Lincoln National 8K Strength in Business Model and Account Values Drive Earnings Increase | LNC 8 Feb 10

Lincoln Financial Group
Available For Sale (AFS) by Industry Classifications
Amounts in Millions

	As of 12/31/2009												As of 9/30/2009
	Amortized		Unrealized		Unrealized			Fair		% Fair			Amortized		Unrealized		Unrealized			Fair		% Fair
AFS - Fixed Maturities	Cost		Gains		(Losses)			Value		Value			Cost		Gains		(Losses)			Value		Value
Corporate
Financial Services	$	8,260	$	248	$	(341	)	$	8,167		13.3	%	$	8,355	$	265	$	(410	)	$	8,210		13.6	%
Basic Industry		2,304		116		(57	)		2,363		3.9	%		2,290		115		(71	)		2,334		3.8	%
Capital Goods		2,995		149		(26	)		3,118		5.1	%		2,914		170		(32	)		3,052		5.0	%
Communications		2,817		200		(51	)		2,966		4.9	%		3,016		222		(63	)		3,175		5.2	%
Consumer Cyclical		2,589		141		(66	)		2,664		4.4	%		2,779		166		(67	)		2,878		4.7	%
Consumer Non-Cyclical		5,568		380		(16	)		5,932		9.8	%		5,572		484		(10	)		6,046		10.0	%
Energy		4,251		290		(22	)		4,519		7.4	%		4,174		312		(20	)		4,466		7.4	%
Technology		1,121		76		(4	)		1,193		2.0	%		1,083		86		(5	)		1,164		1.9	%
Transportation		1,224		85		(15	)		1,294		2.1	%		1,236		64		(33	)		1,267		2.1	%
Industrial Other		709		35		(11	)		733		1.2	%		712		37		(15	)		734		1.2	%
Utilities		8,941		415		(81	)		9,275		15.2	%		8,927		532		(71	)		9,388		15.6	%
ABS
CDO / CLN [1]		735		11		(296	)		450		0.7	%		736		5		(312	)		429		0.7	%
CRE CDO		54		-		(24	)		30		0.0	%		55		-		(26	)		29		0.0	%
Credit Card		265		9		(9	)		265		0.4	%		265		13		(12	)		266		0.4	%
Home Equity		1,099		1		(428	)		672		1.1	%		1,125		-		(480	)		645		1.1	%
Manufactured Housing		122		1		(11	)		112		0.2	%		134		1		(16	)		119		0.2	%
Auto Loan		220		5		-			225		0.4	%		219		4		-			223		0.4	%
Other		230		12		(3	)		239		0.4	%		236		14		(4	)		246		0.4	%
CMBS
Non-Agency Backed		2,436		49		(354	)		2,131		3.5	%		2,601		53		(391	)		2,263		3.7	%
CMOs
Agency Backed		4,494		252		(23	)		4,723		7.8	%		4,645		308		(22	)		4,931		8.1	%
Non-Agency Backed		1,697		5		(454	)		1,248		2.1	%		1,706		5		(492	)		1,219		2.0	%
Pass Throughs
Agency Backed		2,912		64		(14	)		2,962		4.9	%		2,387		78		(2	)		2,463		4.1	%
Non-Agency Backed		69		-		(8	)		61		0.1	%		126		-		(22	)		104		0.2	%
Municipals
Taxable		1,900		13		(53	)		1,860		3.1	%		1,423		54		(15	)		1,462		2.4	%
Tax-Exempt		35		-		-			35		0.1	%		3		-		-			3		0.0	%
Government/Gov Agencies
United States		963		85		(14	)		1,034		1.7	%		979		111		(10	)		1,080		1.8	%
Foreign		1,345		53		(39	)		1,359		2.2	%		1,196		66		(27	)		1,235		2.0	%
Preferred Stock Redeemable & Hybrids		1,402		36		(250	)		1,188		2.0	%		1,548		21		(334	)		1,235		2.0	%

AFS - Fixed Maturities		60,757		2,731		(2,670	)		60,818		100.0	%		60,442		3,186		(2,962	)		60,666		100.0	%
AFS - Equities		382		21		(125	)		278					393		16		(126	)		283
Total AFS Securities		61,139		2,752		(2,795	)		61,096					60,835		3,202		(3,088	)		60,949
Trading Securities [2]		2,342		243		(80	)		2,505					2,364		281		(97	)		2,548
Total AFS & Trading Securities	$	63,481	$	2,995	$	(2,875	)	$	63,601				$	63,199	$	3,483	$	(3,185	)	$	63,497

[1] Includes amortized cost of $600 million as of 12/31/09 and 9/30/2009, related to Credit-Linked Notes. For additional information, see "Credit-Linked Notes (CLN)" disclosure starting on page 122 of the 2008 Form 10K.

[2] The trading securities support our Modco reinsurance agreements and the investment results are passed directly to the reinsurers.

Lincoln Financial Group
AFS - Exposure to Residential MBS ("RMBS") and Related Collateral
As of 12/31/2009
Amounts in Millions


	Total				Prime/Agency				Prime/Non-Agency				Alt-A				Subprime
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
Type	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
CMOs, Pass Throughs	$	8,994	$	9,172	$	7,612	$	7,313	$	907	$	1,211	$	475	$	648		-		-
ABS - Home Equity		672		1,099		-		-		-		-		249		388		423		711
Total	$	9,666	$	10,271	$	7,612	$	7,313	$	907	$	1,211	$	724	$	1,036	$	423	$	711

Rating
AAA	$	8,238	$	8,028	$	7,590	$	7,291	$	290	$	316	$	161	$	185	$	197	$	236
AA		186		242		5		5		36		49		121		155		24		33
A		153		207		17		16		44		50		49		66		43		75
BBB		82		136		-		-		34		49		16		30		32		57
BB and below		1,007		1,658		-		1		503		747		377		600		127		310
Total	$	9,666	$	10,271	$	7,612	$	7,313	$	907	$	1,211	$	724	$	1,036	$	423	$	711

Origination Year
2004 and prior	$	3,672	$	3,738	$	2,874	$	2,725	$	305	$	353	$	279	$	355	$	214	$	305
2005		1,444		1,650		902		861		176		246		210		292		156		251
2006		707		956		319		304		146		195		191		307		51		150
2007		1,597		1,689		1,273		1,190		280		417		44		82		-		-
2008		360		341		360		341		-		-		-		-		-		-
2009		1,886		1,897		1,884		1,892		-		-		-		-		2		5
Total	$	9,666	$	10,271	$	7,612	$	7,313	$	907	$	1,211	$	724	$	1,036	$	423	$	711

Note: This table does not include the fair value of trading securities totaling $220 million which support our Modco reinsurance agreements

since investment results for these agreements are passed directly to the reinsurers. The $220 million in trading securities consisted

of $192 million prime, $16 million Alt-A, and $12 million subprime.

Lincoln Financial Group

AFS - RMBS and Related Collateral

As of 12/31/2009

Amounts in Millions


Prime

	Total				AAA				AA				A				BBB				BB & Below
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
Origination Year	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
2004 and prior	$	3,179	$	3,078	$	3,124	$	2,998	$	27	$	36	$	26	$	26	$	1	$	3	$	1	$	15
2005		1,078		1,107		904		864		14		18		30		32		25		32		105		161
2006		465		499		335		322		-		-		-		-		5		9		125		168
2007		1,553		1,607		1,273		1,190		-		-		5		8		3		5		272		404
2008		360		341		360		341		-		-		-		-		-		-		-		-
2009		1,884		1,892		1,884		1,892		-		-		-		-		-		-		-		-
Total	$	8,519	$	8,524	$	7,880	$	7,607	$	41	$	54	$	61	$	66	$	34	$	49	$	503	$	748

Alt-A

	Total				AAA				AA				A				BBB				BB & Below
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
Origination Year	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
2004 and prior	$	279	$	355	$	129	$	145	$	84	$	109	$	42	$	56	$	9	$	20	$	15	$	25
2005		210		292		21		29		10		13		1		2		7		10		171		238
2006		191		307		11		11		27		33		6		8		-		-		147		255
2007		44		82		-		-		-		-		-		-		-		-		44		82
Total	$	724	$	1,036	$	161	$	185	$	121	$	155	$	49	$	66	$	16	$	30	$	377	$	600

Subprime

	Total				AAA				AA				A				BBB				BB & Below
	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
Origination Year	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
2004 and prior	$	214	$	305	$	143	$	169	$	24	$	33	$	11	$	28	$	19	$	39	$	17	$	36
2005		156		251		54		67		-		-		32		47		13		18		57		119
2006		51		150		-		-		-		-		-		-		-		-		51		150
2009		2		5		-		-		-		-		-		-		-		-		2		5
Total	$	423	$	711	$	197	$	236	$	24	$	33	$	43	$	75	$	32	$	57	$	127	$	310

Lincoln Financial Group
AFS - ABS - Consumer Loan
As of 12/31/2009
Amounts in Millions

	Total				Credit Card [1]				Auto Loans
	Fair		Amortized		Fair		Amortized		Fair		Amortized
	Value		Cost		Value		Cost		Value		Cost
Rating
AAA	$	464	$	459	$	239	$	239	$	225	$	220
BBB		26		26		26		26		-		-
Total	$	490	$	485	$	265	$	265	$	225	$	220

]

Additional indirect credit card exposure through structured securities is excluded from this table.

See "Credit-Linked Notes (CLN)" disclosure starting on page 122 of the 2008 Form 10K.

Note:

This table does not include the fair value of trading securities totaling $2 million which support our Modco

reinsurance agreements since investment results for these agreements are passed directly to the reinsurers.

The $2 million in trading securities were credit card securities.

Lincoln Financial Group
AFS - CMBS
As of 12/31/2009
Amounts in Millions

		Total				Multiple Property				Single Property				CRE CDOs
		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
Type		Value		Cost		Value		Cost		Value		Cost		Value		Cost
CMBS		$	2,131	$	2,436	$	2,047	$	2,301	$	84	$	135		-		-
CRE CDOs			30		54		-		-		-		-		30		54
Total		$	2,161	$	2,490	$	2,047	$	2,301	$	84	$	135	$	30	$	54

Rating
AAA		$	1,532	$	1,505	$	1,474	$	1,440	$	49	$	50	$	9	$	15
AA			292		329		285		319		7		10		-		-
	A		150		238		122		189		9		13		19		36
BBB			109		153		100		130		7		20		2		3
BB and below			78		265		66		223		12		42		-		-
Total		$	2,161	$	2,490	$	2,047	$	2,301	$	84	$	135	$	30	$	54

Origination Year
2004 and prior		$	1,458	$	1,552	$	1,382	$	1,469	$	63	$	67	$	13	$	16
	2005		408		507		379		432		20		60		9		15
	2006		159		261		150		230		1		8		8		23
	2007		136		170		136		170		-		-		-		-
Total		$	2,161	$	2,490	$	2,047	$	2,301	$	84	$	135	$	30	$	54

Note:

This table does not include the fair value of trading securities totaling $83 million which support

our Modco reinsurance agreements since investment results for these agreements are passed

directly to the reinsurers. The $83 million in trading securities consisted of $81 million CMBS

and $2 million CRE CDOs.

Lincoln Financial Group

AFS - CMBS

As of 12/31/2009

Amounts in Millions

Total

AAA

BBB

BB & Below

	Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
Origination Year	Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost
2004 and prior	$	1,458	$	1,552	$	1,061	$	1,042	$	242	$	268	$	98	$	124	$	14	$	26	$	43	$	92
2005		408		507		326		327		18		20		15		30		37		64		12		66
2006		159		261		74		73		20		20		25		63		32		39		8		66
2007		136		170		70		64		11		20		13		20		26		25		16		41
Total	$	2,161	$	2,490	$	1,531	$	1,506	$	291	$	328	$	151	$	237	$	109	$	154	$	79	$	265

Lincoln Financial Group
Commercial Mortgage Loan Portfolio, Net of Reserves
As of 12/31/2009
Amounts in Millions

LNC MORTGAGE LOAN DISTRIBUTION
Property Type	Amount		%			State	Amount		%
Office Building	$	2,483		34	%	CA	$	1,476		20	%
Industrial		1,907		27	%	TX		613		9	%
Retail		1,688		24	%	MD		426		6	%
Apartment		664		9	%	FL		324		5	%
Hotel/Motel		207		3	%	VA		318		4	%
Mixed Use		132		2	%	TN		308		4	%
Other Commercial		97		1	%	AZ		301		4	%
Total	$	7,178		100	%	WA		286		4	%
						IL		265		4	%
						NC		261		4	%
						GA		242		3	%
Geographic Region	Amount		%			PA		208		3	%
Pacific	$	1,868		25	%	NV		204		3	%
South Atlantic		1,712		24	%	OH		195		3	%
East North Central		723		10	%	IN		172		2	%
Mountain		706		10	%	MA		155		2	%
West South Central		648		9	%	MN		153		2	%
Middle Atlantic		477		7	%	NJ		141		2	%
East South Central		438		6	%	NY		128		2	%
West North Central		397		6	%	SC		126		2	%
New England		209		3	%	Below 2%		876		12	%
Total	$	7,178		100	%		$	7,178		100	%

Lincoln Financial Group
Additional Disclosure of Insured Bonds and Direct Exposure
As of 12/31/2009
Amounts in Millions

	Direct		Insured		Total		Total		Total			Total
Monoline Name	Exposure [1]		Bonds [2]		Amortized Cost		Unrealized Gain		Unrealized (Loss)			Fair Value
AMBAC	$	-	$	258	$	258	$	1	$	(67	)	$	192
ASSURED GUARANTY LTD		31		-		31		-		(11	)		20
FGIC		-		88		88		-		(33	)		55
FSA		-		62		62		-		(4	)		58
MBIA		11		157		168		10		(28	)		150
MGIC		12		6		18		-		(3	)		15
PMI GROUP INC		27		-		27		-		(14	)		13
RADIAN GROUP INC		20		-		20		-		(7	)		13
XL CAPITAL LTD		72		63		135		23		(8	)		150
Total	$	173	$	634	$	807	$	34	$	(175	)	$	666

]

Additional direct exposure through Credit Default Swaps with a notional totaling $98 million is excluded from this table.

]

Additional indirect insured exposure through structured securities is excluded from this table. See

"Credit-Linked Notes (CLN)" disclosure starting on page 122 of the 2008 Form 10K.

Note:

This table does not include the fair value of trading securities totaling $32 million, which support our Modco

reinsurance agreements since investment results for these agreements are passed directly to the reinsurers.

The $32 million in trading securities consisted of $12 million of Direct Exposure and $20 million of Insured Exposure.

This table also excludes insured exposure totaling $13 million for a guaranteed investment tax credit partnership.

Lincoln National (LNC) 8-KStrength in Business Model and Account Values Drive Earnings Increase