Lincoln National (LNC) 8-K Second Quarter Actions Strengthen Capital Position and Financial Flexibility

Lincoln Financial Group
Table of Contents
Second 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
Consolidating Statements of Income from Operations - Current Year - Year-to-Date	10
Consolidating Statements of Income from Operations - Prior Year - Year-to-Date	11
Consolidated Balance Sheets	12
Balance Sheet Data - Segment Highlights	13
Retirement Solutions
Annuities:
Income Statements and Operational Data	14
Roll Forwards of DAC, VOBA, DFEL and DSI	15
Account Value Roll Forward	16
Account Values, Spread Information, GLB Expense Assessments,
GLB Attributed Fee and GLB Account Values by Type	17
Defined Contribution:
Income Statements and Operational Data	18
Account Value Roll Forward	19
Account Value Roll Forward - By Product and Supplemental Data	20
Insurance Solutions
Life Insurance:
Income Statements and Operational Data	21
Operational Data and Account Value Roll Forward	22
Group Protection:
Income Statements and Operational Data	23
Investment Management
Income Statements and Operational Data	24
Assets Under Management Roll Forward	25-26
Other Operations	27
Discontinued Operations	27
Consolidated Domestic Deposits, Account Balances, and Net Flows	28
Consolidated Investment Data
Assets Managed	29
Other Investment Data	30

6/30/2009
LFG Analyst Coverage
Second 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		Sean Rourke	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
Sandler O'Neil & Partners		Edward Shields	312-281-3487
Sterne, Agee & Leach		John Nadel	212-338-4717
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

6/30/2009		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.

 

6/30/2009																						PAGE 1
Financial Highlights
Unaudited (in millions, except per share data)
	For the Three Months Ended June 30,												For the Six Months Ended June 30,
							Change												Change
	2009			2008			Amount			%			2009			2008			Amount			%
Income from Operations - By Segment
Annuities	$	65.4		$	116.2		$	(50.8	)		-43.7	%	$	139.3		$	234.0		$	(94.7	)		-40.5	%
Defined Contribution		27.7			41.2			(13.5	)		-32.8	%		57.5			81.6			(24.1	)		-29.5	%
Total Retirement Solutions		93.1			157.4			(64.3	)		-40.9	%		196.8			315.6			(118.8	)		-37.6	%
Life Insurance		132.9			163.6			(30.7	)		-18.8	%		275.1			320.9			(45.8	)		-14.3	%
Group Protection		33.6			32.2			1.4			4.3	%		59.3			58.5			0.8			1.4	%
Total Insurance Solutions		166.5			195.8			(29.3	)		-15.0	%		334.4			379.4			(45.0	)		-11.9	%
Investment Management		5.1			15.0			(9.9	)		-66.0	%		6.5			27.1			(20.6	)		-76.0	%
Other Operations		(52.3	)		(44.8	)		(7.5	)		-16.7	%		(160.8	)		(87.4	)		(73.4	)		-84.0	%
Income from Operations (1)		212.4			323.4			(111.0	)		-34.3	%		376.9			634.7			(257.8	)		-40.6	%
Excluded realized loss, after-tax  (2)		(214.5	)		(73.2	)		(141.3	)	NM				(401.5	)		(102.6	)		(298.9	)	NM
Income from reserve changes (net of related amortization) on business sold through  reinsurance, after-tax		0.4			0.4			-			-			0.8			0.8			-			-
Gain on early extinguishment of   debt, after-tax		-			-			-		NM				41.8			-			41.8		NM
Impairment of intangibles, after-tax		0.6			(139.0	)		139.6			100.4	%		(602.9	)		(139.0	)		(463.9	)	NM
Income (loss) from discontinued operations, after-tax (3)		(160.3	)		13.1			(173.4	)	NM				(155.4	)		19.9			(175.3	)	NM
Net Income (Loss)	$	(161.4	)	$	124.7		$	(286.1	)	NM			$	(740.3	)	$	413.8		$	(1,154.1	)	NM

Earnings Per Share (Diluted) (4)
Income from operations (1) (5)	$	0.81		$	1.24		$	(0.43	)		-34.7	%	$	1.45		$	2.43		$	(0.98	)		-40.3	%
Excluded realized loss, after-tax (2) (6)		(0.81	)		(0.28	)		(0.53	)	NM				(1.55	)		(0.39	)		(1.16	)	NM
Gain on early extinguishment of debt, after-tax (6)		-			-			-		NM				0.16			-			0.16		NM
Impairment of intangibles, after-tax (6)		-			(0.53	)		0.53			100.0	%		(2.33	)		(0.54	)		(1.79	)	NM
Income (loss) from discontinued operations, after-tax  (3) (6)		(0.62	)		0.05			(0.67	)	NM				(0.60	)		0.08			(0.68	)	NM
Net Income (Loss)	$	(0.62	)	$	0.48		$	(1.10	)	NM			$	(2.87	)	$	1.58		$	(4.45	)	NM

Operating Revenues - By Segment
Annuities	$	437.0		$	618.7		$	(181.7	)		-29.4	%	$	1,036.4		$	1,241.3		$	(204.9	)		-16.5	%
Defined Contribution		215.0			239.4			(24.4	)		-10.2	%		440.1			477.1			(37.0	)		-7.8	%
Total Retirement Solutions		652.0			858.1			(206.1	)		-24.0	%		1,476.5			1,718.4			(241.9	)		-14.1	%
Life Insurance		1,002.2			1,087.9			(85.7	)		-7.9	%		2,078.4			2,142.5			(64.1	)		-3.0	%
Group Protection		442.9			424.9			18.0			4.2	%		864.3			824.3			40.0			4.9	%
Total Insurance Solutions		1,445.1			1,512.8			(67.7	)		-4.5	%		2,942.7			2,966.8			(24.1	)		-0.8	%
Investment Management		91.6			124.3			(32.7	)		-26.3	%		173.5			244.6			(71.1	)		-29.1	%
Other Operations		92.5			110.1			(17.6	)		-16.0	%		175.5			228.0			(52.5	)		-23.0	%
Total Operating Revenues		2,281.2			2,605.3			(324.1	)		-12.4	%		4,768.2			5,157.8			(389.6	)		-7.6	%
Excluded realized loss, pre-tax (2)		(330.0	)		(112.8	)		(217.2	)	NM				(617.5	)		(157.8	)		(459.7	)	NM
Amortization of deferred gains arising from reserve changes on business sold through reinsurance, pre-tax		0.7			0.7			-			-			1.3			1.4			(0.1	)		-7.1	%
Total Revenues	$	1,951.9		$	2,493.2		$	(541.3	)		-21.7	%	$	4,152.0		$	5,001.4		$	(849.4	)		-17.0	%

(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 27 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 second quarter and first six months of 2009, shares used in the earnings per share calculation represent diluted shares.

(6) As a result of the net loss in the second quarter and first six months 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.

6/30/2009																						PAGE 2
Financial Highlights (Continued)
Unaudited (billions of dollars)
Operational Data by Segment	For the Three Months Ended June 30,												For the Six Months Ended June 30,
							Change												Change
	2009			2008			Amount			%			2009			2008			Amount			%
Retirement Solutions - Annuities
Gross deposits	$	2.635		$	3.436		$	(0.801	)		-23.3	%	$	4.832		$	6.462		$	(1.630	)		-25.2	%
Net flows		1.043			1.589			(0.546	)		-34.4	%		1.473			2.770			(1.297	)		-46.8	%
Account values (gross)		64.119			73.653			(9.534	)		-12.9	%		64.119			73.653			(9.534	)		-12.9	%
Account values (net of reinsurance)		63.054			72.398			(9.344	)		-12.9	%		63.054			72.398			(9.344	)		-12.9	%
Retirement Solutions - Defined Contribution
Gross deposits (1)		1.238			1.421			(0.183	)		-12.9	%		2.813			2.972			(0.159	)		-5.3	%
Net flows		0.329			0.237			0.092			38.8	%		0.988			0.517			0.471			91.1	%
Account values - annuities		23.172			27.489			(4.317	)		-15.7	%		23.172			27.489			(4.317	)		-15.7	%
Alliance and Smart Future mutual funds		8.155			7.553			0.602			8.0	%		8.155			7.553			0.602			8.0	%
Total annuities and mutual fund account values		31.327			35.042			(3.715	)		-10.6	%		31.327			35.042			(3.715	)		-10.6	%
Insurance Solutions - Life Insurance
Sales (in millions)	$	123.7		$	165.7		$	(42.0	)		-25.3	%	$	268.9		$	339.4		$	(70.5	)		-20.8	%
Life insurance in force		527.533			537.716			(10.183	)		-1.9	%		527.533			537.716			(10.183	)		-1.9	%
Account values (net of reinsurance)		30.622			32.603			(1.981	)		-6.1	%		30.622			32.603			(1.981	)		-6.1	%
Insurance Solutions - Group Protection
Annualized sales (in millions)		59.5			64.6			(5.1	)		-7.9	%		113.8			118.7			(4.9	)		-4.1	%
Loss ratio (2)		68.2	%		70.2	%	NM			NM				69.5	%		70.6	%	NM			NM
Investment Management
Retail sales	$	2.759		$	2.596		$	0.163			6.3	%	$	5.177		$	6.091		$	(0.914	)		-15.0	%
Retail net flows		0.044			(0.937	)		0.981			104.7	%		(0.676	)		(1.592	)		0.916			57.5	%
Institutional inflows		1.108			0.910			0.198			21.8	%		3.820			2.140			1.680			78.5	%
Institutional net flows		0.029			(0.535	)		0.564			105.4	%		0.960			(1.045	)		2.005			191.9	%
Total sales and inflows		3.867			3.506			0.361			10.3	%		8.997			8.231			0.766			9.3	%
Total net flows		0.073			(1.472	)		1.545			105.0	%		0.284			(2.637	)		2.921			110.8	%
Assets under management - retail and institutional		57.867			75.691			(17.824	)		-23.5	%		57.867			75.691			(17.824	)		-23.5	%
Assets under management - general account		68.814			65.997			2.817			4.3	%		68.814			65.997			2.817			4.3	%
Assets under management - total segment		126.681			141.688			(15.007	)		-10.6	%		126.681			141.688			(15.007	)		-10.6	%
Consolidated
Domestic retail deposits	$	6.731		$	7.739		$	(1.008	)		-13.0	%	$	13.227		$	15.449		$	(2.222	)		-14.4	%
Domestic retail account balances		147.927			172.925			(24.998	)		-14.5	%		147.927			172.925			(24.998	)		-14.5	%
Domestic retail net flows		2.001			1.491			0.510			34.2	%		2.926			2.849			0.077			2.7	%
Domestic deposits		7.748			8.615			(0.867	)		-10.1	%		16.866			17.463			(0.597	)		-3.4	%
Domestic net flows		2.072			1.008			1.064			105.6	%		3.986			1.886			2.100			111.3	%
Assets under management		180.774			211.488			(30.714	)		-14.5	%		180.774			211.488			(30.714	)		-14.5	%

(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.

6/30/2009																						PAGE 3
Financial Highlights (Continued)
Unaudited (millions of dollars)
	For the Three Months Ended June 30,												For the Six Months Ended June 30,
							Change												Change
	2009			2008			Amount			%			2009			2008			Amount			%
Balance Sheet Assets - End-of-Period	$	167,044.4		$	184,281.2		$	(17,236.8	)		-9.4	%	$	167,044.4		$	184,281.2		$	(17,236.8	)		-9.4	%
Stockholders' Equity
Beginning-of-period (including AOCI)	$	7,323.5		$	11,086.3		$	(3,762.8	)		-33.9	%	$	7,976.7		$	11,718.4		$	(3,741.7	)		-31.9	%
End-of-period (including AOCI)		9,074.9			10,497.7			(1,422.8	)		-13.6	%		9,074.9			10,497.7			(1,422.8	)		-13.6	%
End-of-period (excluding AOCI)		10,782.3			11,306.0			(523.7	)		-4.6	%		10,782.3			11,306.0			(523.7	)		-4.6	%
Average equity (excluding AOCI)		10,540.5			11,357.0			(816.5	)		-7.2	%		10,540.0			11,403.8			(863.8	)		-7.6	%
Return on Equity
Net income (loss)/average equity (excluding AOCI)		-6.1	%		4.4	%								-14.0	%		7.3	%
Income from operations/average equity (excluding AOCI)		8.1	%		11.4	%								7.2	%		11.1	%
Return on Capital
Income (loss) from operations/average capital		6.3	%		8.9	%								5.7	%		8.8	%
Common Stock Outstanding
Average for the period - diluted (1)		260.1			259.6			0.5			0.2	%		257.8			261.2			(3.4	)		-1.3	%
End-of-period - assuming conversion of preferreds		302.3			257.0			45.3			17.6	%		302.3			257.0			45.3			17.6	%
End-of-period - diluted (1)		304.2			257.8			46.4			18.0	%		304.2			257.8			46.4			18.0	%
Book value (including AOCI)	$	30.02		$	40.85		$	(10.83	)		-26.5	%	$	30.02		$	40.85		$	(10.83	)		-26.5	%
Book value (excluding AOCI)		35.67			43.99			(8.32	)		-18.9	%		35.67			43.99			(8.32	)		-18.9	%
Cash Returned to Shareholders
Share repurchase - dollar amount	$	-		$	139.8		$	(139.8	)		-100.0	%	$	-		$	425.5		$	(425.5	)		-100.0	%
Dividends declared		3.0			106.6			(103.6	)		-97.2	%		5.6			214.2			(208.6	)		-97.4	%
Total Cash Returned to Shareholders	$	3.0		$	246.4		$	(243.4	)		-98.8	%	$	5.6		$	639.7		$	(634.1	)		-99.1	%
Stock issuance - number of shares		46.0			0			46.00		NM				46.0			-			46.00		NM
Share repurchase - number of shares		-			2.631			(2.63	)		-100.0	%		-			8.08			(8.08	)		-100.0	%
Dividend declared on common stock - per share	$	0.010		$	0.415		$	(0.405	)		-97.6	%	$	0.020		$	0.830		$	(0.810	)		-97.6	%
Dividend payout ratio (2)		-1.6	%		86.5	%								-0.7	%		52.5	%
Annualized yield (3)		0.2	%		3.7	%								0.2	%		3.7	%
Comprehensive Income (Loss)
Net income (loss)	$	(161.4	)	$	124.7		$	(286.1	)	NM			$	(740.3	)	$	413.8		$	(1,154.1	)	NM
Net unrealized gain (loss) on available-for-sale securities		1,250.8			(487.2	)		1,738.0		NM				1,205.7			(1,025.3	)		2,231.0			217.6	%
Unrealized other-than-temporary impairment on available-for-sale securities		(42.5	)		-			(42.5	)	NM				(198.9	)		-			(198.9	)	NM
Net unrealized gain on derivative instruments		(4.1	)		(2.6	)		(1.5	)		-57.7	%		(73.4	)		(10.9	)		(62.5	)	NM
Foreign currency translation adjustment		68.3			2.8			65.5		NM				85.3			1.6			83.7		NM
Funded status of employee benefit plans		(4.7	)		0.4			(5.1	)	NM				(3.7	)		1.0			(4.7	)	NM
Comprehensive Income (Loss)	$	1,106.4		$	(361.9	)	$	1,468.3		NM			$	274.7		$	(619.8	)	$	894.5			144.3	%
Ratios
Debt to total capitalization (4)		23.9	%		21.7	%								23.9	%		21.7	%
Debt to equity (4)		31.5	%		27.6	%								31.5	%		27.6	%
	Ratings as of July 29, 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 second quarter and first six months 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 second quarter and first six months of 2009 would have totaled 262.4 million and 260.1 million, respectively.

(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.

6/30/2009																									PAGE 4
Consolidated Operating Expense Detail
Unaudited (in millions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Commissions	$	429.8		$	430.8		$	405.5		$	361.8		$	359.9			-16.3	%	$	852.7		$	721.7			-15.4	%
General and Administrative Expenses
General and administrative expenses		379.6			377.8			411.9			357.6			365.1			-3.8	%		756.8			722.7			-4.5	%
Merger-related expenses		14.9			12.6			8.1			6.7			4.4			-70.5	%		28.7			11.1			-61.3	%
Total General and Administrative Expenses Excluding Broker-Dealer		394.5			390.4			420.0			364.3			369.5			-6.3	%		785.5			733.8			-6.6	%
Communications expenses		15.4			14.1			14.8			12.9			13.5			-12.3	%		30.9			26.4			-14.6	%
Restructuring charges associated with merger-related cost saving initiatives		1.2			0.4			0.1			-			-			-100.0	%		2.1			-			-100.0	%
Restructuring charges for expense initiatives		-			-			8.0			5.1			28.6		NM				-			33.7		NM
Taxes, licenses and fees		52.3			60.3			49.0			57.4			46.2			-11.7	%		114.6			103.6			-9.6	%
Interest and debt expense		64.8			68.6			72.3			64.7			60.9			-6.0	%		140.2			125.6			-10.4	%
TotalCommissions and Expenses Incurred		958.0			964.6			969.7			866.2			878.6			-8.3	%		1,926.0			1,744.8			-9.4	%
Less: Commissions and Expenses Capitalized		(464.0	)		(463.5	)		(470.4	)		(383.5	)		(385.4	)		16.9	%		(920.0	)		(768.9	)		16.4	%
Amortization
Amortization of DAC and VOBA, net of interest		295.1			207.3			644.1			222.2			249.5			-15.5	%		538.8			471.7			-12.5	%
Amortization of intangibles		1.6			1.4			1.4			1.1			1.1			-31.3	%		3.2			2.2			-31.3	%
Total Amortization		296.7			208.7			645.5			223.3			250.6			-15.5	%		542.0			473.9			-12.6	%
Broker-Dealer Commissions and G&A		85.1			78.5			73.3			64.1			69.2			-18.7	%		174.3			133.2			-23.6	%
Total	$	875.8		$	788.3		$	1,218.1		$	770.1		$	813.0			-7.2	%	$	1,722.3		$	1,583.0			-8.1	%
Merger-Related Expenses (1)
Severance and employee-related charges	$	2.5		$	1.2		$	1.7		$	0.7		$	0.6			-76.0	%	$	5.6		$	1.3			-76.8	%
Systems integration and related expenses		12.0			9.6			7.5			5.1			2.6			-78.3	%		21.3			7.7			-63.8	%
Other expenses		1.6			2.2			(1.0	)		0.9			1.2			-25.0	%		3.9			2.1			-46.2	%
Total Merger-Related Expenses	$	16.1		$	13.0		$	8.2		$	6.7		$	4.4			-72.7	%	$	30.8		$	11.1			-64.0	%

(1) Represents merger-related expenses included in general and administrative expenses and restructuring charges.

6/30/2009																						PAGE 5
Results Summary
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Operating Revenues
Annuities	$	618.7		$	675.2		$	693.7		$	599.4		$	437.0			-29.4	%	$	1,241.3		$	1,036.4			-16.5	%
Defined Contribution		239.4			240.8			217.9			225.1			215.0			-10.2	%		477.1			440.1			-7.8	%
Total Retirement Solutions		858.1			916.0			911.6			824.5			652.0			-24.0	%		1,718.4			1,476.5			-14.1	%
Life Insurance		1,087.9			1,073.8			1,042.8			1,076.2			1,002.2			-7.9	%		2,142.5			2,078.4			-3.0	%
Group Protection		424.9			402.8			412.5			421.4			442.9			4.2	%		824.3			864.3			4.9	%
Total Insurance Solutions		1,512.8			1,476.6			1,455.3			1,497.6			1,445.1			-4.5	%		2,966.8			2,942.7			-0.8	%
Investment Management		124.3			109.9			83.2			81.9			91.6			-26.3	%		244.6			173.5			-29.1	%
Other Operations		110.1			111.8			98.6			83.0			92.5			-16.0	%		228.0			175.5			-23.0	%
Total Operating Revenues		2,605.3			2,614.3			2,548.7			2,487.0			2,281.2			-12.4	%		5,157.8			4,768.2			-7.6	%
Excluded realized loss, pre-tax (1)		(112.8	)		(257.3	)		(334.3	)		(287.5	)		(330.0	)	NM				(157.8	)		(617.5	)	NM
Amortization of deferred gains arising from reserve changes on business sold through reinsurance, pre-tax		0.7			0.6			0.7			0.6			0.7			0.0	%		1.4			1.3			-7.1	%
Total Revenues	$	2,493.2		$	2,357.6		$	2,215.1		$	2,200.1		$	1,951.9			-21.7	%	$	5,001.4		$	4,152.0			-17.0	%
Income (Loss) from Operations
Annuities	$	116.2		$	130.9		$	(171.7	)	$	73.9		$	65.4			-43.7	%	$	234.0		$	139.3			-40.5	%
Defined Contribution		41.2			42.3			(1.1	)		29.8			27.7			-32.8	%		81.6			57.5			-29.5	%
Total Retirement Solutions		157.4			173.2			(172.8	)		103.7			93.1			-40.9	%		315.6			196.8			-37.6	%
Life Insurance		163.6			137.3			82.5			142.2			132.9			-18.8	%		320.9			275.1			-14.3	%
Group Protection		32.2			27.2			18.4			25.7			33.6			4.3	%		58.5			59.3			1.4	%
Total Insurance Solutions		195.8			164.5			100.9			167.9			166.5			-15.0	%		379.4			334.4			-11.9	%
Investment Management		15.0			5.3			(4.3	)		1.4			5.1			-66.0	%		27.1			6.5			-76.0	%
Other Operations		(44.8	)		(39.9	)		(55.2	)		(108.5	)		(52.3	)		-16.7	%		(87.4	)		(160.8	)		-84.0	%
Income (Loss) from Operations		323.4			303.1			(131.4	)		164.5			212.4			-34.3	%		634.7			376.9			-40.6	%
Excluded realized loss, after-tax (1)		(73.2	)		(167.3	)		(217.3	)		(187.0	)		(214.5	)	NM				(102.6	)		(401.5	)	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	%		0.8			0.8			0.0	%
Gain on early extinguishment of debt, after-tax		-			-			-			41.8			-		NM				-			41.8		NM
Impairment of intangibles, after-tax		(139.0	)		-			(157.7	)		(603.5	)		0.6			100.4	%		(139.0	)		(602.9	)	NM
Income (loss) from discontinued operations, after-tax (2)		13.1			12.2			0.5			4.9			(160.3	)	NM				19.9			(155.4	)	NM
Net Income (Loss)	$	124.7		$	148.4		$	(505.5	)	$	(578.9	)	$	(161.4	)	NM			$	413.8		$	(740.3	)	NM

	For the Three Months Ended																For the Six Months Ended
	June			Sept.			��	Dec.			March			June			June			June
		2008			2008				2008			2009			2009			2008			2009
Stockholders' Equity
Beginning-of-period (including AOCI)	$	11,086.3		$	10,497.7			$	9,500.1		$	7,976.8		$	7,323.5		$	11,718.4		$	7,976.7
End-of-period (including AOCI)		10,497.7			9,500.1				7,976.8			7,323.5			9,074.9			10,497.7			9,074.9
End-of-period (excluding AOCI)		11,306.0			11,310.4				10,780.3			10,298.6			10,782.3			11,306.0			10,782.3
Average equity (excluding AOCI)		11,357.0			11,308.2				11,045.3			10,539.5			10,540.5			11,403.8			10,540.0
Minority Interest Adjustment  (3)	$	0.2		$	0.1			$	-		$	0.1		$	-		$	0.5		$	0.1
Restructuring Charges, After-Tax	$	0.8		$	0.3			$	5.3		$	3.3		$	18.6		$	1.4		$	21.9
Common Shares Outstanding
Average for the period - diluted - income from operations (4)		259.6			257.6				255.4			257.8			262.4			259.6			260.1
Average for the period - diluted - net income (5)		259.6			257.6				255.4			255.6			260.1			261.2			257.8
End-of-period - diluted (4)		257.8			256.9				257.7			258.1			304.2			257.8			304.2
Per Share Data (Diluted) (3)
Net income (loss) (5)	$	0.48		$	0.58			$	(1.98	)	$	(2.27	)	$	(0.62	)	$	1.58		$	(2.87	)
Income (loss) from operations (4)		1.24			1.18				(0.51	)		0.63			0.81			2.43			1.45
Restructuring charges		0.00			0.00				0.02			0.01			0.07			0.01			0.08
Stockholders' Equity Per Share
Stockholders' equity (including AOCI)	$	40.85		$	37.11			$	31.15		$	28.59		$	30.02		$	40.85		$	30.02
Stockholders' equity (excluding AOCI)		43.99			44.18				42.09			40.20			35.67			43.99			35.67
Dividends declared (common stock)		0.415			0.415				0.210			0.010			0.010			0.830			0.020
Return on Equity
Net income (loss)/average equity		4.4	%		5.2	%			-18.3	%		-22.0	%		-6.1	%		7.3	%		-14.0	%
Income (loss) from operations/average equity		11.4	%		10.7	%			-4.8	%		6.2	%		8.1	%		11.1	%		7.2	%
Market Value of Common Stock
Highest price	$	56.80		$	59.99			$	45.50		$	25.59		$	19.99		$	58.11		$	25.59
Lowest price		45.18			39.83				4.76			4.90			5.52			45.18			4.90
Closing price		45.32			42.81				18.84			6.69			17.21			45.32			17.21

(1)  See page 6 for detail.

(2) Includes discontinued operations and the loss on disposition. See Discontinued Operations on page 27 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 second quarter and the first six months of 2009, shares used represent diluted shares.

(5) As a result of the net loss in the second and 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 second and first quarter of 2009 and fourth quarter of 2008 would have totaled 262.4 million, 257.8 million and 257.6 million, respectively.

6/30/2009													PAGE 6
Details Underlying Realized Loss, After-DAC (1)
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Pre-Tax
Operating realized gain (loss) (2):
Indexed annuity net derivatives results (3)	$	(0.6	)	$	2.0		$	(0.5	)	$	(0.2	)	$	0.2			133.3	%	$	(2.0	)	$	-			100.0	%
GLB (4)		10.4			10.9			11.1			16.3			2.9			-72.1	%		16.2			19.2			18.5	%
GDB (5)		2.6			39.4			136.9			80.7			(113.4	)	NM				8.5			(32.7	)	NM
Total operating realized gain (loss)		12.4			52.3			147.5			96.8			(110.3	)	NM				22.7			(13.5	)	NM
Realized loss related to certain investments (6)		(117.1	)		(314.6	)		(566.7	)		(150.1	)		(158.3	)		-35.2	%		(157.9	)		(308.4	)		-95.3	%
Gain (loss) on certain reinsurance derivative/trading securities (7)		1.5			(1.8	)		3.4			21.7			(9.4	)	NM				1.9			12.3		NM
GLB net derivatives results (8)		1.4			88.7			314.5			(130.3	)		(141.1	)	NM				(5.3	)		(271.4	)	NM
GDB derivatives results(5)		(2.5	)		(33.4	)		(86.3	)		(31.6	)		(27.8	)	NM				(7.7	)		(59.4	)	NM
Indexed annuity forward-starting option (9)		2.1			1.6			(1.4	)		0.6			3.4			61.9	%		6.9			4.0			-42.0	%
Gain on sale of subsidiaries/businesses		1.8			2.2			2.2			2.2			3.2			77.8	%		4.3			5.4			25.6	%
Total excluded realized loss		(112.8	)		(257.3	)		(334.3	)		(287.5	)		(330.0	)	NM				(157.8	)		(617.5	)	NM
Total Realized Loss	$	(100.4	)	$	(205.0	)	$	(186.8	)	$	(190.7	)	$	(440.3	)	NM			$	(135.1	)	$	(631.0	)	NM
After-Tax
Operating realized gain (loss) (2):
Indexed annuity net derivatives results (3)	$	(0.4	)	$	1.3		$	(0.3	)	$	(0.1	)	$	0.1			125.00	%	$	(1.3	)	$	-			100.0	%
GLB (4)		6.8			7.1			7.2			10.6			1.9			-72.1	%		10.5			12.5			19.0	%
GDB (5)		1.7			25.6			89.0			52.5			(73.7	)	NM				5.5			(21.2	)	NM
Total operating realized gain (loss)		8.1			34.0			95.9			63.0			(71.7	)	NM				14.7			(8.7	)	NM
Realized loss related to certain investments (6)		(75.6	)		(204.5	)		(368.3	)		(97.6	)		(102.9	)		-36.1	%		(102.6	)		(200.5	)		-95.4	%
Gain (loss) on certain reinsurance derivative/trading securities (7)		0.6			(1.2	)		2.2			14.1			(6.1	)	NM				1.2			8.0		NM
GLB net derivatives results (8)		0.9			57.6			204.4			(84.8	)		(91.7	)	NM				(3.3	)		(176.5	)	NM
GDB derivatives results (5)		(1.6	)		(21.6	)		(56.1	)		(20.5	)		(18.1	)	NM				(5.0	)		(38.6	)	NM
Indexed annuity forward-starting option (9)		1.4			1.0			(0.9	)		0.4			2.2			57.1	%		4.5			2.6			-42.2	%
Gain on sale of subsidiaries/businesses		1.1			1.4			1.4			1.4			2.1			90.9	%		2.6			3.5			34.6	%
Total excluded realized loss		(73.2	)		(167.3	)		(217.3	)		(187.0	)		(214.5	)	NM				(102.6	)		(401.5	)	NM
Total Realized Loss	$	(65.1	)	$	(133.3	)	$	(121.4	)	$	(124.0	)	$	(286.2	)	NM			$	(87.9	)	$	(410.2	)	NM
Components of GLB Net Derivatives Results
Net valuation premium, net of reinsurance (10)	$	19.2		$	21.4		$	22.3		$	22.2		$	27.4			42.7	%	$	36.2		$	49.6			37.0	%
Change in reserves hedged (10):
Unlocking		-			79.6			84.3			-			-		NM				-			-		NM
Other		213.4			(650.9	)		(2,553.5	)		233.2			1,977.7		NM				(161.5	)		2,210.9		NM
Change in market value of derivative assets (10)		(245.8	)		318.4			2,989.0			(297.9	)		(1,846.3	)	NM				69.3			(2,144.2	)	NM
Hedge program ineffectiveness (10)		(32.4	)		(252.9	)		519.8			(64.7	)		131.4		NM				(92.2	)		66.7			172.3	%
Change in reserves not hedged (NPR component)(10)		16.4			372.0			55.3			(55.4	)		(333.0	)	NM				109.0			(388.4	)	NM
Change in derivative assets not hedged (NPR component)		-			-			(19.9	)		(11.9	)		17.0		NM				-			5.1		NM
Change in SOP 03-1 reserve not hedged		-			-			-			(6.3	)		12.7		NM				-			6.4		NM
Associated amortization expense of DAC, VOBA, DSI and DFEL:
Unlocking		(0.6	)		(100.7	)		297.7			(61.0	)		(80.6	)	NM				9.9			(141.6	)	NM
Other amortization		(1.2	)		48.9			(560.7	)		46.8			84.0		NM				(34.7	)		130.8		NM
Loss from the initial impact of adopting SFAS 157, after-DAC		-			-			-			-			-		NM				(33.5	)		-			100.0	%
GLB Net Derivatives Results (8)	$	1.4		$	88.7		$	314.5		$	(130.3	)	$	(141.1	)	NM			$	(5.3	)	$	(271.4	)	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 cost 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 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 30 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.

                       

6/30/2009																						PAGE 7
Consolidated Statements of Income
Unaudited (in millions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Revenues
Insurance premiums	$	503.3		$	514.3		$	510.5		$	508.2		$	541.8			7.6	%	$	993.1		$	1,050.0			5.7	%
Surrender charges		27.8			32.4			33.0			31.8			36.8			32.4	%		56.6			68.6			21.2	%
Mortality assessments		327.9			331.7			339.2			344.1			320.0			-2.4	%		649.6			664.1			2.2	%
Expense assessments		436.8			389.8			381.2			328.2			332.1			-24.0	%		853.9			660.3			-22.7	%
Investment advisory fees		75.8			67.7			48.4			43.7			47.8			-36.9	%		152.0			91.5			-39.8	%
Net investment income		1,057.0			1,067.9			960.1			1,013.3			970.6			-8.2	%		2,102.1			1,983.9			-5.6	%
Realized loss:
Total other-than-temporary impairment losses on securities		(99.8	)		(236.9	)		(456.2	)		(210.6	)		(220.1	)	NM				(158.3	)		(430.7	)	NM
Portion of loss recognized in other comprehensive income		-			-			-			89.1			102.5		NM				-			191.6		NM
Net other-than-temporary impairment losses on securities recognized in earnings		(99.8	)		(236.9	)		(456.2	)		(121.5	)		(117.6	)		-17.8	%		(158.3	)		(239.1	)		-51.0	%
Realized gain (loss), excluding other-than-temporary impairment losses on securities		(0.6	)		31.9			269.4			(69.2	)		(322.7	)	NM				23.2			(391.9	)	NM
Total realized loss (1)		(100.4	)		(205.0	)		(186.8	)		(190.7	)		(440.3	)	NM				(135.1	)		(631.0	)	NM
Amortization of deferred gains on business sold through reinsurance		19.1			19.0			19.0			19.0			18.3			-4.2	%		38.2			37.3			-2.4	%
Other revenues and fees		145.9			139.9			110.5			102.6			124.7			-14.5	%		291.1			227.3			-21.9	%
Total Revenues		2,493.2			2,357.7			2,215.1			2,200.2			1,951.8			-21.7	%		5,001.5			4,152.0			-17.0	%
Benefits and Expenses
Interest credited		612.7			624.7			653.0			626.9			598.7			-2.3	%		1,224.4			1,225.6			0.1	%
Benefits		656.3			812.6			941.4			920.4			582.6			-11.2	%		1,304.6			1,503.0			15.2	%
Underwriting, acquisition, insurance and other expenses		805.4			719.8			1,138.8			705.5			752.2			-6.6	%		1,576.7			1,457.7			-7.5	%
Interest and debt expense		64.8			68.6			72.3			0.4			60.8			-6.2	%		140.2			61.2			-56.3	%
Impairment of intangibles		175.0			-			205.6			603.7			(0.6	)	NM				175.0			603.1			244.6	%
Total Benefits and Expenses		2,314.2			2,225.7			3,011.1			2,856.9			1,993.7			-13.8	%		4,420.9			4,850.6			9.7	%
Income (loss) from continuing operations before taxes		179.0			132.0			(796.0	)		(656.7	)		(41.9	)	NM				580.6			(698.6	)	NM
Federal income tax expense (benefit)		67.4			(4.2	)		(290.0	)		(72.9	)		(40.8	)	NM				186.7			(113.7	)	NM
Income (Loss) from Continuing Operations		111.6			136.2			(506.0	)		(583.8	)		(1.1	)	NM				393.9			(584.9	)	NM
Income (loss) from discontinued operations, net of federal income tax expense (benefit) (2)		13.1			12.2			0.5			4.9			(160.3	)	NM				19.9			(155.4	)	NM
Net Income (Loss)	$	124.7		$	148.4		$	(505.5	)	$	(578.9	)	$	(161.4	)	NM			$	413.8		$	(740.3	)	NM
Earnings (Loss) Per Share (Diluted) (3) (4)
Income (loss) from continuing operations	$	0.43		$	0.53		$	(1.98	)	$	(2.29	)	$	-			-100.0	%	$	1.50		$	(2.27	)	NM
Income (loss) from discontinued operations, net of federal income tax expense (benefit) (2)		0.05			0.05			-			0.02			(0.62	)	NM				0.08			(0.60	)	NM
Net Income (Loss)	$	0.48		$	0.58		$	(1.98	)	$	(2.27	)	$	(0.62	)	NM			$	1.58		$	(2.87	)	NM
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	9,235.1		$	9,858.1		$	10,993.3		$	11,403.3		$	11,399.4					$	8,807.7		$	11,403.3
Business sold through reinsurance		-			-			-			(292.9	)		-						-			(292.9	)
Deferrals		464.0			463.5			470.4			383.5			385.4						920.0			768.9
Amortization, net of interest:
Unlocking		(17.2	)		19.6			(557.1	)		(79.3	)		74.6						(29.4	)		(4.7	)
Other amortization		(277.9	)		(226.9	)		(87.0	)		(142.9	)		(324.1	)					(509.4	)		(467.0	)
Deferrals, net of amortization included in underwriting, acquisition, insurance and other expenses		168.9			256.2			(173.7	)		161.3			135.9						381.2			297.2
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		4.8			34.4			(142.6	)		12.8			69.4						3.3			82.2
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		449.3			844.6			726.3			114.9			(1,148.8	)					665.9			(1,033.9	)
Balance at End-of-Period	$	9,858.1		$	10,993.3		$	11,403.3		$	11,399.4		$	10,455.9					$	9,858.1		$	10,455.9
Roll Forward of DFEL
Balance at beginning-of-period	$	864.2		$	914.7		$	1,001.1		$	1,019.4		$	1,076.2					$	803.8		$	1,019.4
Business sold through reinsurance		-			-			-			(11.0	)		-						-			(11.0	)
Deferrals		103.5			109.7			114.0			107.5			112.5						204.6			220.1
Amortization, net of interest:
Unlocking		(11.6	)		14.7			(60.3	)		(10.1	)		16.0						(14.3	)		5.9
Other amortization		(40.9	)		(35.6	)		(20.1	)		(26.7	)		(43.3	)					(79.7	)		(70.0	)
Deferrals, net of amortization included in expense assessments		51.0			88.8			33.6			70.7			85.2						110.6			156.0
Adjustment related to realized gains (losses) on available-for-sale securities and derivatives		(0.5	)		(2.4	)		(15.3	)		(3.6	)		(0.8	)					0.3			(4.5	)
Adjustment related to unrealized gains (losses) on available-for-sale securities and derivatives		-			-			-			0.7			0.2						-			0.9
Balance at End-of-Period	$	914.7		$	1,001.1		$	1,019.4		$	1,076.2		$	1,160.8					$	914.7		$	1,160.8
Roll Forward of DSI
Balance at beginning-of-period	$	297.6		$	314.2		$	328.3		$	262.7		$	279.4					$	279.2		$	262.7
Deferrals		26.3			24.5			19.0			15.9			19.2						52.3			35.1
Amortization, net of interest:
Unlocking		(0.2	)		(2.7	)		(48.2	)		(5.7	)		7.4						0.3			1.7
Other amortization		(8.5	)		(5.5	)		4.6			1.1			(18.8	)					(14.7	)		(17.7	)
Deferrals, net of amortization included in insurance benefits or interest credited		17.6			16.3			(24.6	)		11.3			7.8						37.9			19.1
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		(1.0	)		(2.2	)		(41.0	)		5.2			2.6						(2.9	)		7.8
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		-			-			-			0.2			(0.7	)					-			(0.5	)
Balance at End-of-Period	$	314.2		$	328.3		$	262.7		$	279.4		$	289.1					$	314.2		$	289.1

(1)   See page 6 for detail.

(2)  Contains discontinued operations and the loss on disposition.  See Discontinued Operations on page 27 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 second and 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 second and first quarter of 2009 and fourth quarter of 2008 would have totaled 262.4 million, 257.8 million and 257.6 million, respectively.

6/30/2009																	PAGE 8
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Quarter Ended June 30, 2009
	Retirement Solutions						Insurance Solutions
				Defined						Group		Investment		Other
	Annuities			Contribution			Life			Protection		Management		Operations (1)			Consolidated
Operating Revenues
Insurance premiums	$	32.5		$	-		$	93.3		$	413.3	$	-	$	2.7		$	541.8
Surrender charges		8.9			1.3			26.7			-		-		-			36.9
Mortality assessments		-			-			320.0			-		-		-			320.0
Expense assessments		185.3			43.4			103.0			-		-		-			331.7
Investment advisory fees - external		-			-			-			-		47.8		-			47.8
Investment advisory fees - inter-segment		-			-			-			-		20.0		(20.0	)		-
Net investment income		243.9			175.6			453.3			28.1		-		69.8			970.7
Operating realized loss (2)		(101.9	)		(8.4	)		-			-		-		-			(110.3	)
Amortization of deferred gain on business sold through reinsurance		-			-			(0.7	)		-		-		18.4			17.7
Other revenues and fees		68.3			3.1			6.6			1.5		23.8		21.6			124.9
Total Operating Revenues		437.0			215.0			1,002.2			442.9		91.6		92.5			2,281.2
Operating Expenses
Interest credited		164.0			112.0			290.8			0.5		-		31.4			598.7
Benefits		(57.5	)		(11.6	)		323.0			292.7		-		36.0			582.6
Underwriting, acquisition, insurance and other expenses		253.9			76.3			191.7			98.0		61.7		70.5			752.1
Expenses for investment advisory fees - inter-segment		-			-			-			-		20.0		(20.0	)		-
Interest and debt expense		-			-			-			-		-		60.9			60.9
Total Operating Expenses		360.4			176.7			805.5			391.2		81.7		178.8			1,994.3
Income (loss) from operations before federal income tax expense (benefit)		76.6			38.3			196.7			51.7		9.9		(86.3	)		286.9
Federal income tax expense (benefit)		11.2			10.6			63.8			18.1		4.8		(34.0	)		74.5
Income (Loss) from Operations	$	65.4		$	27.7		$	132.9		$	33.6	$	5.1	$	(52.3	)	$	212.4

(1) Includes inter-segment eliminations.

(2)  For detail, see pages 14 and 18.

6/30/2009														PAGE 9
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Quarter Ended June 30, 2008
	Retirement Solutions				Insurance Solutions
			Defined				Group		Investment		Other
	Annuities		Contribution		Life		Protection		Management		Operations (1)			Consolidated
Operating Revenues
Insurance premiums	$	19.0	$	-	$	89.5	$	393.0	$	-	$	1.7		$	503.2
Surrender charges		9.6		1.5		16.7		-		-		-			27.8
Mortality assessments		-		-		327.9		-		-		-			327.9
Expense assessments		247.6		59.3		129.6		-		-		-			436.5
Investment advisory fees - external		-		-		-		-		75.8		-			75.8
Investment advisory fees - inter-segment		-		-		-		-		20.6		(20.6	)		-
Net investment income		245.3		174.8		519.2		30.5		-		87.1			1,056.9
Operating realized gain (2)		12.4		-		-		-		-		-			12.4
Amortization of deferred gain on business sold through reinsurance		-		-		-		-		-		18.4			18.4
Other revenues and fees		84.8		3.8		5.0		1.4		27.9		23.5			146.4
Total Operating Revenues		618.7		239.4		1,087.9		424.9		124.3		110.1			2,605.3
Operating Expenses
Interest credited		163.0		107.0		300.6		0.3		-		41.8			612.7
Benefits		35.2		0.1		306.0		285.7		-		29.0			656.0
Underwriting, acquisition, insurance and other expenses		268.2		75.4		234.0		89.3		80.2		63.8			810.9
Expenses for investment advisory fees - inter-segment		-		-		-		-		20.6		(20.6	)		-
Interest and debt expense		-		-		-		-		-		64.8			64.8
Total Operating Expenses		466.4		182.5		840.6		375.3		100.8		178.8			2,144.4
Income (loss) from operations before federal income tax expense (benefit)		152.3		56.9		247.3		49.6		23.5		(68.7	)		460.9
Federal income tax expense (benefit)		36.1		15.7		83.7		17.4		8.5		(23.9	)		137.5
Income (Loss) from Operations	$	116.2	$	41.2	$	163.6	$	32.2	$	15.0	$	(44.8	)	$	323.4

(1) Includes inter-segment eliminations.

(2)  For detail, see page 14.

6/30/2009																	PAGE 10
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Six Months Ended June 30, 2009
	Retirement Solutions						Insurance Solutions
				Defined						Group		Investment		Other
	Annuities			Contribution			Life			Protection		Management		Operations (1)			Consolidated
Operating Revenues
Insurance premiums	$	59.6		$	-		$	183.8		$	803.1	$	-	$	3.5		$	1,050.0
Surrender charges		18.1			2.3			48.3			-		-		-			68.7
Mortality assessments		-			-			664.1			-		-		-			664.1
Expense assessments		356.8			83.0			219.5			-		-					659.3
Investment advisory fees - external		-			-			-			-		91.5		-			91.5
Investment advisory fees - inter-segment		-			-			-			-		39.9		(39.9	)		-
Net investment income		484.3			351.1			951.0			58.2		-		139.4			1,984.0
Operating realized loss (2)		(11.7	)		(1.8	)		-			-		-		-			(13.5	)
Amortization of deferred gain on business sold through reinsurance		-			-			(0.7	)		-		-		36.8			36.1
Other revenues and fees		129.3			5.5			12.4			3.0		42.1		35.7			228.0
Total Operating Revenues		1,036.4			440.1			2,078.4			864.3		173.5		175.5			4,768.2
Operating Expenses
Interest credited		325.1			223.5			593.6			1.1		-		82.3			1,225.6
Benefits		112.3			(5.2	)		678.7			574.7		-		142.6			1,503.1
Underwriting, acquisition, insurance and other expenses		459.8			147.1			415.7			197.3		120.2		117.4			1,457.5
Expenses for investment advisory fees - inter-segment		-			-			-			-		39.9		(39.9	)		-
Interest and debt expense		-			-			-			-		-		125.6			125.6
Total Operating Expenses		897.2			365.4			1,688.0			773.1		160.1		428.0			4,311.8
Income (loss) from operations before federal income tax expense (benefit)		139.2			74.7			390.4			91.2		13.4		(252.5	)		456.4
Federal income tax expense (benefit)		(0.1	)		17.2			115.3			31.9		6.9		(91.7	)		79.5
Income (Loss) from Operations	$	139.3		$	57.5		$	275.1		$	59.3	$	6.5	$	(160.8	)	$	376.9

(1) Includes inter-segment eliminations.

(2)  For detail, see pages 14 and 18.

6/30/2009														PAGE 11
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Six Months Ended June 30, 2008
	Retirement Solutions				Insurance Solutions
			Defined				Group		Investment		Other
	Annuities		Contribution		Life		Protection		Management		Operations (1)			Consolidated
Operating Revenues
Insurance premiums	$	50.6	$	-	$	175.9	$	763.4	$	-	$	3.1		$	993.0
Surrender charges		19.2		3.4		34.0		-		-		-			56.6
Mortality assessments		-		-		649.6		-		-		-			649.6
Expense assessments		483.6		118.6		250.9		-		-		-			853.1
Investment advisory fees - external		-		-		-		-		152.0		-			152.0
Investment advisory fees - inter-segment		-		-		-		-		40.6		(40.6	)		-
Net investment income		493.1		346.5		1,018.4		58.2		-		185.7			2,101.9
Operating realized gain (2)		22.6		0.1		-		-		-		-			22.7
Amortization of deferred gain on business sold through reinsurance		-		-		-		-		-		36.9			36.9
Other revenues and fees		172.2		8.5		13.7		2.7		52.0		42.9			292.0
Total Operating Revenues		1,241.3		477.1		2,142.5		824.3		244.6		228.0			5,157.8
Operating Expenses
Interest credited		326.2		212.9		597.3		0.5		-		87.6			1,224.5
Benefits		86.6		0.1		606.0		554.8		-		56.9			1,304.4
Underwriting, acquisition, insurance and other expenses		519.9		151.7		453.5		178.9		161.3		116.9			1,582.2
Expenses for investment advisory fees - inter-segment		-		-		-		-		40.6		(40.6	)		-
Interest and debt expense		-		-		-		-		-		140.2			140.2
Total Operating Expenses		932.7		364.7		1,656.8		734.2		201.9		361.0			4,251.3
Income (loss) from operations before federal income tax expense (benefit)		308.6		112.4		485.7		90.1		42.7		(133.0	)		906.5
Federal income tax expense (benefit)		74.6		30.8		164.8		31.6		15.6		(45.6	)		271.8
Income (Loss) from Operations	$	234.0	$	81.6	$	320.9	$	58.5	$	27.1	$	(87.4	)	$	634.7

(1) Includes inter-segment eliminations.

(2)  For detail, see page 14.

6/30/2009													PAGE 12
Consolidated Balance Sheets
Unaudited (millions of dollars)
	As of
	June			Sept.			Dec.			March			June
	2008			2008			2008			2009			2009
ASSETS
Investments:
Corporate bonds	$	41,667.0		$	39,164.9		$	36,055.6		$	37,076.2		$	42,489.5
U.S. Government bonds		203.9			217.0			245.9			233.4			221.2
Foreign government bonds		608.2			546.3			520.8			479.6			479.8
Asset and mortgage-backed securities		10,547.7			10,661.6			10,129.6			9,754.6			9,889.7
State and municipal bonds		245.9			233.5			226.4			226.6			906.6
Preferred stocks - redeemable		98.8			115.6			962.3			765.1			1,063.0
Common stocks		280.1			389.7			200.0			132.8			171.9
Preferred stocks - equity		133.9			59.1			54.1			42.9			64.4
Total available-for-sale securities		53,785.5			51,387.7			48,394.7			48,711.2			55,286.1
Trading securities		2,550.5			2,393.4			2,332.5			2,245.6			2,316.7
Mortgage loans on real estate		7,677.9			7,688.1			7,715.4			7,615.9			7,468.3
Real estate		135.4			126.6			125.2			129.2			159.2
Policy loans		2,849.2			2,867.2			2,921.1			2,905.6			2,896.9
Derivative investments		889.9			1,262.2			3,397.2			2,226.1			1,233.8
Other investments		1,163.5			1,193.0			1,624.1			1,476.2			1,187.1
Total investments		69,051.9			66,918.2			66,510.2			65,309.8			70,548.1
Cash and invested cash		1,774.6			2,009.4			5,754.2			5,510.2			2,539.2
DAC and VOBA		9,858.1			10,993.3			11,403.3			11,399.4			10,455.9
Premiums and fees receivable		399.3			463.2			481.4			488.8			429.2
Accrued investment income		847.3			891.1			814.1			865.0			881.5
Reinsurance recoverables		8,096.1			8,156.6			8,395.9			7,976.0			7,729.3
Reinsurance related derivative assets		-			9.2			31.2			106.9			45.8
Goodwill		4,028.5			4,026.6			3,944.1			3,344.1			3,344.1
Other assets		12,762.7			11,426.9			10,146.7			9,491.4			9,980.4
Separate account assets		77,462.7			68,385.4			55,654.7			52,935.3			61,090.9
Total Assets	$	184,281.2		$	173,279.9		$	163,135.8		$	157,426.9		$	167,044.4
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Future contract benefits	$	15,082.2		$	15,563.2		$	18,431.3		$	18,038.8		$	16,127.5
Other contract holder funds		59,973.7			60,044.1			60,569.7			61,254.8			62,427.2
Short-term debt		900.0			635.2			814.7			1,435.7			454.5
Long-term debt		4,101.8			4,569.4			4,731.0			4,344.9			4,775.1
Reinsurance related derivative liabilities		112.5			-			-			-			-
Funds withheld reinsurance liabilities		2,068.7			2,062.4			2,042.3			1,215.0			1,222.3
Deferred gain on indemnity reinsurance		657.6			638.5			619.5			547.7			529.1
Payables for collateral under securities loaned and derivatives		1,491.1			1,668.4			3,705.9			2,385.9			1,712.1
Other liabilities		11,933.2			10,213.1			8,589.9			7,945.3			9,630.8
Separate account liabilities		77,462.7			68,385.5			55,654.7			52,935.3			61,090.9
Total liabilities		173,783.5			163,779.8			155,159.0			150,103.4			157,969.5
Stockholders' Equity
Preferred stock		0.4			0.4			0.4			0.4			0.4
Common stock		7,023.1			7,006.4			7,035.3			7,033.5			7,681.5
Retained earnings		4,282.5			4,303.6			3,744.6			3,264.7			3,100.4
Accumulated other comprehensive income (loss):
Net unrealized gain (loss) on available-for-sale securities		(939.4	)		(1,903.7	)		(2,654.5	)		(2,699.5	)		(1,448.8	)
Unrealized other-than-temporary  on available-for-sale securities		-			-			-			(75.2	)		(117.7	)
Net unrealized gain on derivative instruments		41.4			53.5			127.1			57.8			53.7
Foreign currency translation adjustment		177.2			121.2			6.3			23.2			91.5
Funded status of employee benefit plans		(87.5	)		(81.3	)		(282.4	)		(281.4	)		(286.1	)
Total accumulated other comprehensive income (loss)		(808.3	)		(1,810.3	)		(2,803.5	)		(2,975.1	)		(1,707.4	)
Total stockholders' equity		10,497.7			9,500.1			7,976.8			7,323.5			9,074.9
Total Liabilities and Stockholders' Equity	$	184,281.2		$	173,279.9		$	163,135.8		$	157,426.9		$	167,044.4
Share Data
Stockholders' equity per share	$	40.85		$	37.11		$	31.15		$	28.59		$	30.02
Book value, excluding AOCI		43.99			44.18			42.09			40.20			35.67
Common shares outstanding - assuming conversion of preferred shares (in millions)		257.0			256.0			256.1			256.2			302.3

6/30/2009														PAGE 13
Balance Sheet Data - Segment Highlights
Unaudited (in millions)
	Retirement Solutions				Insurance Solutions
As of June 30, 2009	Annuities		Defined Contribution		Life		Group Protection		Investment Management		Other Operations (1)			Consolidated
Assets
Allocated investments and cash and invested cash (2)	$	20,092.0	$	12,120.7	$	32,979.6	$	2,135.7	$	147.2	$	5,612.1		$	73,087.3
DAC and VOBA		2,698.1		762.7		6,830.9		149.8		-		14.4			10,455.9
Goodwill		439.8		20.2		2,188.5		274.3		247.7		173.6			3,344.1
DSI and other intangibles		286.6		4.5		87.0		-		4.9		167.2			550.2
Reinsurance recoverables		593.3		-		2,862.0		38.9		-		4,235.1			7,729.3
Separate account assets		45,447.6		11,096.9		4,378.3		-		-		168.1			61,090.9
Liabilities and Capital
Future contract benefits		1,979.0		12.0		6,488.6		1,412.9		-		6,235.0			16,127.5
Other contract holder funds		18,183.3		12,064.4		30,466.8		174.6		-		1,538.1			62,427.2
Allocated capital (3)		3,137.7		1,030.1		7,953.3		1,055.3		365.2		(2,759.3	)		10,782.3
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	$	3,713.7		$	72,264.5
DAC and VOBA		2,976.9		883.3		7,383.5		145.9		-		13.7			11,403.3
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		-		5,597.9			8,395.9
Separate accounts assets		40,849.5		10,579.7		4,063.5		-		-		162.0			55,654.7
Liabilities and Capital
Future contract benefits		3,958.0		24.8		6,379.9		1,378.4		-		6,690.2			18,431.3
Other contract holder funds		17,219.9		11,627.8		29,999.2		148.6		-		1,574.2			60,569.7
Allocated capital (3)		4,401.4		933.7		8,294.8		989.8		364.9		(4,204.3	)		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).

6/30/2009																									PAGE 14
Retirement Solutions - Annuities
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Operating Revenues
Insurance premiums (1)	$	19.0		$	52.1		$	33.7		$	27.1		$	32.5			71.1	%	$	50.6		$	59.6			17.8	%
Surrender charges		9.6			13.0			13.2			9.2			8.9			-7.3	%		19.2			18.1			-5.7	%
Expense assessments		247.6			233.3			200.7			171.5			185.3			-25.2	%		483.6			356.8			-26.2	%
Net investment income		245.3			243.1			235.5			240.4			243.9			-0.6	%		493.1			484.3			-1.8	%
Operating realized gain (loss) (2)		12.4			52.1			144.0			90.2			(101.9	)	NM				22.6			(11.7	)	NM
Other revenues and fees (3)		84.8			81.6			66.6			61.0			68.3			-19.5	%		172.2			129.3			-24.9	%
Total Operating Revenues		618.7			675.2			693.7			599.4			437.0			-29.4	%		1,241.3			1,036.4			-16.5	%
Operating Expenses
Interest credited		163.0			170.0			201.4			161.1			164.0			0.6	%		326.2			325.1			-0.3	%
Benefits (1) (4)		35.2			112.9			253.2			169.8			(57.5	)	NM				86.6			112.3			29.7	%
Underwriting, acquisition, insurance and other expenses		268.2			253.7			548.0			205.9			253.9			-5.3	%		519.9			459.8			-11.6	%
Total Operating Expenses		466.4			536.6			1,002.6			536.8			360.4			-22.7	%		932.7			897.2			-3.8	%
Income (loss) from operations before federal income tax expense (benefit)		152.3			138.6			(308.9	)		62.6			76.6			-49.7	%		308.6			139.2			-54.9	%
Federal income tax expense (benefit)		36.1			7.7			(137.2	)		(11.3	)		11.2			-69.0	%		74.6			(0.1	)	NM
Income (Loss) from Operations	$	116.2		$	130.9		$	(171.7	)	$	73.9		$	65.4			-43.7	%	$	234.0		$	139.3			-40.5	%
Effective Tax Rate		23.7	%		5.6	%		44.4	%		-18.1	%		14.6	%					24.2	%		-0.1	%
Average Equity	$	3,519.2		$	3,646.9		$	4,113.7		$	4,348.0		$	3,716.2					$	3,540.4		$	4,032.1
Return on Average Equity		13.2	%		14.4	%		-16.7	%		6.8	%		7.0	%					13.2	%		6.9	%
Income (Loss) from Operations - Basis Points on Average Account Values - Annualized		62			72			(118	)		52			42			(20	)		63			47			(16	)
Operating Realized Gain (Loss)(2)
Indexed annuity net derivatives results (4)	$	(0.6	)	$	2.0		$	(0.5	)	$	(0.2	)	$	0.2			133.3	%	$	(2.0	)	$	-			100.0	%
GLB (5)		10.3			10.9			11.1			16.3			2.9			-71.8	%		16.1			19.2			19.3	%
GDB (6)		2.7			39.2			133.4			74.1			(104.9	)	NM				8.5			(30.8	)	NM
Total Operating Realized Gain (Loss)	$	12.4		$	52.1		$	144.0		$	90.2		$	(101.8	)	NM			$	22.6		$	(11.6	)	NM
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	186.4		$	160.9		$	132.7		$	124.6		$	157.2			-15.7	%	$	352.0		$	281.8			-19.9	%
General and administrative expenses		79.9			83.1			86.8			72.1			76.2			-4.6	%		160.1			148.3			-7.4	%
Broker-dealer commissions and general and administrative expenses		85.1			78.5			73.3			64.1			69.2			-18.7	%		174.3			133.2			-23.6	%
Taxes, licenses and fees		7.7			6.4			5.7			5.7			6.7			-13.0	%		18.1			12.4			-31.5	%
Total commissions and expenses incurred		359.1			328.9			298.5			266.5			309.3			-13.9	%		704.5			575.7			-18.3	%
Less: commissions and expenses capitalized		(191.7	)		(169.8	)		(151.2	)		(127.3	)		(158.3	)		17.4	%		(364.5	)		(285.5	)		21.7	%
Amortization of DAC and VOBA, net of interest		100.8			94.6			400.7			66.7			102.9			2.1	%		179.9			169.6			-5.7	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	268.2		$	253.7		$	548.0		$	205.9		$	253.9			-5.3	%	$	519.9		$	459.8			-11.6	%

General and Administrative Expenses - Basis Points on
Average Account Values - Annualized (7)	42	46	59	51	49	7	43	50	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.

6/30/2009																			PAGE 15
Retirement Solutions - Annuities
Roll Forwards of DAC, VOBA, DFEL and DSI
Unaudited (millions of dollars)
	For the Three Months Ended															For the Six Months Ended
	June			Sept.			Dec.			March			June			June			June
Roll Forward of DAC and VOBA	2008			2008			2008			2009			2009			2008			2009
Balance at beginning-of-period	$	2,570.8		$	2,855.5		$	3,157.9		$	2,976.9		$	3,056.6		$	2,477.0		$	2,976.9
Inter-segment transfer		-			-			-			-			-			(6.9	)		-
Deferrals		191.7			169.8			151.2			127.3			158.2			364.5			285.5
Amortization, net of interest:
Unlocking		0.4			(32.8	)		(424.5	)		(62.6	)		77.4			(0.2	)		14.8
Other amortization		(101.2	)		(61.8	)		23.8			(4.1	)		(180.3	)		(179.7	)		(184.4	)
Deferrals, net of amortization included in underwriting, acquisition, insurance and other expenses		90.9			75.2			(249.5	)		60.6			55.3			184.6			115.9
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		(7.3	)		(25.4	)		(232.7	)		(12.2	)		21.1			(17.8	)		8.9
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		201.1			252.6			301.2			31.3			(434.9	)		218.6			(403.6	)
Balance at End-of-Period	$	2,855.5		$	3,157.9		$	2,976.9		$	3,056.6		$	2,698.1		$	2,855.5		$	2,698.1
Roll Forward of DFEL
Balance at beginning-of-period	$	141.6		$	151.0		$	160.5		$	130.3		$	134.5		$	130.9		$	130.3
Deferrals		13.4			13.0			11.4			10.6			12.3			25.3			22.9
Amortization, net of interest:
Unlocking		(0.5	)		(1.8	)		(36.4	)		(7.2	)		16.7			0.2			9.5
Other amortization		(3.0	)		0.7			10.1			5.4			(13.7	)		(5.7	)		(8.3	)
Deferrals, net of amortization included in expense assessments		9.9			11.9			(14.9	)		8.8			15.3			19.8			24.1
Adjustment related to realized gains (losses) on available-for-sale securities and derivatives		(0.5	)		(2.4	)		(15.3	)		(4.4	)		(3.3	)		0.3			(7.7	)
Adjustment related to unrealized gains (losses)on available-for-sale securities and derivatives		-			-			-			(0.2	)		-			-			(0.2	)
Balance at End-of-Period	$	151.0		$	160.5		$	130.3		$	134.5		$	146.5		$	151.0		$	146.5
Roll Forward of DSI
Balance at beginning-of-period	$	295.7		$	312.1		$	326.3		$	260.7		$	277.2		$	278.8		$	260.7
Inter-segment transfer		-			-			-			-			-			(1.3	)		-
Deferrals		26.1			24.6			18.8			15.7			18.7			51.8			34.4
Amortization, net of interest:
Unlocking		(0.2	)		(2.7	)		(48.0	)		(5.6	)		7.4			0.4			1.8
Other amortization		(8.5	)		(5.4	)		4.5			1.1			(18.7	)		(14.7	)		(17.6	)
Deferrals, net of amortization included in interest credited		17.4			16.5			(24.7	)		11.2			7.4			37.5			18.6
Adjustment related to realized (gains) losses on available-for-sale securities		(1.0	)		(2.3	)		(40.9	)		5.2			2.6			(2.9	)		7.8
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		-			-			-			0.1			(0.6	)		-			(0.5	)
Balance at End-of-Period	$	312.1		$	326.3		$	260.7		$	277.2		$	286.6		$	312.1		$	286.6

6/30/2009																						PAGE 16
Retirement Solutions - Annuities
Account Value Roll Forward
Unaudited (in billions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Fixed Annuities
Balance at beginning-of-period	$	17.701		$	17.799		$	17.689		$	17.655		$	17.854			0.9	%	$	17.822		$	17.655			-0.9	%
Gross deposits		1.371			1.276			1.233			1.363			1.778			29.7	%		2.531			3.141			24.1	%
Withdrawals and deaths		(0.618	)		(0.787	)		(0.836	)		(0.767	)		(0.642	)		-3.9	%		(1.204	)		(1.409	)		-17.0	%
Net flows		0.753			0.489			0.397			0.596			1.136			50.9	%		1.327			1.732			30.5	%
Transfers to variable annuities		(0.797	)		(0.742	)		(0.581	)		(0.558	)		(0.582	)		27.0	%		(1.477	)		(1.140	)		22.8	%
Inter-segment transfer		-			-			-			-			-		NM				(0.089	)		-			100.0	%
Interest credited		0.116			0.119			0.132			0.145			0.169			45.7	%		0.164			0.314			91.5	%
Sales inducements deferred		0.026			0.024			0.018			0.016			0.019			-26.9	%		0.052			0.035			-32.7	%
Balance at End-of-Period (Gross)		17.799			17.689			17.655			17.854			18.596			4.5	%		17.799			18.596			4.5	%
Reinsurance ceded		(1.255	)		(1.196	)		(1.125	)		(1.094	)		(1.065	)		15.1	%		(1.255	)		(1.065	)		15.1	%
Balance at End-of-Period (Net of Ceded) (1)	$	16.544		$	16.493		$	16.530		$	16.760		$	17.531			6.0	%	$	16.544		$	17.531			6.0	%
Variable Annuities
Balance at beginning-of-period	$	54.966		$	55.854		$	49.982		$	40.925		$	39.301			-28.5	%	$	58.643		$	40.925			-30.2	%
Gross deposits		2.065			1.672			1.087			0.834			0.857			-58.5	%		3.931			1.691			-57.0	%
Withdrawals and deaths		(1.229	)		(1.217	)		(1.108	)		(1.000	)		(0.950	)		22.7	%		(2.488	)		(1.950	)		21.6	%
Net flows		0.836			0.455			(0.021	)		(0.166	)		(0.093	)	NM				1.443			(0.259	)	NM
Transfers from fixed annuities		0.797			0.742			0.579			0.558			0.582			-27.0	%		1.476			1.140			-22.8	%
Inter-segment transfer		-			-			-			-			-		NM				(0.206	)		-			100.0	%
Investment increase and change in market value		(0.745	)		(7.069	)		(9.615	)		(2.016	)		5.733		NM				(5.502	)		3.717			167.6	%
Balance at End-of-Period (2)	$	55.854		$	49.982		$	40.925		$	39.301		$	45.523			-18.5	%	$	55.854		$	45.523			-18.5	%
Total Annuities
Balance at beginning-of-period	$	72.667		$	73.653		$	67.671		$	58.580		$	57.155			-21.3	%	$	76.465		$	58.580			-23.4	%
Gross deposits		3.436			2.948			2.320			2.197			2.635			-23.3	%		6.462			4.832			-25.2	%
Withdrawals and deaths		(1.847	)		(2.004	)		(1.944	)		(1.767	)		(1.592	)		13.8	%		(3.692	)		(3.359	)		9.0	%
Net flows		1.589			0.944			0.376			0.430			1.043			-34.4	%		2.770			1.473			-46.8	%
Transfers between fixed and variable accounts		-			-			(0.002	)		-			-		NM				(0.001	)		-			100.0	%
Inter-segment transfer		-			-			-			-			-		NM				(0.295	)		-			100.0	%
Interest credited and change in market value		(0.629	)		(6.950	)		(9.483	)		(1.871	)		5.902		NM				(5.338	)		4.031			175.5	%
Sales inducements deferred		0.026			0.024			0.018			0.016			0.019			-26.9	%		0.052			0.035			-32.7	%
Balance at End-of-Period (Gross)		73.653			67.671			58.580			57.155			64.119			-12.9	%		73.653			64.119			-12.9	%
Reinsurance ceded		(1.255	)		(1.196	)		(1.125	)		(1.094	)		(1.065	)		15.1	%		(1.255	)		(1.065	)		15.1	%
Balance at End-of-Period (Net of Ceded)	$	72.398		$	66.475		$	57.455		$	56.061		$	63.054			-12.9	%	$	72.398		$	63.054			-12.9	%
Variable Annuities Under Agreement - Included Above	$	0.120		$	0.099		$	0.076		$	0.069		$	0.076			-36.7	%	$	0.120		$	0.076			-36.7	%
Incremental Deposits: (3)
Fixed annuities	$	1.365		$	1.265		$	1.225		$	1.359		$	1.773			29.9	%	$	2.521		$	3.132			24.2	%
Variable annuities		2.043			1.651			1.076			0.822			0.848			-58.5	%		3.881			1.670			-57.0	%
Total Incremental Deposits	$	3.408		$	2.916		$	2.301		$	2.181		$	2.621			-23.1	%	$	6.402		$	4.802			-25.0	%

(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.

6/30/2009																									PAGE 17
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																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Fixed Annuities - Excluding Fixed Portion of Variable Contracts
Deposits	$	0.137		$	0.164		$	0.142		$	0.236		$	0.249			81.8	%	$	0.223		$	0.485			117.5	%
Withdrawals and deaths		(0.406	)		(0.549	)		(0.504	)		(0.398	)		(0.321	)		20.9	%		(0.784	)		(0.719	)		8.3	%
Net flows	$	(0.269	)	$	(0.385	)	$	(0.362	)	$	(0.162	)	$	(0.072	)		73.2	%	$	(0.561	)	$	(0.234	)		58.3	%
Gross fixed contract account values	$	9.595		$	9.305		$	9.035		$	8.959		$	8.981			-6.4	%	$	9.595		$	8.981			-6.4	%
Reinsurance ceded		(1.255	)		(1.196	)		(1.125	)		(1.094	)		(1.065	)		15.1	%		(1.255	)		(1.065	)		15.1	%
Net fixed contract account values	$	8.340		$	8.109		$	7.910		$	7.865		$	7.916			-5.1	%	$	8.340		$	7.916			-5.1	%
Indexed Annuities
Deposits	$	0.356		$	0.215		$	0.289		$	0.367		$	0.651			82.9	%	$	0.574		$	1.018			77.4	%
Withdrawals and deaths		(0.102	)		(0.114	)		(0.142	)		(0.214	)		(0.187	)		-83.3	%		(0.186	)		(0.401	)	NM
Net flows	$	0.254		$	0.101		$	0.147		$	0.153		$	0.464			82.7	%	$	0.388		$	0.617			59.0	%
Indexed Annuity Account Values	$	4.726		$	4.836		$	5.003		$	5.195		$	5.716			20.9	%	$	4.726		$	5.716			20.9	%
Fixed Portion of Variable Contracts
Deposits	$	0.879		$	0.896		$	0.802		$	0.760		$	0.878			-0.1	%	$	1.735		$	1.638			-5.6	%
Withdrawals and deaths		(0.110	)		(0.124	)		(0.191	)		(0.156	)		(0.134	)		-21.8	%		(0.234	)		(0.290	)		-23.9	%
Net flows	$	0.769		$	0.772		$	0.611		$	0.604		$	0.744			-3.3	%	$	1.501		$	1.348			-10.2	%
Fixed Portion of Variable Contract Account Values	$	3.478		$	3.547		$	3.617		$	3.699		$	3.899			12.1	%	$	3.478		$	3.899			12.1	%
Variable Annuities - Including Fixed Portion of Variable Contracts
Deposits	$	2.944		$	2.568		$	1.890		$	1.594		$	1.735			-41.1	%	$	5.665		$	3.329			-41.2	%
Withdrawals and deaths		(1.339	)		(1.340	)		(1.300	)		(1.156	)		(1.084	)		19.0	%		(2.722	)		(2.240	)		17.7	%
Net flows	$	1.605		$	1.228		$	0.590		$	0.438		$	0.651			-59.4	%	$	2.943		$	1.089			-63.0	%
Variable Contract Account Values	$	59.333		$	53.530		$	44.542		$	43.000		$	49.422			-16.7	%	$	59.333		$	49.422			-16.7	%
Average Daily Variable Annuity Separate Account Values	$	57.763		$	54.717		$	40.743		$	39.035		$	43.828			-24.1	%	$	56.541		$	41.445			-26.7	%

											Change							Change
Interest Rate Spread (1)											(Basis Point)							(Basis Point)
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses (2)	5.88	%	5.82	%	5.65	%	5.28	%	5.44	%		(44	)	5.86	%	5.36	%		(50	)
Commercial mortgage loan prepayment and bond make whole premiums	0.00	%	0.02	%	0.02	%	0.00	%	0.01	%		1		0.02	%	0.01	%		(1	)
Alternative investments	-0.01	%	0.00	%	-0.04	%	-0.01	%	0.00	%		1		-0.01	%	-0.01	%		-
Net investment income yield on reserves	5.87	%	5.84	%	5.63	%	5.27	%	5.45	%		(42	)	5.87	%	5.36	%		(51	)
Interest rate credited to contract holders	3.73	%	3.95	%	3.87	%	3.84	%	3.63	%		(10	)	3.77	%	3.73	%		(4	)
Interest rate spread	2.14	%	1.89	%	1.76	%	1.43	%	1.82	%		(32	)	2.10	%	1.63	%		(47	)

Variable Annuity Expense Assessments (in millions) (3) $ 287.0 $ 276.0 $ 244.7 $ 212.9 $ 232.5 -19.0 % $ 558.4 $ 445.4 -20.2 %

GLB Expense Assessments (in millions) (4) $ 42.7 $ 45.5 $ 46.2 $ 47.9 $ 50.6 18.5 % $ 82.3 $ 98.5 19.7 %

Components of Attributed Fees on GLB (in millions)
Attributed fee included in operating revenues and income (loss) from operations (5)	$	17.0	$	17.9	$	18.3	$	16.2	$	16.9	-0.6	%	$	32.8	$	33.1	0.9	%
Attributed fee excluded from operating revenues and income (loss) from operations (6)		22.5		24.8		25.7		25.5		30.6	36.0	%		42.1		56.1	33.3	%
Total Attributed Fees on GLB	$	39.5	$	42.7	$	44.0	$	41.7	$	47.5	20.3	%	$	74.9	$	89.2	19.1	%

GLB Account Values by Type (7)
Guaranteed withdrawal benefits (8)	$	17.435	$	16.613	$	14.785	$	14.910	$	17.973	3.1	%	$	17.435	$	17.973	3.1	%
Guaranteed income benefits (9)		8.550		7.899		6.780		6.623		7.708	-9.8	%		8.550		7.708	-9.8	%
Total GLB Account Values	$	25.985	$	24.512	$	21.566	$	21.533	$	25.680	-1.2	%	$	25.985	$	25.680	-1.2	%

(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 three months ended March 2009 and June 2009, and the six months ended June 2009 reduced our yields by approximately 40 bps, 33 bps, and 37 bps, respectively.

(3) Comprised of the variable annuity expense assessments included in the expense assessments line item on page 14 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 14 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 (loss) 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.

6/30/2009																								PAGE 18
Retirement Solutions - Defined Contribution
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Operating Revenues
Surrender charges	$	1.5		$	1.3		$	1.5		$	1.0		$	1.3			-13.3	%	$	3.4		$	2.3			-32.4	%
Expense assessments		59.3			54.6			42.7			39.6			43.4			-26.8	%		118.6			83.0			-30.0	%
Net investment income		174.8			180.9			167.6			175.5			175.6			0.5	%		346.5			351.1			1.3	%
Operating realized gain (loss) (1)		-			0.2			3.5			6.6			(8.4	)	NM				0.1			(1.8	)	NM
Other revenues and fees		3.8			3.8			2.6			2.4			3.1			-18.4	%		8.5			5.5			-35.3	%
Total Operating Revenues		239.4			240.8			217.9			225.1			215.0			-10.2	%		477.1			440.1			-7.8	%
Operating Expenses
Interest credited		107.0			106.8			109.8			111.5			112.0			4.7	%		212.9			223.5			5.0	%
Benefits		0.1			0.2			13.5			6.4			(11.6	)	NM				0.1			(5.2	)	NM
Underwriting, acquisition, insurance and other expenses		75.4			76.8			111.9			70.8			76.3			1.2	%		151.7			147.1			-3.0	%
Total Operating Expenses		182.5			183.8			235.2			188.7			176.7			-3.2	%		364.7			365.4			0.2	%
Income (loss) from operations before federal income tax expense (benefit)		56.9			57.0			(17.3	)		36.4			38.3			-32.7	%		112.4			74.7			-33.5	%
Federal income tax expense (benefit)		15.7			14.7			(16.2	)		6.6			10.6			-32.5	%		30.8			17.2			-44.2	%
Income (Loss) from Operations	$	41.2		$	42.3		$	(1.1	)	$	29.8		$	27.7			-32.8	%	$	81.6		$	57.5			-29.5	%
Effective Tax Rate		27.6	%		25.8	%		93.6	%		18.1	%		27.7	%					27.4	%		23.0	%
Average Equity	$	933.7		$	961.9		$	952.2		$	983.3		$	1,031.5					$	920.0		$	1,007.4
Return on Average Equity		17.7	%		17.6	%		(0.5	%)		12.1	%		10.7	%					17.7	%		11.4	%
Income (Loss) from Operations - Basis Points on Average Account Values - Annualized		46			49			(1	)		42			37			(9	)		46			39			(7	)
Operating Realized Gain (Loss) (1)
GLB (2)	$	-		$	0.1		$	0.1		$	0.1		$	-		NM			$	0.1		$	0.1			0.0	%
GDB (3)		-			0.1			3.4			6.5			(8.4	)	NM				-			(1.9	)	NM
Total Operating Realized Gain (Loss)	$	-		$	0.2		$	3.5		$	6.6		$	(8.4	)	NM			$	0.1		$	(1.8	)	NM
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	19.4		$	17.2		$	16.0		$	14.0		$	15.5			-20.1	%	$	39.1		$	29.5			-24.6	%
General and administrative expenses		52.0			52.7			63.3			53.6			53.7			3.3	%		103.9			107.3			3.3	%
Taxes, licenses and fees		3.0			3.1			2.8			3.6			3.0			0.0	%		7.4			6.6			-10.8	%
Total commissions and expenses incurred		74.4			73.0			82.1			71.2			72.2			-3.0	%		150.4			143.4			-4.7	%
Less: commissions and expenses capitalized		(22.2	)		(19.7	)		(28.2	)		(18.3	)		(17.0	)		23.4	%		(45.8	)		(35.3	)		22.9	%
Amortization of DAC and VOBA, net of interest		23.2			23.5			58.0			17.9			21.1			-9.1	%		47.1			39.0			-17.2	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	75.4		$	76.8		$	111.9		$	70.8		$	76.3			1.2	%	$	151.7		$	147.1			-3.0	%

General and Administrative Expenses - Basis Points on Average Account Values - Annualized (4) 59 61 86 76 71 12 59 73 14

 

Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	564.2		$	629.7		$	744.8		$	883.3		$	918.2		$	513.8		$	883.3
Inter-segment transfer		-			-			-			-			-			6.9			-
Deferrals		22.2			19.7			28.2			18.3			17.0			45.8			35.3
Amortization, net of interest:
Unlocking		0.1			(2.8	)		(48.6	)		(4.1	)		2.7			(2.4	)		(1.4	)
Other amortization		(23.3	)		(20.7	)		(9.4	)		(13.8	)		(23.8	)		(44.7	)		(37.6	)
Deferrals, net of amortization included in underwriting,
acquisition, insurance and other expenses		(1.0	)		(3.8	)		(29.8	)		0.4			(4.1	)		(1.3	)		(3.7	)
Adjustment related to realized (gains) losses
on available-for-sale securities		1.0			4.6			5.6			2.5			6.0			1.6			8.5
Adjustment related to unrealized (gains) losses
on available-for-sale securities		65.5			114.3			162.7			32.0			(157.4	)		108.7			(125.4	)
Balance at End-of-Period	$	629.7		$	744.8		$	883.3		$	918.2		$	762.7		$	629.7		$	762.7

Roll Forward of DSI
Balance at beginning-of-period	$	1.9		$	2.0		$	2.0		$	2.0		$	2.2		$	0.4		$	2.0
Inter-segment transfer		-			-			-			-			-			1.3			-
Deferrals		0.2			-			0.2			0.2			0.4			0.4			0.6
Amortization, net of interest:
Unlocking		-			-			(0.2	)		(0.1	)		0.1			-			-
Other amortization		(0.1	)		(0.1	)		0.1			0.1			(0.2	)		(0.1	)		(0.1	)
Deferrals, net of amortization included in
interest credited		0.1			(0.1	)		0.1			0.2			0.3			0.3			0.5
Adjustment related to realized (gains) losses
on available-for-sale securities		-			0.1			(0.1	)		-			-			-			-
Balance at End-of-Period	$	2.0		$	2.0		$	2.0		$	2.2		$	2.5		$	2.0		$	2.5

(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.

6/30/2009																						PAGE 19
Retirement Solutions - Defined Contribution
Account Value Roll Forward
Unaudited (in billions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Fixed Annuities
Balance at beginning-of-period	$	11.217		$	11.294		$	11.418		$	11.638		$	11.924			6.3	%	$	10.889		$	11.638			6.9	%
Gross deposits		0.280			0.290			0.279			0.416			0.429			53.2	%		0.612			0.845			38.1	%
Withdrawals and deaths		(0.380	)		(0.411	)		(0.387	)		(0.388	)		(0.354	)		6.8	%		(0.750	)		(0.742	)		1.1	%
Net flows		(0.100	)		(0.121	)		(0.108	)		0.028			0.075			175.0	%		(0.138	)		0.103			174.6	%
Transfers from variable annuities		0.073			0.136			0.214			0.148			(0.036	)	NM				0.245			0.112			-54.3	%
Inter-segment transfer		-			-			-			-			-		NM				0.089			-			-100.0	%
Interest credited		0.104			0.109			0.114			0.110			0.107			2.9	%		0.209			0.217			3.8	%
Balance at End-of-Period  (1)	$	11.294		$	11.418		$	11.638		$	11.924		$	12.070			6.9	%	$	11.294		$	12.070			6.9	%
Variable Annuities
Balance at beginning-of-period	$	16.292		$	16.195		$	13.480		$	10.588		$	9.721			-40.3	%	$	17.876		$	10.588			-40.8	%
Gross deposits		0.561			0.532			0.403			0.425			0.375			-33.2	%		1.235			0.800			-35.2	%
Withdrawals and deaths		(0.646	)		(0.723	)		(0.506	)		(0.419	)		(0.423	)		34.5	%		(1.479	)		(0.842	)		43.1	%
Net flows		(0.085	)		(0.191	)		(0.103	)		0.006			(0.048	)		43.5	%		(0.244	)		(0.042	)		82.8	%
Transfers to fixed annuities		(0.058	)		(0.117	)		(0.143	)		(0.166	)		(0.019	)		67.2	%		(0.201	)		(0.185	)		8.0	%
Inter-product transfer (2)		-			(0.553	)		-			-			-		NM				-			-		NM
Inter-segment transfer		-			-			-			-			-		NM				0.206			-			-100.0	%
Investment increase and change in market value		0.046			(1.854	)		(2.646	)		(0.707	)		1.448		NM				(1.442	)		0.741			151.4	%
Balance at End-of-Period (3)	$	16.195		$	13.480		$	10.588		$	9.721		$	11.102			-31.4	%	$	16.195		$	11.102			-31.4	%
Total Annuities
Balance at beginning-of-period	$	27.509		$	27.489		$	24.898		$	22.226		$	21.645			-21.3	%	$	28.765		$	22.226			-22.7	%
Gross deposits		0.841			0.822			0.682			0.841			0.804			-4.4	%		1.847			1.645			-10.9	%
Withdrawals and deaths		(1.026	)		(1.134	)		(0.893	)		(0.807	)		(0.777	)		24.3	%		(2.229	)		(1.584	)		28.9	%
Net flows		(0.185	)		(0.312	)		(0.211	)		0.034			0.027			114.6	%		(0.382	)		0.061			116.0	%
Transfers between fixed and variable accounts		0.015			0.019			0.071			(0.018	)		(0.055	)	NM				0.044			(0.073	)	NM
Inter-product transfer (2)		-			(0.553	)		-			-			-		NM				-			-		NM
Inter-segment transfer		-			-			-			-			-		NM				0.295			-			-100.0	%
Interest credited and change in market value		0.150			(1.745	)		(2.532	)		(0.597	)		1.555		NM				(1.233	)		0.958			177.7	%
Balance at End-of-Period	$	27.489		$	24.898		$	22.226		$	21.645		$	23.172			-15.7	%	$	27.489		$	23.172			-15.7	%
Alliance and Smart Future Mutual Funds
Balance at beginning-of-period	$	7.255		$	7.553		$	7.675		$	6.652		$	6.848			-5.6	%	$	7.293		$	6.652			-8.8	%
Plan/participant rollovers		0.285			0.215			0.249			0.338			0.071			-75.1	%		0.506			0.409			-19.2	%
Additional contributions		0.295			0.297			0.310			0.396			0.363			23.1	%		0.619			0.759			22.6	%
Gross deposits		0.580			0.512			0.559			0.734			0.434			-25.2	%		1.125			1.168			3.8	%
Withdrawals and deaths		(0.158	)		(0.107	)		(0.177	)		(0.109	)		(0.132	)		16.5	%		(0.226	)		(0.241	)		-6.6	%
Net flows		0.422			0.405			0.382			0.625			0.302			-28.4	%		0.899			0.927			3.1	%
Transfers		(0.026	)		(0.024	)		(0.079	)		-			(0.008	)		69.2	%		(0.096	)		(0.008	)		91.7	%
Inter-product transfer (2)		-			0.553			-			-			-		NM				-			-		NM
Interest credited and change in market value		(0.098	)		(0.812	)		(1.326	)		(0.429	)		1.013		NM				(0.543	)		0.584			207.6	%
Balance at End-of-Period (4)	$	7.553		$	7.675		$	6.652		$	6.848		$	8.155			8.0	%	$	7.553		$	8.155			8.0	%
Total Annuities and Mutual Funds
Balance at beginning-of-period	$	34.764		$	35.042		$	32.573		$	28.878		$	28.493			-18.0	%	$	36.058		$	28.878			-19.9	%
Gross deposits		1.421			1.334			1.241			1.575			1.238			-12.9	%		2.972			2.813			-5.3	%
Withdrawals and deaths		(1.184	)		(1.241	)		(1.070	)		(0.916	)		(0.909	)		23.2	%		(2.455	)		(1.825	)		25.7	%
Net flows		0.237			0.093			0.171			0.659			0.329			38.8	%		0.517			0.988			91.1	%
Transfers		(0.011	)		(0.005	)		(0.008	)		(0.018	)		(0.063	)	NM				(0.052	)		(0.081	)		-55.8	%
Inter-segment transfer		-			-			-			-			-		NM				0.295			-			-100.0	%
Interest credited and change in market value		0.052			(2.557	)		(3.858	)		(1.026	)		2.568		NM				(1.776	)		1.542			186.8	%
Balance at End-of-Period	$	35.042		$	32.573		$	28.878		$	28.493		$	31.327			-10.6	%	$	35.042		$	31.327			-10.6	%
Variable Annuities Under Agreement - Included Above	$	0.014		$	0.011		$	0.008		$	0.007		$	0.008			-42.9	%	$	0.014		$	0.008			-42.9	%
Incremental Deposits: (5)
Fixed annuities	$	0.258		$	0.225		$	0.361		$	0.379		$	0.391			51.6	%	$	0.543		$	0.770			41.8	%
Variable annuities		0.553			0.524			0.398			0.419			0.371			-32.9	%		1.220			0.790			-35.2	%
Total annuities incremental deposits		0.811			0.749			0.759			0.798			0.762			-6.0	%		1.763			1.560			-11.5	%
Total Alliance mutual funds incremental deposits		0.580			0.511			0.560			0.734			0.434			-25.2	%		1.125			1.168			3.8	%
Total Incremental Deposits	$	1.391		$	1.260		$	1.319		$	1.532		$	1.196			-14.0	%	$	2.888		$	2.728			-5.5	%

(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 $653 million, of which $100 million 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.

6/30/2009													PAGE 20
Retirement Solutions - Defined Contribution
Account Value Roll Forward - By Product and Supplemental Data
Unaudited (in billions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Total Micro - Small Segment
Balance at beginning-of-period	$	7.218		$	7.286		$	5.790		$	4.888		$	4.710			-34.7	%	$	7.798		$	4.888			-37.3	%
Gross deposits		0.389			0.389			0.255			0.306			0.256			-34.2	%		0.887			0.562			-36.6	%
Withdrawals and deaths		(0.395	)		(0.465	)		(0.311	)		(0.266	)		(0.268	)		32.2	%		(0.964	)		(0.534	)		44.6	%
Net flows		(0.006	)		(0.076	)		(0.056	)		0.040			(0.012	)		-100.0	%		(0.077	)		0.028			136.4	%
Transfers between fixed and variable accounts		-			-			0.004			(0.004	)		-		NM				(0.012	)		(0.004	)		66.7	%
Inter-product transfer (1)		-			(0.653	)		-			-			-		NM				-			-		NM
Investment increase and change in market value		0.074			(0.767	)		(0.850	)		(0.214	)		0.536		NM				(0.423	)		0.322			176.1	%
Balance at End-of-Period	$	7.286		$	5.790		$	4.888		$	4.710		$	5.234			-28.2	%	$	7.286		$	5.234			-28.2	%
Total Mid - Large Segment
Balance at beginning-of-period	$	9.621		$	9.985		$	10.310		$	9.540		$	9.920			3.1	%	$	9.463		$	9.540			0.8	%
Gross deposits		0.748			0.687			0.729			1.026			0.757			1.2	%		1.516			1.783			17.6	%
Withdrawals and deaths		(0.299	)		(0.222	)		(0.191	)		(0.233	)		(0.234	)		21.7	%		(0.458	)		(0.467	)		-2.0	%
Net flows		0.449			0.465			0.538			0.793			0.523			16.5	%		1.058			1.316			24.4	%
Transfers between fixed and variable accounts		(0.011	)		(0.004	)		(0.011	)		(0.013	)		(0.063	)	NM				(0.039	)		(0.076	)		-94.9	%
Inter-product transfer (1)		-			0.653			-			-			-		NM				-			-		NM
Investment increase and change in market value		(0.074	)		(0.789	)		(1.297	)		(0.400	)		1.045		NM				(0.497	)		0.645			229.8	%
Balance at End-of-Period	$	9.985		$	10.310		$	9.540		$	9.920		$	11.425			14.4	%	$	9.985		$	11.425			14.4	%
Total Multi-Fund® and Other Variable Annuities
Balance at beginning-of-period	$	17.925		$	17.771		$	16.473		$	14.450		$	13.863			-22.7	%	$	18.797		$	14.450			-23.1	%
Gross deposits		0.284			0.258			0.257			0.243			0.225			-20.8	%		0.569			0.468			-17.8	%
Withdrawals and deaths		(0.490	)		(0.554	)		(0.568	)		(0.417	)		(0.407	)		16.9	%		(1.033	)		(0.824	)		20.2	%
Net flows		(0.206	)		(0.296	)		(0.311	)		(0.174	)		(0.182	)		11.7	%		(0.464	)		(0.356	)		23.3	%
Transfers between fixed and variable accounts		(0.000	)		(0.001	)		(0.001	)		(0.001	)		-		NM				(0.001	)		(0.001	)		0.0	%
Inter-segment transfer		-			-			-			-			-		NM				0.295			-			-100.0	%
Investment increase and change in market value		0.052			(1.001	)		(1.711	)		(0.412	)		0.987		NM				(0.856	)		0.575			167.2	%
Balance at End-of-Period	$	17.771		$	16.473		$	14.450		$	13.863		$	14.668			-17.5	%	$	17.771		$	14.668			-17.5	%
Total Annuities and Mutual Funds
Balance at beginning-of-period	$	34.764		$	35.042		$	32.573		$	28.878		$	28.493			-18.0	%	$	36.058		$	28.878			-19.9	%
Gross deposits		1.421			1.334			1.241			1.575			1.238			-12.9	%		2.972			2.813			-5.3	%
Withdrawals and deaths		(1.184	)		(1.241	)		(1.070	)		(0.916	)		(0.909	)		23.2	%		(2.455	)		(1.825	)		25.7	%
Net flows		0.237			0.093			0.171			0.659			0.329			38.8	%		0.517			0.988			91.1	%
Transfers between fixed and variable accounts		(0.011	)		(0.005	)		(0.008	)		(0.018	)		(0.063	)	NM				(0.052	)		(0.081	)		-55.8	%
Inter-segment transfer		-			-			-			-			-		NM				0.295			-			-100.0	%
Investment increase and change in market value		0.052			(2.557	)		(3.858	)		(1.026	)		2.568		NM				(1.776	)		1.542			186.8	%
Balance at End-of-Period (2)	$	35.042		$	32.573		$	28.878		$	28.493		$	31.327			-10.6	%	$	35.042		$	31.327			-10.6	%
Fixed Annuities - Excluding Fixed Portion of Variable Contracts
Deposits	$	0.187		$	0.196		$	0.189		$	0.317		$	0.341			82.4	%	$	0.427		$	0.658			54.1	%
Withdrawals and deaths		(0.198	)		(0.183	)		(0.016	)		(0.187	)		(0.155	)		21.7	%		(0.358	)		(0.342	)		4.5	%
Net flows	$	(0.011	)	$	0.013		$	0.173		$	0.130		$	0.186		NM			$	0.069		$	0.316		NM
Fixed Contract Account Values	$	5.221		$	5.304		$	5.601		$	5.774		$	5.879			12.6	%	$	5.221		$	5.879			12.6	%
Fixed Portion of Variable Contracts
Deposits	$	0.092		$	0.094		$	0.090		$	0.099		$	0.088			-4.3	%	$	0.185		$	0.187			1.1	%
Withdrawals and deaths		(0.182	)		(0.228	)		(0.371	)		(0.202	)		(0.199	)		-9.3	%		(0.392	)		(0.401	)		-2.3	%
Net flows	$	(0.090	)	$	(0.134	)	$	(0.281	)	$	(0.103	)	$	(0.111	)		-23.3	%	$	(0.207	)	$	(0.214	)		-3.4	%
Fixed Portion of Variable Contract Account Values	$	6.073		$	6.114		$	6.037		$	6.150		$	6.191			1.9	%	$	6.073		$	6.191			1.9	%
Variable Annuities - Including Fixed Portion of Variable Contracts
Deposits	$	0.653		$	0.626		$	0.493		$	0.523		$	0.463			-29.1	%	$	1.420		$	0.986			-30.6	%
Withdrawals and deaths		(0.828	)		(0.951	)		(0.877	)		(0.621	)		(0.622	)		24.9	%		(1.870	)		(1.243	)		33.5	%
Net flows	$	(0.175	)	$	(0.325	)	$	(0.384	)	$	(0.098	)	$	(0.159	)		9.1	%	$	(0.450	)	$	(0.257	)		42.9	%
Variable Contract Account Values	$	22.268		$	19.594		$	16.625		$	15.871		$	17.293			-22.3	%	$	22.268		$	17.293			-22.3	%
Average Daily Variable Annuity Separate Account Values	$	16.892		$	15.582		$	10.666		$	9.846		$	10.768			-36.3	%	$	16.766		$	10.309			-38.5	%

											Change							Change
Interest Rate Spread (3)											(Basis Point)							(Basis Point)
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses (4)	5.89	%	5.94	%	5.84	%	5.70	%	5.79	%		(10	)	5.90	%	5.74	%		(16	)
Commercial mortgage loan prepayment and bond make whole premiums	0.05	%	0.17	%	0.00	%	0.00	%	0.01	%		(4	)	0.04	%	0.01	%		(3	)
Alternative investments	-0.03	%	-0.01	%	-0.14	%	-0.01	%	-0.02	%		1		-0.03	%	-0.01	%		2
Net investment income yield on reserves	5.91	%	6.10	%	5.70	%	5.69	%	5.78	%		(13	)	5.91	%	5.74	%		(17	)
Interest rate credited to contract holders	3.80	%	3.77	%	3.79	%	3.78	%	3.73	%		(7	)	3.80	%	3.76	%		(4	)
Interest rate spread	2.11	%	2.33	%	1.91	%	1.91	%	2.05	%		(6	)	2.11	%	1.98	%		(13	)

(1) On 9/30/08, the Lincoln Employee 401(k) Plan transferred from Director to Alliance in the amount of $653 million.

(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 three months ended March 2009 and June 2009, and the six months ended June 2009 reduced our yields by approximately 16 bps, 18 bps, and 17 bps, respectively.

6/30/2009																									PAGE 21
Insurance Solutions - Life Insurance
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Operating Revenues
Insurance premiums	$	89.5		$	90.9		$	93.6		$	90.5		$	93.3			4.2	%	$	175.9		$	183.8			4.5	%
Surrender charges		16.7			18.0			18.1			21.6			26.7			59.9	%		34.0			48.3			42.1	%
Mortality assessments		327.9			331.8			339.1			344.1			320.0			-2.4	%		649.6			664.1			2.2	%
Expense assessments		129.6			101.4			137.6			116.5			103.0			-20.5	%		250.9			219.5			-12.5	%
Net investment income		519.2			522.4			446.9			497.7			453.3			-12.7	%		1,018.4			951.0			-6.6	%
Amortization of deferred loss on business sold throughreinsurance		-			-			-			-			(0.7	)		0.0	%		-			(0.7	)	NM
Other revenues and fees		5.0			9.3			7.5			5.8			6.6			32.0	%		13.7			12.4			-9.5	%
Total Operating Revenues		1,087.9			1,073.8			1,042.8			1,076.2			1,002.2			-7.9	%		2,142.5			2,078.4			-3.0	%
Operating Expenses
Interest credited		300.6			304.7			300.7			302.8			290.8			-3.3	%		597.3			593.6			-0.6	%
Benefits		306.0			399.9			365.9			355.7			323.0			5.6	%		606.0			678.7			12.0	%
Underwriting, acquisition, insurance and other expenses		234.0			167.4			255.7			224.0			191.7			-18.1	%		453.5			415.7			-8.3	%
Total Operating Expenses		840.6			872.0			922.3			882.5			805.5			-4.2	%		1,656.8			1,688.0			1.9	%
Income from operations before federal income tax expense		247.3			201.8			120.5			193.7			196.7			-20.5	%		485.7			390.4			-19.6	%
Federal income tax expense		83.7			64.5			38.0			51.5			63.8			-23.8	%		164.8			115.3			-30.0	%
Income from Operations	$	163.6		$	137.3		$	82.5		$	142.2		$	132.9			-18.8	%	$	320.9		$	275.1			-14.3	%
Effective Tax Rate		33.8	%		32.0	%		31.5	%		26.6	%		32.4	%					33.9	%		29.5	%
Average Equity	$	8,095.3		$	8,164.2		$	8,263.8		$	8,235.3		$	7,980.9					$	8,118.9		$	8,108.1
Return on Average Equity		8.1	%		6.7	%		4.0	%		6.9	%		6.7	%					7.9	%		6.8	%
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	180.5		$	209.1		$	210.5		$	176.9		$	141.9			-21.4	%	$	375.1		$	318.8			-15.0	%
General and administrative expenses		100.8			101.8			116.0			110.2			109.5			8.6	%		206.2			219.7			6.5	%
Taxes, licenses and fees		26.6			36.3			25.0			33.3			22.9			-13.9	%		58.3			56.2			-3.6	%
Amortization of sales force intangibles		1.0			1.0			1.0			1.0			1.0			0.0	%		2.0			2.0			0.0	%
Total commissions and expenses incurred		308.9			348.2			352.5			321.4			275.3			-10.9	%		641.6			596.7			-7.0	%
Less: commissions and expenses capitalized		(237.2	)		(260.7	)		(272.5	)		(224.5	)		(197.5	)		16.7	%		(483.0	)		(422.0	)		12.6	%
Amortization of DAC and VOBA, net of interest		162.3			79.9			175.7			127.1			113.9			-29.8	%		294.9			241.0			-18.3	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	234.0		$	167.4		$	255.7		$	224.0		$	191.7			-18.1	%	$	453.5		$	415.7			-8.3	%
General and Administrative Expenses - Basis Points on Average Account Values - Annualized		124			126			145			139			144			20			127			137			10
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	5,968.1		$	6,235.0		$	6,947.8		$	7,383.5		$	7,265.0					$	5,691.7		$	7,383.5
Business sold through reinsurance		-			-			-			(292.9	)		-						-			(292.9	)
Deferrals		237.2			260.7			272.5			224.5			197.5						483.0			422.0
Amortization, net of interest:
Unlocking		(17.7	)		55.2			(84.0	)		(12.6	)		(5.5	)					(26.8	)		(18.1	)
Other amortization		(144.6	)		(135.1	)		(91.7	)		(114.5	)		(108.4	)					(268.1	)		(222.9	)
Deferrals, net of amortization included in underwriting, acquisition, insurance and other expenses		74.9			180.8			96.8			97.4			83.6						188.1			181.0
Adjustment related to realized losses on available-for-sale securities and derivatives		9.3			54.2			76.3			20.0			41.1						16.6			61.1
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		182.7			477.8			262.6			57.0			(558.8	)					338.6			(501.8	)
Balance at End-of-Period	$	6,235.0		$	6,947.8		$	7,383.5		$	7,265.0		$	6,830.9					$	6,235.0		$	6,830.9
Roll Forward of DFEL
Balance at beginning-of-period	$	722.2		$	763.4		$	840.2		$	888.7		$	941.4					$	672.5		$	888.7
Business sold through reinsurance		-			-			-			(11.0	)		-						-			(11.0	)
Deferrals		90.1			96.6			102.6			96.9			100.3						179.4			197.2
Amortization, net of interest:
Unlocking		(11.1	)		16.5			(24.0	)		(2.9	)		(0.7	)					(14.5	)		(3.6	)
Other amortization		(37.8	)		(36.3	)		(30.1	)		(32.1	)		(29.6	)					(74.0	)		(61.7	)
Deferrals, net of amortization included in expense assessments		41.2			76.8			48.5			61.9			70.0						90.9			131.9
Adjustment related to realized losses on available-for-sale securities and derivatives		-			-			-			0.9			2.4						-			3.3
Adjustment related to unrealized gains (losses) on available-for-sale securities and derivatives		-			-			-			0.9			0.2						-			1.1
Balance at End-of-Period	$	763.4		$	840.2		$	888.7		$	941.4		$	1,014.0					$	763.4		$	1,014.0

6/30/2009			��																						PAGE 22
Insurance Solutions - Life Insurance
Operational Data and Account Value Roll Forward
Unaudited (billions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Sales by Product (in millions)
UL
Excluding MoneyGuard®	$	123.7		$	144.7		$	142.7		$	102.7		$	84.9			-31.4	%	$	237.4		$	187.6			-21.0	%
MoneyGuard®		12.4			13.7			12.8			11.0			14.3			15.3	%		23.4			25.3			8.1	%
Total		136.1			158.4			155.5			113.7			99.2			-27.1	%		260.8			212.9			-18.4	%
VUL		11.4			12.3			14.6			9.0			7.1			-37.7	%		27.0			16.1			-40.4	%
COLI and BOLI (1)		12.8			12.7			30.7			11.7			4.7			-63.3	%		41.1			16.4			-60.1	%
Term/Whole Life		5.4			6.9			10.6			10.8			12.7			135.2	%		10.5			23.5			123.8	%
Total	$	165.7		$	190.3		$	211.4		$	145.2		$	123.7			-25.3	%	$	339.4		$	268.9			-20.8	%
First Year Paid Premiums (in millions)
UL
Excluding MoneyGuard®	$	254.3		$	270.4		$	287.4		$	230.5		$	216.2			-15.0	%	$	499.7		$	446.7			-10.6	%
MoneyGuard®		82.5			91.6			85.1			73.1			94.9			15.0	%		156.1			168.0			7.6	%
Total		336.8			362.0			372.5			303.6			311.1			-7.6	%		655.8			614.7			-6.3	%
VUL		28.8			31.1			34.2			25.2			20.1			-30.2	%		65.8			45.3			-31.2	%
COLI and BOLI (1)		26.0			30.3			82.2			52.0			16.1			-38.1	%		83.9			68.1			-18.8	%
Term/Whole Life		16.2			20.2			29.5			18.8			23.0			42.0	%		30.2			41.8			38.4	%
Total	$	407.8		$	443.6		$	518.4		$	399.6		$	370.3			-9.2	%	$	835.7		$	769.9			-7.9	%
Life Insurance In Force
UL and other	$	303.607		$	306.293		$	310.198		$	288.826		$	288.632			-4.9	%	$	303.607		$	288.632			-4.9	%
Term insurance		234.109			233.671			235.023			236.408			238.901			2.0	%		234.109			238.901			2.0	%
Total	$	537.716		$	539.964		$	545.221		$	525.234		$	527.533			-1.9	%	$	537.716		$	527.533			-1.9	%
Interest-Sensitive Life
Balance at beginning-of-period	$	26.726		$	26.980		$	27.227		$	27.502		$	27.617			3.3	%	$	26.518		$	27.502			3.7	%
Deposits		0.846			0.875			0.951			0.815			0.840			-0.7	%		1.739			1.655			-4.8	%
Withdrawals and deaths		(0.277	)		(0.306	)		(0.325	)		(0.358	)		(0.391	)		-41.2	%		(0.675	)		(0.749	)		-11.0	%
Net flows		0.569			0.569			0.626			0.457			0.449			-21.1	%		1.064			0.906			-14.8	%
Contract holder assessments		(0.601	)		(0.613	)		(0.639	)		(0.631	)		(0.645	)		-7.3	%		(1.169	)		(1.276	)		-9.2	%
Interest credited		0.286			0.291			0.288			0.289			0.288			0.7	%		0.567			0.577			1.8	%
Balance at End-of-Period (Gross) (2)		26.980			27.227			27.502			27.617			27.709			2.7	%		26.980			27.709			2.7	%
Reinsurance ceded		-			-			-			(0.938	)		(0.930	)	NM				-			(0.930	)	NM
Balance at End-of-Period (Net of Ceded) (2)	$	26.980		$	27.227		$	27.502		$	26.679		$	26.779			-0.7	%	$	26.980		$	26.779			-0.7	%
VUL
Balance at beginning-of-period	$	5.615		$	5.623		$	5.056		$	4.251		$	3.992			-28.9	%	$	6.040		$	4.251			-29.6	%
Deposits		0.216			0.207			0.266			0.243			0.180			-16.7	%		0.455			0.423			-7.0	%
Withdrawals and deaths		(0.108	)		(0.086	)		(0.088	)		(0.143	)		(0.089	)		17.6	%		(0.192	)		(0.232	)		-20.8	%
Net flows		0.108			0.121			0.178			0.100			0.091			-15.7	%		0.263			0.191			-27.4	%
Contract holder assessments		(0.091	)		(0.092	)		(0.092	)		(0.094	)		(0.088	)		3.3	%		(0.185	)		(0.182	)		1.6	%
Investment income and change in market value		(0.009	)		(0.596	)		(0.891	)		(0.265	)		0.567		NM				(0.495	)		0.302			161.0	%
Balance at End-of-Period (Gross)		5.623			5.056			4.251			3.992			4.562			-18.9	%		5.623			4.562			-18.9	%
Reinsurance ceded		-			-			-			(0.640	)		(0.719	)	NM				-			(0.719	)	NM
Balance at End-of-Period (Net of Ceded)	$	5.623		$	5.056		$	4.251		$	3.352		$	3.843			-31.7	%	$	5.623		$	3.843			-31.7	%
Total Life Insurance
Balance at beginning-of-period	$	32.341		$	32.603		$	32.283		$	31.753		$	31.609			-2.3	%	$	32.558		$	31.753			-2.5	%
Deposits		1.062			1.082			1.217			1.058			1.020			-4.0	%		2.194			2.078			-5.3	%
Withdrawals and deaths		(0.385	)		(0.392	)		(0.413	)		(0.501	)		(0.480	)		-24.7	%		(0.867	)		(0.981	)		-13.1	%
Net flows		0.677			0.690			0.804			0.557			0.540			-20.2	%		1.327			1.097			-17.3	%
Contract holder assessments		(0.692	)		(0.705	)		(0.731	)		(0.725	)		(0.733	)		-5.9	%		(1.354	)		(1.458	)		-7.7	%
Investment income and change in market value		0.277			(0.305	)		(0.603	)		0.024			0.855			208.7	%		0.072			0.879		NM
Balance at End-of-Period (Gross)		32.603			32.283			31.753			31.609			32.271			-1.0	%		32.603			32.271
Reinsurance ceded		-			-			-			(1.578	)		(1.649	)	NM				-			(1.649	)
Balance at End-of-Period (Net of Ceded)	$	32.603		$	32.283		$	31.753		$	30.031		$	30.622			-6.1	%	$	32.603		$	30.622			-6.1	%

Interest Rate Yields and Spread
											Change							Change
Interest-Sensitive Products (3)											(Basis Points)							(Basis Points)
Fixed maturity securities, mortgage loans on real
estate and other, net of investment expenses (4)	5.89	%	5.92	%	5.86	%	5.83	%	6.03	%		14		5.94	%	5.93	%		(1	)
Commercial mortgage loan prepayment and bond make whole premiums	0.14	%	0.02	%	0.01	%	0.00	%	0.06	%		(8	)	0.09	%	0.03	%		(6	)
Alternative investments	0.21	%	0.31	%	-0.65	%	-0.06	%	-0.71	%		(92	)	0.11	%	-0.38	%		(49	)
Net investment income yield on reserves	6.24	%	6.25	%	5.22	%	5.77	%	5.38	%		(86	)	6.14	%	5.58	%		(56	)
Interest rate credited to contract holders	4.36	%	4.35	%	4.25	%	4.25	%	4.20	%		(16	)	4.36	%	4.22	%		(14	)
Interest rate spread	1.88	%	1.90	%	0.97	%	1.52	%	1.18	%		(70	)	1.78	%	1.36	%		(42	)
Traditional Products (5)
Fixed maturity securities, mortgage loans on real
estate and other, net of investment expenses	6.23	%	6.06	%	6.10	%	6.00	%	5.96	%		(27	)	6.17	%	5.98	%		(19	)
Commercial mortgage loan prepayment and bond make whole premiums	0.00	%	0.00	%	0.00	%	0.01	%	0.01	%		1		0.06	%	0.01	%		(5	)
Alternative investments	-0.02	%	-0.01	%	-0.08	%	-0.01	%	-0.01	%		1		-0.02	%	-0.01	%		1
Net investment income yield on reserves	6.21	%	6.05	%	6.02	%	6.00	%	5.96	%		(25	)	6.21	%	5.98	%		(23	)

 

(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 three months ended March 2009 and the six months ended June 2009 reduced our yields by approximately 11 bps and 6 bps, respectively.  There was no impact for the three months ended June 2009.

(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 June 30, 2009, interest-sensitive products represented approximately 85% of total interest-sensitive and traditional earning assets.

6/30/2009																									PAGE 23
Insurance Solutions - Group Protection
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Operating Revenues
Insurance premiums	$	393.0		$	370.6		$	382.9		$	389.8		$	413.3			5.2	%	$	763.4		$	803.1			5.2	%
Mortality assessments		-			-			0.1			-			-		NM				-			-		NM
Net investment income		30.5			30.8			28.2			30.1			28.1			-7.9	%		58.2			58.2			0.0	%
Other revenues and fees		1.4			1.4			1.3			1.5			1.5			7.1	%		2.7			3.0			11.1	%
Total Operating Revenues		424.9			402.8			412.5			421.4			442.9			4.2	%		824.3			864.3			4.9	%
Operating Expenses
Interest credited		0.3			0.5			0.6			0.6			0.5			66.7	%		0.5			1.1			1.2
Benefits		285.7			268.8			283.1			282.0			292.7			2.5	%		554.8			574.7			3.6	%
Underwriting, acquisition, insurance and other expenses		89.3			91.8			100.4			99.3			98.0			9.7	%		178.9			197.3			10.3	%
Total Operating Expenses		375.3			361.1			384.1			381.9			391.2			4.2	%		734.2			773.1			5.3	%
Income from operations before federal income tax expense		49.6			41.7			28.4			39.5			51.7			4.2	%		90.1			91.2			1.2	%
Federal income tax expense		17.4			14.5			10.0			13.8			18.1			4.0	%		31.6			31.9			0.9	%
Income from Operations	$	32.2		$	27.2		$	18.4		$	25.7		$	33.6			4.3	%	$	58.5		$	59.3			1.4	%
Effective Tax Rate		35.1	%		34.8	%		35.2	%		34.9	%		35.0	%					35.1	%		35.0	%
Average Equity	$	985.3		$	1,001.0		$	1,002.3		$	1,014.7		$	1,047.5					$	980.5		$	1,031.1
Return on Average Equity		13.1	%		10.9	%		7.3	%		10.1	%		12.8	%					11.9	%		11.5	%
Underwriting, Acquisition, Insurance and Other Expenses
Commissions (1)	$	40.0		$	42.1		$	44.7		$	44.2		$	43.6			9.0	%	$	80.8		$	87.8			8.7	%
General and administrative expenses (1)		44.5			44.6			53.9			47.4			48.2			8.3	%		88.9			95.6			7.5	%
Taxes, licenses and fees		9.0			9.0			10.6			10.5			7.3			-18.9	%		19.0			17.8			-6.3	%
Total commissions and expenses incurred		93.5			95.7			109.2			102.1			99.1			6.0	%		188.7			201.2			6.6	%
Less: commissions and expenses capitalized		(13.0	)		(13.1	)		(18.5	)		(13.2	)		(12.5	)		3.8	%		(26.7	)		(25.7	)		3.7	%
Amortization of DAC and VOBA, net of interest		8.8			9.2			9.7			10.4			11.4			29.5	%		16.9			21.8			29.0	%
Total Underwriting, Acquisition, Insurance and Other Expenses	$	89.3		$	91.8		$	100.4		$	99.3		$	98.0			9.7	%	$	178.9		$	197.3			10.3	%

General and Administrative Expenses as a Percentage of Premiums (1) 11.3 % 12.0 % 14.1 % 12.2 % 11.7 % 11.6 % 11.9 %

Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	129.0		$	133.2		$	137.1		$	145.9		$	148.7		$	123.4		$	145.9
Deferrals		13.0			13.1			18.5			13.2			12.5			26.7			25.7
Amortization, net of interest		(8.8	)		(9.2	)		(9.7	)		(10.4	)		(11.4	)		(16.9	)		(21.8	)
Deferrals, net of amortization included in underwriting,
acquisition, insurance and other expenses		4.2			3.9			8.8			2.8			1.1			9.8			3.9
Balance at End-of-Period	$	133.2		$	137.1		$	145.9		$	148.7		$	149.8		$	133.2		$	149.8

Annualized Sales by Product Line
Life	$	23.4		$	30.6		$	49.9		$	22.7		$	21.1			-9.8	%	$	44.7		$	43.8			-2.0	%
Disability		29.9			29.8			63.6			23.5			29.3			-2.0	%		54.8			52.8			-3.6	%
Dental		11.3			8.0			15.5			8.1			9.1			-19.5	%		19.2			17.2			-10.4	%
Total	$	64.6		$	68.4		$	129.0		$	54.3		$	59.5			-7.9	%	$	118.7		$	113.8			-4.1	%
Insurance Premiums by Product Line
Life	$	133.8		$	135.7		$	138.8		$	142.4		$	147.4			10.2	%	$	266.7		$	289.8			8.7	%
Disability		167.0			168.4			173.1			174.0			171.1			2.5	%		330.2			345.1			4.5	%
Dental		37.4			38.0			37.9			37.5			37.2			-0.5	%		73.9			74.7			1.1	%
Other		54.8			28.5			33.1			35.9			57.6			5.1	%		92.6			93.5			1.0	%
Total	$	393.0		$	370.6		$	382.9		$	389.8		$	413.3			5.2	%	$	763.4		$	803.1			5.2	%
Income from Operations by Product Line
Life	$	11.4		$	8.9		$	3.8		$	0.6		$	12.5			9.6	%	$	21.5		$	13.1			-39.1	%
Disability		19.9			16.0			13.1			25.3			20.7			4.0	%		35.3			46.0			30.3	%
Dental		(0.4	)		1.2			0.8			(1.1	)		(1.5	)	NM				(0.7	)		(2.6	)	NM
Other		1.3			1.1			0.7			0.9			1.9			46.2	%		2.4			2.8			16.7	%
Total	$	32.2		$	27.2		$	18.4		$	25.7		$	33.6			4.3	%	$	58.5		$	59.3			1.4	%
Loss Ratios by Product Line
Life		72.3	%		74.0	%		77.3	%		81.6	%		70.3	%					72.1	%		75.8	%
Disability		66.1	%		68.6	%		68.7	%		59.1	%		62.4	%					67.1	%		60.8	%
Dental		81.1	%		75.9	%		75.6	%		84.2	%		86.1	%					81.0	%		85.2	%
Combined Loss Ratios		70.2	%		71.6	%		72.8	%		70.8	%		68.2	%					70.6	%		69.5	%

(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.

6/30/2009																						PAGE 24
Investment Management
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Operating Revenues
Investment advisory fees - external	$	75.8		$	67.7		$	48.4		$	43.7		$	47.8			-36.9	%	$	152.0		$	91.5			-39.8	%
Investment advisory fees - inter-segment		20.6			20.6			20.3			19.9			20.0			-2.9	%		40.6			39.9			-1.7	%
Other revenues and fees		27.9			21.6			14.5			18.3			23.8			-14.7	%		52.0			42.1			-19.0	%
Total Operating Revenues		124.3			109.9			83.2			81.9			91.6			-26.3	%		244.6			173.5			-29.1	%
Operating Expenses
Operating and administrative expenses		100.8			101.8			89.5			78.4			81.7			-18.9	%		201.9			160.1			-20.7	%
Total Operating Expenses		100.8			101.8			89.5			78.4			81.7			-18.9	%		201.9			160.1			-20.7	%
Income (loss) from operations before federal income tax expense (benefit)		23.5			8.1			(6.3	)		3.5			9.9			-57.9	%		42.7			13.4			-68.6	%
Federal income tax expense (benefit)		8.5			2.8			(2.0	)		2.1			4.8			-43.5	%		15.6			6.9			-55.8	%
Income (Loss) from Operations	$	15.0		$	5.3		$	(4.3	)	$	1.4		$	5.1			-66.0	%	$	27.1		$	6.5			-76.0	%
Effective Tax Rate		36.2	%		34.6	%		31.7	%		60.0	%		48.5	%					36.5	%		51.5	%
Pre-Tax Operating Margin		18.9	%		7.4	%		-7.6	%		4.3	%		10.8	%					17.5	%		7.7	%
After-Tax Operating Margin		12.1	%		4.8	%		-5.2	%		1.7	%		5.6	%					11.1	%		3.7	%
Operating and Administrative Expenses
General and administrative expenses	$	85.9		$	90.3		$	79.7		$	70.4		$	73.0			-15.0	%	$	173.5		$	143.4			-17.3	%
Depreciation and amortization		2.1			1.7			1.7			1.3			1.2			-42.9	%		4.3			2.5			-41.9	%
Sub-advisory fees		7.4			6.5			4.4			3.8			4.2			-43.2	%		14.6			8.0			-45.2	%
Total general and administrative expenses		95.4			98.5			85.8			75.5			78.4			-17.8	%		192.4			153.9			-20.0	%
Taxes, licenses and fees		4.9			2.9			3.3			2.8			3.2			-34.7	%		8.6			6.0			-30.2	%
Amortization of intangibles		0.5			0.4			0.4			0.1			0.1			-80.0	%		0.9			0.2			-77.8	%
Total Operating and Administrative Expenses	$	100.8		$	101.8		$	89.5		$	78.4		$	81.7			-18.9	%	$	201.9		$	160.1			-20.7	%

6/30/2009																						PAGE 25
Investment Management
Assets Under Management Roll Forward
Unaudited (in billions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Retail Fixed
Balance at beginning-of-period	$	14.168		$	14.398		$	14.335		$	13.662		$	14.158			-0.1	%	$	13.463		$	13.662			1.5	%
Sales (1)		1.533			1.618			1.844			1.809			1.972			28.6	%		3.514			3.781			7.6	%
Redemptions		(1.238	)		(1.292	)		(2.246	)		(1.531	)		(1.441	)		-16.4	%		(2.633	)		(2.972	)		-12.9	%
Exchanges		0.030			0.098			0.028			0.017			0.061			103.3	%		0.084			0.078			-7.1	%
Net flows		0.325			0.424			(0.374	)		0.295			0.592			82.2	%		0.965			0.887			-8.1	%
Net investment gains and change in market value		(0.095	)		(0.487	)		(0.299	)		0.201			1.033		NM				(0.030	)		1.234		NM
Transfer of assets from an inter-company manager (2)		-			-			-			-			0.072		NM				-			0.072		NM
Balance at End-of-Period (3)	$	14.398		$	14.335		$	13.662		$	14.158		$	15.855			10.1	%	$	14.398		$	15.855			10.1	%
Retail Equity
Balance at beginning-of-period	$	31.463		$	29.770		$	24.741		$	17.838		$	14.536			-53.8	%	$	36.250		$	17.838			-50.8	%
Sales (1)		1.063			1.080			0.750			0.609			0.787			-26.0	%		2.577			1.396			-45.8	%
Redemptions		(2.292	)		(2.832	)		(2.453	)		(1.607	)		(1.265	)		44.8	%		(5.044	)		(2.872	)		43.1	%
Exchanges		(0.033	)		0.002			(0.029	)		(0.017	)		(0.070	)	NM				(0.090	)		(0.087	)		3.3	%
Net flows		(1.262	)		(1.750	)		(1.732	)		(1.015	)		(0.548	)		56.6	%		(2.557	)		(1.563	)		38.9	%
Net investment gains and change in market value		(0.431	)		(3.279	)		(5.171	)		(2.287	)		2.573		NM				(3.923	)		0.286			107.3	%
Transfer of assets from an inter-company manager (2)		-			-			-			-			0.198		NM				-			0.198		NM
Balance at End-of-Period (3)	$	29.770		$	24.741		$	17.838		$	14.536		$	16.759			-43.7	%	$	29.770		$	16.759			-43.7	%
Total Retail
Balance at beginning-of-period	$	45.631		$	44.168		$	39.076		$	31.500		$	28.694			-37.1	%	$	49.713		$	31.500			-36.6	%
Retail sales - annuities		0.786			1.075			1.032			0.771			0.935			19.0	%		2.348			1.706			-27.3	%
Retail sales - mutual funds		1.407			1.303			1.337			1.382			1.524			8.3	%		2.999			2.906			-3.1	%
Retail sales - managed accounts and other		0.403			0.320			0.225			0.265			0.299			-25.8	%		0.744			0.564			-24.2	%
Total retail sales (1)		2.596			2.698			2.594			2.418			2.759			6.3	%		6.091			5.177			-15.0	%
Redemptions		(3.530	)		(4.124	)		(4.699	)		(3.138	)		(2.706	)		23.3	%		(7.677	)		(5.844	)		23.9	%
Exchanges		(0.003	)		0.100			(0.001	)		-			(0.009	)	NM				(0.006	)		(0.009	)		-50.0	%
Net flows		(0.937	)		(1.326	)		(2.106	)		(0.720	)		0.044			104.7	%		(1.592	)		(0.676	)		57.5	%
Net investment gains and change in market value		(0.526	)		(3.766	)		(5.470	)		(2.086	)		3.606		NM				(3.953	)		1.520			138.5	%
Transfer of assets from an inter-company manager (2)		-			-			-			-			0.270		NM				-			0.270		NM
Balance at End-of-Period (3)	$	44.168		$	39.076		$	31.500		$	28.694		$	32.614			-26.2	%	$	44.168		$	32.614			-26.2	%
Institutional Fixed
Balance at beginning-of-period	$	12.409		$	12.070		$	11.928		$	11.373		$	12.766			2.9	%	$	12.746		$	11.373			-10.8	%
Inflows (1)		0.330			0.592			0.432			2.332			0.678			105.5	%		0.573			3.010		NM
Withdrawals/terminations		(0.556	)		(1.152	)		(0.924	)		(0.720	)		(0.609	)		-9.5	%		(1.195	)		(1.329	)		-11.2	%
Exchanges		-			(0.108	)		0.001			0.001			0.012		NM				0.002			0.013		NM
Net flows		(0.226	)		(0.668	)		(0.491	)		1.613			0.081			135.8	%		(0.620	)		1.694		NM
Net investment gains and change in market value		(0.113	)		(0.258	)		(0.064	)		(0.220	)		0.352		NM				(0.056	)		0.132		NM
Transfer of assets from an inter-company manager (2)		-			0.784			-			-			0.016		NM				-			0.016		NM
Balance at End-of-Period (3)	$	12.070		$	11.928		$	11.373		$	12.766		$	13.215			9.5	%	$	12.070		$	13.215			9.5	%
Institutional Equity
Balance at beginning-of-period	$	20.498		$	19.453		$	15.595		$	11.669		$	10.350			-49.5	%	$	22.898		$	11.669			-49.0	%
Inflows (1)		0.580			0.698			0.754			0.380			0.430			-25.9	%		1.567			0.810			-48.3	%
Withdrawals/terminations		(0.889	)		(1.984	)		(1.457	)		(1.061	)		(0.478	)		46.2	%		(1.990	)		(1.539	)		22.7	%
Exchanges		-			(0.053	)		-			(0.001	)		(0.004	)	NM				(0.002	)		(0.005	)	NM
Net flows		(0.309	)		(1.339	)		(0.703	)		(0.682	)		(0.052	)		83.2	%		(0.425	)		(0.734	)		-72.7	%
Net investment gains and change in market value		(0.736	)		(2.470	)		(3.223	)		(0.637	)		1.740		NM				(3.020	)		1.103			136.5	%
Transfer of assets to a third-party		-			(0.065	)		-			-			-		NM				-			-		NM
Transfer of assets from an inter-company manager (2)		-			0.016			-			-			-		NM				-			-		NM
Balance at End-of-Period (3)	$	19.453		$	15.595		$	11.669		$	10.350		$	12.038			-38.1	%	$	19.453		$	12.038			-38.1	%
Total Institutional
Balance at beginning-of-period	$	32.907		$	31.523		$	27.523		$	23.042		$	23.116			-29.8	%	$	35.644		$	23.042			-35.4	%
Inflows (1)		0.910			1.290			1.186			2.712			1.108			21.8	%		2.140			3.820			78.5	%
Withdrawals/terminations		(1.445	)		(3.136	)		(2.381	)		(1.781	)		(1.087	)		24.8	%		(3.185	)		(2.868	)		10.0	%
Exchanges		-			(0.161	)		0.001			-			0.008		NM				-			0.008		NM
Net flows		(0.535	)		(2.007	)		(1.194	)		0.931			0.029			105.4	%		(1.045	)		0.960			191.9	%
Net investment gains and change in market value		(0.849	)		(2.728	)		(3.287	)		(0.857	)		2.092		NM				(3.076	)		1.235			140.1	%
Transfer of assets to a third-party		-			(0.065	)		-			-			-		NM				-			-		NM
Transfer of assets from an inter-company manager (2)		-			0.800			-			-			0.016		NM				-			0.016		NM
Balance at End-of-Period (3)	$	31.523		$	27.523		$	23.042		$	23.116		$	25.253			-19.9	%	$	31.523		$	25.253			-19.9	%
Total Retail and Institutional - At End-of-Period (3)	$	75.691		$	66.599		$	54.542		$	51.810		$	57.867			-23.5	%	$	75.691		$	57.867			-23.5	%
General Account Assets - At End-of-Period	$	65.997		$	63.531		$	65.680		$	64.824		$	68.814			4.3	%	$	65.997		$	68.814			4.3	%
Total Assets Under Management at End-of-Period	$	141.688		$	130.130		$	120.222		$	116.634		$	126.681			-10.6	%	$	141.688		$	126.681			-10.6	%
Total Retail and Institutional - Net Flows	$	(1.472	)	$	(3.333	)	$	(3.300	)	$	0.211		$	0.073			105.0	%	$	(2.637	)	$	0.284			110.8	%
Sub-Advised Assets, Included in Assets Under Management Above
Retail	$	13.651		$	11.168		$	8.047		$	6.076		$	6.831			-50.0	%	$	13.651		$	6.831			-50.0	%
Institutional		3.794			3.035			2.180			1.919			2.261			-40.4	%		3.794			2.261			-40.4	%
Total Sub-Advised Assets	$	17.445		$	14.203		$	10.227		$	7.995		$	9.092			-47.9	%	$	17.445		$	9.092			-47.9	%

(1)  Includes dividend reinvestments.

(2)  Reflects assets that were transferred to an inter-company manager, which did not impact Lincoln's consolidated assets under management.

(3)   Includes inter-segment and external assets under management.

6/30/2009													PAGE 26
Investment Management
Assets Under Management Roll Forward (Continued) (1)
Unaudited (in billions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Inter-Segment Assets - Retail and Institutional
Balance at beginning-of-period	$	9.191		$	8.995		$	8.937		$	7.968		$	7.505			-18.3	%	$	9.672		$	7.968			-17.6	%
Sales/inflows		0.375			0.812			0.829			0.536			0.545			45.3	%		1.093			1.081			-1.1	%
Redemptions/withdrawals/terminations		(0.543	)		(0.866	)		(0.973	)		(0.676	)		(0.654	)		-20.4	%		(1.222	)		(1.330	)		-8.8	%
Exchanges		-			(0.162	)		-			-			0.073		NM				-			0.073		NM
Net flows		(0.168	)		(0.216	)		(0.144	)		(0.140	)		(0.036	)		78.6	%		(0.129	)		(0.176	)		-36.4	%
Net investment gains and change in market value		(0.028	)		(0.551	)		(0.825	)		(0.323	)		0.717		NM				(0.548	)		0.394			171.9	%
Transfer of assets to a third-party		-			(0.075	)		-			-			-		NM				-			-		NM
Transfer of assets from an inter-company manager (2)		-			0.784			-			-			0.286		NM				-			0.286		NM
Balance at End-of-Period	$	8.995		$	8.937		$	7.968		$	7.505		$	8.472			-5.8	%	$	8.995		$	8.472			-5.8	%
Inter-Segment Assets - General Account at End-of-Period	$	65.997		$	63.531		$	65.680		$	64.824		$	68.814			4.3	%	$	65.997		$	68.814			4.3	%
Total Inter-Segment Assets at End-of-Period	$	74.992		$	72.468		$	73.648		$	72.329		$	77.286			3.1	%	$	74.992		$	77.286			3.1	%
Total External
Balance at beginning-of-period (3)	$	69.346		$	66.696		$	57.662		$	46.574		$	44.305			-36.1	%	$	75.686		$	46.574			-38.5	%
Sales/inflows		3.132			3.176			2.951			4.594			3.321			6.0	%		7.136			7.915			10.9	%
Redemptions/withdrawals/terminations		(4.433	)		(6.393	)		(6.107	)		(4.243	)		(3.139	)		29.2	%		(9.640	)		(7.382	)		23.4	%
Exchanges		(0.002	)		0.101			-			-			(0.073	)	NM				(0.005	)		(0.073	)	NM
Net flows		(1.303	)		(3.116	)		(3.156	)		0.351			0.109			108.4	%		(2.509	)		0.460			118.3	%
Net investment gains and change in market value		(1.347	)		(5.944	)		(7.932	)		(2.620	)		4.981		NM				(6.481	)		2.361			136.4	%
Transfer of assets from a third-party		-			0.010			-			-			-		NM				-			-		NM
Transfer of assets from an inter-company manager		-			0.016			-			-			-		NM				-			-		NM
Balance at End-of-Period	$	66.696		$	57.662		$	46.574		$	44.305		$	49.395			-25.9	%	$	66.696		$	49.395			-25.9	%

(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)  Reflects assets that were transferred to an inter-company manager, which did not impact Lincoln's consolidated assets under management.

(3)  Includes Delaware's VIP funds.  Lincoln Financial insurance subsidiaries, as well as unaffiliated insurers, participate in these funds.

6/30/2009																									PAGE 27
Other Operations (1)
Unaudited (in millions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Operating Revenues
Insurance premiums	$	1.7		$	0.6		$	0.3		$	0.8		$	2.7			58.8	%	$	3.1		$	3.5			12.9	%
Net investment income		87.1			90.8			81.9			69.7			69.8			-19.9	%		185.7			139.4			-24.9	%
Amortization of deferred gain on business sold through reinsurance (2)		18.4			18.4			18.4			18.4			18.4			0.0	%		36.9			36.8			-0.3	%
Other revenues and fees		0.6			1.1			(1.1	)		(0.8	)		2.5		NM				(1.7	)		1.8			205.9	%
Communications revenues		22.9			21.5			19.4			14.8			19.1			-16.6	%		44.6			33.9			-24.0	%
Inter-segment elimination of investment advisory fees		(20.6	)		(20.6	)		(20.3	)		(19.9	)		(20.0	)		2.9	%		(40.6	)		(39.9	)		1.7	%
Total Operating Revenues		110.1			111.8			98.6			83.0			92.5			-16.0	%		228.0			175.5			-23.0	%
Operating Expenses
Interest credited		41.8			42.6			40.7			50.9			31.4			-24.9	%		87.6			82.3			-6.1	%
Benefits		29.0			30.7			25.6			106.6			36.0			24.1	%		56.9			142.6			150.6	%
Underwriting, acquisition, insurance and other expenses		47.3			32.2			44.4			32.5			53.9			14.0	%		82.8			86.4			4.3	%
Taxes, licenses and fees		1.1			2.6			1.6			1.5			3.1			181.8	%		3.2			4.6			43.8	%
Interest and debt expenses		64.8			68.6			72.3			64.7			60.9			-6.0	%		140.2			125.6			-10.4	%
Communications expenses		15.4			14.2			14.7			12.9			13.5			-12.3	%		30.9			26.4			-14.6	%
Inter-segment elimination of investment advisory fees		(20.6	)		(20.6	)		(20.3	)		(19.9	)		(20.0	)		2.9	%		(40.6	)		(39.9	)		1.7	%
Total Operating Expenses		178.8			170.3			179.0			249.2			178.8			0.0	%		361.0			428.0			18.6	%
Loss from operations before federal income tax benefit		(68.7	)		(58.5	)		(80.4	)		(166.2	)		(86.3	)		-25.6	%		(133.0	)		(252.5	)		-89.8	%
Federal income tax benefit		(23.9	)		(18.6	)		(25.2	)		(57.7	)		(34.0	)		-42.3	%		(45.6	)		(91.7	)	NM
Loss From Operations	$	(44.8	)	$	(39.9	)	$	(55.2	)	$	(108.5	)	$	(52.3	)		-16.7	%	$	(87.4	)	$	(160.8	)		-84.0	%
Run Off Institutional Pensions Account Values -Balance at End-of-Period	$	2.051		$	2.010		$	1.941		$	1.931		$	1.928			-6.0	%	$	2.051		$	1.928			-6.0	%
Discontinued Operations
Unaudited (in millions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
		2008			2008			2008			2009			2009		Change				2008			2009		Change
Discontinued Operations Before Disposal
Income from discontinued operations before federal income tax expense	$	20.6		$	20.3		$	0.2		$	7.5		$	15.0			-27.2	%	$	45.0		$	22.5			-50.0	%
Federal income tax expense		7.2			7.1			0.1			2.6			5.3			-26.4	%		15.8			7.9			-50.0	%
Income From Discontinued Operations Before Disposal		13.4			13.2			0.1			4.9			9.7			-27.6	%		29.2			14.6			-50.0	%
Disposal
Gain (loss) on disposal before federal income tax expense (benefit)		(0.4	)		(0.2	)		0.6			-			(237.0	)	NM				(12.7	)		(237.0	)	NM
Federal income tax expense (benefit)		(0.1	)		0.8			0.2			-			(67.0	)	NM				(3.4	)		(67.0	)	NM
Gain (Loss) on Disposal		(0.3	)		(1.0	)		0.4			-			(170.0	)	NM				(9.3	)		(170.0	)	NM
Income (Loss) From Discontinued Operations	$	13.1		$	12.2		$	0.5		$	4.9		$	(160.3	)	NM			$	19.9		$	(155.4	)	NM

(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.

6/30/2009																									PAGE 28
Consolidated Domestic Deposits, Account Balances and Net Flows
Unaudited (in billions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Deposits
Retirement Solutions:
Annuities - fixed annuities (1)	$	1.371		$	1.276		$	1.233		$	1.363		$	1.778			29.7	%	$	2.531		$	3.141			24.1	%
Defined Contribution - fixed annuities		0.280			0.290			0.279			0.416			0.429			53.2	%		0.612			0.845			38.1	%
Annuities - variable annuities		2.065			1.672			1.087			0.834			0.857			-58.5	%		3.931			1.691			-57.0	%
Defined Contribution - variable products (2)		1.141			1.044			0.962			1.159			0.809			-29.1	%		2.360			1.968			-16.6	%
Insurance Solutions - Life Insurance		1.062			1.082			1.217			1.058			1.020			-4.0	%		2.194			2.078			-5.3	%
Investment Management:
Annuities		0.786			1.075			1.032			0.771			0.935			19.0	%		2.348			1.706			-27.3	%
Mutual funds		1.407			1.303			1.337			1.382			1.524			8.3	%		2.999			2.906			-3.1	%
Managed accounts and other		0.403			0.320			0.225			0.265			0.299			-25.8	%		0.744			0.564			-24.2	%
Consolidating adjustments		(0.776	)		(1.061	)		(1.019	)		(0.752	)		(0.920	)		-18.6	%		(2.270	)		(1.672	)		26.3	%
Total Gross Retail Deposits		7.739			7.001			6.353			6.496			6.731			-13.0	%		15.449			13.227			-14.4	%
Investment Management - institutional		0.910			1.290			1.186			2.712			1.108			21.8	%		2.140			3.820			78.5	%
Consolidating adjustments		(0.034	)		(0.052	)		(0.109	)		(0.090	)		(0.091	)	NM				(0.126	)		(0.181	)		-43.7	%
Total Gross Deposits	$	8.615		$	8.239		$	7.430		$	9.118		$	7.748			-10.1	%	$	17.463		$	16.866			-3.4	%

	As of
	June			Sept.			Dec.			March			June			%
		2008			2008			2008			2009			2009		Change
Account Balances
Retirement Solutions:
Annuities - fixed annuities (1)	$	16.544		$	16.493		$	16.530		$	16.760		$	17.531			6.0	%
Defined Contribution - fixed annuities		11.294			11.418			11.638			11.924			12.070			6.9	%
Annuities - variable annuities		55.854			49.982			40.925			39.301			45.523			-18.5	%
Defined Contribution - variable products (2)		23.748			21.155			17.240			16.569			19.257			-18.9	%
Insurance Solutions - Life Insurance		32.603			32.283			31.753			30.031			30.622			-6.1	%
Investment Management:
Annuities		11.700			10.952			9.377			8.875			10.184			-13.0	%
Mutual funds		18.176			16.699			14.021			13.716			15.620			-14.1	%
Managed accounts and other		14.292			11.425			8.102			6.102			6.809			-52.4	%
Consolidating adjustments		(11.286	)		(10.590	)		(9.086	)		(8.607	)		(9.690	)		14.1	%
Total Retail Account Balances		172.925			159.817			140.500			134.671			147.927			-14.5	%
Investment Management - institutional		31.523			27.523			23.042			23.116			25.253			-19.9	%
Consolidating adjustments		(2.124	)		(2.423	)		(2.143	)		(2.034	)		(2.176	)		-2.4	%
Total Account Balances	$	202.324		$	184.917		$	161.399		$	155.753		$	171.004			-15.5	%

	For the Three Months Ended																	For the Six Months Ended
	June			Sept.			Dec.			March			June		%			June			June			%
		2008			2008			2008			2009			2009	Change				2008			2009		Change
Net Flows
Retirement Solutions:
Annuities	$	1.589		$	0.944		$	0.376		$	0.430		$	1.043		-34.4	%	$	2.770		$	1.473			-46.8	%
Defined Contribution		0.237			0.093			0.171			0.659			0.329		38.8	%		0.517			0.988			91.1	%
Insurance Solutions - Life Insurance		0.677			0.690			0.804			0.557			0.540		-20.2	%		1.327			1.097			-17.3	%
Investment Management - retail		(0.937	)		(1.326	)		(2.106	)		(0.720	)		0.044		104.7	%		(1.592	)		(0.676	)		57.5	%
Consolidating adjustments		(0.075	)		(0.025	)		0.071			(0.001	)		0.045		160.0	%		(0.173	)		0.044			125.4	%
Total Retail Net Flows		1.491			0.376			(0.684	)		0.925			2.001		34.2	%		2.849			2.926			2.7	%
Investment Management - institutional		(0.535	)		(2.007	)		(1.194	)		0.931			0.029		105.4	%		(1.045	)		0.960			191.9	%
Consolidating adjustments		0.052			0.253			0.130			0.057			0.043		-17.3	%		0.082			0.100			22.0	%
Total Net Flows	$	1.008		$	(1.378	)	$	(1.748	)	$	1.914		$	2.072		105.6	%	$	1.886		$	3.986			111.3	%

(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.

6/30/2009											PAGE 29
Consolidated Investment Data - Assets Managed
Unaudited (in billions)
	As of
	June		Sept.		Dec.		March		June		%
	2008		2008		2008		2009		2009		Change
Assets Managed by Source
LNC's investments and cash:
Available-for-sale fixed maturity securities	$	53.372	$	50.939	$	48.141	$	48.536	$	55.050		3.1	%
Available-for-sale equity securities		0.414		0.449		0.254		0.176		0.236		-43.0	%
Trading securities		2.551		2.393		2.333		2.246		2.317		-9.2	%
Other investments		12.716		13.137		15.783		14.353		12.945		1.8	%
Total LNC investments		69.053		66.918		66.511		65.311		70.548		2.2	%
Separate accounts		77.463		68.385		55.655		52.935		61.091		-21.1	%
Cash and invested cash		1.775		2.009		5.754		5.510		2.539		43.0	%
Total LNC		148.291		137.312		127.920		123.756		134.178		-9.5	%
Non-affiliate assets managed		63.197		54.419		44.107		41.953		46.596		-26.3	%
Total Assets Managed	$	211.488	$	191.731	$	172.027	$	165.709	$	180.774		-14.5	%
Assets Managed by Advisor
Investment Management segment (1)	$	75.691	$	66.599	$	54.542	$	51.810	$	57.867		-23.5	%
Delaware Investment Advisers (2)		65.997		63.531		65.680		64.824		68.814		4.3	%
Policy loans		2.849		2.867		2.921		2.906		2.897		1.7	%
Non-LNC affiliates		66.951		58.734		48.884		46.169		51.196		-23.5	%
Total Assets Managed	$	211.488	$	191.731	$	172.027	$	165.709	$	180.774		-14.5	%

(1)  See page 25 for additional detail.

(2)  Represents assets managed internally.  See page 25 for additional detail.

6/30/2009																						PAGE 30
Consolidated Investment Data - Other Investment Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2008			2008			2008			2009			2009			Change			2008			2009			Change
Net Investment Income
Available-for-sale fixed maturity securities	$	839.1		$	840.1		$	827.5		$	824.9		$	854.6			1.8	%	$	1,680.8		$	1,679.5			-0.1	%
Available-for-sale equity securities		7.3			6.0			4.8			1.7			1.8			-75.3	%		15.5			3.5			-77.4	%
Trading securities		42.1			41.0			40.3			39.6			39.0			-7.4	%		84.7			78.6			-7.2	%
Mortgage loans on real estate		128.6			121.2			122.1			119.2			120.0			-6.7	%		250.2			239.2			-4.4	%
Real estate		5.8			5.1			4.7			3.8			3.5			-39.7	%		13.2			7.3			-44.7	%
Policy loans		43.1			46.0			45.3			44.3			42.2			-2.1	%		87.7			86.5			-1.4	%
Invested cash		12.8			9.1			13.8			8.3			4.1			-68.0	%		29.4			12.4			-57.8	%
Other investments		9.5			29.0			(68.4	)		(2.2	)		(67.4	)	NM				6.3			(69.6	)	NM
Investment income		1,088.3			1,097.5			990.1			1,039.6			997.8			-8.3	%		2,167.8			2,037.4			-6.0	%
Investment expense		(31.3	)		(29.6	)		(30.0	)		(26.3	)		(27.2	)		13.1	%		(65.7	)		(53.5	)		18.6	%
Net Investment Income	$	1,057.0		$	1,067.9		$	960.1		$	1,013.3		$	970.6			-8.2	%	$	2,102.1		$	1,983.9			-5.6	%
Average Invested Assets (Amortized Cost)	$	70,227.1		$	70,150.2		$	69,731.7		$	69,583.2		$	71,331.0					$	70,106.8		$	70,457.1
Ratio of Net Investment Income Over Average Invested Assets		6.02	%		6.09	%		5.51	%		5.82	%		5.44	%					6.00	%		5.63	%
Realized Loss Related to Investments
Available-for-sale fixed maturity securities:
Gross gains	$	16.8		$	18.9		$	16.1		$	53.7		$	32.8			95.2	%	$	25.1		$	86.5			244.6	%
Gross losses		(125.4	)		(372.1	)		(527.1	)		(241.3	)		(172.1	)		-37.2	%		(219.6	)		(413.4	)		-88.3	%
Equity securities:
Gross gains		-			1.0			-			3.1			0.5		NM				0.1			3.6		NM
Gross losses		(6.4	)		(25.4	)		(131.5	)		(2.6	)		(6.0	)		6.3	%		(6.4	)		(8.6	)		-34.4	%
Gain (loss) on other investments		3.1			0.7			8.5			(2.1	)		(57.9	)	NM				28.2			(60.0	)	NM
Associated amortization of DAC, VOBA, DSI, DFEL and changes in other contract holder funds and funds withheld reinsurance liabilities		23.9			92.2			117.4			55.6			48.4			102.5	%		46.9			104.0			121.7	%
Total realized loss on investments, excluding trading securities		(88.0	)		(284.7	)		(516.6	)		(133.6	)		(154.3	)		-75.3	%		(125.7	)		(287.9	)	NM
Loss on certain derivative instruments		(29.1	)		(29.9	)		(50.1	)		(16.5	)		(4.0	)		86.3	%		(32.2	)		(20.5	)		36.3	%
Total, pre-tax		(117.1	)		(314.6	)		(566.7	)		(150.1	)		(158.3	)		-35.2	%		(157.9	)		(308.4	)		-95.3	%
Income taxes		(41.5	)		(110.1	)		(198.4	)		(52.5	)		(55.4	)		-33.5	%		(55.3	)		(107.9	)		-95.1	%
Total, After-Tax	$	(75.6	)	$	(204.5	)	$	(368.3	)	$	(97.6	)	$	(102.9	)		-36.1	%	$	(102.6	)	$	(200.5	)		-95.4	%

	As of June 30, 2009					As of December 31, 2008
	Amount		% of Total			Amount		% of Total
Available-for-Sale and Trading Securities
Fixed maturity securities (fair value)	$	57,364.8		99.6	%	$	50,471.6		99.5	%
Fixed maturity securities (amortized cost)		60,859.4		99.3	%		56,686.3		99.2	%
Equity securities (fair value)		238.0		0.4	%		255.6		0.5	%
Equity securities (amortized cost)		402.1		0.7	%		429.8		0.8	%
% of Available-for-Sale Fixed Maturity Securities (Based on Fair Value)
Treasuries and AAA				18.8	%				24.5	%
AA or better				25.6	%				30.9	%
BB or less				7.0	%				4.5	%

General Account Investments	As of June 30, 2009					As of December 31, 2008
	Amount		% of Total			Amount		% of Total
Fixed Maturities - Security Sector:
Corporate bonds	$	42,489.5		77.2	%	$	36,055.6		74.9	%
U.S. Government bonds		221.2		0.4	%		245.9		0.5	%
Foreign government bonds		479.8		0.9	%		520.8		1.1	%
Mortgage-backed securities		9,889.7		18.0	%		10,129.6		21.0	%
State and municipal bonds		906.6		1.6	%		226.4		0.5	%
Preferred stocks - redeemable		1,063.0		1.9	%		962.3		2.0	%
Total	$	55,049.8		100.0	%	$	48,140.6		100.0	%

	As of
	June		Sept.		Dec.		March		June		%
Composition of Investment Portfolio		2008		2008		2008		2009		2009	Change
Available-for-sale securities, at fair value:
Fixed maturity	$	53,371.5	$	50,938.9	$	48,140.6	$	48,535.5	$	55,049.8		3.1	%
Equity		414.0		448.8		254.1		175.7		236.3		-42.9	%
Trading securities		2,550.5		2,393.4		2,332.5		2,245.6		2,316.7		-9.2	%
Mortgage loans on real estate and real estate		7,813.3		7,814.7		7,840.6		7,745.1		7,627.5		-2.4	%
Policy loans		2,849.2		2,867.2		2,921.1		2,905.6		2,896.9		1.7	%
Derivative investments		889.9		1,262.2		3,397.2		2,226.1		1,233.8		38.6	%
Other investments		1,163.5		1,193.0		1,624.1		1,476.2		1,187.1		2.0	%
Total	$	69,051.9	$	66,918.2	$	66,510.2	$	65,309.8	$	70,548.1		2.2	%