<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, 1999
                                              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 Incorporation or Organization)      Executive Offices)         Identification 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 $5.8 billion at March 17,
2000.

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

<TABLE>
<CAPTION>
                    CLASS                              OUTSTANDING AT MARCH 17, 2000
                    -----                              -----------------------------
<S>                                            <C>
   Common Stock (Par Value $1.25 per share)                     103,093,603
</TABLE>

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Proxy Statement for the Annual Meeting of Shareholders to
be held May 1, 2000 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......................................................    25
ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................    25
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
            AND FINANCIAL DISCLOSURE..................................    56

                                  PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..........    56
ITEM 11.  EXECUTIVE COMPENSATION......................................    56
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT................................................    56
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............    56

                                  PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
            8-K.......................................................    56
Undertakings..........................................................    56
Signatures............................................................    57
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),

          Alexander Hamilton Life Insurance Company of America (AH Life),

          Guarantee Life Insurance Company (GLIC),

          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 and accident and disability insurance policies, writing annuity
policies and selling other investment products, 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 operations are being
consolidated in GLIC'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 five 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 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 51.

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

     On December 30, 1999, JP acquired GLIC and its non-insurance affiliates.

     (b) Financial Information About Industry Segments

     We present industry segment information in Note 16 on page 52.

                                        1
<PAGE>   4

     (c) Narrative Description of Business

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

                              REVENUES BY PRODUCT*

<TABLE>
<CAPTION>
                                                               1999     1998     1997
                                                              ------   ------   ------
                                                                   (IN MILLIONS)
<S>                                                           <C>      <C>      <C>
Life Insurance Products:
  Individual:
     Traditional............................................  $  343   $  368   $  343
     Universal life-type....................................   1,125    1,056      882
  Group.....................................................     164      313      473
                                                              ------   ------   ------
                                                              $1,632   $1,737   $1,698
Annuity and Investment Products.............................     511      506      499
Communications..............................................     200      195      190
Corporate and Other.........................................     218      172      191
                                                              ------   ------   ------
                                                              $2,561   $2,610   $2,578
                                                              ======   ======   ======
</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 commenced business operations
in 1903. It is authorized to write insurance in 49 states, the District of
Columbia, the Virgin Islands and Puerto Rico. It primarily writes whole life,
term, annuity and endowment insurance policies on an individual ordinary basis,
and group life and disability insurance policies.

     JPFIC, domiciled in New Hampshire, through predecessor companies commenced
business in 1903. It is authorized to write insurance in 49 states, the District
of Columbia, Guam, the Virgin Islands and Puerto Rico.

     JPLA, domiciled in New Jersey, commenced business in 1897. It is authorized
to write insurance in 50 states, the District of Columbia, four U.S.
possessions/territories and Taiwan.

     JPFIC and JPLA are primarily engaged in writing universal life, variable
universal life and term life insurance policies.

     AH Life, domiciled in Michigan, commenced business in 1977. It is
authorized to write insurance in 49 states and the District of Columbia, and
primarily writes variable annuities although it also has a substantial block of
fixed annuities and fixed universal life policies.

     FAHL, domiciled in New York, commenced business in 1987. It is authorized
to write insurance in New York only. Sales have been discontinued, but it holds
a block of individual fixed annuity and universal life policies.

     Life Insurance Products.  Insurance subsidiaries offer life 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 products through a career agency force,
independent agents recruited through independent marketing organizations and a
regional marketing network, home service agents, financial

                                        2
<PAGE>   5

institutions and workplace marketing representatives. They market group products
through group brokers, career agents and home service agents.

     Group insurance, principally life and long term disability insurance, is
generally issued to employers covering their employees and to associations
covering their members. We have almost completely phased out the group medical
business as more fully discussed in MD&A. JP Life had continued to pursue group
life and disability insurance and had expanded sales efforts through its other
distribution channels. Now that we have acquired GLIC, we are consolidating
future group product sales into GLIC.

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

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 Michigan, Nebraska, New Hampshire, New Jersey,
New York 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, some of which could adversely affect the taxation of certain products, and
thus impact their marketing and the volume of policies surrendered.

     Employees.  As of December 31, 1999, our insurance operations including our
broker/dealer employed approximately 3,200 persons and held contracts with
48,000 independent and career 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
                                        3
<PAGE>   6

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.

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, 1999, JPCC and its subsidiaries employed
approximately 780 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.

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

     GLIC 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. AH Life is a defendant in a separate
proposed class action suit, Mueller et al vs. Alexander Hamilton Life Insurance
Company, originally filed on

                                        4
<PAGE>   7

November 10, 1998 in the Circuit Court for Wayne County, MI, and with an amended
complaint filed on June 25, 1999. Both suits allege 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. Unspecified compensatory and punitive damages, costs and equitable relief
are sought. While management is unable to make a meaningful estimate of the
amount or range of loss that could result from an unfavorable outcome,
management believes that it has made appropriate disclosures to policyholders as
a matter of practice, and intends to vigorously defend its position.

     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 -- Group
Operations of JP effective upon the acquisition of GLIC on December 30, 1999. He
also has been President of GLIC since 1989, 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 -- Insurance Operations 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 from December 1994, and 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>
                                 1999            1998            1997            1996            1995
                             -------------   -------------   -------------   -------------   -------------
                             HIGH     LOW    HIGH     LOW    HIGH     LOW    HIGH     LOW    HIGH     LOW
                             -----   -----   -----   -----   -----   -----   -----   -----   -----   -----
<S>                          <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
First Quarter..............  77.38   66.06   60.06   48.69   41.00   36.25   38.81   30.06   26.25   23.19
Second Quarter.............  71.25   64.13   62.13   54.88   47.44   34.31   37.06   33.50   26.31   22.56
Third Quarter..............  75.63   61.50   64.06   55.06   53.50   44.88   36.75   33.25   29.19   23.94
Fourth Quarter.............  79.63   61.19   78.38   55.38   57.81   48.25   39.75   34.25   32.06   28.56
</TABLE>

     (b) Holders.  As of March 17, 1999, our stock was owned by 10,212
shareholders of record, and an even 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>
                                                         1999     1998     1997     1996     1995
                                                        ------   ------   ------   ------   ------
<S>                                                     <C>      <C>      <C>      <C>      <C>
Life insurance........................................  $1,632   $1,737   $1,698   $1,370   $1,051
Annuities and investment products.....................     511      506      499      442      217
Communications........................................     200      195      190      189      164
Corporate and other...................................     117       79       80       77       87
                                                        ------   ------   ------   ------   ------
Revenues before investment gains......................   2,460    2,517    2,467    2,078    1,519
Realized investment gains.............................     101       93      111       47       49
                                                        ------   ------   ------   ------   ------
          Total Revenues..............................  $2,561   $2,610   $2,578   $2,125   $1,568
                                                        ======   ======   ======   ======   ======
</TABLE>

                             NET INCOME BY SOURCES

<TABLE>
<CAPTION>
                                                         1999     1998     1997     1996     1995
                                                        ------   ------   ------   ------   ------
<S>                                                     <C>      <C>      <C>      <C>      <C>
Life insurance........................................  $  267   $  245   $  194   $  150   $  127
Annuities and investment products.....................      67       71       63       55       29
Communications........................................      38       32       28       28       23
Corporate and other...................................      33       12       12       27       42
                                                        ------   ------   ------   ------   ------
Net income before investment gains....................     405      360      297      260      221
Realized investment gains, net of taxes...............      65       58       73       31       34
                                                        ------   ------   ------   ------   ------
Net income, continuing operations.....................     470      418      370      291      255
Discontinued operations...............................      --       --       --       --       18
                                                        ------   ------   ------   ------   ------
          Net Income Available to Common
            Stockholders..............................  $  470   $  418   $  370   $  291   $  273
                                                        ======   ======   ======   ======   ======
</TABLE>

                                        6
<PAGE>   9

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                       SUMMARY OF SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                1999       1998       1997       1996       1995
                                              --------   --------   --------   --------   --------
                                              (IN MILLIONS EXCEPT SHARE AND PER SHARE INFORMATION)
<S>                                           <C>        <C>        <C>        <C>        <C>
Total reportable segment results before gain
  from sales of investments:
  Continuing operations.....................  $    405   $    360   $    297   $    260   $    221
  Discontinued operations...................        --         --         --         --          2
                                              --------   --------   --------   --------   --------
Total reportable segment results............       405        360        297        260        223
Gain from sales of investments, net of
  taxes:
  Continuing operations.....................        65         58         73         31         34
  Discontinued operations...................        --         --         --         --         16
                                              --------   --------   --------   --------   --------
Gain from sales of investments..............        65         58         73         31         50
                                              --------   --------   --------   --------   --------
Net income available to common
  stockholders..............................  $    470   $    418   $    370   $    291   $    273
                                              ========   ========   ========   ========   ========
Income per share of common stock:
Total reportable segment results before gain
  from sales of investments:
  Continuing operations.....................  $   3.84   $   3.39   $   2.80   $   2.44   $   2.06
  Discontinued operations...................        --         --         --         --       0.02
                                              --------   --------   --------   --------   --------
Total reportable segment results............      3.84       3.39       2.80       2.44       2.08
Gain from sales of investments, net of
  taxes:
  Continuing operations.....................      0.62       0.55       0.69       0.29       0.31
  Discontinued operations...................        --         --         --         --       0.15
                                              --------   --------   --------   --------   --------
Gain from sales of investments..............      0.62       0.55       0.69       0.29       0.46
                                              --------   --------   --------   --------   --------
Net income available to common
  stockholders..............................  $   4.46   $   3.94   $   3.49   $   2.73   $   2.54
                                              ========   ========   ========   ========   ========
Income per share of common stock -- assuming
  dilution:
  Total reportable segment results..........  $   3.80   $   3.37   $   2.78   $   2.43   $   2.07
                                              ========   ========   ========   ========   ========
  Net income available to common
     stockholders...........................  $   4.42   $   3.91   $   3.47   $   2.72   $   2.53
                                              ========   ========   ========   ========   ========
Cash dividends paid on common stock.........  $    138   $    122   $    110   $    100   $     88
                                              ========   ========   ========   ========   ========
Cash dividends paid per common share:
  First quarter.............................  $   0.30   $   0.27   $   0.24   $   0.21   $   0.19
  Second quarter............................      0.33       0.30       0.27       0.24       0.21
  Third quarter.............................      0.33       0.30       0.27       0.24       0.21
  Fourth quarter............................      0.33       0.30       0.27       0.24       0.21
                                              --------   --------   --------   --------   --------
          Total.............................  $   1.29   $   1.16   $   1.04   $   0.93   $   0.83
                                              ========   ========   ========   ========   ========
Average common shares outstanding
  (thousands)...............................   105,150    106,134    106,217    106,611    107,541
                                              ========   ========   ========   ========   ========
Total assets................................  $ 26,446   $ 24,338   $ 23,131   $ 17,562   $ 16,478
                                              ========   ========   ========   ========   ========
Debt, capital securities and mandatorily
  redeemable preferred stock................  $    951   $    919   $    969   $    423   $    417
                                              ========   ========   ========   ========   ========
Stockholders' equity........................  $  2,753   $  3,052   $  2,732   $  2,297   $  2,156
                                              ========   ========   ========   ========   ========
Stockholders' equity per share of common
  stock.....................................  $  26.63   $  28.82   $  25.70   $  21.65   $  20.19
                                              ========   ========   ========   ========   ========
</TABLE>

 Note: All share information has been restated to reflect an April 1998 3-for-2
       stock split and a December 1995 3-for-2 stock split, each effected
          in the form of a dividend. Cash dividends per share may not
                   add due to rounding related to the splits.

                                        7
<PAGE>   10

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                            SUPPLEMENTAL INFORMATION

<TABLE>
<CAPTION>
                                                  1999       1998       1997      1996      1995
                                                --------   --------   --------   -------   -------
                                                                  (IN MILLIONS)
<S>                                             <C>        <C>        <C>        <C>       <C>
LIFE INSURANCE IN FORCE (EXCLUDES ANNUITIES):
Traditional...................................  $ 46,997   $ 38,928   $ 42,648   $19,734   $21,256
Universal Life................................    93,407     85,649     84,721    52,392    51,199
Variable Universal Life.......................    17,944     14,569     11,099        --        --
Group.........................................    55,877     24,415     24,359    27,224    26,389
                                                --------   --------   --------   -------   -------
          Total Life Insurance In Force.......  $214,225   $163,561   $162,827   $99,350   $98,844
                                                ========   ========   ========   =======   =======
LIFE PREMIUMS ON A FAS 60 BASIS:
First Year Life (Note)........................  $    605   $    575   $    418   $   241   $   119
Renewal and Other Life........................       931        934        822       507       331
                                                --------   --------   --------   -------   -------
  Life Insurance..............................     1,536      1,509      1,240       748       450
Accident and Health, Including Premium
  Equivalents.................................       144        422        612       645       696
                                                --------   --------   --------   -------   -------
          Total Life Insurance Premiums.......  $  1,680   $  1,931   $  1,852   $ 1,393   $ 1,146
                                                ========   ========   ========   =======   =======
LIFE EARNINGS BY PRODUCT:
Individual....................................  $    242   $    221   $    184   $   128   $    93
Group.........................................        25         24         10        22        34
                                                --------   --------   --------   -------   -------
          Total Life Earnings.................  $    267   $    245   $    194   $   150   $   127
                                                ========   ========   ========   =======   =======
ANNUITY PREMIUMS ON A FAS 60 BASIS:
Fixed Annuity.................................  $    858   $    376   $    596   $   557   $   338
Variable Annuity (including separate
  accounts)...................................       140        142        103        74        42
                                                --------   --------   --------   -------   -------
          Total Annuity Premiums..............  $    998   $    518   $    699   $   631   $   380
                                                ========   ========   ========   =======   =======
INVESTMENT PRODUCT SALES......................  $  2,361   $  1,816   $  1,110   $    70   $    44
                                                ========   ========   ========   =======   =======
COMMUNICATIONS BROADCAST CASH FLOW............  $     85   $     76   $     65   $    58   $    48
                                                ========   ========   ========   =======   =======
</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, 1999 analyzes the results of
operations, consolidated financial condition, liquidity and capital resources of
Jefferson-Pilot Corporation and consolidated subsidiaries (collectively referred
to as 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 had four business segments in 1999: Life Insurance Products,
Annuity and Investment Products (AIP), Communications, and Corporate and Other.
Within the Life Insurance Products segment, JP offers individual and group
insurance products. Life insurance, accident, disability, and annuity products
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), Alexander Hamilton Life Insurance Company of
America (AH Life), Jefferson Pilot Financial Insurance Company and its
subsidiary, Jefferson Pilot LifeAmerica Insurance Company (collectively JP
Financial), and Guarantee Life Insurance Company (Guarantee).

     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
mandatorily redeemable preferred stock, and federal and state income taxes not
otherwise allocated to business segments.

     Excluding realized gains, JP's 1999's revenues were derived 66% from Life
Insurance Products, 21% from AIP, 8% from Communications and 5% from Corporate
and Other.

ACQUISITION SUMMARY

     JP's acquisition strategy is designed to deploy capital to enhance core
business growth. The acquisitions focus is to increase distribution, add
products, and provide economies of scale. On December 30, 1999 the Company
acquired Guarantee. In May 1997, the Company acquired JP Financial. 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 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 is relevant and useful information.
Gains from sales 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.

                                        9
<PAGE>   12

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

<TABLE>
<CAPTION>
                                                               1999      1998      1997
                                                              ------    ------    ------
<S>                                                           <C>       <C>       <C>
Consolidated Summary of Income
  Total reportable segment results(1).......................  $404.0    $360.3    $297.1
  Realized investment gains (net of applicable income
     taxes).................................................    65.5      58.0      73.4
                                                              ------    ------    ------
  Net income available to common stockholders...............  $469.5    $418.3    $370.5
                                                              ======    ======    ======
Consolidated Earnings Per Share
  Total reportable segment results(1).......................  $ 3.84    $ 3.39    $ 2.80
  Realized investment gains (net of applicable income
     taxes).................................................    0.62      0.55      0.69
                                                              ------    ------    ------
  Net income available to common stockholders...............  $ 4.46    $ 3.94    $ 3.49
                                                              ======    ======    ======
  Net income available to common stockholders -- assuming
     dilution...............................................  $ 4.42    $ 3.91    $ 3.47
                                                              ======    ======    ======
</TABLE>

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

(1) Total reportable segment results include all elements of net income
    available to common stockholders except realized investment gains.

     Net income available to common stockholders increased 12.2% in 1999 and
12.9% in 1998. Total reportable segment results increased 12.1% in 1999 and
21.3% in 1998 due to increased profitability in the Life Insurance Products,
Communications, and Corporate and Other segments. 1998's increase also reflected
the deployment of Corporate capital into the more profitable Life Insurance
Products segment. Net realized gains increased 12.9% in 1999 and decreased 21.0%
in 1998. 1998's decline occurred because of investment portfolio sales in 1997
to fund the acquisition of JP Financial. Total reportable segment results per
share increased 13.3% in 1999 and 21.1% in 1998, reflecting the increase in core
business earnings and the impact of share repurchases in 1999. Earnings per
share increased 13.2% in 1999 and 12.9% in 1998 and earnings per share assuming
dilution increased 13.0% in 1999 and 12.7% in 1998 for the same reasons.

RESULTS BY BUSINESS SEGMENT

     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 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>
                                                               1999     1998     1997
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Life Insurance Products.....................................  $266.8   $245.2   $193.7
Annuity and Investment Products.............................    67.0     71.1     63.5
Communications..............................................    37.6     32.3     27.5
Corporate and Other.........................................    32.6     11.7     12.4
                                                              ------   ------   ------
Total reportable segment results(1).........................   404.0    360.3    297.1
Net realized investment gains...............................    65.5     58.0     73.4
                                                              ------   ------   ------
Net income available to common stockholders.................  $469.5   $418.3   $370.5
                                                              ======   ======   ======
</TABLE>

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

(1) Total reportable segment results include all elements of net income
    available to common stockholders except realized investment gains.

                                       10
<PAGE>   13

  Segment Assets

<TABLE>
<CAPTION>
                                                               1999      1998      1997
                                                              -------   -------   -------
<S>                                                           <C>       <C>       <C>
Life Insurance Products.....................................  $15,099   $12,579   $11,684
Annuity and Investment Products.............................    7,443     6,495     6,525
Communications..............................................      217       222       218
Corporate and Other.........................................    3,687     5,042     4,704
                                                              -------   -------   -------
          Total Assets......................................  $26,446   $24,338   $23,131
                                                              =======   =======   =======
</TABLE>

     A more detailed discussion of Reportable segment results follows.

  Life Insurance Products

     The Life Insurance Products (Life Insurance) segment offers a wide array of
individual and group insurance policies through a career agency force,
independent agents recruited through independent marketing organizations and a
regional office network, home service agents, financial institutions, and
workplace marketing representatives.

     Individual life insurance products include traditional life and disability
products, as well as universal life (UL) and variable universal life (VUL),
together referred to as UL-type products. The operating cycle for life insurance
products is long-term in nature; therefore, actuarial assumptions are important
to financial reporting for these policies. 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 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 UL-type
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.

     Group insurance products include life and disability products sold to
employers. They also include a block of medical policies which are being
underwritten by a national managed care company on policy renewal dates, on an
"as-rated" basis. Invested capital formerly assigned to these medical policies
is being reinvested in other life insurance products or other reportable
segments during 1999 and 2000, as the Company exits the group medical business.

     Reportable segment results were:

<TABLE>
<CAPTION>
                                           1999       1998       1997       1996       1995
                                         --------   --------   --------   --------   --------
<S>                                      <C>        <C>        <C>        <C>        <C>
Premiums and other considerations......  $  865.4   $1,017.4   $1,080.6   $  910.0   $  756.6
Net investment income..................     766.5      719.2      617.5      459.7      295.3
Total revenues.........................   1,631.9    1,736.6    1,698.1    1,369.7    1,051.9
                                         --------   --------   --------   --------   --------
Policy benefits........................     890.0      992.8    1,057.1      882.8      676.5
Expenses(1)............................     334.7      368.8      345.3      260.7      187.8
                                         --------   --------   --------   --------   --------
Total benefits and expenses............   1,224.7    1,361.6    1,402.4    1,143.5      864.3
                                         --------   --------   --------   --------   --------
Reportable segment results before
  income taxes.........................     407.2      375.0      295.7      226.2      187.6
Provision for income taxes.............     140.4      129.8      102.0       76.6       60.5
                                         --------   --------   --------   --------   --------
Reportable segment results(2)..........  $  266.8   $  245.2   $  193.7   $  149.6   $  127.1
                                         ========   ========   ========   ========   ========
</TABLE>

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

(1) Expenses include deferrals of deferred acquisition costs and value of
    business acquired of $222.9, $205.4, $187.3, $114.9 and $80.2, net of
    amortization of deferred acquisition costs and value of business acquired of
    $175.2, $151.2, $126.3, $103.1, and $51.3 for the years ended December 31,
    1999, 1998, 1997, 1996, and 1995.
(2) Reportable segment results include all elements of net income available to
    common stockholders except realized investment gains.

                                       11
<PAGE>   14

     Life Insurance Reportable segment results increased 8.8% in 1999 and 26.6%
in 1998. In 1999, individual products contributed a 9.5% increase due to growth
of the business in force and expense management, while group products improved
only 2.5% as group medical policies continue to decline. In 1998, individual
products increased 20.1% over 1997, which included JP Financial for eight months
in the prior year. Group products improved 151.6% due to aggressive rate
increases and expense management. The following table summarizes Reportable
segment results for each product category:

<TABLE>
<CAPTION>
                                                 1999     1998     1997     1996     1995
                                                ------   ------   ------   ------   ------
<S>                                             <C>      <C>      <C>      <C>      <C>
Individual....................................  $242.3   $221.3   $184.2   $127.7   $ 92.5
Group.........................................    24.5     23.9      9.5     21.9     34.6
                                                ------   ------   ------   ------   ------
Total Life Insurance Products.................  $266.8   $245.2   $193.7   $149.6   $127.1
                                                ======   ======   ======   ======   ======
</TABLE>

     JP ceased offering group medical policies on April 1, 1999. A full line of
group life and disability policies are still offered through existing
distribution channels of JP Life and Guarantee. The following table illustrates
amounts included in Life Insurance results for group medical contracts:

<TABLE>
<CAPTION>
                                                               1999     1998      1997
                                                              ------   -------   -------
<S>                                                           <C>      <C>       <C>
Premiums and other considerations...........................  $ 39.3   $ 156.0   $ 294.2
Net investment income.......................................     5.1      12.1      15.9
Policy benefits.............................................   (13.5)   (106.8)   (254.7)
Expenses....................................................   (13.2)    (45.8)    (62.2)
                                                              ------   -------   -------
Reportable segment results before taxes.....................  $ 17.7   $  15.5   $  (6.8)
                                                              ======   =======   =======
</TABLE>

     The following table summarizes key information for Life Insurance.

<TABLE>
<CAPTION>
                                                                1999      1998      1997
                                                              --------   -------   -------
<S>                                                           <C>        <C>       <C>
Annualized Individual life insurance sales..................  $    180   $   178   $   144
Annualized Group life and disability sales..................        14        13        11
Individual traditional insurance premium income.............       187       204       195
Group premium income and equivalents........................       179       452       653
Average UL policyholder fund balances.......................     7,783     7,077     5,788
Average VUL separate account assets.........................       994       710       352
                                                              --------   -------   -------
                                                                 8,777     7,787     6,140
Average total face amount insurance in force -- UL-type
  policies..................................................   101,204    97,738    77,785
Average assets -- Individual products.......................    12,803    11,639     9,187
Average assets -- Group products............................       389       482       523
                                                              --------   -------   -------
                                                                13,192    12,121     9,710
</TABLE>

     Life Insurance revenues decreased $104.7 or 6.0% in 1999 because of
declines in Group products revenues of $148.8, and increased $38.5 or 2.3% in
1998 due to the JP Financial acquisition, net of Group reductions. Revenues
include traditional insurance premiums, policy charges and investment income.
Individual revenues increased 3.1% in 1999 and 16.3% in 1998. To a large degree,
increases in individual revenues are driven by growth in average policyholder
fund balances and separate accounts, which increased 12.7% in 1999 and 26.8% in
1998. Group revenues declined 47.6% in 1999 and 33.9% in 1998, because of
actions taken to exit medical insurance.

     Life Insurance traditional insurance premiums declined 33.0% and 23.6% in
1999 and 1998 primarily due to decline in premiums of Group medical products.
Individual traditional premiums decreased 8.3% in 1999 as recent sales have been
more concentrated among UL type products and improved 4.6% in 1998 due in large
part to the acquisition of JP Financial. Group traditional premiums declined
51.6% in 1999 and 36.5% in 1998. Including equivalent premiums on self-insured
health policies, group premiums were down 60.4% and 30.8%. Policy charges, which
include mortality, expense and surrender charges, improved 1.2% in 1999 and
18.6% in

                                       12
<PAGE>   15

1998. 1999's increase is a result of a 3.5% growth in average face amount of UL
type policies in force, partially offset by a 2.9% decline in the average number
of Individual life policies in force as recent sales have been more
heavily-weighted toward higher face amount policies. Surrender charges declined
7.0% as a result of improved persistency. 1998's growth is a result of the JP
Financial acquisition.

     Investment income on assets assigned to the Life Insurance segment improved
6.6% and 16.5% in 1999 and 1998, following the growth in segment assets. Total
portfolio yields remained constant in 1999 and declined slightly in 1998. The
portfolio yield on traditional assets declined 11 basis points in 1999 and 12
basis points in 1998 due to the reduction in older duration policies in force.
The average investment spread on UL products (calculated as the difference
between portfolio yields earned on invested assets less interest credited to
policyholder funds, assuming the same level of invested assets) increased 29
basis points in 1999 to 1.92% and decreased 9 basis points in 1998 to 1.63%. In
addition to being impacted by portfolio yields, interest spreads may vary over
time due to competitive strategies and changes in product design.

     Policy benefits declined 10.4% in 1999 and 6.1% in 1998, primarily due to
Group medical. Traditional policy benefits were 92.2% of premiums in 1999 versus
85.0% and 89.3% in 1998 and 1997. The increase was primarily a result of higher
mortality in 1999. The group health incurred loss ratio improved to 41% in 1999
versus 72% and 87% in 1998 and 1997, as claim liabilities are released on the
declining block of medical business. During the fourth quarter of 1999, the
Company reviewed its claims management and reserving practices for Group
disability policies as well as a closed block of Individual disability policies.
This review resulted in a reduction of claim reserves which benefited fourth
quarter results by $4.5 million, net of taxes, primarily in the closed
Individual block. Approximately $2.6 million of this amount had been recorded as
a charge during the third quarter of 1999. Policy benefits on UL-type products
improved to 6.8% of average policyholder funds and separate accounts in 1999
versus 7.6% in 1998 and 8.2% in 1997. The improvement is due to lower credited
rates on policyholder accounts and an increase in VUL separate account assets as
a percentage of these liabilities. 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) decreased 9.2% in 1999 due to continued aggressive expense
management versus an increase of 6.8% in 1998 due to acquisitions. Expenses on
individual traditional products were 30.0%, 31.3% and 32.8% of premiums in 1999,
1998 and 1997. For UL-type products, expenses as a percentage of average
policyholder funds and separate accounts were 2.75%, 2.97% and 3.14% in 1999,
1998 and 1997. The improvement reflects integration savings from the JP
Financial acquisition as well as overall aggressive expense management. For
group policies, expenses declined 52.8% in 1999 and 21.3% in 1998. The 1999
decline was due to management actions to maintain profitability, and to lower
commissions as revenues declined. As a percentage of premiums and equivalents,
total Group expenses increased to 18.4% in 1999 versus 15.4% and 13.6% in 1998
and 1997. As the Group block of business continues to decline, fixed cost
reductions did not keep pace with the decline in premiums and equivalents.

     Average Life Insurance assets grew 8.8% in 1999 and 24.8% in 1998. 1999's
growth was due to sales of UL-type products, and growth in existing policyholder
funds from interest credited and equity returns. 1998's increase also included
the effect of the JP Financial acquisition. The return on average Life Insurance
assets was 2.02%, 2.02% and 1.99% in 1999, 1998 and 1997, as Reportable segment
results have grown at a rate consistent with the growth in assets.

                                       13
<PAGE>   16

  Annuity and Investment Products

     Annuity and Investment Products (AIP) offers its products through financial
institutions, independent agents, career agents, investment professionals and
broker-dealers. Operating results were:

<TABLE>
<CAPTION>
                                                 1999     1998     1997     1996     1995
                                                ------   ------   ------   ------   ------
<S>                                             <C>      <C>      <C>      <C>      <C>
Policy charges, premiums and other
  considerations..............................  $ 18.5   $ 17.6   $ 35.1   $ 66.7   $ 49.5
Net investment income.........................   418.4    425.0    429.3    371.1    168.2
Other income..................................    74.4     63.0     35.1      4.2       --
                                                ------   ------   ------   ------   ------
Total revenues................................   511.3    505.6    499.5    442.0    217.7
                                                ------   ------   ------   ------   ------
Policy benefits...............................   306.0    299.0    326.3    317.0    158.2
Expenses......................................   101.9     96.9     75.2     40.9     15.5
                                                ------   ------   ------   ------   ------
Total benefits and expenses...................   407.9    395.9    401.5    357.9    173.7
                                                ------   ------   ------   ------   ------
Reportable segment results before income
  taxes.......................................   103.4    109.7     98.0     84.1     44.0
Provision for income taxes....................    36.4     38.6     34.5     29.0     14.4
                                                ------   ------   ------   ------   ------
Reportable segment results(1).................  $ 67.0   $ 71.1   $ 63.5   $ 55.1   $ 29.6
                                                ======   ======   ======   ======   ======
</TABLE>

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

(1) Reportable segment results include all elements of net income available to
    common stockholders except realized investment gains.

     Reportable segment results decreased 5.8% in 1999 and increased 12.0% in
1998. The following table summarizes key information for AIP:

<TABLE>
<CAPTION>
                                                               1999     1998     1997
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Fixed annuity receipts......................................  $  858   $  376   $  596
Variable annuity receipts...................................     140      142      103
                                                              ------   ------   ------
                                                                 998      518      699
Average policyholder fund balances..........................   5,630    5,698    5,755
Average separate account policyholder fund balances.........     587      418      243
                                                              ------   ------   ------
                                                               6,217    6,116    5,998
Investment product sales....................................   2,361    1,816    1,110
Average assets..............................................   6,622    6,516    6,253
</TABLE>

     Revenues increased 1.1% in 1999 and 1.2% in 1998. 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. The
increases in revenues are primarily driven by increases in average policyholder
fund balances including separate accounts, which grew 1.7% in 1999 and 2.0% in
1998. The increases in average fund balances result from interest credited and
new receipts less benefits paid and withdrawals. Average fund balances are
influenced by the timing of those receipts and payments throughout the year.
Fixed annuity receipts increased 128.2% in 1999, primarily in the second half of
the year, and decreased 36.9% in 1998. The 1999 increase was due to significant
sales increases through independent and career agents and financial institutions
of both new and previously-existing products. The decline in 1998 receipts
occurred during a lower interest rate environment as fixed rate products were
perceived less favorably than other investment alternatives and as potential
customers chose variable annuities on the strength of United States equity
markets. In total, fixed and variable annuity receipts increased by 92.7% in
1999 and decreased 25.9% in 1998. Fixed annuity benefits and surrenders as a
percentage of beginning fund balances were 15.8% in 1999 and 1998 and 15.2% in
1997. Annuity surrenders may increase as the portion of the business that can be
withdrawn by policyholders without incurring a surrender charge grows. Other
income, which primarily represents concession income earned by JPSC, increased
18.1% in 1999 and 79.5% in 1998, due to higher sales of the Company's variable
products and others products such as mutual funds.

     Total AIP benefits and expenses increased 3.0% in 1999 and decreased 1.4%
in 1998 primarily in relation to average policyholder fund balances. Policy
benefits as a percentage of average policyholder fund balances were 5.4%, 5.2%
and 5.7% in 1999, 1998 and 1997. The decline in 1998, as well as the decline in
premiums in 1998,

                                       14
<PAGE>   17

was primarily attributable to a reclassification for 1998 of certain single
premium annuity products as interest-sensitive rather than traditional products.
This reclassification did not affect Reportable segment results. Interest
credited represented 5.3% of average policyholder fund balances in 1999 and 5.1%
in 1998 and 1997. Effective spreads, which represent the yield on the investment
portfolio less interest credited to policyholders, adjusted for net deferral of
bonus interest and assuming the same level of assets, were 2.14%, 2.11% and
2.13% for 1999, 1998 and 1997. The 1999 increase results from continued
effective spread management.

     Total AIP expenses increased 5.2% in 1999 and 28.9% in 1998. General and
administrative expenses as a percentage of average invested assets for fixed
annuities were 0.24% for 1999 versus 0.23% in 1998 and 0.26% in 1997. Insurance
expenses as a percentage of average policyholder fund balances including
separate accounts were 1.6%, 1.6% and 1.3% for 1999, 1998 and 1997. The growth
in 1999 and 1998 expenses was primarily due to commissions related to
broker/dealer operations, similar to the increases in other income. In 1997,
expenses included relocating annuity administrative functions to the Greensboro
home office.

     Average AIP assets increased 1.6% in 1999 and 4.2% in 1998. AIP posted
returns on average assets of 1.01% in 1999, 1.09% in 1998 and 1.02% in 1997. The
1999 decline is primarily attributable to reserve corrections and true-up
adjustments to assumptions used in amortizing deferred acquisition costs. The
combined earnings of the broker-dealer and related entities, which are included
in the segment results, were $4.4, $3.9 and $1.2 for 1999,1998 and 1997.

  Communications

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

<TABLE>
<CAPTION>
                                                 1999     1998     1997     1996     1995
                                                ------   ------   ------   ------   ------
<S>                                             <C>      <C>      <C>      <C>      <C>
Communications revenues.......................  $205.0   $199.8   $195.6   $188.9   $160.7
Operating costs and expenses..................   119.9    124.1    130.6    130.9    112.9
                                                ------   ------   ------   ------   ------
Broadcast cash flow...........................    85.1     75.7     65.0     58.0     47.8
Depreciation and amortization.................    11.4     11.5     11.0      9.3      8.8
Corporate general and administrative
  expenses....................................     5.8      5.1      4.1      3.8      3.0
Net interest expense (income).................     5.0      5.1      5.1     (0.5)    (3.0)
                                                ------   ------   ------   ------   ------
Operating revenue before income taxes.........    62.9     54.0     44.8     45.4     39.0
Provision for income taxes....................    25.3     21.7     17.3     17.2     15.4
                                                ------   ------   ------   ------   ------
Reportable segment results(1).................  $ 37.6   $ 32.3   $ 27.5   $ 28.2   $ 23.6
                                                ======   ======   ======   ======   ======
</TABLE>

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

(1) Reportable segment results include all elements of net income available to
    common stockholders except realized investment gains.

     Reportable segment results increased 16.4% in 1999 and 17.5% in 1998. The
Company's broadcasting properties continued to benefit from the generally
favorable advertising environment and the strong local economies in which they
operate. Combined revenues for Radio and Television grew 3.5% and 8.9% in 1999
and 1998. Television experienced strong political revenues in the fourth quarter
of 1998, which were not replaced in 1999. Disregarding political revenues, Radio
and Television grew 5.4% and 7.1% in 1999 and 1998. Radio experienced strong
revenue growth in 1999 and 1998, resulting from increased demand for local
advertising. Two of the television stations are CBS affiliates and benefited
from robust winter Olympic related advertising during first quarter 1998.
However, Television revenues declined for much of 1999 and 1998 as national
agency sales continued to be sluggish, consistent with a nationwide trend. There
was slight improvement in Television national sales in the fourth quarter of
1999, though local sales continued to be off in some markets.

     Revenue from Sports operations decreased 1.1% in 1999 and 25.6% in 1998.
The decline in 1999 results from the sale of certain entertainment production
activities, which improved profitability. 1998's decline was due to a
non-recurring sporting event held in the first quarter of 1997 and a decrease in
collegiate-related basketball sales in 1998.

                                       15
<PAGE>   18

     Broadcast cash flow grew by 12.4% and 16.5% in 1999 and 1998, as a result
of the strong growth of the broadcast properties, particularly Radio in both
years and Sports in 1999.

     Total expenses declined 2.6% and 3.4% in 1999 and 1998. Expenses as a
percent of communication revenues were 66.9%, 70.4% and 74.5% for 1999, 1998 and
1997. The declines are attributable to a change in the mix of business away from
lower margin sports products toward higher margin broadcast business, and
expense management.

  Corporate and Other

     The following table summarizes results for this segment.

<TABLE>
<CAPTION>
                                                   1999     1998     1997     1996     1995
                                                  ------   ------   ------   ------   ------
<S>                                               <C>      <C>      <C>      <C>      <C>
Earnings on investments.........................  $122.6   $ 95.1   $ 87.1   $ 84.0   $ 87.2
Interest expense on debt and Exchangeable
  Securities....................................   (31.3)   (33.1)   (26.9)   (24.2)    (7.9)
Operating expenses..............................   (15.8)   (23.3)   (18.6)   (19.2)   (17.8)
Federal and state income tax expense............   (18.4)    (1.3)    (3.5)   (10.3)   (19.7)
                                                  ------   ------   ------   ------   ------
                                                    57.1     37.4     38.1     30.3     41.8
Dividends on Capital Securities and mandatorily
  redeemable preferred stock....................   (24.5)   (25.7)   (25.7)    (3.4)     (.9)
                                                  ------   ------   ------   ------   ------
Reportable segment results(1)...................    32.6     11.7     12.4     26.9     40.9
Realized investment gains, net..................    65.5     58.0     73.4     30.7     33.1
                                                  ------   ------   ------   ------   ------
Reportable segment results, including realized
  gains.........................................  $ 98.1   $ 69.7   $ 85.8   $ 57.6   $ 74.0
                                                  ======   ======   ======   ======   ======
</TABLE>

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

(1) Reportable segment results include all elements of net income available to
    common stockholders except realized investment gains.

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

<TABLE>
<CAPTION>
                                                               1999     1998     1997
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Parent company, passive investment companies and Corporate
  line assets of insurance subsidiaries.....................  $1,719   $1,978   $1,582
Unrealized gain (loss) on fixed interest investments........    (231)     352      262
Co-insurance receivables on acquired blocks.................   1,267    1,904    2,061
Employee benefit plan assets................................     350      448      369
Goodwill arising from insurance acquisitions................     267      192      187
Other.......................................................     315      168      243
                                                              ------   ------   ------
          Total.............................................  $3,687   $5,042   $4,704
                                                              ======   ======   ======
</TABLE>

     Total assets for the Corporate and Other segment decreased 26.9% in 1999
and increased 7.2% in 1998. 1999's decline occurred primarily due to surrenders
of 100% co-insured COLI policies and changes in market values of available for
sale securities and employee benefit plan assets. Unrealized gains and losses on
all available for sale equity and fixed income securities are assigned to this
segment. Those values declined $743 during 1999 and increased $80 during 1998.
The 1999 decline resulted from increases in market interest rates and declines
in market values of financial services stocks. 1998's increase in total segment
assets occurred primarily due to retention of earnings less capital reinvested
in the Life Insurance and AIP segments.

     Reportable segment results increased 178.6% in 1999 and decreased 5.6% in
1998. Investment earnings improved 28.9% in 1999 and 9.2% in 1998 due to the
accumulation of corporate capital, and increased income on equity method
investments during 1999. Operating expenses, which decreased 32.2% in 1999 and
increased 25.3% in 1998, vary with the level of Corporate activities.
Additionally, 1998's operating expenses included $5.5 one-time costs associated
with promoting the new brand name and recording surplus furniture and equipment
at net realizable values. 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 increased $17.1

                                       16
<PAGE>   19

in 1999 due to higher operating results as well as changes in effective tax
rates on assets assigned to this segment. 1998's taxes declined $2.2 in relation
to the decline in operating results as well as changes in effective tax rates.

     The results of this segment may vary from year to year due to expenses
associated with strategic activities, 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 Life Insurance and
AIP 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 $2,108 or 8.7% in 1999. This growth resulted from
the acquisition of Guarantee, increases in Separate Account assets and
policyholder contract deposits, and cash provided by operating activities. These
favorable influences were offset by declines in the market values of available
for sale investments, a $655 decline related to business that is 100% coinsured
to a third party, cash dividends and share repurchases. Total assets increased
$1,207 or 5.2% in 1998 due to increases in Separate Account assets and
policyholder contract deposits, increases in market values of available for sale
investments and cash provided by operating activities.

     The Life Insurance and AIP 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 $1,091 and $844 at December 31, 1999 and 1998, an
increase of 29.3%. The increase was caused partly by the effect of changes in
unrealized gains on available for sale investments. Without this effect, DAC
increased 16.3% due to strong sales of UL-type and fixed annuity products.

     Value of business acquired (VOBA) represents the actuarially-determined
present value of future gross profits of each business acquired. VOBA of $949 at
December 31, 1999 includes $206 attributable to the Guarantee acquisition. At
December 31, 1998 VOBA was $568. Excluding Guarantee, VOBA increased 30.8%,
primarily as a result of changes in unrealized gains on available for sale
investments. Note 6 contains rollforwards of DAC and VOBA and is incorporated by
reference.

     Goodwill (the cost of acquired businesses in excess of the fair value of
net assets) was $303 and $229 at December 31, 1999 and 1998, with the net
increase due to the Guarantee acquisition, which added $81. Goodwill as a
percentage of shareholders' equity was 11.0% and 7.5% at year end 1999 and 1998.

     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.

     At December 31, 1999 and 1998, JP had reinsurance receivables of $ 1,057
and $1,072 and policy loans of $192 and $831 which are related to the businesses
of AH Life 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, 1999.

CAPITAL RESOURCES

  Stockholders' Equity

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

<TABLE>
<CAPTION>
                                            1999      1998      1997      1996      1995
                                           -------   -------   -------   -------   -------
<S>                                        <C>       <C>       <C>       <C>       <C>
Total assets.............................  $26,446   $24,338   $23,131   $17,562   $16,478
Total stockholders' equity...............    2,753     3,052     2,732     2,297     2,156
Ratio of stockholders' equity to
  assets.................................     10.4%     12.5%     11.8%     13.1%     13.1%
</TABLE>

                                       17
<PAGE>   20

     The ratio of capital to assets has declined, primarily due to assets
acquired through purchases of insurance entities for cash. Stockholders' equity
declined $462 in 1999 and increased $53 in 1998 due to changes in values of
available for sale securities. Additionally, $183 in 1999 and $33 in 1998 was
utilized to purchase common shares outstanding.

     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 Life Insurance and AIP 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   AH LIFE   JP FINANCIAL   GUARANTEE
                                                   -------   -------   ------------   ---------
<S>                                                <C>       <C>       <C>            <C>
A.M. Best........................................    A++       A++         A++             A
Standard & Poor's................................    AAA       AAA         AAA           n/a
Duff and Phelps..................................    AAA       AAA         AAA           n/a
</TABLE>

  Debt and Exchangeable Securities

     Commercial paper outstanding was $361 and $289 at December 31, 1999 and
1998 with weighted average interest rates of 5.80% and 5.61%. The maximum amount
outstanding during 1999 and 1998 was $369 and $302.

     JP has 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 $515 and $290 during 1999 and
1998. The securities involved had a fair value and amortized cost of $530 and
$531, and $303 and $287, as of year end 1999 and 1998.

     At December 31, 1999 and 1998, the Company had $290 and $327 Exchangeable
securities and other debt outstanding, including $137 and $143 Mandatorily
Exchangeable Debt Securities (MEDS) and $152 and $182 Automatic Common Exchange
Securities (ACES). Additionally, $300 of Guaranteed preferred beneficial
interest in subordinated debentures (Capital Securities) were outstanding at
December 31, 1999 and 1998. These are further described in Notes 8 and 9 which
are incorporated by reference. At maturity of the ACES (January 21, 2000), the
Company repaid security holders in cash, commercial paper proceeds of $146.

     In the fourth quarter 1999, the Company used operating cash flows, proceeds
from commercial paper issues and borrowings under repurchase agreements to
finance the Guarantee acquisition and purchase common shares outstanding.
Certain of those borrowings were made by subsidiaries. At December 31, 1999 and
1998 net advances from (to) subsidiaries were $329 and ($121). 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
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 1999, 1998 and 1997 was $481, $438 and $561.
The 1999 increase reflects growth in the Company's business segments as
reflected in net income. 1998's decrease occurred as a result of a

                                       18
<PAGE>   21

decline in Group medical policies in force and a shift from traditional products
(which are reflected in operating cash flows) to UL-type product receipts,
(which are reflected in financing cash flows).

     Net cash used in investing activities was $1,111, $719 and $1,218 in 1999,
1998 and 1997. 1999 and 1997 included acquisitions of subsidiaries, net of cash
received.

     Net cash provided by financing activities was $671, $293 and $561 in 1999,
1998 and 1997. Cash inflows from policyholder contract deposits net of
withdrawals were $704, $318 and $374. 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. 1998's
net policyholder receipts were lower due to lower annuity sales and higher
annuity withdrawals in a very competitive interest rate environment. Net
commercial paper borrowings (repayments) of $303, $201 and ($138) in 1999, 1998
and 1997 were primarily related to the Guarantee acquisition in 1999,
asset/liability management strategies in 1998 and issuance of Capital Securities
and Exchangeable Debt in 1997.

     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 $279 in 1999, $235 in 1998 and $391 in
1997. JP Life and AH Life were the primary sources of these dividends. 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. Approximately 78% of
the amount of dividends planned from life subsidiaries for 2000 will require
regulatory approval, based on the timing of those payments. The Company has no
reason to believe that such approval will be withheld.

     Cash and short-term investments were $62, $21 and $9 at December 31, 1999,
1998 and 1997. Additionally, fixed income and equity securities held by the
parent company and non-regulated subsidiaries were $446, $538 and $564. These
securities, which include the $289 (at December 31, 1999) 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, 1999
and 1998 were $12,568 and $11,907.

  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.

     JP held the following carrying amounts of investments:

<TABLE>
<CAPTION>
                                                    DECEMBER 31, 1999      DECEMBER 31, 1998
                                                    ------------------     ------------------
<S>                                                 <C>          <C>       <C>          <C>
Publicly-issued bonds.............................   $11,943       61%      $11,356       60%
Privately-placed bonds............................     3,220       16         3,131       16
Commercial mortgage loans.........................     2,543       13         1,969       10
Common stock......................................       730        4           931        5
Policy loans......................................       906        5         1,439        8
Preferred stock...................................        26       --            34       --
Real estate.......................................       133        1            86        1
Other.............................................        35       --            32       --
Cash and equivalents..............................        62       --            21       --
                                                     -------      ---       -------      ---
          Total...................................   $19,598      100%      $18,999      100%
                                                     =======      ===       =======      ===
</TABLE>

                                       19
<PAGE>   22

     The strategy of identifying market sectors and niches that provide
investment opportunities to meet the portfolios' growth, quality and yield
requirements is expected to continue to 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. The Company has a reserve for impaired mortgage loans, which
was $30 and $31 at December 31, 1999 and 1998.

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

<TABLE>
<CAPTION>
                                                   DECEMBER 31, 1999     DECEMBER 31, 1998
                                                   -----------------     -----------------
<S>                                                <C>        <C>        <C>        <C>
Bonds near or in default.........................  $     5       --%     $     5       --%
Bonds below investment grade.....................      764      3.9          659      3.5
Mortgage loans 60 days delinquent or in
  foreclosure....................................       --       --            3       --
Mortgage loans restructured......................        9      0.1           10      0.1
Foreclosed properties............................       --       --            3       --
                                                   -------    -----      -------    -----
Sub-total, "higher risk assets"..................      778      4.0          680      3.6
All other investments............................   18,820     96.0       18,319     96.4
                                                   -------    -----      -------    -----
          Total cash and investments.............  $19,598    100.0%     $18,999    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 notional value of $186, $186 and
$200 were open as of December 31, 1999, 1998 and 1997. There were no
terminations of derivative financial instruments in 1999, 1998 or 1997.
Potential termination of these arrangements as of December 31, 1999 under then
current interest rates would result in a potential loss of $1, which would be
amortized over the remaining life of the hedged asset or liability.

     Collateralized Mortgage Obligations (CMO's), which are included in debt
securities Available for Sale, were as follows:

<TABLE>
<CAPTION>
                                                               1999        1998
                                                              ------      ------
<S>                                                           <C>         <C>
Federal agency issued CMO's.................................  $2,498      $2,728
Corporate private-labeled CMO's.............................   1,838       1,706
                                                              ------      ------
          Total.............................................  $4,336      $4,434
                                                              ======      ======
</TABLE>

     The Company's investment strategy with respect to CMO's focuses on actively
traded less volatile issues that produce relatively stable cash flows. The
majority of CMO holdings are sequential and PAC tranches of federal agency
issuers. The CMO 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.

  Year 2000 Issue

     The Company did not experience any significant system failures due to the
inability of its systems or vendor provided equipment and services to
distinguish between dates in the 1900's and in the 2000's.

     The Company began work on the Year 2000 compliance issue in 1995 and
completed remediation and certification of all systems prior to December 31,
1999. The Company also received written documentation for most vendor-provided
equipment, systems and critical services. From inception of the project through
December 31, 1999, the Company incurred external costs of $10.7 and internal
costs of $9.9. Previously-estimated costs to monitor and implement contingency
plans were not necessary and provisions for emergency remediation were not
required as no significant interruptions were experienced. Since the beginning
of the project, costs incurred to

                                       20
<PAGE>   23

remediate and certify systems were charged to specific business segments and
expensed as incurred. There has not been a material adverse impact on the
Company's operations as a result of IT projects being deferred due to resource
constraints caused by the Year 2000 project.

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 1999, 10 year U.S. Treasury rates increased 179
basis points versus a decline of 110 basis points in 1998. These forces
contributed to a decrease in unrealized gains on securities available for sale
of $462 in 1999 versus an increase of $53 in 1998. In 1999, risk premiums over
rates that could otherwise be earned on US Treasury securities remained
favorable for investors in response to heavy corporate debt issuance, especially
during the first three quarters. In 1998, risk premiums widened significantly in
the third and fourth quarters.

     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, through careful selection of 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 3.0% to 5.5%,
with an approximate weighted average of 4.5%. For annuity products, the minimum
rates range from 3.0% to 5.5%, 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, 1999 and 1998, 87% and 88% of policy liabilities
related to interest-sensitive portfolios.

     The Company also considers the timing of cash flows arising from market
risk sensitive instruments (other than trading) 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 (other
than trading) 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, 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 reflect
reasonably possible near term changes in interest rates as of December 31, 1999

                                       21
<PAGE>   24

and 1998. 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                                       1999      1998
-----------------------                                       ----      ----
<S>                                                           <C>       <C>
+ 100 basis points..........................................  $(6)      $(8)
+ 50 basis points...........................................   (3)       (4)
-50 basis points............................................    8         4
-100 basis points...........................................    3         6
</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 among 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, 1999 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 $730. Approximately
$417 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
$289 (see Note 8). Management believes that a hypothetical 10% 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 10%,
the fair value of the Company's common stock and Exchangeable Securities would
change as follows:

<TABLE>
<CAPTION>
                                                                  FAVORABLE (UNFAVORABLE)
                                                                    CHANGE IN FAIR VALUE
                                                                  -----------------------
                                                                    1999           1998
                                                                    ----           ----
<S>                                                               <C>            <C>
BankAmerica common stock....................................        $(42)          $(50)
Exchangeable Securities.....................................          28             27
                                                                    ----           ----
                                                                     (14)           (23)
Remaining equity securities.................................         (32)           (45)
                                                                    ----           ----
Total change in fair values.................................        $(46)          $(68)
                                                                    ====           ====
</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. During
1999 and 1998, the U.S. economy continued to grow without adverse inflationary
pressures. Recently, inflationary concerns over skilled labor shortages and
record equity market returns have prompted the Federal Reserve to become more
active in monetary policy, resulting in a higher interest rate environment and
an inverted yield curve. The Company's operations are 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,

                                       22
<PAGE>   25

competition from other financial services providers, competition from emerging
technologies for television and radio advertising, 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. On November 12,
1999, President Clinton signed the Gramm-Leach-Bliley Act, intended to modernize
the regulatory framework for financial services in the United States and allow
insurance companies, banks and securities firms to affiliate under Financial
Holding Companies. The passage of this law, combined with changing demographics,
technological advances and customer expectations for one-stop shopping, are
expected to result in further strategic alignments within the financial services
industry. JP continues to analyze its options within this environment for
increasing distribution and improving economies of scale.

     The Clinton Administration recently released its 2001 budget proposals,
which included revenue-raising provisions estimated at $12.9 billion aimed at
life insurers and their policyholders. These include re-proposals of measures
from the prior year that were not ultimately included in tax legislation, as
well as several new proposals. In addition, the Administration's budget contains
several retirement savings proposals, which could benefit financial services
providers. It is not possible to predict the outcome or financial impact of the
Administration's proposals.

     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, and is encouraging each
state to adopt Codification as soon as possible, with a proposed implementation
date of January 1, 2001. Related statutory accounting changes are not expected
to significantly impact the Company's statutory capital requirements, although
they are expected to reduce levels of statutory capital industry wide.

     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
by the Company to be insignificant.

  Accounting Pronouncements

     See Note 2, which is incorporated by reference.

                                       23
<PAGE>   26

 Forward-looking information

     The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward looking statements. Certain information contained herein or
in any other written or oral statements made by or on behalf of JP are or may be
viewed as forward looking. Although the Company has used appropriate care in
developing any such forward looking information, forward looking information
involves risks and uncertainties that could significantly impact actual results.
These risks and uncertainties include, but are not limited to, the matters
discussed in "Market Risk Exposures", "External Trends and Forward Looking
Information" and other risks detailed from time to time in the Company's SEC
filings; to 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 through all distribution channels; and more generally to: 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 laws and regulations, including, without limitation, changes in financial
services industry or tax laws and regulations. The Company undertakes no
obligation to publicly update or revise any forward looking statements, whether
as a result of new information, future developments or otherwise.

                                       24
<PAGE>   27

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,
                                                       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>

<TABLE>
<CAPTION>
                                                     MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,
                                                       1998        1998         1998            1998
                                                     ---------   --------   -------------   ------------
                                                           (IN MILLIONS EXCEPT SHARE INFORMATION)
<S>                                                  <C>         <C>        <C>             <C>
Revenues, excluding realized investment gains......    $ 654      $ 632         $ 616          $ 615
Realized investment gains..........................       43         18            33             (1)
                                                       -----      -----         -----          -----
Revenues...........................................      697        650           649            614
Benefits and expenses..............................      521        488           468            463
Provision for income taxes.........................       57         54            66             49
                                                       -----      -----         -----          -----
Net income.........................................      119        108           115            102
Dividends on Capital Securities and preferred
  stock............................................        7          6             6              7
                                                       -----      -----         -----          -----
Net income available to common stockholders........    $ 112      $ 102         $ 109          $  95
                                                       =====      =====         =====          =====
Per share of common stock..........................    $1.05      $0.95         $1.03          $0.91
                                                       =====      =====         =====          =====
Per share of common stock -- assuming dilution.....    $1.04      $0.94         $1.02          $0.90
                                                       =====      =====         =====          =====
Reportable segment results per common share........    $0.79      $0.85         $0.85          $0.90
                                                       =====      =====         =====          =====
</TABLE>

                                       25
<PAGE>   28

                          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, 1999 and 1998,
and the related consolidated statements of income, stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 1999.
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, 1999 and 1998, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States.

                                          /s/ ERNST & YOUNG LLP

Greensboro, North Carolina
February 4, 2000

                                       26
<PAGE>   29

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                              ----------------------
                                                               1999           1998
                                                              -------        -------
                                                                (DOLLAR AMOUNTS IN
                                                                 MILLIONS EXCEPT
                                                                SHARE INFORMATION)
<S>                                                           <C>            <C>
                                       ASSETS
Investments:
  Debt securities available for sale, at fair value
    (amortized cost 1999 -- $12,235;
    1998 -- $10,500)........................................  $11,831        $10,958
  Debt securities held to maturity, at amortized cost (fair
    value 1999 -- $3,259;
    1998 -- $3,699).........................................    3,351          3,545
  Equity securities available for sale, at fair value (cost
    1999 -- $98; 1998 -- $94)...............................      737            949
  Mortgage loans on real estate.............................    2,543          1,969
  Policy loans..............................................      906          1,439
  Real estate...............................................      133             86
  Other investments.........................................       35             32
                                                              -------        -------
         Total investments..................................   19,536         18,978
Cash and cash equivalents...................................       62             21
Accrued investment income...................................      266            241
Due from reinsurers.........................................    1,576          1,342
Deferred policy acquisition costs and value of business
  acquired..................................................    2,040          1,412
Cost in excess of net assets acquired.......................      303            229
Assets held in separate accounts............................    2,272          1,754
Other assets................................................      391            361
                                                              -------        -------
                                                              $26,446        $24,338
                                                              =======        =======
                        LIABILITIES AND STOCKHOLDERS' EQUITY
Policy liabilities:
  Future policy benefits....................................  $ 2,715        $ 2,062
  Policyholder contract deposits............................   15,938         14,996
  Dividend accumulations and other policyholder funds on
    deposit.................................................      307            184
  Policy and contract claims................................      235            179
  Other.....................................................      248            246
                                                              -------        -------
         Total policy liabilities...........................   19,443         17,667
Debt:
  Commercial paper and revolving credit borrowings..........      361            289
  Exchangeable Securities and other debt....................      290            327
Securities sold under repurchase agreements.................      523            292
Currently payable income taxes..............................       36             43
Deferred income tax liabilities.............................       87            301
Liabilities related to separate accounts....................    2,272          1,754
Accounts payable, accruals and other liabilities............      381            310
                                                              -------        -------
         Total liabilities..................................   23,393         20,983
                                                              -------        -------
Commitments and contingent liabilities
Guaranteed preferred beneficial interest in subordinated
  debentures ("Capital Securities").........................      300            300
Mandatorily redeemable preferred stock......................       --              3
Stockholders' equity:
  Common stock and paid in capital, par value $1.25 per
    share: authorized 350,000,000
    shares; issued and outstanding 1999 -- 103,344,685
    shares; 1998 -- 105,896,185 shares......................      129            133
  Retained earnings.........................................    2,358          2,191
  Accumulated other comprehensive income -- net unrealized
    gains on securities.....................................      266            728
                                                              -------        -------
                                                                2,753          3,052
                                                              -------        -------
                                                              $26,446        $24,338
                                                              =======        =======
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       27
<PAGE>   30

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               1999     1998     1997
                                                              ------   ------   ------
                                                                 (DOLLAR AMOUNTS IN
                                                                  MILLIONS EXCEPT
                                                                 SHARE INFORMATION)
<S>                                                           <C>      <C>      <C>
REVENUE
Premiums and other considerations...........................  $  903   $1,049   $1,135
Net investment income.......................................   1,272    1,202    1,103
Realized investment gains...................................     101       93      111
Communications sales........................................     204      198      194
Other.......................................................      81       68       35
                                                              ------   ------   ------
          Total revenues....................................   2,561    2,610    2,578
                                                              ------   ------   ------
BENEFITS AND EXPENSES
Insurance and annuity benefits..............................   1,208    1,307    1,399
Insurance commissions, net of deferrals.....................      93       84       54
General and administrative expenses, net of deferrals.......     131      177      181
Insurance taxes, licenses and fees..........................      58       52       50
Amortization of policy acquisition costs and value of
  business acquired.........................................     200      196      172
Communications operations...................................     120      124      131
                                                              ------   ------   ------
          Total benefits and expenses.......................   1,810    1,940    1,987
                                                              ------   ------   ------
Income before income taxes..................................     751      670      591
Income taxes................................................     256      226      195
                                                              ------   ------   ------
Net income..................................................     495      444      396
Dividends on Capital Securities and preferred stock.........      25       26       26
                                                              ------   ------   ------
Net income available to common stockholders.................  $  470   $  418   $  370
                                                              ======   ======   ======
NET INCOME PER SHARE AVAILABLE TO COMMON STOCKHOLDERS.......  $ 4.46   $ 3.94   $ 3.49
                                                              ======   ======   ======
NET INCOME PER SHARE AVAILABLE TO COMMON
  STOCKHOLDERS -- ASSUMING DILUTION.........................  $ 4.42   $ 3.91   $ 3.47
                                                              ======   ======   ======
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       28
<PAGE>   31

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                    ACCUMULATED OTHER
                                                                      COMPREHENSIVE
                              COMMON STOCK                            INCOME -- NET              TOTAL
                                  AND              RETAINED          UNREALIZED GAINS        STOCKHOLDERS'
                            PAID IN CAPITAL        EARNINGS           ON SECURITIES              EQUITY
                            ----------------   -----------------   --------------------   --------------------
                                          (DOLLAR AMOUNTS IN MILLIONS EXCEPT SHARE INFORMATION)
<S>                         <C>                <C>                 <C>                    <C>
BALANCE, JANUARY 1,
  1997....................        $ 88              $1,708                 $501                  $2,297
  Net income..............          --                 396                   --                     396
  Other comprehensive
     income...............          --                  --                  174                     174
                                                                                                 ------
  Comprehensive income....                                                                          570
  Common dividends $1.07
     per share............          --                (114)                  --                    (114)
  Preferred dividends.....          --                 (26)                  --                     (26)
  Common stock issued.....           5                  --                   --                       5
                                  ----              ------                 ----                  ------
BALANCE, DECEMBER 31,
  1997....................          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
                                  ====              ======                 ====                  ======
</TABLE>

                See Notes to Consolidated Financial Statements.

                                       29
<PAGE>   32

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                               ------------------------------
                                                                 1999       1998       1997
                                                               --------   --------   --------
                                                                (DOLLAR AMOUNTS IN MILLIONS)
<S>                                                            <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income..................................................   $   495    $   444    $   396
Adjustments to reconcile net income to net cash provided by
  operating activities:
  Change in policy liabilities other than deposits..........        (6)       (39)        66
  Credits to policyholder accounts, net.....................       120        125        179
  Deferral of policy acquisition costs, net.................      (145)      (106)      (112)
  Change in receivables and asset accruals..................        (9)       (45)        38
  Change in payables and expense accruals...................        33         68        (28)
  Realized investment gains.................................      (101)       (93)      (111)
  Depreciation and amortization.............................        37         45         45
  Amortization of value of business acquired, net...........        60         48         26
  Other.....................................................        (3)        (9)        62
                                                               -------    -------    -------
    Net cash provided by operating activities...............       481        438        561
                                                               -------    -------    -------
CASH FLOWS FROM INVESTING ACTIVITIES
Securities available for sale:
  Sales.....................................................       835        465      1,614
  Maturities, calls and redemptions.........................       986        884        462
  Purchases.................................................    (2,550)    (2,033)    (2,199)
Securities held to maturity:
  Sales.....................................................         7         13         10
  Maturities, calls and redemptions.........................       495        495        377
  Purchases.................................................       (18)      (267)      (297)
Repayments of mortgage loans................................       139        168        123
Mortgage loans originated...................................      (602)      (427)      (507)
Increase in policy loans, net...............................       (29)       (20)       (33)
Acquisitions of subsidiaries, net of cash received..........      (344)        --       (758)
Purchase of intangibles.....................................        --         --        (15)
Other investing activities, net.............................       (30)         3          5
                                                               -------    -------    -------
         Net cash used in investing activities..............    (1,111)      (719)    (1,218)
                                                               -------    -------    -------
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholder contract deposits..............................     2,249      1,688      1,610
Withdrawals of policyholder contract deposits...............    (1,545)    (1,370)    (1,236)
Borrowings under short-term credit facilities...............     8,167      5,155      2,709
Repayments under short-term credit facilities...............    (8,094)    (5,151)    (2,699)
Issuance of Capital Securities..............................        --         --        300
Issuance of Exchangeable Securities and other debt..........        --         --        150
Proceeds (payments) from securities sold under repurchase
  agreements................................................       230        197       (148)
Cash dividends paid.........................................      (160)      (149)      (129)
Common stock transactions, net..............................      (173)       (27)         4
Redemption of mandatorily redeemable preferred stock........        (3)       (50)        --
                                                               -------    -------    -------
    Net cash provided by financing activities...............       671        293        561
                                                               -------    -------    -------
    Net increase (decrease) in cash and cash equivalents....        41         12        (96)
Cash and cash equivalents, beginning........................        21          9        105
                                                               -------    -------    -------
Cash and cash equivalents, ending...........................   $    62    $    21    $     9
                                                               =======    =======    =======
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid...........................................   $   191    $   169    $   158
                                                               =======    =======    =======
Interest paid...............................................   $    41    $    37    $    38
                                                               =======    =======    =======
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       30
<PAGE>   33

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             (DOLLAR AMOUNTS IN MILLIONS, EXCEPT SHARE INFORMATION)
                               DECEMBER 31, 1999

NOTE 1.  NATURE OF OPERATIONS AND SIGNIFICANT TRANSACTIONS

NATURE OF OPERATIONS

     Jefferson-Pilot Corporation (the Company) operates in the life insurance
and communications industries. Life insurance, accident, disability and annuity
products 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), Alexander Hamilton Life
Insurance Company of America (AH Life), Jefferson Pilot Financial Insurance
Company and its subsidiary, Jefferson Pilot LifeAmerica Insurance Company
(JPLA), collectively referred to as JP Financial, and Guarantee Life Insurance
Company (GLIC). 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 and disability
products marketed through regional group offices. Guarantee also brings 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 Guarantee 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. The allocation of the purchase price was
made based on preliminary estimates of the fair value of Guarantee's tangible
and identifiable intangible assets and liabilities and of the related tax bases
of assets and liabilities, and is subject to change. The acquisition resulted in
$81 of cost in excess of net assets acquired (i.e. goodwill) and $206 of value
of business acquired. This goodwill is being amortized over 35 years. Pro forma
financial information for this acquisition has not been presented, as the pro
forma impact on consolidated operations is not significant.

     In May 1997, the Company acquired JP Financial. JP Financial's operations,
principally universal life, variable universal life and term insurance, are
conducted nationwide. Jefferson Pilot Securities Corporation is a full service
NASD registered broker-dealer. The cost of the acquisition consisted of $775
cash paid, plus other acquisition expenses. The $775 was financed through the
liquidation of invested assets, various securities offerings (see Notes 8 and 9)
and the issuance of commercial paper. The acquisition was accounted for using
the purchase method. JP Financial's results of operations from May 1, 1997
forward are included in the accompanying consolidated financial statements. The
acquisition resulted in $163 of goodwill and $494 of value of business acquired.
This goodwill is being amortized over 35 years.

     The following pro-forma financial information has been prepared assuming
that the acquisition of JP Financial had taken place at the beginning of 1997:

<TABLE>
<CAPTION>
                                                               1997
                                                              ------
<S>                                                           <C>
Revenue.....................................................  $2,690
Net income available to common stockholders.................     335
Net income per common share.................................    3.16
Net income per common share -- assuming dilution............    3.14
</TABLE>

                                       31
<PAGE>   34
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In January 1997, JPCC purchased substantially all of the broadcast assets
of a radio station in Denver, Colorado for $15 in cash. This acquisition
resulted in cost in goodwill of $14 and was accounted for as a purchase.

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 GAAP financial
statements. See Note 12. All share and per share amounts have been restated to
give retroactive effect to the April 1998 three-for-two common stock split. See
Note 10.

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.

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. Estimates are inherently subject to change
and actual results could differ from the estimates. Reported amounts and
disclosures that require extensive use of estimates include 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 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

                                       32
<PAGE>   35
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 $41 and $39 at December 31, 1999 and 1998. 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 $148 and $144 at
December 31, 1999 and 1998.

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
$29 and $21 at December 31, 1999 and 1998. 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.

                                       33
<PAGE>   36
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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, and disability 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, for initiation and administration of the policy, and for
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.

RECOGNITION OF BENEFITS AND EXPENSES

     Benefits and expenses, other than deferred policy acquisition costs,
related to traditional life, accident and health, and disability 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.
                                       34
<PAGE>   37
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 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, AH Life, JP Financial and Guarantee each
file separate consolidated returns with their 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.

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 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 of this pronouncement 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,
                                                  ---------------------------------------
                                                     1999          1998          1997
                                                  -----------   -----------   -----------
<S>                                               <C>           <C>           <C>
NUMERATOR:
  Net income....................................  $       495   $       444   $       396
  Dividends on Capital Securities and preferred
     stock......................................           25            26            26
                                                  -----------   -----------   -----------
  Numerator for net income per share and net
     income per share -- assuming dilution --Net
     income available to common stockholders....  $       470   $       418   $       370
                                                  ===========   ===========   ===========
DENOMINATOR:
  Denominator for net income per
     share -- weighted-average shares
     outstanding................................  105,150,109   106,134,031   106,216,997
  Effect of dilutive securities:
     Employee stock options.....................    1,082,307       918,108       562,314
                                                  -----------   -----------   -----------
  Denominator for net income per
     share -- assuming dilution -- adjusted
     weighted-average shares outstanding........  106,232,416   107,052,139   106,779,311
                                                  ===========   ===========   ===========
NET INCOME PER SHARE............................  $      4.46   $      3.94   $      3.49
                                                  ===========   ===========   ===========
NET INCOME PER SHARE -- ASSUMING DILUTION.......  $      4.42   $      3.91   $      3.47
                                                  ===========   ===========   ===========
</TABLE>

                                       35
<PAGE>   38
                  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, 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>

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 1998
                                                              ---------------------------------------------
                                                                            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.......................................   $   316      $   23        $ --      $   339
Federal agency issued mortgage backed securities (including
  collateralized mortgage obligations)......................     2,610         119          (1)       2,728
Obligations of states and political subdivisions............        18          --          --           18
Corporate obligations.......................................     5,908         288         (45)       6,151
Corporate private-labeled mortgage backed securities
  (including collateralized mortgage obligations)...........     1,633          79          (6)       1,706
Redeemable preferred stocks.................................        15           1          --           16
                                                               -------      ------        ----      -------
Subtotal, debt securities...................................    10,500         510         (52)      10,958
Equity securities...........................................        94         855          --          949
                                                               -------      ------        ----      -------
Securities available for sale...............................   $10,594      $1,365        $(52)     $11,907
                                                               =======      ======        ====      =======
HELD TO MATURITY CARRIED AT AMORTIZED COST
Obligations of state and political subdivisions.............   $     7      $   --        $ --      $     7
Corporate obligations.......................................     3,538         159          (5)       3,692
                                                               -------      ------        ----      -------
Debt securities held to maturity............................   $ 3,545      $  159        $ (5)     $ 3,699
                                                               =======      ======        ====      =======
</TABLE>

                                       36
<PAGE>   39
                  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, 1999, 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..................................   $   263    $   264    $  245     $  245
Due after one year through five years....................     1,645      1,632       949        936
Due after five years through ten years...................     2,473      2,365       472        454
Due after ten years through twenty years.................       770        739       229        215
Due after twenty years...................................       897        843       106        103
Not due at a single maturity date........................     6,168      5,969     1,350      1,306
                                                            -------    -------    ------     ------
                                                             12,216     11,812     3,351      3,259
Redeemable preferred stocks..............................        19         19        --         --
                                                            -------    -------    ------     ------
                                                            $12,235    $11,831    $3,351     $3,259
                                                            =======    =======    ======     ======
</TABLE>

INVESTMENT CONCENTRATION, RISK AND IMPAIRMENT

     Investments in debt and equity securities include 2,049 issuers, with only
one corporate issuer representing more than one percent of investments. Equity
securities include investment in Bank of America Corporation (BankAmerica) of
$417 and $500 as of December 31, 1999 and 1998. Debt securities considered less
than investment grade approximated 5.1% and 4.5% of the total debt securities
portfolio as of December 31, 1999 and 1998.

     The Company's mortgage loan portfolio is comprised primarily of
conventional real estate mortgages collateralized by retail (37%), apartment
(18%), industrial (17%), office (14%) and hotel (13%) 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 36% of stated mortgage loan balances as of December
31, 1999 are due from borrowers in South Atlantic states and approximately 22%
are due from borrowers in West South Central states, and approximately 10% are
due from borrowers in Mountain states. No other geographic region represents as
much as 10% of December 31, 1999 mortgage loans.

     At December 31, 1999 and 1998, the recorded investment in mortgage loans
that are considered to be impaired was $63 and $65. Delinquent loans outstanding
as of December 31, 1999 and 1998 totaled $0 and $3. The related allowance for
credit losses on all mortgage loans decreased from $31 at December 31, 1998 to
$30 at December 31, 1999 through a charge to realized gains in 1999. The average
recorded investment in impaired loans was $64, $70 and $78 during the years
ended December 31, 1999, 1998 and 1997, on which interest income of $6, $7 and
$8 was recognized.

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 monitored daily,
and additional collateral is obtained as necessary. The market value of
securities loaned and collateral received amounted to $210 and $220,
respectively, at December 31, 1999 and $239 and $250, respectively, at December
31, 1998.

                                       37
<PAGE>   40
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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, 1996....................................    $  46        $ 455      $   501
Change during year ended December 31, 1997:
  Increase in stated amount of securities.................      341           94          435
  Increase in value of business acquired and deferred
     policy acquisition costs.............................     (138)           -         (138)
  Increase in carrying value of Exchangeable Securities
     (Note 8).............................................        -          (30)         (30)
  Increase in deferred income tax liabilities.............      (71)         (22)         (93)
                                                              -----        -----      -------
Increase in net unrealized gains included in other
  comprehensive income....................................      132           42          174
                                                              -----        -----      -------
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
                                                              =====        =====      =======
</TABLE>

                                       38
<PAGE>   41
                  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,
                                                              ------------------------
                                                               1999     1998     1997
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Interest on debt securities.................................  $1,063   $1,020   $  935
Investment income on equity securities......................      29       27       30
Interest on mortgage loans..................................     179      153      130
Interest on policy loans....................................      43       40       32
Other investment income.....................................      32       30       32
                                                              ------   ------   ------
Gross investment income.....................................   1,346    1,270    1,159
Investment expenses.........................................     (74)     (68)     (56)
                                                              ------   ------   ------
Net investment income.......................................  $1,272   $1,202   $1,103
                                                              ======   ======   ======
</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,
                                                                -----------------------
                                                                1999     1998     1997
                                                                -----    -----    -----
<S>                                                             <C>      <C>      <C>
Common stocks...............................................    $ 90      $61     $100
Real estate.................................................      11       24        9
Debt securities.............................................      (2)      19        2
Preferred stocks............................................      --       --        2
Other.......................................................       2       (3)      (2)
Amortization of deferred policy acquisition costs and value
  of business acquired......................................      --       (8)      --
                                                                ----      ---     ----
Realized investment gains...................................    $101      $93     $111
                                                                ====      ===     ====
</TABLE>

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

<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                                -----------------------
                                                                1999     1998     1997
                                                                -----    -----    -----
<S>                                                             <C>      <C>      <C>
Gross realized:
  Gains.....................................................    $100      $80     $122
  Losses....................................................     (21)      (9)     (19)
  Amortization of deferred policy acquisition costs and
     value of business acquired.............................      --       (4)      --
                                                                ----      ---     ----
Net realized gains on available for sale securities.........    $ 79      $67     $103
                                                                ====      ===     ====
</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
$7, $13 and $10 in 1999, 1998 and 1997.

                                       39
<PAGE>   42
                  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,
                                                              -------------
                                                              1999    1998
                                                              -----   -----
<S>                                                           <C>     <C>
Receive-fixed swaps held as hedges of direct investments:
  Notional amount...........................................  $156    $156
  Average rate received.....................................  7.21%   7.21%
  Average rate paid.........................................  5.62%   5.46%
Receive-fixed swaps held to modify annuity crediting rates
  Notional amount...........................................  $ 30    $ 30
  Average rate received.....................................  6.78%   6.78%
  Average rate paid.........................................  5.33%   5.31%
</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, 1999 and 1998.

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, 1999, the fair value and the carrying value of these options
totaled $5. The fair value equaled the carrying value due to 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 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.

                                       40
<PAGE>   43
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     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,
                                                              -------------------------
                                                               1999      1998     1997
                                                              -------   ------   ------
<S>                                                           <C>       <C>      <C>
Beginning balance...........................................  $  844    $ 742    $ 669
Deferral:
  Commissions...............................................     200      169      162
  Other.....................................................      63       56       56
                                                              ------    -----    -----
                                                                 263      225      218
Amortization................................................    (117)    (113)    (109)
                                                              ------    -----    -----
Net deferral reflected in expenses..........................     146      112      109
Addition for assumption reinsurance.........................      --       --        3
Adjustment related to unrealized losses (gains) on debt
  securities available for sale.............................     102       (4)     (39)
Adjustment related to realized gains on debt securities.....      (1)      (6)      --
                                                              ------    -----    -----
Ending balance..............................................  $1,091    $ 844    $ 742
                                                              ======    =====    =====
</TABLE>

VALUE OF BUSINESS ACQUIRED

     Information about value of business acquired follows:

<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                                -----------------------
                                                                1999     1998     1997
                                                                -----    -----    -----
<S>                                                             <C>      <C>      <C>
Beginning balance...........................................    $568     $622     $265
                                                                ----     ----     ----
Acquisitions................................................     206       --      482
                                                                ----     ----     ----
Deferral of commissions and accretion of interest...........      22       37       37
Amortization................................................     (83)     (83)     (63)
                                                                ----     ----     ----
Net amortization reflected in expenses......................     (61)     (46)     (26)
                                                                ----     ----     ----
Adjustment related to unrealized losses (gains) on debt
  securities available for sale.............................     235      (18)     (99)
Adjustment related to realized losses (gains) on debt
  securities................................................       1       (2)      --
Adjustment related to purchase accounting...................      --       12       --
                                                                ----     ----     ----
Ending balance..............................................    $949     $568     $622
                                                                ====     ====     ====
</TABLE>

     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.

                                       41
<PAGE>   44
                  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>
2000........................................................      9.8%
2001........................................................      8.7%
2002........................................................      7.8%
2003........................................................      7.1%
2004........................................................      6.4%
</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% to 9.9% and, when applicable, uniform grading over 20 to 30
years to ultimate rates ranging from 2% to 6%. 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 1999, 3.8% to 6.85% in 1998, and 4% to 7.5% in 1997. The average
credited interest rates for universal life-type products were 5.6%, 5.84%, and
6.02% for 1999, 1998 and 1997. For annuity products, credited interest rates
generally ranged from 4% to 9.5% in 1999, 4% to 8.15% in 1998, and 4% to 9.25%
in 1997.

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.

                                       42
<PAGE>   45
                  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>
                                                              1999   1998   1997
                                                              ----   ----   ----
<S>                                                           <C>    <C>    <C>
Balance as of January 1.....................................  $358   $385   $265
Less reinsurance recoverables...............................    71     62     18
                                                              ----   ----   ----
Net balance as of January 1.................................   287    323    247
                                                              ----   ----   ----
Acquisitions................................................   143      -     73
                                                              ----   ----   ----
Amount incurred:
  Current year..............................................    91    246    385
  Prior years...............................................   (30)   (54)   (47)
                                                              ----   ----   ----
                                                                61    192    338
                                                              ----   ----   ----
Less amount paid:
  Current year..............................................    33    130    230
  Prior years...............................................    64     98    105
                                                              ----   ----   ----
                                                                97    228    335
                                                              ----   ----   ----
Net balance as of December 31...............................   394    287    323
Plus reinsurance recoverables...............................   130     71     62
                                                              ----   ----   ----
Balance as of December 31...................................  $524   $358   $385
                                                              ====   ====   ====
Balance as of December 31 included with:
     Future policy benefits.................................  $456   $288   $261
     Policy and contract claims.............................    68     70    124
                                                              ----   ----   ----
                                                              $524   $358   $385
                                                              ====   ====   ====
</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 $150 and extends to December 18, 2000. The credit agreements
principally support the issuance of commercial paper. As of December 31, 1999,
outstanding commercial paper had various maturities, with none 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 $361 and $289 at December
31, 1999 and 1998 were 5.80% and 5.61%.

EXCHANGEABLE SECURITIES

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

                                       43
<PAGE>   46
                  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

     The Company issued 1,815,000 unsecured 7.25% ACES due January 21, 2000,
having a principal amount of $72.50 per security. The principal amount was to be
mandatorily exchanged into either (1) a number of shares of BankAmerica stock
determined based on an exchange rate reflecting the then trading price or (2)
cash of equal value. The exchange rate was 1.6666 shares if the average stock
price, calculated as specified, was at least $43.50; at maturity that average
was $48.3406. 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, 1999 and 1998, the combined carrying value
of the Exchangeable Securities was $289 and $325, based on the market value of
BankAmerica stock, which was $50.1875 per share as of year end 1999.

INTEREST

     Interest expense totaled $50 for 1999, $46 for 1998 and $37 for 1997.

NOTE 9.  CAPITAL SECURITIES AND MANDATORILY REDEEMABLE PREFERRED STOCK

     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.

     Mandatorily redeemable non-voting floating rate preferred stock (with a par
value of $100 per share) of subsidiaries authorized, issued and outstanding at
December 31, 1998 totaled 30,000 shares. The mandatorily redeemable preferred
stock was repurchased and cancelled as of January 1, 1999.

                                       44
<PAGE>   47
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 10.  STOCKHOLDERS' EQUITY

COMMON STOCK

     Changes in the number of shares outstanding, adjusted for the three-for-two
common stock split which was effected as a 50% stock dividend on April 13, 1998,
are as follows:

<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                                                  ---------------------------------------
                                                     1999          1998          1997
                                                  -----------   -----------   -----------
<S>                                               <C>           <C>           <C>
Shares outstanding, beginning...................  105,896,185   106,278,409   106,119,350
Shares issued under stock incentive plans.......      249,900       207,776       159,059
Shares reacquired...............................   (2,801,400)     (590,000)           --
                                                  -----------   -----------   -----------
Shares outstanding, ending......................  103,344,685   105,896,185   106,278,409
                                                  ===========   ===========   ===========
</TABLE>

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 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 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 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 9,875,413 shares are available for issuance pursuant to
outstanding or future awards as of December 31, 1999. 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, 521,064 shares of the
Company's common stock are reserved for issuance pursuant to outstanding or
future awards as of December 31, 1999. Nonqualified stock options are
automatically awarded, at market prices on specified award dates. The options
vest over a period of

                                       45
<PAGE>   48
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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>
                                           1999                     1998                     1997
                                  ----------------------   ----------------------   ----------------------
                                               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...   4,038,698    $39.28      3,675,552    $36.14      2,116,902    $27.60
Granted.........................     886,976     69.18        828,225     53.54      1,746,456     45.38
Exercised.......................    (223,156)    29.89       (210,725)    27.75       (143,883)    20.65
Forfeited.......................    (137,725)    53.37       (254,354)    49.91        (43,923)    42.79
                                  ----------    ------     ----------    ------     ----------    ------
Outstanding end of year.........   4,564,793    $45.12      4,038,698    $39.28      3,675,552    $36.14
                                  ==========    ======     ==========    ======     ==========    ======
Exercisable at end of year......   2,368,463    $33.59      1,801,138    $28.82      1,412,127    $26.53
                                  ==========    ======     ==========    ======     ==========    ======
Weighted-average fair value of
  options granted during the
  year..........................  $    16.32               $    13.54               $    10.07
                                  ==========               ==========               ==========
</TABLE>

The following table summarizes certain stock option information at December 31,
1999:

<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.......................    884,125       5.3           $22.74         884,125       $22.74
$31.17 - $38.58.......................  1,416,992       7.5            37.19       1,180,238        36.91
$48.50 - $69.25.......................  2,263,676       5.3            58.83         304,100        52.25
                                        ---------                     ------       ---------       ------
                                        4,564,793       6.9           $45.12       2,368,463       $33.59
                                        =========                     ======       =========       ======
</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 1999, 1998 and 1997: risk-free
interest rates of 5.2%, 5.8% and 6.2%; volatility factors of the expected market
price of the stock of 0.19; and a weighted-average expected life of the options
of 8.2 years for 1999, 9.9 years for 1998 and 7.7 years for 1997. Dividends were
assumed to increase by 10% annually.

     The Black-Scholes 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
employee 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.

                                       46
<PAGE>   49
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                              1999     1998     1997
                                                              -----    -----    -----
<S>                                                           <C>      <C>      <C>
Pro forma net income available to common stockholders.......  $ 462    $ 411    $ 366
Pro forma earnings per share available to common
  stockholders..............................................  $4.39    $3.87    $3.45
Pro forma earnings per share available to common
  stockholders -- assuming dilution.........................  $4.35    $3.84    $3.43
</TABLE>

     Because the options generally vest over three years and because SFAS 123
applies only to options granted after December 31, 1994, 1998 is the first year
in which the full pro forma effect is reflected.

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 GLIC) determined on the basis of SAP to net
income and stockholder's equity of these life insurance subsidiaries (excluding
GLIC) on the basis of GAAP is as follows:

<TABLE>
<CAPTION>
                                                               1999     1998     1997
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
STATUTORY ACCOUNTING PRACTICES
Net income for the year ended December 31...................  $  417   $  384   $  462
                                                              ======   ======   ======
Statutory capital and surplus as of December 31.............  $1,696   $1,584   $1,470
                                                              ======   ======   ======
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Net income for the year ended December 31...................  $  444   $  388   $  349
                                                              ======   ======   ======
Stockholder's equity as of December 31......................  $3,149   $3,342   $3,106
                                                              ======   ======   ======
</TABLE>

     At December 31, 1999, GLIC had statutory capital and surplus of $157 and
GAAP stockholder's equity of $426. Prior to the acquisition of Guarantee, GLIC
converted from a mutual form to a stock life company. In connection with that
conversion, GLIC 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. At December 31, 1999, the
assets and liabilities relating to these

                                       47
<PAGE>   50
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

participating policies amounted to $332 and $371. The excess of liabilities over
the assets represents the total estimated future earnings expected to emerge
from these participating policies.

     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, 1999, the life insurance
subsidiaries' adjusted capital and surplus exceeded their authorized control
level RBC.

     The NAIC Codification of Statutory Accounting Principles has been
completed. The purpose of Codification is to create uniformity in statutory
financial reporting across states. Codification must be adopted by individual
states before it will have any bearing on the statutory reporting requirements
of their domiciliary companies. The NAIC is encouraging the states to adopt
Codification as soon as possible, with an implementation date of January 1,
2001. The Company does not expect implementation to have a material impact on
statutory surplus of its insurance subsidiaries. However, implementation is
expected to result in a net reduction of statutory surplus and RBC throughout
the insurance industry.

     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 $263 of
dividends could be paid by the life insurance subsidiaries at various times
during 2000 without regulatory approval.

NOTE 13.  INCOME TAXES

     Income taxes reported are as follows:

<TABLE>
<CAPTION>
                                                                     YEAR ENDED
                                                                    DECEMBER 31,
                                                                --------------------
                                                                1999    1998    1997
                                                                ----    ----    ----
<S>                                                             <C>     <C>     <C>
Current expense.............................................    $212    $195    $180
Deferred expense............................................      44      31      15
                                                                ----    ----    ----
          Total income tax expense..........................    $256    $226    $195
                                                                ====    ====    ====
</TABLE>

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

<TABLE>
<CAPTION>
                                                                     YEAR ENDED
                                                                    DECEMBER 31,
                                                                --------------------
                                                                1999    1998    1997
                                                                ----    ----    ----
<S>                                                             <C>     <C>     <C>
Federal income tax rate.....................................    35.0%   35.0%   35.0%
Reconciling items:
  Tax exempt interest and dividends received deduction......    (0.9)   (1.5)   (1.3)
  Other increases (decreases), net..........................      --     0.2    (0.7)
                                                                ----    ----    ----
Effective income tax rate...................................    34.1%   33.7%   33.0%
                                                                ====    ====    ====
</TABLE>

                                       48
<PAGE>   51
                  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,
                                                              -------------
                                                              1999    1998
                                                              -----   -----
<S>                                                           <C>     <C>
Deferred tax assets:
  Difference in policy liabilities..........................  $450    $453
  Obligation for postretirement benefits....................     5       5
  Deferred compensation.....................................    22      21
  Differences in investment basis...........................     2      --
  Other deferred tax assets.................................   103      61
                                                              ----    ----
Gross deferred tax assets...................................   582     540
                                                              ----    ----
Deferred tax liabilities:
  Net unrealized gains on securities........................   140     385
  Deferral of policy acquisition costs and value of business
     acquired...............................................   429     356
  Deferred gain recognition for income tax purposes.........    16      17
  Differences in investment bases...........................    --      19
  Depreciation differences..................................    17       8
  Other deferred tax liabilities............................    67      56
                                                              ----    ----
Gross deferred tax liabilities..............................   669     841
                                                              ----    ----
Net deferred income tax liability...........................  $ 87    $301
                                                              ====    ====
</TABLE>

     Federal income tax returns for all years through 1994 are closed. Tax years
1995 and 1996 are currently under examination by the Internal Revenue Service,
and assessments totaling $15.1 million have been proposed. The potential
assessments pertain to issues related to timing differences between tax
accounting and generally accepted accounting principles. The Company is
contesting the proposed assessments. In the opinion of management, recorded
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. The Clinton Administration is proposing to tax, as part of its 2001
budget initiative, the "Policyholders' Surplus" over a five-year period. No
related deferred tax liability has been recognized for the potential tax which
would approximate $37 million.

                                       49
<PAGE>   52
                  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,
                                                              -------------
                                                              1999    1998
                                                              -----   -----
<S>                                                           <C>     <C>
Change in benefit obligation:
  Benefit obligation at beginning of year...................  $ 241   $ 224
  Service cost..............................................      9      10
  Interest cost.............................................     16      14
  Actuarial gains...........................................    (20)      7
  Benefits paid.............................................    (16)    (14)
  Obligation assumed with Guarantee acquisition.............     35      --
                                                              -----   -----
Benefit obligation at end of year...........................    265     241
                                                              -----   -----
Change in plan assets:
  Fair value of assets at beginning of year.................    347     302
  Actual return on plan assets..............................     17      57
  Transfer in...............................................      2       2
  Benefits paid.............................................    (16)    (14)
  Assets acquired with Guarantee acquisition................     42      --
                                                              -----   -----
Fair value of assets at end of year.........................    392     347
                                                              -----   -----
Funded status of the plans..................................    127     106
Unrecognized net gain.......................................   (117)   (103)
Unrecognized transition net asset...........................    (10)    (12)
Unrecognized prior service cost.............................      8       8
                                                              -----   -----
Prepaid (accrued) benefit cost..............................  $   8   $  (1)
                                                              =====   =====
</TABLE>

<TABLE>
<CAPTION>
                                                                  YEAR ENDED
                                                                 DECEMBER 31,
                                                              ------------------
                                                              1999   1998   1997
                                                              ----   ----   ----
<S>                                                           <C>    <C>    <C>
Weighted-average assumptions as of December 31:
  Discount rate.............................................   7.4%   6.5%   7.0%
  Expected return on plan assets............................   8.0%   8.0%   8.0%
  Rate of compensation increase.............................   5.5%   4.5%   5.0%
Components of net periodic benefit cost:
  Service cost, benefits earned during the year.............  $  9   $ 10   $  8
  Interest cost on projected benefit obligation.............    16     14     14
  Expected return on plan assets............................   (22)   (19)   (17)
  Net amortization and deferral.............................    (3)    (1)    (1)
                                                              ----   ----   ----
Benefit cost................................................  $ --   $  4   $  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

                                       50
<PAGE>   53
                  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 1999,
1998 and 1997.

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 $1, $3 and $4 during 1999,
1998 and 1997.

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
$0.1 to $1.25 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.

     AH Life reinsured 100% of the Periodic Payment Annuities (PPA), COLI and
Affiliated credit insurance business written prior to their acquisition in 1995
with affiliates of Household International, Inc. on a coinsurance basis.
Balances are settled monthly, and AH Life is compensated by the reinsurers for
administrative services related to the reinsured business. In 1996, AH Life
recaptured a portion of the PPA reinsurance. The amount due from reinsurers in
the consolidated balance sheets includes $1,080 and $1,057 due from the
Household affiliates at December 31, 1999 and 1998.

     Assets related to the reinsured PPA and COLI business have been placed in
irrevocable trusts formed to hold the assets for the benefit of AH Life 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. AH
Life 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. AH Life 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, 1999 and 1998, JP Financial had a reinsurance
recoverable of $87 and $95 from a single reinsurer, pursuant to a 50%
coinsurance agreement. JP Financial and the reinsurer are joint and equal owners
in $191 of securities and short-term investments as of December 31, 1999 and
1998, 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 reinsurance activities of the
subsidiaries during the three years ended December 31, 1999.

                                       51
<PAGE>   54
                  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,
                                                              ------------------------
                                                               1999     1998     1997
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Premiums and other considerations, before effect of
  reinsurance ceded.........................................  $1,070   $1,217   $1,233
Less premiums and other considerations ceded................     167      168       98
                                                              ------   ------   ------
Net premiums and other considerations.......................  $  903   $1,049   $1,135
                                                              ======   ======   ======
Benefits, before reinsurance recoveries.....................  $1,481   $1,654   $1,648
Less reinsurance recoveries.................................     273      347      249
                                                              ------   ------   ------
Net benefits................................................  $1,208   $1,307   $1,399
                                                              ======   ======   ======
</TABLE>

NOTE 16.  SEGMENT INFORMATION

     The Company has four reportable segments which are defined based on the
nature of the products and services offered: Life Insurance Products, Annuity
and Investment Products (AIP), Communications, and Corporate and Other. The Life
Insurance Products segment offers a wide array of life and health insurance. AIP
offers fixed and variable annuities and investment products. The Communications
segment consists principally of radio and television broadcasting 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 otherwise allocated to reportable segments including earnings
thereon, and all of the Company's realized gains and losses. Surplus is
allocated to the Life Insurance Products and AIP 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 life insurance, annuity and investment products have been aggregated
in the Life Insurance and AIP reporting segments.

     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 the summary of significant accounting policies (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,
                                                              -----------------
                                                               1999      1998
                                                              -------   -------
<S>                                                           <C>       <C>
ASSETS
Life Insurance Products.....................................  $15,099   $12,579
AIP.........................................................    7,443     6,495
Communications..............................................      217       222
Corporate & other...........................................    3,687     5,042
                                                              -------   -------
          Total assets......................................  $26,446   $24,338
                                                              =======   =======
</TABLE>

                                       52
<PAGE>   55
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               1999     1998     1997
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
REVENUES
Life Insurance Products.....................................  $1,632   $1,737   $1,698
AIP.........................................................     511      506      499
Communications..............................................     200      195      190
Corporate & other...........................................     117       79       80
                                                              ------   ------   ------
                                                               2,460    2,517    2,467
Realized investment gains, before tax.......................     101       93      111
                                                              ------   ------   ------
          Total revenues....................................  $2,561   $2,610   $2,578
                                                              ======   ======   ======
TOTAL REPORTABLE SEGMENT RESULTS AND RECONCILIATION TO NET
  INCOME AVAILABLE TO COMMON STOCKHOLDERS
Life Insurance Products.....................................  $  267   $  245   $  194
AIP.........................................................      67       71       63
Communications..............................................      38       32       28
Corporate & other...........................................      33       12       12
                                                              ------   ------   ------
          Total reportable segment results..................     405      360      297
Realized investment gains, net of tax.......................      65       58       73
                                                              ------   ------   ------
          Net income available to common stockholders.......  $  470   $  418   $  370
                                                              ======   ======   ======
NET INVESTMENT INCOME
Life Insurance Products.....................................  $  766   $  719   $  618
AIP.........................................................     419      425      429
Communications..............................................      (5)      (5)      (5)
Corporate & other...........................................      92       63       61
                                                              ------   ------   ------
          Total net investment income.......................  $1,272   $1,202   $1,103
                                                              ======   ======   ======
AMORTIZATION OF DEFERRED POLICY ACQUISITION COSTS AND VALUE
  OF BUSINESS ACQUIRED
Life Insurance Products.....................................  $  175   $  168   $  147
AIP.........................................................      25       28       25
                                                              ------   ------   ------
Amortization reflected in total reportable segment
  results...................................................     200      196      172
Amortization on realized investment gains...................      --        8       --
                                                              ------   ------   ------
Amortization of deferred policy acquisition costs and value
  of business acquired......................................  $  200   $  204   $  172
                                                              ======   ======   ======
INCOME TAX EXPENSE
Life Insurance Products.....................................  $  141   $  130   $  102
AIP.........................................................      36       38       34
Communications..............................................      25       22       17
Corporate & other...........................................      18        1        4
                                                              ------   ------   ------
          Total operating income tax expense................     220      191      157
Income tax expense on realized investment gains.............      36       35       38
                                                              ------   ------   ------
          Total income tax expense..........................  $  256   $  226   $  195
                                                              ======   ======   ======
</TABLE>

     The Company allocates depreciation expense to Life Insurance and AIP, but
the related fixed assets are not allocated to these reportable segments.

                                       53
<PAGE>   56
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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,
                                                                -------------------------
                                                                 1999     1998      1997
                                                                ------    -----    ------
<S>                                                             <C>       <C>      <C>
Unrealized holding gains arising during period, before
  taxes.....................................................    $(632)    $147     $ 370
Income taxes................................................      221      (51)     (129)
                                                                -----     ----     -----
Unrealized holding gains arising during period, net of
  taxes.....................................................     (411)      96       241
                                                                -----     ----     -----
Less: reclassification adjustment
  Gains realized in net income..............................       79       67       103
  Income taxes..............................................      (28)     (24)      (36)
                                                                -----     ----     -----
Reclassification adjustment for gains realized in net
  income....................................................       51       43        67
                                                                -----     ----     -----
Other comprehensive income -- net unrealized gains
  (losses)..................................................    $(462)    $ 53     $ 174
                                                                =====     ====     =====
</TABLE>

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>
                                                           1999                 1998
                                                    ------------------   ------------------
                                                    CARRYING    FAIR     CARRYING    FAIR
                                                     VALUE      VALUE     VALUE      VALUE
                                                    --------   -------   --------   -------
<S>                                                 <C>        <C>       <C>        <C>
FINANCIAL ASSETS
Debt securities available for sale................  $11,832    $11,832   $10,947    $10,947
Interest rate swaps available for sale............       (1)        (1)       11         11
Debt securities held to maturity..................    3,351      3,259     3,545      3,697
Interest rate swaps held to maturity..............       --         --        --          2
Equity securities available for sale..............      737        737       949        949
Mortgage loans....................................    2,543      2,467     1,969      2,124
Policy loans......................................      906        998     1,439      1,525
FINANCIAL LIABILITIES
Annuity contract liabilities in accumulation
  phase...........................................    5,240      5,057     4,959      4,785
Commercial paper and revolving credit
  borrowings......................................      361        361       289        289
Exchangeable Securities and other debt............      290        277       327        338
Securities sold under repurchase agreements.......      523        523       292        292
Capital Securities................................      300        276       300        333
Mandatorily redeemable preferred stock............       --         --         3          3
</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.

                                       54
<PAGE>   57
                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     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 is 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.

     The fair value of the Company's mandatorily redeemable preferred stock
approximates its stated amount because its dividend rate is adjustable.

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 $85 as of December 31, 1999.

     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
future sports programming rights, and commitments on other contracts totaling
approximately $89 as of December 31, 1999. These commitments are not reflected
as an asset or liability in the consolidated balance sheet because the programs
are not currently available for use.

     JP Life is a defendant in a proposed class action suit, and AH Life is a
defendant in a separate proposed class action suit. Each suit alleges deceptive
practices, fraudulent and negligent misrepresentation and breach of contract in
the sale of certain life insurance policies using policy illustrations which
plaintiffs claim were misleading. Unspecified compensatory and punitive damages,
costs and equitable relief are sought in each case. While management is unable
to make a meaningful estimate of the amount or range of loss that could result
from an unfavorable outcome in either or both cases, management believes that it
has made appropriate disclosures to policyholders as a matter of practice, and
intends to vigorously defend its position.

     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.

                                       55
<PAGE>   58

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 1, 2000 (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 1999.

     (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.

                                       56
<PAGE>   59

                                   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/ David A. Stonecipher
                         (NAME AND TITLE)                   --------------------------------------------
                                                            David A. Stonecipher
                                                            Chairman, President and Director
                                                            (Also signing as Principal
                                                            Executive Officer)
                         DATE                               March 28, 2000
</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/  Dennis R. Glass
                                --------------------------------------------------------
NAME AND TITLE)                 Dennis R. Glass
                                Executive Vice President and Treasurer
                                (Principal Financial Officer)
DATE                            March 28, 2000

BY (SIGNATURE)                  /s/  Reggie D. Adamson
                                --------------------------------------------------------
(NAME AND TITLE)                Reggie D. Adamson
                                Senior Vice President, Finance
                                (Principal Accounting Officer)
DATE                            March 28, 2000

BY (SIGNATURE)                  /s/  Edwin B. Borden*
                                --------------------------------------------------------
(NAME AND TITLE)                Edwin B. Borden, Director
DATE                            March 28, 2000

BY (SIGNATURE)                  /s/  William H. Cunningham*
                                --------------------------------------------------------
(NAME AND TITLE)                William H. Cunningham, Director
DATE                            March 28, 2000

BY (SIGNATURE)                  /s/  Robert G. Greer*
                                --------------------------------------------------------
(NAME AND TITLE)                Robert G. Greer, Director
DATE                            March 28, 2000

BY (SIGNATURE)                  /s/  George W. Henderson, III*
                                --------------------------------------------------------
(NAME AND TITLE)                George W. Henderson, III
DATE                            March 28, 2000

BY (SIGNATURE)                  /s/  E. S. Melvin*
                                --------------------------------------------------------
(NAME AND TITLE)                E. S. Melvin, Director
DATE                            March 28, 2000
</TABLE>

                                       57
<PAGE>   60
<TABLE>
<S>                             <C>
BY (SIGNATURE)                  /s/  Kenneth C. Mlekush*
                                --------------------------------------------------------
(NAME AND TITLE)                Kenneth C. Mlekush, Director
DATE                            March 28, 2000

BY (SIGNATURE)                  /s/  William P. Payne*
                                --------------------------------------------------------
(NAME AND TITLE)                William P. Payne, Director
DATE                            March 28, 2000

BY (SIGNATURE)                  /s/  Patrick S. Pittard*
                                --------------------------------------------------------
(NAME AND TITLE)                Patrick S. Pittard, Director
DATE                            March 28, 2000

BY (SIGNATURE)                  /s/  Donald S. Russell, Jr.*
                                --------------------------------------------------------
(NAME AND TITLE)                Donald S. Russell, Jr., Director
DATE                            March 28, 2000
</TABLE>

*By  /s/  Robert A. Reed
     --------------------------------------------------------------
     Robert A. Reed, Attorney-in-Fact
     March 28, 2000

                                       58
<PAGE>   61

         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, 1999 and 1998

          Consolidated Statements of Income -- Years Ended December 31, 1999,
     1998 and 1997

          Consolidated Statements of Stockholders' Equity -- Years Ended
     December 31, 1999, 1998 and 1997

          Consolidated Statements of Cash Flows -- Years Ended December 31,
     1999, 1998 and 1997

          Notes to Consolidated Financial Statements -- December 31, 1999

     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, 1999 and
      1998..................................................      F-3
     Condensed Statements of Income for the Years Ended
      December 31, 1999, 1998 and 1997......................      F-4
     Condensed Statements of Cash Flows for the Years Ended
      December 31, 1999, 1998 and 1997......................      F-5
     Note to Condensed Financial Statements.................      F-6
Schedule III -- Supplementary Insurance Information.........      F-7
Schedule IV  -- Reinsurance.................................      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>   62

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                     SCHEDULE I -- SUMMARY OF INVESTMENTS -
                   OTHER THAN INVESTMENTS IN RELATED PARTIES
                               DECEMBER 31, 1999
                                  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..................................  $   343    $   349       $   349
     Federal agency issued collateralized mortgage
       obligations..........................................    2,530      2,498         2,498
     Obligations of states, municipalities and political
       subdivisions (b).....................................       40         39            39
     Obligations of public utilities (b)....................    1,460      1,423         1,439
     Corporate obligations (b)..............................    9,298      8,921         8,997
     Corporate private-labeled collateralized mortgage
       obligations..........................................    1,896      1,841         1,841
  Redeemable preferred stocks...............................       19         19            19
                                                              -------    -------       -------
          Total debt securities.............................   15,586     15,090        15,182
                                                              -------    =======       -------
Equity securities:
  Common stocks:
     Public utilities.......................................       40        149           149
     Banks, trust and insurance companies...................       17        469           469
     Industrial and all other...............................       33        111           111
  Nonredeemable preferred stocks............................        8          8             8
                                                              -------    -------       -------
          Total equity securities...........................       98        737           737
                                                              -------    =======       -------
Mortgage loans on real estate (c)...........................    2,573                    2,543
Real estate acquired by foreclosure (c).....................        1                        1
Other real estate held for investment.......................      132                      132
Policy loans................................................      906                      906
Other long-term investments.................................       35                       35
                                                              -------                  -------
          Total investments.................................  $19,331                  $19,536
                                                              =======                  =======
</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>   63

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                              ----------------
                                                               1999      1998
                                                              ------    ------
<S>                                                           <C>       <C>
                                    ASSETS
Cash and investments:
  Cash and cash equivalents.................................  $   48    $   --
  Investment in subsidiaries................................   4,206     4,019
  Other investments.........................................       4         4
                                                              ------    ------
          Total cash and investments:.......................   4,258     4,023
Deferred income tax assets..................................       1        15
Other assets................................................      15        14
                                                              ------    ------
                                                              $4,274    $4,052
                                                              ======    ======
                     LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Notes payable, short-term.................................  $  361    $  289
  Exchangeable Securities...................................     289       325
  Notes payable, subsidiaries...............................     811       343
  Payables and accruals.....................................      22         8
  Dividends payable.........................................      34        31
  Income taxes payable......................................       4         4
                                                              ------    ------
          Total liabilities.................................   1,521     1,000
                                                              ------    ------
Commitments & contingent liabilities
Stockholders' equity :
  Common stock, par value $1.25 per share, authorized 1999
     and 1998: -- 350,000,000; issued: 1999 -- 103,344,685
     shares; 1998 -- 105,896,185 shares.....................     129       133
  Retained earnings, including equity in undistributed net
     income of subsidiaries; 1998 -- $1,979,
     1998 -- $1,729.........................................   2,358     2,191
  Accumulated other comprehensive income -- net unrealized
     gains on securities....................................     266       728
                                                              ------    ------
          Total stockholders' equity........................   2,753     3,052
                                                              ------    ------
                                                              $4,274    $4,052
                                                              ======    ======
</TABLE>

                  See Note to Condensed Financial Statements.

                                       F-3
<PAGE>   64

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                               YEARS ENDED DECEMBER 31,
                                                              --------------------------
                                                               1999      1998      1997
                                                              ------    ------    ------
<S>                                                           <C>       <C>       <C>
Income:
  Dividends from subsidiaries:
     Jefferson-Pilot Life Insurance Company.................   $120      $120      $337
     Alexander Hamilton Life Insurance Company..............    100        70        --
     Jefferson-Pilot Communications Company.................     34        25        29
     Other subsidiaries.....................................     25        20        25
                                                               ----      ----      ----
                                                                279       235       391
  Other investment income, including interest from
     subsidiaries, net......................................      2         1         4
  Realized investment gains.................................      1        --        14
                                                               ----      ----      ----
          Total income......................................    282       236       409
Financing costs.............................................     66        67        55
Other expenses..............................................     17        20        20
                                                               ----      ----      ----
          Income before income taxes and equity in
            undistributed net income of subsidiaries........    199       149       334
Income taxes (benefits).....................................    (21)      (29)      (20)
                                                               ----      ----      ----
          Income before equity in undistributed net income
            of subsidiaries.................................    220       178       354
                                                               ----      ----      ----
Equity in undistributed net income of subsidiaries:
     Jefferson-Pilot Life Insurance Company.................    120        89      (129)
     Alexander Hamilton Life Insurance Company..............      2        29        88
     Jefferson-Pilot Communications Company.................      5         7        (1)
     Jefferson Pilot Financial Insurance Company............    102        80        54
     Other subsidiaries, net................................     21        35         4
                                                               ----      ----      ----
                                                                250       240        16
                                                               ----      ----      ----
          Net income available to common stockholders.......   $470      $418      $370
                                                               ====      ====      ====
</TABLE>

                  See Note to Condensed Financial Statements.

                                       F-4
<PAGE>   65

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                               YEARS ENDED DECEMBER 31,
                                                              ---------------------------
                                                               1999      1998      1997
                                                              -------   -------   -------
<S>                                                           <C>       <C>       <C>
Cash Flows from Operating Activities:
  Net income................................................  $   470   $   418   $   370
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Equity in undistributed net income of subsidiaries.....     (250)     (240)      (16)
     Realized investment gains..............................       (1)       --       (14)
     Change in accrued items and other adjustments, net.....        9         8        12
                                                              -------   -------   -------
       Net cash provided by operating activities............      228       186       352
                                                              -------   -------   -------
Cash Flows from Investing Activities:
  Purchases of investments..................................       (4)       --       (22)
  Proceeds from sales of investments........................       --        --        57
  Acquisitions of subsidiaries..............................     (389)       --      (786)
  Other returns from (investments in) subsidiaries..........       --        27       (42)
  Other, net................................................        7        --        (2)
                                                              -------   -------   -------
       Net cash (used in) provided by investing
        activities..........................................     (386)       27      (795)
                                                              -------   -------   -------
Cash Flows from Financing Activities:
  Cash dividends............................................     (135)     (122)     (113)
  Common stock transactions, net............................     (173)      (26)        4
  Proceeds from external borrowings.........................    8,167     5,155     2,815
  Repayments of external borrowings.........................   (8,094)   (5,151)   (2,603)
  Borrowings from subsidiaries, net.........................      441       (71)      333
                                                              -------   -------   -------
       Net cash provided by (used in) financing
        activities..........................................      206      (215)      436
                                                              -------   -------   -------
       Net increase (decrease) in cash and cash
        equivalents.........................................       48        (2)       (7)
Cash and cash equivalents:
  Beginning.................................................       --         2         9
                                                              -------   -------   -------
  Ending....................................................  $    48   $    --   $     2
                                                              =======   =======   =======
</TABLE>

                  See Note to Condensed Financial Statements.

                                       F-5
<PAGE>   66

                  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, 1999.

     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, 1999.

                                       F-6
<PAGE>   67

                  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,
  1999
Life insurance products.............      $1,760             $11,353            $58           $655           $  865
AIP.................................         280               7,300             --             43               19
Corporate and other.................          --                  --             --             34               19
                                          ------             -------            ---           ----           ------
         Total......................      $2,040             $18,653            $58           $732           $  903
                                          ======             =======            ===           ====           ======
As of or Year Ended December 31,
  1998
Life insurance products.............      $1,234             $10,390            $56           $532           $1,017
AIP.................................         178               6,668             --             21               17
Corporate and other.................          --                  --             --             --               15
                                          ------             -------            ---           ----           ------
         Total......................      $1,412             $17,058            $56           $553           $1,049
                                          ======             =======            ===           ====           ======
As of or Year Ended December 31,
  1997
Life insurance products.............      $1,192             $10,003            $47           $586           $1,081
AIP.................................         172               6,838             --             23               35
Corporate and other.................          --                  --             --             --               19
                                          ------             -------            ---           ----           ------
         Total......................      $1,364             $16,841            $47           $609           $1,135
                                          ======             =======            ===           ====           ======
</TABLE>

<TABLE>
<CAPTION>
                         COLUMN A                            COLUMN G     COLUMN H      COLUMN I      COLUMN J
----------------------------------------------------------  ----------   ----------   ------------   -----------
                                                                                      AMORTIZATION
                                                                                      OF DEFERRED
                                                                                         POLICY
                                                                         BENEFITS,    ACQUISITION
                                                                          CLAIMS,      COSTS AND
                                                               NET       LOSSES AND     VALUE OF        OTHER
                                                            INVESTMENT   SETTLEMENT     BUSINESS      OPERATING
                         SEGMENT                              INCOME      EXPENSES      ACQUIRED     EXPENSES(B)
                         -------                            ----------   ----------   ------------   -----------
<S>                                                         <C>          <C>          <C>            <C>
As of or Year Ended December 31, 1999
Life insurance products...................................    $  766       $  890         $175          $160
AIP.......................................................       419          306           25            77
Communications............................................        (5)          --           --           137
Corporate and other.......................................        92           12           --            28
                                                              ------       ------         ----          ----
         Total............................................    $1,272       $1,208         $200          $402
                                                              ======       ======         ====          ====
As of or Year Ended December 31, 1998
Life insurance products...................................    $  719       $  993         $168          $200
AIP.......................................................       425          299           28            69
Communications............................................        (5)          --           --           141
Corporate and other.......................................        63           15           --            27
                                                              ------       ------         ----          ----
         Total............................................    $1,202       $1,307         $196          $437
                                                              ======       ======         ====          ====
As of or Year Ended December 31, 1997
Life insurance products...................................    $  618       $1,057         $147          $198
AIP.......................................................       429          326           25            50
Communications............................................        (5)          --           --           146
Corporate and other.......................................        61           16           --            22
                                                              ------       ------         ----          ----
         Total............................................    $1,103       $1,399         $172          $416
                                                              ======       ======         ====          ====
</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 $74 in 1999, $68 in 1998, and $56 in 1997.

                                       F-7
<PAGE>   68

                  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, 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%
Year Ended December 31, 1997:
  Life insurance in force at end of
     year..............................    $175,267      $42,214      $  186      $133,239       0.1%
  Premiums and other considerations:
     (a)...............................    $  1,223      $    98      $   10      $  1,135       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>   69

                  JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES

                SCHEDULE V -- VALUATION AND QUALIFYING ACCOUNTS
                               DECEMBER 31, 1999
                                  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>
1999:
  Valuation allowance for
     mortgage loans on real
     estate....................   $       31       $       --        $       --     $        1    $       30
                                  ==========       ==========        ==========     ==========    ==========
1998:
  Valuation allowance for
     mortgage loans on real
     estate....................   $       27       $        4        $       --     $       --    $       31
                                  ==========       ==========        ==========     ==========    ==========
1997:
  Valuation allowance for
     mortgage loans on real
     estate....................   $       27       $       --        $       --     $       --    $       27
                                  ==========       ==========        ==========     ==========    ==========
</TABLE>

                                       F-9
<PAGE>   70

                           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 February 9, 1998 are incorporated by
                         reference to Form 10-K for 1997...........................   --
    (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 20, 1999 among the Registrant, the
                         lender named therein, Bank of America, N.A. as
                         Administrative Agent and another affiliate of that 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, is incorporated by reference to Form 10-Q for the
                         third quarter 1997. The 1999 amendment is being provided
                         as part of the electronic filing..........................   --
                 (ii)  Employment contract between the Registrant and Theresa M.
                         Stone, an executive officer, effective July 1, 1997 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 being provided as part of the electronic filing........   --
                 (iv)  Long Term Stock Incentive Plan, as amended, is incorporated
                         by reference to Form 10-K for 1998........................   --
</TABLE>

                                       E-1
<PAGE>   71

<TABLE>
<CAPTION>
 REFERENCE
PER EXHIBIT
   TABLE                                  DESCRIPTION OF EXHIBIT                     PAGE
-----------                               ----------------------                     ----
<C>            <C>     <S>                                                           <C>
                  (v)  Non-Employee Directors' Stock Option Plan, as amended, is
                         incorporated by reference to Form 10-K for 1998...........   --
                 (vi)  Jefferson-Pilot Corporation Supplemental Benefit Plan, as
                         amended, is being provided as part of the electronic
                         filing; 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 is incorporated
                         by reference to Form 10-K for 1998. The 1999 amendment is
                         being provided as part of the electronic filing...........   --
   (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.)..................................................   --
   (27)                Financial Data Schedule. (Provided as part of the electronic
                         filing.)..................................................   --
</TABLE>

                                       E-2
<PAGE>   72

                                                                      EXHIBIT 21

                          JEFFERSON-PILOT CORPORATION

SUBSIDIARY LISTING AS OF MARCH 17, 2000

Jefferson-Pilot Corporation (North Carolina corp.)

    Alexander Hamilton Life Insurance Company of America (Michigan corp.)

       First Alexander Hamilton Life Insurance Company (New York corp.)

    The Guarantee Life Companies Inc. (Delaware corp.)

       Guarantee Life Insurance Company (Nebraska corp.)

    HARCO Capital Corp. (Delaware corp.)

    Hampshire Funding Inc. (New Hampshire corp.)

    Jefferson-Pilot Capital Trust A (Delaware business trust)

    Jefferson-Pilot Capital Trust B (Delaware business trust)

    Jefferson-Pilot Communications Company (North Carolina corp.)

       Jefferson-Pilot Communications Company of California (North Carolina
       corp.)

       Jefferson-Pilot Communications Company of Virginia (Virginia corp.)

       Jefferson-Pilot Sports, Inc. (North Carolina corp.)

       WCSC, Inc. (South Carolina corp.)

          Tall Tower, Inc. (South Carolina corp.)

    Jefferson Pilot Financial Insurance Company (New Hampshire corp.)

       Jefferson Pilot LifeAmerica Insurance Company (New Jersey corp.)

    Jefferson Pilot Investment Advisory Corporation (Tennessee corp.)

    Jefferson-Pilot Investments, Inc. (North Carolina corp.)

    Jefferson Pilot Variable Corporation (North Carolina corp.)

    Jefferson-Pilot Life Insurance Company (North Carolina corp.)

       Jefferson Standard Life Insurance Company (North Carolina corp.)

    Jefferson Pilot Securities Corporation (New Hampshire corp.)

       Allied Professional Advisors, Inc. (New Hampshire corp.)

       The Polaris Group, Inc. (Connecticut corp.)

          Polaris Financial Services, Inc. (Connecticut corp.)

          Polaris Advisory Services, Inc. (Connecticut corp.)
---------------

Notes:

(1) Each indentation reflects another tier of ownership.
(2) The immediate parent owns 100% of the voting securities of each entity,
    except that 10% of each of the lower tier Polaris companies is owned by
    Jefferson Pilot Securities Corporation.
(3) All entities more than 50% owned are listed, except that several
    subsidiaries that in the aggregate are insignificant have been omitted.

                                       E-3
<PAGE>   73

                                                                      EXHIBIT 23

                        CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference of our report dated February
4, 2000 with respect to the consolidated financial statements included in this
Annual Report (Form 10-K) of Jefferson-Pilot Corporation, and our report
included in the following paragraph with respect to the financial statement
schedules, in the following Registration Statements:

        Form S-8, Nos. 2-36778, 2-56410, and 33-30530, pertaining to the Long
        Term Stock Incentive Plan and predecessor stock plans, and outstanding
        effective registration statements on Form S-16 included in such S-8
        filings;

        Form S-8, No. 33-56369, pertaining to the JP Teamshare Plan and
        Guarantee Thrift Savings Plan and Trust;

        Form S-8, No. 33-64137, pertaining to the Non-Employee Directors' Stock
        Option Plan.

     Our audit also included the financial statement schedules of
Jefferson-Pilot Corporation listed in Item 14(a). These schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, the financial statement schedules
referred to above, when considered in relation to the basic financial statements
taken as a whole, present fairly in all material respects the information set
forth therein.

                                          ERNST & YOUNG LLP

Greensboro, North Carolina
March 24, 2000

                                       E-4
<PAGE>   74

                        (JEFFERSON PILOT FINANCIAL LOGO)