Lincoln National (LNC) 8-K Announces Increase in Dividend

Lincoln Financial Group
Table of Contents
Analyst Coverage	1
Notes	2
Consolidated Statements of Income (Loss)	3
Consolidated Balance Sheets	4
Earnings, Shares, Return on Equity and Return to Stockholder Highlights	5
Income (Loss) from Operations, Average Equity and ROE By Segment	6
Sources of Earnings	7
Select Earnings Drivers By Segment	8
Deposits, Net Flows and Account Balances By Segment	9
Sales By Segment	10
Operating Revenues and General and Administrative Expenses By Segment	11
Operating Commissions and Other Expenses	12
Interest Rate Yields and Spreads By Segment	13
Select Investment Data	14
Realized Gain (Loss) and Benefit Ratio Unlocking, After-DAC	15
Select Liquidity and Ratings Agency Data	16
Select Earnings and Operational Data:
Annuities	17
Retirement Plan Services	18
Life Insurance	19
Group Protection	20
Other Operations	21
DAC, VOBA, DSI and DFEL Roll Forwards:
Consolidated	22
Annuities	23
Retirement Plan Services, Life Insurance and Group Protection	24
Account Value Roll Forwards:
Annuities	25
Retirement Plan Services	26
Life Insurance	27
Select Non-GAAP to GAAP Reconciliations	28

	Lincoln Financial Group
	Analyst Coverage
	Firm	Analyst	Phone Number
	Bank of America Merrill Lynch	Seth Weiss	646-855-3783
	Barclays Capital	Jay Gelb	212-526-1561
	Citi Research	Erik Bass	212-816-5257
	Credit Suisse	Tom Gallagher	212-538-2010
	Deutsche Bank	Yaron Kinar	212-250-7927
	FBR Capital Markets	Randy Binner	703-312-1890
	J.P. Morgan Securities	Jimmy Bhullar	212-622-6397
	Janney Capital Markets	Bob Glasspiegel	860-724-1203
	Keefe, Bruyette and Woods	Ryan Krueger	860-722-5930
	Macquarie Capital	Sean Dargan	212-231-0663
	Morgan Stanley	Nigel Dally	212-761-4132
	Raymond James and Associates	Steven Schwartz	312-612-7686
	RBC Capital	Eric Berg	212-618-7593
	Scotia Capital	Joanne Smith	212-225-5071
	Sterne, Agee and Leach, Inc.	John Nadel	212-338-4717
	UBS	Suneet Kamath	212-713-1355
	Wells Fargo Securities	John Hall	212-214-8032
	Investor Inquiries May Be Directed To
	Jim Sjoreen, Senior 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 Supplement will be available immediately after the release of earnings for each quarter through our Investor Relations website:
	www.lfg.com/investor.
Page 1

	Lincoln Financial Group
	Notes
	Computations
	The quarterly financial information for the current year may not sum to the corresponding year-to-date amount as both are rounded to millions.
	The financial ratios reported herein are calculated using whole dollars instead of dollars rounded to millions.
	If the effect of equity classification would result in a more dilutive Earnings Per Share (“EPS”), the numerator used in the calculation of our diluted EPS is adjusted to remove the mark-to-market
	adjustment for deferred units of LNC stock in our deferred compensation plans.  In addition, for any period where a loss from continuing operations is experienced, shares used in the diluted  EPS
	calculation represent basic shares, as using dilutive shares would be anti-dilutive to the calculation.  In these periods, we would also exclude the deferred compensation adjustment.
	Return on equity (“ROE”) measures how efficiently we generate profits from the resources provided by our net assets.  ROE is calculated by dividing annualized net income (loss) (or
	income (loss) from operations) by average equity, excluding accumulated other comprehensive income (loss) (“AOCI”).  Management evaluates consolidated ROE by both including
	and excluding the effect of average goodwill.
	Book value per share, excluding AOCI, is calculated by dividing stockholders’ equity, excluding AOCI, by common shares outstanding assuming the conversion of our 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.
	Pre-tax net margin is calculated by dividing income (loss) from operations before taxes by net revenue, which is defined as total operating revenues less interest credited.
	Definitions
	Holding company available liquidity consists of cash and invested cash, excluding cash held as collateral, and certain short-term investments that can be readily converted into cash, net of
	commercial paper outstanding.
	Sales as reported consist of the following:
	•  MoneyGuard®, our linked-benefit product – 15% of total expected premium deposits;
	• Single premium bank-owned universal life and variable universal life (“BOLI”) – 15% of single premium deposits;
	•  Universal life (“UL”), variable universal life (“VUL”), and corporate-owned UL and VUL (“COLI”) – first year commissionable premiums plus 5% of excess premiums received, including an
	adjustment for internal replacements of approximately 50% of commissionable premiums;
	•  Term – 100% of annualized first year premiums;
	•  Annuities – deposits from new and existing customers; and
	•  Group Protection – annualized first year premiums from new policies.
	Throughout the document, “after-DAC” refers to the associated amortization expense of deferred acquisition costs (“DAC”), value of business acquired (“VOBA”), deferred sales
	inducements (“DSI”) and deferred front-end loads (“DFEL”) and changes in other contract holder funds.
	Sources of Earnings are defined as follows:
	•  Investment spread earnings consist primarily of net investment income, net of interest credited earned on the underlying general account investments supporting our fixed products
	less related expenses.
	•  Mortality/morbidity earnings result from mortality margins, morbidity margins, and certain expense assessments and related fees that are a function of the rates priced into the product
	and level of insurance in force.
	•  Fees on Assets Under Management (“AUM”) earnings results consist primarily of asset-based fees charged based on variable account values less associated benefits and related expenses.
	•  Variable Annuity (“VA”) Riders earnings consist of fees charged to the contract holder related to guaranteed benefit rider features, less the net valuation premium and associated change in
	benefit reserves and related expenses.
Page 2a

	Lincoln Financial Group
	Notes
	Non-GAAP Performance Measures
	Non-GAAP measures do not replace the most directly comparable GAAP measures, and we have included detailed reconciliations herein.
	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)”):
	▪  Sales or disposals;
	▪ Impairments of securities;
	▪  Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities (“gain (loss) on the mark-to-market on certain
	instruments”);
	▪  Changes in the fair value of the derivatives we own to hedge our guaranteed death benefit (“GDB”) riders reflected within variable annuity net derivative results;
	▪  Changes in the fair value of the embedded derivatives of our guaranteed living benefit (“GLB”) riders accounted for at fair value, net of the change in the fair value of the derivatives
	we own to hedge them reflected within variable annuity 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 at fair value (“indexed annuity forward-starting option”);
	•  Changes in reserves resulting from benefit ratio unlocking on our GDB and GLB riders (“benefit ratio unlocking”) reflected within variable annuity net derivative results;
	•  Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;
	•  Gains (losses) on early extinguishment of debt;
	• Losses from the impairment of intangible assets;
	•  Income (loss) from discontinued operations; and
	•  Income (loss) from the initial adoption of new accounting standards.
	Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items:
	• Excluded realized gain (loss);
	•  Revenue adjustments from the initial adoption of new accounting standards;
	•  Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking; and
	•  Amortization of deferred gains arising from reserve changes on business sold through reinsurance.
	We use our prevailing 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.
	Management believes that the non-GAAP performance measures discussed above explain the results of our ongoing businesses in a manner that allows for a better understanding of the
	underlying trends in our current business as the excluded items are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the
	business segments, and, in many instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.  In addition, we believe that our
	definitions of operating revenues and income from operations provide investors with more valuable measures of our performance as they better reveal trends in our business.
	Statistical Supplement is Dated
	The financial data in this document is dated October 29, 2014, and has not been updated since that date.  Lincoln Financial Group does not intend to update this document.
Page 2b

	Lincoln Financial Group
	Consolidated Statements of Income (Loss)
	Unaudited (millions of dollars, except per share data)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Revenues
	Insurance premiums	$	672	$	687	$	739	$	755	$	741	10.3%	$	2,000	$	2,236	11.8%
	Fee income		1,032		1,095		1,098		1,134		1,216	17.8%		2,973		3,448	16.0%
	Net investment income		1,180		1,211		1,208		1,207		1,212	2.7%		3,543		3,627	2.4%
	Realized gain (loss):
	Other-than-temporary impairment (“OTTI”)		(19)		(18)		(3)		(3)		(4)	78.9%		(52)		(11)	78.8%
	Realized gain (loss), excluding OTTI		(9)		(12)		(15)		38		93	NM		(53)		117	NM
	Total realized gain (loss)		(28)		(30)		(18)		35		89	NM		(105)		106	201.0%
	Amortization of deferred gains on business
	sold through reinsurance		19		18		19		18		18	-5.3%		56		55	-1.8%
	Other revenues		134		141		130		133		135	0.7%		380		397	4.5%
	Total revenues		3,009		3,122		3,176		3,282		3,411	13.4%		8,847		9,869	11.6%
	Expenses
	Interest credited		627		639		633		636		631	0.6%		1,871		1,900	1.5%
	Benefits		945		968		1,078		1,079		1,117	18.2%		2,894		3,275	13.2%
	Commissions and other expenses		928		980		971		963		995	7.2%		2,721		2,929	7.6%
	Interest and debt expense		67		68		67		67		67	0.0%		196		201	2.6%
	Total expenses		2,567		2,655		2,749		2,745		2,810	9.5%		7,682		8,305	8.1%
	Income (loss) from continuing operations before taxes		442		467		427		537		601	36.0%		1,165		1,564	34.2%
	Federal income tax expense (benefit)		105		116		98		139		162	54.3%		272		398	46.3%
	Net income (loss)		337		351		329		398		439	30.3%		893		1,166	30.6%
	Adjustment for LNC stock units in our
	deferred compensation plans		-		-		(1)		1		2	NM		-		2	NM
	Net income (loss) available to common
	stockholders – diluted	$	337	$	351	$	328	$	399	$	441	30.9%	$	893	$	1,168	164.9%
	Earnings (Loss) Per Common Share – Diluted
	Net income (loss)	$	1.23	$	1.29	$	1.21	$	1.48	$	1.65	34.1%	$	3.24	$	4.34	34.0%
Page 3

	Lincoln Financial Group
	Consolidated Balance Sheets
	Unaudited (millions of dollars)
		As of
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change
	ASSETS
	Investments:
	Available-for-sale (“AFS”) securities:
	Corporate bonds	$	68,525	$	68,937	$	71,681	$	74,017	$	73,799	7.7%
	U.S. government bonds		368		367		388		396		402	9.2%
	Foreign government bonds		576		549		559		556		551	-4.3%
	Mortgage-backed securities		5,445		5,078		4,944		4,929		4,931	-9.4%
	Asset-backed collateralized debt obligations		194		225		241		256		286	47.4%
	State and municipal bonds		3,976		3,918		4,204		4,395		4,419	11.1%
	Hybrid and redeemable preferred securities		1,051		1,004		971		962		960	-8.7%
	VIEs' fixed maturity securities		699		697		597		598		598	-14.4%
	Equity securities		185		201		207		256		234	26.5%
	Total AFS securities		81,019		80,976		83,792		86,365		86,180	6.4%
	Trading securities		2,354		2,282		2,316		2,339		2,134	-9.3%
	Mortgage loans on real estate		7,127		7,210		7,089		7,096		7,466	4.8%
	Real estate		56		47		42		32		20	-64.3%
	Policy loans		2,679		2,677		2,687		2,683		2,677	-0.1%
	Derivative investments		1,114		881		1,044		1,142		1,439	29.2%
	Other investments		1,219		1,218		1,237		1,301		1,469	20.5%
	Total investments		95,568		95,291		98,207		100,958		101,385	6.1%
	Cash and invested cash		2,650		2,364		1,849		1,509		1,821	-31.3%
	DAC and VOBA		8,500		8,886		8,454		8,149		8,372	-1.5%
	Premiums and fees receivable		427		420		504		465		448	4.9%
	Accrued investment income		1,111		1,029		1,116		1,081		1,129	1.6%
	Reinsurance recoverables		6,528		6,041		5,984		6,007		5,906	-9.5%
	Funds withheld reinsurance assets		782		776		772		764		761	-2.7%
	Goodwill		2,273		2,273		2,273		2,273		2,273	0.0%
	Other assets		2,709		2,730		3,822		3,760		3,414	26.0%
	Separate account assets		109,376		117,135		118,968		124,159		122,937	12.4%
	Total assets	$	229,924	$	236,945	$	241,949	$	249,125	$	248,446	8.1%
Page 4a

	Lincoln Financial Group
	Consolidated Balance Sheets
	Unaudited (millions of dollars)
		As of
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change
	LIABILITIES AND STOCKHOLDERS’ EQUITY
	Liabilities
	Future contract benefits	$	18,138	$	17,251	$	18,997	$	19,460	$	19,553	7.8%
	Other contract holder funds		74,106		74,548		74,507		74,735		74,893	1.1%
	Short-term debt		503		501		-		250		250	-50.3%
	Long-term debt by rating agency leverage definitions:
	Operating (see note (1) on page 16 for details)		1,122		1,122		1,122		1,122		1,122	0.0%
	Financial		4,243		4,198		4,258		4,048		4,064	-4.2%
	Reinsurance related embedded derivatives		121		108		135		155		141	16.5%
	Funds withheld reinsurance liabilities		898		867		843		842		806	-10.2%
	Deferred gain on business sold through reinsurance		263		245		226		208		190	-27.8%
	Payables for collateral on investments		3,553		3,238		3,519		3,571		3,853	8.4%
	VIEs' liabilities		67		27		22		10		17	-74.6%
	Other liabilities		4,145		4,253		4,866		5,114		5,168	24.7%
	Separate account liabilities		109,376		117,135		118,968		124,159		122,937	12.4%
	Total liabilities		216,535		223,493		227,463		233,674		232,994	7.6%
	Stockholders’ Equity
	Common stock		6,886		6,876		6,805		6,739		6,696	-2.8%
	Retained earnings		4,753		5,013		5,228		5,513		5,834	22.7%
	AOCI:
	Unrealized gain (loss) on AFS securities		1,870		1,609		2,523		3,282		2,996	60.2%
	Unrealized OTTI on AFS securities		(84)		(78)		(79)		(67)		(68)	19.0%
	Unrealized gain (loss) on derivative instruments		270		256		239		216		221	-18.1%
	Foreign currency translation adjustment		(5)		(5)		(10)		(10)		(10)	-100.0%
	Funded status of employee benefit plans		(301)		(219)		(220)		(222)		(217)	27.9%
	Total AOCI		1,750		1,563		2,453		3,199		2,922	67.0%
	Total stockholders’ equity		13,389		13,452		14,486		15,451		15,452	15.4%
	Total liabilities and stockholders’ equity	$	229,924	$	236,945	$	241,949	$	249,125	$	248,446	8.1%
Page 4b

	Lincoln Financial Group
	Earnings, Shares, Return on Equity and Return to Stockholder Highlights
	Unaudited (millions of dollars, except per share data)
		As of or For the Three Months Ended											As of or For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Income (Loss)
	Income (loss) from operations	$	367	$	382	$	365	$	394	$	414	12.8%	$	1,002	$	1,173	17.1%
	Net income (loss)		337		351		329		398		439	30.3%		893		1,166	30.6%
	Earnings (Loss) Per Diluted Share
	Income (loss) from operations	$	1.34	$	1.40	$	1.34	$	1.47	$	1.56	16.4%	$	3.63	$	4.36	20.1%
	Net income (loss)		1.23		1.29		1.21		1.48		1.65	34.1%		3.24		4.34	34.0%
	Average Stockholders’ Equity
	Average equity, including AOCI	$	13,353	$	13,421	$	13,969	$	14,968	$	15,452	15.7%	$	14,120	$	14,796	4.8%
	Average AOCI		1,821		1,656		2,008		2,826		3,061	68.1%		2,751		2,631	-4.4%
	Average equity, excluding AOCI	$	11,532	$	11,765	$	11,961	$	12,142	$	12,391	7.4%	$	11,369	$	12,165	7.0%
	ROE
	Income (loss) from operations		12.7%		13.0%		12.2%		13.0%		13.4%			11.8%		12.9%
	Net income (loss)		11.7%		11.9%		11.0%		13.1%		14.2%			10.5%		12.8%
	Per Share
	Dividends declared during the period	$	0.12	$	0.16	$	0.16	$	0.16	$	0.16	33.3%	$	0.36	$	0.48	33.3%
	Book value, including AOCI		51.04		51.17		54.94		59.24		59.48	16.5%		51.04		59.48	16.5%
	Book value, excluding AOCI		44.37		45.23		45.63		46.97		48.23	8.7%		44.37		48.23	8.7%
	Shares
	Repurchased during the period		2.3		2.0		3.0		3.1		2.8	23.0%		10.0		8.9	-10.9%
	Average for the period – diluted		273.7		272.8		272.1		268.9		266.8	-2.5%		276.0		269.3	-2.4%
	End-of-period – assuming conversion of preferred		262.3		262.9		263.7		260.8		259.8	-1.0%		262.3		259.8	-1.0%
	End-of-period – diluted		272.5		272.2		270.4		267.6		265.5	-2.6%		272.5		265.5	-2.6%
	Cash Returned to Common Stockholders
	Shares repurchased	$	100	$	100	$	150	$	150	$	150	50.0%	$	350	$	450	28.6%
	Common dividends		32		31		42		42		42	31.3%		97		126	29.9%
	Total cash returned to common stockholders	$	132	$	131	$	192	$	192	$	192	45.5%	$	447	$	576	28.9%
Page 5

	Lincoln Financial Group
	Income (Loss) from Operations, Average Equity and ROE By Segment
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Income (Loss) from Operations
	Annuities	$	198	$	199	$	216	$	227	$	245	23.7%	$	551	$	688	24.9%
	Retirement Plan Services		33		34		39		39		40	21.2%		108		118	9.3%
	Life Insurance		140		157		120		148		150	7.1%		387		418	8.0%
	Group Protection		23		11		20		2		8	-65.2%		60		29	-51.7%
	Other Operations		(27)		(19)		(30)		(22)		(29)	-7.4%		(104)		(80)	23.1%
	Income (loss) from operations	$	367	$	382	$	365	$	394	$	414	12.8%	$	1,002	$	1,173	17.1%
	Average Equity, Excluding AOCI
	Segment equity, excluding goodwill:
	Annuities	$	3,009	$	3,079	$	3,225	$	3,398	$	3,632	20.7%	$	2,988	$	3,418	14.4%
	Retirement Plan Services		983		979		969		949		966	-1.7%		954		961	0.7%
	Life Insurance		6,196		6,058		5,989		6,088		6,226	0.5%		6,106		6,101	-0.1%
	Group Protection		1,083		1,121		1,157		1,186		1,208	11.5%		1,060		1,183	11.6%
	Total segment equity, excluding goodwill		11,271		11,237		11,340		11,621		12,032	6.8%		11,108		11,663	5.0%
	Other Operations and goodwill		261		528		621		521		359	37.5%		261		502	92.3%
	Total average equity, excluding AOCI	$	11,532	$	11,765	$	11,961	$	12,142	$	12,391	7.4%	$	11,369	$	12,165	7.0%
	ROE
	Segment ROE, excluding goodwill:
	Annuities		26.3%		25.9%		26.8%		26.7%		27.0%			24.6%		26.8%
	Retirement Plan Services		13.5%		13.7%		16.1%		16.5%		16.6%			15.1%		16.4%
	Life Insurance		9.1%		10.4%		8.0%		9.7%		9.7%			8.4%		9.1%
	Group Protection		8.6%		3.9%		6.8%		0.6%		2.6%			7.6%		3.3%
	Consolidated ROE – income (loss) from operations		12.7%		13.0%		12.2%		13.0%		13.4%			11.8%		12.9%
Page 6

	Lincoln Financial Group
	Sources of Earnings
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Twelve Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	12/31/12		12/31/13		Change
	Income (Loss) from Operations, Before Income Taxes
	Annuities	$	239	$	252	$	266	$	286	$	315	31.8%	$	716	$	927	29.5%
	Retirement Plan Services		44		44		53		54		55	25.0%		168		190	13.1%
	Life Insurance		210		234		178		223		226	7.6%		838		812	-3.1%
	Group Protection		36		17		30		3		12	-66.7%		111		109	-1.8%
	Other Operations		(42)		(34)		(46)		(34)		(45)	-7.1%		(264)		(192)	27.3%
	Income (loss) from operations, before income taxes	$	487	$	513	$	481	$	532	$	563	15.6%	$	1,569	$	1,846	17.7%
	Sources of Earnings, Before Income Taxes
	Investment spread	$	189	$	198	$	181	$	202	$	195	3.2%	$	765	$	772	0.9%
	Mortality/morbidity		139		134		118		115		127	-8.6%		515		507	-1.6%
	Fees on AUM		181		177		189		201		251	38.7%		502		649	29.3%
	VA riders		20		38		39		48		35	75.0%		51		110	115.7%
	Total sources of earnings, before income taxes		529		547		527		566		608	14.9%		1,833		2,038	11.2%
	Other Operations		(42)		(34)		(46)		(34)		(45)	-7.1%		(264)		(192)	27.3%
	Total operating earnings, before income taxes	$	487	$	513	$	481	$	532	$	563	15.6%	$	1,569	$	1,846	17.7%
	Sources of Earnings, Before Income Taxes, % By Component
	Investment spread		35.8%		36.2%		34.2%		35.6%		32.1%			41.7%		37.8%
	Mortality/morbidity		26.2%		24.4%		22.5%		20.4%		20.9%			28.1%		24.9%
	Fees on AUM		34.2%		32.5%		35.9%		35.6%		41.3%			27.4%		31.9%
	VA riders		3.8%		6.9%		7.4%		8.4%		5.7%			2.8%		5.4%
	Total		100.0%		100.0%		100.0%		100.0%		100.0%			100.0%		100.0%
Page 7

	Lincoln Financial Group
	Select Earnings Drivers By Segment
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Annuities
	Operating revenues	$	842	$	886	$	909	$	926	$	944	12.1%	$	2,436	$	2,779	14.1%
	Average account values		106,490		111,995		115,282		118,268		121,260	13.9%		103,222		118,296	14.6%
	Net flows		1,235		1,190		695		831		565	-54.3%		3,822		2,091	-45.3%
	Retirement Plan Services
	Operating revenues	$	269	$	271	$	271	$	270	$	272	1.1%	$	800	$	813	1.6%
	Average account values		48,344		50,496		51,460		52,587		53,618	10.9%		46,948		52,534	11.9%
	Net flows		219		(107)		(361)		366		50	-77.2%		901		55	-93.9%
	Life Insurance
	Operating revenues	$	1,301	$	1,344	$	1,337	$	1,363	$	1,446	11.1%	$	3,827	$	4,146	8.3%
	Average account values		38,801		39,636		40,333		40,895		41,371	6.6%		38,234		40,866	6.9%
	Average in-force face amount		604,585		612,477		619,715		625,961		632,154	4.6%		598,144		625,944	4.6%
	Net flows		862		1,112		829		919		934	8.4%		2,598		2,682	3.2%
	Group Protection
	Operating revenues	$	561	$	575	$	610	$	621	$	598	6.6%	$	1,685	$	1,829	8.5%
	Non-medical earned premiums		494		502		533		528		528	6.9%		1,451		1,588	9.4%
	Consolidated
	Operating revenues	$	3,073	$	3,187	$	3,233	$	3,286	$	3,363	9.4%	$	9,052	$	9,882	9.2%
	Average account values		193,635		202,127		207,075		211,750		216,249	11.7%		188,404		211,696	12.4%
	Net flows		2,316		2,195		1,163		2,116		1,549	-33.1%		7,321		4,828	-34.1%
Page 8

	Lincoln Financial Group
	Deposits, Net Flows and Account Balances By Segment
	Unaudited (millions of dollars)
			As of or For the Three Months Ended										As of or For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Deposits
	Annuities	$	3,640	$	3,733	$	3,379	$	3,566	$	3,453	-5.1%	$	11,040	$	10,398	-5.8%
	Retirement Plan Services		1,860		1,643		1,758		1,814		1,611	-13.4%		5,144		5,183	0.8%
	Life Insurance		1,230		1,445		1,266		1,308		1,285	4.5%		3,723		3,859	3.7%
	Total deposits	$	6,730	$	6,821	$	6,403	$	6,688	$	6,349	-5.7%	$	19,907	$	19,440	-2.3%
	Net Flows
	Annuities	$	1,235	$	1,190	$	695	$	831	$	565	-54.3%	$	3,822	$	2,091	-45.3%
	Retirement Plan Services		219		(107)		(361)		366		50	-77.2%		901		55	-93.9%
	Life Insurance		862		1,112		829		919		934	8.4%		2,598		2,682	3.2%
	Total net flows	$	2,316	$	2,195	$	1,163	$	2,116	$	1,549	-33.1%	$	7,321	$	4,828	-34.1%
	Account Balances as of End-of-Period
	Annuities	$	108,699	$	115,090	$	116,784	$	121,192	$	120,270	10.6%	$	108,699	$	120,270	10.6%
	Retirement Plan Services		49,309		51,618		51,851		53,748		53,362	8.2%		49,309		53,362	8.2%
	Life Insurance		39,157		40,113		40,552		41,238		41,504	6.0%		39,157		41,504	6.0%
	Total account balances	$	197,165	$	206,821	$	209,187	$	216,178	$	215,136	9.1%	$	197,165	$	215,136	9.1%
	Average Account Balances
	Annuities	$	106,490	$	111,995	$	115,282	$	118,268	$	121,260	13.9%	$	103,222	$	118,296	14.6%
	Retirement Plan Services		48,344		50,496		51,460		52,587		53,618	10.9%		46,948		52,534	11.9%
	Life Insurance		38,801		39,636		40,333		40,895		41,371	6.6%		38,234		40,866	6.9%
	Total average account balances	$	193,635	$	202,127	$	207,075	$	211,750	$	216,249	11.7%	$	188,404	$	211,696	12.4%
Page 9

	Lincoln Financial Group
	Sales By Segment
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Sales
	Annuities:
	Variable	$	3,407	$	3,454	$	2,947	$	3,173	$	3,226	-5.3%	$	10,263	$	9,346	-8.9%
	Fixed		233		279		432		393		227	-2.6%		777		1,052	35.4%
	Total Annuities	$	3,640	$	3,733	$	3,379	$	3,566	$	3,453	-5.1%	$	11,040	$	10,398	-5.8%
	Retirement Plan Services:
	First year sales	$	766	$	566	$	432	$	661	$	429	-44.0%	$	1,733	$	1,522	-12.2%
	Recurring deposits		1,094		1,077		1,326		1,153		1,182	8.0%		3,411		3,661	7.3%
	Total Retirement Plan Services	$	1,860	$	1,643	$	1,758	$	1,814	$	1,611	-13.4%	$	5,144	$	5,183	0.8%
	Life Insurance:
	UL:
	Excluding MoneyGuard® and indexed UL	$	32	$	29	$	21	$	24	$	27	-15.6%	$	92	$	72	-21.7%
	MoneyGuard®		44		46		34		40		43	-2.3%		143		116	-18.9%
	Indexed UL		17		19		18		15		18	5.9%		37		52	40.5%
	Total UL		93		94		73		79		88	-5.4%		272		240	-11.8%
	VUL		36		51		46		56		44	22.2%		91		145	59.3%
	Term		24		26		23		23		23	-4.2%		63		69	9.5%
	Total individual life insurance		153		171		142		158		155	1.3%		426		454	6.6%
	COLI and BOLI		15		16		3		14		5	-66.7%		80		23	-71.3%
	Total Life Insurance	$	168	$	187	$	145	$	172	$	160	-4.8%	$	506	$	477	-5.7%
	Group Protection:
	Life	$	43	$	128	$	31	$	29	$	34	-20.9%	$	107	$	92	-14.0%
	Disability		47		108		26		30		41	-12.8%		120		97	-19.2%
	Dental		17		32		7		14		19	11.8%		46		40	-13.0%
	Total Group Protection	$	107	$	268	$	64	$	73	$	94	-12.1%	$	273	$	229	-16.1%
Page 10

	Lincoln Financial Group
	Operating Revenues and General and Administrative Expenses By Segment
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Operating Revenues
	Annuities	$	842	$	886	$	909	$	926	$	944	12.1%	$	2,436	$	2,779	14.1%
	Retirement Plan Services		269		271		271		270		272	1.1%		800		813	1.6%
	Life Insurance		1,301		1,344		1,337		1,363		1,446	11.1%		3,827		4,146	8.3%
	Group Protection		561		575		610		621		598	6.6%		1,685		1,829	8.5%
	Other Operations		100		111		106		106		103	3.0%		304		315	3.6%
	Total	$	3,073	$	3,187	$	3,233	$	3,286	$	3,363	9.4%	$	9,052	$	9,882	9.2%
	General and Administrative Expenses,
	Net of Amounts Capitalized
	Annuities	$	106	$	116	$	110	$	110	$	109	2.8%	$	303	$	329	8.6%
	Retirement Plan Services		71		80		69		70		73	2.8%		209		212	1.4%
	Life Insurance		105		114		103		109		99	-5.7%		306		311	1.6%
	Group Protection		61		70		60		65		66	8.2%		179		191	6.7%
	Other Operations		7		25		14		17		18	157.1%		66		48	-27.3%
	Total	$	350	$	405	$	356	$	371	$	365	4.3%	$	1,063	$	1,091	2.6%
	General and Administrative Expenses,
	Net of Amounts Capitalized, As a Percentage
	of Operating Revenues
	Annuities		12.6%		13.1%		12.1%		11.9%		11.5%			12.4%		11.8%
	Retirement Plan Services		26.2%		29.4%		25.5%		26.1%		26.7%			26.1%		26.1%
	Life Insurance		8.1%		8.5%		7.7%		8.0%		6.8%			8.0%		7.5%
	Group Protection		10.9%		12.1%		9.8%		10.5%		11.0%			10.6%		10.4%
	Other Operations		6.3%		22.1%		12.7%		15.3%		17.8%			21.5%		15.3%
	Total		11.4%		12.7%		11.0%		11.3%		10.9%			11.7%		11.0%
Page 11

	Lincoln Financial Group
	Operating Commissions and Other Expenses
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Operating Commissions and
	Other Expenses Incurred
	General and administrative expenses	$	406	$	493	$	404	$	419	$	411	1.2%	$	1,228	$	1,233	0.4%
	Commissions		564		605		572		604		602	6.7%		1,648		1,781	8.1%
	Media expenses		15		16		14		14		15	0.0%		45		44	-2.2%
	Taxes, licenses and fees		70		48		81		47		66	-5.7%		189		194	2.6%
	Interest and debt expense		67		68		67		67		67	0.0%		196		201	2.6%
	Expenses associated with reserve financing
	and unrelated letters of credit		16		16		17		17		18	12.5%		48		53	10.4%
	Total operating commissions and other
	expenses incurred		1,138		1,246		1,155		1,168		1,179	3.6%		3,354		3,506	4.5%
	Less Amounts Capitalized
	General and administrative expenses		(56)		(88)		(48)		(48)		(46)	17.9%		(165)		(142)	13.9%
	Commissions		(321)		(349)		(310)		(331)		(329)	-2.5%		(940)		(969)	-3.1%
	Taxes, licenses and fees		(7)		(8)		(8)		(6)		(7)	0.0%		(27)		(22)	18.5%
	Total amounts capitalized		(384)		(445)		(366)		(385)		(382)	0.5%		(1,132)		(1,133)	-0.1%
	Total expenses incurred, net of amounts
	capitalized, excluding amortization		754		801		789		783		797	5.7%		2,222		2,373	6.8%
	Amortization
	Amortization of DAC and VOBA		239		245		247		242		265	10.9%		687		754	9.8%
	Amortization of intangibles		1		1		1		1		1	0.0%		3		3	0.0%
	Total amortization		240		246		248		243		266	10.8%		690		757	9.7%
	Total operating commissions and
	other expenses	$	994	$	1,047	$	1,037	$	1,026	$	1,063	6.9%	$	2,912	$	3,130	7.5%
Page 12

	Lincoln Financial Group
	Interest Rate Yields and Spreads By Segment
	Unaudited
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Annuities
	Earned rate on reserves		4.54%		4.55%		4.55%		4.49%		4.43%	(11)		4.66%		4.49%	(17)
	Prepayment and make whole premiums		0.10%		0.17%		0.08%		0.11%		0.11%	1		0.19%		0.10%	(9)
	Net investment income yield on reserves		4.64%		4.72%		4.63%		4.60%		4.54%	(10)		4.85%		4.59%	(26)
	Interest rate credited to contract holders		2.86%		2.91%		2.81%		2.79%		2.81%	(5)		2.83%		2.80%	(3)
	Interest rate spread		1.78%		1.81%		1.82%		1.81%		1.73%	(5)		2.02%		1.79%	(23)
	Retirement Plan Services
	Earned rate on reserves		4.97%		4.85%		4.89%		4.78%		4.77%	(20)		5.00%		4.81%	(19)
	Prepayment and make whole premiums		0.18%		0.21%		0.12%		0.12%		0.15%	(3)		0.17%		0.13%	(4)
	Net investment income yield on reserves		5.15%		5.06%		5.01%		4.90%		4.92%	(23)		5.17%		4.94%	(23)
	Interest rate credited to contract holders		3.12%		3.08%		3.06%		3.05%		3.04%	(8)		3.12%		3.05%	(7)
	Interest rate spread		2.03%		1.98%		1.95%		1.85%		1.88%	(15)		2.05%		1.89%	(16)
	Life Insurance
	Attributable to interest-sensitive products:
	Earned rate on reserves		5.54%		5.48%		5.46%		5.41%		5.39%	(15)		5.58%		5.43%	(15)
	Prepayment and make whole premiums		0.08%		0.16%		0.04%		0.16%		0.07%	(1)		0.09%		0.09%	-
	Alternative investments		0.14%		0.13%		0.18%		0.15%		0.28%	14		0.10%		0.20%	10
	Net investment income yield on reserves		5.76%		5.77%		5.68%		5.72%		5.74%	(2)		5.77%		5.72%	(5)
	Interest rate credited to contract holders		3.93%		3.96%		3.94%		3.96%		3.94%	1		3.92%		3.95%	3
	Interest rate spread		1.83%		1.81%		1.74%		1.76%		1.80%	(3)		1.85%		1.77%	(8)
	Attributable to traditional products:
	Earned rate on reserves		5.57%		5.59%		5.87%		5.48%		5.23%	(34)		5.63%		5.53%	(10)
	Prepayment and make whole premiums		0.03%		0.37%		0.22%		0.34%		0.18%	15		0.07%		0.25%	18
	Net investment income yield on reserves		5.60%		5.96%		6.09%		5.82%		5.41%	(19)		5.70%		5.78%	8
Page 13

	Lincoln Financial Group
	Select Investment Data
	Unaudited (millions of dollars)
								As of 9/30/13				As of 12/31/13				As of 9/30/14
								Amount		%		Amount		%		Amount		%
	AFS and Trading Securities, at Fair Value
	AFS securities:
	Corporate bonds							$	68,525		82.2%	$	68,937		82.8%	$	73,798		83.6%
	U.S. government bonds								368		0.5%		367		0.5%		402		0.5%
	Foreign government bonds								576		0.7%		549		0.7%		551		0.6%
	Mortgage-backed securities								5,445		6.5%		5,078		6.1%		4,931		5.6%
	Asset-backed collateralized debt obligations								194		0.2%		225		0.3%		286		0.3%
	State and municipal bonds								3,976		4.8%		3,918		4.7%		4,420		5.0%
	Hybrid and redeemable preferred securities								1,051		1.3%		1,004		1.2%		960		1.1%
	VIEs’ fixed maturity securities								699		0.8%		697		0.8%		598		0.7%
	Equity securities								185		0.2%		201		0.2%		234		0.3%
	Total AFS securities								81,019		97.2%		80,976		97.3%		86,180		97.7%
	Trading securities								2,354		2.8%		2,282		2.7%		2,134		2.3%
	Total AFS and trading securities							$	83,373		100.0%	$	83,258		100.0%	$	88,314		100.0%
	AFS and Trading Securities, at Amortized Cost
	Fixed maturity securities							$	78,611		99.8%	$	79,062		99.8%	$	80,910		99.7%
	Equity securities								165		0.2%		182		0.2%		217		0.3%
	Total AFS and trading securities							$	78,776		100.0%	$	79,244		100.0%	$	81,127		100.0%
	Percentage of Fixed Maturity AFS Securities, at Amortized Cost
	Investment grade										94.8%				95.3%				94.8%
	Below investment grade										5.2%				4.7%				5.2%
		For the Three Months Ended												For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change		9/30/13		9/30/14		Change
	Net Investment Income	$	1,180	$	1,211	$	1,208	$	1,207	$	1,212		2.7%	$	3,543	$	3,627		2.4%
	Average Invested Assets, at Amortized Cost		89,910		90,395		91,027		91,879		92,704		3.1%		88,870		91,870		3.4%
	Net Investment Income Yield		5.25%		5.36%		5.31%		5.25%		5.23%		(2)		5.32%		5.26%		(6)
Page 14

	Lincoln Financial Group
	Realized Gain (Loss) and Benefit Ratio Unlocking, After-DAC
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Realized Gain (Loss), Pre-Tax
	Total operating realized gain (loss)	$	37	$	36	$	40	$	40	$	42	13.5%	$	103	$	121	17.5%
	Total excluded realized gain (loss)		(65)		(66)		(58)		(5)		47	172.3%		(208)		(15)	92.8%
	Total realized gain (loss), pre-tax	$	(28)	$	(30)	$	(18)	$	35	$	89	NM	$	(105)	$	106	201.0%
	Realized Gain (Loss) Net of Benefit Ratio
	Unlocking, After-Tax
	Realized gain (loss) related to investments	$	(7)	$	2	$	(17)	$	5	$	(16)	NM	$	(34)	$	(27)	20.6%
	Variable annuity net derivative results:
	Hedge program performance, including unlocking
	for GLB reserves hedged		6		(12)		(14)		16		26	NM		13		26	100.0%
	GLB non-performance risk component		(22)		(15)		7		(9)		6	127.3%		(73)		4	105.5%
	Total variable annuity net derivative results		(16)		(27)		(7)		7		32	300.0%		(60)		30	150.0%
	Indexed annuity forward-starting option		(7)		(6)		(12)		(8)		9	228.6%		(16)		(11)	31.3%
	Excluded realized gain (loss) net of
	benefit ratio unlocking, after-tax	$	(30)	$	(31)	$	(36)	$	4	$	25	183.3%	$	(110)	$	(8)	92.7%
	Components of Realized Gain (Loss)
	Related to Investments, After-Tax
	OTTI	$	(12)	$	(12)	$	(2)	$	(2)	$	(3)	78.9%	$	(34)	$	(7)	79.3%
	Other realized gain (loss) related to
	certain investments		(9)		(4)		(2)		2		(1)	83.8%		(14)		(1)	93.0%
	Gain (loss) on the mark-to-market
	on certain instruments		14		18		(13)		5		(12)	NM		14		(19)	NM
	Total realized gain (loss) related
	to investments, after-tax	$	(7)	$	2	$	(17)	$	5	$	(16)	NM	$	(34)	$	(27)	20.6%
Page 15

	Lincoln Financial Group
	Select Liquidity and Rating Agency Data
	Unaudited (millions of dollars)
		As of
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change
	Leverage Ratio
	Short-term debt	$	503	$	501	$	-	$	250	$	250	-50.3%
	Long-term debt		5,365		5,320		5,380		5,170		5,186	-3.3%
	Total debt		5,868		5,821		5,380		5,420		5,436	-7.4%
	Less:
	Long-term operating debt (1)		1,122		1,122		1,122		1,122		1,122	0.0%
	75% of capital securities		908		909		909		909		909	0.1%
	Carrying value of fair value hedges		105		59		120		159		175	66.7%
	Total numerator	$	3,733	$	3,731	$	3,229	$	3,230	$	3,230	-13.5%
	Stockholders’ equity, excluding AOCI	$	11,639	$	11,889	$	12,033	$	12,252	$	12,530	7.7%
	Total debt		5,868		5,821		5,380		5,420		5,436	-7.4%
	Total denominator	$	17,507	$	17,710	$	17,413	$	17,672	$	17,966	2.6%
	Leverage ratio		21.3%		21.1%		18.5%		18.3%		18.0%
	Holding Company Available Liquidity	$	1,041	$	1,186	$	562	$	573	$	572	-45.1%
							Ratings as of October 29, 2014
												Standard
							A.M. Best		Fitch		Moody’s	& Poor’s
	Senior Debt Ratings						a-		BBB+		Baa1	A-
	Financial Strength Ratings
	Lincoln National Life Insurance Company						A+		A+		A1	AA-
	First Penn-Pacific Life Insurance Company						A		A+		A1	A-
	Lincoln Life & Annuity Company of New York						A+		A+		A1	AA-
	(1) We have categorized as operating debt the senior notes issued in October 2007 and June 2010 because the proceeds were used as a long-term structured solution to reduce the strain
	on increasing statutory reserves associated with secondary guarantee UL and term policies and the senior note issued in September 2008 by our primary insurance subsidiary.
Page 16

	Lincoln Financial Group
	Annuities – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		As of or For the Three Months Ended											As of or For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Income (Loss) from Operations
	Operating revenues:
	Insurance premiums	$	30	$	28	$	45	$	42	$	39	30.0%	$	87	$	126	44.8%
	Fee income		417		454		464		486		503	20.6%		1,178		1,452	23.3%
	Net investment income		254		260		259		258		257	1.2%		784		774	-1.3%
	Operating realized gain (loss)		36		36		39		40		42	16.7%		100		119	19.0%
	Other revenues		105		108		102		100		103	-1.9%		287		308	7.3%
	Total operating revenues		842		886		909		926		944	12.1%		2,436		2,779	14.1%
	Operating expenses:
	Interest credited		153		161		154		154		152	-0.7%		463		460	-0.6%
	Benefits		78		68		87		80		101	29.5%		206		267	29.6%
	Commissions incurred		250		267		250		270		270	8.0%		754		791	4.9%
	Other expenses incurred		213		234		217		210		215	0.9%		610		642	5.2%
	Amounts capitalized		(181)		(193)		(165)		(174)		(175)	3.3%		(558)		(514)	7.9%
	Amortization		90		97		100		100		66	-26.7%		286		267	-6.6%
	Total operating expenses		603		634		643		640		629	4.3%		1,761		1,913	8.6%
	Income (loss) from operations before taxes		239		252		266		286		315	31.8%		675		866	28.3%
	Federal income tax expense (benefit)		41		53		50		59		70	70.7%		124		178	43.5%
	Income (loss) from operations	$	198	$	199	$	216	$	227	$	245	23.7%	$	551	$	688	24.9%
	Effective Federal Income Tax Rate		17.2%		21.0%		18.7%		20.6%		22.1%			18.4%		20.6%
	Average Equity, Excluding Goodwill and AOCI	$	3,009	$	3,079	$	3,225	$	3,398	$	3,632	20.7%	$	2,988	$	3,418	14.4%
	ROE, Excluding Goodwill		26.3%		25.9%		26.8%		26.7%		27.0%			24.6%		26.8%
	Return on Average Account Values		74		71		75		77		81	7		71		78	7
	Account Values
	Separate account values:
	Average	$	85,151	$	90,711	$	94,058	$	96,913	$	99,892	17.3%	$	82,005	$	96,976	18.3%
	End-of-period		87,415		93,822		95,512		99,801		98,997	13.2%		87,415		98,997	13.2%
	General account values:
	Average		21,339		21,284		21,224		21,355		21,368	0.1%		21,217		21,320	0.5%
	End-of-period		21,284		21,268		21,272		21,391		21,273	-0.1%		21,284		21,273	-0.1%
Page 17

	Lincoln Financial Group
	Retirement Plan Services – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		As of or For the Three Months Ended											As of or For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Income (Loss) from Operations
	Operating revenues:
	Fee income	$	59	$	60	$	61	$	62	$	62	5.1%	$	172	$	184	7.0%
	Net investment income		207		208		207		204		207	0.0%		620		618	-0.3%
	Other revenues		3		3		3		4		3	0.0%		8		11	37.5%
	Total operating revenues		269		271		271		270		272	1.1%		800		813	1.6%
	Operating expenses:
	Interest credited		118		118		118		118		118	0.0%		351		354	0.9%
	Benefits		-		-		-		-		-	NM		1		-	-100.0%
	Commissions incurred		18		18		18		18		17	-5.6%		54		54	0.0%
	Other expenses incurred		78		89		80		76		81	3.8%		234		236	0.9%
	Amounts capitalized		(7)		(9)		(8)		(6)		(8)	-14.3%		(23)		(21)	8.7%
	Amortization		18		11		10		10		9	-50.0%		37		29	-21.6%
	Total operating expenses		225		227		218		216		217	-3.6%		654		652	-0.3%
	Income (loss) from operations before taxes		44		44		53		54		55	25.0%		146		161	10.3%
	Federal income tax expense (benefit)		11		10		14		15		15	36.4%		38		43	13.2%
	Income (loss) from operations	$	33	$	34	$	39	$	39	$	40	21.2%	$	108	$	118	9.3%
	Effective Federal Income Tax Rate		24.1%		24.3%		26.3%		26.9%		26.7%			26.2%		26.6%
	Average Equity, Excluding Goodwill and AOCI	$	983	$	979	$	969	$	949	$	966	-1.7%	$	954	$	961	0.7%
	ROE, Excluding Goodwill		13.5%		13.7%		16.1%		16.5%		16.6%			15.1%		16.4%
	Pre-tax Net Margin		29.0%		28.9%		34.5%		35.3%		35.5%			32.5%		35.1%
	Return on Average Account Values		27		27		30		30		30	3		31		30	(1)
	Average Account Values
	Separate account	$	14,481	$	14,920	$	15,122	$	15,221	$	15,471	6.8%	$	14,256	$	15,273	7.1%
	Mutual fund		18,741		20,316		20,965		21,901		22,582	20.5%		17,724		21,791	22.9%
	General account		15,122		15,260		15,373		15,465		15,565	2.9%		14,968��		15,470	3.4%
	Net Flows – Trailing Twelve Months	$	1,249	$	793	$	88	$	117	$	(52)	NM	$	1,249	$	(52)	NM
Page 18

	Lincoln Financial Group
	Life Insurance – Select Earnings and Operational Data
	Unaudited (millions of dollars)
			As of or For the Three Months Ended										As of or For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Income (Loss) from Operations
	Operating revenues:
	Insurance premiums	$	125	$	129	$	132	$	139	$	153	22.4%	$	357	$	424	18.8%
	Fee income		556		581		574		586		651	17.1%		1,622		1,810	11.6%
	Net investment income		615		627		624		632		636	3.4%		1,825		1,892	3.7%
	Operating realized gain (loss)		1		-		1		-		-	-100.0%		3		2	-33.3%
	Other revenues		4		7		6		6		6	50.0%		20		18	-10.0%
	Total operating revenues		1,301		1,344		1,337		1,363		1,446	11.1%		3,827		4,146	8.3%
	Operating expenses:
	Interest credited		329		332		334		337		337	2.4%		973		1,008	3.6%
	Benefits		476		496		541		519		550	15.5%		1,482		1,610	8.6%
	Commissions incurred		157		174		163		173		172	9.6%		442		508	14.9%
	Other expenses incurred		183		194		182		177		173	-5.5%		521		532	2.1%
	Amounts capitalized		(175)		(204)		(178)		(187)		(189)	-8.0%		(498)		(554)	-11.2%
	Amortization		121		118		117		121		177	46.3%		329		416	26.4%
	Total operating expenses		1,091		1,110		1,159		1,140		1,220	11.8%		3,249		3,520	8.3%
	Income (loss) from operations before taxes		210		234		178		223		226	7.6%		578		626	8.3%
	Federal income tax expense (benefit)		70		77		58		75		76	8.6%		191		208	8.9%
	Income (loss) from operations	$	140	$	157	$	120	$	148	$	150	7.1%	$	387	$	418	8.0%
	Effective Federal Income Tax Rate		33.4%		32.8%		32.7%		33.4%		33.4%			33.1%		33.2%
	Average Equity, Excluding Goodwill and AOCI	$	6,196	$	6,058	$	5,989	$	6,088	$	6,226	0.5%	$	6,106	$	6,101	-0.1%
	ROE, Excluding Goodwill		9.1%		10.4%		8.0%		9.7%		9.7%			8.4%		9.1%
	Average Account Values	$	38,801	$	39,636	$	40,333	$	40,895	$	41,371	6.6%	$	38,234	$	40,866	6.9%
	In-Force Face Amount
	UL and other	$	315,763	$	318,444	$	319,414	$	321,056	$	322,416	2.1%	$	315,763	$	322,416	2.1%
	Term insurance		292,375		298,373		303,200		308,253		312,584	6.9%		292,375		312,584	6.9%
	Total in-force face amount	$	608,138	$	616,817	$	622,614	$	629,309	$	635,000	4.4%	$	608,138	$	635,000	4.4%
Page 19

	Lincoln Financial Group
	Group Protection – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Income (Loss) from Operations
	Operating revenues:
	Insurance premiums	$	516	$	529	$	562	$	574	$	550	6.6%	$	1,555	$	1,685	8.4%
	Net investment income		41		43		45		44		45	9.8%		122		134	9.8%
	Other revenues		4		3		3		3		3	-25.0%		8		10	25.0%
	Total operating revenues		561		575		610		621		598	6.6%		1,685		1,829	8.5%
	Operating expenses:
	Interest credited		1		1		1		2��		1	0.0%		2		4	100.0%
	Benefits		382		396		423		463		428	12.0%		1,163		1,314	13.0%
	Commissions incurred		62		65		66		68		68	9.7%		187		202	8.0%
	Other expenses incurred		90		116		87		92		87	-3.3%		259		266	2.7%
	Amounts capitalized		(20)		(38)		(16)		(18)		(11)	45.0%		(53)		(45)	15.1%
	Amortization		10		18		19		11		13	30.0%		34		43	26.5%
	Total operating expenses		525		558		580		618		586	11.6%		1,592		1,784	12.1%
	Income (loss) from operations before taxes		36		17		30		3		12	-66.7%		93		45	-51.6%
	Federal income tax expense (benefit)		13		6		10		1		4	-69.2%		33		16	-51.5%
	Income (loss) from operations	$	23	$	11	$	20	$	2	$	8	-65.2%	$	60	$	29	-51.7%
	Effective Federal Income Tax Rate		35.0%		34.9%		35.0%		34.9%		35.0%			35.0%		35.0%
	Average Equity, Excluding Goodwill and AOCI	$	1,083	$	1,121	$	1,157	$	1,186	$	1,208	11.5%	$	1,060	$	1,183	11.6%
	ROE, Excluding Goodwill		8.6%		3.9%		6.8%		0.6%		2.6%			7.6%		3.3%
	Loss Ratios by Product Line
	Life		74.2%		79.3%		76.1%		80.0%		75.9%			77.1%		77.3%
	Disability		73.2%		70.7%		73.6%		82.6%		80.8%			70.8%		79.0%
	Dental		71.5%		70.2%		74.0%		71.1%		70.8%			74.3%		72.0%
	Total non-medical		73.4%		74.3%		74.8%		80.3%		77.6%			73.9%		77.5%
	Medical		88.3%		88.5%		87.6%		89.0%		90.6%			88.8%		88.9%
Page 20

	Lincoln Financial Group
	Other Operations – Select Earnings and Operational Data
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Other Operations
	Operating revenues:
	Insurance premiums	$	-	$	-	$	-	$	-	$	-	NM	$	1	$	-	-100.0%
	Net investment income		63		73		73		70		68	7.9%		192		211	9.9%
	Amortization of deferred gain on
	business sold through reinsurance		18		18		18		18		18	0.0%		54		54	0.0%
	Media revenues		18		18		15		17		17	-5.6%		53		49	-7.5%
	Other revenues		1		2		-		1		-	-100.0%		4		1	-75.0%
	Total operating revenues		100		111		106		106		103	3.0%		304		315	3.6%
	Operating expenses:
	Interest credited		26		27		27		26		22	-15.4%		82		74	-9.8%
	Benefits		29		28		30		29		28	-3.4%		85		87	2.4%
	Media expenses		15		16		14		14		15	0.0%		45		44	-2.2%
	Commissions and other expenses		5		6		14		4		16	220.0%		56		33	-41.1%
	Interest and debt expenses		67		68		67		67		67	0.0%		196		201	2.6%
	Total operating expenses		142		145		152		140		148	4.2%		464		439	-5.4%
	Income (loss) from operations before taxes		(42)		(34)		(46)		(34)		(45)	-7.1%		(160)		(124)	22.5%
	Federal income tax expense (benefit)		(15)		(15)		(16)		(12)		(16)	-6.7%		(56)		(44)	21.4%
	Income (loss) from operations	$	(27)	$	(19)	$	(30)	$	(22)	$	(29)	-7.4%	$	(104)	$	(80)	23.1%
Page 21

	Lincoln Financial Group
	Consolidated – DAC, VOBA, DSI and DFEL Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	DAC and VOBA
	Balance as of beginning-of-period	$	8,214	$	8,500	$	8,886	$	8,454	$	8,149	-0.8%	$	6,667	$	8,886	33.3%
	Business sold through reinsurance		2		2		-		-		2	0.0%		2		2	0.0%
	Deferrals		384		445		366		385		382	-0.5%		1,132		1,133	0.1%
	Operating amortization		(239)		(245)		(247)		(242)		(265)	-10.9%		(687)		(754)	-9.8%
	Deferrals, net of operating amortization		145		200		119		143		117	-19.3%		445		379	-14.8%
	Amortization associated with benefit ratio unlocking		(3)		(2)		(1)		(2)		1	133.3%		(4)		(1)	75.0%
	Adjustment related to realized (gains) losses		(7)		6		(8)		-		(27)	NM		(14)		(36)	NM
	Adjustment related to unrealized (gains) losses		149		180		(542)		(446)		130	-12.8%		1,404		(858)	NM
	Balance as of end-of-period	$	8,500	$	8,886	$	8,454	$	8,149	$	8,372	-1.5%	$	8,500	$	8,372	-1.5%
	DSI
	Balance as of beginning-of-period	$	266	$	267	$	267	$	256	$	244	-8.3%	$	253	$	267	5.5%
	Deferrals		2		3		3		4		3	50.0%		7		9	28.6%
	Operating amortization		(2)		(10)		(10)		(10)		(8)	NM		(23)		(27)	-17.4%
	Deferrals, net of operating amortization		-		(7)		(7)		(6)		(5)	NM		(16)		(18)	-12.5%
	Amortization associated with benefit ratio unlocking		-		-		-		-		-	NM		(1)		-	100.0%
	Adjustment related to realized (gains) losses		-		-		-		(1)		(3)	NM		(1)		(4)	NM
	Adjustment related to unrealized (gains) losses		1		7		(4)		(5)		6	NM		32		(3)	NM
	Balance as of end-of-period	$	267	$	267	$	256	$	244	$	242	-9.4%	$	267	$	242	-9.4%
	DFEL
	Balance as of beginning-of-period	$	1,819	$	1,861	$	1,938	$	1,707	$	1,520	-16.4%	$	1,373	$	1,938	41.2%
	Deferrals		75		81		81		90		108	44.0%		239		279	16.7%
	Operating amortization		(68)		(62)		(65)		(73)		(125)	-83.8%		(167)		(263)	-57.5%
	Deferrals, net of operating amortization		7		19		16		17		(17)	NM		72		16	-77.8%
	Amortization associated with benefit ratio unlocking		-		-		-		-		-	NM		(1)		-	100.0%
	Adjustment related to realized (gains) losses		(1)		-		(2)		(2)		(1)	0.0%		(2)		(6)	NM
	Adjustment related to unrealized (gains) losses		36		58		(245)		(202)		21	-41.7%		419		(425)	NM
	Balance as of end-of-period	$	1,861	$	1,938	$	1,707	$	1,520	$	1,523	-18.2%	$	1,861	$	1,523	-18.2%
Page 22

	Lincoln Financial Group
	Annuities – DAC, VOBA, DSI and DFEL Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	DAC and VOBA
	Balance as of beginning-of-period	$	2,507	$	2,609	$	2,770	$	2,784	$	2,810	12.1%	$	2,092	$	2,770	32.4%
	Deferrals		181		193		165		174		175	-3.3%		558		514	-7.9%
	Operating amortization		(90)		(97)		(100)		(100)		(66)	26.7%		(286)		(267)	6.6%
	Deferrals, net of operating amortization		91		96		65		74		109	19.8%		272		247	-9.2%
	Amortization associated with benefit ratio unlocking		(2)		(2)		(1)		(2)		1	150.0%		(4)		(1)	75.0%
	Adjustment related to realized (gains) losses		(3)		11		(4)		6		(23)	NM		(4)		(21)	NM
	Adjustment related to unrealized (gains) losses		16		56		(46)		(52)		54	237.5%		253		(44)	NM
	Balance as of end-of-period	$	2,609	$	2,770	$	2,784	$	2,810	$	2,951	13.1%	$	2,609	$	2,951	13.1%
	DSI
	Balance as of beginning-of-period	$	262	$	261	$	259	$	248	$	234	-10.7%	$	249	$	259	4.0%
	Deferrals		2		2		2		1		1	-50.0%		7		4	-42.9%
	Operating amortization		(5)		(11)		(10)		(9)		(7)	-40.0%		(26)		(26)	0.0%
	Deferrals, net of operating amortization		(3)		(9)		(8)		(8)		(6)	-100.0%		(19)		(22)	-15.8%
	Adjustment related to realized (gains) losses		-		-		-		(1)		(3)	NM		(1)		(4)	NM
	Adjustment related to unrealized (gains) losses		2		7		(3)		(5)		6	200.0%		32		(2)	NM
	Balance as of end-of-period	$	261	$	259	$	248	$	234	$	231	-11.5%	$	261	$	231	-11.5%
	DFEL
	Balance as of beginning-of-period	$	262	$	263	$	265	$	264	$	262	0.0%	$	258	$	265	2.7%
	Deferrals		7		8		8		8		9	28.6%		19		25	31.6%
	Operating amortization		(5)		(6)		(7)		(9)		(6)	-20.0%		(14)		(22)	-57.1%
	Deferrals, net of operating amortization		2		2		1		(1)		3	50.0%		5		3	-40.0%
	Amortization associated with benefit ratio unlocking		-		-		-		-		-	NM		(1)		-	100.0%
	Adjustment related to realized (gains) losses		(1)		-		(2)		(1)		(2)	-100.0%		(1)		(5)	NM
	Adjustment related to unrealized (gains) losses		-		-		-		-		-	NM		2		-	-100.0%
	Balance as of end-of-period	$	263	$	265	$	264	$	262	$	263	0.0%	$	263	$	263	0.0%
Page 23

	Lincoln Financial Group
	Retirement Plan Services, Life Insurance and Group Protection – DAC, VOBA and DFEL Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	DAC and VOBA – Retirement Plan Services
	Balance as of beginning-of-period	$	162	$	160	$	173	$	165	$	135	-16.7%	$	102	$	173	69.6%
	Deferrals		7		9		8		6		8	14.3%		23		21	-8.7%
	Operating amortization		(18)		(11)		(10)		(10)		(9)	50.0%		(37)		(29)	21.6%
	Deferrals, net of operating amortization		(11)		(2)		(2)		(4)		(1)	90.9%		(14)		(8)	42.9%
	Adjustment related to unrealized (gains) losses		9		15		(6)		(26)		13	44.4%		72		(18)	NM
	Balance as of end-of-period	$	160	$	173	$	165	$	135	$	147	-8.1%	$	160	$	147	-8.1%
	DAC and VOBA – Life Insurance
	Balance as of beginning-of-period	$	5,344	$	5,520	$	5,713	$	5,278	$	4,970	-7.0%	$	4,281	$	5,713	33.5%
	Business sold through reinsurance		2		2		-		-		2	0.0%		2		2	0.0%
	Deferrals		175		204		178		187		189	8.0%		498		554	11.2%
	Operating amortization		(121)		(118)		(117)		(121)		(177)	-46.3%		(329)		(416)	-26.4%
	Deferrals, net of operating amortization		54		86		61		66		12	-77.8%		169		138	-18.3%
	Adjustment related to realized (gains) losses		(4)		(5)		(4)		(6)		(4)	0.0%		(10)		(14)	-40.0%
	Adjustment related to unrealized (gains) losses		124		110		(492)		(368)		63	-49.2%		1,078		(796)	NM
	Balance as of end-of-period	$	5,520	$	5,713	$	5,278	$	4,970	$	5,043	-8.6%	$	5,520	$	5,043	-8.6%
	DFEL – Life Insurance
	Balance as of beginning-of-period	$	1,556	$	1,597	$	1,673	$	1,443	$	1,258	-19.2%	$	1,115	$	1,673	50.0%
	Deferrals		68		73		73		82		100	47.1%		220		255	15.9%
	Operating amortization		(63)		(55)		(58)		(64)		(119)	-88.9%		(152)		(241)	-58.6%
	Deferrals, net of operating amortization		5		18		15		18		(19)	NM		68		14	-79.4%
	Adjustment related to realized (gains) losses		(1)		(1)		(1)		(1)		(1)	0.0%		(2)		(3)	-50.0%
	Adjustment related to unrealized (gains) losses		37		59		(244)		(202)		21	-43.2%		416		(425)	NM
	Balance as of end-of-period	$	1,597	$	1,673	$	1,443	$	1,258	$	1,259	-21.2%	$	1,597	$	1,259	-21.2%
	DAC and VOBA – Group Protection
	Balance as of beginning-of-period	$	201	$	211	$	230	$	227	$	234	16.4%	$	192	$	230	19.8%
	Deferrals		20		37		16		18		11	-45.0%		53		45	-15.1%
	Operating amortization		(10)		(18)		(19)		(11)		(13)	-30.0%		(34)		(43)	-26.5%
	Deferrals, net of operating amortization		10		19		(3)		7		(2)	NM		19		2	-89.5%
	Balance as of end-of-period	$	211	$	230	$	227	$	234	$	232	10.0%	$	211	$	232	10.0%
Page 24

	Lincoln Financial Group
	Annuities – Account Value Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Fixed Annuities
	Balance as of beginning-of-period	$	18,494	$	18,457	$	18,552	$	18,730	$	18,875	2.1%	$	18,438	$	18,552	0.6%
	Gross deposits		233		279		432		393		227	-2.6%		777		1,052	35.4%
	Withdrawals and deaths		(462)		(440)		(424)		(460)		(475)	-2.8%		(1,360)		(1,359)	0.1%
	Net flows		(229)		(161)		8		(67)		(248)	-8.3%		(583)		(307)	47.3%
	Reinvested interest credited		190		254		168		211		118	-37.9%		595		497	-16.5%
	Sales inducements deferred		2		2		2		1		1	-50.0%		7		4	-42.9%
	Balance as of end-of-period, gross		18,457		18,552		18,730		18,875		18,746	1.6%		18,457		18,746	1.6%
	Reinsurance ceded		(779)		(759)		(744)		(726)		(714)	8.3%		(779)		(714)	8.3%
	Balance as of end-of-period, net	$	17,678	$	17,793	$	17,986	$	18,149	$	18,032	2.0%	$	17,678	$	18,032	2.0%
	Variable Annuities
	Balance as of beginning-of-period	$	85,395	$	91,021	$	97,298	$	98,798	$	103,043	20.7%	$	78,906	$	97,298	23.3%
	Gross deposits		3,407		3,454		2,947		3,173		3,226	-5.3%		10,263		9,346	-8.9%
	Withdrawals and deaths		(1,943)		(2,103)		(2,260)		(2,275)		(2,413)	-24.2%		(5,858)		(6,948)	-18.6%
	Net flows		1,464		1,351		687		898		813	-44.5%		4,405		2,398	-45.6%
	Change in market value and reinvestment		4,162		4,926		813		3,347		(1,618)	NM		7,710		2,542	-67.0%
	Balance as of end-of-period, gross		91,021		97,298		98,798		103,043		102,238	12.3%		91,021		102,238	12.3%
	Reinsurance ceded		-		(1)		-		-		-	NM		-		-	NM
	Balance as of end-of-period, net	$	91,021	$	97,297	$	98,798	$	103,043	$	102,238	12.3%	$	91,021	$	102,238	12.3%
	Total
	Balance as of beginning-of-period	$	103,889	$	109,478	$	115,850	$	117,528	$	121,918	17.4%	$	97,344	$	115,850	19.0%
	Gross deposits		3,640		3,733		3,379		3,566		3,453	-5.1%		11,040		10,398	-5.8%
	Withdrawals and deaths		(2,405)		(2,543)		(2,684)		(2,735)		(2,888)	-20.1%		(7,218)		(8,307)	-15.1%
	Net flows		1,235		1,190		695		831		565	-54.3%		3,822		2,091	-45.3%
	Change in market value and reinvestment		4,352		5,180		981		3,558		(1,500)	NM		8,305		3,039	-63.4%
	Sales inducements deferred		2		2		2		1		1	-50.0%		7		4	-42.9%
	Balance as of end-of-period, gross		109,478		115,850		117,528		121,918		120,984	10.5%		109,478		120,984	10.5%
	Reinsurance ceded		(779)		(760)		(744)		(726)		(714)	8.3%		(779)		(714)	8.3%
	Balance as of end-of-period, net	$	108,699	$	115,090	$	116,784	$	121,192	$	120,270	10.6%	$	108,699	$	120,270	10.6%
Page 25

	Lincoln Financial Group
	Retirement Plan Services – Account Value Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Small Market
	Balance as of beginning-of-period	$	7,377	$	7,695	$	8,203	$	8,223	$	8,521	15.5%	$	7,001	$	8,203	17.2%
	Gross deposits		362		548		470		409		449	24.0%		1,135		1,328	17.0%
	Withdrawals and deaths		(375)		(434)		(510)		(389)		(376)	-0.3%		(1,153)		(1,275)	-10.6%
	Net flows		(13)		114		(40)		20		73	NM		(18)		53	NM
	Transfers between fixed and variable accounts		-		8		-		-		1	NM		(13)		1	107.7%
	Change in market value and reinvestment		331		386		60		278		(136)	NM		725		202	-72.1%
	Balance as of end-of-period	$	7,695	$	8,203	$	8,223	$	8,521	$	8,459	9.9%	$	7,695	$	8,459	9.9%
	Mid – Large Market
	Balance as of beginning-of-period	$	23,486	$	25,059	$	26,468	$	26,708	$	28,107	19.7%	$	21,049	$	26,468	25.7%
	Gross deposits		1,338		945		1,111		1,260		1,023	-23.5%		3,532		3,394	-3.9%
	Withdrawals and deaths		(881)		(884)		(1,213)		(697)		(799)	9.3%		(1,956)		(2,709)	-38.5%
	Net flows		457		61		(102)		563		224	-51.0%		1,576		685	-56.5%
	Transfers between fixed and variable accounts		(14)		(1)		9		7		(13)	7.1%		5		3	-40.0%
	Change in market value and reinvestment		1,130		1,349		333		829		(256)	NM		2,429		906	-62.7%
	Balance as of end-of-period	$	25,059	$	26,468	$	26,708	$	28,107	$	28,062	12.0%	$	25,059	$	28,062	12.0%
	Multi-Fund®and Other
	Balance as of beginning-of-period	$	16,234	$	16,555	$	16,947	$	16,920	$	17,120	5.5%	$	15,881	$	16,947	6.7%
	Gross deposits		160		150		177		145		139	-13.1%		477		461	-3.4%
	Withdrawals and deaths		(385)		(432)		(396)		(362)		(386)	-0.3%		(1,134)		(1,144)	-0.9%
	Net flows		(225)		(282)		(219)		(217)		(247)	-9.8%		(657)		(683)	-4.0%
	Change in market value and reinvestment		546		674		192		417		(32)	NM		1,331		577	-56.6%
	Balance as of end-of-period	$	16,555	$	16,947	$	16,920	$	17,120	$	16,841	1.7%	$	16,555	$	16,841	1.7%
	Total
	Balance as of beginning-of-period	$	47,097	$	49,309	$	51,618	$	51,851	$	53,748	14.1%	$	43,931	$	51,618	17.5%
	Gross deposits		1,860		1,643		1,758		1,814		1,611	-13.4%		5,144		5,183	0.8%
	Withdrawals and deaths		(1,641)		(1,750)		(2,119)		(1,448)		(1,561)	4.9%		(4,243)		(5,128)	-20.9%
	Net flows		219		(107)		(361)		366		50	-77.2%		901		55	-93.9%
	Transfers between fixed and variable accounts		(14)		7		9		7		(12)	14.3%		(8)		4	150.0%
	Change in market value and reinvestment		2,007		2,409		585		1,524		(424)	NM		4,485		1,685	-62.4%
	Balance as of end-of-period	$	49,309	$	51,618	$	51,851	$	53,748	$	53,362	8.2%	$	49,309	$	53,362	8.2%
Page 26

	Lincoln Financial Group
	Life Insurance – Account Value Roll Forwards
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Interest-Sensitive Life
	Balance as of beginning-of-period	$	33,108	$	33,366	$	33,721	$	33,886	$	34,094	3.0%	$	32,432	$	33,721	4.0%
	Deposits		938		1,017		869		890		934	-0.4%		2,902		2,693	-7.2%
	Withdrawals and deaths		(255)		(208)		(292)		(253)		(259)	-1.6%		(690)		(804)	-16.5%
	Net flows		683		809		577		637		675	-1.2%		2,212		1,889	-14.6%
	Contract holder assessments		(752)		(785)		(741)		(764)		(791)	-5.2%		(2,243)		(2,296)	-2.4%
	Reinvested interest credited		327		331		329		335		337	3.1%		965		1,001	3.7%
	Balance as of end-of-period, gross		33,366		33,721		33,886		34,094		34,315	2.8%		33,366		34,315	2.8%
	Reinsurance ceded		(813)		(809)		(804)		(797)		(793)	2.5%		(813)		(793)	2.5%
	Balance as of end-of-period, net	$	32,553	$	32,912	$	33,082	$	33,297	$	33,522	3.0%	$	32,553	$	33,522	3.0%
	VUL
	Balance as of beginning-of-period	$	6,972	$	7,453	$	8,094	$	8,354	$	8,842	26.8%	$	6,523	$	8,094	24.1%
	Deposits		292		428		397		418		351	20.2%		821		1,166	42.0%
	Withdrawals and deaths		(113)		(125)		(145)		(136)		(92)	18.6%		(435)		(373)	14.3%
	Net flows		179		303		252		282		259	44.7%		386		793	105.4%
	Contract holder assessments		(104)		(119)		(112)		(118)		(119)	-14.4%		(302)		(349)	-15.6%
	Change in market value and reinvestment		406		457		120		324		(128)	NM		846		316	-62.6%
	Balance as of end-of-period, gross		7,453		8,094		8,354		8,842		8,854	18.8%		7,453		8,854	18.8%
	Reinsurance ceded		(849)		(893)		(884)		(901)		(872)	-2.7%		(849)		(872)	-2.7%
	Balance as of end-of-period, net	$	6,604	$	7,201	$	7,470	$	7,941	$	7,982	20.9%	$	6,604	$	7,982	20.9%
	Total
	Balance as of beginning-of-period	$	40,080	$	40,819	$	41,815	$	42,240	$	42,936	7.1%	$	38,955	$	41,815	7.3%
	Deposits		1,230		1,445		1,266		1,308		1,285	4.5%		3,723		3,859	3.7%
	Withdrawals and deaths		(368)		(333)		(437)		(389)		(351)	4.6%		(1,125)		(1,177)	-4.6%
	Net flows		862		1,112		829		919		934	8.4%		2,598		2,682	3.2%
	Contract holder assessments		(856)		(904)		(853)		(882)		(910)	-6.3%		(2,545)		(2,645)	-3.9%
	Change in market value and reinvestment		733		788		449		659		209	-71.5%		1,811		1,317	-27.3%
	Balance as of end-of-period, gross		40,819		41,815		42,240		42,936		43,169	5.8%		40,819		43,169	5.8%
	Reinsurance ceded		(1,662)		(1,702)		(1,688)		(1,698)		(1,665)	-0.2%		(1,662)		(1,665)	-0.2%
	Balance as of end-of-period, net	$	39,157	$	40,113	$	40,552	$	41,238	$	41,504	6.0%	$	39,157	$	41,504	6.0%
Page 27

	Lincoln Financial Group
	Select Non-GAAP to GAAP Reconciliations
	Unaudited (millions of dollars)
		For the Three Months Ended											For the Nine Months Ended
		9/30/13		12/31/13		3/31/14		6/30/14		9/30/14		Change	9/30/13		9/30/14		Change
	Revenues
	Operating revenues	$	3,073	$	3,187	$	3,233	$	3,286	$	3,363	9.4%	$	9,052	$	9,882	9.2%
	Excluded realized gain (loss)		(65)		(66)		(58)		(5)		47	172.3%		(208)		(15)	92.8%
	Amortization of DFEL on benefit ratio unlocking		-		-		-		-		-	NM		1		-	-100.0%
	Amortization of deferred gains arising from reserve
	changes on business sold through reinsurance		1		1		1		1		1	0.0%		2		2	0.0%
	Total revenues	$	3,009	$	3,122	$	3,176	$	3,282	$	3,411	13.4%	$	8,847	$	9,869	11.6%
	Excluded Realized Gain (Loss) Net of
	Benefit Ratio Unlocking, After-Tax
	Total excluded realized gain (loss)	$	(43)	$	(43)	$	(38)	$	(3)	$	31	172.1%	$	(135)	$	(10)	92.6%
	Benefit ratio unlocking		13		12		2		7		(6)	NM		25		2	-92.0%
	Net gain (loss), after-tax	$	(30)	$	(31)	$	(36)	$	4	$	25	183.3%	$	(110)	$	(8)	92.7%
	Net Income
	Income (loss) from operations	$	367	$	382	$	365	$	394	$	414	12.8%	$	1,002	$	1,173	17.1%
	Excluded realized gain (loss)		(43)		(43)		(38)		(3)		31	172.1%		(135)		(10)	92.6%
	Benefit ratio unlocking		13		12		2		7		(6)	NM		25		2	-92.0%
	Income (loss) from reserve changes (net of related
	amortization) on business sold through reinsurance		-		-		-		-		-	NM		1		1	0.0%
	Net income (loss)	$	337	$	351	$	329	$	398	$	439	30.3%	$	893	$	1,166	30.6%
	Earnings (Loss) Per Common Share – Diluted
	Income (loss) from operations	$	1.34	$	1.40	$	1.34	$	1.47	$	1.56	16.4%	$	3.63	$	4.36	20.1%
	Excluded realized gain (loss)		(0.16)		(0.15)		(0.14)		(0.01)		0.11	168.8%		(0.48)		(0.03)	93.8%
	Benefit ratio unlocking		0.05		0.04		0.01		0.02		(0.02)	NM		0.09		0.01	-88.9%
	Net income (loss)	$	1.23	$	1.29	$	1.21	$	1.48	$	1.65	34.1%	$	3.24	$	4.34	34.0%
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