Lincoln National (LNC) 8-K Results of Operations and Financial Condition

Lincoln Financial Group
Table of Contents
First Quarter
2009
LFG Analyst Coverage	i
Notes	ii-iii
Financial Highlights	1 - 3
Consolidated Operating Expense Detail	4
Results Summary	5
Details Underlying Realized Loss, After-DAC	6
Consolidated Statements of Income	7
Consolidating Statements of Income from Operations - Current Year - Quarter	8
Consolidating Statements of Income from Operations - Prior Year - Quarter	9
Consolidated Balance Sheets	10
Balance Sheet Data - Segment Highlights	11
Retirement Solutions
Annuities:
Income Statements and Operational Data	12
Roll Forwards of DAC, VOBA, DFEL and DSI	13
Account Value Roll Forward	14
Account Values, Spread Information, GLB Expense Assessments,
GLB Attributed Fee and GLB Account Values by Type	15
Defined Contribution:
Income Statements and Operational Data	16
Account Value Roll Forward	17
Account Value Roll Forward - By Product and Supplemental Data	18
Insurance Solutions
Life Insurance:
Income Statements and Operational Data	19
Operational Data and Account Value Roll Forward	20
Group Protection:
Income Statements and Operational Data	21
Investment Management
Income Statements and Operational Data	22
Assets Under Management Roll Forward	23-24
Lincoln UK
Income Statements and Operational Data	25
Other Operations	26
Discontinued Operations	26
Domestic Deposits, Account Balances, and Net Flows	27
Consolidated Investment Data
Assets Managed	28
Other Investment Data	29

3/31/2009			i
LFG Analyst Coverage
First Quarter, 2009
FIRM	ANALYST	PHONE NUMBER
Bank of America - Merrill Lynch	Ed Spehar	212-449-4245
Barclays Capital	Eric Berg	212-526-2805
Bernstein	Suneet Kamath	212-756-4587
Citigroup	Colin Devine	212-816-1682
Credit Suisse	Tom Gallagher	212-538-2010
Deutsche Bank	Darin Arita	212-250-7321
Dowling & Partners	Paul Goulekas	860-676-8600
Fox-Pitt Kelton Cochran Caronia Waller	Mark Finkelstein	312-425-4079
Goldman Sachs & Company	Christopher Neczypor	212-357-8512
JP Morgan	Jimmy Bhullar	212-622-6397
Keefe, Bruyette & Woods	Jeff Schuman	860-722-5902
Langen McAlenney	Bob Glasspiegel	860-724-1203
Morgan Stanley	Nigel Dally	212-761-4132
Raymond James & Associates	Steven Schwartz	312-612-7686
Sterne, Agee & Leach	John Nadel	212-338-4717
UBS	Andrew Kligerman	212-713-2492
Wachovia Securities	John Hall	212-214-8032
Investor inquiries may be directed to:
Jim Sjoreen, Vice President, Investor Relations
Email: Jim.Sjoreen@lfg.com
Voice: (484) 583-1420
Fax: (484) 593-3962
Note: This list is provided for informational purposes only.  LFG does not endorse the analyses,
conclusions, or recommendations contained in any report issued by these or any other analysts.
**Statistical data will be available immediately after the release of earnings for each quarter through
LNC’s Investor Relations website:        http://www.LincolnFinancial.com/investor

3/31/2009		ii
NOTES
Definitions and Presentation
"Income (loss) from operations," "operating revenues" and "return on capital" are non-GAAP financial measures and do not replace GAAP revenues,
net income (loss) and return on stockholders' equity. Detailed reconciliations of these non-GAAP financial measures to the most directly
comparable GAAP financial measure are included in this statistical supplement.
*	We exclude the after-tax effects of the following items from GAAP net income (loss) to arrive at income (loss) from operations:
	* Realized gains and losses associated with the following ("excluded realized gain (loss)"):
	* Sale or disposal of securities;
	* Impairments of securities;
	* Change in the fair value of embedded derivatives within certain reinsurance arrangements and the change in the fair
	value of related trading securities;
	* Change in the fair value of the embedded derivatives of our guaranteed living benefits within our variable annuities
	("GLB") net of the change in the fair value of the derivatives we own to hedge the changes in the embedded derivative
	("GLB net derivatives results");
	* Net difference between the benefit ratio unlocking of SOP 03-1 reserves on our guaranteed death benefit ("GDB")
	riders within our variable annuities and the change in the fair value of the derivatives excluding our expected cost of the
	hedging instruments ("GDB derivatives results"); and
	* Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the
	future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products as
	required under SFAS 133 and SFAS 157 ("indexed annuity forward-starting option");
	* Income (loss) from the initial adoption of changes in accounting principles;
	* Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance;
	* Gains (losses) on early retirement of debt, including subordinated debt;
	* Losses from the impairment of intangible assets; and
	* Income (loss) from discontinued operations.
*	Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:
	* Excluded realized gain (loss);
	* Amortization of deferred gains arising from the reserve changes on business sold through reinsurance; and
	* Revenue adjustments from the initial impact of the adoption of changes in accounting principles.
*	Return on capital measures the effectiveness of our use of total capital, which includes equity (excluding accumulated other
	comprehensive income), debt, capital securities and junior subordinated debentures issued to affiliated trusts. Return on capital is
	calculated by dividing annualized income (loss) from operations (after adding back interest expense) by average capital. The difference
	between return on capital and return on stockholders' equity represents the effect of leveraging on our consolidated results.
Income (loss) from operations, operating revenues and return on capital are financial measures we use to evaluate and assess our results. Our
management and Board of Directors believe that these performance measures explain the results of our ongoing businesses in a manner that
allows for a better understanding of the underlying trends in our current business because the excluded items are unpredictable and not
necessarily indicative of current operating fundamentals or future performance of the business segments, and, in most instances, decisions
regarding these items do not necessarily relate to the operations of the individual segments.
*	Certain operating and statistical measures are included in this report to provide supplemental data regarding the performance of our
	current business. These measures include deposits, sales, net flows, first-year premiums, in force, spreads and assets under
	management.
*	Sales as reported consist of the following:
	* Universal life ("UL") (excluding linked-benefit products) and variable universal life ("VUL"), including corporate-owned life
	insurance ("COLI") and bank-owned life insurance ("BOLI") - first year commissionable premiums plus 5% of excess premiums
	received, including an adjustment for internal replacements at approximately 50% of target;
	* Whole life and term - 100% of first year paid premiums;
	* Linked-benefit - 15% of premium deposits;
	* Annuities - deposits from new and existing customers;
	* Group Protection - annualized first year premiums from new policies; and
	* Investment Management retail sales and institutional inflows - contributions, transfer in kind purchases
	and reinvested dividends for new and existing accounts.

		iii
Our roll forwards of deferred acquisition costs ("DAC") and value of business acquired ("VOBA"), deferred sales inducements ("DSI") and deferred
front-end loads ("DFEL") disclose the net impact of prospective and retrospective unlocking on amortization for these accounts. This information
helps explain a source of volatility in amortization.
*	Prospective unlocking - In the third quarter of each year, we review and update our assumptions used in projecting our future estimated
	gross profits ("EGPs") used to amortize DAC, VOBA, DFEL, DSI and the calculations of embedded derivatives and reserves for
	annuity and life insurance products with certain guarantees. We may also have prospective unlocking if we experience long-term
	or significant deviations from expected equity market returns requiring a change to best estimate projections of EGPs and reversion
	to the mean ("RTM") prospective unlocking of DAC, VOBA, DFEL, DSI and other contract holder funds. These updates to assumptions
	result in unlocking that represent an increase or decrease to our carrying value of DAC, VOBA, DFEL, DSI and other contract holder
	funds based upon our updated view of future EGPs. The various assumptions that are reviewed include investment margins, mortality,
	retention and rider utilization. In addition, in the third quarter of each year during our annual prospective unlocking review, we may
	identify and implement actuarial modeling refinements which can result in prospective and retrospective unlocking impacts that impact
	DAC, VOBA, DSI, DFEL and SOP 03-1, SFAS 133 and SFAS 157 reserves.
*	Retrospective unlocking - On a quarterly basis, we “true-up” our models for actual gross profits and in-force experience for the period.
	To the extent that actual experience differs from previously expected, a positive or negative retrospective adjustment to the
	amortization of DAC, VOBA, DSI and DFEL is recorded. This update to the models may generate a change in the amortization rate
	which results in a catch-up to the cumulative amortization, by recalculating the DAC, VOBA, DSI and DFEL balances assuming that
	the revised amortization rate had been used since issue.
Book value per share excluding accumulated other comprehensive income ("AOCI") is calculated based upon a non-GAAP financial measure. It is
calculated by dividing (a) stockholders' equity excluding AOCI, by (b) common shares outstanding. We provide book value per share excluding
AOCI to enable investors to analyze the amount of our net worth that is primarily attributable to our business operations. We believe 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 operating margin is calculated as income (loss) from operations before federal income taxes divided by operating revenues. After-tax operating
margin is calculated as income (loss) from operations divided by operating revenues.
Inter-segment transfer refers to a transfer from Retirement Solutions - Annuities to Retirement Solutions - Defined Contribution.

Reclassifications

In addition to the items discussed above, certain amounts reported in prior periods have been reclassed to the presentation adopted in the current period.

These reclassifications had no effect on net income, income from operations or stockholders' equity in the prior period.

3/31/2009										PAGE 1
Financial Highlights
Unaudited (in millions, except per share data)
	For the Three Months Ended March 31,
							Change
	2009			2008			Amount			%
Income from Operations - By Segment
Annuities	$	73.9		$	117.8		$	(43.9	)		-37.3	%
Defined Contribution		29.8			40.4			(10.6	)		-26.2	%
Total Retirement Solutions		103.7			158.2			(54.5	)		-34.5	%
Life Insurance		142.2			157.4			(15.2	)		-9.7	%
Group Protection		25.7			26.3			(0.6	)		-2.3	%
Total Insurance Solutions		167.9			183.7			(15.8	)		-8.6	%
Investment Management		1.4			12.1			(10.7	)		-88.4	%
Lincoln UK		6.2			10.7			(4.5	)		-42.1	%
Other Operations		(108.3	)		(42.3	)		(66.0	)	NM
Income from Operations (1)		170.9			322.4			(151.5	)		-47.0	%
Excluded realized loss, after-tax  (2)		(188.5	)		(29.5	)		(159.0	)	NM
Income from reserve changes (net of related amortization)
on business sold through reinsurance, after-tax		0.4			0.4			-			-
Gain on early extinguishment of debt, after-tax		41.8			-			41.8		NM
Impairment of intangibles, after-tax		(603.5	)		-			(603.5	)	NM
Income (loss) from discontinued operations, after-tax (3)		-			(4.2	)		4.2			100.0	%
Net Income (Loss)	$	(578.9	)	$	289.1		$	(868.0	)	NM
		-			-
Earnings Per Share (Diluted) (4)
Income from operations (1) (5)	$	0.66		$	1.23		$	(0.57	)		-46.3	%
Excluded realized loss, after-tax  (2) (6)		(0.73	)		(0.11	)		(0.62	)	NM
Gain on early extinguishment of debt, after-tax (6)		0.16			-			0.16		NM
Impairment of intangibles, after-tax (6)		(2.36	)		-			(2.36	)	NM
Income (loss) from discontinued operations, after-tax  (3) (6)		-			(0.02	)		0.02			100.0	%
Net Income (Loss)	$	(2.27	)	$	1.10		$	(3.37	)	NM
		-
Operating Revenues - By Segment
Annuities	$	599.4		$	622.6		$	(23.2	)		-3.7	%
Defined Contribution		225.1			237.7			(12.6	)		-5.3	%
Total Retirement Solutions		824.5			860.3			(35.8	)		-4.2	%
Life Insurance		1,076.2			1,054.6			21.6			2.0	%
Group Protection		421.4			399.4			22.0			5.5	%
Total Insurance Solutions		1,497.6			1,454.0			43.6			3.0	%
Investment Management		81.9			120.3			(38.4	)		-31.9	%
Lincoln UK		47.4			85.6			(38.2	)		-44.6	%
Other Operations		83.0			117.9			(34.9	)		-29.6	%
Total Operating Revenues		2,534.4			2,638.1			(103.7	)		-3.9	%
Excluded realized loss, pre-tax (2)		(289.9	)		(45.3	)		(244.6	)	NM
Amortization of deferred gains arising from reserve changes
on business sold through reinsurance, pre-tax		0.6			0.7			(0.1	)		-14.3	%
Total Revenues	$	2,245.1		$	2,593.5		$	(348.4	)		-13.4	%
		-			-
(1)  Income from operations includes restructuring charges.  See page 5 for detail.
(2) See page 6 for detail.
(3) Includes discontinued operations and the loss on disposal. See Discontinued Operations on page 26 for details.
(4) The income used in the calculation of our diluted earnings per share is reduced by minority interest adjustments related to outstanding stock options under the Delaware Investments U.S., Inc stock option incentive plan. See page 5 for detail of minority interest adjustments.
(5) As a result of income from operations in the first quarter of 2009, shares used in the earnings per share calculation represent diluted shares.
(6) As a result of the net loss in the first quarter of 2009, shares used in the earnings (loss) per share calculation represent basic shares since using diluted shares would have been anti-dilutive to the calculation. See page 3 for details.

3/31/2009										PAGE 2
Financial Highlights (Continued)
Unaudited (billions of dollars)
Operational Data by Segment	For the Three Months Ended March 31,
							Change
	2009			2008			Amount			%
Retirement Solutions - Annuities
Gross deposits	$	2.197		$	3.026		$	(0.829	)		-27.4	%
Net flows		0.430			1.181			(0.751	)		-63.6	%
Account values (gross)		57.155			72.667			(15.512	)		-21.3	%
Account values (net of reinsurance)		56.061			71.361			(15.300	)		-21.4	%
Retirement Solutions - Defined Contribution
Gross deposits (1)		1.575			1.551			0.024			1.5	%
Net flows		0.659			0.280			0.379			135.4	%
Account values - annuities		21.645			27.509			(5.864	)		-21.3	%
Alliance and Smart Future mutual funds		6.848			7.255			(0.407	)		-5.6	%
Total annuities and mutual fund account values		28.493			34.764			(6.271	)		-18.0	%
Insurance Solutions - Life Insurance
Sales (in millions)	$	145.2		$	173.6		$	(28.4	)		-16.4	%
Life insurance in force		525.234			536.873			(11.639	)		-2.2	%
Account values		30.031			32.341			(2.310	)		-7.1	%
Insurance Solutions - Group Protection
Annualized sales (in millions)		54.3			54.1			0.2			0.4	%
Loss ratio (2)		70.8	%		71.0	%	NM			NM
Investment Management
Retail sales	$	2.418		$	3.495		$	(1.077	)		-30.8	%
Retail net flows		(0.720	)		(0.655	)		(0.065	)		-9.9	%
Institutional inflows		2.712			1.228			1.484			120.8	%
Institutional net flows		0.931			(0.510	)		1.441			282.5	%
Total sales and inflows		5.130			4.723			0.407			8.6	%
Total net flows		0.211			(1.165	)		1.376			118.1	%
Assets under management - retail and institutional		51.810			78.538			(26.728	)		-34.0	%
Assets under management - general account		64.824			67.339			(2.515	)		-3.7	%
Assets under management - total segment		116.634			145.877			(29.243	)		-20.0	%
Consolidated
Domestic retail deposits	$	6.496		$	7.710		$	(1.214	)		-15.7	%
Domestic retail account balances		134.671			172.832			(38.161	)		-22.1	%
Domestic retail net flows		0.925			1.359			(0.434	)		-31.9	%
Domestic deposits		9.118			8.846			0.272			3.1	%
Domestic net flows		1.914			0.879			1.035			117.7	%
Assets under management		171.208			224.776			(53.568	)		-23.8	%
(1) Includes deposits for mutual funds. Mutual fund account values are not included in the separate accounts reported on our Consolidated Balance Sheets, as we do not have any ownership interest in them.
(2) Represents combined loss ratio for life, disability and dental businesses.

3/31/2009										PAGE 3
Financial Highlights (Continued)
Unaudited (millions of dollars)
	For the Three Months Ended March 31,
							Change
	2009			2008			Amount			%
Balance Sheet Assets - End-of-Period	$	157,426.9		$	185,349.3		$	(27,922.4	)		-15.1	%
Stockholders' Equity
Beginning-of-period (including AOCI)	$	7,976.8		$	11,718.4		$	(3,741.6	)		-31.9	%
End-of-period (including AOCI)		7,323.5			11,086.3			(3,762.8	)		-33.9	%
End-of-period (excluding AOCI)		10,298.6			11,408.0			(1,109.4	)		-9.7	%
Average equity (excluding AOCI)		10,539.5			11,450.5			(911.0	)		-8.0	%
Return on Equity
Net income (loss)/average equity (excluding AOCI)		-22.0	%		10.1	%
Income from operations/average equity (excluding AOCI)		6.5	%		11.3	%
Return on Capital
Income (loss) from operations/average capital		5.3	%		9.0	%
Common Stock Outstanding
Average for the period - diluted (1)		255.6			262.8			(7.2	)		-2.7	%
End-of-period - assuming conversion of preferreds		256.2			259.4			(3.2	)		-1.2	%
End-of-period - diluted (1)		258.1			260.5			(2.4	)		-0.9	%
Book value (including AOCI)	$	28.59		$	42.74		$	(14.15	)		-33.1	%
Book value (excluding AOCI)		40.20			43.98			(3.78	)		-8.6	%
Cash Returned to Shareholders
Share repurchase - dollar amount	$	-		$	285.7		$	(285.7	)		-100.0	%
Dividends declared		2.6			107.5			(104.9	)		-97.6	%
Total Cash Returned to Shareholders	$	2.6		$	393.2		$	(390.6	)		-99.3	%
Share repurchase - number of shares		-			5.450			(5.45	)		-100.0	%
Dividend declared on common stock - per share	$	0.010		$	0.415		$	(0.405	)		-97.6	%
Dividend payout ratio (2)		-0.4	%		37.7	%
Annualized yield (3)		0.6	%		3.2	%
Comprehensive Income (Loss)
Net income (loss)	$	(578.9	)	$	289.1		$	(868.0	)	NM
Net unrealized gain (loss) on available-for-sale securities		(120.2	)		(538.2	)		418.0			77.7	%
Unrealized other-than-temporary impairment on available-for-sale securities		(57.9	)		-			(57.9	)	NM
Net unrealized gain on derivative instruments		(69.3	)		(8.3	)		(61.0	)	NM
Foreign currency translation adjustment		16.9			(1.2	)		18.1		NM
Funded status of employee benefit plans		0.9			0.6			0.3			50.0	%
Comprehensive Income (Loss)	$	(808.5	)	$	(258.0	)	$	(550.5	)	NM
Ratios
Debt to total capitalization (4)		27.3	%		21.7	%
Debt to equity (4)		37.6	%		27.7	%
	Ratings as of May 5, 2009
										Standard &
	A.M. Best			Fitch			Moody's			Poor's
Senior Debt Ratings		a-		BBB			Baa2				A-
Financial Strength Ratings
Lincoln National Life Insurance Company		A+			A+			A2		AA-
First Penn-Pacific Life Insurance Company		A+			A+			A2			A+
Lincoln Life & Annuity Company of New York		A+			A+			A2		AA-
(1) As a result of the net loss in the first quarter of 2009, shares used represent basic shares, since using diluted shares would have been anti-dilutive to the calculation. In the absence of the net loss, weighted average diluted shares for the first quarter of 2009 would have totaled 257.8 million.
(2)  Indicated dividend divided by net income (loss) per share.
(3)  Indicated dividend divided by the closing price.
(4) Equity used in calculation excludes AOCI and $375 million of senior notes issued in October of 2007 because the proceeds were reinvested in a pool of long-term assets. Capital securities are considered 25% debt and 75% equity.

3/31/2009																PAGE 4
Consolidated Operating Expense Detail
Unaudited (in millions)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Commissions	$	423.9		$	430.7		$	431.9		$	406.6		$	362.4			-14.5	%
General and Administrative Expenses
General and administrative expenses		403.3			404.8			399.1			432.9			374.4			-7.2	%
Merger-related expenses		13.8			14.9			12.6			8.1			6.7			-51.4	%
Total General and Administrative Expenses
Excluding Broker-Dealer		417.1			419.7			411.7			441.0			381.1			-8.6	%
Communications expenses		15.5			15.4			14.1			14.8			12.9			-16.8	%
Restructuring charges associated with merger-related cost saving initiatives		0.9			1.2			0.4			0.1			-			-100.0	%
Restructuring charges for expense initiatives		-			-			-			8.0			5.1		NM
Taxes, licenses and fees		62.3			52.3			60.3			49.0			57.4			-7.9	%
Interest and debt expense		75.4			64.8			68.6			72.3			64.7			-14.2	%
Total Commissions and Expenses Incurred		995.1			984.1			987.0			991.8			883.6			-11.2	%
Less: Commissions and Expenses Capitalized		(456.5	)		(464.7	)		(464.2	)		(471.2	)		(384.1	)		15.9	%
Amortization
Amortization of DAC and VOBA, net of interest		255.2			309.0			219.6			652.4			224.5			-12.0	%
Amortization of intangibles		1.6			1.6			1.4			1.4			1.1			-31.3	%
Total Amortization		256.8			310.6			221.0			653.8			225.6			-12.1	%
Broker-Dealer Commissions and G&A		89.2			85.1			78.5			73.3			64.1			-28.1	%
Total	$	884.6		$	915.1		$	822.3		$	1,247.7		$	789.2			-10.8	%
		(0.0	)		0.0				)		0.0			-
Merger-Related Expenses (1)
Severance and employee-related charges	$	3.1		$	2.5		$	1.2		$	1.7		$	0.7			-77.4	%
Systems integration and related expenses		9.3			12.0			9.6			7.5			5.1			-45.2	%
Other expenses		2.3			1.6			2.2			(1.0	)		0.9			-60.9	%
Total Merger-Related Expenses	$	14.7		$	16.1		$	13.0		$	8.2		$	6.7			-54.4	%
(1)  Represents merger-related expenses included in general and administrative expenses and restructuring charges.

3/31/2009																PAGE 5
Results Summary
Unaudited (millions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Operating Revenues
Annuities	$	622.6		$	618.7		$	675.2		$	693.7		$	599.4			-3.7	%
Defined Contribution		237.7			239.4			240.8			217.9			225.1			-5.3	%
Total Retirement Solutions		860.3			858.1			916.0			911.6			824.5			-4.2	%
Life Insurance		1,054.6			1,087.9			1,073.8			1,042.8			1,076.2			2.0	%
Group Protection		399.4			424.9			402.8			412.5			421.4			5.5	%
Total Insurance Solutions		1,454.0			1,512.8			1,476.6			1,455.3			1,497.6			3.0	%
Investment Management		120.3			124.3			109.9			83.2			81.9			-31.9	%
Lincoln UK		85.6			97.9			79.8			64.4			47.4			-44.6	%
Other Operations		117.9			110.1			111.8			98.6			83.0			-29.6	%
Total Operating Revenues		2,638.1			2,703.2			2,694.1			2,613.1			2,534.4			-3.9	%
Excluded realized loss, pre-tax (1)		(45.3	)		(120.3	)		(256.5	)		(337.1	)		(289.9	)	NM
Amortization of deferred gains arising from reserve changes on business sold through reinsurance, pre-tax		0.7			0.7			0.6			0.7			0.6			-14.3	%
Total Revenues	$	2,593.5		$	2,583.6		$	2,438.2		$	2,276.7		$	2,245.1			-13.4	%
		-			-			-			-			-
Income (Loss) from Operations
Annuities	$	117.8		$	116.2		$	130.9		$	(171.7	)	$	73.9			-37.3	%
Defined Contribution		40.4			41.2			42.3			(1.1	)		29.8			-26.2	%
Total Retirement Solutions		158.2			157.4			173.2			(172.8	)		103.7			-34.5	%
Life Insurance		157.4			163.6			137.3			82.5			142.2			-9.7	%
Group Protection		26.3			32.2			27.2			18.4			25.7			-2.3	%
Total Insurance Solutions		183.7			195.8			164.5			100.9			167.9			-8.6	%
Investment Management		12.1			15.0			5.3			(4.3	)		1.4			-88.4	%
Lincoln UK		10.7			18.0			12.3			9.4			6.2			-42.1	%
Other Operations		(42.3	)		(44.4	)		(39.5	)		(54.8	)		(108.3	)	NM
Income (Loss) from Operations		322.4			341.8			315.8			(121.6	)		170.9			-47.0	%
Excluded realized loss, after-tax (1)		(29.5	)		(78.2	)		(166.8	)		(219.1	)		(188.5	)	NM
Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance, after-tax		0.4			0.4			0.4			0.4			0.4			0.0	%
Gain on early extinguishment of debt, after-tax		-			-			-			-			41.8		NM
Impairment of intangibles, after-tax		-			(139.0	)		-			(165.6	)		(603.5	)	NM
Income (loss) from discontinued operations, after-tax (2)		(4.2	)		(0.3	)		(1.0	)		0.4			-			100.0	%
Net Income (Loss)	$	289.1		$	124.7		$	148.4		$	(505.5	)	$	(578.9	)	NM
	For the Three Months Ended
	March			June			Sept.			Dec.			March
		2008			2008			2008			2008			2009
Stockholders' Equity
Beginning-of-period (including AOCI)	$	11,718.4		$	11,086.3		$	10,497.7		$	9,500.1		$	7,976.8
End-of-period (including AOCI)		11,086.3			10,497.7			9,500.1			7,976.8			7,323.5
End-of-period (excluding AOCI)		11,408.0			11,306.0			11,310.4			10,780.3			10,298.6
Average equity (excluding AOCI)		11,450.5			11,357.0			11,308.2			11,045.3			10,539.5
Minority Interest Adjustment  (3)	$	0.3		$	0.2		$	0.1		$	-		$	0.1
Restructuring Charges, After-Tax	$	0.6		$	0.8		$	0.3		$	5.3		$	3.3
Common Shares Outstanding
Average for the period - diluted - income from operations (4)		262.8			259.6			257.6			255.4			257.8
Average for the period - diluted - net income (5)		262.8			259.6			257.6			255.4			255.6
End-of-period - diluted (4)		260.5			257.8			256.9			257.7			258.1
Per Share Data (Diluted) (3)
Net income (loss) (5)	$	1.10		$	0.48		$	0.58		$	(1.98	)	$	(2.27	)
Income (loss) from operations (4)		1.23			1.32			1.23			(0.48	)		0.66
Restructuring charges		0.00			0.00			0.00			0.02			0.01
Stockholders' Equity Per Share
Stockholders' equity (including AOCI)	$	42.74		$	40.85		$	37.11		$	31.15		$	28.59
Stockholders' equity (excluding AOCI)		43.98			43.99			44.18			42.09			40.20
Dividends declared (common stock)		0.415			0.415			0.415			0.210			0.010
Return on Equity
Net income (loss)/average equity		10.1	%		4.4	%		5.2	%		-18.3	%		-22.0	%
Income (loss) from operations/average equity		11.3	%		12.0	%		11.2	%		-4.4	%		6.5	%
Market Value of Common Stock
Highest price	$	58.11		$	56.80		$	59.99		$	45.50		$	25.59
Lowest price		45.50			45.18			39.83			4.76			4.90
Closing price		52.00			45.32			42.81			18.84			6.69
(1)  See page 6 for detail.
(2) Includes discontinued operations and the loss on disposition. See Discontinued Operations on page 26 for details.
(3) The income used in the calculation of our diluted earnings per share is reduced by minority interest adjustments related to outstanding stock options under the Delaware Investments U.S., Inc stock option incentive plan.
(4) As a result of income from operations in the first quarter of 2009, shares used represent diluted shares.
(5) As a result of the net loss in the first quarter of 2009 and fourth quarter of 2008, shares used represent basic shares, since using diluted shares would have been anti-dilutive to the calculation. In the absence of the net loss, weighted average diluted shares for the first quarter of 2009 and fourth quarter of 2008 would have totaled 257.8 million and 257.6 million, respectively.

3/31/2009                                                                                                                                 ;                                                                                                                                                               PAGE 6
Details Underlying Realized Loss, After-DAC (1)
Unaudited (millions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Pre-Tax
Operating realized gain (2):
Indexed annuity net derivatives results (3)	$	(1.4	)	$	(0.6	)	$	2.0		$	(0.5	)	$	(0.2	)		85.7	%
GLB (4)		5.8			10.4			10.9			11.1			16.3			181.0	%
GDB (5)		5.8			2.6			39.4			136.9			80.7		NM
Total operating realized gain		10.2			12.4			52.3			147.5			96.8		NM
Realized loss related to certain investments (6)		(41.1	)		(124.6	)		(313.9	)		(569.5	)		(152.5	)	NM
Gain (loss) on certain reinsurance derivative/
trading securities (7)		0.4			1.5			(1.8	)		3.4			21.7		NM
GLB net derivatives results (8)		(6.7	)		1.4			88.8			314.5			(130.3	)	NM
GDB derivatives results (5)		(5.2	)		(2.5	)		(33.4	)		(86.3	)		(31.6	)	NM
Indexed annuity forward-starting option (9)		4.8			2.1			1.6			(1.4	)		0.6			-87.5	%
Gain on sale of subsidiaries/businesses		2.5			1.8			2.2			2.2			2.2			-12.0	%
Total excluded realized loss		(45.3	)		(120.3	)		(256.5	)		(337.1	)		(289.9	)	NM
Total Realized Loss	$	(35.1	)	$	(107.9	)	$	(204.2	)	$	(189.6	)	$	(193.1	)	NM
After-Tax
Operating realized gain (2):
Indexed annuity net derivatives results (3)	$	(0.9	)	$	(0.4	)	$	1.3		$	(0.3	)	$	(0.1	)		88.89	%
GLB (4)		3.8			6.8			7.1			7.2			10.6			178.9	%
GDB (5)		3.8			1.7			25.6			89.0			52.5		NM
Total operating realized gain		6.7			8.1			34.0			95.9			63.0		NM
Realized loss related to certain investments (6)		(27.1	)		(80.6	)		(204.0	)		(370.1	)		(99.1	)	NM
Gain (loss) on certain reinsurance derivative/
trading securities (7)		0.6			0.6			(1.2	)		2.2			14.1		NM
GLB net derivatives results (8)		(4.2	)		0.9			57.6			204.4			(84.8	)	NM
GDB derivatives results (5)		(3.4	)		(1.6	)		(21.6	)		(56.1	)		(20.5	)	NM
Indexed annuity forward-starting option (9)		3.1			1.4			1.0			(0.9	)		0.4			-87.1	%
Gain (loss) on sale of subsidiaries/businesses		1.5			1.1			1.4			1.4			1.4			-6.7	%
Total excluded realized loss		(29.5	)		(78.2	)		(166.8	)		(219.1	)		(188.5	)	NM
Total Realized Loss	$	(22.8	)	$	(70.1	)	$	(132.8	)	$	(123.2	)	$	(125.5	)	NM
Components of GLB Net Derivatives Results
Net valuation premium, net of reinsurance (10)	$	17.0		$	19.2		$	21.4		$	22.3		$	22.2			30.6	%
Change in reserves hedged (10):
Unlocking		-			-			79.6			84.3			-		NM
Other		(374.5	)		213.4			(650.9	)		(2,657.0	)		233.2			162.3	%
Change in market value of derivative assets (10)		315.1			(245.8	)		318.4			2,969.1			(309.8	)	NM
Hedge program ineffectiveness (10)		(59.4	)		(32.4	)		(252.9	)		396.4			(76.6	)		-29.0	%
Change in reserves not hedged (10)		92.3			16.4			372.0			158.8			(55.4	)	NM
Change in SOP 03-1 reserve not hedged (10)		-			-			-			-			(6.3	)	NM
Associated amortization expense of DAC,
VOBA, DSI and DFEL:
Unlocking		10.5			(0.6	)		(100.7	)		297.7			(61.0	)	NM
Other amortization		(33.6	)		(1.2	)		49.0			(560.7	)		46.8			239.3	%
Loss from the initial impact of adopting SFAS 157, after-DAC		(33.5	)		-			-			-			-			100.0	%
GLB Net Derivatives Results (8)	$	(6.7	)	$	1.4		$	88.8		$	314.5		$	(130.3	)	NM

(1) DAC refers to the associated amortization expense of DAC, VOBA, DSI and DFEL and changes in other contract holder funds and funds withheld reinsurance liabilities.

(2) We exclude from our definitions of income (loss) from operations and operating revenues any realized gains (losses) that are 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.

(3) Represents the net difference between the change in the fair value of the S&P 500 Index® call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity products. The change in the fair value of the liability for the embedded derivative represents the amount that is credited to the indexed annuity contract.

(4)In bifurcating the embedded derivative for our GLBs, we attribute to the embedded derivative the portion of total fees collected from the contract holder that relates to the GLB riders (the “attributed fees”). These attributed fees represent the present value of future claims expected to be paid for the GLB at the inception of the contract (the “net valuation premium”) plus a margin that a theoretical market participant would include for risk/profit (the “risk/profit margin”). We include the risk/profit margin portion of the GLB attributed rider fees as well as the benefit ratio unlocking of our SOP 03-1 reserves on GLB riders including expected costs of the hedging instruments in operating realized gain and include the net valuation premium of the GLB attributed rider fees in excluded realized gain (loss). For our Retirement Solutions – Annuities and Retirement Solutions – Defined Contribution segments, the excess of total fees collected from the contract holders over the GLB attributed rider fees is reported in insurance fees.

(5) Represents the change in the fair value of the derivatives that offsets the benefit ratio unlocking of our SOP 03-1 reserves on our GDB riders, including our expected cost of the hedging instruments. These changes in reserves attributable to Retirement Solutions’ benefit ratio unlocking of its SOP 03-1 reserves for GDB riders and associated amortization of DAC, VOBA, DSI and DFEL is offset in benefits within income from operations. This approach (as well as the one in (4) above) excludes the benefit ratio unlocking from income from operations according to our definition of income from operations and instead reflects it within GDB derivatives results, a component of excluded realized gain (loss). On our Consolidated Statements of Income, the benefit ratio unlocking is reported within benefits.

(6) See page 29 for detail.

(7) Represents changes in the fair values of total return swaps (embedded derivatives) theoretically included in our various modified coinsurance and coinsurance with funds withheld reinsurance arrangements that have contractual returns related to various assets and liabilities associated with these arrangements. Changes in the fair value of these derivatives are offset by the change in fair value of trading securities in the portfolios that support these arrangements.

(8) Represents the net valuation premium, the change in the fair value of the embedded derivative liabilities of our GLB products and the change in the fair value of the derivative instruments we own to hedge. This includes the cost of purchasing the hedging instruments. Refer to the table above titled "Components of GLB Net Derivatives Results" for a detailed breakout of the GLB net derivatives results line item.

(9) Represents changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products as required under SFAS 133 and SFAS 157. These fair values represent an estimate of the cost of the options we will purchase in the future, discounted back to the date of the balance sheet, using current market indications of volatility and interest rates, which can vary significantly from period to period due to a number of factors and therefore can provide results that are not indicative of the underlying trends.

(10) Amounts are before the associated amortization expense of DAC, VOBA, DSI and DFEL.

3/31/2009																PAGE 7
Consolidated Statements of Income
Unaudited (in millions)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Revenues
Insurance premiums	$	508.8		$	529.7		$	533.2		$	524.5		$	518.5			1.9	%
Surrender charges		28.9			27.8			32.3			33.0			31.8			10.0	%
Mortality assessments		330.8			337.0			340.3			346.6			351.1			6.1	%
Expense assessments		454.1			479.4			421.0			407.4			344.9			-24.0	%
Investment advisory fees		76.2			75.8			67.7			48.4			43.7			-42.7	%
Net investment income		1,065.4			1,076.8			1,089.0			976.9			1,026.6			-3.6	%
Realized loss:
Total other-than-temporary impairment losses on securities		(56.5	)		(99.8	)		(239.1	)		(457.2	)		(213.8	)	NM
Portion of loss recognized in other comprehensive income		-			-			-			-			89.2		NM
Net other-than-temporary impairment losses on securities recognized in earnings		(56.5	)		(99.8	)		(239.1	)		(457.2	)		(124.6	)		100.0	%
Realized gain (loss), excluding other-than-temporary impairment losses on securities		21.5			(8.1	)		34.7			267.7			(68.5	)		NM
Total realized loss (1)		(35.1	)		(107.9	)		(204.2	)		(189.6	)		(193.1	)	NM
Amortization of deferred gains on business sold through reinsurance		19.1			19.1			19.1			19.0			19.0			-0.5	%
Other revenues and fees		145.3			145.9			140.0			110.4			102.6			-29.4	%
Total Revenues		2,593.6			2,583.6			2,438.2			2,276.7			2,245.1			-13.4	%
		-			-			-			-			-
Benefits and Expenses
Interest credited		611.7			612.7			624.7			653.1			626.9			2.5	%
Benefits		679.0			686.5			839.1			961.2			938.9			38.3	%
Underwriting, acquisition, insurance and other expenses		809.2			844.8			753.7			1,168.3			724.5			-10.5	%
Interest and debt expense		75.4			64.8			68.6			72.3			0.4			-99.5	%
Impairment of intangibles		-			175.0			-			217.7			603.7		NM
Total Benefits and Expenses		2,175.3			2,383.8			2,286.1			3,072.6			2,894.4			33.1	%
		-			-			-			-			-
Income (loss) from continuing operations before taxes		418.3			199.8			152.1			(795.9	)		(649.3	)	NM
Federal income tax expense (benefit)		125.0			74.8			2.7			(290.0	)		(70.4	)	NM
Income (Loss) from Continuing Operations		293.3			125.0			149.4			(505.9	)		(578.9	)	NM
Income (loss) from discontinued operations, net of federal income tax expense (benefit) (2)		(4.2	)		(0.3	)		(1.0	)		0.4			-			100.0	%
Net Income (Loss)	$	289.1		$	124.7		$	148.4		$	(505.5	)	$	(578.9	)	NM
		-			(0.0	)		-			-			-
Earnings (Loss) Per Share (Diluted) (3) (4)
Income (loss) from continuing operations	$	1.12		$	0.48		$	0.58		$	(1.98	)	$	(2.27	)	NM
Loss from discontinued operations, net of federal income tax expense (benefit) (2)		(0.02	)		-			-			-			-			100.0	%
Net Income (Loss)	$	1.10		$	0.48		$	0.58		$	(1.98	)	$	(2.27	)	NM
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	9,579.8		$	9,995.5		$	10,608.1		$	11,651.7		$	11,936.8
Business sold through reinsurance		-			-			-			-			(292.9	)
Deferrals		456.5			464.7			464.2			471.2			384.1
Amortization, net of interest:
Unlocking		(10.9	)		(17.5	)		18.1			(556.1	)		(74.4	)
Other amortization		(244.3	)		(291.5	)		(237.7	)		(96.3	)		(150.1	)
Deferrals, net of amortization included in underwriting, acquisition, insurance and other expenses		201.3			155.7			244.6			(181.2	)		159.6
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		(1.4	)		4.8			34.4			(142.6	)		12.8
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		216.6			449.5			844.7			726.2			115.0
Foreign currency translation adjustment		(0.8	)		2.6			(80.1	)		(117.3	)		(9.0	)
Balance at End-of-Period	$	9,995.5		$	10,608.1		$	11,651.7		$	11,936.8		$	11,922.3
Roll Forward of DFEL
Balance at beginning-of-period	$	1,183.1		$	1,235.6		$	1,281.5		$	1,324.9		$	1,281.6
Business sold through reinsurance		-			-			-			-			(11.0	)
Deferrals		102.0			104.1			110.5			114.9			108.8
Amortization, net of interest:
Unlocking		(3.2	)		(10.4	)		15.1			(60.6	)		(8.2	)
Other amortization		(46.6	)		(48.7	)		(40.5	)		(24.8	)		(31.0	)
Deferrals, net of amortization included in expense assessments		52.2			45.0			85.1			29.5			69.6
Adjustment related to realized gains (losses) on available-for-sale securities and derivatives		0.8			(0.5	)		(2.4	)		(15.3	)		(4.4	)
Adjustment related to unrealized gains (losses) on available-for-sale securities and derivatives		-			-			-			-			1.4
Foreign currency translation adjustment		(0.5	)		1.4			(39.3	)		(57.5	)		(4.4	)
Balance at End-of-Period	$	1,235.6		$	1,281.5		$	1,324.9		$	1,281.6		$	1,332.8
		-			-			-			-			-
Roll Forward of DSI
Balance at beginning-of-period	$	279.2		$	297.6		$	314.2		$	328.3		$	262.7
Deferrals		26.0			26.3			24.5			19.0			15.9
Amortization, net of interest:
Unlocking		0.5			(0.2	)		(2.7	)		(48.2	)		(5.7	)
Other amortization		(6.2	)		(8.5	)		(5.5	)		4.6			1.1
Deferrals, net of amortization included in insurance benefits or interest credited		20.3			17.6			16.3			(24.6	)		11.3
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		(1.9	)		(1.0	)		(2.2	)		(41.0	)		5.2
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		-			-			-			-			0.2
Balance at End-of-Period	$	297.6		$	314.2		$	328.3		$	262.7		$	279.4
(1)   See page 6 for detail.
(2) Contains discontinued operations and the loss on disposition. See Discontinued Operations on page 26 for additional details.
(3) The income used in the calculation of our diluted earnings per share is reduced by minority interest adjustments related to outstanding stock options under the Delaware Investments U.S., Inc stock option incentive plan. See page 5 for detail of our minority interest adjustments.
(4) As a result of the net loss in the first quarter of 2009 and the fourth quarter of 2008, shares used in the earnings (loss) per share calculation represent basic shares, since using diluted shares would have been anti-dilutive to the calculation. In the absence of the net loss, weighted average diluted shares for the first quarter of 2009 and the fourth quarter of 2008 would have totaled 257.8 million and 257.6 million, respectively.

3/31/2009																	PAGE 8
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Quarter Ended March 31, 2009
	Retirement Solutions					Insurance Solutions
				Defined				Group		Investment				Other
	Annuities			Contribution		Life		Protection		Management		Lincoln UK		Operations (1)			Consolidated
Operating Revenues
Insurance premiums	$	27.1		$	-	$	90.5	$	389.8	$	-	$	10.3	$	0.8		$	518.5
Surrender charges		9.2			1.0		21.6		-		-		-		-			31.8
Mortality assessments		-			-		344.1		-		-		7.0		-			351.1
Expense assessments		171.5			39.6		116.5		-		-		16.7		-			344.3
Investment advisory fees - external		-			-		-		-		43.7		-		-			43.7
Investment advisory fees - inter-segment		-			-		-		-		19.9		-		(19.9	)		-
Net investment income		240.4			175.5		497.7		30.1		-		13.4		69.7			1,026.8
Operating realized gain (2)		90.2			6.6		-		-		-		-		-			96.8
Amortization of deferred gain on business sold through reinsurance		-			-		-		-		-		-		18.4			18.4
Other revenues and fees		61.0			2.4		5.8		1.5		18.3		-		14.0			103.0
Total Operating Revenues		599.4			225.1		1,076.2		421.4		81.9		47.4		83.0			2,534.4
Operating Expenses
Interest credited		161.1			111.5		302.8		0.6		-		-		50.9			626.9
Benefits		169.8			6.4		355.7		282.0		-		18.4		106.6			938.9
Underwriting, acquisition, insurance and other expenses		205.9			70.8		224.0		99.3		58.5		19.5		46.5			724.5
Expenses for investment advisory fees - inter-segment		-			-		-		-		19.9		-		(19.9	)		-
Interest and debt expense		-			-		-		-		-		-		64.7			64.7
Total Operating Expenses		536.8			188.7		882.5		381.9		78.4		37.9		248.8			2,355.0
Income (loss) from operations before federal income tax expense (benefit)		62.6			36.4		193.7		39.5		3.5		9.5		(165.8	)		179.4
Federal income tax expense (benefit)		(11.3	)		6.6		51.5		13.8		2.1		3.3		(57.5	)		8.5
Income (Loss) from Operations	$	73.9		$	29.8	$	142.2	$	25.7	$	1.4	$	6.2	$	(108.3	)	$	170.9
		0.0			0.0		0.0		0.0		0.0		0.0		0.0			0.0
(1) Includes inter-segment eliminations.
(2)  For detail, see pages 12 and 16.

3/31/2009																PAGE 9
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Quarter Ended March 31, 2008
	Retirement Solutions				Insurance Solutions
			Defined				Group		Investment				Other
	Annuities		Contribution		Life		Protection		Management		Lincoln UK		Operations (1)			Consolidated
Operating Revenues
Insurance premiums	$	31.6	$	-	$	86.4	$	370.4	$	-	$	19.0	$	1.4		$	508.8
Surrender charges		9.6		1.9		17.2		-		-		-		-			28.7
Mortality assessments		-		-		321.7		-		-		9.1		-			330.8
Expense assessments		236.0		59.3		121.3		-		-		37.1		-			453.7
Investment advisory fees - external		-		-		-		-		76.2		-		-			76.2
Investment advisory fees - inter-segment		-		-		-		-		20.0		-		(20.0	)		-
Net investment income		247.8		171.7		499.3		27.7		-		20.3		98.6			1,065.4
Operating realized gain (2)		10.2		-		-		-		-		-		-			10.2
Amortization of deferred gain on business sold through reinsurance		-		-		-		-		-		-		18.5			18.5
Other revenues and fees		87.4		4.8		8.7		1.3		24.1		0.1		19.4			145.8
Total Operating Revenues		622.6		237.7		1,054.6		399.4		120.3		85.6		117.9			2,638.1
Operating Expenses
Interest credited		163.2		105.9		296.5		0.2		-		-		45.8			611.6
Benefits		51.4		-		300.1		269.1		-		30.7		27.8			679.1
Underwriting, acquisition, insurance and other expenses		251.7		76.3		219.5		89.6		81.1		38.5		52.5			809.2
Expenses for investment advisory fees - inter-segment		-		-		-		-		20.0		-		(20.0	)		-
Interest and debt expense		-		-		-		-		-		-		75.4			75.4
Total Operating Expenses		466.3		182.2		816.1		358.9		101.1		69.2		181.5			2,175.3
Income (loss) from operations before federal income tax expense (benefit)		156.3		55.5		238.5		40.5		19.2		16.4		(63.6	)		462.8
Federal income tax expense (benefit)		38.5		15.1		81.1		14.2		7.1		5.7		(21.3	)		140.4
Income (Loss) from Operations	$	117.8	$	40.4	$	157.4	$	26.3	$	12.1	$	10.7	$	(42.3	)	$	322.4
(1) Includes inter-segment eliminations.
(2)  For detail, see page 12.

3/31/2009													PAGE 10
Consolidated Balance Sheets
Unaudited (millions of dollars)
	As of
	March			June			Sept.			Dec.			March
	2008			2008			2008			2008			2009
ASSETS
Investments:
Corporate bonds	$	43,535.4		$	42,618.0		$	40,020.7		$	36,710.4		$	37,705.4
U.S. Government bonds		231.9			203.9			217.0			245.9			233.4
Foreign government bonds		1,037.4			907.5			786.5			760.8			764.8
Asset and mortgage-backed securities		10,568.8			10,547.7			10,661.6			10,129.6			9,754.6
State and municipal bonds		153.0			141.7			129.7			125.4			125.6
Preferred stocks - redeemable		97.5			98.8			115.6			962.3			765.1
Common stocks		384.2			330.7			433.5			234.4			162.1
Preferred stocks - equity		90.2			133.9			59.1			54.1			42.9
Total available-for-sale securities		56,098.4			54,982.2			52,423.7			49,222.9			49,553.9
Trading securities		2,713.6			2,550.5			2,393.4			2,332.5			2,245.6
Mortgage loans on real estate		7,531.9			7,677.9			7,688.1			7,715.4			7,615.9
Real estate		175.3			135.7			126.9			125.4			129.4
Policy loans		2,854.8			2,852.5			2,870.1			2,923.3			2,907.6
Derivative investments		1,091.1			889.9			1,262.2			3,397.2			2,226.1
Other investments		1,141.0			1,163.5			1,193.0			1,624.2			1,476.3
Total investments		71,606.1			70,252.2			67,957.4			67,340.9			66,154.8
Cash and invested cash		2,446.8			1,921.4			2,159.7			5,926.4			5,613.4
DAC and VOBA		9,995.5			10,608.1			11,651.7			11,936.8			11,922.3
Premiums and fees receivable		468.1			399.3			463.2			481.4			488.8
Accrued investment income		917.3			875.9			921.2			831.8			881.4
Reinsurance recoverables		8,356.4			8,168.9			8,222.5			8,450.4			8,033.1
Reinsurance related derivative assets		-			-			9.2			31.2			106.9
Goodwill		4,128.4			4,045.0			4,041.3			3,944.1			3,344.1
Other assets		2,727.6			2,715.0			2,882.9			3,560.2			3,395.6
Separate account assets		84,703.1			85,295.4			74,970.8			60,632.6			57,486.5
Total Assets	$	185,349.3		$	184,281.2		$	173,279.9		$	163,135.8		$	157,426.9
		-			-			-			-			-
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Future contract benefits	$	16,501.0		$	16,218.1		$	16,572.0		$	19,259.7		$	18,836.2
Other contract holder funds		60,175.8			60,362.5			60,387.2			60,847.1			61,525.3
Short-term debt		410.6			900.0			635.2			814.7			1,435.7
Long-term debt		4,627.0			4,101.8			4,569.4			4,731.0			4,344.9
Reinsurance related derivative liabilities		205.2			112.5			-			-			-
Funds withheld reinsurance liabilities		2,117.0			2,068.7			2,062.4			2,042.3			1,215.0
Deferred gain on indemnity reinsurance		676.6			657.6			638.5			619.5			547.7
Payables for collateral under securities loaned and derivatives		1,796.2			1,491.1			1,668.4			3,705.9			2,385.9
Other liabilities		3,050.5			2,575.8			2,275.9			2,506.2			2,326.2
Separate account liabilities		84,703.1			85,295.4			74,970.8			60,632.6			57,486.5
Total liabilities		174,263.0			173,783.5			163,779.8			155,159.0			150,103.4
Stockholders' Equity
Preferred stock		0.4			0.4			0.4			0.4			0.4
Common stock		7,074.8			7,023.1			7,006.4			7,035.3			7,033.5
Retained earnings		4,332.8			4,282.5			4,303.6			3,744.6			3,264.7
Accumulated other comprehensive income (loss):
Net unrealized gain (loss) on available-for-sale securities		(452.1	)		(939.4	)		(1,903.7	)		(2,654.5	)		(2,698.7	)
Unrealized other-than-temporary impairment on available-for-sale securities		-			-			-			-			(76.0	)
Net unrealized gain on derivative instruments		43.9			41.4			53.5			127.1			57.8
Foreign currency translation adjustment		174.4			177.2			121.2			6.3			23.2
Funded status of employee benefit plans		(87.9	)		(87.5	)		(81.3	)		(282.4	)		(281.4	)
Total accumulated other comprehensive income (loss)		(321.7	)		(808.3	)		(1,810.3	)		(2,803.5	)		(2,975.1	)
Total stockholders' equity		11,086.3			10,497.7			9,500.1			7,976.8			7,323.5
Total Liabilities and Stockholders' Equity	$	185,349.3		$	184,281.2		$	173,279.9		$	163,135.8		$	157,426.9
		-			-			-			-			-
Share Data
Stockholders' equity per share	$	42.74		$	40.85		$	37.11		$	31.15		$	28.59
Book value, excluding AOCI		43.98			43.99			44.18			42.09			40.20
Common shares outstanding - assuming conversion of preferred shares (in millions)		259.4			257.0			256.0			256.1			256.2

3/31/2009																PAGE 11
Balance Sheet Data - Segment Highlights
Unaudited (in millions)
	Retirement Solutions				Insurance Solutions
As of March 31, 2009	Annuities		Defined Contribution		Life		Group Protection		Investment Management		Lincoln UK		Other Operations (1)			Consolidated
Assets
Allocated investments and cash and invested cash (2)	$	21,612.9	$	11,565.8	$	31,353.8	$	2,015.2	$	131.1	$	948.1	$	4,141.3		$	71,768.2
DAC and VOBA		3,056.6		918.2		7,265.0		148.7		-		522.8		11.0			11,922.3
Goodwill		439.8		20.2		2,188.5		274.3		247.7		-		173.6			3,344.1
DSI and other intangibles		277.2		4.1		88.0		-		5.0		-		169.4			543.7
Reinsurance recoverables		726.4		-		2,858.3		36.5		-		57.1		4,354.8			8,033.1
Separate account assets		39,232.2		9,716.8		3,828.3		-		-		4,551.3		157.9			57,486.5
Liabilities and Capital
Future contract benefits		3,764.1		29.9		6,489.3		1,407.8		-		797.4		6,347.7			18,836.2
Other contract holder funds		17,432.3		11,914.1		30,186.4		157.3		-		270.5		1,564.7			61,525.3
Allocated capital (3)		4,294.7		1,032.9		8,008.4		1,039.7		359.8		384.8		(4,821.7	)		10,298.6
As of December 31, 2008
Assets
Allocated investments and cash and invested cash (2)	$	23,175.5	$	11,304.2	$	31,934.0	$	1,962.9	$	174.2	$	1,002.8	$	3,713.7		$	73,267.3
DAC and VOBA		2,976.9		883.3		7,383.5		145.9		-		533.5		13.7			11,936.8
Goodwill		1,039.8		20.2		2,188.5		274.3		247.7		-		173.6			3,944.1
DSI and other intangibles		260.7		4.6		89.0		-		5.1		-		169.4			528.8
Reinsurance recoverables		725.8		-		2,039.0		33.2		-		54.5		5,597.9			8,450.4
Separate accounts assets		40,849.5		10,579.7		4,063.5		-		-		4,977.9		162.0			60,632.6
Liabilities and Capital
Future contract benefits		3,958.0		24.8		6,379.9		1,378.4		-		828.4		6,690.2			19,259.7
Other contract holder funds		17,219.9		11,627.8		29,999.2		148.6		-		277.4		1,574.2			60,847.1
Allocated capital (3)		4,401.4		933.7		8,294.8		989.8		364.9		392.4		(4,596.7	)		10,780.3
(1) Includes inter-segment eliminations.
(2) Includes inter-segment cash management balances our segments utilize to borrow money to meet their short-term needs and also to invest short-term funds with other segments. These balances eliminate in consolidation.
(3) Allocated capital is based on internal economic capital models plus certain other items (principally intangibles, including DAC and VOBA, goodwill and other items).

3/31/2009																PAGE 12
Retirement Solutions - Annuities
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Operating Revenues
Insurance premiums (1)	$	31.6		$	19.0		$	52.1		$	33.7		$	27.1			-14.2	%
Surrender charges		9.6			9.6			13.0			13.2			9.2			-4.2	%
Expense assessments		236.0			247.6			233.3			200.7			171.5			-27.3	%
Net investment income		247.8			245.3			243.1			235.5			240.4			-3.0	%
Operating realized gain (2)		10.2			12.4			52.1			144.0			90.2		NM
Other revenues and fees (3)		87.4			84.8			81.6			66.6			61.0			-30.2	%
Total Operating Revenues		622.6			618.7			675.2			693.7			599.4			-3.7	%
		-			-			-			-			-
Operating Expenses
Interest credited		163.2			163.0			170.0			201.4			161.1			-1.3	%
Benefits (1) (4)		51.4			35.2			112.9			253.2			169.8			230.4	%
Underwriting, acquisition, insurance and other expenses		251.7			268.2			253.7			548.0			205.9			-18.2	%
Total Operating Expenses		466.3			466.4			536.6			1,002.6			536.8			15.1	%
		-			-			-			-			-
Income (loss) from operations before federal income tax expense (benefit)		156.3			152.3			138.6			(308.9	)		62.6			-59.9	%
Federal income tax expense (benefit)		38.5			36.1			7.7			(137.2	)		(11.3	)	NM
Income (Loss) from Operations	$	117.8		$	116.2		$	130.9		$	(171.7	)	$	73.9			-37.3	%
Effective Tax Rate		24.6	%		23.7	%		5.6	%		44.4	%		-18.1	%
Average Equity	$	3,561.6		$	3,519.2		$	3,646.9		$	4,113.7		$	4,348.0
Return on Average Equity		13.2	%		13.2	%		14.4	%		-16.7	%		6.8	%
Income (Loss) from Operations - Basis Points on Average Account Values - Annualized		64			62			72			(118	)		52			(12	)
Operating Realized Gain (2)
Indexed annuity net derivatives results (4)	$	(1.4	)	$	(0.6	)	$	2.0		$	(0.5	)	$	(0.2	)		85.7	%
GLB (5)		5.8			10.3			10.9			11.1			16.3			181.0	%
GDB (6)		5.8			2.7			39.2			133.4			74.1		NM
Total Operating Realized Gain	$	10.2		$	12.4		$	52.1		$	144.0		$	90.2		NM

Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	165.6		$	186.4		$	160.9		$	132.7		$	124.6		-24.8	%
General and administrative expenses		80.2			79.9			83.1			86.8			72.1		-10.1	%
Broker-dealer commissions and general and
administrative expenses		89.2			85.1			78.5			73.3			64.1		-28.1	%
Taxes, licenses and fees		10.4			7.7			6.4			5.7			5.7		-45.2	%
Total commissions and expenses incurred		345.4			359.1			328.9			298.5			266.5		-22.8	%
Less: commissions and expenses capitalized		(172.8	)		(191.7	)		(169.8	)		(151.2	)		(127.3	)	26.3	%
Amortization of DAC and VOBA, net of interest		79.1			100.8			94.6			400.7			66.7		-15.7	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	251.7		$	268.2		$	253.7		$	548.0		$	205.9		-18.2	%
General and Administrative Expenses - Basis Points on Average Account Values - Annualized (7)		44			42			46			59			51		7

                                                   

(1)   Includes our single premium immediate annuities, which have a corresponding offset to benefits for changes in reserves.

(2)   Included in income (loss) from operations.

(3)  Primarily broker-dealer revenues.

(4)  See note (3) on page 6 for details.

(5)  See note (4) on page 6 for details.

(6)  See note (5) on page 6 for details.

(7)  Includes distribution costs.

                                             

3/31/2009													PAGE 13
Retirement Solutions - Annuities
Roll Forwards of DAC, VOBA, DFEL and DSI
Unaudited (millions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March
Roll Forward of DAC and VOBA	2008			2008			2008			2008			2009
Balance at beginning-of-period	$	2,477.0		$	2,570.8		$	2,855.5		$	3,157.9		$	2,976.9
Inter-segment transfer		(6.9	)		-			-			-			-
Deferrals		172.8			191.7			169.8			151.2			127.3
Amortization, net of interest:
Unlocking		(0.6	)		0.4			(32.8	)		(424.5	)		(62.6	)
Other amortization		(78.5	)		(101.2	)		(61.8	)		23.8			(4.1	)
Deferrals, net of amortization included in underwriting,acquisition, insurance and other expenses		93.7			90.9			75.2			(249.5	)		60.6
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		(10.5	)		(7.3	)		(25.4	)		(232.7	)		(12.2	)
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		17.5			201.1			252.6			301.2			31.3
Balance at End-of-Period	$	2,570.8		$	2,855.5		$	3,157.9		$	2,976.9		$	3,056.6
		-			-			-			-			-
Roll Forward of DFEL
Balance at beginning-of-period	$	130.9		$	141.6		$	151.0		$	160.5		$	130.3
Deferrals		11.9			13.4			13.0			11.4			10.6
Amortization, net of interest:
Unlocking		0.7			(0.5	)		(1.8	)		(36.4	)		(7.2	)
Other amortization		(2.7	)		(3.0	)		0.7			10.1			5.4
Deferrals, net of amortization included in expense assessments		9.9			9.9			11.9			(14.9	)		8.8
Adjustment related to realized gains (losses) on available-for-sale securities and derivatives		0.8			(0.5	)		(2.4	)		(15.3	)		(4.4	)
Adjustment related to unrealized gains (losses) on available-for-sale securities and derivatives		-			-			-			-			(0.2	)
Balance at End-of-Period	$	141.6		$	151.0		$	160.5		$	130.3		$	134.5
		-			-			-			-			-
Roll Forward of DSI
Balance at beginning-of-period	$	278.8		$	295.7		$	312.1		$	326.3		$	260.7
Inter-segment transfer		(1.3	)		-			-			-			-
Deferrals		25.7			26.1			24.6			18.8			15.7
Amortization, net of interest:
Unlocking		0.5			(0.2	)		(2.7	)		(48.0	)		(5.6	)
Other amortization		(6.1	)		(8.5	)		(5.4	)		4.5			1.1
Deferrals, net of amortization included in interest credited		20.1			17.4			16.5			(24.7	)		11.2
Adjustment related to realized (gains) losses on available-for-sale securities		(1.9	)		(1.0	)		(2.3	)		(40.9	)		5.2
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		-			-			-			-			0.1
Balance at End-of-Period	$	295.7		$	312.1		$	326.3		$	260.7		$	277.2
		-			-			-			-			-

3/31/2009																PAGE 14
Retirement Solutions - Annuities
Account Value Roll Forward
Unaudited (in billions)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008		��	2008			2008			2009			Change
Fixed Annuities
Balance at beginning-of-period	$	17.822		$	17.701		$	17.799		$	17.689		$	17.655			-0.9	%
Gross deposits		1.160			1.371			1.276			1.233			1.363			17.5	%
Withdrawals and deaths		(0.586	)		(0.618	)		(0.787	)		(0.836	)		(0.767	)		-30.9	%
Net flows		0.574			0.753			0.489			0.397			0.596			3.8	%
Transfers to variable annuities		(0.680	)		(0.797	)		(0.742	)		(0.581	)		(0.558	)		17.9	%
Inter-segment transfer		(0.089	)		-			-			-			-			100.0	%
Interest credited		0.048			0.116			0.118			0.132			0.145			202.1	%
Sales inducements deferred		0.026			0.026			0.025			0.018			0.016			-38.5	%
Balance at End-of-Period (Gross)		17.701			17.799			17.689			17.655			17.854			0.9	%
Reinsurance ceded		(1.306	)		(1.255	)		(1.196	)		(1.125	)		(1.094	)		16.2	%
Balance at End-of-Period (Net of Ceded)(1)	$	16.395		$	16.544		$	16.493		$	16.530		$	16.760			2.2	%
		-			-			-			-			0.000
Variable Annuities
Balance at beginning-of-period	$	58.643		$	54.966		$	55.854		$	49.982		$	40.925			-30.2	%
Gross deposits		1.866			2.065			1.672			1.087			0.834			-55.3	%
Withdrawals and deaths		(1.259	)		(1.229	)		(1.217	)		(1.108	)		(1.000	)		20.6	%
Net flows		0.607			0.836			0.455			(0.021	)		(0.166	)	NM
Transfers from fixed annuities		0.680			0.797			0.742			0.579			0.558			-17.9	%
Inter-segment transfer		(0.206	)		-			-			-			-			100.0	%
Investment increase and change in market value		(4.758	)		(0.745	)		(7.069	)		(9.615	)		(2.016	)		57.6	%
Balance at End-of-Period (2)	$	54.966		$	55.854		$	49.982		$	40.925		$	39.301			-28.5	%
		-			-			-			-			-
Total Annuities
Balance at beginning-of-period	$	76.465		$	72.667		$	73.653		$	67.671		$	58.580			-23.4	%
Gross deposits		3.026			3.436			2.948			2.320			2.197			-27.4	%
Withdrawals and deaths		(1.845	)		(1.847	)		(2.004	)		(1.944	)		(1.767	)		4.2	%
Net flows		1.181			1.589			0.944			0.376			0.430			-63.6	%
Transfers between fixed and variable accounts		-			-			-			(0.002	)		-		NM
Inter-segment transfer		(0.295	)		-			-			-			-			100.0	%
Interest credited and change in market value		(4.710	)		(0.629	)		(6.951	)		(9.483	)		(1.871	)		60.3	%
Sales inducements deferred		0.026			0.026			0.025			0.018			0.016			-38.5	%
Balance at End-of-Period (Gross)		72.667			73.653			67.671			58.580			57.155			-21.3	%
Reinsurance ceded		(1.306	)		(1.255	)		(1.196	)		(1.125	)		(1.094	)		16.2	%
Balance at End-of-Period (Net of Ceded)	$	71.361		$	72.398		$	66.475		$	57.455		$	56.061			-21.4	%
		-			-			-			-			-
Variable Annuities Under Agreement - Included Above	$	0.128		$	0.120		$	0.099		$	0.076		$	0.069			-46.1	%
Incremental Deposits: (3)
Fixed annuities	$	1.156		$	1.365		$	1.265		$	1.225		$	1.359			17.6	%
Variable annuities		1.838			2.043			1.651			1.076			0.822			-55.3	%
Total Incremental Deposits	$	2.994		$	3.408		$	2.916		$	2.301		$	2.181			-27.2	%
		-			-			-			-			-
(1)  Includes the fixed portion of variable annuities.
(2) Excludes the fixed portion of variable annuities.
(3) Represents gross deposits reduced by transfers from other Lincoln products.

3/31/2009																PAGE 15
Retirement Solutions - Annuities
Account Values, Spread Information, GLB Expense Assessments,
GLB Attributed Fee and GLB Account Values by Type
Unaudited (billions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Fixed Annuities - Excluding Fixed Portion of Variable Contracts
Deposits	$	0.086		$	0.137		$	0.164		$	0.142		$	0.236			174.4	%
Withdrawals and deaths		(0.378	)		(0.406	)		(0.549	)		(0.504	)		(0.398	)		-5.3	%
Net flows	$	(0.292	)	$	(0.269	)	$	(0.385	)	$	(0.362	)	$	(0.162	)		44.5	%
Gross fixed contract account values	$	9.767		$	9.595		$	9.305		$	9.035		$	8.959			-8.3	%
Reinsurance ceded		(1.306	)		(1.255	)		(1.196	)		(1.125	)		(1.094	)		16.2	%
Net fixed contract account values	$	8.461		$	8.340		$	8.109		$	7.910		$	7.865			-7.0	%
		-			-			-			-			-
Indexed Annuities
Deposits	$	0.218		$	0.356		$	0.215		$	0.289		$	0.367			68.3	%
Withdrawals and deaths		(0.083	)		(0.102	)		(0.114	)		(0.142	)		(0.214	)	NM
Net flows	$	0.135		$	0.254		$	0.101		$	0.147		$	0.153			13.3	%
Indexed Annuity Account Values	$	4.465		$	4.726		$	4.836		$	5.003		$	5.195			16.3	%
Fixed Portion of Variable Contracts
Deposits	$	0.856		$	0.879		$	0.896		$	0.802		$	0.760			-11.2	%
Withdrawals and deaths		(0.124	)		(0.110	)		(0.124	)		(0.191	)		(0.156	)		-25.8	%
Net flows	$	0.732		$	0.769		$	0.772		$	0.611		$	0.604			-17.5	%
Fixed Portion of Variable Contract Account Values	$	3.469		$	3.478		$	3.547		$	3.617		$	3.699			6.6	%
Variable Annuities - Including Fixed Portion of Variable Contracts
Deposits	$	2.721		$	2.944		$	2.568		$	1.890		$	1.594			-41.4	%
Withdrawals and deaths		(1.383	)		(1.339	)		(1.340	)		(1.300	)		(1.156	)		16.4	%
Net flows	$	1.338		$	1.605		$	1.228		$	0.590		$	0.438			-67.3	%
		-			-			-			-			-
Variable Contract Account Values	$	58.435		$	59.333		$	53.530		$	44.542		$	43.000			-26.4	%
Average Daily Variable Annuity Separate Account Values	$	55.318		$	57.763		$	54.717		$	40.743		$	39.035			-29.4	%
																Change
Interest Rate Spread (1)																(Basis Point)
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses (2)		5.85	%		5.88	%		5.82	%		5.65	%		5.28	%		(57	)
Commercial mortgage loan prepayment and bond make whole premiums		0.03	%		0.00	%		0.02	%		0.02	%		0.00	%		(3	)
Alternative investments		-0.01	%		-0.01	%		0.00	%		-0.04	%		-0.01	%		-
Net investment income yield on reserves		5.87	%		5.87	%		5.84	%		5.63	%		5.27	%		(60	)
Interest rate credited to contract holders		3.81	%		3.73	%		3.95	%		3.87	%		3.84	%		3
Interest rate spread		2.06	%		2.14	%		1.89	%		1.76	%		1.43	%		(63	)
Variable Annuity Expense Assessments (in millions) (3)	$	271.4		$	287.0		$	276.0		$	244.7		$	212.9			-21.6	%
GLB Expense Assessments (in millions) (4)	$	39.6		$	42.7		$	45.5		$	46.2		$	47.9			21.0	%
Components of Attributed Fees on GLB (in millions)
Attributed fee included in operating revenues and income (loss) from operations (5)	$	15.8		$	17.0		$	17.9		$	18.3		$	16.2			2.5	%
Attributed fee excluded from operating revenues and income (loss) from operations (6)		19.6			22.5			24.8			25.7			25.5			30.1	%
Total Attributed Fees on GLB	$	35.4		$	39.5		$	42.7		$	44.0		$	41.7			17.8	%
GLB Account Values by Type (7)
Guaranteed withdrawal benefits (8)	$	16.476		$	17.435		$	16.613		$	14.785		$	14.910			-9.5	%
Guaranteed income benefits (9)		8.069			8.550			7.899			6.780			6.623			-17.9	%
Total GLB Account Values	$	24.544		$	25.985		$	24.512		$	21.566		$	21.533			-12.3	%
(1) For the annuity products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average invested assets on reserves. We exclude net investment income earned on investments supporting statutory surplus, reverse repurchase agreement interest expense and inter-segment cash management account interest expense from our yield and spread calculations. The average crediting rate is calculated using interest credited before DSI amortization, plus the immediate annuity reserve change (included within benefits), divided by average fixed account values net of co-insured account values. Fixed account values reinsured under modified co-insurance agreements are included in account values for this calculation since assets (and therefore margin) are retained under these agreements.
(2) Our yields on net investment income have been lowered due to holding higher cash balances related to our short-term liquidity strategy during recent volatile markets. The increased cash and short-term investment balances for the first three months of 2009 reduced our yields by approximately 54 bps.
(3) Comprised of the variable annuity expense assessments included in the expense assessments line item on page 12 and the amounts presented in the components of attributed fees on GLB, as described in footnotes 5 and 6 and disclosed above.
(4) Comprised of the GLB expense assessments included in the expense assessments line item on page 12 and the amounts presented in the components of attributed fees on GLB, as described in footnotes 5 and 6 and disclosed above.
(5) Includes the risk/profit margin portion of the GLB attributed rider fees in operating realized gain and the amount reported in expense assessments. See note (4) on page 6 for further discussion.
(6) Includes the net valuation premium of the GLB attributed rider fees in excluded realized gain (loss). See note (8) on page 6 for further discussion.
(7) As of March 31, 2009, we modified our presentation of these period end balances to reflect the amounts net of reinsurance and adjusted all prior periods accordingly.
(8) Guaranteed withdrawal benefits include features that offer the contract holder a guarantee equal to the initial deposit (or contract value, if elected after issue), adjusted for any subsequent purchase payments or withdrawals.
(9) For our guaranteed income benefits, we offer other product riders allowing variable annuity contract holders access and control during the income distribution phase of their contract. This added flexibility allows the contract holder to access the account value for transfers, additional withdrawals and other service features, such as portfolio rebalancing.

3/31/2009												PAGE 16
Retirement Solutions - Defined Contribution
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended
	March		June		Sept.		Dec.			March		%
	2008		2008		2008		2008			2009		Change
Operating Revenues
Surrender charges	$	1.9	$	1.5	$	1.3	$	1.5		$	1.0		-47.4	%
Expense assessments		59.3		59.3		54.6		42.7			39.6		-33.2	%
Net investment income		171.7		174.8		180.9		167.6			175.5		2.2	%
Operating realized gain (1)		-		-		0.2		3.5			6.6	NM
Other revenues and fees		4.8		3.8		3.8		2.6			2.4		-50.0	%
Total Operating Revenues		237.7		239.4		240.8		217.9			225.1		-5.3	%
Operating Expenses
Interest credited		105.9		107.0		106.8		109.8			111.5		5.3	%
Benefits		-		0.1		0.2		13.5			6.4	NM
Underwriting, acquisition, insurance and other expenses		76.3		75.4		76.8		111.9			70.8		-7.2	%
Total Operating Expenses		182.2		182.5		183.8		235.2			188.7		3.6	%
Income (loss) from operations before federal income tax expense (benefit)		55.5		56.9		57.0		(17.3	)		36.4		-34.4	%
Federal income tax expense (benefit)		15.1		15.7		14.7		(16.2	)		6.6		-56.3	%
Income (Loss) from Operations	$	40.4	$	41.2	$	42.3	$	(1.1	)	$	29.8		-26.2	%

Effective Tax Rate		27.2	%		27.6	%		25.8	%		93.6	%		18.1	%
Average Equity	$	906.4		$	933.7		$	961.9		$	952.2		$	983.3
Return on Average Equity		17.8	%		17.7	%		17.6	%		(0.5	%)		12.1	%
Income (Loss) from Operations - Basis Points on
Average Account Values - Annualized		46			46			49			(1	)		42		(4	)

Operating Realized Gain (1)
GLB (2)	$	-	$	-	$	0.1	$	0.1	$	0.1	NM
GDB (3)		-		-		0.1		3.4		6.5	NM
Total Operating Realized Gain	$	-	$	-	$	0.2	$	3.5	$	6.6	NM

Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	19.7		$	19.4		$	17.2		$	16.0		$	14.0		-28.9	%
General and administrative expenses		51.9			52.0			52.7			63.3			53.6		3.3	%
Taxes, licenses and fees		4.4			3.0			3.1			2.8			3.6		-18.2	%
Total commissions and expenses incurred		76.0			74.4			73.0			82.1			71.2		-6.3	%
Less: commissions and expenses capitalized		(23.6	)		(22.2	)		(19.7	)		(28.2	)		(18.3	)	22.5	%
Amortization of DAC and VOBA, net of interest		23.9			23.2			23.5			58.0			17.9		-25.1	%
Total Underwriting, Acquisition, Insurance
and Other Expenses	$	76.3		$	75.4		$	76.8		$	111.9		$	70.8		-7.2	%
General and Administrative Expenses - Basis       Points on Average Account Values - Annualized (4)		59			59			61			86			76		17

 

Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	513.8		$	564.2		$	629.7		$	744.8		$	883.3
Inter-segment transfer		6.9			-			-			-			-
Deferrals		23.6			22.2			19.7			28.2			18.3
Amortization, net of interest:
Unlocking		(2.5	)		0.1			(2.8	)		(48.6	)		(4.1	)
Other amortization		(21.4	)		(23.3	)		(20.7	)		(9.4	)		(13.8	)
Deferrals, net of amortization included in underwriting,
acquisition, insurance and other expenses		(0.3	)		(1.0	)		(3.8	)		(29.8	)		0.4
Adjustment related to realized (gains) losses
on available-for-sale securities		0.6			1.0			4.6			5.6			2.5
Adjustment related to unrealized (gains) losses
on available-for-sale securities		43.2			65.5			114.3			162.7			32.0
Balance at End-of-Period	$	564.2		$	629.7		$	744.8		$	883.3		$	918.2

Roll Forward of DSI
Balance at beginning-of-period	$	0.4	$	1.9		$	2.0		$	2.0		$	2.0
Inter-segment transfer		1.3		-			-			-			-
Deferrals		0.2		0.2			-			0.2			0.2
Amortization, net of interest:
Unlocking		-		-			-			(0.2	)		(0.1	)
Other amortization		-		(0.1	)		(0.1	)		0.1			0.1
Deferrals, net of amortization included in
interest credited		0.2		0.1			(0.1	)		0.1			0.2
Adjustment related to realized (gains) losses
on available-for-sale securities		-		-			0.1			(0.1	)		-
Balance at End-of-Period	$	1.9	$	2.0		$	2.0		$	2.0		$	2.2

               

(1)    Included in income (loss) from operations.

(2)  See note (4) on page 6 for details.

(3)  See note (5) on page 6 for details.

(4)  Includes distribution costs.

                              

3/31/2009																PAGE 17
Retirement Solutions - Defined Contribution
Account Value Roll Forward
Unaudited (in billions)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Fixed Annuities
Balance at beginning-of-period	$	10.889		$	11.217		$	11.294		$	11.418		$	11.638			6.9	%
Gross deposits		0.332			0.280			0.290			0.279			0.416			25.3	%
Withdrawals and deaths		(0.370	)		(0.380	)		(0.411	)		(0.387	)		(0.388	)		-4.9	%
Net flows		(0.038	)		(0.100	)		(0.121	)		(0.108	)		0.028			173.7	%
Transfers from variable annuities		0.172			0.073			0.136			0.214			0.148			-14.0	%
Inter-segment transfer		0.089			-			-			-			-			-100.0	%
Interest credited		0.105			0.104			0.109			0.114			0.110			4.8	%
Balance at End-of-Period  (1)	$	11.217		$	11.294		$	11.418		$	11.638		$	11.924			6.3	%
		-			-			-			-			-
Variable Annuities
Balance at beginning-of-period	$	17.876		$	16.292		$	16.195		$	13.480		$	10.588			-40.8	%
Gross deposits		0.674			0.561			0.532			0.403			0.425			-36.9	%
Withdrawals and deaths		(0.833	)		(0.646	)		(0.723	)		(0.506	)		(0.419	)		49.7	%
Net flows		(0.159	)		(0.085	)		(0.191	)		(0.103	)		0.006			103.8	%
Transfers to fixed annuities		(0.143	)		(0.058	)		(0.117	)		(0.143	)		(0.166	)		-16.1	%
Inter-product transfer (2)		-			-			(0.553	)		-			-		NM
Inter-segment transfer		0.206			-			-			-			-			-100.0	%
Investment increase and change in market value		(1.488	)		0.046			(1.854	)		(2.646	)		(0.707	)		52.5	%
Balance at End-of-Period (3)	$	16.292		$	16.195		$	13.480		$	10.588		$	9.721			-40.3	%
		-			-			-			-			-
Total Annuities
Balance at beginning-of-period	$	28.765		$	27.509		$	27.489		$	24.898		$	22.226			-22.7	%
Gross deposits		1.006			0.841			0.822			0.682			0.841			-16.4	%
Withdrawals and deaths		(1.203	)		(1.026	)		(1.134	)		(0.893	)		(0.807	)		32.9	%
Net flows		(0.197	)		(0.185	)		(0.312	)		(0.211	)		0.034			117.3	%
Transfers between fixed and variable accounts		0.029			0.015			0.019			0.071			(0.018	)	NM
Inter-product transfer (2)		-			-			(0.553	)		-			-		NM
Inter-segment transfer		0.295			-			-			-			-			-100.0	%
Interest credited and change in market value		(1.383	)		0.150			(1.745	)		(2.532	)		(0.597	)		56.8	%
Balance at End-of-Period	$	27.509		$	27.489		$	24.898		$	22.226		$	21.645			-21.3	%
		-			-			-			-			-
Alliance and Smart Future Mutual Funds
Balance at beginning-of-period	$	7.293		$	7.255		$	7.553		$	7.675		$	6.652			-8.8	%
Plan/participant rollovers		0.221			0.285			0.215			0.249			0.338			52.9	%
Additional contributions		0.324			0.295			0.297			0.310			0.396			22.2	%
Gross deposits		0.545			0.580			0.512			0.559			0.734			34.7	%
Withdrawals and deaths		(0.068	)		(0.158	)		(0.107	)		(0.177	)		(0.109	)		-60.3	%
Net flows		0.477			0.422			0.405			0.382			0.625			31.0	%
Transfers		(0.070	)		(0.026	)		(0.024	)		(0.079	)		-			100.0	%
Inter-product transfer (2)		-			-			0.553			-			-		NM
Interest credited and change in market value		(0.445	)		(0.098	)		(0.812	)		(1.326	)		(0.429	)		3.6	%
Balance at End-of-Period (4)	$	7.255		$	7.553		$	7.675		$	6.652		$	6.848			-5.6	%
		-			-			-			-			-
Total Annuities and Mutual Funds		-			-			-			-			-
Balance at beginning-of-period	$	36.058		$	34.764		$	35.042		$	32.573		$	28.878			-19.9	%
Gross deposits		1.551			1.421			1.334			1.241			1.575			1.5	%
Withdrawals and deaths		(1.271	)		(1.184	)		(1.241	)		(1.070	)		(0.916	)		27.9	%
Net flows		0.280			0.237			0.093			0.171			0.659			135.4	%
Transfers		(0.041	)		(0.011	)		(0.005	)		(0.008	)		(0.018	)		56.1	%
Inter-segment transfer		0.295			-			-			-			-			-100.0	%
Interest credited and change in market value		(1.828	)		0.052			(2.557	)		(3.858	)		(1.026	)		43.9	%
Balance at End-of-Period	$	34.764		$	35.042		$	32.573		$	28.878		$	28.493			-18.0	%
		-			-			-			-			-
Variable Annuities Under Agreement - Included Above	$	0.015		$	0.014		$	0.011		$	0.008		$	0.007			-53.3	%
Incremental Deposits: (5)
Fixed annuities	$	0.285		$	0.258		$	0.225		$	0.361		$	0.379			33.0	%
Variable annuities		0.667			0.553			0.524			0.398			0.419			-37.2	%
Total annuities incremental deposits		0.952			0.811			0.749			0.759			0.798			-16.2	%
Total Alliance mutual funds incremental deposits		0.545			0.580			0.511			0.560			0.734			34.7	%
Total Incremental Deposits	$	1.497		$	1.391		$	1.260		$	1.319		$	1.532			2.3	%
(1) Includes fixed annuity products offered under our mutual fund products and the fixed portion of variable annuities.
(2) On 9/30/08, the Lincoln Employee 401(k) Plan transferred from Director to Alliance in the amount of $0.653 billion, of which $0.100 billion transferred within fixed annuities and therefore is not depicted on this roll forward.
(3)  Excludes the fixed portion of variable annuities.
(4) Represents amounts attributable to mutual fund net flows. Mutual fund account values are not included in the separate accounts reported on our Consolidated Balance Sheets, as we do not have any ownership interest in them.
(5) Represents gross deposits reduced by transfers from other Lincoln products.

3/31/2009																PAGE 18
Retirement Solutions - Defined Contribution
Account Value Roll Forward - By Product and Supplemental Data
Unaudited (in billions)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Total Micro - Small Segment
Balance at beginning-of-period	$	7.798		$	7.218		$	7.286		$	5.790		$	4.888			-37.3	%
Gross deposits		0.498			0.389			0.389			0.255			0.306			-38.6	%
Withdrawals and deaths		(0.569	)		(0.395	)		(0.465	)		(0.311	)		(0.266	)		53.3	%
Net flows		(0.071	)		(0.006	)		(0.076	)		(0.056	)		0.040			156.3	%
Transfers between fixed and variable accounts		(0.012	)		-			-			0.004			(0.004	)		66.7	%
Inter-product transfer (1)		-			-			(0.653	)		-			-		NM
Investment increase and change in market value		(0.497	)		0.074			(0.767	)		(0.850	)		(0.214	)		56.9	%
Balance at End-of-Period	$	7.218		$	7.286		$	5.790		$	4.888		$	4.710			-34.7	%
		-			-			-			-			-
Total Mid - Large Segment
Balance at beginning-of-period	$	9.463		$	9.621		$	9.985		$	10.310		$	9.540			0.8	%
Gross deposits		0.769			0.748			0.687			0.729			1.026			33.4	%
Withdrawals and deaths		(0.159	)		(0.299	)		(0.222	)		(0.191	)		(0.233	)		-46.5	%
Net flows		0.610			0.449			0.465			0.538			0.793			30.0	%
Transfers between fixed and variable accounts		(0.029	)		(0.011	)		(0.004	)		(0.011	)		(0.013	)		55.2	%
Inter-product transfer (1)		-			-			0.653			-			-		NM
Investment increase and change in market value		(0.423	)		(0.074	)		(0.789	)		(1.297	)		(0.400	)		5.4	%
Balance at End-of-Period	$	9.621		$	9.985		$	10.310		$	9.540		$	9.920			3.1	%
		-			-			-			-			-
Total Multi-Fund® and Other Variable Annuities
Balance at beginning-of-period	$	18.797		$	17.925		$	17.771		$	16.473		$	14.450			-23.1	%
Gross deposits		0.284			0.284			0.258			0.257			0.243			-14.4	%
Withdrawals and deaths		(0.543	)		(0.490	)		(0.554	)		(0.568	)		(0.417	)		23.2	%
Net flows		(0.259	)		(0.206	)		(0.296	)		(0.311	)		(0.174	)		32.8	%
Transfers between fixed and variable accounts		-			(0.000	)		(0.001	)		(0.001	)		(0.001	)	NM
Inter-segment transfer		0.295			-			-			-			-			-100.0	%
Investment increase and change in market value		(0.908	)		0.052			(1.001	)		(1.711	)		(0.412	)		54.6	%
Balance at End-of-Period	$	17.925		$	17.771		$	16.473		$	14.450		$	13.863			-22.7	%
		-			-			-			-			-
Total Annuities and Mutual Funds
Balance at beginning-of-period	$	36.058		$	34.764		$	35.042		$	32.573		$	28.878			-19.9	%
Gross deposits		1.551			1.421			1.334			1.241			1.575			1.5	%
Withdrawals and deaths		(1.271	)		(1.184	)		(1.241	)		(1.070	)		(0.916	)		27.9	%
Net flows		0.280			0.237			0.093			0.171			0.659			135.4	%
Transfers between fixed and variable accounts		(0.041	)		(0.011	)		(0.005	)		(0.008	)		(0.018	)		56.1	%
Inter-segment transfer		0.295			-			-			-			-			-100.0	%
Investment increase and change in market value		(1.828	)		0.052			(2.557	)		(3.858	)		(1.026	)		43.9	%
Balance at End-of-Period (2)	$	34.764		$	35.042		$	32.573		$	28.878		$	28.493			-18.0	%
		-			-			-			-			-
Fixed Annuities - Excluding Fixed Portion of Variable Contracts
Deposits	$	0.240		$	0.187		$	0.196		$	0.189		$	0.317			32.1	%
Withdrawals and deaths		(0.160	)		(0.198	)		(0.183	)		(0.016	)		(0.187	)		-16.9	%
Net flows	$	0.080		$	(0.011	)	$	0.013		$	0.173		$	0.130			62.5	%
		-			-			-			-			-
Fixed Contract Account Values	$	5.166		$	5.221		$	5.304		$	5.601		$	5.774			11.8	%
Fixed Portion of Variable Contracts
Deposits	$	0.093		$	0.092		$	0.094		$	0.090		$	0.099			6.5	%
Withdrawals and deaths		(0.210	)		(0.182	)		(0.228	)		(0.371	)		(0.202	)		3.8	%
Net flows	$	(0.117	)	$	(0.090	)	$	(0.134	)	$	(0.281	)	$	(0.103	)		12.0	%
Fixed Portion of Variable Contract Account Values	$	6.051		$	6.073		$	6.114		$	6.037		$	6.150			1.6	%
Variable Annuities - Including Fixed Portion of Variable Contracts
Deposits	$	0.767		$	0.653		$	0.626		$	0.493		$	0.523			-31.8	%
Withdrawals and deaths		(1.043	)		(0.828	)		(0.951	)		(0.877	)		(0.621	)		40.5	%
Net flows	$	(0.276	)	$	(0.175	)	$	(0.325	)	$	(0.384	)	$	(0.098	)		64.5	%
Variable Contract Account Values	$	22.343		$	22.268		$	19.594		$	16.625		$	15.871			-29.0	%
Average Daily Variable Annuity Separate Account Values	$	16.640		$	16.892		$	15.582		$	10.666		$	9.846			-40.8	%
																Change
Interest Rate Spread (3)																(Basis Point)
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses(4)		5.93	%		5.89	%		5.94	%		5.84	%		5.70	%		(23	)
Commercial mortgage loan prepayment and bond make whole premiums		0.02	%		0.05	%		0.17	%		0.00	%		0.00	%		(2	)
Alternative investments		-0.03	%		-0.03	%		-0.01	%		-0.14	%		-0.01	%		2
Net investment income yield on reserves		5.92	%		5.91	%		6.10	%		5.70	%		5.69	%		(23	)
Interest rate credited to contract holders		3.81	%		3.80	%		3.77	%		3.79	%		3.78	%		(3	)
Interest rate spread		2.11	%		2.11	%		2.33	%		1.91	%		1.91	%		(20	)
(1) On 9/30/08, the Lincoln Employee 401(k) Plan transferred from Director to Alliance in the amount of $0.653 billion.
(2) Includes mutual fund account values. Mutual fund account values are not included in the separate accounts reported on our Consolidated Balance Sheets, as we do not have any ownership interest in them.
(3) For the annuity products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average invested assets on reserves. We exclude net investment income earned on investments supporting statutory surplus from our spread calculations. The average crediting rate is calculated as interest credited before DSI amortization, plus the immediate annuity reserve change (included within benefits), divided by the average fixed account values, including the fixed portion of variable annuities.
(4) Our yields on net investment income have been lowered due to holding higher cash balances related to our short-term liquidity strategy during recent volatile markets. The increased cash and short-term investment balances for the first three months of 2009 reduced our yields by approximately 16 bps.

3/31/2009																PAGE 19
Insurance Solutions - Life Insurance
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Operating Revenues
Insurance premiums	$	86.4		$	89.5		$	90.9		$	93.6		$	90.5			4.7	%
Surrender charges		17.2			16.7			18.0			18.1			21.6			25.6	%
Mortality assessments		321.7			327.9			331.8			339.1			344.1			7.0	%
Expense assessments		121.3			129.6			101.4			137.6			116.5			-4.0	%
Net investment income		499.3			519.2			522.4			446.9			497.7			-0.3	%
Other revenues and fees		8.7			5.0			9.3			7.5			5.8			-33.3	%
Total Operating Revenues		1,054.6			1,087.9			1,073.8			1,042.8			1,076.2			2.0	%
		-			-			-			-			-
Operating Expenses
Interest credited		296.5			300.6			304.7			300.7			302.8			2.1	%
Benefits		300.1			306.0			399.9			365.9			355.7			18.5	%
Underwriting, acquisition, insurance and other expenses		219.5			234.0			167.4			255.7			224.0			2.1	%
Total Operating Expenses		816.1			840.6			872.0			922.3			882.5			8.1	%
		-			-			-			-			-
Income from operations before federal income tax expense		238.5			247.3			201.8			120.5			193.7			-18.8	%
Federal income tax expense		81.1			83.7			64.5			38.0			51.5			-36.5	%
Income from Operations	$	157.4		$	163.6		$	137.3		$	82.5		$	142.2			-9.7	%
Effective Tax Rate		34.0	%		33.8	%		32.0	%		31.5	%		26.6	%
Average Equity	$	8,142.5		$	8,095.3		$	8,164.2		$	8,263.8		$	8,235.3
Return on Average Equity		7.7	%		8.1	%		6.7	%		4.0	%		6.9	%
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	194.6		$	180.5		$	209.1		$	210.5		$	176.9			-9.1	%
General and administrative expenses		105.3			100.8			101.8			116.0			110.2			4.7	%
Taxes, licenses and fees		31.8			26.6			36.3			25.0			33.3			4.7	%
Amortization of sales force intangibles		1.0			1.0			1.0			1.0			1.0			0.0	%
Total commissions and expenses incurred		332.7			308.9			348.2			352.5			321.4			-3.4	%
Less: commissions and expenses capitalized		(245.8	)		(237.2	)		(260.7	)		(272.5	)		(224.5	)		8.7	%
Amortization of DAC and VOBA, net of interest		132.6			162.3			79.9			175.7			127.1			-4.1	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	219.5		$	234.0		$	167.4		$	255.7		$	224.0			2.1	%
		-			-			-			-			-
General and Administrative Expenses - Basis Points on Average Account Values - Annualized		130			124			126			145			139			9
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	5,691.7		$	5,968.1		$	6,235.0		$	6,947.8		$	7,383.5
Business sold through reinsurance		-			-			-			-			(292.9	)
Deferrals		245.8			237.2			260.7			272.5			224.5
Amortization, net of interest:
Unlocking		(9.1	)		(17.7	)		55.2			(84.0	)		(12.6	)
Other amortization		(123.5	)		(144.6	)		(135.1	)		(91.7	)		(114.5	)
Deferrals, net of amortization included in underwriting, acquisition, insurance and other expenses		113.2			74.9			180.8			96.8			97.4
Adjustment related to realized losses on available-for-sale securities and derivatives		7.3			9.3			54.2			76.3			20.0
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		155.9			182.7			477.8			262.6			57.0
Balance at End-of-Period	$	5,968.1		$	6,235.0		$	6,947.8		$	7,383.5		$	7,265.0
Roll Forward of DFEL
Balance at beginning-of-period	$	672.6		$	722.2		$	763.4		$	840.2		$	888.7
Business sold through reinsurance		-			-			-			-			(11.0	)
Deferrals		89.2			90.1			96.6			102.6			96.9
Amortization, net of interest:
Unlocking		(3.4	)		(11.1	)		16.5			(24.0	)		(2.9	)
Other amortization		(36.2	)		(37.8	)		(36.3	)		(30.1	)		(32.1	)
Deferrals, net of amortization included in
expense assessments		49.6			41.2			76.8			48.5			61.9
Adjustment related to unrealized gains (losses) on available-for-sale securities and derivatives		-			-			-			-			1.8
Balance at End-of-Period	$	722.2		$	763.4		$	840.2		$	888.7		$	941.4

3/31/2009																PAGE 20
Insurance Solutions - Life Insurance
Operational Data and Account Value Roll Forward
Unaudited (billions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Sales by Product (in millions)
UL
Excluding MoneyGuard®	$	113.7		$	123.7		$	144.7		$	142.7		$	102.7			-9.7	%
MoneyGuard®		11.0			12.4			13.7			12.8			11.0			0.0	%
Total		124.7			136.1			158.4			155.5			113.7			-8.8	%
VUL		15.6			11.4			12.3			14.6			9.0			-42.3	%
COLI and BOLI (2)		28.2			12.8			12.7			30.7			11.7			-58.5	%
Term/Whole Life		5.1			5.4			6.9			10.6			10.8			111.8	%
Total	$	173.6		$	165.7		$	190.3		$	211.4		$	145.2			-16.4	%
First Year Paid Premiums (in millions)
UL
Excluding MoneyGuard®	$	245.4		$	254.3		$	270.4		$	287.4		$	230.5			-6.1	%
MoneyGuard®		73.6			82.5			91.6			85.1			73.1			-0.7	%
Total		319.0			336.8			362.0			372.5			303.6			-4.8	%
VUL		37.0			28.8			31.1			34.2			25.2			-31.9	%
COLI and BOLI (1)		57.9			26.0			30.3			82.2			52.0			-10.2	%
Term/Whole Life		14.0			16.2			20.2			29.5			18.8			34.3	%
Total	$	427.9		$	407.8		$	443.6		$	518.4		$	399.6			-6.6	%
Life Insurance In Force
UL and other	$	302.013		$	303.607		$	306.293		$	310.198		$	288.826			-4.4	%
Term insurance		234.860			234.109			233.671			235.023			236.408			0.7	%
Total	$	536.873		$	537.716		$	539.964		$	545.221		$	525.234			-2.2	%
		-			-			-			-			-
Interest-Sensitive Life
Balance at beginning-of-period	$	26.518		$	26.726		$	26.980		$	27.227		$	27.502			3.7	%
Deposits		0.893			0.846			0.875			0.951			0.815			-8.7	%
Withdrawals and deaths		(0.398	)		(0.277	)		(0.306	)		(0.325	)		(0.358	)		10.1	%
Net flows		0.495			0.569			0.569			0.626			0.457			-7.7	%
Contract holder assessments		(0.568	)		(0.601	)		(0.613	)		(0.639	)		(0.631	)		-11.1	%
Interest credited		0.281			0.286			0.291			0.288			0.289			2.8	%
Balance at End-of-Period (Gross) (2)		26.726			26.980			27.227			27.502			27.617			3.3	%
Reinsurance ceded		-			-			-			-			(0.938	)	NM
Balance at End-of-Period (Net of Ceded)(2)	$	26.726		$	26.980		$	27.227		$	27.502		$	26.679			-0.2	%
		-			-			-			-			-
VUL
Balance at beginning-of-period	$	6.040		$	5.615		$	5.623		$	5.056		$	4.251			-29.6	%
Deposits		0.239			0.216			0.207			0.266			0.243			1.7	%
Withdrawals and deaths		(0.083	)		(0.108	)		(0.086	)		(0.088	)		(0.143	)		-72.3	%
Net flows		0.156			0.108			0.121			0.178			0.100			-35.9	%
Contract holder assessments		(0.095	)		(0.091	)		(0.092	)		(0.092	)		(0.094	)		1.1	%
Investment income and change in market value		(0.486	)		(0.009	)		(0.596	)		(0.891	)		(0.265	)		45.5	%
Balance at End-of-Period (Gross)		5.615			5.623			5.056			4.251			3.992			-28.9	%
Reinsurance ceded		-			-			-			-			(0.640	)	NM
Balance at End-of-Period (Net of Ceded)	$	5.615		$	5.623		$	5.056		$	4.251		$	3.352			-40.3	%
Total Life Insurance
Balance at beginning-of-period	$	32.558		$	32.341		$	32.603		$	32.283		$	31.753			-2.5	%
Deposits		1.132			1.062			1.082			1.217			1.058			-6.5	%
Withdrawals and deaths		(0.481	)		(0.385	)		(0.392	)		(0.413	)		(0.501	)		-4.2	%
Net flows		0.651			0.677			0.690			0.804			0.557			-14.4	%
Contract holder assessments		(0.663	)		(0.692	)		(0.705	)		(0.731	)		(0.725	)		-9.4	%
Investment income and change in market value		(0.205	)		0.277			(0.305	)		(0.603	)		0.024			111.7	%
Balance at End-of-Period (Gross)		32.341			32.603			32.283			31.753			31.609			-2.3	%
Reinsurance ceded		-			-			-			-			(1.578	)		NM
Balance at End-of-Period (Net of Ceded)	$	32.341		$	32.603		$	32.283		$	31.753		$	30.031			-7.1	%
		-			-			-			-			(0.000	)
Interest Rate Yields and Spread
																Change
Interest-Sensitive Products (3)																(Basis Points)
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses (4)		6.00	%		5.89	%		5.92	%		5.86	%		5.83	%		(17	)
Commercial mortgage loan prepayment and bond make whole premiums		0.04	%		0.14	%		0.02	%		0.01	%		0.00	%		(4	)
Alternative investments		0.00	%		0.21	%		0.31	%		-0.65	%		-0.06	%		(6	)
Net investment income yield on reserves		6.04	%		6.24	%		6.25	%		5.22	%		5.77	%		(27	)
Interest rate credited to contract holders		4.37	%		4.36	%		4.35	%		4.25	%		4.25	%		(12	)
Interest rate spread		1.67	%		1.88	%		1.90	%		0.97	%		1.52	%		(15	)
Traditional Products (5)
Fixed maturity securities, mortgage loans on real
estate and other, net of investment expenses		6.12	%		6.23	%		6.06	%		6.10	%		6.00	%		(12	)
Commercial mortgage loan prepayment and bond make whole premiums		0.11	%		0.00	%		0.00	%		0.00	%		0.01	%		(10	)
Alternative investments		-0.02	%		-0.02	%		-0.01	%		-0.08	%		-0.01	%		1
Net investment income yield on reserves		6.21	%		6.21	%		6.05	%		6.02	%		6.00	%		(21	)
(1)  COLI and BOLI are interest-sensitive and contain both UL and VUL products.
(2)  Includes UL, interest-sensitive whole life and the fixed investment option of VUL products.
(3) For the interest-sensitive life products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. We exclude net investment income earned on investments supporting statutory surplus and reverse repurchase agreement interest expense from our yield and spread calculations. The average crediting rate is calculated using interest credited on life products divided by average fixed account values.
(4)  Our yields on net investment income have been lowered due to holding higher cash balances related to our short-term liquidity strategy during recent volatile markets.  The increased cash and short-term investment balances for the first three months of 2009 reduced our yields by approximately 11 bps.
(5) For the traditional life products, the yield on earning assets is calculated as net investment income on traditional investment portfolios divided by average earning assets. As of March 31, 2009, interest-sensitive products represented approximately 85% of total interest-sensitive and traditional earning assets.

3/31/2009																PAGE 21
Insurance Solutions - Group Protection
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Operating Revenues
Insurance premiums	$	370.4		$	393.0		$	370.6		$	382.9		$	389.8			5.2	%
Mortality assessments		-			-			-			0.1			-		NM
Net investment income		27.7			30.5			30.8			28.2			30.1			8.7	%
Other revenues and fees		1.3			1.4			1.4			1.3			1.5			15.4	%
Total Operating Revenues		399.4			424.9			402.8			412.5			421.4			5.5	%
		-			-			-			-			-
Operating Expenses
Interest credited		0.2			0.3			0.5			0.6			0.6			200	%
Benefits		269.1			285.7			268.8			283.1			282.0			4.8	%
Underwriting, acquisition, insurance and other expenses		89.6			89.3			91.8			100.4			99.3			10.8	%
Total Operating Expenses		358.9			375.3			361.1			384.1			381.9			6.4	%
		-			-			-			-			-
Income from operations before federal income tax expense		40.5			49.6			41.7			28.4			39.5			-2.5	%
Federal income tax expense		14.2			17.4			14.5			10.0			13.8			-2.8	%
Income from Operations	$	26.3		$	32.2		$	27.2		$	18.4		$	25.7			-2.3	%
Effective Tax Rate		35.1	%		35.1	%		34.8	%		35.2	%		34.9	%
Average Equity	$	975.8		$	985.3		$	1,001.0		$	1,002.3		$	1,014.7
Return on Average Equity		10.8	%		13.1	%		10.9	%		7.3	%		10.1	%
Underwriting, Acquisition, Insurance and Other Expenses
Commissions (1)	$	40.7		$	40.0		$	42.1		$	44.7		$	44.2			8.6	%
General and administrative expenses (1)		44.5			44.5			44.6			53.9			47.4			6.5	%
Taxes, licenses and fees		10.0			9.0			9.0			10.6			10.5			5.0	%
Total commissions and expenses incurred		95.2			93.5			95.7			109.2			102.1			7.2	%
Less: commissions and expenses capitalized		(13.7	)		(13.0	)		(13.1	)		(18.5	)		(13.2	)		3.6	%
Amortization of DAC and VOBA, net of interest		8.1			8.8			9.2			9.7			10.4			28.4	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	89.6		$	89.3		$	91.8		$	100.4		$	99.3			10.8	%
		-			-			-			-			-
General and Administrative Expenses as a Percentage of Premiums (1)		12.0	%		11.3	%		12.0	%		14.1	%		12.2	%
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	123.4		$	129.0		$	133.2		$	137.1		$	145.9
Deferrals		13.7			13.0			13.1			18.5			13.2
Amortization, net of interest		(8.1	)		(8.8	)		(9.2	)		(9.7	)		(10.4	)
Deferrals, net of amortization included in underwriting, acquisition, insurance and other expenses		5.6			4.2			3.9			8.8			2.8
Balance at End-of-Period	$	129.0		$	133.2		$	137.1		$	145.9		$	148.7
		-			-			-			-			-
Annualized Sales by Product Line
Life	$	21.3		$	23.4		$	30.6		$	49.9		$	22.7			6.6	%
Disability		24.9			29.9			29.8			63.6			23.5			-5.6	%
Dental		7.9			11.3			8.0			15.5			8.1			2.5	%
Total	$	54.1		$	64.6		$	68.4		$	129.0		$	54.3			0.4	%
Insurance Premiums by Product Line
Life	$	132.9		$	133.8		$	135.7		$	138.8		$	142.4			7.1	%
Disability		163.2			167.0			168.4			173.1			174.0			6.6	%
Dental		36.5			37.4			38.0			37.9			37.5			2.7	%
Other		37.8			54.8			28.5			33.1			35.9			-5.0	%
Total	$	370.4		$	393.0		$	370.6		$	382.9		$	389.8			5.2	%
		-			-			-			-			-
Income from Operations by Product Line
Life	$	10.1		$	11.4		$	8.9		$	3.8		$	0.6			-94.1	%
Disability		15.4			19.9			16.0			13.1			25.3			64.3	%
Dental		(0.3	)		(0.4	)		1.2			0.8			(1.1	)	NM
Other		1.1			1.3			1.1			0.7			0.9			-18.2	%
Total	$	26.3		$	32.2		$	27.2		$	18.4		$	25.7			-2.3	%
		-			-			-			-			-
Loss Ratios by Product Line
Life		71.9	%		72.3	%		74.0	%		77.3	%		81.6	%
Disability		68.1	%		66.1	%		68.6	%		68.7	%		59.1	%
Dental		80.8	%		81.1	%		75.9	%		75.6	%		84.2	%
Combined Loss Ratios		71.0	%		70.2	%		71.6	%		72.8	%		70.8	%
(1) Prior periods reflect a reclassification to general and administrative expenses from commissions for approximately $2.5 million a quarter as third party administrative fees were incorrectly reflected as commissions.

3/31/2009																PAGE 22
Investment Management
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Operating Revenues
Investment advisory fees - external	$	76.2		$	75.8		$	67.7		$	48.4		$	43.7		-42.7	%
Investment advisory fees - inter-segment		20.0			20.6			20.6			20.3			19.9		-0.5	%
Other revenues and fees		24.1			27.9			21.6			14.5			18.3		-24.1	%
Total Operating Revenues		120.3			124.3			109.9			83.2			81.9		-31.9	%
		-			-			-			-			-
Operating Expenses
Operating and administrative expenses		101.1			100.8			101.8			89.5			78.4		-22.5	%
Total Operating Expenses		101.1			100.8			101.8			89.5			78.4		-22.5	%
		-			-			-			-			-
Income (loss) from operations before federal income tax expense (benefit)		19.2			23.5			8.1			(6.3	)		3.5		-81.8	%
Federal income tax expense (benefit)		7.1			8.5			2.8			(2.0	)		2.1		-70.4	%
Income (Loss) from Operations	$	12.1		$	15.0		$	5.3		$	(4.3	)	$	1.4		-88.4	%
Effective Tax Rate		37.0	%		36.2	%		34.6	%		31.7	%		60.0	%
Pre-Tax Operating Margin		16.0	%		18.9	%		7.4	%		-7.6	%		4.3	%
After-Tax Operating Margin		10.1	%		12.1	%		4.8	%		-5.2	%		1.7	%
Operating and Administrative Expenses
General and administrative expenses	$	87.6		$	85.9		$	90.3		$	79.7		$	70.4		-19.6	%
Depreciation and amortization		2.2			2.1			1.7			1.7			1.3		-40.9	%
Sub-advisory fees		7.2			7.4			6.5			4.4			3.8		-47.2	%
Total general and administrative expenses		97.0			95.4			98.5			85.8			75.5		-22.2	%
Taxes, licenses and fees		3.6			4.9			2.9			3.3			2.8		-22.2	%
Amortization of intangibles		0.5			0.5			0.4			0.4			0.1		-80.0	%
Total Operating and Administrative Expenses	$	101.1		$	100.8		$	101.8		$	89.5		$	78.4		-22.5	%
		-			-			-			-			-

3/31/2009																PAGE 23
Investment Management
Assets Under Management Roll Forward
Unaudited (in billions)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Retail Fixed
Balance at beginning-of-period	$	13.463		$	14.168		$	14.398		$	14.335		$	13.662			1.5	%
Sales (1)		1.981			1.533			1.618			1.844			1.809			-8.7	%
Redemptions		(1.395	)		(1.238	)		(1.292	)		(2.246	)		(1.531	)		-9.7	%
Exchanges		0.054			0.030			0.098			0.028			0.017			-68.5	%
Net flows		0.640			0.325			0.424			(0.374	)		0.295			-53.9	%
Net investment gains and change in market value		0.065			(0.095	)		(0.487	)		(0.299	)		0.201			209.2	%
Balance at End-of-Period (2)	$	14.168		$	14.398		$	14.335		$	13.662		$	14.158			-0.1	%
		-			-			-			-			-
Retail Equity
Balance at beginning-of-period	$	36.250		$	31.463		$	29.770		$	24.741		$	17.838			-50.8	%
Sales (1)		1.514			1.063			1.080			0.750			0.609			-59.8	%
Redemptions		(2.752	)		(2.292	)		(2.832	)		(2.453	)		(1.607	)		41.6	%
Exchanges		(0.057	)		(0.033	)		0.002			(0.029	)		(0.017	)		70.2	%
Net flows		(1.295	)		(1.262	)		(1.750	)		(1.732	)		(1.015	)		21.6	%
Net investment gains and change in market value		(3.492	)		(0.431	)		(3.279	)		(5.171	)		(2.287	)		34.5	%
Balance at End-of-Period (2)	$	31.463		$	29.770		$	24.741		$	17.838		$	14.536			-53.8	%
Total Retail
Balance at beginning-of-period	$	49.713		$	45.631		$	44.168		$	39.076		$	31.500			-36.6	%
Retail sales - annuities		1.562			0.786			1.075			1.032			0.771			-50.6	%
Retail sales - mutual funds		1.592			1.407			1.303			1.337			1.382			-13.2	%
Retail sales - managed accounts and other		0.341			0.403			0.320			0.225			0.265			-22.3	%
Total retail sales (1)		3.495			2.596			2.698			2.594			2.418			-30.8	%
Redemptions		(4.147	)		(3.530	)		(4.124	)		(4.699	)		(3.138	)		24.3	%
Exchanges		(0.003	)		(0.003	)		0.100			(0.001	)		-			100.0	%
Net flows		(0.655	)		(0.937	)		(1.326	)		(2.106	)		(0.720	)		-9.9	%
Net investment gains and change in market value		(3.427	)		(0.526	)		(3.766	)		(5.470	)		(2.086	)		39.1	%
Balance at End-of-Period (2)	$	45.631		$	44.168		$	39.076		$	31.500		$	28.694			-37.1	%
Institutional Fixed														-
Balance at beginning-of-period	$	12.746		$	12.409		$	12.070		$	11.928		$	11.373			-10.8	%
Inflows (1)		0.242			0.330			0.592			0.432			2.332		NM
Withdrawals/terminations		(0.638	)		(0.556	)		(1.152	)		(0.924	)		(0.720	)		-12.9	%
Exchanges		0.002			-			(0.108	)		0.001			0.001			-50.0	%
Net flows		(0.394	)		(0.226	)		(0.668	)		(0.491	)		1.613		NM
Net investment gains and change in market value		0.057			(0.113	)		(0.258	)		(0.064	)		(0.220	)	NM
Transfer of assets from an inter-company manager (3)		-			-			0.784			-			-		NM
Balance at End-of-Period (2)	$	12.409		$	12.070		$	11.928		$	11.373		$	12.766			2.9	%
Institutional Equity
Balance at beginning-of-period	$	22.898		$	20.498		$	19.453		$	15.595		$	11.669			-49.0	%
Inflows (1)		0.986			0.580			0.698			0.754			0.380			-61.5	%
Withdrawals/terminations		(1.100	)		(0.889	)		(1.984	)		(1.457	)		(1.061	)		3.5	%
Exchanges		(0.002	)		-			(0.053	)		-			(0.001	)		50.0	%
Net flows		(0.116	)		(0.309	)		(1.339	)		(0.703	)		(0.682	)	NM
Net investment gains and change in market value		(2.284	)		(0.736	)		(2.470	)		(3.223	)		(0.637	)		72.1	%
Transfer of assets to a third-party		-			-			(0.065	)		-			-		NM
Transfer of assets from an inter-company manager (3)		-			-			0.016			-			-		NM
Balance at End-of-Period (2)	$	20.498		$	19.453		$	15.595		$	11.669		$	10.350			-49.5	%
								-			-			-
Total Institutional
Balance at beginning-of-period	$	35.644		$	32.907		$	31.523		$	27.523		$	23.042			-35.4	%
Inflows (1)		1.228			0.910			1.290			1.186			2.712			120.8	%
Withdrawals/terminations		(1.738	)		(1.445	)		(3.136	)		(2.381	)		(1.781	)		-2.5	%
Exchanges		-			-			(0.161	)		0.001			-		NM
Net flows		(0.510	)		(0.535	)		(2.007	)		(1.194	)		0.931			282.5	%
Net investment gains and change in market value		(2.227	)		(0.849	)		(2.728	)		(3.287	)		(0.857	)		61.5	%
Transfer of assets to a third-party		-			-			(0.065	)		-			-		NM
Transfer of assets from an inter-company manager(3)		-			-			0.800			-			-		NM
Balance at End-of-Period (2)	$	32.907		$	31.523		$	27.523		$	23.042		$	23.116			-29.8	%
		-			-			-			-			-
Total Retail and Institutional - At End-of-Period (2)	$	78.538		$	75.691		$	66.599		$	54.542		$	51.810			-34.0	%
General Account Assets - At End-of-Period	$	67.339		$	65.997		$	63.531		$	65.680		$	64.824			-3.7	%
Total Assets Under Management at End-of-Period	$	145.877		$	141.688		$	130.130		$	120.222		$	116.634			-20.0	%
		-
Total Retail and Institutional - Net Flows	$	(1.165	)	$	(1.472	)	$	(3.333	)	$	(3.300	)	$	0.211			118.1	%
Sub-Advised Assets, Included in Assets
Under Management Above
Retail	$	14.212		$	13.651		$	11.168		$	8.047		$	6.076			-57.2	%
Institutional		4.071			3.794			3.035			2.180			1.919			-52.9	%
Total Sub-Advised Assets	$	18.283		$	17.445		$	14.203		$	10.227		$	7.995			-56.3	%
		-			-			-			-			-
(1)  Includes dividend reinvestments.
(2)   Includes inter-segment and external assets under management.
(3) Reflects assets that were transferred to an inter-company manager, which did not impact Lincoln's consolidated assets under management.

3/31/2009																PAGE 24
Investment Management
Assets Under Management Roll Forward (Continued) (1)
Unaudited (in billions)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Inter-Segment Assets - Retail and Institutional
Balance at beginning-of-period	$	9.672		$	9.191		$	8.995		$	8.937		$	7.968			-17.6	%
Sales/inflows		0.718			0.375			0.812			0.829			0.536			-25.3	%
Redemptions/withdrawals/terminations		(0.679	)		(0.543	)		(0.866	)		(0.973	)		(0.676	)		0.4	%
Exchanges		-			-			(0.162	)		-			-		NM
Net flows		0.039			(0.168	)		(0.216	)		(0.144	)		(0.140	)	NM
Net investment gains and change in market value		(0.520	)		(0.028	)		(0.551	)		(0.825	)		(0.323	)		37.9	%
Transfer of assets to a third-party		-			-			(0.075	)		-			-		NM
Transfer of assets from an inter-company manager		-			-			0.784			-			-		NM
Balance at End-of-Period	$	9.191		$	8.995		$	8.937		$	7.968		$	7.505			-18.3	%
		-												-
Inter-Segment Assets - General Account at End-of-Period	$	67.339		$	65.997		$	63.531		$	65.680		$	64.824			-3.7	%
Total Inter-Segment Assets at End-of-Period	$	76.530		$	74.992		$	72.468		$	73.648		$	72.329			-5.5	%
Total External
Balance at beginning-of-period (2)	$	75.686		$	69.346		$	66.696		$	57.662		$	46.574			-38.5	%
Sales/inflows		4.004			3.132			3.176			2.951			4.594			14.7	%
Redemptions/withdrawals/terminations		(5.207	)		(4.433	)		(6.393	)		(6.107	)		(4.243	)		18.5	%
Exchanges		(0.003	)		(0.002	)		0.101			-			-			100.0	%
Net flows		(1.206	)		(1.303	)		(3.116	)		(3.156	)		0.351			129.1	%
Net investment gains and change in market value		(5.134	)		(1.347	)		(5.944	)		(7.932	)		(2.620	)		49.0	%
Transfer of assets from a third-party		-			-			0.010			-			-		NM
Transfer of assets from an inter-company manager		-			-			0.016			-			-		NM
Balance at End-of-Period	$	69.346		$	66.696		$	57.662		$	46.574		$	44.305			-36.1	%
		-			-			-			-			-
(1) This roll forward breaks out total assets under management by inter-segment and external balances, which include both retail and institutional assets under management.
(2) Includes Delaware's VIP funds. Lincoln Financial insurance subsidiaries, as well as unaffiliated insurers, participate in these funds.

3/31/2009																PAGE 25
Lincoln UK
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Operating Revenues
Insurance premiums	$	19.0		$	26.4		$	18.9		$	14.0		$	10.3			-45.8	%
Mortality assessments		9.1			9.1			8.7			7.4			7.0			-23.1	%
Expense assessments		37.1			42.6			31.1			26.2			16.7			-55.0	%
Net investment income		20.3			19.8			21.1			16.8			13.4			-34.0	%
Other revenues and fees		0.1			-			-			-			-			-100.0	%
Total Operating Revenues		85.6			97.9			79.8			64.4			47.4			-44.6	%
		-			-			-			-			-
Operating Expenses
Benefits		30.7			30.2			26.5			19.9			18.4			-40.1	%
Underwriting, acquisition, insurance and other expenses		38.5			40.0			34.4			30.0			19.5			-49.4	%
Total Operating Expenses		69.2			70.2			60.9			49.9			37.9			-45.2	%
		-			-			-			-			-
Income from operations before federal income tax expense		16.4			27.7			18.9			14.5			9.5			-42.1	%
Federal income tax expense		5.7			9.7			6.6			5.1			3.3			-42.1	%
Income from Operations	$	10.7		$	18.0		$	12.3		$	9.4		$	6.2			-42.1	%
Effective Tax Rate		34.8	%		35.0	%		34.9	%		35.2	%		34.7	%
Average Equity	$	375.7		$	384.6		$	385.7		$	392.1		$	388.6
Return on Average Equity		11.4	%		18.7	%		12.8	%		9.6	%		6.4	%
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	1.0		$	1.0		$	1.0		$	1.1		$	0.6			-40.0	%
General and administrative expenses		26.6			25.9			21.9			21.5			17.2			-35.3	%
Total commissions and expenses incurred		27.6			26.9			22.9			22.6			17.8			-35.5	%
Less: commissions and expenses capitalized		(0.6	)		(0.7	)		(0.8	)		(0.8	)		(0.6	)		0.0	%
Amortization of DAC and VOBA, net of interest		11.5			13.8			12.3			8.2			2.3			-80.0	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	38.5		$	40.0		$	34.4		$	30.0		$	19.5			-49.4	%
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	772.1		$	760.4		$	749.9		$	658.3		$	533.5
Deferrals		0.6			0.7			0.8			0.8			0.6
Amortization, net of interest:
Unlocking		1.3			(0.3	)		(1.5	)		1.0			4.9
Other amortization		(12.8	)		(13.5	)		(10.8	)		(9.3	)		(7.2	)
Deferrals, net of amortization included in underwriting, acquisition, insurance and other expenses		(10.9	)		(13.1	)		(11.5	)		(7.5	)		(1.7	)
Foreign currency translation adjustment		(0.8	)		2.6			(80.1	)		(117.3	)		(9.0	)
Balance at End-of-Period	$	760.4		$	749.9		$	658.3		$	533.5		$	522.8
Roll Forward of DFEL
Balance at beginning-of-period	$	379.3		$	371.5		$	366.8		$	323.8		$	262.2
Deferrals		0.9			0.6			0.8			0.9			1.3
Amortization, net of interest:
Unlocking		(0.5	)		1.2			0.4			(0.2	)		1.9
Other amortization		(7.7	)		(7.9	)		(4.9	)		(4.8	)		(4.3	)
Deferrals, net of amortization included in expense assessments		(7.3	)		(6.1	)		(3.7	)		(4.1	)		(1.1	)
Foreign currency translation adjustment		(0.5	)		1.4			(39.3	)		(57.5	)		(4.4	)
Balance at End-of-Period	$	371.5		$	366.8		$	323.8		$	262.2		$	256.7
Unit-Linked Assets
Balance at beginning-of-period	$	8.850		$	8.079		$	7.833		$	6.585		$	4.978			-43.8	%
Deposits		0.060			0.101			0.081			0.057			0.039			-35.0	%
Withdrawals (including charges) and deaths		(0.213	)		(0.227	)		(0.189	)		(0.138	)		(0.108	)		49.3	%
Net flows		(0.153	)		(0.126	)		(0.108	)		(0.081	)		(0.069	)		54.9	%
Investment income and change in market value		(0.608	)		(0.150	)		(0.304	)		(0.462	)		(0.279	)		54.1	%
Foreign currency adjustment		(0.010	)		0.030			(0.836	)		(1.064	)		(0.079	)	NM
Balance at End-of-Period	$	8.079		$	7.833		$	6.585		$	4.978		$	4.551			-43.7	%
		-			-			-			-			-
Individual Life In Force	$	18.283		$	18.009		$	15.605		$	12.284		$	11.674			-36.1	%
Exchange Rate - Dollars to Pounds
For-the-period		1.987			1.986			1.897			1.590			1.443			-27.4	%
End-of-period		1.985			1.992			1.778			1.459			1.435			-27.7	%

3/31/2009																PAGE 26
Other Operations (1)
Unaudited (in millions)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Operating Revenues
Insurance premiums	$	1.4		$	1.7		$	0.6		$	0.3		$	0.8			-42.9	%
Net investment income		98.6			87.1			90.8			81.9			69.7			-29.3	%
Amortization of deferred gain on business sold through reinsurance (2)		18.5			18.4			18.4			18.4			18.4			-0.5	%
Other revenues and fees		(2.3	)		0.6			1.1			(1.1	)		(0.8	)		65.2	%
Communications revenues		21.7			22.9			21.5			19.4			14.8			-31.8	%
Inter-segment elimination of investment advisory fees		(20.0	)		(20.6	)		(20.6	)		(20.3	)		(19.9	)		0.5	%
Total Operating Revenues		117.9			110.1			111.8			98.6			83.0			-29.6	%
		-			-			-			-			-
Operating Expenses
Interest credited		45.8			41.8			42.6			40.7			50.9			11.1	%
Benefits		27.8			29.0			30.7			25.7			106.6			283.5	%
Underwriting, acquisition, insurance and other expenses		34.9			46.7			31.6			44.0			32.1			-8.0	%
Taxes, licenses and fees		2.1			1.1			2.6			1.4			1.5			-28.6	%
Interest and debt expenses		75.4			64.8			68.6			72.3			64.7			-14.2	%
Communications expenses		15.5			15.4			14.2			14.7			12.9			-16.8	%
Inter-segment elimination of investment advisory fees		(20.0	)		(20.6	)		(20.6	)		(20.3	)		(19.9	)		0.5	%
Total Operating Expenses		181.5			178.2			169.7			178.5			248.8			37.1	%
		-			-			-			-			-
Loss from operations before federal income tax benefit		(63.6	)		(68.1	)		(57.9	)		(79.9	)		(165.8	)	NM
Federal income tax benefit		(21.3	)		(23.7	)		(18.4	)		(25.1	)		(57.5	)	NM
Loss From Operations	$	(42.3	)	$	(44.4	)	$	(39.5	)	$	(54.8	)	$	(108.3	)	NM
Run Off Institutional Pensions Account Values - Balance at End-of-Period	$	2.074		$	2.051		$	2.010		$	1.941		$	1.931			-6.9	%
Discontinued Operations
Unaudited (in millions)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Discontinued Operations Before Disposal
Income from discontinued operations before federal income tax expense	$	7.4		$	-		$	-		$	-		$	-			-100.0	%
Federal income tax expense		2.6			-			-			-			-			-100.0	%
Income From Discontinued Operations Before Disposal		4.8			-			-			-			-			-100.0	%
		-			-			-			-			-
Disposal
Gain (loss) on disposal before federal income tax expense (benefit)		(12.3	)		(0.4	)		(0.2	)		0.6			-			100.0	%
Federal income tax expense (benefit)		(3.3	)		(0.1	)		0.8			0.2			-			100.0	%
Gain (Loss) on Disposal		(9.0	)		(0.3	)		(1.0	)		0.4			-			100.0	%
Income (Loss) From Discontinued Operations	$	(4.2	)	$	(0.3	)	$	(1.0	)	$	0.4		$	-			100.0	%
(1)Includes inter-segment eliminations of transactions.
(2) Represents the amortization of deferred gain recognized on the business sold through indemnity reinsurance to Swiss Re.

3/31/2009																PAGE 27
Consolidated Domestic Deposits, Account Balances and Net Flows
Unaudited (in billions)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Deposits
Retirement Solutions:
Annuities - fixed annuities (1)	$	1.160		$	1.371		$	1.276		$	1.233		$	1.363			17.5	%
Defined Contribution - fixed annuities		0.332			0.280			0.290			0.279			0.416			25.3	%
Annuities - variable annuities		1.866			2.065			1.672			1.087			0.834			-55.3	%
Defined Contribution - variable products (2)		1.219			1.141			1.044			0.962			1.159			-4.9	%
Insurance Solutions - Life Insurance		1.132			1.062			1.082			1.217			1.058			-6.5	%
Investment Management:
Annuities		1.562			0.786			1.075			1.032			0.771			-50.6	%
Mutual funds		1.592			1.407			1.303			1.337			1.382			-13.2	%
Managed accounts and other		0.341			0.403			0.320			0.225			0.265			-22.3	%
Consolidating adjustments		(1.494	)		(0.776	)		(1.061	)		(1.019	)		(0.752	)		49.7	%
Total Gross Retail Deposits		7.710			7.739			7.001			6.353			6.496			-15.7	%
Investment Management - institutional		1.228			0.910			1.290			1.186			2.712			120.8	%
Consolidating adjustments		(0.092	)		(0.034	)		(0.052	)		(0.109	)		(0.090	)		2.2	%
Total Gross Deposits	$	8.846		$	8.615		$	8.239		$	7.430		$	9.118			3.1	%
	As of
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Account Balances
Retirement Solutions:
Annuities - fixed annuities (1)	$	16.395		$	16.544		$	16.493		$	16.530		$	16.760			2.2	%
Defined Contribution - fixed annuities		11.217			11.294			11.418			11.638			11.924			6.3	%
Annuities - variable annuities		54.966			55.854			49.982			40.925			39.301			-28.5	%
Defined Contribution - variable products (2)		23.547			23.748			21.155			17.240			16.569			-29.6	%
Insurance Solutions - Life Insurance		32.341			32.603			32.283			31.753			30.031			-7.1	%
Investment Management:
Annuities		11.697			11.700			10.952			9.377			8.875			-24.1	%
Mutual funds		18.690			18.176			16.699			14.021			13.716			-26.6	%
Managed accounts and other		15.244			14.292			11.425			8.102			6.102			-60.0	%
Consolidating adjustments		(11.264	)		(11.286	)		(10.590	)		(9.086	)		(8.607	)		23.6	%
Total Retail Account Balances		172.832			172.925			159.817			140.500			134.671			-22.1	%
Investment Management - institutional		32.907			31.523			27.523			23.042			23.116			-29.8	%
Consolidating adjustments		(2.208	)		(2.124	)		(2.423	)		(2.143	)		(2.034	)		7.9	%
Total Account Balances	$	203.531		$	202.323		$	184.917		$	161.399		$	155.754			-23.5	%
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Net Flows
Retirement Solutions:
Annuities	$	1.181		$	1.589		$	0.944		$	0.376		$	0.430			-63.6	%
Defined Contribution		0.280			0.237			0.093			0.171			0.659			135.4	%
Insurance Solutions - Life Insurance		0.651			0.677			0.690			0.804			0.557			-14.4	%
Investment Management - retail		(0.655	)		(0.937	)		(1.326	)		(2.106	)		(0.720	)		-9.9	%
Consolidating adjustments		(0.098	)		(0.075	)		(0.025	)		0.071			(0.001	)		99.0	%
Total Retail Net Flows		1.359			1.491			0.376			(0.684	)		0.925			-31.9	%
Investment Management - institutional		(0.510	)		(0.535	)		(2.007	)		(1.194	)		0.931			282.5	%
Consolidating adjustments		0.030			0.052			0.253			0.130			0.057			90.0	%
Total Net Flows	$	0.879		$	1.008		$	(1.378	)	$	(1.748	)	$	1.914			117.7	%
(1)  Includes fixed portion of variable annuities.
(2) Includes amounts attributable to mutual fund net flows. Mutual fund account values are not included in the separate accounts reported on our Consolidated
Balance Sheets, as we do not have any ownership interest in them.

3/31/2009											PAGE 28
Consolidated Investment Data - Assets Managed
Unaudited (in billions)
	As of
	March		June		Sept.		Dec.		March		%
	2008		2008		2008		2008		2009		Change
Assets Managed by Source
LNC's investments and cash:
Available-for-sale fixed maturity securities	$	55.624	$	54.518	$	51.931	$	48.934	$	49.349		-11.3	%
Available-for-sale equity securities		0.474		0.465		0.493		0.289		0.205		-56.8	%
Trading securities		2.714		2.551		2.393		2.333		2.246		-17.2	%
Other investments		12.794		12.720		13.140		15.786		14.355		12.2	%
Total LNC investments		71.606		70.254		67.957		67.342		66.155		-7.6	%
Separate accounts		84.703		85.295		74.971		60.633		57.487		-32.1	%
Cash and invested cash		2.447		1.921		2.160		5.926		5.613		129.4	%
Total LNC		158.756		157.470		145.088		133.901		129.255		-18.6	%
Non-affiliate assets managed		66.020		63.197		54.419		44.107		41.953		-36.5	%
Total Assets Managed	$	224.776	$	220.667	$	199.507	$	178.008	$	171.208		-23.8	%
		-
Assets Managed by Advisor
Investment Management segment (1)	$	78.538	$	75.691	$	66.599	$	54.542	$	51.810		-34.0	%
Delaware Investment Advisers (2)		67.339		65.997		63.531		65.680		64.824		-3.7	%
Lincoln UK (excluding policy loans)		9.442		9.176		7.772		5.978		5.497		-41.8	%
Policy loans		2.855		2.852		2.870		2.923		2.908		1.9	%
Non-LNC affiliates		66.602		66.951		58.735		48.885		46.169		-30.7	%
Total Assets Managed	$	224.776	$	220.667	$	199.507	$	178.008	$	171.208		-23.8	%
(1)  See page 23 for additional detail.
(2) Represents assets managed internally. See page 23 for additional detail.

3/31/2009																PAGE 29
Consolidated Investment Data - Other Investment Data
Unaudited (millions of dollars)
	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2008			2008			2008			2008			2009			Change
Net Investment Income
Available-for-sale fixed maturity securities	$	858.0		$	855.2		$	856.1		$	840.8		$	836.3			-2.5	%
Available-for-sale equity securities		9.1			7.8			7.0			5.2			2.1			-76.9	%
Trading securities		42.5			42.1			41.0			40.3			39.6			-6.8	%
Mortgage loans on real estate		121.6			128.6			121.2			122.1			119.2			-2.0	%
Real estate		8.0			6.4			6.0			5.2			3.7			-53.8	%
Policy loans		44.6			43.2			46.1			45.4			44.3			-0.7	%
Invested cash		18.9			15.3			12.2			16.4			9.9			-47.6	%
Other investments		(2.9	)		9.5			29.0			(68.4	)		(2.2	)		24.1	%
Investment income		1,099.8			1,108.1			1,118.6			1,007.0			1,052.9			-4.3	%
Investment expense		(34.4	)		(31.3	)		(29.6	)		(30.1	)		(26.3	)		23.5	%
Net Investment Income	$	1,065.4		$	1,076.8		$	1,089.0		$	976.9		$	1,026.6			-3.6	%
Average Invested Assets (Amortized Cost)	$	71,195.4		$	71,438.8		$	71,269.9		$	70,666.6		$	70,421.1
Ratio of Net Investment Income Over Average Invested Assets		5.99	%		6.03	%		6.11	%		5.53	%		5.83	%
Realized Loss Related to Investments
Available-for-sale fixed maturity securities:
Gross gains	$	9.1		$	21.7		$	26.8		$	16.4		$	54.6		NM
Gross losses		(100.0	)		(137.8	)		(380.1	)		(527.6	)		(244.3	)	NM
Equity securities:
Gross gains		2.7			0.3			1.1			0.7			3.1			14.8	%
Gross losses		-			(7.0	)		(26.0	)		(131.0	)		(2.6	)	NM
Gain (loss) on other investments		25.1			3.1			(0.9	)		5.5			(2.1	)	NM
Associated amortization of DAC, VOBA, DSI, DFEL and changes in other contract holder funds and funds withheld reinsurance liabilities		25.1			24.2			95.1			116.6			55.3			120.3	%
Total realized loss on investments, excluding trading securities		(38.0	)		(95.5	)		(284.0	)		(519.4	)		(136.0	)	NM
Loss on certain derivative instruments		(3.1	)		(29.1	)		(29.9	)		(50.1	)		(16.5	)	NM
Total, pre-tax		(41.1	)		(124.6	)		(313.9	)		(569.5	)		(152.5	)	NM
Income taxes		(14.0	)		(44.0	)		(109.9	)		(199.4	)		(53.4	)	NM
Total, After-Tax	$	(27.1	)	$	(80.6	)	$	(204.0	)	$	(370.1	)	$	(99.1	)	NM
				As of March 31, 2009									As of December 31, 2008
				Amount			% of Total						Amount			% of Total
Available-for-Sale and Trading Securities
Fixed maturity securities (fair value)				$	51,593.1			99.6	%				$	51,265.4			99.4	%
Fixed maturity securities (amortized cost)					58,153.5			99.2	%					57,498.6			99.2	%
Equity securities (fair value)					206.4			0.4	%					290.0			0.6	%
Equity securities (amortized cost)					465.9			0.8	%					468.1			0.8	%
% of Available-for-Sale Fixed Maturity Securities (Based on Fair Value)
Treasuries and AAA								22.1	%								24.5	%
AA or better								28.4	%								30.9	%
BB or less								5.6	%								4.5	%
General Account Investments				As of March 31, 2009									As of December 31, 2008
				Amount			% of Total						Amount			% of Total
Fixed Maturities - Security Sector:
Corporate bonds				$	37,705.4			76.4	%				$	36,710.4			75.0	%
U.S. Government bonds					233.4			0.5	%					245.9			0.5	%
Foreign government bonds					764.8			1.5	%					760.8			1.5	%
Mortgage-backed securities					9,754.6			19.8	%					10,129.6			20.7	%
State and municipal bonds					125.6			0.3	%					125.4			0.3	%
Preferred stocks - redeemable					765.1			1.6	%					962.3			2.0	%
Total				$	49,348.9			100.0	%				$	48,934.4			100.0	%
					-
	As of
	March			June			Sept.			Dec.			March			%
Composition of Investment Portfolio	2008			2008			2008			2008			2009			Change
Available-for-sale securities, at fair value:
Fixed maturity	$	55,624.0		$	54,517.6		$	51,931.1		$	48,934.4		$	49,348.9			-11.3	%
Equity		474.4			464.6			492.6			288.5			205.0			-56.8	%
Trading securities		2,713.6			2,550.5			2,393.4			2,332.5			2,245.6			-17.2	%
Mortgage loans on real estate and real estate		7,707.2			7,813.6			7,815.0			7,840.8			7,745.3			0.5	%
Policy loans		2,854.8			2,852.5			2,870.1			2,923.3			2,907.6			1.8	%
Derivative investments		1,091.1			889.9			1,262.2			3,397.2			2,226.1			104.0	%
Other investments		1,141.0			1,163.5			1,193.0			1,624.2			1,476.3			29.4	%
Total	$	71,606.1		$	70,252.2		$	67,957.4		$	67,340.9		$	66,154.8			-7.6	%