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| Lincoln Financial Group |
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| Table of Contents |
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| Notes | 1 |
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| Credit Ratings | 2 |
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| Consolidated |
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| Consolidated Statements of Income (Loss) | 3 |
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| Consolidated Balance Sheets | 4 |
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| Earnings, Shares and Return on Equity | 5 |
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| Key Stakeholder Metrics | 6 |
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| Segment and Sources of Earnings | 7 |
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| Select Earnings Drivers By Segment | 8 |
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| Sales By Segment | 9 |
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| Operating Revenues and General and Administrative Expenses By Segment | 10 |
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| Operating Commissions and Other Expenses | 11 |
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| Interest Rate Yields and Spreads By Segment | 12 |
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| Select Earnings and Operational Data from Business Segments |
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| Annuities | 13 |
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| Retirement Plan Services | 14 |
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| Life Insurance | 15 |
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| Group Protection | 16 |
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| Other Operations | 17 |
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| DAC & Account Value Rollforwards |
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| Consolidated DAC, VOBA, DSI and DFEL Roll Forwards | 18 |
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| Account Value Roll Forwards: |
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| Annuities | 19 |
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| Retirement Plan Services | 20 |
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| Life Insurance | 21 |
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| Other Information |
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| Fixed-Income Asset Class | 22 |
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| Fixed-Income Credit Quality | 23 |
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| Realized Gain (Loss), After-DAC | 24 |
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| Select GAAP to Non-GAAP Reconciliations | 25 |
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| Lincoln Financial Group |
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| Notes |
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| Computations |
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| • The quarterly financial information for the current year may not sum to the corresponding year-to-date amount as both are rounded to millions. |
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| • The financial ratios reported herein are calculated using whole dollars instead of dollars rounded to millions. |
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| • We exclude deferred units of LNC stock that are antidilutive from our diluted earnings per share calculation. In addition, for any period where a net loss or adjusted loss from operations is experienced, |
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| shares used in the diluted EPS calculation represent basic shares, as the use of diluted shares would result in a lower loss per share. |
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| • 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) |
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| from operations) by average equity, excluding accumulated other comprehensive income (loss) (“AOCI”). Management evaluates consolidated ROE by both including and excluding the effect |
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| of average goodwill. |
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| • 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 |
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| 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 |
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| 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. |
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| • 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. |
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| Definitions |
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| 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 |
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| paper outstanding. |
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| Sales as reported consist of the following: |
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| • Annuities and Retirement Plan Services – deposits from new and existing customers; |
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| • Universal life insurance (“UL”), indexed universal life insurance (“IUL”), variable universal life insurance (“VUL”) – first-year commissionable premiums plus 5% of excess premiums received; |
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| • MoneyGuard® linked-benefit products – MoneyGuard® (UL), 15% of total expected premium deposits, and MoneyGuard Market AdvantageSM (VUL), 150% of commissionable premiums; |
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| • Executive Benefits – insurance and corporate-owned UL and VUL, first-year commissionable premiums plus 5% of excess premium received, and single premium bank-owned UL and VUL, 15% of |
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| single premium deposits; |
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| • Term – 100% of annualized first-year premiums; and |
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| • Group Protection – annualized first-year premiums from new policies. |
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| 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”) |
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| and deferred front-end loads (“DFEL”) and changes in other contract holder funds. |
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| Sources of earnings are defined as follows: |
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| • 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 |
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| expenses. |
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| • 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 |
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| of insurance in force. |
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| • 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. |
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| • 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 |
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| benefit reserves and related expenses. |
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| Page 1a |
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| Lincoln Financial Group |
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| Notes |
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| Non-GAAP Performance Measures |
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| Non-GAAP measures do not replace the most directly comparable GAAP measures, and we have included detailed reconciliations herein. |
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| Adjusted income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable: |
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| • Realized gains and losses associated with the following (“excluded realized gain (loss)”): |
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| ▪ Sales or disposals and impairments of financial assets; |
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| ▪ Changes in the fair value of equity securities; |
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| ▪ 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”); |
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| ▪ Changes in the fair value of the derivatives we own to hedge our guaranteed death benefit (“GDB”) riders within our variable annuities; |
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| ▪ 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; |
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| ▪ Changes in the fair value of the derivatives we own to hedge our GLB riders reflected within variable annuity net derivative results; and |
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| ▪ 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 |
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| future reset periods for our indexed annuity products accounted for at fair value (“indexed annuity forward-starting options”); |
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| • Changes in reserves resulting from benefit ratio unlocking on our GDB and GLB riders and variable universal life insurance products with secondary guarantees (“benefit ratio unlocking”); |
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| • Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance; |
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| • Gains (losses) on modification or early extinguishment of debt; |
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| • Losses from the impairment of intangible assets; |
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| • Income (loss) from discontinued operations; |
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| • Transaction and integration costs related to mergers and acquisitions including the acquisition or divestiture, through reinsurance or other means, of business or blocks of business; and |
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| • 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. |
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| Adjusted operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable: |
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| • Excluded realized gain (loss); |
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| • Revenue adjustments from the initial adoption of new accounting standards; |
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| • Amortization of DFEL arising from changes in benefit ratio unlocking; and |
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| • Amortization of deferred gains arising from reserve changes on business sold through reinsurance. |
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| 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 |
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| 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 |
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| 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 |
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| income from operations provide investors with more valuable measures of our performance as they better reveal trends in our business. |
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| Annuities interest rate spreads for the six months ended 2021 have been restated to conform to the current presentation. |
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| Statistical Supplement is Dated |
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| The financial data in this document is dated August 3, 2022, and has not been updated since that date. Lincoln Financial Group does not intend to update this document. |
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| Page 1b |
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| Lincoln Financial Group |
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| Credit Ratings |
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| Ratings as of August 3, 2022 |
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| Standard |
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| A.M Best |
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| Fitch |
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| Moody's |
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| a- |
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| BBB+ |
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| Baa1 |
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| Financial Strength Ratings |
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| The Lincoln National Life Insurance Company |
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| A+ |
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| A1 |
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| First Penn-Pacific Life Insurance Company |
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| A |
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| A- |
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| Lincoln Life & Annuity Company of New York |
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| A+ |
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| Investor Inquiries May Be Directed To: |
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| Albert Copersino, Vice President, Investor Relations |
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| Email: Albert.Copersino@lfg.com |
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| Phone: 203-257-4493 |
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| Page 2 |
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| Lincoln Financial Group |
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| Consolidated Statements of Income (Loss) |
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| Unaudited (millions of dollars, except per share data) |
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| For the Three Months Ended |
| For the Six Months Ended |
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| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Insurance premiums | $ | 1,398 |
| $ | 1,394 |
| $ | 1,420 |
| $ | 1,477 |
| $ | 1,498 |
| 7.2% |
| $ | 2,804 |
| $ | 2,975 |
| 6.1% |
|
| Fee income |
| 1,670 |
|
| 1,996 |
|
| 1,628 |
|
| 1,568 |
|
| 1,506 |
| -9.8% |
|
| 3,262 |
|
| 3,075 |
| -5.7% |
|
| Net investment income |
| 1,584 |
|
| 1,576 |
|
| 1,445 |
|
| 1,412 |
|
| 1,369 |
| -13.6% |
|
| 3,094 |
|
| 2,781 |
| -10.1% |
|
| Realized gain (loss) |
| (2) |
|
| 85 |
|
| (115) |
|
| 29 |
|
| 522 |
| NM |
|
| (182) |
|
| 551 |
| NM |
|
| Amortization of deferred gain on business |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| sold through reinsurance |
| 9 |
|
| 9 |
|
| 19 |
|
| 19 |
|
| 19 |
| 111.1% |
|
| 17 |
|
| 38 |
| 123.5% |
|
| Other revenues |
| 192 |
|
| 181 |
|
| 207 |
|
| 182 |
|
| 190 |
| -1.0% |
|
| 391 |
|
| 371 |
| -5.1% |
|
| Total revenues |
| 4,851 |
|
| 5,241 |
|
| 4,604 |
|
| 4,687 |
|
| 5,104 |
| 5.2% |
|
| 9,386 |
|
| 9,791 |
| 4.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest credited |
| 737 |
|
| 750 |
|
| 692 |
|
| 697 |
|
| 706 |
| -4.2% |
|
| 1,474 |
|
| 1,403 |
| -4.8% |
|
| Benefits |
| 1,930 |
|
| 2,122 |
|
| 2,251 |
|
| 2,565 |
|
| 2,890 |
| 49.7% |
|
| 4,156 |
|
| 5,456 |
| 31.3% |
|
| Commissions and other expenses |
| 1,326 |
|
| 1,906 |
|
| 1,328 |
|
| 1,236 |
|
| 1,127 |
| -15.0% |
|
| 2,556 |
|
| 2,362 |
| -7.6% |
|
| Interest and debt expense |
| 65 |
|
| 73 |
|
| 66 |
|
| 66 |
|
| 68 |
| 4.6% |
|
| 131 |
|
| 134 |
| 2.3% |
|
| Spark program expense |
| 21 |
|
| 22 |
|
| 30 |
|
| 31 |
|
| 44 |
| 109.5% |
|
| 35 |
|
| 75 |
| 114.3% |
|
| Total expenses |
| 4,079 |
|
| 4,873 |
|
| 4,367 |
|
| 4,595 |
|
| 4,835 |
| 18.5% |
|
| 8,352 |
|
| 9,430 |
| 12.9% |
|
| Income (loss) before taxes |
| 772 |
|
| 368 |
|
| 237 |
|
| 92 |
|
| 269 |
| -65.2% |
|
| 1,034 |
|
| 361 |
| -65.1% |
|
| Federal income tax expense (benefit) |
| 130 |
|
| 50 |
|
| 17 |
|
| (12) |
|
| 31 |
| -76.2% |
|
| 167 |
|
| 20 |
| -88.0% |
|
| Net income (loss) |
| 642 |
|
| 318 |
|
| 220 |
|
| 104 |
|
| 238 |
| -62.9% |
|
| 867 |
|
| 341 |
| -60.7% |
|
| Adjustment for deferred units of LNC stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| in our deferred compensation plans |
| - |
|
| - |
|
| - |
|
| (1) |
|
| (7) |
| NM |
|
| - |
|
| (7) |
| NM |
|
| Net income (loss) available to common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| stockholders – diluted | $ | 642 |
| $ | 318 |
| $ | 220 |
| $ | 103 |
| $ | 231 |
| -64.0% |
| $ | 867 |
| $ | 334 |
| -61.5% |
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
| Earnings (Loss) Per Common Share – Diluted |
|
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|
|
|
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|
|
|
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|
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|
|
|
|
|
| Net income (loss) | $ | 3.34 |
| $ | 1.68 |
| $ | 1.20 |
| $ | 0.58 |
| $ | 1.34 |
| -59.9% |
| $ | 4.51 |
| $ | 1.91 |
| -57.6% |
|
|
|
|
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|
|
|
| ROE, including AOCI |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
| 12.4% |
|
| 5.9% |
|
| 4.2% |
|
| 2.4% |
|
| 8.0% |
|
|
|
| 8.3% |
|
| 4.6% |
|
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| Page 3 |
|
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|
| Lincoln Financial Group |
| ||||||||||||||||
| Consolidated Balance Sheets |
| ||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||
|
|
|
|
|
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|
|
| As of |
| |||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| |||||
| ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fixed maturity available-for-sale (“AFS”) securities, net of allowance for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| credit losses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Corporate bonds | $ | 101,003 |
| $ | 100,862 |
| $ | 98,120 |
| $ | 90,561 |
| $ | 83,158 |
| -17.7% |
|
| U.S. government bonds |
| 444 |
|
| 443 |
|
| 433 |
|
| 418 |
|
| 415 |
| -6.5% |
|
| State and municipal bonds |
| 6,919 |
|
| 6,901 |
|
| 6,621 |
|
| 6,001 |
|
| 5,523 |
| -20.2% |
|
| Foreign government bonds |
| 464 |
|
| 512 |
|
| 432 |
|
| 383 |
|
| 348 |
| -25.0% |
|
| Residential mortgage-backed securities |
| 3,027 |
|
| 2,935 |
|
| 2,525 |
|
| 2,338 |
|
| 2,181 |
| -27.9% |
|
| Commercial mortgage-backed securities |
| 1,578 |
|
| 1,594 |
|
| 1,599 |
|
| 1,592 |
|
| 1,557 |
| -1.3% |
|
| Asset-backed securities |
| 8,177 |
|
| 8,303 |
|
| 8,512 |
|
| 8,929 |
|
| 9,711 |
| 18.8% |
|
| Hybrid and redeemable preferred securities |
| 603 |
|
| 535 |
|
| 504 |
|
| 473 |
|
| 472 |
| -21.7% |
|
| Total fixed maturity AFS securities, net of allowance for credit losses |
| 122,215 |
|
| 122,085 |
|
| 118,746 |
|
| 110,695 |
|
| 103,365 |
| -15.4% |
|
| Trading securities |
| 4,232 |
|
| 4,191 |
|
| 4,482 |
|
| 4,385 |
|
| 3,822 |
| -9.7% |
|
| Equity securities |
| 174 |
|
| 243 |
|
| 318 |
|
| 346 |
|
| 344 |
| 97.7% |
|
| Mortgage loans on real estate, net of allowance for credit losses |
| 17,586 |
|
| 17,730 |
|
| 17,991 |
|
| 17,892 |
|
| 17,922 |
| 1.9% |
|
| Policy loans |
| 2,410 |
|
| 2,379 |
|
| 2,364 |
|
| 2,339 |
|
| 2,368 |
| -1.7% |
|
| Derivative investments |
| 4,548 |
|
| 4,828 |
|
| 5,437 |
|
| 4,840 |
|
| 3,370 |
| -25.9% |
|
| Other investments |
| 3,950 |
|
| 4,069 |
|
| 4,292 |
|
| 4,127 |
|
| 4,054 |
| 2.6% |
|
| Total investments |
| 155,115 |
|
| 155,525 |
|
| 153,630 |
|
| 144,624 |
|
| 135,245 |
| -12.8% |
|
| Cash and invested cash |
| 2,389 |
|
| 2,614 |
|
| 2,612 |
|
| 1,960 |
|
| 1,567 |
| -34.4% |
|
| DAC and VOBA |
| 6,261 |
|
| 5,965 |
|
| 6,081 |
|
| 8,810 |
|
| 11,872 |
| 89.6% |
|
| Premiums and fees receivable |
| 583 |
|
| 584 |
|
| 580 |
|
| 671 |
|
| 656 |
| 12.5% |
|
| Accrued investment income |
| 1,254 |
|
| 1,297 |
|
| 1,189 |
|
| 1,247 |
|
| 1,226 |
| -2.2% |
|
| Reinsurance recoverables, net of allowance for credit losses |
| 15,981 |
|
| 15,729 |
|
| 20,295 |
|
| 20,044 |
|
| 19,909 |
| 24.6% |
|
| Funds withheld reinsurance assets |
| 527 |
|
| 526 |
|
| 517 |
|
| 510 |
|
| 506 |
| -4.0% |
|
| Goodwill |
| 1,778 |
|
| 1,778 |
|
| 1,778 |
|
| 1,778 |
|
| 1,778 |
| 0.0% |
|
| Other assets |
| 17,465 |
|
| 17,367 |
|
| 18,036 |
|
| 17,406 |
|
| 17,219 |
| -1.4% |
|
| Separate account assets |
| 178,795 |
|
| 175,667 |
|
| 182,583 |
|
| 168,879 |
|
| 145,791 |
| -18.5% |
|
| Total assets | $ | 380,148 |
| $ | 377,052 |
| $ | 387,301 |
| $ | 365,929 |
| $ | 335,769 |
| -11.7% |
|
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| Page 4a |
|
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|
|
|
|
| Lincoln Financial Group |
| ||||||||||||||||
| Consolidated Balance Sheets |
| ||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||
|
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| As of |
| |||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Future contract benefits | $ | 40,250 |
| $ | 40,641 |
| $ | 41,030 |
| $ | 39,773 |
| $ | 39,306 |
| -2.3% |
|
| Other contract holder funds |
| 108,778 |
|
| 109,297 |
|
| 111,702 |
|
| 112,901 |
|
| 115,127 |
| 5.8% |
|
| Short-term debt |
| 300 |
|
| 300 |
|
| 300 |
|
| - |
|
| - |
| -100.0% |
|
| Long-term debt by rating agency leverage definitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating (see note (2) on page 6 for details) |
| 866 |
|
| 866 |
|
| 867 |
|
| 867 |
|
| 867 |
| 0.1% |
|
| Financial |
| 5,468 |
|
| 5,457 |
|
| 5,458 |
|
| 5,694 |
|
| 5,631 |
| 3.0% |
|
| Reinsurance-related embedded derivatives |
| 328 |
|
| 304 |
|
| 206 |
|
| - |
|
| - |
| -100.0% |
|
| Funds withheld reinsurance liabilities |
| 2,027 |
|
| 2,078 |
|
| 2,118 |
|
| 2,164 |
|
| 2,229 |
| 10.0% |
|
| Payables for collateral on investments |
| 8,199 |
|
| 8,379 |
|
| 8,946 |
|
| 8,927 |
|
| 7,524 |
| -8.2% |
|
| Other liabilities |
| 13,392 |
|
| 12,893 |
|
| 13,819 |
|
| 12,012 |
|
| 10,106 |
| -24.5% |
|
| Separate account liabilities |
| 178,795 |
|
| 175,667 |
|
| 182,583 |
|
| 168,879 |
|
| 145,791 |
| -18.5% |
|
| Total liabilities |
| 358,403 |
|
| 355,882 |
|
| 367,029 |
|
| 351,217 |
|
| 326,581 |
| -8.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
| 5,021 |
|
| 4,956 |
|
| 4,735 |
|
| 4,586 |
|
| 4,546 |
| -9.5% |
|
| Retained earnings |
| 9,245 |
|
| 9,365 |
|
| 9,096 |
|
| 8,876 |
|
| 8,985 |
| -2.8% |
|
| AOCI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unrealized investment gains (losses) |
| 7,756 |
|
| 7,128 |
|
| 6,674 |
|
| 1,485 |
|
| (4,104) |
| NM |
|
| Foreign currency translation adjustment |
| (10) |
|
| (14) |
|
| (14) |
|
| (19) |
|
| (33) |
| NM |
|
| Funded status of employee benefit plans |
| (267) |
|
| (265) |
|
| (219) |
|
| (216) |
|
| (206) |
| 22.8% |
|
| Total AOCI |
| 7,479 |
|
| 6,849 |
|
| 6,441 |
|
| 1,250 |
|
| (4,343) |
| NM |
|
| Total stockholders’ equity |
| 21,745 |
|
| 21,170 |
|
| 20,272 |
|
| 14,712 |
|
| 9,188 |
| -57.7% |
|
| Total liabilities and stockholders’ equity | $ | 380,148 |
| $ | 377,052 |
| $ | 387,301 |
| $ | 365,929 |
| $ | 335,769 |
| -11.7% |
|
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| Page 4b |
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| Lincoln Financial Group |
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| Earnings, Shares and Return on Equity |
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| Unaudited (millions of dollars, except per share data) |
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| As of or For the Three Months Ended |
| As of or For the Six Months Ended |
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| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
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| Income (Loss) |
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| Net income (loss) | $ | 642 |
| $ | 318 |
| $ | 220 |
| $ | 104 |
| $ | 238 |
| -62.9% |
| $ | 867 |
| $ | 341 |
| -60.7% |
|
| Pre-tax adjusted income (loss) from operations |
| 729 |
|
| 354 |
|
| 320 |
|
| 333 |
|
| 463 |
| -36.5% |
|
| 1,150 |
|
| 796 |
| -30.8% |
|
| After-tax adjusted income (loss) from operations (1) |
| 608 |
|
| 307 |
|
| 286 |
|
| 294 |
|
| 391 |
| -35.7% |
|
| 959 |
|
| 685 |
| -28.6% |
|
| Adjusted operating tax rate |
| 16.5% |
|
| 13.3% |
|
| 10.6% |
|
| 11.5% |
|
| 15.6% |
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| 16.6% |
|
| 13.9% |
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| Average Stockholders’ Equity |
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| Average equity, including AOCI | $ | 20,669 |
| $ | 21,458 |
| $ | 20,721 |
| $ | 17,492 |
| $ | 11,950 |
| -42.2% |
| $ | 20,908 |
| $ | 14,721 |
| -29.6% |
|
| Average AOCI |
| 6,620 |
|
| 7,164 |
|
| 6,645 |
|
| 3,846 |
|
| (1,547) |
| NM |
|
| 6,983 |
|
| 1,149 |
| -83.5% |
|
| Average equity, excluding AOCI | $ | 14,049 |
| $ | 14,294 |
| $ | 14,076 |
| $ | 13,646 |
| $ | 13,497 |
| -3.9% |
| $ | 13,925 |
| $ | 13,572 |
| -2.5% |
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| ROE, Excluding AOCI |
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| Net income (loss) |
| 18.3% |
|
| 8.9% |
|
| 6.3% |
|
| 3.0% |
|
| 7.0% |
|
|
|
| 12.5% |
|
| 5.0% |
|
|
|
| Adjusted income (loss) from operations |
| 17.3% |
|
| 8.6% |
|
| 8.1% |
|
| 8.6% |
|
| 11.6% |
|
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| 13.8% |
|
| 10.1% |
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| Per Share |
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| Net income (loss) (diluted) | $ | 3.34 |
| $ | 1.68 |
| $ | 1.20 |
| $ | 0.58 |
| $ | 1.34 |
| -59.9% |
| $ | 4.51 |
| $ | 1.91 |
| -57.6% |
|
| Adjusted income (loss) from operations (diluted) |
| 3.17 |
|
| 1.62 |
|
| 1.56 |
|
| 1.66 |
|
| 2.23 |
| -29.7% |
|
| 4.98 |
|
| 3.88 |
| -22.1% |
|
| Dividends declared during the period |
| 0.42 |
|
| 0.42 |
|
| 0.45 |
|
| 0.45 |
|
| 0.45 |
| 7.1% |
|
| 0.84 |
|
| 0.90 |
| 7.1% |
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| Book value, including AOCI | $ | 115.00 |
| $ | 113.77 |
| $ | 114.41 |
| $ | 85.59 |
| $ | 53.97 |
| -53.1% |
| $ | 115.00 |
| $ | 53.97 |
| -53.1% |
|
| Per share impact of AOCI |
| 39.55 |
|
| 36.81 |
|
| 36.36 |
|
| 7.27 |
|
| (25.52) |
| NM |
|
| 39.55 |
|
| (25.52) |
| NM |
|
| Book value, excluding AOCI | $ | 75.45 |
| $ | 76.96 |
| $ | 78.05 |
| $ | 78.32 |
| $ | 79.49 |
| 5.4% |
| $ | 75.45 |
| $ | 79.49 |
| 5.4% |
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| Shares |
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| Repurchased during the period |
| 2.2 |
|
| 3.1 |
|
| 9.1 |
|
| 5.8 |
|
| 1.8 |
| -18.2% |
|
| 4.1 |
|
| 7.6 |
| 85.4% |
|
| End-of-period – basic |
| 189.1 |
|
| 186.1 |
|
| 177.2 |
|
| 171.9 |
|
| 170.2 |
| -10.0% |
|
| 189.1 |
|
| 170.2 |
| -10.0% |
|
| End-of-period – diluted |
| 191.4 |
|
| 188.1 |
|
| 179.8 |
|
| 173.8 |
|
| 171.6 |
| -10.3% |
|
| 191.4 |
|
| 171.6 |
| -10.3% |
|
| Average for the period – diluted |
| 192.2 |
|
| 189.1 |
|
| 183.2 |
|
| 176.4 |
|
| 172.7 |
| -10.1% |
|
| 192.4 |
|
| 174.6 |
| -9.3% |
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| (1) See reconciliation to net income (loss) on page 25. |
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| Page 5 |
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| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Key Stakeholder Metrics |
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| Unaudited (millions of dollars, except per share data) |
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| As of or For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Cash Returned to Common Stockholders |
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| Shares repurchased | $ | 150 |
| $ | 200 |
| $ | 650 |
| $ | 400 |
| $ | 100 |
| -33.3% |
| $ | 255 |
| $ | 500 |
| 96.1% |
|
| Common dividends |
| 80 |
|
| 79 |
|
| 78 |
|
| 80 |
|
| 77 |
| -3.8% |
|
| 161 |
|
| 157 |
| -2.5% |
|
| Total cash returned to common stockholders | $ | 230 |
| $ | 279 |
| $ | 728 |
| $ | 480 |
| $ | 177 |
| -23.0% |
| $ | 416 |
| $ | 657 |
| 57.9% |
|
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| Leverage Ratio |
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| Short-term debt | $ | 300 |
| $ | 300 |
| $ | 300 |
| $ | - |
| $ | - |
| -100.0% |
|
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|
|
|
|
|
|
|
| Long-term debt |
| 6,334 |
|
| 6,323 |
|
| 6,325 |
|
| 6,561 |
|
| 6,498 |
| 2.6% |
|
|
|
|
|
|
|
|
|
| Total debt (1) |
| 6,634 |
|
| 6,623 |
|
| 6,625 |
|
| 6,561 |
|
| 6,498 |
| -2.1% |
|
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| Less: |
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| Operating debt (2) |
| 866 |
|
| 866 |
|
| 867 |
|
| 867 |
|
| 867 |
| 0.1% |
|
|
|
|
|
|
|
|
|
| 25% of capital securities and subordinated notes |
| 302 |
|
| 302 |
|
| 302 |
|
| 302 |
|
| 302 |
| 0.0% |
|
|
|
|
|
|
|
|
|
| Carrying value of fair value hedges and other items |
| 345 |
|
| 333 |
|
| 335 |
|
| 273 |
|
| 209 |
| -39.4% |
|
|
|
|
|
|
|
|
|
| Total numerator | $ | 5,121 |
| $ | 5,122 |
| $ | 5,121 |
| $ | 5,119 |
| $ | 5,120 |
| 0.0% |
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| Stockholders’ equity, excluding unrealized |
|
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|
| investment gains (losses) | $ | 13,989 |
| $ | 14,042 |
| $ | 13,598 |
| $ | 13,227 |
| $ | 13,292 |
| -5.0% |
|
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| Add: 25% of capital securities and subordinated |
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| notes |
| 302 |
|
| 302 |
|
| 302 |
|
| 302 |
|
| 302 |
| 0.0% |
|
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|
|
| Total numerator |
| 5,121 |
|
| 5,122 |
|
| 5,121 |
|
| 5,119 |
|
| 5,120 |
| 0.0% |
|
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|
| Total denominator | $ | 19,412 |
| $ | 19,466 |
| $ | 19,021 |
| $ | 18,648 |
| $ | 18,714 |
| -3.6% |
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| Leverage ratio |
| 26.4% |
|
| 26.3% |
|
| 26.9% |
|
| 27.4% |
|
| 27.4% |
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| Holding Company Available Liquidity | $ | 762 |
| $ | 754 |
| $ | 1,117 |
| $ | 755 |
| $ | 756 |
| -0.8% |
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| (1) Excludes obligations under finance leases and certain financing arrangements of $557 million that are reported in other liabilities on our Consolidated Balance Sheets. |
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| (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 |
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| on increasing statutory reserves associated with secondary guarantee UL and term policies. |
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| Page 6 |
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| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Segment and Sources of Earnings |
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| Unaudited (millions of dollars) |
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| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Income (Loss) from Operations, Pre-Tax |
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| Annuities | $ | 380 |
| $ | 403 |
| $ | 391 |
| $ | 351 |
| $ | 295 |
| -22.4% |
| $ | 730 |
| $ | 646 |
| -11.5% |
|
| Retirement Plan Services |
| 74 |
|
| 72 |
|
| 68 |
|
| 64 |
|
| 63 |
| -14.9% |
|
| 144 |
|
| 128 |
| -11.1% |
|
| Life Insurance |
| 317 |
|
| 113 |
|
| 97 |
|
| 65 |
|
| 139 |
| -56.2% |
|
| 447 |
|
| 204 |
| -54.4% |
|
| Group Protection |
| 59 |
|
| (40) |
|
| (146) |
|
| (52) |
|
| 75 |
| 27.1% |
|
| 26 |
|
| 23 |
| -11.5% |
|
| Other Operations |
| (101) |
|
| (194) |
|
| (90) |
|
| (95) |
|
| (109) |
| -7.9% |
|
| (197) |
|
| (205) |
| -4.1% |
|
| Adjusted income (loss) from operations, before |
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| income taxes | $ | 729 |
| $ | 354 |
| $ | 320 |
| $ | 333 |
| $ | 463 |
| -36.5% |
| $ | 1,150 |
| $ | 796 |
| -30.8% |
|
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| Income (Loss) from Operations, After-Tax |
|
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| Annuities | $ | 323 |
| $ | 338 |
| $ | 332 |
| $ | 302 |
| $ | 256 |
| -20.7% |
| $ | 613 |
| $ | 558 |
| -9.0% |
|
| Retirement Plan Services |
| 62 |
|
| 60 |
|
| 57 |
|
| 55 |
|
| 54 |
| -12.9% |
|
| 118 |
|
| 109 |
| -7.6% |
|
| Life Insurance |
| 255 |
|
| 93 |
|
| 80 |
|
| 58 |
|
| 114 |
| -55.3% |
|
| 362 |
|
| 172 |
| -52.5% |
|
| Group Protection |
| 46 |
|
| (32) |
|
| (115) |
|
| (41) |
|
| 59 |
| 28.3% |
|
| 20 |
|
| 18 |
| -10.0% |
|
| Other Operations |
| (78) |
|
| (152) |
|
| (68) |
|
| (80) |
|
| (92) |
| -17.9% |
|
| (154) |
|
| (172) |
| -11.7% |
|
| Adjusted income (loss) from operations | $ | 608 |
| $ | 307 |
| $ | 286 |
| $ | 294 |
| $ | 391 |
| -35.7% |
| $ | 959 |
| $ | 685 |
| -28.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the Three Months Ended |
| For the Trailing Twelve Months |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Sources of Earnings, Pre-Tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investment spread | $ | 228 |
| $ | 152 |
| $ | 113 |
| $ | 99 |
| $ | 128 |
| -43.9% |
| $ | 387 |
| $ | 492 |
| 27.1% |
|
| Mortality/morbidity |
| 219 |
|
| 21 |
|
| (81) |
|
| (11) |
|
| 150 |
| -31.5% |
|
| 97 |
|
| 79 |
| -18.6% |
|
| Fees on AUM |
| 363 |
|
| 381 |
|
| 355 |
|
| 325 |
|
| 305 |
| -16.0% |
|
| 1,321 |
|
| 1,366 |
| 3.4% |
|
| VA riders |
| 20 |
|
| (6) |
|
| 23 |
|
| 15 |
|
| (11) |
| NM |
|
| (56) |
|
| 22 |
| 139.3% |
|
| Total sources of earnings, before income taxes |
| 830 |
|
| 548 |
|
| 410 |
|
| 428 |
|
| 572 |
| -31.1% |
|
| 1,749 |
|
| 1,959 |
| 12.0% |
|
| Other Operations |
| (101) |
|
| (194) |
|
| (90) |
|
| (95) |
|
| (109) |
| -7.9% |
|
| (418) |
|
| (489) |
| -17.0% |
|
| Adjusted income (loss) from operations, before |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| income taxes | $ | 729 |
| $ | 354 |
| $ | 320 |
| $ | 333 |
| $ | 463 |
| -36.5% |
| $ | 1,331 |
| $ | 1,470 |
| 10.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sources of Earnings, Pre-Tax, Percentage By Component |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
| Investment spread |
| 27.5% |
|
| 27.7% |
|
| 27.6% |
|
| 23.2% |
|
| 22.3% |
|
|
|
| 22.1% |
|
| 25.1% |
|
|
|
| Mortality/morbidity |
| 26.4% |
|
| 3.9% |
|
| -19.7% |
|
| -2.6% |
|
| 26.2% |
|
|
|
| 5.6% |
|
| 4.0% |
|
|
|
| Fees on AUM |
| 43.6% |
|
| 69.4% |
|
| 86.5% |
|
| 76.0% |
|
| 53.3% |
|
|
|
| 75.5% |
|
| 69.7% |
|
|
|
| VA riders |
| 2.5% |
|
| -1.0% |
|
| 5.6% |
|
| 3.4% |
|
| -1.8% |
|
|
|
| -3.2% |
|
| 1.2% |
|
|
|
| Total |
| 100.0% |
|
| 100.0% |
|
| 100.0% |
|
| 100.0% |
|
| 100.0% |
|
|
|
| 100.0% |
|
| 100.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Page 7 |
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Select Earnings Drivers By Segment |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Annuities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating revenues | $ | 1,249 |
| $ | 1,267 |
| $ | 1,282 |
| $ | 1,232 |
| $ | 1,169 |
| -6.4% |
| $ | 2,453 |
| $ | 2,401 |
| -2.1% |
|
| Deposits |
| 3,209 |
|
| 2,707 |
|
| 3,011 |
|
| 2,705 |
|
| 2,702 |
| -15.8% |
|
| 6,023 |
|
| 5,407 |
| -10.2% |
|
| Net flows |
| (297) |
|
| (841) |
|
| (655) |
|
| (553) |
|
| (318) |
| -7.1% |
|
| (1,073) |
|
| (871) |
| 18.8% |
|
| Average account values, net of reinsurance |
| 166,034 |
|
| 169,581 |
|
| 170,953 |
|
| 163,628 |
|
| 152,025 |
| -8.4% |
|
| 163,091 |
|
| 157,727 |
| -3.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Retirement Plan Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating revenues | $ | 333 |
| $ | 328 |
| $ | 335 |
| $ | 318 |
| $ | 315 |
| -5.4% |
| $ | 660 |
| $ | 633 |
| -4.1% |
|
| Deposits |
| 2,789 |
|
| 2,411 |
|
| 3,000 |
|
| 3,367 |
|
| 2,943 |
| 5.5% |
|
| 5,429 |
|
| 6,310 |
| 16.2% |
|
| Net flows |
| 517 |
|
| (21) |
|
| (380) |
|
| 946 |
|
| 913 |
| 76.6% |
|
| 865 |
|
| 1,859 |
| 114.9% |
|
| Average account values |
| 94,096 |
|
| 96,723 |
|
| 98,008 |
|
| 95,843 |
|
| 90,628 |
| -3.7% |
|
| 91,902 |
|
| 93,050 |
| 1.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Life Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating revenues | $ | 2,029 |
| $ | 2,325 |
| $ | 1,844 |
| $ | 1,825 |
| $ | 1,800 |
| -11.3% |
| $ | 3,968 |
| $ | 3,625 |
| -8.6% |
|
| Deposits |
| 1,278 |
|
| 1,324 |
|
| 1,872 |
|
| 1,334 |
|
| 1,439 |
| 12.6% |
|
| 2,498 |
|
| 2,775 |
| 11.1% |
|
| Net flows |
| 879 |
|
| 871 |
|
| 1,438 |
|
| 883 |
|
| 1,038 |
| 18.1% |
|
| 1,673 |
|
| 1,921 |
| 14.8% |
|
| Average account values, net of reinsurance |
| 59,056 |
|
| 59,642 |
|
| 51,067 |
|
| 51,236 |
|
| 49,380 |
| -16.4% |
|
| 58,532 |
|
| 59,416 |
| 1.5% |
|
| Average in-force face amount |
| 916,600 |
|
| 935,096 |
|
| 959,478 |
|
| 985,286 |
|
| 1,010,659 |
| 10.3% |
|
| 908,786 |
|
| 997,973 |
| 9.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Group Protection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating revenues | $ | 1,247 |
| $ | 1,243 |
| $ | 1,252 |
| $ | 1,303 |
| $ | 1,323 |
| 6.1% |
| $ | 2,500 |
| $ | 2,626 |
| 5.0% |
|
| Insurance premiums |
| 1,107 |
|
| 1,107 |
|
| 1,117 |
|
| 1,169 |
|
| 1,187 |
| 7.2% |
|
| 2,226 |
|
| 2,356 |
| 5.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted operating revenues (1) | $ | 4,903 |
| $ | 5,205 |
| $ | 4,769 |
| $ | 4,718 |
| $ | 4,641 |
| -5.3% |
| $ | 9,665 |
| $ | 9,359 |
| -3.2% |
|
| Deposits |
| 7,276 |
|
| 6,442 |
|
| 7,883 |
|
| 7,406 |
|
| 7,084 |
| -2.6% |
|
| 13,950 |
|
| 14,492 |
| 3.9% |
|
| Net flows |
| 1,099 |
|
| 9 |
|
| 403 |
|
| 1,276 |
|
| 1,633 |
| 48.6% |
|
| 1,465 |
|
| 2,909 |
| 98.6% |
|
| Average account values, net of reinsurance |
| 319,186 |
|
| 325,946 |
|
| 320,028 |
|
| 310,707 |
|
| 292,033 |
| -8.5% |
|
| 313,525 |
|
| 310,193 |
| -1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) See reconciliation to total revenues on page 25. |
|
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| Page 8 |
|
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|
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|
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|
|
| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Sales By Segment |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Annuities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Indexed variable | $ | 1,600 |
| $ | 853 |
| $ | 977 |
| $ | 1,048 |
| $ | 1,220 |
| -23.8% |
| $ | 3,080 |
| $ | 2,269 |
|
|
|
| Other variable without GLBs |
| 683 |
|
| 739 |
|
| 787 |
|
| 605 |
|
| 422 |
| -38.2% |
|
| 1,293 |
|
| 1,025 |
|
|
|
| Other variable with GLBs |
| 742 |
|
| 773 |
|
| 834 |
|
| 678 |
|
| 536 |
| -27.8% |
|
| 1,381 |
|
| 1,214 |
| -12.1% |
|
| Total variable |
| 3,025 |
|
| 2,365 |
|
| 2,598 |
|
| 2,331 |
|
| 2,178 |
| -28.0% |
|
| 5,754 |
|
| 4,508 |
| -21.7% |
|
| Fixed |
| 184 |
|
| 342 |
|
| 413 |
|
| 374 |
|
| 524 |
| 184.8% |
|
| 269 |
|
| 899 |
| 234.2% |
|
| Total Annuities | $ | 3,209 |
| $ | 2,707 |
| $ | 3,011 |
| $ | 2,705 |
| $ | 2,702 |
| -15.8% |
| $ | 6,023 |
| $ | 5,407 |
| -10.2% |
|
| Percent with GLBs |
| 23.1% |
|
| 28.6% |
|
| 27.7% |
|
| 25.1% |
|
| 19.8% |
|
|
|
| 22.9% |
|
| 22.5% |
|
|
|
| Percent with GLBs, including the impact of VA reinsurance |
| 17.2% |
|
| 20.2% |
|
| 20.8% |
|
| 17.9% |
|
| 14.0% |
|
|
|
| 19.8% |
|
| 16.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Retirement Plan Services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| First-year sales | $ | 1,102 |
| $ | 745 |
| $ | 1,270 |
| $ | 1,198 |
| $ | 1,210 |
| 9.8% |
| $ | 1,796 |
| $ | 2,409 |
| 34.1% |
|
| Recurring deposits |
| 1,687 |
|
| 1,666 |
|
| 1,730 |
|
| 2,169 |
|
| 1,733 |
| 2.7% |
|
| 3,633 |
|
| 3,901 |
| 7.4% |
|
| Total Retirement Plan Services | $ | 2,789 |
| $ | 2,411 |
| $ | 3,000 |
| $ | 3,367 |
| $ | 2,943 |
| 5.5% |
| $ | 5,429 |
| $ | 6,310 |
| 16.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Life Insurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| IUL/UL | $ | 20 |
| $ | 24 |
| $ | 42 |
| $ | 26 |
| $ | 27 |
| 35.0% |
| $ | 38 |
| $ | 53 |
| 39.5% |
|
| MoneyGuard® |
| 23 |
|
| 26 |
|
| 36 |
|
| 22 |
|
| 24 |
| 4.3% |
|
| 39 |
|
| 47 |
| 20.5% |
|
| VUL |
| 27 |
|
| 40 |
|
| 92 |
|
| 34 |
|
| 44 |
| 63.0% |
|
| 49 |
|
| 78 |
| 59.2% |
|
| Term |
| 35 |
|
| 42 |
|
| 47 |
|
| 43 |
|
| 48 |
| 37.1% |
|
| 64 |
|
| 90 |
| 40.6% |
|
| Executive Benefits |
| 21 |
|
| 34 |
|
| 37 |
|
| 30 |
|
| 50 |
| 138.1% |
|
| 50 |
|
| 79 |
| 58.0% |
|
| Total Life Insurance | $ | 126 |
| $ | 166 |
| $ | 254 |
| $ | 155 |
| $ | 193 |
| 53.2% |
| $ | 240 |
| $ | 347 |
| 44.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Group Protection: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Life | $ | 37 |
| $ | 22 |
| $ | 163 |
| $ | 53 |
| $ | 62 |
| 67.6% |
| $ | 78 |
| $ | 116 |
| 48.7% |
|
| Disability |
| 37 |
|
| 20 |
|
| 199 |
|
| 47 |
|
| 59 |
| 59.5% |
|
| 65 |
|
| 105 |
| 61.5% |
|
| Dental |
| 5 |
|
| 6 |
|
| 23 |
|
| 5 |
|
| 6 |
| 20.0% |
|
| 10 |
|
| 11 |
| 10.0% |
|
| Total Group Protection | $ | 79 |
| $ | 48 |
| $ | 385 |
| $ | 105 |
| $ | 127 |
| 60.8% |
| $ | 153 |
| $ | 232 |
| 51.6% |
|
| Percent employee-paid |
| 56.3% |
|
| 50.1% |
|
| 35.0% |
|
| 57.0% |
|
| 48.5% |
|
|
|
| 61.3% |
|
| 52.4% |
|
|
|
|
|
|
|
|
|
|
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| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Operating Revenues and General and Administrative Expenses By Segment |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
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| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Operating Revenues |
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| Annuities | $ | 1,249 |
| $ | 1,267 |
| $ | 1,282 |
| $ | 1,232 |
| $ | 1,169 |
| -6.4% |
| $ | 2,453 |
| $ | 2,401 |
| -2.1% |
|
| Retirement Plan Services |
| 333 |
|
| 328 |
|
| 335 |
|
| 318 |
|
| 315 |
| -5.4% |
|
| 660 |
|
| 633 |
| -4.1% |
|
| Life Insurance |
| 2,029 |
|
| 2,325 |
|
| 1,844 |
|
| 1,825 |
|
| 1,800 |
| -11.3% |
|
| 3,968 |
|
| 3,625 |
| -8.6% |
|
| Group Protection |
| 1,247 |
|
| 1,243 |
|
| 1,252 |
|
| 1,303 |
|
| 1,323 |
| 6.1% |
|
| 2,500 |
|
| 2,626 |
| 5.0% |
|
| Other Operations |
| 45 |
|
| 42 |
|
| 56 |
|
| 40 |
|
| 34 |
| -24.4% |
|
| 84 |
|
| 74 |
| -11.9% |
|
| Total segment operating revenues | $ | 4,903 |
| $ | 5,205 |
| $ | 4,769 |
| $ | 4,718 |
| $ | 4,641 |
| -5.3% |
| $ | 9,665 |
| $ | 9,359 |
| -3.2% |
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| General and Administrative Expenses, |
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| Net of Amounts Capitalized (1) |
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| Annuities | $ | 121 |
| $ | 115 |
| $ | 125 |
| $ | 112 |
| $ | 108 |
| -10.7% |
| $ | 237 |
| $ | 220 |
| -7.2% |
|
| Retirement Plan Services |
| 73 |
|
| 70 |
|
| 80 |
|
| 69 |
|
| 69 |
| -5.5% |
|
| 142 |
|
| 138 |
| -2.8% |
|
| Life Insurance |
| 126 |
|
| 121 |
|
| 138 |
|
| 117 |
|
| 115 |
| -8.7% |
|
| 244 |
|
| 233 |
| -4.5% |
|
| Group Protection |
| 161 |
|
| 163 |
|
| 177 |
|
| 165 |
|
| 166 |
| 3.1% |
|
| 320 |
|
| 331 |
| 3.4% |
|
| Other Operations |
| 46 |
|
| 143 |
|
| 52 |
|
| 48 |
|
| 48 |
| 4.3% |
|
| 90 |
|
| 95 |
| 5.6% |
|
| Total | $ | 527 |
| $ | 612 |
| $ | 572 |
| $ | 511 |
| $ | 506 |
| -4.0% |
| $ | 1,033 |
| $ | 1,017 |
| -1.5% |
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| General and Administrative Expenses, |
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| Net of Amounts Capitalized, as a Percentage |
|
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| of Operating Revenues |
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| Annuities |
| 9.6% |
|
| 9.1% |
|
| 9.7% |
|
| 9.1% |
|
| 9.3% |
|
|
|
| 9.7% |
|
| 9.2% |
|
|
|
| Retirement Plan Services |
| 21.9% |
|
| 21.5% |
|
| 23.8% |
|
| 21.7% |
|
| 21.8% |
|
|
|
| 21.5% |
|
| 21.8% |
|
|
|
| Life Insurance |
| 6.2% |
|
| 5.2% |
|
| 7.5% |
|
| 6.4% |
|
| 6.4% |
|
|
|
| 6.1% |
|
| 6.4% |
|
|
|
| Group Protection |
| 13.0% |
|
| 13.1% |
|
| 14.1% |
|
| 12.7% |
|
| 12.5% |
|
|
|
| 12.8% |
|
| 12.6% |
|
|
|
| Other Operations |
| 100.8% |
|
| 345.5% |
|
| 96.8% |
|
| 116.6% |
|
| 141.5% |
|
|
|
| 107.6% |
|
| 128.0% |
|
|
|
| Total |
| 10.7% |
|
| 11.8% |
|
| 12.0% |
|
| 10.8% |
|
| 10.9% |
|
|
|
| 10.7% |
|
| 10.9% |
|
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| (1) See page 11 for general and administrative expenses capitalized. |
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| Page 10 |
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| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Operating Commissions and Other Expenses |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||||||||||
|
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| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Operating Commissions and |
|
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| Other Expenses Incurred |
|
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|
|
| General and administrative expenses | $ | 579 |
| $ | 662 |
| $ | 642 |
| $ | 562 |
| $ | 559 |
| -3.5% |
| $ | 1,135 |
| $ | 1,121 |
| -1.2% |
|
| Commissions |
| 652 |
|
| 656 |
|
| 760 |
|
| 654 |
|
| 656 |
| 0.6% |
|
| 1,268 |
|
| 1,311 |
| 3.4% |
|
| Taxes, licenses and fees |
| 86 |
|
| 79 |
|
| 89 |
|
| 98 |
|
| 83 |
| -3.5% |
|
| 173 |
|
| 181 |
| 4.6% |
|
| Interest and debt expense |
| 65 |
|
| 66 |
|
| 66 |
|
| 66 |
|
| 68 |
| 4.6% |
|
| 131 |
|
| 134 |
| 2.3% |
|
| Expenses associated with reserve financing |
|
|
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| and letters of credit |
| 25 |
|
| 26 |
|
| 26 |
|
| 26 |
|
| 27 |
| 8.0% |
|
| 50 |
|
| 53 |
| 6.0% |
|
| Total adjusted operating commissions and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
| expenses incurred |
| 1,407 |
|
| 1,489 |
|
| 1,583 |
|
| 1,406 |
|
| 1,393 |
| -1.0% |
|
| 2,757 |
|
| 2,800 |
| 1.6% |
|
|
|
|
|
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|
|
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|
|
| Less Amounts Capitalized |
|
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|
|
| General and administrative expenses |
| (52) |
|
| (50) |
|
| (70) |
|
| (51) |
|
| (53) |
| -1.9% |
|
| (102) |
|
| (104) |
| -2.0% |
|
| Commissions |
| (261) |
|
| (253) |
|
| (361) |
|
| (265) |
|
| (281) |
| -7.7% |
|
| (492) |
|
| (546) |
| -11.0% |
|
| Taxes, licenses and fees |
| (11) |
|
| (9) |
|
| (15) |
|
| (11) |
|
| (10) |
| 9.1% |
|
| (20) |
|
| (22) |
| -10.0% |
|
| Total amounts capitalized |
| (324) |
|
| (312) |
|
| (446) |
|
| (327) |
|
| (344) |
| -6.2% |
|
| (614) |
|
| (672) |
| -9.4% |
|
| Total expenses incurred, net of amounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
| capitalized, excluding amortization |
| 1,083 |
|
| 1,177 |
|
| 1,137 |
|
| 1,079 |
|
| 1,049 |
| -3.1% |
|
| 2,143 |
|
| 2,128 |
| -0.7% |
|
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| Amortization |
|
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|
| Amortization of DAC, VOBA and other intangibles |
| 317 |
|
| 821 |
|
| 263 |
|
| 289 |
|
| 250 |
| -21.1% |
|
| 563 |
|
| 539 |
| -4.3% |
|
| Total operating commissions and other expenses | $ | 1,400 |
| $ | 1,998 |
| $ | 1,400 |
| $ | 1,368 |
| $ | 1,299 |
| -7.2% |
| $ | 2,706 |
| $ | 2,667 |
| -1.4% |
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| Page 11 |
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| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Interest Rate Yields and Spreads By Segment |
| ||||||||||||||||||||||||
| Unaudited |
| ||||||||||||||||||||||||
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| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Annuities |
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| Earned rate on reserves |
| 3.10% |
|
| 3.07% |
|
| 3.06% |
|
| 2.99% |
|
| 3.09% |
| (1) |
|
| 3.18% |
|
| 3.04% |
| (14) |
|
| Variable investment income on reserves (1) |
| 0.24% |
|
| 0.28% |
|
| 0.31% |
|
| 0.23% |
|
| 0.11% |
| (13) |
|
| 0.18% |
|
| 0.17% |
| (1) |
|
| Net investment income yield on reserves |
| 3.34% |
|
| 3.35% |
|
| 3.37% |
|
| 3.22% |
|
| 3.20% |
| (14) |
|
| 3.36% |
|
| 3.21% |
| (15) |
|
| Interest rate credited to contract holders |
| 1.97% |
|
| 1.90% |
|
| 1.82% |
|
| 1.85% |
|
| 1.90% |
| (7) |
|
| 2.00% |
|
| 1.88% |
| (12) |
|
| Interest rate spread |
| 1.37% |
|
| 1.45% |
|
| 1.55% |
|
| 1.37% |
|
| 1.30% |
| (7) |
|
| 1.36% |
|
| 1.33% |
| (3) |
|
| Base spreads excluding variable investment income |
| 1.13% |
|
| 1.17% |
|
| 1.24% |
|
| 1.14% |
|
| 1.19% |
| 6 |
|
| 1.18% |
|
| 1.16% |
| (2) |
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| Retirement Plan Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earned rate on reserves |
| 3.60% |
|
| 3.56% |
|
| 3.51% |
|
| 3.45% |
|
| 3.49% |
| (11) |
|
| 3.61% |
|
| 3.48% |
| (13) |
|
| Variable investment income on reserves (1) |
| 0.21% |
|
| 0.22% |
|
| 0.39% |
|
| 0.19% |
|
| 0.14% |
| (7) |
|
| 0.20% |
|
| 0.16% |
| (4) |
|
| Net investment income yield on reserves |
| 3.81% |
|
| 3.78% |
|
| 3.90% |
|
| 3.64% |
|
| 3.63% |
| (18) |
|
| 3.81% |
|
| 3.64% |
| (17) |
|
| Interest rate credited to contract holders |
| 2.69% |
|
| 2.65% |
|
| 2.63% |
|
| 2.55% |
|
| 2.55% |
| (14) |
|
| 2.68% |
|
| 2.56% |
| (12) |
|
| Interest rate spread |
| 1.12% |
|
| 1.13% |
|
| 1.27% |
|
| 1.09% |
|
| 1.08% |
| (4) |
|
| 1.13% |
|
| 1.08% |
| (5) |
|
| Base spreads excluding variable investment income |
| 0.91% |
|
| 0.91% |
|
| 0.88% |
|
| 0.90% |
|
| 0.94% |
| 3 |
|
| 0.93% |
|
| 0.92% |
| (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Life Insurance – Interest-Sensitive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earned rate on reserves |
| 4.68% |
|
| 4.64% |
|
| 4.67% |
|
| 4.60% |
|
| 4.50% |
| (18) |
|
| 4.70% |
|
| 4.55% |
| (15) |
|
| Variable investment income on reserves (1) |
| 1.38% |
|
| 1.23% |
|
| 0.85% |
|
| 0.54% |
|
| 0.36% |
| (102) |
|
| 1.21% |
|
| 0.45% |
| (76) |
|
| Net investment income yield on reserves |
| 6.06% |
|
| 5.87% |
|
| 5.52% |
|
| 5.14% |
|
| 4.86% |
| (120) |
|
| 5.91% |
|
| 5.00% |
| (91) |
|
| Interest rate credited to contract holders |
| 3.78% |
|
| 3.76% |
|
| 3.76% |
|
| 3.77% |
|
| 3.74% |
| (4) |
|
| 3.77% |
|
| 3.76% |
| (1) |
|
| Interest rate spread |
| 2.28% |
|
| 2.11% |
|
| 1.76% |
|
| 1.37% |
|
| 1.12% |
| (116) |
|
| 2.14% |
|
| 1.24% |
| (90) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Base spreads excluding alternative investments |
| 1.06% |
|
| 1.05% |
|
| 1.12% |
|
| 1.06% |
|
| 0.99% |
| (7) |
|
| 1.08% |
|
| 1.02% |
| (6) |
|
| Base spreads assuming 10% annualized yield on alternative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| investments |
| 1.24% |
|
| 1.24% |
|
| 1.35% |
|
| 1.30% |
|
| 1.25% |
| 1 |
|
| 1.26% |
|
| 1.28% |
| 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
| Total (2) |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earned rate (3) |
| 3.94% |
|
| 3.93% |
|
| 3.80% |
|
| 3.80% |
|
| 3.77% |
| (17) |
|
| 3.94% |
|
| 3.78% |
| (16) |
|
| Variable investment income (1) (3) |
| 0.78% |
|
| 0.72% |
|
| 0.53% |
|
| 0.36% |
|
| 0.22% |
| (56) |
|
| 0.69% |
|
| 0.29% |
| (40) |
|
| Net investment income yield (3) |
| 4.72% |
|
| 4.65% |
|
| 4.33% |
|
| 4.16% |
|
| 3.99% |
| (73) |
|
| 4.63% |
|
| 4.07% |
| (56) |
|
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|
|
|
|
| (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. |
| ||||||||||||||||||||||||
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| Page 12 |
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| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Annuities – Select Earnings and Operational Data |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||||||||||
|
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|
|
| As of or For the Three Months Ended |
| As of or For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Income (Loss) from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating revenues: |
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
| Insurance premiums | $ | 27 |
| $ | 30 |
| $ | 27 |
| $ | 30 |
| $ | 25 |
| -7.4% |
| $ | 59 |
| $ | 55 |
| -6.8% |
|
| Fee income |
| 679 |
|
| 690 |
|
| 702 |
|
| 658 |
|
| 611 |
| -10.0% |
|
| 1,332 |
|
| 1,269 |
| -4.7% |
|
| Net investment income |
| 352 |
|
| 371 |
|
| 349 |
|
| 360 |
|
| 337 |
| -4.3% |
|
| 680 |
|
| 697 |
| 2.5% |
|
| Operating realized gain (loss) |
| 53 |
|
| 49 |
|
| 55 |
|
| 54 |
|
| 51 |
| -3.8% |
|
| 103 |
|
| 105 |
| 1.9% |
|
| Amortization of deferred gain |
| 6 |
|
| 7 |
|
| 7 |
|
| 6 |
|
| 6 |
| 0.0% |
|
| 12 |
|
| 13 |
| 8.3% |
|
| Other revenues |
| 132 |
|
| 120 |
|
| 142 |
|
| 124 |
|
| 139 |
| 5.3% |
|
| 267 |
|
| 262 |
| -1.9% |
|
| Total operating revenues |
| 1,249 |
|
| 1,267 |
|
| 1,282 |
|
| 1,232 |
|
| 1,169 |
| -6.4% |
|
| 2,453 |
|
| 2,401 |
| -2.1% |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest credited |
| 199 |
|
| 210 |
|
| 203 |
|
| 207 |
|
| 214 |
| 7.5% |
|
| 398 |
|
| 422 |
| 6.0% |
|
| Benefits |
| 135 |
|
| 135 |
|
| 138 |
|
| 152 |
|
| 180 |
| 33.3% |
|
| 275 |
|
| 332 |
| 20.7% |
|
| Commissions incurred |
| 297 |
|
| 276 |
|
| 287 |
|
| 268 |
|
| 257 |
| -13.5% |
|
| 573 |
|
| 526 |
| -8.2% |
|
| Other expenses incurred |
| 264 |
|
| 258 |
|
| 280 |
|
| 260 |
|
| 243 |
| -8.0% |
|
| 519 |
|
| 501 |
| -3.5% |
|
| Amounts capitalized |
| (144) |
|
| (113) |
|
| (132) |
|
| (118) |
|
| (110) |
| 23.6% |
|
| (271) |
|
| (228) |
| 15.9% |
|
| Amortization |
| 118 |
|
| 98 |
|
| 115 |
|
| 112 |
|
| 90 |
| -23.7% |
|
| 229 |
|
| 202 |
| -11.8% |
|
| Total operating expenses |
| 869 |
|
| 864 |
|
| 891 |
|
| 881 |
|
| 874 |
| 0.6% |
|
| 1,723 |
|
| 1,755 |
| 1.9% |
|
| Income (loss) from operations before taxes |
| 380 |
|
| 403 |
|
| 391 |
|
| 351 |
|
| 295 |
| -22.4% |
|
| 730 |
|
| 646 |
| -11.5% |
|
| Federal income tax expense (benefit) |
| 57 |
|
| 65 |
|
| 59 |
|
| 49 |
|
| 39 |
| -31.6% |
|
| 117 |
|
| 88 |
| -24.8% |
|
| Income (loss) from operations | $ | 323 |
| $ | 338 |
| $ | 332 |
| $ | 302 |
| $ | 256 |
| -20.7% |
| $ | 613 |
| $ | 558 |
| -9.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Effective Federal Income Tax Rate |
| 15.0% |
|
| 16.1% |
|
| 15.1% |
|
| 14.0% |
|
| 13.1% |
|
|
|
| 16.0% |
|
| 13.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Equity, Excluding Goodwill and AOCI | $ | 5,077 |
| $ | 5,282 |
| $ | 5,310 |
| $ | 5,298 |
| $ | 5,665 |
| 11.6% |
| $ | 5,074 |
| $ | 5,481 |
| 8.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ROE, Excluding Goodwill and AOCI |
| 25.5% |
|
| 25.6% |
|
| 25.0% |
|
| 22.8% |
|
| 18.1% |
|
|
|
| 24.2% |
|
| 20.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on Average Account Values |
| 78 |
|
| 80 |
|
| 78 |
|
| 74 |
|
| 67 |
| (11) |
|
| 75 |
|
| 71 |
| (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (Loss) from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Variable annuity |
| 293 |
|
| 287 |
|
| 295 |
|
| 269 |
|
| 230 |
| -21.5% |
|
| 553 |
|
| 499 |
| -9.8% |
|
| Fixed annuity |
| 30 |
|
| 51 |
|
| 37 |
|
| 33 |
|
| 26 |
| -13.3% |
|
| 60 |
|
| 59 |
| -1.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Account Values, Net of Reinsurance – End of Period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Variable account values without GLBs | $ | 64,495 |
| $ | 65,223 |
| $ | 69,625 |
| $ | 66,584 |
| $ | 59,163 |
| -8.3% |
| $ | 64,495 |
| $ | 59,163 |
| -8.3% |
|
| Variable account values with GLBs |
| 86,901 |
|
| 84,320 |
|
| 86,234 |
|
| 78,837 |
|
| 68,468 |
| -21.2% |
|
| 86,901 |
|
| 68,468 |
| -21.2% |
|
| Fixed account values |
| 16,911 |
|
| 16,804 |
|
| 16,866 |
|
| 16,723 |
|
| 16,621 |
| -1.7% |
|
| 16,911 |
|
| 16,621 |
| -1.7% |
|
| Total account values |
| 168,307 |
|
| 166,347 |
|
| 172,725 |
|
| 162,144 |
|
| 144,252 |
| -14.3% |
|
| 168,307 |
|
| 144,252 |
|
|
|
| Percent variable account values with GLBs |
| 51.6% |
|
| 50.7% |
|
| 49.9% |
|
| 48.6% |
|
| 47.5% |
|
|
|
| 51.6% |
|
| 47.5% |
|
|
|
|
|
|
|
|
|
|
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|
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|
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| Page 13 |
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|
|
| 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 |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Income (Loss) from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fee income | $ | 74 |
| $ | 75 |
| $ | 76 |
| $ | 70 |
| $ | 65 |
| -12.2% |
| $ | 146 |
| $ | 135 |
| -7.5% |
|
| Net investment income |
| 250 |
|
| 245 |
|
| 250 |
|
| 238 |
|
| 241 |
| -3.6% |
|
| 498 |
|
| 479 |
| -3.8% |
|
| Other revenues |
| 9 |
|
| 8 |
|
| 9 |
|
| 10 |
|
| 9 |
| 0.0% |
|
| 16 |
|
| 19 |
| 18.8% |
|
| Total operating revenues |
| 333 |
|
| 328 |
|
| 335 |
|
| 318 |
|
| 315 |
| -5.4% |
|
| 660 |
|
| 633 |
| -4.1% |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest credited |
| 155 |
|
| 153 |
|
| 154 |
|
| 152 |
|
| 156 |
| 0.6% |
|
| 309 |
|
| 308 |
| -0.3% |
|
| Benefits |
| 1 |
|
| 1 |
|
| 1 |
|
| 1 |
|
| 1 |
| 0.0% |
|
| 1 |
|
| 2 |
| 100.0% |
|
| Commissions incurred |
| 20 |
|
| 21 |
|
| 21 |
|
| 20 |
|
| 18 |
| -10.0% |
|
| 42 |
|
| 37 |
| -11.9% |
|
| Other expenses incurred |
| 79 |
|
| 78 |
|
| 89 |
|
| 79 |
|
| 76 |
| -3.8% |
|
| 158 |
|
| 154 |
| -2.5% |
|
| Amounts capitalized |
| (4) |
|
| (5) |
|
| (7) |
|
| (5) |
|
| (5) |
| -25.0% |
|
| (10) |
|
| (9) |
| 10.0% |
|
| Amortization |
| 8 |
|
| 8 |
|
| 9 |
|
| 7 |
|
| 6 |
| -25.0% |
|
| 16 |
|
| 13 |
| -18.8% |
|
| Total operating expenses |
| 259 |
|
| 256 |
|
| 267 |
|
| 254 |
|
| 252 |
| -2.7% |
|
| 516 |
|
| 505 |
| -2.1% |
|
| Income (loss) from operations before taxes |
| 74 |
|
| 72 |
|
| 68 |
|
| 64 |
|
| 63 |
| -14.9% |
|
| 144 |
|
| 128 |
| -11.1% |
|
| Federal income tax expense (benefit) |
| 12 |
|
| 12 |
|
| 11 |
|
| 9 |
|
| 9 |
| -25.0% |
|
| 26 |
|
| 19 |
| -26.9% |
|
| Income (loss) from operations | $ | 62 |
| $ | 60 |
| $ | 57 |
| $ | 55 |
| $ | 54 |
| -12.9% |
| $ | 118 |
| $ | 109 |
| -7.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Effective Federal Income Tax Rate |
| 16.7% |
|
| 16.8% |
|
| 16.3% |
|
| 13.7% |
|
| 15.5% |
|
|
|
| 17.8% |
|
| 14.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Equity, Excluding Goodwill and AOCI | $ | 1,535 |
| $ | 1,492 |
| $ | 1,477 |
| $ | 1,534 |
| $ | 1,618 |
| 5.4% |
| $ | 1,530 |
| $ | 1,576 |
| 3.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ROE, Excluding Goodwill and AOCI |
| 16.1% |
|
| 16.1% |
|
| 15.4% |
|
| 14.4% |
|
| 13.3% |
|
|
|
| 15.5% |
|
| 13.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Return on Average Account Values |
| 26 |
|
| 25 |
|
| 23 |
|
| 23 |
|
| 24 |
| (2) |
|
| 26 |
|
| 23 |
| (3) |
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pre-tax Net Margin |
| 41.5% |
|
| 41.2% |
|
| 37.6% |
|
| 38.6% |
|
| 39.8% |
|
|
|
| 41.0% |
|
| 39.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Flows by Market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
| Small Market | $ | 106 |
| $ | (43) |
| $ | 98 |
| $ | (116) |
| $ | 80 |
| -24.5% |
| $ | 79 |
| $ | (36) |
| NM |
|
| Mid - Large Market |
| 755 |
|
| 423 |
|
| (58) |
|
| 1,350 |
|
| 1,074 |
| 42.3% |
|
| 1,435 |
|
| 2,424 |
| 68.9% |
|
| Multi-Fund® and Other |
| (344) |
|
| (401) |
|
| (420) |
|
| (288) |
|
| (241) |
| 29.9% |
|
| (649) |
|
| (529) |
| 18.5% |
|
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|
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|
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|
|
|
| Net Flows – Trailing Twelve Months | $ | 1,566 |
| $ | 1,183 |
| $ | 464 |
| $ | 1,062 |
| $ | 1,458 |
| -6.9% |
| $ | 1,566 |
| $ | 1,458 |
| -6.9% |
|
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| Page 14 |
|
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|
|
| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Life Insurance – Select Earnings and Operational Data |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
| As of or For the Three Months Ended |
| As of or For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Income (Loss) from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Insurance premiums | $ | 258 |
| $ | 256 |
| $ | 266 |
| $ | 277 |
| $ | 283 |
| 9.7% |
| $ | 511 |
| $ | 560 |
| 9.6% |
|
| Fee income |
| 915 |
|
| 1,230 |
|
| 848 |
|
| 846 |
|
| 840 |
| -8.2% |
|
| 1,783 |
|
| 1,686 |
| -5.4% |
|
| Net investment income |
| 852 |
|
| 832 |
|
| 716 |
|
| 688 |
|
| 665 |
| -21.9% |
|
| 1,661 |
|
| 1,353 |
| -18.5% |
|
| Operating realized gain (loss) |
| (2) |
|
| - |
|
| (4) |
|
| 1 |
|
| (2) |
| 0.0% |
|
| (4) |
|
| (1) |
| 75.0% |
|
| Amortization of deferred gain on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| business sold through reinsurance |
| 3 |
|
| 3 |
|
| 13 |
|
| 12 |
|
| 12 |
| 300.0% |
|
| 5 |
|
| 25 |
| NM |
|
| Other revenues |
| 3 |
|
| 4 |
|
| 5 |
|
| 1 |
|
| 2 |
| -33.3% |
|
| 12 |
|
| 2 |
| -83.3% |
|
| Total operating revenues |
| 2,029 |
|
| 2,325 |
|
| 1,844 |
|
| 1,825 |
|
| 1,800 |
| -11.3% |
|
| 3,968 |
|
| 3,625 |
| -8.6% |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest credited |
| 372 |
|
| 375 |
|
| 322 |
|
| 325 |
|
| 329 |
| -11.6% |
|
| 742 |
|
| 653 |
| -12.0% |
|
| Benefits |
| 999 |
|
| 976 |
|
| 1,126 |
|
| 1,126 |
|
| 1,041 |
| 4.2% |
|
| 2,172 |
|
| 2,167 |
| -0.2% |
|
| Commissions incurred |
| 130 |
|
| 153 |
|
| 236 |
|
| 156 |
|
| 176 |
| 35.4% |
|
| 250 |
|
| 332 |
| 32.8% |
|
| Other expenses incurred |
| 208 |
|
| 201 |
|
| 234 |
|
| 202 |
|
| 199 |
| -4.3% |
|
| 403 |
|
| 402 |
| -0.2% |
|
| Amounts capitalized |
| (154) |
|
| (175) |
|
| (276) |
|
| (182) |
|
| (204) |
| -32.5% |
|
| (293) |
|
| (386) |
| -31.7% |
|
| Amortization |
| 157 |
|
| 682 |
|
| 105 |
|
| 133 |
|
| 120 |
| -23.6% |
|
| 247 |
|
| 253 |
| 2.4% |
|
| Total operating expenses |
| 1,712 |
|
| 2,212 |
|
| 1,747 |
|
| 1,760 |
|
| 1,661 |
| -3.0% |
|
| 3,521 |
|
| 3,421 |
| -2.8% |
|
| Income (loss) from operations before taxes |
| 317 |
|
| 113 |
|
| 97 |
|
| 65 |
|
| 139 |
| -56.2% |
|
| 447 |
|
| 204 |
| -54.4% |
|
| Federal income tax expense (benefit) |
| 62 |
|
| 20 |
|
| 17 |
|
| 7 |
|
| 25 |
| -59.7% |
|
| 85 |
|
| 32 |
| -62.4% |
|
| Income (loss) from operations | $ | 255 |
| $ | 93 |
| $ | 80 |
| $ | 58 |
| $ | 114 |
| -55.3% |
| $ | 362 |
| $ | 172 |
| -52.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Effective Federal Income Tax Rate |
| 19.7% |
|
| 17.6% |
|
| 17.1% |
|
| 11.3% |
|
| 17.6% |
|
|
|
| 19.1% |
|
| 15.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Equity, Excluding Goodwill and AOCI | $ | 9,035 |
| $ | 9,245 |
| $ | 8,971 |
| $ | 8,831 |
| $ | 9,294 |
| 2.9% |
| $ | 8,972 |
| $ | 9,063 |
| 1.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ROE, Excluding Goodwill and AOCI |
| 11.3% |
|
| 4.0% |
|
| 3.6% |
|
| 2.6% |
|
| 4.9% |
|
|
|
| 8.1% |
|
| 3.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Account Values, Net of Reinsurance | $ | 59,056 |
| $ | 59,642 |
| $ | 51,067 |
| $ | 51,236 |
| $ | 49,380 |
| -16.4% |
| $ | 58,532 |
| $ | 59,416 |
| 1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| In-Force Face Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| UL and other | $ | 357,670 |
| $ | 357,624 |
| $ | 362,106 |
| $ | 361,490 |
| $ | 361,565 |
| 1.1% |
| $ | 357,670 |
| $ | 361,565 |
| 1.1% |
|
| Term insurance |
| 567,525 |
|
| 587,372 |
|
| 611,854 |
|
| 635,123 |
|
| 663,140 |
| 16.8% |
|
| 567,525 |
|
| 663,140 |
| 16.8% |
|
| Total in-force face amount | $ | 925,195 |
| $ | 944,996 |
| $ | 973,960 |
| $ | 996,613 |
| $ | 1,024,705 |
| 10.8% |
| $ | 925,195 |
| $ | 1,024,705 |
| 10.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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| Page 15 |
|
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|
|
|
|
|
|
|
| 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 |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Income (Loss) from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Insurance premiums | $ | 1,107 |
| $ | 1,107 |
| $ | 1,117 |
| $ | 1,169 |
| $ | 1,187 |
| 7.2% |
| $ | 2,226 |
| $ | 2,356 |
| 5.8% |
|
| Net investment income |
| 95 |
|
| 91 |
|
| 90 |
|
| 85 |
|
| 86 |
| -9.5% |
|
| 185 |
|
| 171 |
| -7.6% |
|
| Other revenues |
| 45 |
|
| 45 |
|
| 45 |
|
| 49 |
|
| 50 |
| 11.1% |
|
| 89 |
|
| 99 |
| 11.2% |
|
| Total operating revenues |
| 1,247 |
|
| 1,243 |
|
| 1,252 |
|
| 1,303 |
|
| 1,323 |
| 6.1% |
|
| 2,500 |
|
| 2,626 |
| 5.0% |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest credited |
| 1 |
|
| 1 |
|
| 2 |
|
| 1 |
|
| 2 |
| 100.0% |
|
| 3 |
|
| 3 |
| 0.0% |
|
| Benefits |
| 877 |
|
| 971 |
|
| 1,072 |
|
| 1,027 |
|
| 926 |
| 5.6% |
|
| 1,847 |
|
| 1,953 |
| 5.7% |
|
| Commissions incurred |
| 87 |
|
| 88 |
|
| 95 |
|
| 94 |
|
| 96 |
| 10.3% |
|
| 178 |
|
| 190 |
| 6.7% |
|
| Other expenses incurred |
| 210 |
|
| 209 |
|
| 225 |
|
| 217 |
|
| 214 |
| 1.9% |
|
| 417 |
|
| 432 |
| 3.6% |
|
| Amounts capitalized |
| (21) |
|
| (19) |
|
| (30) |
|
| (21) |
|
| (24) |
| -14.3% |
|
| (42) |
|
| (46) |
| -9.5% |
|
| Amortization |
| 34 |
|
| 33 |
|
| 34 |
|
| 37 |
|
| 34 |
| 0.0% |
|
| 71 |
|
| 71 |
| 0.0% |
|
| Total operating expenses |
| 1,188 |
|
| 1,283 |
|
| 1,398 |
|
| 1,355 |
|
| 1,248 |
| 5.1% |
|
| 2,474 |
|
| 2,603 |
| 5.2% |
|
| Income (loss) from operations before taxes |
| 59 |
|
| (40) |
|
| (146) |
|
| (52) |
|
| 75 |
| 27.1% |
|
| 26 |
|
| 23 |
| -11.5% |
|
| Federal income tax expense (benefit) |
| 13 |
|
| (8) |
|
| (31) |
|
| (11) |
|
| 16 |
| 23.1% |
|
| 6 |
|
| 5 |
| -16.7% |
|
| Income (loss) from operations | $ | 46 |
| $ | (32) |
| $ | (115) |
| $ | (41) |
| $ | 59 |
| 28.3% |
| $ | 20 |
| $ | 18 |
| -10.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 | $ | 2,731 |
| $ | 2,759 |
| $ | 2,810 |
| $ | 2,899 |
| $ | 2,988 |
| 9.4% |
| $ | 2,725 |
| $ | 2,943 |
| 8.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ROE, Excluding Goodwill and AOCI |
| 6.8% |
|
| -4.6% |
|
| -16.4% |
|
| -5.6% |
|
| 7.9% |
|
|
|
| 1.5% |
|
| 1.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss Ratios by Product Line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Life |
| 79.6% |
|
| 105.1% |
|
| 108.7% |
|
| 91.0% |
|
| 80.5% |
|
|
|
| 90.2% |
|
| 85.8% |
|
|
|
| Disability |
| 79.0% |
|
| 77.7% |
|
| 90.2% |
|
| 87.2% |
|
| 76.7% |
|
|
|
| 78.9% |
|
| 81.9% |
|
|
|
| Dental |
| 81.6% |
|
| 75.7% |
|
| 71.1% |
|
| 71.1% |
|
| 76.9% |
|
|
|
| 79.2% |
|
| 74.0% |
|
|
|
| Total |
| 79.3% |
|
| 87.8% |
|
| 96.1% |
|
| 88.0% |
|
| 78.2% |
|
|
|
| 83.1% |
|
| 83.0% |
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| Page 16 |
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| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Other Operations – Select Earnings and Operational Data |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||||||||||
|
|
|
|
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|
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|
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|
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|
| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Other Operations |
|
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| Operating revenues: |
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| Insurance premiums | $ | 6 |
| $ | 1 |
| $ | 10 |
| $ | 1 |
| $ | 3 |
| -50.0% |
| $ | 8 |
| $ | 4 |
| -50.0% |
|
| Net investment income |
| 35 |
|
| 37 |
|
| 40 |
|
| 41 |
|
| 40 |
| 14.3% |
|
| 70 |
|
| 81 |
| 15.7% |
|
| Other revenues |
| 4 |
|
| 4 |
|
| 6 |
|
| (2) |
|
| (9) |
| NM |
|
| 6 |
|
| (11) |
| NM |
|
| Total operating revenues |
| 45 |
|
| 42 |
|
| 56 |
|
| 40 |
|
| 34 |
| -24.4% |
|
| 84 |
|
| 74 |
| -11.9% |
|
| Operating expenses: |
|
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|
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| Interest credited |
| 10 |
|
| 10 |
|
| 10 |
|
| 12 |
|
| 9 |
| -10.0% |
|
| 22 |
|
| 21 |
| -4.5% |
|
| Benefits |
| 25 |
|
| 21 |
|
| 21 |
|
| 14 |
|
| 21 |
| -16.0% |
|
| 40 |
|
| 35 |
| -12.5% |
|
| Commissions and other expenses |
| 25 |
|
| 117 |
|
| 19 |
|
| 12 |
|
| 1 |
| -96.0% |
|
| 53 |
|
| 14 |
| -73.6% |
|
| Interest and debt expense |
| 65 |
|
| 66 |
|
| 66 |
|
| 66 |
|
| 68 |
| 4.6% |
|
| 131 |
|
| 134 |
| 2.3% |
|
| Spark program expense |
| 21 |
|
| 22 |
|
| 30 |
|
| 31 |
|
| 44 |
| 109.5% |
|
| 35 |
|
| 75 |
| 114.3% |
|
| Total operating expenses |
| 146 |
|
| 236 |
|
| 146 |
|
| 135 |
|
| 143 |
| -2.1% |
|
| 281 |
|
| 279 |
| -0.7% |
|
| Income (loss) from operations before taxes |
| (101) |
|
| (194) |
|
| (90) |
|
| (95) |
|
| (109) |
| -7.9% |
|
| (197) |
|
| (205) |
| -4.1% |
|
| Federal income tax expense (benefit) |
| (23) |
|
| (42) |
|
| (22) |
|
| (15) |
|
| (17) |
| 26.1% |
|
| (43) |
|
| (33) |
| 23.3% |
|
| Income (loss) from operations | $ | (78) |
| $ | (152) |
| $ | (68) |
| $ | (80) |
| $ | (92) |
| -17.9% |
| $ | (154) |
| $ | (172) |
| -11.7% |
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| Page 17 |
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| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Consolidated – DAC, VOBA, DSI and DFEL Roll Forwards |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
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|
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|
|
| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| DAC, VOBA and DSI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
| Balance as of beginning-of-period | $ | 7,884 |
| $ | 6,472 |
| $ | 6,169 |
| $ | 6,284 |
| $ | 9,020 |
| 14.4% |
| $ | 6,025 |
| $ | 6,284 |
| 4.3% |
|
| Business acquired (sold) through reinsurance |
| - |
|
| - |
|
| (650) |
|
| - |
|
| - |
| NM |
|
| - |
|
| - |
| NM |
|
| Deferrals |
| 325 |
|
| 312 |
|
| 446 |
|
| 328 |
|
| 345 |
| 6.2% |
|
| 619 |
|
| 673 |
| 8.7% |
|
| Operating amortization |
| (314) |
|
| (820) |
|
| (259) |
|
| (284) |
|
| (245) |
| 22.0% |
|
| (558) |
|
| (530) |
| 5.0% |
|
| Deferrals, net of operating amortization |
| 11 |
|
| (508) |
|
| 187 |
|
| 44 |
|
| 100 |
| NM |
|
| 61 |
|
| 143 |
| 134.4% |
|
| Amortization associated with benefit ratio unlocking |
| (11) |
|
| 4 |
|
| (11) |
|
| 36 |
|
| 64 |
| NM |
|
| (17) |
|
| 100 |
| NM |
|
| Adjustment related to realized (gains) losses |
| (10) |
|
| 10 |
|
| 36 |
|
| (37) |
|
| (131) |
| NM |
|
| 41 |
|
| (168) |
| NM |
|
| Adjustment related to unrealized (gains) losses |
| (1,402) |
|
| 191 |
|
| 553 |
|
| 2,693 |
|
| 3,034 |
| NM |
|
| 362 |
|
| 5,728 |
| NM |
|
| Balance as of end-of-period | $ | 6,472 |
| $ | 6,169 |
| $ | 6,284 |
| $ | 9,020 |
| $ | 12,087 |
| 86.8% |
| $ | 6,472 |
| $ | 12,087 |
| 86.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| DFEL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of beginning-of-period | $ | 559 |
| $ | 433 |
| $ | 396 |
| $ | 415 |
| $ | 1,363 |
| 143.8% |
| $ | 401 |
| $ | 415 |
| 3.5% |
|
| Business acquired (sold) through reinsurance |
| - |
|
| - |
|
| (290) |
|
| - |
|
| - |
| NM |
|
| - |
|
| - |
| NM |
|
| Deferrals |
| 240 |
|
| 251 |
|
| 294 |
|
| 256 |
|
| 270 |
| 12.5% |
|
| 471 |
|
| 526 |
| 11.7% |
|
| Operating amortization |
| (179) |
|
| (522) |
|
| (147) |
|
| (151) |
|
| (145) |
| 19.0% |
|
| (310) |
|
| (296) |
| 4.5% |
|
| Deferrals, net of operating amortization |
| 61 |
|
| (271) |
|
| 147 |
|
| 105 |
|
| 125 |
| 104.9% |
|
| 161 |
|
| 230 |
| 42.9% |
|
| Amortization associated with benefit ratio unlocking |
| (2) |
|
| 1 |
|
| (1) |
|
| 6 |
|
| 10 |
| NM |
|
| (2) |
|
| 15 |
| NM |
|
| Adjustment related to realized (gains) losses |
| (2) |
|
| (8) |
|
| (1) |
|
| (6) |
|
| (12) |
| NM |
|
| (2) |
|
| (17) |
| NM |
|
| Adjustment related to unrealized (gains) losses |
| (183) |
|
| 241 |
|
| 164 |
|
| 843 |
|
| 2,611 |
| NM |
|
| (125) |
|
| 3,454 |
| NM |
|
| Balance as of end-of-period | $ | 433 |
| $ | 396 |
| $ | 415 |
| $ | 1,363 |
| $ | 4,097 |
| NM |
| $ | 433 |
| $ | 4,097 |
| NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| DAC, VOBA, DSI and DFEL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of End-of-Period, After-Tax | $ | 4,771 |
| $ | 4,561 |
| $ | 4,637 |
| $ | 6,049 |
| $ | 6,312 |
| 32.3% |
| $ | 4,771 |
| $ | 6,312 |
| 32.3% |
|
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| Page 18 |
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|
|
| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Annuities – Account Value Roll Forwards |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||||||||||
|
|
|
|
|
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|
|
| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Fixed Annuities |
|
|
|
|
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|
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|
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|
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|
|
|
| Balance as of beginning-of-period | $ | 25,008 |
| $ | 24,840 |
| $ | 24,642 |
| $ | 24,728 |
| $ | 24,475 |
| -2.1% |
| $ | 25,405 |
| $ | 24,728 |
| -2.7% |
|
| Gross deposits |
| 184 |
|
| 342 |
|
| 413 |
|
| 374 |
|
| 524 |
| 184.8% |
|
| 269 |
|
| 899 |
| 234.2% |
|
| Full surrenders and deaths |
| (482) |
|
| (489) |
|
| (415) |
|
| (420) |
|
| (457) |
| 5.2% |
|
| (975) |
|
| (877) |
| 10.1% |
|
| Other contract benefits |
| (115) |
|
| (163) |
|
| (198) |
|
| (171) |
|
| (176) |
| -53.0% |
|
| (257) |
|
| (347) |
| -35.0% |
|
| Net flows |
| (413) |
|
| (310) |
|
| (200) |
|
| (217) |
|
| (109) |
| 73.6% |
|
| (963) |
|
| (325) |
| 66.3% |
|
| Contract holder assessments |
| (22) |
|
| (20) |
|
| (17) |
|
| (15) |
|
| (12) |
| 45.5% |
|
| (45) |
|
| (28) |
| 37.8% |
|
| Reinvested interest credited |
| 267 |
|
| 132 |
|
| 303 |
|
| (21) |
|
| (101) |
| NM |
|
| 443 |
|
| (122) |
| NM |
|
| Balance as of end-of-period, gross |
| 24,840 |
|
| 24,642 |
|
| 24,728 |
|
| 24,475 |
|
| 24,253 |
| -2.4% |
|
| 24,840 |
|
| 24,253 |
| -2.4% |
|
| Reinsurance ceded |
| (7,929) |
|
| (7,838) |
|
| (7,862) |
|
| (7,752) |
|
| (7,632) |
| 3.7% |
|
| (7,929) |
|
| (7,632) |
| 3.7% |
|
| Balance as of end-of-period, net | $ | 16,911 |
| $ | 16,804 |
| $ | 16,866 |
| $ | 16,723 |
| $ | 16,621 |
| -1.7% |
| $ | 16,911 |
| $ | 16,621 |
| -1.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Variable Annuities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of beginning-of-period | $ | 144,157 |
| $ | 151,396 |
| $ | 149,550 |
| $ | 155,866 |
| $ | 145,428 |
| 0.9% |
| $ | 140,313 |
| $ | 155,866 |
| 11.1% |
|
| Gross deposits |
| 3,025 |
|
| 2,365 |
|
| 2,598 |
|
| 2,331 |
|
| 2,178 |
| -28.0% |
|
| 5,754 |
|
| 4,508 |
| -21.7% |
|
| Full surrenders and deaths |
| (1,871) |
|
| (1,875) |
|
| (1,858) |
|
| (1,567) |
|
| (1,366) |
| 27.0% |
|
| (3,772) |
|
| (2,933) |
| 22.2% |
|
| Other contract benefits |
| (1,038) |
|
| (1,021) |
|
| (1,195) |
|
| (1,100) |
|
| (1,021) |
| 1.6% |
|
| (2,092) |
|
| (2,121) |
| -1.4% |
|
| Net flows |
| 116 |
|
| (531) |
|
| (455) |
|
| (336) |
|
| (209) |
| NM |
|
| (110) |
|
| (546) |
| NM |
|
| Contract holder assessments |
| (705) |
|
| (723) |
|
| (727) |
|
| (692) |
|
| (655) |
| 7.1% |
|
| (1,390) |
|
| (1,347) |
| 3.1% |
|
| Change in market value and reinvestment |
| 7,828 |
|
| (592) |
|
| 7,498 |
|
| (9,410) |
|
| (16,925) |
| NM |
|
| 12,583 |
|
| (26,334) |
| NM |
|
| Balance as of end-of-period, gross |
| 151,396 |
|
| 149,550 |
|
| 155,866 |
|
| 145,428 |
|
| 127,639 |
| -15.7% |
|
| 151,396 |
|
| 127,639 |
| -15.7% |
|
| Reinsurance ceded |
| - |
|
| (7) |
|
| (7) |
|
| (7) |
|
| (8) |
| NM |
|
| - |
|
| (8) |
| NM |
|
| Balance as of end-of-period, net | $ | 151,396 |
| $ | 149,543 |
| $ | 155,859 |
| $ | 145,421 |
| $ | 127,631 |
| -15.7% |
| $ | 151,396 |
| $ | 127,631 |
| -15.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of beginning-of-period | $ | 169,165 |
| $ | 176,236 |
| $ | 174,192 |
| $ | 180,594 |
| $ | 169,903 |
| 0.4% |
| $ | 165,718 |
| $ | 180,594 |
| 9.0% |
|
| Gross deposits |
| 3,209 |
|
| 2,707 |
|
| 3,011 |
|
| 2,705 |
|
| 2,702 |
| -15.8% |
|
| 6,023 |
|
| 5,407 |
| -10.2% |
|
| Full surrenders and deaths |
| (2,353) |
|
| (2,364) |
|
| (2,273) |
|
| (1,987) |
|
| (1,823) |
| 22.5% |
|
| (4,747) |
|
| (3,810) |
| 19.7% |
|
| Other contract benefits |
| (1,153) |
|
| (1,184) |
|
| (1,393) |
|
| (1,271) |
|
| (1,197) |
| -3.8% |
|
| (2,349) |
|
| (2,468) |
| -5.1% |
|
| Net flows |
| (297) |
|
| (841) |
|
| (655) |
|
| (553) |
|
| (318) |
| -7.1% |
|
| (1,073) |
|
| (871) |
| 18.8% |
|
| Contract holder assessments |
| (727) |
|
| (743) |
|
| (744) |
|
| (707) |
|
| (667) |
| 8.3% |
|
| (1,435) |
|
| (1,375) |
| 4.2% |
|
| Change in market value and reinvestment |
| 8,095 |
|
| (460) |
|
| 7,801 |
|
| (9,431) |
|
| (17,026) |
| NM |
|
| 13,026 |
|
| (26,456) |
| NM |
|
| Balance as of end-of-period, gross |
| 176,236 |
|
| 174,192 |
|
| 180,594 |
|
| 169,903 |
|
| 151,892 |
| -13.8% |
|
| 176,236 |
|
| 151,892 |
| -13.8% |
|
| Reinsurance ceded |
| (7,929) |
|
| (7,845) |
|
| (7,869) |
|
| (7,759) |
|
| (7,640) |
| 3.6% |
|
| (7,929) |
|
| (7,640) |
| 3.6% |
|
| Balance as of end-of-period, net | $ | 168,307 |
| $ | 166,347 |
| $ | 172,725 |
| $ | 162,144 |
| $ | 144,252 |
| -14.3% |
| $ | 168,307 |
| $ | 144,252 |
| -14.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| General Account |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of beginning-of-period | $ | 23,008 |
| $ | 22,995 |
| $ | 23,152 |
| $ | 23,639 |
| $ | 23,958 |
| 4.1% |
| $ | 22,916 |
| $ | 23,639 |
| 3.2% |
|
| Gross deposits |
| 424 |
|
| 504 |
|
| 908 |
|
| 572 |
|
| 1,132 |
| 167.0% |
|
| 913 |
|
| 1,704 |
| 86.6% |
|
| Withdrawals |
| (590) |
|
| (647) |
|
| (631) |
|
| (554) |
|
| (485) |
| 17.8% |
|
| (1,173) |
|
| (1,039) |
| 11.4% |
|
| Net flows |
| (166) |
|
| (143) |
|
| 277 |
|
| 18 |
|
| 647 |
| NM |
|
| (260) |
|
| 665 |
| NM |
|
| Transfers between fixed and variable accounts |
| 3 |
|
| 149 |
|
| 59 |
|
| 154 |
|
| 160 |
| NM |
|
| 40 |
|
| 315 |
| NM |
|
| Contract holder assessments |
| (3) |
|
| (3) |
|
| (4) |
|
| (3) |
|
| (3) |
| 0.0% |
|
| (7) |
|
| (7) |
| 0.0% |
|
| Reinvestment interest credited |
| 153 |
|
| 154 |
|
| 155 |
|
| 150 |
|
| 155 |
| 1.3% |
|
| 306 |
|
| 305 |
| -0.3% |
|
| Balance as of end-of-period | $ | 22,995 |
| $ | 23,152 |
| $ | 23,639 |
| $ | 23,958 |
| $ | 24,917 |
| 8.4% |
| $ | 22,995 |
| $ | 24,917 |
| 8.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Separate Account and Mutual Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of beginning-of-period | $ | 68,149 |
| $ | 72,913 |
| $ | 72,454 |
| $ | 75,475 |
| $ | 71,385 |
| 4.7% |
| $ | 65,391 |
| $ | 75,475 |
| 15.4% |
|
| Gross deposits |
| 2,365 |
|
| 1,907 |
|
| 2,092 |
|
| 2,795 |
|
| 1,811 |
| -23.4% |
|
| 4,516 |
|
| 4,606 |
| 2.0% |
|
| Withdrawals |
| (1,682) |
|
| (1,785) |
|
| (2,749) |
|
| (1,867) |
|
| (1,545) |
| 8.1% |
|
| (3,391) |
|
| (3,412) |
| -0.6% |
|
| Net flows |
| 683 |
|
| 122 |
|
| (657) |
|
| 928 |
|
| 266 |
| -61.1% |
|
| 1,125 |
|
| 1,194 |
| 6.1% |
|
| Transfers between fixed and variable accounts |
| (43) |
|
| (154) |
|
| (77) |
|
| (230) |
|
| (9) |
| 79.1% |
|
| (186) |
|
| (241) |
| -29.6% |
|
| Contract holder assessments |
| (65) |
|
| (66) |
|
| (67) |
|
| (64) |
|
| (60) |
| 7.7% |
|
| (127) |
|
| (123) |
| 3.1% |
|
| Change in market value and reinvestment |
| 4,189 |
|
| (361) |
|
| 3,822 |
|
| (4,724) |
|
| (9,793) |
| NM |
|
| 6,710 |
|
| (14,516) |
| NM |
|
| Balance as of end-of-period | $ | 72,913 |
| $ | 72,454 |
| $ | 75,475 |
| $ | 71,385 |
| $ | 61,789 |
| -15.3% |
| $ | 72,913 |
| $ | 61,789 |
| -15.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of beginning-of-period | $ | 91,157 |
| $ | 95,908 |
| $ | 95,606 |
| $ | 99,114 |
| $ | 95,343 |
| 4.6% |
| $ | 88,307 |
| $ | 99,114 |
| 12.2% |
|
| Gross deposits |
| 2,789 |
|
| 2,411 |
|
| 3,000 |
|
| 3,367 |
|
| 2,943 |
| 5.5% |
|
| 5,429 |
|
| 6,310 |
| 16.2% |
|
| Withdrawals |
| (2,272) |
|
| (2,432) |
|
| (3,380) |
|
| (2,421) |
|
| (2,030) |
| 10.7% |
|
| (4,564) |
|
| (4,451) |
| 2.5% |
|
| Net flows |
| 517 |
|
| (21) |
|
| (380) |
|
| 946 |
|
| 913 |
| 76.6% |
|
| 865 |
|
| 1,859 |
| 114.9% |
|
| Transfers between fixed and variable accounts |
| (40) |
|
| (5) |
|
| (18) |
|
| (76) |
|
| 151 |
| NM |
|
| (146) |
|
| 74 |
| 150.7% |
|
| Contract holder assessments |
| (68) |
|
| (69) |
|
| (71) |
|
| (67) |
|
| (63) |
| 7.4% |
|
| (134) |
|
| (130) |
| 3.0% |
|
| Change in market value and reinvestment |
| 4,342 |
|
| (207) |
|
| 3,977 |
|
| (4,574) |
|
| (9,638) |
| NM |
|
| 7,016 |
|
| (14,211) |
| NM |
|
| Balance as of end-of-period | $ | 95,908 |
| $ | 95,606 |
| $ | 99,114 |
| $ | 95,343 |
| $ | 86,706 |
| -9.6% |
| $ | 95,908 |
| $ | 86,706 |
| -9.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
| Page 20 |
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Life Insurance – Account Value Roll Forwards |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| General Account |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of beginning-of-period | $ | 38,053 |
| $ | 38,013 |
| $ | 37,969 |
| $ | 38,094 |
| $ | 37,921 |
| -0.3% |
| $ | 38,136 |
| $ | 38,094 |
| -0.1% |
|
| Deposits |
| 895 |
|
| 894 |
|
| 1,050 |
|
| 878 |
|
| 880 |
| -1.7% |
|
| 1,794 |
|
| 1,759 |
| -2.0% |
|
| Withdrawals and deaths |
| (243) |
|
| (237) |
|
| (213) |
|
| (315) |
|
| (226) |
| 7.0% |
|
| (539) |
|
| (543) |
| -0.7% |
|
| Net flows |
| 652 |
|
| 657 |
|
| 837 |
|
| 563 |
|
| 654 |
| 0.3% |
|
| 1,255 |
|
| 1,216 |
| -3.1% |
|
| Contract holder assessments |
| (1,074) |
|
| (1,086) |
|
| (1,107) |
|
| (1,131) |
|
| (1,096) |
| -2.0% |
|
| (2,148) |
|
| (2,227) |
| -3.7% |
|
| Reinvested interest credited |
| 382 |
|
| 385 |
|
| 395 |
|
| 395 |
|
| 338 |
| -11.5% |
|
| 770 |
|
| 734 |
| -4.7% |
|
| Balance as of end-of-period, gross |
| 38,013 |
|
| 37,969 |
|
| 38,094 |
|
| 37,921 |
|
| 37,817 |
| -0.5% |
|
| 38,013 |
|
| 37,817 |
| -0.5% |
|
| Reinsurance ceded |
| (628) |
|
| (620) |
|
| (5,562) |
|
| (5,544) |
|
| (5,549) |
| NM |
|
| (628) |
|
| (5,549) |
| NM |
|
| Balance as of end-of-period, net | $ | 37,385 |
| $ | 37,349 |
| $ | 32,532 |
| $ | 32,377 |
| $ | 32,268 |
| -13.7% |
| $ | 37,385 |
| $ | 32,268 |
| -13.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Separate Account |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of beginning-of-period | $ | 21,983 |
| $ | 23,361 |
| $ | 23,250 |
| $ | 24,907 |
| $ | 23,464 |
| 6.7% |
| $ | 21,078 |
| $ | 24,907 |
| 18.2% |
|
| Deposits |
| 383 |
|
| 430 |
|
| 822 |
|
| 456 |
|
| 559 |
| 46.0% |
|
| 704 |
|
| 1,016 |
| 44.3% |
|
| Withdrawals and deaths |
| (156) |
|
| (216) |
|
| (221) |
|
| (136) |
|
| (175) |
| -12.2% |
|
| (286) |
|
| (311) |
| -8.7% |
|
| Net flows |
| 227 |
|
| 214 |
|
| 601 |
|
| 320 |
|
| 384 |
| 69.2% |
|
| 418 |
|
| 705 |
| 68.7% |
|
| Contract holder assessments |
| (203) |
|
| (211) |
|
| (247) |
|
| (218) |
|
| (230) |
| -13.3% |
|
| (400) |
|
| (449) |
| -12.3% |
|
| Change in market value and reinvestment |
| 1,354 |
|
| (114) |
|
| 1,303 |
|
| (1,545) |
|
| (3,255) |
| NM |
|
| 2,265 |
|
| (4,800) |
| NM |
|
| Balance as of end-of-period, gross |
| 23,361 |
|
| 23,250 |
|
| 24,907 |
|
| 23,464 |
|
| 20,363 |
| -12.8% |
|
| 23,361 |
|
| 20,363 |
| -12.8% |
|
| Reinsurance ceded |
| (1,044) |
|
| (1,018) |
|
| (5,593) |
|
| (5,215) |
|
| (4,498) |
| NM |
|
| (1,044) |
|
| (4,498) |
| NM |
|
| Balance as of end-of-period, net | $ | 22,317 |
| $ | 22,232 |
| $ | 19,314 |
| $ | 18,249 |
| $ | 15,865 |
| -28.9% |
| $ | 22,317 |
| $ | 15,865 |
| -28.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of beginning-of-period | $ | 60,036 |
| $ | 61,374 |
| $ | 61,219 |
| $ | 63,001 |
| $ | 61,385 |
| 2.2% |
| $ | 59,214 |
| $ | 63,001 |
| 6.4% |
|
| Deposits |
| 1,278 |
|
| 1,324 |
|
| 1,872 |
|
| 1,334 |
|
| 1,439 |
| 12.6% |
|
| 2,498 |
|
| 2,775 |
| 11.1% |
|
| Withdrawals and deaths |
| (399) |
|
| (453) |
|
| (434) |
|
| (451) |
|
| (401) |
| -0.5% |
|
| (825) |
|
| (854) |
| -3.5% |
|
| Net flows |
| 879 |
|
| 871 |
|
| 1,438 |
|
| 883 |
|
| 1,038 |
| 18.1% |
|
| 1,673 |
|
| 1,921 |
| 14.8% |
|
| Contract holder assessments |
| (1,277) |
|
| (1,297) |
|
| (1,354) |
|
| (1,349) |
|
| (1,326) |
| -3.8% |
|
| (2,548) |
|
| (2,676) |
| -5.0% |
|
| Change in market value and reinvestment |
| 1,736 |
|
| 271 |
|
| 1,698 |
|
| (1,150) |
|
| (2,917) |
| NM |
|
| 3,035 |
|
| (4,066) |
| NM |
|
| Balance as of end-of-period, gross |
| 61,374 |
|
| 61,219 |
|
| 63,001 |
|
| 61,385 |
|
| 58,180 |
| -5.2% |
|
| 61,374 |
|
| 58,180 |
| -5.2% |
|
| Reinsurance ceded |
| (1,672) |
|
| (1,638) |
|
| (11,155) |
|
| (10,759) |
|
| (10,047) |
| NM |
|
| (1,672) |
|
| (10,047) |
| NM |
|
| Balance as of end-of-period, net | $ | 59,702 |
| $ | 59,581 |
| $ | 51,846 |
| $ | 50,626 |
| $ | 48,133 |
| -19.4% |
| $ | 59,702 |
| $ | 48,133 |
| -19.4% |
|
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|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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| Page 21 |
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|
| Lincoln Financial Group |
| |||||||||||||||||
| Fixed-Income Asset Class |
| |||||||||||||||||
| Unaudited (millions of dollars) |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of 6/30/21 |
| As of 12/31/21 |
| As of 6/30/22 |
| ||||||||||||
|
| Amount |
| % |
| Amount |
| % |
| Amount |
| % |
| ||||||
| Fixed Maturity AFS Securities, Net of Allowance for Credit Losses, at Amortized Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Industry corporate bonds: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial services | $ | 16,422 |
|
| 15.4% |
| $ | 16,438 |
|
| 15.6% |
| $ | 17,372 |
|
| 15.8% |
|
| Basic industry |
| 4,639 |
|
| 4.3% |
|
| 4,436 |
|
| 4.2% |
|
| 4,487 |
|
| 4.1% |
|
| Capital goods |
| 7,397 |
|
| 6.9% |
|
| 7,316 |
|
| 7.0% |
|
| 7,349 |
|
| 6.7% |
|
| Communications |
| 4,285 |
|
| 4.0% |
|
| 4,124 |
|
| 3.9% |
|
| 4,271 |
|
| 3.9% |
|
| Consumer cyclical |
| 5,633 |
|
| 5.3% |
|
| 5,811 |
|
| 5.5% |
|
| 6,052 |
|
| 5.5% |
|
| Consumer non-cyclical |
| 17,009 |
|
| 15.9% |
|
| 16,905 |
|
| 16.1% |
|
| 17,163 |
|
| 15.7% |
|
| Energy |
| 5,445 |
|
| 5.1% |
|
| 4,932 |
|
| 4.7% |
|
| 4,875 |
|
| 4.4% |
|
| Technology |
| 5,090 |
|
| 4.8% |
|
| 5,173 |
|
| 4.9% |
|
| 5,377 |
|
| 4.9% |
|
| Transportation |
| 3,445 |
|
| 3.2% |
|
| 3,414 |
|
| 3.2% |
|
| 3,580 |
|
| 3.3% |
|
| Industrial other |
| 2,110 |
|
| 2.0% |
|
| 2,159 |
|
| 2.1% |
|
| 2,294 |
|
| 2.1% |
|
| Utilities |
| 14,139 |
|
| 13.3% |
|
| 13,785 |
|
| 13.0% |
|
| 14,131 |
|
| 12.9% |
|
| Government-related entities |
| 1,951 |
|
| 1.8% |
|
| 1,863 |
|
| 1.8% |
|
| 1,833 |
|
| 1.7% |
|
| Residential mortgage-backed securities ("RMBS") |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Agency backed |
| 2,363 |
|
| 2.2% |
|
| 1,973 |
|
| 1.9% |
|
| 1,878 |
|
| 1.7% |
|
| Non-agency backed |
| 387 |
|
| 0.4% |
|
| 360 |
|
| 0.3% |
|
| 360 |
|
| 0.3% |
|
| Commercial mortgage-backed securities ("CMBS") |
| 1,499 |
|
| 1.4% |
|
| 1,552 |
|
| 1.5% |
|
| 1,708 |
|
| 1.6% |
|
| Asset-backed securities ("ABS") |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Collateralized loan obligations ("CLOs") |
| 6,391 |
|
| 6.0% |
|
| 6,356 |
|
| 6.0% |
|
| 7,471 |
|
| 6.8% |
|
| Other ABS |
| 1,648 |
|
| 1.5% |
|
| 2,083 |
|
| 2.0% |
|
| 2,802 |
|
| 2.6% |
|
| Municipals |
| 5,513 |
|
| 5.2% |
|
| 5,322 |
|
| 5.1% |
|
| 5,422 |
|
| 4.9% |
|
| Government: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| United States |
| 383 |
|
| 0.4% |
|
| 375 |
|
| 0.4% |
|
| 415 |
|
| 0.4% |
|
| Foreign |
| 400 |
|
| 0.4% |
|
| 373 |
|
| 0.4% |
|
| 361 |
|
| 0.3% |
|
| Hybrid & redeemable preferred securities |
| 510 |
|
| 0.5% |
|
| 408 |
|
| 0.4% |
|
| 434 |
|
| 0.4% |
|
| Total fixed maturity AFS securities, net of allowance for credit losses, at amortized cost |
| 106,659 |
|
| 100.0% |
|
| 105,158 |
|
| 100.0% |
|
| 109,635 |
|
| 100.0% |
|
| Trading Securities |
| 3,851 |
|
|
|
|
| 4,170 |
|
|
|
|
| 4,034 |
|
|
|
|
| Equity Securities |
| 151 |
|
|
|
|
| 285 |
|
|
|
|
| 319 |
|
|
|
|
| Total fixed maturity AFS, trading and equity securities | $ | 110,661 |
|
|
|
| $ | 109,613 |
|
|
|
| $ | 113,988 |
|
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| Page 22 |
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|
| Lincoln Financial Group |
| |||||||||||||||||
| Fixed-Income Credit Quality |
| |||||||||||||||||
| Unaudited (millions of dollars) |
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of 6/30/21 |
| As of 12/31/21 |
| As of 6/30/22 |
| ||||||||||||
|
| Amount |
| % |
| Amount |
| % |
| Amount |
| % |
| ||||||
| Fixed Maturity AFS Securities, Net of Allowance for Credit Losses, at Amortized Cost (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NAIC 1 (AAA-A) | $ | 58,609 |
|
| 54.8% |
| $ | 58,542 |
|
| 55.7% |
| $ | 61,623 |
|
| 56.2% |
|
| NAIC 2 (BBB) |
| 44,031 |
|
| 41.3% |
|
| 42,797 |
|
| 40.7% |
|
| 44,166 |
|
| 40.3% |
|
| Total investment grade |
| 102,640 |
|
| 96.1% |
|
| 101,339 |
|
| 96.4% |
|
| 105,789 |
|
| 96.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NAIC 3 (BB) |
| 2,654 |
|
| 2.6% |
|
| 2,278 |
|
| 2.1% |
|
| 2,187 |
|
| 2.0% |
|
| NAIC 4 (B) |
| 1,259 |
|
| 1.2% |
|
| 1,424 |
|
| 1.4% |
|
| 1,544 |
|
| 1.4% |
|
| NAIC 5 (CCC and lower) |
| 53 |
|
| 0.0% |
|
| 51 |
|
| 0.0% |
|
| 113 |
|
| 0.1% |
|
| NAIC 6 (in or near default) |
| 53 |
|
| 0.0% |
|
| 66 |
|
| 0.1% |
|
| 2 |
|
| 0.0% |
|
| Total below investment grade |
| 4,019 |
|
| 3.9% |
|
| 3,819 |
|
| 3.6% |
|
| 3,846 |
|
| 3.5% |
|
| Total | $ | 106,659 |
|
| 100.0% |
| $ | 105,158 |
|
| 100.0% |
| $ | 109,635 |
|
| 100.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial Mortgage Loans, at Amortized Cost (1)(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CM1 (AAA-A) | $ | 13,808 |
|
| 81.2% |
| $ | 14,028 |
|
| 81.7% |
| $ | 13,623 |
|
| 80.7% |
|
| CM2 (BBB) |
| 2,845 |
|
| 16.7% |
|
| 2,878 |
|
| 16.8% |
|
| 3,004 |
|
| 17.8% |
|
| CM3-7 (BB and lower) |
| 346 |
|
| 2.0% |
|
| 265 |
|
| 1.5% |
|
| 259 |
|
| 1.5% |
|
| Total | $ | 16,999 |
|
| 100.0% |
| $ | 17,171 |
|
| 100.0% |
| $ | 16,886 |
|
| 100.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Fixed Maturity AFS Securities and Commercial Mortgage Loans, at Amortized Cost (1)(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| AAA-A | $ | 72,417 |
|
| 58.6% |
| $ | 72,570 |
|
| 59.3% |
| $ | 75,246 |
|
| 59.5% |
|
| BBB |
| 46,876 |
|
| 37.9% |
|
| 45,675 |
|
| 37.3% |
|
| 47,170 |
|
| 37.3% |
|
| BB and lower |
| 4,365 |
|
| 3.5% |
|
| 4,084 |
|
| 3.4% |
|
| 4,105 |
|
| 3.2% |
|
| Total | $ | 123,658 |
|
| 100.0% |
| $ | 122,329 |
|
| 100.0% |
| $ | 126,521 |
|
| 100.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) Ratings are based upon the designations determined and provided by the National Association of Insurance Commissioners (“NAIC”) or based upon ratings from credit rating |
| |||||||||||||||||
| agencies to derive the NAIC designation. |
| |||||||||||||||||
| (2) CM ratings reflect the risk-based capital risk category for commercial mortgage loans. Letter ratings are assumed NAIC equivalent ratings where NAIC 1 = CM1, NAIC 2 = CM2 |
| |||||||||||||||||
| and NAIC 3-6 = CM3-7. |
| |||||||||||||||||
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| Page 23 |
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|
| Lincoln Financial Group |
| ||||||||||||||||||||||||
| Realized Gain (Loss), After-DAC |
| ||||||||||||||||||||||||
| Unaudited (millions of dollars) |
| ||||||||||||||||||||||||
|
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|
| For the Three Months Ended |
| For the Six Months Ended |
| |||||||||||||||||||||
|
| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
| |||||||
| Components of Realized Gain (Loss), Pre-Tax |
|
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|
|
|
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|
|
|
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|
|
|
|
|
|
|
| Total adjusted operating realized gain (loss) | $ | 51 |
| $ | 49 |
| $ | 51 |
| $ | 55 |
| $ | 49 |
| -3.9% |
| $ | 99 |
| $ | 104 |
| 5.1% |
|
| Total excluded realized gain (loss) |
| (53) |
|
| 36 |
|
| (166) |
|
| (26) |
|
| 473 |
| NM |
|
| (281) |
|
| 447 |
| 259.1% |
|
| Total realized gain (loss), pre-tax | $ | (2) |
| $ | 85 |
| $ | (115) |
| $ | 29 |
| $ | 522 |
| NM |
| $ | (182) |
| $ | 551 |
| NM |
|
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| Components of Excluded Realized Gain (Loss), After-Tax |
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| Credit loss benefit (expense) on mortgage loans on |
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| real estate | $ | 8 |
| $ | 28 |
| $ | 26 |
| $ | 13 |
| $ | (5) |
| NM |
| $ | 26 |
| $ | 8 |
| -69.2% |
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| Credit loss benefit (expense) on other financial assets |
| (3) |
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| (9) |
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| 5 |
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| (4) |
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| (4) |
| -33.3% |
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| (4) |
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| (8) |
| -100.0% |
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| Realized gain (loss) related to certain financial assets |
| (5) |
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| (4) |
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| (6) |
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| (7) |
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| (5) |
| 0.0% |
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| (7) |
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| (14) |
| -100.0% |
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| Realized gain (loss) on equity securities |
| 16 |
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| 3 |
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| 4 |
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| 3 |
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| (6) |
| NM |
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| 26 |
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| (2) |
| NM |
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| Realized gain (loss) on the mark-to-market on certain |
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| instruments |
| (2) |
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| 8 |
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| 34 |
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| (9) |
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| - |
| 100.0% |
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| 18 |
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| (9) |
| NM |
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| Realized gain (loss) related to financial assets, after-tax |
| 14 |
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| 26 |
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| 63 |
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| (4) |
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| (20) |
| NM |
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| 59 |
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| (25) |
| NM |
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| Variable annuity net derivative results: |
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| Hedge program performance, including unlocking |
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| for GLB reserves hedged and benefit ratio unlocking |
| 13 |
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| (4) |
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| (78) |
|
| (247) |
|
| (183) |
| NM |
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| (29) |
|
| (430) |
| NM |
|
| GLB non-performance risk component |
| (1) |
|
| (2) |
|
| (47) |
|
| 18 |
|
| 74 |
| NM |
|
| (145) |
|
| 92 |
| 163.4% |
|
| Total variable annuity net derivative results |
| 12 |
|
| (6) |
|
| (125) |
|
| (229) |
|
| (109) |
| NM |
|
| (174) |
|
| (338) |
| -94.3% |
|
| Indexed annuity forward-starting option |
| 8 |
|
| (3) |
|
| 7 |
|
| 43 |
|
| (3) |
| NM |
|
| 23 |
|
| 39 |
| 69.6% |
|
| Excluded realized gain (loss), including |
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| benefit ratio unlocking, after-tax |
| 34 |
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| 17 |
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| (55) |
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| (190) |
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| (132) |
| NM |
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| (92) |
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| (324) |
| NM |
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| Less: benefit ratio unlocking on GDB |
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| and GLB riders, after-tax |
| 77 |
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| (12) |
|
| 77 |
|
| (170) |
|
| (506) |
| NM |
|
| 131 |
|
| (676) |
| -30.0% |
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| Total excluded realized gain (loss), after-tax | $ | (43) |
| $ | 29 |
| $ | (132) |
| $ | (20) |
| $ | 374 |
| NM |
| $ | (223) |
| $ | 352 |
| 9.1% |
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| Page 24 |
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| Lincoln Financial Group |
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| Select GAAP to Non-GAAP Reconciliations |
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| Unaudited (millions of dollars) |
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| For the Three Months Ended |
| For the Six Months Ended |
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| 6/30/21 |
| 9/30/21 |
| 12/31/21 |
| 3/31/22 |
| 6/30/22 |
| Change |
| 6/30/21 |
| 6/30/22 |
| Change |
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| Revenues |
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| Total revenues | $ | 4,851 |
| $ | 5,241 |
| $ | 4,604 |
| $ | 4,687 |
| $ | 5,104 |
| 5.2% |
| $ | 9,386 |
| $ | 9,791 |
| 4.3% |
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| Less: |
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| Excluded realized gain (loss) |
| (53) |
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| 36 |
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| (166) |
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| (26) |
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| 473 |
| NM |
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| (281) |
|
| 447 |
| 259.1% |
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| Amortization of DFEL associated with |
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| benefit ratio unlocking |
| 1 |
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| - |
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| 1 |
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| (5) |
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| (10) |
| NM |
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| 2 |
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| (15) |
| NM |
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| Adjusted operating revenues | $ | 4,903 |
| $ | 5,205 |
| $ | 4,769 |
| $ | 4,718 |
| $ | 4,641 |
| -5.3% |
| $ | 9,665 |
| $ | 9,359 |
| -3.2% |
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| Net Income |
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| Net income (loss) | $ | 642 |
| $ | 318 |
| $ | 220 |
| $ | 104 |
| $ | 238 |
| -62.9% |
| $ | 867 |
| $ | 341 |
| -60.7% |
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| Less: |
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| Excluded realized gain (loss), after-tax |
| (43) |
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| 29 |
|
| (132) |
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| (20) |
|
| 374 |
| NM |
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| (223) |
|
| 352 |
| 257.8% |
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| Benefit ratio unlocking, after-tax |
| 77 |
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| (12) |
|
| 77 |
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| (170) |
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| (527) |
| NM |
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| 131 |
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| (696) |
| NM |
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| Transaction and integration costs related to |
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| mergers, acquisitions and divestitures, after-tax |
| - |
|
| - |
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| (11) |
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| - |
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| - |
| NM |
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| - |
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| - |
| NM |
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| Gain (loss) on modification or early extinguishment |
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| of debt, after-tax |
| - |
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| (6) |
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| - |
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| - |
|
| - |
| NM |
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| - |
|
| - |
| NM |
|
| Total adjustments |
| 34 |
|
| 11 |
|
| (66) |
|
| (190) |
|
| (153) |
| NM |
|
| (92) |
|
| (344) |
| NM |
|
| Adjusted income (loss) from operations | $ | 608 |
| $ | 307 |
| $ | 286 |
| $ | 294 |
| $ | 391 |
| -35.7% |
| $ | 959 |
| $ | 685 |
| -28.6% |
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| Earnings (Loss) Per Common Share – Diluted |
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| Net income (loss) | $ | 3.34 |
| $ | 1.68 |
| $ | 1.20 |
| $ | 0.58 |
| $ | 1.34 |
| -59.9% |
| $ | 4.51 |
| $ | 1.91 |
| -57.6% |
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| Less: |
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| Excluded realized gain (loss), after-tax |
| (0.22) |
|
| 0.15 |
|
| (0.72) |
|
| (0.11) |
|
| 2.16 |
| NM |
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| (1.15) |
|
| 2.02 |
| 275.7% |
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| Benefit ratio unlocking, after-tax |
| 0.39 |
|
| (0.06) |
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| 0.42 |
|
| (0.97) |
|
| (3.05) |
| NM |
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| 0.68 |
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| (3.99) |
| NM |
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| Transaction and integration costs related to |
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| mergers, acquisitions and divestitures, after-tax |
| - |
|
| - |
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| (0.06) |
|
| - |
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| - |
| NM |
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| - |
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| - |
| NM |
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| Gain (loss) on modification or early extinguishment |
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| of debt, after-tax |
| - |
|
| (0.03) |
|
| - |
|
| - |
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| - |
| NM |
|
| - |
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| - |
| NM |
|
| Adjusted income (loss) from operations | $ | 3.17 |
| $ | 1.62 |
| $ | 1.56 |
| $ | 1.66 |
| $ | 2.23 |
| -29.7% |
| $ | 4.98 |
| $ | 3.88 |
| -22.1% |
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| Page 25 |
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