-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GNftue4FMoVTzRywnCR+eTzgEacWJk4cb9Ev+jV8fVI4JUfR+dDe0pmzy23Py4jh ya2tVYHPrFpoiDGPPqb2fg== 0001010521-04-000051.txt : 20040206 0001010521-04-000051.hdr.sgml : 20040206 20040205190943 ACCESSION NUMBER: 0001010521-04-000051 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040205 ITEM INFORMATION: FILED AS OF DATE: 20040206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANCOCK JOHN LIFE INSURANCE CO CENTRAL INDEX KEY: 0000917406 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 041414660 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31445 FILM NUMBER: 04571308 BUSINESS ADDRESS: STREET 1: CORPORATE LAW DIVISION T-55 STREET 2: P O BOX 111 CITY: BOSTON STATE: MA ZIP: 02117 BUSINESS PHONE: 6175726000 MAIL ADDRESS: STREET 1: CORPORATE LAW DIVISION T-55 STREET 2: P O BOX 111 CITY: BOSTON STATE: MA ZIP: 02117 FORMER COMPANY: FORMER CONFORMED NAME: HANCOCK JOHN MUTUAL LIFE INSURANCE CO / MA DATE OF NAME CHANGE: 19940111 8-K 1 jhlico.txt JOHN HANCOCK LIFE INSURANCE COMPANY SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: February 5, 2004 (Date of Earliest Event Reported) JOHN HANCOCK LIFE INSURANCE COMPANY (Exact name of registrant as specified in charter) Commission File Number: 333-45862 MASSACHUSETTS 04-1414660 (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) John Hancock Place Boston, Massachusetts 02117 (Address of principal executive offices) (617) 572-6000 (Registrant's telephone number, including area code) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS The following exhibit is furnished as part of this Form 8-K: (c) Exhibits Exhibit No. Item ----------- ---- 99 John Hancock Financial Services, Inc. Press Release dated February 5, 2004. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On February 5, 2004, John Hancock Financial Services, Inc., a Delaware corporation, issued a press release, a copy of which is attached hereto as Exhibit 99 and is incorporated herein by reference. John Hancock Life Insurance Company is a direct, wholly-owned subsidiary of John Hancock Financial Services, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. JOHN HANCOCK LIFE INSURANCE COMPANY Date: February 5, 2004 By: /s/Wayne A. Budd ----------------------------------- Wayne A. Budd Executive Vice President and General Counsel Exhibit 99 [LOGO] John Hancock Financial Services News John Hancock Financial Services Reports $806 million of Net Income for 2003, a Record 61% Increase over 2002 o Company also reports record net operating income $3.29 for full-year 2003 and $0.94 per diluted share for fourth quarter, up 16.7% and 20.5% , respectively o Net Income per diluted share up 64% to $2.79 in 2003 versus $1.70 in 2002
-------------------------- ----------------- ---------------- ------------- -- --------------- ---------------- ----------- Earnings summary 4th Quarter 4th Quarter % Full Year Full Year % (Table 1) 2003 2002 Change 2003 2002 Change -------------------------- ----------------- ---------------- ------------- -- --------------- ---------------- ----------- Net income $72.1 million $96.6 million (25.4%) $806.0 $499.5 61.4% Net income per share diluted $0.25 $0.33 (24.2%) $2.79 $1.70 64.1% Consolidated net operating income* $271.9 million $224.1 million 21.3% $949.1 $826.2 14.9% Consolidated net operating income* per share diluted $0.94 $0.78 20.5% $3.29 $2.82 16.7% Weighted-average shares outstanding diluted 289.69 million 288.47 million 288.84 million 293.46 million -------------------------- ----------------- ---------------- ------------- -- --------------- ---------------- ----------- BOSTON (February 5, 2004) - John Hancock Financial Services, Inc. (NYSE: JHF) today reported net income of $806.0 million for 2003, up 61.4% from $499.5 million in the prior year; on a per diluted share basis, net income was $2.79 versus $1.70 in 2002. The company also reported record 2003 operating results of $949.1 million, or $3.29 per diluted share, a 16.7% increase from the $2.82 per diluted share reported for 2002. Fourth quarter 2003 net operating income was a record $271.9 million, or $0.94 per diluted share, which excludes both an accounting principle change and net realized investment and other losses of $33.6 million. Fourth quarter net income of $72.1 million, or $0.25 per diluted share, included a $0.57 per diluted share charge for the cumulative effect of the required October 1, 2003 adoption of the Financial Accounting Standards Board's Derivative Implementation Group's Implementation Issue No. B36, which requires differences between fair value and amortized cost for certain liabilities to be reported through net income. The accounting treatment is unchanged for the recording of any change in the fair value of related assets through other comprehensive income or, in the case of mortgages and real estate, not at all. The impact of this adoption occurred primarily in the company's group participating pension business in the G&SFP segment, where all investment results are ultimately borne by the contract holders. - ------------------------------------- *JHF management uses net operating income to evaluate financial performance of its business segments and as one of a number of different bases for management incentives. The company believes the combined presentation and evaluation of consolidated net operating income along with net income under generally accepted accounting principles (GAAP) provides information that may enhance investors' understanding of the company's underlying profitability from operations. Net operating income differs from GAAP net income because it excludes net realized investment and other gains and losses and certain other items that management believes are not indicative of ongoing operating trends. Net operating income is a measure commonly used in the life insurance industry and by securities analysts in the evaluation of company performance. See Table 4 for a reconciliation of net operating income to GAAP net income. 1 The company's investment performance was substantially improved from the prior year's fourth quarter, as net realized investment and other losses declined to $33.6 million versus $125.8 million. The prior year's net income additionally included $1.7 million of charges in the fourth quarter related to restructuring. The 20.5% increase in net operating income per diluted share in the fourth quarter was driven by strong results from all retail and institutional business operating units. Additionally, sales momentum and account balances continued to improve across a number of key retail product areas. Total life sales were up 6% from the prior year's fourth quarter, and grew 46% on a sequential basis from the third quarter. Variable annuity account balances increased 7% from the prior year, to $5.6 billion, and fixed annuity account balances grew 24%, to $10.6 billion. "Our record 2003 operating results, dramatic growth in net income from the prior year and broad-based business growth, demonstrate the strength and vitality of John Hancock's businesses as we move forward in our merger with Manulife Financial," said David F. D'Alessandro, chairman and chief executive officer. "It is a tremendous testament to the focus and caliber of our employees that we have achieved such a strong finish to the year, with excellent operating results and improved investment performance." The proposed merger with Manulife Financial Corporation is scheduled to be voted on by John Hancock stockholders at a special meeting on February 24, 2004. At closing of the transaction, John Hancock common stockholders would receive 1.1853 Manulife common shares for each John Hancock common share. In addition to approval by shareholders, the transaction is subject to among other things approval by regulatory authorities in the U.S. and Canada. The transaction is currently expected to be completed early in the second quarter of 2004. Net realized investment and other losses of $33.6 million included writedowns of $115 million in Parmalat bonds related to accounting fraud at the company, $12 million related to a toll-road project in Texas and $12 million related to a pharmaceuticals equity investment; partially offset by gross gains of $188.8 million including $53 million in equity gains, $27 million of recoveries on previously impaired securities and $26 million of bond and mortgage prepayments booked as realized gains in the quarter. Components of gross pre-tax realized investment gains and losses are shown in the following table: --------------------------------------- ------------------------- ----------------------- Total Gross Pre-tax Realized Investment Gain/(Loss)* (millions) (Table 2) 4th Quarter 2003 4th Quarter 2002 --------------------------------------- ------------------------- ----------------------- Gain on disposal, recoveries & prepayments $188.8 $196.0 Impairments ($152.7) ($256.1) Loss on disposal ($75.4) ($55.0) ------- ------- Subtotal ($39.3) ($115.0) Derivatives and hedging ($38.8) ($148.4) ------- -------- Total ($78.1) ($263.4) --------------------------------------- ------------------------- ----------------------- *Excludes amortization of deferred policy acquisition costs, and amounts allocated to participating pension contracts and the closed block policyholder dividend obligation. 2 "As we expected, the fundamentals of the investment portfolio continued to improve throughout 2003," said D'Alessandro. "We were very disturbed by the apparent fraudulent activity at Parmalat, which drove this investment grade company into bankruptcy in a very short period of time. However, barring that unfortunate situation, we have seen solid sequential improvement of both realized and unrealized investment losses in each of the four quarters of 2003." The net unrealized gain on available-for-sale securities was $2.6 billion at December 31, 2003, a dramatic increase from $1.1 billion a year ago. Gross unrealized losses, excluding hedging adjustments (which are temporary in nature), improved to $331 million from $1.2 billion at the end of 2002. This marks the fifth quarter of sequential improvement in gross unrealized losses as credit spreads have improved significantly and more than offset the increase in interest rates. -------------------------------------------- --------------------- ----------------------- Total Unrealized Investment Gains/(Loss) On Available-for- Sale Securities* (billions) (Table 3) 4th Quarter 2003 4th Quarter 2002 -------------------------------------------- --------------------- ----------------------- Gross unrealized gain $3.1 $2.6 Gross unrealized loss ($0.5) ($1.5) ------ ------ Net unrealized gain $2.6 $1.1 ------------------------------------------ -- ---------------------- ---------------------- *Includes basis adjustments related to hedging. The following table reconciles net income with consolidated net operating income: --------------------------------------------------- --------------------------- -------------------------- Net income reconciliation (Table 4) 4th Quarter 2003 4th Quarter 2002 --------------------------------------------------- --------------------------- -------------------------- (millions) Consolidated net operating income $271.9 $224.1 Net realized investment and other gains (losses) ($33.6) ($125.8) Adoption of FASB DIG B-36 ($166.2) - Other - ($1.7) ------------ ------ Total non-operating items ($199.8) ($127.5) Net income $72.1 $96.6 -------------------------------------------------- -------------------------- -------------------------- 3 Business Segment Highlights Protection Segment - ------------------------------ ---------- ---------- ------------ --------------------------------------------------------------- Net operating income pre-tax Q4 Q4 % (millions) 2003 2002 Change Comment - ------------------------------ ---------- ---------- ------------ --------------------------------------------------------------- Total Protection $149.8 $134.1 11.7% Strong results in the non-traditional life business and - ---------------- continued growth in federal long-term care fee income. Non-traditional life $75.2 $62.9 19.6% Improvement due to higher fee income, including fees from an acquired block of business, and from the release of reserves from conversion of term policies to universal life. Traditional life $38.8 $38.7 0.3% Lower expenses offset by slightly unfavorable mortality. Long-term care $34.1 $33.8 0.9% Growth in the business offset by higher expenses, lower portfolio yield, and continued low lapse. Federal long-term care $2.0 $0.7 186% Continued fee income growth from ongoing business ramp-up. - ------------------------------ ---------- ---------- ------------ ---------------------------------------------------------------- Sales (millions) * - ------------------------------- ---------- --------- ------------- --------------------------------------------------------------- Core life (excludes bank- and $58.9 $59.5 (1.0%) A 35% increase in universal life was offset by a 41% decline corporate-owned (COLI/BOLI)) in variable life sales. Versus the 3rd quarter, core life sales grew by 13% reflecting a 40% increase in UL and 21% increase in term sales, offset by lower variable life sales. This is the third quarter of sequential sales growth. Total life $95.6 $90.0 6.2% Driven by a 130% increase in COLI sales at M Group, including (includes COLI/BOLI) four large case placements. This offset a 42% decline in COLI sales at Signator. Long-term care $52.9 $46.9 12.8% Strong sales of both retail and group LTC, driven by gains in the direct brokerage channel which offset a decline in Signator agent sales. - ------------------------------- ---------- --------- ------------- --------------------------------------------------------------- *Sales are presented as defined by the Life Insurance Marketing Research Association (LIMRA) and represent the amount of new business sold during the period. 4 Asset Gathering Segment - ------------------------ --------------- --------------- -------------- ------------------------------------------------------------ Net operating income pre-tax Q4 Q4 % (millions) 2003 2002 Change Comment - ------------------------ --------------- --------------- -------------- ------------------------------------------------------------ Total Asset Gathering $78.0 $53.6 45.5% Results were strong across all business lines, with improved - --------------------- investment spreads and market performance. Fixed annuities $44.5 $32.9 35.3% Investment spreads of 258 basis points (bps) from 203 bps in the year ago period, due to continued renewal rate reductions, lower initial crediting rates, lower guaranteed minimum rates and growth in average assets. Earned rates also improved due to higher partnership income. Variable annuities $9.7 $4.7 106% Favorable separate account performance during quarter resulted in higher fee income and lower GMDB expense. Separate account balances were up 7.8% in the quarter versus 4.6% in the year ago period. Mutual funds $23.3 $17.2 35.5% Advisory fees increased due to growth in assets under management. - ------------------------ --------------- --------------- -------------- ------------------------------------------------------------ Sales (millions) Fixed annuity $325.6 $567.4 (42.6%) Disciplined pricing and introduction of products with lower minimum rates reduced market demand. Variable annuity $108.0 $177.3 (39.1%) Continued overall weak consumer demand and aggressive competition from peers offering products with higher risk guarantee features. Mutual funds $945.2 $1,588.7 (40.5%) Prior period closed-end funds deposits were $600 million higher than current quarter. The current quarter includes $116 million increase in open-end funds. - ------------------------ --------------- --------------- -------------- ------------------------------------------------------------ Average account balances (millions) Fixed annuity $10,568.8 $8,516.2 24.1% Increase due to net sales growth. Variable annuity $5,592.4 $5,222.1 7.1% Growth due to separate account appreciation offset by net redemptions. Mutual funds $28,619.3 $25,232.2 13.4% Growth due to strong equity market appreciation. - ------------------------ --------------- ------------------ --------------- -------------------------------------------------------- 5 Guaranteed & Structured Financial Products Segment - ------------------------------ ----------- ------------ ------------- -------------------------------------------------------------- Net operating income pre-tax Q4 Q4 % (millions) 2003 2002 Change Comment - ------------------------------ ----------- ------------ ------------- -------------------------------------------------------------- Total GSFP $127.6 $101.9 25.2% Results driven by spread-based business. - ---------- Spread-based $120.9 $94.4 28.1% Spreads of 170 bps in the quarter compared with 137 bps in the year ago period due primarily to additional partnership income that added 40 bps to spreads in the current quarter. Fee-based $6.7 $7.5 (10.7%) Decline due to gradual run-off of general account asset balances and lower earnings on capital. - ------------------------------ ----------- ------------ ------------- -------------------------------------------------------------- Spread-based sales (millions) Guaranteed investment $64.7 $142.7 (54.7%) Continued weak demand for traditional GICs, and a competitive contracts (GICs) pricing environment. Funding $641.7 $674.5 (4.9%) Competitive pricing in markets as well as managing growth. agreements Group annuities $257.2 $21.9 1074% Two large contracts placed in the quarter. SignatureNotes $464.9 $232.0 100% Sales momentum continued this quarter reflecting the pick-up in the level of interest rates. Banking products $245.2 - N/M Strong market reception to new brokered CD product introduced in the quarter. - ------------------------------------------------------------------------------------------------------------------------------------ Investment Management Segment - ------------------------- --------------- ------------- --------------- ------------------------------------------------------------ Net operating income pre-tax Q4 Q4 % (millions) 2003 2002 Change Comment - ------------------------- --------------- ------------- --------------- ------------------------------------------------------------ Total Investment $11.5 $6.1 88.5% Strong gains in investment management businesses. - ---------------- Management - ---------- Independence $2.7 $0.2 1250% Higher fee income on growing assets under management driven Investment by market appreciation and operating expense reductions. Other Investment $8.8 $5.9 49.2% Growth driven by real estate securitization gains and Management increased fee business in bond and corporate finance. - ------------------------------------------------------------------------------------------------------------------------------------ 6 Maritime Life Segment - ----------------------- ------------- ------------ ------------ --------------------------------------------------------------- Net operating income pre-tax Q4 Q4 % (millions) 2003 2002 Change Comment - ----------------------- ------------- ------------ ------------ --------------------------------------------------------------- Total Maritime $63.5 $23.1 175% The acquisition of Liberty Health and continued refinement of - -------------- US GAAP models boosted results. Retail protection $21.6 $11.6 86.2% Strong specialty market results, including the Liberty Health acquired business, and good claims experience drove earnings growth. In addition, refinements in US GAAP models resulted in a large gain in the quarter. Asset gathering $30.6 $4.6 565% Improved equity market performance reduced DAC amortization. In addition, refinements in US GAAP models resulted in a large gain in the quarter. Group life and health $8.5 $9.3 (8.6%) Current quarter results reflect the ongoing impact of pricing increases, the addition of the Liberty Health business and improved LTD results. However, the year ago quarter included LTD reserve releases of $3.4 million in excess of the current quarter. - ----------------------- ------------- ------------ ------------ --------------------------------------------------------------- Sales (millions) Retail protection $16.4 $11.6 41.4% Flat individual life sales overall due to competitive environment were offset by currency gains during the year. Asset gathering $179.8 $117.3 53.3% Increased group pension deposits and individual GIC business helped to offset weak consumer demand for separate account equity investments. Group life & health $17.3 $17.1 1.2% Slower new sales following the Manulife merger announcement. - ----------------------- ------------- ------------ ------------ --------------------------------------------------------------- 7 Corporate & Other Segment - ------------------------- ----------- ----------- -------------- ----------------------------------------------------------------- Net operating income pre-tax Q4 Q4 % (millions) 2003 2002 Change Comment - ------------------------- ----------- ----------- -------------- ----------------------------------------------------------------- Total Corporate ($32.6) ($15.8) (106%) Loss driven primarily by higher pension and other expenses, - --------------- including $6.6 million of merger related expenses and & Other capital transfers to business units. After-tax result of - -------- ($8.4) million in current quarter, declined from ($1.1) million in prior period due to pre-tax decline as well from lower ratio of tax-preferenced investments versus the prior quarter. - ------------------------- ----------- ----------- -------------- ----------------------------------------------------------------- 8 Forward-looking Statements The statements, analyses, and other information contained herein relating to trends in the company's operations and financial results, the markets for the company's products, the future development of the company's business, and the contingencies and uncertainties to which the company may be subject, including those related to the proposed merger with Manulife, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," and other similar expressions, are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Such statements are made based upon management's current expectations and beliefs concerning future events and their potential effects on the company. Future events and their effects on the company may not be those anticipated by management. John Hancock's actual results may differ materially from the results anticipated in these forward-looking statements. For a discussion of factors that could cause or contribute to such material differences, investors are directed to the risks and uncertainties discussed in our Form 10-K for the year ended December 31, 2002, and other documents filed by the company with the Securities and Exchange Commission. These risks and uncertainties include, without limitation, the following: changes in general economic conditions; the performance of financial markets and interest rates; customer responsiveness to existing and new products and distribution channels; competitive and business factors; new tax or other legislation; and government regulation. The company specifically disclaims any obligation to update or revise any forward looking information, whether as a result of new information, future developments or otherwise. Important Legal Information This communication may contain references to the proposed merger involving John Hancock Financial Services, Inc. and Manulife Financial Corporation. In connection with the proposed merger, Manulife has filed a registration statement on Form F-4 containing a proxy statement/prospectus for the stockholders of John Hancock, including and each of John Hancock and Manulife will be filing other documents regarding the proposed transaction, with the SEC. Before making any voting or investment decision, John Hancock Financial Services, Inc.'s stockholders and investors are urged to read the proxy statement/prospectus regarding the merger and any other relevant documents carefully and in their entirety because they contain important information about the proposed transaction. The registration statement containing the proxy statement/prospectus and other documents are available free of charge at the SEC's Web site, www.sec.gov. Stockholders and investors in John Hancock Financial Services, Inc. are also be able to obtain the proxy statement/prospectus and other documents free of charge by directing their requests to John Hancock Financial Services, Inc. Shareholder Services, Investor Relations T-58-01, 200 Clarendon St, Boston, Ma 02116 or by calling 617-572-0620. 9 Conference Call John Hancock will discuss fourth quarter results during a conference call on Friday, February 6th, 2004, at 10:00 a.m. Eastern Time. The conference call will be available live -- and for replay -- at www.jhancock.com/investor. The live call can also be accessed by telephone in the U.S. at (973)-935-2040, and a rebroadcast will be available through February 13, 2003, at (973) 341-3080. The replay access code will be 4415094. This press release, the company's quarterly financial supplement, and other financial documents may be obtained at www.jhancock.com/investor. John Hancock Financial Services, Inc., with $142.5 billion in assets under management, provides a wide range of insurance and investment products and services to individual and institutional customers. Contacts Media: Roy Anderson, 617-572-6385; Leslie Uyeda, 617-572-6387 Investors: Jean Peters, 617-572-9282; Alicia Charity, 617-572-0882 Supplemental Financial Information Follows 10 Additional Financial Data The following table provides additional financial data: - ------------------------------------------------------------------------------------------------------------------------------------ Three months ended Twelve months ended ------------------------------------------------------------------------------------- December 31, December 31, December 31, December 31, 2003 2002 2003 2002 Table 5 ------------------------------------------------------------------------------------- Consolidated net operating income return on 16.33% 15.55% 15.32% 14.64% equity (excluding FAS 115 market adjustment)* Operating income adjustments (12.00)% (8.85)% (2.31) (5.79)% Net income return on equity (excluding FAS 115 market adjustment) 4.33% 6.70% 13.01% 8.85% Unrealized (appreciation) depreciation on AFS securities (0.80)% (0.41)% (1.84)% (0.58)% Net income return on shareholders' equity 3.53% 6.29% 11.17% 8.27% Shareholders' equity, in millions (excluding FAS 115 market adjustment)* $6,636.6 $5,752.8 Per share $22.90 $19.98 Unrealized appreciation (depreciation) on AFS securities, in millions (net of tax) $1,579.1 $458.3 Per share $5.45 $1.59 Shareholders' equity, in millions $8,215.7 $6,211.1 Per share $28.35 $21.57 End of period shares outstanding, in millions 289.79 287.98 Assets under management, in billions General account $76.0 $66.6 Separate account $24.1 $20.8 Third party $42.4 $40.2 - ------------------------------------------------------------------------------------------------------------------------------------ Total consolidated $142.5 $127.6 - ------------------------------------------------------------------------------------------------------------------------------------ * FAS 115 requires the adjustment of available for sale securities to fair market value. Without the FAS 115 adjustment, these assets would be reported at book value. John Hancock management believes that presentation of balance sheet information without the FAS 115 adjustment, along with the GAAP basis, provides information that may enhance investors' understanding of the company's financial performance. Many industry analysts prefer to view this data excluding the FAS 115 adjustment. - ------------------------------------------------------------------------------------------------------------------------------------ 11 Consolidated Operating Income Statements ($ millions) Three months ended Twelve months ended December 31, December 31, 2003 2002 2003 2002 ------------------------------- -------------------------------- Premiums $ 1,365.3 $864.4 $4,147.7 $3,377.1 Universal life and investment-type product fees 221.1 201.7 838.9 815.2 Net investment income 1,109.9 1,016.5 4,227.0 3,934.1 Net realized investment gains (losses) (1) 2.6 (1.0) 11.5 0.9 Investment management revenues/ commissions/other fees 139.4 131.0 532.4 550.7 Other revenue 91.9 72.7 291.7 255.7 ------------------------------- -------------------------------- Total revenues (1) 2,930.2 2,285.3 10,049.2 8,933.7 Benefits to policyholders 1,810.0 1,385.5 6,084.3 5,373.1 Other operating costs and expenses (2) 501.8 399.4 1,755.7 1,486.5 Amortization of deferred policy acquisition costs 97.3 50.3 315.5 350.2 Dividends to policyholders 123.3 147.1 566.9 585.4 ------------------------------- -------------------------------- Total benefits and expenses (2) 2,532.4 1,982.3 8,722.4 7,795.2 Pre-tax operating income 397.8 303.0 1,326.8 1,138.5 Income tax 125.9 78.9 377.7 312.3 ------------------------------- -------------------------------- Operating income $271.9 $224.1 $949.1 $826.2 After-tax adjustments: Net realized investment gains(losses) (1) (33.6) (125.8) 23.1 (296.7) Change in accounting principle, net (166.2) - (166.2) - Class action lawsuit, net - - - (19.5) Severance/other (2) - (1.7) - (10.5) ------------------------------- -------------------------------- Net income $72.1 $96.6 $806.0 $499.5 =============================== ================================
(1) Excludes $(63.1) million and $22.1 million of pre-tax realized investment gains (losses) for the quarter and year ended December 31, 2003, respectively, which are treated as an operating income adjustment. For the quarter and year ended December 31, 2002, pre-tax realized investment gains (losses) of $(198.3) million and $(455.6) million, respectively, are treated as an operating income adjustment. (2) Effective Q1 2003, severance charges are part of segment operating income. Includes after-tax severance charges of $1.7 million and $10.5 million of the quarter and year ended December 31, 2002, respectively. For the quarter and year ended December 31, 2003, pre-tax severance charges of $3.0 million and $14.1 million, respectively, were included in segment operating income. 12 -----END PRIVACY-ENHANCED MESSAGE-----