|                         |  |                     |           |           |                     |  |           |                |  |   |           |           |  |                |          
|$16.19  $25.72          |  |                     | 859,161   |           |                     |  | 1.7       |                |  | $ | 24.80     |           |  |                | 859,161   |  |  | $ | 24.80 | 
|$32.33  $35.96          |  |                     | 1,382,376 |           |                     |  | 4.1       |                |  |   | 35.06     |           |  |                | 1,382,376 |  |  |   | 35.06 | 
|$36.00  $46.17          |  |                     | 2,474,853 |           |                     |  | 5.4       |                |  |   | 40.01     |           |  |                | 2,025,159 |  |  |   | 40.50 | 
|$46.55  $52.98          |  |                     | 4,284,791 |           |                     |  | 6.4       |                |  |   | 49.01     |           |  |                | 3,177,731 |  |  |   | 47.93 | 
|                         |  |                     |           |           |                     |  |           |                |  |   |           |           |  |                |          
|                         |  |                     | 9,001,181 |           |                     |  |           |                |  | $ | 42.08     |           |  |                | 7,444,427 |  |  | $ | 40.85 | 
|                         |  |                     |           |           |                     |  |           |                |  |   |           |           |  |                |          









|         |                                
|-------- | -------------------------------
|NOTE 11. | STATUTORY FINANCIAL INFORMATION



79



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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                                                |  |      |       |  |      |   |       |      |  |   |       | 
|----------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ----- | 
|                                                |  | 2004 |       |  | 2003 |   |       | 2002 | 
|                                                |  |      |       |  |      |   |       |      | 
|Statutory Accounting Practices                  |  |      |       |  |      |   |       |      |  |   |       | 
|Net income for the year ended December 31       |  | $    | 295   |  |      | $ | 424   |      |  | $ | 240   | 
|                                                |  |      |       |  |      |   |       |      | 
|Statutory capital and surplus as of December 31 |  | $    | 1,930 |  |      | $ | 1,774 |      |  | $ | 1,555 | 
|                                                |  |      |       |  |      |   |       |      | 
|Generally Accepted Accounting Principles        |  |      |       |  |      |   |       |      |  |   |       | 
|Net income for the year ended December 31       |  | $    | 445   |  |      | $ | 450   |      |  | $ | 323   | 
|                                                |  |      |       |  |      |   |       |      | 
|Stockholders equity as of December 31          |  | $    | 4,553 |  |      | $ | 4,244 |      |  | $ | 4,023 | 
|                                                |  |      |       |  |      |   |       |      | 







80



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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|         |             
|-------- | ------------
|NOTE 12. | INCOME TAXES



|                                                                                  |                          |              |     |     |      |   |     |      |  |   |     |     | 
|--------------------------------------------------------------------------------- | ------------------------ | ------------ | --- | --- | ---- | - | --- | ---- |  | - | --- | --- | 
|                                                                                  |                          | Year Ended   |    
|                                                                                  |                          | December 31, |    
|                                                                                  |                          |              |    
|                                                                                  |                          | 2004         |     |     | 2003 |   |     | 2002 | 
|                                                                                  |                          |              |     |     |      |   |     |      | 
|Current expense                                                                   |                          | $            | 193 |     |      | $ | 127 |      |  | $ | 238 |    
|Deferred expense                                                                  |                          |              | 84  |     |      |   | 119 |      |  |   | (3  | )  
|                                                                                  |                          |              |     |     |      |   |     |      | 
|Income tax expense before cumulative effect of change in
    accounting principle |                          |              | 277 |     |      |   | 246 |      |  |   | 235 |    
|Income tax effect of change in accounting for long-duration
    contracts         |                          |              | (9  | )   |      |   |    |      |  |   |    |    
|                                                                                  |                          |              |     |     |      |   |     |      | 
|                                                                                  | Total income tax expense |              | $   | 268 |      |   | $   | 246  |  |   | $   | 235 | 
|                                                                                  |                          |              |     |     |      |   |     |      | 



|                          |                                                      |              |      |      |      |  |      |      |   |  |      |      |  
|------------------------- | ---------------------------------------------------- | ------------ | ---- | ---- | ---- |  | ---- | ---- | - |  | ---- | ---- | -
|                          |                                                      | Year ended   |     
|                          |                                                      | December 31, |     
|                          |                                                      |              |     
|                          |                                                      | 2004         |      |      | 2003 |  |      | 2002 |  
|                          |                                                      |              |      |      |      |  |      |      |  
|Federal income tax rate   |                                                      |              | 35.0 | %    |      |  | 35.0 | %    |   |  | 35.0 | %   
|Reconciling items:        |                                                      |              |      |      |      |  |      |      |   |  |      |     
|                          | Tax exempt interest and dividends received deduction |              |      | (1.2 | )    |  |      | (1.2 | ) |  |      | (1.5 | )
|                          | Affordable housing credits                           |              |      | (0.4 | )    |  |      |     |   |  |      |     |  
|                          | Other, net                                           |              |      | (0.4 | )    |  |      | (0.5 | ) |  |      | 0.8  |  
|                          |                                                      |              |      |      |      |  |      |      |  
|Effective income tax rate |                                                      |              | 33.0 | %    |      |  | 33.3 | %    |   |  | 34.3 | %   
|                          |                                                      |              |      |      |      |  |      |      |  

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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                  |                                                                         |              |       |     |      |   |       |     | 
|--------------------------------- | ----------------------------------------------------------------------- | ------------ | ----- | --- | ---- | - | ----- | --- | 
|                                  |                                                                         | December 31, |      
|                                  |                                                                         |              |      
|                                  |                                                                         | 2004         |       |     | 2003 |  
|                                  |                                                                         |              |       |     |      |  
|Deferred tax assets:              |                                                                         |              |       |     |      |   |       |    
|                                  | Difference in policy liabilities                                        |              | $     | 518 |      |   | $     | 470 | 
|                                  | Deferred compensation                                                   |              |       | 37  |      |   |       | 33  | 
|                                  | Capital loss carryforward                                               |              |       |    |      |   |       | 25  | 
|                                  | Other deferred tax assets                                               |              |       | 40  |      |   |       | 33  | 
|                                  |                                                                         |              |       |     |      |  
|Gross deferred tax assets         |                                                                         |              | 595   |     |      |   | 561   |    
|                                  |                                                                         |              |       |     |      |  
|Deferred tax liabilities:         |                                                                         |              |       |     |      |   |       |    
|                                  | Net unrealized gains on securities and other                            |              |       | 368 |      |   |       | 369 | 
|                                  | Deferral of policy acquisition costs and value of business
    acquired |              |       | 659 |      |   |       | 517 | 
|                                  | Deferred gain recognition for income tax purposes                       |              |       | 37  |      |   |       | 41  | 
|                                  | Differences in investment bases                                         |              |       | 47  |      |   |       | 64  | 
|                                  | Depreciation differences                                                |              |       | 40  |      |   |       | 44  | 
|                                  | Other deferred tax liabilities                                          |              |       | 33  |      |   |       | 69  | 
|                                  |                                                                         |              |       |     |      |  
|Gross deferred tax liabilities    |                                                                         |              | 1,184 |     |      |   | 1,104 |    
|                                  |                                                                         |              |       |     |      |  
|Net deferred income tax liability |                                                                         | $            | 589   |     |      | $ | 543   |    
|                                  |                                                                         |              |       |     |      |  









|         |                         
|-------- | ------------------------
|NOTE 13. | RETIREMENT BENEFIT PLANS

Pension Plans




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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                            |                                                   |              |     |     |      |   |     |     |  
|------------------------------------------- | ------------------------------------------------- | ------------ | --- | --- | ---- | - | --- | --- | -
|                                            |                                                   | Year Ended   |    
|                                            |                                                   | December 31, |    
|                                            |                                                   |              |    
|                                            |                                                   | 2004         |     |     | 2003 |  
|                                            |                                                   |              |     |     |      |  
|Change in projected benefit obligation:     |                                                   |              |     |     |      |   |     |    
|                                            | Projected benefit obligation at beginning of year |              | $   | 361 |      |   | $   | 322 |  
|                                            | Service cost                                      |              |     | 15  |      |   |     | 13  |  
|                                            | Interest cost                                     |              |     | 22  |      |   |     | 21  |  
|                                            | Actuarial loss                                    |              |     | 26  |      |   |     | 30  |  
|                                            | Benefits paid                                     |              |     | (19 | )    |   |     | (25 | )
|                                            |                                                   |              |     |     |      |  
|Projected benefit obligation at end of year |                                                   |              | 405 |     |      |   | 361 |    
|                                            |                                                   |              |     |     |      |  
|Change in plan assets:                      |                                                   |              |     |     |      |   |     |    
|                                            | Fair value of assets at beginning of year         |              |     | 369 |      |   |     | 331 |  
|                                            | Actual return on plan assets                      |              |     | 47  |      |   |     | 58  |  
|                                            | Transfer in                                       |              |     | (1  | )    |   |     | (1  | )
|                                            | Employer contribution                             |              |     | 1   |      |   |     | 6   |  
|                                            | Benefits paid                                     |              |     | (19 | )    |   |     | (25 | )
|                                            |                                                   |              |     |     |      |  
|Fair value of assets at end of year         |                                                   |              | 397 |     |      |   | 369 |    
|                                            |                                                   |              |     |     |      |  
|Funded status of the plans                  |                                                   |              | (8  | )   |      |   | 8   |    
|Unrecognized net loss                       |                                                   |              | 15  |     |      |   | 8   |    
|Unrecognized transition net asset           |                                                   |              | (1  | )   |      |   | (2  | )  
|Unrecognized prior service cost             |                                                   |              | 1   |     |      |   |    |    
|                                            |                                                   |              |     |     |      |  
|Net amount recognized                       |                                                   | $            | 7   |     |      | $ | 14  |    
|                                            |                                                   |              |     |     |      |  
|Amounts recognized consist of:              |                                                   |              |     |     |      |   |     |    
|Prepaid benefit cost                        |                                                   | $            | 27  |     |      | $ | 28  |    
|Accrued benefit cost                        |                                                   |              | (37 | )   |      |   | (14 | )  
|Intangible asset                            |                                                   |              | 2   |     |      |   |    |    
|Accumulated other comprehensive income      |                                                   |              | 15  |     |      |   |    |    
|                                            |                                                   |              |     |     |      |  
|Net amount recognized                       |                                                   | $            | 7   |     |      | $ | 14  |    
|                                            |                                                   |              |     |     |      |  







Information for Pension Plans with Accumulated Benefit
Obligation in Excess of Plan Assets:


|                               |  |              |    |  |      |   |    | 
|------------------------------ |  | ------------ | -- |  | ---- | - | -- | 
|                               |  | December 31, |   
|                               |  |              |   
|                               |  | 2004         |    |  | 2003 |  
|                               |  |              |    |  |      |  
|Projected benefit obligation   |  | $            | 39 |  |      | $ | 26 | 
|Accumulated benefit obligation |  |              | 37 |  |      |   | 21 | 
|Fair value of plan assets      |  |              |   |  |      |   |   | 

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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Components of Net Periodic Benefit Cost:


|                                     |  |                         |     |   |      |   |     |      |  |   |     |  
|------------------------------------ |  | ----------------------- | --- | - | ---- | - | --- | ---- |  | - | --- | -
|                                     |  | Year Ended December 31, |    
|                                     |  |                         |    
|                                     |  | 2004                    |     |   | 2003 |   |     | 2002 | 
|                                     |  |                         |     |   |      |   |     |      | 
|Service cost                         |  | $                       | 15  |   |      | $ | 13  |      |  | $ | 11  |  
|Interest cost                        |  |                         | 22  |   |      |   | 21  |      |  |   | 20  |  
|Expected return on plan assets       |  |                         | (31 | ) |      |   | (31 | )    |  |   | (30 | )
|Amortization of net transition asset |  |                         | (1  | ) |      |   | (1  | )    |  |   | (2  | )
|Amortization of prior service cost   |  |                         | 1   |   |      |   | 1   |      |  |   | 1   |  
|Amortization of net loss             |  |                         | 1   |   |      |   | (2  | )    |  |   | (3  | )
|                                     |  |                         |     |   |      |   |     |      | 
|Net periodic benefit cost            |  | $                       | 7   |   |      | $ | 1   |      |  | $ | (3  | )
|                                     |  |                         |     |   |      |   |     |      | 

Assumptions:


|                                                                                         |                                |      |  |      |      |  |  |      |   |  |  |      |  
|---------------------------------------------------------------------------------------- | ------------------------------ | ---- |  | ---- | ---- |  |  | ---- | - |  |  | ---- | -
|                                                                                         |                                | 2004 |  |      | 2003 |  |  | 2002 |  
|                                                                                         |                                |      |  |      |      |  |  |      |  
|Weighted-average assumptions used to determine benefit
    obligations at December 31:   |                                |      |  |      |      |  |  |      |   |  |  |     
|                                                                                         | Discount rate                  |      |  | 6.00 | %    |  |  | 6.25 | % |  |  | 6.75 | %
|                                                                                         | Rate of compensation increase  |      |  | 4.00 | %    |  |  | 4.00 | % |  |  | 4.00 | %
|Weighted-average assumptions used to determine net cost for
    years ended December 31: |                                |      |  |      |      |  |  |      |   |  |  |     
|                                                                                         | Discount rate                  |      |  | 6.25 | %    |  |  | 6.75 | % |  |  | 7.00 | %
|                                                                                         | Expected return on plan assets |      |  | 8.00 | %    |  |  | 8.00 | % |  |  | 8.00 | %
|                                                                                         | Rate of compensation increase  |      |  | 4.00 | %    |  |  | 4.00 | % |  |  | 4.00 | %





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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Plan Assets




|                  |       |              |    |     |      |  |    |     |  
|----------------- | ----- | ------------ | -- | --- | ---- |  | -- | --- | -
|                  |       | December 31, |   
|                  |       |              |   
|Asset Category    |       | 2004         |    |     | 2003 | 
|                  |       |              |    |     |      | 
|Equity securities |       |              | 73 | %   |      |  | 70 | %  
|Debt securities   |       |              | 26 |     |      |  | 29 |    
|Other             |       |              | 1  |     |      |  | 1  |    
|                  |       |              |    |     |      | 
|                  | Total |              |    | 100 | %    |  |    | 100 | %
|                  |       |              |    |     |      | 



Contributions




Benefit Payments




|                  |  |   |     | 
|----------------- |  | - | --- | 
|2005              |  | $ | 30  | 
|2006              |  |   | 19  | 
|2007              |  |   | 20  | 
|2008              |  |   | 20  | 
|2009              |  |   | 21  | 
|2010 through 2014 |  |   | 124 | 

Other Postretirement Benefit Plans






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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug, Improvement, and Modernization Act
of 2003.


Defined Contribution Plans






|         |            
|-------- | -----------
|NOTE 14. | REINSURANCE













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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                         |  |                         |       |  |      |   |       |      |  |   |       |  
|-------------------------------------------------------- |  | ----------------------- | ----- |  | ---- | - | ----- | ---- |  | - | ----- | -
|                                                         |  | Year Ended December 31, |      
|                                                         |  |                         |      
|                                                         |  | 2004                    |       |  | 2003 |   |       | 2002 | 
|                                                         |  |                         |       |  |      |   |       |      | 
|Premiums and other considerations direct                 |  | $                       | 1,200 |  |      | $ | 1,029 |      |  | $ | 924   |  
|Premiums and other considerations assumed                |  |                         | 164   |  |      |   | 2     |      |  |   | 4     |  
|Less premiums and other considerations ceded             |  |                         | 71    |  |      |   | 80    |      |  |   | 87    |  
|                                                         |  |                         |       |  |      |   |       |      | 
|Net premiums and other considerations                    |  | $                       | 1,293 |  |      | $ | 951   |      |  | $ | 841   |  
|                                                         |  |                         |       |  |      |   |       |      | 
|Universal life and investment product charges direct     |  | $                       | 850   |  |      | $ | 798   |      |  | $ | 745   |  
|Universal life and investment product charges assumed    |  |                         | 7     |  |      |   |      |      |  |   |      |  
|Less universal life and investment product charges ceded |  |                         | 125   |  |      |   | 107   |      |  |   | 107   |  
|                                                         |  |                         |       |  |      |   |       |      | 
|Net universal life and investment product charges        |  | $                       | 732   |  |      | $ | 691   |      |  | $ | 638   |  
|                                                         |  |                         |       |  |      |   |       |      | 
|Benefits direct                                          |  | $                       | 2,371 |  |      | $ | 2,227 |      |  | $ | 2,323 |  
|Benefits assumed                                         |  |                         | 155   |  |      |   | 6     |      |  |   | (48   | )
|Less reinsurance recoveries                              |  |                         | 239   |  |      |   | 228   |      |  |   | 361   |  
|                                                         |  |                         |       |  |      |   |       |      | 
|Net benefits                                             |  | $                       | 2,287 |  |      | $ | 2,005 |      |  | $ | 1,914 |  
|                                                         |  |                         |       |  |      |   |       |      | 



|         |                    
|-------- | -------------------
|NOTE 15. | SEGMENT INFORMATION





87



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JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|       |                     |              |   |        |        |  |   |        |        | 
|------ | ------------------- | ------------ | - | ------ | ------ |  | - | ------ | ------ | 
|       |                     | December 31, |  
|       |                     |              |  
|       |                     | 2004         |   |        | 2003   | 
|       |                     |              |   |        |        | 
|Assets |                     |              |   |        |        |  |   |       
|       | Individual Products |              | $ | 18,776 |        |  | $ | 17,717 |       
|       | AIP                 |              |   | 10,504 |        |  |   | 9,941  |       
|       | Benefit Partners    |              |   | 1,839  |        |  |   | 1,079  |       
|       | Communications      |              |   | 223    |        |  |   | 210    |       
|       | Corporate & Other   |              |   | 3,763  |        |  |   | 3,749  |       
|       |                     |              |   |        |        | 
|       |                     | Total assets |   | $      | 35,105 |  |   | $      | 32,696 | 
|       |                     |              |   |        |        | 

|                                                                      |                                                                                         |                         |       |       |      |   |       |       |  |   |       |       | 
|--------------------------------------------------------------------- | --------------------------------------------------------------------------------------- | ----------------------- | ----- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                                                                      |                                                                                         | Year Ended December 31, |      
|                                                                      |                                                                                         |                         |      
|                                                                      |                                                                                         | 2004                    |       |       | 2003 |   |       | 2002  | 
|                                                                      |                                                                                         |                         |       |       |      |   |       |       | 
|Revenues                                                              |                                                                                         |                         |       |       |      |   |       |       |  |   |       |      
|Individual Products                                                   |                                                                                         | $                       | 1,780 |       |      | $ | 1,774 |       |  | $ | 1,737 |      
|AIP                                                                   |                                                                                         |                         | 718   |       |      |   | 694   |       |  |   | 686   |      
|Benefit Partners                                                      |                                                                                         |                         | 1,202 |       |      |   | 820   |       |  |   | 698   |      
|Communications                                                        |                                                                                         |                         | 239   |       |      |   | 214   |       |  |   | 208   |      
|Corporate & Other                                                     |                                                                                         |                         | 122   |       |      |   | 118   |       |  |   | 99    |      
|                                                                      |                                                                                         |                         |       |       |      |   |       |       | 
|                                                                      |                                                                                         |                         | 4,061 |       |      |   | 3,620 |       |  |   | 3,428 |      
|Realized investment gains (losses), before taxes                      |                                                                                         |                         | 41    |       |      |   | (47   | )     |  |   | (22   | )    
|                                                                      |                                                                                         |                         |       |       |      |   |       |       | 
|                                                                      | Total revenues                                                                          |                         | $     | 4,102 |      |   | $     | 3,573 |  |   | $     | 3,406 | 
|                                                                      |                                                                                         |                         |       |       |      |   |       |       | 
|Total reportable segment results and reconciliation to net
    income |                                                                                         |                         |       |       |      |   |       |       |  |   |       |      
|Individual Products                                                   |                                                                                         | $                       | 302   |       |      | $ | 309   |       |  | $ | 293   |      
|AIP                                                                   |                                                                                         |                         | 76    |       |      |   | 85    |       |  |   | 80    |      
|Benefit Partners                                                      |                                                                                         |                         | 71    |       |      |   | 51    |       |  |   | 48    |      
|Communications                                                        |                                                                                         |                         | 54    |       |      |   | 46    |       |  |   | 40    |      
|Corporate & Other                                                     |                                                                                         |                         | 33    |       |      |   | 32    |       |  |   | 4     |      
|                                                                      |                                                                                         |                         |       |       |      |   |       |       | 
|                                                                      | Total reportable segment results                                                        |                         |       | 536   |      |   |       | 523   |  |   |       | 465   | 
|Realized investment gains (losses), net of taxes                      |                                                                                         |                         | 27    |       |      |   | (31   | )     |  |   | (15   | )    
|                                                                      |                                                                                         |                         |       |       |      |   |       |       | 
|                                                                      | Income before cumulative effect of change in accounting principle                       |                         |       | 563   |      |   |       | 492   |  |   |       | 450   | 
|                                                                      | Cumulative effect of change in accounting for long-duration
    contracts, net of taxes |                         |       | (17   | )    |   |       |      |  |   |       |      | 
|                                                                      |                                                                                         |                         |       |       |      |   |       |       | 
|                                                                      | Net income                                                                              |                         | $     | 546   |      |   | $     | 492   |  |   | $     | 450   | 
|                                                                      |                                                                                         |                         |       |       |      |   |       |       | 
|Net investment income (expense)                                       |                                                                                         |                         |       |       |      |   |       |       |  |   |       |      
|Individual Products                                                   |                                                                                         | $                       | 900   |       |      | $ | 914   |       |  | $ | 924   |      
|AIP                                                                   |                                                                                         |                         | 593   |       |      |   | 587   |       |  |   | 577   |      
|Benefit Partners                                                      |                                                                                         |                         | 89    |       |      |   | 64    |       |  |   | 60    |      
|Communications                                                        |                                                                                         |                         | (2    | )     |      |   | (2    | )     |  |   | (3    | )    
|Corporate & Other                                                     |                                                                                         |                         | 92    |       |      |   | 94    |       |  |   | 76    |      
|                                                                      |                                                                                         |                         |       |       |      |   |       |       | 
|                                                                      | Total net investment income                                                             |                         | $     | 1,672 |      |   | $     | 1,657 |  |   | $     | 1,634 | 
|                                                                      |                                                                                         |                         |       |       |      |   |       |       | 

88



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                                                     |                                                        |                         |     |     |      |   |     |      |  |   |     |     | 
|------------------------------------------------------------------------------------ | ------------------------------------------------------ | ----------------------- | --- | --- | ---- | - | --- | ---- |  | - | --- | --- | 
|                                                                                     |                                                        | Year Ended December 31, |    
|                                                                                     |                                                        |                         |    
|                                                                                     |                                                        | 2004                    |     |     | 2003 |   |     | 2002 | 
|                                                                                     |                                                        |                         |     |     |      |   |     |      | 
|Amortization of deferred policy acquisition costs and value
    of business acquired |                                                        |                         |     |     |      |   |     |      |  |   |     |    
|Individual Products                                                                  |                                                        | $                       | 207 |     |      | $ | 195 |      |  | $ | 167 |    
|AIP                                                                                  |                                                        |                         | 53  |     |      |   | 46  |      |  |   | 38  |    
|Benefit Partners                                                                     |                                                        |                         | 27  |     |      |   | 100 |      |  |   | 81  |    
|                                                                                     |                                                        |                         |     |     |      |   |     |      | 
|Amortization reflected in total reportable segment results                           |                                                        |                         | 287 |     |      |   | 341 |      |  |   | 286 |    
|Amortization on realized investment gains (losses)                                   |                                                        |                         | (2  | )   |      |   | (14 | )    |  |   | 5   |    
|                                                                                     |                                                        |                         |     |     |      |   |     |      | 
|Amortization of deferred policy acquisition costs and value of
    business acquired |                                                        | $                       | 285 |     |      | $ | 327 |      |  | $ | 291 |    
|                                                                                     |                                                        |                         |     |     |      |   |     |      | 
|Income tax expense (benefit)                                                         |                                                        |                         |     |     |      |   |     |      |  |   |     |    
|Individual Products                                                                  |                                                        | $                       | 156 |     |      | $ | 163 |      |  | $ | 158 |    
|AIP                                                                                  |                                                        |                         | 40  |     |      |   | 46  |      |  |   | 43  |    
|Benefit Partners                                                                     |                                                        |                         | 38  |     |      |   | 27  |      |  |   | 26  |    
|Communications                                                                       |                                                        |                         | 36  |     |      |   | 29  |      |  |   | 26  |    
|Corporate & Other                                                                    |                                                        |                         | (7  | )   |      |   | (3  | )    |  |   | (11 | )  
|                                                                                     |                                                        |                         |     |     |      |   |     |      | 
|                                                                                     | Total income tax expense in reportable segment results |                         |     | 263 |      |   |     | 262  |  |   |     | 242 | 
|Income tax expense (benefit) on realized investment gains
    (losses)               |                                                        |                         | 14  |     |      |   | (16 | )    |  |   | (7  | )  
|                                                                                     |                                                        |                         |     |     |      |   |     |      | 
|Income tax expense before cumulative effect of change in
    accounting principle    |                                                        |                         | 277 |     |      |   | 246 |      |  |   | 235 |    
|Tax on cumulative effect of change in accounting principle                           |                                                        |                         | (9  | )   |      |   |    |      |  |   |    |    
|                                                                                     |                                                        |                         |     |     |      |   |     |      | 
|                                                                                     | Total income tax expense                               |                         | $   | 268 |      |   | $   | 246  |  |   | $   | 235 | 
|                                                                                     |                                                        |                         |     |     |      |   |     |      | 





89



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                           
|-------- | --------------------------
|NOTE 16. | OTHER COMPREHENSIVE INCOME



|                                                                            |                                                       |            |     |     |                |   |    |            |  |   |       |   |  |   |     |     |  
|--------------------------------------------------------------------------- | ----------------------------------------------------- | ---------- | --- | --- | -------------- | - | -- | ---------- |  | - | ----- | - |  | - | --- | --- | -
|                                                                            |                                                       | Unrealized |     |     |                |   |    |            | 
|                                                                            |                                                       | Gains on   |     |     | Derivative     |   |    | Additional |  |   |      
|                                                                            |                                                       | Available- |     |     | Financial      |   |    | Minimum    |  |   |      
|                                                                            |                                                       | for-Sale   |     |     | Instruments    |   |    | Pension    |  |   |      
|                                                                            |                                                       | Securities |     |     | Gains (Losses) |   |    | Liability  |  |   | Total |  
|                                                                            |                                                       |            |     |     |                |   |    |            |  |   |       |  
|Balance at December 31, 2001                                                |                                                       | $          | 410 |     |                | $ | 4  |            |  | $ |      |   |  | $ | 414 |    
|Unrealized holding gains arising during period, net of $104 tax
    expense |                                                       |            | 193 |     |                |   |   |            |  |   |      |   |  |   | 193 |    
|Change in fair value of derivatives, net of $5 tax expense                  |                                                       |            |    |     |                |   | 9  |            |  |   |      |   |  |   | 9   |    
|Less: reclassification adjustment                                           |                                                       |            |     |     |                |   |    |            |  |   |       |   |  |   |     |    
|                                                                            | Gains realized in net income, net of $3 tax expense   |            |     | 6   |                |   |    |           |  |   |       |  |  |   |     | 6   |  
|                                                                            |                                                       |            |     |     |                |   |    |            |  |   |       |  
|Balance at December 31, 2002                                                |                                                       |            | 597 |     |                |   | 13 |            |  |   |      |   |  |   | 610 |    
|Unrealized holding gains arising during period, net of $23 tax
    expense  |                                                       |            | 46  |     |                |   |   |            |  |   |      |   |  |   | 46  |    
|Change in fair value of derivatives, net of $2 tax benefit                  |                                                       |            |    |     |                |   | (5 | )          |  |   |      |   |  |   | (5  | )  
|Less: reclassification adjustment                                           |                                                       |            |     |     |                |   |    |            |  |   |       |   |  |   |     |    
|                                                                            | Losses realized in net income, net of $17 tax benefit |            |     | (32 | )              |   |    |           |  |   |       |  |  |   |     | (32 | )
|                                                                            |                                                       |            |     |     |                |   |    |            |  |   |       |  
|Balance at December 31, 2003                                                |                                                       |            | 675 |     |                |   | 8  |            |  |   |      |   |  |   | 683 |    
|Unrealized holding gains arising during period, net of $12 tax
    expense  |                                                       |            | 25  |     |                |   |   |            |  |   |      |   |  |   | 25  |    
|Change in minimum pension liability, net of $6 tax benefit                  |                                                       |            |    |     |                |   |   |            |  |   | (9    | ) |  |   | (9  | )  
|Change in fair value of derivatives, net of $2 tax benefit                  |                                                       |            |    |     |                |   | (3 | )          |  |   |      |   |  |   | (3  | )  
|Less: reclassification adjustment                                           |                                                       |            |     |     |                |   |    |            |  |   |       |   |  |   |     |    
|                                                                            | Gains realized in net income, net of $7 tax expense   |            |     | 13  |                |   |    |           |  |   |       |  |  |   |     | 13  |  
|                                                                            |                                                       |            |     |     |                |   |    |            |  |   |       |  
|Balance at December 31, 2004                                                |                                                       | $          | 687 |     |                | $ | 5  |            |  | $ | (9    | ) |  | $ | 683 |    
|                                                                            |                                                       |            |     |     |                |   |    |            |  |   |       |  

90



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                                      
|-------- | -----------------------------------------------------
|NOTE 17. | DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS



|                                                   |  |          |        |  |       |   |        |          |  |   |        |  |  |   |        | 
|-------------------------------------------------- |  | -------- | ------ |  | ----- | - | ------ | -------- |  | - | ------ |  |  | - | ------ | 
|                                                   |  | 2004     |        |  | 2003  |  
|                                                   |  |          |        |  |       |  
|                                                   |  | Carrying |        |  | Fair  |   |        | Carrying |  |   | Fair   | 
|                                                   |  | Value    |        |  | Value |   |        | Value    |  |   | Value  | 
|                                                   |  |          |        |  |       |   |        |          |  |   |        | 
|Financial Assets                                   |  |          |        |  |       |   |        |          |  |   |        |  |  |   |        | 
|Debt securities available-for-sale                 |  | $        | 19,725 |  |       | $ | 19,725 |          |  | $ | 17,706 |  |  | $ | 17,706 | 
|Debt securities held-to-maturity                   |  |          | 2,369  |  |       |   | 2,514  |          |  |   | 2,752  |  |  |   | 2,918  | 
|Equity securities available-for-sale               |  |          | 650    |  |       |   | 650    |          |  |   | 756    |  |  |   | 756    | 
|Mortgage loans                                     |  |          | 3,667  |  |       |   | 3,854  |          |  |   | 3,472  |  |  |   | 3,675  | 
|Policy loans                                       |  |          | 839    |  |       |   | 926    |          |  |   | 869    |  |  |   | 972    | 
|Derivative financial instruments                   |  |          | 82     |  |       |   | 82     |          |  |   | 33     |  |  |   | 33     | 
|Financial Liabilities                              |  |          |        |  |       |   |        |          |  |   |        |  |  |   |        | 
|Annuity contract liabilities in accumulation phase |  |          | 8,733  |  |       |   | 8,325  |          |  |   | 8,059  |  |  |   | 7,714  | 
|Commercial paper and revolving credit borrowings   |  |          | 188    |  |       |   | 188    |          |  |   | 654    |  |  |   | 654    | 
|Securities sold under repurchase agreements        |  |          | 468    |  |       |   | 468    |          |  |   | 401    |  |  |   | 401    | 
|Junior subordinated debentures                     |  |          | 309    |  |       |   | 309    |          |  |   | 309    |  |  |   | 309    | 
|Notes payable                                      |  |          | 600    |  |       |   | 597    |          |  |   |       |  |  |   |       | 

















91



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##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                                       
|-------- | --------------------------------------
|NOTE 18. | COMMITMENTS AND CONTINGENT LIABILITIES







|           |  |             |     |  |          |   |     |     |  |   |     | 
|---------- |  | ----------- | --- |  | -------- | - | --- | --- |  | - | --- | 
|           |  | Commitments |     |  | Revenues |   |     | Net | 
|           |  |             |     |  |          |   |     |     | 
|2005       |  | $           | 69  |  |          | $ | 55  |     |  | $ | 14  | 
|2006       |  |             | 58  |  |          |   | 29  |     |  |   | 29  | 
|2007       |  |             | 51  |  |          |   | 28  |     |  |   | 23  | 
|2008       |  |             | 49  |  |          |   | 28  |     |  |   | 21  | 
|2009       |  |             | 41  |  |          |   | 29  |     |  |   | 12  | 
|2010       |  |             | 34  |  |          |   | 30  |     |  |   | 4   | 
|Thereafter |  |             | 35  |  |          |   | 32  |     |  |   | 3   | 
|           |  |             |     |  |          |   |     |     | 
|Total      |  | $           | 337 |  |          | $ | 231 |     |  | $ | 106 | 
|           |  |             |     |  |          |   |     |     | 







92



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##### 





|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure





|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures









|         |                  
|-------- | -----------------
|Item 9B. | Other Information



93



---



##### 



PART III




|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant





www.jpfinancial.com




|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation





|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters







|                                                          |  |                         |           |  |                     |   |       |                                |  |  |           |    
|--------------------------------------------------------- |  | ----------------------- | --------- |  | ------------------- | - | ----- | ------------------------------ |  |  | --------- | ---
|                                                          |  | Number of Shares to be  |           |  | Weighted Average    |   |       | Number of Shares Remaining     | 
|                                                          |  | issued Upon Exercise of |           |  | Exercise Price of   |   |       | Available for Future Issuance  | 
|Plan Category                                             |  | Outstanding Options     |           |  | Outstanding Options |   |       | Excluding Shares in column (a) | 
|                                                          |  |                         |           |  |                     |   |       |                                | 
|                                                          |  | (a)                     |           |  | (b)                 |   |       | (c)                            | 
|Equity compensation plans approved by shareholders(1)     |  |                         | 9,001,181 |  |                     | $ | 42.08 |                                |  |  | 2,784,156 | (2)
|Equity compensation plans not approved by shareholders(3) |  |                         | 0         |  |                     |   | 0     |                                |  |  | 0         |    






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Option shares in column (a) approximated 6.6% of
    outstanding shares, and available shares in column
    (c) approximated 2.0% of outstanding shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(2) | Of these shares available for future awards, 2,426,656 are
    available under the Long Term Stock Incentive Plan
    (LTS) and 357,500 are available under the Non-Employee
    Directors Stock Option Plan. Shares covered by options
    that terminate unexercised, and any shares tendered to pay for
    an option exercise or withheld for taxes, will be available for
    future option grants under the respective plan. The LTS permits
    awards other than options, such as restricted stock up to 10% of
    the shares reserved, and our LTIP payouts as described in our
    Proxy Statement are made 50% in common shares from the LTS
    shares shown in column (c).
|   
|(3) | Our directors fee deferral plan is not an equity
    compensation plan because there is no share reserve, overhang or
    dilution and fee deferrals are promptly used by the grantor
    trust to buy shares in the open market for later payout after
    directors leave the Board as described in our proxy statement.                                                                                                                                                                                                                                                                                                                                                              



|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions



94



---



##### 





|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services



PART IV




|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules







Undertakings






95



---



##### 



SIGNATURES




|                                    |  |                                                                                                                        
|----------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------
|                                    |  | JEFFERSON-PILOT CORPORATION
    Registrant                                                                             
|                                   
|BY (SIGNATURE)
    (NAME AND TITLE) |  | /s/ Dennis R. Glass
    ------------------------------------------------
    Dennis R. Glass                           
|DATE                                |  | President and Chief Executive Officer
    (also signing as Principal Executive Officer and Director)
    March 15, 2005



| |  |                                                                                                                                                                                                             
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | /s/ Theresa M.
    Stone---------------------------------------------
    Theresa M. Stone
    Executive Vice President and
    Chief Financial Officer
    (Principal Financial Officer)
    March 15, 2005
|
| |  | /s/ Reggie D.
    Adamson---------------------------------------------
    Reggie D. Adamson
    Senior Vice President and Treasurer
    (Principal Accounting Officer)
    March 15, 2005                  
|
| |  | /s/ Edwin B.
    Borden*---------------------------------------------
    Edwin B. Borden, Director
    March 15, 2005                                                                                      
|
| |  | /s/ William H.
    Cunningham*---------------------------------------------
    William H. Cunningham, Director
    March 15, 2005                                                                          
|
| |  | /s/ Robert G.
    Greer*---------------------------------------------
    Robert G. Greer, Director
    March 15, 2005                                                                                      
|
| |  | /s/ George W.
    Henderson, III*---------------------------------------------
    George W. Henderson, III
    March 15, 2005                                                                              
|
| |  | /s/ Elizabeth
    Valk Long*---------------------------------------------
    Elizabeth Valk Long
    March 15, 2005                                                                                        

96



---



##### 



| |  |                                                                                                                                     
| |  | ------------------------------------------------------------------------------------------------------------------------------------
|
| |  | /s/ E. S.
    Melvin*---------------------------------------------
    E. S. Melvin, Director
    March 15, 2005                    
|
| |  | /s/ William P.
    Payne*---------------------------------------------
    William P. Payne, Director
    March 15, 2005            
|
| |  | /s/ Patrick S.
    Pittard*---------------------------------------------
    Patrick S. Pittard, Director
    March 15, 2005        
|
| |  | /s/ Donald S.
    Russell, Jr.*---------------------------------------------
    Donald S. Russell, Jr., Director
    March 15, 2005
|
| |  | /s/ David A.
    Stonecipher*---------------------------------------------
    David A. Stonecipher, Director
    March 15, 2005    



|    |                   
|--- | ------------------
|*By | /s/ Robert A. Reed








97



---



##### 



LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES






| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | Consolidated Balance Sheets  December 31, 2004
and 2003                                              
|
| | Consolidated Statements of Income  Years Ended
    December 31, 2004, 2003 and 2002                  
|
| | Consolidated Statements of Stockholders
    Equity  Years Ended December 31, 2004, 2003 and
    2002
|
| | Consolidated Statements of Cash Flows  Years Ended
    December 31, 2004, 2003 and 2002              
|
| | Notes to Consolidated Financial Statements 
December 31, 2004                                        



|                                                                                     |                                                                                             |         |    
|------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------- | ------- | ---
|                                                                                     |                                                                                             | Page   
|                                                                                     |                                                                                             |        
|Schedule I   Summary of Investments 
    Other Than Investments in Related Parties |                                                                                             | F-2    
|Schedule II  Financial Statements of
    Jefferson-Pilot Corporation:               |                                                                                             |        
|                                                                                     | Condensed Balance Sheets as of December 31, 2004 and 2003                                   |         | F-3
|                                                                                     | Condensed Statements of Income for the Years Ended
    December 31, 2004, 2003 and 2002     |         | F-4
|                                                                                     | Condensed Statements of Cash Flows for the Years Ended
    December 31, 2004, 2003 and 2002 |         | F-5
|                                                                                     | Note to Condensed Financial Statements                                                      |         | F-6
|Schedule III  Supplementary Insurance Information                                   |                                                                                             | F-7    
|Schedule IV   Reinsurance for the Years Indicated                                   |                                                                                             | F-8    
|Schedule V  Valuation and Qualifying Accounts                                       |                                                                                             | F-8    
|List and Index of Exhibits                                                           |                                                                                             | E-1-E-2



F-1



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


SCHEDULE I  SUMMARY OF INVESTMENTS 


OTHER THAN INVESTMENTS IN RELATED PARTIES


December 31, 2004


In millions


|                                      |                                   |                                                                                           |                         |      |          |              |              |               |        |        |       |    |        |        | 
|------------------------------------- | --------------------------------- | ----------------------------------------------------------------------------------------- | ----------------------- | ---- | -------- | ------------ | ------------ | ------------- | ------ | ------ | ----- | -- | ------ | ------ | 
|Column A                              |                                   | Column B                                                                                  |                         |      | Column C |              |              | Column D      |       
|                                      |                                   |                                                                                           |                         |      |          |              |              |               |       
|                                      |                                   |                                                                                           |                         |      |          | Amount       |             
|                                      |                                   |                                                                                           |                         |      |          | at Which     |             
|                                      |                                   |                                                                                           |                         |      |          | Shown in the |             
|                                      |                                   |                                                                                           |                         | Fair |          |              | Consolidated |              
|Type of Investment                    |                                   | Cost (a)                                                                                  |                         |      | Value    |              |              | Balance Sheet |       
|                                      |                                   |                                                                                           |                         |      |          |              |              |               |       
|Debt securities:                      |                                   |                                                                                           |                         |      |          |              |              |               |        |        |       |   
|                                      | Bonds and other debt instruments: |                                                                                           |                         |      |          |              |              |               |        |        |       |    |       
|                                      |                                   | United States Treasury obligations and direct obligations of
    U.S. Government agencies |                         | $    | 253      |              |              | $             | 266    |        |       | $  | 266    |       
|                                      |                                   | Federal agency issued collateralized mortgage obligations                                 |                         |      | 1,610    |              |              |               | 1,670  |        |       |    | 1,670  |       
|                                      |                                   | Obligations of states, municipalities and political
    subdivisions (b)                  |                         |      | 63       |              |              |               | 68     |        |       |    | 67     |       
|                                      |                                   | Obligations of public utilities (b)                                                       |                         |      | 3,897    |              |              |               | 4,132  |        |       |    | 4,099  |       
|                                      |                                   | Corporate obligations (b)                                                                 |                         |      | 14,691   |              |              |               | 15,402 |        |       |    | 15,291 |       
|                                      |                                   | Corporate private-labeled collateralized mortgage obligations                             |                         |      | 659      |              |              |               | 688    |        |       |    | 688    |       
|                                      | Redeemable preferred stocks       |                                                                                           |                         | 12   |          |              |              | 13            |        |        |       | 13 |       
|                                      |                                   |                                                                                           |                         |      |          |              |              |               |       
|                                      |                                   |                                                                                           | Total debt securities   |      |          | 21,185       |              |               |        | 22,239 |       |    |        | 22,094 | 
|                                      |                                   |                                                                                           |                         |      |          |              |              |               |       
|Equity securities:                    |                                   |                                                                                           |                         |      |          |              |              |               |        |        |       |   
|                                      | Common stocks:                    |                                                                                           |                         |      |          |              |              |               |        |        |       |    |       
|                                      |                                   | Public utilities                                                                          |                         |      | 112      |              |              |               | 133    |        |       |    | 133    |       
|                                      |                                   | Banks, trust and insurance companies                                                      |                         |      | 63       |              |              |               | 478    |        |       |    | 478    |       
|                                      |                                   | Industrial and all other                                                                  |                         |      | 24       |              |              |               | 37     |        |       |    | 37     |       
|                                      | Non-redeemable preferred stocks   |                                                                                           |                         | 2    |          |              |              | 2             |        |        |       | 2  |       
|                                      |                                   |                                                                                           |                         |      |          |              |              |               |       
|                                      |                                   |                                                                                           | Total equity securities |      |          | 201          |              |               |        | 650    |       |    |        | 650    | 
|                                      |                                   |                                                                                           |                         |      |          |              |              |               |       
|Mortgage loans on real estate (c)     |                                   |                                                                                           | 3,689                   |      |          |              |              |               |        |        | 3,667 |   
|Other real estate held for investment |                                   |                                                                                           | 125                     |      |          |              |              |               |        |        | 125   |   
|Policy loans                          |                                   |                                                                                           | 839                     |      |          |              |              |               |        |        | 839   |   
|Other long-term investments           |                                   |                                                                                           | 193                     |      |          |              |              |               |        |        | 193   |   
|                                      |                                   |                                                                                           |                         |      |          |              |              |               |       
|                                      |                                   |                                                                                           | Total investments       |      | $        | 26,232       |              |               |        |        |       |    | $      | 27,568 | 
|                                      |                                   |                                                                                           |                         |      |          |              |              |               |       






|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a. | Cost of debt securities is original cost, reduced by repayments
    and other-than-temporary impairments and adjusted for
    amortization of premiums accrual of discounts. Cost of equity
    securities is original cost. Cost of mortgage loans on real
    estate and policy loans represents aggregate outstanding
    balances. Cost of real estate acquired by foreclosure is the
    originally capitalized amount, reduced by applicable
    depreciation. Cost of other real estate held for investment is
    depreciated original cost.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|b. | Differences between amounts reflected in Column B or
    Column C and amounts at which shown in the consolidated
    balance sheet reflected in Column D result from the
    application of SFAS 115, Accounting for Certain
    Investments in Debt and Equity Securities. A portion
    of bonds and debt securities are recorded as investments
    held-to-maturity at amortized cost and a portion are recorded as
    investments available-for-sale at fair value.

|   |                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|c. | Differences between cost reflected in Column B and amounts
    at which shown in the consolidated balance sheet reflected in
    Column D result from valuation allowances.

F-2



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


SCHEDULE II  CONDENSED BALANCE SHEETS OF
JEFFERSON-PILOT CORPORATION


In millions (except share information)


|                                     |                                                                                                                                                        |                                            |    |       |       |  |    |       |       | 
|------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | -- | ----- | ----- |  | -- | ----- | ----- | 
|                                     |                                                                                                                                                        | December 31,                               |   
|                                     |                                                                                                                                                        |                                            |   
|                                     |                                                                                                                                                        | 2004                                       |    |       | 2003  | 
|                                     |                                                                                                                                                        |                                            |    |       |       | 
|ASSETS                              
|Cash and investments:                |                                                                                                                                                        |                                            |    |       |       |  |    |      
|                                     | Cash and cash equivalents                                                                                                                              |                                            | $  | 2     |       |  | $  | 13    |      
|                                     | Investment in subsidiaries                                                                                                                             |                                            |    | 5,688 |       |  |    | 5,300 |      
|                                     |                                                                                                                                                        |                                            |    |       |       | 
|                                     |                                                                                                                                                        | Total cash and investments                 |    |       | 5,690 |  |    |       | 5,313 | 
|Other assets                         |                                                                                                                                                        |                                            | 12 |       |       |  | 16 |      
|                                     |                                                                                                                                                        |                                            |    |       |       | 
|                                     |                                                                                                                                                        | Total assets                               |    | $     | 5,702 |  |    | $     | 5,329 | 
|                                     |                                                                                                                                                        |                                            |    |       |       | 
|LIABILITIES AND STOCKHOLDERS EQUITY
|Liabilities:                         |                                                                                                                                                        |                                            |    |       |       |  |    |      
|                                     | Commercial paper and revolving credit borrowings                                                                                                       |                                            | $  | 188   |       |  | $  | 654   |      
|                                     | Notes payable, subsidiaries                                                                                                                            |                                            |    | 587   |       |  |    | 486   |      
|                                     | Notes payable, other                                                                                                                                   |                                            |    | 600   |       |  |    |      |      
|                                     | Junior subordinated debentures                                                                                                                         |                                            |    | 309   |       |  |    | 309   |      
|                                     | Payables and accruals                                                                                                                                  |                                            |    | 39    |       |  |    | 32    |      
|                                     | Dividends payable                                                                                                                                      |                                            |    | 52    |       |  |    | 46    |      
|                                     | Income taxes receivable                                                                                                                                |                                            |    | (7    | )     |  |    | (9    | )    
|                                     | Deferred income tax assets                                                                                                                             |                                            |    |      |       |  |    | 5     |      
|                                     |                                                                                                                                                        |                                            |    |       |       | 
|                                     |                                                                                                                                                        | Total liabilities                          |    |       | 1,768 |  |    |       | 1,523 | 
|                                     |                                                                                                                                                        |                                            |    |       |       | 
|Commitments & contingent liabilities |                                                                                                                                                        |                                            |    |       |       |  |    |      
|Stockholders equity:                |                                                                                                                                                        |                                            |    |       |       |  |    |      
|                                     | Common stock, par value $1.25 per share, authorized 2004 and
    2003:  350,000,000; issued: 2004 
    136,819,214 shares; 2003  140,610,540 shares |                                            |    | 180   |       |  |    | 176   |      
|                                     | Retained earnings, including equity in undistributed net income
    of subsidiaries 2004  $2,780, 2003 
    $2,466                                   |                                            |    | 3,071 |       |  |    | 2,947 |      
|                                     | Accumulated other comprehensive income                                                                                                                 |                                            |    | 683   |       |  |    | 683   |      
|                                     |                                                                                                                                                        |                                            |    |       |       | 
|                                     |                                                                                                                                                        | Total stockholders equity                 |    |       | 3,934 |  |    |       | 3,806 | 
|                                     |                                                                                                                                                        |                                            |    |       |       | 
|                                     |                                                                                                                                                        | Total liabilities and stockholders equity |    | $     | 5,702 |  |    | $     | 5,329 | 
|                                     |                                                                                                                                                        |                                            |    |       |       | 



F-3



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


SCHEDULE II  CONDENSED STATEMENTS OF INCOME


OF JEFFERSON-PILOT CORPORATION


In millions


|                                                           |                                                                        |                                             |                                                                                              |    |      |     |     |      |     |     |     |    |      |     | 
|---------------------------------------------------------- | ---------------------------------------------------------------------- | ------------------------------------------- | -------------------------------------------------------------------------------------------- | -- | ---- | --- | --- | ---- | --- | --- | --- | -- | ---- | --- | 
|                                                           |                                                                        | Year Ended December 31,                     |                                                                                             
|                                                           |                                                                        |                                             |                                                                                             
|                                                           |                                                                        | 2004                                        |                                                                                              |    | 2003 |     |     | 2002 |    
|                                                           |                                                                        |                                             |                                                                                              |    |      |     |     |      |    
|Income:                                                    |                                                                        |                                             |                                                                                              |    |      |     |     |      |     |     |     |   
|                                                           | Dividends from subsidiaries:                                           |                                             |                                                                                              |    |      |     |     |      |     |     |     |    |     
|                                                           |                                                                        | Jefferson-Pilot Life Insurance Company      |                                                                                              | $  | 10   |     |     | $    | 130 |     |     | $  | 20   |    
|                                                           |                                                                        | Jefferson Pilot Financial Insurance Company |                                                                                              |    | 154  |     |     |      | 96  |     |     |    | 216  |    
|                                                           |                                                                        | Jefferson-Pilot Communications Company      |                                                                                              |    | 53   |     |     |      | 38  |     |     |    | 33   |    
|                                                           |                                                                        | Other subsidiaries                          |                                                                                              |    | 72   |     |     |      | 8   |     |     |    | 133  |    
|                                                           |                                                                        |                                             |                                                                                              |    |      |     |     |      |    
|                                                           |                                                                        |                                             | 289                                                                                          |    |      |     | 272 |      |     |     | 402 |   
|                                                           | Other investment income, including interest from subsidiaries,
    net |                                             |                                                                                              | (2 | )    |     |     | 2    |     |     |     | 1  |     
|                                                           | Realized investment losses                                             |                                             |                                                                                              | (2 | )    |     |     | (2   | )   |     |     | (7 | )   
|                                                           |                                                                        |                                             |                                                                                              |    |      |     |     |      |    
|                                                           |                                                                        |                                             | Total income                                                                                 |    |      | 285 |     |      |     | 272 |     |    |      | 396 | 
|Financing costs                                            |                                                                        |                                             | 65                                                                                           |    |      |     | 45  |      |     |     | 47  |   
|Other expenses                                             |                                                                        |                                             | 20                                                                                           |    |      |     | 25  |      |     |     | 24  |   
|                                                           |                                                                        |                                             |                                                                                              |    |      |     |     |      |    
|                                                           |                                                                        |                                             | Income before income taxes and equity in undistributed net
    income (loss) of subsidiaries |    |      | 200 |     |      |     | 202 |     |    |      | 325 | 
|Income tax benefits                                        |                                                                        |                                             | (32                                                                                          | )  |      |     | (34 | )    |     |     | (27 | ) 
|                                                           |                                                                        |                                             |                                                                                              |    |      |     |     |      |    
|                                                           |                                                                        |                                             | Income before equity in undistributed net income (loss) of
    subsidiaries                  |    |      | 232 |     |      |     | 236 |     |    |      | 352 | 
|                                                           |                                                                        |                                             |                                                                                              |    |      |     |     |      |    
|Equity in undistributed net income (loss) of subsidiaries: |                                                                        |                                             |                                                                                              |    |      |     |     |      |     |     |     |   
|                                                           |                                                                        | Jefferson-Pilot Life Insurance Company      |                                                                                              |    | 197  |     |     |      | 35  |     |     |    | 138  |    
|                                                           |                                                                        | Jefferson Pilot Financial Insurance Company |                                                                                              |    | 49   |     |     |      | 165 |     |     |    | (104 | )  
|                                                           |                                                                        | Jefferson-Pilot Communications Company      |                                                                                              |    | 2    |     |     |      | 7   |     |     |    | 7    |    
|                                                           |                                                                        | Other subsidiaries, net                     |                                                                                              |    | 66   |     |     |      | 49  |     |     |    | 57   |    
|                                                           |                                                                        |                                             |                                                                                              |    |      |     |     |      |    
|                                                           |                                                                        |                                             | 314                                                                                          |    |      |     | 256 |      |     |     | 98  |   
|                                                           |                                                                        |                                             |                                                                                              |    |      |     |     |      |    
|Net income                                                 |                                                                        | $                                           | 546                                                                                          |    |      | $   | 492 |      |     | $   | 450 |   
|                                                           |                                                                        |                                             |                                                                                              |    |      |     |     |      |    



F-4



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


SCHEDULE II  CONDENSED STATEMENTS OF CASH FLOWS


OF JEFFERSON-PILOT CORPORATION


In millions


|                                        |                                                                                       |                                                    |                                                      |        |      |      |   |        |      |      |   |        |     |      |  
|--------------------------------------- | ------------------------------------------------------------------------------------- | -------------------------------------------------- | ---------------------------------------------------- | ------ | ---- | ---- | - | ------ | ---- | ---- | - | ------ | --- | ---- | -
|                                        |                                                                                       | Year Ended December 31,                            |                                                     
|                                        |                                                                                       |                                                    |                                                     
|                                        |                                                                                       | 2004                                               |                                                      |        | 2003 |      |   | 2002   |     
|                                        |                                                                                       |                                                    |                                                      |        |      |      |   |        |     
|Cash Flows from Operating Activities:   |                                                                                       |                                                    |                                                      |        |      |      |   |        |      |      |   |       
|                                        | Net income                                                                            |                                                    | $                                                    | 546    |      |      | $ | 492    |      |      | $ | 450    |    
|                                        | Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                    |                                                      |        |      |      |   |        |      |      |   |        |    
|                                        |                                                                                       | Equity in undistributed net income of subsidiaries |                                                      |        | (314 | )    |   |        | (256 | )    |   |        | (97 | )   
|                                        |                                                                                       | Realized investment losses                         |                                                      |        | 2    |      |   |        | 2    |      |   |        | 7   |     
|                                        |                                                                                       | Change in accrued items and other adjustments, net |                                                      |        | (6   | )    |   |        | 110  |      |   |        | (76 | )   
|                                        |                                                                                       |                                                    |                                                      |        |      |      |   |        |     
|                                        |                                                                                       |                                                    | Net cash provided by operating activities            |        |      | 228  |   |        |      | 348  |   |        |     | 284  |  
|                                        |                                                                                       |                                                    |                                                      |        |      |      |   |        |     
|Cash Flows from Investing Activities:   |                                                                                       |                                                    |                                                      |        |      |      |   |        |      |      |   |       
|                                        | Sales of investments                                                                  |                                                    |                                                      |       |      |      |   | 4      |      |      |   | 2      |    
|                                        | Other returns from (investments in) subsidiaries                                      |                                                    |                                                      | (115   | )    |      |   | 250    |      |      |   | (7     | )  
|                                        |                                                                                       |                                                    |                                                      |        |      |      |   |        |     
|                                        |                                                                                       |                                                    | Net cash provided by (used in) investing activities  |        |      | (115 | ) |        |      | 254  |   |        |     | (5   | )
|                                        |                                                                                       |                                                    |                                                      |        |      |      |   |        |     
|Cash Flows from Financing Activities:   |                                                                                       |                                                    |                                                      |        |      |      |   |        |      |      |   |       
|                                        | Cash dividends                                                                        |                                                    |                                                      | (203   | )    |      |   | (184   | )    |      |   | (174   | )  
|                                        | Common stock transactions, net                                                        |                                                    |                                                      | (210   | )    |      |   | (112   | )    |      |   | (321   | )  
|                                        | Proceeds from external borrowings                                                     |                                                    |                                                      | 6,145  |      |      |   | 5,178  |      |      |   | 3,643  |    
|                                        | Repayments of external borrowings                                                     |                                                    |                                                      | (6,011 | )    |      |   | (4,977 | )    |      |   | (3,637 | )  
|                                        | Borrowings from subsidiaries, net                                                     |                                                    |                                                      | 155    |      |      |   | (229   | )    |      |   | (12    | )  
|                                        |                                                                                       |                                                    |                                                      |        |      |      |   |        |     
|                                        |                                                                                       |                                                    | Net cash used in financing activities                |        |      | (124 | ) |        |      | (324 | ) |        |     | (501 | )
|                                        |                                                                                       |                                                    |                                                      |        |      |      |   |        |     
|                                        |                                                                                       |                                                    | Net increase (decrease) in cash and cash equivalents |        |      | (11  | ) |        |      | 278  |   |        |     | (222 | )
|Cash and cash equivalents (overdrafts): |                                                                                       |                                                    |                                                      |        |      |      |   |        |      |      |   |       
|                                        | Beginning                                                                             |                                                    |                                                      | 13     |      |      |   | (265   | )    |      |   | (43    | )  
|                                        |                                                                                       |                                                    |                                                      |        |      |      |   |        |     
|                                        | Ending                                                                                |                                                    | $                                                    | 2      |      |      | $ | 13     |      |      | $ | (265   | )  
|                                        |                                                                                       |                                                    |                                                      |        |      |      |   |        |     



F-5



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


SCHEDULE II  NOTE TO CONDENSED FINANCIAL
STATEMENTS


OF JEFFERSON-PILOT CORPORATION




|        |                                                          
|------- | ---------------------------------------------------------
|Note 1. | Basis of Presentation and Significant Accounting Policies





F-6



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


SCHEDULE III  SUPPLEMENTARY INSURANCE
INFORMATION


For the Years Indicated  In millions


|                                      |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |     |     |     |   |       |     |       | 
|------------------------------------- | ----- | --------------- | ----- | ----- | ----------------- | - | -------- | ------------ | ------ | - | ------------ | --- | --- | -------------- | --- | --- | --- | - | ----- | --- | ----- | 
|Column A                              |       | Column B        |       |       | Column C          |   |          | Column D     |        |   | Column E     |     |     | Column F       |    
|                                      |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |    
|                                      |       | Deferred Policy |       |       |                   |   | Deferred |              |        |   |              |    
|                                      |       | Acquisition     |       |       | Future Policy     |   |          | Revenue and  |        |   | Other Policy |     |     |               
|                                      |       | Costs and Value |       |       | Benefits and      |   |          | Premiums     |        |   | Claims and   |     |     | Premiums and   |    
|                                      |       | of Business     |       |       | Policyholder      |   |          | Collected in |        |   | Benefits     |     |     | Other          |    
|Segment                               |       | Acquired        |       |       | Contract Deposits |   |          | Advance      |        |   | Payable(a)   |     |     | Considerations |    
|                                      |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |    
|As of or Year Ended December 31, 2004 |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |     |     |     |   |       |    
|Individual Products                   |       | $               | 1,998 |       |                   | $ | 13,642   |              |        | $ | 378          |     |     | $              | 723 |     |     | $ | 152   |    
|AIP                                   |       |                 | 325   |       |                   |   | 10,428   |              |        |   |             |     |     |                | 2   |     |     |   | 1     |    
|Benefit Partners                      |       |                 | 105   |       |                   |   | 695      |              |        |   | 5            |     |     |                | 265 |     |     |   | 1,113 |    
|Corporate and Other                   |       |                 | 2     |       |                   |   | 25       |              |        |   |             |     |     |                | 3   |     |     |   | 27    |    
|                                      |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |    
|                                      |       | Total           |       | $     | 2,430             |   |          | $            | 24,790 |   |              | $   | 383 |                |     | $   | 993 |   |       | $   | 1,293 | 
|                                      |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |    
|As of or Year Ended December 31, 2003 |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |     |     |     |   |       |    
|Individual Products                   |       | $               | 1,847 |       |                   | $ | 13,077   |              |        | $ | 303          |     |     | $              | 603 |     |     | $ | 171   |    
|AIP                                   |       |                 | 320   |       |                   |   | 9,849    |              |        |   |             |     |     |                |    |     |     |   |      |    
|Benefit Partners                      |       |                 | 61    |       |                   |   | 370      |              |        |   | 4            |     |     |                | 206 |     |     |   | 756   |    
|Corporate and Other                   |       |                 | 2     |       |                   |   | 20       |              |        |   |             |     |     |                | 3   |     |     |   | 24    |    
|                                      |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |    
|                                      | Total |                 | $     | 2,230 |                   |   | $        | 23,316       |        |   | $            | 307 |     |                | $   | 812 |     |   | $     | 951 |      
|                                      |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |    
|As of or Year Ended December 31, 2002 |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |     |     |     |   |       |    
|Individual Products                   |       | $               | 1,668 |       |                   | $ | 12,458   |              |        | $ | 225          |     |     | $              | 631 |     |     | $ | 180   |    
|AIP                                   |       |                 | 310   |       |                   |   | 9,350    |              |        |   |             |     |     |                |    |     |     |   |      |    
|Benefit Partners                      |       |                 | 47    |       |                   |   | 308      |              |        |   | 5            |     |     |                | 187 |     |     |   | 638   |    
|Corporate and Other                   |       |                 | 2     |       |                   |   | 21       |              |        |   |             |     |     |                | 4   |     |     |   | 23    |    
|                                      |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |    
|                                      |       | Total           |       | $     | 2,027             |   |          | $            | 22,137 |   |              | $   | 230 |                |     | $   | 822 |   |       | $   | 841   | 
|                                      |       |                 |       |       |                   |   |          |              |        |   |              |     |     |                |    

|                                      |       |            |     |           |            |              |             |          |       |   |             |     |     |   |     |     |     | 
|------------------------------------- | ----- | ---------- | --- | --------- | ---------- | ------------ | ----------- | -------- | ----- | - | ----------- | --- | --- | - | --- | --- | --- | 
|Column A                              |       | Column G   |     |           | Column H   |              |             | Column I |       |   | Column J    |    
|                                      |       |            |     |           |            |              |             |          |       |   |             |    
|                                      |       |            |     |           |            | Amortization |             |          |      
|                                      |       |            |     |           |            | of Deferred  |             |          |      
|                                      |       |            |     |           |            | Policy       |             |          |      
|                                      |       |            |     | Benefits, |            |              | Acquisition |          |       |  
|                                      |       |            |     | Claims,   |            |              | Costs and   |          |       |  
|                                      |       | Net        |     |           | Losses and |              |             | Value of |       |   | Other       |    
|                                      |       | Investment |     |           | Settlement |              |             | Business |       |   | Operating   |    
|Segment                               |       | Income     |     |           | Expenses   |              |             | Acquired |       |   | Expenses(b) |    
|                                      |       |            |     |           |            |              |             |          |       |   |             |    
|As of or Year Ended December 31, 2004 |       |            |     |           |            |              |             |          |       |   |             |     |     |   |     |    
|Individual Products                   |       | $          | 900 |           |            | $            | 993         |          |       | $ | 207         |     |     | $ | 122 |    
|AIP                                   |       |            | 593 |           |            |              | 426         |          |       |   | 53          |     |     |   | 122 |    
|Benefit Partners                      |       |            | 89  |           |            |              | 841         |          |       |   | 27          |     |     |   | 225 |    
|Communications                        |       |            | (2  | )         |            |              |            |          |       |   |            |     |     |   | 149 |    
|Corporate and Other                   |       |            | 92  |           |            |              | 27          |          |       |   |            |     |     |   | 70  |    
|                                      |       |            |     |           |            |              |             |          |       |   |             |    
|                                      |       | Total      |     | $         | 1,672      |              |             | $        | 2,287 |   |             | $   | 287 |   |     | $   | 688 | 
|                                      |       |            |     |           |            |              |             |          |       |   |             |    
|As of or Year Ended December 31, 2003 |       |            |     |           |            |              |             |          |       |   |             |     |     |   |     |    
|Individual Products                   |       | $          | 914 |           |            | $            | 986         |          |       | $ | 195         |     |     | $ | 121 |    
|AIP                                   |       |            | 587 |           |            |              | 417         |          |       |   | 46          |     |     |   | 100 |    
|Benefit Partners                      |       |            | 64  |           |            |              | 576         |          |       |   | 100         |     |     |   | 65  |    
|Communications                        |       |            | (2  | )         |            |              |            |          |       |   |            |     |     |   | 141 |    
|Corporate and Other                   |       |            | 94  |           |            |              | 26          |          |       |   |            |     |     |   | 62  |    
|                                      |       |            |     |           |            |              |             |          |       |   |             |    
|                                      | Total |            | $   | 1,657     |            |              | $           | 2,005    |       |   | $           | 341 |     |   | $   | 489 |    
|                                      |       |            |     |           |            |              |             |          |       |   |             |    
|As of or Year Ended December 31, 2002 |       |            |     |           |            |              |             |          |       |   |             |     |     |   |     |    
|Individual Products                   |       | $          | 924 |           |            | $            | 989         |          |       | $ | 167         |     |     | $ | 129 |    
|AIP                                   |       |            | 577 |           |            |              | 425         |          |       |   | 38          |     |     |   | 101 |    
|Benefit Partners                      |       |            | 60  |           |            |              | 478         |          |       |   | 81          |     |     |   | 67  |    
|Communications                        |       |            | (3  | )         |            |              |            |          |       |   |            |     |     |   | 141 |    
|Corporate and Other                   |       |            | 76  |           |            |              | 22          |          |       |   |            |     |     |   | 83  |    
|                                      |       |            |     |           |            |              |             |          |       |   |             |    
|                                      |       | Total      |     | $         | 1,634      |              |             | $        | 1,914 |   |             | $   | 286 |   |     | $   | 521 | 
|                                      |       |            |     |           |            |              |             |          |       |   |             |    






|   |                                                                                                                                                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a. | Other policy claims and benefits payable include dividend
    accumulations and other policyholder funds on deposit, policy
    and contract claims (life and annuity and accident and health),
    dividends for policyholders and other policy liabilities.

|   |                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|b. | Expenses related to the management and administration of
    investments have been netted with investment income in the
    determination of net investment income. Such expenses amounted
    to $36 in 2004, $33 in 2003, and $34 in 2002.

F-7



---



##### 



JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


SCHEDULE IV  REINSURANCE FOR THE YEARS
INDICATED


In millions


|                              |                                        |              |   |          |           |  |            |           |  |            |            |         |  |          |   |         |  |  |  |      |  
|----------------------------- | -------------------------------------- | ------------ | - | -------- | --------- |  | ---------- | --------- |  | ---------- | ---------- | ------- |  | -------- | - | ------- |  |  |  | ---- | -
|Column A                      |                                        | Column B     |   |          | Column C  |  |            | Column D  |  |            | Column E   |         |  | Column F |  
|                              |                                        |              |   |          |           |  |            |           |  |            |            |         |  |          |  
|                              |                                        |              |   |          |           |  |            |           |  | Percentage |           
|                              |                                        |              |   |          |           |  |            |           |  | of         |           
|                              |                                        |              |   |          |           |  |            |           |  | Amount     |           
|                              |                                        |              |   | Ceded to |           |  | Assumed    |           |  |            |            | Assumed | 
|                              |                                        |              |   | Other    |           |  | From Other |           |  |            |            | to      | 
|                              |                                        | Gross Amount |   |          | Companies |  |            | Companies |  |            | Net Amount |         |  | Net(a)   |  
|                              |                                        |              |   |          |           |  |            |           |  |            |            |         |  |          |  
|Year Ended December 31, 2004: |                                        |              |   |          |           |  |            |           |  |            |            |         |  |          |   |         |  |  |  |     
|                              | Life insurance in force at end of year |              | $ | 312,825  |           |  | $          | 60,007    |  |            | $          | 5,022   |  |          | $ | 257,840 |  |  |  | 1.9  | %
|                              | Premiums and other considerations      |              | $ | 1,200    |           |  | $          | 71        |  |            | $          | 164     |  |          | $ | 1,293   |  |  |  | 12.7 | %
|Year Ended December 31, 2003: |                                        |              |   |          |           |  |            |           |  |            |            |         |  |          |   |         |  |  |  |     
|                              | Life insurance in force at end of year |              | $ | 269,163  |           |  | $          | 58,797    |  |            | $          | 1,966   |  |          | $ | 212,332 |  |  |  | 0.9  | %
|                              | Premiums and other considerations      |              | $ | 1,029    |           |  | $          | 80        |  |            | $          | 2       |  |          | $ | 951     |  |  |  | 0.2  | %
|Year Ended December 31, 2002: |                                        |              |   |          |           |  |            |           |  |            |            |         |  |          |   |         |  |  |  |     
|                              | Life insurance in force at end of year |              | $ | 257,463  |           |  | $          | 58,607    |  |            | $          | 1,501   |  |          | $ | 200,357 |  |  |  | 0.7  | %
|                              | Premiums and other considerations      |              | $ | 924      |           |  | $          | 87        |  |            | $          | 4       |  |          | $ | 841     |  |  |  | 0.5  | %






|    |  |                                                                                                                  
|--- |  | -----------------------------------------------------------------------------------------------------------------
|(a) |  | Percentage of amount assumed to net is computed by dividing the
    amount in Column D by the amount in Column E.

JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES


SCHEDULE V  VALUATION AND QUALIFYING ACCOUNTS


December 31, 2004


In millions


|         |                                                       |              |   |           |                  |  |          |                |          |            |   |               |   |  |   |   |   |  |   |    |    | 
|-------- | ----------------------------------------------------- | ------------ | - | --------- | ---------------- |  | -------- | -------------- | -------- | ---------- | - | ------------- | - |  | - | - | - |  | - | -- | -- | 
|Column A |                                                       | Column B     |   |           | Column C         |  | Column D |                | Column E |           
|         |                                                       |              |   |           |                  |  |          |                |          |           
|         |                                                       |              |   | Additions |                  |  |          |               
|         |                                                       |              |   |           |                  |  |          |               
|         |                                                       | Balance at   |   |           | Charged          |  |          |                |          |            |   |              
|         |                                                       | Beginning of |   |           | to Realized      |  |          | Charged to     |          |            |   | Balance at    |  
|         |                                                       | Period       |   |           | Investment Gains |  |          | Other Accounts |          | Deductions |   | End of Period |  
|         |                                                       |              |   |           |                  |  |          |                |          |            |   |               |  
|2004:    |                                                       |              |   |           |                  |  |          |                |          |            |   |               |   |  |   |   |   |  |   |   
|         | Valuation allowance for mortgage loans on real estate |              | $ | 36        |                  |  | $        | (14            | )        |            | $ |              |   |  | $ |  |   |  | $ | 22 |   
|         | Valuation allowance for uncollectible agents balances |              |   | 1         |                  |  |          |               |          |            |   |              |   |  |   |  |   |  |   | 1  |   
|         |                                                       |              |   |           |                  |  |          |                |          |            |   |               |   |  |  
|         |                                                       | Total        |   | $         | 37               |  |          | $              | (14      | )          |   | $             |  |  |   | $ |  |  |   | $  | 23 | 
|         |                                                       |              |   |           |                  |  |          |                |          |            |   |               |   |  |  
|2003:    |                                                       |              |   |           |                  |  |          |                |          |            |   |               |   |  |   |   |   |  |   |   
|         | Valuation allowance for mortgage loans on real estate |              | $ | 36        |                  |  | $        |               |          |            | $ |              |   |  | $ |  |   |  | $ | 36 |   
|         | Valuation allowance for uncollectible agents balances |              |   | 1         |                  |  |          |               |          |            |   |              |   |  |   |  |   |  |   | 1  |   
|         |                                                       |              |   |           |                  |  |          |                |          |            |   |               |   |  |  
|         |                                                       | Total        |   | $         | 37               |  |          | $              |         |            |   | $             |  |  |   | $ |  |  |   | $  | 37 | 
|         |                                                       |              |   |           |                  |  |          |                |          |            |   |               |   |  |  
|2002:    |                                                       |              |   |           |                  |  |          |                |          |            |   |               |   |  |   |   |   |  |   |   
|         | Valuation allowance for mortgage loans on real estate |              | $ | 29        |                  |  | $        | 7              |          |            | $ |              |   |  | $ |  |   |  | $ | 36 |   
|         | Valuation allowance for uncollectible agents balances |              |   | 1         |                  |  |          |               |          |            |   |              |   |  |   |  |   |  |   | 1  |   
|         |                                                       |              |   |           |                  |  |          |                |          |            |   |               |   |  |  
|         |                                                       | Total        |   | $         | 30               |  |          | $              | 7        |            |   | $             |  |  |   | $ |  |  |   | $  | 37 | 
|         |                                                       |              |   |           |                  |  |          |                |          |            |   |               |   |  |  

F-8



---



##### 



LIST AND INDEX OF EXHIBITS


|            |      |  |  |        |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |      |  |     | 
|----------- | ---- |  |  | ------ | ---------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- |  | --- | 
|Reference   |      |  |  |        |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |     
|Per Exhibit |      |  |  |        |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |     
|Table       |      |  |  |        | Description of Exhibit |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Page | 
|            |      |  |  |        |                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |      | 
|            | (3)  |  |  | (i)    |                        | Articles of Incorporation and amendments that have been approved
    by shareholders are incorporated by reference to Form 10-Q
    (Commission file no. 1-5955) for the first quarter 1996                                                                                                                                                                                                                                                                                                                             |      |  |    | 
|            |      |  |  | (ii)   |                        | By-laws as amended November 3, 2003 are incorporated by
    reference to Form 10-K for 2003                                                                                                                                                                                                                                                                                                                                                                                                                             |      |  |    | 
|            | (4)  |  |  | (i)    |                        | Amended and Restated Rights Agreement dated November 7,
    1994 between Jefferson-Pilot Corporation and First Union
    National Bank, as Rights Agent, was included in Form 8-K
    for November 7, 1994, and Amendment to Rights Agreement
    dated February 8, 1999 was included in Form 8-K for
    February 8, 1999 (Commission file no. 1-5955); both
    are incorporated by reference                                                                                                                         |      |  |    | 
|            |      |  |  | (ii)   |                        | Credit agreements and other agreements and instruments relating
    to debt securities issued by or borrowings available to the
    Registrant, are not being filed because the total amount of
    borrowing available under credit agreements or amount of debt
    securities authorized by any other agreement or instrument
    respectively does not exceed 10% of total consolidated assets.
    The Registrant agrees to furnish a copy of any such agreements
    and documents to the Commission upon request |      |  |    | 
|            | (10) |  |  |        |                        | The following contracts and plans:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |      |  |     | 
|            |      |  |  | (i)    |                        | Employment Agreement signed in December 2002 between the
    Registrant and David A. Stonecipher, an executive officer until
    he retired on December 31, 2004, is incorporated by
    reference to Form 10-K for 2002; summary of his current
    arrangements is incorporated by reference to the March 2005
    Proxy Statement                                                                                                                                                                                    |      |  |    | 
|            |      |  |  | (ii)   |                        | Employment Agreement between the Registrant and Dennis R.
    Glass, our Chief Executive Officer, dated December 6, 2003,
    is incorporated by reference to Form 10-K for 2003                                                                                                                                                                                                                                                                                                                                        |      |  |    | 
|            |      |  |  | (iii)  |                        | Long Term Stock Incentive Plan, as amended in February 2005; the
    summaries of the long term incentive compensation awards and
    payments (LTIP) on pages 10 and 14 of the March 2005 Proxy
    Statement are incorporated by reference                                                                                                                                                                                                                                                                            |      |  | E-3 | 
|            |      |  |  | (iv)   |                        | Non-Employee Directors Stock Option Plan, as amended in
    February 2005                                                                                                                                                                                                                                                                                                                                                                                                                                              |      |  | E-7 | 
|            |      |  |  | (v)    |                        | Jefferson-Pilot Corporation Supplemental Benefit Plan, as
    amended, is incorporated by reference to Form 10-K for 1999
    (Commission file no. 1-5955); the Executive Special
    Supplemental Benefit Plan, which now operates under this Plan,
    is incorporated by reference to Form 10-K (Commission file
    no. 1-5955) for 1994.                                                                                                                                                                           |      |  |    | 
|            |      |  |  | (vi)   |                        | Management Incentive Compensation Plan for Jefferson-Pilot
    Corporation and its insurance subsidiaries is incorporated by
    reference to Form 10-K for 2002; description of the bonus
    program for executives is incorporated by reference to the March
    2003 Proxy Statement.                                                                                                                                                                                                                               |      |  |    | 
|            |      |  |  | (vii)  |                        | Deferred Fee Plan for Non-Employee Directors, as amended, is
    incorporated by reference to Form 10-K (Commission file
    no. 1-5955) for 1998                                                                                                                                                                                                                                                                                                                                                                       |      |  |    | 
|            |      |  |  | (viii) |                        | Executive Change in Control Severance Plan and the 1999
    amendment thereto are incorporated by reference to
    Forms 10-K (Commission file no. 1-5955) for 1998 and
    1999, respectively                                                                                                                                                                                                                                                                                                                          |      |  |    | 

E-1



---



##### 



|            |        |  |  |       |                        |                                                                                                                                                                            |      |  |      | 
|----------- | ------ |  |  | ----- | ---------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- |  | ---- | 
|Reference   |        |  |  |       |                        |                                                                                                                                                                            |     
|Per Exhibit |        |  |  |       |                        |                                                                                                                                                                            |     
|Table       |        |  |  |       | Description of Exhibit |                                                                                                                                                                            | Page | 
|            |        |  |  |       |                        |                                                                                                                                                                            |      | 
|            |        |  |  | (ix)  |                        | Employment arrangement letter between the Registrant and
    Warren H. May, an executive officer, is incorporated by
    reference to Form 10-Q for the third quarter 2002 |      |  |     | 
|            |        |  |  | (x)   |                        | Summary of non-employee director compensation                                                                                                                              |      |  | E-12 | 
|            |        |  |  | (xi)  |                        | Form of stock option terms for non-employee directors                                                                                                                      |      |  | E-13 | 
|            |        |  |  | (xii) |                        | Form of stock option terms for officers                                                                                                                                    |      |  | E-18 | 
|            | (21)   |  |  |       |                        | Subsidiaries of the Registrant                                                                                                                                             |      |  | E-25 | 
|            | (23)   |  |  |       |                        | Consent of Independent Auditors                                                                                                                                            |      |  | E-26 | 
|            | (24)   |  |  |       |                        | Power of Attorney form                                                                                                                                                     |      |  | E-27 | 
|            | (31.1) |  |  |       |                        | Certification of Chief Executive Officer pursuant to Exchange
    Act Rule 13a-14(a)                                                                                       |      |  | E-28 | 
|            | (31.2) |  |  |       |                        | Certification of Chief Financial Officer pursuant to Exchange
    Act Rule 13a-14(a)                                                                                       |      |  | E-29 | 
|            | (32)   |  |  |       |                        | Written Statement Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002                                                                                            |      |  | E-30 | 

E-2