LINCOLN NATIONAL CORP - FORM 8-K - EX-99.2

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8-K - 8-K - LINCOLN NATIONAL CORP	lnc-20210505x8k.htm
EX-99.1 - EX-99.1 - LINCOLN NATIONAL CORP	lnc-20210505xex99_1.htm


	Lincoln Financial Group
	Table of Contents


	Analyst Coverage and Credit Ratings	1
	Notes	2
	Consolidated
	Consolidated Statements of Income (Loss)	3
	Consolidated Balance Sheets	4
	Earnings, Shares and Return on Equity	5
	Key Stakeholder Metrics	6
	Segment and Sources of Earnings	7
	Select Earnings Drivers By Segment	8
	Sales By Segment	9
	Operating Revenues and General and Administrative Expenses By Segment	10
	Operating Commissions and Other Expenses	11
	Interest Rate Yields and Spreads By Segment	12
	Select Earnings and Operational Data from Business Segments
	Annuities	13
	Retirement Plan Services	14
	Life Insurance	15
	Group Protection	16
	Other Operations	17
	DAC & Account Value Rollforwards
	Consolidated DAC, VOBA, DSI and DFEL Roll Forwards	18
	Account Value Roll Forwards:
	Annuities	19
	Retirement Plan Services	20
	Life Insurance	21
	Other Information
	Select Investment Data	22
	Realized Gain (Loss), After-DAC	23
	Select GAAP to Non-GAAP Reconciliations	24


Lincoln Financial Group
Analyst Coverage and Credit Ratings


Firm	Analyst				Phone Number
Autonomous Research U.S., L.P.	Erik Bass					646-561-6248
B. Riley FBR	Randy Binner					703-312-1890
Bank of America Merrill Lynch	Joshua Shanker					646-855-5716
Barclays	Tracy Benguigui					212-526-1561
Citi Research	Suneet Kamath					212-816-3457
Credit Suisse	Andrew Kligerman					212-325-5069
Dowling & Partners	Humphrey Lee					860-676-7324
Evercore	Thomas Gallagher					212-446-9439
Goldman Sachs	Yaron Kinar					212-902-9592
J.P. Morgan Securities	Jimmy Bhullar					212-622-6397
Keefe, Bruyette & Woods, Inc.	Ryan Krueger					860-722-5930
Morgan Stanley	Nigel Dally					212-761-4132
Piper Sandler & Co.	John Barnidge					312-281-3412
RBC Capital Markets	Mark Dwelle					804-782-4008
UBS	Brian Meredith					212-713-2492
Wells Fargo	Elyse Greenspan					212-214-8031

This list is provided for informational purposes only. Lincoln Financial Group does not endorse the analyses, conclusions or recommendations contained in any report issued by these
or any other analysts.

		Ratings as of May 5, 2021
						Standard
		A.M Best	Fitch	Moody's		& Poor's
Senior Debt Ratings		a-	BBB+	Baa1		A-
Financial Strength Ratings
The Lincoln National Life Insurance Company		A+	A+	A1		AA-
First Penn-Pacific Life Insurance Company		A	A+	A1		A-
Lincoln Life & Annuity Company of New York		A+	A+	A1		AA-
Lincoln Life Assurance Company of Boston		A+				AA-

Investor Inquiries May Be Directed To:
Albert Copersino, Vice President, Investor Relations
Email: Albert.Copersino@lfg.com
Phone: 203-257-4493


Page 1

Lincoln Financial Group

Notes

Computations

• The quarterly financial information for the current year may not sum to the corresponding year-to-date amount as both are rounded to millions.

• The financial ratios reported herein are calculated using whole dollars instead of dollars rounded to millions.

• If the effect of equity classification would result in a more dilutive Earnings Per Share (“EPS”), the numerator used in the calculation of our diluted EPS is adjusted to remove the mark-to-market

adjustment for deferred units of LNC stock in our deferred compensation plans. In addition, for any period where a net loss or adjusted loss from operations is experienced, shares used in the diluted EPS

calculation represent basic shares, as the use of diluted shares would result in a lower loss per share.

• Return on equity (“ROE”) measures how efficiently we generate profits from the resources provided by our net assets. ROE is calculated by dividing annualized net income (loss) (or adjusted income (loss)

from operations) by average equity, excluding accumulated other comprehensive income (loss) (“AOCI”). Management evaluates consolidated ROE by both including and excluding the effect

of average goodwill.

• Book value per share, excluding AOCI, is calculated by dividing stockholders’ equity, excluding AOCI, by common shares outstanding. We provide book value per share, excluding AOCI, to enable

investors to analyze the amount of our net worth that is attributable primarily to our business operations. Management believes book value per share excluding AOCI is useful to investors because

it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates. Book value per share is the most directly comparable GAAP measure.

• Pre-tax net margin is calculated by dividing adjusted income (loss) from operations before taxes by net revenue, which is defined as total adjusted operating revenues less interest credited.

Definitions

Holding company available liquidity consists of cash and invested cash, excluding cash held as collateral, and certain short-term investments that can be readily converted into cash, net of commercial

paper outstanding.

Sales as reported consist of the following:

• Annuities and Retirement Plan Services – deposits from new and existing customers;

• Universal life insurance (“UL”), indexed universal life insurance (“IUL”), variable universal life insurance (“VUL”) – first-year commissionable premiums plus 5% of excess premiums received;

• MoneyGuard® linked-benefit products – MoneyGuard® (UL), 15% of total expected premium deposits, and MoneyGuard Market AdvantageSM (VUL), 150% of commissionable premiums;

• Executive Benefits – single premium bank-owned UL and VUL, 15% of single premium deposits, and corporate-owned UL and VUL, first-year commissionable premiums plus 5% of excess

premium received;

• Term – 100% of annualized first-year premiums; and

• Group Protection – annualized first-year premiums from new policies.

Throughout the document, “after-DAC” refers to the associated amortization expense of deferred acquisition costs (“DAC”), value of business acquired (“VOBA”), deferred sales inducements (“DSI”)

and deferred front-end loads (“DFEL”) and changes in other contract holder funds.

Page 2a

Lincoln Financial Group

Notes

Sources of earnings are defined as follows:

• Investment spread earnings consist primarily of net investment income, net of interest credited earned on the underlying general account investments supporting our fixed products less related

expenses.

• Mortality/morbidity earnings result from mortality margins, morbidity margins, and certain expense assessments and related fees that are a function of the rates priced into the product and level

of insurance in force.

• Fees on assets under management (“AUM”) earnings results consist primarily of asset-based fees charged based on variable account values less associated benefits and related expenses.

• Variable annuity (“VA”) riders earnings consist of fees charged to the contract holder related to guaranteed benefit rider features, less the net valuation premium and associated change in

benefit reserves and related expenses.

Non-GAAP Performance Measures

Non-GAAP measures do not replace the most directly comparable GAAP measures, and we have included detailed reconciliations herein.

Adjusted income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:

• Realized gains and losses associated with the following (“excluded realized gain (loss)”):

▪ Sales or disposals and impairments of financial assets;

▪ Changes in the fair value of equity securities;

▪ Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities (“gain (loss) on the mark-to-market on certain instruments”);

▪ Changes in the fair value of the derivatives we own to hedge our guaranteed death benefit (“GDB”) riders within our variable annuities;

▪ Changes in the fair value of the embedded derivatives of our guaranteed living benefit (“GLB”) riders reflected within variable annuity net derivative results accounted for at fair value;

▪ Changes in the fair value of the derivatives we own to hedge our GLB riders reflected within variable annuity net derivative results; and

▪ Changes in the fair value of the embedded derivative liabilities related to index options we may purchase or sell in the future to hedge contract holder index allocations applicable to

future reset periods for our indexed annuity products accounted for at fair value (“indexed annuity forward-starting options”);

• Changes in reserves resulting from benefit ratio unlocking on our GDB and GLB riders (“benefit ratio unlocking”);

• Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;

• Gains (losses) on early extinguishment of debt;

• Losses from the impairment of intangible assets;

• Income (loss) from discontinued operations;

• Acquisition and integration costs related to mergers and acquisitions; and

• Income (loss) from the initial adoption of new accounting standards, regulations and policy changes including the net impact from the Tax Cuts and Jobs Act.

Adjusted operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:

• Excluded realized gain (loss);

• Revenue adjustments from the initial adoption of new accounting standards;

• Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking; and

• Amortization of deferred gains arising from reserve changes on business sold through reinsurance.

Page 2b

Lincoln Financial Group

Notes

Management believes that the non-GAAP performance measures previously discussed explain the results of our ongoing businesses in a manner that allows for a better understanding of the underlying

trends in our current business as the excluded items are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in many

instances, decisions regarding these items do not necessarily relate to the operations of the individual segments. In addition, we believe that our definitions of adjusted operating revenues and adjusted

income from operations provide investors with more valuable measures of our performance as they better reveal trends in our business.

Statistical Supplement is Dated

The financial data in this document is dated May 5, 2021, and has not been updated since that date. Lincoln Financial Group does not intend to update this document.

Page 2c


Lincoln Financial Group
Consolidated Statements of Income (Loss)
Unaudited (millions of dollars, except per share data)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Revenues
Insurance premiums	$	1,373	$	1,342	$	1,293	$	1,364	$	1,406	2.4%
Fee income		1,539		1,458		1,815		1,559		1,592	3.4%
Net investment income		1,375		1,172		1,458		1,505		1,510	9.8%
Realized gain (loss)		(24)		(647)		629		(470)		(181)	NM
Amortization of deferred gains on business
sold through reinsurance		11		11		11		9		9	-18.2%
Other revenues		151		181		155		168		198	31.1%
Total revenues		4,425		3,517		5,361		4,135		4,534	2.5%

Expenses
Interest credited		725		732		732		734		737	1.7%
Benefits		2,501		1,725		2,484		1,966		2,226	-11.0%
Commissions and other expenses		1,085		1,123		1,599		1,258		1,231	13.5%
Interest and debt expense		68		84		66		65		65	-4.4%
Strategic digitization expense		12		14		20		23		13	8.3%
Total expenses		4,391		3,678		4,901		4,046		4,272	-2.7%
Income (loss) before taxes		34		(161)		460		89		262	NM
Federal income tax expense (benefit)		(18)		(67)		62		(54)		37	NM
Net income (loss)		52		(94)		398		143		225	NM
Adjustment for LNC stock units in our
deferred compensation plans		(23)		-		(5)		-		-	100.0%
Net income (loss) available to common
stockholders – diluted	$	29	$	(94)	$	393	$	143	$	225	NM

Earnings (Loss) Per Common Share – Diluted
Net income (loss)	$	0.15	$	(0.49)	$	2.01	$	0.74	$	1.16	NM

ROE, including AOCI
Net income (loss)		1.1%		-2.0%		7.5%		2.6%		4.3%






Page 3


Lincoln Financial Group
Consolidated Balance Sheets
Unaudited (millions of dollars)

	As of
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
ASSETS
Investments:
Fixed maturity available-for-sale (“AFS”) securities, net of allowance for
credit losses:
Corporate bonds	$	85,797	$	95,390	$	98,717	$	102,789	$	96,570	12.6%
U.S. government bonds		482		504		496		484		444	-7.9%
State and municipal bonds		5,906		6,393		6,774		6,921		6,625	12.2%
Foreign government bonds		389		436		436		470		485	24.7%
Residential mortgage-backed securities		3,271		3,272		3,203		3,076		3,077	-5.9%
Commercial mortgage-backed securities		1,119		1,226		1,430		1,505		1,516	35.5%
Asset-backed securities		5,086		5,716		6,590		7,184		7,996	57.2%
Hybrid and redeemable preferred securities		556		582		606		615		600	7.9%
Total fixed maturity AFS securities, net of allowance for credit losses		102,606		113,519		118,252		123,044		117,313	14.3%
Trading securities		4,019		4,651		4,633		4,501		4,365	8.6%
Equity securities		83		87		122		129		123	48.2%
Mortgage loans on real estate, net of allowance for credit losses		16,791		16,578		16,541		16,763		17,255	2.8%
Policy loans		2,571		2,551		2,527		2,426		2,502	-2.7%
Derivative investments		4,417		2,957		3,236		3,109		3,453	-21.8%
Other investments		4,765		4,574		4,204		3,984		3,548	-25.5%
Total investments		135,252		144,917		149,515		153,956		148,559	9.8%
Cash and invested cash		6,202		4,201		2,595		1,708		1,350	-78.2%
DAC and VOBA		9,212		7,012		6,307		5,812		7,665	-16.8%
Premiums and fees receivable		562		490		498		486		653	16.2%
Accrued investment income		1,185		1,168		1,320		1,257		1,301	9.8%
Reinsurance recoverables, net of allowance for credit losses		16,923		16,866		16,610		16,496		16,289	-3.7%
Reinsurance related embedded derivatives		137		-		-		-		-	-100.0%
Funds withheld reinsurance assets		535		535		539		530		528	-1.3%
Goodwill		1,778		1,778		1,778		1,778		1,778	0.0%
Other assets		16,246		15,905		15,667		15,956		17,298	6.5%
Separate account assets		130,617		146,787		152,975		167,965		171,339	31.2%
Total assets	$	318,649	$	339,659	$	347,804	$	365,944	$	366,760	15.1%
		`



Page 4a


Lincoln Financial Group
Consolidated Balance Sheets
Unaudited (millions of dollars)

	As of
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Future contract benefits	$	37,100	$	38,604	$	40,089	$	40,814	$	39,591	6.7%
Other contract holder funds		99,508		100,537		102,568		105,405		107,002	7.5%
Short-term debt		-		-		-		-		300	NM
Long-term debt by rating agency leverage definitions:
Operating (see note (2) on page 6 for details)		866		866		866		866		866	0.0%
Financial		5,882		5,870		5,848		5,816		5,428	-7.7%
Reinsurance related embedded derivatives		-		245		334		392		244	NM
Funds withheld reinsurance liabilities		1,843		1,867		1,910		1,942		1,976	7.2%
Payables for collateral on investments		8,434		7,031		6,435		6,222		7,597	-9.9%
Other liabilities		17,824		17,121		15,230		13,823		12,824	-28.1%
Separate account liabilities		130,617		146,787		152,975		167,965		171,339	31.2%
Total liabilities		302,074		318,928		326,255		343,245		347,167	14.9%

Stockholders’ Equity
Common stock		5,071		5,081		5,093		5,082		5,057	-0.3%
Retained earnings		8,500		8,327		8,647		8,686		8,775	3.2%
AOCI:
Unrealized investment gains (losses)		3,348		7,668		8,153		9,209		6,040	80.4%
Foreign currency translation adjustment		(27)		(28)		(21)		(12)		(10)	63.0%
Funded status of employee benefit plans		(317)		(317)		(323)		(266)		(269)	15.1%
Total AOCI		3,004		7,323		7,809		8,931		5,761	91.8%
Total stockholders’ equity		16,575		20,731		21,549		22,699		19,593	18.2%
Total liabilities and stockholders’ equity	$	318,649	$	339,659	$	347,804	$	365,944	$	366,760	15.1%










Page 4b


Lincoln Financial Group
Earnings, Shares and Return on Equity
Unaudited (millions of dollars, except per share data)

	As of or For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Income (Loss)
Net income (loss)	$	52	$	(94)	$	398	$	143	$	225	NM
Pre-tax adjusted income (loss) from operations		558		195		(212)		393		421	-24.6%
After-tax adjusted income (loss) from operations (1)		465		187		(133)		346		350	-24.7%
Adjusted operating tax rate		16.5%		4.0%		37.2%		12.0%		16.8%

Average Stockholders’ Equity
Average equity, including AOCI	$	18,132	$	18,653	$	21,140	$	22,124	$	21,146	16.6%
Average AOCI		4,338		5,164		7,566		8,370		7,346	69.3%
Average equity, excluding AOCI	$	13,794	$	13,489	$	13,574	$	13,754	$	13,800	0.0%

ROE, Excluding AOCI
Net income (loss)		1.5%		-2.8%		11.7%		4.2%		6.5%
Adjusted income (loss) from operations		13.5%		5.5%		-3.9%		10.1%		10.2%

Per Share
Net income (loss) (diluted)	$	0.15	$	(0.49)	$	2.01	$	0.74	$	1.16	NM
Adjusted income (loss) from operations (diluted)		2.24		0.97		(0.72)		1.78		1.82	-18.8%
Dividends declared during the period		0.40		0.40		0.40		0.42		0.42	5.0%

Book value, including AOCI	$	85.79	$	107.28	$	111.51	$	118.02	$	102.50	19.5%
Per share impact of AOCI		15.55		37.90		40.41		46.43		30.14	93.8%
Book value, excluding AOCI	$	70.24	$	69.38	$	71.10	$	71.59	$	72.36	3.0%

Shares
Repurchased during the period		3.8		-		-		1.1		1.9	-50.0%
End-of-period – basic		193.2		193.2		193.3		192.3		191.1	-1.1%
End-of-period – diluted		195.0		194.0		195.3		193.7		192.5	-1.3%
Average for the period – diluted		197.3		193.8		195.4		193.9		193.1	-2.1%

(1) See reconciliation to net income (loss) on page 24.




Page 5


Lincoln Financial Group
Key Stakeholder Metrics
Unaudited (millions of dollars, except per share data)

	As of or For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Cash Returned to Common Stockholders
Shares repurchased	$	225	$	-	$	-	$	50	$	105	-53.3%
Common dividends		79		77		77		77		81	2.5%
Total cash returned to common stockholders	$	304	$	77	$	77	$	127	$	186	-38.8%

Leverage Ratio
Short-term debt	$	-	$	-	$	-	$	-	$	300	NM
Long-term debt		6,748		6,736		6,714		6,682		6,294	-6.7%
Total debt (1)		6,748		6,736		6,714		6,682		6,594	-2.3%
Less:
Operating debt (2)		866		866		866		866		866	0.0%
25% of capital securities		302		302		302		302		302	0.0%
Carrying value of fair value hedges and other items		459		451		428		395		306	-33.3%
Total numerator	$	5,121	$	5,117	$	5,118	$	5,119	$	5,120	0.0%

Stockholders’ equity, excluding unrealized
investment gains (losses)	$	13,227	$	13,063	$	13,396	$	13,490	$	13,553	2.5%
Add: 25% of capital securities		302		302		302		302		302	0.0%
Total numerator		5,121		5,117		5,118		5,119		5,120	0.0%
Total denominator	$	18,650	$	18,482	$	18,816	$	18,911	$	18,975	1.7%

Leverage ratio		27.5%		27.7%		27.2%		27.1%		27.0%

Holding Company Available Liquidity	$	760	$	774	$	756	$	754	$	758	-0.3%

(1) Excludes obligations under finance leases and certain financing arrangements of $450 million that are reported in other liabilities on our Consolidated Balance Sheets.
(2) We have categorized as operating debt the senior notes issued in October 2007 and June 2010 because the proceeds were used as a long-term structured solution to reduce the strain
on increasing statutory reserves associated with secondary guarantee UL and term policies.







Page 6


Lincoln Financial Group
Segment and Sources of Earnings
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Income (Loss) from Operations, Pre-Tax
Annuities	$	302	$	272	$	220	$	338	$	350	15.9%
Retirement Plan Services		45		33		58		57		70	55.6%
Life Insurance		209		(52)		(400)		177		130	-37.8%
Group Protection		50		49		8		(54)		(33)	NM
Other Operations		(48)		(107)		(98)		(125)		(96)	-100.0%
Adjusted income (loss) from operations, before
income taxes	$	558	$	195	$	(212)	$	393	$	421	-24.6%

Income (Loss) from Operations, After-Tax
Annuities	$	261	$	237	$	196	$	289	$	290	11.1%
Retirement Plan Services		40		30		50		49		57	42.5%
Life Insurance		171		(37)		(311)		144		107	-37.4%
Group Protection		40		39		6		(42)		(26)	NM
Other Operations		(47)		(82)		(74)		(94)		(78)	-66.0%
Adjusted income (loss) from operations	$	465	$	187	$	(133)	$	346	$	350	-24.7%

	For the Three Months Ended											For the Trailing Twelve Months
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change	3/31/20		3/31/21		Change
Sources of Earnings, Pre-Tax
Investment spread	$	151	$	39	$	(119)	$	147	$	130	-13.9%	$	362	$	197	-45.6%
Mortality/morbidity		165		15		(208)		47		39	-76.4%		432		(107)	NM
Fees on AUM		290		245		321		308		332	14.5%		1,094		1,206	10.2%
VA riders		-		3		(108)		16		16	NM		17		(73)	NM
Total sources of earnings, before income taxes		606		302		(114)		518		517	-14.7%		1,905		1,223	-35.8%
Other Operations		(48)		(107)		(98)		(125)		(96)	-100.0%		(321)		(425)	-32.4%
Adjusted income (loss) from operations, before
income taxes	$	558	$	195	$	(212)	$	393	$	421	-24.6%	$	1,584	$	798	-49.6%

Sources of Earnings, Pre-Tax, Percentage By Component
Investment spread		25.0%		12.7%		103.7%		28.5%		25.2%			19.0%		16.1%
Mortality/morbidity		27.3%		4.8%		181.6%		9.1%		7.5%			22.7%		-8.8%
Fees on AUM		47.8%		81.3%		-279.5%		59.4%		64.1%			57.4%		98.6%
VA riders		-0.1%		1.2%		94.2%		3.0%		3.2%			0.9%		-5.9%
Total		100.0%		100.0%		100.0%		100.0%		100.0%			100.0%		100.0%

Page 7

Lincoln Financial Group
Select Earnings Drivers By Segment
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Annuities
Operating revenues	$	1,129	$	1,037	$	1,126	$	1,163	$	1,204	6.6%
Deposits		3,697		2,515		2,539		2,510		2,814	-23.9%
Net flows		528		58		(283)		(644)		(776)	NM
Average account values		137,922		134,197		144,368		150,875		160,099	16.1%

Retirement Plan Services
Operating revenues	$	297	$	282	$	311	$	323	$	327	10.1%
Deposits		2,779		2,307		2,374		2,557		2,640	-5.0%
Net flows		671		(1,207)		362		340		347	-48.3%
Average account values		75,845		73,611		79,644		83,889		89,589	18.1%

Life Insurance
Operating revenues	$	1,821	$	1,639	$	2,127	$	1,928	$	1,939	6.5%
Deposits		1,450		1,428		1,537		1,476		1,219	-15.9%
Net flows		963		1,023		1,156		996		793	-17.7%
Average account values		52,866		52,693		54,570		56,419		58,008	9.7%
Average in-force face amount		836,488		853,071		870,505		886,005		900,973	7.7%

Group Protection
Operating revenues	$	1,224	$	1,199	$	1,184	$	1,184	$	1,254	2.5%
Insurance premiums		1,094		1,086		1,052		1,049		1,119	2.3%

Consolidated
Adjusted operating revenues (1)	$	4,509	$	4,209	$	4,788	$	4,655	$	4,762	5.6%
Deposits		7,926		6,250		6,450		6,543		6,673	-15.8%
Net flows		2,162		(126)		1,235		692		364	-83.2%
Average account values		266,633		260,501		278,582		291,183		307,696	15.4%

(1) See reconciliation to total revenues on page 24.





Page 8


Lincoln Financial Group
Sales By Segment
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Sales
Annuities:
With guaranteed living benefits	$	1,185	$	824	$	541	$	507	$	638	-46.2%
Without guaranteed living benefits		1,454		1,392		1,911		1,921		2,090	43.7%
Variable		2,639		2,216		2,452		2,428		2,728	3.4%
Fixed		1,058		299		87		82		86	-91.9%
Total Annuities	$	3,697	$	2,515	$	2,539	$	2,510	$	2,814	-23.9%

Retirement Plan Services:
First-year sales	$	867	$	827	$	870	$	1,107	$	694	-20.0%
Recurring deposits		1,912		1,480		1,504		1,450		1,946	1.8%
Total Retirement Plan Services	$	2,779	$	2,307	$	2,374	$	2,557	$	2,640	-5.0%

Life Insurance:
UL	$	9	$	5	$	3	$	3	$	2	-77.8%
MoneyGuard®		34		36		35		22		16	-52.9%
IUL		21		23		24		22		16	-23.8%
VUL		44		55		60		30		22	-50.0%
Term		35		36		28		32		30	-14.3%
Total individual life insurance		143		155		150		109		86	-39.9%
Executive Benefits		26		4		36		6		28	7.7%
Total Life Insurance	$	169	$	159	$	186	$	115	$	114	-32.5%

Group Protection:
Life	$	50	$	47	$	24	$	144	$	41	-18.0%
Disability		42		47		17		291		28	-33.3%
Dental		10		11		8		15		5	-50.0%
Total Group Protection	$	102	$	105	$	49	$	450	$	74	-27.5%
Percent employee-paid		59.9%		51.6%		58.9%		28.4%		66.7%






Page 9


Lincoln Financial Group
Operating Revenues and General and Administrative Expenses By Segment
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Operating Revenues
Annuities	$	1,129	$	1,037	$	1,126	$	1,163	$	1,204	6.6%
Retirement Plan Services		297		282		311		323		327	10.1%
Life Insurance		1,821		1,639		2,127		1,928		1,939	6.5%
Group Protection		1,224		1,199		1,184		1,184		1,254	2.5%
Other Operations		38		52		40		57		38	0.0%
Total segment operating revenues	$	4,509	$	4,209	$	4,788	$	4,655	$	4,762	5.6%

General and Administrative Expenses,
Net of Amounts Capitalized (1)
Annuities		120	$	111	$	111	$	126	$	116	-3.3%
Retirement Plan Services		72		68		69		78		69	-4.2%
Life Insurance		121		116		118		126		118	-2.5%
Group Protection		154		153		155		164		158	2.6%
Other Operations		(4)		55		34		71		44	NM
Total	$	463	$	503	$	487	$	565	$	505	9.1%

General and Administrative Expenses,
Net of Amounts Capitalized, as a Percentage
of Operating Revenues
Annuities		10.7%		10.7%		9.9%		10.8%		9.7%
Retirement Plan Services		24.4%		24.3%		22.3%		24.2%		21.2%
Life Insurance		6.7%		7.1%		5.5%		6.5%		6.1%
Group Protection		12.5%		12.7%		13.1%		13.8%		12.5%
Other Operations		-10.0%		107.5%		83.7%		125.8%		115.6%
Total		10.3%		12.0%		10.2%		12.1%		10.6%

(1) See page 11 for general and administrative expenses capitalized.







Page 10


Lincoln Financial Group
Operating Commissions and Other Expenses
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Operating Commissions and
Other Expenses Incurred
General and administrative expenses	$	520	$	554	$	537	$	638	$	556	6.9%
Commissions		706		621		611		625		616	-12.7%
Taxes, licenses and fees		90		79		85		73		87	-3.3%
Interest and debt expense		68		68		66		65		65	-4.4%
Expenses associated with reserve financing
and letters of credit		23		23		24		25		25	8.7%
Total adjusted operating commissions and other
expenses incurred		1,407		1,345		1,323		1,426		1,349	-4.1%

Less Amounts Capitalized
General and administrative expenses		(57)		(51)		(50)		(73)		(51)	10.5%
Commissions		(362)		(291)		(272)		(250)		(233)	35.6%
Taxes, licenses and fees		(13)		(13)		(11)		(9)		(8)	38.5%
Total amounts capitalized		(432)		(355)		(333)		(332)		(292)	32.4%
Total expenses incurred, net of amounts
capitalized, excluding amortization		975		990		990		1,094		1,057	8.4%

Amortization
Amortization of DAC, VOBA and other intangibles		247		207		680		218		247	0.0%
Total operating commissions and other expenses	$	1,222	$	1,197	$	1,670	$	1,312	$	1,304	6.7%













Page 11


Lincoln Financial Group
Interest Rate Yields and Spreads By Segment
Unaudited

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Annuities
Earned rate on reserves		3.73%		3.69%		3.63%		3.42%		3.27%	(46)
Variable investment income on reserves (1)		0.03%		0.10%		0.09%		0.15%		0.11%	8
Net investment income yield on reserves		3.76%		3.79%		3.72%		3.57%		3.38%	(38)
Interest rate credited to contract holders		2.31%		2.26%		2.12%		1.97%		2.00%	(31)
Interest rate spread		1.45%		1.53%		1.60%		1.60%		1.38%	(7)
Base spreads excluding variable investment income		1.42%		1.43%		1.51%		1.45%		1.27%	(15)

Retirement Plan Services
Earned rate on reserves		3.95%		3.85%		3.82%		3.68%		3.64%	(31)
Variable investment income on reserves (1)		0.05%		0.06%		0.10%		0.21%		0.17%	12
Net investment income yield on reserves		4.00%		3.91%		3.92%		3.89%		3.81%	(19)
Interest rate credited to contract holders		2.87%		2.86%		2.81%		2.78%		2.68%	(19)
Interest rate spread		1.13%		1.05%		1.11%		1.11%		1.13%	-
Base spreads excluding variable investment income		1.08%		0.99%		1.01%		0.90%		0.96%	(12)

Life Insurance – Interest-Sensitive
Earned rate on reserves		4.77%		4.78%		4.76%		4.71%		4.71%	(6)
Variable investment income on reserves (1)		0.31%		-0.72%		0.76%		0.95%		1.05%	74
Net investment income yield on reserves		5.08%		4.06%		5.52%		5.66%		5.76%	68
Interest rate credited to contract holders		3.80%		3.81%		3.75%		3.83%		3.76%	(4)
Interest rate spread		1.28%		0.25%		1.77%		1.83%		2.00%	72
Base spreads excluding variable investment income		0.97%		0.97%		1.01%		0.88%		0.95%	(2)

Total (2)
Earned rate (3)		4.29%		4.06%		4.09%		4.04%		3.96%	(33)
Variable investment income (1) (3)		0.19%		-0.34%		0.45%		0.56%		0.59%	40
Net investment income yield (3)		4.48%		3.72%		4.54%		4.60%		4.55%	7

(1) Variable investment income consists of commercial mortgage loan prepayment and bond make-whole premiums and investment income on alternative investments.
(2) Includes the results of all of our business segments and Other Operations.
(3) Includes investment yields on reserves and surplus.





Page 12


Lincoln Financial Group
Annuities – Select Earnings and Operational Data
Unaudited (millions of dollars)

	As of or For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	53	$	22	$	17	$	29	$	32	-39.6%
Fee income		593		567		608		626		652	9.9%
Net investment income		326		270		334		343		328	0.6%
Operating realized gain (loss)		54		49		57		54		50	-7.4%
Amortization of deferred gain		8		8		8		5		6	-25.0%
Other revenues		95		121		102		106		136	43.2%
Total operating revenues		1,129		1,037		1,126		1,163		1,204	6.6%
Operating expenses:
Interest credited		192		192		198		191		199	3.6%
Benefits		170		127		261		138		141	-17.1%
Commissions incurred		311		246		248		255		275	-11.6%
Other expenses incurred		250		221		232		252		255	2.0%
Amounts capitalized		(191)		(122)		(118)		(117)		(127)	33.5%
Amortization		95		101		85		106		111	16.8%
Total operating expenses		827		765		906		825		854	3.3%
Income (loss) from operations before taxes		302		272		220		338		350	15.9%
Federal income tax expense (benefit)		41		35		24		49		60	46.3%
Income (loss) from operations	$	261	$	237	$	196	$	289	$	290	11.1%

Effective Federal Income Tax Rate		13.4%		12.9%		11.1%		14.5%		17.2%

Average Equity, Excluding Goodwill and AOCI	$	4,887	$	5,002	$	5,394	$	5,405	$	5,071	3.8%

ROE, Excluding Goodwill and AOCI		21.4%		19.0%		14.5%		21.4%		22.9%

Return on Average Account Values		76		71		54		77		72	(4)

Income (Loss) from Operations
Variable annuity		232		207		176		254		261	12.5%
Fixed annuity		29		30		20		35		29	0.0%

Account Values
Variable annuity account values:
Average	$	120,972	$	116,861	$	127,011	$	133,630	$	142,990	18.2%
End-of-period		108,689		121,712		127,585		140,313		144,157	32.6%
Fixed annuity account values:
Average		16,950		17,336		17,357		17,245		17,109	0.9%
End-of-period		17,208		17,349		17,263		17,205		16,966	-1.4%

Page 13


Lincoln Financial Group
Retirement Plan Services – Select Earnings and Operational Data
Unaudited (millions of dollars)

	As of or For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Income (Loss) from Operations
Operating revenues:
Fee income	$	61	$	58	$	65	$	69	$	71	16.4%
Net investment income		229		218		240		246		248	8.3%
Other revenues		7		6		6		8		8	14.3%
Total operating revenues		297		282		311		323		327	10.1%
Operating expenses:
Interest credited		150		153		155		157		155	3.3%
Benefits		-		1		1		-		1	NM
Commissions incurred		19		18		19		20		21	10.5%
Other expenses incurred		82		77		74		86		77	-6.1%
Amounts capitalized		(6)		(6)		(4)		(5)		(5)	16.7%
Amortization		7		6		8		8		8	14.3%
Total operating expenses		252		249		253		266		257	2.0%
Income (loss) from operations before taxes		45		33		58		57		70	55.6%
Federal income tax expense (benefit)		5		3		8		8		13	160.0%
Income (loss) from operations	$	40	$	30	$	50	$	49	$	57	42.5%

Effective Federal Income Tax Rate		11.3%		10.1%		13.7%		14.6%		18.9%

Average Equity, Excluding Goodwill and AOCI	$	1,415	$	1,410	$	1,441	$	1,480	$	1,526	7.8%

ROE, Excluding Goodwill and AOCI		11.2%		8.5%		13.8%		13.2%		14.9%

Pre-tax Net Margin		30.4%		25.8%		36.8%		34.4%		40.4%

Return on Average Account Values		21		16		25		23		25	4

Net Flows by Market
Small Market		141		30		113		66		(28)	NM
Mid - Large Market		790		(1,084)		500		587		680	-13.9%
Multi-Fund® and Other		(260)		(153)		(251)		(313)		(305)	-17.3%

Net Flows – Trailing Twelve Months	$	1,672	$	158	$	248	$	166	$	(158)	NM





Page 14


Lincoln Financial Group
Life Insurance – Select Earnings and Operational Data
Unaudited (millions of dollars)

	As of or For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	224	$	230	$	223	$	274	$	253	12.9%
Fee income		893		830		1,141		861		867	-2.9%
Net investment income		697		577		761		787		809	16.1%
Operating realized gain (loss)		(3)		(2)		-		(1)		(2)	33.3%
Amortization of deferred gain on
business sold through reinsurance		3		3		3		4		3	0.0%
Other revenues		7		1		(1)		3		9	28.6%
Total operating revenues		1,821		1,639		2,127		1,928		1,939	6.5%
Operating expenses:
Interest credited		371		375		369		375		370	-0.3%
Benefits		954		1,084		1,428		1,120		1,173	23.0%
Commissions incurred		191		173		171		152		120	-37.2%
Other expenses incurred		209		195		209		204		194	-7.2%
Amounts capitalized		(216)		(202)		(202)		(168)		(138)	36.1%
Amortization		103		66		552		68		90	-12.6%
Total operating expenses		1,612		1,691		2,527		1,751		1,809	12.2%
Income (loss) from operations before taxes		209		(52)		(400)		177		130	-37.8%
Federal income tax expense (benefit)		38		(15)		(89)		33		23	-39.5%
Income (loss) from operations	$	171	$	(37)	$	(311)	$	144	$	107	-37.4%

Effective Federal Income Tax Rate		18.1%		28.9%		22.2%		18.6%		17.7%

Average Equity, Excluding Goodwill and AOCI	$	8,798	$	8,977	$	8,854	$	8,788	$	8,909	1.3%

ROE, Excluding Goodwill and AOCI		7.8%		-1.6%		-14.1%		6.5%		4.8%

Average Account Values	$	52,866	$	52,693	$	54,570	$	56,419	$	58,008	9.7%

In-Force Face Amount
UL and other	$	356,889	$	357,690	$	358,897	$	358,554	$	358,044	0.3%
Term insurance		486,311		505,251		519,173		535,387		549,960	13.1%
Total in-force face amount	$	843,200	$	862,941	$	878,070	$	893,941	$	908,004	7.7%




Page 15


Lincoln Financial Group
Group Protection – Select Earnings and Operational Data
Unaudited (millions of dollars)

	As of or For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	1,094	$	1,086	$	1,052	$	1,049	$	1,119	2.3%
Net investment income		81		69		88		91		91	12.3%
Other revenues		49		44		44		44		44	-10.2%
Total operating revenues		1,224		1,199		1,184		1,184		1,254	2.5%
Operating expenses:
Interest credited		2		1		1		1		1	-50.0%
Benefits		862		843		875		920		970	12.5%
Commissions incurred		87		97		80		95		91	4.6%
Other expenses incurred		200		198		194		227		208	4.0%
Amounts capitalized		(19)		(23)		(9)		(41)		(21)	-10.5%
Amortization		42		34		35		36		38	-9.5%
Total operating expenses		1,174		1,150		1,176		1,238		1,287	9.6%
Income (loss) from operations before taxes		50		49		8		(54)		(33)	NM
Federal income tax expense (benefit)		10		10		2		(12)		(7)	NM
Income (loss) from operations	$	40	$	39	$	6	$	(42)	$	(26)	NM

Effective Federal Income Tax Rate		21.0%		21.0%		21.0%		21.0%		21.0%

Average Equity, Excluding Goodwill and AOCI	$	2,601	$	2,628	$	2,678	$	2,711	$	2,718	4.5%

ROE, Excluding Goodwill and AOCI		6.1%		5.9%		0.9%		-6.3%		-3.8%

Loss Ratios by Product Line
Life		79.4%		82.6%		91.9%		93.4%		101.0%
Disability		78.3%		78.7%		78.9%		86.2%		78.8%
Dental		74.6%		40.2%		70.1%		67.3%		76.8%
Total		78.5%		77.8%		83.2%		87.8%		86.8%








Page 16


Lincoln Financial Group
Other Operations – Select Earnings and Operational Data
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Other Operations
Operating revenues:
Insurance premiums	$	2	$	5	$	2	$	11	$	2	0.0%
Net investment income		42		38		35		38		34	-19.0%
Other revenues		(6)		9		3		8		2	133.3%
Total operating revenues		38		52		40		57		38	0.0%
Operating expenses:
Interest credited		12		11		9		8		12	0.0%
Benefits		16		30		33		40		15	-6.3%
Commissions and other expenses		(22)		36		10		46		29	231.8%
Interest and debt expenses		68		68		66		65		65	-4.4%
Strategic digitization expense		12		14		20		23		13	8.3%
Total operating expenses		86		159		138		182		134	55.8%
Income (loss) from operations before taxes		(48)		(107)		(98)		(125)		(96)	-100.0%
Federal income tax expense (benefit)		(1)		(25)		(24)		(31)		(18)	NM
Income (loss) from operations	$	(47)	$	(82)	$	(74)	$	(94)	$	(78)	-66.0%



















Page 17


Lincoln Financial Group
Consolidated – DAC, VOBA, DSI and DFEL Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
DAC, VOBA and DSI
Balance as of beginning-of-period	$	7,928	$	9,457	$	7,241	$	6,520	$	6,025	-24.0%
Business acquired (sold) through reinsurance		(10)		-		-		-		-	100.0%
Cumulative effect from adoption of new
accounting standard		5		-		-		-		-	-100.0%
Deferrals		435		355		334		333		295	-32.2%
Operating amortization		(243)		(204)		(679)		(212)		(244)	-0.4%
Deferrals, net of operating amortization		192		151		(345)		121		51	-73.4%
Amortization associated with benefit ratio unlocking		66		(4)		(10)		(30)		(6)	NM
Adjustment related to realized (gains) losses		58		33		(198)		87		50	-13.8%
Adjustment related to unrealized (gains) losses		1,218		(2,396)		(168)		(673)		1,764	44.8%
Balance as of end-of-period	$	9,457	$	7,241	$	6,520	$	6,025	$	7,884	-16.6%

DFEL
Balance as of beginning-of-period	$	650	$	1,379	$	433	$	392	$	401	-38.3%
Cumulative effect from adoption of new
accounting standard		4		-		-		-		-	-100.0%
Deferrals		240		252		263		249		231	-3.8%
Operating amortization		(160)		(111)		(424)		(120)		(131)	18.1%
Deferrals, net of operating amortization		80		141		(161)		129		100	25.0%
Amortization associated with benefit ratio unlocking		8		(2)		(1)		(4)		(1)	NM
Adjustment related to realized (gains) losses		17		12		(14)		9		1	-94.1%
Adjustment related to unrealized (gains) losses		620		(1,097)		135		(125)		58	-90.6%
Balance as of end-of-period	$	1,379	$	433	$	392	$	401	$	559	-59.5%

DAC, VOBA, DSI and DFEL
Balance as of End-of-Period, After-Tax	$	6,382	$	5,378	$	4,841	$	4,443	$	5,787	-9.3%








Page 18


Lincoln Financial Group
Annuities – Account Value Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Fixed Annuities
Balance as of beginning-of-period	$	25,384	$	25,740	$	25,801	$	25,572	$	25,405	0.1%
Gross deposits		1,058		299		87		82		86	-91.9%
Full surrenders and deaths		(400)		(384)		(399)		(400)		(494)	-23.5%
Other contract benefits		(156)		(143)		(135)		(145)		(141)	9.6%
Net flows		502		(228)		(447)		(463)		(549)	NM
Contract holder assessments		(13)		(16)		(16)		(19)		(25)	-92.3%
Reinvested interest credited		(133)		305		234		315		177	233.1%
Balance as of end-of-period, gross		25,740		25,801		25,572		25,405		25,008	-2.8%
Reinsurance ceded		(8,532)		(8,452)		(8,309)		(8,200)		(8,042)	5.7%
Balance as of end-of-period, net	$	17,208	$	17,349	$	17,263	$	17,205	$	16,966	-1.4%

Variable Annuities
Balance as of beginning-of-period	$	125,492	$	108,689	$	121,713	$	127,585	$	140,313	11.8%
Gross deposits		2,639		2,216		2,452		2,428		2,728	3.4%
Full surrenders and deaths		(1,602)		(1,068)		(1,384)		(1,600)		(1,901)	-18.7%
Other contract benefits		(1,011)		(862)		(904)		(1,009)		(1,054)	-4.3%
Net flows		26		286		164		(181)		(227)	NM
Contract holder assessments		(632)		(611)		(648)		(666)		(684)	-8.2%
Change in market value and reinvestment		(16,197)		13,349		6,356		13,575		4,755	129.4%
Balance as of end-of-period, gross		108,689		121,713		127,585		140,313		144,157	32.6%
Reinsurance ceded		-		(1)		-		-		-	NM
Balance as of end-of-period, gross and net	$	108,689	$	121,712	$	127,585	$	140,313	$	144,157	32.6%

Total
Balance as of beginning-of-period	$	150,876	$	134,429	$	147,514	$	153,157	$	165,718	9.8%
Gross deposits		3,697		2,515		2,539		2,510		2,814	-23.9%
Full surrenders and deaths		(2,002)		(1,452)		(1,783)		(2,000)		(2,395)	-19.6%
Other contract benefits		(1,167)		(1,005)		(1,039)		(1,154)		(1,195)	-2.4%
Net flows		528		58		(283)		(644)		(776)	NM
Contract holder assessments		(645)		(627)		(664)		(685)		(709)	-9.9%
Change in market value and reinvestment		(16,330)		13,654		6,590		13,890		4,932	130.2%
Balance as of end-of-period, gross		134,429		147,514		153,157		165,718		169,165	25.8%
Reinsurance ceded		(8,532)		(8,453)		(8,309)		(8,200)		(8,042)	5.7%
Balance as of end-of-period, net	$	125,897	$	139,061	$	144,848	$	157,518	$	161,123	28.0%

Page 19


Lincoln Financial Group
Retirement Plan Services – Account Value Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
General Account
Balance as of beginning-of-period	$	20,558	$	21,335	$	21,672	$	22,316	$	22,916	11.5%
Gross deposits		609		817		568		731		490	-19.5%
Withdrawals		(565)		(752)		(477)		(533)		(583)	-3.2%
Net flows		44		65		91		198		(93)	NM
Transfers between fixed and variable accounts		587		124		402		247		35	-94.0%
Contract holder assessments		(3)		(3)		(4)		(3)		(3)	0.0%
Reinvestment interest credited		149		151		155		158		153	2.7%
Balance as of end-of-period	$	21,335	$	21,672	$	22,316	$	22,916	$	23,008	7.8%

Separate Account and Mutual Funds
Balance as of beginning-of-period	$	58,131	$	48,301	$	54,886	$	58,255	$	65,391	12.5%
Gross deposits		2,170		1,490		1,806		1,826		2,150	-0.9%
Withdrawals		(1,543)		(2,762)		(1,535)		(1,684)		(1,710)	-10.8%
Net flows		627		(1,272)		271		142		440	-29.8%
Transfers between fixed and variable accounts		(610)		(161)		(436)		(326)		(141)	76.9%
Contract holder assessments		(54)		(49)		(50)		(59)		(62)	-14.8%
Change in market value and reinvestment		(9,793)		8,067		3,584		7,379		2,521	125.7%
Balance as of end-of-period	$	48,301	$	54,886	$	58,255	$	65,391	$	68,149	41.1%

Total
Balance as of beginning-of-period	$	78,689	$	69,636	$	76,558	$	80,571	$	88,307	12.2%
Gross deposits		2,779		2,307		2,374		2,557		2,640	-5.0%
Withdrawals		(2,108)		(3,514)		(2,012)		(2,217)		(2,293)	-8.8%
Net flows		671		(1,207)		362		340		347	-48.3%
Transfers between fixed and variable accounts		(23)		(37)		(34)		(79)		(106)	NM
Contract holder assessments		(57)		(52)		(54)		(62)		(65)	-14.0%
Change in market value and reinvestment		(9,644)		8,218		3,739		7,537		2,674	127.7%
Balance as of end-of-period	$	69,636	$	76,558	$	80,571	$	88,307	$	91,157	30.9%







Page 20


Lincoln Financial Group
Life Insurance – Account Value Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
General Account
Balance as of beginning-of-period	$	38,141	$	38,054	$	38,034	$	38,080	$	38,136	0.0%
Deposits		996		964		966		1,028		899	-9.7%
Withdrawals and deaths		(380)		(263)		(230)		(282)		(296)	22.1%
Net flows		616		701		736		746		603	-2.1%
Contract holder assessments		(1,075)		(1,073)		(1,079)		(1,088)		(1,073)	0.2%
Reinvested interest credited		372		352		389		398		387	4.0%
Balance as of end-of-period, gross		38,054		38,034		38,080		38,136		38,053	0.0%
Reinsurance ceded		(649)		(646)		(646)		(640)		(636)	2.0%
Balance as of end-of-period, net	$	37,405	$	37,388	$	37,434	$	37,496	$	37,417	0.0%

Separate Account
Balance as of beginning-of-period	$	17,646	$	14,782	$	17,351	$	18,671	$	21,078	19.4%
Deposits		454		464		571		448		320	-29.5%
Withdrawals and deaths		(107)		(142)		(151)		(198)		(130)	-21.5%
Net flows		347		322		420		250		190	-45.2%
Contract holder assessments		(204)		(211)		(217)		(209)		(197)	3.4%
Change in market value and reinvestment		(3,007)		2,458		1,117		2,366		912	130.3%
Balance as of end-of-period, gross		14,782		17,351		18,671		21,078		21,983	48.7%
Reinsurance ceded		(712)		(830)		(874)		(969)		(990)	-39.0%
Balance as of end-of-period, net	$	14,070	$	16,521	$	17,797	$	20,109	$	20,993	49.2%

Total
Balance as of beginning-of-period	$	55,787	$	52,836	$	55,385	$	56,751	$	59,214	6.1%
Deposits		1,450		1,428		1,537		1,476		1,219	-15.9%
Withdrawals and deaths		(487)		(405)		(381)		(480)		(426)	12.5%
Net flows		963		1,023		1,156		996		793	-17.7%
Contract holder assessments		(1,279)		(1,284)		(1,296)		(1,297)		(1,270)	0.7%
Change in market value and reinvestment		(2,635)		2,810		1,506		2,764		1,299	149.3%
Balance as of end-of-period, gross		52,836		55,385		56,751		59,214		60,036	13.6%
Reinsurance ceded		(1,361)		(1,476)		(1,520)		(1,609)		(1,626)	-19.5%
Balance as of end-of-period, net	$	51,475	$	53,909	$	55,231	$	57,605	$	58,410	13.5%




Page 21


Lincoln Financial Group
Select Investment Data
Unaudited (millions of dollars)

	As of 3/31/20				As of 12/31/20				As of 3/31/21
	Amount		%		Amount		%		Amount		%
Fixed Maturity AFS, Trading and Equity Securities, at Fair Value
Fixed maturity AFS securities, net of allowance for credit losses:
Corporate bonds	$	85,797		80.3%	$	102,789		80.5%	$	96,570		79.3%
U.S. government bonds		482		0.5%		484		0.4%		444		0.4%
State and municipal bonds		5,906		5.5%		6,921		5.4%		6,625		5.4%
Foreign government bonds		389		0.4%		470		0.4%		485		0.4%
Residential mortgage-backed securities		3,271		3.1%		3,076		2.4%		3,077		2.5%
Commercial mortgage-backed securities		1,119		1.0%		1,505		1.2%		1,516		1.2%
Asset-backed securities		5,086		4.8%		7,184		5.6%		7,996		6.6%
Hybrid and redeemable preferred securities		556		0.5%		615		0.5%		600		0.5%
Total fixed maturity AFS securities, net of allowance for credit losses		102,606		96.1%		123,044		96.4%		117,313		96.3%
Trading securities		4,019		3.8%		4,501		3.5%		4,365		3.6%
Equity securities		83		0.1%		129		0.1%		123		0.1%
Total fixed maturity AFS securities, net of allowance for credit losses, and trading and
equity securities	$	106,708		100.0%	$	127,674		100.0%	$	121,801		100.0%

Fixed Maturity AFS, Trading and Equity Securities, at Amortized Cost
Fixed maturity AFS securities	$	96,217		96.1%	$	104,174		96.1%	$	105,866		96.2%
Trading securities		3,790		3.8%		4,072		3.8%		4,067		3.7%
Equity securities		121		0.1%		132		0.1%		125		0.1%
Total fixed maturity AFS, trading and equity securities	$	100,128		100.0%	$	108,378		100.0%	$	110,058		100.0%

Percentage of Fixed Maturity AFS Securities, at Amortized Cost
Investment grade				95.8%				95.8%				96.0%
Below investment grade				4.2%				4.2%				4.0%










Page 22


Lincoln Financial Group
Realized Gain (Loss), After-DAC
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Components of Realized Gain (Loss), Pre-Tax
Total adjusted operating realized gain (loss)	$	51	$	47	$	57	$	53	$	48	-5.9%
Total excluded realized gain (loss)		(75)		(694)		572		(523)		(229)	NM
Total realized gain (loss), pre-tax	$	(24)	$	(647)	$	629	$	(470)	$	(181)	NM

Components of Excluded Realized Gain (Loss), After-Tax
Credit loss benefit (expense) on mortgage loans on
real estate	$	(51)	$	(79)	$	50	$	(6)	$	17	133.3%
Credit loss benefit (expense) on other financial assets		(16)		(1)		(1)		(2)		(1)	93.8%
Realized gain (loss) related to certain financial assets		14		(36)		(5)		(7)		1	-92.9%
Realized gain (loss) on equity securities		(15)		2		3		13		8	153.3%
Realized gain (loss) on the mark-to-market on certain
instruments		38		(1)		(6)		2		19	-50.0%
Realized gain (loss) related to financial assets, after-tax		(30)		(115)		41		-		44	246.7%
Variable annuity net derivative results:
Hedge program performance, including unlocking
for GLB reserves hedged and benefit ratio unlocking		(496)		(71)		12		(9)		(42)	91.5%
GLB non-performance risk component		147		(79)		464		(240)		(144)	NM
Total variable annuity net derivative results		(349)		(150)		476		(249)		(186)	46.7%
Indexed annuity forward-starting option		(30)		(1)		18		12		17	156.7%
Excluded realized gain (loss), including
benefit ratio unlocking, after-tax		(409)		(266)		535		(237)		(125)	69.4%
Less: benefit ratio unlocking, after-tax		(349)		282		83		177		55	115.8%
Total excluded realized gain (loss), after-tax	$	(60)	$	(548)		452	$	(414)	$	(180)	NM












Page 23

Lincoln Financial Group
Select GAAP to Non-GAAP Reconciliations
Unaudited (millions of dollars)

	For the Three Months Ended
	3/31/20		6/30/20		9/30/20		12/31/20		3/31/21		Change
Revenues
Total revenues	$	4,425	$	3,517	$	5,361	$	4,135	$	4,534	2.5%
Less:
Excluded realized gain (loss)		(75)		(694)		572		(523)		(229)	NM
Amortization of DFEL associated with
benefit ratio unlocking		(9)		2		1		3		1	111.1%
Adjusted operating revenues	$	4,509	$	4,209	$	4,788	$	4,655	$	4,762	5.6%

Net Income
Net income (loss)	$	52	$	(94)	$	398	$	143	$	225	NM
Less:
Excluded realized gain (loss), after-tax		(60)		(548)		452		(414)		(180)	NM
Benefit ratio unlocking, after-tax		(349)		282		83		177		55	115.8%
Net impact from the Tax Cuts and Jobs Act		-		-		-		37		-	NM
Acquisition and integration costs related to
mergers and acquisitions, after-tax		(4)		(3)		(4)		(3)		-	100.0%
Gain (loss) on early extinguishment of debt, after-tax		-		(12)		-		-		-	NM
Total adjustments		(413)		(281)		531		(203)		(125)	69.7%
Adjusted income (loss) from operations	$	465	$	187	$	(133)	$	346	$	350	-24.7%

Earnings (Loss) Per Common Share – Diluted
Net income (loss)	$	0.15	$	(0.49)	$	2.01	$	0.74	$	1.16	NM
Less:
Excluded realized gain (loss), after-tax		(0.30)		(2.85)		2.32		(2.12)		(0.94)	NM
Benefit ratio unlocking, after-tax		(1.77)		1.46		0.43		0.91		0.28	115.8%
Net impact from the Tax Cuts and Jobs Act		-		-		-		0.19		-	NM
Acquisition and integration costs related to mergers
and acquisitions, after-tax		(0.02)		(0.01)		(0.02)		(0.02)		-	100.0%
Gain (loss) on early extinguishment of debt, after-tax		-		(0.06)		-		-		-	NM
Adjusted income (loss) from operations	$	2.24	$	0.97	$	(0.72)	$	1.78	$	1.82	-18.8%





Page 24

LINCOLN NATIONAL CORP - FORM 8-K - EX-99.2 - May 5, 2021

Attached files