Lincoln National 8K Account Value Growth Drives Earnings Increase | LNC 28 Apr 10

Lincoln Financial Group
Table of Contents
First Quarter 2010

Lincoln Financial Group Analyst Coverage		i
Notes	ii-iii

Financial Highlights		1 - 3
Consolidated Operating Expense Detail		4
Selected Financial Results Summary		5
Details Underlying Realized Loss, After-DAC		6
Consolidated Statements of Income		7
Consolidated Roll Forwards of DAC, VOBA, DFEL and DSI		8
Consolidating Statements of Income from Operations - Current Year - Quarter		9
Consolidating Statements of Income from Operations - Prior Year - Quarter		10
Consolidated Balance Sheets and Selected Share Data		11
Balance Sheet Data - Segment Highlights		12

Retirement Solutions
Annuities:
Income Statements and Operational Data		13
DAC, VOBA, DFEL and DSI Roll Forwards		14
Account Value Roll Forwards and Information		15
Account Value Information		16
Interest Rate Spread Information, GLB Expense Assessments, GLB Attributed Fee
and GLB Account Values by Type		17
Defined Contribution:
Income Statements, Operational Data and DAC, VOBA and DSI Roll Forwards		18
Account Value Roll Forwards and Information		19
Account Value Roll Forwards by Product		20
Account Value and Interest Rate Spread Information		21

Insurance Solutions
Life Insurance:
Income Statements, Operational Data and DAC, VOBA and DFEL Roll Forwards		22
Operational Data and Account Value Roll Forwards		23
Group Protection:
Income Statements and Operational Data		24

Other Operations		25

Discontinued Operations		25

Consolidated Deposits, Account Balances and Net Flows		26

Consolidated Investment Data		27

3/31/2010			i
Lincoln Financial Group Analyst Coverage
First Quarter 2010

Firm	Analyst	Phone Number
Bank of America - Merrill Lynch	Ed Spehar	212-449-4245
Barclays Capital	Eric Berg	212-526-2805
Citigroup	Colin Devine	212-816-1682
Credit Suisse	Tom Gallagher	212-538-2010
Deutsche Bank	Darin Arita	212-250-7321
Dowling and Partners	Sean Rourke	860-676-8600
FBR Capital Markets	Randy Binner	703-312-1890
Goldman Sachs and Company	Christopher Neczypor	212-357-8512
JP Morgan Securities	Jimmy Bhullar	212-622-6397
Keefe, Bruyette and Woods	Jeff Schuman	860-722-5902
Langen McAlenney	Bob Glasspiegel	860-724-1203
Macquarie Securities	Mark Finkelstein	312-425-4079
Morgan Stanley	Nigel Dally	212-761-4132
Raymond James and Associates	Steven Schwartz	312-612-7686
Sandler O'Neil and Partners	Edward Shields	312-281-3487
Sanford C. Bernstein & Co.	Suneet Kamath	212-756-4587
Sterne, Agee and Leach, Inc.	John Nadel	212-338-4717
UBS	Andrew Kligerman	212-713-2492
Wells Fargo 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) 583-3962

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

Lincoln Financial Group's Statistical Report will be available immediately after the release of
earnings for each quarter through our Investor Relations website: www.LincolnFinancial.com/investor

3/31/2010

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 our trading

securities;

•

Change in the fair value of the derivatives we own to hedge our guaranteed death benefit ("GDB") riders within our variable annuities, which

is referred to as "GDB derivatives results";

•

Change in the fair value of the embedded derivatives of our guaranteed living benefit (“GLB”) riders within our variable annuities accounted

for under the Derivatives and Hedging and the Fair Value Measurements and Disclosures Topics of the FASB ASC (“embedded derivative

reserves”), net of the change in the fair value of the derivatives we own to hedge the changes in the embedded derivative reserves, the net of

which is referred to as “GLB net derivative 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 accounted for under the Derivatives and Hedging

and the Fair Value Measurements and Disclosures Topics of the FASB ASC (“indexed annuity forward-starting option”).

•

Change in reserves accounted for under the Financial Services - Insurance - Claim Costs and Liabilities for Future Policy Benefits Subtopic of

the FASB ASC resulting from benefit ratio unlocking on our GDB and GLB riders ("benefit ratio unlocking");

•

Income (loss) from the initial adoption of new accounting standards;

•

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

•

Gain (loss) on early extinguishment of 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 front-end loads ("DFEL") arising from changes in GDB and GLB benefit ratio unlocking;

•

Amortization of deferred gains arising from the reserve changes on business sold through reinsurance; and

•

Revenue adjustments from the initial adoption of new accounting standards.

•

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 and spreads.

•

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

Our roll forwards of deferred acquisition costs ("DAC") and value of business acquired ("VOBA"), deferred sales inducements ("DSI") and 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 embedded derivatives and reserves for annuity and life products with living and death benefit guarantee reserves.

iii

•

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 and Series B preferred stock balances as it is non-convertible (issued and sold to the

U.S. Treasury in connection with the Troubled Asset Relief Program Capital Purchase Program as part of the Emergency Economic Stabilization Act

of 2008), by (b) common shares outstanding, assuming conversion of Series A preferred shares. We provide book value per share excluding AOCI

to enable investors to analyze the amount of our net worth that is attributable primarily to our business operations. 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.

We use our prevailing corporate federal income tax rate of 35% while taking into account any permanent differences for events recognized differently

in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure.

In June 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-17, “Improvements to Financial Reporting by Enterprises Involved

with Variable Interest Entities” (“ASU 2009-17”), which amended the consolidation guidance for variable interest entities (“VIEs”). For a more detailed

description of ASU 2009-17, see “Future Adoption of New Accounting Standards – Consolidations Topic” in Note 2 of our 2009 Form 10-K.

Effective January 1, 2010, we adopted the amendments in ASU 2009-17, and accordingly reconsidered our involvement with all our VIEs and the

primary beneficiary of the VIEs. In accordance with ASU 2009-17, we are the beneficiary of the VIEs associated with our investments in credit-linked

notes, and as such, we have consolidated all the assets and liabilities of these VIEs, and recorded a cumulative effect adjustment of $169 million,

after-tax, to reduce the beginning balance of retained earnings as of January 1, 2010.

Throughout the document, "after-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.

Reclassifications

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

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

3/31/2010										PAGE 1
Financial Highlights
Unaudited (in millions, except per share data)

	For the Three Months Ended March 31,
							Change
	2010			2009			Amount			%
Income from Operations - By Segment
Annuities	$	118.7		$	73.9		$	44.8			60.6	%
Defined Contribution		35.9			29.8			6.1			20.5	%
Total Retirement Solutions		154.6			103.7			50.9			49.1	%
Life Insurance		136.7			142.2			(5.5	)		-3.9	%
Group Protection		21.4			25.7			(4.3	)		-16.7	%
Total Insurance Solutions		158.1			167.9			(9.8	)		-5.8	%
Other Operations		(36.6	)		(108.5	)		71.9			66.3	%
Income from Operations (1)		276.1			163.1			113.0			69.3	%
Excluded realized loss, after-tax (2) (3)		(26.5	)		(136.4	)		109.9			80.6	%
Benefit ratio unlocking, after-tax (3)		5.5			(52.0	)		57.5			110.6	%
Income from reserve changes (net of related amortization)
on business sold through reinsurance, after-tax (3)		0.4			0.4			-			0.0	%
Gain on early extinguishment of debt, after-tax (3)		-			41.8			(41.8	)		-100.0	%
Impairment of intangibles, after-tax (3)		-			(603.5	)		603.5			100.0	%
Income from discontinued operations, after-tax (4)		27.9			7.7			20.2			262.3	%
Net Income (Loss)		283.4			(578.9	)		862.3			149.0	%
Preferred stock dividends and accretion of discount		(18.4	)		-			(18.4	)	NM
Minority interest adjustment (5)		-			(0.1	)		0.1			100.0	%
Net Income (Loss) Available to Common Stockholders	$	265.0		$	(579.0	)	$	844.0			145.8	%

Earnings Per Common Share - Diluted
Income from operations (1) (6)	$	0.83		$	0.64		$	0.19		29.7	%
Excluded realized loss, after-tax (2) (3) (6)		(0.09	)		(0.54	)		0.45		83.3	%
Benefit ratio unlocking, after-tax (3) (6)		0.02			(0.20	)		0.22		110.0	%
Gain on early extinguishment of debt, after-tax (3) (6)		-			0.16			(0.16	)	-100.0	%
Impairment of intangibles, after-tax (3) (6)		-			(2.36	)		2.36		100.0	%
Income from discontinued operations, after-tax (4) (6)		0.09			0.03			0.06		200.0	%
Net Income (Loss)	$	0.85		$	(2.27	)	$	3.12		137.4	%

Operating Revenues - By Segment
Annuities	$	629.9		$	521.7		$	108.2	20.7	%
Defined Contribution		240.5			218.5			22.0	10.1	%
Total Retirement Solutions		870.4			740.2			130.2	17.6	%
Life Insurance		1,127.8			1,076.2			51.6	4.8	%
Group Protection		445.2			421.4			23.8	5.6	%
Total Insurance Solutions		1,573.0			1,497.6			75.4	5.0	%
Other Operations		123.9			105.4			18.5	17.6	%
Total Operating Revenues		2,567.3			2,343.2			224.1	9.6	%
Excluded realized loss, pre-tax (2)		(40.9	)		(207.6	)		166.7	80.3	%
Amortization income of DFEL associated with benefit
ratio unlocking, pre-tax		0.3			(4.2	)		4.5	107.1	%
Amortization of deferred gains arising from reserve
changes on business sold through reinsurance, pre-tax		0.7			0.7			-	-
Total Revenues	$	2,527.4		$	2,132.1		$	395.3	18.5	%

(1)	Income from operations includes restructuring charges. See page 5 for detail.
(2)	See page 6 for detail.
(3)	We use our prevailing corporate federal income tax rate of 35% while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure.
(4)	Includes discontinued operations and the loss on disposal. See Discontinued Operations on page 25 for details.
(5)	Relates to outstanding stock options under the Delaware Investments U.S. Inc. stock option incentive plan.
(6)	In those periods with a loss from continuing operations, shares used in the earnings per share calculation represent basic shares, since using diluted shares would have been anti-dilutive. This same concept applies to our income (loss) from operations as well.

3/31/2010										PAGE 2
Financial Highlights (Continued)
Unaudited (billions of dollars)

	For the Three Months Ended March 31,
							Change
	2010			2009			Amount			%
Retirement Solutions - Annuities
Gross deposits	$	2.276		$	2.188		$	0.088			4.0	%
Net flows		0.575			0.430			0.145			33.7	%
Account values (gross)		77.857			57.155			20.702			36.2	%
Account values (net of reinsurance)		76.846			56.061			20.785			37.1	%

Retirement Solutions - Defined Contribution
Gross deposits (1)		1.307			1.561			(0.254	)		-16.3	%
Net flows		0.109			0.657			(0.548	)		-83.4	%
Account values - annuities		25.670			21.645			4.025			18.6	%
Alliance and Smart Future mutual funds		11.029			6.848			4.181			61.1	%
Total annuities and mutual fund account values		36.699			28.493			8.206			28.8	%

Insurance Solutions - Life Insurance
Sales (in millions)	$	142.6		$	145.2		$	(2.6	)		-1.8	%
Life insurance in force		546.319			525.234			21.085			4.0	%
Account values (net of reinsurance)		32.074			30.031			2.043			6.8	%

Insurance Solutions - Group Protection
Annualized sales (in millions)		63.1			54.3			8.8			16.2	%
Loss ratio (2)		74.8	%		70.8	%	NM			NM

Consolidated
Total deposits	$	4.660		$	4.807		$	(0.147	)		-3.1	%
Total account balances		145.619			114.585			31.034			27.1	%
Total net flows		1.286			1.644			(0.358	)		-21.8	%

(1)

Includes deposits for mutual funds. Mutual fund account values are not included in the separate accounts reported on our Consolidated Balance Sheets, as we do not have any ownership interest in them.

(2)

Represents combined loss ratio for life, disability and dental businesses.

3/31/2010										PAGE 3
Financial Highlights (Continued)
Unaudited (millions of dollars)

	For the Three Months Ended March 31,
							Change
	2010			2009			Amount			%
Balance Sheet Assets - End-of-Period	$	181,621.4		$	157,426.9		$	24,194.5			15.4	%

Stockholders' Equity
Beginning-of-period (including AOCI)	$	11,700.2		$	7,976.8		$	3,723.4			46.7	%
End-of-period (including AOCI)		12,368.5			7,323.5			5,045.0			68.9	%
End-of-period (excluding AOCI)		12,066.3			10,298.6			1,767.7			17.2	%
Average equity (excluding AOCI)		12,013.9			10,539.5			1,474.4			14.0	%

Return on Equity
Net income (loss)/average equity (excluding AOCI)		9.4	%		-22.0	%
Income (loss) from operations/average equity (excluding AOCI)		9.2	%		6.2	%

Return on Capital
Income (loss) from operations/average capital		7.4	%		5.1	%

Common Shares Outstanding
Average for the period - basic		302.2			255.6			46.6			18.2	%
Average for the period - diluted		312.1			257.8			54.3			21.1	%
End-of-period - assuming conversion of preferreds (1)		302.6			256.2			46.4			18.1	%
End-of-period - diluted		313.0			258.1			54.9			21.3	%

Book value per common share (including AOCI) (2)	$	38.19		$	28.59		$	9.60			33.6	%
Book value per common share (excluding AOCI) (2)		37.19			40.20			(3.01	)		-7.5	%

Cash Returned to Common Stockholders
Common dividends declared	$	3.0		$	2.6			0.4			15.4	%

Dividend declared on common stock - per share	$	0.010		$	0.010		$	-			0.0	%
Dividend payout ratio		1.2	%		-0.4	%
Annualized yield (3)		0.1	%		0.6	%

Comprehensive Income (Loss)
Net income (loss)	$	283.4		$	(578.9	)	$	862.3			149.0	%
Net unrealized gain (loss) on available-for-sale securities		551.2			(45.0	)		596.2		NM
Unrealized other-than-temporary impairment on
available-for-sale securities		1.2			(75.2	)		76.4			101.6	%
Net unrealized gain (loss) on derivative instruments		9.6			(69.3	)		78.9			113.9	%
Foreign currency translation adjustment		(1.2	)		16.9			(18.1	)	NM
Funded status of employee benefit plans		2.8			0.9			1.9			211.1	%
Comprehensive Income (Loss)	$	847.0		$	(750.6	)	$	1,597.6			212.8	%

Leverage Ratio (4)		26.8	%		26.7	%

Ratings as of April 28, 2010

Standard &

A.M. Best

Fitch

Moody's

Poor's

Senior Debt Ratings

BBB

Baa2

A-

Financial Strength Ratings

Lincoln National Life Insurance Company

A+

AA-

First Penn-Pacific Life Insurance Company

A+

Lincoln Life & Annuity Company of New York

A+

AA-

(1)	The holders of our Series B preferred stock have no right to exchange or convert such shares into any other securities, therefore these shares have not been converted in this calculation.
(2)	These computations exclude Series B preferred stock balances as it is non-convertible.
(3)	Indicated dividend divided by the closing price.
(4)	The numerator in this calculation is arrived at by adding our total debt, $5,161, excluding 75% of our capital securities, $1,114, and all of our $373 million senior note, which is net of the unamortized discount, issued in October 2007 because the proceeds were reinvested in a pool of long-term assets, plus our Series B preferred stock liquidation value of $950 million. The denominator in this calculation is arrived at by adding the numerator, $4,624, excluding the Series B preferred stock liquidation value, plus our stockholders' equity, excluding AOCI, $12,066, plus 75% of our capital securities, plus all of our senior notes.

3/31/2010																PAGE 4
Consolidated Operating Expense Detail
Unaudited (in millions)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Commissions	$	360.0		$	358.2		$	403.9		$	421.2		$	379.7			5.5	%

General and Administrative Expenses
General and administrative expenses		306.3			311.4			317.3			351.7			310.8			1.5	%
Merger-related expenses		6.7			4.4			2.5			2.8			2.3			-65.7	%
Total General and Administrative Expenses,
Excluding Broker-Dealer		313.0			315.8			319.8			354.5			313.1			0.0	%

Communications expenses		12.9			13.5			13.2			12.9			13.8			7.0	%
Restructuring charges associated with merger-
related cost saving initiatives		-			-			0.1			-			-		NM
Restructuring charges for expense initiatives		5.1			28.6			0.5			0.3			-			-100.0	%
Taxes, licenses and fees		54.6			43.0			48.2			24.3			57.5			5.3	%
Interest and debt expense		64.7			60.9			68.0			68.1			68.1			5.3	%
Total Commissions and Expenses Incurred		810.3			820.0			853.7			881.3			832.2			2.7	%

Less: Commissions and Expenses Capitalized		(383.5	)		(385.4	)		(422.5	)		(460.0	)		(385.1	)		-0.4	%

Total Expenses Incurred, Excluding
Amortization and Broker-Dealer Expenses		426.8			434.6			431.2			421.3			447.1			4.8	%

Amortization
Amortization of DAC and VOBA, net of interest		237.7			231.7			311.4			260.9			258.1			8.6	%
Amortization of intangibles		1.1			1.0			1.1			1.0			1.0			-9.1	%
Total Amortization		238.8			232.7			312.5			261.9			259.1			8.5	%

Broker-Dealer Commissions and Other Expenses		64.1			69.2			73.6			81.1			73.6			14.8	%

Total	$	729.7		$	736.5		$	817.3		$	764.3		$	779.8			6.9	%

Merger-Related Expenses (1)
Severance and employee-related charges	$	0.7		$	0.6		$	0.3		$	0.5		$	0.2			-71.4	%
Systems integration and related expenses		5.1			2.6			1.5			1.4			2.0			-60.8	%
Other expenses		0.9			1.2			0.8			0.9			0.1			-88.9	%
Total Merger-Related Expenses	$	6.7		$	4.4		$	2.6		$	2.8		$	2.3			-65.7	%

(1)

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

3/31/2010																PAGE 5
Selected Financial Results Summary
Unaudited (millions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Operating Revenues
Annuities	$	521.7		$	552.5		$	598.2		$	628.9		$	629.9			20.7	%
Defined Contribution		218.5			223.5			240.6			243.7			240.5			10.1	%
Total Retirement Solutions		740.2			776.0			838.8			872.6			870.4			17.6	%
Life Insurance		1,076.2			1,002.2			1,089.1			1,125.9			1,127.8			4.8	%
Group Protection		421.4			442.9			414.6			433.6			445.2			5.6	%
Total Insurance Solutions		1,497.6			1,445.1			1,503.7			1,559.5			1,573.0			5.0	%
Other Operations		105.4			115.4			119.6			126.4			123.9			17.6	%
Total Operating Revenues		2,343.2			2,336.5			2,462.1			2,558.5			2,567.3			9.6	%
Excluded realized loss, pre-tax (1)		(207.6)			(454.6	)		(381.1	)		(156.6	)		(40.9	)		80.3	%
Amortization of DFEL associated with benefit
ratio unlocking, pre-tax		(4.2	)		(0.2	)		0.2			-			0.3			107.1	%
Amortization of deferred gains arising from reserve
changes on business sold through reinsurance, pre-tax		0.7			0.7			0.7			0.5			0.7			0.0	%
Total Revenues	$	2,132.1		$	1,882.4		$	2,081.9		$	2,402.4		$	2,527.4			18.5	%

Income (Loss) from Operations
Annuities	$	73.9		$	65.4		$	94.5		$	119.7		$	118.7			60.6	%
Defined Contribution		29.8			27.7			42.6			33.3			35.9			20.5	%
Total Retirement Solutions		103.7			93.1			137.1			153.0			154.6			49.1	%
Life Insurance		142.2			132.9			136.5			157.6			136.7			-3.9	%
Group Protection		25.7			33.6			34.5			30.1			21.4			-16.7	%
Total Insurance Solutions		167.9			166.5			171.0			187.7			158.1			-5.8	%
Other Operations		(108.5	)		(52.3	)		(32.6	)		(43.5	)		(36.6	)		66.3	%
Income from Operations		163.1			207.3			275.5			297.2			276.1			69.3	%
Excluded realized loss, after-tax (1) (2)		(136.4)			(296.8	)		(248.3	)		(98.3	)		(26.5	)		80.6	%
Benefit ratio unlocking, after-tax (2)		(52.0	)		80.9			52.3			7.6			5.5			110.6	%
Income from reserve changes (net of related
amortization) on business sold through reinsurance, after-tax (2)		0.4			0.4			0.4			0.5			0.4			0.0	%
Gain on early extinguishment of debt, after-tax (2)		41.8			-			-			-			-			-100.0	%
Impairment of intangibles, after-tax (2)		(603.5	)		0.6			1.4			(108.8	)		-			100.0	%
Income (loss) from discontinued operations, after- tax (3)		7.7			(153.8	)		72.0			4.1			27.9			262.3	%
Net Income (Loss)		(578.9	)		(161.4	)		153.3			102.3			283.4			149.0	%
Preferred stock dividends and accretion of discount		-			-			(16.3	)		(18.2	)		(18.4	)	NM
Minority interest adjustment (4)		(0.1	)		-			-			-			-			100.0	%
Net Income (Loss) Available to Common
Stockholders	$	(579.0	)	$	(161.4	)	$	137.0		$	84.1		$	265.0			145.8	%

Stockholders' Equity
Beginning-of-period (including AOCI)	$	7,976.8		$	7,323.5		$	9,074.9		$	11,655.5		$	11,700.2
End-of-period (including AOCI)		7,323.5			9,074.9			11,655.5			11,700.2			12,368.5
End-of-period (excluding AOCI)		10,298.6			10,782.3			11,876.0			11,961.6			12,066.3
Average equity (excluding AOCI)		10,539.5			10,540.5			11,329.1			11,918.8			12,013.9

Restructuring Charges, After-Tax	$	3.3		$	18.6		$	0.4		$	0.2		$	0.0

Common Shares Outstanding
Average for the period - basic		255.6			260.1			301.8			301.9			302.2
Average for the period - diluted		257.8			262.4			310.0			311.6			312.1
End-of-period - diluted		258.1			304.2			311.8			311.8			313.0

Earnings (Loss) Per Common Share - Diluted
Income (loss) from operations (5)	$	0.64		$	0.80		$	0.84		$	0.90		$	0.83
Net income (loss) (5)		(2.27	)		(0.62	)		0.44			0.27			0.85
Restructuring charges		(0.01	)		(0.07	)		(0.00	)		(0.00	)		(0.00	)

Stockholders' Equity Per Common Share
Stockholders' equity (including AOCI) (6)	$	28.59		$	30.02		$	35.91		$	36.02		$	38.19
Stockholders' equity (excluding AOCI) (6)		40.20			35.67			36.64			36.89			37.19
Dividends declared (common stock)		0.010			0.010			0.010			0.010			0.010

Return on Equity
Net income (loss)/average equity		-22.0	%		-6.1	%		5.4	%		3.4	%		9.4	%
Income (loss) from operations/average equity		6.2	%		7.9	%		9.7	%		10.0	%		9.2	%

Market Value of Common Shares
Highest price	$	25.59		$	19.99		$	27.82		$	28.10		$	30.74
Lowest price		4.90			5.52			14.34			21.99			22.52
Closing price		6.69			17.21			25.91			24.88			30.70

(1)	See page 6 for detail.
(2)	We use our prevailing corporate federal income tax rate of 35% while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure.
(3)	Includes discontinued operations and the loss on disposal. See Discontinued Operations on page 25 for details.
(4)	Relates to outstanding stock options under the Delaware Investments U.S. Inc. stock option incentive plan.
(5)	In those periods with a loss from continuing operations, shares used in the earnings per share calculation represent basic shares, since using diluted shares would have been anti-dilutive. This same concept applies to our income (loss) from operations as well.
(6)	These computations exclude Series B preferred stock balances as it is non-convertible.

3/31/2010																PAGE 6
Details Underlying Realized Loss, After-DAC
Unaudited (millions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Pre-Tax
Operating realized gain (loss):
Indexed annuity net derivatives results (1)	$	(0.2	)	$	0.2		$	0.3		$	-		$	0.4			300.0	%
GLB (2)		11.8			11.5			14.7			15.8			15.0			27.1	%
Total operating realized gain		11.6			11.7			15.0			15.8			15.4			32.8	%
Realized loss related to certain investments (3)		(150.1	)		(158.3	)		(135.6	)		(128.1	)		(44.4	)		70.4	%
Gain (loss) on certain reinsurance
derivative/trading securities (4)		21.7			(9.4	)		70.5			(12.5	)		2.0			-90.8	%
GLB net derivatives results (5)		(125.6	)		(150.5	)		(227.9	)		2.8			11.9			109.5	%
GDB derivatives results (6)		45.8			(140.8	)		(84.2	)		(21.7	)		(13.0	)	NM
Indexed annuity forward-starting option (7)		0.6			3.4			(3.9	)		2.9			2.6		NM
Gain on sale of subsidiaries/businesses		-			1.0			-			-			-		NM
Total excluded realized loss		(207.6	)		(454.6	)		(381.1	)		(156.6	)		(40.9	)		80.3	%
Total Realized Loss	$	(196.0	)	$	(442.9	)	$	(366.1	)	$	(140.8	)	$	(25.5	)		87.0	%

After-Tax
Operating realized gain (loss):
Indexed annuity net derivatives results (1) (8)	$	(0.1	)	$	0.1		$	0.2		$	-		$	0.3		NM
GLB (2) (8)		7.6			7.5			9.6			10.3			9.8			28.9	%
Total operating realized gain		7.5			7.6			9.8			10.3			10.1			34.7	%
Realized loss related to certain investments (3) (8)		(97.6	)		(102.9	)		(88.0	)		(83.3	)		(28.8	)		70.5	%
Gain (loss) on certain reinsurance
derivative/trading securities (4) (8)		14.1			(6.1	)		45.8			(8.1	)		1.3			-90.8	%
GLB net derivatives results (5) (8)		(81.6	)		(97.9	)		(148.0	)		1.7			7.7			109.4	%
GDB derivatives results (6) (8)		28.3			(92.8	)		(55.6	)		(10.5	)		(8.4	)	NM
Indexed annuity forward-starting option (7) (8)		0.4			2.2			(2.5	)		1.9			1.7		NM
Gain on sale of subsidiaries/businesses (8)		-			0.7			-			-			-		NM
Total excluded realized loss		(136.4	)		(296.8	)		(248.3	)		(98.3	)		(26.5	)		80.6	%
Total Realized Loss	$	(128.9	)	$	(289.2	)	$	(238.5	)	$	(88.0	)	$	(16.4	)		87.3	%

Components of GLB Net Derivatives Results
Net valuation premium, net of reinsurance, after-
DAC	$	22.2		$	27.4		$	31.2		$	34.8		$	25.8			16.2	%
Change in reserves hedged, after-DAC:
Unlocking		-			-			(25.7	)		(240.8	)		-		NM
Other		233.2			1,977.7			208.9			644.6			190.0			-18.5	%
Change in market value of derivative assets, after-
DAC		(297.9	)		(1,846.3	)		(241.1	)		(548.9	)		(198.0	)		33.5	%
Hedge program effectiveness (ineffectiveness),
after-DAC		(64.7	)		131.4			(57.9	)		(145.1	)		(8.0	)		87.6	%
Change in reserves not hedged (NPR component),
after-DAC		(55.4	)		(333.0	)		(212.0	)		54.1			(0.9	)		98.4	%
Change in derivative assets not hedged (NPR
component)		(11.9	)		17.0			5.0			4.7			(1.0	)		91.6	%
Associated amortization expense of DAC, VOBA,
DSI and DFEL:
Unlocking		(59.4	)		(83.7	)		(76.5	)		43.5			4.7			107.9	%
Other amortization		43.6			90.4			82.3			10.8			(8.7	)	NM
GLB Net Derivatives Results	$	(125.6	)	$	(150.5	)	$	(227.9	)	$	2.8		$	11.9			109.5	%

(1)	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.
(2)	Represents the "risk/profit margin" portion of the attributed GLB rider fees. We have certain GLB variable annuity riders with GWB and GIB features that are embedded derivatives. 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 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 total fees collected from the contract holders in excess of the GLB attributed fees are reported in insurance fees.
(3)	See page 27 for detail.
(4)	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.
(5)	Represents the net valuation premium, the change in the fair value of the embedded derivative liabilities of our GLB products, the change in the fair value of the derivative instruments we own to hedge the embedded derivative, the cost of purchasing the derivative instruments, and the associated changes to DAC, VOBA, DSI, and DFEL.
(6)	Represents the change in the fair value of the derivatives we own to hedge the change in the GDB riders.
(7)	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.
(8)	We use our prevailing corporate federal income tax rate of 35% while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure.

3/31/2010																PAGE 7
Consolidated Statements of Income
Unaudited (in millions)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Revenues
Insurance premiums	$	508.2		$	541.8		$	490.4		$	523.8		$	531.8			4.6	%
Surrender charges		31.8			36.8			43.2			40.6			42.7			34.3	%
Mortality assessments		344.1			320.0			317.1			317.8			317.9			-7.6	%
Expense assessments		324.9			333.9			405.3			406.9			427.5			31.6	%
Net investment income		1,013.3			970.6			1,071.3			1,122.3			1,106.1			9.2	%
Realized loss:
Total other-than-temporary impairment losses on securities		(210.6	)		(220.1	)		(147.5	)		(88.7	)		(75.9	)		64.0	%
Portion of loss recognized in other comprehensive income		89.1			102.5			67.8			15.4			23.5			-73.6	%
Net other-than-temporary impairment losses on
securities recognized in earnings		(121.5	)		(117.6	)		(79.7	)		(73.3	)		(52.4	)		56.9	%
Realized gain (loss), excluding other-than-temporary
impairment losses on securities		(74.5	)		(325.3	)		(286.4	)		(67.5	)		26.9			65.8	%
Total realized loss (1)		(196.0	)		(442.9	)		(366.1	)		(140.8	)		(25.5	)		87.0	%
Amortization of deferred gains on business sold
through reinsurance		19.0			18.3			18.4			20.3			18.9			-0.5	%
Other revenues and fees		86.8			103.9			102.3			111.5			108.0			24.4	%
Total Revenues		2,132.1			1,882.4			2,081.9			2,402.4			2,527.4			18.5	%

Benefits and Expenses
Interest credited		626.9			606.9			614.2			614.9			617.7			-1.5	%
Benefits		920.1			574.6			577.2			763.9			779.2			-15.3	%
Underwriting, acquisition, insurance and other expenses		643.5			694.5			761.4			694.6			713.7			10.9	%
Interest and debt expense		0.4			60.9			68.0			68.1			68.1		NM
Impairment of intangibles		603.7			(0.6	)		(1.4	)		127.8			-			-100.0	%
Total Benefits and Expenses		2,794.6			1,936.3			2,019.4			2,269.3			2,178.7			-22.0	%
Income (loss) from continuing operations before taxes		(662.5	)		(53.9	)		62.5			133.1			348.7			152.6	%
Federal income tax expense (benefit)		(75.9	)		(46.3	)		(18.8	)		34.9			93.2			222.8	%
Income (Loss) from Continuing Operations		(586.6	)		(7.6	)		81.3			98.2			255.5			143.6	%
Income (loss) from discontinued operations, net of
federal income tax expense (benefit) (2)		7.7			(153.8	)		72.0			4.1			27.9			262.3	%
Net Income (Loss)		(578.9	)		(161.4	)		153.3			102.3			283.4			149.0	%
Preferred stock dividends and accretion of discount		-			-			(16.3	)		(18.2	)		(18.4	)	NM
Minority interest adjustment (3)		(0.1	)		-			-			-			-			100.0	%
Net Income (Loss) Available to Common
Stockholders	$	(579.0	)	$	(161.4	)	$	137.0		$	84.1		$	265.0			145.8	%

Earnings (Loss) Per Common Share (Diluted) (4)
Income (loss) from continuing operations	$	(2.30	)	$	(0.03	)	$	0.21		$	0.26		$	0.76			133.0	%
Income (loss) from discontinued operations, net of
federal income tax expense (benefit) (2)		0.03			(0.59	)		0.23			0.01			0.09			200.0	%
Net Income (Loss)	$	(2.27	)	$	(0.62	)	$	0.44		$	0.27		$	0.85			137.4	%

(1)	See page 6 for detail.
(2)	Contains discontinued operations and the loss on disposition. See Discontinued Operations on page 25 for additional details.
(3)	Relates to outstanding stock options under the Delaware Investments U.S. Inc. stock option incentive plan.
(4)	In those periods with a loss from continuing operations, shares used in the earnings per share calculation represent basic shares, since using diluted shares would have been anti-dilutive.

3/31/2010													PAGE 8
Consolidated Roll Forwards of DAC, VOBA, DFEL and DSI
Unaudited (in millions)

	For the Three Months Ended
	March			June			Sept.			Dec.			March
DAC and VOBA	2009			2009			2009			2009			2010
Balance as of beginning-of-period	$	11,403.3		$	11,399.4		$	10,455.9		$	9,182.3		$	9,509.6
Business sold through reinsurance		(292.9	)		-			-			-			-
Deferrals		383.5			385.4			422.5			460.0			385.1
Amortization, net of interest:
Unlocking		(32.6	)		(0.5	)		(39.9	)		12.7			43.3
Amortization, net of interest, excluding unlocking		(205.1	)		(231.2	)		(271.5	)		(273.6	)		(301.4	)
Deferrals, net of amortization included in operating
underwriting, acquisition, insurance and other expenses		145.8			153.7			111.1			199.1			127.0
Amortization, net of interest, associated with benefit ratio unlocking		21.4			(18.9	)		(12.1	)		(1.1	)		(1.8	)
Adjustment related to realized (gains) losses		6.9			70.5			31.2			82.1			(8.6	)
Adjustment related to unrealized (gains) losses		114.9			(1,148.8	)		(1,403.8	)		47.2			(431.1	)
Balance as of End-of-Period	$	11,399.4		$	10,455.9		$	9,182.3		$	9,509.6		$	9,195.1

DFEL
Balance as of beginning-of-period	$	1,019.4		$	1,076.2		$	1,160.8		$	1,220.3		$	1,337.6
Business sold through reinsurance		(11.0	)		-			-			-			-
Deferrals		107.5			112.5			124.0			151.6			135.2
Amortization, net of interest:
Unlocking		(4.9	)		(0.9	)		(30.7	)		(2.0	)		(7.0	)
Amortization, net of interest, excluding unlocking		(32.8	)		(28.3	)		(36.6	)		(34.4	)		(44.0	)
Deferrals, net of amortization included in operating
expense assessments		69.8			83.3			56.7			115.2			84.2
Amortization, net of interest, associated with benefit
ratio unlocking		4.1			0.2			(0.2	)		-			(0.3	)
Adjustment related to realized gains (losses)		(6.8	)		0.9			2.2			2.8			(1.3	)
Adjustment related to unrealized gains (losses)		0.7			0.2			0.8			(0.7	)		(74.9	)
Balance as of End-of-Period	$	1,076.2		$	1,160.8		$	1,220.3		$	1,337.6		$	1,345.3

DSI
Balance as of beginning-of-period	$	262.7		$	279.4		$	289.1		$	305.0		$	323.3
Deferrals		15.9			19.2			20.1			21.1			19.5
Amortization, net of interest:
Unlocking		(1.7	)		(0.1	)		3.6			2.5			2.1
Amortization, net of interest, excluding unlocking		(4.9	)		(9.9	)		(10.2	)		(6.3	)		(15.0	)
Deferrals, net of amortization included in operating
insurance benefits or interest credited		9.3			9.2			13.5			17.3			6.6
Amortization, net of interest, associated with benefit
ratio unlocking		2.4			(1.7	)		(1.1	)		(0.1	)		(0.2	)
Adjustment related to realized (gains) losses		4.8			2.9			3.1			2.0			(1.9	)
Adjustment related to unrealized (gains) losses		0.2			(0.7	)		0.4			(0.9	)		(28.4	)
Balance as of End-of-Period	$	279.4		$	289.1		$	305.0		$	323.3		$	299.4

3/31/2010												PAGE 9
Consolidating Statements of Income From Operations
For the Quarter Ended March 31, 2010
Unaudited (in millions)

	Retirement Solutions				Insurance Solutions
			Defined		Life		Group		Other
	Annuities		Contribution		Insurance		Protection		Operations (1)			Consolidated
Operating Revenues
Insurance premiums	$	9.9	$	-	$	112.3	$	409.9	$	(0.3	)	$	531.8
Surrender charges		10.9		1.1		30.8		-		-			42.8
Mortality assessments		-		-		317.9		-		-			317.9
Expense assessments		249.2		49.1		128.7		-		-			427.0
Net investment income		270.8		186.2		530.1		33.6		85.4			1,106.1
Operating realized gain (2)		15.3		0.1		-		-		-			15.4
Amortization of deferred gain on business sold
through reinsurance		-		-		-		-		18.2			18.2
Other revenues and fees		73.8		4.0		8.0		1.7		20.6			108.1
Total Operating Revenues		629.9		240.5		1,127.8		445.2		123.9			2,567.3

Operating Expenses
Interest credited		176.2		110.4		296.9		0.5		33.6			617.6
Benefits		43.8		2.0		398.9		310.7		34.1			789.5
Underwriting, acquisition, insurance and other expenses		259.8		77.9		230.0		101.1		43.1			711.9
Interest and debt expense		-		-		-		-		68.1			68.1
Total Operating Expenses		479.8		190.3		925.8		412.3		178.9			2,187.1
Income (loss) from operations before federal income tax expense (benefit)		150.1		50.2		202.0		33.0		(55.0	)		380.3
Federal income tax expense (benefit)		31.4		14.3		65.3		11.6		(18.4	)		104.2
Income (Loss) from Operations	$	118.7	$	35.9	$	136.7	$	21.4	$	(36.6	)	$	276.1

(1)	Includes inter-segment eliminations.
(2)	For detail, see pages 13 and 18.

3/31/2010														PAGE 10
Consolidating Statements of Income From Operations
For the Quarter Ended March 31, 2009
Unaudited (in millions)

	Retirement Solutions						Insurance Solutions
				Defined			Life		Group		Other
	Annuities			Contribution			Insurance		Protection		Operations (1)			Consolidated
Operating Revenues
Insurance premiums	$	27.1		$	-		$	90.5	$	389.8	$	0.8		$	508.2
Surrender charges		9.2			1.0			21.6		-		-			31.8
Mortality assessments		-			-			344.1		-		-			344.1
Expense assessments		172.5			39.6			116.5		-		-			328.6
Net investment income		240.4			175.5			497.7		30.1		69.7			1,013.4
Operating realized gain (2)		11.5			0.1			-		-		-			11.6
Amortization of deferred gain on business sold
through reinsurance		-			-			-		-		18.4			18.4
Other revenues and fees		61.0			2.3			5.8		1.5		16.5			87.1
Total Operating Revenues		521.7			218.5			1,076.2		421.4		105.4			2,343.2

Operating Expenses
Interest credited		163.6			111.5			302.8		0.6		50.9			629.4
Benefits		75.8			(1.8	)		355.7		282.0		106.6			818.3
Underwriting, acquisition, insurance and other expenses		219.7			72.4			224.0		99.3		49.4			664.8
Interest and debt expense		-			-			-		-		64.7			64.7
Total Operating Expenses		459.1			182.1			882.5		381.9		271.6			2,177.2
Income (loss) from operations before federal income tax expense (benefit)		62.6			36.4			193.7		39.5		(166.2	)		166.0
Federal income tax expense (benefit)		(11.3	)		6.6			51.5		13.8		(57.7	)		2.9
Income (Loss) from Operations	$	73.9		$	29.8		$	142.2	$	25.7	$	(108.5	)	$	163.1

(1)

Includes inter-segment eliminations.

(2)

For detail, see pages 13 and 18.

3/31/2010													PAGE 11
Consolidated Balance Sheets and Selected Share Data
Unaudited (millions of dollars)

	As of
	March			June			Sept.			Dec.			March
	2009			2009			2009			2009			2010
ASSETS
Investments:
Corporate bonds	$	37,076.2		$	42,489.5		$	46,304.6		$	45,860.3		$	47,446.2
U.S. Government bonds		233.4			221.2			221.7			194.2			198.3
Foreign government bonds		479.6			479.8			492.9			504.9			456.1
Mortgage-backed securities		9,754.6			9,889.7			10,946.9			11,103.3			11,365.4
State and municipal bonds		226.6			906.6			1,464.9			1,967.6			2,198.1
VIEs' fixed maturity securities		-			-			-			-			579.5
Preferred stocks - redeemable		765.1			1,063.0			1,235.2			1,188.0			1,216.7
Common stocks		132.8			171.9			211.6			198.4			222.3
Preferred stocks - equity		42.9			64.4			71.4			80.0			87.7
Total available-for-sale securities		48,711.2			55,286.1			60,949.2			61,096.7			63,770.3
Trading securities		2,245.6			2,316.7			2,547.9			2,504.6			2,532.5
Mortgage loans on real estate		7,615.9			7,468.3			7,276.7			7,177.8			7,012.5
Real estate		129.2			159.2			154.3			173.8			200.6
Policy loans		2,905.6			2,896.9			2,893.0			2,897.8			2,902.8
Derivative investments		2,226.1			1,233.8			1,282.0			1,010.1			992.4
Other investments		1,476.2			1,187.1			1,079.6			1,057.2			1,046.4
Total investments		65,309.8			70,548.1			76,182.7			75,918.0			78,457.5
Cash and invested cash		5,386.9			2,399.5			3,159.0			4,024.7			3,444.7
DAC and VOBA		11,399.4			10,455.9			9,182.3			9,509.6			9,195.1
Premiums and fees receivable		462.7			400.2			323.4			320.9			397.4
Accrued investment income		865.0			881.5			943.2			889.2			940.0
Reinsurance recoverables		7,976.0			7,729.3			7,664.1			6,425.9			6,520.1
Reinsurance related derivative assets		106.9			45.8			-			-			-
Goodwill		3,096.4			3,096.4			3,096.4			3,013.5			3,013.5
Other assets		9,888.5			10,396.8			10,827.1			3,831.4			3,223.9
Separate account assets		52,935.3			61,090.9			70,111.0			73,500.1			76,429.2
Total Assets	$	157,426.9		$	167,044.4		$	181,489.2		$	177,433.3		$	181,621.4
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Future contract benefits	$	18,038.8		$	16,127.5		$	15,970.2		$	15,287.4		$	15,269.9
Other contract holder funds		61,262.3			62,427.6			63,956.3			64,818.5			65,452.3
Short-term debt		1,435.7			454.5			400.2			349.9			101.2
Long-term debt		4,344.9			4,775.1			4,788.6			5,050.4			5,060.3
Reinsurance related derivative liabilities		-			-			39.1			30.5			46.6
Funds withheld reinsurance liabilities		1,215.0			1,222.3			1,219.8			1,260.6			1,216.4
Deferred gain on indemnity reinsurance		547.7			529.1			510.8			543.4			524.7
Payables for collateral under securities loaned and derivatives		2,385.9			1,712.1			2,239.8			1,906.7			1,827.7
VIEs' liabilities		-			-			-			-			142.0
Other liabilities		7,937.8			9,630.4			10,597.9			2,985.6			3,182.6
Separate account liabilities		52,935.3			61,090.9			70,111.0			73,500.1			76,429.2
Total liabilities		150,103.4			157,969.5			169,833.7			165,733.1			169,252.9
Stockholders' Equity
Series A preferred stock		0.4			0.4			0.4			0.4			0.4
Series B preferred stock		-			-			799.9			806.3			812.8
Common stock		7,033.5			7,681.5			7,841.7			7,839.9			7,845.3
Retained earnings		3,264.7			3,100.4			3,234.0			3,315.0			3,407.8
Accumulated other comprehensive income (loss):
Net unrealized gain (loss) on available-for-sale securities		(2,699.5	)		(1,448.8	)		126.8			49.4			600.6
Unrealized other-than-temporary impairment on available-
for-sale securities		(75.2	)		(117.7	)		(121.8	)		(115.1	)		(113.9	)
Net unrealized gain on derivative instruments		57.8			53.7			10.8			11.4			21.0
Foreign currency translation adjustment		23.2			91.5			68.2			2.9			1.7
Funded status of employee benefit plans		(281.4	)		(286.1	)		(304.5	)		(210.0	)		(207.2	)
Total accumulated other comprehensive loss		(2,975.1	)		(1,707.4	)		(220.5	)		(261.4	)		302.2
Total stockholders' equity		7,323.5			9,074.9			11,655.5			11,700.2			12,368.5
Total Liabilities and Stockholders' Equity	$	157,426.9		$	167,044.4		$	181,489.2		$	177,433.3		$	181,621.4
Share Data Per Common Share
Stockholders' equity per share (1)	$	28.59		$	30.02		$	35.91		$	36.02		$	38.19
Book value, excluding AOCI (1)		40.20			35.67			36.64			36.89			37.19
Common shares outstanding - assuming conversion of
Series A preferred shares (in millions)		256.2			302.3			302.3			302.4			302.6

(1)

These computations exclude Series B preferred stock balances as it is non-convertible.

3/31/2010												PAGE 12
Balance Sheet Data - Segment Highlights
Unaudited (in millions)

	Retirement Solutions				Insurance Solutions
As of March 31, 2010			Defined		Life		Group		Other
	Annuities		Contribution		Insurance		Protection		Operations (1)			Consolidated
Assets
Allocated investments and cash and invested cash (2)	$	21,348.0	$	13,338.7	$	36,037.1	$	2,371.4	$	8,807.0		$	81,902.2
DAC and VOBA		2,285.0		462.1		6,285.0		163.0		-			9,195.1
Goodwill		439.8		20.2		2,188.5		274.3		90.7			3,013.5
DSI and other intangibles		296.9		4.5		84.0		-		118.1			503.5
Reinsurance recoverables		514.5		-		1,895.9		39.0		4,070.7			6,520.1
Separate account assets		57,734.3		13,240.8		5,273.7		-		180.4			76,429.2

Liabilities and Capital
Future contract benefits		1,235.9		2.1		6,491.1		1,480.2		6,060.6			15,269.9
Other contract holder funds		19,684.7		12,414.0		31,617.0		207.9		1,528.7			65,452.3

Allocated capital (3)		2,931.5		1,045.5		8,363.9		1,085.0		(1,359.6	)		12,066.3

As of December 31, 2009
Assets
Allocated investments and cash and invested cash (2)	$	21,113.4	$	13,053.4	$	35,072.6	$	2,296.1	$	8,407.2		$	79,942.7
DAC and VOBA		2,381.0		537.7		6,427.9		159.5		3.5			9,509.6
Goodwill		439.8		20.2		2,188.5		274.3		90.7			3,013.5
DSI and other intangibles		320.6		4.6		85.0		-		118.2			528.4
Reinsurance recoverables		531.8		-		1,870.8		39.9		3,983.4			6,425.9
Separate accounts assets		55,286.9		12,949.6		5,088.3		-		175.3			73,500.1

Liabilities and Capital
Future contract benefits		1,439.0		2.6		6,434.7		1,446.3		5,964.8			15,287.4
Other contract holder funds		19,565.6		12,239.8		31,287.4		193.1		1,532.6			64,818.5

Allocated capital (3)		2,785.0		1,070.6		8,144.1		1,065.1		(1,103.2	)		11,961.6

(1)	Includes inter-segment eliminations.
(2)	Includes inter-segment cash management balances our segments utilize to borrow money to meet their short-term needs and also to invest short-term funds with other segments. These balances eliminate in consolidation.
(3)	Allocated capital is based on internal economic capital models plus certain other items (principally intangibles, including DAC and VOBA, goodwill and other items).

3/31/2010																PAGE 13
Retirement Solutions - Annuities
Income Statements and Operational Data
Unaudited (millions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Operating Revenues
Insurance premiums (1)	$	27.1		$	32.5		$	17.3		$	11.9		$	9.9			-63.5	%
Surrender charges		9.2			8.9			9.0			9.3			10.9			18.5	%
Expense assessments		172.5			187.3			214.3			230.1			249.2			44.5	%
Net investment income		240.4			243.9			271.5			281.2			270.8			12.6	%
Operating realized gain (2)		11.5			11.6			14.9			15.8			15.3			33.0	%
Other revenues and fees (3)		61.0			68.3			71.2			80.6			73.8			21.0	%
Total Operating Revenues		521.7			552.5			598.2			628.9			629.9			20.7	%

Operating Expenses
Interest credited		163.6			170.4			175.9			172.5			176.2			7.7	%
Benefits (1)		75.8			67.0			51.5			47.5			43.8			-42.2	%
Underwriting, acquisition, insurance and other expenses		219.7			238.5			258.8			266.0			259.8			18.3	%
Total Operating Expenses		459.1			475.9			486.2			486.0			479.8			4.5	%
Income from operations before federal income tax
expense		62.6			76.6			112.0			142.9			150.1			139.8	%
Federal income tax expense (benefit)		(11.3	)		11.2			17.5			23.2			31.4		NM
Income from Operations	$	73.9		$	65.4		$	94.5		$	119.7		$	118.7			60.6	%

Effective Tax Rate		-18.1	%		14.6	%		15.6	%		16.2	%		20.9	%

Average Equity	$	3,193.4		$	2,912.1		$	2,814.2		$	2,785.6		$	2,858.3
Return on Average Equity		9.3	%		9.0	%		13.4	%		17.2	%		16.6	%

Income from Operations - Basis Points on
Average Account Values - Annualized		52			42			55			65			63			11

Operating Realized Gain (Loss) (2)
Indexed annuity net derivatives results (4)	$	(0.2	)	$	0.2		$	0.4		$	-		$	0.4			300.0	%
GLB (5)		11.7			11.4			14.5			15.8			14.9			27.4	%
Total Operating Realized Gain	$	11.5		$	11.6		$	14.9		$	15.8		$	15.3			33.0	%

Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	124.6		$	157.2		$	185.3		$	161.1		$	150.0			20.4	%
General and administrative expenses		72.1			76.2			82.5			85.9			78.0			8.2	%
Broker-dealer commissions and general and
administrative expenses		64.1			69.2			73.6			81.1			73.6			14.8	%
Taxes, licenses and fees		5.7			6.7			6.3			4.0			9.1			59.6	%
Total commissions and expenses incurred		266.5			309.3			347.7			332.1			310.7			16.6	%
Less: commissions and expenses capitalized		(127.3	)		(158.2	)		(181.0	)		(157.2	)		(131.6	)		-3.4	%
Amortization of DAC and VOBA, net of interest		80.5			87.4			92.1			91.1			80.7			0.2	%
Total Underwriting, Acquisition, Insurance
and Other Expenses	$	219.7		$	238.5		$	258.8		$	266.0		$	259.8			18.3	%

General and Administrative Expenses - Basis
Points on Average Account Values - Annualized (6)		51			49			48			47			41			(10	)

(1)	Includes our single premium immediate annuities, which have a corresponding offset to benefits for changes in reserves.
(2)	Included in income from operations.
(3)	Primarily broker-dealer revenues.
(4)	See note (1) on page 6 for details.
(5)	See note (2) on page 6 for details.
(6)	Includes distribution costs.

3/31/2010													PAGE 14
Retirement Solutions - Annuities
DAC, VOBA, DFEL and DSI Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March
DAC and VOBA	2009			2009			2009			2009			2010
Balance as of beginning-of-period	$	2,976.9		$	3,056.6		$	2,698.1		$	2,286.6		$	2,381.0
Deferrals		127.3			158.2			181.0			157.2			131.6
Amortization, net of interest:
Unlocking		(17.8	)		5.0			5.1			16.2			59.4
Amortization, net of interest, excluding unlocking		(62.7	)		(92.4	)		(97.2	)		(107.3	)		(140.1	)
Deferrals, net of amortization included in operating
underwriting, acquisition, insurance and other expenses		46.8			70.8			88.9			66.1			50.9
Amortization, net of interest, associated with benefit
ratio unlocking		19.8			(16.9	)		(11.0	)		(0.9	)		(1.3	)
Adjustment related to realized (gains) losses		(18.2	)		22.5			26.2			43.9			(11.5	)
Adjustment related to unrealized (gains) losses		31.3			(434.9	)		(515.6	)		(14.7	)		(134.1	)
Balance as of End-of-Period	$	3,056.6		$	2,698.1		$	2,286.6		$	2,381.0		$	2,285.0

DFEL
Balance as of beginning-of-period	$	130.3		$	134.5		$	146.5		$	162.2		$	182.1
Deferrals		10.6			12.3			15.8			17.6			17.0
Amortization, net of interest:
Unlocking		(2.0	)		(0.2	)		(2.8	)		0.9			1.1
Amortization, net of interest, excluding unlocking		(0.7	)		1.1			1.0			1.8			(5.5	)
Deferrals, net of amortization included in operating
expense assessments		7.9			13.2			14.0			20.3			12.6
Amortization, net of interest, associated with benefit
ratio unlocking		4.1			0.2			(0.2	)		-			(0.3	)
Adjustment related to realized gains (losses)		(7.6	)		(1.4	)		1.8			(0.4	)		(1.3	)
Adjustment related to unrealized gains (losses)		(0.2	)		-			0.1			-			(2.1	)
Balance as of End-of-Period	$	134.5		$	146.5		$	162.2		$	182.1		$	191.0

DSI
Balance as of beginning-of-period	$	260.7		$	277.2		$	286.6		$	302.4		$	320.6
Deferrals		15.7			18.7			20.0			21.0			19.4
Amortization, net of interest:
Unlocking		(1.7	)		(0.2	)		3.6			2.6			2.1
Amortization, net of interest, excluding unlocking		(4.7	)		(9.7	)		(10.2	)		(6.4	)		(15.0	)
Deferrals, net of amortization included in operating
interest credited		9.3			8.8			13.4			17.2			6.5
Amortization, net of interest, associated with benefit
ratio unlocking		2.4			(1.7	)		(1.1	)		(0.1	)		(0.2	)
Adjustment related to realized (gains) losses		4.7			2.9			3.1			2.0			(1.9	)
Adjustment related to unrealized (gains) losses		0.1			(0.6	)		0.4			(0.9	)		(28.1	)
Balance as of End-of-Period	$	277.2		$	286.6		$	302.4		$	320.6		$	296.9

3/31/2010																PAGE 15
Retirement Solutions - Annuities
Account Value Roll Forwards and Information
Unaudited (in billions)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Fixed Annuities
Balance as of beginning-of-period	$	17.655		$	17.854		$	18.596		$	19.766		$	19.940			12.9	%
Gross deposits		1.361			1.774			2.025			1.195			1.138			-16.4	%
Withdrawals and deaths		(0.765	)		(0.646	)		(0.501	)		(0.523	)		(0.486	)		36.5	%
Net flows		0.596			1.128			1.524			0.672			0.652			9.4	%
Transfers to variable annuities		(0.558	)		(0.582	)		(0.610	)		(0.726	)		(0.772	)		-38.4	%
Interest credited		0.145			0.177			0.237			0.207			0.203			40.0	%
Sales inducements deferred		0.016			0.019			0.019			0.021			0.019			18.8	%
Balance as of End-of-Period (Gross)		17.854			18.596			19.766			19.940			20.042			12.3	%
Reinsurance ceded		(1.094	)		(1.065	)		(1.049	)		(1.027	)		(1.011	)		7.6	%
Balance as of End-of-Period (Net of Ceded) (1)	$	16.760		$	17.531		$	18.717		$	18.913		$	19.031			13.6	%

Variable Annuities
Balance as of beginning-of-period	$	40.925		$	39.301		$	45.523		$	52.429		$	55.368			35.3	%
Gross deposits		0.827			0.851			1.063			1.266			1.138			37.6	%
Withdrawals and deaths		(0.993	)		(0.944	)		(0.977	)		(1.120	)		(1.215	)		-22.4	%
Net flows		(0.166	)		(0.093	)		0.086			0.146			(0.077	)		53.6	%
Transfers from fixed annuities		0.558			0.582			0.609			0.726			0.772			38.4	%
Investment increase and change in market value		(2.016	)		5.733			6.211			2.067			1.752			186.9	%
Balance as of End-of-Period (2)	$	39.301		$	45.523		$	52.429		$	55.368		$	57.815			47.1	%

Total Annuities
Balance as of beginning-of-period	$	58.580		$	57.155		$	64.119		$	72.195		$	75.308			28.6	%
Gross deposits		2.188			2.625			3.088			2.461			2.276			4.0	%
Withdrawals and deaths		(1.758	)		(1.590	)		(1.478	)		(1.643	)		(1.701	)		3.2	%
Net flows		0.430			1.035			1.610			0.818			0.575			33.7	%
Transfers between fixed and variable accounts		-			-			(0.001	)		-			-		NM
Interest credited and change in market value		(1.871	)		5.910			6.448			2.274			1.955			204.5	%
Sales inducements deferred		0.016			0.019			0.019			0.021			0.019			18.8	%
Balance as of End-of-Period (Gross)		57.155			64.119			72.195			75.308			77.857			36.2	%
Reinsurance ceded		(1.094	)		(1.065	)		(1.049	)		(1.027	)		(1.011	)		7.6	%
Balance as of End-of-Period (Net of Ceded)	$	56.061		$	63.054		$	71.146		$	74.281		$	76.846			37.1	%

Variable Annuities Under Agreement - Included Above	$	0.069		$	0.076		$	0.082		$	0.082		$	0.082			18.8	%

Incremental Deposits: (3)
Fixed annuities	$	1.358		$	1.774		$	2.023		$	1.194		$	1.137			-16.3	%
Variable annuities		0.824			0.849			1.059			1.263			1.134			37.6	%
Total Incremental Deposits	$	2.182		$	2.623		$	3.082		$	2.457		$	2.271			4.1	%

(1)	Includes the fixed portion of variable annuities.
(2)	Excludes the fixed portion of variable annuities.
(3)	Represents gross deposits reduced by transfers from other Lincoln products.

3/31/2010																PAGE 16
Retirement Solutions - Annuities
Account Value Information
Unaudited (billions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Fixed Annuities, Excluding Fixed Portion of Variable
Contracts
Deposits	$	0.235		$	0.248		$	0.414		$	0.082		$	0.087			-63.0	%
Withdrawals and deaths		(0.397	)		(0.328	)		(0.283	)		(0.299	)		(0.264	)		33.5	%
Net flows	$	(0.162	)	$	(0.080	)	$	0.131		$	(0.217	)	$	(0.177	)		-9.3	%

Gross fixed contract account values	$	8.959		$	8.981		$	9.219		$	9.102		$	9.015			0.6	%
Reinsurance ceded		(1.094	)		(1.065	)		(1.049	)		(1.027	)		(1.011	)		7.6	%
Net fixed contract account values	$	7.865		$	7.916		$	8.170		$	8.075		$	8.004			1.8	%

Indexed Annuities
Deposits	$	0.367		$	0.651		$	0.846		$	0.318		$	0.324			-11.7	%
Withdrawals and deaths		(0.214	)		(0.187	)		(0.115	)		(0.120	)		(0.124	)		42.1	%
Net flows	$	0.153		$	0.464		$	0.731		$	0.198		$	0.200			30.7	%

Indexed Annuity Account Values	$	5.195		$	5.716		$	6.557		$	6.839		$	7.131			37.3	%

Fixed Portion of Variable Contracts
Deposits	$	0.759		$	0.875		$	0.765		$	0.795		$	0.727			-4.2	%
Withdrawals and deaths		(0.155	)		(0.131	)		(0.104	)		(0.103	)		(0.098	)		36.8	%
Net flows	$	0.604		$	0.744		$	0.661		$	0.692		$	0.629			4.1	%

Fixed Portion of Variable Contract Account Values	$	3.699		$	3.899		$	3.990		$	3.999		$	3.896			5.3	%

Variable Annuities, Including Fixed Portion of
Variable Contracts
Deposits	$	1.586		$	1.726		$	1.829		$	2.060		$	1.865			17.6	%
Withdrawals and deaths		(1.148	)		(1.075	)		(1.082	)		(1.222	)		(1.313	)		-14.4	%
Net flows	$	0.438		$	0.651		$	0.747		$	0.838		$	0.552			26.0	%

Variable Contract Account Values	$	43.000		$	49.422		$	56.419		$	59.367		$	61.711			43.5	%

Average Daily Variable Annuity Separate Account
Values	$	39.035		$	43.828		$	49.135		$	54.013		$	55.809			43.0	%

3/31/2010																PAGE 17
Retirement Solutions - Annuities
Interest Rate Spread Information, GLB Expense Assessments,
GLB Attributed Fee and GLB Account Values by Type
Unaudited (billions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
																(Basis Point)
Interest Rate Spread (1)																Change
Fixed maturity securities, mortgage loans on real estate
and other, net of investment expenses (2)		5.28	%		5.44	%		5.68	%		5.59	%		5.63	%		35
Commercial mortgage loan prepayment and bond
make whole premiums		0.00	%		0.01	%		0.02	%		0.08	%		0.02	%		2
Alternative investments		-0.01	%		0.00	%		0.01	%		0.00	%		0.00	%		1
Net investment income yield on reserves		5.27	%		5.45	%		5.71	%		5.67	%		5.65	%		38
Interest rate credited to contract holders		3.85	%		3.81	%		3.80	%		3.65	%		3.52	%		(33	)
Interest rate spread		1.42	%		1.64	%		1.91	%		2.02	%		2.13	%		71

Variable Annuity Expense Assessments
(in millions) (3)	$	213.8		$	234.6		$	265.7		$	287.4		$	300.8			40.7	%

GLB Expense Assessments (in millions) (4)	$	47.9		$	50.6		$	54.7		$	58.9		$	63.6			32.8	%

Components of Attributed Fees on GLB (in millions)
Attributed fee included in operating revenues and
income (loss) from operations (5)	$	16.2		$	16.9		$	17.5		$	18.6		$	22.8			40.7	%
Attributed fee excluded from operating revenues
and income (loss) from operations (6)		25.5			30.6			34.3			37.9			28.9			13.3	%
Total Attributed Fees on GLB	$	41.7		$	47.5		$	51.8		$	56.5		$	51.7			24.0	%

GLB Account Values by Type
Guaranteed withdrawal benefits (7)	$	14.910		$	17.973		$	21.462		$	23.500		$	25.179			68.9	%
Guaranteed income benefits (8)		6.623			7.708			8.835			9.333			9.851			48.7	%
Total GLB Account Values	$	21.533		$	25.681		$	30.297		$	32.833		$	35.030			62.7	%

(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 imme diate 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, June 2009, September 2009, and December 2009 reduced our yields by approximately 40 bps, 33 bps, 3 bps and 5 bps, respectively. There was no impact for the three months ended March 2010.
(3)		Comprised of the variable annuity expense assessments included in the expense assessments line item on page 13 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 13 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 (2) 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 (5) on page 6 for further discussion.
(7)		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.
(8)		For our guaranteed income benefits, we offer other product riders allowing variable annuity contract holders access and control during the income distribution phase of their contract. This added flexibility allows the contract holder to access the account value for transfers, additional withdrawals and other service features, such as portfolio rebalancing.

3/31/2010																PAGE 18
Retirement Solutions - Defined Contribution
Income Statements, Operational Data and DAC, VOBA and DSI Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Operating Revenues
Surrender charges	$	1.0		$	1.3		$	1.3		$	0.9		$	1.1			10.0	%
Expense assessments		39.6			43.4			46.5			48.8			49.1			24.0	%
Net investment income		175.5			175.6			189.8			190.6			186.2			6.1	%
Operating realized gain (1)		0.1			0.1			0.1			0.1			0.1			0.0	%
Other revenues and fees		2.3			3.1			2.9			3.3			4.0			73.9	%
Total Operating Revenues		218.5			223.5			240.6			243.7			240.5			10.1	%

Operating Expenses
Interest credited		111.5			112.0			110.9			111.1			110.4			-1.0	%
Benefits		(1.8	)		(0.7	)		(0.3	)		(0.2	)		2.0			211.1	%
Underwriting, acquisition, insurance and other expenses		72.4			73.9			70.6			83.4			77.9			7.6	%
Total Operating Expenses		182.1			185.2			181.2			194.3			190.3			4.5	%
Income from operations before federal income tax expense		36.4			38.3			59.4			49.4			50.2			37.9	%
Federal income tax expense		6.6			10.6			16.8			16.1			14.3			116.7	%
Income from Operations	$	29.8		$	27.7		$	42.6		$	33.3		$	35.9			20.5	%

Effective Tax Rate		18.1	%		27.7	%		28.3	%		32.6	%		28.5	%

Average Equity	$	1,009.7		$	1,050.0		$	1,025.2		$	1,040.8		$	1,058.1
Return on Average Equity		11.8	%		10.6	%		16.6	%		12.8	%		13.6	%

Income from Operations - Basis Points on
Average Account Values - Annualized		42			37			52			38			40			(2	)

Operating Realized Gain (1)
GLB (2)	$	0.1		$	0.1		$	0.1		$	0.1		$	0.1			0.0	%
Total Operating Realized Gain	$	0.1		$	0.1		$	0.1		$	0.1		$	0.1			0.0	%

Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	14.0		$	15.5		$	16.4		$	18.1		$	16.3			16.4	%
General and administrative expenses		53.6			53.7			53.3			59.2			52.9			-1.3	%
Taxes, licenses and fees		3.6			3.0			2.7			2.9			3.8			5.6	%
Total commissions and expenses incurred		71.2			72.2			72.4			80.2			73.0			2.5	%
Less: commissions and expenses capitalized		(18.3	)		(17.0	)		(15.4	)		(17.9	)		(15.9	)		13.1	%
Amortization of DAC and VOBA, net of interest		19.5			18.7			13.6			21.1			20.8			6.7	%
Total Underwriting, Acquisition, Insurance
and Other Expenses	$	72.4		$	73.9		$	70.6		$	83.4		$	77.9			7.6	%

General and Administrative Expenses - Basis Points
on Average Account Values - Annualized (3)		76			71			65			68			59			(17	)

DAC and VOBA
Balance as of beginning-of-period	$	883.3		$	918.2		$	762.7		$	550.4		$	537.7
Deferrals		18.3			17.0			15.4			17.9			15.9
Amortization, net of interest:
Unlocking		(2.2	)		0.1			7.8			0.1			(1.4	)
Amortization, net of interest, excluding unlocking		(17.3	)		(18.8	)		(21.4	)		(21.2	)		(19.4	)
Deferrals, net of amortization included in operating
underwriting, acquisition, insurance and other expenses		(1.2	)		(1.7	)		1.8			(3.2	)		(4.9	)
Amortization, net of interest, associated with benefit
ratio unlocking		1.6			(2.0	)		(1.1	)		(0.2	)		(0.4	)
Adjustment related to realized losses		2.5			5.6			2.3			0.8			0.4
Adjustment related to unrealized (gains) losses		32.0			(157.4	)		(215.3	)		(10.1	)		(70.7	)
Balance as of End-of-Period	$	918.2		$	762.7		$	550.4		$	537.7		$	462.1

DSI
Balance as of beginning-of-period	$	2.0		$	2.2		$	2.5		$	2.6		$	2.7
Deferrals		0.3			0.4			0.2			0.1			0.1
Amortization, net of interest:
Unlocking		-			-			0.1			-			-
Amortization, net of interest, excluding unlocking		(0.1	)		(0.1	)		(0.2	)		(0.1	)		(0.1	)
Deferrals, net of amortization included in operating
interest credited		0.2			0.3			0.1			-			-
Adjustment related to realized losses		-			-			-			0.1			-
Adjustment related to unrealized gains		-			-			-			-			(0.2	)
Balance as of End-of-Period	$	2.2		$	2.5		$	2.6		$	2.7		$	2.5

(1)	Included in income (loss) from operations.
(2)	See note (2) on page 6 for details.
(3)	Includes distribution costs.

3/31/2010																PAGE 19
Retirement Solutions - Defined Contribution
Account Value Roll Forwards and Information
Unaudited (in billions)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Fixed Annuities
Balance as of beginning-of-period	$	11.638		$	11.924		$	12.070		$	12.158		$	12.246			5.2	%
Gross deposits		0.409			0.328			0.306			0.299			0.316			-22.7	%
Withdrawals and deaths		(0.383	)		(0.326	)		(0.327	)		(0.368	)		(0.341	)		11.0	%
Net flows		0.026			0.002			(0.021	)		(0.069	)		(0.025	)	NM
Transfers from variable annuities		0.150			0.037			(0.003	)		0.044			0.090			-40.0	%
Interest credited		0.110			0.107			0.112			0.113			0.109			-0.9	%
Balance as of End-of-Period (1)	$	11.924		$	12.070		$	12.158		$	12.246		$	12.420			4.2	%

Variable Annuities
Balance as of beginning-of-period	$	10.588		$	9.721		$	11.102		$	12.620		$	12.953			22.3	%
Gross deposits		0.418			0.368			0.387			0.413			0.441			5.5	%
Withdrawals and deaths		(0.412	)		(0.416	)		(0.471	)		(0.589	)		(0.637	)		-54.6	%
Net flows		0.006			(0.048	)		(0.084	)		(0.176	)		(0.196	)	NM
Transfers to fixed annuities		(0.166	)		(0.019	)		0.021			(0.012	)		(0.022	)		86.7	%
Investment increase and change in market value		(0.707	)		1.448			1.581			0.521			0.515			172.8	%
Balance as of End-of-Period (2)	$	9.721		$	11.102		$	12.620		$	12.953		$	13.250			36.3	%

Total Annuities
Balance as of beginning-of-period	$	22.226		$	21.645		$	23.172		$	24.778		$	25.199			13.4	%
Gross deposits		0.827			0.696			0.693			0.712			0.757			-8.5	%
Withdrawals and deaths		(0.795	)		(0.742	)		(0.798	)		(0.957	)		(0.978	)		-23.0	%
Net flows		0.032			(0.046	)		(0.105	)		(0.245	)		(0.221	)	NM
Transfers between fixed and variable accounts		(0.016	)		0.018			0.018			0.032			0.068		NM
Interest credited and change in market value		(0.597	)		1.555			1.693			0.634			0.624			204.5	%
Balance as of End-of-Period	$	21.645		$	23.172		$	24.778		$	25.199		$	25.670			18.6	%

Alliance and Smart Future Mutual Funds
Balance as of beginning-of-period	$	6.652		$	6.848		$	8.155		$	9.544		$	10.103			51.9	%
Plan/participant rollovers		0.338			0.071			0.057			0.086			0.103			-69.5	%
Additional contributions		0.396			0.363			0.353			0.360			0.447			12.9	%
Gross deposits		0.734			0.434			0.410			0.446			0.550			-25.1	%
Withdrawals and deaths		(0.109	)		(0.132	)		(0.161	)		(0.263	)		(0.220	)	NM
Net flows		0.625			0.302			0.249			0.183			0.330			-47.2	%
Transfers		-			(0.008	)		(0.003	)		(0.032	)		(0.063	)	NM
Other (3)		-			-			-			-			0.186		NM
Interest credited and change in market value		(0.429	)		1.013			1.143			0.408			0.473			210.3	%
Balance as of End-of-Period (4)	$	6.848		$	8.155		$	9.544		$	10.103		$	11.029			61.1	%

Total Annuities and Mutual Funds
Balance as of beginning-of-period	$	28.878		$	28.493		$	31.327		$	34.322		$	35.302			22.2	%
Gross deposits		1.561			1.130			1.103			1.158			1.307			-16.3	%
Withdrawals and deaths		(0.904	)		(0.874	)		(0.959	)		(1.220	)		(1.198	)		-32.5	%
Net flows		0.657			0.256			0.144			(0.062	)		0.109			-83.4	%
Transfers		(0.016	)		0.010			0.015			-			0.005			131.3	%
Other (3)		-			-			-			-			0.186		NM
Interest credited and change in market value		(1.026	)		2.568			2.836			1.042			1.097			206.9	%
Balance as of End-of-Period	$	28.493		$	31.327		$	34.322		$	35.302		$	36.699			28.8	%

Variable Annuities Under Agreement - Included Above	$	0.007		$	0.008		$	0.009		$	0.009		$	0.009			28.6	%

Incremental Deposits: (5)
Fixed annuities	$	0.407		$	0.327		$	0.305		$	0.298		$	0.315			-22.6	%
Variable annuities		0.418			0.367			0.387			0.413			0.440			5.3	%
Total annuities incremental deposits		0.825			0.694			0.692			0.711			0.755			-8.5	%
Total Alliance mutual funds incremental deposits		0.734			0.434			0.410			0.446			0.550			-25.1	%
Total Incremental Deposits	$	1.559		$	1.128		$	1.102		$	1.157		$	1.305			-16.3	%

(1)	Includes fixed annuity products offered under our mutual fund products and the fixed portion of variable annuities.
(2)	Excludes the fixed portion of variable annuities.
(3)	Represents LINCOLN ALLIANCE® program assets held by a third-party trustee that were not previously included in the account value roll forward. Effective January 1, 2010, all such LINCOLN ALLIANCE® program activity was included in the account value roll forward.
(4)	Includes mutual fund account values and other third party trustee-held assets as mentioned in footnote three. These items are not included in the separate accounts reported on our Consolidated Balance Sheets, as we do not have any ownership interest in them.
(5)	Represents gross deposits reduced by transfers from other Lincoln products.

3/31/2010																PAGE 20
Retirement Solutions - Defined Contribution
Account Value Roll Forwards by Product
Unaudited (in billions)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Total Micro - Small Segment
Balance as of beginning-of-period	$	4.888		$	4.710		$	5.234		$	5.785		$	5.863			19.9	%
Gross deposits		0.306			0.256			0.290			0.305			0.342			11.8	%
Withdrawals and deaths		(0.266	)		(0.268	)		(0.319	)		(0.420	)		(0.422	)		-58.6	%
Net flows		0.040			(0.012	)		(0.029	)		(0.115	)		(0.080	)	NM
Transfers between fixed and variable accounts		(0.004	)		-			-			0.002			(0.001	)		75.0	%
Investment increase and change in market value		(0.214	)		0.536			0.580			0.191			0.184			186.0	%
Balance as of End-of-Period	$	4.710		$	5.234		$	5.785		$	5.863		$	5.966			26.7	%

Total Mid - Large Segment
Balance as of beginning-of-period	$	9.540		$	9.920		$	11.425		$	12.972		$	13.653			43.1	%
Gross deposits		1.026			0.661			0.617			0.650			0.769			-25.0	%
Withdrawals and deaths		(0.233	)		(0.211	)		(0.259	)		(0.407	)		(0.350	)		-50.2	%
Net flows		0.793			0.450			0.358			0.243			0.419			-47.2	%
Transfers between fixed and variable accounts		(0.013	)		0.010			0.016			(0.001	)		0.006			146.2	%
Other (1)		-			-			-			-			0.186		NM
Investment increase and change in market value		(0.400	)		1.045			1.173			0.439			0.503			225.8	%
Balance as of End-of-Period	$	9.920		$	11.425		$	12.972		$	13.653		$	14.767			48.9	%

Total Multi-Fund® and Other Variable Annuities
Balance as of beginning-of-period	$	14.450		$	13.863		$	14.668		$	15.565		$	15.786			9.2	%
Gross deposits		0.229			0.213			0.196			0.203			0.196			-14.4	%
Withdrawals and deaths		(0.405	)		(0.395	)		(0.381	)		(0.393	)		(0.426	)		-5.2	%
Net flows		(0.176	)		(0.182	)		(0.185	)		(0.190	)		(0.230	)		-30.7	%
Transfers between fixed and variable accounts		0.001			-			(0.001	)		(0.001	)		-			-100.0	%
Investment increase and change in market value		(0.412	)		0.987			1.083			0.412			0.410			199.5	%
Balance as of End-of-Period	$	13.863		$	14.668		$	15.565		$	15.786		$	15.966			15.2	%

Total Annuities and Mutual Funds
Balance as of beginning-of-period	$	28.878		$	28.493		$	31.327		$	34.322		$	35.302			22.2	%
Gross deposits		1.561			1.130			1.103			1.158			1.307			-16.3	%
Withdrawals and deaths		(0.904	)		(0.874	)		(0.959	)		(1.220	)		(1.198	)		-32.5	%
Net flows		0.657			0.256			0.144			(0.062	)		0.109			-83.4	%
Transfers between fixed and variable accounts		(0.016	)		0.010			0.015			-			0.005			131.3	%
Other (1)		-			-			-			-			0.186		NM
Investment increase and change in market value		(1.026	)		2.568			2.836			1.042			1.097			206.9	%
Balance as of End-of-Period (2)	$	28.493		$	31.327		$	34.322		$	35.302		$	36.699			28.8	%

(1)

Represents LINCOLN ALLIANCE® program assets held by a third-party trustee that were not previously included in the account value roll forward. Effective January 1, 2010, all such LINCOLN ALLIANCE® program activity was included in the account value roll forward.

(2)

Includes mutual fund account values and other trustee-held assets as mentioned in footnote one. These items are not included in the separate accounts reported on our Consolidated Balance Sheets, as we do not have any ownership interest in them.

3/31/2010																PAGE 21
Retirement Solutions - Defined Contribution
Account Value and Interest Rate Spread Information
Unaudited (in billions)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Fixed Annuities, Excluding Fixed Portion of Variable
Contracts
Deposits	$	0.316		$	0.244		$	0.227		$	0.224		$	0.236			-25.3	%
Withdrawals and deaths		(0.185	)		(0.132	)		(0.149	)		(0.201	)		(0.174	)		5.9	%
Net flows	$	0.131		$	0.112		$	0.078		$	0.023		$	0.062			-52.7	%

Fixed Contract Account Values	$	5.773		$	5.879		$	6.030		$	6.139		$	6.324			9.5	%

Fixed Portion of Variable Contracts
Deposits	$	0.093		$	0.084		$	0.079		$	0.075		$	0.080			-14.0	%
Withdrawals and deaths		(0.198	)		(0.194	)		(0.178	)		(0.167	)		(0.167	)		15.7	%
Net flows	$	(0.105	)	$	(0.110	)	$	(0.099	)	$	(0.092	)	$	(0.087	)		17.1	%

Fixed Portion of Variable Contract Account Values	$	6.150		$	6.191		$	6.128		$	6.107		$	6.096			-0.9	%

Variable Annuities, Including Fixed Portion of
Variable Contracts
Deposits	$	0.511		$	0.452		$	0.466		$	0.488		$	0.521			2.0	%
Withdrawals and deaths		(0.610	)		(0.610	)		(0.649	)		(0.756	)		(0.804	)		-31.8	%
Net flows	$	(0.099	)	$	(0.158	)	$	(0.183	)	$	(0.268	)	$	(0.283	)	NM

Variable Contract Account Values	$	15.872		$	17.293		$	18.748		$	19.060		$	19.346			21.9	%

Average Daily Variable Annuity Separate Account
Values	$	9.846		$	10.768		$	11.881		$	12.726		$	12.909			31.1	%

																(Basis Point)
Interest Rate Spread (1)																Change
Fixed maturity securities, mortgage loans on real estate
and other, net of investment expenses (2)		5.70	%		5.79	%		5.85	%		5.72	%		5.71	%		1
Commercial mortgage loan prepayment and bond make
whole premiums		0.00	%		0.01	%		0.08	%		0.08	%		0.01	%		1
Alternative investments		-0.01	%		-0.02	%		0.03	%		0.02	%		0.02	%		3
Net investment income yield on reserves		5.69	%		5.78	%		5.96	%		5.82	%		5.74	%		5
Interest rate credited to contract holders		3.78	%		3.73	%		3.66	%		3.63	%		3.58	%		(20	)
Interest rate spread		1.91	%		2.05	%		2.30	%		2.19	%		2.16	%		25

(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 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 fix ed portion of variable annuities.
(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, June 2009, September 2009, and December 2009 reduced our yields by approximately 16 bps, 18 bps, 11 bps and 6 bps, respectively. There was no impact for the three months ended March 2010.

3/31/2010																PAGE 22
Insurance Solutions - Life Insurance
Income Statements, Operational Data and DAC, VOBA and DFEL Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Operating Revenues
Insurance premiums	$	90.5		$	93.3		$	93.5		$	115.2		$	112.3			24.1	%
Surrender charges		21.6			26.7			32.8			30.5			30.8			42.6	%
Mortality assessments		344.1			320.0			317.1			317.6			317.9			-7.6	%
Expense assessments		116.5			103.0			144.1			127.4			128.7			10.5	%
Net investment income		497.7			453.3			495.3			528.2			530.1			6.5	%
Amortization of deferred loss on business sold
through reinsurance		-			(0.7	)		(0.7	)		1.4			-		NM
Other revenues and fees		5.8			6.6			7.0			5.6			8.0			37.9	%
Total Operating Revenues		1,076.2			1,002.2			1,089.1			1,125.9			1,127.8			4.8	%

Operating Expenses
Interest credited		302.8			290.8			292.9			297.7			296.9			-1.9	%
Benefits		355.7			323.0			320.7			374.6			398.9			12.1	%
Underwriting, acquisition, insurance and other expenses		224.0			191.7			283.9			221.5			230.0			2.7	%
Total Operating Expenses		882.5			805.5			897.5			893.8			925.8			4.9	%
Income from operations before federal income tax expense		193.7			196.7			191.6			232.1			202.0			4.3	%
Federal income tax expense		51.5			63.8			55.1			74.5			65.3			26.8	%
Income from Operations	$	142.2		$	132.9		$	136.5		$	157.6		$	136.7			-3.9	%

Effective Tax Rate		26.6	%		32.4	%		28.8	%		32.1	%		32.3	%

Average Equity	$	8,235.3		$	7,980.9		$	8,053.3		$	8,348.8		$	8,254.0
Return on Average Equity		6.9	%		6.7	%		6.8	%		7.6	%		6.6	%

Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	176.9		$	141.9		$	159.0		$	197.8		$	167.1			-5.5	%
General and administrative expenses		110.2			109.5			112.5			122.4			106.9			-3.0	%
Taxes, licenses and fees		33.3			22.9			30.7			28.5			32.2			-3.3	%
Amortization of sales force intangibles		1.0			1.0			1.0			1.0			1.0			0.0	%
Total commissions and expenses incurred		321.4			275.3			303.2			349.7			307.2			-4.4	%
Less: commissions and expenses capitalized		(224.5	)		(197.5	)		(213.4	)		(264.2	)		(223.0	)		0.7	%
Amortization of DAC and VOBA, net of interest		127.1			113.9			194.1			136.0			145.8			14.7	%
Total Underwriting, Acquisition, Insurance
and Other Expenses	$	224.0		$	191.7		$	283.9		$	221.5		$	230.0			2.7	%

General and Administrative Expenses - Basis Points
on Average Account Values - Annualized		139			144			145			155			134			(5	)

DAC and VOBA
Balance as of beginning-of-period	$	7,399.4		$	7,280.9		$	6,846.9		$	6,189.4		$	6,427.9
Business sold through reinsurance		(292.9	)		-			-			-			-
Deferrals		224.5			197.5			213.4			264.2			223.0
Amortization, net of interest:
Unlocking		(12.6	)		(5.5	)		(52.8	)		(3.7	)		(14.7	)
Other amortization, net of interest, excluding unlocking		(114.5	)		(108.4	)		(141.3	)		(132.3	)		(131.1	)
Deferrals, net of amortization included in operating
underwriting, acquisition, insurance and other expenses		97.4			83.6			19.3			128.2			77.2
Adjustment related to realized losses		20.0			41.1			1.7			38.3			2.5
Adjustment related to unrealized (gains) losses		57.0			(558.7	)		(678.5	)		72.0			(222.6	)
Balance as of End-of-Period	$	7,280.9		$	6,846.9		$	6,189.4		$	6,427.9		$	6,285.0

DFEL
Balance as of beginning-of-period	$	888.7		$	941.4		$	1,014.0		$	1,057.8		$	1,155.2
Business sold through reinsurance		(11.0	)		-			-			-			-
Deferrals		96.9			100.3			108.2			133.8			118.3
Amortization, net of interest:
Unlocking		(2.9	)		(0.7	)		(27.9	)		(3.0	)		(8.1	)
Other amortization, net of interest, excluding unlocking		(32.1	)		(29.6	)		(37.7	)		(36.0	)		(38.5	)
Deferrals, net of amortization included in operating
expense assessments		61.9			70.0			42.6			94.8			71.7
Adjustment related to realized losses		0.9			2.4			0.3			3.1			0.1
Adjustment related to unrealized gains (losses)		0.9			0.2			0.9			(0.5	)		(73.0	)
Balance as of End-of-Period	$	941.4		$	1,014.0		$	1,057.8		$	1,155.2		$	1,154.0

3/31/2010																PAGE 23
Insurance Solutions - Life Insurance
Operational Data and Account Value Roll Forwards
Unaudited (billions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Sales by Product (in millions)
UL
Excluding MoneyGuard®	$	102.7		$	84.9		$	91.0		$	117.7		$	90.1			-12.3	%
MoneyGuard®		11.0			14.3			18.4			23.3			18.5			68.2	%
Total		113.7			99.2			109.4			141.0			108.6			-4.5	%
VUL		9.0			7.1			6.7			13.3			7.7			-14.4	%
COLI and BOLI (1)		11.7			4.7			14.4			20.7			6.8			-41.9	%
Term/Whole Life		10.8			12.7			15.7			19.8			19.5			80.6	%
Total	$	145.2		$	123.7		$	146.2		$	194.8		$	142.6			-1.8	%

First Year Paid Premiums (in millions)
UL
Excluding MoneyGuard®	$	230.5		$	216.2		$	238.3		$	329.5		$	262.5			13.9	%
MoneyGuard®		73.1			94.9			122.1			154.4			122.4			67.4	%
Total		303.6			311.1			360.4			483.9			384.9			26.8	%
VUL		25.2			20.1			10.2			38.6			17.1			-32.1	%
COLI and BOLI (1)		52.0			16.1			33.8			46.9			11.9			-77.1	%
Term/Whole Life		18.8			23.0			28.2			37.3			19.1			1.6	%
Total	$	399.6		$	370.3		$	432.6		$	606.7		$	433.0			8.4	%

Life Insurance In Force
UL and other	$	288.826		$	288.632		$	289.124		$	291.879		$	292.204			1.2	%
Term insurance		236.408			238.901			242.889			248.726			254.115			7.5	%
Total	$	525.234		$	527.533		$	532.013		$	540.605		$	546.319			4.0	%

Interest-Sensitive Life
Balance as of beginning-of-period	$	27.502		$	27.617		$	27.709		$	27.825		$	28.192			2.5	%
Deposits		0.815			0.840			0.899			1.067			0.910			11.7	%
Withdrawals and deaths		(0.358	)		(0.391	)		(0.417	)		(0.296	)		(0.367	)		-2.5	%
Net flows		0.457			0.449			0.482			0.771			0.543			18.8	%
Contract holder assessments		(0.631	)		(0.645	)		(0.657	)		(0.698	)		(0.673	)		-6.7	%
Interest credited		0.289			0.288			0.291			0.294			0.293			1.4	%
Balance as of End-of-Period (Gross) (2)		27.617			27.709			27.825			28.192			28.355			2.7	%
Reinsurance ceded		(0.938	)		(0.930	)		(0.923	)		(0.917	)		(0.911	)		2.9	%
Balance as of End-of-Period (Net of Ceded) (2)	$	26.679		$	26.779		$	26.902		$	27.275		$	27.444			2.9	%

VUL
Balance as of beginning-of-period	$	4.251		$	3.992		$	4.562		$	5.176		$	5.287			24.4	%
Deposits		0.243			0.180			0.174			0.233			0.167			-31.3	%
Withdrawals and deaths		(0.143	)		(0.089	)		(0.095	)		(0.243	)		(0.108	)		24.5	%
Net flows		0.100			0.091			0.079			(0.010	)		0.059			-41.0	%
Contract holder assessments		(0.094	)		(0.088	)		(0.091	)		(0.092	)		(0.090	)		4.3	%
Investment income and change in market value		(0.265	)		0.567			0.626			0.213			0.211			179.6	%
Balance as of End-of-Period (Gross)		3.992			4.562			5.176			5.287			5.467			36.9	%
Reinsurance ceded		(0.640	)		(0.719	)		(0.807	)		(0.820	)		(0.837	)		-30.8	%
Balance as of End-of-Period (Net of Ceded)	$	3.352		$	3.843		$	4.369		$	4.467		$	4.630			38.1	%

Total Life Insurance
Balance as of beginning-of-period	$	31.753		$	31.609		$	32.271		$	33.001		$	33.479			5.4	%
Deposits		1.058			1.020			1.073			1.300			1.077			1.8	%
Withdrawals and deaths		(0.501	)		(0.480	)		(0.512	)		(0.539	)		(0.475	)		5.2	%
Net flows		0.557			0.540			0.561			0.761			0.602			8.1	%
Contract holder assessments		(0.725	)		(0.733	)		(0.748	)		(0.790	)		(0.763	)		-5.2	%
Investment income and change in market value		0.024			0.855			0.917			0.507			0.504		NM
Balance as of End-of-Period (Gross)		31.609			32.271			33.001			33.479			33.822			7.0	%
Reinsurance ceded		(1.578	)		(1.649	)		(1.730	)		(1.737	)		(1.748	)		-10.8	%
Balance as of End-of-Period (Net of Ceded)	$	30.031		$	30.622		$	31.271		$	31.742		$	32.074			6.8	%

																(Basis Point)
Interest-Sensitive Products Interest Rate Spreads (3)																Change
Fixed maturity securities, mortgage loans on real
estate and other, net of investment expenses (4)		5.83	%		6.03	%		5.97	%		5.88	%		5.82	%		(1	)
Commercial mortgage loan prepayment and bond make whole premiums		0.00	%		0.06	%		0.04	%		0.07	%		0.05	%		5
Alternative investments		-0.06	%		-0.71	%		-0.29	%		0.05	%		0.18	%		24
Net investment income yield on reserves		5.77	%		5.38	%		5.72	%		6.00	%		6.05	%		28
Interest rate credited to contract holders		4.25	%		4.20	%		4.22	%		4.25	%		4.18	%		(7	)
Interest rate spread		1.52	%		1.18	%		1.50	%		1.75	%		1.87	%		35

Traditional Products Interest Rate Spreads (5)
Fixed maturity securities, mortgage loans on real
estate and other, net of investment expenses		6.00	%		5.96	%		5.98	%		6.01	%		6.23	%		23
Commercial mortgage loan prepayment and bond make whole premiums		0.01	%		0.01	%		0.01	%		0.00	%		0.00	%		(1	)
Alternative investments		-0.01	%		-0.01	%		0.02	%		0.01	%		0.02	%		3
Net investment income yield on reserves		6.00	%		5.96	%		6.01	%		6.02	%		6.25	%		25

(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, September 2009, December 2009 and March 2010 reduced our yields by approximately 11 bps, 4 bps, 13 bps and 11 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 March 31, 2010, interest-sensitive products represented approximately 87% of total interest-sensitive and traditional earning assets.

3/31/2010																PAGE 24
Insurance Solutions - Group Protection
Income Statements and Operational Data
Unaudited (millions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Operating Revenues
Insurance premiums	$	389.8		$	413.3		$	379.5		$	396.4		$	409.9			5.2	%
Mortality assessments		-			-			0.1			-			-		NM
Net investment income		30.1			28.1			33.5			35.7			33.6			11.6	%
Other revenues and fees		1.5			1.5			1.5			1.5			1.7			13.3	%
Total Operating Revenues		421.4			442.9			414.6			433.6			445.2			5.6	%

Operating Expenses
Interest credited		0.6			0.5			0.5			0.7			0.5			-16.7	%
Benefits		282.0			292.7			261.6			281.1			310.7			10.2	%
Underwriting, acquisition, insurance and other expenses		99.3			98.0			99.3			105.4			101.1			1.8	%
Total Operating Expenses		381.9			391.2			361.4			387.2			412.3			8.0	%
Income from operations before federal income tax expense		39.5			51.7			53.2			46.4			33.0			-16.5	%
Federal income tax expense		13.8			18.1			18.7			16.3			11.6			-15.9	%
Income from Operations	$	25.7		$	33.6		$	34.5		$	30.1		$	21.4			-16.7	%

Effective Tax Rate		34.9	%		35.0	%		35.2	%		35.1	%		35.2	%

Average Equity	$	1,014.7		$	1,047.5		$	1,056.8		$	1,061.7		$	1,075.0
Return on Average Equity		10.1	%		12.8	%		13.1	%		11.3	%		8.0	%

Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	44.2		$	43.6		$	43.3		$	44.5		$	46.9			6.1	%
General and administrative expenses		47.4			48.2			48.1			60.0			46.9			-1.1	%
Taxes, licenses and fees		10.5			7.3			9.3			9.1			10.9			3.8	%
Total commissions and expenses incurred		102.1			99.1			100.7			113.6			104.7			2.5	%
Less: commissions and expenses capitalized		(13.2	)		(12.5	)		(12.8	)		(20.8	)		(14.6	)		-10.6	%
Amortization of DAC and VOBA, net of interest		10.4			11.4			11.4			12.6			11.0			5.8	%
Total Underwriting, Acquisition, Insurance
and Other Expenses	$	99.3		$	98.0		$	99.3		$	105.4		$	101.1			1.8	%

General and Administrative Expenses as a
Percentage of Premiums		12.2	%		11.7	%		12.7	%		15.1	%		11.4	%

DAC and VOBA
Balance as of beginning-of-period	$	145.9		$	148.7		$	149.8		$	151.2		$	159.5
Deferrals		13.2			12.5			12.8			20.9			14.6
Amortization, net of interest		(10.4	)		(11.4	)		(11.4	)		(12.6	)		(11.1	)
Deferrals, net of amortization included in operating
underwriting, acquisition, insurance and other expenses		2.8			1.1			1.4			8.3			3.5
Balance as of End-of-Period	$	148.7		$	149.8		$	151.2		$	159.5		$	163.0

Annualized Sales by Product Line
Life	$	22.7		$	21.1		$	31.4		$	67.2		$	24.0			5.7	%
Disability		23.5			29.3			38.5			78.3			28.8			22.6	%
Dental		8.1			9.1			9.9			21.3			10.3			27.2	%
Total	$	54.3		$	59.5		$	79.8		$	166.8		$	63.1			16.2	%

Insurance Premiums by Product Line
Life	$	142.4		$	147.4		$	142.2		$	152.1		$	157.2			10.4	%
Disability		174.0			171.1			173.0			174.1			178.3			2.5	%
Dental		37.5			37.2			36.2			37.7			39.5			5.3	%
Other		35.9			57.6			28.1			32.5			34.9			-2.8	%
Total	$	389.8		$	413.3		$	379.5		$	396.4		$	409.9			5.2	%

Income from Operations by Product Line
Life	$	0.6		$	12.5		$	16.0		$	13.3		$	3.4		NM
Disability		25.3			20.7			17.3			15.6			18.6			-26.5	%
Dental		(1.1	)		(1.5	)		(0.6	)		1.1			(1.8	)		-63.6	%
Other		0.9			1.9			1.8			0.1			1.2			33.3	%
Total	$	25.7		$	33.6		$	34.5		$	30.1		$	21.4			-16.7	%

Loss Ratios by Product Line
Life		81.6	%		70.3	%		66.6	%		69.6	%		82.4	%
Disability		59.1	%		62.4	%		66.8	%		67.5	%		65.5	%
Dental		84.2	%		86.1	%		79.7	%		76.6	%		86.1	%
Combined Loss Ratios		70.8	%		68.2	%		68.1	%		69.3	%		74.8	%

3/31/2010																PAGE 25
Other Operations
Unaudited (in millions)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Operating Revenues
Insurance premiums	$	0.8		$	2.7		$	0.1		$	0.4		$	(0.3	)	NM
Net investment income		69.7			69.8			81.1			86.5			85.4			22.5	%
Amortization of deferred gain on business sold
through reinsurance (1)		18.4			18.4			18.3			18.3			18.2			-1.1	%
Other revenues and fees		1.7			5.4			2.9			4.5			5.1			200.0	%
Communications revenues		14.8			19.1			17.2			16.7			15.5			4.7	%
Total Operating Revenues		105.4			115.4			119.6			126.4			123.9			17.6	%

Operating Expenses
Interest credited		50.9			31.4			32.9			32.8			33.6			-34.0	%
Benefits		106.6			36.0			36.0			79.0			34.1			-68.0	%
Underwriting, acquisition, insurance and other expenses		35.0			56.8			24.3			27.5			27.8			-20.6	%
Taxes, licenses and fees		1.5			3.1			(0.9	)		(20.2	)		1.5			0.0	%
Interest and debt expenses		64.7			60.9			68.0			68.1			68.1			5.3	%
Communications expenses		12.9			13.5			13.3			12.9			13.8			7.0	%
Total Operating Expenses		271.6			201.7			173.6			200.1			178.9			-34.1	%
Loss from operations before federal income tax benefit		(166.2	)		(86.3	)		(54.0	)		(73.7	)		(55.0	)		66.9	%
Federal income tax benefit		(57.7	)		(34.0	)		(21.4	)		(30.2	)		(18.4	)		68.1	%
Loss From Operations	$	(108.5	)	$	(52.3	)	$	(32.6	)	$	(43.5	)	$	(36.6	)		66.3	%

Run Off Institutional Pensions Account Values -
Balance at End-of-Period	$	1.931		$	1.928		$	1.931		$	1.911		$	1.909			-1.1	%


	Discontinued Operations
	Unaudited (in millions)

		For the Three Months Ended
		March		June			Sept.			Dec.		March			%
		2009		2009			2009			2009		2010			Change
Discontinued Operations Before Disposal
Income from discontinued operations before federal
income tax expense		$	13.2	$	27.0		$	27.3		$	7.2	$	(16.9	)	NM
Federal income tax expense			5.5		10.8			10.3			4.1		(2.6	)	NM
Income (Loss) From Discontinued Operations
Before Disposal			7.7		16.2			17.0			3.1		(14.3	)	NM

Disposal
Gain (loss) on disposal before federal income tax
expense (benefit)			-		(237.0	)		16.7			1.0		64.8		NM
Federal income tax expense (benefit)			-		(67.0	)		(38.3	)		-		22.6		NM
Gain (Loss) on Disposal			-		(170.0	)		55.0			1.0		42.2		NM
Income (Loss) From Discontinued Operations		$	7.7	$	(153.8	)	$	72.0		$	4.1	$	27.9			262.3	%

(1)

Represents the amortization of deferred gain recognized on the business sold through indemnity reinsurance to Swiss Re.

3/31/2010																PAGE 26
Consolidated Deposits, Account Balances and Net Flows
Unaudited (in billions)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Deposits
Retirement Solutions:
Annuities - fixed annuities (1)	$	1.361		$	1.774		$	2.025		$	1.195		$	1.138			-16.4	%
Defined Contribution - fixed annuities		0.409			0.328			0.306			0.299			0.316			-22.7	%
Annuities - variable annuities		0.827			0.851			1.063			1.266			1.138			37.6	%
Defined Contribution - variable products (2)		1.152			0.802			0.797			0.859			0.991			-14.0	%
Insurance Solutions - Life Insurance:
Interest-Sensitive Life		0.815			0.840			0.899			1.067			0.910			11.7	%
VUL		0.243			0.180			0.174			0.233			0.167			-31.3	%
Total Deposits	$	4.807		$	4.775		$	5.264		$	4.919		$	4.660			-3.1	%


	As of
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Account Balances
Retirement Solutions:
Annuities - fixed annuities (1)	$	16.760		$	17.531		$	18.717		$	18.913		$	19.031			13.6	%
Defined Contribution - fixed annuities		11.924			12.070			12.158			12.246			12.420			4.2	%
Annuities - variable annuities		39.301			45.523			52.429			55.368			57.815			47.1	%
Defined Contribution - variable products (2)		16.569			19.257			22.164			23.056			24.279			46.5	%
Insurance Solutions - Life Insurance:
Interest-Sensitive Life		26.679			26.779			26.902			27.275			27.444			2.9	%
VUL		3.352			3.843			4.369			4.467			4.630			38.1	%
Total Account Balances	$	114.585		$	125.003		$	136.739		$	141.325		$	145.619			27.1	%


	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change
Net Flows
Retirement Solutions:
Annuities - fixed annuities (1)	$	0.596		$	1.128		$	1.524		$	0.672		$	0.652			9.4	%
Defined Contribution - fixed annuities		0.026			0.002			(0.021	)		(0.069	)		(0.025	)	NM
Annuities - variable annuities		(0.166	)		(0.093	)		0.086			0.146			(0.077	)		53.6	%
Defined Contribution - variable products (2)		0.631			0.254			0.165			0.007			0.134			-78.8	%
Insurance Solutions - Life Insurance:
Interest-Sensitive Life		0.457			0.449			0.482			0.771			0.543			18.8	%
VUL		0.100			0.091			0.079			(0.010	)		0.059			-41.0	%
Total Net Flows	$	1.644		$	1.831		$	2.315		$	1.517		$	1.286			-21.8	%

(1)

Includes fixed portion of variable annuities.

(2)

Includes amounts attributable to mutual fund net flows. Mutual fund account values are not included in the separate accounts reported on our Consolidated Balance Sheets, as we do not have any ownership interest in them.

3/31/2010																PAGE 27
Consolidated Investment Data
Unaudited (millions of dollars)

	For the Three Months Ended
	March			June			Sept.			Dec.			March			%
	2009			2009			2009			2009			2010			Change

Net Investment Income
Available-for-sale fixed maturity securities	$	824.9		$	854.6		$	904.7		$	903.4		$	905.5			9.8	%
Available-for-sale equity securities		1.7			1.8			1.8			2.2			1.8			5.9	%
Available-for-sale VIEs' fixed maturity securities		-			-			-			-			3.8		NM
Trading securities		39.6			39.0			40.0			40.2			39.4			-0.5	%
Mortgage loans on real estate		119.2			120.0			114.2			118.2			112.8			-5.4	%
Real estate		3.8			3.5			3.6			8.1			6.6			73.7	%
Policy loans		44.3			42.2			41.9			43.2			42.1			-5.0	%
Invested cash		8.3			4.1			1.0			1.6			1.4			-83.1	%
Other investments		(2.2	)		(67.4	)		(6.7	)		36.5			22.4		NM
Investment income		1,039.6			997.8			1,100.5			1,153.4			1,135.8			9.3	%
Investment expense		(26.3	)		(27.2	)		(29.2	)		(31.1	)		(29.7	)		-12.9	%
Net Investment Income	$	1,013.3		$	970.6		$	1,071.3		$	1,122.3		$	1,106.1			9.2	%

Average Invested Assets (Amortized Cost)	$	69,583.2		$	71,331.0		$	73,791.1		$	74,731.7		$	75,458.8

Ratio of Net Investment Income Over Average
Invested Assets		5.82	%		5.44	%		5.81	%		6.01	%		5.86	%

Realized Loss Related to Investments
Available-for-sale fixed maturity securities:
Gross gains	$	53.7		$	32.8		$	23.4		$	51.5		$	49.8			-7.3	%
Gross losses		(241.3	)		(172.1	)		(165.9	)		(129.3	)		(83.6	)		65.4	%
Equity securities:
Gross gains		3.1			0.5			0.5			1.5			0.1			-96.8	%
Gross losses		(2.6	)		(6.0	)		(7.8	)		(10.9	)		(3.5	)		-34.6	%
Gain (loss) on other investments		(2.1	)		(57.9	)		1.6			(72.0	)		(21.6	)	NM
Associated amortization of DAC, VOBA, DSI,
DFEL and changes in other contract holder funds
and funds withheld reinsurance liabilities		55.6			48.4			24.7			32.6			3.8			-93.2	%
Total realized loss on investments, excluding
trading securities		(133.6	)		(154.3	)		(123.5	)		(126.6	)		(55.0	)		58.8	%
Loss on certain derivative instruments		(16.5	)		(4.0	)		(12.1	)		(1.5	)		10.6			164.2	%
Total, pre-tax		(150.1	)		(158.3	)		(135.6	)		(128.1	)		(44.4	)		70.4	%
Income taxes		(52.5	)		(55.4	)		(47.6	)		(44.8	)		(15.6	)		70.3	%
Total, After-Tax	$	(97.6	)	$	(102.9	)	$	(88.0	)	$	(83.3	)	$	(28.8	)		70.5	%

	As of March 31, 2010					As of December 31, 2009
	Amount		% of Total			Amount		% of Total
Available-for-Sale and Trading Securities
Fixed maturity securities (fair value)	$	65,990.7		99.5	%	$	63,320.8		99.6	%
Fixed maturity securities (amortized cost)		64,504.7		99.4	%		63,097.0		99.4	%

Equity securities (fair value)		312.1		0.5	%		280.5		0.4	%
Equity securities (amortized cost)		378.6		0.6	%		383.7		0.6	%

% of Available-for-Sale Fixed Maturity Securities,
Based on Fair Value
Treasuries and AAA				20.1	%				19.3	%
AA or better				28.8	%				27.3	%
BB or less				6.1	%				6.9	%


General Account Investments	As of March 31, 2010					As of December 31, 2009
	Amount		% of Total			Amount		% of Total
Fixed Maturities - Security Sector:
Corporate bonds	$	47,446.2		74.8	%	$	45,860.3		75.4	%
U.S. Government bonds		198.3		0.3	%		194.2		0.3	%
Foreign government bonds		456.1		0.7	%		504.9		0.8	%
Mortgage-backed securities		11,365.4		17.9	%		11,103.3		18.3	%
State and municipal bonds		2,198.1		3.5	%		1,967.6		3.2	%
Preferred stocks - redeemable		1,216.7		1.9	%		1,188.0		2.0	%
VIEs		579.5		0.9	%		-		0.0	%
Total	$	63,460.3		100.0	%	$	60,818.3		100.0	%


	As of
	March		June		Sept.		Dec.		March		%
Composition of Investment Portfolio	2009		2009		2009		2009		2010		Change
Available-for-sale securities, at fair value:
Fixed maturity	$	48,535.5	$	55,049.8	$	60,666.2	$	60,818.3	$	62,880.8		29.6	%
Equity		175.7		236.3		283.0		278.4		310.0		76.4	%
VIEs' fixed maturity		-		-		-		-		579.5	NM
Trading securities		2,245.6		2,316.7		2,547.9		2,504.6		2,532.5		12.8	%
Mortgage loans on real estate and real estate		7,745.1		7,627.5		7,431.0		7,351.6		7,213.1		-6.9	%
Policy loans		2,905.6		2,896.9		2,893.0		2,897.8		2,902.8		-0.1	%
Derivative investments		2,226.1		1,233.8		1,282.0		1,010.1		992.4		-55.4	%
Other investments		1,476.2		1,187.1		1,079.6		1,057.2		1,046.4		-29.1	%
Total	$	65,309.8	$	70,548.1	$	76,182.7	$	75,918.0	$	78,457.5		20.1	%

Lincoln National (LNC) 8-KAccount Value Growth Drives Earnings Increase