SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________ to ___________
Commission file number 33-56369
JEFFERSON-PILOT CORPORATION TEAMSHARE PLAN
GUARANTEE LIFE INSURANCE COMPANY
THRIFT SAVINGS PLAN AND TRUST
(Full title of the plans)
JEFFERSON-PILOT CORPORATION
(Name of the issuer of the securities held pursuant to the plan)
100 North Greene Street
Greensboro, North Carolina 27401
(Address of principal executive office)
Audited Financial Statements and Supplemental Schedules
Jefferson-Pilot Corporation Teamshare Plan
Years ended December 31, 2002 and 2001 with Report of Independent Auditors
Jefferson-Pilot Corporation
Teamshare Plan
Audited Financial Statements
and Supplemental Schedules
Years ended December 31, 2002 and 2001
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Supplemental Schedules
Schedule of Assets (Held At End of Year) 10
Schedule of Reportable Transactions 11
Report of Independent Auditors
To the Plan Administrator and Participants
Jefferson-Pilot Corporation Teamshare Plan
We have audited the accompanying statements of net assets available for benefits
of Jefferson-Pilot Corporation Teamshare Plan as of December 31, 2002 and 2001,
and the related statements of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Plan'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 net assets available for benefits of the Plan at
December 31, 2002 and 2001, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
(held at end of year) as of December 31, 2002, and reportable transactions for
the year then ended are presented for purposes of additional analysis and are
not a required part of the financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
June 13, 2003
Jefferson-Pilot Corporation
Teamshare Plan
Statements of Net Assets Available for Benefits
December 31
2002 2001
Assets ----------- -----------
Investments, at fair value $82,559,297 $ 89,365,423
Investments, at contract value 12,570,914 4,688,510
Cash - 10,001,283
Receivables:
Employer's matching contribution 6,437 6,249
Employer's Gainshare contribution 1,503,618 1,437,385
Participants' contributions 96,247 120,821
Loan interest 1,452 5,062
----------- -----------
Total receivables 1,607,754 1,569,517
----------- -----------
Net assets available for benefits $96,737,965 $105,624,733
=========== ============
See accompanying notes.
Jefferson-Pilot Corporation
Teamshare Plan
Statements of Changes in Net Assets Available for Benefits
Year ended December 31
2002 2001
-------------------------
Additions
Investment income:
Interest $ 598,470 $ 374,347
Contributions:
Participants 10,678,398 7,947,999
Rollovers 502,482 479,237
Employer matching 774,936 458,135
Gainshare 1,503,618 1,437,385
----------- -----------
13,459,434 10,322,756
----------- -----------
Transfers in from related plan - 20,670,368
----------- -----------
Total additions 14,057,904 31,367,471
Deductions
Benefits paid to participants 5,722,170 5,063,451
Administrative expenses 148,759 45,058
----------- -----------
5,870,929 5,108,509
----------- -----------
Net depreciation in fair value of
investments (17,073,743) (7,395,347)
----------- -----------
Net (decrease) increase (8,886,768) 18,863,615
Net assets available for benefits:
Beginning of year 105,624,733 86,761,118
----------- -----------
End of year $ 96,737,965 $105,624,733
=========== ===========
See accompanying notes.
Jefferson-Pilot Corporation
Teamshare Plan
Notes to Financial Statements
December 31, 2002
1. Description of Plan
The following description of the Jefferson-Pilot Corporation (the "Company")
Teamshare Plan (the "Plan") provides only general information. Participants
should refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution and profit sharing plan covering all
employees and career agents of the Company and the following subsidiaries
(collectively, the "Sponsor") who are age twenty-one or older:
Jefferson-Pilot Life Insurance Company
Jefferson-Pilot Communications Company
Jefferson-Pilot Communications Company of Virginia
WCSC, Inc.
Jefferson Pilot Financial Insurance Company
Jefferson Pilot Securities Corporation
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"). The Company serves as Plan administrator and named
fiduciary.
The Guarantee Life Insurance Company Thrift Savings Plan merged into the
Jefferson-Pilot Corporation Teamshare Plan effective December 31, 2001. Total
assets transferred into the Plan was approximately $20.7 million. These assets
included cash, mutual funds and Jefferson-Pilot common stock. The cash and
Jefferson-Pilot common stock transferred January 2, 2002. The mutual fund
transfer, made in two installments, was completed by March 2002.
Contributions
Eligible participants may contribute up to 15% of pre-tax compensation, as
defined in the Plan. Participants may also contribute amounts representing
distributions from other qualified plans. The Company matches 10% of a
participant's total pre-tax contributions for the Plan year that do not exceed
6% of a participant's compensation for the portion of the year during which the
participant elected to make pre-tax contributions.
1. Description of Plan (continued)
Gainshare contributions are subject to approval by the Compensation Committee of
the Company's Board of Directors. Gainshare contributions are made by the
Sponsor on behalf of participants (1) who meet certain eligibility requirements
specified in the Plan document and (2) whose employer, business unit and, if
applicable, business subunit satisfy predetermined financial performance
standards, in amounts of up to 4% of compensation.
Employees in Puerto Rico and the U.S. Virgin Islands are not eligible for pre-
tax or matching contributions, but may participate in Gainshare contributions
when the eligibility requirements and performance standards are met.
Gainshare contributions for 2002 and 2001 were disbursed 50% in cash and 50% in
the Jefferson-Pilot Common Stock Fund. For individual Gainshare amounts of $200
and less, the total was disbursed in the Jefferson-Pilot Common Stock Fund.
Participant Accounts
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's contributions and (b) Plan earnings.
Allocations are based upon participant earnings as defined in the Plan document.
Investment income, including net (depreciation) appreciation in value of the
Plan's investments, is allocated to individual participant accounts in the same
ratio that the value of the individual account bears to the sum of the values of
all participants' accounts. Forfeited balances of terminated participants'
nonvested accounts are used to reduce Company Gainshare contributions and to pay
administrative expenses. The balance of forfeited nonvested accounts was $56,674
and $74,657 for 2002 and 2001, respectively. The benefit to which a participant
is entitled is the benefit that can be provided from the participant's account.
Vesting
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company contribution portion of their accounts plus
actual earnings thereon is based on years of service. A participant is 100%
vested after three years of credited service.
1. Description of Plan (continued)
Participant Loans
Participants may borrow from their accounts if (1) there is an immediate and
heavy financial need and (2) at least two years have elapsed since the member
first made contributions to the Plan. Participant loans may range from a minimum
amount of $1,000 up to a maximum amount equal to the lesser of (1) 50% of their
vested account balance or (2) $50,000 reduced by the highest outstanding balance
of prior loans from the Plan or any other qualified retirement plan maintained
by a sponsoring employer during the one-year period ending on the day prior to
the loan. Loan terms range from 1 - 5 years. The loans are secured by the
balance in the participant's account and bear interest at a rate equal to the
prime lending rate reported in the Wall Street Journal on the last business day
of the calendar quarter, plus one percentage point. Principal and interest are
paid ratably through weekly, bi-weekly or bi-monthly payroll deductions.
Payment of Benefits
Upon termination of service, a participant may receive the vested value of
his/her account in either a lump sum payment, periodic installments in
substantially equal amounts for a period not to exceed 15 years or direct
rollover to an eligible retirement plan. Distributions from the Jefferson-Pilot
Common Stock Fund may be distributed in cash or in shares of the Company's
common stock, if so elected.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
2. Summary of Accounting Policies
Investment Valuation
The Plan's investments in mutual funds and common stock are stated at fair value
based on quoted market prices. The investment contract is stated at contract
value, representing contributions made to the Fund, plus earnings credited, less
benefits paid and any expense charges. The participant loans are valued at their
outstanding balances, which approximate fair value.
2. Summary of Accounting Policies (continued)
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
3. Investments
During 2002 and 2001, the Plan's investments (including investments purchased,
sold as well as held during the year) depreciated in fair value as determined by
quoted market prices as follows:
Net Realized and
Unrealized
(Depreciation)
Appreciation in Fair
Value of Investments
Year ended December 31
2002 2001
---------------------------
Mutual Funds $(10,338,128) $(5,704,547)
Common Stock (6,735,615) (1,690,800)
------------- ------------
$(17,073,743) $(7,395,347)
============= ============
Investments that represent 5% or more of net assets are as follows:
December 31
2002 2001
---------------------------
Investments at fair value:
Jefferson-Pilot Common Stock* $37,480,675 $42,824,780
Fidelity Advisor Equity-Income Fund 11,733,712 13,363,013
MFS Capital Opportunities Fund 9,247,094 12,258,194
PIMCO Total Return 5,107,798 -
Munder Index 500 Fund 6,627,285 -
JP Life Guaranteed Account 12,570,914 -
*Nonparticipant-directed
3. Investments (continued)
The average yield of the JP Life Guaranteed Fund for 2002 and 2001 approximated
4.85% and 5.23%, respectively, and the crediting interest rates as of December
31, 2002 and 2001 were 4.60% and 5.10%, respectively. Crediting interest rates
are normally adjusted annually and a minimum crediting rate of 3.5% applies.
The fair value approximates contract value.
4. Nonparticipant-Directed Investments
Information about the net assets and the significant components of changes in
net assets related to the nonparticipant-directed investment is as follows:
December 31
2002 2001
---------------------------
Investments, at fair value:
Jefferson-Pilot Common Stock $37,480,675 $42,824,780
Year ended
December 31, 2002
-----------------
Change in net assets:
Contributions $ 4,586,380
Transfers to participant directed
investments (1,022,970)
Net realized and unrealized depreciation
in fair value (6,735,615)
Loan principle 9,552
Loan interest 39,083
Distributions to participants (2,220,535)
------------
$(5,344,105)
============
5. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated March 24, 1997, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. The Plan has been amended since receiving the
determination letter. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
6. Administration and Plan Expenses
The Plan provides that investment and administrative expenses of the Plan will
be paid from the Plan's assets unless paid by the Sponsor. During 2002 and 2001,
most expenses associated with the Plan were paid for by the Sponsor.
7. Related Party Transactions
The Plan invests in common stock of Jefferson-Pilot Corporation and a Jefferson-
Pilot Life Insurance Company managed guaranteed fund.
Jefferson-Pilot Corporation
Teamshare Plan
EIN: 56-0896180 Plan Number: 002
Schedule H, Line 4i
Schedule of Assets (Held At End of Year)
December 31, 2002
(c)
Description of Investment
(b) Including Maturity Date,
Indentity of Issue, Rate of Interest, (e)
Borrower, Lessor, or Collateral, Par or (d) Current
(a) Similar Party Maturity Value Cost Value
--------------------------------------------------------------------------------
* Jefferson-Pilot Corporation Common Stock $42,891,438 $37,480,675
Fidelity Advisor Equity-Income Fund + 11,733,712
Templeton Foreign Fund + 4,386,010
Franklin Advisor Small-Mid Cap
Growth Fund + 4,511,002
PIMCO Money Market Fund + 1,227,083
PIMCO Total Return Fund + 5,107,798
MFS Capital Opportunities
Fund + 9,247,094
MFS Mid Cap Growth Fund + 596,808
Munder Index 500 Fund + 6,627,285
Weiss, Peck and Greer Money Market Fund + 230,606
Pioneer Money Market Fund + 56,573
-----------
81,204,646
* JP Life Guaranteed Account Investment contract, 4.60% + 12,570,914
Participant Loans Interest rates ranging
from 5.75-12.50% 1,354,651
-----------
$95,130,211
===========
*Represents party-in-interest.
+ Cost information is not presented, as investment is participant directed
Jefferson-Pilot Corporation
Teamshare Plan
EIN: 56-0896180
Plan Number: 002
Schedule H, Line 4j
Schedule of Reportable Transactions
Year ended December 31, 2002
(b)
Description of Asset (h)
(a) Including Interest (c) (d) (g) Current Value (i)
Identity of Party Rate and Maturity in Purchase Selling Cost of Asset on Net Gain
Involved Case of a Loan Price Price of Asset Transaction Date or (Loss)
-----------------------------------------------------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5% of plan assets
----------------------------------------------------------------------
Jefferson-Pilot
Corporation Common Stock
Purchases $12,161,848 $ - $12,161,848 $12,161,848 $ -
Sales - 4,876,164 4,807,707 4,876,164 68,457
JP Life Guaranteed
Account Balance
Purchase $ 7,896,179 $ - $ 7,896,179 $ 7,896,179 $ -
Sales - - - - -
There were no category (i), (ii) or (iv) reportable transactions during 2002.
Columns (f) and (e) are not applicable.
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized, on June 27, 2003.
JEFFERSON-PILOT CORPORATION
By: /s/ Hoyt J. Phillips
Senior Vice President,
Human Resources
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(FormS-8 No. 33-56369) pertaining to the Jefferson-Pilot Corporation Teamshare
Plan of Jefferson-Pilot Corporation of our report dated June 13, 2003, with
respect to the financial statements and schedules of the Jefferson-Pilot
Corporation Teamshare Plan included in this Annual Report (Form 11-K) for the
year ended December 31, 2002.
/s/ Ernst & Young LLP
Greensboro, North Carolina
June 26, 2003