<PAGE>   1

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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                             ---------------------

                                   FORM 10-K

<TABLE>
<C>              <S>
   (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, 2000
                                              OR
      [  ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
                 FOR THE TRANSITION PERIOD FROM ____________ TO ____________
</TABLE>

                         COMMISSION FILE NUMBER 1-5955

                          JEFFERSON-PILOT CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S>                             <C>                               <C>
                                    100 NORTH GREENE STREET,
        NORTH CAROLINA          GREENSBORO, NORTH CAROLINA 27401      56-0896180
 (State or Other Jurisdiction        (Address of Principal         (I.R.S. Employer
              of                       Executive Offices)           Identification
Incorporation or Organization)                                           No.)
</TABLE>

        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 336-691-3000

          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<TABLE>
<CAPTION>
                                                                 NAME OF EXCHANGE(S)
                    TITLE OF EACH CLASS                          ON WHICH REGISTERED
                    -------------------                          -------------------
<S>                                                           <C>
Common Stock (Par Value $1.25)                                  New York, Midwest and
                                                               Pacific Stock Exchange
</TABLE>

          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                                      NONE

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for at least the past 90 days.     Yes  [X]     No  [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]

     State the aggregate market value of the voting and non-voting common equity
held by nonaffiliates of the registrant: approximately $6.9 billion at March 5,
2001.

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock:

<TABLE>
<CAPTION>
                    CLASS                               OUTSTANDING AT MARCH 5, 2001
                    -----                               ----------------------------
<S>                                            <C>
   Common Stock (Par Value $1.25 per share)                     102,223,049
</TABLE>

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Proxy Statement for the Annual Meeting of Shareholders to
be held May 7, 2001 are incorporated by reference into Part III.

     List of Exhibits appears on page E-1.
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<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                        PAGE
                                                                        ----
<S>       <C>                                                           <C>
                                   PART I
ITEM 1.   BUSINESS....................................................     1
ITEM 2.   PROPERTIES..................................................     4
ITEM 3.   LEGAL PROCEEDINGS...........................................     4
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.......     5
          EXECUTIVE OFFICERS OF THE REGISTRANT........................     5
                                  PART II
ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
            STOCKHOLDER MATTERS.......................................     6
ITEM 6.   SELECTED FINANCIAL DATA.....................................     6
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS.................................     9
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
            RISK......................................................    26
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................    26
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
            AND FINANCIAL DISCLOSURE..................................    58
                                  PART III
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..........    58
ITEM 11.  EXECUTIVE COMPENSATION......................................    58
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT................................................    58
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............    58
                                  PART IV
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
            8-K.......................................................    58
Undertakings..........................................................    58
Signatures............................................................    59
List of Financial Statements and Financial Statement Schedules,
  followed by the Schedules...........................................   F-1
List and Index of Exhibits, followed by Exhibits......................   E-1
</TABLE>
<PAGE>   3

                                     PART I

ITEM 1.  BUSINESS

     (a) General Development of Business

     Jefferson-Pilot Corporation was incorporated in North Carolina in 1968.
While it has broad powers to engage in business, it is solely a holding company.
Our principal subsidiaries, which are wholly owned, are:

          Jefferson-Pilot Life Insurance Company (JP Life),

          Jefferson Pilot Financial Insurance Company (JPFIC),

          Jefferson Pilot LifeAmerica Insurance Company (JPLA),

          Jefferson Pilot Securities Corporation, a full service NASD registered
     broker/dealer, and

          Jefferson-Pilot Communications Company (JPCC).

Through these and other subsidiaries, we are primarily engaged in the business
of writing life insurance policies, writing annuity policies and selling other
investment products, writing group life, disability income and dental policies,
operating radio and television facilities, and producing sports programming.
Greensboro, North Carolina is the center for most operations, although a major
base of operations in Concord, NH serves JPFIC, JPLA and the broker/dealer, and
the group life, disability income and dental operations have been consolidated
in JPFIC's offices in Omaha, Nebraska. We provide further detail in Management's
Discussion and Analysis of Financial Condition and Results of Operations which
begins on page 9 (MD&A).

     We have grown substantially in the past six years both internally and
through acquisitions.

     In May 1995, JP Life assumed certain life insurance and annuity business of
Kentucky Central Life Insurance Company in an assumption reinsurance
transaction.

     In October 1995, JP acquired Alexander Hamilton Life Insurance Company of
America (AH Life) and its subsidiary, First Alexander Hamilton Life Insurance
Company (FAHL), from a subsidiary of Household International, Inc. With the
acquisition, certain blocks of the acquired business were 100% coinsured with
affiliates of Household; this is more fully discussed in Note 15 on page 52.

     Effective May 1, 1997, JP acquired JPFIC, its subsidiary JPLA, and our full
service broker/dealer, Jefferson Pilot Securities Corporation, from The Chubb
Corporation.

     On December 30, 1999, JP acquired Guarantee Life Insurance Company (GLIC)
and its non-insurance affiliates.

     On August 1, 2000, AH Life and GLIC merged into JPFIC. On December 31,
2000, FAHL merged into JPLA. These mergers reduce costs and improve efficiency
in our insurance operations.

     (b) Financial Information About Industry Segments

     We present industry segment information in Note 16 on page 53.

                                        1
<PAGE>   4

     (c) Narrative Description of Business

     Revenues derived from the principal products and services of our insurance
subsidiaries and revenues from the Communications segment for the past three
years are as follows:

                              REVENUES BY SEGMENT*

<TABLE>
<CAPTION>
                                                               2000     1999     1998
                                                              ------   ------   ------
                                                                   (IN MILLIONS)
<S>                                                           <C>      <C>      <C>
Individual Products.........................................  $1,684   $1,468   $1,424
Annuity and Investment Products.............................     629      511      506
Benefit Partners............................................     537      164      313
Communications..............................................     206      200      195
Corporate and Other.........................................     182      218      172
                                                              ------   ------   ------
                                                              $3,238   $2,561   $2,610
                                                              ======   ======   ======
</TABLE>

* Revenues include net investment income

     The following briefly describes our principal wholly-owned subsidiaries,
including their principal products and services, markets and methods of
distribution.

                         INSURANCE COMPANY SUBSIDIARIES

     JP Life is domiciled in North Carolina and began business in 1903. It is
authorized to write insurance in 49 states, the District of Columbia, Guam, the
Virgin Islands and Puerto Rico. It primarily writes universal life, term and
endowment insurance policies on an individual basis, and individual non-variable
annuities including equity indexed annuities.

     JPFIC has been domiciled in Nebraska since its redomestication from New
Hampshire in August 2000. It began business in 1903 through predecessor
companies, and is authorized to write insurance in 49 states, the District of
Columbia, Guam, the Virgin Islands and Puerto Rico. It principally writes
universal life, variable universal life and term insurance policies, and
variable annuities. Since its merger with GLIC, JPFIC also writes substantially
all our group term life, disability income and dental insurance.

     JPLA, domiciled in New Jersey, began business in 1897. It is authorized to
write insurance in 50 states, the District of Columbia and several U.S.
possessions/territories. It primarily writes universal life, variable universal
life and term insurance policies, and non-variable annuities.

     The former AH Life block of universal life insurance policies and variable
and non-variable annuities is now part of JPFIC.

     The former FAHL block of non-variable annuities and universal life and term
insurance policies is now part of JPLA.

     Individual Products.  Insurance subsidiaries offer individual life
insurance policies including traditional life products as well as universal life
and variable universal life policies, and level and decreasing term policies. On
most policies, accidental death and disability benefits are available in the
form of riders, and IRA riders also are available, as are other benefits. At
times, we accept substandard risks at higher premiums.

     The companies market individual life products through independent general
agents, independent national account marketing firms, agency building general
agents, home service agents, broker/dealers, banks and strategic alliances.

     Annuity and Investment Products.  Our insurance subsidiaries offer annuity
and investment products including variable annuity products. They market through
most of the distribution channels discussed above and through investment
professionals and annuity marketing organizations. Our full service
broker/dealer markets variable life insurance and variable annuities written by
our insurance subsidiaries, and also sells other securities and mutual funds.

                                        2
<PAGE>   5

     Benefit Partners.  Group term life, disability income and dental insurance
offered by JPFIC is sold through regional group offices nationwide, marketing to
employee benefit brokers, third-party administrators and employee benefit firms.

OTHER INFORMATION REGARDING INSURANCE COMPANY SUBSIDIARIES

     Regulation.  Insurance companies are subject to regulation and supervision
in all the states where they do business. Generally the state supervisory
agencies have broad administrative powers relating to granting and revoking
licenses to transact business, licensing agents, approving forms of policies
used, regulating trade practices and market conduct, the form and content of
required financial statements, reserve requirements, permitted investments,
approval of dividends and, in general, the conduct of all insurance activities.

     Insurance companies also must file detailed annual reports on a statutory
accounting basis with the state supervisory agencies where each does business.
These agencies may examine the business and accounts at any time. Under the
rules of the National Association of Insurance Commissioners (NAIC) and state
laws, the supervisory agencies of one or more states examine a company
periodically, usually at three to five year intervals.

     Various states, including Nebraska, New Jersey and North Carolina, have
enacted insurance holding company legislation. Registrant's insurance
subsidiaries have registered as members of an "insurance holding company system"
under applicable laws. Most states require prior approval by state insurance
regulators of transactions with affiliates, including prior approval for
extraordinary dividends by insurance subsidiaries, and for acquisitions of
insurance companies.

     Risk-based capital requirements and state guaranty fund laws are discussed
in MD&A.

     Competition.  Our insurance subsidiaries operate in a highly competitive
field which consists of a large number of stock, mutual and other types of
insurers.

     Certain insurance and annuity products also compete with other investment
vehicles. Marketing of annuities and other competing products by banks and other
financial institutions is increasing. Our broker/dealer also operates in a
highly competitive environment. Existing tax laws affect the taxation of life
insurance and many competing products. Various proposals for changes have been
made in income and estate tax laws, some of which could adversely affect the
taxation of certain products or their use as estate planning vehicles, and thus
impact their marketing and the volume of policies surrendered.

     Employees.  As of December 31, 2000, our insurance operations including our
broker/dealer employed approximately 3,000 persons and held contracts with
41,000 independent and career agents. We have been reducing the number of
licensed agents as we increase our focus on the more productive agents.

                                 COMMUNICATIONS

     JPCC owns and operates television and radio stations as well as
Jefferson-Pilot Sports, a production and syndication business.

TELEVISION OPERATIONS

     JPCC owns and operates three television stations. WBTV, Channel 3,
Charlotte, NC, is affiliated with CBS under a Network Affiliation Agreement
expiring on May 31, 2011. Absent cancellation by either party, the Agreement
will be renewed for successive five-year periods. WWBT, Channel 12, Richmond,
VA, is affiliated with NBC under a Network Affiliation Agreement expiring August
15, 2002. Absent cancellation by either party, the Agreement will be renewed for
successive five-year periods. WCSC, Channel 5, Charleston, SC, is affiliated
with CBS under a Network Affiliation Agreement expiring on May 31, 2011. Absent
cancellation by either party, the Agreement will be renewed for successive
five-year periods.

RADIO OPERATIONS

     JPCC owns and operates one AM and one FM station in Atlanta, GA, one AM and
two FM stations in Charlotte, NC, two AM and three FM stations in Denver, CO,
one AM and two FM stations in Miami, FL and one AM and three FM stations in San
Diego, CA.

                                        3
<PAGE>   6

OTHER INFORMATION REGARDING COMMUNICATIONS COMPANIES

     Competition.  The radio and television stations compete for programming,
talent and revenues with other radio and television stations as well as with
other advertising and entertainment media. JP Sports competes with other vendors
of similar products and services.

     Employees.  As of December 31, 2000, JPCC and its subsidiaries employed
approximately 775 persons full time.

     Federal Regulation.  Television and radio broadcasting operations are
subject to the jurisdiction of the Federal Communications Commission ("FCC")
under the Communications Act of 1934, as amended (the "Act"). The Act empowers
the FCC to issue, revoke or modify broadcasting licenses, assign frequencies,
determine the locations of stations, regulate the apparatus used by stations,
establish areas to be served, adopt necessary regulations, and impose certain
penalties for violation of the regulations. The Act and present regulations
prohibit the transfer of a license or of control of a licensee without prior
approval of the FCC; restrict in various ways the common and multiple ownership
of broadcast facilities; restrict alien ownership of licenses; and impose
various other strictures on ownership and operation.

     Broadcasting licenses are granted for a period of eight years for both
television and radio and, in the absence of adverse claims as to the licensee's
qualifications or performance, will normally be renewed by the FCC for an
additional term. All our station licenses have been renewed as required.

     (d) Foreign Operations

     Substantially all operations are conducted within the United States.
Subsidiaries that had begun life insurance operations in Argentina and Uruguay,
which were not material to our operations, were sold in late 1999.

ITEM 2.  PROPERTIES

     JP and most subsidiaries utilize space and personnel of JP Life. JP Life
owns its home office consisting of a 20-story building and an adjacent 17-story
building in downtown Greensboro, NC. These buildings house insurance operations
and provide space for commercial leasing. JP Life also owns a supply and
printing facility, a parking deck and a computer center, all located on nearby
properties. JP Life leases office space in Lexington, KY for operation of the
KCL business assumed, although these operations are being moved to Greensboro.

     Subsidiaries conduct operations in Concord, NH in two buildings on
approximately 196 acres owned by JPFIC.

     JPFIC conducts operations in Omaha, NE in two buildings and also owns a
third building on its 11 acre campus.

     Subsidiaries lease insurance sales office space in various jurisdictions.

     JPCC owns its three television studios and office buildings, owns most of
its radio studios and offices, and owns or leases the towers supporting its
radio and television antennas.

ITEM 3.  LEGAL PROCEEDINGS

     JP Life is a defendant in a proposed class action suit, Romig v.
Jefferson-Pilot Life Insurance Company, filed on November 6, 1995 in the
Superior Court of Guilford County, NC. The suit alleges deceptive practices,
fraudulent and negligent misrepresentation and breach of contract in the sale of
certain life insurance policies using policy performance illustrations which
used then current interest or dividend rates and insurance charges and
illustrated that some or all of the future premiums might be paid from policy
values rather than directly by the insured. The claimant's actual policy values
exceeded those illustrated on a guaranteed basis, but were less than those
illustrated on a then current basis due primarily to the interest crediting
rates having declined along with the overall decline in interest rates in recent
years. The plaintiffs seek unspecified compensatory and punitive damages, costs
and equitable relief. While management is unable to estimate the probability or
range of any

                                        4
<PAGE>   7

possible loss, management believes that we have made appropriate disclosures to
policyholders as a matter of practice, and intends to vigorously defend the
claims asserted.

     JP Life, as successor to Pilot Life Insurance Company, is a defendant in a
proposed class action suit, Thorn v. Jefferson-Pilot Life Insurance Company,
filed September 11, 2000 in the United States District Court in Columbia, South
Carolina. The complaint alleges that Pilot Life and its successors decades ago
unfairly discriminated in the sale of certain small face amount life insurance
policies and that these policies were unreasonably priced. The suit alleges
fraudulent inducement, constructive fraud, and negligence in the marketing of
these policies. The plaintiffs seek unspecified compensatory and punitive
damages, costs and equitable relief. While management is unable to estimate the
probability or range of any possible loss, management believes that our
practices have complied with state insurance laws and intends to vigorously
defend the claims asserted.

     JP and its subsidiaries are involved in other legal and administrative
proceedings and claims of various types, some of which include claims for
punitive damages. In recent years, the life insurance industry has experienced
increased litigation in which large jury awards including punitive damages have
occurred. Because of the considerable uncertainties that exist, we cannot
predict the outcome of pending or future litigation with certainty. Based on
consultation with our legal advisers, management believes that resolution of
pending legal proceedings will not have a material adverse effect on our
financial position or liquidity, but could have a material adverse effect on the
results of operations for a specific period.

     Environmental Proceedings.  We have no material administrative proceedings
involving environmental matters.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

     None.

EXECUTIVE OFFICERS OF THE REGISTRANT

     David A. Stonecipher, Chairman, President and Chief Executive Officer,
joined JP as President-Elect and CEO-Elect in September 1992, and became
President and CEO in March 1993, and Chairman in May 1998. Previously he was
President of the Life Insurance Company of Georgia and Southland Life Insurance
Company and their parent company, Georgia US.

     Robert D. Bates became an Executive Vice President and President -- Benefit
Partners of JP effective with the GLIC acquisition on December 30, 1999. He was
President of GLIC from 1989 until the August 2000 merger of GLIC into JPFIC, and
was Chairman, President and Chief Executive Officer of GLIC and its publicly
held parent, The Guarantee Life Companies Inc., until December 30, 1999.

     Dennis R. Glass, Executive Vice President, Chief Financial Officer and
Treasurer, and also President -- Financial Operations from February 1999, joined
JP in October 1993. Previously, he was Executive Vice President and CFO of
Protective Life Corporation, and earlier, of the Portman Companies.

     John D. Hopkins, Executive Vice President and General Counsel, joined JP in
April 1993, and previously was a partner in King & Spalding, an Atlanta law
firm.

     Kenneth C. Mlekush, Executive Vice President, and also President -- Life
Companies from February 1999, joined JP in January 1993. Previously he was
President and Chief Operating Officer of Southland Life Insurance Company and
Executive Vice President of its parent, Georgia US.

     Theresa M. Stone, Executive Vice President of JP and President of JPCC
since July 1, 1997, was previously President and Chief Executive Officer of
JPFIC, and also was Executive Vice President of The Chubb Corporation to May 13,
1997.

     There are no agreements or understandings between any executive officer and
any other person pursuant to which such executive officer was or is to be
selected as an officer. Executive officers hold office at the will of the Board,
subject for certain executives to their rights under employment agreements
listed as exhibits to this Form 10-K.

                                        5
<PAGE>   8

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

     (a) Market Information.  JP common stock principally trades on the New York
Stock Exchange. Quarterly composite tape trading ranges have been:

<TABLE>
<CAPTION>
                                 2000            1999            1998            1997            1996
                             -------------   -------------   -------------   -------------   -------------
                             HIGH     LOW    HIGH     LOW    HIGH     LOW    HIGH     LOW    HIGH     LOW
                             -----   -----   -----   -----   -----   -----   -----   -----   -----   -----
<S>                          <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
First Quarter..............  68.13   49.88   77.38   66.06   60.06   48.69   41.00   36.25   38.81   30.06
Second Quarter.............  69.69   55.31   71.25   63.63   62.13   54.88   47.44   34.31   37.06   33.50
Third Quarter..............  70.81   56.75   75.63   61.50   64.06   55.06   53.50   44.88   36.75   33.25
Fourth Quarter.............  75.88   59.00   79.63   61.19   78.38   55.38   57.81   48.25   39.75   34.25
</TABLE>

     (b) Holders.  As of March 6, 2001, our stock was owned by 9,625
shareholders of record, and a much larger number of street name holders.

     (c) Dividends.  They are shown in Item 6 below.

     Dividends to the Registrant from its insurance subsidiaries are subject to
state regulation, as more fully described in MD&A on page 19.

ITEM 6.  SELECTED FINANCIAL DATA

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                               REVENUE BY SOURCES

<TABLE>
<CAPTION>
                                                         2000     1999     1998     1997     1996
                                                        ------   ------   ------   ------   ------
<S>                                                     <C>      <C>      <C>      <C>      <C>
Individual products...................................  $1,684   $1,468   $1,424   $1,225   $  864
Annuities and investment products.....................     629      511      506      499      442
Benefit partners......................................     537      164      313      473      506
Communications........................................     206      200      195      190      189
Corporate and other...................................      80      117       79       80       77
                                                        ------   ------   ------   ------   ------
Revenues before investment gains......................   3,136    2,460    2,517    2,467    2,078
Realized investment gains.............................     102      101       93      111       47
                                                        ------   ------   ------   ------   ------
          Total Revenues..............................  $3,238   $2,561   $2,610   $2,578   $2,125
                                                        ======   ======   ======   ======   ======
</TABLE>

                             NET INCOME BY SOURCES

<TABLE>
<CAPTION>
                                                              2000   1999   1998   1997   1996
                                                              ----   ----   ----   ----   ----
<S>                                                           <C>    <C>    <C>    <C>    <C>
Individual products.........................................  $287   $242   $221   $184   $128
Annuities and investment products...........................    78     67     71     63     55
Benefit partners............................................    33     25     24     10     22
Communications..............................................    41     38     32     28     28
Corporate and other.........................................     6     33     12     12     27
                                                              ----   ----   ----   ----   ----
Net income before investment gains..........................   445    405    360    297    260
Realized investment gains, net of taxes.....................    67     65     58     73     31
                                                              ----   ----   ----   ----   ----
          Net Income Available to Common Stockholders.......  $512   $470   $418   $370   $291
                                                              ====   ====   ====   ====   ====
</TABLE>

                                        6
<PAGE>   9

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                       SUMMARY OF SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                2000       1999       1998       1997       1996
                                              --------   --------   --------   --------   --------
                                              (IN MILLIONS EXCEPT SHARE AND PER SHARE INFORMATION)
<S>                                           <C>        <C>        <C>        <C>        <C>
Total reportable segment results before gain
  from sales of investments.................  $    445   $    405   $    360   $    297   $    260
Gain from sales of investments, net of
  taxes.....................................        67         65         58         73         31
                                              --------   --------   --------   --------   --------
Net income available to common
  stockholders..............................  $    512   $    470   $    418   $    370   $    291
                                              ========   ========   ========   ========   ========
Income per share of common stock:
Total reportable segment results before gain
  from sales of investments.................  $   4.32   $   3.84   $   3.39   $   2.80   $   2.44
Gain from sales of investments, net of
  taxes.....................................      0.65       0.62       0.55       0.69       0.29
                                              --------   --------   --------   --------   --------
Net income available to common
  stockholders..............................  $   4.97   $   4.46   $   3.94   $   3.49   $   2.73
                                              ========   ========   ========   ========   ========
Income per share of common stock -- assuming
  dilution:
  Total reportable segment results..........  $   4.28   $   3.80   $   3.37   $   2.78   $   2.43
                                              ========   ========   ========   ========   ========
  Net income available to common
     stockholders...........................  $   4.93   $   4.42   $   3.91   $   3.47   $   2.72
                                              ========   ========   ========   ========   ========
Cash dividends paid on common stock.........  $    152   $    138   $    122   $    110   $    100
                                              ========   ========   ========   ========   ========
Cash dividends paid per common share:
  First quarter.............................  $   0.33   $   0.30   $   0.27   $   0.24   $   0.21
  Second quarter............................      0.37       0.33       0.30       0.27       0.24
  Third quarter.............................      0.37       0.33       0.30       0.27       0.24
  Fourth quarter............................      0.37       0.33       0.30       0.27       0.24
                                              --------   --------   --------   --------   --------
          Total.............................  $   1.44   $   1.29   $   1.16   $   1.04   $   0.93
                                              ========   ========   ========   ========   ========
Average common shares outstanding
  (thousands)...............................   103,050    105,150    106,134    106,217    106,611
                                              ========   ========   ========   ========   ========
Total assets................................  $ 27,321   $ 26,446   $ 24,338   $ 23,131   $ 17,562
                                              ========   ========   ========   ========   ========
Debt, capital securities and mandatorily
  redeemable preferred stock................  $    843   $    951   $    919   $    969   $    423
                                              ========   ========   ========   ========   ========
Stockholders' equity........................  $  3,159   $  2,753   $  3,052   $  2,732   $  2,297
                                              ========   ========   ========   ========   ========
Stockholders' equity per share of common
  stock.....................................  $  30.71   $  26.63   $  28.82   $  25.70   $  21.65
                                              ========   ========   ========   ========   ========
</TABLE>

     Note: All share information has been restated to reflect an April 1998
            3-for-2 stock split, effected in the form of a dividend.
   Cash dividends per share may not add due to rounding related to the split.

                                        7
<PAGE>   10

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                            SUPPLEMENTAL INFORMATION

<TABLE>
<CAPTION>
                                                 2000       1999       1998       1997      1996
                                               --------   --------   --------   --------   -------
                                                                  (IN MILLIONS)
<S>                                            <C>        <C>        <C>        <C>        <C>
LIFE INSURANCE IN FORCE (EXCLUDES ANNUITIES):
Traditional..................................  $ 43,083   $ 46,997   $ 38,928   $ 42,648   $19,734
Universal Life...............................    89,741     93,407     85,649     84,721    52,392
Variable Universal Life......................    23,884     17,944     14,569     11,099        --
Benefit Partners.............................    61,812     55,877     24,415     24,359    27,224
                                               --------   --------   --------   --------   -------
          Total Life Insurance In Force......  $218,520   $214,225   $163,561   $162,827   $99,350
                                               ========   ========   ========   ========   =======
LIFE PREMIUMS ON A FAS 60 BASIS:
First Year Life (Note).......................  $    517   $    605   $    575   $    418   $   241
Renewal and Other Life.......................     1,062        931        934        822       507
                                               --------   --------   --------   --------   -------
  Life Insurance.............................     1,579      1,536      1,509      1,240       748
Accident and Health, Including Premium
  Equivalents................................       351        144        422        612       645
                                               --------   --------   --------   --------   -------
          Total Life Insurance Premiums......  $  1,930   $  1,680   $  1,931   $  1,852   $ 1,393
                                               ========   ========   ========   ========   =======
LIFE EARNINGS BY PRODUCT:
Individual...................................  $    287   $    242   $    221   $    184   $   128
Benefit Partners.............................        33         25         24         10        22
                                               --------   --------   --------   --------   -------
          Total Life Earnings................  $    320   $    267   $    245   $    194   $   150
                                               ========   ========   ========   ========   =======
ANNUITY PREMIUMS ON A FAS 60 BASIS:
Fixed Annuity................................  $  1,273   $    858   $    376   $    596   $   557
Variable Annuity (including separate
  accounts)..................................       127        140        142        103        74
                                               --------   --------   --------   --------   -------
          Total Annuity Premiums.............  $  1,400   $    998   $    518   $    699   $   631
                                               ========   ========   ========   ========   =======
INVESTMENT PRODUCT SALES.....................  $  3,677   $  2,361   $  1,816   $  1,110   $    70
                                               ========   ========   ========   ========   =======
COMMUNICATIONS BROADCAST CASH FLOW...........  $     90   $     85   $     76   $     65   $    58
                                               ========   ========   ========   ========   =======
</TABLE>

            Note: First year life premiums include single premiums.

                                        8
<PAGE>   11

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

                          JEFFERSON-PILOT CORPORATION

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Management's discussion and analysis of financial condition and results of
operations for the three years ended December 31, 2000 analyzes the results of
operations, consolidated financial condition, liquidity and capital resources of
Jefferson-Pilot Corporation and consolidated subsidiaries (collectively, JP or
Company). The discussion should be read in conjunction with the Consolidated
Financial Statements and Notes. All dollar amounts are in millions except per
share amounts. All references to Notes are to Notes to the Consolidated
Financial Statements.

COMPANY PROFILE

     The Company has five reportable segments: Individual Products, Annuity and
Investment Products (AIP), Benefit Partners (formerly called Group Products),
Communications, and Corporate and Other. Within the Individual Products segment,
JP offers a wide array of individual life insurance products including variable
life insurance. AIP offers both fixed and variable annuities, as well as other
investment products. Benefit Partners offers group non-medical products such as
term life, disability and dental insurance to the employer marketplace. Various
insurance and investment products are currently marketed to individuals and
businesses in the United States. At December 31, 2000, the Company's principal
life insurance subsidiaries were Jefferson-Pilot Life Insurance Company (JP
Life), Jefferson Pilot Financial Insurance Company (JPFIC) and its subsidiary
Jefferson Pilot LifeAmerica Insurance Company (JPLA), (collectively, JP
Financial). Effective August 1, 2000, Alexander Hamilton Life Insurance Company
of America (AHL) and Guarantee Life Insurance Company (Guarantee) merged into
JPFIC in order to improve efficiencies and reduce administrative expenses and
other costs.

     Communications operations are conducted by Jefferson-Pilot Communications
Company (JPCC) and consist of radio and television broadcasting operations
located in strategically selected markets in the Southeastern and Western United
States, and sports program production.

     Corporate and Other contains the activities of the parent company and
passive investment affiliates, surplus of the life insurance subsidiaries not
allocated to other reportable segments including earnings thereon, financing
expenses on Corporate debt and debt securities including Capital Securities, and
federal and state income taxes not otherwise allocated to business segments.

     Excluding realized gains and losses, JP's 2000's revenues were derived 54%
from Individual Products, 20% from AIP, 17% from Benefit Partners, 7% from
Communications, and 2% from Corporate and Other.

ACQUISITION SUMMARY

     JP's acquisition strategy is designed to enhance core business growth and
deploy excess capital. The focus is to increase distribution, add products, add
technology and provide economies of scale. On December 30, 1999, the Company
acquired Guarantee using the purchase method of accounting. JP integrated
Guarantee's life and annuity operations into the respective segments, while
integrating its prior group life and disability operations of JP Life into
Guarantee's Omaha, Nebraska life, disability and dental operations. During the
first quarter 2000, Jefferson Pilot Securities Corporation, a broker/dealer
subsidiary included in the AIP segment, completed the acquisition of Polaris
Financial Services and Polaris Advisory Services. The discussion of these
acquisitions and other significant transactions in Note 1 is incorporated by
reference.

RESULTS OF OPERATIONS

     In the following discussion "reportable segment results" and "total
reportable segment results" include all elements of net income available to
common stockholders except realized gains on sales of investments (realized
investment gains). Realized investment gains, as defined, are net of related
income taxes and amortization of

                                        9
<PAGE>   12

deferred acquisition costs and value of business acquired. Realized investment
gains are included in the "Corporate and Other" segment. Reportable segment
results is the basis used by management of the Company in assessing the
performance of its business segments. Management believes that reportable
segment results are relevant and useful information. Gains from sale of
investments arise in majority from its Available for Sale equity and bond
portfolios and may be realized in the sole discretion of management. Reportable
segment results as described above may not be comparable to similarly titled
measures reported by other companies.

     The following tables illustrate JP's results before and after the inclusion
of realized investment gains:

<TABLE>
<CAPTION>
                                                               2000      1999      1998
                                                              ------    ------    ------
<S>                                                           <C>       <C>       <C>
Consolidated Summary of Income
  Total reportable segment results..........................  $445.2    $404.0    $360.3
  Realized investment gains (net of applicable income
     taxes).................................................    66.9      65.5      58.0
                                                              ------    ------    ------
  Net income available to common stockholders...............  $512.1    $469.5    $418.3
                                                              ======    ======    ======
Consolidated Earnings Per Share
Basic:
  Total reportable segment results..........................  $ 4.32    $ 3.84    $ 3.39
  Realized investment gains (net of applicable income
     taxes).................................................    0.65      0.62      0.55
                                                              ------    ------    ------
  Net income available to common stockholders...............  $ 4.97    $ 4.46    $ 3.94
                                                              ======    ======    ======
Fully-diluted:
  Total reportable segment results..........................  $ 4.28    $ 3.80    $ 3.37
  Realized investment gains (net of applicable income
     taxes).................................................    0.65      0.62      0.54
                                                              ------    ------    ------
  Net income available to common stockholders...............  $ 4.93    $ 4.42    $ 3.91
                                                              ======    ======    ======
</TABLE>

     Net income available to common stockholders increased 9.1% in 2000 and
12.2% in 1999, and total reportable segment results increased 10.2% in 2000 and
12.1% in 1999, due to increased profitability in the Individual Products, AIP,
Benefit Partners and Communications segments. The increase in 2000 also
reflected the deployment of corporate capital into the more profitable
Individual Products, AIP and Benefit Partners segments primarily through the
acquisition of Guarantee. The Corporate and Other segment declined in 2000 due
to financing costs associated with the Guarantee acquisition, share repurchases
and the redeployment of capital into operating segments. Net realized gains
increased 2.1% in 2000 and 12.9% in 1999.

     Total reportable segment results per share increased 12.5% in 2000 and
13.3% in 1999, reflecting the increase in core business earnings and the share
repurchases in 2000 and 1999. Earnings per share increased 11.4% in 2000 and
13.2% in 1999 and earnings per share assuming dilution increased 11.5% in 2000
and 13.0% in 1999 for the same reasons. Due to share repurchases net of stock
plan issuances, the average number of diluted shares outstanding decreased 2.2%
to 103.9 million shares in 2000 and decreased 0.8% to 106.2 million shares in
1999.

RESULTS BY BUSINESS SEGMENT

     Management assesses profitability by business segment and measures other
operating statistics as detailed in the separate segment discussions that
follow. Sales are one of the statistics we use to track performance. Because of
the nature of our sales, which are primarily long-duration contracts in the
Individual Products and AIP segments, sales in a given quarter do not have a
near term material impact on operating results and therefore are not considered
to be material information. However, trends relating to new product sales over a
longer period of time may be an indicator of future growth and profitability.

     Reportable segments are determined in a manner consistent with the way
management organizes for purposes of making operating decisions and assessing
performance. Invested assets backing insurance liabilities are assigned to
segments in relation to policyholder funds and reserves. Net deferred
acquisition costs incurred, value of business acquired, reinsurance receivables
and communications assets are assigned to the respective segments where those
assets originate. Invested assets are also assigned to back capital allocated to
each segment

                                        10
<PAGE>   13

in relation to JP's philosophy for managing business risks, reflecting
appropriate conservatism. The remainder of invested and other assets are
assigned to the Corporate and Other segment.

  Results by Reportable Segment

<TABLE>
<CAPTION>
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Individual Products.........................................  $287.3   $242.3   $221.3
Annuity and Investment Products.............................    77.9     67.0     71.1
Benefit Partners............................................    32.6     24.5     23.9
Communications..............................................    41.2     37.6     32.3
Corporate and Other.........................................     6.2     32.6     11.7
                                                              ------   ------   ------
Total reportable segment results............................   445.2    404.0    360.3
Net realized investment gains...............................    66.9     65.5     58.0
                                                              ------   ------   ------
Net income available to common stockholders.................  $512.1   $469.5   $418.3
                                                              ======   ======   ======
</TABLE>

  Segment Assets

<TABLE>
<CAPTION>
                                                               2000      1999      1998
                                                              -------   -------   -------
<S>                                                           <C>       <C>       <C>
Individual Products.........................................  $15,054   $14,493   $12,142
Annuity and Investment Products.............................    7,691     7,443     6,495
Benefit Partners............................................      736       606       437
Communications..............................................      212       217       222
Corporate and Other.........................................    3,628     3,687     5,042
                                                              -------   -------   -------
          Total Assets......................................  $27,321   $26,446   $24,338
                                                              =======   =======   =======
</TABLE>

     A more detailed discussion of reportable segment results follows.

  Individual Products

     The Individual Products segment offers a wide array of life insurance
products to individuals through a career agency force, independent agents
recruited through independent marketing organizations and a regional office
network, home service agents, and financial institutions.

     Individual Products include universal life (UL) and variable universal life
(VUL), together referred to as UL-type products, as well as traditional life
products. The operating cycle for life insurance products is long term in
nature; therefore, actuarial assumptions are important to financial reporting
for these products. Traditional products require the policyholder to pay
scheduled premiums over the life of the coverage. Traditional premium receipts
are recognized as revenues and profits are expected to emerge in relation
thereto. Interest-sensitive product (or UL-type product) premiums may vary over
the life of the policy at the discretion of the policyholder and are not
recognized as revenues. Revenues and reportable segment results on these
products arise from mortality, expense and surrender charges to policyholder
fund balances (policy charges). Additionally, JP earns interest spreads and
investment advisory fees on policyholder fund balances. Reportable segment
results for both traditional and UL-type products also includes earnings on
required capital.

                                        11
<PAGE>   14

     Segment results were:

<TABLE>
<CAPTION>
                                            2000       1999       1998       1997      1996
                                          --------   --------   --------   --------   ------
<S>                                       <C>        <C>        <C>        <C>        <C>
Life premiums and other
  considerations........................  $  211.7   $  189.8   $  208.3   $  201.9   $146.5
U.L. and investment product charges.....     623.7      535.8      529.4      446.3    298.8
Investment income, net of expenses......     840.0      736.1      681.1      576.5    418.5
Other income............................       8.6        6.1        4.9        0.0      0.0
                                          --------   --------   --------   --------   ------
Total revenues..........................   1,684.0    1,467.8    1,423.7    1,224.7    863.8
                                          --------   --------   --------   --------   ------
Policy benefits.........................     939.5      796.3      786.1      686.7    497.9
Expenses................................     304.3      301.7      299.0      256.7    173.0
                                          --------   --------   --------   --------   ------
Total benefits and expenses.............   1,243.8    1,098.0    1,085.1      943.4    670.9
                                          --------   --------   --------   --------   ------
Reportable segment results before income
  taxes.................................     440.2      369.8      338.6      281.3    192.9
Provision for income taxes..............     152.9      127.5      117.3       97.1     65.4
                                          --------   --------   --------   --------   ------
Reportable segment results..............  $  287.3   $  242.3   $  221.3   $  184.2   $127.5
                                          ========   ========   ========   ========   ======
</TABLE>

     The following table summarizes key information for Individual Products:

<TABLE>
<CAPTION>
                                                           2000       1999       1998
                                                         --------   --------   --------
<S>                                                      <C>        <C>        <C>
Life insurance premium sales:
  Recurring premium sales..............................  $    128   $    124   $    137
  Single premium sales.................................        36         56         41
Individual traditional insurance premiums..............       210        187        204
Average UL policyholder fund balances..................     8,808      7,783      7,077
Average VUL separate account assets....................     1,383        994        710
                                                         --------   --------   --------
                                                           10,191      8,777      7,787
Average face amount insurance in force --
  Total................................................   157,140    139,460    138,540
  UL-type policies.....................................   112,594    101,204     97,738
Average assets.........................................    14,890     12,803     11,639
</TABLE>

     Individual Products reportable segment results increased 18.6% in 2000 due
primarily to the acquisition of Guarantee along with growth of the business in
force and increased 9.5% in 1999 due to the growth of business in force.

     Recurring premium sales increased in 2000 due primarily to an increase in
VUL sales resulting from new product introductions and a heightened marketing
emphasis versus a decrease in 1999. Single premium sales relating to benefit
funding products, such as Bank Owned Life Insurance (BOLI), decreased 35.7% in
2000 and increased 36.6% in 1999. Due to the nature of these single premium
products, volatility between periods is normal. Overall, life insurance premium
sales decreased 8.9% in 2000 and increased 1.1% in 1999.

     Revenues include traditional insurance premiums, policy charges, and
investment income. Individual revenues increased $216.2 or 14.7% and $44.1 or
3.1% in 2000 and 1999 due to growth in average UL policyholder fund balances and
average VUL separate account assets, in addition to the Guarantee acquisition.
The growth in average UL policyholder fund balances and VUL separate accounts,
which increased 16.1% in 2000 and 12.7% in 1999, was a result of net
policyholder receipts and interest credited. The 2000 increase in average UL
policyholder fund balances also reflected the acquisition of Guarantee.

     Individual traditional premiums increased 12.3% in 2000 resulting primarily
from the Guarantee acquisition. Individual traditional premiums decreased 8.3%
in 1999 as sales were more concentrated among UL type products. Policy charges,
which include mortality, expense and surrender charges, improved 16.4% in 2000
and 1.2% in 1999. 2000's increases are primarily from the Guarantee acquisition
and growth of the business. 1999's increases are a result of growth in UL type
policies in force.

                                        12
<PAGE>   15

     Net investment income increased 14.1% and 8.1% in 2000 and 1999, following
the growth in policyholder funds. Total portfolio yield on traditional assets
increased 1 basis point to 7.72% in 2000 and declined 11 basis points in 1999
due to the reduction in older policies in force. The average investment spread
on UL-type products increased 5 basis points to 1.97% in 2000 and increased 29
basis points to 1.92% in 1999. Interest spreads are impacted by portfolio yields
and also may vary over time due to competitive strategies and changes in product
design.

     Policy benefits increased 18.0% and 1.3% in 2000 and 1999. The increase is
due to the Guarantee acquisition and growth of business in force. Traditional
policy benefits were 102.8% of premiums in 2000 versus 106.5% and 95.8% in 1999
and 1998. The decrease in 2000 was due primarily to favorable mortality and the
Guarantee acquisition. The increase in 1999 was primarily a result of higher
mortality. Policy benefits on UL-type products increased slightly to 7.1% of
average policyholder funds and separate accounts in 2000 versus 6.8% and 7.6% in
1999 and 1998. Policy benefits include interest credited to policyholder
accounts on UL-type products, whereas premium receipts on these products are
credited directly to policyholder accounts and not recorded as revenues.

     Total expenses (including the net deferral and amortization of policy
acquisition costs) increased 0.9% in 2000 and 1999. Expenses on individual
traditional products were 29.7%, 30.0% and 31.3% of premiums in 2000, 1999 and
1998. For UL-type products, expenses as a percentage of policyholder funds and
separate accounts were 2.3%, 2.7% and 3.0% in 2000, 1999 and 1998. The
improvement in 2000 reflects the Guarantee acquisition, growth in policyholder
funds and separate accounts, as well as an adjustment to deferred acquisition
cost (DAC) amortization on UL-type products. This adjustment is a result of
better than expected experience on UL-type products, which allowed a slow down
in DAC amortization. The 1999 decrease reflects overall lower expenses as well
as growth in policyholder funds and separate accounts.

     Average Individual Products assets grew 16.3% in 2000 and 10.0% in 1999.
2000's increase was due to the Guarantee acquisition, net receipts on UL-type
products, new sales and growth in existing policyholder funds. 1999's growth was
due to sales of UL-type products, and growth in existing policyholder funds from
interest credited and equity returns. The return on average Individual Products
assets for 2000 and 1999 was 1.9%.

     The Company spent much of 2000 reviewing strategies in order to position JP
for continued growth, and in particular to accelerate life insurance sales
growth above the current increase of approximately 4%. The Company is embarking
on a significant set of new initiatives designed to boost individual life
insurance sales. These initiatives focus particularly on relationships with more
productive agents, by providing a higher level of marketing support, as well as
new ways of differentiating service for these key agents. Further, JP will focus
on selective markets in which the Company will tailor specific products and
marketing programs: wealth accumulation, wealth preservation and business
planning. The Company will invest approximately $5 million in 2001, primarily in
new field recruiting and relationship management marketing support for agents.
Related JP initiatives include an increased emphasis on employee development,
continued effective cost control and application of "lean manufacturing"
concepts to improve quality and reliability throughout our operating processes.

                                        13
<PAGE>   16

  Annuity and Investment Products

     Annuity and Investment Products offers its products through financial
institutions, independent agents, career agents, investment professionals and
broker/dealers. Reportable segment results were:

<TABLE>
<CAPTION>
                                                 2000     1999     1998     1997     1996
                                                ------   ------   ------   ------   ------
<S>                                             <C>      <C>      <C>      <C>      <C>
Policy charges, premiums and other
  considerations..............................  $ 26.9   $ 18.5   $ 17.6   $ 35.1   $ 66.7
Net investment income.........................   482.2    418.4    425.0    429.3    371.1
Concession and other income...................   119.5     74.4     63.0     35.1      4.2
                                                ------   ------   ------   ------   ------
Total revenues................................   628.6    511.3    505.6    499.5    442.0
                                                ------   ------   ------   ------   ------
Policy benefits...............................   341.6    306.0    299.0    326.3    317.0
Expenses......................................   166.8    101.9     96.9     75.2     40.9
                                                ------   ------   ------   ------   ------
Total benefits and expenses...................   508.4    407.9    395.9    401.5    357.9
                                                ------   ------   ------   ------   ------
Reportable segment results before income
  taxes.......................................   120.2    103.4    109.7     98.0     84.1
Provision for income taxes....................    42.3     36.4     38.6     34.5     29.0
                                                ------   ------   ------   ------   ------
Reportable segment results....................  $ 77.9   $ 67.0   $ 71.1   $ 63.5   $ 55.1
                                                ======   ======   ======   ======   ======
</TABLE>

     Reportable segment results increased 16.3% in 2000 and decreased 5.8% in
1999. The following table summarizes key information for AIP:

<TABLE>
<CAPTION>
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Fixed annuity premium receipts..............................  $1,273   $  858   $  376
Variable annuity premium receipts...........................     106      111       88
                                                              ------   ------   ------
                                                               1,379      969      464
Average policyholder fund balances..........................   6,338    5,630    5,698
Average separate account policyholder fund balances.........     694      587      418
                                                              ------   ------   ------
                                                               7,032    6,217    6,116
Investment product sales....................................   3,676    2,361    1,816
Average assets..............................................   7,554    6,622    6,516
</TABLE>

     Annuity revenues are derived from investment income on segment assets,
policy charges, and concession income earned on investment product sales by
Jefferson Pilot Securities Corporation (JPSC), a registered broker/dealer, and
related entities. Revenues increased 22.9% in 2000 primarily due to the
Guarantee acquisition, as well as higher concession income relating to the
Polaris acquisition, an increase in surrender charges relating to an unusually
high surrender rate and a general growth in average policyholder fund balances
including separate accounts. The 1999 increase in revenues was in line with the
increase in average policyholder funds and separate accounts. The increases in
policyholder fund balances and average assets resulted from new receipts and
interest credited less benefits and withdrawals paid, as well as the Guarantee
acquisition. Fixed annuity receipts increased 48.4% and 128.2% in 2000 and 1999
due to significant sales increases through independent and career agents and
financial institutions, of both older products and new products introduced in
1999. In total, fixed and variable annuity receipts increased by 42.3% in 2000
and 108.8% in 1999. Fixed annuity benefits and surrenders as a percentage of
beginning fund balances rose to 21.2% in 2000 from 15.8% in 1999 and 1998. The
surrender rate in the AIP segment is influenced by many factors, including the
portion of the business that has low or no remaining surrender charges, and
competition from annuity products which pay interest rate bonuses and from other
investment products. JP maintains asset/liability management practices that
reflect the characteristics of the AIP liabilities. Concession and other income
increased 60.6% and 18.1% in 2000 and 1999, due to a higher utilization of JPSC
for non-insurance transactions and the completion of the Polaris integration in
2000.

     Total AIP benefits and expenses increased 24.6% in 2000 due primarily to
the Guarantee acquisition and growth of the business, versus 3.0% in 1999
consistent with the growth in average policyholder fund balances. Policy
benefits, which are mainly comprised of interest credited to policyholder
accounts, as a percentage of average policyholder fund balances were 5.4% in
2000 and 1999 and 5.2% in 1998. Interest credited represented 5.3% of average
policyholder fund balances in 2000 and 1999, versus 5.1% in 1998. Effective
spreads were
                                        14
<PAGE>   17

2.14% in 2000 and 1999 versus 2.11% in 1998. The increase in 2000 resulted from
blending of the Guarantee acquisition and higher yields on new investments.
Spreads on new products sold in 2000 averaged somewhat lower than on the
existing block of business, in part due to one product's design with lower
commission expenses and lower required spread.

     Total AIP expenses increased 63.7% in 2000 and 5.2% in 1999, with insurance
expenses as a percentage of average policyholder fund balances including
separate accounts being 2.4% in 2000 versus 1.6% in 1999 and 1998. The growth in
expenses was due to an increase in concessions related to broker/dealer
operations, similar to the increases in concession and other income, and an
increase in amortization of DAC due to increased surrenders.

     AIP posted returns on average assets of 1.0% for 2000 and 1999 versus 1.1%
in 1998.

     The combined earnings of the broker/dealer and related entities which are
included in the segment results were $6.3, $4.4 and $3.9 for 2000, 1999 and
1998. The increase relates primarily to the Polaris acquisition in 2000 and
higher concession income.

     The strategic initiatives discussed for the Individual Products segment
involving JP's relationship with key agents, additional marketing support, and
operating process improvements are also targeted to impact the AIP segment.

  Benefit Partners

     The Benefit Partners segment offers group non-medical products such as term
life, disability and dental insurance to the employer marketplace. These
products are marketed primarily through a national distribution system of
regional group offices. These offices develop business through employee benefit
brokers, third party administrators and other employee benefit firms.

     Reportable segment results were:

<TABLE>
<CAPTION>
                                                 2000     1999     1998     1997     1996
                                                ------   ------   ------   ------   ------
<S>                                             <C>      <C>      <C>      <C>      <C>
Premiums and other considerations.............  $485.5   $133.7   $274.8   $432.4   $464.7
Investment income, net of expenses............    51.3     30.4     38.1     41.0     41.2
                                                ------   ------   ------   ------   ------
Total revenues................................   536.8    164.1    312.9    473.4    505.9
                                                ------   ------   ------   ------   ------
Policy benefits...............................   359.6     93.7    206.7    370.3    384.9
Expenses......................................   127.2     33.0     69.8     88.7     87.7
                                                ------   ------   ------   ------   ------
Total benefits and expenses...................   486.8    126.7    276.5    459.0    472.6
                                                ------   ------   ------   ------   ------
Reportable segment results before income
  taxes.......................................    50.0     37.4     36.4     14.4     33.3
Provision for income taxes....................    17.4     12.9     12.5      4.9     11.2
                                                ------   ------   ------   ------   ------
Reportable segment results....................  $ 32.6   $ 24.5   $ 23.9   $  9.5   $ 22.1
                                                ======   ======   ======   ======   ======
</TABLE>

     Benefit Partners reportable segment results increased $8.1 or 33.1% in
2000, primarily as a result of the Guarantee acquisition, and growth in this
business. 1999 and 1998 reflect our decision to exit the group medical business
in late 1997. The following table summarizes key information for Benefit
Partners:

<TABLE>
<CAPTION>
                                                              2000    1999    1998
                                                              -----   -----   -----
<S>                                                           <C>     <C>     <C>
Life, Disability, and Dental:
  Annualized sales..........................................  $ 120   $  15   $  17
  Loss ratio................................................   73.4%   85.2%   83.4%
Total expenses, % of premiums and equivalents...............   26.2%   18.4%   15.4%
Average assets..............................................  $ 708   $ 389   $ 482
Premium income and equivalents..............................  $ 486   $ 179   $ 452
</TABLE>

     Benefit Partners revenues increased $372.7 or 227.1% in 2000, reflecting
the acquisition of Guarantee, including premium growth of $351.2 or 269.1%. 1999
revenues declined $148.8 or 47.6% including declines in premiums of $139.0 or
51.6% due to exiting the group medical business in 1999 and 1998. Including
equivalent
                                        15
<PAGE>   18

premiums on self-insured health policies, premiums increased 171.5% and
decreased 60.4% in 2000 and 1999. Annualized sales for the core life, disability
and dental lines of business grew $105 or 700.0% and declined $2 or 11.8% in
2000 and 1999, with new sales now reflecting Guarantee. If sales for Guarantee
were included in 1999, the increase in 2000 would be 24.0%, reflecting core
growth in life, disability and dental sales.

     Policy benefits increased 283.8% in 2000 with the addition of the Guarantee
acquisition and decreased 54.7% in 1999 primarily due to declining group medical
business. The life, disability and dental incurred loss ratio was 73.4% versus
85.2% in 2000 and 1999. The results for 1999 were comprised solely of the JP
Life business, which has a significantly larger average policy size than that of
Guarantee and is a more mature block of business. Both of these factors
contributed to the higher 1999 loss ratio.

     Total expenses (including the net deferral and amortization of policy
acquisition costs) increased 285.5% in 2000 primarily due to the Guarantee
acquisition. 1999 total expenses decreased 52.7% as a result of continued
aggressive expense management and the declining block of medical business. As a
percentage of premiums and equivalents, total expenses were 26.2% for 2000 and
18.4% for 1999 due to the change in average policy size with the addition of the
Guarantee contracts.

  Communications

     JPCC operates radio and television broadcast properties and produces
syndicated sports and entertainment programming. Reportable segment results
were:

<TABLE>
<CAPTION>
                                                 2000     1999     1998     1997     1996
                                                ------   ------   ------   ------   ------
<S>                                             <C>      <C>      <C>      <C>      <C>
Communications revenues (net).................  $210.4   $205.0   $199.8   $195.6   $188.9
Operating costs and expenses..................   120.9    119.9    124.1    130.6    130.9
                                                ------   ------   ------   ------   ------
Broadcast cash flow...........................    89.5     85.1     75.7     65.0     58.0
Depreciation and amortization.................    11.1     11.4     11.5     11.0      9.3
Corporate general and administrative
  expenses....................................     5.5      5.8      5.1      4.1      3.8
Net interest expense (income).................     4.6      5.0      5.1      5.1     (0.5)
                                                ------   ------   ------   ------   ------
Operating revenue before income taxes.........    68.3     62.9     54.0     44.8     45.4
Provision for income taxes....................    27.1     25.3     21.7     17.3     17.2
                                                ------   ------   ------   ------   ------
Reportable segment results....................  $ 41.2   $ 37.6   $ 32.3   $ 27.5   $ 28.2
                                                ======   ======   ======   ======   ======
</TABLE>

     Reportable segment results increased 9.6% in 2000 and 16.4% in 1999. During
the last half of 2000, the Company experienced a slowing in the rate of revenue
growth from that experienced earlier and in previous years. This is consistent
with a general slowing in economic activity throughout the country. 1999's
increase resulted from the favorable advertising environment and the strong
local economies in which our stations operated. Combined revenues for Radio and
Television grew 5.9% and 3.5% in 2000 and 1999. Disregarding political revenues,
Radio and Television grew 3.8% and 5.4% in 2000 and 1999. Television revenues
declined for much of 2000 and 1999 despite strong performances in our two
smaller markets, which were offset by disappointing sales in our largest market,
reflecting activity associated with rebuilding the sales force in that market.

     Revenues from Sports operations decreased 16.7% in 2000 and 1.1% in 1999.
The decline in 2000 revenues resulted from the one time only payment received in
1999 for the sale of certain entertainment production activities and a change in
our relationship with the Carolina Panthers that resulted in lower revenues but
higher net profits for that product. The decline in 1999 resulted from the sale
of certain entertainment production activities.

     Broadcast cash flow grew by 5.2% and 12.4% in 2000 and 1999.

     Total expenses, excluding interest expense, increased .3% and declined 2.6%
in 2000 and 1999, respectively. Expenses as a percent of communication revenues
were 65.4%, 66.9% and 70.4% for 2000, 1999 and 1998. The declines are
attributable to expense management and a change in the mix of business away from
lower margin sports products toward higher margin broadcast business.

                                        16
<PAGE>   19

  Corporate and Other

     The following table summarizes results for this segment.

<TABLE>
<CAPTION>
                                                  2000     1999     1998     1997     1996
                                                 ------   ------   ------   ------   ------
<S>                                              <C>      <C>      <C>      <C>      <C>
Earnings on investments........................  $112.7   $122.6   $ 95.1   $ 87.1   $ 84.0
Interest expense on debt and Exchangeable
  Securities...................................   (51.9)   (31.3)   (33.1)   (26.9)   (24.2)
Operating expenses.............................   (28.0)   (15.8)   (23.3)   (18.6)   (19.2)
Federal and state income tax expense...........    (2.0)   (18.4)    (1.3)    (3.5)   (10.3)
                                                 ------   ------   ------   ------   ------
                                                   30.8     57.1     37.4     38.1     30.3
Dividends on Capital Securities and mandatorily
  redeemable preferred stock...................   (24.6)   (24.5)   (25.7)   (25.7)    (3.4)
                                                 ------   ------   ------   ------   ------
Reportable segment results.....................     6.2     32.6     11.7     12.4     26.9
Realized investment gains, net.................    66.9     65.5     58.0     73.4     30.7
                                                 ------   ------   ------   ------   ------
Reportable segment results, including realized
  gains........................................  $ 73.1   $ 98.1   $ 69.7   $ 85.8   $ 57.6
                                                 ======   ======   ======   ======   ======
</TABLE>

     The following table summarizes assets assigned to this segment at the end
of each year:

<TABLE>
<CAPTION>
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Parent company, passive investment companies and Corporate
  line assets of insurance subsidiaries.....................  $1,473   $1,720   $1,990
Unrealized gain (loss) on fixed interest investments........      42     (231)     293
Co-insurance receivables on acquired blocks.................   1,155    1,378    1,944
Employee benefit plan assets................................     383      350      448
Goodwill arising from insurance acquisitions................     279      267      192
Other.......................................................     296      203      175
                                                              ------   ------   ------
          Total.............................................  $3,628   $3,687   $5,042
                                                              ======   ======   ======
</TABLE>

     Total assets for the Corporate and Other segment decreased 1.6% in 2000 and
decreased 26.9% in 1999. 2000's decline occurred primarily due to asset
transfers to support internal growth of other reportable segments and surrenders
of 100% co-insured COLI policies net of increases in market values of Available
for Sale securities. 1999's decline resulted primarily from surrenders of 100%
co-insured COLI policies, declines in market values of Available for Sale
securities, net of increases in employee benefit plan assets. Unrealized gains
and losses on all Available for Sale fixed income securities are assigned to
this segment, and increased $273 during 2000 and declined $524 during 1999. The
increase during 2000 is primarily the result of declining interest rates, net of
declines in market values of financial services stocks and the 1999 decline
resulted from increases in market interest rates and declines in market values
of financial services stocks.

     Reportable segment results including realized gains decreased 25.5% in 2000
and increased 40.7% in 1999. Investment earnings decreased 8.1% in 2000 and
improved 28.9% in 1999. 2000's decline was attributable to capital being
allocated to other segments through the Guarantee acquisition and a change in
allocation methodology for intra-company rents between this and other segments
of $3.3. 1999's increase was due to the accumulation of corporate capital, and
increased income on equity method investments. Interest expense on debt and
exchangeable securities increased $20.6 in 2000 and decreased $1.8 in 1999 as
the level of commercial paper borrowings and life company reverse repurchase
agreements increased with the acquisition of Guarantee, share repurchases and
the January 2000 redemption of Automatic Common Exchange Securities (ACES).
Operating expenses, which increased 77.2% in 2000 and decreased 32.2% in 1999,
vary with the level of Corporate activities. Such activities included
approximately $3 for developing strategic marketing initiatives during 2000.
Federal and state income tax expense includes the tax benefit of preferred
dividends on Capital Securities, which are recorded gross of related tax
effects. Federal and state income taxes decreased $16.4 in 2000 due primarily to
the tax effect of lower Corporate and Other segment pre-tax operating results.
Federal and state income taxes increased $17.1 in 1999 due to higher operating
results as well as changes in effective tax rates on assets assigned to this
segment.

                                        17
<PAGE>   20

     The results of this segment fluctuate from quarter to quarter and year to
year due to expenses associated with strategic activities, advertising expenses,
income recorded on equity method investments, transfers of assets to and from
business segments as well as refinements in asset assignments and investment
income allocation methodologies to other reportable segments.

FINANCIAL POSITION, CAPITAL RESOURCES AND LIQUIDITY

     JP's primary resources are investments related to its Individual Products,
AIP and Benefit Partners segments, properties and other assets utilized in all
segments and investments backing corporate capital. The Investments section
reviews the Company's investment portfolio and key strategies.

     Total assets increased $875 or 3.3% in 2000, reflecting growth in separate
accounts, policyholder contract deposits and investments. In 1999, total assets
increased $2,108 or 8.7% as a result of the Guarantee acquisition, increases in
Separate Account assets and policyholder contract deposits, and cash provided by
operating activities.

     The Individual Products, AIP and Benefit Partners segments defer the costs
of acquiring new business, including commissions, first year bonus interest,
certain costs of underwriting and issuing policies plus agency office expenses
(referred to as DAC). Amounts deferred were $1,219 and $1,091 at December 31,
2000 and 1999, an increase of 11.7%. The increase was due to strong sales of VUL
and fixed annuity products net of the effect of changes in unrealized gains on
Available for Sale securities.

     Value of business acquired (VOBA) represents the actuarially-determined
present value of future gross profits of each business acquired. VOBA was $740
at December 31, 2000, down 22.0% from 1999 due to amortization and the change in
unrealized gains on Available for Sale securities. At December 31, 1999 VOBA was
$949, which included $206 attributable to the Guarantee acquisition. Excluding
Guarantee, VOBA decreased 0.4%, primarily as a result of amortization offset by
changes in unrealized gains on Available for Sale securities. Note 6 contains
rollforwards of DAC and VOBA, and is incorporated by reference.

     Goodwill (cost of acquired businesses in excess of the fair value of net
assets) was $323 and $303 at December 31, 2000 and 1999, with the net increase
due to an adjustment to Guarantee's preliminary allocation of goodwill and the
Polaris acquisition. Goodwill as a percentage of shareholders' equity was 10.2%
and 11.0% at year-end 2000 and 1999.

     Carrying amounts of goodwill, VOBA and DAC are regularly reviewed for
indications of value impairment, with consideration given to the financial
performance of acquired properties, future gross profits of insurance in force
and other factors. Reductions, which flow through earnings, have been made where
appropriate, including for the higher level of annuity withdrawals.

     At December 31, 2000 and 1999, JP had reinsurance receivables of $947 and
$1,057 and policy loans of $184 and $192 which are related to the businesses of
JP Financial that were coinsured with Household International (HI) affiliates.
HI has provided payment, performance and capital maintenance guarantees with
respect to the balances receivable. JP regularly evaluates the financial
condition of its reinsurers and monitors concentrations of credit risk related
to reinsurance activities. No significant credit losses have resulted from
reinsurance activities during the three years ended December 31, 2000.

CAPITAL RESOURCES

  Stockholders' Equity

     JP's capital adequacy is illustrated by the following table:

<TABLE>
<CAPTION>
                                            2000      1999      1998      1997      1996
                                           -------   -------   -------   -------   -------
<S>                                        <C>       <C>       <C>       <C>       <C>
Total assets less separate accounts......  $25,010   $24,174   $22,584   $21,849   $17,070
Total stockholders' equity...............    3,159     2,753     3,052     2,732     2,297
Ratio of stockholders' equity to
  assets.................................     12.6%     11.4%     13.5%     12.5%     13.5%
</TABLE>

                                        18
<PAGE>   21

     The ratio of equity to assets has increased primarily due to changes in
unrealized gains on securities and a decline in stock repurchases from 1999. The
decline in 1999 was due to an increase in unrealized losses on securities and an
increase in stock repurchases. Stockholders' equity increased $79 in 2000 and
declined $462 in 1999 due to changes in values of Available for Sale securities.
Additionally, $44 in 2000 (734,000 shares at an average cost of $60.10) and $183
in 1999 (2,801,400 shares at an average cost of $65.50) was used to purchase
common shares outstanding. In February 2001, JP's Board of Directors updated its
ongoing share repurchase authorization to cover 5 million shares of common
stock, and the Company intends to continue to make opportunistic repurchases.

     JP considers existing capital resources to be more than adequate to support
the current level of its business activities. The business plan places priority
on redirecting certain capital resources invested in bonds and stocks into its
core businesses, which would be expected to produce higher returns over time.

     The Individual Products, AIP and Benefit Partners segments are subject to
regulatory constraints. The Company's insurance subsidiaries have statutory
surplus and risk based capital levels well above required levels. These capital
levels together with the rating agencies' assessments of the Company's business
strategies have enabled the major life insurance affiliates to attain the
following claims paying ratings:

<TABLE>
<CAPTION>
                                                              JP LIFE   JPFIC   JPLA
                                                              -------   -----   ----
<S>                                                           <C>       <C>     <C>
A.M. Best...................................................    A++      A++    A++
Standard & Poor's...........................................    AAA      AAA    AAA
Fitch.......................................................    AAA      AAA    AAA
</TABLE>

  Debt and Exchangeable Securities

     Commercial paper outstanding was $405 and $361 at December 31, 2000 and
1999 with weighted average interest rates of 6.21% and 5.80%. The increase in
commercial paper is due primarily to the retirement of ACES as noted below, and
share repurchases. The maximum amount outstanding during 2000 and 1999 was $525
and $369.

     JP insurance subsidiaries have sold U. S. Treasury obligations and
collateralized mortgages under repurchase agreements involving various
counterparties, accounted for as financing arrangements. Proceeds are used to
purchase securities with longer durations as an asset/liability management
strategy and to provide acquisition financing. The maximum amounts outstanding
were $467 and $515 during 2000 and 1999 following a substantial increase in 1999
to help fund the Guarantee acquisition. The securities involved had a fair value
and amortized cost of $415 and $404 at year end 2000 versus $530 and $531 at the
end of 1999.

     At December 31, 2000 and 1999, the Company had $139 and $290 of
Exchangeable securities and other debt outstanding. This includes $139 and $137
at December 31, 2000 and 1999 of Mandatorily Exchangeable Debt Securities (MEDS)
and $152 of Automatic Common Exchange Securities (ACES) at December 31, 1999.
The ACES matured on January 21, 2000, and security holders were repaid in cash
using commercial paper proceeds of $146. The Exchangeable Securities are further
described in Notes 8 and 9 which are incorporated by reference. Additionally,
$300 of guaranteed preferred beneficial interest in subordinated debentures
(Capital Securities) remained outstanding at December 31, 2000.

     At December 31, 2000 and 1999, net advances from subsidiaries were $346 and
$329, all of which are eliminated in consolidation.

     While the Company has no commitments for additional financing, additional
funds may be borrowed to finance acquisitions or for other corporate purposes.

LIQUIDITY

     Liquidity requirements are met primarily by positive cash flows from the
operations of subsidiaries. Overall sources of liquidity are sufficient to
satisfy operating requirements. Primary sources of cash from the insurance
operations are premiums, other insurance considerations, receipts for
policyholder accounts, investment sales and maturities and investment income.
Primary uses of cash include purchases of investments, payment of insurance

                                        19
<PAGE>   22

benefits, operating expenses, withdrawals from policyholder accounts, costs
related to acquiring new business, and income taxes. Primary sources of cash
from the Communications operations are revenues from advertising. Primary uses
of cash include payment of agency commissions, cost of sales, operating expenses
and income taxes.

     Cash provided by operations in 2000, 1999 and 1998 was $501, $481 and $438.
2000's increase of $20 reflects changes in payables and receivables related to
the timing of investment commitments net of higher policy acquisition costs. The
1999 increase reflects growth in the Company's business segments as reflected in
net income.

     Net cash used in investing activities was $611, $1,111 and $719 in 2000,
1999 and 1998, with the decline due to the timing of investment commitments and
repayment of commercial paper borrowings. 1999 included the acquisition of
Guarantee, net of cash received.

     Net cash provided by financing activities was $74, $671 and $293 in 2000,
1999 and 1998. The 2000 decrease of $597 is primarily due to net borrowing
repayments of $232 versus 1999 short-term borrowings of $303 for the Guarantee
acquisition. Cash inflows from policyholder contract deposits net of withdrawals
were $512, $704 and $318. The 2000 decrease is a result of higher annuity
surrenders and decreased UL-type contract receipts. The 1999 increase is a
result of higher annuity sales, lower withdrawals of policyholder funds, and
higher UL-type contract receipts due to the shift from traditional to UL-type
business.

     In order to meet the parent company's dividend payments, debt servicing
obligations and other expenses, internal dividends are received from
subsidiaries. Total cash dividends paid by subsidiaries were $649 in 2000, $279
in 1999 and $235 in 1998. 2000 included extraordinary dividends of $200 from JP
Life representing all its publicly traded equity securities and $100 from JP
Financial in connection with the merger of AHL and Guarantee into JPFIC. JP
Life, JPFIC and JPCC were the primary sources of dividends in 2000. The
Company's life insurance subsidiaries are subject to laws in the states of
domicile that limit the amount of dividends that can be paid without the prior
approval of the respective State's Insurance Commissioner. The Company has no
reason to believe that such approval will be withheld.

     Cash and cash equivalents were $26, $62 and $21 at December 31, 2000, 1999
and 1998. Additionally, fixed income and equity securities held by the parent
company and non-regulated subsidiaries were $549, $446 and $538. The increase
reflects the extraordinary dividends mentioned above. These securities,
including $139 (at December 31, 2000) of Bank of America Corporation common
stock which supports the Exchangeable Securities, are considered to be sources
of liquidity to support the Company's strategies.

     Total debt and equity securities Available for Sale at December 31, 2000
and 1999 were $13,529 and $12,568.

  Investments

     JP's strategy for managing the insurance investment portfolio is to
dependably meet pricing assumptions while achieving the highest possible
after-tax returns over the long term. Cash flows are invested primarily in fixed
income securities. The nature and quality of investments held by insurance
subsidiaries must comply with state regulatory requirements. The Company has a
formal investment policy that governs overall quality and diversification.

                                        20
<PAGE>   23

     JP held the following carrying amounts of investments:

<TABLE>
<CAPTION>
                                                    DECEMBER 31, 2000      DECEMBER 31, 1999
                                                    ------------------     ------------------
<S>                                                 <C>          <C>       <C>          <C>
Publicly-issued bonds.............................   $12,445       61%      $11,943       61%
Privately-placed bonds............................     3,634       18         3,220       16
Commercial mortgage loans.........................     2,771       13         2,543       13
Common stock......................................       549        3           730        4
Policy loans......................................       923        4           906        5
Preferred stock...................................        31       --            26       --
Real estate.......................................       135        1           133        1
Other.............................................        11       --            35       --
Cash and equivalents..............................        26       --            62       --
                                                     -------      ---       -------      ---
          Total...................................   $20,525      100%      $19,598      100%
                                                     =======      ===       =======      ===
</TABLE>

     The strategy of identifying market sectors and niches that provide
investment opportunities to meet the portfolios' growth, quality and yield
requirements could result in increasing percentages of private placements and
commercial mortgage loans.

     JP's Investment Policy Statement requires an average quality fixed income
portfolio (excluding mortgage loans) of "A" or higher. Currently, the average
quality is "A1". The Policy also imposes limits on the amount of lower quality
investments and requires diversification by issuer and asset type. The Company
monitors "higher risk" investments for compliance with the Policy and for proper
valuation. Securities that experience other than temporary declines in value are
adjusted to net realizable values through a charge to earnings. Commercial
mortgage loans in foreclosure are carried at the net present value of expected
future cash flows.

     Carrying amounts of investments categorized as "higher risk" assets were:

<TABLE>
<CAPTION>
                                                 DECEMBER 31, 2000      DECEMBER 31, 1999
                                                 ------------------     ------------------
<S>                                              <C>         <C>        <C>         <C>
Bonds near or in default.......................  $    21       0.1%     $     5        --%
Bonds below investment grade...................      751       3.7          764       3.9
Mortgage loans 60 days delinquent or in
  Foreclosure..................................        1        --           --        --
Mortgage loans restructured....................       10        --            9       0.1
Foreclosed properties..........................        2        --           --        --
                                                 -------     -----      -------     -----
Sub-total, "higher risk assets"................      785       3.8          778       4.0
All other investments..........................   19,740      96.2       18,820      96.0
                                                 -------     -----      -------     -----
          Total cash and investments...........  $20,525     100.0%     $19,598     100.0%
                                                 =======     =====      =======     =====
</TABLE>

     The Policy permits use of derivative financial instruments such as futures
contracts and interest rate swaps in conjunction with specific direct
investments. Actual use of derivatives has been limited to managing well-defined
interest rate risks. Interest rate swaps with a current notional value of $185,
$186 and $186 were open as of December 31, 2000, 1999 and 1998. There were no
terminations of derivative financial instruments in 2000, 1999 or 1998.
Potential termination of these arrangements as of December 31, 2000 under then
current interest rates would result in a potential gain of $5.

     Mortgage backed securities (including Collateralized Mortgage Obligations)
at December 31, which are included in debt securities Available for Sale, were
as follows:

<TABLE>
<CAPTION>
                                                               2000     1999
                                                              ------   ------
<S>                                                           <C>      <C>
Federal agency issued mortgage backed securities............  $2,492   $2,498
Corporate private-labeled mortgage backed securities........   2,230    1,838
                                                              ------   ------
          Total.............................................  $4,722   $4,336
                                                              ======   ======
</TABLE>

     The Company's investment strategy with respect to mortgage backed
securities focuses on actively traded, less volatile issues that produce
relatively stable cash flows. The majority of mortgage backed security holdings

                                        21
<PAGE>   24

are sequential and planned amortization class tranches of federal agency
issuers. The mortgage backed security portfolio has been constructed with
underlying mortgage collateral characteristics and structure in order to lower
cash flow volatility over a range of interest rate levels.

     Effective January 1, 2001, the Company adopted SFAS 133, "Accounting for
Derivative Instruments and for Hedging Activities", and the discussion in the
New Accounting Pronouncements section of Note 2 is incorporated by reference.

MARKET RISK EXPOSURES

     Since JP's assets and liabilities are largely monetary in nature, the
Company's financial position and earnings are subject to risks resulting from
changes in interest rates at varying maturities, changes in spreads over U.S.
Treasuries on new investment opportunities, changes in the yield curve and
equity pricing risks. During 2000, 10 year U.S. Treasury rates decreased 148
basis points versus an increase of 179 basis points in 1999. In 2000, risk
premiums over rates that could otherwise be earned on US Treasury securities
increased due to continued poor liquidity conditions and expectations of
deteriorating credit conditions in the market. In 1999, risk premiums over rates
that could otherwise be earned on US Treasury securities remained favorable for
investors compared to 1998 in response to heavy corporate debt issuance.

     In a falling interest rate environment, the risk of prepayment on some
fixed income securities increases, causing funds to be reinvested at lower
yields. The Company limits this risk by concentrating the fixed income portfolio
on non-callable securities, by carefully selecting CMO's that are structured to
minimize cash flow volatility and by purchasing securities that provide for
"make-whole" type prepayment fees. Falling interest rates can also impact demand
for the Company's products, as bank certificates of deposit with no surrender
charges, and higher average returns from equity markets, may become more
attractive to new and existing customers. Conversely, in a rising interest rate
environment, competitive pressures may make it difficult for the Company to
sustain spreads between rates credited on interest-sensitive products and
portfolio earnings rates, thereby prompting withdrawals by policyholders. The
Company manages this risk by adjusting interest crediting rates, at least on an
annual basis, with due regard to the yield of its investment portfolio and
pricing assumptions and by prudently managing interest rate risk of assets and
liabilities.

     As is typical in the industry, the Company's life and annuity products
contain minimum rate guarantees regarding interest credited. For interest
sensitive life products, the minimum rates range from approximately 2.5% to
6.0%, with an approximate weighted average of 4.4%. For annuity products, the
minimum rates range from 3.0% to 6.0%, with the greatest concentration in the
3.5% to 4.0% range.

     The Company employs various methodologies to manage its exposure to
interest rate risks. The asset/liability management process focuses primarily on
the management of interest rate risk of the Company's insurance operations. JP
monitors the duration of insurance liabilities compared to the duration of
assets backing the insurance lines, giving measurement to the optionality of
cash flows. The Company's goal in such analysis is to prudently balance
profitability and risk for each insurance product category, and for the Company
as a whole. At December 31, 2000 and 1999, 88% and 87% of policy liabilities
related to interest-sensitive portfolios.

     The Company also considers the timing of cash flows arising from market
risk sensitive instruments and insurance portfolios under varying interest rate
scenarios as well as the related impact on reported earnings under those varying
scenarios. Market risk sensitive instruments include debt and equity securities
Available for Sale and Held to Maturity, mortgage loans, policy loans,
investment commitments, annuities in the accumulation phase and periodic payment
annuities, commercial paper borrowings, repurchase agreements, interest rate
swaps, and debt and Exchangeable Securities. The following table shows the
estimated impact that various hypothetical interest rate scenarios would be
expected to have on the Company's earnings for a calendar year, based on the
assumptions contained in the Company's model. Management believes that its
analysis of the effects of 100 basis point increases and decreases utilized in
the sensitivity analysis below reflects reasonably possible near term

                                        22
<PAGE>   25

changes in interest rates as of December 31, 2000 and 1999. The change in these
estimates was due primarily to differences in the yield curves and in the
sensitivities they introduced to the Company's model.

<TABLE>
<CAPTION>
                                                              INCREMENTAL
                                                                INCOME
                                                                (LOSS)
                                                              -----------
CHANGE IN INTEREST RATE                                       2000   1999
-----------------------                                       ----   ----
<S>                                                           <C>    <C>
+ 100 basis points..........................................  $(6)   $(6)
+ 50 basis points...........................................   (5)    (3)
-50 basis points............................................    2      3
-100 basis points...........................................    4      8
</TABLE>

     These estimates were derived by modeling estimated cash flows of the
Company's market risk sensitive instruments and insurance portfolios. Changes in
interest rates illustrated above assume parallel shifts in the yield curve
graded pro-rata over four quarters. Incremental income or loss is net of taxes
at 35%. Estimated cash flows produced in the model assume reinvestments
representative of JP's current investment strategy, and calls/prepayments
include scheduled maturities as well as those expected to occur when issuers can
benefit financially based on the difference between prepayment penalties and new
money rates under each scenario. Assumed lapse rates within insurance portfolios
give consideration to relationships expected between crediting rates and market
interest rates, as well as the level of surrender charges inherent in individual
contracts. The illustrated incremental income or loss also includes the expected
impact on amortization of DAC and VOBA. The model is based on the Company's
existing business in force as of December 31, 2000 and does not consider new
sales of life and annuity products or the potential impact (as discussed above)
of interest rate fluctuations on sales.

     The Company is exposed to equity price risk on its equity securities (other
than trading). JP holds common stock with a fair value of $549. Approximately
$382 of such value is represented by investments in a single issuer, Bank of
America Corporation (BankAmerica). The Company's Exchangeable Securities are
exchangeable into shares of BankAmerica common stock. Had the Exchangeable
Securities been redeemed as of year-end, the redemption value would have been
$139 (see Note 8). Management believes that a hypothetical 20% decline in the
equity market is reasonably possible in the near term. If the market value of
the S&P 500 Index, and of BankAmerica common stock specifically, decreased 20%,
the fair value of the Company's common stock and Exchangeable Securities would
change as follows:

<TABLE>
<CAPTION>
                                                              FAVORABLE (UNFAVORABLE)
                                                                CHANGE IN FAIR VALUE
                                                              ------------------------
                                                                 2000          1999
                                                              ----------    ----------
<S>                                                           <C>           <C>
BankAmerica common stock....................................     $(76)        $ (83)
Exchangeable Securities.....................................       35            45
                                                                 ----         -----
  Subtotal..................................................      (41)          (38)
Remaining equity securities.................................      (34)          (62)
                                                                 ----         -----
          Total change in fair values.......................     $(75)        $(100)
                                                                 ====         =====
</TABLE>

     Certain fixed interest rate market risk sensitive instruments may not give
rise to incremental income or loss during the period illustrated but may be
subject to changes in fair values. Note 18 presents additional disclosures
concerning fair values of financial assets and financial liabilities, and is
incorporated by reference.

EXTERNAL TRENDS AND FORWARD LOOKING INFORMATION

     JP operates within the United States financial services and communications
market sectors, which are both subject to general economic conditions. After
increasing in 1999 and much of 2000, interest rates on longer maturity
instruments began trending down later in 2000 as economic growth slowed. Changes
in rates may affect our businesses as discussed earlier. The Company's
operations are also impacted over the longer term by demographic shifts, global
markets, technological innovation and overall capital market volatility. These
forces impact JP in various ways such as demand for its insurance products and
advertising revenues, competition from other financial services providers,
competition from emerging technologies for television and radio advertising,

                                        23
<PAGE>   26

competition for new investments, debt costs, mergers and consolidations within
the financial services and communications sectors, and costs inherent in
administering complex financial products.

  Regulatory and Legal Environment

     The U.S. insurance industry has experienced an increasing number of
mergers, acquisitions, consolidations, sales of business lines and marketing
arrangements with other financial services providers. These activities have been
driven by a need to reduce costs of distribution and to increase economies of
scale in the face of growing competition from larger insurers, banks, securities
brokers, mutual funds and other non-traditional competitors. The
Gramm-Leach-Bliley Act modernized the regulatory framework for financial
services in the United States and allows insurance companies, banks and
securities firms to affiliate under Financial Holding Companies. With the
passage of this law, combined with changing demographics, technological advances
and customer expectations for one-stop shopping, further strategic alignments
are expected within the financial services industry. JP continues to analyze its
options within this environment for increasing distribution and improving
economies of scale.

     The Bush Administration has proposed an income tax plan that reduces tax
rates, which could make our tax advantaged products less attractive. Various
proposals have been considered by Administration officials which could eliminate
or reduce estate taxes. If enacted, this could have an adverse impact on some
life insurance products such as those with survivorship benefits. Additionally,
recent drops in the equity markets have caused variable products to become less
appealing. However, this same drop in equity products may contribute to growth
in the markets for UL and non-variable annuities.

     Prescribed or permitted Statutory Accounting Principles (SAP) may vary
between states and between companies. The NAIC has completed the process of
codifying SAP to promote standardization of methods which must be implemented by
January 1, 2001. The Company's preliminary calculations indicate that an
immaterial increase in statutory capital will result from the application of
these principles.

     Assessments by state guaranty associations are made to cover losses to
policyholders of insolvent or rehabilitated insurance companies. Assessments may
be partially recovered through a reduction in future premium taxes in most
states. The Company has accrued for expected assessments net of estimated future
premium tax deductions.

     In recent years, the life insurance industry has experienced increased
litigation in which large jury awards including punitive damages have occurred.
See Note 19, which is incorporated by reference, for discussion of the Company's
contingent liabilities.

  Environmental Liabilities

     JP is exposed to environmental regulation and litigation as a result of
ownership of investment real estate and Communications subsidiaries. Actual loss
experience has been minimal and exposure to environmental losses is considered
to be insignificant.

  Accounting Pronouncements

     See Note 2, which is incorporated by reference.

  Forward-looking Information

     You should note that this document and our other SEC filings reflect
information that we believe was accurate as of the date the respective materials
were made publicly available. Thus they do not reflect later developments.

     As a matter of policy, Jefferson Pilot does not normally make projections
or forecasts of future events or our performance. When we do, we rely on a safe
harbor provided by the Private Securities Litigation Reform Act of 1995 for
statements that are not historical facts, called forward looking statements.
These may include statements relating to our future actions, sales and product
development efforts, expenses, the outcome of contingencies such

                                        24
<PAGE>   27

as legal proceedings, or financial performance. An example would be our forecast
of the anticipated earnings contribution over time from the Guarantee
acquisition.

     Certain information in our SEC filings and in any other written or oral
statements made by JP or on our behalf, involves forward looking statements. We
have used appropriate care in developing this information, but any forward
looking statements may turn out to be wrong. They can be affected by inaccurate
assumptions or by known or unknown risks and uncertainties that could
significantly affect our actual results. These risks and uncertainties include,
among others, the risks that JP might fail to successfully complete strategies
for cost reductions, including anticipated expense savings and operating
efficiencies from the integration of Guarantee, and for growth in sales of
products. Other uncertainties include general economic conditions, competitive
factors, including pricing pressures, technological developments, new product
offerings and the emergence of new competitors, interest rate trends and
fluctuations, and changes in federal and state tax, financial services industry
or other laws and regulations.

     We undertake no obligation to publicly correct or update any forward
looking statements, whether as a result of new information, future developments
or otherwise. You are advised, however, to consult any further disclosures we
make on related subjects in our press releases and filings with the SEC. In
particular, you should read the discussion in the section entitled "External
Trends and Forward Looking Information," and other sections it may reference, in
our most recent 10-K report to the SEC, as it may be updated in our subsequent
10-Q and 8-K reports. That discussion covers certain risks, uncertainties and
possibly inaccurate assumptions that could cause our actual results to differ
materially from expected and historical results. Other factors besides those
listed there could also adversely affect our performance.

                                        25
<PAGE>   28

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Information under the heading "Market Risk Exposures" in MD&A is
incorporated herein by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

       MANAGEMENT'S PRESENTATION OF QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                     MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,
                                                       2000        2000         2000            2000
                                                     ---------   --------   -------------   ------------
                                                           (IN MILLIONS EXCEPT SHARE INFORMATION)
<S>                                                  <C>         <C>        <C>             <C>
Revenues, excluding realized investment gains......    $ 772      $ 772         $ 781          $ 811
Realized investment gains..........................       48         31            26             (3)
                                                       -----      -----         -----          -----
Revenues...........................................      820        803           807            808
Benefits and expenses..............................      599        595           604            626
Provision for income taxes.........................       76         72            68             61
                                                       -----      -----         -----          -----
Net income.........................................      145        136           135            121
Dividends on Capital Securities....................        6          6             6              7
                                                       -----      -----         -----          -----
Net income available to common stockholders........    $ 139      $ 130         $ 129          $ 114
                                                       =====      =====         =====          =====
Per share of common stock..........................    $1.35      $1.26         $1.25          $1.11
                                                       =====      =====         =====          =====
Per share of common stock -- assuming dilution.....    $1.34      $1.25         $1.24          $1.10
                                                       =====      =====         =====          =====
Reportable segment results per common share........    $1.04      $1.07         $1.09          $1.12
                                                       =====      =====         =====          =====
</TABLE>

<TABLE>
<CAPTION>
                                                     MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,
                                                       1999        1999         1999            1999
                                                     ---------   --------   -------------   ------------
                                                           (IN MILLIONS EXCEPT SHARE INFORMATION)
<S>                                                  <C>         <C>        <C>             <C>
Revenues, excluding realized investment gains......    $ 626      $ 612         $ 609          $ 613
Realized investment gains..........................       44         27            27              3
                                                       -----      -----         -----          -----
Revenues...........................................      670        639           636            616
Benefits and expenses..............................      466        452           452            440
Provision for income taxes.........................       71         63            62             60
                                                       -----      -----         -----          -----
Net income.........................................      133        124           122            116
Dividends on Capital Securities and preferred
  stock............................................        6          6             6              7
                                                       -----      -----         -----          -----
Net income available to common stockholders........    $ 127      $ 118         $ 116          $ 109
                                                       =====      =====         =====          =====
Per share of common stock..........................    $1.20      $1.11         $1.10          $1.05
                                                       =====      =====         =====          =====
Per share of common stock -- assuming dilution.....    $1.19      $1.10         $1.09          $1.04
                                                       =====      =====         =====          =====
Reportable segment results per common share........    $0.93      $0.94         $0.94          $1.03
                                                       =====      =====         =====          =====
</TABLE>

                                        26
<PAGE>   29

                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
Jefferson-Pilot Corporation
Greensboro, North Carolina

     We have audited the accompanying consolidated balance sheets of
Jefferson-Pilot Corporation and subsidiaries as of December 31, 2000 and 1999,
and the related consolidated statements of income, stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 2000.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Jefferson-Pilot
Corporation and subsidiaries at December 31, 2000 and 1999, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States.

                                          /s/ ERNST & YOUNG LLP

Greensboro, North Carolina
February 5, 2001

                                        27
<PAGE>   30

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                              ----------------------
                                                               2000           1999
                                                              -------        -------
                                                                (DOLLAR AMOUNTS IN
                                                                 MILLIONS EXCEPT
                                                                SHARE INFORMATION)
<S>                                                           <C>            <C>
                                       ASSETS
Investments:
  Debt securities available for sale, at fair value
    (amortized cost 2000 -- $12,919 and
    1999 -- $12,235)........................................  $12,978        $11,831
  Debt securities held to maturity, at amortized cost (fair
    value 2000 -- $3,134 and
    1999 -- $3,259).........................................    3,130          3,351
  Equity securities available for sale, at fair value (cost
    2000 -- $64 and 1999 -- $98)............................      551            737
  Mortgage loans on real estate.............................    2,771          2,543
  Policy loans..............................................      923            906
  Real estate...............................................      135            133
  Other investments.........................................       11             35
                                                              -------        -------
         Total investments..................................   20,499         19,536
Cash and cash equivalents...................................       26             62
Accrued investment income...................................      272            266
Due from reinsurers.........................................    1,450          1,576
Deferred policy acquisition costs and value of business
  acquired..................................................    1,959          2,040
Cost in excess of net assets acquired.......................      323            303
Assets held in separate accounts............................    2,311          2,272
Other assets................................................      481            391
                                                              -------        -------
         Total assets.......................................  $27,321        $26,446
                                                              =======        =======
                        LIABILITIES AND STOCKHOLDERS' EQUITY
Policy liabilities:
  Future policy benefits....................................  $ 2,655        $ 2,715
  Policyholder contract deposits............................   16,555         15,938
  Dividend accumulations and other policyholder funds on
    deposit.................................................      191            307
  Policy and contract claims................................      176            235
  Other.....................................................      388            248
                                                              -------        -------
         Total policy liabilities...........................   19,965         19,443
Debt:
  Commercial paper and revolving credit borrowings..........      405            361
  Exchangeable Securities and other debt....................      139            290
Securities sold under repurchase agreements.................      397            523
Currently payable income taxes..............................       60             36
Deferred income tax liabilities.............................      212             87
Liabilities related to separate accounts....................    2,311          2,272
Accounts payable, accruals and other liabilities............      373            381
                                                              -------        -------
         Total liabilities..................................   23,862         23,393
                                                              -------        -------
Commitments and contingent liabilities
Guaranteed preferred beneficial interest in subordinated
  debentures ("Capital Securities").........................      300            300
Stockholders' Equity:
  Common stock and paid in capital, par value $1.25 per
    share: authorized 350,000,000 shares; issued and
    outstanding 2000 -- 102,870,564 shares;
    1999 -- 103,344,685 shares..............................      131            129
  Retained earnings.........................................    2,683          2,358
  Accumulated other comprehensive income -- net unrealized
    gains on securities.....................................      345            266
                                                              -------        -------
                                                                3,159          2,753
                                                              -------        -------
         Total liabilities and stockholders' equity.........  $27,321        $26,446
                                                              =======        =======
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        28
<PAGE>   31

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               2000     1999     1998
                                                              ------   ------   ------
                                                                 (DOLLAR AMOUNTS IN
                                                                  MILLIONS EXCEPT
                                                                 SHARE INFORMATION)
<S>                                                           <C>      <C>      <C>
REVENUE:
Premiums and other considerations...........................  $1,365   $  903   $1,049
Net investment income.......................................   1,430    1,272    1,202
Realized investment gains...................................     102      101       93
Communications sales........................................     210      204      198
Other.......................................................     131       81       68
                                                              ------   ------   ------
          Total revenue.....................................   3,238    2,561    2,610
                                                              ------   ------   ------
BENEFITS AND EXPENSES:
Insurance and annuity benefits..............................   1,660    1,208    1,307
Insurance commissions, net of deferrals.....................     134       93       84
General and administrative expenses, net of deferrals.......     180      131      177
Insurance taxes, licenses and fees..........................      68       58       52
Amortization of policy acquisition costs and value of
  business acquired.........................................     261      200      196
Communications operations...................................     121      120      124
                                                              ------   ------   ------
          Total benefits and expenses.......................   2,424    1,810    1,940
                                                              ------   ------   ------
Income before income taxes..................................     814      751      670
Income taxes................................................     277      256      226
                                                              ------   ------   ------
Net income..................................................     537      495      444
Dividends on Capital Securities and preferred stock.........      25       25       26
                                                              ------   ------   ------
Net income available to common stockholders.................  $  512   $  470   $  418
                                                              ======   ======   ======
NET INCOME PER SHARE AVAILABLE TO COMMON STOCKHOLDERS.......  $ 4.97   $ 4.46   $ 3.94
                                                              ======   ======   ======
NET INCOME PER SHARE AVAILABLE TO COMMON
  STOCKHOLDERS -- ASSUMING DILUTION.........................  $ 4.93   $ 4.42   $ 3.91
                                                              ======   ======   ======
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        29
<PAGE>   32

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                      ACCUMULATED OTHER
                                                                        COMPREHENSIVE
                                COMMON STOCK                            INCOME -- NET              TOTAL
                                    AND                                UNREALIZED GAINS        STOCKHOLDERS'
                              PAID IN CAPITAL    RETAINED EARNINGS      ON SECURITIES              EQUITY
                              ----------------   -----------------   --------------------   --------------------
                                            (DOLLAR AMOUNTS IN MILLIONS EXCEPT SHARE INFORMATION)
<S>                           <C>                <C>                 <C>                    <C>
BALANCE, JANUARY 1, 1998....        $ 93              $1,964                 $675                  $2,732
  Net income................          --                 444                   --                     444
  Other comprehensive
     income.................          --                  --                   53                      53
                                                                                                   ------
  Comprehensive income......                                                                          497
  Common dividends $1.18 per
     share..................          --                (125)                  --                    (125)
  Preferred dividends.......          --                 (26)                  --                     (26)
  Common stock issued.......           6                  --                   --                       6
  Common stock reacquired...         (10)                (22)                  --                     (32)
  Three-for-two common stock
     split..................          44                 (44)                  --                      --
                                    ----              ------                 ----                  ------
BALANCE, DECEMBER 31,
  1998......................         133               2,191                  728                   3,052
  Net income................          --                 495                   --                     495
  Other comprehensive
     income.................          --                  --                 (462)                   (462)
                                                                                                   ------
  Comprehensive income......                                                                           33
  Common dividends $1.32 per
     share..................          --                (138)                  --                    (138)
  Preferred dividends.......          --                 (25)                  --                     (25)
  Common stock issued.......          15                  --                   --                      15
  Common stock reacquired...         (19)               (165)                  --                    (184)
                                    ----              ------                 ----                  ------
BALANCE, DECEMBER 31,
  1999......................         129               2,358                  266                   2,753
  Net income................          --                 537                   --                     537
  Other comprehensive
     income.................          --                  --                   79                      79
                                                                                                   ------
  Comprehensive income......                                                                          616
  Common dividends $1.44 per
     share..................          --                (152)                  --                    (152)
  Preferred dividends.......          --                 (25)                  --                     (25)
  Common stock issued.......          12                  --                   --                      12
  Common stock reacquired...         (10)                (35)                  --                     (45)
                                    ----              ------                 ----                  ------
BALANCE, DECEMBER 31,
  2000......................        $131              $2,683                 $345                  $3,159
                                    ====              ======                 ====                  ======
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        30
<PAGE>   33

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
                                                               (DOLLAR AMOUNTS IN MILLIONS)
<S>                                                           <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income..................................................  $   537    $   495    $   444
Adjustments to reconcile net income to net cash provided by
  operating activities:
  Change in policy liabilities other than deposits..........      (21)        (6)       (39)
  Credits to policyholder accounts, net.....................      138        120        125
  Deferral of policy acquisition costs, net.................     (201)      (145)      (106)
  Change in receivables and asset accruals..................      (87)        (9)       (45)
  Change in payables and expense accruals...................      111         33         68
  Realized investment gains.................................     (102)      (101)       (93)
  Depreciation and amortization.............................       29         37         45
  Amortization of value of business acquired, net...........       90         60         48
  Other.....................................................        7         (3)        (9)
                                                              -------    -------    -------
          Net cash provided by operating activities.........      501        481        438
                                                              -------    -------    -------
CASH FLOWS FROM INVESTING ACTIVITIES
Securities available for sale:
  Sales.....................................................    1,002        835        465
  Maturities, calls and redemptions.........................      718        986        884
  Purchases.................................................   (2,261)    (2,550)    (2,033)
Securities held to maturity:
  Sales.....................................................       13          7         13
  Maturities, calls and redemptions.........................      481        495        495
  Purchases.................................................     (292)       (18)      (267)
Repayments of mortgage loans................................      122        139        168
Mortgage loans originated...................................     (350)      (602)      (427)
Increase in policy loans, net...............................      (25)       (29)       (20)
Acquisitions of subsidiaries, net of cash received..........       (3)      (344)        --
Other investing activities, net.............................      (16)       (30)         3
                                                              -------    -------    -------
          Net cash used in investing activities.............     (611)    (1,111)      (719)
                                                              -------    -------    -------
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholder contract deposits..............................    2,570      2,249      1,688
Withdrawals of policyholder contract deposits...............   (2,058)    (1,545)    (1,370)
Borrowings under short-term credit facilities...............    3,266      8,167      5,155
Repayments under short-term credit facilities...............   (3,222)    (8,094)    (5,151)
Proceeds (payments) from securities sold under repurchase
  agreements................................................     (126)       230        197
Repayment of ACES...........................................     (146)        --         --
Cash dividends paid.........................................     (173)      (160)      (149)
Common stock transactions, net..............................      (33)      (173)       (27)
Redemption of mandatorily redeemable preferred stock........       --         (3)       (50)
Other financing activities, net.............................       (4)        --         --
                                                              -------    -------    -------
          Net cash provided by financing activities.........       74        671        293
                                                              -------    -------    -------
          Net (decrease) increase in cash and cash
            equivalents.....................................      (36)        41         12
Cash and cash equivalents, beginning........................       62         21          9
                                                              -------    -------    -------
Cash and cash equivalents, ending...........................  $    26    $    62    $    21
                                                              =======    =======    =======
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid...........................................  $   223    $   191    $   169
                                                              =======    =======    =======
Interest paid...............................................  $    67    $    41    $    37
                                                              =======    =======    =======
</TABLE>

                 See Notes to Consolidated Financial Statements

                                        31
<PAGE>   34

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             (DOLLAR AMOUNTS IN MILLIONS, EXCEPT SHARE INFORMATION)
                               DECEMBER 31, 2000

NOTE 1.  NATURE OF OPERATIONS AND SIGNIFICANT TRANSACTIONS

NATURE OF OPERATIONS

     Jefferson-Pilot Corporation (with its subsidiaries, referred to as the
Company) operates in the life insurance and communications industries. Life
insurance, annuities, and disability and dental insurance are currently marketed
to individuals and businesses in the United States through the Company's
principal life insurance subsidiaries: Jefferson-Pilot Life Insurance Company
(JP Life), and Jefferson Pilot Financial Insurance Company (JPFIC) and its
subsidiary, Jefferson Pilot LifeAmerica Insurance Company (JPLA), collectively
referred to as JP Financial. Alexander Hamilton Life Insurance Company of
America and Guarantee Life Insurance Company were merged into JP Financial
effective August 1, 2000. Communications operations are conducted by Jefferson-
Pilot Communications Company (JPCC) and consist of radio and television
broadcasting, through facilities located in strategically selected markets in
the Southeastern and Western United States, and sports program production.

BUSINESS ACQUISITIONS

     On December 30, 1999, the Company acquired The Guarantee Life Companies
Inc. and its subsidiaries, including Guarantee Life Insurance Company,
collectively referred to as Guarantee. Guarantee's operations include group and
worksite marketed non-medical products, including term life, disability, and
dental products marketed through regional group offices. Guarantee's operations
also include a substantial block of individual insurance products, principally
universal life. The cost of the acquisition consisted of $298 cash paid plus
other acquisition expenses. In addition, the Company assumed outstanding debt of
$123. The Company financed the acquisition through the issuance of commercial
paper and through proceeds from repurchase agreements. The acquisition was
accounted for using the purchase method. Because the acquisition took place on
December 30, none of Guarantee's results of operations are included in the
consolidated income statement for 1999. In 2000, the final allocation of the
purchase price to Guarantee's tangible and indentifiable intangible assets was
completed, based on their fair values. The acquisition resulted in $105 of cost
in excess of net assets acquired (i.e. goodwill) and $202 of value of business
acquired. This goodwill is being amortized over 35 years.

     During the first quarter 2000, the Company acquired Polaris Financial
Services and Polaris Advisory Services, collectively referred to as Polaris.
Polaris's operations consist of financial planning and broker/dealer services.
The purchase price was $9, including cash and assumed liabilities, and was
accounted for under the purchase method. The acquisition resulted in $9 of cost
in excess of net assets acquired.

     Pro forma financial information for these acquisitions has not been
presented, as the pro forma impact on consolidated operations is not
significant.

NOTE 2.  SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

     The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles (GAAP). The insurance
subsidiaries also submit financial statements to insurance industry regulatory
authorities. Those financial statements are prepared on the basis of statutory
accounting practices (SAP) and are significantly different from financial
statements prepared in accordance with GAAP. See Note 12.

PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of
Jefferson-Pilot Corporation and all of its subsidiaries. All material
intercompany accounts and transactions have been eliminated.
                                        32
<PAGE>   35
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

USE OF ESTIMATES

     The preparation of financial statements requires management to make
estimates and assumptions affecting the reported amounts of assets and
liabilities and the disclosures of contingent assets and liabilities as of the
date of the financial statements, and the reported amounts of revenue and
expenses for the reporting period. Those estimates are inherently subject to
change and actual results could differ from those estimates. Included among the
material (or potentially material) reported amounts and disclosures that require
extensive use of estimates are asset valuation allowances, policy liabilities,
deferred policy acquisition costs, value of business acquired and the potential
effects of resolving litigated matters.

CASH AND CASH EQUIVALENTS

     The Company includes with cash and cash equivalents its holdings of highly
liquid investments which mature within three months of the date of acquisition.

DEBT AND EQUITY SECURITIES

     Debt and equity securities are classified as either securities held to
maturity, stated at amortized cost, or securities available for sale, stated at
fair value with net unrealized gains and losses included in accumulated other
comprehensive income, net of deferred income taxes and adjustments to deferred
policy acquisition costs and value of business acquired.

     Amortization of premiums and accrual of discounts on investments in debt
securities are reflected in earnings over the contractual terms of the
investments in a manner that produces a constant effective yield. Realized gains
and losses on dispositions of securities are determined by the
specific-identification method.

MORTGAGE AND POLICY LOANS

     Mortgage loans on real estate are stated at unpaid balances, net of
estimated unrecoverable amounts. In addition to a general estimated allowance,
an allowance for unrecoverable amounts is provided when a mortgage loan becomes
impaired. Mortgage loans are considered impaired when it becomes probable the
Company will be unable to collect the total amounts due, including principal and
interest, according to contractual terms. The impairment is measured based upon
the present value of expected cash flows discounted at the effective interest
rate on both a loan by loan basis and by measuring aggregated loans with similar
risk characteristics. Interest on mortgage loans is recorded until collection is
deemed improbable. Policy loans are stated at their unpaid balances.

REAL ESTATE AND OTHER INVESTMENTS

     Real estate not acquired by foreclosure is stated at cost less accumulated
depreciation. Real estate acquired by foreclosure is stated at the lower of
depreciated cost or fair value minus estimated costs to sell. Real estate,
primarily buildings, is depreciated principally by the straight-line method over
estimated useful lives generally ranging from 30 to 40 years. Accumulated
depreciation was $43 and $41 at December 31, 2000 and 1999. Other investments
are stated at equity, or the lower of cost or market, as appropriate.

PROPERTY AND EQUIPMENT

     Property and equipment, which is included in other assets, is stated at
cost and depreciated principally by the straight-line method over estimated
useful lives, generally 30 to 50 years for buildings and approximately 10 years
for other property and equipment. Accumulated depreciation was $159 and $148 at
December 31, 2000 and 1999.

                                        33
<PAGE>   36
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED

     Costs related to obtaining new and renewal business, including commissions,
certain costs of underwriting and issuing policies, certain agency office
expenses, and first year bonus interest on annuities, all of which vary with and
are primarily related to the production of new and renewal business, have been
deferred.

     Deferred policy acquisition costs for traditional life insurance policies
are amortized over the premium paying periods of the related contracts using the
same assumptions for anticipated premium revenue that are used to compute
liabilities for future policy benefits. For universal life and annuity products,
these costs are amortized at a constant rate based on the present value of the
estimated future gross profits to be realized over the terms of the contracts,
not to exceed 25 years.

     Value of business acquired represents the actuarially determined present
value of anticipated profits to be realized from life insurance and annuity
business purchased, using the same assumptions used to value the related
liabilities. Amortization of the value of business acquired occurs over the
related contract periods, using current crediting rates to accrete interest and
a constant amortization rate based on the present value of expected future
profits.

     The carrying amounts of deferred policy acquisition costs and value of
business acquired are adjusted for the effect of realized gains and losses and
the effects of unrealized gains or losses on debt securities classified as
available for sale. Both deferred policy acquisition costs and value of business
acquired are reviewed periodically to determine that the unamortized portion
does not exceed expected recoverable amounts. No impairment adjustments have
been reflected in the results of operations for any year presented.

COST IN EXCESS OF NET ASSETS ACQUIRED

     Cost in excess of net assets acquired (goodwill) is amortized on a
straight-line basis over periods of 25 to 40 years. Accumulated amortization was
$39 and $29 at December 31, 2000 and 1999. Carrying amounts are regularly
reviewed for indications of value impairment, with consideration given to
financial performance and other relevant factors.

SEPARATE ACCOUNTS

     Separate account assets and liabilities represent funds segregated for the
benefit of certain policyholders who bear the investment risk. The separate
account assets and liabilities, which are equal, are recorded at fair value.
Policyholder account deposits and withdrawals, investment income and realized
investment gains and losses are excluded from the amounts reported in the
Consolidated Statements of Income. Fees charged on policyholders' deposits are
included in other considerations.

RECOGNITION OF REVENUE

     Premiums on traditional life insurance products are reported as revenue
when received unless received in advance of the due date.

     Premiums on accident and health, disability and dental insurance are
reported as earned, over the contract period. A reserve is provided for the
portion of premiums written which relates to unexpired coverage terms.

     Revenue from universal life-type and annuity products includes charges for
the cost of insurance, initiation and administration of the policy and surrender
of the policy. Revenue from these products is recognized in the year assessed to
the policyholder, except that any portion of an assessment which relates to
services to be provided in future years is deferred and recognized over the
period during which services are provided.

     Communications sales are presented net of agency and representative
commissions. Concession income of the broker/dealer subsidiaries is recorded as
earned and is presented in other revenue.

                                        34
<PAGE>   37
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

RECOGNITION OF BENEFITS AND EXPENSES

     Benefits and expenses, other than deferred policy acquisition costs,
related to traditional life, accident and health, disability and dental
insurance products are recognized when incurred in a manner designed to match
them with related premiums and spread income recognition over expected policy
lives. For universal life-type and annuity products, benefits include interest
credited to policyholders' accounts, which is recognized as it accrues.

FUTURE POLICY BENEFITS

     Liabilities for future policy benefits on traditional life and disability
insurance are computed by the net level premium valuation method based on
assumptions about future investment yield, mortality, morbidity and persistency.
Estimates about future circumstances are based principally on historical
experience and provide for possible adverse deviations.

POLICYHOLDER CONTRACT DEPOSITS

     Policyholder contract deposits consist of policy values that accrue to
holders of universal life-type contracts and annuities. The liability is
determined using the retrospective deposit method and consists of policy values
that accrue to the benefit of the policyholder, before deduction of surrender
charges.

POLICY AND CONTRACT CLAIMS

     The liability for policy and contract claims consists of the estimated
amount payable for claims reported but not yet settled and an estimate of claims
incurred but not reported, which is based on historical experience, adjusted for
trends and circumstances. Management believes that the recorded liability is
sufficient to provide for claims incurred through the balance sheet date and the
associated claims adjustment expenses.

REINSURANCE BALANCES AND TRANSACTIONS

     Reinsurance receivables include amounts related to paid benefits and
estimated amounts related to unpaid policy and contract claims, future policy
benefits and policyholder contract deposits. The cost of reinsurance is
accounted for over the terms of the underlying reinsured policies using
assumptions consistent with those used to account for the policies.

STOCK BASED COMPENSATION

     The Company accounts for stock incentive awards in accordance with APB
Opinion No. 25, "Accounting for Stock Issued to Employees", and accordingly,
recognizes no compensation expense for stock option awards to employees when the
option price is not less than the market value of the stock at the date of
award.

INCOME TAXES

     The Company and most of its subsidiaries file a consolidated life/nonlife
federal income tax return. Currently, JP Financial files a separate consolidated
return with its respective subsidiaries. Deferred income taxes are recorded on
the differences between the tax bases of assets and liabilities and the amounts
at which they are reported in the consolidated financial statements. Recorded
amounts are adjusted to reflect changes in income tax rates and other tax law
provisions as they become enacted.

RECLASSIFICATIONS

     Certain amounts reported in prior years' consolidated financial statements
have been reclassified to conform with the presentations adopted in the current
year. These reclassifications have no effect on net income available to common
stockholders or stockholders' equity of the prior years.

                                        35
<PAGE>   38
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NEW ACCOUNTING PRONOUNCEMENTS

     Effective January 1, 2001, the Company will adopt SFAS 133, "Accounting for
Derivative Instruments and for Hedging Activities". SFAS 133 requires all
derivatives to be recorded on the balance sheet at fair value and establishes
accounting rules for hedging activities. The effect of the hedge accounting
rules is to offset changes in value or cash flows of both the hedge and hedged
item in earnings in the same period. Changes in the fair value of derivatives
that do not qualify for hedge accounting are reported in earnings in the period
of the change. Based on the limited nature of the Company's use of derivatives
and hedging activities, adoption is not expected to have a material impact on
the Company's financial position or results of operations.

NOTE 3.  INCOME PER SHARE OF COMMON STOCK

     The following table sets forth the computation of net income per share and
net income per share assuming dilution:

<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                                                  ---------------------------------------
                                                     2000          1999          1998
                                                  -----------   -----------   -----------
<S>                                               <C>           <C>           <C>
NUMERATOR:
  Net income....................................  $       537   $       495   $       444
  Dividends on Capital Securities and preferred
     stock......................................           25            25            26
                                                  -----------   -----------   -----------
  Numerator for net income per share and net
     income per share -- assuming dilution --Net
     income available to common stockholders....  $       512   $       470   $       418
                                                  ===========   ===========   ===========
DENOMINATOR:
  Denominator for net income per
     share -- weighted-average shares
     outstanding................................  103,050,422   105,150,109   106,134,031
  Effect of dilutive securities:
     Employee/agent stock options...............      897,201     1,082,307       918,108
                                                  -----------   -----------   -----------
  Denominator for net income per
     share -- assuming dilution -- adjusted
     weighted-average shares outstanding........  103,947,623   106,232,416   107,052,139
                                                  ===========   ===========   ===========
NET INCOME PER SHARE............................  $      4.97   $      4.46   $      3.94
                                                  ===========   ===========   ===========
NET INCOME PER SHARE -- ASSUMING DILUTION.......  $      4.93   $      4.42   $      3.91
                                                  ===========   ===========   ===========
</TABLE>

                                        36
<PAGE>   39
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4.  INVESTMENTS

SUMMARY COST AND FAIR VALUE INFORMATION

     Aggregate amortized cost, aggregate fair value and gross unrealized gains
and losses are as follows:

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 2000
                                                              ---------------------------------------------
                                                                            GROSS        GROSS
                                                              AMORTIZED   UNREALIZED   UNREALIZED    FAIR
                                                                COST        GAINS       (LOSSES)     VALUE
                                                              ---------   ----------   ----------   -------
<S>                                                           <C>         <C>          <C>          <C>
AVAILABLE FOR SALE CARRIED AT FAIR VALUE
U. S. Treasury obligations and direct obligations of U.S.
  Government agencies.......................................   $   231       $ 11        $  --      $   242
Federal agency issued mortgage backed securities (including
  collateralized mortgage obligations)......................     2,417         83           (8)       2,492
Obligations of states and political subdivisions............        29          1           --           30
Corporate obligations.......................................     8,031        182         (258)       7,955
Corporate private-labeled mortgage backed securities
  (including collateralized mortgage obligations)...........     2,183         66          (19)       2,230
Redeemable preferred stocks.................................        28          1           --           29
                                                               -------       ----        -----      -------
Subtotal, debt securities...................................    12,919        344         (285)      12,978
Equity securities...........................................        64        489           (2)         551
                                                               -------       ----        -----      -------
Securities available for sale...............................   $12,983       $833        $(287)     $13,529
                                                               =======       ====        =====      =======
HELD TO MATURITY CARRIED AT AMORTIZED COST
U. S. Treasury obligations and direct obligations of U.S.
  Government agencies.......................................   $    --       $ --        $  --      $    --
Obligations of state and political subdivisions.............        17         --           --           17
Corporate obligations.......................................     3,113         58          (54)       3,117
Corporate private-labeled mortgage backed securities
  (including collateralized mortgage obligations)...........        --         --           --           --
                                                               -------       ----        -----      -------
Debt securities held to maturity............................   $ 3,130       $ 58        $ (54)     $ 3,134
                                                               =======       ====        =====      =======
</TABLE>

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 1999
                                                              ---------------------------------------------
                                                                            GROSS        GROSS
                                                              AMORTIZED   UNREALIZED   UNREALIZED    FAIR
                                                                COST        GAINS       (LOSSES)     VALUE
                                                              ---------   ----------   ----------   -------
<S>                                                           <C>         <C>          <C>          <C>
AVAILABLE FOR SALE CARRIED AT FAIR VALUE
U. S. Treasury obligations and direct obligations of U.S.
  Government agencies.......................................   $   336       $  6        $  --      $   342
Federal agency issued mortgage backed securities (including
  collateralized mortgage obligations)......................     2,530         20          (52)       2,498
Obligations of states and political subdivisions............        23         --           (1)          22
Corporate obligations.......................................     7,434         17         (339)       7,112
Corporate private-labeled mortgage backed securities
  (including collateralized mortgage obligations)...........     1,893         13          (68)       1,838
Redeemable preferred stocks.................................        19         --           --           19
                                                               -------       ----        -----      -------
Subtotal, debt securities...................................    12,235         56         (460)      11,831
Equity securities...........................................        98        641           (2)         737
                                                               -------       ----        -----      -------
Securities available for sale...............................   $12,333       $697        $(462)     $12,568
                                                               =======       ====        =====      =======
HELD TO MATURITY CARRIED AT AMORTIZED COST
U. S. Treasury obligations and direct obligations of U.S.
  Government agencies.......................................   $     7       $ --        $  --      $     7
Obligations of state and political subdivisions.............        17         --           --           17
Corporate obligations.......................................     3,324         14         (106)       3,232
Corporate private-labeled mortgage backed securities
  (including collateralized mortgage obligations)...........         3         --           --            3
                                                               -------       ----        -----      -------
Debt securities held to maturity............................   $ 3,351       $ 14        $(106)     $ 3,259
                                                               =======       ====        =====      =======
</TABLE>

                                        37
<PAGE>   40
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONTRACTUAL MATURITIES

     Aggregate amortized cost and aggregate fair value of debt securities as of
December 31, 2000, according to contractual maturity date, are as indicated
below. Actual future maturities will differ from the contractual maturities
shown because the issuers of certain debt securities have the right to call or
prepay the amounts due the Company, with or without penalty.

<TABLE>
<CAPTION>
                                                           AVAILABLE FOR SALE     HELD TO MATURITY
                                                           -------------------   ------------------
                                                           AMORTIZED    FAIR     AMORTIZED    FAIR
                                                             COST       VALUE      COST      VALUE
                                                           ---------   -------   ---------   ------
<S>                                                        <C>         <C>       <C>         <C>
Due in one year or less..................................   $   254    $   256    $  146     $  146
Due after one year through five years....................     1,840      1,831       991        992
Due after five years through ten years...................     2,690      2,669       392        393
Due after ten years through twenty years.................       715        733       245        241
Due after twenty years...................................       971        954       121        126
Amounts not due at a single maturity date................     6,421      6,506     1,235      1,236
                                                            -------    -------    ------     ------
                                                             12,891     12,949     3,130      3,134
Redeemable preferred stocks..............................        28         29        --         --
                                                            -------    -------    ------     ------
                                                            $12,919    $12,978    $3,130     $3,134
                                                            =======    =======    ======     ======
</TABLE>

INVESTMENT CONCENTRATION, RISK AND IMPAIRMENT

     Investments in debt and equity securities include 1,863 issuers, with one
corporate issuer representing more than one percent of investments. Equity
securities include investment in Bank of America Corporation (BankAmerica) of
$382 and $417 as of December 31, 2000 and 1999. Debt securities considered less
than investment grade approximated 4.8% and 5.1% of the total debt securities
portfolio as of December 31, 2000 and 1999.

     The Company's mortgage loan portfolio is comprised primarily of
conventional real estate mortgages collateralized by retail (35%), apartment
(17%), industrial (18%), office (18%) and hotel (12%) properties. Mortgage loan
underwriting standards emphasize the credit status of a prospective borrower,
quality of the underlying collateral and conservative loan-to-value
relationships. Approximately 34% of stated mortgage loan balances as of December
31, 2000 are due from borrowers in South Atlantic states and approximately 23%
are due from borrowers in West South Central states. No other geographic region
represents as much as 10% of December 31, 2000 mortgage loans.

     At December 31, 2000 and 1999, the recorded investment in mortgage loans
that are considered to be impaired was $52 and $63. Delinquent loans outstanding
as of December 31, 2000 and 1999 totaled $0.6 and $0. The related allowance for
credit losses on all mortgage loans decreased from $30 at December 31, 1999 to
$29 at December 31, 2000 through a charge to realized gains in 2000. The average
recorded investment in impaired loans was $57, $64 and $70 during the years
ended December 31, 2000, 1999 and 1998, on which interest income of $3, $6 and
$7 was recognized.

     The Company uses repurchase agreements to meet various cash requirements.
At December 31, 2000 and 1999, the amounts held in debt securities available for
sale pledged as collateral for these borrowings were $415 and $530.

SECURITIES LENDING

     In its securities lending program, the Company generally receives cash
collateral in an amount that is in excess of the market value of the securities
loaned. Market values of securities loaned and collateral are

                                        38
<PAGE>   41
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

monitored daily, and additional collateral is obtained as necessary. The market
value of securities loaned and collateral received amounted to $294 and $303 at
December 31, 2000 and $210 and $220 at December 31, 1999.

CHANGES IN NET UNREALIZED GAINS ON SECURITIES

     Changes in amounts affecting net unrealized gains included in other
comprehensive income, reduced by deferred income taxes, are as follows:

<TABLE>
<CAPTION>
                                                              NET UNREALIZED GAINS (LOSSES)
                                                            ---------------------------------
                                                               DEBT        EQUITY
                                                            SECURITIES   SECURITIES    TOTAL
                                                            ----------   ----------   -------
<S>                                                         <C>          <C>          <C>
Net unrealized gains on securities available for sale as
  of December 31, 1997....................................    $ 178        $ 497      $   675
Change during year ended December 31, 1998:
  Increase in stated amount of securities.................       49           51          100
  Decrease in value of business acquired and deferred
     policy acquisition costs.............................      (22)          --          (22)
  Decrease in carrying value of Exchangeable Securities
     (Note 8).............................................       --            2            2
  Increase in deferred income tax liabilities.............       (8)         (19)         (27)
                                                              -----        -----      -------
Increase in net unrealized gains included in other
  comprehensive income....................................       19           34           53
                                                              -----        -----      -------
Net unrealized gains on securities available for sale as
  of December 31, 1998....................................      197          531          728
Change during year ended December 31, 1999:
  Decrease in stated amount of securities.................     (864)        (216)      (1,080)
  Increase in value of business acquired and deferred
     policy acquisition costs.............................      337           --          337
  Decrease in carrying value of Exchangeable Securities
     (Note 8).............................................       --           36           36
  Decrease in deferred income tax liabilities.............      184           61          245
                                                              -----        -----      -------
Decrease in net unrealized gains included in other
  comprehensive income....................................     (343)        (119)        (462)
                                                              -----        -----      -------
Net unrealized gains (losses) on securities available for
  sale as of December 31, 1999............................     (146)         412          266
Change during year ended December 31, 2000:
  Increase in stated amount of securities.................      460         (152)         308
  Decrease in value of business acquired and deferred
     policy acquisition costs.............................     (190)          --         (190)
  Decrease in carrying value of Exchangeable Securities
     (Note 8).............................................       --            4            4
  Increase in deferred income tax liabilities.............      (95)          52          (43)
                                                              -----        -----      -------
Increase in net unrealized gains included in other
  comprehensive income....................................      175          (96)          79
                                                              -----        -----      -------
Net unrealized gains on securities available for sale as
  of December 31, 2000....................................    $  29        $ 316      $   345
                                                              =====        =====      =======
</TABLE>

                                        39
<PAGE>   42
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NET INVESTMENT INCOME

     The details of investment income, net of investment expenses, follow:

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Interest on debt securities.................................  $1,202   $1,063   $1,020
Investment income on equity securities......................      27       29       27
Interest on mortgage loans..................................     212      179      153
Interest on policy loans....................................      49       43       40
Other investment income.....................................      34       32       30
                                                              ------   ------   ------
Gross investment income.....................................   1,524    1,346    1,270
Investment expenses.........................................     (94)     (74)     (68)
                                                              ------   ------   ------
Net investment income.......................................  $1,430   $1,272   $1,202
                                                              ======   ======   ======
</TABLE>

     Investment expenses include interest, salaries, expenses of maintaining and
operating investment real estate, real estate depreciation and other allocated
costs of investment management and administration.

REALIZED GAINS AND LOSSES

     The details of realized investment gains (losses) follow:

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                              2000     1999     1998
                                                              -----    -----    -----
<S>                                                           <C>      <C>      <C>
Common stocks...............................................  $120     $ 90      $61
Real estate.................................................     1       11       24
Debt securities.............................................   (22)      (2)      19
Other.......................................................     1        2       (3)
Amortization of deferred policy acquisition costs and value
  of business acquired......................................     2       --       (8)
                                                              ----     ----      ---
Realized investment gains...................................  $102     $101      $93
                                                              ====     ====      ===
</TABLE>

     Information about gross realized gains and losses on available for sale
securities transactions follows:

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                              2000     1999     1998
                                                              -----    -----    -----
<S>                                                           <C>      <C>      <C>
Gross realized:
  Gains.....................................................  $266     $100     $ 80
  Losses....................................................   (23)     (21)      (9)
  Amortization of deferred policy acquisition costs and
     value of business acquired.............................    --       --       (4)
                                                              ----     ----     ----
Net realized gains on available for sale securities.........  $243     $ 79     $ 67
                                                              ====     ====     ====
</TABLE>

OTHER INFORMATION

     The Company sold certain securities that had been classified as held to
maturity, due to significant declines in credit worthiness. Total proceeds were
$13, $7 and $13 in 2000, 1999 and 1998.

                                        40
<PAGE>   43
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5.  DERIVATIVES

USE OF DERIVATIVES

     The Company's investment policy permits limited use of derivative financial
instruments such as interest rate swaps in certain circumstances. The following
summarizes open interest rate swaps:

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                              --------------
                                                              2000     1999
                                                              -----    -----
<S>                                                           <C>      <C>
Receive-fixed swaps held as hedges of direct investments:
  Notional amount...........................................  $ 155    $ 156
  Average rate received.....................................   7.22%    7.21%
  Average rate paid.........................................   6.88%    5.62%
Receive-fixed swaps held to modify annuity crediting rates
  Notional amount...........................................  $  30    $  30
  Average rate received.....................................   6.78%    6.78%
  Average rate paid.........................................   6.56%    5.33%
</TABLE>

HEDGING DIRECT INVESTMENTS

     Interest rate swaps are used to reduce the impact of interest rate
fluctuations on specific floating-rate direct investments. Interest is exchanged
periodically on the notional value, with the Company receiving the fixed rate
and paying various short-term LIBOR rates on a net exchange basis. The net
amount received or paid under these swaps is reflected as an adjustment to
investment income. For hedges of investments classified as available for sale,
net unrealized gains, net of the effects of income taxes and the impact on
deferred policy acquisition costs and the value of business acquired, are not
significant and are included in net unrealized gains on securities available for
sale in stockholders' equity as of December 31, 2000 and 1999.

MODIFYING ANNUITY CREDITING RATES

     Interest rate swaps are used to modify the interest characteristics of
certain blocks of annuity contract deposits. Interest is exchanged periodically
on the notional value, with the Company receiving a fixed rate and paying
various short-term LIBOR rates on a net exchange basis. The net amount received
or paid under these swaps is reflected as an adjustment to insurance and annuity
benefits.

HEDGING EQUITY INDEXED ANNUITY CREDITING RATES

     Guarantee marketed an equity indexed annuity product which has an equity
market component, where interest credited to the contracts is linked to the
performance of the S&P 500(R) index. Guarantee historically managed this risk by
purchasing call options that mirrored the interest credited to the contracts. As
of December 31, 2000, the fair value and the carrying value of these options
totaled $4. As of December 31, 1999, the fair value and the carrying value of
these options totaled $5 reflecting the mark-to-market adjustment made to
Guarantee's assets as of the acquisition date.

CREDIT AND MARKET RISK

     The Company is exposed to credit risk in the event of non-performance by
counterparties to derivative instruments. The Company limits this exposure by
diversifying among counterparties with high credit ratings.

     The Company's credit exposure on swaps is limited to the fair value of swap
agreements favorable to the Company. The Company does not expect any
counterparty to fail to meet its obligation. Currently, non-performance by a
counterparty would not have a material adverse effect on the Company's financial
position or

                                        41
<PAGE>   44
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

results of operations. The Company's exposure to market risk is mitigated by the
offsetting effects of changes in the value of swap agreements and the related
direct investments and credited interest on annuities.

     The Company routinely monitors correlation between hedged items and hedging
instruments. In the event a hedge relationship is terminated or loses
correlation, any related hedging instrument that remained would be marked to
market through income. If the hedging instrument is terminated, any gain or loss
is deferred and amortized over the remaining life of the hedged asset or
liability.

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

DEFERRED POLICY ACQUISITION COSTS

     Information about deferred policy acquisition costs follows:

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                               2000     1999    1998
                                                              ------   ------   -----
<S>                                                           <C>      <C>      <C>
Beginning balance...........................................  $1,091   $  844   $ 742
Deferral:
  Commissions...............................................     274      200     169
  Other.....................................................      80       63      56
                                                              ------   ------   -----
                                                                 354      263     225
Amortization................................................    (153)    (117)   (113)
Adjustment related to unrealized (gains) losses on debt
  securities available for sale.............................     (75)     102      (4)
Adjustment related to realized losses (gains) on debt
  securities................................................       2       (1)     (6)
                                                              ------   ------   -----
Ending balance..............................................  $1,219   $1,091   $ 844
                                                              ======   ======   =====
</TABLE>

VALUE OF BUSINESS ACQUIRED

     Information about value of business acquired follows:

<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31,
                                                               ------------------------
                                                                2000     1999     1998
                                                               ------    -----    -----
<S>                                                            <C>       <C>      <C>
Beginning balance..........................................    $ 949     $568     $622
Acquisitions...............................................       --      206       --
Deferral of commissions and accretion of interest..........       18       22       37
Amortization...............................................     (108)     (83)     (83)
Adjustment related to unrealized (gains) losses on debt
  securities available for sale............................     (115)     235      (18)
Adjustment related to realized losses (gains) on debt
  securities...............................................       --        1       (2)
Adjustment related to purchase accounting..................       (4)      --       12
                                                               -----     ----     ----
Ending balance.............................................    $ 740     $949     $568
                                                               =====     ====     ====
</TABLE>

     During 2000, the Company finalized its purchase accounting for the
acquisition of Guarantee, resulting in an adjustment to decrease the value of
business acquired by $4.

     During 1998, the Company finalized its purchase accounting for the
acquisition of JP Financial, resulting in an adjustment to increase the value of
business acquired by $12.

                                        42
<PAGE>   45
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Expected approximate amortization percentages relating to the value of
business acquired for the next five years are as follows:

<TABLE>
<CAPTION>
                                                              AMORTIZATION
YEAR                                                           PERCENTAGE
----                                                          ------------
<S>                                                           <C>
2001........................................................      10.6%
2002........................................................       9.4%
2003........................................................       8.2%
2004........................................................       6.9%
2005........................................................       5.7%
</TABLE>

NOTE 7.  POLICY LIABILITIES INFORMATION

INTEREST RATE ASSUMPTIONS

     The liability for future policy benefits associated with ordinary life
insurance policies has been determined using initial interest rate assumptions
ranging from 2.0% to 9.9% and, when applicable, uniform grading over 20 to 30
years to ultimate rates ranging from 2.0% to 6.0%. Interest rate assumptions for
weekly premium, monthly debit and term life insurance products generally fall
within the same ranges as those pertaining to individual life insurance
policies.

     Credited interest rates for universal life-type products ranged from 4.1%
to 6.65% in 2000, 4.1% to 6.65% in 1999 and 3.8% to 6.85% in 1998. The average
credited interest rates for universal life-type products were 5.59%, 5.6% and
5.84% for 2000, 1999 and 1998. For annuity products, credited interest rates
generally ranged from 4.0% to 9.0% in 2000, 4% to 9.5% in 1999 and 4% to 8.15%
in 1998.

MORTALITY AND WITHDRAWAL ASSUMPTIONS

     Assumed mortality rates are generally based on experience multiples applied
to select and ultimate tables commonly used in the industry. Withdrawal
assumptions for individual life insurance policies are based on historical
company experience and vary by issue age, type of coverage and policy duration.

     For immediate annuities issued prior to 1987, mortality assumptions are
based on blends of the 1971 Individual Annuity Mortality Table and the 1969-71
U.S. Life Tables. For similar products issued after 1986, mortality assumptions
are based on blends of the 1983a and 1979-81 U.S. Life Tables.

                                        43
<PAGE>   46
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

ACCIDENT AND HEALTH AND DISABILITY INSURANCE LIABILITIES ACTIVITY

     Activity in the liabilities for accident and health and disability
benefits, including reserves for future policy benefits and unpaid claims and
claim adjustment expenses, is summarized below:

<TABLE>
<CAPTION>
                                                              2000   1999   1998
                                                              ----   ----   ----
<S>                                                           <C>    <C>    <C>
Balance as of January 1.....................................  $524   $358   $385
Less reinsurance recoverables...............................   130     71     62
                                                              ----   ----   ----
Net balance as of January 1.................................   394    287    323
                                                              ----   ----   ----
Acquisitions................................................    --    143     --
                                                              ----   ----   ----
Amount incurred:
  Current year..............................................   270     91    246
  Prior years...............................................   (15)   (30)   (54)
                                                              ----   ----   ----
                                                               255     61    192
                                                              ----   ----   ----
Less amount paid:
  Current year..............................................   148     33    130
  Prior years...............................................    95     64     98
                                                              ----   ----   ----
                                                               243     97    228
                                                              ----   ----   ----
Net balance as of December 31...............................   406    394    287
Plus reinsurance recoverables...............................   146    130     71
                                                              ----   ----   ----
Balance as of December 31...................................  $552   $524   $358
                                                              ====   ====   ====
Balance as of December 31 included with:
  Future policy benefits....................................  $485   $456   $288
  Policy and contract claims................................    67     68     70
                                                              ----   ----   ----
                                                              $552   $524   $358
                                                              ====   ====   ====
</TABLE>

     The Company uses conservative estimates for determining its liability for
accident and health and disability benefits, which are based on historical claim
payment patterns and attempt to provide for potential adverse changes in claim
patterns and severity. Lower than anticipated claims resulted in adjustments to
liabilities in each year.

NOTE 8.  DEBT AND EXCHANGEABLE SECURITIES

COMMERCIAL PAPER AND REVOLVING CREDIT BORROWINGS

     The Company has entered into two bank credit agreements for unsecured
revolving credit, under which the Company has the option to borrow at various
interest rates. One agreement is for $375 and extends to May 2002, and the other
agreement is for $200 and extends to December 18, 2001. The credit agreements
principally support the issuance of commercial paper. As of December 31, 2000,
outstanding commercial paper had various maturities, with $214 maturing in
excess of 90 days. The Company can issue commercial paper with maturities of up
to 270 days. If the Company cannot remarket commercial paper at maturity, the
Company intends to borrow a like amount under a credit agreement. The
weighted-average interest rates for commercial paper borrowings outstanding of
$405 and $361 at December 31, 2000 and 1999 were 6.51% and 5.80%.

EXCHANGEABLE SECURITIES

     The Mandatorily Exchangeable Debt Securities (MEDS) and Automatic Common
Exchange Securities (ACES) are collectively referred to as Exchangeable
Securities.

                                        44
<PAGE>   47
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  MEDS

     In April and June 1997, the Company issued MEDS of $75 at 6.95% and $75 at
6.65%. The MEDS are based on BankAmerica common stock. Interest is payable
quarterly. The MEDS mature January 10, 2002 and represent senior indebtedness of
the Corporation. The MEDS had principal amounts at issue of: 6.95% MEDS, $55.55
per security and 6.65% MEDS, $66.625 per security. Two weeks prior to, or at,
maturity, the principal amount of the MEDS will be mandatorily exchanged into
either a number of shares of the common stock of BankAmerica (stock) determined
based on an exchange rate reflecting the then trading price for the stock, or
cash in an amount of equal value, at the Company's option. Subject to
adjustments to reflect dilution, the exchange rate is equal to (1) 0.8264 shares
if the stock price is at least: 6.95% MEDS, $67.22 and 6.65% MEDS, $80.62, (2) a
fractional share of the stock having a value equal to the principal amount if
the price is more than the principal amount but less than the amount stated in
(1), or (3) one share if the price is less than or equal to the principal
amount.

     Effective September 22, 1999, the 6.65% MEDS were renegotiated with the
holder and now provide for an interest rate of 3.325% and an additional cash
payment per security at redemption or maturity equal to any shortfall in the
stock price below $66.625 but not more than $11.125 per security. Similarly,
effective December 22, 1999, the 6.95% MEDS were renegotiated. The interest rate
is 3.475% and the additional cash payment per security equals any shortfall in
the stock price below $55.55 but not more than $9.2375 per security.

  ACES

     On January 21, 2000, the Company repaid the ACES for $146.2 in cash, plus
accrued interest.

  Carrying Value of Exchangeable Securities

     The Exchangeable Securities are carried at fair value. Changes in the
carrying value, net of deferred income taxes, are recorded in other
comprehensive income. At December 31, 2000 and 1999, the combined carrying value
of the Exchangeable Securities was $139 and $289, based on the market value of
BankAmerica stock, which was $45.875 per share as of year end 2000.

INTEREST

     Interest expense totaled $67 for 2000, $50 for 1999 and $46 for 1998.

NOTE 9.  CAPITAL SECURITIES

     In January and March 1997, respectively, the Company privately placed $200
of 8.14% Capital Securities, Series A and $100 of 8.285% Capital Securities,
Series B. The Capital Securities mature in the year 2046, but are redeemable
prior to maturity at the option of the Company beginning January 15, 2007. The
Capital Securities are supported by subordinated indebtedness of the Company.

                                        45
<PAGE>   48
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 10.  STOCKHOLDERS' EQUITY

COMMON STOCK

     Changes in the number of shares outstanding are as follows:

<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                                                  ---------------------------------------
                                                     2000          1999          1998
                                                  -----------   -----------   -----------
<S>                                               <C>           <C>           <C>
Shares outstanding, beginning...................  103,344,685   105,896,185   106,278,409
Shares issued under stock option plans..........      261,060       249,900       207,776
Shares reacquired...............................     (735,181)   (2,801,400)     (590,000)
                                                  -----------   -----------   -----------
Shares outstanding, ending......................  102,870,564   103,344,685   105,896,185
                                                  ===========   ===========   ===========
</TABLE>

     On February 12, 2001, the Board authorized a three-for-two common stock
split which will be effected as a 50% stock dividend distributed on April 9,
2001 to shareholders of record as of March 19, 2001.

SHAREHOLDERS' RIGHTS PLAN

     Under a shareholders' rights plan, one common share purchase right is
attached to each share of the Company's common stock. The plan becomes operative
in certain events involving an offer for or the acquisition of 15% or more of
the Company's common stock by any person or group. Following such an event, each
right, unless redeemed by the Company's Board, entitles the holder (other than
the acquiring person or group) to purchase for an exercise price of $235.00 an
amount of common stock of the Company (or in the discretion of the Board,
preferred stock, debt securities, or cash), or in certain circumstances stock of
the acquiring company, having a market value of twice the exercise price.
Approximately 103 million shares of common stock are currently reserved for the
amended rights plan. The rights expire on February 8, 2009 unless extended by
the Board, and are redeemable by the Board at a price of 0.44 cents per right at
any time before they become exercisable.

PREFERRED STOCK

     The Company has 20,000,000 shares of preferred stock authorized (none
issued) with the par value, dividend rights and other terms to be fixed by the
Board of Directors, subject to certain limitations on voting rights.

NOTE 11.  STOCK INCENTIVE PLANS

LONG TERM STOCK INCENTIVE PLAN

     Under the Long Term Stock Incentive Plan, a Committee of disinterested
directors may award nonqualified or incentive stock options and stock
appreciation rights, and make grants of the Company's stock, to employees of the
Company and to life insurance agents. Stock grants may be either restricted
stock or unrestricted stock distributed upon the achievement of performance
goals established by the Committee.

     A total of 9,626,603 shares are available for issuance pursuant to
outstanding or future awards as of December 31, 2000. The option price may not
be less than the market value of the Company's common stock on the award date.
Options are exercisable for periods determined by the Committee, not to exceed
ten years from the award date, and vest immediately or over periods as
determined by the Committee. Restricted and unrestricted stock grants are
limited to 10% of the total shares reserved for the Plan. This plan will
terminate as to further awards on May 3, 2009, unless earlier terminated by the
Board.

NON-EMPLOYEE DIRECTORS' PLAN

     Under the Non-Employee Directors' Stock Option Plan, 509,814 shares of the
Company's common stock are reserved for issuance pursuant to outstanding or
future awards as of December 31, 2000. Nonqualified stock

                                        46
<PAGE>   49
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

options are automatically awarded, at market prices on specified award dates.
The options vest over a period of one to three years, and terminate ten years
from the date of award, but are subject to earlier vesting or termination under
certain circumstances. This plan will terminate as to further awards on March
31, 2003.

SUMMARY STOCK OPTION ACTIVITY

     Summarized information about the Company's stock option activity follows:

<TABLE>
<CAPTION>
                                           2000                     1999                     1998
                                  ----------------------   ----------------------   ----------------------
                                               WEIGHTED-                WEIGHTED-                WEIGHTED-
                                                AVERAGE                  AVERAGE                  AVERAGE
                                               EXERCISE                 EXERCISE                 EXERCISE
                                                 PRICE                    PRICE                    PRICE
                                   OPTIONS     PER SHARE    OPTIONS     PER SHARE    OPTIONS     PER SHARE
                                  ----------   ---------   ----------   ---------   ----------   ---------
<S>                               <C>          <C>         <C>          <C>         <C>          <C>
Outstanding beginning of year...   4,564,793    $45.12      4,038,698    $39.28      3,675,552    $36.14
Granted.........................     886,150     53.94        886,976     69.18        828,225     53.54
Exercised.......................    (257,394)    33.19       (223,156)    29.89       (210,725)    27.75
Forfeited.......................     (97,255)    59.78       (137,725)    53.37       (254,354)    49.91
                                  ----------    ------     ----------    ------     ----------    ------
Outstanding end of year.........   5,096,294    $46.98      4,564,793    $45.12      4,038,698    $39.28
                                  ==========    ======     ==========    ======     ==========    ======
Exercisable at end of year......   3,558,069    $41.72      2,368,463    $33.59      1,801,138    $28.82
                                  ==========    ======     ==========    ======     ==========    ======
Weighted-average fair value of
  options granted during the
  year..........................  $    13.44               $    16.32               $    13.54
                                  ==========               ==========               ==========
</TABLE>

     The following table summarizes certain stock option information at December
31, 2000:

<TABLE>
<CAPTION>
                                                  OPTIONS OUTSTANDING                 OPTIONS EXERCISABLE
                                        ----------------------------------------   --------------------------
                                                     WEIGHTED-
                                                      AVERAGE
                                                     REMAINING      WEIGHTED-                    WEIGHTED-
                                        NUMBER OF   CONTRACTUAL      AVERAGE       NUMBER OF      AVERAGE
RANGE OF EXERCISE PRICES                 SHARES        LIFE       EXERCISE PRICE    SHARES     EXERCISE PRICE
------------------------                ---------   -----------   --------------   ---------   --------------
<S>                                     <C>         <C>           <C>              <C>         <C>
$17.45 - $24.89.......................    793,125       4.3           $22.59         793,125       $22.59
$31.17 - $38.58.......................  1,261,048       6.5            37.19       1,261,048        37.19
$48.50 - $69.25.......................  3,042,121       5.9            57.39       1,503,896        55.61
                                        ---------                     ------       ---------       ------
                                        5,096,294       5.8           $46.98       3,558,069       $41.72
                                        =========                     ======       =========       ======
</TABLE>

PRO FORMA INFORMATION

     SFAS 123 requires the presentation of pro forma information as if the
Company had accounted for its employee and director stock options granted after
December 31, 1994 under the fair value method of that Statement. The fair value
was estimated at grant date using a Black-Scholes option pricing model with the
following weighted-average assumptions for 2000, 1999 and 1998: risk-free
interest rates of 6.7%, 5.2% and 5.8%; volatility factors of the expected market
price of the Company's common stock of 0.20, 0.19 and 0.17; and a
weighted-average expected life of the options of 8.6 years for 2000, 8.2 years
for 1999 and 9.9 years for 1998. Dividends were assumed to increase by 10%
annually.

     The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's stock options have characteristics
significantly different from those of traded options, and changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not provide a reliable single
measure of the fair value of the options.

                                        47
<PAGE>   50
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The estimated fair value of the options under SFAS 123 is amortized to
expense over the options' vesting period. The pro forma information follows:

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                              2000     1999     1998
                                                              -----    -----    -----
<S>                                                           <C>      <C>      <C>
Pro forma net income available to common stockholders.......  $ 504    $ 462    $ 411
Pro forma earnings per share available to common
  stockholders..............................................  $4.89    $4.39    $3.87
Pro forma earnings per share available to common
  stockholders -- assuming dilution.........................  $4.85    $4.35    $3.84
</TABLE>

NOTE 12.  STATUTORY FINANCIAL INFORMATION

     The Company's life insurance subsidiaries prepare financial statements on
the basis of statutory accounting practices (SAP) prescribed or permitted by the
insurance departments of their states of domicile. Prescribed SAP include a
variety of publications of the National Association of Insurance Commissioners
(NAIC) as well as state laws, regulations and administrative rules. Permitted
SAP encompass all accounting practices not so prescribed. The impact of
permitted accounting practices is not significant for the life insurance
subsidiaries.

     The principal differences between SAP and GAAP are (1) policy acquisition
costs are expensed as incurred under SAP, but are deferred and amortized under
GAAP, (2) the value of business acquired is not capitalized under SAP but is
under GAAP, (3) amounts collected from holders of universal life-type and
annuity products are recognized as premiums when collected under SAP, but are
initially recorded as contract deposits under GAAP, with cost of insurance
recognized as revenue when assessed and other contract charges recognized over
the periods for which services are provided, (4) the classification and carrying
amounts of investments in certain securities are different under SAP than under
GAAP, (5) the criteria for providing asset valuation allowances, and the
methodologies used to determine the amounts thereof, are different under SAP
than under GAAP, (6) the timing of establishing certain reserves, and the
methodologies used to determine the amounts thereof, are different under SAP
than under GAAP, (7) no provision is made for deferred income taxes under SAP
and (8) certain assets are not admitted for purposes of determining surplus
under SAP.

     A comparison of net income and statutory capital and surplus of the life
insurance subsidiaries (excluding Guarantee for 1999 and 1998) determined on the
basis of SAP to net income and stockholder's equity of these life insurance
subsidiaries (excluding Guarantee for 1999 and 1998) on the basis of GAAP is as
follows:

<TABLE>
<CAPTION>
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
STATUTORY ACCOUNTING PRACTICES
Net income for the year ended December 31...................  $  561   $  417   $  384
                                                              ======   ======   ======
Statutory capital and surplus as of December 31.............  $1,529   $1,696   $1,584
                                                              ======   ======   ======
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Net income for the year ended December 31...................  $  577   $  444   $  388
                                                              ======   ======   ======
Stockholder's equity as of December 31......................  $3,561   $3,149   $3,342
                                                              ======   ======   ======
</TABLE>

     At December 31, 1999, Guarantee had statutory capital and surplus of $157
and GAAP stockholder's equity of $426. Prior to its acquisition, Guarantee
converted from a mutual form to a stock life company. In connection with that
conversion, Guarantee agreed to segregate certain assets to provide for
dividends on participating policies using dividend scales in effect at the time
of the conversion, providing that the experience underlying such scales
continued. The assets, including revenue therefrom, allocated to the
participating policies will accrue solely to the benefit of those policies. The
assets and liabilities relating to these participating policies amounted to $341
and $372 at December 31, 2000 and $332 and $371 at December 31, 1999. The excess
of liabilities over the assets represents the total estimated future earnings
expected to emerge from these participating policies.

                                        48
<PAGE>   51
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Risk-Based Capital ("RBC") requirements promulgated by the NAIC require
life insurers to maintain minimum capitalization levels that are determined
based on formulas incorporating credit risk, insurance risk, interest rate risk
and general business risk. As of December 31, 2000, the life insurance
subsidiaries' adjusted capital and surplus exceeded their authorized control
level RBC.

     The NAIC revised the Accounting Practices and Procedures Manual in a
process referred to as Codification. The revised manual will be effective
January 1, 2001. The domiciliary states of the Company's insurance subsidiaries
have adopted the provisions of the revised manual with certain exceptions. The
revised manual has changed, to some extent, prescribed statutory accounting
practices and will result in changes to the accounting practices that the
Company's insurance subsidiaries use to prepare their statutory basis financial
statements. The Company expects implementation to have an immaterial impact on
statutory surplus of its insurance subsidiaries.

     The insurance statutes of the states of domicile limit the amount of
dividends that the life insurance subsidiaries may pay annually without first
obtaining regulatory approval. Generally, the limitations are based on a
combination of statutory net gain from operations for the preceding year, 10% of
statutory surplus at the end of the preceding year, and dividends and
distributions made within the preceding twelve months. Approximately $180 of
dividends could be paid to the ultimate parent by the life insurance
subsidiaries in 2001 without regulatory approval.

NOTE 13.  INCOME TAXES

     Income taxes reported are as follows:

<TABLE>
<CAPTION>
                                                                  YEAR ENDED
                                                                 DECEMBER 31,
                                                              ------------------
                                                              2000   1999   1998
                                                              ----   ----   ----
<S>                                                           <C>    <C>    <C>
Current expense.............................................  $215   $212   $195
Deferred expense............................................    62     44     31
                                                              ----   ----   ----
          Total income tax expense..........................  $277   $256   $226
                                                              ====   ====   ====
</TABLE>

     A reconciliation of the federal income tax rate to the Company's effective
income tax rate follows:

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                              2000     1999     1998
                                                              -----    -----    -----
<S>                                                           <C>      <C>      <C>
Federal income tax rate.....................................  35.0%    35.0%    35.0%
Reconciling items:
  Tax exempt interest and dividends received deduction......  (1.0)    (0.9)    (1.5)
  Other increases, net......................................    --       --      0.2
                                                              ----     ----     ----
Effective income tax rate...................................  34.0%    34.1%    33.7%
                                                              ====     ====     ====
</TABLE>

                                        49
<PAGE>   52
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The tax effects of temporary differences that result in significant
deferred tax assets and deferred tax liabilities are as follows:

<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                              -------------
                                                              2000    1999
                                                              -----   -----
<S>                                                           <C>     <C>
Deferred tax assets:
  Difference in policy liabilities..........................  $388    $450
  Obligation for postretirement benefits....................     6       5
  Deferred compensation.....................................    26      22
  Differences in investment basis...........................    --       2
  Other deferred tax assets.................................   123     103
                                                              ----    ----
Gross deferred tax assets...................................   543     582
                                                              ----    ----
Deferred tax liabilities:
  Net unrealized gains on securities........................   183     140
  Deferral of policy acquisition costs and value of business
     acquired...............................................   316     429
  Deferred gain recognition for income tax purposes.........    16      16
  Differences in investment bases...........................    36      --
  Depreciation differences..................................    12      17
  Other deferred tax liabilities............................   192      67
                                                              ----    ----
Gross deferred tax liabilities..............................   755     669
                                                              ----    ----
Net deferred income tax liability...........................  $212    $ 87
                                                              ====    ====
</TABLE>

     Federal income tax returns for all years through 1994 are closed. The
Internal Revenue Service has examined tax years 1995 and 1996, and assessments
totaling $15.1 million have been proposed. The assessments pertain to issues
related to timing differences between tax accounting and generally accepted
accounting principles. The Company has contested the proposed assessments. Tax
years 1997 and 1998 are currently under examination by the Internal Revenue
Service, and no assessments have been proposed to date. In the opinion of
management, recorded income tax liabilities adequately provide for these pending
assessments as well as all remaining open years.

     Under prior federal income tax law, one-half of the excess of a life
insurance company's income from operations over its taxable investment income
was not taxed, but was set aside in a special tax account designated as
"Policyholders' Surplus." The Company has approximately $107 of untaxed
"Policyholders' Surplus" on which no payment of federal income taxes will be
required unless it is distributed as a dividend, or under other specified
conditions. No related deferred tax liability has been recognized for the
potential tax, which would approximate $37 million.

                                        50
<PAGE>   53
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 14.  RETIREMENT BENEFIT PLANS

PENSION PLANS

     The Company and its subsidiaries other than Guarantee have defined benefit
pension plans which are funded through group annuity contracts with JP Life. The
assets of the plans are those of the related contracts, and are primarily held
in separate accounts of JP Life. Information regarding pension plans is as
follows:

<TABLE>
<CAPTION>
                                                               YEAR ENDED
                                                              DECEMBER 31,
                                                              -------------
                                                              2000    1999
                                                              -----   -----
<S>                                                           <C>     <C>
Change in benefit obligation:
  Benefit obligation at beginning of year...................  $ 265   $ 241
  Service cost..............................................     11       9
  Interest cost.............................................     19      16
  Actuarial gains...........................................    (35)    (20)
  Benefits paid.............................................    (20)    (16)
  Obligation assumed with Guarantee acquisition.............     --      35
                                                              -----   -----
Benefit obligation at end of year...........................    240     265
                                                              -----   -----
Change in plan assets:
  Fair value of assets at beginning of year.................    392     347
  Actual return on plan assets..............................     15      17
  Transfer in...............................................     (2)      2
  Benefits paid.............................................    (20)    (16)
  Assets acquired with Guarantee acquisition................     --      42
                                                              -----   -----
Fair value of assets at end of year.........................    385     392
                                                              -----   -----
Funded status of the plans..................................    145     127
Unrecognized net gain.......................................   (139)   (117)
Unrecognized transition net asset...........................     (8)    (10)
Unrecognized prior service cost.............................      5       8
                                                              -----   -----
Prepaid benefit cost........................................  $   3   $   8
                                                              =====   =====
</TABLE>

<TABLE>
<CAPTION>
                                                             YEAR ENDED DECEMBER 31,
                                                             ------------------------
                                                              2000     1999     1998
                                                             ------   ------   ------
<S>                                                          <C>      <C>      <C>
Weighted-average assumptions as of December 31:
  Discount rate............................................    7.5%     7.4%     6.5%
  Expected return on plan assets...........................    8.0%     8.0%     8.0%
  Rate of compensation increase............................    5.5%     5.5%     4.5%
Components of net periodic benefit cost:
  Service cost, benefits earned during the year............  $  11    $   9     $ 10
  Interest cost on projected benefit obligation............     19       16       14
  Expected return on plan assets...........................    (27)     (22)     (19)
  Net amortization and deferral............................     (6)      (3)      (1)
                                                             -----    -----     ----
Benefit cost...............................................  $  (3)   $  --     $  4
                                                             =====    =====     ====
</TABLE>

OTHER POSTRETIREMENT BENEFIT PLANS

     The Company sponsors contributory health care and life insurance benefit
plans for eligible retired employees, qualifying retired agents and certain
surviving spouses. The Company contributes to a welfare benefit

                                        51
<PAGE>   54
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

trust from which future benefits will be paid. The Company accrues the cost of
providing postretirement benefits other than pensions during the employees'
active service period. The non-pension postretirement expense was $1 in 2000,
1999 and 1998.

DEFINED CONTRIBUTION PLANS

     Defined contribution retirement plans cover most employees and full time
agents. The Company matches a portion of participant contributions and makes
profit sharing contributions to a fund that acquires and holds shares of the
Company's common stock. Most plan assets are invested under a group variable
annuity contract issued by JP Life. Expenses were $3, $1 and $3 during 2000,
1999 and 1998.

NOTE 15.  REINSURANCE

     The insurance subsidiaries attempt to reduce exposure to significant
individual claims by reinsuring portions of certain individual life insurance
policies and annuity contracts written. They reinsure the portion of an
individual life insurance risk in excess of their retention, which ranges from
$0.4 to $2.0 for various individual life and annuity products. They also attempt
to reduce exposure to losses that may result from unfavorable events or
circumstances by reinsuring certain levels and types of accident and health
insurance risks underwritten. They assume portions of the life and accident and
health risks underwritten by certain other insurers on a limited basis, but
amounts related to assumed reinsurance are not significant to the consolidated
financial statements.

     JPFIC reinsures 100% of the Periodic Payment Annuities (PPA), COLI and
Affiliated credit insurance business written prior to 1995 with affiliates of
Household International, Inc. on a coinsurance basis. Balances are settled
monthly, and the reinsurers compensate JPFIC for administrative services related
to the reinsured business. In 1996, the Company recaptured a portion of the PPA
reinsurance. The amount due from reinsurers in the consolidated balance sheets
includes $948 and $1,057 due from the Household affiliates at December 31, 2000
and 1999.

     Assets related to the reinsured PPA and COLI business have been placed in
irrevocable trusts formed to hold the assets for the benefit of JPFIC and are
subject to investment guidelines which identify (1) the types and quality
standards of securities in which new investments are permitted, (2) prohibited
new investments, (3) individual credit exposure limits and (4) portfolio
characteristics. Household has unconditionally and irrevocably guaranteed, as
primary obligor, full payment and performance by its affiliated reinsurers.
JPFIC has the right to terminate the PPA and COLI reinsurance agreements by
recapture of the related assets and liabilities if Household does not take a
required action under the guarantee agreements within 90 days of a triggering
event. JPFIC has the option to terminate the PPA and COLI reinsurance agreements
on the seventh anniversary of the acquisition, by recapturing the related assets
and liabilities at an agreed-upon price or their then current fair values as
independently determined.

     As of December 31, 2000 and 1999, JPFIC had a reinsurance recoverable of
$84 and $87 from a single reinsurer, pursuant to a 50% coinsurance agreement.
JPFIC and the reinsurer are joint and equal owners in $172 and $191 of
securities and short-term investments as of December 31, 2000 and 1999, 50% of
which is included in investments in the accompanying consolidated balance
sheets.

     Reinsurance contracts do not relieve an insurer from its primary obligation
to policyholders. Therefore, the failure of a reinsurer to discharge its
reinsurance obligations could result in a loss to the subsidiaries. The
subsidiaries regularly evaluate the financial condition of their reinsurers and
monitor concentrations of credit risk related to reinsurance activities. No
significant credit losses have resulted from the reinsurance activities of the
subsidiaries during the three years ended December 31, 2000.

                                        52
<PAGE>   55
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The effects of reinsurance on total premiums and other considerations and
total benefits are as follows:

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Premiums and other considerations, before effect of
  reinsurance ceded.........................................  $1,571   $1,070   $1,217
Less premiums and other considerations ceded................     206      167      168
                                                              ------   ------   ------
Net premiums and other considerations.......................  $1,365   $  903   $1,049
                                                              ======   ======   ======
Benefits, before reinsurance recoveries.....................  $1,922   $1,481   $1,654
Less reinsurance recoveries.................................     262      273      347
                                                              ------   ------   ------
Net benefits................................................  $1,660   $1,208   $1,307
                                                              ======   ======   ======
</TABLE>

NOTE 16.  SEGMENT INFORMATION

     The Company has five reportable segments which are defined based on the
nature of the products and services offered: Individual Products, Annuity and
Investment Products (AIP), Benefit Partners (formerly called Group Products),
Communications, and Corporate and Other. The Benefit Partners segment was
created in the first quarter of 2000, as a result of the acquisition of
Guarantee. Amounts related to group non-medical products such as term life,
disability and dental insurance that had been classified as Life Insurance
Products in prior years have been reclassified to the Benefit Partners segment
for all years presented. The remaining amounts that had been classified as Life
Insurance Products in prior years relate to individual life insurance products
and have been renamed Individual Products for all years presented. Within the
Individual Products segment, the Company offers a wide array of individual life
insurance products including variable life insurance. AIP offers both fixed and
variable annuities, as well as other investment products. As mentioned above,
Benefit Partners offers group non-medical products such as term life, disability
and dental insurance to the employer marketplace. Various insurance and
investment products are currently marketed to individuals and businesses in the
United States. The Communications segment consists principally of radio and
television broadcasting operations located in strategically selected markets in
the Southeastern and Western United States, and sports program production. The
Corporate and Other segment includes activities of the parent company and
passive investment affiliates, surplus of the life insurance subsidiaries not
allocated to other reportable segments including earnings thereon, financing
expenses on Corporate debt and debt securities including Capital Securities,
federal and state income taxes not otherwise allocated to other reportable
segments, and all of the Company's realized gains and losses. Surplus is
allocated to the Individual Products, AIP, and Benefit Partners reportable
segments based on risk-based capital formulae which give consideration to
asset/liability and general business risks, as well as the Company's strategies
for managing those risks. Various distribution channels and/or product classes
related to the Company's individual life, annuity and investment products and
group insurance have been aggregated in the Individual Products, AIP, and
Benefit Partners reporting segments.

                                        53
<PAGE>   56
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The segments are managed separately because of the different products,
distribution channels and marketing strategies each employs. The Company
evaluates performance based on several factors, of which the primary financial
measure is reportable segment results, which excludes realized gains and losses.
The accounting policies of the business segments are the same as those described
in Note 2. Substantially all revenue is derived from sales in the United States,
and foreign assets are not material. The following table summarizes financial
information of the reportable segments:

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                              -----------------
                                                               2000      1999
                                                              -------   -------
<S>                                                           <C>       <C>
ASSETS
  Individual Products.......................................  $15,054   $14,493
  AIP.......................................................    7,691     7,443
  Benefit Partners..........................................      736       606
  Communications............................................      212       217
  Corporate & other.........................................    3,628     3,687
                                                              -------   -------
          Total assets......................................  $27,321   $26,446
                                                              =======   =======
</TABLE>

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
REVENUES
Individual Products.........................................  $1,684   $1,468   $1,424
AIP.........................................................     629      511      506
Benefit Partners............................................     537      164      313
Communications..............................................     206      200      195
Corporate & other...........................................      80      117       79
                                                              ------   ------   ------
                                                               3,136    2,460    2,517
Realized investment gains, before tax.......................     102      101       93
                                                              ------   ------   ------
          Total revenues....................................  $3,238   $2,561   $2,610
                                                              ======   ======   ======
TOTAL REPORTABLE SEGMENT RESULTS AND RECONCILIATION TO NET
  INCOME AVAILABLE TO COMMON STOCKHOLDERS
Individual Products.........................................  $  287   $  242   $  221
AIP.........................................................      78       67       71
Benefit Partners............................................      33       25       24
Communications..............................................      41       38       32
Corporate & other...........................................       6       33       12
                                                              ------   ------   ------
          Total reportable segment results..................     445      405      360
Realized investment gains, net of tax.......................      67       65       58
                                                              ------   ------   ------
          Net income available to common stockholders.......  $  512   $  470   $  418
                                                              ======   ======   ======
NET INVESTMENT INCOME
Individual Products.........................................  $  840   $  736   $  681
AIP.........................................................     482      419      425
Benefit Partners............................................      51       30       38
Communications..............................................      (5)      (5)      (5)
Corporate & other...........................................      62       92       63
                                                              ------   ------   ------
          Total net investment income.......................  $1,430   $1,272   $1,202
                                                              ======   ======   ======
</TABLE>

                                        54
<PAGE>   57
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
AMORTIZATION OF DEFERRED POLICY ACQUISITION COSTS AND VALUE
  OF BUSINESS ACQUIRED
Individual Products.........................................  $  158   $  167   $  149
AIP.........................................................      46       25       28
Benefit Partners............................................      57        8       19
                                                              ------   ------   ------
Amortization reflected in total reportable segment
  results...................................................     261      200      196
Amortization on realized investment gains...................      (2)      --        8
                                                              ------   ------   ------
Amortization of deferred policy acquisition costs and value
  of business acquired......................................  $  259   $  200   $  204
                                                              ======   ======   ======
INCOME TAX EXPENSE
Individual Products.........................................  $  153   $  128   $  117
AIP.........................................................      42       36       38
Benefit Partners............................................      18       13       13
Communications..............................................      27       25       22
Corporate & other...........................................       2       18        1
                                                              ------   ------   ------
          Total operating income tax expense................     242      220      191
Income tax expense on realized investment gains.............      35       36       35
                                                              ------   ------   ------
          Total income tax expense..........................  $  277   $  256   $  226
                                                              ======   ======   ======
</TABLE>

     The Company allocates depreciation expense to Individual Products, AIP and
Benefit Partners, but the related fixed assets are contained in the Corporate
and Other segment.

NOTE 17.  OTHER COMPREHENSIVE INCOME

     Comprehensive income and its components are displayed in the consolidated
statements of stockholders' equity. Currently, the only element of other
comprehensive income is changes in unrealized gains and losses on securities
classified as available for sale, which is displayed in the following table,
along with related tax effects. See Note 4 for further detail of changes in
unrealized gains.

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Unrealized holding gains arising during period, before
  taxes.....................................................  $ 365    $(632)    $147
Income taxes................................................   (128)     221      (51)
                                                              -----    -----     ----
Unrealized holding gains arising during period, net of
  taxes.....................................................    237     (411)      96
                                                              -----    -----     ----
Less: reclassification adjustment
  Gains realized in net income..............................    243       79       67
  Income taxes..............................................    (85)     (28)     (24)
                                                              -----    -----     ----
Reclassification adjustment for gains realized in net
  income....................................................    158       51       43
                                                              -----    -----     ----
Other comprehensive income -- net unrealized gains
  (losses)..................................................  $  79    $(462)    $ 53
                                                              =====    =====     ====
</TABLE>

                                        55
<PAGE>   58
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 18.  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying values and fair values of financial instruments as of December
31 are summarized as follows:

<TABLE>
<CAPTION>
                                                           2000                 1999
                                                    ------------------   ------------------
                                                    CARRYING    FAIR     CARRYING    FAIR
                                                     VALUE      VALUE     VALUE      VALUE
                                                    --------   -------   --------   -------
<S>                                                 <C>        <C>       <C>        <C>
FINANCIAL ASSETS
Debt securities available for sale................  $12,974    $12,974   $11,832    $11,832
Interest rate swaps available for sale............        4          4        (1)        (1)
Debt securities held to maturity..................    3,130      3,133     3,351      3,259
Interest rate swaps held to maturity..............       --          1        --         --
Equity securities available for sale..............      551        551       737        737
Mortgage loans....................................    2,771      2,890     2,543      2,467
Policy loans......................................      923      1,032       906        998
FINANCIAL LIABILITIES
Annuity contract liabilities in accumulation
  phase...........................................    5,818      5,608     5,240      5,057
Commercial paper and revolving credit
  borrowings......................................      405        405       361        361
Exchangeable Securities and other debt............      139        124       290        277
Securities sold under repurchase agreements.......      397        397       523        523
Capital Securities................................      300        294       300        276
</TABLE>

     The fair values of cash, cash equivalents, balances due on account from
agents, reinsurers and others, and accounts payable approximate their carrying
amounts in the consolidated balance sheets due to their short-term maturity or
availability. Assets and liabilities related to separate accounts are reported
at fair value in the consolidated balance sheets.

     The fair values of debt and equity securities have been determined from
nationally quoted market prices and by using values supplied by independent
pricing services and discounted cash flow techniques.

     The fair value of the mortgage loan portfolio has been estimated by
discounting expected future cash flows using the interest rate currently offered
for similar loans.

     The fair value of policy loans outstanding for traditional life products
has been estimated using a current risk-free interest rate applied to expected
future loan repayments projected based on historical repayment patterns. The
fair values of policy loans on universal life-type and annuity products
approximate carrying values due to the variable interest rates charged on those
loans.

     Annuity contracts do not generally have defined maturities. Therefore, fair
values of the liabilities under annuity contracts, the carrying amounts of which
are included with policyholder contract deposits in the consolidated balance
sheets, are estimated to equal the cash surrender values of the contracts.

     The fair values of commercial paper and revolving credit borrowings
approximate their carrying amounts due to their short-term nature. Similarly,
the fair value of the liability for securities sold under repurchase agreements
approximates its carrying amount, which includes accrued interest. With respect
to the Exchangeable Securities, the fair value of the ACES in 1999 was based on
its nationally quoted market price. The fair value of the MEDS, which are not
publicly traded, is estimated based on the value holders would have received had
the MEDS been redeemable as of year end based on the market price of BankAmerica
stock.

     The fair value of the Capital Securities was determined based on market
quotes for the securities.

                                        56
<PAGE>   59
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 19.  COMMITMENTS AND CONTINGENT LIABILITIES

     The Company routinely enters into commitments to extend credit in the form
of mortgage loans and to purchase certain debt instruments for its investment
portfolio in private placement transactions. The fair value of outstanding
commitments to fund mortgage loans and to acquire debt securities in private
placement transactions, which are not reflected in the consolidated balance
sheet, approximates $81 at December 31, 2000.

     The Company leases electronic data processing equipment and field office
space under noncancelable operating lease agreements. The lease terms generally
range from three to five years. Neither annual rent nor future rental
commitments are significant.

     JPCC has commitments for purchases of syndicated television programming and
commitments on other contracts, and future sports programming rights of
approximately $459 as of December 31, 2000 payable through the year 2011. The
company has commitments to sell a portion of the sports programming rights to
other entities for approximately $247, over the same period. These commitments
are not reflected as an asset or liability in the accompanying consolidated
balance sheet because the programs are not currently available for use.

     Jefferson-Pilot Life is a defendant in two separate proposed class action
suits. The plaintiffs' fundamental claim in the first suit is that our policy
illustrations were misleading to consumers. Management believes that our policy
illustrations made appropriate disclosures and were not misleading. The second
suit alleges that a predecessor company, Pilot Life, decades ago unfairly
discriminated in the sale of certain small face amount life insurance policies,
and unreasonably priced these policies. In both cases, the plaintiffs seek
unspecified compensatory and punitive damages, costs and equitable relief. While
management is unable to estimate the probability or range of any possible loss
in either or both of these cases, management believes that our practices have
complied with state insurance laws and intends to vigorously defend the claims
asserted.

     In the normal course of business, the Company and its subsidiaries are
parties to various lawsuits. Because of the considerable uncertainties that
exist, the Company cannot predict the outcome of pending or future litigation.
However, management believes that the resolution of pending legal proceedings
will not have a material adverse effect on the Company's financial position or
liquidity, although it could have a material adverse effect on the results of
operations for a specific period.

                                        57
<PAGE>   60

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     We incorporate by reference the background information under the heading
"Proposal I -- Election of Directors" in the Registrant's definitive Proxy
Statement for the Annual Meeting to be held on May 7, 2001 (Proxy Statement).
Executive Officers are described in Part I above.

     We incorporate by reference the information under the heading "Stock
Ownership -- Section 16(a) Beneficial Ownership Reporting Compliance" in the
Proxy Statement relating to the one delinquent filer under Section 16(a) of the
Securities Exchange Act of 1934.

ITEM 11.  EXECUTIVE COMPENSATION

     We incorporate by reference the information under the heading "Executive
Compensation" in the Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     We incorporate by reference the information under the heading "Stock
Ownership" in the Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We incorporate by reference the information under the heading "Is the
Compensation Committee Independent?" in the Proxy Statement.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) This portion of Item 14 appears in a separate section of this report.
See the index on page F-1. The List and Index of Exhibits appears on page E-1 of
this report.

     (b) No Form 8-K was filed in the fourth quarter 2000.

     (c) Exhibits appear in a separate section of this report. See page E-1.

     (d) Financial Statement Schedules -- This portion of Item 14 appears in a
separate section of this report. See the index on page F-1.

UNDERTAKINGS

     For the purposes of complying with the amendments to the rules governing
Form S-8 under the Securities Act of 1933, the undersigned registrant hereby
undertakes as follows, which undertaking shall be incorporated by reference into
registrant's Registration Statements on Form S-8 Nos. 2-36778 (filed March 23,
1970) and 2-56410 (filed May 12, 1976) and 33-30530 (filed August 15, 1989), and
in outstanding effective registration statements on Form S-16 included in such
S-8 filings:

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

                                        58
<PAGE>   61

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

<TABLE>
<S>                                                         <C>
                                                            JEFFERSON-PILOT CORPORATION
                                                            (Registrant)

                         BY (SIGNATURE)                     /s/ Reggie D. Adamson
                         (NAME AND TITLE)                   --------------------------------------------
                                                            Reggie D. Adamson
                                                            Senior Vice President, Finance
                                                            (Also signing as Principal Accounting
                         DATE                               Officer)
                                                            March 23, 2001
</TABLE>

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<S>                             <C>
BY (SIGNATURE)                  /s/  David A. Stonecipher*
                                --------------------------------------------------------
(NAME AND TITLE)                David A. Stonecipher
                                Chairman, President and Director
                                (Principal Executive Officer)
DATE                            March 23, 2001

BY (SIGNATURE)                  /s/  Dennis R. Glass*
                                --------------------------------------------------------
NAME AND TITLE)                 Dennis R. Glass
                                Executive Vice President and Treasurer
                                (Principal Financial Officer)
DATE                            March 23, 2001

BY (SIGNATURE)                  /s/  Edwin B. Borden*
                                --------------------------------------------------------
(NAME AND TITLE)                Edwin B. Borden, Director
DATE                            March 23, 2001

BY (SIGNATURE)                  /s/  William H. Cunningham*
                                --------------------------------------------------------
(NAME AND TITLE)                William H. Cunningham, Director
DATE                            March 23, 2001

BY (SIGNATURE)                  /s/  Robert G. Greer*
                                --------------------------------------------------------
(NAME AND TITLE)                Robert G. Greer, Director
DATE                            March 23, 2001

BY (SIGNATURE)                  /s/  George W. Henderson, III*
                                --------------------------------------------------------
(NAME AND TITLE)                George W. Henderson, III
DATE                            March 23, 2001

BY (SIGNATURE)                  /s/  E. S. Melvin*
                                --------------------------------------------------------
(NAME AND TITLE)                E. S. Melvin, Director
DATE                            March 23, 2001
</TABLE>

                                        59
<PAGE>   62
<TABLE>
<S>                             <C>
BY (SIGNATURE)                  /s/  Kenneth C. Mlekush*
                                --------------------------------------------------------
(NAME AND TITLE)                Kenneth C. Mlekush, Director
DATE                            March 23, 2001

BY (SIGNATURE)                  /s/  William P. Payne*
                                --------------------------------------------------------
(NAME AND TITLE)                William P. Payne, Director
DATE                            March 23, 2001

BY (SIGNATURE)                  /s/  Patrick S. Pittard*
                                --------------------------------------------------------
(NAME AND TITLE)                Patrick S. Pittard, Director
DATE                            March 23, 2001

BY (SIGNATURE)                  /s/  Donald S. Russell, Jr.*
                                --------------------------------------------------------
(NAME AND TITLE)                Donald S. Russell, Jr., Director
DATE                            March 23, 2001
</TABLE>

*By  /s/  Robert A. Reed
     --------------------------------------------------------------
     Robert A. Reed, Attorney-in-Fact
     March 23, 2001

                                        60
<PAGE>   63

         LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

          The following consolidated financial statements of Jefferson-Pilot
     Corporation and subsidiaries are included in Item 8.

          Consolidated Balance Sheets -- December 31, 2000 and 1999

          Consolidated Statements of Income -- Years Ended December 31, 2000,
     1999 and 1998

          Consolidated Statements of Stockholders' Equity -- Years Ended
     December 31, 2000, 1999 and 1998

          Consolidated Statements of Cash Flows -- Years Ended December 31,
     2000, 1999 and 1998

          Notes to Consolidated Financial Statements -- December 31, 2000

     The following consolidated financial statement schedules of Jefferson-Pilot
Corporation and subsidiaries are included in Item 14(d).

<TABLE>
<CAPTION>
                                                               PAGE
                                                              -------
<S>                                                           <C>
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, 2000 and
      1999..................................................      F-3
     Condensed Statements of Income for the Years Ended
      December 31, 2000, 1999 and 1998......................      F-4
     Condensed Statements of Cash Flows for the Years Ended
      December 31, 2000, 1999 and 1998......................      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-9
List and Index of Exhibits..................................  E-1-E-2
</TABLE>

     All other schedules required by Article 7 of Regulation S-X are not
required under the related instructions or are inapplicable and therefore have
been omitted.

                                       F-1
<PAGE>   64

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                     SCHEDULE I -- SUMMARY OF INVESTMENTS -
                   OTHER THAN INVESTMENTS IN RELATED PARTIES
                               DECEMBER 31, 2000
                                  IN MILLIONS

<TABLE>
<CAPTION>
                          COLUMN A                            COLUMN B   COLUMN C     COLUMN D
                          --------                            --------   --------   -------------
                                                                                       AMOUNT
                                                                                      AT WHICH
                                                                                    SHOWN IN THE
                                                                                    CONSOLIDATED
                     TYPE OF INVESTMENT                       COST (a)    VALUE     BALANCE SHEET
                     ------------------                       --------   --------   -------------
<S>                                                           <C>        <C>        <C>
Debt securities:
  Bonds and other debt instruments:
     United States Treasury obligations and direct
       obligations of U. S. Government agencies.............  $   231    $   242       $   242
     Federal agency issued collateralized mortgage
       obligations..........................................    2,417      2,492         2,492
     Obligations of states, municipalities and political
       subdivisions (b).....................................       46         47            47
     Obligations of public utilities (b)....................    1,563      1,585         1,581
     Corporate obligations (b)..............................    9,581      9,487         9,487
     Corporate private-labeled collateralized mortgage
       obligations..........................................    2,183      2,230         2,230
  Redeemable preferred stocks...............................       28         29            29
                                                              -------    -------       -------
          Total debt securities.............................   16,049     16,112        16,108
                                                              -------    =======       -------
Equity securities:
  Common stocks:
     Public utilities.......................................       21         74            74
     Banks, trust and insurance companies...................       25        424           424
     Industrial and all other...............................       16         51            51
  Nonredeemable preferred stocks............................        2          2             2
                                                              -------    -------       -------
          Total equity securities...........................       64        551           551
                                                              -------    =======       -------
Mortgage loans on real estate (c)...........................    2,800                    2,771
Real estate acquired by foreclosure (c).....................        1                        1
Other real estate held for investment.......................      134                      134
Policy loans................................................      923                      923
Other long-term investments.................................       11                       11
                                                              -------                  -------
          Total investments.................................  $19,982                  $20,499
                                                              =======                  =======
</TABLE>

---------------

a. Cost of debt securities is original cost, reduced by repayments and adjusted
   for amortization of premiums and 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
<PAGE>   65

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

     SCHEDULE II -- CONDENSED BALANCE SHEETS OF JEFFERSON-PILOT CORPORATION
                     IN MILLIONS (EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                              ----------------
                                                               2000      1999
                                                              ------    ------
<S>                                                           <C>       <C>
                                    ASSETS
Cash and investments:
  Cash and cash equivalents.................................  $   --    $   48
  Investment in subsidiaries................................   4,405     4,206
  Other investments.........................................       4         4
                                                              ------    ------
          Total cash and investments........................   4,409     4,258
Other assets................................................       6        15
                                                              ------    ------
                                                              $4,415    $4,273
                                                              ======    ======
                     LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Notes payable, short-term.................................  $  405    $  361
  Exchangeable Securities...................................     139       289
  Notes payable, subsidiaries...............................     655       811
  Payables and accruals.....................................       8        22
  Dividends payable.........................................      38        34
  Income taxes payable......................................      10         4
  Deferred income tax liabilities (assets)..................       1        (1)
                                                              ------    ------
          Total liabilities.................................   1,256     1,520
                                                              ------    ------
Commitments & contingent liabilities
Stockholders' equity :
  Common stock, par value $1.25 per share, authorized 2000
     and 1999: -- 350,000,000; issued: 2000 -- 102,870,564
     shares; 1999 -- 103,344,685 shares.....................     131       129
  Retained earnings, including equity in undistributed net
     income of subsidiaries 2000 -- $1,919,
     1999 -- $1,979.........................................   2,683     2,358
  Accumulated other comprehensive income -- net unrealized
     gains on securities....................................     345       266
                                                              ------    ------
          Total stockholders' equity........................   3,159     2,753
                                                              ------    ------
                                                              $4,415    $4,273
                                                              ======    ======
</TABLE>

                  See Note to Condensed Financial Statements.

                                       F-3
<PAGE>   66

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                 SCHEDULE II -- CONDENSED STATEMENTS OF INCOME
                         OF JEFFERSON-PILOT CORPORATION
                                  IN MILLIONS

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                              2000     1999     1998
                                                              -----    -----    -----
<S>                                                           <C>      <C>      <C>
Income:
  Dividends from subsidiaries:
     Jefferson-Pilot Life Insurance Company.................  $360     $120     $120
     Jefferson Pilot Financial Insurance Company............   244      100       70
     Jefferson-Pilot Communications Company.................    44       34       25
     Other subsidiaries.....................................     1       25       20
                                                              ----     ----     ----
                                                               649      279      235
  Other investment income, including interest from
     subsidiaries, net......................................     4        2        1
  Realized investment gains.................................    --        1       --
                                                              ----     ----     ----
          Total income......................................   653      282      236
Financing costs.............................................    89       66       67
Other expenses..............................................    25       17       20
                                                              ----     ----     ----
          Income before income taxes and equity in
            undistributed net income of subsidiaries........   539      199      149
Income taxes (benefits).....................................   (33)     (21)     (29)
                                                              ----     ----     ----
          Income before equity in undistributed net income
            of subsidiaries.................................   572      220      178
                                                              ----     ----     ----
Equity in undistributed net income of subsidiaries:
     Jefferson-Pilot Life Insurance Company.................   (22)     120       89
     Jefferson Pilot Financial Insurance Company............   (22)     104      109
     Jefferson-Pilot Communications Company.................    (3)       5        7
     Other subsidiaries, net................................   (13)      21       35
                                                              ----     ----     ----
                                                               (60)     250      240
                                                              ----     ----     ----
Net income available to common stockholders.................  $512     $470     $418
                                                              ====     ====     ====
</TABLE>

                  See Note to Condensed Financial Statements.

                                       F-4
<PAGE>   67

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

               SCHEDULE II -- CONDENSED STATEMENTS OF CASH FLOWS
                         OF JEFFERSON-PILOT CORPORATION
                                  IN MILLIONS

<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                              ---------------------------
                                                               2000      1999      1998
                                                              -------   -------   -------
<S>                                                           <C>       <C>       <C>
Cash Flows from Operating Activities:
  Net income................................................  $   512   $   470   $   418
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Equity in undistributed net income of subsidiaries.....       60      (250)     (240)
     Realized investment gains..............................       --        (1)       --
     Change in accrued items and other adjustments, net.....        3         9         8
                                                              -------   -------   -------
       Net cash provided by operating activities............      575       228       186
                                                              -------   -------   -------
Cash Flows from Investing Activities:
  Purchases of investments..................................       --        (4)       --
  Acquisition of subsidiaries...............................       --      (389)       --
  Other (investments in) returns from subsidiaries..........     (184)       --        27
  Other, net................................................       --         7        --
                                                              -------   -------   -------
       Net cash (used in) provided by investing
        activities..........................................     (184)     (386)       27
                                                              -------   -------   -------
Cash Flows from Financing Activities:
  Cash dividends............................................     (148)     (135)     (122)
  Common stock transactions, net............................      (33)     (173)      (26)
  Proceeds from external borrowings.........................    3,266     8,167     5,155
  Repayments of external borrowings.........................   (3,368)   (8,094)   (5,151)
  Borrowings from subsidiaries, net.........................     (156)      441       (71)
                                                              -------   -------   -------
       Net cash (used in) provided by financing
        activities..........................................     (439)      206      (215)
                                                              -------   -------   -------
       Net (decrease) increase in cash and cash
        equivalents.........................................      (48)       48        (2)
Cash and cash equivalents:
  Beginning.................................................       48        --         2
                                                              -------   -------   -------
  Ending....................................................  $    --   $    48   $    --
                                                              =======   =======   =======
</TABLE>

                  See Note to Condensed Financial Statements.

                                       F-5
<PAGE>   68

                  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

     The accompanying financial statements comprise a condensed presentation of
financial position, results of operations, and cash flows of Jefferson-Pilot
Corporation (the "Company") on a separate-company basis. These condensed
financial statements do not include the accounts of the Company's majority-owned
subsidiaries, but instead include the Company's investment in those
subsidiaries, stated at amounts which are substantially equal to the Company's
equity in the subsidiaries' net assets. Therefore the accompanying financial
statements are not those of the primary reporting entity. The consolidated
financial statements of the Company and its subsidiaries are included in the
Form 10-K for the year ended December 31, 2000.

     Additional information about (1) accounting policies pertaining to
investments and other significant accounting policies applied by the Company and
its subsidiaries, (2) debt and (3) commitments and contingent liabilities are as
set forth in Notes 2, 8 and 19, respectively, to the consolidated financial
statements of Jefferson-Pilot Corporation and subsidiaries which are included in
the Form 10-K for the year ended December 31, 2000.

                                       F-6
<PAGE>   69

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

              SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION
                     FOR THE YEARS INDICATED -- IN MILLIONS

<TABLE>
<CAPTION>
                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
                                             OF BUSINESS       POLICYHOLDER       COLLECTED      BENEFITS        AND OTHER
                 SEGMENT                      ACQUIRED       CONTRACT DEPOSITS   IN ADVANCE     PAYABLE(a)    CONSIDERATIONS
                 -------                   ---------------   -----------------   -----------   ------------   ---------------
<S>                                        <C>               <C>                 <C>           <C>            <C>
As of or Year Ended December 31, 2000
Individual products......................      $1,648             $11,394            $58           $510           $  835
AIP......................................         284               7,544             --             25               27
Benefit partners.........................          25                 246             --            140              486
Corporate and other......................           2                  26             --             22               17
                                               ------             -------            ---           ----           ------
        Total............................      $1,959             $19,210            $58           $697           $1,365
                                               ======             =======            ===           ====           ======
As of or Year Ended December 31, 1999
Individual products......................      $1,744             $11,033            $58           $480           $  732
AIP......................................         280               7,300             --             43               19
Benefit partners.........................          16                 320             --            175              133
Corporate and other......................          --                  --             --             34               19
                                               ------             -------            ---           ----           ------
        Total............................      $2,040             $18,653            $58           $732           $  903
                                               ======             =======            ===           ====           ======
As of or Year Ended December 31, 1998
Individual products......................      $1,233             $10,201            $56           $393           $  742
AIP......................................         178               6,668             --             21               17
Benefit partners.........................           1                 189             --            139              275
Corporate and other......................          --                  --             --             --               15
                                               ------             -------            ---           ----           ------
        Total............................      $1,412             $17,058            $56           $553           $1,049
                                               ======             =======            ===           ====           ======
</TABLE>

<TABLE>
<CAPTION>
                         COLUMN A                             COLUMN G     COLUMN H       COLUMN I        COLUMN J
-----------------------------------------------------------  ----------   ----------   ---------------   -----------
                                                                                       AMORTIZATION OF
                                                                          BENEFITS,    DEFERRED POLICY
                                                                           CLAIMS,       ACQUISITION
                                                                NET       LOSSES AND   COSTS AND VALUE      OTHER
                                                             INVESTMENT   SETTLEMENT     OF BUSINESS      OPERATING
                          SEGMENT                              INCOME      EXPENSES       ACQUIRED       EXPENSES(b)
                          -------                            ----------   ----------   ---------------   -----------
<S>                                                          <C>          <C>          <C>               <C>
As of or Year Ended December 31, 2000
Individual products........................................    $  840       $  940          $158            $146
AIP........................................................       482          342            46             121
Benefit partners...........................................        51          360            57              70
Communications.............................................        (5)          --            --             138
Corporate and other........................................        62           18            --              28
                                                               ------       ------          ----            ----
        Total..............................................    $1,430       $1,660          $261            $503
                                                               ======       ======          ====            ====
As of or Year Ended December 31, 1999
Individual products........................................    $  736       $  796          $167            $135
AIP........................................................       419          306            25              77
Benefit partners...........................................        30           94             8              25
Communications.............................................        (5)          --            --             137
Corporate and other........................................        92           12            --              28
                                                               ------       ------          ----            ----
        Total..............................................    $1,272       $1,208          $200            $402
                                                               ======       ======          ====            ====
As of or Year Ended December 31, 1998
Individual products........................................    $  681       $  786          $149            $150
AIP........................................................       425          299            28              69
Benefit partners...........................................        38          207            19              50
Communications.............................................        (5)          --            --             141
Corporate and other........................................        63           15            --              27
                                                               ------       ------          ----            ----
        Total..............................................    $1,202       $1,307          $196            $437
                                                               ======       ======          ====            ====
</TABLE>

---------------

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 $94 in 2000, $74 in 1999, and $68 in 1998.

                                       F-7
<PAGE>   70

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

               SCHEDULE IV -- REINSURANCE FOR THE YEARS INDICATED
                                  IN MILLIONS

<TABLE>
<CAPTION>
               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(b)
                                         ------------   ---------   ----------   ----------   ----------
<S>                                      <C>            <C>         <C>          <C>          <C>
Year Ended December 31, 2000:
  Life insurance in force at end of
     year..............................    $231,903      $55,884      $1,201      $177,220       0.7%
  Premiums and other considerations:
     (a)...............................    $  1,555      $   206      $   16      $  1,365       1.2%
Year Ended December 31, 1999:
  Life insurance in force at end of
     year..............................    $220,466      $55,418      $1,549      $166,597       0.9%
  Premiums and other considerations:
     (a)...............................    $  1,064      $   167      $    6      $    903       0.7%
Year Ended December 31, 1998:
  Life insurance in force at end of
     year..............................    $172,351      $48,592      $   29      $123,788       0.0%
  Premiums and other considerations:
     (a)...............................    $  1,207      $   168      $   10      $  1,049       1.0%
</TABLE>

---------------

(a) Included with life insurance premiums are premiums on ordinary life
    insurance products and policy charges on interest-sensitive products.
(b) Percentage of amount assumed to net is computed by dividing the amount in
    Column D by the amount in Column E.

                                       F-8
<PAGE>   71

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                SCHEDULE V -- VALUATION AND QUALIFYING ACCOUNTS
                               DECEMBER 31, 2000
                                  IN MILLIONS

<TABLE>
<CAPTION>
           COLUMN A                COLUMN B                 COLUMN C                 COLUMN D      COLUMN E
-------------------------------  ------------   ---------------------------------   ----------   -------------
                                                            ADDITIONS
                                                ---------------------------------
                                  BALANCE AT        CHARGED
                                 BEGINNING OF     TO REALIZED        CHARGED TO                   BALANCE AT
          DESCRIPTION               PERIOD      INVESTMENT GAINS   OTHER ACCOUNTS   DEDUCTIONS   END OF PERIOD
          -----------            ------------   ----------------   --------------   ----------   -------------
<S>                              <C>            <C>                <C>              <C>          <C>
2000:
  Valuation allowance for
     mortgage loans on real
     estate....................   $       30       $       --        $       --     $        1    $       29
                                  ==========       ==========        ==========     ==========    ==========
1999:
  Valuation allowance for
     mortgage loans on real
     estate....................   $       31       $       --        $       --     $        1    $       30
                                  ==========       ==========        ==========     ==========    ==========
1998:
  Valuation allowance for
     mortgage loans on real
     estate....................   $       27       $        4        $       --     $       --    $       31
                                  ==========       ==========        ==========     ==========    ==========
</TABLE>

                                       F-9
<PAGE>   72

                           LIST AND INDEX OF EXHIBITS

<TABLE>
<CAPTION>
 REFERENCE
PER EXHIBIT
   TABLE                                  DESCRIPTION OF EXHIBIT                     PAGE
-----------                               ----------------------                     ----
<C>            <C>     <S>                                                           <C>
    (2)           (i)  Stock Purchase Agreement by and among Household Group, Inc.,
                         Household International, Inc., Alexander Hamilton Life
                         Insurance Company of America, and Jefferson-Pilot
                         Corporation dated August 9, 1995, is incorporated by
                         reference to Form 8-K for October 6, 1995 (confidential
                         treatment requested with respect to certain portions
                         thereof). Exhibits set forth in the Stock Purchase
                         Agreement have been omitted and will be furnished
                         supplementally to the Commission upon request.............   --
                 (ii)  Stock Purchase Agreement dated as of February 23, 1997
                         between Jefferson-Pilot Corporation and The Chubb
                         Corporation (confidential treatment was granted with
                         respect to certain portions thereof), is incorporated by
                         reference to Form 10-K/A for 1996. Exhibits and Schedules
                         to the Stock Purchase Agreement were omitted and were
                         furnished supplementally to the Commission................   --
    (3)           (i)  Articles of Incorporation and amendments that have been
                         approved by shareholders are incorporated by reference to
                         Form 10-Q for the first quarter 1996......................   --
                 (ii)  By-laws as amended May 1, 2000 are incorporated by reference
                         to Form 10-Q for the first quarter 2000...................   --
    (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; both are incorporated by reference......   --
                 (ii)  Amended and Restated Credit Agreement dated as of May 7,
                         1997 among the Registrant and the banks named therein, and
                         Bank of America, N.A., as Agent, and Credit Agreement
                         dated as of December 19, 2000 between the Registrant and
                         Wachovia Bank, N.A. as Administrative Agent, are not being
                         filed because the total amount of borrowings available
                         under either agreement does not exceed 10% of total
                         consolidated assets. The Registrant agrees to furnish a
                         copy of each Credit Agreement to the Commission upon
                         request...................................................   --
   (10)                The following contracts and plans:
                  (i)  Employment contract between the Registrant and David A.
                         Stonecipher, an executive officer, effective September 15,
                         1997, and the 1999 amendment thereto, are incorporated by
                         reference to Form 10-Q for the third quarter 1997 and Form
                         10-K for 1999, respectively...............................   --
                 (ii)  Employment contract between the Registrant and Theresa M.
                         Stone, an executive officer, effective July 1, 1997 for a
                         period of three years is incorporated by reference to Form
                         10-Q for the second quarter 1997..........................   --
                (iii)  Employment Agreement between the Registrant and Robert D.
                         Bates, an executive officer, effective December 30, 1999,
                         is incorporated by reference to Form 10-K for 1999........   --
                 (iv)  Long Term Stock Incentive Plan, as amended, is incorporated
                         by reference to Form 10-K for 1998........................   --
                  (v)  Non-Employee Directors' Stock Option Plan, as amended, is
                         incorporated by reference to Form 10-K for 1998...........   --
</TABLE>

                                       E-1
<PAGE>   73

<TABLE>
<CAPTION>
 REFERENCE
PER EXHIBIT
   TABLE                                  DESCRIPTION OF EXHIBIT                     PAGE
-----------                               ----------------------                     ----
<C>            <C>     <S>                                                           <C>
                 (vi)  Jefferson-Pilot Corporation Supplemental Benefit Plan, as
                         amended, is incorporated by reference to Form 10-K for
                         1999; the Executive Special Supplemental Benefit Plan,
                         which now operates under this Plan, is incorporated by
                         reference to Form 10-K for 1994...........................   --
                (vii)  Management Incentive Compensation Plan for Jefferson-Pilot
                         Corporation and its insurance subsidiaries is incorporated
                         by reference to Form 10-K for 1997........................   --
               (viii)  Deferred Fee Plan for Non-Employee Directors, as amended, is
                         incorporated by reference to Form 10-K for 1998...........   --
                 (ix)  Executive Change in Control Severance Plan and the 1999
                         amendment thereto are incorporated by reference to Forms
                         10-K for 1998 and 1999, respectively......................   --
   (21)                Subsidiaries of the Registrant..............................  E-3
   (23)                Consent of Independent Auditors.............................  E-4
   (24)                Power of Attorney form. (Provided as part of the electronic
                         filing.)..................................................   --
</TABLE>

                                       E-2
<PAGE>   74

                        (JEFFERSON PILOT FINANCIAL LOGO)

JPC-01777                                                                  03/01