Lincoln National (LNC) 8-K Lincoln Financial Group reports second Quarter 2021 Results

Lincoln Financial Group
Table of Contents
Analyst Coverage and Credit Ratings	1
Notes	2
Consolidated
Consolidated Statements of Income (Loss)	3
Consolidated Balance Sheets	4
Earnings, Shares and Return on Equity	5
Key Stakeholder Metrics	6
Segment and Sources of Earnings	7
Select Earnings Drivers By Segment	8
Sales By Segment	9
Operating Revenues and General and Administrative Expenses By Segment	10
Operating Commissions and Other Expenses	11
Interest Rate Yields and Spreads By Segment	12
Select Earnings and Operational Data from Business Segments
Annuities	13
Retirement Plan Services	14
Life Insurance	15
Group Protection	16
Other Operations	17
DAC & Account Value Rollforwards
Consolidated DAC, VOBA, DSI and DFEL Roll Forwards	18
Account Value Roll Forwards:
Annuities	19
Retirement Plan Services	20
Life Insurance	21
Other Information
Select Investment Data	22
Realized Gain (Loss), After-DAC	23
Select GAAP to Non-GAAP Reconciliations	24

Lincoln Financial Group
Analyst Coverage and Credit Ratings
Firm	Analyst				Phone Number
Autonomous Research U.S., L.P.	Erik Bass					646-561-6248
Bank of America Merrill Lynch	Joshua Shanker					646-855-5716
Barclays	Tracy Benguigui					212-526-1561
Citi Research	Suneet Kamath					212-816-3457
Credit Suisse	Andrew Kligerman					212-325-5069
Dowling & Partners	Humphrey Lee					860-676-7324
Evercore	Thomas Gallagher					212-446-9439
J.P. Morgan Securities	Jimmy Bhullar					212-622-6397
Keefe, Bruyette & Woods, Inc.	Ryan Krueger					860-722-5930
Morgan Stanley	Nigel Dally					212-761-4132
Piper Sandler & Co.	John Barnidge					312-281-3412
RBC Capital Markets	Mark Dwelle					804-782-4008
UBS	Brian Meredith					212-713-2492
Wells Fargo	Elyse Greenspan					212-214-8031
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.
		Ratings as of August 4, 2021
						Standard
		A.M Best	Fitch	Moody's		& Poor's
Senior Debt Ratings		a-	BBB+	Baa1		A-
Financial Strength Ratings
The 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-
Lincoln Life Assurance Company of Boston		A+				AA-
Investor Inquiries May Be Directed To:
Albert Copersino, Vice President, Investor Relations
Email:  Albert.Copersino@lfg.com
Phone:  203-257-4493
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 net loss or adjusted loss from operations is experienced, shares used in the diluted EPS

 calculation represent basic shares, as the use of diluted shares would result in a lower loss per share.

• 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 adjusted 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.  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.  Management believes 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 net margin is calculated by dividing adjusted income (loss) from operations before taxes by net revenue, which is defined as total adjusted 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:

• Annuities and Retirement Plan Services – deposits from new and existing customers;

• Universal life insurance (“UL”), indexed universal life insurance (“IUL”), variable universal life insurance (“VUL”) – first-year commissionable premiums plus 5% of excess premiums received;

•  MoneyGuard®linked-benefit products – MoneyGuard® (UL), 15% of total expected premium deposits, and MoneyGuard Market AdvantageSM (VUL), 150% of commissionable premiums;

• Executive Benefits – single premium bank-owned UL and VUL, 15% of single premium deposits, and corporate-owned UL and VUL, first-year commissionable premiums plus 5% of excess

     premium received;

• Term – 100% of annualized first-year premiums; 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.

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Lincoln Financial Group
Notes
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.
Non-GAAP Performance Measures
Non-GAAP measures do not replace the most directly comparable GAAP measures, and we have included detailed reconciliations herein.
Adjusted income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:
• Realized gains and losses associated with the following (“excluded realized gain (loss)”):
▪ Sales or disposals and impairments of financial assets;
▪ Changes in the fair value of equity 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 within our variable annuities;
▪ Changes in the fair value of the embedded derivatives of our guaranteed living benefit (“GLB”) riders reflected within variable annuity net derivative results accounted for at fair value;
▪ Changes in the fair value of the derivatives we own to hedge our GLB riders reflected within variable annuity net derivative results; and
▪ Changes in the fair value of the embedded derivative liabilities related to index options we may purchase or sell 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 options”);
• Changes in reserves resulting from benefit ratio unlocking on our GDB and GLB riders (“benefit ratio unlocking”);
• 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;
• Acquisition and integration costs related to mergers and acquisitions; and
• Income (loss) from the initial adoption of new accounting standards, regulations and policy changes including the net impact from the Tax Cuts and Jobs Act.
Adjusted operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:
• 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.
	��
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Lincoln Financial Group

Notes

Management believes that the non-GAAP performance measures previously discussed 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 adjusted operating revenues and adjusted

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 August 4, 2021, and has not been updated since that date.  Lincoln Financial Group does not intend to update this document.

Page 2c

Lincoln Financial Group
Consolidated Statements of Income (Loss)
Unaudited (millions of dollars, except per share data)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Revenues
Insurance premiums	$	1,342	$	1,293	$	1,364	$	1,406	$	1,398	4.2%	$	2,715	$	2,804	3.3%
Fee income		1,458		1,815		1,559		1,592		1,670	14.5%		2,997		3,262	8.8%
Net investment income		1,172		1,458		1,505		1,510		1,584	35.2%		2,547		3,094	21.5%
Realized gain (loss)		(647)		629		(470)		(181)		(2)	99.7%		(671)		(182)	72.9%
Amortization of deferred gains on business
sold through reinsurance		11		11		9		9		9	-18.2%		22		17	-22.7%
Other revenues		181		155		168		198		192	6.1%		332		391	17.8%
Total revenues		3,517		5,361		4,135		4,534		4,851	37.9%		7,942		9,386	18.2%
Expenses
Interest credited		732		732		734		737		737	0.7%		1,457		1,474	1.2%
Benefits		1,725		2,484		1,966		2,226		1,930	11.9%		4,227		4,156	-1.7%
Commissions and other expenses		1,123		1,599		1,258		1,231		1,326	18.1%		2,207		2,556	15.8%
Interest and debt expense		84		66		65		65		65	-22.6%		152		131	-13.8%
Strategic digitization expense		14		20		23		13		21	50.0%		26		35	34.6%
Total expenses		3,678		4,901		4,046		4,272		4,079	10.9%		8,069		8,352	3.5%
Income (loss) before taxes		(161)		460		89		262		772	NM		(127)		1,034	NM
Federal income tax expense (benefit)		(67)		62		(54)		37		130	294.0%		(85)		167	296.5%
Net income (loss)		(94)		398		143		225		642	NM		(42)		867	NM
Adjustment for LNC stock units in our
deferred compensation plans		-		(5)		-		-		-	NM		(10)		-	100.0%
Net income (loss) available to common
stockholders – diluted	$	(94)	$	393	$	143	$	225	$	642	NM	$	(52)	$	867	NM
Earnings (Loss) Per Common Share – Diluted
Net income (loss)	$	(0.49)	$	2.01	$	0.74	$	1.16	$	3.34	NM	$	(0.27)	$	4.51	NM
ROE, including AOCI
Net income (loss)		-2.0%		7.5%		2.6%		4.3%		12.4%			-0.5%		8.3%
Page 3

Lincoln Financial Group
Consolidated Balance Sheets
Unaudited (millions of dollars)
	As of
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change
ASSETS
Investments:
Fixed maturity available-for-sale (“AFS”) securities, net of allowance for
credit losses:
Corporate bonds	$	95,390	$	98,717	$	102,789	$	96,570	$	101,003	5.9%
U.S. government bonds		504		496		484		444		444	-11.9%
State and municipal bonds		6,393		6,774		6,921		6,625		6,919	8.2%
Foreign government bonds		436		436		470		485		464	6.4%
Residential mortgage-backed securities		3,272		3,203		3,076		3,077		3,027	-7.5%
Commercial mortgage-backed securities		1,226		1,430		1,505		1,516		1,578	28.7%
Asset-backed securities		5,716		6,590		7,184		7,996		8,177	43.1%
Hybrid and redeemable preferred securities		582		606		615		600		603	3.6%
Total fixed maturity AFS securities, net of allowance for credit losses		113,519		118,252		123,044		117,313		122,215	7.7%
Trading securities		4,651		4,633		4,501		4,365		4,232	-9.0%
Equity securities		87		122		129		123		174	100.0%
Mortgage loans on real estate, net of allowance for credit losses		16,578		16,541		16,763		17,255		17,586	6.1%
Policy loans		2,551		2,527		2,426		2,502		2,410	-5.5%
Derivative investments		2,957		3,236		3,109		3,453		4,548	53.8%
Other investments		4,574		4,204		3,984		3,548		3,950	-13.6%
Total investments		144,917		149,515		153,956		148,559		155,115	7.0%
Cash and invested cash		4,201		2,595		1,708		1,350		2,389	-43.1%
DAC and VOBA		7,012		6,307		5,812		7,665		6,261	-10.7%
Premiums and fees receivable		490		498		486		653		583	19.0%
Accrued investment income		1,168		1,320		1,257		1,301		1,254	7.4%
Reinsurance recoverables, net of allowance for credit losses		16,866		16,610		16,496		16,289		15,981	-5.2%
Funds withheld reinsurance assets		535		539		530		528		527	-1.5%
Goodwill		1,778		1,778		1,778		1,778		1,778	0.0%
Other assets		15,905		15,667		15,960		17,298		17,465	9.8%
Separate account assets		146,787		152,975		167,965		171,339		178,795	21.8%
Total assets	$	339,659	$	347,804	$	365,948	$	366,760	$	380,148	11.9%
		`
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Lincoln Financial Group
Consolidated Balance Sheets
Unaudited (millions of dollars)
	As of
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Future contract benefits	$	38,604	$	40,089	$	40,814	$	39,591	$	40,250	4.3%
Other contract holder funds		100,537		102,568		105,405		107,002		108,778	8.2%
Short-term debt		-		-		-		300		300	NM
Long-term debt by rating agency leverage definitions:
Operating (see note (2) on page 6 for details)		866		866		866		866		866	0.0%
Financial		5,870		5,848		5,816		5,428		5,468	-6.8%
Reinsurance related embedded derivatives		245		334		392		244		328	33.9%
Funds withheld reinsurance liabilities		1,867		1,910		1,946		1,976		2,027	8.6%
Payables for collateral on investments		7,031		6,435		6,222		7,597		8,199	16.6%
Other liabilities		17,121		15,230		13,823		12,824		13,392	-21.8%
Separate account liabilities		146,787		152,975		167,965		171,339		178,795	21.8%
Total liabilities		318,928		326,255		343,249		347,167		358,403	12.4%
Stockholders’ Equity
Common stock		5,081		5,093		5,082		5,057		5,021	-1.2%
Retained earnings		8,327		8,647		8,686		8,775		9,245	11.0%
AOCI:
Unrealized investment gains (losses)		7,668		8,153		9,209		6,040		7,756	1.1%
Foreign currency translation adjustment		(28)		(21)		(12)		(10)		(10)	64.3%
Funded status of employee benefit plans		(317)		(323)		(266)		(269)		(267)	15.8%
Total AOCI		7,323		7,809		8,931		5,761		7,479	2.1%
Total stockholders’ equity		20,731		21,549		22,699		19,593		21,745	4.9%
Total liabilities and stockholders’ equity	$	339,659	$	347,804	$	365,948	$	366,760	$	380,148	11.9%
Page 4b

Lincoln Financial Group
Earnings, Shares and Return on Equity
Unaudited (millions of dollars, except per share data)
	As of or For the Three Months Ended											As of or For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Income (Loss)
Net income (loss)	$	(94)	$	398	$	143	$	225	$	642	NM	$	(42)	$	867	NM
Pre-tax adjusted income (loss) from operations		195		(212)		393		421		729	273.8%		752		1,150	52.9%
After-tax adjusted income (loss) from operations (1)		187		(133)		346		350		608	225.1%		652		959	47.1%
Adjusted operating tax rate		4.0%		37.2%		12.0%		16.8%		16.5%			13.3%		16.6%
Average Stockholders’ Equity
Average equity, including AOCI	$	18,653	$	21,140	$	22,124	$	21,146	$	20,669	10.8%	$	18,393	$	20,908	13.7%
Average AOCI		5,164		7,566		8,370		7,346		6,620	28.2%		4,751		6,983	47.0%
Average equity, excluding AOCI	$	13,489	$	13,574	$	13,754	$	13,800	$	14,049	4.2%	$	13,642	$	13,925	2.1%
ROE, Excluding AOCI
Net income (loss)		-2.8%		11.7%		4.2%		6.5%		18.3%			-0.6%		12.5%
Adjusted income (loss) from operations		5.5%		-3.9%		10.1%		10.2%		17.3%			9.6%		13.8%
Per Share
Net income (loss) (diluted)	$	(0.49)	$	2.01	$	0.74	$	1.16	$	3.34	NM	$	(0.27)	$	4.51	NM
Adjusted income (loss) from operations (diluted)		0.97		(0.72)		1.78		1.82		3.17	226.8%		3.27		4.98	52.3%
Dividends declared during the period		0.40		0.40		0.42		0.42		0.42	5.0%		0.80		0.84	5.0%
Book value, including AOCI	$	107.28	$	111.51	$	118.02	$	102.50	$	115.00	7.2%	$	107.28	$	115.00	7.2%
Per share impact of AOCI		37.90		40.41		46.43		30.14		39.55	4.4%		37.90		39.55	4.4%
Book value, excluding AOCI	$	69.38	$	71.10	$	71.59	$	72.36	$	75.45	8.7%	$	69.38	$	75.45	8.7%
Shares
Repurchased during the period		-		-		1.1		1.9		2.2	NM		3.8		4.1	7.9%
End-of-period – basic		193.2		193.3		192.3		191.1		189.1	-2.1%		193.2		189.1	-2.1%
End-of-period – diluted		194.0		195.3		193.7		192.5		191.4	-1.3%		194.0		191.4	-1.3%
Average for the period – diluted		193.8		195.4		193.9		193.1		192.2	-0.8%		196.2		192.4	-1.9%
(1) See reconciliation to net income (loss) on page 24.
Page 5

Lincoln Financial Group
Key Stakeholder Metrics
Unaudited (millions of dollars, except per share data)
	As of or For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Cash Returned to Common Stockholders
Shares repurchased	$	-	$	-	$	50	$	105	$	150	NM	$	225	$	255	13.3%
Common dividends		77		77		77		81		80	3.9%		156		161	3.2%
Total cash returned to common stockholders	$	77	$	77	$	127	$	186	$	230	198.7%	$	381	$	416	9.2%
Leverage Ratio
Short-term debt	$	-	$	-	$	-	$	300	$	300	NM
Long-term debt		6,736		6,714		6,682		6,294		6,334	-6.0%
Total debt (1)		6,736		6,714		6,682		6,594		6,634	-1.5%
Less:
Operating debt (2)		866		866		866		866		866	0.0%
25% of capital securities		302		302		302		302		302	0.0%
Carrying value of fair value hedges and other items		451		428		395		306		345	-23.5%
Total numerator	$	5,117	$	5,118	$	5,119	$	5,120	$	5,121	0.1%
Stockholders’ equity, excluding unrealized
investment gains (losses)	$	13,063	$	13,396	$	13,490	$	13,553	$	13,989	7.1%
Add:  25% of capital securities		302		302		302		302		302	0.0%
Total numerator		5,117		5,118		5,119		5,120		5,121	0.1%
Total denominator	$	18,482	$	18,816	$	18,911	$	18,975	$	19,412	5.0%
Leverage ratio		27.7%		27.2%		27.1%		27.0%		26.4%
Holding Company Available Liquidity	$	774	$	756	$	754	$	758	$	762	-1.6%
(1) Excludes obligations under finance leases and certain financing arrangements of $499 million that are reported in other liabilities on our Consolidated Balance Sheets.
(2) 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.
Page 6

Lincoln Financial Group
Segment and Sources of Earnings
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Income (Loss) from Operations, Pre-Tax
Annuities	$	272	$	220	$	338	$	350	$	380	39.7%	$	574	$	730	27.2%
Retirement Plan Services		33		58		57		70		74	124.2%		78		144	84.6%
Life Insurance		(52)		(400)		177		130		317	NM		157		447	184.7%
Group Protection		49		8		(54)		(33)		59	20.4%		100		26	-74.0%
Other Operations		(107)		(98)		(125)		(96)		(101)	5.6%		(157)		(197)	-25.5%
Adjusted income (loss) from operations, before
income taxes	$	195	$	(212)	$	393	$	421	$	729	273.8%	$	752	$	1,150	52.9%
Income (Loss) from Operations, After-Tax
Annuities	$	237	$	196	$	289	$	290	$	323	36.3%	$	498	$	613	23.1%
Retirement Plan Services		30		50		49		57		62	106.7%		69		118	71.0%
Life Insurance		(37)		(311)		144		107		255	NM		134		362	170.1%
Group Protection		39		6		(42)		(26)		46	17.9%		79		20	-74.7%
Other Operations		(82)		(74)		(94)		(78)		(78)	4.9%		(128)		(154)	-20.3%
Adjusted income (loss) from operations	$	187	$	(133)	$	346	$	350	$	608	225.1%	$	652	$	959	47.1%
	For the Three Months Ended											For the Trailing Twelve Months
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Sources of Earnings, Pre-Tax
Investment spread	$	39	$	(119)	$	147	$	130	$	228	NM	$	237	$	387	63.3%
Mortality/morbidity		15		(208)		47		39		219	NM		250		97	-61.2%
Fees on AUM		245		321		308		332		363	48.2%		1,072		1,321	23.2%
VA riders		3		(108)		16		16		20	NM		(1)		(56)	NM
Total sources of earnings, before income taxes		302		(114)		518		517		830	174.8%		1,558		1,749	12.3%
Other Operations		(107)		(98)		(125)		(96)		(101)	5.6%		(344)		(418)	-21.5%
Adjusted income (loss) from operations, before
income taxes	$	195	$	(212)	$	393	$	421	$	729	273.8%	$	1,214	$	1,331	9.6%
Sources of Earnings, Pre-Tax, Percentage By Component
Investment spread		12.7%		103.7%		28.5%		25.2%		27.5%			15.2%		22.1%
Mortality/morbidity		4.8%		181.6%		9.1%		7.5%		26.4%			16.1%		5.6%
Fees on AUM		81.3%		-279.5%		59.4%		64.1%		43.6%			68.8%		75.5%
VA riders		1.2%		94.2%		3.0%		3.2%		2.5%			-0.1%		-3.2%
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 Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Annuities
Operating revenues	$	1,037	$	1,126	$	1,163	$	1,204	$	1,249	20.4%	$	2,166	$	2,453	13.3%
Deposits		2,515		2,539		2,510		2,814		3,209	27.6%		6,211		6,023	-3.0%
Net flows		58		(283)		(644)		(776)		(297)	NM		585		(1,073)	NM
Average account values		134,197		144,368		150,875		160,099		166,034	23.7%		136,114		163,091	19.8%
Retirement Plan Services
Operating revenues	$	282	$	311	$	323	$	327	$	333	18.1%	$	579	$	660	14.0%
Deposits		2,307		2,374		2,557		2,640		2,789	20.9%		5,086		5,428	6.7%
Net flows		(1,207)		362		340		347		517	142.8%		(536)		864	261.2%
Average account values		73,611		79,644		83,889		89,589		94,096	27.8%		75,187		91,902	22.2%
Life Insurance
Operating revenues	$	1,639	$	2,127	$	1,928	$	1,939	$	2,029	23.8%	$	3,460	$	3,968	14.7%
Deposits		1,428		1,537		1,476		1,219		1,278	-10.5%		2,878		2,498	-13.2%
Net flows		1,023		1,156		996		793		879	-14.1%		1,986		1,673	-15.8%
Average account values		52,693		54,570		56,419		58,008		59,056	12.1%		52,780		58,532	10.9%
Average in-force face amount		853,071		870,505		886,005		900,973		916,600	7.4%		844,779		908,786	7.6%
Group Protection
Operating revenues	$	1,199	$	1,184	$	1,184	$	1,254	$	1,247	4.0%	$	2,424	$	2,500	3.1%
Insurance premiums		1,086		1,052		1,049		1,119		1,107	1.9%		2,179		2,226	2.2%
Consolidated
Adjusted operating revenues (1)	$	4,209	$	4,788	$	4,655	$	4,762	$	4,903	16.5%	$	8,719	$	9,665	10.8%
Deposits		6,250		6,450		6,543		6,673		7,276	16.4%		14,175		13,949	-1.6%
Net flows		(126)		1,235		692		364		1,099	NM		2,035		1,464	-28.1%
Average account values		260,501		278,582		291,183		307,696		319,186	22.5%		264,081		313,525	18.7%
(1) See reconciliation to total revenues on page 24.
Page 8

Lincoln Financial Group
Sales By Segment
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Sales
Annuities:
With guaranteed living benefits	$	824	$	541	$	507	$	638	$	742	-10.0%	$	2,008	$	1,381	-31.2%
Without guaranteed living benefits		1,392		1,911		1,921		2,090		2,283	64.0%		2,846		4,373	53.7%
Variable		2,216		2,452		2,428		2,728		3,025	36.5%		4,854		5,754	18.5%
Fixed		299		87		82		86		184	-38.5%		1,357		269	-80.2%
Total Annuities	$	2,515	$	2,539	$	2,510	$	2,814	$	3,209	27.6%	$	6,211	$	6,023	-3.0%
Retirement Plan Services:
First-year sales	$	827	$	870	$	1,107	$	694	$	1,102	33.3%	$	1,694	$	1,796	6.0%
Recurring deposits		1,480		1,504		1,450		1,946		1,687	14.0%		3,392		3,632	7.1%
Total Retirement Plan Services	$	2,307	$	2,374	$	2,557	$	2,640	$	2,789	20.9%	$	5,086	$	5,428	6.7%
Life Insurance:
UL	$	5	$	3	$	3	$	2	$	2	-60.0%	$	14	$	4	-71.4%
MoneyGuard®		36		35		22		16		23	-36.1%		70		39	-44.3%
IUL		23		24		22		16		18	-21.7%		44		34	-22.7%
VUL		55		60		30		22		27	-50.9%		98		49	-50.0%
Term		36		28		32		30		35	-2.8%		72		64	-11.1%
Total individual life insurance		155		150		109		86		105	-32.3%		298		190	-36.2%
Executive Benefits		4		36		6		28		21	NM		30		50	66.7%
Total Life Insurance	$	159	$	186	$	115	$	114	$	126	-20.8%	$	328	$	240	-26.8%
Group Protection:
Life	$	47	$	24	$	144	$	41	$	37	-21.3%	$	98	$	78	-20.4%
Disability		47		17		291		28		37	-21.3%		89		65	-27.0%
Dental		11		8		15		5		5	-54.5%		20		10	-50.0%
Total Group Protection	$	105	$	49	$	450	$	74	$	79	-24.8%	$	207	$	153	-26.1%
Percent employee-paid		51.6%		58.9%		28.4%		66.7%		56.3%			55.7%		61.3%
Page 9

Lincoln Financial Group
Operating Revenues and General and Administrative Expenses By Segment
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Operating Revenues
Annuities	$	1,037	$	1,126	$	1,163	$	1,204	$	1,249	20.4%	$	2,166	$	2,453	13.3%
Retirement Plan Services		282		311		323		327		333	18.1%		579		660	14.0%
Life Insurance		1,639		2,127		1,928		1,939		2,029	23.8%		3,460		3,968	14.7%
Group Protection		1,199		1,184		1,184		1,254		1,247	4.0%		2,424		2,500	3.1%
Other Operations		52		40		57		38		45	-13.5%		90		84	-6.7%
Total segment operating revenues	$	4,209	$	4,788	$	4,655	$	4,762	$	4,903	16.5%	$	8,719	$	9,665	10.8%
General and Administrative Expenses,
Net of Amounts Capitalized (1)
Annuities	$	111	$	111	$	126	$	116	$	121	9.0%	$	232	$	237	2.2%
Retirement Plan Services		68		69		78		69		73	7.4%		141		142	0.7%
Life Insurance		116		118		126		118		126	8.6%		238		244	2.5%
Group Protection		153		155		164		158		161	5.2%		304		320	5.3%
Other Operations		55		34		71		44		46	-16.4%		51		90	76.5%
Total	$	503	$	487	$	565	$	505	$	527	4.8%	$	966	$	1,033	6.9%
General and Administrative Expenses,
Net of Amounts Capitalized, as a Percentage
of Operating Revenues
Annuities		10.7%		9.9%		10.8%		9.7%		9.6%			10.7%		9.7%
Retirement Plan Services		24.3%		22.3%		24.2%		21.2%		21.9%			24.3%		21.5%
Life Insurance		7.1%		5.5%		6.5%		6.1%		6.2%			6.9%		6.1%
Group Protection		12.7%		13.1%		13.8%		12.5%		13.0%			12.6%		12.8%
Other Operations		107.5%		83.7%		125.8%		115.6%		100.8%			57.1%		107.6%
Total		12.0%		10.2%		12.1%		10.6%		10.7%			11.1%		10.7%
(1) See page 11 for general and administrative expenses capitalized.
Page 10

Lincoln Financial Group
Operating Commissions and Other Expenses
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Operating Commissions and
Other Expenses Incurred
General and administrative expenses	$	554	$	537	$	638	$	556	$	579	4.5%	$	1,073	$	1,135	5.8%
Commissions		621		611		625		616		652	5.0%		1,327		1,268	-4.4%
Taxes, licenses and fees		79		85		73		87		86	8.9%		169		173	2.4%
Interest and debt expense		68		66		65		65		65	-4.4%		137		131	-4.4%
Expenses associated with reserve financing
and letters of credit		23		24		25		25		25	8.7%		45		50	11.1%
Total adjusted operating commissions and other
expenses incurred		1,345		1,323		1,426		1,349		1,407	4.6%		2,751		2,757	0.2%
Less Amounts Capitalized
General and administrative expenses		(51)		(50)		(73)		(51)		(52)	-2.0%		(107)		(102)	4.7%
Commissions		(291)		(272)		(250)		(233)		(261)	10.3%		(652)		(492)	24.5%
Taxes, licenses and fees		(13)		(11)		(9)		(8)		(11)	15.4%		(26)		(20)	23.1%
Total amounts capitalized		(355)		(333)		(332)		(292)		(324)	8.7%		(785)		(614)	21.8%
Total expenses incurred, net of amounts
capitalized, excluding amortization		990		990		1,094		1,057		1,083	9.4%		1,966		2,143	9.0%
Amortization
Amortization of DAC, VOBA and other intangibles		207		680		218		247		317	53.1%		455		563	23.7%
Total operating commissions and other expenses	$	1,197	$	1,670	$	1,312	$	1,304	$	1,400	17.0%	$	2,421	$	2,706	11.8%
Page 11

Lincoln Financial Group
Interest Rate Yields and Spreads By Segment
Unaudited
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Annuities
Earned rate on reserves		3.69%		3.63%		3.42%		3.27%		3.10%	(59)		3.71%		3.18%	(53)
Variable investment income on reserves (1)		0.10%		0.09%		0.15%		0.11%		0.24%	14		0.06%		0.18%	12
Net investment income yield on reserves		3.79%		3.72%		3.57%		3.38%		3.34%	(45)		3.77%		3.36%	(41)
Interest rate credited to contract holders		2.26%		2.12%		1.97%		2.00%		1.90%	(36)		2.28%		1.95%	(33)
Interest rate spread		1.53%		1.60%		1.60%		1.38%		1.44%	(9)		1.49%		1.41%	(8)
Base spreads excluding variable investment income		1.43%		1.51%		1.45%		1.27%		1.20%	(23)		1.43%		1.23%	(20)
Retirement Plan Services
Earned rate on reserves		3.85%		3.82%		3.68%		3.64%		3.60%	(25)		3.90%		3.61%	(29)
Variable investment income on reserves (1)		0.06%		0.10%		0.21%		0.17%		0.21%	15		0.06%		0.20%	14
Net investment income yield on reserves		3.91%		3.92%		3.89%		3.81%		3.81%	(10)		3.96%		3.81%	(15)
Interest rate credited to contract holders		2.86%		2.81%		2.78%		2.68%		2.69%	(17)		2.88%		2.68%	(20)
Interest rate spread		1.05%		1.11%		1.11%		1.13%		1.12%	7		1.08%		1.13%	5
Base spreads excluding variable investment income		0.99%		1.01%		0.90%		0.96%		0.91%	(8)		1.02%		0.93%	(9)
Life Insurance – Interest-Sensitive
Earned rate on reserves		4.78%		4.76%		4.71%		4.71%		4.68%	(10)		4.77%		4.70%	(7)
Variable investment income on reserves (1)		-0.72%		0.76%		0.95%		1.05%		1.38%	210		-0.21%		1.21%	142
Net investment income yield on reserves		4.06%		5.52%		5.66%		5.76%		6.06%	200		4.56%		5.91%	135
Interest rate credited to contract holders		3.81%		3.75%		3.83%		3.76%		3.78%	(3)		3.80%		3.77%	(3)
Interest rate spread		0.25%		1.77%		1.83%		2.00%		2.28%	203		0.76%		2.14%	138
Base spreads excluding variable investment income		0.97%		1.01%		0.88%		0.95%		0.90%	(7)		0.97%		0.93%	(4)
Total (2)
Earned rate (3)		4.06%		4.09%		4.04%		3.96%		3.94%	(12)		4.18%		3.94%	(24)
Variable investment income (1) (3)		-0.34%		0.45%		0.56%		0.59%		0.78%	112		-0.08%		0.69%	77
Net investment income yield (3)		3.72%		4.54%		4.60%		4.55%		4.72%	100		4.10%		4.63%	53
(1) Variable investment income consists of commercial mortgage loan prepayment and bond make-whole premiums and investment income on alternative investments.
(2) Includes the results of all of our business segments and Other Operations.
(3) Includes investment yields on reserves and surplus.
Page 12

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 Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	22	$	17	$	29	$	32	$	27	22.7%	$	75	$	59	-21.3%
Fee income		567		608		626		652		679	19.8%		1,160		1,332	14.8%
Net investment income		270		334		343		328		352	30.4%		595		680	14.3%
Operating realized gain (loss)		49		57		54		50		53	8.2%		104		103	-1.0%
Amortization of deferred gain		8		8		5		6		6	-25.0%		16		12	-25.0%
Other revenues		121		102		106		136		132	9.1%		216		267	23.6%
Total operating revenues		1,037		1,126		1,163		1,204		1,249	20.4%		2,166		2,453	13.3%
Operating expenses:
Interest credited		192		198		191		199		199	3.6%		384		398	3.6%
Benefits		127		261		138		141		135	6.3%		297		275	-7.4%
Commissions incurred		246		248		255		275		297	20.7%		558		573	2.7%
Other expenses incurred		221		232		252		255		264	19.5%		470		519	10.4%
Amounts capitalized		(122)		(118)		(117)		(127)		(144)	-18.0%		(313)		(271)	13.4%
Amortization		101		85		106		111		118	16.8%		196		229	16.8%
Total operating expenses		765		906		825		854		869	13.6%		1,592		1,723	8.2%
Income (loss) from operations before taxes		272		220		338		350		380	39.7%		574		730	27.2%
Federal income tax expense (benefit)		35		24		49		60		57	62.9%		76		117	53.9%
Income (loss) from operations	$	237	$	196	$	289	$	290	$	323	36.3%	$	498	$	613	23.1%
Effective Federal Income Tax Rate		12.9%		11.1%		14.5%		17.2%		15.0%			13.2%		16.0%
Average Equity, Excluding Goodwill and AOCI	$	5,002	$	5,394	$	5,405	$	5,071	$	5,077	1.5%	$	4,945	$	5,074	2.6%
ROE, Excluding Goodwill and AOCI		19.0%		14.5%		21.4%		22.9%		25.5%			20.2%		24.2%
Return on Average Account Values		71		54		77		72		78	7		73		75	2
Income (Loss) from Operations
Variable annuity		207		176		254		261		293	41.5%		439		553	26.0%
Fixed annuity		30		20		35		29		30	0.0%		59		60	1.7%
Account Values - Average
Variable account values	$	116,861	$	127,011	$	133,630	$	142,990	$	149,066	27.6%	$	118,979	$	146,042	22.7%
Fixed account values		17,336		17,357		17,245		17,109		16,968	-2.1%		17,135		17,049	-0.5%
Account Values - End of Period
Variable account values with GLBs	$	74,858	$	77,084	$	83,377	$	84,155	$	86,901	16.1%	$	74,858	$	86,901	16.1%
Variable account values without GLBs		46,854		50,501		56,936		60,002		64,495	37.7%		46,854		64,495	37.7%
Fixed account values		17,349		17,263		17,205		16,966		16,911	-2.5%		17,349		16,911	-2.5%
Page 13

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 Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Income (Loss) from Operations
Operating revenues:
Fee income	$	58	$	65	$	69	$	71	$	74	27.6%	$	119	$	146	22.7%
Net investment income		218		240		246		248		250	14.7%		447		498	11.4%
Other revenues		6		6		8		8		9	50.0%		13		16	23.1%
Total operating revenues		282		311		323		327		333	18.1%		579		660	14.0%
Operating expenses:
Interest credited		153		155		157		155		155	1.3%		303		309	2.0%
Benefits		1		1		-		1		1	0.0%		1		1	0.0%
Commissions incurred		18		19		20		21		20	11.1%		37		42	13.5%
Other expenses incurred		77		74		86		77		79	2.6%		159		158	-0.6%
Amounts capitalized		(6)		(4)		(5)		(5)		(4)	33.3%		(12)		(10)	16.7%
Amortization		6		8		8		8		8	33.3%		13		16	23.1%
Total operating expenses		249		253		266		257		259	4.0%		501		516	3.0%
Income (loss) from operations before taxes		33		58		57		70		74	124.2%		78		144	84.6%
Federal income tax expense (benefit)		3		8		8		13		12	300.0%		9		26	188.9%
Income (loss) from operations	$	30	$	50	$	49	$	57	$	62	106.7%	$	69	$	118	71.0%
Effective Federal Income Tax Rate		10.1%		13.7%		14.6%		18.9%		16.7%			10.8%		17.8%
Average Equity, Excluding Goodwill and AOCI	$	1,410	$	1,441	$	1,480	$	1,526	$	1,535	8.9%	$	1,413	$	1,530	8.3%
ROE, Excluding Goodwill and AOCI		8.5%		13.8%		13.2%		14.9%		16.1%			9.8%		15.5%
Pre-tax Net Margin		25.8%		36.8%		34.4%		40.4%		41.5%			28.3%		41.0%
Return on Average Account Values		16		25		23		25		26	10		18		26	8
Net Flows by Market
Small Market		30		113		66		(28)		106	253.3%	$	171	$	79	-53.8%
Mid - Large Market		(1,084)		500		587		680		755	169.6%		(294)		1,435	NM
Multi-Fund® and Other		(153)		(251)		(313)		(305)		(344)	NM		(413)		(650)	-57.4%
Net Flows – Trailing Twelve Months	$	158	$	248	$	166	$	(158)	$	1,566	NM	$	158	$	1,566	NM
Page 14

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 Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	230	$	223	$	274	$	253	$	258	12.2%	$	454	$	511	12.6%
Fee income		830		1,141		861		867		915	10.2%		1,723		1,783	3.5%
Net investment income		577		761		787		809		852	47.7%		1,274		1,661	30.4%
Operating realized gain (loss)		(2)		-		(1)		(2)		(2)	0.0%		(5)		(4)	20.0%
Amortization of deferred gain on
business sold through reinsurance		3		3		4		3		3	0.0%		6		5	-16.7%
Other revenues		1		(1)		3		9		3	200.0%		8		12	50.0%
Total operating revenues		1,639		2,127		1,928		1,939		2,029	23.8%		3,460		3,968	14.7%
Operating expenses:
Interest credited		375		369		375		370		372	-0.8%		746		742	-0.5%
Benefits		1,084		1,428		1,120		1,173		999	-7.8%		2,037		2,172	6.6%
Commissions incurred		173		171		152		120		130	-24.9%		364		250	-31.3%
Other expenses incurred		195		209		204		194		208	6.7%		405		403	-0.5%
Amounts capitalized		(202)		(202)		(168)		(138)		(154)	23.8%		(418)		(293)	29.9%
Amortization		66		552		68		90		157	137.9%		169		247	46.2%
Total operating expenses		1,691		2,527		1,751		1,809		1,712	1.2%		3,303		3,521	6.6%
Income (loss) from operations before taxes		(52)		(400)		177		130		317	NM		157		447	184.7%
Federal income tax expense (benefit)		(15)		(89)		33		23		62	NM		23		85	269.6%
Income (loss) from operations	$	(37)	$	(311)	$	144	$	107	$	255	NM	$	134	$	362	170.1%
Effective Federal Income Tax Rate		28.9%		22.2%		18.6%		17.7%		19.7%			14.5%		19.1%
Average Equity, Excluding Goodwill and AOCI	$	8,977	$	8,854	$	8,788	$	8,909	$	9,035	0.6%	$	8,888	$	8,972	0.9%
ROE, Excluding Goodwill and AOCI		-1.6%		-14.1%		6.5%		4.8%		11.3%			3.0%		8.1%
Average Account Values	$	52,693	$	54,570	$	56,419	$	58,008	$	59,056	12.1%	$	52,780	$	58,532	10.9%
In-Force Face Amount
UL and other	$	357,690	$	358,897	$	358,554	$	358,044	$	357,670	0.0%	$	357,690	$	357,670	0.0%
Term insurance		505,251		519,173		535,387		549,960		567,525	12.3%		505,251		567,525	12.3%
Total in-force face amount	$	862,941	$	878,070	$	893,941	$	908,004	$	925,195	7.2%	$	862,941	$	925,195	7.2%
Page 15

Lincoln Financial Group
Group Protection – Select Earnings and Operational Data
Unaudited (millions of dollars)
	As of or For the Three Months Ended											As of or For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	1,086	$	1,052	$	1,049	$	1,119	$	1,107	1.9%	$	2,179	$	2,226	2.2%
Net investment income		69		88		91		91		95	37.7%		151		185	22.5%
Other revenues		44		44		44		44		45	2.3%		94		89	-5.3%
Total operating revenues		1,199		1,184		1,184		1,254		1,247	4.0%		2,424		2,500	3.1%
Operating expenses:
Interest credited		1		1		1		1		1	0.0%		3		3	0.0%
Benefits		843		875		920		970		877	4.0%		1,706		1,847	8.3%
Commissions incurred		97		80		95		91		87	-10.3%		183		178	-2.7%
Other expenses incurred		198		194		227		208		210	6.1%		397		417	5.0%
Amounts capitalized		(23)		(9)		(41)		(21)		(21)	8.7%		(42)		(42)	0.0%
Amortization		34		35		36		38		34	0.0%		77		71	-7.8%
Total operating expenses		1,150		1,176		1,238		1,287		1,188	3.3%		2,324		2,474	6.5%
Income (loss) from operations before taxes		49		8		(54)		(33)		59	20.4%		100		26	-74.0%
Federal income tax expense (benefit)		10		2		(12)		(7)		13	30.0%		21		6	-71.4%
Income (loss) from operations	$	39	$	6	$	(42)	$	(26)	$	46	17.9%	$	79	$	20	-74.7%
Effective Federal Income Tax Rate		21.0%		21.0%		21.0%		21.0%		21.0%			21.0%		21.0%
Average Equity, Excluding Goodwill and AOCI	$	2,628	$	2,678	$	2,711	$	2,718	$	2,731	3.9%	$	2,615	$	2,725	4.2%
ROE, Excluding Goodwill and AOCI		5.9%		0.9%		-6.3%		-3.8%		6.8%			6.0%		1.5%
Loss Ratios by Product Line
Life		82.6%		91.9%		93.4%		101.0%		79.6%			81.0%		90.2%
Disability		78.7%		78.9%		86.2%		78.8%		79.0%			78.5%		78.9%
Dental		40.2%		70.1%		67.3%		76.8%		81.6%			57.7%		79.2%
Total		77.8%		83.2%		87.8%		86.8%		79.3%			78.1%		83.1%
Page 16

Lincoln Financial Group
Other Operations – Select Earnings and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Other Operations
Operating revenues:
Insurance premiums	$	5	$	2	$	11	$	2	$	6	20.0%	$	7	$	8	14.3%
Net investment income		38		35		38		34		35	-7.9%		80		70	-12.5%
Other revenues		9		3		8		2		4	-55.6%		3		6	100.0%
Total operating revenues		52		40		57		38		45	-13.5%		90		84	-6.7%
Operating expenses:
Interest credited		11		9		8		12		10	-9.1%		23		22	-4.3%
Benefits		30		33		40		15		25	-16.7%		46		40	-13.0%
Commissions and other expenses		36		10		46		29		25	-30.6%		15		53	253.3%
Interest and debt expense		68		66		65		65		65	-4.4%		137		131	-4.4%
Strategic digitization expense		14		20		23		13		21	50.0%		26		35	34.6%
Total operating expenses		159		138		182		134		146	-8.2%		247		281	13.8%
Income (loss) from operations before taxes		(107)		(98)		(125)		(96)		(101)	5.6%		(157)		(197)	-25.5%
Federal income tax expense (benefit)		(25)		(24)		(31)		(18)		(23)	8.0%		(29)		(43)	-48.3%
Income (loss) from operations	$	(82)	$	(74)	$	(94)	$	(78)	$	(78)	4.9%	$	(128)	$	(154)	-20.3%
Page 17

Lincoln Financial Group
Consolidated – DAC, VOBA, DSI and DFEL Roll Forwards
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
DAC, VOBA and DSI
Balance as of beginning-of-period	$	9,457	$	7,241	$	6,520	$	6,025	$	7,884	-16.6%	$	7,928	$	6,025	-24.0%
Business acquired (sold) through reinsurance		-		-		-		-		-	NM		(10)		-	100.0%
Cumulative effect from adoption of new
accounting standard		-		-		-		-		-	NM		5		-	-100.0%
Deferrals		355		334		333		295		325	-8.5%		790		619	-21.6%
Operating amortization		(204)		(679)		(212)		(244)		(314)	-53.9%		(447)		(558)	-24.8%
Deferrals, net of operating amortization		151		(345)		121		51		11	-92.7%		343		61	-82.2%
Amortization associated with benefit ratio unlocking		(4)		(10)		(30)		(6)		(11)	NM		62		(17)	NM
Adjustment related to realized (gains) losses		33		(198)		87		50		(10)	NM		91		41	-54.9%
Adjustment related to unrealized (gains) losses		(2,396)		(168)		(673)		1,764		(1,402)	41.5%		(1,178)		362	130.7%
Balance as of end-of-period	$	7,241	$	6,520	$	6,025	$	7,884	$	6,472	-10.6%	$	7,241	$	6,472	-10.6%
DFEL
Balance as of beginning-of-period	$	1,379	$	433	$	392	$	401	$	559	-59.5%	$	650	$	401	-38.3%
Cumulative effect from adoption of new
accounting standard		-		-		-		-		-	NM		4		-	-100.0%
Deferrals		252		263		249		231		240	-4.8%		492		471	-4.3%
Operating amortization		(111)		(424)		(120)		(131)		(179)	-61.3%		(270)		(310)	-14.8%
Deferrals, net of operating amortization		141		(161)		129		100		61	-56.7%		222		161	-27.5%
Amortization associated with benefit ratio unlocking		(2)		(1)		(4)		(1)		(2)	0.0%		6		(2)	NM
Adjustment related to realized (gains) losses		12		(14)		9		1		(2)	NM		29		(2)	NM
Adjustment related to unrealized (gains) losses		(1,097)		135		(125)		58		(183)	83.3%		(478)		(125)	73.8%
Balance as of end-of-period	$	433	$	392	$	401	$	559	$	433	0.0%	$	433	$	433	0.0%
DAC, VOBA, DSI and DFEL
Balance as of End-of-Period, After-Tax	$	5,378	$	4,841	$	4,443	$	5,787	$	4,771	-11.3%	$	5,378	$	4,771	-11.3%
Page 18

Lincoln Financial Group
Annuities – Account Value Roll Forwards
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Fixed Annuities
Balance as of beginning-of-period	$	25,740	$	25,801	$	25,572	$	25,405	$	25,008	-2.8%	$	25,384	$	25,405	0.1%
Gross deposits		299		87		82		86		184	-38.5%		1,357		269	-80.2%
Full surrenders and deaths		(384)		(399)		(400)		(494)		(482)	-25.5%		(784)		(975)	-24.4%
Other contract benefits		(143)		(135)		(145)		(141)		(115)	19.6%		(299)		(257)	14.0%
Net flows		(228)		(447)		(463)		(549)		(413)	-81.1%		274		(963)	NM
Contract holder assessments		(16)		(16)		(19)		(25)		(22)	-37.5%		(28)		(45)	-60.7%
Reinvested interest credited		305		234		315		177		267	-12.5%		171		443	159.1%
Balance as of end-of-period, gross		25,801		25,572		25,405		25,008		24,840	-3.7%		25,801		24,840	-3.7%
Reinsurance ceded		(8,452)		(8,309)		(8,200)		(8,042)		(7,929)	6.2%		(8,452)		(7,929)	6.2%
Balance as of end-of-period, net	$	17,349	$	17,263	$	17,205	$	16,966	$	16,911	-2.5%	$	17,349	$	16,911	-2.5%
Variable Annuities
Balance as of beginning-of-period	$	108,689	$	121,713	$	127,585	$	140,313	$	144,157	32.6%	$	125,492	$	140,313	11.8%
Gross deposits		2,216		2,452		2,428		2,728		3,025	36.5%		4,854		5,754	18.5%
Full surrenders and deaths		(1,068)		(1,384)		(1,600)		(1,901)		(1,871)	-75.2%		(2,670)		(3,772)	-41.3%
Other contract benefits		(862)		(904)		(1,009)		(1,054)		(1,038)	-20.4%		(1,873)		(2,092)	-11.7%
Net flows		286		164		(181)		(227)		116	-59.4%		311		(110)	NM
Contract holder assessments		(611)		(648)		(666)		(684)		(705)	-15.4%		(1,243)		(1,390)	-11.8%
Change in market value and reinvestment		13,349		6,356		13,575		4,755		7,828	-41.4%		(2,847)		12,583	NM
Balance as of end-of-period, gross		121,713		127,585		140,313		144,157		151,396	24.4%		121,713		151,396	24.4%
Reinsurance ceded		(1)		-		-		-		-	100.0%		(1)		-	100.0%
Balance as of end-of-period, net	$	121,712	$	127,585	$	140,313	$	144,157	$	151,396	24.4%	$	121,712	$	151,396	24.4%
Total
Balance as of beginning-of-period	$	134,429	$	147,514	$	153,157	$	165,718	$	169,165	25.8%	$	150,876	$	165,718	9.8%
Gross deposits		2,515		2,539		2,510		2,814		3,209	27.6%		6,211		6,023	-3.0%
Full surrenders and deaths		(1,452)		(1,783)		(2,000)		(2,395)		(2,353)	-62.1%		(3,454)		(4,747)	-37.4%
Other contract benefits		(1,005)		(1,039)		(1,154)		(1,195)		(1,153)	-14.7%		(2,172)		(2,349)	-8.1%
Net flows		58		(283)		(644)		(776)		(297)	NM		585		(1,073)	NM
Contract holder assessments		(627)		(664)		(685)		(709)		(727)	-15.9%		(1,271)		(1,435)	-12.9%
Change in market value and reinvestment		13,654		6,590		13,890		4,932		8,095	-40.7%		(2,676)		13,026	NM
Balance as of end-of-period, gross		147,514		153,157		165,718		169,165		176,236	19.5%		147,514		176,236	19.5%
Reinsurance ceded		(8,453)		(8,309)		(8,200)		(8,042)		(7,929)	6.2%		(8,453)		(7,929)	6.2%
Balance as of end-of-period, net	$	139,061	$	144,848	$	157,518	$	161,123	$	168,307	21.0%	$	139,061	$	168,307	21.0%
Page 19

Lincoln Financial Group
Retirement Plan Services – Account Value Roll Forwards
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
General Account
Balance as of beginning-of-period	$	21,335	$	21,672	$	22,316	$	22,916	$	23,008	7.8%	$	20,558	$	22,916	11.5%
Gross deposits		817		568		731		490		424	-48.1%		1,426		913	-36.0%
Withdrawals		(752)		(477)		(533)		(583)		(590)	21.5%		(1,317)		(1,173)	10.9%
Net flows		65		91		198		(93)		(166)	NM		109		(260)	NM
Transfers between fixed and variable accounts		124		402		247		35		3	-97.6%		711		40	-94.4%
Contract holder assessments		(3)		(4)		(3)		(3)		(3)	0.0%		(6)		(7)	-16.7%
Reinvestment interest credited		151		155		158		153		153	1.3%		300		306	2.0%
Balance as of end-of-period	$	21,672	$	22,316	$	22,916	$	23,008	$	22,995	6.1%	$	21,672	$	22,995	6.1%
Separate Account and Mutual Funds
Balance as of beginning-of-period	$	48,301	$	54,886	$	58,255	$	65,391	$	68,149	41.1%	$	58,131	$	65,391	12.5%
Gross deposits		1,490		1,806		1,826		2,150		2,365	58.7%		3,660		4,515	23.4%
Withdrawals		(2,762)		(1,535)		(1,684)		(1,710)		(1,682)	39.1%		(4,305)		(3,391)	21.2%
Net flows		(1,272)		271		142		440		683	153.7%		(645)		1,124	274.3%
Transfers between fixed and variable accounts		(161)		(436)		(326)		(141)		(43)	73.3%		(771)		(185)	76.0%
Contract holder assessments		(49)		(50)		(59)		(62)		(65)	-32.7%		(103)	��	(127)	-23.3%
Change in market value and reinvestment		8,067		3,584		7,379		2,521		4,189	-48.1%		(1,726)		6,710	NM
Balance as of end-of-period	$	54,886	$	58,255	$	65,391	$	68,149	$	72,913	32.8%	$	54,886	$	72,913	32.8%
Total
Balance as of beginning-of-period	$	69,636	$	76,558	$	80,571	$	88,307	$	91,157	30.9%	$	78,689	$	88,307	12.2%
Gross deposits		2,307		2,374		2,557		2,640		2,789	20.9%		5,086		5,428	6.7%
Withdrawals		(3,514)		(2,012)		(2,217)		(2,293)		(2,272)	35.3%		(5,622)		(4,564)	18.8%
Net flows		(1,207)		362		340		347		517	142.8%		(536)		864	261.2%
Transfers between fixed and variable accounts		(37)		(34)		(79)		(106)		(40)	-8.1%		(60)		(145)	NM
Contract holder assessments		(52)		(54)		(62)		(65)		(68)	-30.8%		(109)		(134)	-22.9%
Change in market value and reinvestment		8,218		3,739		7,537		2,674		4,342	-47.2%		(1,426)		7,016	NM
Balance as of end-of-period	$	76,558	$	80,571	$	88,307	$	91,157	$	95,908	25.3%	$	76,558	$	95,908	25.3%
Page 20

Lincoln Financial Group
Life Insurance – Account Value Roll Forwards
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
General Account
Balance as of beginning-of-period	$	38,054	$	38,034	$	38,080	$	38,136	$	38,053	0.0%	$	38,141	$	38,136	0.0%
Deposits		964		966		1,028		899		895	-7.2%		1,960		1,794	-8.5%
Withdrawals and deaths		(263)		(230)		(282)		(296)		(243)	7.6%		(643)		(539)	16.2%
Net flows		701		736		746		603		652	-7.0%		1,317		1,255	-4.7%
Contract holder assessments		(1,073)		(1,079)		(1,088)		(1,073)		(1,074)	-0.1%		(2,148)		(2,148)	0.0%
Reinvested interest credited		352		389		398		387		382	8.5%		724		770	6.4%
Balance as of end-of-period, gross		38,034		38,080		38,136		38,053		38,013	-0.1%		38,034		38,013	-0.1%
Reinsurance ceded		(646)		(646)		(640)		(636)		(628)	2.8%		(646)		(628)	2.8%
Balance as of end-of-period, net	$	37,388	$	37,434	$	37,496	$	37,417	$	37,385	0.0%	$	37,388	$	37,385	0.0%
Separate Account
Balance as of beginning-of-period	$	14,782	$	17,351	$	18,671	$	21,078	$	21,983	48.7%	$	17,646	$	21,078	19.4%
Deposits		464		571		448		320		383	-17.5%		918		704	-23.3%
Withdrawals and deaths		(142)		(151)		(198)		(130)		(156)	-9.9%		(249)		(286)	-14.9%
Net flows		322		420		250		190		227	-29.5%		669		418	-37.5%
Contract holder assessments		(211)		(217)		(209)		(197)		(203)	3.8%		(415)		(400)	3.6%
Change in market value and reinvestment		2,458		1,117		2,366		912		1,354	-44.9%		(549)		2,265	NM
Balance as of end-of-period, gross		17,351		18,671		21,078		21,983		23,361	34.6%		17,351		23,361	34.6%
Reinsurance ceded		(830)		(874)		(969)		(990)		(1,044)	-25.8%		(830)		(1,044)	-25.8%
Balance as of end-of-period, net	$	16,521	$	17,797	$	20,109	$	20,993	$	22,317	35.1%	$	16,521	$	22,317	35.1%
Total
Balance as of beginning-of-period	$	52,836	$	55,385	$	56,751	$	59,214	$	60,036	13.6%	$	55,787	$	59,214	6.1%
Deposits		1,428		1,537		1,476		1,219		1,278	-10.5%		2,878		2,498	-13.2%
Withdrawals and deaths		(405)		(381)		(480)		(426)		(399)	1.5%		(892)		(825)	7.5%
Net flows		1,023		1,156		996		793		879	-14.1%		1,986		1,673	-15.8%
Contract holder assessments		(1,284)		(1,296)		(1,297)		(1,270)		(1,277)	0.5%		(2,563)		(2,548)	0.6%
Change in market value and reinvestment		2,810		1,506		2,764		1,299		1,736	-38.2%		175		3,035	NM
Balance as of end-of-period, gross		55,385		56,751		59,214		60,036		61,374	10.8%		55,385		61,374	10.8%
Reinsurance ceded		(1,476)		(1,520)		(1,609)		(1,626)		(1,672)	-13.3%		(1,476)		(1,672)	-13.3%
Balance as of end-of-period, net	$	53,909	$	55,231	$	57,605	$	58,410	$	59,702	10.7%	$	53,909	$	59,702	10.7%
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Lincoln Financial Group
Select Investment Data
Unaudited (millions of dollars)
	As of 6/30/20				As of 12/31/20				As of 6/30/21
	Amount		%		Amount		%		Amount		%
Fixed Maturity AFS, Trading and Equity Securities, at Fair Value
Fixed maturity AFS securities, net of allowance for credit losses:
Corporate bonds	$	95,390		80.7%	$	102,789		80.5%	$	101,003		79.8%
U.S. government bonds		504		0.4%		484		0.4%		444		0.4%
State and municipal bonds		6,393		5.4%		6,921		5.4%		6,919		5.5%
Foreign government bonds		436		0.4%		470		0.4%		464		0.4%
Residential mortgage-backed securities		3,272		2.8%		3,076		2.4%		3,027		2.4%
Commercial mortgage-backed securities		1,226		1.0%		1,505		1.2%		1,578		1.2%
Asset-backed securities		5,716		4.8%		7,184		5.6%		8,177		6.5%
Hybrid and redeemable preferred securities		582		0.5%		615		0.5%		603		0.5%
Total fixed maturity AFS securities, net of allowance for credit losses		113,519		96.0%		123,044		96.4%		122,215		96.7%
Trading securities		4,651		3.9%		4,501		3.5%		4,232		3.2%
Equity securities		87		0.1%		129		0.1%		174		0.1%
Total fixed maturity AFS securities, net of allowance for credit losses, and trading and
equity securities	$	118,257		100.0%	$	127,674		100.0%	$	126,621		100.0%
Fixed Maturity AFS, Trading and Equity Securities, at Amortized Cost
Fixed maturity AFS securities	$	98,817		95.9%	$	104,174		96.1%	$	106,668		96.4%
Trading securities		4,096		4.0%		4,072		3.8%		3,851		3.5%
Equity securities		112		0.1%		132		0.1%		151		0.1%
Total fixed maturity AFS, trading and equity securities	$	103,025		100.0%	$	108,378		100.0%	$	110,670		100.0%
Percentage of Fixed Maturity AFS Securities, at Amortized Cost
Investment grade				95.8%				95.9%				96.2%
Below investment grade				4.2%				4.1%				3.8%
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Lincoln Financial Group
Realized Gain (Loss), After-DAC
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Components of Realized Gain (Loss), Pre-Tax
Total adjusted operating realized gain (loss)	$	47	$	57	$	53	$	48	$	51	8.5%	$	99	$	99	0.0%
Total excluded realized gain (loss)		(694)		572		(523)		(229)		(53)	92.4%		(770)		(281)	63.5%
Total realized gain (loss), pre-tax	$	(647)	$	629	$	(470)	$	(181)	$	(2)	99.7%	$	(671)	$	(182)	72.9%
Components of Excluded Realized Gain (Loss), After-Tax
Credit loss benefit (expense) on mortgage loans on
real estate	$	(79)	$	50	$	(6)	$	17	$	8	110.1%	$	(130)	$	26	120.0%
Credit loss benefit (expense) on other financial assets		(1)		(1)		(2)		(1)		(3)	NM		(17)		(4)	76.5%
Realized gain (loss) related to certain financial assets		(36)		(5)		(7)		1		(5)	86.1%		(22)		(7)	68.2%
Realized gain (loss) on equity securities		2		3		13		8		16	NM		(12)		26	NM
Realized gain (loss) on the mark-to-market on certain
instruments		(1)		(6)		2		19		(2)	-100.0%		36		18	-50.0%
Realized gain (loss) related to financial assets, after-tax		(115)		41		-		44		14	112.2%		(145)		59	140.7%
Variable annuity net derivative results:
Hedge program performance, including unlocking
for GLB reserves hedged and benefit ratio unlocking		(71)		12		(9)		(42)		13	118.3%		(568)		(29)	94.9%
GLB non-performance risk component		(79)		464		(240)		(144)		(1)	98.7%		69		(145)	NM
Total variable annuity net derivative results		(150)		476		(249)		(186)		12	108.0%		(499)		(174)	65.1%
Indexed annuity forward-starting option		(1)		18		12		17		8	NM		(32)		23	171.9%
Excluded realized gain (loss), including
benefit ratio unlocking, after-tax		(266)		535		(237)		(125)		34	112.8%		(676)		(92)	86.4%
Less: benefit ratio unlocking, after-tax		282		83		177		55		77	-72.7%		(67)		131	-30.0%
Total excluded realized gain (loss), after-tax	$	(548)	$	452		(414)	$	(180)	$	(43)	92.2%	$	(609)	$	(223)	9.1%
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Lincoln Financial Group
Select GAAP to Non-GAAP Reconciliations
Unaudited (millions of dollars)
	For the Three Months Ended											For the Six Months Ended
	6/30/20		9/30/20		12/31/20		3/31/21		6/30/21		Change	6/30/20		6/30/21		Change
Revenues
Total revenues	$	3,517	$	5,361	$	4,135	$	4,534	$	4,851	37.9%	$	7,942	$	9,386	18.2%
Less:
Excluded realized gain (loss)		(694)		572		(523)		(229)		(53)	92.4%		(770)		(281)	63.5%
Amortization of DFEL associated with
benefit ratio unlocking		2		1		3		1		1	-50.0%		(7)		2	128.6%
Adjusted operating revenues	$	4,209	$	4,788	$	4,655	$	4,762	$	4,903	16.5%	$	8,719	$	9,665	10.8%
Net Income
Net income (loss)	$	(94)	$	398	$	143	$	225	$	642	NM	$	(42)	$	867	NM
Less:
Excluded realized gain (loss), after-tax		(548)		452		(414)		(180)		(43)	92.2%		(609)		(223)	63.4%
Benefit ratio unlocking, after-tax		282		83		177		55		77	-72.7%		(67)		131	295.5%
Net impact from the Tax Cuts and Jobs Act		-		-		37		-		-	NM		-		-	NM
Acquisition and integration costs related to
mergers and acquisitions, after-tax		(3)		(4)		(3)		-		-	100.0%		(6)		-	100.0%
Gain (loss) on early extinguishment of debt, after-tax		(12)		-		-		-		-	100.0%		(12)		-	100.0%
Total adjustments		(281)		531		(203)		(125)		34	112.1%		(694)		(92)	86.7%
Adjusted income (loss) from operations	$	187	$	(133)	$	346	$	350	$	608	225.1%	$	652	$	959	47.1%
Earnings (Loss) Per Common Share – Diluted
Net income (loss)	$	(0.49)	$	2.01	$	0.74	$	1.16	$	3.34	NM	$	(0.27)	$	4.51	NM
Less:
Excluded realized gain (loss), after-tax		(2.85)		2.32		(2.12)		(0.94)		(0.22)	92.3%		(3.13)		(1.15)	63.3%
Benefit ratio unlocking, after-tax		1.46		0.43		0.91		0.28		0.39	-73.3%		(0.35)		0.68	294.3%
Net impact from the Tax Cuts and Jobs Act		-		-		0.19		-		-	NM		-		-	NM
Acquisition and integration costs related to mergers
and acquisitions, after-tax		(0.01)		(0.02)		(0.02)		-		-	100.0%		(0.04)		-	100.0%
Gain (loss) on early extinguishment of debt, after-tax		(0.06)		-		-		-		-	100.0%		(0.06)		-	100.0%
Adjustment attributable to using different average
diluted shares for adjusted income from operations
as compared to net loss		-		-		-		-		-	NM		0.04		-	-100.0%
Adjusted income (loss) from operations	$	0.97	$	(0.72)	$	1.78	$	1.82	$	3.17	226.8%	$	3.27	$	4.98	52.3%
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